July 28, 2004

What's the Matter with Minnesota?

By Doug McGill
The McGill Report

ROCHESTER, MN -- Normally in this space I compare Minnesota and its government's policies to those of foreign countries – like our gun control laws compared to Japan's.  

But today I simply must ask, is Minnesota starting to resemble Kansas?  
The question came to mind while reading "What's the Matter With Kansas?" by Thomas Franks. The book, number five on this week's New York Times bestseller list, tells the story of a state that once was bedrock blue-collar, agrarian, pro-union, suffragist, populist, and progressive. A state once much like Minnesota was.  

Today, Kansas has turned deeply conservative. Facing the state's deepest fiscal crisis in recent history, its Republican-dominated legislature cuts tax after tax while also passing conservative legislation such as a law to ban references to evolution in state-funded science publications.  

Throughout the state, economic crises incongruously vie with conservative cultural issues in the headlines.  A town goes broke, and water fluoridation is reviled as a big government scheme; a company outsources its workforce, as a town adopts a resolution actually requiring its citizens to own firearms.  

"This is Not Corporate Welfare"

Its disastrous economy would seem to make Kansas ripe for a progressive revival – yet the opposite has happened. As the economy worsens, more conservatives are voted in.  

It's "a panorama of madness and delusion worthy of Hieronymous Bosch," Franks writes, "of working-class guys cheering as they deliver up a landslide for a candidate whose policies will end their way of life, will transform their region into a 'rust belt,' will strike people like them blows from which they will never recover." 

We're not to Heironymous Bosch-level here in Minnesota yet, but to Rene Magritte-level, definitely yes. I am thinking of Magritte's famous painting of a curved smoking pipe with a five-word message written underneath it: "This is not a pipe."  

In Minnesota's case, the fundamental disconnect -- found in any number of Pawlenty administration programs -- can be paraphrased as "this is not corporate welfare," when in fact it obviously is.  

When the Governor starts a new economic development initiative, he usually includes this "it's not" caveat. For example, when launching his centerpiece economic program for rural Minnesota, the Job Opportunity Building Zones plan, he took care to emphasize that "these have been called 'tax-free zones' in the past, but they're not about taxes, they are about jobs." 

Swaggering Townships

In a sense, of course, he's right. The zones are definitely not about taxes –on big corporations, that is. The program extends to corporations that start in a JOBZ zone a 100% tax holiday on corporate income tax or state property tax on improvements for a full 12 years – 12 years! That's much longer than many states offer as incentives to attract big business.  
Plenty of economists, including Art Rolnick, the research director of the Minneapolis Reserve Bank, say the evidence proves that such corporate subsidies don't benefit anyone except the corporations. They don't create many jobs, and especially not higher-paying ones.  

Rolnick wrote in an Annual Report of the Minneapolis Fed that such subsidies create a "trade war between states" that "undermines the national economic union by misallocating resources and causing states to provide too few public goods." 

Pawlenty follows a "what's good for big business is good for Minnesota" philosophy in agriculture, too. His recently-released task force report on the state's struggling livestock industry, for example, says the best way to solve the state's livestock problems is to weaken rural counties and townships – those swaggering political behemoths!  

In recent years, many rural jurisdictions have blocked big agriculture companies from opening manure lagoons and processing plants in their locales. The big ag lobbyists are fed up, and the Governor now is, too. 

Focus on Customers

Meanwhile, the Governor increasingly apes the Kansas-style strategy of propounding culturally conservative rhetoric – e.g., on gun ownership, the death penalty, a federal marriage amendment, and patriotism in Iraq and Kosovo – while pushing economic policies that strongly favor big business. 

Perhaps our governor learned this trick from George W. Bush, who  promises "high payin' jobs" jobs to "workin' folks," while in fact presiding over the loss of 2 to 3 million of those jobs over the past 3 years. Yet he still somehow persuades millions of working men and women to vote for him.  

Minnesota's Governor is so enamored of business that he even talks like a CEO. He travels through the state preaching "productivity," "efficiency," and "competitiveness," rather than urging citizens to aspire to apparently old-fashioned ideals like "equality," "justice," "community," and "democracy."  

On his official state web site, the Governor declares that his two top guiding principles as Governor are "Commitment to Mission" and "Focus on Customers." 

" Customers"?! Is the governor leading Minnesota, or running a Wal-Mart?  

Today the question of Minnesota's vital linkages to the world bows before the question, are we becoming a Kansas?

Copyright @ 2004 The McGill Report