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Progressive Politics in Minnesota, the Nation, and the World

Growth and Justice -- Building Blocks of a Strong Economy

Category: Economy
Posted: 12/13/08 03:10

by Dave Mindeman

I saw a reprint of an opinion piece by Craig Westover at the Minnesota Free Market website yesterday. It was titled, "The Problem With Progressives", under the sub-heading of "A Dialogue on Government Restraint". It was inspired by a symposium that Growth and Justice had during the Republican Convention about the "Minnesota Republican Progressive Tradition". (Yes, believe it or not Republicans used to be (kind of) progressive.) TPT television is airing a documentary examining this phenomenon later this month. Mr. Westover apparently thinks it will be a fictional account.

The ideas expressed by Westover produce an array of debatable points. However, in his opinion piece, there were some economic points about progressive ideas on the economy and government which I found a little "off the mark", shall we say.

Westover uses broad strokes:

"Growth" and "justice" are both desirable, and the progressive believes this makes them compatible irrespective of the laws of economics. Equality and freedom are both good things; therefore the progressive justifies state intervention to eliminate conflict among the vicissitudes of fate and the variability of personal ambition, so that all might be free to achieve their potentials.

Hmm, you know what, that is pretty darn close to what I believe (I must be a progressive). Growth and justice are not only both desirable but completely compatible. In fact, they need each other for everyone to have the chance to achieve their full potential. Here, Westover seems to be saying that our potential cannot and should not be modified against fate and the variables of personal ambition.

I am trying to think of an economic law that would make growth and justice incompatible. I think Westover is wrong and that the converse is true. Growth and justice would always work together if the effects of fate (economic downturns, health events, accidents, etc) were softened by government intervention (help, if you will) and if the variables of personal ambition were simply regulated enough by government, so that everyone plays by the same rules.

He goes on:

Everyone, says the progressive, has the "right" to a useful job at a fair wage, a decent home, medical care, a good education and adequate protection from economic fears of old age, sickness, accident and unemployment. Concern that such "rights" necessarily impose obligations on others is negated by the righteous beliefs that we all have moral obligations to our fellow citizens, and moral obligation to the "common good" can be coerced by the police power of the state.

Westover states that paragraph in the pejorative sense. There are no such rights in the Westover world. That would eliminate personal responsibility -- the nanny state would be the norm.

I disagree. Maybe people don't have absolute rights to those tangible things, but they absolutely do have a right to a fair and equal chance to obtain them. Only government can provide that fairness.... not as a police state, but as an arbitor of the rules and protector against those that would manipulate them for their own greed.

We have just been through a relatively clear case of what happens when government removes itself from the "free" market. The government reduced its oversight in the banking industry. The high rolling financiers were left to create their own devices. Clear paths to unlimited wealth. Westover should be talking about how the relaxation of our "moral obligation" to the "common good" by the wealthy, imposed its own version of obligations to their fellow citizens. Their greed not only wrecked their own lives, but nearly took down the entire economy, our economy....it still may.

Moral obligation to the common good is what separates a good economy from a foolishly chaotic one. Capitalism, by its nature, creates winners and losers. That is simply part of its inner workings. But winners don't get to create their own rules and values and losers shouldn't be cast aside as useless and without value. Some of the strongest companies and best management have risen from a failed enterprise. Government must protect us from the overzealous winners and create, at least the opportunity for a loser to get that second chance.

Government has an extremely important role to play in a healthy economy. We are a nation built on individual achievement and entrepreneurial spirit. But, it is our commonality that sets us apart from the lesser economies and gives us our real strength. Strong government is necessary to protect that.

As the man said, "We all do better when we all do better".
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Everybody to Blame for Auto Bill Failure

Category: Economy
Posted: 12/12/08 19:28

by Dave Mindeman

I'm not sure who I am madder at....Republicans or Democrats! This auto rescue bill should have been passed. I don't care about the Big Three management failures. That's a known commodity. I care about union jobs and if the UAW goes down, then labor may never come back.

For all the pompous talk on Capitol Hill about the bad management in Detroit over the years and the lame way of presenting their future plans, the facts are pretty simple. American auto manufacturing, and the jobs that go with it, is at the brink. Unlike the Banking bailout where the rich get richer... the auto industry directly affects middle class America. What the hell good are middle class tax cuts if the middle class is gone?

First of all, let me just say that Senator Corker from Tennessee is very aptly named, because he IS a real one. To sabotage an agreed upon deal in the Senate, and then have the gaul to blame it on the UAW....the very people he is trying to scuttle...takes some big cajones, or at least the appearance of them.

The GOP Republicans from the South are protecting foreign auto makers, pure and simple. Remember when the Republican south was up in arms over the Japanese auto industry getting too competitive? Funny what a few strategically placed plant locations can do for you.

But, heck, at least they have a somewhat logical reason for what they are doing.

But before I move on to Democrats -- how about Senator Coleman? Yea, he voted against this bill and against the auto workers. The same guy who made those theatrical appearances with Ford management supposedly looking out for the St. Paul auto plant. Same guy who is out there "gettin' things done". Done is the word...at least that's the word that Ford will say if Coleman ever wants Ford's ear again.

But back to the Democrats. Trust me, we got blame to scatter all over the fricking place. The Auto bill failed 52-35 on a procedural vote, meaning it failed to get 60 affirmative votes to move it to the floor. 52 votes.... 8 short. It might surprise you a little that 10 Republicans voted for the bill. That's right...10.

Bond, Mo.; Brownback, Kan.; Collins, Maine; Dole, N.C.; Domenici, N.M.; Lugar, Ind.; Snowe, Maine; Specter, Pa.; Voinovich, Ohio; Warner, Va.

That's an interesting group...especially Brownback, Dole, and Domenici.... but the need for the auto industry crosses lines.

But four Democrats opposed it.

Baucus, Mont.; Lincoln, Ark.; Reid, Nev.; Tester, Mont.

Both Montana Senators (Baucus and Tester) voted against it for reasons unknown... although Baucus seems to be upset with an added provision. Lincoln was turf protecting for Arkansas foreign auto plants. And Reid probably voted against for procedural reasons....so he is able to reintroduce it later. (Not likely)

So counting Reid, you have 53 votes. Montana's Senators could have been talked into it I think...that's 55 votes. Still 5 short.

But we have some Senators AWOL here:

Democrats NOT Voting:
Biden, Del.; Kennedy, Mass.; Kerry, Mass.; Wyden, Ore.


I'm not sure why Biden couldn't be there...maybe he would have been there if needed. That's 56. Kennedy and Kerry? What happened there. Kennedy may have had a good excuse, but Kerry? Come on! That should have been 58. And Wyden from Oregon? That's another usually reliable labor vote. Could have been 59.

And of course, Governor Blago.nut.job from Illinois has completely gummed up the works for Obama's replacement. Not likely to see any help there until somebody knife's Blagman in an alley somewhere. (I'm just kidding......kind of).

So, if Democrats had their act together, we could have had 60 votes. Not to mention bi-partisan Norm.

What is going in Washington? We can't shovel money to the banks fast enough (and for no apparent reason either); but when the jobs of autoworkers are on the line... not to mention entire communities of small businesses that are supported by those jobs... we just can't pull the trigger because we are looking out for the taxpayers.

Who are we kidding? Democrats are impotent. If they don't start playing tougher than this, the Republican minority in the Senate is going to control the agenda of this country.

You think this country is in trouble now.....just wait.
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Maybe We Do Need a DEED ShakeUp

Category: Tim Pawlenty
Posted: 12/11/08 07:14

by Dave Mindeman

A few days ago, Senator Larry Pogemiller made a pointed remark about the state of economic development in Minnesota:

"I think it's pretty clear that our economic development strategy that we're on has been a failure, and I think we need a total revamping of that," Pogemiller said. "And frankly, I think we need some new leadership there." --MPR, 12/09/2008

That remark was directed at the Commissioner of DEED, Dan McElroy. McElroy has previously been Pawlenty's Finance Commissioner, as well as his Chief of Staff. No one knows Pawlenty's policies better than Dan McElroy.

Part of the economic development questions revolve around the Governor's signature development program JOBZ (Job Opportunity Building Zones). The essence of the program is to spur development via business tax breaks....especially targeting rural Minnesota.

McElroy is well aware of the lack of confidence in JOBZ by the legislative leaders. He responded:

McElroy said improvements were made and JOBZ is creating new jobs. Despite difficult economic times, McElroy said he thinks the state's economic development strategy is working. He said he welcomes a thorough debate with legislators.

He thinks it's working? One has to wonder what evidence he bases that on. He certainly doesn't have much data that backs that up. Back in February, the Legislative Auditor was pretty skeptical too.

A February report from that office made some critical comments:

1. Administration of the Program lacking.

"We think that JOBZ is doing some good in some places," he said. "But we think the program at this point in its life really needs some re-tooling, some reform at the legislative level. And also some tightening up in its administration and particularly stronger oversight for the Department of Employment and Economic Development."

Oversight. That would be a responsibility of McElroy. Has that been part of the improvements? If so, it certainly hasn't translated much into jobs.

2. Need for accurate information from the Department.

John Yunker, the project manager for the audit, said the Department of Employment and Economic Development, or DEED, has overstated the business growth by nearly 30 percent.

30% is not a clerical error. That is, at best, a fluffed up exaggeration....at worst, a falsehood. Clearly, true economic activity from jobs reports indicate the contrary.

3. Hurting instead of helping in places?

The report from Nobles' office says JOBZ has not met its goal of targeting areas that are considered economically distressed and in most need of assistance. In addition, the program has subsidized some businesses that are competing with existing Minnesota companies for the same customers. The report also raises questions about the true economic impact of JOBZ. Quote:"50 percent (of businesses involved) said they would have expanded to some extent in Greater Minnesota even without JOBZ. So clearly some of the growth would have occurred anyway."

The idea was to reach areas in most need of economic stimulus. Instead, JOBZ is being utilized in areas that don't need the help or are fostering false advantages for one Minnesota company over another. That is clearly the wrong type of economic activity.

Pogemiller is right to point a finger of responsibility at DEED. Minnesota's economy is functioning below the US average and the deficit (on a per capita basis) is the largest in the nation. Something is not working... that is, besides thousands of Minnesota workers.

McElroy has the position that has the responsibility, and he may be the focus of criticism; but he is only following the policy of his boss, the Governor. The ultimate accountability should reside there. So far it has not.....and so, McElroy may be the one paying the price.

Minnesota can and must do better. When businesses have problems, the CEO gets fired or there is a shakeup in management. When states have problem, they can't fire the CEO but we can still do some shakeups.

Maybe its time we did.




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