Pawlenty to Probe

Journalists are at at their best when they are dissecting the political conventional wisdom, not simply parroting it. And this week, journalists are doing a pretty solid job questioning the various forms of conventional wisdom put forth about the federal stimulus package.

For instance, after months of covering Republicans’ “where are the jobs?” taunting without seriously investigating the accusation, this week they are reporting that economists say between 0.8 million and 2.4 million jobs have been created so far, about halfway through the fund. The stimulus seems to have bended the curve, but not snapped it. Minnesota State economist Tom Stinson said Minnesota probably won’t get back to 2007 unemployment figures until 2012, but also noted “Without this (federal stimulus) program, it probably would have taken a couple more years (i.e. until 2014).”

This kind of reporting is considerably more insightful than hearing Boehner and Pelosi hurling endless zingers to and fro. This week’s coverage has actually allowed me to learn something about the gray areas of this issue.

Here’s my question, though. Where is this kind of journalistic probing in Minnesota public affairs reporting?

For instance, in the final year of the Pawlenty era, a year in which our Governor is pledging to do for all of America what he did for L’Étoile du Nord, it would be interesting — important even — to deeply probe the Governor’s contention that he helped Minnesota by lowering taxes.

The Governor makes this claim constantly. But unlike this week’s fairly balanced reporting on the relative effectiveness of the stimulus package, the Pawlenty claim about the wonders of “no new taxes” is almost never examined by Minnesota public affairs journalists.

That’s a darn shame, because it’s an interesting and important question. While the Governor has played cutesy games on the revenue side (e.g. increased fees, labeled tobacco taxes “fees,” shifted revenue burdens to others) it does look pretty clear that overall taxes did decrease during the Pawlenty years.

But, to what effect? Did these lower taxes make Pawlenty era Minnesota into a land of milk and honey, as the Governor implies on the national hustings? Did lower taxes lead Minnesota’s economic growth and jobs picture to outshine other states? Did lower taxes improve Minnesota’s competitiveness vis a vis other states when it comes to major drivers of long-term economic growth, such as education and infrastructure?

Here there is plenty to probe, according data gathered by the liberal interest group Minnesota 2020.

I know, I know, Minnesota 2020 has a liberal bias. Even though they’re aggregating data from other sources, its analysis has to be taken with a grain of salt. But why isn’t this an issue being analyzed by Minnesota journalists?

– Loveland

18 thoughts on “Pawlenty to Probe

  1. Newt says:

    Using a card from the Obama deck … How much worse off would Minnesota be if Pawlenty hadn’t held the line on taxation?

    (Obama went from claiming he created jobs to claiming he spared job losses.)

    1. Joe Loveland says:

      But Newt, those numbers in the second chart are comparing Minnesota’s performance with other states’ performances, and all of the states existed in the same national economy.

    1. Joe Loveland says:

      No one disputes that federal spending is going up. The debate is whether the federal spending was necessary to bring back growth and jobs.

      And again, at least that debate is happening. In Minnesota, I don’t see any debate on the news pages on the question of “have Pawlenty-era tax reductions made Minnesota more competitive compared to other states.” Reporters tell the “Pawlenty reduced taxes” side of the story, but never probe the “and then what happened?”

    2. PM says:

      It appears that Newt’s chart is of MN State and local government spending, not federal spending.

      Doesn’t say anything about pawlenty holding the line on taxes or anything, but there certainly does not appear to be any evidence of Pawlenty holding the line on State and local govt expenditures. Of course, Pawlenty has limited ability to control local government spending, so I,m not certain that this chart shows us much about Pawlenty at all.

      Care to explain further, Newt?

    3. Joe Loveland says:

      Sorry, Newt, my mistake. Lame.

      It looks like the chart you shared is not inflation adjusted. As the first chart in this analysis shows, real inflation-adjusted spending has decreased under Pawlenty.

  2. Joe, You’re right about inflation-adjusted state spending decreasing. The site Newt used allows adjustment of the parameters to show the same thing (as well as to look at state-only spending). What’s really troubling is the spike that occurs in the out-years, after Pawlenty leaves.

    As Moody’s recently indicated, Minnesota’s structural imbalance created by Pawlenty’s budget tricks will come home to roost.

  3. Joe Loveland says:

    So if lower taxes and lower spending leads to more economic growth and employment — the persistent TPaw saw — why hasn’t Minnesota moved ahead in state-by-state growth and employement comparisons?

  4. I’m the guy who did the original Minnesota 2020 graphs that Joe uses in his blog post. By way of explanation, I would note that the first graph Joe uses is not adjusted for inflation for two reasons. First, the graph is looking at revenues and spending as a percentage of personal income; when looking at a ratio like this, it is not necessary to adjust for inflation because if you adjusted both the numerator (revenue or spending) and the denominator (personal income) for inflation, the inflation adjustment of the numerator cancels out the inflation adjustment of the denominator, producing no net effect.

    Second, the graph in question is examining Minnesota relative to the U.S. average. Even if the numbers were adjusted for inflation, the ratio of Minnesota to the U.S. average would not change since—in this case—the same inflation adjustment would be applied to both.

    Regarding the information that Newt cites, I am not sure how the projections through 2015 were made, although I share Charlie’s concern about chickens coming home to roost as we struggle to deal with the one-time shifts. Furthermore, from FY 2002 to 2007 (the most current year for which we have actual Census data), inflation-adjusted per capita state and local government general spending has fallen by 10%.

    Not surprisingly, I agree with Joe that more attention needs to be paid to Minnesota’s overall economic performance during Pawlenty’s tenure. After all, the Governor has said that he wants more accountability in government.

    1. Joe Loveland says:

      Thanks for the clarification Mr. VanWychen. My understanding of the second chart was a little off, but the point I was making with the chart stands: Minnesota’s standing, relative to the rest of the nation, on jobs and economic growth has gotten worse since the Governor cut taxes and spending.

      The data seem to indicate that the outgoing Governor’s legacy is The Minnesota Mishap, not The Minnesota Miracle.

  5. Newt says:

    “All data are wrong – some data are useful.” – George Box, Statistician

    It is wholly immaterial to examine revenues and spending as a percentage of personal income.

    There only needs to be two questions: How much government do we need? And how much does it cost?

    Instead, the Lori Sturdevants, Bruce Benidts and Joel Kramers of the world ask: How many wealthy people are there, and how can we claim their wealth in the name of egalitarianism?

  6. Joe Loveland says:

    Newt, so inflation isn’t relevant in financial analysis?

    Let’s say in 1997, your boss said to you: “Newton, you earn $75,000/year, and are a fine and loyal employee. Therefore, I promise you I will give you a $1,000/year raise every year for a decade!”

    Your boss, being a man of his word, gives you a $1,000 raise every year for a decade, until in 2007, you are earning $85,000/yr! What a boss! No cuts! Increases! Whoo hoo!

    BUT, over those ten years, inflation happened. My online inflation calculator tells me that the same goods and services you could purchase in 1997 with $75,000 cost $96,549.86 in 2007. So, yes, you’re making $85,000 in 2007, much more than in 1997. But you can no longer buy anywhere near what you could buy in 1997, even with your “raise.”

    So, would you really say your boss spared you a salary cut and gave you a salary increase when he made that deal in 1997? If he gave you the same deal for 2007-2017 would you view it as an increase or a cut? If he told you inflation had no relevance in the conversation, would you agree with him?

    1. And don’t forget, Newt’s company paid all his health insurance premium in 1997, and 50% of family coverage. Now it pays 80% of his premium and Newt is on the hook for all of his dependents’ coverage in the new high-deductible plan.

  7. Joe Loveland says:

    Many Minnesota political reporters are very pro-Pawlenty right now. Not because they have a conservative bias. Not because they are in love Pawlenty personally. Not because they are impressed with Pawlenty’s accomplishments as Governor.

    They are very pro-Pawlenty because most reporters’ dominant bias is pro-good story, and Pawlenty is running for President.

    Most political reporters live to cover big, interesting stories-of-a-lifetime. If Pawlenty develops into a strong Presidential candidate, that will be a big, interesting, story-of-a-lifetime for reporters. It will get them on presidential campaign planes, cable TV news shows, talk radio and promotional tours to promote their new books. But if Pawlenty is judged a failed Governor and that causes his Presidential bid to prematurely fizzle, reporters will be stuck with the same old same old.

    1. PM says:

      Excuse me, but are you suggesting that *gasp* self interest might have something to do with journalism?

      I am shocked! Shocked!! (to find gambling going on in this establishment).

  8. Joe Loveland says:

    Interesting commentary related to this subject in the Strib today by Charlie Quimbley and Dane Smith:

    The case for paying higher taxes, happily

    Put down your coffee cup. Minnesota’s state government needs to raise taxes by as much as $1 billion a year. Pick the cup back up. That’s only four-tenths of 1 percent of our annual $230 billion in personal income. And it would still leave the total portion of our income paid in taxes smaller than it was a decade ago

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