Facts

[Note:  As usual Mitch Berg has already covered this point.  But here goes anyway.]

The good people at Minnesota Public Radio (MPR) are keeping state politicians honest, declaring a statement made by GOP candidate for governor Jeff Johnson as “misleading.”

Johnson was touting the results of two recent opinion polls showing incumbent Democrat Gov. Mark Dayton below 50 percent and only single digits ahead of him.

As MPR concedes Johnson correctly quotes the results of the recent polls.  Where he errs, in MPR’s view, is to draw too optimistic a conclusion about where he stands.

In true Pauline Kael fashion MPR has not met anyone on their staff or in their audience that will vote Republican this November.  So, for Johnson to speak optimistically about his chances can only mislead the general electorate.

Besides, MPR pronounced the 2014 race over more than a year and a half ago, months before Johnson even entered the race.  In MPR’s view, for Johnson to keep up his challenge is just wasting everyone’s time.

You would think that local media should root for just the opposite:  a close race means conflict, and conflict draws subscribers, readers, viewers, and listeners.  If you thought that, you thought wrong.

There are two factors at work here.  First, local media believe that Democrat incumbents should not be challenged for re-election.  The people have spoken, once, got the answer correct, and their wishes should be honored as long as the incumbent is willing to serve the grateful people.

Second, with Democrats in complete control of state government, political reporters see elections as a distraction from their real work.  Local political reporters would rather report on the latest progressive initiative awaited by an eager populace.

In elections, Democrats have to waste their time and resources making a case for what local media have already accepted as necessary and urgently needed.  They would prefer to report on the implementation of the progressive vision:  Democrats have already closed the sale.

DEED’s Job Numbers Don’t Add Up

Each month the Minnesota Department of Employment and Economic Development (DEED) issues a press release announcing the number of jobs created in the previous month by the state’s economy.

And each month local media hail the latest figure as further proof (as if it were needed) of the genius of the current Democrat-run state government.

For June, DEED reported that the state gained 8,500 jobs for the month (3,900 created by the government, by the way).  DEED also reported that the state gained 10,700 jobs in the first six months of 2014.

Doing the arithmetic, that total means Minnesota gained 8,500 jobs in June, but a mere 2,200 jobs in the five months of January through May, combined.

Each month DEED also reports on the jobs created in the previous 12 months, for a rolling look at the number of jobs created for a year-long period.  For the 12 months ending June 2014, DEED reports Minnesota created almost 53,800 jobs.  That figure would mean that we’d created 43,100 jobs in the six month of July through December 2013, but a mere 10,700 jobs in the most recent six months.  Rather than suggesting an economic boom, those numbers indicate a real weakness in our state’s economy.

But consider this anomaly:

Reporting		Jobs Gained
Month	Month	YTD	Last 12 Mo.
June	8,500	10,700	53,779
May	10,300	---	45,617
April	(4,200)	---	41,934
March	2,600	---	41,582
February	(100)	---	44,714
January	600	---	52,160
Total	17,700

Adding together the number of jobs created each month in 2014, as reported by DEED, produces a total of 17,700 jobs for the year so far.  So that means that sometime during the last few months, 7,000 jobs have vanished from the official state rolls.

Here’s a prediction:  that 8,500 number for June will be quietly revised downward.  That’s been the pattern of late:  May’s job gain number was revised down from 10,300 to 7,200.  April’s loss of 4,200 jobs was revised down to an even bigger loss of 5,300.  The originally reported March gain of 2,600 jobs was revised down to 1,900 the following month.  DEED marked down the February loss of 100 jobs it originally reported by a further 1,100.

DEED actually revised the January gain of 600 upward by 200 the following month.  For those keeping score at home, we’ve had four consecutive months of downward revisions, with the average monthly downgrade being 1,500 jobs.  That’s where 6,000 of the 7,000 missing jobs have vanished, but 1,000 are still not accounted for.

If we were flipping coins, the odds of four consecutive downward revisions would be 1 chance in 16, or 6.25 percent.  If it were a race horse, I wouldn’t bet it to show.

At the length truth will out.

The Last Public Policy Taboo, Part 3

The Zombie Economy

I’ve never quite understood the appeal of the zombie as entertainment.  [I did like Shaun of the Dead, though].

In Hollywood, vampires are out.  The zombie is in.  For my taste, I prefer the classic movie monsters: Dracula, Frankenstein’s Monster, the Mummy, etc.  They may have sloughed off the mortal coil, but can still summon a display of superhuman strength when the plot calls for it.

Zombies merely shuffle along, in that halting gait, with little more than a vague purpose.  They are devoid of the anima that makes your classic monster so scary.

In the first two parts of this series [Part 1 and Part 2], I develop the hypothesis that populations in Minnesota and the Twin Cities’ region are in the process of declining, rather than poised for the boom that everyone expects to occur over the next few decades.

I’ve wondered why demography is such a taboo subject in today’s politics.  To talk about demographics is to hint that today’s economy—if not the larger society—shuffles along like the original Hollywood zombie:  ambulatory, but without that fighting spirit.  Outside of a handful of locations like Williston, North Dakota, it is becoming tougher to find a sense of urgency out there.

The Last Public Policy Taboo, Part 2

The Challenges Created by Falling Birth Rates

In my first post (Part 1) in this series, I introduce the public policy topic that dare not speak its name: the dilemma caused by falling birth rates. 

Exhibit One:  The Ukraine’s falling birth rates mean that troubled nation is losing people at the rate of 150,000 per year.

The situation in this country is not nearly as dire.  Demographers look at a measure called the fertility rate.  Demographers have calculated that a rate around 2.1 will produce a stable population, over time.  A number below 2.1 is said to be below replacement rate.  For comparison, Ukraine’s fertility rate stands at 1.29.
 

The Last Public Policy Taboo, Part 1

Missing the Point

The last taboo subject in public policy is demographics.  When the talk turns to birth rates, polite company quietly exits the room.  As a result, all too often the thing we think were arguing about is not really the thing we are arguing about.

Unfortunately, and to a large extent, demography is destiny.  The world belongs to those who show up.  Ignoring that fact does not change the outcome, regardless of how uncomfortable we become when discussing the subject.

Ringers

[This post has been updated.  See below.]

An incident occurred this past week that deserves far more scrutiny than it has received so far.

The state’s Obamacare agency, MNsure, held a meeting of its Board of Directors last Wednesday.  As is the Board’s custom, the meeting was to begin with a story from a MNsure “customer.”

The Minnesota Jobs Coalition points out that the week’s success story turns out to be a paid consultant for the state’s Democrat party, Mike Sherman.

As I've documented before, this is not the first time (or the second) the MNsure “success” story turns out to be a partisan ringer.  But this time around, MNsure has dropped Northwoods icons Paul Bunyan and Babe the Blue Ox from its multi-million-dollar ad campaign in favor of testimonials from actual customers.

As I’ve also discussed before, the Board would be in much better shape if it listened to unsuccessful customers.  The disastrous rollout of the Affordable Care Act in Minnesota has gained the state a much-deserved national reputation for mismanagement.

[Updated:  It turns out that Mr. Sherman's insurance story has gone national.  He is featured at Organizing for Action's (OFA) Barack Obama.com site.  The photo used for "Michael" from Minnesota is the same photo Sherman uses as his profile picture on his employer's website and his Twitter profile pic.  The only question remains is "Who Found Mike First, MNsure or OFA?"  For the record, Michael tweeted his OFA-MN appearance on February 11th and his appearance at the MNsure Board meeting was scheduled for February 26.]

Now MNsure seeks to add misrepresentation to mismanagement.  If the Board cannot find success stories from somewhere other than ruling party’s payroll, then MNsure is in worse trouble than anybody believes.  Furthermore, with the hand-selected success stories turning out to be fakes—time after time—then why should we believe anything (enrollment figures, cost data, etc.) put out by MNsure?

Minneapolis Falling Behind on Jobs

Joel Kotkin and his colleagues at New Geography have produced this ranking of the 51 largest metropolitan areas on the ability to attract high wage professional, scientific and technical services jobs.  This is the area where Minneapolis has gone "all in" on the creative class strategy. At this point I think it's fair to say the results are in and they are not good.

The metro area of Minneapolis-St. Paul-Bloomington finished 37th of 51.  It's not just about climate, with sun belt cities Birmingham and Memphis finishing 50th and 51st.

Cities in red states dominate the top of the list, taking 8 of the top 9 spots.  State capitals like No. 1 Austin and, to a lesser extent, No. 5 Salt Lake City can get away with their liberal quirkiness as they are surrounded by overwhelmingly red states--in a way that a Providence (No. 48) or a Hartford (No. 45) cannot.

Kotkin describes what draws some to No. 2 Jacksonville,

"Jerry Mallot, president of the local business development group Jaxusa Partnership, suggests that low costs, a high rate of housing affordability and Florida’s lack of income tax make Jacksonville attractive to companies seeking to expand or relocate."

Joel's rankings prove exactly the point I was making on the Sue Jeffers radio show earlier this month.  In a massive example of cart-horse misplacement, Minneapolis believes that by acquiring the accoutrement of the world-class city--mass transit trains, bike lanes, stadia, museums--we will attract the "creative" class of young, single professionals.  Like some South Pacific cargo cult, we apparently do not understand that it is surplus wealth that produces the trinkets of culture and not the other way around.  It is like thinking that building the Colosseum is what made the Roman Empire great.  Leaders of the Twin Cities region suffer from a lower-grade strain of the "world class city complex" afflicting second-tier cities like Chicago.

Kotkin's rankings reveal a different and more useful path to urban proserity:  create the wealth first and then you get the stuff.  Urban hipsters may love trains and are willing to pay premium prices for access to trendy transit, but they have to have the money first.

No. 10, Portland, OR, is the "evolved" city that Minneapolis most wants to become, as we openly envy the land of Portlandia.

Forbes takes a deeper look, ranking the top 200 cities for business and career prospects.  Of the top 200, Minneapolis ranked a dismal 156th in cost of doing business.  Minneapolis ranks well above No. 197 San Francisco, but well below No. 106 Portland.  In chasing Portland's amenities, Minneapolis cannot give up 50 places on the cost part of the equation.

Minneapolis needs to understand that it's about more than $50,000 water fountains:  the city needs to offer good value, too.

James Buchanan, RIP

We lost a titan this week.  Nobel-prize winning economist James Buchanan died at age 93.  He was one of the founders of Public Choice Theory and taught for a time at my alma mater (alas, before my time).

The Wall Street Journal includes two [1, 2] tributes to the man and his work in today's editorial/opinion pages.

For an explanation of Public Choice Theory in his own words, read Buchanan's Politics Without Romance.  This Buchanan quote sums it up,

"In a very real sense, public choice became a set of theories of governmental failures, as an offset to the theories of market failures that had previously emerged from theoretical welfare economics."

Edison light bulb to become illegal January 1st

According to The Hill.

Updated: Tempest in a Trash Can

[Updated:  As expected, the Maplewood City Council voted to end competition for trash collection in that eastern Minnesota suburban community.  The 4-1 vote capped a contentious meeting.  Chalk it up to a cautionary tale about representatives not listening to voters and the dangers of lame duck legislative sessions.  As least the citizens went down fighting.]

The St. Paul, Minnesota, suburb of Maplewood has all but decided to end competition among garbage haulers in the city and award one company a monopoly franchise.  Somehow the lame-duck City Council has decided that this will somehow save residents money in the long run.

The real driver behind this wholesale silliness is Minnesota's Pollution Control Agency, (PCA) who are convinced that all those competing trucks driving down the street are bad for the environment (diesel fumes) and everything would be so much tidier if only one monopoly provider were at work.  Capitalism often turns out to be a messier business than our enlightened central planners would prefer.  The PCA couldn't sell this policy to the state legislators, so they are taking their 300-page study of how capitalism doesn't work on the road.  The PCA is now trying to convince each city to drop garbage competition.  I'm not sure what state law authorizes a state agency to lobby city by city for its own agenda, but no matter.

As usual, the people are ahead of their leaders.  The Star Tribune quotes one Maplewood resident, Sue Stark,

"They are not saving me any money," said Stark, who pays about $16 a month for service.  "They are taking away my rights."

Sorry Ms. Stark, as usual, your rights were in the way.

Collapse of the Blue Social Model

Bard College Professor Walter Russell Mead writes frequently about the collapse of the "Blue Social Model," the collection of policies and attitudes that form the progressive state.

Most recently Mead writes about a police corruption (ticket-fixing) trial in the Bronx, New York, and how it stands in for the breakdown of big-city, liberal politics.  Mead observes that the following vignette outside the Bronx courthouse, illustrates a great city in crisis,

"Between the good government, pro-minority [New York] Times reporters, the angry crowd of police rallying to protect their privileges and perks against the background of a city facing financial cutbacks, and the crowd of poor benefit seekers waiting in the street, resentful of the privileged police, we see can see the political and social crisis of New York in a single space."

We in "good government" Minnesota think we are immune to this sort of thing.  Think again.  In the Minneapolis Star Tribune appears a report about a pensions issue, with a City pension fund being rolled up into a larger state plan.  This merger of plans means the workers assigned to managing the now-defunct City plan are in line for generous severance benefits.  Writes the Star Tribune,

"The four employees of the soon-to-be-defunct Minneapolis police and fire pension funds will leave their jobs with at least $400,000 in severance benefits, although all four have preference for jobs with a statewide pension plan that's absorbing their organizations."

$400,000 divided by four workers equals $100,000 per worker.  One case study,

"The biggest salary settlement goes to Minneapolis Firefighters' Relief Association executive secretary Wally Schirmer, a retired firefighter already drawing a city pension of more than $41,000 annually.  He was granted about $116,500, or one year's salary."

He's already getting a pension, he continued to work, drawing a six-figure salary, and now gets a six-figure severance.  That doesn't count "continued health insurance and cashouts of their unused sick and vacation time."

What ties the Bronx and Minneapolis together in the belief that there will always be enough money to satisfy the various big city liberal constituencies.  Whether its public employees, benefit seekers, or "good government" media, we have run out of cash to make everyone happy.

Climate Change and Pseudoscience

Dr. Matt Ridley, a British journalist with a Ph.D. in Zoology from Oxford, delivered a great lecture on Halloween on scientific heresy and pseudo-science in the climate change field,

Key paragraph,

"The problem is that you can accept all the basic tenets of greenhouse physics and still conclude that the threat of a dangerously large warming is so improbable as to be negligible, while the threat of real harm from climate-mitigation policies is already so high as to be worrying, that the cure is proving far worse than the disease is ever likely to be.  Or as I put it once, we may be putting a tourniquet round our necks to stop a nosebleed."

It's worth reading the whole thing.  Dr. Ridley does everyone a service by explaining the role that Confirmation Bias plays in the controversy.

Victor Davis Hanson on the System of Liberal Indulgences

And the coming Reformation.

Planning for Disaster

Over at MinnPost, there is a longish piece bemoaning the demise nearly a decade ago of the Minnesota State Planning Agency.  A rare example of a government agency going out of business, then Governor Tim Pawlenty dissolved the agency in 2003, distributing a few remaining bits to other agencies.

Now comes Steven Dornfeld to pine for the former agency, under the premise that "long-range, strategic planning would be an essential function of state government — especially in these troubled economic times."

Perhaps for the first time ever, I am in agreement with State Representative Phyllis Kahn (DFL-Minneapolis), who is quoted saying,

"I don't think it ever produced anything of any intellectual depth.  We were better off looking to the university, the departments and special commissions for planning and policy proposals."

But many of her colleagues believe otherwise.  Over the past few years I have come across several proposals to revive the agency and give it broad powers to plan large swaths of our economy.  Mostly, these calls come from those unhappy with the results produced by markets or just happenstance, preferring a "top down" approach.

Now I am familiar with a few examples where long-term, strategic planning is valuable.  The electric transmission grid is the subject of a series of long-term plans running 10 years and decades further into the future.  But the Grid itself is a great example of why planning as a concept is not helpful.  Sitting today, who can imagine what technological breakthroughs will occur in materials, the "smart grid", shifts in demand, new supply technologies, etc.  Just imagine grid planners thirty years ago trying to plan for the electrical requirements of plug-in hybrid cars or the iPhone, inventions that were years into the future, but both important future drivers of electrical demand.

Multiply that by 5 million times and you get a sense of the problems with state-level planning, even for a mid-sized state like Minnesota.  Economists refer to the "Economic Calculation Problem".  Simply stated, not even the smartest planners, armed with the largest, fastest computers, can collect and manipulate enough data to mimic the workings of a free market with millions of independent actors.  There are just too many variables, and too many interactions between those variables, to get it right.

Instead, in any large-scale planning exercise, you are usually left with the warmed-over conventional wisdom of the present, projected into the future, with any real controversy left out.  Imagine a group of state bureaucrats coming up with something like the Moynihan Report today.  It simply would not happen.
But Planners keep trying.

Our own Minnesota Department of Transportation is accepting comments for the next few weeks on its 50-Year Transportation Plan.  All I know is that by 2061 I'd better have my Jetson's flying car.

Oh My! Germany to Use "Climate Change Money" on New Coal Power

Via Grist, comes this story from Germany.  It seems my German cousins have decided to end nuclear power and are now raiding the "clean energy" piggy bank to pay for new fossil fuel (coal and natural gas) power plants.  How did no one see this coming?

Believing Impossible Things: Green Jobs

In his weekly syndicated column, Mark Steyn takes on the Green Jobs debacle and post-modern lawmaking.

Political Allocation of Capital: Picking Losers and Losers

The news that Green Energy darling Solyndra is filing for bankruptcy should surprise no one.  The political allocation of capital is less and less an exercise in the the government picking winners and losers and more and more an exercise in picking losers and more losers.  In any event, it's a half billion dollars of public money down the drain.

What is surprising is that some believe that it wasn't enough.  From a blog at the San Jose Mercury News comes two local California legislators who are quoted as wishing that the government had done more for this company.  From the blog,

“Although there has been criticism of the amount of public funding received by the company, we must recognize that our fiercest foreign competitors often receive substantially more assistance from their own governments.”

I'm speechless.

Unicorn Ribs and Green Jobs

Deservedly so, Walter Russell Mead is getting a great deal of attention for his recent essay, "Feeding the Masses on Unicorn Ribs."  An excerpt was reprinted in today's paper version of the Wall Street Journal.

Professor Mead makes the important point that it was ok to promote the idea of "green jobs" (employment tied to the clean energy industry), but not to make it the centerpiece of the Administration's jobs program.  As Mead points out (and his title suggests) the whole exercise was another example of believing impossible things,

"The belief that green jobs would drive a new era of American prosperity was — like the large majority of green policy chat — intellectually incoherent.  The goods that drive renewable energy industries, like so much else in this world, are far cheaper to construct in Asia."

Today, in a follow up post on his blog, Mead makes a larger point about green policies,

"Every time anyone points out the flaws (obvious, fatal) in many green policy prescriptions, greens essentially respond that the sky is falling and that their critics hate science.  Partly a cheap rhetorical trick and partly reflecting the degree to which greens are thinking emotionally rather than politically, the habit doesn’t help the greens."

Mead's post mostly discusses the failed Regional Greenhouse Gas Initiative (RGGI) a cap and trade system actually adopted by northeastern and New England states (New Jersey has since dropped out).  This system was the model on which the Midwestern Greenhouse Gas Accord was based.  Thankfully, that effort never went forward.

Unbelieving Impossible Things

I read this column by Victor Davis Hanson as being hopeful.  Perhaps this latest financial crisis will be the one that forces our political elites to stop believing impossible things, specifically, about the sustainability of the modern welfare state.

Not everyone is ready to believe the new truth, Jacob Weisberg at Slate beleives that the unwashed masses are all too stupid to understand the "big ideas" that the big brain elites are thinking.

Meanwhile, Walter Russell Mead continues to identify the service jobs of the future.

Believing Impossible Things

Recent events have remained me of the passage from Lewis Carroll's Through the Looking-Glass involving Alice and the White Queen,

"I can't believe that!" said Alice.

"Can't you?" the Queen said in a pitying tone.  "Try again: draw a long breath, and shut your eyes."

Alice laughed.  "There's no use trying," she said:  "one can't believe impossible things."

"I daresay you haven't had much practice," said the Queen.  "When I was your age, I always did it for half-an-hour a day.  Why, sometimes I've believed as many as six impossible things before breakfast."