Doctor Frankenstein, Meet Your Monster

Several weeks ago, the right wing Center of the American Experiment (CAE) observed that Minnesota’s economic performance over the course of the 21st century has been “mediocre” and touted a forthcoming report that would stimulate debate over “the extent to which Minnesota’s blue-state policies are eroding the state’s historic economic strength.” Our five-part series, which concludes with today’s article, has shown that Minnesota’s “mediocre” performance during the 21st century cannot be plausibly attributed to progressive policies. In fact, the timing of Minnesota’s sub-par economic performance during the 21st century more closely aligns with conservative dominance of state fiscal policy.

Our series began by noting the difficulty of discerning the impact of fiscal policy on a state’s economic performance, in light of numerous other forces that impact the economy, many of which are far more potent then state taxing and spending decisions. As noted in that article, these forces “generally swamp the impact of state fiscal policy choices; winnowing out the impact of fiscal policy amidst the impact of other more powerful forces can be nigh onto impossible.” In the absence of a demonstrable cause-and-effect relationship, Minnesotans should be wary of ideologically driven assertions attributing a particular economic outcome to a particular policy or set of policies.

Attribution of Minnesota’s lackluster economic performance since 2000 to “blue-state polices” has an even more fundamental problem in that conservative fiscal policies have dominated for the vast majority of the 21st century.

  • Part one of this series demonstrated the success of conservative policies in shrinking the state’s public sector, as Minnesota’s real state and local government spending declined at one of the fastest rates in the nation from 2000 to 2013.
  • Part two found that annual wages in Minnesota grew below the national average from 2000 to 2013, when conservative policies dominated the state fiscal agenda, but above the national average since 2013.
  • Part three found that job growth in Minnesota was below the national average under both conservative and progressive policies; Minnesota’s below average job growth since 2000 is explicable in terms of labor market factors unrelated to state fiscal policy.
  • Part four revealed that Minnesota GDP growth was slightly below the national average under conservative policies and slightly above under progressive policies.

To note that Minnesota’s economy performed better relative to the national average under progressive policies than under conservative policies should not be construed as proof that progressive policies were the reason for the superior outcomes. Correlation does not equal causation—and proof of causation is beyond the scope of this analysis. Furthermore, many of the new policies enacted in 2013—including establishment of all-day kindergarten and restored outlays for K-12 and higher education—are long-term investments and should not be expected to produce dramatic results within a span of two or three years.

The information in this series does not prove the success of progressive fiscal policies, but it is sufficient to disprove two popular right wing mantras: first, that the 2013 tax act would ruin Minnesota’s economy, and second, that Minnesota’s mediocre performance during the 21st century is the fault of “blue-state” policies. The fact that the state’s economic performance has improved—albeit modestly—since progressive policies were enacted relative to the preceding thirteen years of conservative policies is sufficient to belie both claims.

This is not the first time that conservatives have incorrectly blamed progressive policies for outcomes that occurred while conservatives were running the state’s fiscal show. For example, a March CAE report attributed “net income migration” out of Minnesota to state tax policy. The report failed to actually measure income migration at all, and to the extent that alleged income migration did happen, it occurred primarily during years when conservative tax policies were dominating Minnesota’s fiscal agenda. As noted in March 2016 North Star article,

“The ideological blinders with which the CAE report was written prevent the authors from exploring the extent to which conservative fiscal strategies contributed to the outcomes they decry.”

Progressives should not be held responsible for disappointing outcomes that occurred while conservatives were running Minnesota fiscal policy. When right wing interest groups insist on attributing mediocre economic outcomes since 2000 to state fiscal policy, they must accept responsibility for these outcomes, since their policies dominated for the vast majority of the century. Doctor Frankenstein, meet your monster.