Last fall, I wrote about
the strange case of Minnesota governor Mark Dayton, a left-wing
billionaire heir to the Target fortune who came to power and reversed
his Republican predecessors’ Reagonomic idiocy, instead raising taxes on
rich people, increasing public spending, and creating shared prosperity
for the people of Minnesota.
The results of the experiment continue to surprise and delight:
unemployment is down to 3.7%, private sector earnings are up 1.5% to
$891/week, 47,000 new jobs were added to the economy in the past year,
and the state just declared a $1.8B budget surplus, even as Forbes ranked it 9th in its table of best states for business.
But this is all the more remarkable when compared the fate of the
Republican-run, austerity-fuelled neighboring states, where a succession
of GOP governors and state houses have slashed taxes on business and
the wealthy, eliminated social spending, and attacked trade unionism.
They are running deficits, the people there are earning less
than their Minnesotan cousins, they’re adding fewer (and worse) jobs,
and posting less growth.
Economics is bedeviled by confounding factors: comparing the outcome of
the same intervention in two states will always be complicated by the
other differences in between them. But as controlled experiments go, you
could hardly ask for a better one than the outcomes in Kansas and
Winsconsin – the homes of the “American carnage” that Trump weaponized
in 2016 – and the ones in Minnesota over the same period. If that’s not
enough, we can just compare Minnesota under Dayton to the former
Republican governor Tim Pawlenty, who slashed services, cut taxes, and
drove the Minnesota economy off a cliff, from whose depths Dayton has
now comprehensively rescued it.
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