Those “Laboratories of Democracy”

A friend from Madison, Wisconsin, often sends me articles from that city’s newspaper. The most recent one had this headline: “As Deficit Looms in Wisconsin, Minnesotans Fight Over How to Spend 1.9 Billion Surplus.”

I’ve written about Wisconsin and Minnesota before. Scott Walker and Mark Dayton were elected at the same time; Walker, as we all know, pursued GOP “austerity” policies–slashing money for state government and education in order to “return” money to taxpayers, while Dayton actually raised taxes and increased funding for education.

As I noted in a previous post,

Minnesota and Wisconsin share common roots: both were settled primarily by German and Northern European immigrants; both states engage heavily in farming; and, until recently, both shared a political culture of populist progressivism. So when their politics diverged (with the election of Republican Scott Walker in Wisconsin and Democrat Mark Dayton in Minnesota), it created a natural experiment.

What happens when you apply dramatically different economic policies in otherwise very similar states?

The Madison newspaper article provides us with an answer to that question.

While Wisconsin’s budget, enacted in July, sets the state up for a $210 million structural deficit, legislators across the Mississippi are arguing over how to spend a $1.9 billion surplus.

Of course, results inconsistent with ideology and/or the desires of campaign donors will be discounted and explained away by the true believers, because we live in a world where “reality” is what the most skillful and unscrupulous propagandists tell us it is….

18 thoughts on “Those “Laboratories of Democracy”

  1. Since when has Mississippi had a $1.9 billion surplus??? And how did it get up there to be across the river from Wisconsin? 😉

  2. Steve Smith, you need to read the quote again.

    “Across the Mississippi”. THE Mississippi.

    The river you are mention is named Mississippi. There is nothing in the quote about the state with that name.

  3. The difference in the outcome to two states with similar demographics and geography truly tells the tale of two states with different ideologies. One of those ideologies is truly bankrupt. Poor cheeseheads. You should have gotten rid of Scott Walker when you had the chance.

  4. It is true that both states are similar. But after closer investigation, one begins to discern subtle differences. Rochester’s high intelligence/wages sways MN. Madison cannot sway WI.

  5. Another result of Walker: A defunding of the UW Madison leading to the exit of leading scientists. Where are some of them going? MN.

  6. I think common ancestral roots have little to do with fiscal outcomes of the various states. For instance, if we compared Wisconsin with Herr Brownback’s territory of Kansas, Wisconsin would look like Jerry Brown’s state of California, perhaps one of our most liberal conclaves (and one that with appropriate taxing, investing and spending has California in the black).

    There is no big mystery in how to have a prosperous state, or a nation. Dayton has shown us how to do it (as FDR and Truman did long ago). You tax the people who can afford to pay, invest (not spend) in education, infrastructure, and in your people rather than spend on tax breaks for corporations and banks and others who least need public spending, all with a Keynesian economic mindset (no austerity plans need apply). Accord: Joseph E. Stiglitz, Nobel Prize-winning economist. Instead of making the economic pie smaller for the rich and devious to divide via political control (austerity), you adopt policies which make the pie bigger with Keynesian principles and then proceed to divide the new income and wealth more equitably with all of your people and the state’s needs (education, public safety, roads, streets, bridges, public buildings etc.). With such new activities, you reap what Dayton has reaped in Minnesota, i.e., good wages and high employment numbers. Who in any state (other than those in the rich and corporate class) can complain of that outcome?

    When you play the Brownback/Walker game of giving away tax money to people who don’t need it while simultaneously poor mouthing the needs of the state and its people with reductions of budgets for education and repair of crumbling infrastructure, and then insist on cutting taxes on the same people who didn’t need the tax cut you gave them in the first place, you are dealing in fantasy, not reality. No budget can withstand such austerity, whose adherents are always telling us that “we can’t afford it” but do nothing to put us in a position to “afford it.” These people need to sit at the knee of Governor Dayton for a tutorial and read some of Lord Keynes’s views of how to beat the rap of economic malaise

  7. Both conservatives and liberals have the same information on and insight onto any state’s economics. Both notice that the economy needs to grow into the obligations that the state agreed to provide to its residents.

    That’s where they part company.

    Conservatives believe that the economy can be grown by robbing the poor and giving to the rich. And as a byproduct the rich give back to the party so the party stays elected. The party megaphones words to the residents to the effect that the poor don’t matter, the rich do, and that by acting like that propaganda is true, magic happens and growth ensues. And if it doesn’t, no matter, because the party has the state’s back.

    Liberals believe that the state belongs to all of its residents equally and the needs of some are different than the needs of others. They believe that when the state promises to do something it is an obligation and there was and probably still is a good reason for it. Also liberals believe that employment in America is the responsibility of the private sector and good business people and capitalism grow companies and jobs and that whichever state has natural attractions to people and companies. For instance infrastructure and education and hard working capable and educated people.

    It was not that long ago that we all were liberals divided into two parties.

  8. I think common ancestral roots have little to do with fiscal outcomes of the various states. For instance, if we compared today’s Wisconsin with Herr Brownback’s territory of Kansas, Wisconsin would look much like Jerry Brown’s State of California, perhaps one of our most liberal enclaves and one that with good management, appropriate taxing, investing and spending has California in the black.

    There is no big mystery in how to have a prosperous state or nation. Dayton in his “laboratory” has shown us how to do it (as FDR and Truman did long ago). You tax the people who can best afford to pay, invest (not spend) in education, infrastructure, and in your people rather than spend on tax breaks for corporations and banks and others who least need public spending, all with a Keynesian economic mindset (no austerity plans need apply). Accord: Joseph E. Stiglitz, Nobel Prize-winning economist. Money invested in education and in public “furniture” pays handsome public dividends both immediately and down the road; money spent on tax cuts for the rich and corporate class goes into a black hole (perhaps in Zurich) and yields little if any pubic benefit. There is no trickle down with tax cuts to the rich; only trickle up.

    Instead of making the economic pie smaller for the rich and devious to divide via political control (austerity), you adopt policies which make the pie bigger with Keynesian principles and then proceed to divide the new income and wealth derived from the economy’s enhanced performance more equitably with all of your people and the state’s needs (education, public safety, roads, streets, bridges, public buildings etc.). With such new activities, you reap what Dayton has reaped in Minnesota, i.e., good wages and high employment numbers, resulting, among other things, in increases in local aggregate demand. Who in any state (other than those of the rich and corporate class) can complain of that outcome whether blue or white collar?

    When you play the Brownback/Walker game of giving away tax money to people who don’t need it while simultaneously poor mouthing the needs of the state and its people with reductions of budgets for education and repair of crumbling infrastructure , and then insist on cutting taxes on the same people who didn’t need the tax cut you gave them in the first place, you are dealing in fantasy. There is no invisible hand beyond the theoretical nor manna from heaven outside the biblical. It’s the “peoples’ capital” you are giving away, Governor(s)! That’s our money, not yours!

    No budget can long withstand such austerity (and largesse to campaign contributors at the same time) whose adherents are always telling us that “we can’t afford it” but do nothing to put us in a position to “afford it,” though I note they seem to find funding for tax cuts for their friends whatever the state of their respective treasuries. These people need to leave their ideologies at home and go sit at the knee of Governor Dayton for an enlightening tutorial after reading some of Lord Keynes’s books and tracts, go back to their offices, become pragmatists, and adopt policies that serve the wants and needs of those who elected them (as well as those who voted for their opponents, since all are entitled to good management of their “capital” irrespective of their voting records).

    So when does trickle down, austerity and other such fantasies end? They end when the people elect pragmatists and not ideologues to manage the policies and finances of the various states and our nation, so let’s ignore the propaganda of the status quo and get on with that project, since, in a reversal of events, we are the ones who “cannot afford” continuation of the current system of giveaways to friends and austerity for the rest of us. So vote your interests.

  9. Sheila and Jerry,

    Many, many thanks. I knew from my first posting with this blog, about six months ago, that it would be the place I would find my answer to defeating Donald Trump and the Tea Party:

    It’s comparing Indianapolis with Jacksonville. “It’s like comparing oranges and rotten to the core oranges.”

    No one in their right mind would ever follow anyone having anything to do with Jacksonville: “The Tea Party Spearhead/Prototype.”

  10. We’ll see next year who defines America in this era, the takers or the makers. As usually what happens here will spread globally.

    The takers don’t believe we, or the world for that matter, have a future, so it’s time to harvest what we’ve been bequeathed and hope to die before the results hit the fan.

    The makers look forward to a robust future certainly not the same as but actually better than the past. Breathable air, global collaboration, freedom for all, enough of the necessities of life for everyone including food, water, energy, education, good health, and government stability.

    Makers dream, takers take, then run for cover forever afraid.

    The dark ages of the takers are on the wain, the brightness of enlightenment is on the horizon.

  11. Thanks for the in depth analysis of two “similar” states. It is amazing how smart people such as participate in this group can reduce the analysis ofthe complex economies in two states to a single number. Of course it would be helpful it the assumptions were accurate. According to the Wisconsin state website, there is about a $2 million surplus during this current cycle. It looks like rumors of deficits come from Trump rather than a more reliable source. BTW, how can it be that the fat cats were the only beneficiary of tax refunds in Wisconsin when those refunds were in the form of property tax relief?

  12. My piece did not discuss any surplus for Wisconsin and the two million dollar surplus cited in their current account, which is at best an accounting rounding error and nowhere near the 1.6 billion dollar surplus enjoyed by their neighbor across the Mississippi in any event. My chief purpose is writing this piece is to point out that pragmatism trumps (and that’s a verb) ideology when assessing policy.

  13. Wisconsin may have been prudent to retain some of the 1/2 billion tax refund but scrambling to spend an extra 2 billion does not seem to be the right thing to do either?

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