I recently speculated whether Seattle should be considered the worst-governed city in the country.
Though there’s lots of competition for that honor from places like San Francisco, Detroit, New York City, and Chicago. And John Stossel makes a compelling case for Minneapolis in this new video.
As I’ve previously noted, statist policies are never a good idea, but they’re especially foolish when adopted by local or state governments.
Why? Because it’s relatively easy for productive people to escape bad policy by moving across borders.
And that happens. A lot.
Yet the folks in Minnesota – at least if the anti-capitalism comments in the video are any indication – must not care whether the geese with the golden eggs fly away.
To learn more, let’s take a look at the Washington Post story referenced in the Stossel video.
Authored by Tracy Jan, it looks at all the big-government policies imposed by local and state government.
The Twin Cities…and…progressive policies… Taxes, for decades, have been redistributed from wealthy suburbs to poorer communities to combat inequality — an effort bolstered in recent years by raising state income taxes on the rich. The result: more money for schools, affordable housing and social services in lower-income neighborhoods. …Minnesota’s progressive reputation was cemented nearly five decades ago… Gov. Wendell Anderson…worked with the Republican-controlled legislature to pass…a redistributive tax policy introduced in 1971 that required wealthy communities in the Twin Cities region to share their commercial property tax revenue with the poorest areas. Income and sales tax revenue from rich suburbs across the state also was shared with less-affluent cities and rural communities to fund schools, police and housing. …It would be the beginning of a suite of policies that over subsequent decades increased investments in housing, schools and small businesses in disadvantaged communities. …more state aid poured into poor communities in 2013, when then-Gov. Mark Dayton raised taxes on the wealthiest Minnesotans. The Democrat…campaigned to “Tax the Rich!” — saying everyone should pay their “fair share” to keep society “functional.” The income tax rate, already fairly high for top income earners compared with other states, increased from 7.85 percent to 9.85 percent for individuals making more than $150,000.
I fully agree with Stossel that the story’s headline is hopelessly biased, though that’s usually the fault of editors rather than reporters.
But let’s set that aside and focus on the details in the report.
What conclusions are warranted? The reporter can’t resist making a silly assertion that growth isn’t part of the solution (she’s obviously not familiar with Census Bureau data).
Those enduring disparities…highlight the flawed premise…that economic prosperity is a remedy for racial inequality.
Though she does acknowledge that the mess in Minneapolis poses a challenge for the left’s argument that big government is the answer.
…progressive policies ha[ve] not translated into economic equality. Instead, the wealth gap between Minneapolis’s largely white population and the city’s black residents has deepened, producing some of the nation’s widest racial disparities in income, employment and homeownership. …The shortcomings have given rise to an urgent debate about where Minneapolis went wrong and what measures would bring better results. …The typical black family in the Twin Cities earned $39,851 in 2017, lower than the median income for African Americans nationally… A quarter of black households lived in poverty, five times the poverty rate for white households. …the outcome for black residents in Minneapolis and St. Paul…undercuts the liberal argument that spending on progressive policies can create systemic change. …Black residents…are worse off today by some measures than they were 20 and 30 years ago, even as the fortunes of their white counterparts held steady or improved, according to census data. …Despite a slew of programs to help first-time home buyers, only a quarter of black residents in the Twin Cities own their homes…much lower than the national black homeownership rate of 42 percent.
I’ll make four points in response to this story.
First, there is no substitute for growth, and – as Stossel observed in the video, but as Ms. Tan doesn’t seem to appreciate – we shouldn’t care if some groups get rich faster than other groups.
Second, stronger growth not only explains why average living standards in the United States are higher than in other nations, but also why the average low-income person in America does better than the average middle class person in many other countries.
Third, the only effective and successful way to achieve long-run growth is with free markets and small government, but Minnesota doesn’t fare well in rankings of economic liberty (see here, here, and here) and Minneapolis scores poorly when cities are ranked.
Fourth, the redistribution programs from both local and state governments doubtlessly have trapped many poor residents in dependency, especially since there are high implicit marginal tax rates if they seek self-sufficiency and financial independence.
The bottom line is that Minneapolis has poor governance, as does the entire state of Minnesota, but the politicians will have to try harder to achieve worst-in-nation status.
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] guest on) John Stossel’s TV show, and I’m now a big fan of his videos (see here, here, here, here, here, here, and […]
[…] is from the great article “Minneapolis vs. Capitalism” by Dan […]
[…] let’s not overlook Minneapolis. I wrote two months ago about that city’s hostility to capitalism, but the problems go well beyond run-of-the-mill […]
Dan- pone point you missed here is the amount of paperwork and bureaucracy necessary to make this system work. It means that to abide by their new rules, one would have to hire additional people to just take care of the government burden. This is in addition to the additional bureaucrats the government hires to enforce their new administrative requirements. And of course those bureaucrats would make even more money by fining those who do not comply.
Explain to me how ANYTHING can be cheaper and better when you have to pay a whole new group of people from the profits just to satisfy a paperwork load.
The problem is not “the schools”. The problem is “dropouts”. The inner city problem in America is cultural, and until we are willing to take that on headlong the decline will continue.
Reblogged this on Boudica BPI Weblog.
BTW Europe has similar dynamics with its Muslim sub class.
You can’t fix socialism or stupidity with money. There is plenty of corruption in the Dem apparatus and so the money is not used wisely but politically. Unions burn through most of this money, as David Craig in California shows us every week.
Minneapolis and Minnesota suffer the same problem common across America.
Most people can’t be bothered to vote in local/state elections.
Thus, small activist (usually left) groups can control the outcomes.
Additionally, those who do vote tend to reflexively vote Democrat.
So, the people who couldn’t be bothered or just automatically vote Democrat are paying the price, for which I have ZERO sympathy.
Life’s tough, it’s tougher when you’re stupid.
About 20 years ago, I attended a meeting of the Downtown Minneapolis Rotary Club, at which the Minneapolis superintendent of schools was the guest speaker. She said her top priority was lowering the dropout rate, which was then around 50 percent. The rate has since dropped, but is still around 33 percent. Almost every one of those lost students faces a life of limited opportunities. The acceptance of thousands of dropouts is a primary cause for the low income level among Twin City minorities. Until the schools are fixed and education is given more respect, the unacceptable disparities in income will continue.
Growth is hard with a poorly educated populous. Minnesota is horrible at educating black students. The only responses to poor school outcomes that the progressives ever seem to turn to are to dumb down the schools more, ask even less of students, allow more chaos and disruptions in classrooms and schools, and make the curriculum more useless at every turn.
In the aftermath of the so-called Civil War, the African chattel were promised 40 acres and a mule by the US government, the victors of that war. The land of the losing slaveholders was to be divvied up. That was the proper solution.
The same federal government reneged on that promise. Stan Deaton, of the Georgia Historical Society, points out that after Lincoln’s assassination, President Andrew Johnson reversed Sherman’s order, giving the land back to its former Confederate owners.
There remains a claim outstanding on that land and until that claim is satisfied, there will continue to be strife and conflict.
The money they raked in from all the taxes *didn’t* benefit minorities. It funded schools and their bloated administrations, social service agencies, and host of other stuff, including lots of chic non-profits. All run by rich, white liberals who enjoy being visible “helping” minorities. Redirecting money from the police just provides a new stream of cash to fund more of such “help.” This isn’t a mistake. The system is working exactly the way it was designed to work.
Reblogged this on Freedom Is Just Another Word….
There will always be group disparities. It is unavoidable (as per Thomas Sowell). But if groups won’t let go of decade or century old wrongs and keep rehashing them at every opportunity and at every imagined wrong… how can we ever have racial peace?
Che Guevara always said you judge the effectiveness of a socialist revolution by how many people flee.
The economic hardship caused by Marxism is not a bug, it is the main feature.