Latest Posts





Minnesota, Land of 10,000 Lakes and One Shrimp Farm?

Shrimp-Prawn Northern-pandalus_borealis_swMinnesota has lots of water, but all of it is fresh. Shrimp live in salt water, of which Minnesota has none. So the state has never been associated with shrimp, or shrimp production. Until now. As Tom Steward noted a couple of weeks ago, legislation is wending its way through Minnesota’s House and Senate that would subsidize shrimp production facilities in the state. The subsidy would be 69 cents per pound of shrimp; in addition, shrimp production facilities would be exempt from sales and use taxes.

It’s no secret what is going on: a businessman near Marshall wants to grow shrimp, and he has persuaded his local legislators to try to obtain government funding for his project. There are several things wrong with this picture:

1) Hundreds or thousands of small businesses are starting up across Minnesota. Why should the state single out one of them, at the expense of the others, for millions of dollars in subsidies? Best case, it’s unfair. Worst case, other businesses conclude they are missing out and besiege the legislature for subsidies for their projects.

2) It seems unlikely that shrimp production in Minnesota is a good idea. Minnesota has zero natural advantages in that business; anyone could put up a building, anywhere in the country, and do the same thing. So it seems probable that the shrimp farm will experience the same fate as Hibbing’s chopsticks factory, which survived for two years at a cost of $3 million in taxpayer dollars.

Vacant chopsticks factory

Vacant chopsticks factory

3) But perhaps that is wrong. Maybe growing shrimp in Minnesota is a great idea. If so, the owners should do what other small businessmen do: either find investors, or get a bank loan. The problem, of course, is that investors want a piece of the action, and banks expect to be repaid. Taxpayer dollars are ideal: if the project fails, the taxpayers bear the loss.

4) Note that the sponsors of the shrimp subsidy bill in both the House and the Senate are Republicans. This illustrates an important point: Electing Republicans is not the same thing as electing conservatives, and a Republican legislature does not guarantee sound fiscal policy. Republicans, like Democrats, are often tempted to try to advance local business interests at the expense of the rest of the state. The only cure for foolish subsidies–whether we are talking about a small shrimp business or a vastly worse boondoggle like Southwest Light Rail Transit–is sound conservative principles.

Yesterday, I recorded our Monday three-minute segment with the Rookie on KSTP radio on the subject of the shrimp subsidy. It is pretty entertaining, I think:





Upcoming Events

  • Morning in Minnesota: St. Cloud

    Location: St. Cloud

    Sign up HERE! Courtyard by Marriott St. Cloud 404 West Saint Germain Street St. Cloud, MN, 56301 Please join Center of the American Experiment on Tuesday, July 21 for breakfast with Center policy fellow and education expert Catrin Wigfall as she explains K-12 education in the state and its persistent disparities despite decades of increased spending. Following her presentation, Catrin will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude   Catrin Wigfall is a Policy Fellow at Center of the American Experiment. She is also the director of EducatedTeachersMN and EmployeeFreedomMN. Catrin’s…

    Register Now
  • Kristi Noem: The Courage to Reject a Shutdown

    Location: Online

    Sign up HERE! Join us Wednesday, July 8th for an interview with South Dakota Governor Kristi Noem over Zoom. In response to COVID-19, Noem defied the norm of a statewide shutdown and let South Dakotans choose for themselves what safety precautions to take. Tune in to this live online event to hear how Governor Noem preserved her state’s economy while still keeping citizens safe. Wednesday, July 8th at Noon CT Sign up HERE!  

    Register Now
  • Morning in Minnesota: Marshall

    Location: Marshall Golf Club

      Sign up for this event HERE! Please join Center of the American Experiment on Thursday, July 16 at Marshall Golf Club for a breakfast with Center economist, John Phelan, as he discusses Minnesota’s economic future. Following his presentation, John will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude John Phelan is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He…

    Register Now