Convenient truths?

Liberals know so much that isn’t true.

Yogi Berra, the New York Yankee catcher and sometime social analyst, once said that “you can observe a whole lot just by watching.” Here in Minnesota, we’ve been keenly “watching” our job creators, business leaders and wealthy retirees leave the state to escape our high income tax, estate tax and regulatory burdens. Where are they going? No surprise here: to low tax states! Just ask any financial planner, accountant, or trust attorney. They’ll tell you that the Dayton Administration’s record tax increase in 2012 prompted throngs of clients to leave the state permanently.

Not satisfied to make policy recommendations based only on Yogi-esque anecdotes (even when we know they’re true), American Experiment’s Peter Nelson used publicly available IRS data to verify this phenomenon in his study, Minnesotans on the Move, which appeared in the last edition of Thinking Minnesota. He showed that approximately $1 billion had left the state in 2014 alone.

Liberals in St. Paul and the Star Tribune responded with predictably ferocious attacks on Peter’s work, relying heavily on anecdotes and casual observations, but never challenging Peter’s underlying facts.

The Star Tribune featured a screaming front-page headline announcing that despite the fact that Minnesota is a high tax state, nobody was moving out of state in any significant numbers due to high taxes, without citing any government data to dispute our conclusion. In addition, Minnesota Revenue Commissioner Cynthia Bauerly wrote a half-hearted rebuttal that was light on facts and big on anecdotes. In spite of evidence, why is it that so many so called smart elected officials and bureaucrats in St. Paul and in the media continue to believe in things that simply aren’t true?

There are other examples. Earlier this summer, the Center hosted a luncheon in which the American Enterprise Institute’s Peter Wallison used a mountain of evidence to show how the financial “reforms” in Dodd-Frank make it increasingly difficult for middle class borrowers to gain access to capital, whether for home or business (page 19). Any community banker will readily tell you that Dodd-Frank may be great for big business and Wall Street, but this legislation is freezing marginal borrowers out of the capital markets. Yet liberal policy makers ignore the crippling effects of Dodd-Frank and are now proposing more regulations tomake it even more difficult for Main Street to secure loans to grow their businesses.

It all illustrates the closed loop echo chamber of our political system, in which liberal policy makers and government bureaucrats conspire to perpetuate an ever-deeper morass of rules and guidelines. If regulations are deemed to “work,” they immediately double down on more regulations to make them “even better.” If they don’t work, such as Dodd-Frank, they declare the need to create more regulations to “fix” them. (Obamacare come to mind?) It’s never ending. Tell me when a bureaucrat has ever said, “Oops, that regulation didn’t work. Let’s eliminate it.”

Also in this issue, John Hinderaker, our president, interviews renowned conservative author and academic Steve Hayward. The Center has contracted with Steve to write three papers yet this year pertaining to Minnesota regulations. He’ll start with mining, then turn to so-called green energy policies, and end with agriculture.

On September 8th, the Center will host a debate on the minimum wage as contemplated by the Minneapolis City Council. We’ll see whether increasing the minimum wage to $15 per hour (whether well intentioned or politically expedient), will result in the unintended consequence of pricing more young or unskilled workers out of the market.

You get the picture. The nagging question still remains: why do so many so called smart people in government know so much that simply isn’t true? Our mission at the Center is to aggressively use policy papers, town hall meetings, op-eds, and public forums to argue against these hurtful policies that make it harder and harder for the middle class, low income wage earners and minorities to get ahead economically and improve their lives.