Friday, November 20, 2009

Local responsibility for taxes reduces spending 

Property taxes would increase an average of 3.5 percent across Minnesota next year if local governments adopt their proposed levies, the state Revenue Department announced Thursday.

That would be less than the 5.6 percent increase in average property taxes this year and the average 6.9 percent increase over the past three years.

"City councils are very well aware of how poor the economy is and are doing everything they can to keep the levies down," said League of Minnesota Cities lobbyist Gary Carlson.

By law, cities and counties could have increased their property tax levies by the full amount that Gov. Tim Pawlenty cut their state aid. But counties appear to be levying for just 40 percent to 50 percent of their lost state funding, said Jim Mulder, executive director of the Association of Minnesota Counties.

The state cut aid to cities by $130 million over the past two years. Cities have levied $95 million in property taxes to replace those funds and absorbed $35 million in cuts, Carlson said.
Source. The cap of property taxes was a bone of contention between DFL legislative leaders and Pawlenty, after Pawlenty cut intergovernmental aids. Giving local control of taxes seems to have reduced spending, rather than have the burden of some paid for by the taxes of others.

Notable: Minneapolis property taxes are scheduled to rise almost 12%, highest in the state. Will any DFLer make this an issue in Mayor Rybak's run for governor?

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Friday, October 02, 2009

The governor made me do it! 

For many years my parents paid for my meals. By the time I was 30, they decided they didn't have to do this anymore. I could afford to buy my own dinners.

While I was holding up a pedestrian on the street, the victim asked me why I was doing this. "Well, it's my parents' fault. They stopped buying my dinner. They had always done it, and now just because one of them is out of work and I turned 30, they stopped. What ingrates."

Of course the above story is farce, unless you're the Hennepin County Board of Commissioners.

County Administrator Richard Johnson presented a $1.6 billion budget Tuesday to the county board for next year, down about 6 percent from this year's $1.71 billion.

But even after cutting 163 jobs and reducing capital improvements, the county still needs to raise property taxes by 3 percent solely to pay increased costs at Hennepin County Medical Center, Johnson said.

Those higher costs were caused by the state's cancellation of General Medical Assistance for poor adults, he said.

Hearing that, county commissioners began their budget deliberations by blasting Gov. Tim Pawlenty again for shifting the state's budget problems to them. The county estimates that 40 percent of the state's poor adults who were covered by General Medical Assistance live in Hennepin County.

The tax increase is required "just because the governor cut the legs out'' from under thousands of low-income adults who depended on General Medical Assistance, Commissioner Gail Dorfman said.

So rather than have property owners in Hennepin County pay for the poor in Hennepin County, the people in the entire state of Minnesota should pay for the poor in Hennepin County? The county had already planned to raise taxes. Commissioner Jeff Johnson writes about the negotiations earlier this month.
I�ve heard a lot of talk the past few weeks about the needs of county government, the needs of HCMC and the needs of those who receive government benefits. I�ve heard much less talk about the needs of the taxpayers who fund county government, HCMC and the government programs that provide those benefits. I�m hopeful as we move forward toward a final levy decision in December we place a little more emphasis on the well-being of Hennepin County taxpayers.
But it's not their fault, Jeff! It's the mean parent in the governor's mansion done made them do it! When you decide it's the right of one person to live at the expense of another, it's little surprise that you make a villain of those that do not.

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Thursday, April 02, 2009

Sizzle and steak 

As one might expect in days of creeping corporatism, the interest in economic freedom is growing among economic policy thinkers. You have a great opportunity to get a little more education on this on April 14th, noon at the Minneapolis Hilton, from a talk by Lawrence McQuillan of the Pacific Research Institute. Titled "The Sizzle of Economic Freedom", McQuillan argues that �along with extolling the virtue of liberty, conservatives should be selling the everyday benefits of economic freedom. � He will highlight the results of PRI's U.S. Economic Freedom Index and how Minnesota compares. I used that index a few years back when Minnesota was 44th. I'm not sure if we got better or other states got worse, but the new index puts Minnesota at 26th. Not good, not even average (we have expectations to be better than average here in Lake Wobegon County, donchaknow!), but perhaps in all the Sturm und Drang of this legislative season, a way in which we can say ideas on liberty are making inroads in this state. I'm sure Dr. McQuillan will hit on these points. Classroom duties will keep me away, but I hope you'll attend.

UPDATE: John LaPlante published a few weeks ago on the Mercatus Center's alternative ranking of the states. Minnesota did far worse in that index. How can these things flip around so much? Read my book.

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Thursday, September 18, 2008

Behold! I am trying socialism! Again! 

Our friends at ISAIAH are once again trying to inject religion in politics. But you never hear the media complain about this kind of injection.
We believe that it is time to create an agenda that truly responds to the challenges of our generation � global climate change, endemic racism, crumbling public infrastructure, schools failing to educate large portions of our children and increasing economic insecurity.

Our current politics are not sufficient to respond to these profound challenges. We must eliminate racial inequities in our state, chart a course for environmental renewal, revitalize our economy for the benefit of all, and transform our government and public institutions to enable a democracy fit for a challenging future.

Every generation must decide what legacy they will leave. We are making our decision.
Would you mind just leaving me alone?
To create our health and the health of our democracy, major societal change is necessary.

We will move our democracy and public institutions to:
Guess not.
  • Create Racial and Economic Equity with Reparation for Past Harms
  • Expand and Protect that Which Must Belong to All of Us
  • Pool our Collective Resources into Public Investments for the Common Good
  • Create Deep Democratic Participation in All Aspects of Our Common Lives
  • Ensure that �Citizenship� Extends to All Stakeholders in Our Democracy.
This breathtaking list calls for nothing less than the collectivization of the means of production and the end of a country's ability to define its own citizenry, its own borders.
We must also act to Transform Our Own Hearts:
  • We Must Know Who We Are
  • We Must Reckon With Our Past
  • We Must Know We Are Called
  • We Must Act As If We Believe It
We know who you are, you haven't reckoned with your own past, nobody called you, and I'm sure you believe you are doing the right thing. But ignorance of history is no excuse.
ISAIAH will pursue Racial and Economic Equity in:
  • Health and Health Care
  • Job Creation and Transportation Equity
  • Comprehensive Immigration Reform
  • Education and Housing
  • Environmental Renewal
It is remarkable, I think, that from such lofty ideals ISAIAH ends up with an "issues agenda" that just happens to mimic the DFL. Do we think this is entirely coincidental? Hardly. These are, after all, the people who transformed their hearts with $6.6 billion of your money.

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Wednesday, August 20, 2008

Minneapolis housing market woes 

The Twin Cities real estate market continues to be flooded with "lender-mediated" sales. Here's the report. Lowlights from the press release:
The mix of traditional and lender-mediated has changed so much that the net price decline overall has fallen 11.9% over the last two years. Over that same period, traditional home sales have fallen more than 43%, while foreclosures and short sales have risen by a factor of more than five.

Data on the right (from Calculated Risk) shows that the overbuilding of 2004-06 has yet to be worked out nationally. The same appears to be true for the Twin Cities.

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Monday, August 11, 2008

Go ahead, prove me wrong 

Minneapolis city councilor Gary Schiff: liar:
The Minneapolis City Council is considering a resolution that would require passengers to pay a $1 surcharge per cab ride during the Sept. 1-4 Republican National Convention. A subcommittee will vote on it Wednesday. Final approval rests with the full council and Mayor R.T. Rybak.

City Council member Gary Schiff, the measure�s author, said he�s not worried about irritating visitors to the Twin Cities by targeting them for fare increases. �Republicans will be very generous and heavy tippers,� he predicted.

Schiff said he wanted to tailor a fare surcharge so that most Twin Cities residents would not be affected. �I�m targeting it to a time when most city residents won�t have to pay it,� Schiff said.

He suggested most residents won�t be taking cabs that week because it will be �next to impossible� to grab one during the convention because taxis will be so busy shuttling visitors around the city for convention parties and events.

Minneapolis and St. Paul are trying to cash in on the GOP convention in ways beyond cab fares. They are also selling licenses to bar owners who want to extend their hours of operation during the convention. Only a handful of bars have so far applied for the licenses, possibly because of their $2,500 cost, according to a report in the Minneapolis Star Tribune.

While the Twin Cities are seen as a liberal enclave, Schiff said he wasn�t deliberately trying to target Republicans with the fare increase. If Democrats were holding their convention in the Twin Cities, he would have raised the same resolution, he said. �Or if it was Alcoholics Anonymous or the real estate leaders of America,� he said.
Here is the schedule for the Minneapolis Convention Center for the next three months. The American Diabetes Association is having an expo on October 11th. Tax it! Show me one of those events you would tax. Target Center?

And if it's about there not being enough cabs for the locals, didn't you just allow more cabs to enter the marketplace? How about making that market truly free? You were against exploitation when it was done by the government cab monopoly your predecessors created, but not when it's a chance to line the government's purse?

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Monday, May 19, 2008

Real estate on sale! 33% off! 

Via Mitch, the other side of a housing down-cycle:
This month more than 2,600 houses were on the market at less than $120,000 -- a 608 percent increase over the same period in 2005, according to the Minneapolis Area Association of Realtors. The inventory for all price ranges increased 62 percent over 2005.

The return of the starter house is the upside of the down housing market. And buyers are taking notice.

Now this may not mean the end of the housing slump is near, or that cutting prices is a good thing. But the overhang in housing inventory has to be worked through somehow, and with starts declining relative to sales, stories like this one might be the first sign of how we are working through the housing bubble.

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Tuesday, May 06, 2008

One in four home sales in Mpls market in Q1 "lender-mediated" 

The Minneapolis Board of Realtors put out today a report on the number of sales they estimate have been either foreclosures or "short sales". It is partially an attempt to get people to understand that the market for traditional sales -- where the owner is selling the house and the bank is a passive party -- has not fallen in prices nearly as fast as suggested in the aggregated data.
Not surprisingly, lender-mediated homes have seen a substantial increase in total market share over the last 24 months. The percent of total new residential listings in the Twin Cities 13-county region that are flagged as foreclosures or short sales using our methodology has shown steady growth, rising from 2.9 percent in Q1 2006 to 7.1 percent in Q1 2007 and 21.7 percent in Q1 2008.

...The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years, with only 19,675 in Q1 of this year compared to 27,116 in Q1 of 2006. So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory.

The market share picture is similar for home sales, with foreclosures and short sales comprising a larger portion of overall sales than they have before. In Q1 2008, 27.6 percent of total residential closed sales were mediated by a financial institution, up substantially from the first quarter of the two years prior. And the number of traditional closed sales fell from 8,896 in Q1 2006 to 4,790 in Q1 2008, while the number of bank mediated sales increased from 324 to 1,828 for the same time period comparison.
So people putting homes on the market has fallen, but the number of homes put up by traditional sellers and which sold fell by much, much more. 1828 houses either through foreclosure or through short sales has a very depressing effect on homeowners "holding steady" in their homes. They may be holding, but they're not steady.

More of the short-sale and foreclosed homes are lower-price homes, so if the rate of those homes being put into the market accelerates, the report is right to point out, that makes the value of houses look like it's falling faster than it is. But there may be many more homes out there with people not able to sell, not able to make their payments, and not able to get out of the game. Even if traditional sale prices have only fallen 3.5% over the last two years, that still means a lot of homes with mortgages repricing this year are about to be in big trouble.

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Tuesday, February 26, 2008

An argument worth having 

My own representative, Larry Haws, is quoted in the local paper (not online, and my copy is at home so I'll do this from memory) saying he voted for the transit tax bill and its override based on thinking the gas tax was a better way of getting that money than getting it from grandma through property or income taxes. Again, not exactly those words, but that was the gist of what he was saying. And that's an argument worth having, a basis for voting that I can respect because that's the real choice that was made yesterday. I disagree with it vigorously, though.

I received a prepared email assailing yesterday's vote sent to a group of individuals mostly living in the Twin Cities directed against DFL Sen. Linda Berglin. I'm not sure how I ended up on this list, but it contains a number of prominent private citizens who I know to be conservative. One such individual sent back a message.

I agree that our overall tax structure is too high, but we need the roads and we need money to fund them.

I never thought that I'd support anything that Linda Berglin supported, but here it is. Thank you Linda.
I believe the description of my reaction would be 'gobsmacked', if you were British. I am admittedly one to respond to people who write things to me that leave me in such a state, and this was no exception.

I notice your address is in Minneapolis. I live in St. Cloud. Approximately 13,000 St. Cloud residents (out of the 105,000 workers in our area) drive outside our metro area to work each day, and most of those drive to some place in the seven-county metro. It�s about a 75-mile one-way trip. Assuming they get the average fuel efficiency of American cars, your �need� just cost my friends an extra $172 just to commute to work and back. They�d buy a more fuel-efficient car, but your �need� just hit them with an extra $200 for their tabs.

So as you enjoy the new roads and bridges you �need� � which will be not many, since a big chunk of this money will go for the half-empty trains you�ll watch while waiting at a crossing (but you�ll be waiting on new roads! O joy!) � thank a St. Cloud resident.
Using our benefit principle discussion from yesterday, I assume you to say that the commuters are paying for roads they benefit from so are properly charged. But the point is that all taxation and expenditure involves a reallocation, and the extra $172 is not going to improve I-94 or US 10. It's not going to be used to build a connector in Clearwater between those two highways. Rep. Haws chose to have his own residents who work outside of St. Cloud, who are likely to be wage earners with families, bear a larger burden instead of grandmothers. Even if we accept the premise of our interlocutor, that we "need" roads and bridges and even if we assume that we actually will get roads and bridges and not just more transit projects, what makes Grandma more deserving of protection from government taxation than the family trying to better themselves, provide for their children, and producing goods and services people want to buy?

As the old saying goes, those who rob Peter to pay Paul can always count on Paul�s support. If you're Grandma, Rep. Haws is your hero. If you're a worker commuting from St. Cloud to Hennepin County, or from Randall to Waite Park to work in our manufacturing plants, Rep. Haws decided you are Peter.

Here's Peter's friend
. I don't know if he would tax Grandma more; he might just decide to make some real budget choices.

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Wednesday, January 02, 2008

Dude, the colors did me in 

Speed Gibson uses colors to illustrate a very flawed analysis in yesterday's StarTribune. Learn the codes and follow along if you like through a maze of tax increases and decreases that indicate its author knows exactly how the economy should be structured and by gum he'll change relative prices to make it so. A couple of quick points:

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Friday, December 21, 2007

Fare deal at last 

The case of Minneapolis taxi cab licenses (previously reported here) has now been dismissed by a judge, making it possible for free entry into the Minneapolis cab market. The Institute for Justice is doing a bang-up job for economic liberty and has brought the immigrant groups that sought entry into the cab market a nice Christmas gift.

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Wednesday, December 19, 2007

Psst, wanna ride a train? 

What should be the price of a ride on a public train? One of the things we know from basic microeconomics is that some element of price discrimination -- getting more from the inelastic demand riders and then offering a lower price from those with more elastic demand -- should result in more riders. If the purpose of LRT is to get cars off the street, finding ways to separate those groups and charge different prices will help.

Craig Westover and I exchanged some email about this a few weeks ago, and he now has an op-ed in which he tries to use a two-tier pricing mechanism to generate a proper price for transit and in the meantime provide a market for trading riding rights that could be income support for those with lower incomes. It's an intriguing idea. You cannot expand it too much, of course, because one problem with LRT will be congestion -- if the train is too crowded, you drive both the low price and high price riders off it. But I don't see the problem as being insurmountable.

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Tuesday, December 18, 2007


Milton Friedman divides spending in four categories. You can spend your money on yourself, you can spend your money on others, you can spend other people's money (OPM) on yourself, or you can spend OPM on other people. "And if I spend somebody else�s money on somebody else, I�m not concerned about how much it is, and I�m not concerned about what I get."

I think he would argue this is because I pay a fairly small share of it, my vote on whether or not to spend it is unlikely to be decisive, but investing resources in it is.

I suspect this might explain why no bigger hullabaloo is made over the item Lileks has found in the Minneapolis budget. That Mayor R.T. Rybak thinks it should be using OPM on making loans that banks could easily make (a violation of the yellow pages test) is bad enough. I might understand the desire to use money to take property owned by the city and make loans to help get it rehabilitated and back in use productively. Maybe. But the thought that the City of Minneapolis should offer itself as an alternative to Islamic banking boggles the mind. I fail to see how any court would uphold a unit of government in the United States making any loan to an entity on the basis of a religious test as passing muster of the separation of church and state, and that Rybak could not even SEE this as a problem is utterly amazing.

There are private market alternatives already in place for this, so even if you restricted your search of the yellow pages to interest-free loans, you have choices.

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Tuesday, October 30, 2007

A win for economic liberty in Minneapolis 

We spoke in August on the Final Word with Lee McGrath and Scott Bullock of the Institute for Justice about their case defending a Minneapolis City Council decision to end the use of entry restrictions into the Minneapolis taxi market. The case was in court because existing members of the taxi cartel argued that changing the regulation and removing the restriction was a regulatory taking. IJ reports that they have won a ruling from the magistrate.
Can an entrenched cartel of Minneapolis taxi drivers violate the civil rights of entrepreneurs and consumers?

No, according to U.S. Magistrate Judge Franklin L. Noel. In an opinion released today, the judge recommended that a lawsuit brought by members of the taxi cartel to overturn the city�s free-market reforms be dismissed.

In his opinion, Judge Noel determined: �The [established] taxi vehicle license holders do not have a constitutionally protected freedom from competition.�

Taxicab regulation has long been seen by economists as an entry barrier protecting cab cartels. Here and in Canada, such regulations make it difficult for the poor who want to travel to places inconvenient by bus. (Here's a survey of the literature.) In St. Cloud, one of the most frequently cited problems for people with modest or low incomes is the lack of public transportation; yet we have had a system that has prevented immigrants from even holding a license. While St. Cloud has a pretty good bus system, there are still places of work that would be difficult for the car-less to get to regularly. ("I used to walk to work, in the winter, in the snow, uphill, both ways." Yeah, I hear you.) If cabs were to operate freely in the city, could workers find better jobs off the bus routes, get their children to child care more easily, and get to cheaper grocery stores for food? It might be worth the effort.

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My neighbor the farmer 

If you live in the Twin Cities, look around you. One of your neighbors might be getting money from agricultural subsidies. Over a billion dollars in an eighteen month period. While there have been repeated attempts to limit farm subsidy payments to only those who are actively participating in farming, the article claims some are getting checks merely for participating in a conference call once a year.

There's a new farm bill working its way through Congress right now, and fixing this problem is not on the agenda. If someone would like to wear the mantle of fiscal conservative -- let's say you, Rep. Bachmann -- how about a proposal to stop this silliness?

H/T: Mark J. Perry, who has a map of where the money goes.

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Wednesday, October 24, 2007

The bundles intertwined 

I was reading Phil Miller's excellent essay on McMansions in Edina and saw that he used the "bundle of rights" approach pioneered by Armen Alchian. Here's an essay by Anthony de Jasay on that point. de Jasay makes a useful point on the nature of rights versus freedoms.

A freedom is a relation between one person and a set of acts. The person is presumed to be free to perform any act in the set that does not breach the rules against torts (offences against person and property) and (a less stringent requirement) the rules of civility. A substantial obstruction of freedom (e.g., gagging or threatening to hit a person to stop him from speaking freely) is a tort or an incivility. As such, it is wrong. To say that a person has a "right to a freedom" is tantamount to saying that he has a right not to be wronged�a redundant and silly proposition. It also implies that he would not have this freedom if he had not somehow obtained a right to it�an implication that is at the source of much false theorizing. You do not need a right to move if your moves stay within the rules�this indeed is what it means to have rules.

In contrast to a freedom, a right is a relation between two persons, the right-holder and the obligor, and an act the obligor must perform at the rightholder's bidding. A right may be created by contract in which the obligor, in exchange for a consideration, surrenders his freedom to perform (or forbear from performing) some set of acts as he pleases, and agrees to perform (or forbear from performing) it as required by the rightholder. Here, both parties enter voluntarily into the right/obligation relation. However, a right may also be created by some authority, such as the government acting on behalf of "society", conferring it upon rightholders and imposing the corresponding obligation on obligors of its own choosing.
There is no right that I see for the homeowner to build, as the building contract is between the owner and the construction company, and to a lesser extent between the owner and the zoning authority. Whether or not someone is free to build a McMansion is, however, a matter where civility does play a role. Suppose St. Cloud did not have a noise ordinance, and you were to play Iron Maiden very, very loud at 3am. You may claim you have a right to do so because the government has not enjoined you from it, and courts might declare your behavior not to be a nuisance (I hear you could get a good ruling about Iron Maiden from Justice Foot) but you do not have the freedom to do so without consequences. It is, among the non-Iron Maiden-loving crowd, uncivil.

I agree with Phil that it's troubling that positional goods are a call for government action which turns the question of freedom into a set of rights (as de Jasay's last sentence discusses.) P.J. O'Rourke's idea of the rules of governance as "keep your hands to yourself, and mind your own business" appeal to me, but a government by the people means the people have to accept those rules first. In the town of Edina, it appears they do not.

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Monday, August 27, 2007

Minneapolis taxi case goes to trial 

Oral arguments are expected this week in the lawsuit of the existing taxi owner/operators in Minneapolis against the city's desire to remove limits on the number of cab licenses in the city. The demand for cabs is currently expressed by a price of $25,000 per license that Luis Paucar faced when he wanted to operate fifteen licenses in the city. George Will explained in May:

As a byproduct of government intervention, a secondary market arose in which government-conferred benefits were traded by the cartel. In 2006, Minneapolis had only one cab for every 1,000 residents (compared to three times as many in St. Louis and Boston), which was especially punishing to the poor who lack cars.

That fact -- and Paucar's determination and, eventually, litigiousness; he is a real American -- helped persuade the City Council members, liberals all (12 members of the Democratic Farmer-Labor Party, one member of the Green Party), to vote to allow 45 new cabs per year until 2010, at which point the cap will disappear. In response, the cartel is asking a federal court to say the cartel's constitutional rights have been violated. It says the cap -- a barrier to entry into the taxi business -- constituted an entitlement to profits that now are being "taken" by government action.

The Institute for Justice has joined with Paucar and blind Minneapolis resident Blanca Prescott (who pays more for cab services as a result of the cartel) as a third party of interest in the lawsuit to argue for the city's right to remove its own regulation and free the market. It would be a perversion of the Fifth Amendment to use the compensation clause as an argument for making government pay to deregulate.

Such regulations have long been known to kill jobs in a community, as John Fund notes in the WSJ today. The hair braiders story (also picked up by IJ in 2005) is just one example of this. But it's also important to see the other side of the story: the consumers who are denied services because they cannot contract freely with people like Luis Paucar who want to give it. IJ explains how she comes to this lawsuit:

On June 7, 2005, hours before her daughter�s graduation from Head Start, she telephoned Luis Paucar�s company, A New Star, and scheduled a multi-stop trip, involving travel to the local K-Mart and then on to her daughter�s ceremony. A New Star�s driver waited in the parking lot for his blind passenger.

But while the driver was assisting Blanca back into his car for the second leg of the trip, he was cited for operating a taxi in Minneapolis without a government-approved license. The Minneapolis police officer ordered Blanca out of the car, had the vehicle towed and left her in the parking lot to fend for herself. It was 5:30 p.m. and her daughter�s graduation was at 6:30 p.m. No other taxis were in the vicinity, and Blanca eventually arrived late to her daughter�s graduation.
We anticipate having Lee McGrath or Scott Bullock from IJ on The Final Word next weekend to tell us how oral arguments went and how the case might proceed. While we normally would rail against liberals on the show, let's stand in fulsome praise of the Minneapolis City Council's action to remove this barrier to public transportation among the poor of that city.

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Monday, August 13, 2007

Preserve this quote 

We hoped all along the governor would be willing to compromise and we're glad to see he's willing to be flexible and move Minnesota forward. Hopefully, (a special session) would be about jobs and infrastructure, including transportation, bonding and Local Government Aid.
Senator Tarryl "No Entertainment Radio" Clark, from the St. Cloud Times, page 5A. This somehow was not on their website when I looked for it, so I wanted to be sure we preserved it for when the accusations of Republicans playing political games come.

cff., the Mee Moua Stratagem.

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Wednesday, August 08, 2007

A thought about taxing for the bridge 

After the initial emotional reaction of some Republicans to increase the gas tax to pay for the bridge, it appears some have come back to reason.
I just got off of the phone with Gary Gross, who incidentally just got off of the horn with State Representative Steve Gottwalt. Gross stated, when asked about the probability of a special session, Mr. Gottwalt replied, "God, I hope not!"

There appears to be a substantial number of Republican lawmakers who are seeing the call for raising the state gas tax to be what it is-- an opportunistic ploy by DFL lawmakers to ramrod a political agenda by exploiting a tragedy that had absolutely nothing to do with either the presence of or absence of a tax increase. While they certainly see the need to prioritize and ensure the safety of bridges and other infrastructure, they are likewise acknowledging that the answer lies not in an additional burden on Minnesota taxpayers, but rather on a good, old-fashioned prioritization of allocation of resources.
The DFL has already made clear that once brought to a special session they will not limit their actions to funding the bridge. Senator Tarryl Clark was cited in the Saturday paper as arguing that a special session would include restoration of local government aid. Relevance to the bridge = 0. Captain Ed and others have spent time looking at where the transportation dollars are spent; it's disheartening to see that the tragedy is used by both our U.S. Senators to call for expedited monies to go to Northstar, which would not be ready before the bridge is replaced according to current estimates. All around, behavior towards this has been opportunistic.

Here's another example of this, from Saint Paulicy:
SPicy has learned that last week, as part of the 4th Annual Tom Bakk Golf Scramble, there was a "caucus-like" meeting of elected DFL'ers. One of the issues apparently on the clubhouse table was the probable special session and what should be on the agenda.

...SPicy has been told that as legislators discussed the special session, State Senator Mee Moua found it time to make a dramatic announcement. If Saint Paul does not get $18 million � the full amount that was originally in the formula for the city � than Saint Paul does not want a special session.
So you want these people to come back? I'm with Rep. Gottwalt: God, I hope not.

Here's a thought: Do we not keep a reserve in this state? Why yes, yes we do. A billion dollars, in fact. What is the purpose of a reserve, if not to be used to meet unexpected expenses? If you're not going to use a rainy day fund for a bridge collapse, why have it? Pay for it from reserves, and then let the next Legislature replenish the money from the entire budget, not just from a gas tax. Pawlenty can do this without resort to a special session.

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Friday, August 03, 2007

How people can help 

Michael has been posting some information at the end of each post since Wednesday night with information on how to help with the victims of the Minneapolis Bridge tragedy. Here's some information (poststamped to stay top for the day.)

Minneapolis Red Cross - donate blood and money
* Web site:
* Donate blood: 1-800-448-3543
* Donate money: 612-460-3700

United Way (2-1-1)
The United Way has an established protocol for handling donations. They work with state and local officials by consolidating offers of emergency assistance and making them known to responders. Contact United Way's 211 hotline for donations. Just dial 2-1-1 or 651-291-0211. (Full disclosure: I am a board member of the United Way of Central Minnesota.)

Minneapolis Red Cross has established a Family Assistance Center at the Holiday-Inn Metrodome, 1500 Washington Ave., Minneapolis, MN 55454

We'll talk more about this tomorrow on The Final Word at 3pm on AM 1280 the Patriot, and I will guest host for Tony Garcia on The Tony Garcia Show on 1450 KNSI Sunday at 1pm. (Links go to sites where streaming audio is available.) More about the bridge tragedy as infomrmation develops, otherwise, we'll see you Monday.

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River traffic 

I am listening to last night's Hugh Hewitt podcast (note to Duane: I'm still Billy Preston when he announces NARN!) and noting Rep. Michele Bachmann's discussion of river traffic and the importance of the river to economic commerce here. The Reuters report reminds us that most of the grain that would move through that area is still in the field and so it will be a few months before it moves down the Mississippi River to market. I'm looking at corn, soybean and wheat futures contract charts and while prices have risen somewhat, it doesn't appear to have had that large an impact. (Check also the Minneapolis Grain Exchange figures.) From what I can see, taconite shipping is over the Great Lakes rather than down the Mississippi.

How much traffic is that? According to this article from the Minnesota Dept. of Transportation (scroll down to the place where the discussion of draining of the St. Anthony lock begins), 1.5 million tons of commodities are shipped through there (as of 2005) "including grain, gravel, coal, steel, cement and rock salt."

Plans by the city of Minneapolis to convert part of its port for parkland, housing and other uses, Lambert said, will have an effect on river shipping and other transportation modes as well.

He said, for example, that grain that was once delivered to the Minneapolis port by rail now goes to the port at Savage on the Minnesota River for shipment downriver on the Mississippi.
This data on shipping on the waterway suggests much less now, little more than a million tons, compared to over five million from St. Paul and three more from Savage (on the Minnesota River, which enters the Mississippi below the bridge.) The impact here will be felt, but it's not as big as one might have thought from that discussion. The lack of movement on grains and metal prices is indicative of that.

For further research: More on shipping in Minnesota. A directory of river terminals.

UPDATE: William Polley notes there are only three terminals upstream of the St. Anthony locks, and they do not have any grain, so the effects should be de minimus.

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How soon would we have been ready? At what cost? 

As the blame game continues, I got to thinking about time to build. Roughly how long would it take to have rebuilt the bridge that fell, assuming that Governor Pawlenty had somehow been able to gaze into a crystal ball and foreseen the black swan?

I use black swan in the Taleb-ian sense. Unlike Matt's otherwise very sensible post, I don't think trying to figure out why the bridge fell is going to somehow improve policy. I make this point repeatedly to students -- you can sometimes do everything right and get a bad outcome due to randomness. Black swans are simply outliers -- they are things that just happen that cannot be expected within the realm of our experience. I think that until investigation concludes, you should reserve the possibility that the bridge collapse is a black swan event. (Or perhaps a gray swan, for those who've read Taleb.)

Begin with the observation that no bridge can ever be perfectly safe. Rational allocation of scarce resources must involve marginal analysis: We allocate the money to make transportation safe up to the point where the marginal benefit of investing the dollar in project A is equal to that of project B is equal to that of project C, etc. And we invest only an amount where the increase of safety is worth the expense of providing it. I don't wait for the car 300 feet away that I judge to be traveling about 30 mph to pass before crossing the road; experience teaches that I can cross that road without incident. 99.999% of the time, it will be the case; every time I have done so before I have arrived to the other side safely. That doesn't mean the car will never hit me, just that the chance that it will is vanishingly small so that I do not allow it to disturb the decision that I'd rather be on the other side of the street now.

So it is with the I-35W bridge: We knew it was "structurally deficient", just like 73,533 other bridges in America. Repairing them takes a generation, we are told, and costs $188 billion. But, as Peter Gordon points out in another context, all applied economic analysis comes to ten words: At what cost? Compared to what? How do we know? We are told this is the cost, but what else can you do with the money? Would it have come out of light rail? Would it have come out of the DNR budget? Schools?

And the time consideration is vital. The argument over whether we could have prevented this particular event means either the Pawlenty administration would have been willing to impose the costs of detoured traffic on the possibility that this particular bridge would fail. It would have required you to build out over some period of time, probably longer than two years. What is the value of all the time that drivers in the Twin Cities would have lost? And that would have been certainly lost, compared to the possibility of failure. So the state made a decision, with full knowledge, knowing that "sometimes Things Fall Down" but investing the dollars into other, more likely or more beneficial projects. All scarce resources have to be allocated somehow. If you don't want to allocate based on marginal cost equals marginal benefit, tell us what your decision rule is.

Had the Pawlenty administration actually foreseen this black swan, it would have had to argue that this was the one to pay attention to, and damn all the other structurally deficient bridges in the state. Or it would have had to add billions more in taxes, plus all the detours of traffic, to repair all the deficient bridges; otherwise, it must prioritize and leave some other deficient bridges out there. Certainly the road construction firms would have been delighted, but they're the glaziers in the broken window fallacy.

Short of a report from the tragedy that says the engineers missed a flaw in the bridge, we will be left with a report that this was something that just happened, a random event, a black swan. (And not necessarily the only one; recall the Schoharie Bridge failure on the New York Thruway in 1987 after a "50-year flood".) And while engineers can determine whether something could be done to make bridges safer, I can give you the answer: There always is something more. But it's not free, and we don't know if it's worth it. That's a question for markets.

ADDENDUM: As one might have expected, the told-you-sos are now out. Engineers, again, are not paid to decide whether to invest in this project or that, just to tell you what it costs to get a certain result. Engineers never tell you "compared to what?" But engineers make great copy for an article, or witnesses for a legislative investigation. Neither journalists nor legislators will answer the compared-to-what question for you, either.

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Thursday, June 28, 2007

Let's make it 500 

Bad press is better than no press, says Evan Coyne Maloney, director of Indoctrinate U.
Most of the [New York Times review] was spent addressing cases that weren�t in the film, rather than addressing what was in the film. The author also claims that �professors, administrators and students say the national picture is far more complicated than that pictured in �Indoctrinate U,�� although I don�t know how they could know that, because none of those people actually saw the film.
Off the IU website you will see that Minneapolis is currently second on the list of people who have signed up to see the movie, with 248 people. That doesn't include, I'd guess, folks like me up in St. Cloud. But, I want to have Minneapolis be number one. So, if you are a Minneapolis-based reader and you want to see this movie -- and after listening to this Final Word interview with him, you will -- click and sign up. Then we can watch it and give it a real review.

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Wednesday, May 02, 2007

A Bunker with a View 

Last evening my husband and I went to the world-renowned Guthrie Theater newly located on the Mississippi River in downtown Minneapolis. After exiting the parking ramp at ground level one crosses the street, outdoors, to the Guthrie theater entrance. The lobby reminds one of an enormous cave with its dark walls, dark blue glass, and subtle lighting.

To reach the theaters, people ride a totally enclosed escalator, dimly lit, to the fourth floor. Emerging from this tunnel, one sees wide spaces with chairs, bars, and bunker-like windows. Everything is dark: black chairs, dark carpet, black ceiling, etc. The only noticeable light components are the brushed steel counters for beverages and the information desk.

At intermission we walked around the entire theater portion of the building - dark, dull, depressing. There is a lit fabric wall of red: not an uplifting red, but rather a German Cabaret red from the 1930's. Though the views are impressive, looking at the river through mostly bunker-like windows is eerie.

The visibly bright spot is the theater. The Guthrie stage has maintained its intimacy with its audience. Comfortable, inviting seats in warm, melon/orange/autumn gold colors welcome each to the theater arena.

The performance of The Merchant of Venice was terrific! However, this current focus on the trendy, hip, Manhattan architectural style of darkness, glass and metal results in a cold, antiseptic, unfriendly atmosphere in the rest of the building, including what could have been a spectacular restaurant, Cue. The interior environment was depressing; there was no "buzz." I prefer entertainment in an uplifting venue. I will take the Ordway Theater in St. Paul, with its inviting architecture and warm ambiance any day of the week.


Friday, March 23, 2007

Let's eat 

Minneapolis Star-Tribune editorial: Pawlenty took office in 2003 determined to starve the state beast.

Minnesota general fund spending increase, 2006-07 biennium: 11.9%. (5.6% in 2004-05 when the budget deficit was over $4 billion.)

Fastest growing expenditures:
That's some kind of starving there, boy. I hate to think what would happen to my waistline if I went on that diet.

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Friday, March 16, 2007

24 no more 

No, not the show. Despite Kouba's rants, he and I still both watch faithfully. No, I meant 24 no more at the StarTribune, taking voluntary buyouts. Heard this from a friend in the parking lot yesterday, but also confirmed by Drew Emmer.
Those accepting the buyouts include: Judy Arginteanu, Bill Arthur, Steve Aschburner, Mike Carroll, Bob Franklin, Gretchen Gramenz, Doug Halliday, Jeremy Iggers, Jocelina Joiner, Tom Jones, Jim Landberg, Bob Lutsey, Ron Meador, Richard Parker, Darlene Prois, John Reinan, Pam Schmid, Al Sicherman, David Silk, Derek Simmons, Tom Simon, Dane Smith, Brad Stokman and Margaret Zack.
Dane Smith will be missed. Al Sicherman not so much.

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Tuesday, February 06, 2007

Red Sox travels 

As part of Black History Month, a story today about Pumpsie Green, the answer to the trivia question "Who was the last African-American player to be the first on his major league baseball team?" All he wanted to do was to play for the Oakland Oaks in the Pacific Coast League, which in the 1950s was considered by many players a good substitute for the major leagues. Joe DiMaggio and Ted Williams had been PCLers. But just as they were purchased, so was Green.

The call to play in Oakland never came. During the 1955 season, Green was having a terrific year when he was called into the manager's office. The news was a bit of a surprise -- The Boston Red Sox had purchased Green's contract and wanted him to finish the season in their farm system.

There was only one catch. Boston wanted him to head to their club in Montgomery, Alabama. It doesn't take a history professor to know that heading to Alabama in 1955, eight years after Robinson joined the Dodgers and just one after the landmark Brown vs. Board of Education Supreme Court case forced the integration of schools, was not a move most African-Americans wanted to make.

"I don't think there was a black man in America who wanted to go to Montgomery, Alabama in 1955," Green said in Herbert F. Crehan's Red Sox Heroes of Yesteryear.

He eventually was a Minneapolis Miller in 1958 and 1959. He had played well in spring training in 1959 but was sent down to the minors, perhaps because his manager, Pinky Higgins, wasn't ready to integrate the Sox. But after hitting .320 in the first half of the season and being named to the American Association All-Star team, he was called up. His minor league manager? Gene Mauch. And he might not be the most famous 2b on that team in 1959: Roy Smalley was also on the squad.

P.S. If you've never read Stew Thornley's essay on the Millers vs. The Havana Sugar Kings in the 1959 Junior World Series, you must.

Public Service Announcement: Pitchers and catchers report in ten days.

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