The Minnesota DFL Meltdown: Why it matters, why it is overdue, why it is mostly good

The meltdown of the Minnesota DFL was entirely predictable.  It is  also overdue and mostly good.  The roots of  this implosion  can be located in its failure till now to address significant changes in Minnesota, ranging from structural forces in the state to demographic ones.  But simply the cause is that the DFL failed to gradually reform, forcing an abrupt crisis that is happening now, at a most critical if inopportune time.
The DFL implosion parallels one found with the national Democratic party.  Nationally the Democrats are facing their failures to rebuild the lost New Deal coalition that linked labor unions, working class, and people of color.  Unions are all best decimated and will meet their final fate in a few weeks when the Supreme Court kills them off in Janus v. AFSCME, in part because when given the chance, Obama and the Democrats took them for granted and did nothing to change the law to help them modernize.  Democrats long ago abandoned working class when they became a corporate party chasing Wall Street and rich donors while ignoring the growing gap between the rich and poor in America. Now a new generation expresses disdain for these Reagan and now Trump Democrats, seeing them as ignorant, racists who are not worth courting.  And while yes Democrats still appeal to people of color for votes, how much they really deliver for them versus take their vote for granted is a matter of serious debate.
The crisis of the national Democratic party is one lacking a compelling narrative, it is one  of having a one-size-fits-all campaign strategy well suited to run in urban settings but largely ineffective in rural and often suburban areas.  It is a party facing an existential crisis as the aging Baby Boomers and soon Gen Xers  exit politics and it is unable to talk an agenda relevant  to Millennials and soon Gen Z.  It is a party whose divide and problems surfaced in the 2016 clash between Clinton and Sanders, where many Democrats stayed home because they could not stand to vote for another neo-liberal.  It is a party whose problems are summed up by saying that their rationale or narrative in 2016 was that “We are not Trump,” and who may, if they are lucky, this year, squeak out a victory in 2018 on running against something and not for something.  This is the problem of the national Democrats.  Trump is only the latest external threat to the Democrats, both externally and internally.
The Minnesota DFL faces similar challenges.  It is a party still living in the past, assuming  that the political landscape of the state is the same as it was 20, 30, or 40 years ago when the DFL  was the majority party.  The statistics fail to show that.  It is a Blue state gone Purple and maybe headed Red.  It is a state where the party still pays homage to fallen and past party leaders and lives in their shadow.  Yes Humphrey, Wellstone, McCarthy, and Mondale were great figures, but they represent a different political area.  The Minnesota DFL is an insular party where its one-size-fits-all campaign strategy has reduced its political base to a few  urban cores and no more than maybe 10 or so counties.  It is a party occupied by an ideology of Baby Boomers and some Gen Xers, and it is a party with a leadership looking backwards and not to the future.  It is a party facing an existential crisis.
Political scientist Walter Dean Burnham wrote in his  Critical Elections and the Mainsprings of American Politics that every 30 or 40 years American politics and parties are characterized by a critical realignment.  Driven by economic or political crises, American history  demonstrates the need for parties and political to change, forcing changes in party labels, coalitions, and alignments.  For too long too Democrats nationally and the DFL in Minnesota have needed to  critically realign.  Changes in the economy and political changes, driven by racial and generational  demographics, necessitate the DFL to change.  This is what is happening now.
The DFL change began five years ago in Minneapolis with Betsy Hodges.  It was a DFL without the F and L.  Hodges had an opportunity to ride the wave of change but she was simply too inept to manage it.  Jacob Frey and Melvin Carter are a second wave of the change, how they respond is too soon to tell.  Now what has happened over the last few days is another sign of a party torn in lots of directions.  Murphy, Walz, and Swanson at the gubernatorial level represent three wings of the party, three ideologies, and three strategies on how to campaign in the state and forge winning coalitions.  The divide played out at the DFL convention with the fight over the attorney general nomination and subsequent filings for the office, and it plays out in replacing Keith Ellison. 
Much of this is destructive.  Many of the candidates running appear to be in it for themselves and not for the party of state.  Many seem to lack the experience or qualifications for the job, and many in choosing to run seem to have conceded that the State House of Representatives is a lost cause and are abandoning it for higher office.  All of this is unfortunate, coming at a time when control for so  many institutions and levers of powers in Minnesota are at stake. 
But much of this behavior is also understandable.  It comes at a time when the party has sat on reform and change for too many years and where new leaders are demanding that the party reflect  their generation’s interests and needs.  Short term it is not clear how well the DFL navigates  this meltdown, longer term it is too soon to tell the results.   But this meltdown matters, it is overdue, and maybe mostly good.

How the Minnesota DFL Lost Their Narrative

    One can already see the Minnesota Republican political narrative for 2016 and it is not pretty for the Democrats.  Simply put the narrative is that the DFL is out of touch with middle class Minnesota, they are the party of gridlock, and GOP will defend the middle class and stop the bickering.  How did all this happen?
    The strength of the DFL narrative in 2010 and even though most of the 2013-14 session was its defense of the middle and working class.  They had a great narrative: an increased minimum wage, tax increases on the wealthy and cuts for the middle class, more money for K-12, and the Women’s Economic Security Act.  This is a terrific “We are on your side message.”  But somewhere along the way to the 2014 elections the Minnesota DFL lost their message and the battle for images and symbols.  Spending on a new state senate office building did not help and the messaging on taxes and spending fell flat, costing the DFL the House in 2014.
     Now the DFL are in trouble.  Dayton’s push for commissioners’ pay raises was simply politically dumb.  After years where most Americans if not Minnesotans have not seen pay increases, arguing for commissioners’ raises when they already make two to three times the median family income in Minnesota was not smart.  Nor were defenses of it by some DFL commentators that these individuals deserved raises or else government would not be able to recruit or hold talented administrators.  It sounded greedy...like private sector business CEOs who whine they do not make enough.
    But then it got worse.  The Dayton-Bakk fight did not look good.  It painted a party as dysfunctional, undermining another narrative that the DFL had for the last two years–they delivered on their promises.  And then the deal to address the raises was brokered by Kurt Daubt–the GOP Speaker of the House.  His intervention sets up a narrative that the DFL cannot govern alone and that what is needed is unified Republican control of the legislature.  Moreover the deal he did broker did not take the pay raises off the table–it merely postponed them until later this year–even closer to the 2016 elections.
    And then this past week the State Auditor sharply criticized the mismanagement of MNSure.  Yes it has insured many more Minnesotans yet its managed was flawed and it needs to be fixed.
    Finally, while no one doubts we need to spend billions more on infrastructure and that the Republican proposal to spend the non-existent surplus on roads and bridges is an insufficient smoke and mirrors idea, the DFL have not messaged their proposed tax increases well.
    So think about 2016 and the issues Republicans will use.
    The Senate office building will be nearly done, standing as a monument to government excess; pay raises for commissioners while the middle class struggle; tax increases for infrastructure; health care mismanagement; and possibly a feuding DFL that cannot work together.  Together they paint a picture of Democrats as out of touch with middle class Minnesotans and as a party that potentially cannot get anything done (aided by Republicans who now have an incentive to drive the state into a budget impasse or shut down again and then blame it on the DFL).  This is a 2016 Minnesota replay of what the national Republicans did in 2014 when the ran against Obama and the Senate Democrats.
    What is perplexing is how the DFL lost control of its narrative again.  In the larger scheme of things they are probably do way more to help middle class Minnesota than the Republicans are, but they are simply terrible at messaging and one wonders if they can improve their ability to communicate and understand how these issues play beyond their metro base.

What if we gave an election and nobody came?

Well, literally not nobody came, instead, as Woody Allen once said, 90% of life is just showing up and that is what the Republicans did on Tuesday when they routed to a major sweep across the country.
    First, consider nationally, only 33.3% of the voters showed up.  This compares to 41% in 2010, and it is by far the lowest turnout going back to the early 1980s.  Two-thirds of Americans stayed home, including young voters and people of color.  These are core Democrat voters critical to Obama’s coalition yet they had better things to do than vote.  Even in Minnesota, a state priding itself on the highest voter turnout in the nation, only 50.2% of the voters showed up, down from 55% in 2010, and 60% in 2006.  Despite all the money and resources spent by the national Democrats and the DFL on GOTV, their base did not turnout.  One might speculate what would have happened if they did.  Perhaps the national GOP blowout would not have occurred and many of the close races would have tipped the other way.  Perhaps the Minnesota House of Representatives would not have flipped with the loss of 11 DFL seats.  Who knows, the results might have been different.
    It would be too easy to blame the low turnout on restrictive voting laws.  Maybe in some states that was an issue, but it does not explain places like Minnesota.  Moreover, there were some states such as Wisconsin which actually had higher turnout than four years ago.  No, the laws were not the sources of voter discontent.  What was?
    The first was that there was no constructive defining narrative in 2014.  Republicans ran against Obama and Democrats away from him.  Republicans told us what they would not do Democrats failed to explain what they did and why they deserve two more years.  This was a repeated on the dueling non-narratives of 2010.  Republicans had enough of a message to get their base out, Democrats did not.  Democrats had a failure of nerve, a failure to articulate why they had made the lives of many people better.  They can point to many successes, but too they failed.  Obama really has failed on many scores. 
    Yes Republicans did scuttle many of his efforts, but the President never pushed far and bold enough.  Too small a stimulus, too meek health care reform, waiting too late to tackle the environment, money in politics, or serious education reform.  He gives a good speech but the reforms he pushed were never grand enough to make the types of differences that needed to be made.  We all hoped Obama would be a transformative president, he turned out barely to be a transactional one.  Thus, in part the reason why Democrats stayed home was a combination of disillusionment, disappointment, and simply a failure of the president move the country in a direction far enough for people to see a major difference in their life now or in the future.
    Going forward, what does all this mean? The election results did little to change national politics.  For the last two if not four years power has been gridlocked in Washington, and that is certainly not going to change with the new Congress.  Obama was already a lame duck before the election and he was  destined to lose influence no matter what the results.  Tuesday’s returns simply accelerate the shrinkage of his presidency.  The last four years have been marked by repeated but failed efforts to repeal the Affordable Care Act, inaction on immigration and global warming, short term stopgap budget issues, and stalemates on minimum wage and a host of other issues.  Don’t expect to see that change in the next two years.  New congressional majorities do not necessarily mean that the House and Senate will act more responsibly and that its leadership and Obama will reach agreement by necessity.  What needs to be understood is that there is a basic philosophical difference over the role of government here, with little electoral incentive to compromise.  This is the core to understanding  the 2014 elections.
    The Pew Research Center has argued correctly that what has emerged in American politics is a two tract election cycle.  We have a presidential election cycle marked by turnouts in the mid 50s where women, the young, and people of color turn out, or at least vote in percentages greater than in midterm elections.  These are presidential election years that favor Democrats, in theory.  But the midterm elections produce significantly lower turnouts, with older, whiter, and more male electorates.  In each of these election cycles a different mixture of congressional, state, and local seats are up for election too.  The result is that different electorates create contrasting majorities and results.  Effectively we have dual majorities rule in the United States, each checking one another. With right now the midterm majorities driving American politics.
    Democrats are now looking to 2016 as their salvation when anticipated turnout is up to save them.  Don’t count on pure demographics to bail them out.  One still needs a good narrative and message, an argument to give people a reason to vote.  Obama’s lasting legacy may be one I saw in a New Yorker cartoon from a few years ago when one person turned to another and said “I think Obama has the potential to get a whole new generation disillusioned.”  It is this disillusionment that is the reason why we gave an election this past Tuesday and no one came.

Previewing the 2014 Minnesota Legislative Session: Issues and Contrasting Agendas

    This week the Minnesota Legislature reconvenes. To predict the dynamics of the 2014 session one needs to understand how the governor, the House and the Senate, and the Democrats and Republicans all have different interests in what should happen in this short session.  While in some cases their interests may converge, there are also powerful forces that may push them in very different directions, potentially creating interesting conflicts that set up the 2014 elections.  Specifically, lookto see how party, region, and chamber and branch of government create contrasting interests in what happens in the 2014 session.

The Issues
    What are the major issues for the 2014 session?  Passing a bonding bill is the main reason for the session.  Estimates are that a bill of about $800 million is what both the Democrats and Republicans seem to want, but beyond the amount, the exact projects remain in dispute.
    Second, left over from 2013 are three issues–a hike in the minimum wage, anti-bullying legislation, and a fix to the civil commitment program for sexual offenders.  All three are hugely controversial items that will divide the parties.  Third, the legislature needs to decide what to do with the budget surplus–spend or save.  Finally, other issues such as whether to repeal the business warehouse tax, finding a more permanent funding solution for the Vikings stadium, and business law reform (something Dayton has talked about) are possibilities.
    What will we not see in 2014?  Government ethics reform.  Minnesota’s government ethics laws in terms of disclosure and conflict of interest are vastly out of date.  The legislature made it worse last session in voting to change the gift ban law for themselves, making it yet again possible for them to be wined and dined by lobbyists.  Representative Winkler is correctly proposing in HF  1986 to undue this exemption, but it will be a shocker if this legislation passes.  But even if it does more reforms are needed.  The state could use a revolving door bill to place limits on former legislators from coming back and lobbying the legislature at least for a year.  About half the states have laws like this.  More lobbyist disclosure, legislator conflict of interest of laws, ethics laws for law governments, and contribution limits to the parties and caucuses are all needed.  But don’t expect to see any of these reforms proposed.

The Coming Elections
    Overshadowing the session are the 2014 elections.  The governor is up for re-election as is the entire House of Representatives.  This is not necessarily a good year for Democrats.  No this is not 2010 all over again where anger against Obama and health care reform mobilized Republicans, depressed Democrat turnout, and swung independents toward the GOP.  This year Dayton’s approval ratings are riding high, as are Senator Franken, and perhaps there are some coattail affects here.  Yet  in a non-presidential election year Minnesota’s voter turnout drops to the low to mid 50s–a 20 or so plunge from presidential election year turnouts.  The biggest loss comes in terms of voters who generally support Democrats–the young, women, and people of color.  Democrats can do well this year in Minnesota, but they need to mobilize their base and keep the swing voters on their side.
    This means, at least for the Democrats, that they want this to be a short legislative session where they can get their main task accomplished–passing a bonding bill–while giving the Republicans little opportunity to find anything to use against them in the election.  Thus in general Democrats will not push too hard this session, much to the dismay of many of their supporters.  Conversely, Republicans are looking for inroads, wedge issues of use to them that will rally their base and peal away independent voters from the Democrats.
    Don’t look to see gay marriage be a 2014 general election issue.  It is a loser for Republicans, except as an issue to use within the party to beat up fellow party members.

Contrasting Political Agendas
    However, the DFL House, Senate, and Dayton have contrasting interests.  The entire House is up for  election and the DFL there do not want to tackle issues that will hurt them.   The Senate is not up for election. At best, there are probably no more than a dozen or so seats that are swing in the House, and the DFL will need to hold them to keep their majority.  Look for them to avoid medical marijuana and anti-bullying legislation.  Both are too controversial and may be perceived to be issues that produce political backlash from conservatives.  Moreover, the DFL has said that they want to move on minimum wage, but again don’t look to seem them push for a wage that really makes a difference.  It would make sense to pass meaningful minimum wage laws and with a built-in index for future automatic increases.  The DFL may have only this session to address the minimum  wage issue and if it were smart it would take advantage of the opportunity.
    No one wants to touch the sex offender civil commitment program.  It is probably unconstitutional but any change in the law lends to potential partisan criticism that the other is soft on sex crimes.  This is an issue that both parties would rather see go away–at least until 2015.  Alternatively, the GOP would love the DFL to act, giving the former a great issue for the 2014 elections.
    Additionally, the DFL needs to decide what to do with the budget surplus.  The House would love to be Santa Claus and do a tax cut–such as repeal the business warehouse tax–or provide other cuts that will be politically popular.  The DFL Senate does not see it that way, perhaps preferring to save it in a rainy day fund.  So far Governor Dayton has not made it clear what his priorities are, and his interests may be closer to the House in terms of what to do.
    Among other types of legislation that need to be addressed is fixing the fix. By that, the fix to the Vikings Stadium funding is still not financially secure it needs revisiting.  The money to pay for the  state’s share of the stadium is still not built on a secure revenue stream and unless another one is found, the public will be paying for the stadium out of general revenue.  Looming over the session also will be MNSure.  How it operates in the next few months and what might be done  legislatively about it may be one of the make or break political issues in the coming session.
    Finally, plans by Polymet mining pose a huge risk for the DFL, potentially pitting urban progressives and environmentalists against unions and Iron Rangers.  While there are no immediate calls for legislative action on this issue there is still the potential that it could creep up in bills, forcing the Democrats to make difficult choices.

Conclusion
    No legislative session is devoid of politics.  The same will be true in 2014.  How that politics plays out in next couple of months will tell us a lot about what might happen in the November elections.  For now, look to see how the issues divide along the party, branch and chamber of government, and region.

The End of Bipartisanship (and why that may be good)

    Legislative partisanship is gone and that may be good.  It was probably overrated.
    The holy grail of politics for many is bipartisanship. Good public policy is only possible if the two parties compromise, work together, and enact laws with the aim of furthering the public good.  Such a belief suggests truth lies in the middle and that compromise is the essence of good government.  But that is not always so.
    Some lament that the 2013 Minnesota legislative session was anything but bipartisan.  Significant evidence supports this.  Consider legislation creating the health care exchanges for the Affordable Care Act (Obamacare); 99% of DFLers voted for it, 98.8% of Republicans voted against it.  Similar partisan divides existed with legalization of same-sex marriage with 95.5% of Democrats voting yes, 94.4% of Republicans voting no.  Or the House and Senate tax bills with 92% DFL yes and 98.8% GOP no.  Finally, 92% of DFLers voted for the  legislation authorizing day-care workers to unionize, no Republicans supported it.  For these four bills,  94.6% of votes cast by Democrats were yes, while 98% of the GOP votes cast were  no.  Had there been floor votes on minimum wage and the anti-bullying legislation one probably would have found similar percentages. 
    Are Democrats guilty of single-party rule?  Perhaps, but  Republicans are not innocent.  Look back to the 2011-12 legislative session at two of the biggest bills–the votes authorizing the constitutional amendments banning same-sex marriage and requiring photo ID when voting.  For the marriage amendment, 96.2% of Republicans votes yes, 96.5% of Democrats voted no.  With the elections amendment, 99% of Republicans voted yes, 100% of Democrats voted no.  Overall, 97.7% of DFL votes cast on these amendments were no, while for Republicans 98.3% were yes.  When the GOP were in the majority, the two parties were polarized.  Straight-party line votes are becoming more the norm of Minnesota politics, paralleling a similar trend in Congress over the last 30 years.  Why?  There are four major reasons.
    First, the end of the Cold War meant that the forces to drive compromise at the congressional level ended.  The battle against communism forged a foreign policy consensus and compromise that translated often into agreement on domestic policy, even at the state level.  Second, political scientists talk of the declining marginals–the disappearance of competitive swing districts that could shift control from one party to another.  This is due to gerrymandering but more importantly to a geographic sorting of where we live.  We hear of blue and red states but increasingly households and neighborhoods are politically sorting themselves out.  In Congress there may be less than 50 swing seats,  in the 2014 Minnesota House of Representative races, maybe 15 seats are competitive.  The rest are solidly partisan, creating little incentive to compromise,
    Third, American political party composition has changed.  Historically American parties were less ideological than at present.  One could point to both major parties having a mixture of conservatives, moderates, and liberals.  Such coalitions made bipartisanship possible.  But American political parties are more ideological now–with clear divides on social and  and economic issues.
    Fourth, the transformation into ideological parties is fueled by increasingly  large differences over the simple question “Why government?”  Republicans and Democrats have developed rival views on the role of government in the economy, the value of taxes and public spending, and on a range of social issues about reproductive rights and same-sex marriage.  When there is a basic disagreement over “Why government?” it is hard to compromise.  At the end of the day, there is no compromise on the right of same-sex couples to marry–you support it or not.
    These four trends have also driven politics in Minnesota to make it less bipartisan.  But additionally, Minnesota politics further polarized after the Wellstone plane crash in 2002.  His death and the events in the last few days before the 2002 Senate race–including the memorial service–exacerbated the forces already at play in Minnesota to reinforce the polarization.
    This is where we are now.  The structural forces that once drove bipartisanship are gone and the new reality is one of partisan rule in Minnesota and across many states that are legislating depending on which party is in power.  Just compare Minnesota to Wisconsin. 
    Should we worry about this?  Not necessarily.  Agreement for agreement sake is not good if it passes bad policy.   Sequestration was the product of compromise.  Minnesota Democrats and Republicans  agreed on a new campaign finance law this session that increases contribution and spending limits, weakens disclosure, and enhances the ability of lobbyists to leverage political influence.  Both were bad laws, the product of bipartisanship.
    Regardless of the desirability of bipartisanship, it is over.  Voters need to accommodate to a world of partisan rule or bipartisan gridlock.  They have to decide whose politics they like better and vote for it–giving them what appears to be real policy choices and options at elections.

Partisanship at the Minnesota Legislature–How Divided?

So how divided were the Republicans and Democrats in 2013 Minnesota Legislative session that just ended?  A quick sample of the numbers suggests a big divided.

I looked at four of the biggest bills that the House and Senate voted on during the 2013 session.  These four were the creation of the health care exchanges for the Affordable Care Act (Obamacare); legalization of same-sex marriage; the tax bill; and legislation authorizing day-care workers to unionize.  Arguably these were the four most important if not contentious bills the legislators had to vote on in 2013.  What I found was that for DFL in the House and Senate, 94.6% of votes cast by Democrats were for  yes on these bills, while 98% of the GOP votes cast were  no.  Had there been floor votes on minimum wage and the anti-bullying legislation I suspect we would find similar percentages.

So does this prove that the DFL is guilty of one-party rule or that they are acting in a partisan fashion when in the majority?  Maybe.  But just for comparison, I looked back to the 2011-12 legislative session at two of the biggest bills–the votes authorizing the constitutional amendment banning same-sex marriage and the one authorizing the constitutional amendment requiring photo ID when voting.  Here, 97.7% of DFL votes cast on these amendments were no, while for Republicans 98.3% were yes.  When the GOP were in the majority, the two parties also seemed very divided.

In a future blog or op-ed I will discuss what all this means and what it says about the possibility of bipartisanship.

Same-Sex Marriage and the Beginning and End of Minnesota Politics: A Tale of Four Circles

The best thing that could happen to the Republican Party of Minnesota (RPM) if not the national Republican Party,  is for same-sex  marriage to be legalized.  Its legalization would remove from the agenda one that the Republicans are losing on, and one that is continuing to alienate them from younger millennial voters and moderates.  Legalization of same-sex marriage would permit Republicans to move away from social issues and concentrate on their core economic and limited government message.
    Assuming Monday’s passage of same-sex marriage by the Minnesota Senate the state will have come full circle four ways.  The first circle to close is  Baker v. Nelson, 291 Minn. 310, 191 N.W.2d 185 (1971).  Minnesota is home to the first case in the nation adjudicating bans on same-sex marriage.  In Baker at issue was whether a state law lacking  an express statutory prohibition against same-sex marriages signaled  a legislative intent to authorize such marriages. The Minnesota Supreme Court declared not, contending furthermore than the ban on same-sex marriage did not violate the First, Eighth, Ninth, or Fourteenth Amendments to the United States Constitution.  Legalization of same-sex marriage in Minnesota would thus overturn Baker, bringing to an end the first and original precedent standing against marriage equality.
    The second circle to close involves Congresswoman Michele Bachmann, Minnesota’s Defense of Marriage Act, and same-sex marriage.    Bachman’s political career is intertwined with opposition to same-sex marriage.  In 1997 the Minnesota legislature adopted Minn. Stat. § 517.01, Minnesota’s Defense of Marriage Act (DOMA) restricting marriage to that of couples of the opposite sex.  DOMA and Baker should have been enough to persuade social conservatives that same-sex marriage would not become the law of the land in Minnesota.  But it was not. 
    Bachmann’s 2000 run for the Minnesota Senate and successful defeat of a Republican moderate was premised as much upon opposition to gay rights and same-sex marriage as it was on her anti-tax positions.  Once elected she sponsored first in 2003 and then in 2005 state constitutional amendments to ban same-sex marriage.  Her fear?  A Minnesota Supreme Court would overturn Baker and DOMA.  Fear of  same-sex marriage played well as a springboard and theme in her 2006 election to Congress in a deeply conservative Catholic district.    Adoption of same-sex marriage in Minnesota, as well as the turning of the tide on the issue across the country, undercuts one of the defining themes of her political career.  She may continue to get elected as defending an embattled minority, but she will look increasingly anachronistic and shrill, making it even more difficult for her to win re-election in 2014.
    The third circle to close is on the RPM’s failed marriage amendment in 2012.  While Bachmann was no longer in the Minnesota legislature, her opposition to same-sex marriage lived on in a political party.  When the RPM was swept into control of the Minnesota Legislature in the 2010 elections the Republicans declared that the economy was job one.  Speakers Zellers pronounced it was all about jobs and not social issues.  Yet soon they strayed from that message.  Minnesota witnessed a budget gridlock and state shutdown and the defining theme of Republican control became their overreach on social issues, including the elections and marriage amendments.  Both went down to surprising defeats in 2012.
    The reasons for the crash of the marriage amendment are many.  It was about over-reach by Republicans and a misreading of their mandate (their mandate was actually more rooted in the 2010 opposition to Obama and the Democrats than in anything they offered).  It was about the cynicism  of some legislators saying that pushing the two amendments was a way to turn out their base in the 2012 elections, seeking to yet against rekindle the successful formula Karl Rove and the Republicans had used since 2004.  It was almost about the failure to see how the issue of same-sex marriage was a defining issue for the Millennials and how public opinion had shifted.  Republicans just did not see how the issue of same-sex marriage would counter-mobilize.
    Going into the 2013 legislative session many Democrats and Republicans argued that the 2012 results were not a mandate to support same-sex marriage but instead simple opposition to a constitutional amendment against it.  Some cautioned that pushing same-sex marriage would run the risk of DFL overreach, and initially Democratic leadership seemed to agree.  But others contended that were it not for the issue of same-sex marriage the Democrats would not have won in 2012 and therefore they had to deliver on the issue less than alienate their base.  The latter theory prevailed.  But it did so in a self-fulfilling way.  The momentum to oppose the marriage amendment was quickly turned around to support for same-sex marriage and quietly and slowly support for its legalization  was built.  Thus, the third circle–from a failed marriage amendment to legalization of same-sex marriage–also closes.
    The last circle is the re-redefining the RPM. The DFL wins on this issue, but potentially not as big as the RPM could.  DFLers were expected to push this issue and they delivered.  That is good for them.  But with the legalization of same-sex marriage the GOP loses a thorn it its side.  This issue drove many away from their side.  They had lost an entire generation of young people because of this issue.  Take same-sex marriage off the issue and it opens up new possibilities for the RPM to redefine a base that is old.  Of course the real danger for Republicans is that the social conservatives will seek retribution in the 2014 primaries and conventions, but what are they really able to accomplish?  They can destroy the party with unproductive infighting, or they too can move on.  For Republicans who voted to legalize same-sex marriage, if they can survive intraparty fights, they may emerge as the new voice of a redefined  GOP in a post-same-sex marriage world that focuses more on economics and small government than social issues.  This is where the party was a generation ago when the Arnie Carlsons and David Durenbergers were the face of the RPM.

Clothing Taxes and Hotel Subsidies: Dumb and Dumber

Two items in the news point again to foolish decision making by some elected officials, especially when it comes to economics and business.

The first is continued insistence by Senator Tom Baak and the DFL to impose a sales tax on clothing.  Recall that the governor initially suggested this idea earlier this year in his tax plan version 1.0.  He proposed it along with a B2B tax on various services.  Both the clothing tax and the B2B were so unpopular that he repudiated both.  Now the Senate wants to move forward with the clothing tax even though the governor and the House DFL are opposed.  This political opposition should be enough to suggest it is a bad idea, but there are other reasons to oppose the clothing tax.

First, while a tax on clothing is not unheard of in other states, it is not something that has been done yet in Minnesota.  Perhaps the public could get accustomed to it over time, but right now there is a lot of resistance to it among the public.

Second, even if extending sales tax to clothing can be done at a lower rate and thereby make the overall sales tax rate lower, this is a regressive tax being proposed by the DFL.  If clothing is taxed but there is no extension of the sales tax to B2B services then this is definitely an overall less progressive tax than before. This is a tax that will weigh more heavily on the poor.  It is a tax that soccer moms will notice when buying school clothing for their children. 

Third, this is a tax that might also hurt Minnesota businesses.  Currently many Minnesota businesses are hurt by Internet companies which do not have to collect sales tax.  With clothing not taxed the impact for sales of this type is less.  However, enact a clothing sales tax and businesses with a physical presence in Minnesota will be hurt because Internet businesses will have a tax advantage.  Perhaps this tax advantage will disappear if the US Congress agrees to allow states to tax Internet sales.  However, at present the change in tax law seems foolish and it risks hurting places like Mall of America which do a brisk job in terms of tourist and destination sales.

The second issue is a call for the City of Minneapolis to subsidize the building of a new hotel in the city.  The city aspires to becoming a major convention city and some believe that adding another 1,000 rooms will do that. 

In many ways the City is becoming captured by subsidy fever.  First the public pays for Target Filed and now it is going to be on the hook for the new Vikings stadium.  The Convention Center loses money and the Target Center would like a handout too.  With all of these demands for the public  to subsidize it is not a surprise that a hotel wants the money too.

However, remember that hotels are private businesses.  The public should generally not be in the business of giving tax dollars to private businesses. If there truly were a market for another 1,000 units it would be profitable for private investors to build it.  If the public were to subsidize this hotel what is likely to happen is what has transpired in other cities–the other hotels suffer and often close.  It gives unfair competition to one developer or hotel over another. 

The logic of the subsidy here is a Field of Dreams “If you build it they will come” belief.    It is a belief that by building another hotel more tourist will flock here.  Yes, to Minnesota, a state with a cold six or more months of winter that wants to compete against San Antonio, Texas and other Sunbelt cities.

There is little evidence that Field of Dreams development strategies work.  As I have pointed out in my recent book, many other cities have built convention centers, aquariums, and other tourist attractions with the hope of luring people to their cities.  One city doing this makes sense, multiple cities doing it dilutes the effect and increases the competition, thereby lessening the chance that such a tourism strategy will work.  This is where Minneapolis is headed too.  Some seem to believe that instead of investing in neighborhoods, schools, and quality of life.  sports, convention centers, and hotels are the key to the city’s economic development.  Any strategy  relying heavily on public subsidies is questionable.