Wednesday, August 25, 2010

What I want in a Governor

I don't think I can recall a time in recent history where the stakes have
been higher for a gubernatorial election.  With the Minnesota economy in a
steady, but fragile recovery; a whopping $6-7 billion state budget
deficit; and a massive wave of baby-boomers about to retire, the need for
a leader with vision and skills is essential.
The truth is that our state economy, while weakened, is not doing that
bad.  Our state budget on the other hand is a mess because both Democrat
and Republican leaders have mismanaged it for most of the past decade.
Putting the needs of their party ahead of the needs of their state, our
leaders have been content to kick the can down the road, while praying
that the economy takes off again.  Too bad it didn't work.
So as I listen to the current crop of gubernatorial candidates all I hear
is the same old tax the rich message from one party; and a trickle down -
starve the beast message from the other.  This is not leadership.
I want a new kind of leader for a 21st Century Minnesota.  I want a leader
that is not bound and censored by party officials.  I want a leader who
wants to solve problems - not just win elections.  I want a leader who
cares about the well-being of our small rural towns, as well our Fortune
500 companies.  And I want a leader who is not shy about telling me that
we all will have to sacrifice to get out of this mess.  I want ... Tom
Horner as our next Governor.

Sunday, August 8, 2010

Having the Courage not to Pander

I’m sure that over the years in his role as a political strategist and communications professional, Tom Horner has helped dozens of political candidates prepare for a major speech, debate or similar event. Of course, the first rule for such preparation is always the same – know your audience. As a result, political candidates are advised not to talk about cutting Medicare or means-testing Social Security when addressing the AARP; nor are they going to discuss the merits of alternative teacher licensure when giving a speech to the Education Minnesota crowd; and they certainly won’t discuss cutting producer payments when meeting with the members of the Farm Bureau. Some may view such strategy as smartly tailoring their message, but often it’s no more than pandering. In other words, just tell the crowd what they want to hear.

So why was Tom Horner the only candidate to go into the tent at Farm Fest last week and tell the crowd that he believes that it is time to end the subsidy payments to ethanol producers? Political suicide; or is Tom Horner what we used to call a “straight shooter?” You know what I mean, the kind of guy who will give you the same answer to your face as he would behind your back. Well … I really can’t tell you what Mr. Horner was thinking, but I can tell you that it takes a lot of courage not to pander when facing 1,000 farmers deep in the heart of Minnesota’s First District.

But if you think about it, it fits perfectly with the straight talk we have heard from Mr. Horner to date. He’s the only candidate who has outlined a plan for tackling our looming budget mess; or reforming our taxes; or financing a Vikings Stadium; need I go on? Maybe it’s that Horner has nothing to lose; or maybe he realizes that we are in such a deep budget mess that Minnesotans can’t afford anything less than straight talk? I don’t know; but I can tell you that if you watch the political ads from the other candidates you would never know that our state is facing a $6 billion deficit. All they want to do is tell you that they will invest more in K-12 education or alternative energy jobs. With what money … WE’RE BROKE! Heck even Candidate Emmer, who never saw a state budget line item that he wouldn’t cut, couldn’t look the farmers at Farm Fest in the eye and tell them that we can’t afford the ethanol subsidies anymore.

I don’t know about you, but I’m tired of being pandered to. All I want is a candidate that will give me a straight answer to a straight question – and then try their best to follow through if they are elected. From what I can see, Tom Horner is the only candidate that passes that test.

Wednesday, August 4, 2010

Private Troubles vs. Public Issues

There’s little doubt that between now and the mid-term elections, all we are going to hear about is record high unemployment and jobs, jobs, jobs. And during times like these, I can’t help but think about the late C. Wright Mills. Mills was a Texan and one of America’s most influential sociologists. His 1959 classic, The Sociological Imagination, should be required reading for both policy makers and those who aspire to be.

One of Mills’ fundamental concepts was both the distinction and connection between one’s “private troubles” and societal “public issues.” Simply put Mills would argue that if you come home one day to learn that your teenage daughter is pregnant, that’s your private troubles. On the other hand if 25 percent of the teenage girls at the local high school turn up pregnant, it’s a public issue! In other words, at some point we cross a threshold and come to understand that we are dealing with more than personal failings; and therefore the solutions need to be structural and societal. And I couldn’t help but think of Mills during the summer-long debate regarding the extension of unemployment benefits to workers who are categorized as the long-term unemployed.

Those who opposed the extension of benefits regularly cited two reasons. The first was simply that if Congress wishes to extend these benefits they should identify a mechanism to pay for it. That sure makes sense to me. But other voices opposed to the extension of benefits seemed to suggest that allowing unemployment benefits to expire was precisely the medicine needed to get the long-term unemployed off the couch and on to a payroll.

How anyone can be immune to the fact that the national unemployment rate is still above 9%; that there are currently 5 applicants for every job opening; or watch on the nightly news the thousands of unemployed Americans lining up at job fairs all across the country is beyond me. Using Mills’ framework, I guess they still view being unemployed as one’s private troubles instead of a public issue.

But allow me to give you one more reason for extending unemployment benefits that may not have been emphasized to date. That being, in some ways it is a more direct jobs stimulus than any of those that have been proposed to date. Allow me to explain.

As every business person knows, there are two commonly used figures that summarize the health of a business: the “top” line and the “bottom” line. The top line reflects the demand for the goods and services a business produces and sells. A growing top line means that demand for your products is increasing. The bottom line however, takes into account the sales reflected in the top line, but also factors in the costs of production and delivery. So the bottom line more accurately reflects the business’s net income.
Both figures are extremely important, but top line growth is much more important when you are trying to stimulate job creation. Think about it this way, government tax credits or the relaxation of certain regulations may in fact help improve the bottom line and make the business more profitable. But increased business income does not really motivate business owners to hire more workers. Rather, the primary event that really motivates business owners to create more jobs is a significant and sustained increase in sales (the top line). If factory orders or showroom sales increase to the point where the business cannot meet this growing demand in a timely fashion, they hire more workers. It’s often that simple.

Returning to the issue of the unemployed, the reality is that providing the extension of benefits not only keeps households afloat during tough times; but because unemployed workers are typically cash-strapped, funds paid in unemployment benefits will quickly be re-invested back into the local economy to pay for rent, utilities, groceries, gasoline, clothing, etc… In other words, it helps directly increase the top line of local businesses; supports local demand and improves the chances of local job growth. On the other hand, the majority of jobs programs comprised of tax breaks and incentives for business owners may in fact reduced business expenses and improve their bottom line, but if it doesn’t increase business sales, it won’t serve to stimulate any new jobs.

So how long do we continue to extend benefits to the long-term unemployed? After all, where does it end? Well if Mills were alive today he would likely suggest that if you are unemployed when the unemployment rate is below 6 percent, that’s your private troubles. But as long as the unemployment rate hovers close to 10 percent it’s a matter of public policy.