During last week’s gubernatorial debate in Duluth, Governor Dayton referred to the Iron Range has having been victimized by “hucksters” with hare-brained economic development schemes to try to compensate for the crash of the mining industry.

Yesterday on their show blog, Jack and Ben (who, notwithstanding working for the lesser talk station, have been on fire this past week or so) discovered something important; exactly who one of the key “hucksters” was:

The smoking gun is a January 1986 document titled “Housing and Community Development Briefs” authored by the Minnesota Department of Energy and Economic Development and several other organizations. According to the document: “The Department of Energy and Economic Development recently approved [a direct, fixed-interest rate, fixed asset new/expanding business loan].” The publication then lists several businesses that were recipients of the loans, including Lakewood Industries [the company that built the chopstick factory]. It states, “Lakewood Industries, a startup company expected to create 76 jobs in the next two years, received final approval for a $250,000 loan.”

Now, Dayton was Minnesota Department of Energy and Economic Development commissioner from 1978-79, and again from 1983-86.  In other words, his fingerprints are all over the infamous Chopstick Factory. 

Now, $250,000 might not seem like all that much compared to the $5 million in total financing, including $3 million from the Iron Range Resources and Rehabilitation Board (IRRB).

But the story doesn’t end there (emphasis added):

So let’s look at the IRRRB. The Director of Economic Development of the IRRRB during the chopstick factory fiasco was Mark Phillips. Mark Phillips was intimately involved in the details of the chopstick project, according to a statement he provided in a Chicago Tribune article from June 5, 1998: “They [the Japanese] wanted real white wood with no stain to it. We have a good species here, real white wood that veneers well.” And a December 8, 1986 Associate Press article shows that Mark Phillips was keenly aware of the financing the IRRRB had provided to the project.

So what happened to Mark Phillips? In 2011, Mark Dayton appointed him Commissioner of the Minnesota Department of Employment and Economic Development.

Once a boondoggler, always a boondoggler; Phillips was a prominent supporter of public funding for both the Vikings stadium and the Saint Paul Saints ballpark in Saint Paul. 

As to Governor Messinger Dayton?

I read yesterday’s headlines about the new, Preferred-One-Free MNSure rates, and got ready to write.

Then, I got an email from a friend who works in the Healthcare industry, which explains it much better:

The headlines on MNSure saying premiums rose only 4.5%.  This reminds me of an old story.

A friend of mine was flying a helicopter in the fog in downtown St. Paul and his radio and navigation equipment failed suddenly.  He knew he was in the midst of the downtown and going any direction could mean an immediate crash.  He stayed put hovering for a few minutes, inching lower.  When the fog lifted he was right outside the MN Dept. of Commerce.  Not recognizing the building he grabbed a piece of paper and a big sharpie.  He wrote in big block letters “Where am I?” and put it put it on the outside of his windshield.  A commerce employee saw the helicopter’s predictament and wrote a note back and placed it in the building window.  “You’re in a helicopter.”

Technically correct and absolutely meaningless.

That’s my take of this headline.  The real problem is that the low cost insurer, Preferred One, dropped out.  Maybe the remaining plans only increased by 4.5% but to the 60% who were on Preferred One, the real story is that their premiums are rising about 20%.  Minnesotans will understand that if they take time to read the full story.

Which the DFL is counting on people not doing, naturally, as they relentlessly pound away with that “4.5%” number on ads around the state.

Recent history shows it’s not hard to fool Minnesotans.

Daytonomics - a noun, referring to economic conditions that look rosy on the surface, but worse and worse the more one examines them.  See also: “Potemkin”.  

The DFL is running the bulk of their state campaigns – the Legislature, the Constitutional Officers and Governor – on the notion that two years of Daytonomics have left Minnesota an economic powerhouse.

Like squatters who move into an “Architectural Digest” house, there’s still some zing in the state’s economic elevator pitch – leftovers from ten years of at least partial GOP stewardship.

But under the surface?

There are three signs that the various editorial boards are doing their level best to avoid, or at the most downplay:

• State revenue keeps falling short of projections.  It’s lagging because personal income tax withholding is slowing down.  They’re slowing down because personal income in Minnesota is not keeping pace with expectations as of the last budget session.  The fact that it means we’re heading for another deficit is the least of the issues; the economy isn’t that damn good.
• Along those same lines?  The Minnesota Zoo is laying people off. Costs are up – thanks, Barack Obama! – but attendance is also down.  4.5%.  The Zoo – especially the Minnesota Zoo, which is a pretty spendy day out for a family – is something people do when they’re feeling flush, and feel like showing the kids a good time.  You’ll note that attendance at the Como Zoo – which is free, unless you’re a Saint Paul taxpayer – isn’t hurting.
• Oh, yeah – after a year or so of bragging about Minnesota in comparison to Scott Walker’s Wisconsin that Minnesota is dead last in new job creation in the Midwest.

Wanna see the interesting part of this last story?  Look in the graph comparing the states in the Midwest.  Check out the historical job numbers:

• 10 years ago, when Tim Pawlenty and a GOP House ran the show?   Booming economic growth.
• Five years ago, when Tim Pawlenty at least held the line on DFL spending?   At the depths of the Great Recession, no less?  We were among the region’s leaders!
• Two years ago, at the end of the GOP’s control of the Legislature?   Still good.

Today?

Dead last.

Dead.  Last.

Last.  Dead.

This is Mark Dayton’s economy.

Governor Dayton says “the buck stops” with him in re MNSure:

— Gov. Mark Dayton [said] that he ultimately feels responsible for the success or failure of [MNSure].

Dayton apologized for problems Minnesotans are having on the state’s health care exchange. The governor is promising to fix multiple website problems, as soon as possible.

“I apologize to those Minnesotans who have been seriously inconvenienced or are distraught by the failures of MNsure. It’s unacceptable,” Dayton said Thursday.“Did I cause? I don’t think I caused the problems at MNsure and I did everything I could to prevent them,” he said. “Ultimately the buck stops here.”

Oh, yeah – you read that right; the story came out last December. 

Before MNSure’s current woes – the cratering of the code, and Preferred One’s bailing out of the whole debacle. 

So – when Governor Dayton says “the buck stops here”, does he mean it like he did…:

• during the Vikings Stadium fiasco, where he committed the state’s taxpayers to hundreds of millions of dollars, then told the Legislature to “deal with it”, a la Michael Scott?
• during the Minimum Wage fiasco, when signed a deeply flawed bill, and then publicly wavered a few months later when his spawn told him they were having trouble making ends meet at their posh Minneapolis restaurant?
• during the last Budget session, when he served as an untrained mouthpiece for the public employee unions that put him in power?

Because none of those, nor his behavior in re MNSure, involve actually stopping any bucks.

Just keep repeating it to yourself, DFLers; the Dayton economy is awesome!

The Dayton economy is awesome!

The Dayton economy is awesome!

Housing starts are off 15 percent in August (the full story appeared on MPR last night – but naturally isn’t available online today):

Confidence in the local homebuilding market took a hit in August, as permits for new single-family houses declined 15 percent from a year ago and permits for new multifamily units were down 78 percent. 

And the price of farm land – one of the key indicators and drivers of the farm economy – is slipping in Minnesota.  But hey, at least they’ll be getting taxed more for it…

…is baked wind.

 Minnesota lost 4,200 jobs in July, and is adding them at an anemic pace year-to-date:

State officials said Thursday that Minnesota employers shed a seasonally adjusted 4,200 jobs in July. Meanwhile, they also revised June’s numbers downward by 3,600 jobs.

That means that, year-to-date, Minnesota has added a meager 2,900 jobs, or about 400 per month, on an adjusted basis.

During July, the education and health services sector lost 5,300 jobs. Information shed 1,000; construction, 700; financial activities, 200; and government, 100.

The sectors that added jobs: trade, transportation, and utilities (up 1,600); manufacturing (700); leisure and hospitality (600); and other services (200). Logging and mining, and professional and business services held steady.

Look for the Alliance for a Better Minnesota’s lie machine to fabricate a lot of phony economic happytalk in the next ten weeks; as we discussed earlier, they’re off to a running start.

No – a lot.

Amid all the DFL’s bragging about the economy – which Bill Glahn dispensed with earlier this week – let’s note that for the fifth straight month, tax receipts are off.

And not by just a little bit (emphasis added):

Minnesota’s tax collections for July have come in $69 million below expectations.

The Department of Minnesota Management and Budget released its monthly revenue Monday. It shows the state took in 6.6 percent less than was forecast.

And in the wake of the DFL’s bragging about the state’s ostensible unemployment rate?

The shortage was most acute in the area of individual income taxes, which were off by $36 million. Officials say some could be attributed to timing of tax payments or refunds.

Sure.  Some of it could.

But most of it is attributed to the fact that under DFL rule, the state’s economy is slumping.  Slowly – it’s a gradual thing, as economic trends always are – but definite.

And all the DFL’s happy talk is fermented BS.

I had a great pleasure of meeting seven or eight of my closest friends at the River Oasis Café in Stillwater Saturday morning.

We talked about the cafe last week; they aroused the ire of the entire Minnesota Left – few of whom would ever seem to have been at the River Oasis – by putting their “minimum wage fee” on their receipts:

First things first: It’s a classic American diner – like Mickey’s on West Seventh, or Keys, and not a whole lot of others out there anymore. The food was excellent.

I had the pleasure of talking with Craig Beemer, the owner, on my show on Saturday afternoon (and his wife on Saturday morning). And we learned a couple of things about the place, and the “controversy”.

Money:  One of the left’s main whining points about the public “minimum wage fee” is that it’s “disrespectful to the employees”.  

Of course, it’s a stupid point.  Unlike most restaurants, the Beemers already pay the back of the house staff – the line cooks, dishwashers and the like – better than minimum wage, and (according to Beemer) very competitively with the similar places in Stillwater.  That’s the kind of “respect” I actually cared about when I was a low-wage employee.

The only people making minimum wage are the waitstaff – and when you add on tips, they’re making closer to $25 an hour, often more, and the minimum wage is not an issue. 

Except for the Beemers, for whom the wage hike was a $10,000/year hit on the bottom line.   Remember – restaurants across the river in Wisconsin have a minimum wage of $3-and-change per hour.

Because they have a tip credit.

Power:  Which is what Governor Dayton’s sons asked for earlier this summer.  Andrew and Eric Dayton, owners of “The Bachelor Farmer”, a chi-chi restaurant in Minneapolis, complained to Dadders because the new, higher minimum wage hike was harshing their fiscal mellow.  They asked for…

…a tip credit.

Bonus Explanation For Leftybloggers, none of whom apparently have ever worked for tips:  you don’t work for minimum wage.  Even when there’s a “tip credit” in effect and your “wage” is $3-and-change/hour, like in most surrounding states, you’re still making more.  How much more?  If you work at a crummy place with lousy food, maybe not enough more.  If you work at Manny’s Steakhouse and tend to tables  that rack up $400-$1000 for a meal, you can make well into six digits.  In between?  It’s a complex set of dependencies; waiting skill, clientele, season, even the weather. 

But for all the crap that Tom Emmer took for his “waitstaff making over $100,000″ “gaffe” four years ago, you might be amazed at the number of waitstaff that take home solid middle-class “living wages”; $50,000, $75,000 and more. 

Which isn’t bad for a trade that requires no education, licensing or anything but talent and hard work.

Which may be what bothers liberals about all of this.

“If Ifs, Ands And Buts Were Candy And Nuts, We’d All Have A Wonderful Unbedankfest”:  Here’s another note for ignorant leftybloggers; a “tip credit” acknowledges the fact that for a good waiter at a good establishment with a good clientele, the minimum wage is the fringe of their income; the owner can apply some of the waitstaff’s tips to the wage, in effect. 

“I think tipping is just wrong”, whined a massive clot of liberals last week, “and I think we should do away with it; it’s unfair.  They should all just be paid”, they say, reflecting the “progressive” desire to oversimplify the free market (and working for tips is the ultimate meritocracy). 

Of course, it’s been tried.  Not a few restaurants have tried to abolish tipping – paying their waitstaff more, and jacking up the prices accordingly, to a brief flurry of adoring media attention. 

Then they quietly vanish.  And a few years later, the cycle repeats. 

“It’s So Tacky!”:  Tackier than jamming down a minimum wage increase with the barest possible minimum of debate, and then reconsidering when the governor’s kids get into a jam? 

“Why don’t they publicize all the costs that hit their bottom line?”:   Because if they use too much electricity, they can unscrew the lightbulbs in the bathrooms.  If the price of tomatoes goes up, they can use fewer of them in their recipes.  If Ecolab cleaning products are too expensive, they can switch to Servicemaster.   In other words – as with everything in the free market (including restaurant choices), they, the consumer, can say “no” and pick a better option. 

But they can’t switch states.  Tempting as it is for many businesspeople.  Government is the one thing you can’t say “no” to, without having men in uniforms with guns busting down your door eventually. 

And the hypocrisy of a “progressive” movement that twisted itself into knots to try to legitimize the “Occupy” movement turning around and attacking an actual working business for using its right to free speech is enough to put me off my breakfast, were it less delicious.  

“What are you going to do, Berg?  Hang out there all the time?”:  It’s not really about me.  But when in Stillwater – a place I may get to annually – sure why not? 

The “point” they’re shooting for is that conservatives won’t be going there forever, and the liberals among the Oasis’ clientele will stay gone. 

I’m going to guess that most of the people doing the “protesting” have never been there, and would never have gone - and if they did, they were, like most liberals, lousy tippers anyway. 

Anyway - kudos to the Beemers.  And thanks for a fantastic breakfast, a great discussion, and for fighting a battle that a lot more people need to fight.