My fellow columnist Joe Soucheray thinks that property tax increases in St. Paul are too high, that they reflect bloated government and that they may drive people out of the city, turning it into another Detroit. I disagree, for reasons I’ll explain. But first, let’s review the basics. First, the taxes on any property go to different jurisdictions. For 2011, of the total $3,251.76 that my wife and I...
The dollar’s current status as “the nicest horse in the glue factory” is a source of pride for some, but on the whole it is bad for the Minnesota economy. Moreover, it may get worse, depending on how acute the smoldering problems of the eurozone get. Yet, politicians in both parties continue to prattle on about how they favor a “strong dollar.” That misunderstanding of the effects of an...
Leadership is important, but even the president of the United States has less of an effect on the economic fundamentals of a large, diverse nation like ours than you might think. And individual members of Congress, even leaders like the speaker of the House, make virtually no difference, despite what former Speaker Newt Gingrich says. A reader had asked about Gingrich’s assertion that he was responsible for Mitt Romney’s...
Why would anyone, especially a Minnesota farmer, risk their farm or grain business on what would happen in the European bond market? The answer is that they would not, but the MF Global debacle, in which the company collapsed and some $1.2 billion of customer money – including that of many Minnesotans – is missing, shows that in today’s financial system this can happen without the clients’ knowledge. MF...
The Federal Reserve dominated the news in the past week, and its actions were consistently misunderstood. At the beginning of the week, the news was details, forced from the Fed by Bloomberg News, about some $7.7 trillion in short-term emergency lending in 2008-2010. Nearly all news reports over-represented the magnitude of this lending. On Wednesday, the news was an agreement among the Fed, the European Central Bank and the...