Elected officials don’t have the economic power most people think. State leaders have even less influence than those in Washington, D.C. Minnesota governors can do little to alter economic conditions despite claims to the contrary.
Keep these reassuring thoughts in mind when contemplating the race between Republican incumbent Tim Pawlenty and Democratic challenger Mike Hatch. While both might be appalling to economists for different reasons, neither can do much economic damage if elected.
Both have served in state government for years and have acquitted themselves reasonably well. They have well-known track records and personalities. Some of us might choke while marking our ballots next fall, but no one is getting a pig in a poke.
In this race, the candidates’ personalities will be a much bigger issue than their economic philosophies. Most people agree that Pawlenty is a nice guy even when they disagree with his policy positions. Even those who love Hatch’s policies concede that the attorney general is abrasive to a fault.
Both endorsed candidates tell us something about how their respective parties have changed — or not changed — in recent years.
Pawlenty’s economic views often run counter to his party’s historical stands. Republicans from Teddy Roosevelt to former Minnesota Gov. Arne Carlson stood for prudent finance and balanced budgets. They wanted fiscal discipline but if costs could not be cut, taxes had to cover outlays. Republicans generally favored letting markets alone whenever possible and avoided trying to micromanage economic activity.
Pawlenty places priority on tax reductions, regardless of what happens to state finances. He adores ad hoc micromanagement, especially when it can be cast in the guise of tax reductions such as his JOBZ program. He scorns the counsel of Republican Party think tanks on the best ways to tackle environmental and resource conservation problems. If Pawlenty is mainline GOP, this ain’t your father’s Grand Old Party. In many ways, Hatch’s opportunistic populism represents an old tradition among Democrats. Hatch is not a pragmatic pro-business centrist like Bill Clinton or Harry Truman. But he is honest in that he does not even give lip service to letting markets function.
At his worst, Hatch is a pale Minnesota version of populists like Argentine dictator Juan Peron. Such leaders believe in championing truth and justice against the dark forces of business. They think they are the only ones who fully understand just what truth and justice are. Moreover, they insist prosperity will flourish once they can call the shots.
But don’t worry. Decisions at the national level affect inflation, unemployment and growth. States cannot coin money or pump up the national debt. Much ballyhooed state business subsidies have little overall effect. And governors generally possess less power than legislatures. Who next occupies our governor’s office will have little effect on whether the next four years here are prosperous or not.
© 2006 Edward Lotterman
Chanarambie Consulting, Inc.