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 Response Page - Madden  Interview -      

These comments are responses to the questions listed below,
which were generated in regard to the
Toby Madden  Interview of


It may not feel like it, but the economy in Minnesota, the country and the world is in a period of expansion, says Toby Madden, regional economist in the public affairs department of the Federal Reserve Bank of Minneapolis. The U.S., Minnesota and the world economies are producing record amounts of output. However, the economy is uneven among states, among sectors and among different socio-economic groups, so not everybody feels like we're in an expansion, he says. The Ninth Federal Reserve District has a diverse economy and is doing very well compared with the rest of the country. Madden believes that increases in productivity can free up people to produce other things and will not necessarily lead to fewer people being employed overall. Investment in early childhood education can increase people's productivity throughout their lives, especially in at-risk kids, he posits. Economies in both low-tax states and high-tax states can do well and people are free to move wherever they think they'll be better off. Madden believes the gas tax is too low and that the benefits of immigration far outweigh the costs.

For the complete interview summary see:

Response Summary: Readers have been asked to rate, on a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, the following points discussed by Toby Madden. Average response ratings shown below are simply the mean of all readers’ zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

1. Unevenness causes pessimism. (6.4 average response) The unevenness of the recovery across regions, business sectors and socio-economic levels has led to a widespread, gloomy misperception of our current economic conditions.

2. Insecurity restrains expansion. (6.8 average response) This misperception contributes to a lack of confidence that restrains the rate of recovery and expansion.

3. Productivity gains lead to more jobs. (7.3 average response) Increases in productivity allow more creative economic activity that will result in more, not fewer, jobs in the long term.

4. Increase funding of early education. (7.7 average response) The state should invest more money in early childhood education to increase the long-term productivity of the workforce.

5. Increase the gas tax. (6.9 average response) The gas tax should be much higher than it is.

6. High-tax states can compete. (5.8 average response) High-tax/high-service states can compete successfully with low-tax/low-service states in attracting businesses.

7. Economic outlook still poor. (4.2 average response) Despite some recent gains in economic activity, the outlook for economic expansion in Minnesota and the U.S. is not favorable.

Response Distribution:

Strongly disagree

Moderately disagree


Moderately agree

Strongly agree

Total Responses

1. Unevenness causes pessimism.







2. Insecurity restrains expansion.







3. Productivity gains lead to more jobs.







4. Increase funding of early education.







5. Increase the gas tax.







6. High tax states can compete.







7. Economic outlook still poor.







Individual Responses:

Bert LeMunyon (7.5) (7.5) (5) (2.5) (5) (5) (2.5)

5. Increase the gas tax. The gas tax should be sufficient to take care of roads and bridges and nothing else.

David G. Dillon (0) (5) (10) (10) (10) (0) (5)

1. Unevenness causes pessimism. Other than confusing correlation with causation I find no support for this statement. Every person I know is gloomy about the economy, and not because only some people are succeeding. In every instance they point to these facts: The debt is huge, growing and will continue to grow. (The only small gloomy hope is that it might grow more slowly through that famous political phrase "reduce the deficit!") Taxes are going up and will continue to go up. Health care costs are already unaffordable, increasing faster than inflation and will go up from here. The Fed is printing money at rate that is unprecedented. Why not point to any of these for a gloomy outlook.

2. Insecurity restrains expansion. Insecurity and lack of confidence certainly restrain recovery and expansion. Who is to say it is a misconception? Maybe the good things happening in the economy, such as the oil and gas boom, will offset all the new regulations, taxes, health care costs and the rest. Maybe not. Maybe the growing debt and printing of money will set off some precipitous calamity in the world markets on prices and interest rates.

3. Productivity gains lead to more jobs. Happy to agree on this point.

4. Increase funding of early education. From what I read, this proposition [is] still far from proven. As a conservative, I still it should be a funding priority while we work to improve the effort.

5. Increase the gas tax. [Pricing] carbon is a simple and good idea. As a conservative and a libertarian, I certainly don't think it is fair to price putting carbon in the air as free.

6. High tax states can compete. This is incredibly wrong. I am now preparing to follow a list of family and friends to move my residence out of the state to avoid the exact taxes you are talking about. Just look at California. My next business venture will not be saddled with Minnesota anti business taxes. My son is just now joining our family business; it makes no sense for me to die in Minnesota or he will have to pay 16% of the value of the company to the state simply because I am a resident. (This kind of dramatic payment can sink a business.) I love Minnesota; I hope liberals wake up before they turn it into Detroit, Michigan.

Dave Broden (7.5) (10) (10) (10) (7.5) (10) (0)

1. Unevenness causes pessimism. There certainly is a wide range of public opinion and understanding of the economic conditions in Minnesota, the region, and the nation. This is due to the variation in recovery and the negative communication that is available. More positive expression by business and places like the 9th Fed can help.

2. Insecurity restrains expansion. Economic indicators, public confidence indices, and behavioral economics are key to the view of the economy -- there must be counter-arguments to the negativism, which is everywhere.

3. Productivity gains lead to more jobs. The public understanding of productivity is definitely a key needed for improvement. Far too many people focus only on jobs and not on the output and how increased output leads to greater rate and content of growth.

4. Increase funding of early education. Minnesota and upper Midwest have demonstrated value of education and early childhood offers a key risk mitigator and opportunity for stronger education and work force capability in the future.

5. Increase the gas tax. The gas tax may not be the vehicle for more revenue but more transportation revenue should be established in an innovative manner.

6. High tax states can compete. This has been proven by Minnesota, but some adjustment may be beneficial.

7. Economic outlook still poor. There are many economic segments with growth opportunities in Minnesota that can and will evolve.

Chris Brazelton (10) (10) (5) (10) (10) (10) (0)

1. Unevenness causes pessimism. Most people respond based on their own experiences, or that of people very close to them.

2. Insecurity restrains expansion. A study just reported shows Republicans more pessimistic about the future and Democrats more optimistic, and historically this is tied to whose party is in the White House. If we are pessimistic, we spend less, and if we spend less, the economy does not expand as it would otherwise. Economically, perception affects reality.

5. Increase the gas tax. While none of us wants to pay more, I believe that Madden is correct in his assessment of the long-term gains and benefits.

6. High tax states can compete. We always have. While many successful business owners envy lower taxes elsewhere, they are reluctant to move their families to those low tax, low service states. Especially in high tech manufacturing, businesses need highly trained workers and you don't get that at bargain basement prices. You need top notch education and that comes at a cost.

Fred Zimmerman (7.5) (7.5) (7.5) (2.5) (5) (0) (10)

1. Unevenness causes pessimism. I have great respect for Toby Madden and I tend to weigh his comments carefully.

2. Insecurity restrains expansion. I am not sure insecurity or lack of confidence is exactly what is going on. The people I talk to (mostly manufacturers) seem to feel that the ineptitude and irresponsibility of government in addressing any problem that needs to be resolved leaves them with a very short window of what the future may be like. So, they wait.

3. Productivity gains lead to more jobs. Empirically, the industries doing the most automating are losing fewer jobs. The biggest job losses have been in the industries doing the least automating.

4. Increase funding of early education. I also would like to see more early childhood efforts as our family has housed more than ninety foster children. However, I am fearful that Minnesota’s cumbersome and self-serving public bureaucracy would reduce the effectiveness of even the best-intentioned programs. Minnesota clearly needs a major rebuild in the way it does things – with fewer full-time staff provided with lucrative early retirement programs that will provide a major drag on the state’s economic development long into the future.

5. Increase the gas tax. It depends on how the money is spent. If the money is spent wisely, gasoline taxes are too low -- but only then.

6. High tax states can compete. There is a mountain of statistical evidence to refute the statement that high-cost and high-tax states can compete effectively over long spans of several decades. Industrial job losses can be attenuated, slightly, pushing many people into services and health care. However, these trends have rigid upper limits in their effectiveness and may actually worsen things over longer periods. Overhead, both internal to the firm and that imposed from outside, is the single most significant erosion of competitiveness, not wages. Minnesota is losing its competitive edge because of too much overhead.

7. Economic outlook still poor. We have a government with the same financial ratios as Spain, a central bank that is attempting to prop up the economy by buying the distressed cast-off assets of poorly functioning financial institutions, a diminishing labor force that is less well educated, more people moving into retirement than we have workers, and almost nobody who knows how to weld. What do you think?

Don Anderson (7.5) (5) (2.5) (7.5) (7.5) (7.5) (5)

John Doll (7.5) (10) (7.5) (10) (10) (7.5) (5)

Scott Halstead (10) (7.5) (7.5) (10) (7.5) (10) (2.5)

5. Increase the gas tax. The gas tax should be higher. There should be higher tax on parking lots to encourage transit, constructing ramps to reduce the use of land for parking and reduce environmental problems caused by runoff. Transit prices should also be higher. We need to significantly improve the speed of rail transit while reducing the operating costs. We can't afford 15 mile an hour trains operating at ground level on already busy roads. We need to construct rail transit in the same right of ways on new and expanded freeways.

6. High tax states can compete. They need well-educated and talented employees performing a higher level of work.

7. Economic outlook still poor. We need to reform our State Government. First, reduce the size of the legislature. Second, pay them for performance. 3rd, lengthen terms to 4 years and establish term limits. Establish a planning department. Elect the Metropolitan Council Representatives. Establish performance standards for high cost transit projects.

Vici Oshiro (7.5) (7.5) (7.5) (10) (10) (10) (5)

7. Economic outlook still poor. We need to expand in some areas and contract in others. This would be better measured by a more nuanced measure than GDP - and several options exist.

Robert Jacobs (0) (0) (0) (0) (0) (0) (10)

7. Economic outlook still poor. Watch both of these attached youtube clips from Americatalyst, Mr. Madden. Think in terms of sovereign default just around the corner. Minnesota is just another domino that will be tipped also.

John Nowicki (6) (9) (5) (9) (5) (7) (4)

It is refreshing to have a doer and not someone from a think-tank or consultant. My feeling is that a consultant or think tank head is there and not in the trenches because they do not have the intestinal fortitude to actually execute and take responsibility for the outcome.

Mark Ritchie (na) (na) (na) (na) (na) (na) (na)

Another great interview - thanks. We have had a steady rise in new business creation as long as I have been secretary of state—setting a new all-time record in 2012 and on a five year rolling average basis rising from 50k per year to near 60k per year. My own data totally confirms his assertion of expansion. But it is odd to only talk about jobs and job creation since most of the new family income in MN has been coming from self-employment and companies with zero employees. "Jobs" is a tricky concept that is often used to talk about employment, which is a completely different animal.

Wayne Jennings (8) (8) (8) (10) (10) (10) (5)

Tom Spitznagle (5) (5) (9) (5) (2) (5) (4)

The federal government’s precarious financial condition is the elephant in the room, but this apparently did not come up during the interview. Although the economy is strengthening in the short term, many economists are predicting an eventual collapse when the so-called debt and dollar bubbles burst. Many informed citizens (including business people) are buying into these concerns. National politician’s attempts to cover up the problem aren’t working because there are too many other reputable politicians and economists whose messages about the true nature of the national economic situation are gaining traction.

Al Quie (5) (5) (10) (10) (10) (0) (0)

William Kuisle (3) (2) (6) (5) (0) (4) (6)

The $16 trillion debt is one big gorrilla that remains on the back of the economy that is not being addressed. Mr. Madden ignores it and I guess thinks it has no drag on the economy. There is no long-range good economic news until congress and the President address the national debt.

Chuck Lutz (8) (8) (9) (8) (9) (9) (0)

Fred Zimmerman (8) (8) (5) (3) (7) (2) (10)

I have great respect for Toby Madden and I tend to weigh his comments carefully. I also would like to see more early childhood efforts as our family has housed more than ninety foster children. However, I am fearful that Minnesota’s cumbersome and self-serving public bureaucracy would reduce the effectiveness of even the best-intentioned programs. Minnesota clearly needs a major rebuild in the way it does things – with fewer full-time staff provided with lucrative early retirement programs that will provide a major drag on the state’s economic development long into the future.

Paul and Ruth Hauge (8) (7) (8) (9) (9) (9) (3)

Toby Madden is right on with most of his comments and projections- he is positive in a time when doom seems to be popular.

Carolyn Ring (8) (8) (9) (10) (5) (5) (2)

Lyall Schwarzkopf (6) (7) (9) (8) (6) (4) (4)

Tom Swain (5) (5) (8) (10) (9) (5) (na)

Larry Schluter (8) (8) (9) (9) (6) (5) (7)

Very interesting information. I think if more people knew this they would feel more positive on the state of the economy. All legislators should have this information.

R. C. Angevine (5) (7.5) (10) (7.5) (7.5) (7.5) (2.5)

3. Productivity gains lead to more jobs. I agree but it needs strong support from all including proactive retraining of those who lose their jobs as a result of the productivity increases.

5. Increase the gas tax. I would agree that a moderate increase in the gas tax is warranted and desirable.

6. High tax states can compete. You get what you pay for.


The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions, reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   David Broden,  Janis Clay,  Bill Frenzel,  Paul Gilje,   Jan Hively,  Dan Loritz (Chair),  Marina Lyon,  Joe Mansky, 
Tim McDonald,  John Mooty,  Jim Olson,  Wayne Popham  and Bob White

The Civic Caucus, 01-01-2008
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Verne C. Johnson, chair, 952-835-4549,       Paul A. Gilje, coordinator, 952-890-5220.

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