Watch for lots of retrospective media commentary in the next couple of weeks, as we mark the end of not only one of the worst years in the economic history of Minnesota and the United States, but also one of the worst decades in modern times. The pundits will offer us a zillion theoretical causes for these hard times, from the 9/11 trauma at the start of this blighted decade, to dislocations from a more global economy, to the federal deregulation trends that presumed wealthy private interests would police themselves and act in the common interest.
For a quick tutorial on the specifics of how bad the decade was, check these two sources: a concise and authoritative McClatchy Newspapers article by Tony Pugh, published in September, and our good friends at the Minnesota Budget Project, who published an excellent report earlier this year, The Lost Decade: Taking a Closer Look at Minnesota’s Public Investments in the 2000s. The McClatchy analysis echoes the overhwelming consensus that those in the top 1 percent or the top 10 percent benefitted enormously and disproportionately from whatever economic growth occurred, and now have a greater share of wealth and income than the top tier has enjoyed since 1929, just before the Great Depression. The Minnesota Budget Project analysis chronicles how cuts, and then more cuts, dictated by the “no-new-taxes” dogma, affected our quality of life and our economy.
Explaining how we lost this decade gets infinitely complicated, and it’s best not to get too invested in a simplistic single-bullet theory. But let us not forget that this decade was ushered in with grandiose promises from anti-tax conservatives that we would achieve unprecedented prosperity as a result of signficant income tax cuts at both the federal level (capital gains cuts too) and the state level. Those lost revenues are a huge factor in our mounting national deficit, as explained by this Center for Budget and Policy Priorities analysis of the deficit components, and our chronic state-local budget shortfalls in Minnesota. And at least partially because we shrunk our public sector by unprecedented levels this decade, we have made college much more expensive, diminished the quality of our public schools, failed to invest in proven early childhood interventions, neglected our roads and bridges and public works infrastructure, and underinvested in health care and economic security for the middle- and lower-income households.
Happy New Year! Happy New Decade! And let us resolve — in the smartest possible and cost-effective ways of course — to reinvest for our common good.