The Business Guy

Last week, we took a look at the Strib op-ed by Roger Hale that supported Governor Dayton’s budget plan, whom the Strib felt it was important to remind you was a former CEO at Tennant Corporation…

…but not that he was a large-scale DFL donor who’d given $110,000 in the last gubernatorial race alone to Alliance for a Better Minnesota, the Dayton-family-supported attack-PAC that launched the most epic sleaze campaign in Minnesota history against Tom Emmer.  That, apparently, the Strib didn’t believe was relevant.

“But what about what he said about business?”, some leftybloggers responded.

Doug Baker, CEO of St. Paul-based Ecolab, responded in the Strib over the weekend.  (Full disclosure:  I worked for Ecolab for four years. A good chunk of my retirement is still in Ecolab stock – and it’s performing better than most of my portfolio at the moment.  Their IT department would give Scott Adams a year worth of material, but it’s a good company – as it happens, 20 times the size of Roger Hale’s Tennant).

And Baker is unimpressed by either Hale or Governor Dayton:

I have two reactions to [Hale’s piece]: First, many in the business community strongly disagree — and second, focusing on revenue generation misses the point and delays action on the more important issue — unsustainable increases in government spending.

It’s no secret that Minnesota always has been a high-tax state. An April 2010 report from the Itasca Project, which highlighted our region’s strengths and weaknesses, identified Minnesota’s uncompetitive tax structure as one of the main barriers to job creation.


The “progressives” never, never get that.

My experience, which is shared by the majority of my fellow business leaders in Minnesota, is that personal taxes do matter. It’s an issue that frequently comes up when recruiting people or transferring people to Minnesota.

A majority.

And that’s when it comes to getting talent to come to Ecolab Tower in downtown Saint Paul, or the R&D center in Eagan.   Like most big Minnesota companies, Ecolab has created no manufacturing, distribution or non-sales jobs in Minnesota in years.

Following Gov. Mark Dayton and enacting the second-highest tax rate in the nation would hurt our state.

This is especially true today when state and national borders no longer constrain the movement of labor, capital and intellectual property. In this digital age, people can and do work from anywhere — and they can and will choose to work where they can keep more of their income.

And that’s just speaking of people who work for major corporations.

Ecolab started in the 1920’s, back when the barriers to enter business were very, very low.  The corporation was able to build its business during decades when Minnesota’s taxes were blissfully unintrusive.

How about people starting the next generation of businesses?  The little S-corporations that are the big C-corporations of tomorrow?

They’re moving to Hudson, or Fargo, or Sioux Falls, or Dallas/Fort Worth.

Bring this up to a progressive.  Note that North Dakota is lowering taxes as their revenues boom; they’ll respond “but how many Fortune 500 companies have?”  The response is “that’s a function of population density, but nice try.  Still – how many jobs are those Fortune 500 companies creating in MN?”

The answer: fewer:

There also have been recent headquarters moves that cost Minnesota thousands of jobs — MoneyGram comes to mind — which I strongly believe was motivated more by personal income tax rates than anything else (in my opinion).

But you don’t have to take my word for it. According to the U.S. Bureau of Labor statistics, Minnesota employment growth has lagged the U.S. rate for a decade. More than 1,200 small and medium-sized businesses left the state from 1997 to 2008.

Baker gets the real problem – the one Hale glossed right past:

More important than the tax issue, though, is Dayton’s proposed double-digit increase in state spending. The legislative majorities have offered a 6 percent increase in spending over last year’s budget — this includes a substantial increase in spending on both K-12 education and health care.

For any family or anyone who owns a business in this state, a 6 percent increase in revenue would be considered very good news and would be considered a budget they could live with. However, in government-speak, a 6 percent increase is considered a “cut” because it represents less than the government wanted to spend.

Baker notes the same thing I did in shredding Hale last week; back in the seventies, Japan and Germany were getting done with recovering from World War 2. China and India were mired in experiments with various degrees of extreme socialism, and starving and riven with political contortions and very much third world countries.

Back in the sixties and seventies – which is where Dayton’s entire strategy came from, and when Roger Hale was an active CEO – it was a very different world.

Baker gets this:

Raising taxes and double-digit increases in government spending may have been a manageable strategy in the 1980s and 1990s, when our competition for jobs came primarily from Wisconsin and Iowa.

But the reality our state faces today is a very different one.

Our global competitors and the majority of U.S. states — led by a number of prominent Democrat governors — are moving toward lowering taxes, prioritizing government spending and building a more supportive business environment in order to attract jobs.

Minnesota must do the same if we hope to grow jobs in the future and compete in the 21st century.

Baker’s piece utterly shreds Hale.  You can tell it hurt the DFLers who were defending Hale last week.  They’re responding.

With name-calling.

15 thoughts on “The Business Guy

  1. We need about ten more Doug Bakers to write a similar rebuttal.

    This morning, another left wingnut, Work MN or something like that, most likely another Dayton family funded smear organization, ran another lying fearmongering ad supporting Dipshit Dayton. Probably the most egregious claim was that “there won’t be any guardrails on the highway when you crash!”

    Let’s see if that new commitment to “investigative journalism” promised by Kommisar Nancy Barnes, goes after this!

  2. I especially like the Alliance for a Better Minnesota where the bubble headed girl says “rich people should pay their fair share”. Is being clueless a requirement for joining the DFL, or is it the logical result?

  3. Wisc businesses were surveyed one year ago, and again this month and asked if they thought Wisc was on the right track. I don’t remember the exact wording of the question, but it dealt with if these businesses leaders would be willing to expand in Wisconsin based on how the state was run.

    2010 – 10% said Wisc is on the right path
    2011 – 88% said Wisc is on the right path

    2010 – Wisc was run by Diamond Jim Doyle and liberal Democrats
    2011 – Wisc is run by Scott Walker and mainstream Republicans

    Unless Wisc does something stupid and puts the left back in control, they are setting themselves up quite well to attract business.

  4. Ecolab execs can write articles like this as they primarily sale to professional buyers (hospitals for example).

    Minnesota’s big retailers know this too, but are scared silly of the ranting left. So they don’t dare speak out.

  5. So the Democrats are running this ad many many times a day (even on cable channels now) talking about how the Republicans are “cutting the budget”. Which, as you note above, isn’t true.

    So are the Republicans going to do what they did last year and not respond? How’d that work out for Tom Emmer?

  6. Chuck, good point. ECL has actually NO direct-to-consumer trade.

    And the GOP is answering the charges – but money talks, and the DFL’s got the money.

  7. Another question: Where is the Honeywell general office located now? Not in Minneapolis. Gee, I wonder why.

    And before Dog Gone can come in and blame the loss of Honeywell on Pawlenty, let me point out the FACT that they left during the Ventura administration. After years of enduring Perpich and the fake Republican Arne Carlson.

  8. Chuck;

    “Unless Wisc does something stupid and puts the left back in control, they are setting themselves up quite well to attract business.”

    I saw the same data, but don’t remember where. If the left turds recall ploy works, there may be a different outcome. Now, they also have that ranting moonbat Shelly Moore running for a Senate seat. It will be interesting to see what happens in that race.

  9. In the PR war, the dems win because they have the money and the media. However, we have the votes to thwart Governor Dipstick. All we need do is keep our powder dry while he puts his up his nose.

  10. I had the chance to spend the weekend with my parents. My father, who’s 81 and HATES politics (much less politicians) actually reacted to one of these commercials. His reaction was: If I see ONE MORE of these STUPID commercials, I’m gonna throw a brick through the TV.

    So please….PLEASE….DemoncRATS….you are doing the SAME thing you did in Washington. You are over-playing your hand (AGAIN). PLEASE keep plowing money into commericals! Every news program starts “Government shutdown”…all those commericals…you are turning the public off in a MAJOR way!

    Thanks. Please keep pissing your money for 2012 away.

  11. “There also have been recent headquarters moves that cost Minnesota thousands of jobs…”

    Just ask Boeing; good-bye WA, hello SC. It starts with the Boeing (BA) 787 Dreamliner Final Assembly building, expect more Boeing facilities to make the move to a better business climate in the very near future. (hint: It won’t be MN.)

  12. To be fair, Scott, the Boeing move is an expansion, not a relocation. So far.

  13. Granted Mitch, but they’ve elected not to expand ($750M worth) in the utopia that is WA state, much to the chagrin of the union thugs and Lafe Solomon of the NLRB.

  14. Yes, but Boeing not expanding into a union shop has drawn the wrath of the Obama mafia. How dare free enterprise try to remain, well, free?
    “That’s a nice airplane company you got there. It would be a shame if something happened to it.”

  15. Yea, and Obumbler’s goons are trying to ban that move, stating it’s a violation of union rights, I mean NLRB rules. Oh, wait, I’m being redundant. Sorry!

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