MinnEcon: April 8, 2010 Archive

Economic Lookout: Eye on the Range

Posted at 12:00 PM on April 8, 2010 by Paul Tosto (0 Comments)
Filed under: Economic Lookouts, Greater Minnesota

MinnEcon note: We're pleased to launch a regular feature called Economic Lookouts -- Minnesotans in MPR's Public Insight Network sharing first-person accounts of the economy around them.

Economic Lookout
Aaron J. Brown | Balsam Township Itasca County

It's a natural next step for MinnEcon. We've really tried to let the economic stories and insights of Minnesotans drive what you see here. With Economic Lookouts, we'll let folks talk directly about the economy as they see it.

Today, Aaron Brown, gives us a read on the Iron Range. He writes the MinnesotaBrown blog and teaches communication at Hibbing Community College.

The Range has struggled in the recession. Hibbing unemployment spiked to nearly 19 percent last year. It's better now but still higher than the rest of Minnesota.

"We need a dose of creativity and we need a dose of 21st century thinking to get us out of this mess," Brown says in his video. "We're not there yet."

Check out Brown's report and then post your own thoughts below.

Interested in being an Economic Lookout? Contact us directly at MinnEcon.

Unemployment in Hibbing (click on the chart for a larger view).

Source: Department of Employment and Economic Development

Aaron Brown is the author of "Overburden: Modern Life on the Iron Range" and the MinnesotaBrown blog. He teaches communication at Hibbing Community College.

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Want to be an Economic Lookout? Drop us a line.

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More trade with Cuba could aid Minnesota but it needs to go both ways

Posted at 3:36 PM on April 8, 2010 by Paul Tosto (0 Comments)
Filed under: Greater Minnesota

Rep. Collin Peterson and Sen. Amy Klobuchar recently introduced the Travel Restriction Reform and Export Enhancement Act in the House and Senate. The bill would remove travel restrictions between the U.S. and Cuba and make it easier for Americans to sell goods there.

From economist Louis Johnston, St. John's University | College of St. Benedict

Removing those barriers would roughly double American agricultural exports to Cuba and greatly benefit Minnesota farmers. But it does nothing to help Cuba export goods in which it holds an advantage.

That's a problem.

The only way Cubans can ultimately pay for American imports is to export goods and services to the U.S and earn U.S. dollars. Cuban importers could borrow the money from U.S. banks to buy American products.

The legislation makes this easier to do. But Cuba will have to earn U.S. dollars to pay back the loans because U.S. banks won't accept loan payments in Cuban currency

The bill does nothing to alleviate this problem. In fact, it sets up the banks to make loans that have a high chance of not being paid back if we continue to ban imports from Cuba.

There are Cuban exports that Americans would want. Cuba's largest export is sugar, and there is clearly a large American appetite for sweeteners.

But sugar beets are one of Minnesota's major agricultural products and that would pit the export interests of some Minnesota farmers against the business interests of others.

Free and open trade is a policy about which almost all economists agree. The logic of trade is simple: A country should export the goods in which it has a comparative advantage and import goods in which they do not have a comparative advantage.

Political considerations, concerns about environmental and labor standards, and other factors are important determinants of trade flows, and clearly play a role in U.S.-Cuba trade.

In the long run, however, the economic reasoning is inescapable: we need to let Cuba sell stuff to us so that we can sell stuff to them.

Johnston teaches economics at St. John's University and the College of St. Benedict and is a regular voice on MPR News.

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