Knocking on Inflations' Door?

Inflation is a rise in the level of prices of goods and services in an economy over a period of time.

Food prices increased 3.9% in Febuary, the largest single month increase in 36 years. Likewise, the producer price index (wholesale g00ds) is also increasing -- 1.6% last month, which translates to 19.2% for the year. The decimation of the Japanese supply line will also continue to add to the cost of electronics and tools.

Also of interest is the expected trends in rental demand and rates. Rental supply is flat while demand continues to increase. There are predictions of a 10% increase in rental rates in some cities. As explained in a recent article:

There will be an envelope of two or three years," said Macke, "when the rise in
demand for rentals will exceed the industry's ability to meet it." Plus,
Alford added, "there's been a shift in the American Dream. We're learning from
our surveys that a huge proportion of people are choosing to rent."

They've experienced the downsides of homeownership -- or seen friends
and family suffer -- and don't want to take the risks or pay the higher costs of
homeownership.

Time will tell whether Greater Minnesota will see a continued increase in demand and rates, but the trend seems to be heading in the direction of tightening supply and higher rental rates.

Flat wages and increased cost of living is never an attractive prospect, but one that may be coming. This will be a good year to implement a long-term planning and tight budget control. Our local leaders also need to fix their balance sheets to control debt and cash flow.

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Turf Wars Threaten to Block Reform

Governor Mark Dayton has certainly perfected the political art of pitting groups against each other in pursuit of his agenda. Consider the following messages from our Governor:

1. Income Warfare = “tax the rich”

2. Regional Warfare = mayors versus legislators;

3. Worker Warfare = public employees v. private employees; and

4. Class Warfare = keep telling people they are poor and the job providers are too rich.

It appears that the Governor is determined to protect the status quo (and his campaign funding sources) in blocking any real reform of State government.

This “us versus them” mentality is destructive and will not solve our long-term woes. We (Minnesotans) are in this mess together and need to solve it together.

The next few weeks, the Senate and House will be making agonizing decisions to right size and reform State Government. Resist the “us versus them” temptation and remember that our elected officials have a duty to work for all of us.

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