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“Definitive Proof Of Failure Of Supply-Side Economics”: Kansas’ Experiment In Right-Wing Economics Is Still Failing Miserably

Every few weeks I feel it’s important to return to the ongoing disaster in Sam Brownback’s Kansas. It doesn’t get nearly as much play as it should in the media, which is unfortunate because Kansas’ experience is definitive proof of the failure of supply-side, Laffer-curve-based economic theory.

Under the leadership of Brownback and one of the most conservative legislatures in America, Kansas dramatically slashed the tax rates of Kansas’ wealthy and its corporations. According to ideology, the cuts should have jumpstarted Kansas’ economy and led to rapid growth that created jobs and helped the tax cuts pay for themselves. Of course, nothing of the sort happened.

The effect was disastrous, a slow-rolling series of budget shortfalls followed by cuts to essential services like education and roads, which only slowed the economy further. A series of punitive and regressive sin taxes on tobacco and other goods were instituted to make up for the cuts to the tax rates of the wealthy, which of course only further undermined consumer spending.

Officials in Kansas have tried to blame the problems on a slow national economy, but that is hogwash. Say what you will about the unequal distribution in gains from national economic growth, there is no doubt that the national economy is performing well by traditional metrics. It is not doing so in Kansas. Moreover, Kansas’ neighboring states are doing far better than it is.

It’s not local economic variations. Kansas’ troubles really are directly the fault of its tax cuts. They didn’t boost the economy–they slowed it down.

And now Kansans are paying the price. Even more cuts are coming, including devastating cuts to road maintenance through thefts from its already plundered Department of Transportation. These cuts to transportation (totaling over $2 billion in a small state!) are leading to deferred maintenance that will, of course, be incredibly expensive to deal with at a time when borrowing costs will likely be far higher than they are now.

This is on top of the damage Brownback is already doing to the state’s K-12 and university education systems, causing good teachers and professors to flee to more hospitable states. It’s a complete disaster.

The nation’s eyes should be trained on Kansas. This is what happens when you put Republicans in charge with the freedom to pursue their economic ideology. It’s not just a moral train wreck in terms of inequality and shared prosperity. It doesn’t even work to keep the lights on and make the trains run on time. Conservative economic orthodoxy is completely dysfunctional for running governments and society because it’s built on assumptions that aren’t true: rich people don’t create jobs, cutting their taxes doesn’t stimulate growth, cutting government services doesn’t “free up” capital to be spent on private sector growth, etc. What actually happens is that the rich simply hoard more money, corporations build up savings in their balance sheets, government cuts damage public confidence and infrastructure, and regular people don’t have as much money to spend, which dries up the consumer confidence and spending that is the real driver of job and economic growth.

 

By: David Atkins, Political Animal Blog, The Washington Monthly, July 3, 2016

July 5, 2016 Posted by | Kansas, Sam Brownback, Supply Side Economics | , , , , , , | Leave a comment

“Sam Brownback’s Kansas Disaster Is Getting Even Worse”: Conservative Policies Are Both A Moral And Practical Disaster

Politics is all too often couched in terms of morality and ethics, rather than simple right and wrong. What I mean by that is that reasonable people can come to different moral value judgments about ethical dilemmas: is it more moral to ensure that everyone has access to a social safety net even if some people game the system, or is it more moral to ensure that people keep all their private property and never have to give it up to someone less hardworking than themselves?

But it’s important to remember that it’s not just about empathy and ethics. It’s about what works and what doesn’t. And every day in every way, we are learning that conservative approaches simply don’t work–not in terms of social policy, and certainly not in terms of economic policy.

Exhibit A in the utter failure of conservative dogma is Sam Brownback’s trainwreck in Kansas. Here are the latest figures, courtesy of Yael Abouhalkah in the Kansas City Star:

This has been a bad week for Gov. Sam Brownback and others who believe his massive income tax cuts are going to dramatically boost employment in the state. A new report Friday showed that Kansas had lost a whopping 4,300 jobs in July from a month earlier.

The unemployment rate climbed for the fourth straight month, up to 4.6 percent, according to the federal Bureau of Labor Statistics. And look at this disastrous note: The Sunflower State now has 1,700 fewer jobs than it did at the start of 2015.

One more fact from the latest report shows that Kansas has added a puny 5,600 total jobs in the last year — from July 2014 to July 2015. The new information shows that the tax cuts that have drained the Kansas treasury of hundreds of millions of dollars the past two years are not working to attract employers and jobs.

Keep in mind that Kansas’ atrocious performance has nothing to do with the state of the midwest or the manufacturing sector generally, because both manufacturing and Kansas’ neighbors are actually doing pretty well comparatively:

Meanwhile, Missouri celebrated much better news in the latest BLS report. The Show-Me State gained 11,900 jobs in July, and now has added 30,900 for 2015. Yes, that’s without the huge tax cuts that Brownback and Co. put in place.

Earlier this week, a separate report showed Kansas is missing out on the growth in manufacturing employment, which is happening across much of the rest of America. One key statistic: Kansas lost 39,000 manufacturing jobs during the recession but has added just 4,000 since it ended.

All this as Brownback’s tax cuts are destroying what remains of the state’s educational system and social services. Brownback and his allies suffer under the delusion that supply-side economics really works, and that if they cut taxes enough on rich people and businesses that there will be an explosion of jobs and economic growth. That’s not just immoral because it increases inequality and hurts the poor. It’s as wrong as 2+2=5. In all but the most extreme cases, cutting taxes on the rich does nothing to create jobs, but slashing the salaries of teachers and cutting welfare benefits means less consumer demand, which in turns drives the economy into recession. The immorality would at least be somewhat tolerable if the ideology functioned at a broad utilitarian level, but it doesn’t.

Conservative policies are both a moral and practical disaster.

 

By: David Atkins, Political Animal Blog, The Washington Monthly, August 22, 2015

August 23, 2015 Posted by | Kansas, Sam Brownback, Supply Side Economics | , , , , , , | 3 Comments

“Pure Fanaticism”: Tax-Cutting Sam Brownback Pushing Huge Tax Increase–But Not For His Corporate Friends

As noted at Lunch Buffet, Louisiana Republicans finally caved in to Bobby Jindal’s demands that the state budget he’s screwed up can only be fixed if Grover Norquist goes along. Their counterparts in Kansas have not yet thrown in the towel in their fight to keep Sam Brownback from dragging them and the state to the bottom of fiscal hell. But he’s refusing to bend, and is now pre-blaming legislators for across-the-board budget cuts he says he’ll be forced to impose if solons don’t give him a budget that reflects his fanatical faith in supply-side economics.

According to the Topeka Capital-Journal‘s Tim Carpenter, it’s getting tense in Republican circles in that city, and Brownback even got “choked up” in one meeting with GOP legislators. And that’s understandable. He wants to insulate the out-of-state corporations to whom he’s given a huge tax cut from any budgetary pain, and can’t seem to figure out why legislators don’t just go along with his proposal to hike sales taxes on everybody else. If he’s rebuffed, obviously he has to cut the budget more, right?

Today it looks like Brownback may dry his tears, and in the words of Kansas City Star columnist Yael Abouhalkah, even have the “last laugh:”

Gov. Sam Brownback edged closer early Friday morning to his second greatest victory as the leader of Kansas government.

Shortly after 4 a.m., the House took the spineless way out and approved the largest tax increase in state history.

It was badly needed to fill the huge budget hole created by Brownback’s greatest “victory” — income tax cuts he pushed in 2012 for thousands of businesses.

Those cuts — as everyone knows by now — slashed state revenues by more than $600 million a year, imperiled funding for education and other state services, and caused the Kansas Legislature to continue meeting until Friday, the 113th day of a scheduled 90-day session….

[T]he Kansas Senate has already passed a similar bill to boost the sales tax — by the narrowest of margins last Sunday — but would still have to vote Friday to endorse the House’s action.

If that happens — and let’s hope it doesn’t — Brownback will have succeeded in making the Legislature come up with a solution for a mess he created, and for which he has never taken responsibility.

At least Bobby Jindal has the excuse of wanting really really badly to become President of the United States, and convincing himself his party and constituents owe it to him to help out by gutting their own public services and making a hash of the state tax code. In Brownback’s case, it’s pure fanaticism.

 

By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, June 12, 2015

June 16, 2015 Posted by | Kansas, Sam Brownback, Tax Increases | , , , , , , , | Leave a comment

“Being Punitive For The Hell Of It”: Kansas Wants The Very Poor To Crawl, Often, For The Means Of Survival

Former WaMo Weekend Blogger Max Ehrenfreund has an important if maddening piece up at WaPo’s Wonkblog today about the latest indignity towards the poor inflicted by those good Christian GOP lawmakers in Kansas.

A dollar bill is a special kind of thing. You can keep it as long as you like. You can pay for things with it. No one will ever charge you a fee. No one will ask any questions about your credit history. And other people won’t try to tell you that they know how to spend that dollar better than you do.

For these reasons, cash is one of the most valuable resources a poor person in the United States can possess. Yet legislators in Kansas, not trusting the poor to use their money wisely, have voted to limit how much cash that welfare beneficiaries can receive, effectively reducing their overall benefits, as well.

The legislature placed a daily cap of $25 on cash withdrawals beginning July 1, which will force beneficiaries to make more frequent trips to the ATM to withdraw money from the debit cards used to pay public assistance benefits.

Since there’s a fee for every withdrawal, the limit means that some families will get substantially less money.

Why is this happening? Apparently because Republican legislators heard anecdotes about “the welfare” accessing ATMs at baseball games, liquor stores, casinos, etc. It’s just like the stuff Ronald Reagan once said about food stamp beneficiaries using their change to buy vodka. So for their own good, the solons decided to force them to make more and much smaller withdrawals, even if their cash benefits are used, as they typically are, for relatively large payments like rent.

While some politicians and news organizations have found occasional examples of the poor misusing their public assistance, there’s no clear evidence that it’s a systemic problem or that limiting the recipients’ access to cash would force them to use their money differently.

In other words, the legislators were just being punitive for the hell of it. After all, it’s mostly those people we’re talking about. Why shouldn’t they have to crawl?

 

By: Ed Kilgore, Contributing Writer, Political Animal Blog, The Washington Monthly, May 21, 2015

May 22, 2015 Posted by | Kansas, Poor and Low Income, Poverty | , , , , , | Leave a comment

“Kansas Has Gone Full Tea Party”: Kansas’ Experiment In Concentrated Conservatism Keeps Getting Grimmer

Kansas is in the midst of a grim experiment putting crackpot supply-side economic theories into practice. While these economic anti-reforms will have devastating results for poor people in the state, in other respects Republican Gov. Sam Brownback and his legislative allies have made the government more intrusive into the private lives of the state’s citizens. April has provided some particularly egregious examples of this disastrous turn.

Kansas has been a Republican state for a long time. Since 1936, the only time the state has given its electoral votes to a Democratic candidate was to Lyndon Johnson in the massive landslide of 1964. Despite this, Kansas has historically not been a far-right state. Prominent Kansas Republicans have generally been moderates, like Bob Dole and Nancy Kassebaum. Kathleen Sebelius, President Obama’s former secretary of health and human services, was the state’s Democratic governor as recently as 2009.

But since the election of Brownback, Kansas has gone full Tea Party. Kansas Republicans have enacted massive upper-class tax cuts, with the idea that they would produce such an explosion of economic growth that the state would actually gain revenues. This makes no sense in theory and has been a catastrophe in practice. Revenues have cratered, while economic growth lags behind neighboring states. Spending on the poor has decreased, while the tax burden on the poor has increased. Needless to say, Kansas has rejected the Medicaid expansion offered by the Affordable Care Act, denying access to health care for many poor Kansans.

Kansas Republicans certainly have no intention of taking responsibility for this disaster, which means a search for scapegoats. The targets should not be surprising: poor people, women, and gay people.

Earlier this month, Brownback signed a bill that, among other things, prevents welfare recipients from spending government-provided funds on things poor people do not spend their money on, such as cruise ships. As Emily Badger of The Washington Post observes, this reflects a trend in Republican-governed states of placing burdens and restrictions on poor people that do not apply to any other recipients of government benefits — and for no good reason.

The demeaning of the poor doesn’t end there. Recipients of funds from the Temporary Assistance to Needy Families program will have their daily withdrawals, using the provided ATM cards, limited to $25 a day, not only creating needless inconvenience, but effectively transferring money from the poorest citizens in the state to banks in the forms of additional fees.

Brownback rose to prominence as more of a social conservative than a fiscal conservative. So it’s not surprising that Kansas is placing irrational legal burdens on women as well. Kansas passed a bill banning dilation and evacuation abortions (under the junk science name “dismemberment abortions.”) The procedure is safe — so there is no health-related justification for banning it — and is the most common one used for second-trimester abortions, which women have a constitutional right to obtain.

Even worse, the ban does not contain exceptions for rape, incest, or most threats to a woman’s health. The law puts women’s health at risk by interfering with the judgment of doctors in order to punish women for exercising their constitutional rights in a way Kansas legislators disapprove of.

Brownback’s attacks on basic justice and equality don’t end there. In 2007, Sebelius issued an order banning discrimination against LGBT state employees. Earlier this year, Brownback rescinded the order, creating a new standard under which state employees could be fired simply because of their sexual orientation. Brownback defended the order using the traditionally disingenuous “special rights” language so often employed by those who favor legal protection for bigotry: “This Executive Order ensures that state employees enjoy the same civil rights as all Kansans without creating additional ‘protected classes’ as the previous order did.”

This argument would make sense — if you think that gay and straight people are equally likely to be discriminated against because of their sexual orientation. In the actually existing world, Brownback’s measure does not guarantee civil rights to all Kansans, opening the door for discrimination against gays and lesbians based on their sexual orientation.

Under Brownback, Kansas has offered a concentrated form of what most national Republicans claim to want. Tax cuts for the wealthy, tax increases and reduced benefits for the poor, arbitrary interference with the reproductive freedom of women, and increased discrimination against gays and lesbians. Voters next November should ask themselves whether they want this ghastly agenda to be repeated on a national scale.

Editor’s note: A previous version of this article mistakenly asserted that Kansas recently banned dilation and extraction abortions, but these were already illegal.

 

By: Scott Lemieux, The Week, April 24, 2015

April 26, 2015 Posted by | Civil Rights, Kansas, Tea Party | , , , , , , , | 1 Comment

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