“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
“They Haven’t Learned Yet”: Republican’s Love Affair With Voodoo Economics
In a moment of sanity, George HW Bush once called Ronald Reagan’s proposal for tax cuts “voodoo economics.” The idea was that tax cuts for the wealthy would somehow “trickle down” to the rest of us and grow the economy. Bush eventually had to embrace the idea as Reagan’s vice president, but later as president himself, he paid the price when he had to abandon his “no new taxes” pledge because the tax cuts accomplished nothing more than to blow up the federal budget deficit.
Along came President Clinton, who raised taxes on the wealthy (something that seems to have been forgotten in this presidential primary) and we witnessed the first budget surplus in generations. Next came George W. Bush, who cut taxes with the same result – a huge budget deficit compounded by wars and the Great Recession. At that point we were treated to the “wisdom” of VP Dick Cheney who quipped that “deficits don’t matter.” Of course that only lasted until Barack Obama became president and all of a sudden it became a national crisis. Eventually President Obama raised taxes on the wealthy once again, and cut the deficit by two thirds.
At some point, one has to wonder how long Republicans can continue their love affair with trickle-down economics. And yet all three presidential candidates continue to espouse the idea that tax cuts for the wealthy will make the economy grow.
The failure of trickle-down has been demonstrated in states as well as at the national level. We’ve all watched as the Republican governors of Kansas, Louisiana and Wisconsin failed to grow their economies by providing massive tax cuts to the wealthy. The most extreme case for years now has been Gov. Brownback in Kansas.
Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.
Rather than grow the economy, that resulted in things like the following:
Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.
With the 2016 election on the horizon and the state budget still in crisis, it looks like some Republicans may be questioning their commitment to voodoo economics.
Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.
If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.
“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”
While Rep. Hutton’s remarks won’t win him a “profile in courage” award, the Republican proposal at this point – which Brownback rejected – is to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.
George HW Bush knew that trickle-down was just another name for voodoo economics. Now it sounds like a few Republicans in Kansas are figuring that out. But I don’t hold out a lot of hope that this kind of awareness will be contagious in the GOP. After all, acquaintance with facts and reality is clearly not their strong suit these days.
By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, April 19, 2016
“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
“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
“A Voter-Fraud Witch Hunt In Kansas”: Voters Could Be Charged With A Felony For Mistakenly Showing Up At The Wrong Polling Place
In fall 2010, Kansas Secretary of State Kris Kobach held a press conference alleging that dead people were voting in the state. He singled out Alfred K. Brewer as a possible zombie voter. There was only one problem: Brewer was very much alive. The Wichita Eagle found the 78-year-old working in his front yard. “I don’t think this is heaven, not when I’m raking leaves,” Brewer said.
Since his election in 2010, Kobach has been the leading crusader behind the myth of voter fraud, making headline-grabbing claims about the prevalence of such fraud with little evidence to back it up. Now he’s about to become a lot more powerful.
On Monday, Kansas Governor Sam Brownback signed a bill giving Kobach’s office the power to prosecute voter-fraud cases if county prosecutors decline to do so and upgrading such charges from misdemeanors to felonies. Voters could be charged with a felony for mistakenly showing up at the wrong polling place. No other secretary of state in the country has such sweeping prosecutorial power, says Dale Ho, director of the ACLU’s Voting Rights Project.
“It means a person and an office with no experience or background in criminal prosecutions is now going to be making a determination of whether there’s probable cause to bring a criminal case against an individual who may have just made a paperwork mistake,” Ho says. “There is a reason why career prosecutors typically handle these cases. They know what they’re doing.”
Kobach claims there are 100 cases of “double voting” from the 2014 election that he wants to prosecute, but there’s been scant evidence of such fraud in Kansas in past elections. From 1997 to 2010, according to The Wichita Eagle, there were only 11 confirmed cases of voter fraud in the state.
Such fraud has been just as rare nationally, even according to Kobach’s own data, noted The Washington Post:
Kansas’ secretary of state examined 84 million votes cast in 22 states to look for duplicate registrants. In the end 14 cases were referred for prosecution, representing 0.00000017 percent of the votes cast.
Kobach says he needs this extraordinary prosecutorial power because county and federal attorneys are not bringing enough voter-fraud cases. But Kansas US Attorney Barry Grissom said last year that Kobach’s office had not referred any cases of voter fraud to his office. “We have received no voter fraud cases from your office in over four and a half years,” Grissom wrote to Kobach.
Kobach has been a leading proponent of his state’s strict voter-ID law, which decreased turnout by 2 percent in 2012, according to the Government Accountability Office, with the state falling from 28th to 36th in voter turnout following its implementation.
He’s also been the driving force behind Kansas’s 2011 proof-of-citizenship law for voter registration, which requires voters to show a birth certificate or passport to participate in the political process. Twenty-five thousand voters had their registrations “suspended” in the 2014 election because of the law; even the right-wing group True the Vote claimed that only 1 percent of the list were verified non-citizens.
Those wrongly on the list included Da Anna Allen, an Air Force vet. She told The Wichita Eagle:
“It just caught me off guard that I was not registered. I served for a week on a jury trial, which basically told me I was a registered voter. I’m a disabled veteran, so it’s particularly frustrating. Why should I have to prove my citizenship when I served in the military?”
After the Supreme Court found that Arizona’s proof-of-citizenship law violated the National Voter Registration Act, Kansas and Arizona instituted a two-tiered voting system, arguing that those who registered through the federal NVRA form could not vote in state or local elections. That system has it roots in the Jim Crow South.
Kobach, who wrote Arizona’s “papers, please” anti-illegal immigration law, alleges “in Kansas, the illegal registration of alien voters has become pervasive.” That defies common sense, as Johnson County District Attorney Steve Howe pointed out. “Why would an illegal alien want to go to vote and draw attention to himself?” Howe asked.
Kobach has asked the Supreme Court to restore the proof-of-citizenship law. The Court will decide on June 25 whether to take the case. If Kobach succeeds, proof-of-citizenship laws will spread to more states, and Kobach’s voter-fraud crusade will become even more influential.
By: Ari Berman, The Nation, June 11, 2015
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