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“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

“Emerging From The Ferment”: The Real Irony Of Scott Walker’s Messy Personal Finances

The finances of Wisconsin Gov. Scott Walker got a rather stern once-over from National Journal on Monday.

“Walker has two credit-card debts of more than $10,000 apiece on separate cards and is paying an eye-popping 27.24 percent interest rate on one of them,” the Journal harrumphed, before quickly lasering in on the irony. “The Republican presidential candidate has cast himself as both a fiscal conservative leader and a penny-pinching everyman on the campaign trail, often touting his love of Kohl’s, the discount department store.”

Walker isn’t the first Republican presidential hopeful to get this treatment either. Back in June, The New York Times took Sen. Marco Rubio of Florida to task for a “strikingly low savings rate” and some household purchases of questionable wisdom.

This is a deeply silly genre of journalism. It treats troubles the vast majority of Americans grapple with as vaguely scandalous. And it implicitly assumes the same rules of thumb that should guide household budgets should also guide the federal budget, which is catastrophically wrong.

More to the point, other details in the Journal piece offer a brief look at a presidential candidate of relatively modest means.

“Walker listed only six investments worth between $1,000 and $15,000, a whole life insurance plan worth between $15,000 and $50,000, and a deferred compensation plan from Milwaukee County worth between $15,000 and $50,000,” the Journal continued. Walker received a $45,000 advance for a book in the last year, and it looks like his annual salary since assuming the governorship in 2011 has been around $140,000. That’s certainly a lot of income compared to most Americans — it puts Walker just below the threshold for the top 10 percent — but it’s obviously nothing compared to the fortunes Jeb Bush and Hillary Clinton have amassed.

This gets at something poignant about Walker the politician, and by extension Walker the man. While most all presidential candidates and politicians have a significant amount of socioeconomic distance from the median American, Walker has less than most. Besides his income and wealth, Walker came from modest beginnings as a preacher’s kid in a small Wisconsin manufacturing town. He attended Marquette University in Milwaukee, but didn’t finish his degree — passing on one of the key status symbols that American elites use to separate themselves from the pack.

And yet few Republicans, and certainly no other Republican presidential candidate, has been so ferociously focused on grinding everyday workers into the ground.

Like any good conservative, Walker pushed massive tax cuts for the well-to-do through Wisconsin’s state budget, creating a hole he’s now trying to fill by slicing education spending. But he also drove a blistering and brutally successful push to crush Wisconsin’s public-sector unions, followed by “right to work” laws that will likely cripple the state’s private unions as well.

Nor does it look like Walker did this because Republican and business interests were demanding it — he did it because he wanted to, as a matter of ideology.

An explanation probably lies in the unique and poisonous way the history of race and class intersected in the Milwaukee political milieu Walker came from. In the early 20th century, large numbers of black Americans migrated from the South to northern urban centers. But no sooner had they put down roots than the mid-century collapse of manufacturing arrived, sucking away jobs and bringing poverty to the cities.

Black Americans had never been permitted to build up the wealth that white Americans had: Along with the aftereffects of slavery and the social consequences of segregation, they were initially excluded from policies like Social Security and the G.I. Bill, which helped build the white middle class. And racist policies like redlining and the construction of the highway system destroyed many of their neighborhoods and prevented them from accessing areas of economic vibrancy.

So when the white middle class fled to the suburbs, the poorer black populations could not follow. That set up Reaganite white suburbs, which surrounded and disdained the urban interiors of impoverished African-Americans, and all the vicious politics that followed. The funny thing, as Alec MacGillis laid out in a 2014 profile of Walker, was that this process came a few decades late to Milwaukee. The future governor cut his political teeth as a member of Milwaukee’s fleeing white upper-middle class, just as this conflict was reaching its apex.

So it should come as no surprise that those public-sector jobs Walker helped crush have also been one of the great economic havens where black Americans can actually earn a decent living.

For decades, American macroeconomic policy has done a terrible job providing enough work to keep everyone employed. That’s introduced a bottom-up desperation that’s trickled higher and higher over the years. On top of that, while America has a hidden welfare state for the rich and the upper-middle class, its explicit social safety net is skimpy and targeted at the poorest Americans. This creates a perverse circumstance in which many Americans in the middle of the pack feel left behind, while they see people with different skin colors and alien cultural habits — habits often shaped by poverty — receiving aid (however grossly inadequate).

More and more, American society is becoming a brute contest, in which the groups of varying power must trample one another for the scraps that fall from the elite table. This sort of divide-and-conquer effect, in populations that should be uniting over common interests and common foes, has a long history in U.S. labor struggles.

When people find themselves outside the elite inner circle, and see themselves as in a zero-sum economic game with impoverished subcultures that look and act different from them, the likes of Scott Walker is often what emerges from the ferment.

 

By: Jeff Spross, The Week, August 5, 2015

August 7, 2015 Posted by | GOP Presidential Candidates, GOP Primaries, Scott Walker | , , , , , , , , | Leave a comment

“Social Safety Net In Hands Of The States?”: The GOP’s State Budget Disaster Is The Best Case For Big Government

The Republican Party is cutting a swath of destruction through state budgets.

In Kansas, Gov. Sam Brownback’s experiment in income and business tax cuts has blown a $344 million hole in the budget for this fiscal year, and a projected $600 million hole for the next fiscal year. Part of his plan to close it is to cut $44.5 million from public schools and universities.

Illinois needs to cut over $6 billion to balance its books. So Gov. Bruce Rauner is calling for a $1.5 billion cut to the state’s Medicaid program, plus $600 million in cuts to local government finances and $387 million in cuts to higher education (though he may have trouble getting those ideas past the Democrats in the Illinois legislature).

Wisconsin’s state budget, meanwhile, faces a $238 million deficit, thanks in small part to tax cuts Gov. Scott Walker pushed through after taking office in 2011. That wiped out a $759 million budget surplus in 2013. Now Walker is looking to cut $300 million from higher education over the next two years, along with cuts to the state park system and its recycling programs, among other things, and to restructure about $100 million in debt payments the state already owes.

These three examples show the GOP’s “tax cuts now, tax cuts forever” ideology remains utterly unconcerned with economic reality. But more deeply, they’re a lesson in some bad choices America made in how to design its national social safety net, which set the stage for the current crises.

In not one of these three cases do the projected budget gaps rise above 1 percent of the income generated annually by the state’s economy. The idea that taxes couldn’t be raised, starting on high earners, to close these holes is risible.

On top of that, these tax cuts are often pitched as growth enhancers for state economies. That was the explicit case Brownback made for his tax cut package. But for such a policy gambit to have even a chance of working, spending must be held constant. If you start cutting spending on things like health care or education or transit or whatnot, you’re just pulling more dollars out of the state economy with one hand even as you leave more dollars in with the other.

In other words, you have to be able to deficit spend. But that can be hard for states. First off, most of them have balanced budget amendments in their constitutions, which means deficit spending is just a no-go. These restrictions generally don’t cover individual infrastructure projects and the like, which states can choose to borrow a set amount for from the bond markets. But covering shortfalls between general annual spending and revenue is much more difficult legislatively.

The other problem is that the bond markets might just not give you the money. Investors may consider a state a bad bet, which would drive its borrowing and interest payments up. That hasn’t been much of a problem in the aftermath of the recession, as investors have been desperate for safe places to park their money — which makes the refusal of state governments to borrow to cover their regular expenditures all the more absurd.

But the low rates won’t last forever, and the willingness of investors to take a bet on a state puts limits on state government borrowing.

What this all means is that state government spending is pretty pro-cyclical — i.e. it rises and falls with the economy. If the economy is doing well, state tax revenues go up. If the economy goes into recession, state tax revenues go down, forcing budget cuts in health, education, and elsewhere. And that’s before you factor in Republican governors and state legislators who are out to cut taxes willy-nilly.

But for spending on things like health care and education — two of the biggest drivers of any state’s budget — being pro-cyclical makes no sense. It’s not as if people just stop getting sick during recessions, or that children simply stop needing an education. These are public investments in the health and well-being of the American people themselves, and the need for them remains constant throughout all the ups and downs in the economy.

The only entity that can spend with impunity regardless of the state of the economy is the federal government. That’s because it can print money, which means it can always pay lenders back in a pinch. This does mean the federal government faces a different sort of threat — instead of being abandoned by investors, it could print so much money it drives up inflation. But that’s just really hard to do, historically speaking.

In short, these are programs that should be run through the federal government. But Medicaid is a joint state-and-federal program, meaning both the federal government and state government supply some of the money from their respective budgets. Meanwhile, education is funded by streams from the federal, state, and local levels at the same time.

That structure leaves these programs critically vulnerable to the whims of the economy — not to mention the whims of Walker, Brownback, Rauner, and their friends in the Republican Party.

 

By: Jeff Spross, The Week, February 24, 2015

February 25, 2015 Posted by | Social Safety Net, State and Local Governments, State Budgets | , , , , , , , | Leave a comment

“A Wishy-Washy Wonk”: Paul Ryan, Still A Total Jerk

Remind me not to get in a foxhole with Paul Ryan. At the first sign of trouble, he’ll pack up his gunny sack and head for base camp, running into the latrine to hide.

Or so I conclude from the budget he released this week. Remember how last year Ryan was reinventing himself as the true friend of “the poors,” as we ironically say in liberal blogland? Aside from being stunned that all those skewed polls turned out to be exactly on the money and he and Mitt Romney lost, he was also, we were told, chagrined and maddened that he came away from the 2012 campaign with a reputation as a pitiless Randian with a hole where his heart used to be.

So he set out last year to prove us all wrong. He hired a disaffected ex-Democratic wonk as his top social-policy guy. He was getting the great press you’d expect out of Politico, which loves Republicans Who Confound Liberals (“The new Paul Ryan,” last December 10; “Is Paul Ryan the GOP’s Next Jack Kemp?”, December 12; someone was asleep at the wheel on December 11 I guess). America would soon see the revealed truth: Government keeps poor people poor, bleeds them of the pluck and spunk needed to liberate oneself from the dependent-American community. St. Paul would save them.

Then came the CPAC conference a month ago, and he tells one little story, about the kid who didn’t want a free lunch, just a normal brown bag like the other kids, and he gets it wrong, and the real and true version of the story doesn’t remotely prove the point he wants it to prove in his retelling, and he gets hammered over it for days, and boom, he throws in the poverty towel. To blazes with those poors. Kicking them was pretty fun after all.

I jest, of course, with my chronology. But the budget he put out this week is nothing to laugh at. Or maybe on reflection it is something to laugh at. Why in the world does it exist, and what good do he and his fellow House Republicans think it’s going to do them?

In case you haven’t heard the basic skinny, it’s a budget that’s very pre-new Paul Ryan, characterized by the two features that have chiefly characterized all Ryan budgets: meanness and dishonesty. Meanness starts with the $5.1 trillion in cuts to domestic discretionary spending programs over 10 years, with steep cuts to Medicaid and food stamps, and—

No, wait. Let’s stop here and mull this food stamp cut. As you probably know, in last year’s farm bill negotiations, House Republicans proposed a $40 billion cut to food stamps. By the time the House and Senate agreed to a farm bill last month, that was whittled down to $8.7 billion over 10 years. That’s a small cut in percentage terms (about 1 percent). But even it takes $90 a month away from 850,000 poor families. Ryan’s proposed food stamps cut? $125 billion. More than 14 times the size of the already controversial current cut. As St. Paul sayeth, we rejoice in our sufferings.

Beyond that it’s the usual Dickensian gruel. Federal programs block-granted, which always means far less money and almost always means that governors can spend the money on some more rewarding and more agreeably ZIP-coded constituency if they want to. Huge education cuts. Big cuts to Pell Grants. Oh, and here’s a nice touch—college students would start being charged interest on their loans while still in college, so that now, on top of everything else, the Republican Party is getting into the usury business.

Now don’t think I’ve forgotten the dishonesty part. Obamacare, as you might recall from the aforementioned campaign, cuts $716 billion in payments to hospitals and such. You remember—Romney and Ryan pounded on Obama about that $716 billion. You’re killing the oldsters, and so on.

Well, Ryan’s budget would repeal Obamacare. And yet, it pockets that same roughly $700 billion in Medicare cuts as savings, and, as Sahil Kapur noted for TPM, it “uses the savings to meet its fiscal targets.” How dandy is that? Hate Obamacare hate Obamacare hate Obamacare hate Obamacare…Oh, but I’ll pocket that $700 billion, Barack, thanks, great idea!

I haven’t even mentioned the plan’s biggest political weakness, which is Ryan’s return, yes, to Medicare, to quasi-privatizing it for people under 55. Democrats, until this week wholly on the defensive, have now been handed a huge sledgehammer. The 7.1 million Obamacare enrollees takes the heat off health care for the time being and allows for a topic change. And so here comes Ryan, the very day after Obamacare enrollment closed, offering that topic.

Why? Why is he re-introducing the idea of tampering with Medicare in an election year? In fact, why even release a document such as this? And why, having released it, force all your members to vote on it within the next week or so, which Ryan and Eric Cantor vow will happen? As Greg Sargent pointed out Wednesday, eight House Republicans in six different states are going to have to vote for this Medicare- and Medicaid-killing budget (old people understand that “Medicaid” means “nursing home care”).

And, depending on how you rate these things, there are around 25 House Republicans who could conceivably lose to Democrats this November. Why force them to vote for this? Or maybe if you’re John Boehner you don’t force them to. You let them vote no. But then you lose! Then what a laughing stock you are! But you’ll probably get 218 votes one way or another. So fine—you’ve forced some people in vulnerable positions to vote aye, but hey, you’ve won the vote. Then what? Then nothing. Harry Reid’s Senate will not even take it up. So it’s all symbolism.

And this is the symbol the GOP wants to present? The party that destroys federal education programs, Medicaid, food stamps, and (in the future) Medicare? I suppose they think it’ll rev up their base. Will it really? This is the fifth Ryan budget by my count. They’ve all said in essence the same thing, and they’ve all gone the same place: nowhere.

I’d like to know, sort of, what’s actually in Paul Ryan’s head and heart. But at the end of the day it doesn’t matter. What matters with him, as with any politician, is what he puts on paper. And here we have it. If this is trying to help the poor, then what Putin is doing in Russia is pro-gay. At least we won’t have to read any more “Paul Ryan loves poor people” stories. So long, St. Paul.

 

By: Michael Tomasky, The Daily Beast, April 3, 2014

April 4, 2014 Posted by | Paul Ryan, Ryan Budget Plan | , , , , , , , | Leave a comment

   

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