Trickle down economics made Kansas business dry up

September 30, 2014

Kansas voters are angry; they elected Sam Brownback governor on his promises that slashing state budgets and slashing taxes for the wealthy would make Kansas prosperous.

Now the roads are bad, schools are suffering, and many other state services can’t be done.  Kansas is crumbling, and the state government is too broke to do anything about it.

Which explains this picture, in Mother Jones:

Kansas Gov. Sam Brownback meets with Kansas farmers about why the roads to get their crops to market are so bad, breaking their trucks and costing them time and money. Illustration by Roberto Parada, in Mother Jones Magazine.

Kansas Gov. Sam Brownback meets with Kansas farmers about why the roads to get their crops to market are so bad, breaking their trucks and costing them time and money. Illustration by Roberto Parada, in Mother Jones Magazine.

I do love that illustration. It tells an important story.

From the story, by Patrick Caldwell:

That the RGA had been forced to mobilize reinforcements in Kansas spoke to just how imperiled Brownback had become. After representing Kansas for nearly two decades in Congress, he had won the governorship in 2010 by a 30-point margin. Once in office, Brownback wasted no time implementing a radical agenda that blended his trademark social conservatism with the libertarian-tinged economic agenda favored by one of his most famous constituents, Charles Koch, whose family company is headquartered in Wichita and employs more than 3,500 people in the state. Other GOP governors elected in the tea party wave, such as Wisconsin’s Scott Walker, garnered more ink for their brash policy maneuvers, but in many ways Brownback had presided over the most sweeping transformation.

Early in his tenure, he said he wanted to turn Kansas into a “real, live experiment” for right-wing policies. In some cases relying on proposals promoted by the Kansas Policy Institute—a conservative think tank that belongs to the Koch-backed State Policy Network and is chaired by a former top aide to Charles Koch—Brownback led the charge to privatize Medicaid, curb the power of teachers’ unions, and cull thousands from the welfare rolls.

“[Brownback] said, ‘I’ll be glad to campaign for you coming up, but I want all of my guns pointed in the same direction,’ meaning there’s no room for difference of opinion. From there on it was chilling.”

But his boldest move was a massive income tax cut. Brownback flew in Reagan tax cut guru Arthur Laffer to help sell the plan to lawmakers, with the state paying the father of supply-side economics $75,000 for three days of work. Brownback and his legislative allies ultimately wiped out the top rate of 6.45 percent, slashed the middle rate from 6.25 to 4.9 percent, and dropped the bottom tier from 3.5 to 3 percent. A subsequent bill set in motion future cuts, with the top rate declining to 3.9 percent by 2018 and falling incrementally from there. Brownback’s tax plan also absolved nearly 200,000 small business owners of their state income tax burdens. Among the “small” businesses that qualified were more than 20 Koch Industries LLCs. “Without question they’re the biggest beneficiaries of the tax cuts,” says University of Kansas political scientist Burdett Loomis.

Laffer told me that “what Sam Brownback has done is and will be extraordinarily beneficial for the state of Kansas,” but many Kansans beg to differ. Brownback had said that his tax cut plan would provide “a shot of adrenaline into the heart of the Kansas economy.” Instead, the state has gone into cardiac arrest. “The revenue projections were just horrendous once the tax cuts were put into place,” Loomis says. The state’s $700 million budget surplus is projected to dwindle into a $238 million deficit. Standard & Poor’s and Moody’s downgraded the state’s bond rating earlier this year as a result. “The state’s on a crisis course,” says H. Edward Flentje, a professor emeritus of political science at Wichita State University who served alongside Brownback in the cabinet of Kansas Gov. Mike Hayden in the 1980s. “He has literally put us in a ditch.”

Conservatives once celebrated Brownback’s grand tax experiment as a prototype worthy of replication in other states and lauded Brownback himself as a model conservative reformer (“phenomenal,” Grover Norquist has said). “My focus,” Brownback said in one 2013 interview, “is to create a red-state model that allows the Republican ticket to say, ‘See, we’ve got a different way, and it works.'” By this fall it was hard to imagine anyone touting the Brownback model, especially with the Kansas governor at risk of going down in defeat—in the Koch brothers’ backyard, no less—and dragging the entire state ticket down with him. The Wall Street Journal recently dubbed Brownback’s approach “more of a warning than a beacon.”

More at the website.

Income inequality, failure of trickle down economics, dramatic tax cut disasters, all come home to roost at some point. Kansans, it appears, are ready to change things.

How about the rest of the nation?

More: 


Ice sheets thick as a denialist’s head

August 25, 2014

Cartoonist Randall Munroe at XKCD demonstrates ice age issues.

Of course it was a cartoonist. Where else does one go to find the truth these days, but the cartoons?

XKCD dramatically shows differences in North American cities and their relationship with their local ice sheets, 21,000 years ago.

XKCD dramatically shows differences in North American cities and their relationship with their local ice sheets, 21,000 years ago. Cartoon by Randall Munroe.

Enric Sala wrote about our disappearing ice for the World Economic Forum — a post worth reading.

Twenty kilometres in 20 years. That’s how much the Ilulissat glacier has retreated as this mighty, flowing river of ice crumbles into the ocean. It sounds like a lot. But I did not fully realize what this meant until we flew over the Ilulissat icefjord. It takes 10 minutes for the helicopter to fly over the amount of ice that has been lost because of global warming – in this glacier alone.

The speed at which the glacier moves has doubled relative to that in 1998. My scientist brain, accustomed to working with numbers and large scales, had a hard time absorbing this information. If I was rationally aware of the consequences of global warming from scientific reports before, now I felt it emotionally. This is what my trip to Greenland with a group of World Economic Forum Young Global Leaders did to us. It made us move from knowing and caring to be desperate to do something about it.

The experience also made us realize that all the international negotiations and agreements to date are not going to help avert the imminent catastrophe. Not even the boldest targets to reduce carbon pollution put forward by the smartest nations are going to move the dial. It’s all an illusion of movement, kind of like Alice in Wonderland’s Red Queen, running and running but not going anywhere.

Truth on ice.

There is a difference, though.  Ice thins, gets weaker, and covers less area.  As that happens, as the planet warms, the density of denialists does not appear to decrease, at least not fast, and not toward greater understanding and less insanity.


Want to wave the flag while your kids go back to school? Buy union-made

August 24, 2014

Union-Made School Supplies Checklist, from the Twitter feed of AAFSCME

Union-Made School Supplies Checklist, from the Twitter feed of AFSCME

You may have to shop a little harder; my experience, from the classroom, is that these products generally work better than non-union-made, and cheap import substitutes.  Over the course of a year in class — or a year in a kid’s backpack — quality can save you a lot of money.

Having difficulty reading the board?  Check out a similar list from Mike Hall at AFL-CIO Now:

photo by Avolore/Twitter creative Commons

Back to School photo by Avolore/Twitter Creative Commons

International Paper Co.; Mead Lined Paper; Roaring Springs Wirebound Notebooks (including these sub-brands: Environotes, Imagine, Genesis, Enviroshades, Emoticon, Lifenotes and Maxim); Roaring Spring Environotes Index cards; and Roaring Spring Legal Pads (including these sub-brands: Boardroom, Enviroshades, WIDE, Enviropads and Envirogold).

Notebooks and Binders:

Acco/Mead; Day-Timer Organizers; Roaring Spring Pocket Folders; Roaring Spring Composition Books.

Pens:

Sharp; Sheaffer; and Parker.

Student and Teacher Supplies:  

Martin Weber Art Supplies; Roaring Spring Art Supplies; Scotch Tape; Master Lock; Kleenex and Puff Tissues; and Claus Scissors.

Shops Staffed by Union Employees:

Office Max; Safeway; Giant; Albertson’s; Supervalu; Ralph’s; and Vons. 

Back to School Clothes:

All USA Clothing; Ben Davis; Hugo Boss; Oshkosh B’Gosh; Russell Athletic; Union Line; and Windjammer.

Lunchbox items:

Jif peanut butter; Oroweat bread; Farmer John lunch meat; Mott’s apple sauce; Wheat Thins; Slim Jim; Minute Maid juice; and  V8-Splash.

Go, students: Make America and your parents proud.


August 3, 1923: Calvin Coolidge sworn in as president

August 2, 2014

Calvin Coolidge taking the oath of office August 3, 1923, upon learning of the death of President Warren G. Harding. Curtis Publishing Company image (artist?), 1924; from the American Memory Collection at the Library of Congress

Calvin Coolidge taking the oath of office August 3, 1923, upon learning of the death of President Warren G. Harding. Curtis Publishing Company image (artist?), 1924; from the American Memory Collection at the Library of Congress

Vice President Calvin Coolidge took the oath of office for the presidency first from his father, a notary public, in New Hampshire, after having been officially informed of the death of President Warren G. Harding while on a tour, in San Francisco.

Coolidge is the only president to have been sworn in by a member of his immediate family.

More on Calvin Coolidge from the Library of Congress “Today in History” feature:

Calvin Coolidge

After all, the chief business of the American people is business.

President Calvin Coolidge,
address before the American Society of Newspaper Editors,
Washington, D.C., January 17, 1925.
Foundations of the Republic (1926), 187.

Calvin Coolidge
Calvin Coolidge, full-length portrait, seated at desk, facing front, holding pen and paper, wearing black armband in mourning for President Harding,
Washington, D.C.,
August 4, 1923.
Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929

Calvin Coolidge took the presidential oath of office on August 3, 1923, after the unexpected death in office of President Warren Harding. The new president inherited an administration plagued and discredited by corruption scandals. In the two remaining years of this term, Coolidge, long recognized for his own frugality and moderation, worked to restore the administration’s image and regain the public’s trust.  He went on to win the presidential election of 1924 in his own right.

Coolidge believed that government should interfere as little as possible with business and industry. His administration supported tax reductions for U.S. businesses as well as high protective tariffs in support of U.S. goods—which were being produced in greater quantities than ever before. Technological and managerial innovations, improvements in the methods of production, and growing distribution networks made consumer items more generally available.  Many Americans purchased cars and radios, vacuum cleaners, and washing machines—taking advantage of increasingly obtainable consumer credit.

Vacuum Cleaners on Display at the J.C. Harding & Co. Store
Vacuum cleaners on display at the J. C. Harding & Co. Store, probably in Washington, D.C.,
[1909-32].
Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929

Raleigh Haberdasher Show Window
Raleigh Haberdasher show window
Washington, D.C., circa 1925.
Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929

Automobiles in Window of the Washington-Cadillac Co.
Automobiles in window of the Washington-Cadillac Co.,
Washington, D.C., 1927.
Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929

Some groups did not participate fully in the emergent consumer economy, notably both African-American and white farmers as well as immigrants. While one-fifth of the American population made their living on the land, rural poverty was widespread. Despite agricultural overproduction and successive attempts in Congress to provide relief, the agricultural economy of the 1920s experienced an ongoing depression. Large surpluses were accompanied by falling prices at a time when American farmers were burdened by heavy debt. Between 1920 and 1932, one in four farms was sold to meet financial obligations and many farmers migrated to urban areas.

Restrictive immigration laws, aided by a resurgence of nativism in America in the 1920s, contributed to an atmosphere hostile to immigrants. The Emergency Quota Act of 1921 discriminated against immigrants from southern and eastern Europe. The National Origins Act of 1924 completely excluded Japanese and other Asian immigrants and further reduced those admitted from southern and eastern Europe.

Visitin' 'Round at Coolidge Corners
Visitin’ ‘Round at Coolidge Corners,
1924.
Prosperity and Thrift: The Coolidge Era and the Consumer Economy, 1921-1929

The economic growth of the 1920s spurred the rise of consumer organizations and campaigns. Some, such as the Truth-in-Advertising Movement, which pursued ethics and self-regulation in advertising, were industry-based. Other campaigns and organizations sought to educate consumers. The Better Homes Movement celebrated home ownership, home maintenance and improvement, and home decoration in towns and cities across the country. The Thrift Movement sought to teach children and citizens how to save and spend wisely. Stuart Chase worked to educate consumers about unfair advertising and pricing practices used by manufacturers of consumer products. Lastly, there were campaigns such as the Playground Movement which began in response to popular anxieties about material excess, misuse of leisure time, and the loss of traditional values.

Learn more about Calvin Coolidge and his era:

More:

From the Library of Congress collections: Calvin Coolidge, full-length portrait, seated at desk, facing front, holding pen and paper, wearing black armband in mourning for President Harding. Coolidge took the oath of office in Plymouth Notch, VT early in the morning of Friday, August 3rd, and arrived in Washington late that night, the day after the death of President Warren Gamaliel Harding (1865-1923). Coolidge was the nation’s thirtieth president.


80/20 Day: July 15, 1848, Vilfredo Pareto joined the human race

July 15, 2014

Happy 80/20 Day!

Italian economist, engineer and political activist Vilfredo Pareto was born on July 15, 1848, in Paris, where his father had fled due to political difficulties.

Pareto should be more famous, for his explanation of the 80/20 rule, and for his contribution to making better things, the Pareto chart.  Many economic texts ignore his work almost completely.  Quality management texts ignore his life, too — generally mentioning the principles they borrow, but offering no explanation.

Vilifred Pareto, Wikipedia image

Vilfredo Pareto, Wikipedia image

His contributions, as accounted at Wikipedia:

A few economic rules are based on his work:

And now you, dear reader, having just skimmed the surface of the pool of information on Vilfredo Pareto, know more about the man than 99.99% of the rest of the people on the planet.  Welcome to the tip-top 0.01%.

Resources:


What happens when “austerity” budget cutting blows up on the GOP? See Kansas

July 8, 2014

Kansas finds itself in a big, big pickle.

Republican Governor Sam Brownback managed to get the legislature to make massive tax cuts, claiming it would boost jobs in Kansas and stimulate the Kansas economy, thereby  paying for themselves.

Instead the Kansas economy is failing. Massive cuts have gutted Kansas’s once-revered public education system, and deeper cuts will be necessary to keep the state government afloat, unless there is some change in tax policy, or a massive, miraculous influx of business beyond what even the Koch Bros. could arrange.

Gov. Brownback is running for re-election, and finds himself behind in popularity in Kansas — behind even President Barack Obama.

Wow.

Full story at Vox, “Kansas was supposed to be the GOP’s tax-cut paradise, but now can barely pay its bills.”

And of course, there is comedy of the kind that you couldn’t make up:  Brownback blames Obama.

Oy.

Chart from Vox, showing what happened to Kansas's surplus revenues, promised to balloon with the tax cuts Gov. Brownback asked for, and got.

Chart from Vox, showing what happened to Kansas’s surplus revenues, promised to balloon with the tax cuts Gov. Brownback asked for, and got.

Turns out Americans, and especially the citizens of Kansas, want government that works.  They’d like taxes to be low, but low taxes won’t make voters happy when the roads are bad and the kids’ schools are crappy.

Wonkblog's chart showing job creation in Kansas is terrible, also.

Wonkblog’s chart showing job creation in Kansas is lagging, also, contrary to the GOP promises when tax cuts were instituted.

Government’s first job is to govern; just governments are established among men to secure human rights, old Tom Jefferson wrote.  Life, liberty and pursuit of happiness make a snappy line in a patriotic reading on July 4, but when the crowd drives home, they don’t want to be dodging potholes, and they don’t want their kids to complain from the back seat of the car that they don’t know what the Declaration of Independence is or what it says, “and who is Jefferson — I thought it was just a street in Dallas?”  When government fails to do basic jobs, voters may not be happy.

Will false advertising be able to bail Sam Brownback out?  Watch Kansas.

More:


Insta-Millard: In the new Gilded Age, the rich do not share the wealth

May 6, 2014

Have the GOP and the Über-wealthy set up the whole world for another Great Depression?  Should we expect a World War to follow?

Or, do we have time to make our societies more egalitarian, and more anti-poverty, and more stable?  Graphic from BusinessWeek:

Super wealthy have concentrated the wealth of the world in their personal control.  Capitalism run riot? Graphic from BusinessWeek

Super wealthy have concentrated the wealth of the world in their personal control. Capitalism run riot? Graphic from BusinessWeek

Opportunity to move up, economically, is stifled when so much wealth blocks access to the top economic rungs.

These figures come out of a clever analysis by economists Emmanuel Saez of the University of California at Berkeley and Gabriel Zucman of the London School of Economics, who is a visiting professor at Berkeley. The Internal Revenue Service asks about income, not wealth, which is the market value of real estate, stocks, bonds, and other assets. Saez and Zucman were able to deduce wealth by exploiting IRS data going back to when the federal income tax was instituted in 1913. They figured out how much property different strata of society owned by looking at the income that was generated by that property, such as dividends and capital gains. To simplify, if a family reported $1 million in rental income one year and the market rate of return on rental properties was 10 percent, then Saez and Zucman concluded that the family must have owned property worth $10 million.

The message for strivers is that if you want to be very, very rich, start out very rich. The threshold for being in the top 0.1 percent of tax filers in 2012 was wealth of about $20 million. To be in the top 0.01 percent—that’s the 1 Percent club’s 1 Percent club—required net worth of $100 million. Of course, even $100 million is a pittance to Bill Gates, whose net worth, according to the Bloomberg Billionaires Index, is nearly 800 times that.

It will require great creativity to work our way out of this maldistribution without some sort of catastrophe.

More: 

Read the rest of this entry »


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