Thursday, January 29, 2015

Arthur Laffer Says Tax Cuts Will Make Kansas' Economy Soar...In 10 Years

Those of you who have been following this blog know that I've been keeping a close eye on the economic black hole that was formerly the great state of Kansas.

The Sunflower state is the most recent and best example of the disastrous results of trickle-down economics. Contrary to what was promised, cutting taxes didn't - shockingly enough - lead to more revenues, and job growth wasn't anything to brag about either.

Supply-side proponents are in somewhat of an uncomfortable position, and because of Kansas' blood red political make up, Republicans can't blame any of their troubles on any effeminate Democrats mucking things up. So what can they say?

Well, recently, Arthur Laffer, the father of supply-side economics, attempted to explain to everyone that everything was a-okay:

Celebrity economist Arthur Laffer told me in an interview last week that he was not surprised by the huge deficits Kansas is facing because of massive tax cuts. 
What? Really? He "was not surprised" that his stupid tax cuts would result in large deficits? Because neither he nor his ideological brethren ever seem to pose such a possibility before any tax cuts are enacted.

He told a reporter at the time that he had not produced an economic model on when Kansas will notice meaningful economic growth.
Why the hell not? Did he just figure that tax cuts would lead to massive economic growth because obviously tax cuts lead to massive economic growth?

In a 45-minute phone interview, Laffer said while he is “not surprised,” he didn’t know why the deficits have occurred. He still believes adamantly in his supply-side theory: If you reduce income taxes, you will raise more revenue, not less.
This is an amazing passage. Laffer's both not surprised and also confused by the failure of his policies. And despite the fact that they've clearly resulted in less revenue, he still feels that they'll lead to more revenue. Somehow.

Just when the revenue starts to rise is another matter.
 Ah there we go. So when can we expect the freedom fairy to pay a visit to the Kansas treasury department?

“You have to view this over 10 years,” Laffer said. “It will work in Kansas.”
Aaaand there we have it. Sam Brownback once said the tax cuts he signed into law would act like a “shot of adrenaline” to the state’s economy. And just like an actual shot of adrenaline, it clearly takes a whole decade to take effect.

Monday, January 26, 2015

Ohio Governor Uses Made Up Lincoln Quote To Attack Obama's Free Community College Program

On Fox News Sunday, Gov. John Kasich (R-OH) had this to say about President Obama's proposal to raise the capital gains tax to pay for his free community college program:

"You can’t build a little guy up by tearing the big guy down. Abraham Lincoln said it then, and he’s right."

 Sounds like a nice quote. Except one problem: Lincoln didn't actually say that. As Politifact explains:

The true author is Rev. William J. H. Boetcker, a minister-turned-public speaker, born in 1873, eight years after Lincoln was killed. After he left the pulpit, Boetcker, a political conservative, negotiated labor relations.

In 1916, Boetcker published the list of "10 Cannots," a collection of personal truisms largely centered around the benefits of laissez-faire capitalism. The axioms have been mistakenly attributed to Lincoln for decades.


But what's also hilarious about Kasich's supposed invocation of Lincoln is that he is one of the worst examples one could use when arguing against taxing the wealthy. After all, it was the very first Republican president himself who signed into law the U.S.' very first progressive income tax. Taxing the job creators at a higher rate is how the Party of Lincoln used to operate before it turned into the Party of Reagan. Lincoln did the very thing that Kasich thinks he would never have done.

That's a pretty big fail all around, governor.

Friday, January 23, 2015

Ronald Reagan Convinces GOP Voters To Support Tax Hikes. Seriously.

Well this quite interesting:

Republican voters are divided over the idea of increasing taxes on wealthy U.S. taxpayers, according to a new GBA Strategies poll first shared with The Hill.

When asked whether they support raising the tax rate on personal income above $1 million annually, 36 percent of Republicans supported the plan and 47 percent of Republicans were opposed. The rest were undecided.

Okay, a solid plurality of GOP voters are against raising taxes on millionaires. Nothing new here, right?  But if we continue reading:

But when asked whether they supported raising the personal income tax on those earning $1 million a year to 50 percent, "the same rate taxed under President Reagan," Republicans shifted their support, with 53 percent supporting and 33 opposing.

Behold, the power of Ronaldus Magnus. The mere mention of the Gipper caused a not so insignificant portion of conservatives to do a complete 180 and actually support raising taxes on the job creators!

But hey, I'm not complaining. At this point I'm sure many on the Left would be willing to accept any path to progressive legislation, regardless of the rationale behind it.

Monday, January 19, 2015

Rep. Steve Scalise (R-LA) Praises Martin Luther King Jr. Day, But Voted Against Making It A Federal Holiday. Twice.

Man, the stones on this guy:

This tweet by itself would be rather uncontroversial if it wasn't for the fact that said tweeter just happened to vote against making Martin Luther King Day a federal holiday. Twice.

You would think that supporting such a thing would be a no-brainer. I mean, just to drive the point home, even Strom Thurmond (!!!) voted in favor of it! Seriously, when your record on civil rights is even worse than the guy who filibustered the original Civil Rights Act, it's probably time for some introspection.

Also, too. Scalise was one of two Republicans in the Louisian legislature who thought there was no need to apologize for that whole slavery thing. Just throwing that out there.

If the congressman really wants to honor MLK, he should probably do something actually productive, like offer support to fix the Voting Rights Act. I'm pretty sure Dr. King would appreciate that more than some empty, useless tweet.

Friday, January 16, 2015

Wyoming Governor Admits Obamacare Provisions Create Jobs

Matt Mead of Wyoming, is one of the few Republican governors who appears to be open to the idea of expanding medicaid under the reviled Affordable Care Act. While an expansion would be implemented with a few annoying Republican "modifications", overall it's a step in a positive direction for low income Wyoming citizens:

Mead made the case for the optional expansion during his State of the State address that was held Wednesday before a joint session of the 63rd Wyoming Legislature.

The expansion, which would extend health benefits to about 17,600 low-income residents, is a key part of the federal Affordable Care Act, also known as Obamacare.


But what really caught my eye was this comment from Mead:

But in November, Mead said he would support an expansion plan that was developed out of negotiations between the Wyoming Department of Health and the federal government.


Mead told the Legislature that he doesn't care which plan they ultimately select. But he said something is needed to create jobs, to help the state's hospitals with their uncompensated care, and to support the "working men and women who don't have insurance."
Did a Republican governor actually admit that one of the key components of Obamacare actually creates jobs? This is a pretty significant admission. After all, Republicans not only believe that government doesn't create jobs, but that a government program like the ACA especially doesn't create jobs, and in fact, destroys them. For a governor of a blood red state like Wyoming to say such a thing is a pretty impressive feat.

Mead further rationalizes position:
"The fact is many of us don't like the ACA, including me," he said. "But here's another fact: Our federal tax dollars help pay for the ACA, and Wyoming tax dollars pay for the ACA.

"Do we choose to have that Wyoming money be returned to Colorado, California or Wyoming? I say Wyoming."

Exactly. As we covered a little while back, the idea of rejecting something like a medicaid expansion would be a remarkably stupid way to sock it to Obama.  The residents of Wyoming are paying for Obamacare whether Republicans expand medicaid in their state or not. The only question is whether they want to pay for it and get some actual benefits, like jobs and health care, or pay for it and get nothing in return. Seems to me like a no brainer.

But that's just me.

Tuesday, January 13, 2015

Welfare For Me, Not For Thee: Joni Ernst Edition

Joni Ernst, one of the most recent additions to the chicken-head-biting caucus in the senate, ran on making sure that congress stops spending so much dang money. Well, unless it's spent on the right people, of course:

The truth about her family’s farm roots and living within one’s means, however, is more complex. Relatives of Ernst (née: Culver), based in Red Oak, Iowa (population: 5,568) have received over $460,000 in farm subsidies between 1995 and 2009. Ernst’s father, Richard Culver, was given $14,705 in conservation payments and $23,690 in commodity subsidies by the federal government–with all but twelve dollars allocated for corn support. Richard’s brother, Dallas Culver, benefited from $367,141 in federal agricultural aid, with over $250,000 geared toward corn subsidies. And the brothers’ late grandfather Harold Culver received $57,479 from Washington—again, mostly corn subsidies—between 1995 and 2001. He passed away in January 2003.


The benefit accrued to Ernst’s family does, however, undermine her claims that her family “lived within her means” and that she is committed to cutting pork–swine testicle extrication past notwithstanding.

 "I've been on welfare and farm subsidies, but did anyone help me out? No!"

Wednesday, January 7, 2015

Can We Finally Put Trickle-Down Economics To Rest?

When it comes to growing the economy,  Republicans always argue the virtues of supply-side economics. It's not just a school of macroeconomics, it's practically a religion. Republicans insist that by lowering taxes and reducing regulations, the economy (any economy) will flourish like never before. The more taxes and red tape you cut, the more growth that will surely follow.

Conversely, if one raises taxes or increases regulations, the reverse will occur. Jobs will be lost, the economy will contract and fire will reign from the sky. These are the immutable laws that govern the conservative universe.

But how do conservative economic policies hold up in the world of reality so far? Unfortunately, not very well.

Let's begin with job growth. As we already covered, tax hikes and new regulations kill jobs. While there have been various tax hikes throughout Obama's presidency, the ones that grind conservatives' gears the most have to be his hike in income taxes and a medicare surtax on high income earners that occurred at the beginning of 2013. As far as regulations, the big one is of course, Obamacare, which had many provisions that took effect by the beginning of 2013. How did the economy fare since then? Here's a graph, and a table of the overall job growth by month since the beginning of Obama's term to the present (click to enlarge):

 Now let's break this down by annual job totals:

2009: - 5,087,000
2010:   1,058,000
2011:   2.083,000
2012:   2,236,000
2013:   2,331,000
2014:   2,650,000

2009 was a pretty awful year for job growth considering that whole economic meltdown thing, so that shouldn't be surprising to anyone. But notice how job numbers steadily grew year after year. In fact, the last two years we had our best growth so far, and that's WITH the worst of Obama's policies being enacted. If trickle-down theory was even remotely accurate, we would see weaker numbers for 2013 and 2014 than than we did for 2012, but the exact opposite happened.

Here's some more fun data. This time, only counting job growth from the private sector:

And once again, a breakdown by year:

2009: - 5,013,000
2010:   1,277,000
2011:   2,400,000
2012:   2,294,000
2013:   2,365,000
2014:   2,571,000

Here we seem to have a similar situation. Job growth, just in the private sector, grew as time went on. In the past two years since some of the most pernicious of Obama's tax hikes and regulations have been implemented, we've actually had the most robust growth since the booming 90s, gaining nearly 5 million private sector jobs.

Now here's a chart of the overall unemployment rate throughout Obama's presidency:

Observe how the UE rate has been steadily going down as time went on. That's supposed to be a good thing. And once again, since 2013, it's had some of the steepest drops. If people like Grover Norquist were correct, UE should have skyrocketed once again after 2013 and line should have been going up until it reached the stratosphere. Oddly enough that didn't happen.

Of course, none of this should be surprising. We've had plenty of examples in the past where committing anti-freedom blasphemies haven't led to catastrophe. When Bill Clinton raised the top tax rate in 1993, conservatives made the same dire claims as they do now, but the economy wound up creating over 22 million jobs. But probably my favorite example is Franklin Roosevelt's presidency:

When the Great Depression started, the top tax rate was about 25%. As time went on, the rates gradually increased until they reached a staggering, 94% by the time the Depression finally ended. Yet when we observe the graph, the UE rate went down even when taxes went up, even to astronomical levels, far higher than anything we have today. If people like Rush Limbaugh knew what they were talking about, then the economic havoc caused by such high taxes would make people beg for the days of 25% unemployment.

Speaking of which, what makes the FDR era even better as a counterpoint to trickle-down economics is that not only was this a period of super high taxation, but it was also a period of dramatic hikes in government spending, something supported by the school of Keynesian economics, which conservatives generally despise. I don't think one could come up with a worse combination of right-wing terrors than what we had in the 30s/40s, yet we had the greatest economic expansion in our history. How do conservatives explain such a thing? Easy. By pointing out that Keynes was gay, therefore none of this counts.

Finally, let me finish this article off by addressing one of the other very well known, and also very wrong, conservative claims, concocted by supply-side founding father, Art Laffer: tax hikes lead to less revenue. Here are the annual revenues compiled by the Tax Policy center since 2009:

2009: $2,105 trillion
2010: $2,162 trillion
2011: $2,303 trillion
2012: $2,450 trillion
2013: $2,775 trillion
2014: $3,021 trillion*

 *Reported by the Wall Street Journal. The TPC hasn't updated their total for 2014 for some reason.

My math is a bit rusty, but those revenue numbers appear to have been getting bigger every year. Indeed, nearly a $600 billion increase since Obama's most detrimental taxes have been in effect. Not to belabor the point, but it must be asked yet again, how can this be? Why haven't the job creators closed up shop and fled to Somalia at the first sign of these job killing initiatives?

Alternatively, how has the recently formed conservative utopia, formerly known as the great state of Kansas fared under anti-Obama, pro-growth policies championed by supply-siders? You could probably guess by now:

Kansas will collect $1 billion less in revenue in 2015 and 2016 than its projected expenses following massive income tax cuts signed into law by Republican Gov. Sam Brownback.

The new revenue estimates released Monday revealed that Kansas would burn through about $380 million in reserves and still need to cut $280 million to balance its current budget for fiscal year 2015, which ends next June 30.

Laffer once said that when you tax something you get less of of it. Apparently, when you ask less of something, you also get less of it. Who knew?

All snark aside, let me be clear here. I'm not saying that Obama's tax hikes and new regulations caused higher economic growth (though I do think the tax hikes did increase revenues), but rather, at the very least, his policies didn't appear to impede growth to any noticeable degree.

Since 2013, businesses have created nearly 5 million private sector jobs, with 2014 having the fastest period of job growth since 1995. Much better than any period during the entire 8 years of the Bush administration, despite its lower tax rates and much more lax regulatory regime. Democratic policies haven't hurt the economy during FDR's presidency, or Clinton's and now even Obama's.  How much clearer can the verdict be?

Thursday, January 1, 2015

Fox News Contributor Says Putin Date-Raped That Slutty Obama

You know my new year was going pretty well until I saw this video of one of the pilonidal cysts at Fox News:

For those of you that can't watch videos at work, Fox News contributor, and massive sack of pus, Lt. Colonel Peters had this to say about the way President Obama has been dealing with Vladmir Putin:

“You know, he tried to romance Putin and he got date-raped.”

First of all, seriously, what is the deal with conservatives and rape? Second, that attack is pretty incoherent. If Obama was the one was trying to "romance" Putin, presumably that mean he was trying to get into the former KGB leader's pants, it would make the "date-rape" kind of unnecessary, no? Yes, I know for conservatives, it's generally insult Obama first and worry about it making sense later, and Peters was no doubt just looking for any excuse to put "Obama" and "rape" together but still.

But also, how exactly is the situation bad from the U.S. perspective exactly? Unless there was some massive geopolitical change that happened in the past 5 minutes, Russia's not looking too hot. Their economy is in a downward spiral and Putin's shenanigans in Ukraine have led him losing major support from other allies. How does Putin look good in any of this?

Of course, it's probably also one of those things that you're not supposed to actually think about, just accept that it's bad cause a conservative says so.

Happy 2015, People!

Happy New Year, to my adoring public! Here's to hoping this year will be better than the last and that I'll actually be able to post semi-frequently for once.