Politics, Society, Uncategorized

Supply Side Kansas and ALEC

Sam_Brownback,_official_Governor's_portrait

Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

In these post Recession days, we have seen various stories of state and municipalities economies make positive strides toward recovery.  According to economist Paul Krugman, the state of Kansas is not one of those success stories.  If you don’t recall, the Republican Governor, Sam Brownback, signed legislation granting huge tax breaks for corporations and the wealthy.

Brownback crowed that these tax cuts would lead Kansas into the promised land of economic nirvana.  Unfortunately for regular, non-wealthy Kansans, the recovery has not materialized.  As Krugman states, the economy in Kansas tanked.

“Sam Brownback, the governor, proposed the legislation — in percentage terms, the largest tax cut in one year any state has ever enacted — in close consultation with the economist Arthur Laffer. And Mr. Brownback predicted that the cuts would jump-start an economic boom — “Look out, Texas,” he proclaimed.

But Kansas isn’t booming — in fact, its economy is lagging both neighboring states and America as a whole. Meanwhile, the state’s budget has plunged deep into deficit, provoking a Moody’s downgrade of its debt.” New York Times 

I guess this story may have garnered more national coverage if the Hobby Lobby decision had not consumed the mass media last week.  Should anyone be surprised that supply side economics would fail on any level?  If you were alive during the Reagan years and seemingly ever since, the Right continues to bang the drum of tax cuts for the wealthy and too many times a compliant Congress or in the case of Kansas, the Kansas State Legislature has agreed. I consider the constant Republican call for austerity for social programs to be part of this supply side mantra.

You know the argument.  The wealthy and big corporations will only succeed if we give them big tax breaks and then the trickle down of gains for the whole economy will lift all boats. However, it did not work for the Reagan Administration so why would the Kansas Legislature think it would improve the Kansas economy?

As Krugman suggests the answer to why Kansas took this ill-advised economic course is the American Legislative Exchange Council (ALEC) and an economist named Art Laffer.

“For the Brownback tax cuts didn’t emerge out of thin air. They closely followed a blueprint laid out by the American Legislative Exchange Council, or ALEC, which has also supported a series of economic studies purporting to show that tax cuts for corporations and the wealthy will promote rapid economic growth. The studies are embarrassingly bad, and the council’s Board of Scholars — which includes both Mr. Laffer and Stephen Moore of the Heritage Foundation — doesn’t exactly shout credibility. But it’s good enough for antigovernment work. 

And what is ALEC? It’s a secretive group, financed by major corporations, that drafts model legislation for conservative state-level politicians. Ed Pilkington of The Guardian, who acquired a number of leaked ALEC documents, describes it as “almost a dating service between politicians at the state level, local elected politicians, and many of America’s biggest companies.” And most of ALEC’s efforts are directed, not surprisingly, at privatization, deregulation, and tax cuts for corporations and the wealthy.” New York Times

If anyone was on the fence as to the ALEC connection to these austerity and tax cut for the wealthy and for corporations, this Kansas story should convince you.  Prof. Krugman suggests that these cuts and policies are not designed to help anyone but the wealthy and the corporations that are paying for the ALEC service.

“But how can you justify enriching the already wealthy while making life harder for those struggling to get by? The answer is, you need an economic theory claiming that such a policy is the key to prosperity for all. So supply-side economics fills a need backed by lots of money, and the fact that it keeps failing doesn’t matter.

And the Kansas debacle won’t matter either. Oh, it will briefly give states considering similar policies pause. But the effect won’t last long, because faith in tax-cut magic isn’t about evidence; it’s about finding reasons to give powerful interests what they want.”  New York Times

It seems evident that ALEC and Brownback and Laffer are not serious in their stated desires to help all the citizens of Kansas.  Am I just being cynical?  Are we expecting too much from State legislators and governors when we ask them to do what is best for all citizens?  Or at least most citizens?  Supply side economics has been long discredited, but Governor Brownback threw his unwavering support to principles and policies that only work to make certain people richer.  The facts seem to indicate that Brownback and the Kansas State legislature are only concerned about corporations and the wealth.

I guess I should not be surprised since the Republicans and some Democrats in Congress are hell bent on boosting the corporate profits at the expense of the rest of us.  Maybe the citizens of Kansas will remember this come election time.  Maybe the debacle in Kansas will convince other States and Congress to stop the corporate entitlements and tax cut rhetoric and start legislating with all of us in mind.  I can dream can’t I?

Does it surprise you that state legislatures and Congress for that matter never seem to be interested in tax cuts for the 99%?  What do you think?

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103 thoughts on “Supply Side Kansas and ALEC”

  1. Bron: “Reagan’s work set the path for 20 years of prosperity. BushI, Clinton, BushII and now Obama have killed it.”

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH….. Breath…. HAHAHAHAHAhA….

    Oh, yeah, that’s the stuff…

    Wages used to go up with productivity. That ended when Ronnie and the Trickledownonauts had their number one hit: “We’ll Be Stealing Your Productivity Now.”

    http://econintersect.com/wordpress/wp-content/uploads/2012/05/productivity-Mishel-2012-April-fig-1.jpg

    Yeah, what a saint Ronnie was…

    http://thedailyblog.co.nz/wp-content/uploads/2014/05/379-reaganomics-we-told-them-the-wealth-would-trickle-down.jpg

    It’s bad enough you guys gave us years of this crap capped by the Little Bush Depression. What’s worse is that you’re still BSing about it.

  3. TheSaucyMugwump apparently is unaware that the Labor Force participation rate dropping includes baby boomers dropping out, people who the Little Bush Depression discouraged right out of the work force, A HUGE increase in gray and black market workers off the books, and a whole bunch of other things that can’t be pinned on Obama, including the tendency of states to cut public workers rather than keep up with population growth.

    It also includes people freeing themselves from job lock in order to keep health insurance. Hopefully our pitifully low self-employment rate will go up as a result. Those people, being business owners, will no longer be considered “labor.”

    Further, if the GOP would pass the various infrastructure investment bills they’ve refused to even vote on, or have outright voted against, then we’d see a lot more people employed. The idea that this is all Obama’s fault is hilarious. We’re all suffering from the effects of Republican trickle down and war mongering. We have a TWO TRILLION deficit on infrastructure spending, almost precisely what the GOP borrowed and blew in Iraq.

  5. The above was from a year ago…
    … The following was from two years ago.

    United States of ALEC

  6. Those who control large corporations take huge sums of money from the public, in bank loans, in over-charging for their products, and in underpaying employees. They need to return what they wrongly took either in higher wages, higher taxes, lower prices for goods, or all three. It is immoral for anyone to hoard more money than they need.

  8. I have looked at it, and lived through it. Reagan’s work set the path for 20 years of prosperity. BushI, Clinton, BushII and now Obama have killed it.

    What is killing the economy now is a mixture of fascism and socialism. You may be able to make a case that tax cuts for only corporations is fascism but you cannot say that an across the board tax cut for everyone is a bad idea, it just isnt so.

  9. Bron,
    Take a look at the history of the tax breaks/supply side theory and the facts speak for themselves.

  10. rafflaw:

    I am sort of curious how you come to your conclusions. Krugman thinks a war with aliens is the way to stimulate our economy which is outlandish. Thinking that more money in the hands of individuals to invest will encourage job creation is sound thinking.

    The money government spends does not go into savings which is what fuels our economy. Frederic Bastiat speaks to this and so do others.

    But you are right, we all should get a hefty tax break, not just the rich.

  11. We’re putting an awful lot of energy on Kansas!! Having lived in Mo., we knew those Jayhawker white trash just started walking upright.

  15. I don’t know what is more laughable, Obama getting the Nobel Peace Prize, or Krugman getting the Nobel for economics.

  16. Sorry Mespo! I misspelled your name!:) That is what I get from posting from my phone!

  17. bigfatmike wrote “Still waiting for wages to rise as companies bid up wages to attract people with the right skills because all those lazy butts would rather live it up on unemployment instead of get a job.”

    The problem is due to both parties.

    Corporations are allowed to outsource millions of jobs overseas. The solution is as simple as taxing companies inversely proportional to the percentage of Americans they employ. If a company like Apple plays games by moving its corporate headquarters, tax it at 100%.

    Corporations are allowed to import hundreds of thousands of foreigners each year via H-1B and other visa fictions. These people replace American workers. And the Senate immigration “reform” bill S.744 will grant even more H-1B visas.

    Krugman is a very bright guy, but he is sometimes a cheerleader for the Democratic party. I remember he said something like, Pelosi is the best politician of her generation, but I think she is the same as McConnell, Reid, and Boehner.

  18. Seems Mr Blowback… er, Brownback will have to live with the memory of screwing Kansas out of well needed infrastructure dollars. My he never take a bridge, again.

    I guess the idea of the Neocons is to starve the State and run off the undesirable poor people to other States. Yea, they can take ’em. Kind of like bussing immigrants from Texas to California. You know, to shift that burden of being a kind human being.

    Speaking of human beings… an embryo is considered one, a Corporation is considered one, but the women who bear one or work for one aren’t? Well, my closely held Faith says otherwise. Maybe we can get a High Court to rule that Mr Blowback, er… Brownback isn’t a human being enough.

  20. “Krugman has been right more than he’s been wrong, which is more than I can say for Laffer or any other supply-sider that’s been telling us the wealth would trickle down.”

    Not only that Krugman frequently points out when he was wrong, what he learned from being wrong, his new position and what supports his new position.

    If Laffer, Taylor, Cochrane, Moore, Mulligan and others were half as candid regarding their mistakes they would have far more credibility and we would all be better off for it.

    Still waiting for all that inflation that has been just around the corner for 5 years now. Still waiting for wages to rise as companies bid up wages to attract people with the right skills because all those lazy butts would rather live it up on unemployment instead of get a job. Still waiting for the economy to jump into high gear.

    Oh wait! There is no inflation. Wages aren’t rising. And you know about the economy. But don’t tell Laffer, Taylor, Cochrane, Moore, Mulligan and the other right wing idealogs.

    At some point, regardless of the political philosophy, we have to look at the claims and predictions and compare with the reality we see.

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