Supply Side Kansas and ALEC


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. Scott
    “If terrorists were killing Americans like our crumbling infrastructure is, how much would Republicans be willing to borrow and spend to invade the wrong country?”
    = = =
    Almost 2 trillion so far…

  2. Saucy, Squeeky is a free thinking woman. She deserves effort and replies.

  3. Kansas has other problems…..But you will pay… What’s mine is you’res and you’res mine policy.

  4. Squeeky Fromm, Girl Reporter wrote “The Repugs do it for the cheep labor while the Dems do it to buy votes.”

    You go, girl (reporter)!

    And I like the way you spelled Repubs. But to make it fair, you should have spelled the opposition “Dims.”

    P.S. Sorry I jumped on you at first. You add a “je ne sais quoi” so lacking in comments here.

  5. Saucy, looks like Spinelli loves you again, how fickle can an admirer be? 😕

  6. Saucy, Don’t waste one second of your time. It’s wasted and you’ll never get it back!

  7. Scott Supak wrote “If we suddenly decided to start spending on infrastructure and teachers and cops again, we’ll need lots more skilled laborers, like teachers and engineers…”

    Except that we have a large number of underemployed technical workers already here who have been replaced by H-1B holders. Almost all of the H-1B visa holders possess only B.S. degrees. The American workers are already here, but their skills have become stale. It would only take minimal training to bring them back into the workforce.

    There is absolutely no difference between your position and that of the Republicans, except for your love for the great Obama. Adiós.

  8. Oh, and BTW (which means by the way) while I tend to think much of what ALEC and other such shills for the 1% and their camp followers, why is there not just as much disdain for the Dems who are accomplishing the same thing by their failure to shut down illegal immigration.

    The Repugs do it for the cheep labor while the Dems do it to buy votes.

    Squeeky Fromm
    Girl Reporter

  9. Nick Spinelli

    I don’t know what is more laughable, Obama getting the Nobel Peace Prize, or Krugman getting the Nobel for economics.
    On topic, the answer is Brownback thinking that he or any other psychopathic racist can govern.

  10. Brownback has a long career of torturing living things.

    Deadbeat brains are like that.

    They never grow up they just get larger, then torture humans.

  11. Well, I am NOT a supply side person at all and I would love to have proof all the Republicans who have knelt down on their kneepads for Wall Street are uh errr uh gagging in Kansas. However there seems to be a lack of numerical evidence above unless one subscribes to the WSJ (???) .

    Plus I get this wierd vibe that once again we are supposed to ignore the Obama Economic Train Wreck and instead focus on a couple of Republican Mental Tots who ran their trikes into the garbage cans and skint their widdle knees.

    Soooo, a wasted read for now.

    Squeeky Fromm
    Girl Reporter

  12. Scott Supak wrote “the Labor Force participation rate dropping includes … whole bunch of other things that can’t be pinned on Obama”

    I just created a new BLS graph by using all available data, from 1948 to the present. You can do the same by going to the link I provided, selecting “More Formatting Options,” and changing the starting year. If this website allows it, I will post a screen shot of it.

    There are some ups and downs as one would expect, but the general trend starting in 1963 is upward at about a 45 degree angle, i.e. really good growth. Then at the end of Clinton / beginning of Bush — the dot-com crash — the trend starts downward. There is a halfway decent recovery near the end of Bush, though not nearly enough to make up for the dot-com crash. And then all through the reign of Obama, jobs are lost faster than you can say “red line,” with the slope being a steady 45 degrees downward.

    So, contrary to the complete nonsense you posted, we can definitely pin the blame on the imperious, incompetent Obama.

    1. The labor force participation rate is just the total of those Working plus those looking for work divided by total number of workers.

      There is no direct relation between the number of jobs created in a period of time and the labor force participation rate.

      And people do leave the labor force – stop working or looking for work – for many reasons including personal ones like they are well enough off that they do not have to continue to work or would rather spend more time with their children.

      Finally we do have a very serious problem with unemployed people leaving the labor force by not searching for work. That seems to be due to being unemployed so long they view their situation as hopeless. That perception is supported by the fact that many companies are far less likely to hire the long term unemployed rather than those who have been unemployed for 6 or fewer months.

      I do criticize the Obama administration for not taking a stronger stand for the unemployed.

      But the primary blame must be placed on an intransigent republican congress with will not allow funds to be spent on jobs programs. For example, right now this country is faced with both a deteriorating infrastructure that will have to be repaired or replaced at some point and the lowest interest rates since the great depression. Now would be the perfect time to rebuild our aging roads, highways, bridges and tunnels. We could do it at the lowest cost interest cost in generations. It would put millions to work that has real benefits. It would add needed demand to the economy.

      Yet conservative idealogs reject an obvious win/win/win situation.

  13. Max-1: “Seattle is booming”


    > When Washington residents voted in 1998 to raise the state’s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn’t been borne out.

    > In the 15 years that followed, the state’s minimum wage climbed to $9.32 — the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.

    And it’s true for states with higher minimum wages in general:

    > As CEPR noted in March and April posts, economists at Goldman Sachs conducted a simple evaluation of the impact of these state minimum-wage increases. GS compared the employment change between December and January in the 13 states where the minimum wage increased with the changes in the remainder of the states. The GS analysis found that the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level.

  14. Post eaten for dinner?
    Video from Kansas ALEC public meeting presented by Progress Missouri.

  15. Published on May 2, 2014
    Stand Up To ALEC Public Meeting presented by Progress Missouri at the Crowne Plaza in Kansas City on 5/1/14 following the screening of The United States of ALEC by Bill Moyers.

    Ron Perry, Kansas worker and AFSCME member
    Mark Jones, MNEA
    Rep. Judy Morgan, Missouri House
    Rep. Chris Taylor, Wisconsin House
    Brendan Fischer, Center for Media & Democracy
    Moderator: Sean Soendker Nicholson, ProgressMO

  16. TheSaucyMugwump

    “The problem is due to both parties.”

    This presumes that both parties are similarly infected with corporatism. They are not. The Democrats have a branch, the Congressional Progressive Caucus, that is not the same as the corporate Democrats. They vote for all the things people like Spinelli claim to like, like ending the Patriot Act and keeping the DEA out of state marijuana programs. They are NOT corporate whores.

    “Corporations are allowed to outsource millions of jobs overseas. ”

    Well, free marketeers like that.

    “The solution is as simple as taxing companies inversely proportional to the percentage of Americans they employ”

    Good luck getting any Republicans to go along with that. I’m sure many Democrats would be fine with it.

    “Corporations are allowed to import hundreds of thousands of foreigners each year via H-1B and other visa fictions. These people replace American workers.”

    Not really. For example, we have a serious MD shortage, especially in rural areas. This is obvious from the fact that our doctors are so highly paid. Big demand, little supply. So, we need more supply or less demand. Since a whole bunch of newly insured people will be using their services, demand is going to go up. In your world, we would not be allowed to import new supply. And we already pay twice as much per person for health care with worse results. Why would you want to exacerbate that problem?

    ” And the Senate immigration “reform” bill S.744 will grant even more H-1B visas.”

    Indeed it would. That’s one of the reasons I support it. If we suddenly decided to start spending on infrastructure and teachers and cops again, we’ll need lots more skilled laborers, like teachers and engineers…

    SO, when Big Fat Mike said: “Still waiting for wages to rise as companies bid up wages to attract people with the right skills ” he’s really on to something… I hear people like Mike Rowe out there bitching about skills shortage. There is no such thing. Basic economics teaches us that if there was a skills shortage, we’d see pay being raised to attract the workers they seek. Pay is flat. Has been for a long time.

    This is largely because of supply-side economics. As Pickety showed, the capital grows faster than the growth. This is a problem, especially if you keep cutting taxes to feed the capital that isn’t being invested in things that create new jobs.

    We could address that problem with infrastructure. It would make us more productive, more competitive. It would save lives and money. It would create skilled jobs. It would raise pay.

    Maybe that’s why the GOP won’t vote for it.

    If terrorists were killing Americans like our crumbling infrastructure is, how much would Republicans be willing to borrow and spend to invade the wrong country?

  17. Seattle is booming… So much so, they gave their workers a raise!
    Something Sam Brownback just can’t figure out…

  18. Nick Spinelli:

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

    The answer is YOU, Spinelli. You are more laughable. Been lied into any $2 trillion wars lately? Obama start any land wars in Asia? Hell, what I see is neocons bitching about what a wimp he is for getting out of Iraq and not invading Syria or Iran.

    Which is it, Spinelli? You want less war or more?

    And Krugman’s Nobel was well deserved. If you knew anything about economics you’d know that.

    Now run along and ask Laffer why the entire economy didn’t collapse as he predicted.

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