Post by agito on Sept 19, 2008 15:27:18 GMT -6
... crazy to think about all the things that have happened in the past week. 1 week ago in the WSJ, an opinion appeared that was cowritten by phil gramm. I sat on it while watching the hoopla that was the past week, but since i did the write up- i might as well share.
online.wsj.com/article/SB122126282034130461.html?mod=opinion_main_commentaries
and it was crap
Despite the federal government's growing economic dominance, individual states still exercise substantial freedom in pursuing their own economic fortune -- or misfortune. As a result, the states provide a laboratory for testing various policies.
In this election year, the experience of the states gives us some ability to look at the economic policies of the two presidential candidates in action. If a program is not playing in Peoria, it probably won't work elsewhere.
By that logic, since gambling worked in Nevada- we should apply it everywhere? Logically speaking, if a program doesn’t work in Peoria, it will do BETTER elsewhere.(technically)(if it doesn’t do better elsewhere, then that means it did better in Peoria)(that would mean it worked in Peoria!)(isn’t logic fun?)(you think Gramm will take us on a few more circles?)
Americans have voted with their feet by moving to states with greater opportunities, but federal adoption of failed state programs would take away our ability to walk away from bad government.
After 8 years of W., I can SO relate.
I disagree with people voting with their feet though. If anything, it’s the RETIREES that move, not the workers.
Growth in jobs, income and population are proof that a state is prospering.
Growth in jobs and income are proof that a state is prospering. Growth in population is proof that abstinence only education is working. Or that you share a border with mexico. Ironically- this study says California lost a million people last 10 years. On a serious note population makes income per capita an uphill climb (kudos to the states that did raise both).
But figuring out why one state does well while another struggles requires in-depth analysis.
In other words, Phil Gramm just said “wait till you get a taste of this bull we are about to unload on you”
In an effort to explain differences in performance, think tanks have generated state-based economic freedom indices modeled on the World Economic Freedom Index published by The Wall Street Journal and the Heritage Foundation.
That’s nice. I’m sure you’re proud. And if a different think tank came up with a different affluency index, would you accept that as a counter argument? … didn’t think so. Guess we’ll just have to analyze what you guys screwed up.
www.heritage.org/research/features/index/chapters/pdf/Index2008_Chap4.pdf
The World economic freedom index is based on 10 economic freedoms:
Business Freedom-red tape
Trade Freedom- tariffs
Fiscal Freedom- taxes
Government Size- ah government: business’s competitor
Monetary Freedom- 0 inflation and freedom to set one’s own price
Investment Capital- freedom to lend
Financial Freedom- safe banks that won’t be meddled with from politicians (guess the US took a ding on this in regards to our recent bank failures huh?)
Property rights- right to property
Freedom from corruption- wonder how they quantify this.”perception of corruption”. Heh- want to know what my perception of republican business environment is?
Labor Freedom- What? Really? “ability of workers and businesses to interact without restriction by the state.” I’m going to have to remember this the next time a national guard is called in to break a strike.(they really mean minimum wage)
Ok- why did we learn that?
The Competitiveness Index created by the American Legislative Exchange Council (ALEC) identifies "16 policy variables that have a proven impact on the migration of capital -- both investment capital and human capital -- into and out of states."
The original 10 encompassed some rights that are pretty much non-negotiable in the US- “right to property” (unless you’ve just lost an eminent domain case). Monetary Freedom, trade freedom, financial freedom. The rules for these issues are determined nationally, they won’t fluctuate from state to state. Let’s see what the 16 are.
(www.alec.org)
1)top marginal personal income tax rate
2)top marginal corporate income tax rate
3)personal income tax progressivity
4)property tax burden
5)sales tax burden
6)remaining tax burden
7)Estate tax
8)recent legislated tax changes
9)Debt service as a % of revenue
10)Public Employees Per 10,000 of population
11)state liability system Survey
12) State Minimum Wage:
13) Avg. Workers' Compensation Costs:
14) Right-To-Work State?:
15) Number of Tax Expenditure Limits:
16) Education Freedom Index Score:
Not heartening to see that the first 2 factors in this index is the “top-marginal.” I sense Bias. Even more stupid- the first 9 factors could be summed up very simply. Government Spending as a percentage of state GDP.
State liability system survey is completely arbitrary, (being a lawyer is a job too you know- and like republicans like to say “you don’t want bureaucrats deciding which jobs should succeed)
State minimum wage is a good point of reference- more important would be a percentage of the workforce that is actually earning minimum wage.
Right-To-Work state is a binary question with a yes or no answer. A better measure for ranking purposes would have been a percentage of union workers to non-union.
Number of tax expenditure limits- another arbitrary measurements (in such flavors as 0 , 1 , 2 , and 3)!
And lastly- the education freedom index score measures things such as school vouchers and hometeaching? Why not just measure the rate of HS drop-outs- or measure the number of private students (and charter school students) to public students? Another arbitrary measure exposed to bias.
Its analysis shows that "generally speaking, states that spend less, especially on income transfer programs, and states that tax less, particularly on productive activities such as working or investing, experience higher growth rates than states that tax and spend more."
We’ll see about that.
Ranking states by domestic migration,
Phil Gramm doesn’t count mexicans
per-capita income growth
uh… capital income or wage income? Median or mean?
and employment growth,
good jobs vs bad jobs?
ALEC found that from 1996 through 2006, Texas, Florida and Arizona were the three most successful states. Illinois, Ohio and Michigan were the three least successful.
I sense a pattern already: Warm states good, cold states bad! I don’t suppose ALEC was smart enough to control for age factors?
The rewards for success were huge. Texas gained 1.7 million net new jobs, Florida gained 1.4 million and Arizona gained 600,000. While the U.S. average job growth percentage was 9.9%, Texas, Florida and Arizona had job growth of 18.5%, 21.4% and 28.9%, respectively.
Remarkably, a third of all the jobs in the U.S. in the last 10 years were created in these three states. While the population of the three highest-performing states grew twice as fast as the national average, per-capita real income still grew by $6,563 or 21.4% in Texas, Florida and Arizona. That's a $26,252 increase for a typical family of four.
What?
Did you catch that? Did you see what he did?
Phil Gramm thinks that if you have 2 kids, your income magically shoots up by $13,126.
$6,563 * 4 = “ $26,252 increase for a typical family of four “
Imagine if you had a 5th! Sorry Phil, I don’t know how many jobs you might have hooked up for your offspring, but the “typical” family of four does not have 2 employed child laborers.
This is one of the reasons why comparing Median income vs Mean income is important.
This is also a reason why comparing earned income vs unearned income is important.
This is the reason Phil Gramm is an idiot and thinks the US is a nation of whiners.
By comparison, Illinois gained only 122,000 jobs, Ohio lost 62,900 and Michigan lost 318,000. Population growth in Michigan, Ohio and Illinois was only 4.2%, a third the national average, and real income per capita rose by only $3,466, just 58% of the national average. Workers in the three least successful states had to contend with a quarter-million fewer jobs rather than taking their pick of the 3.7 million new jobs that were available in the three fastest-growing states.
And they also had to contend with fewer people competing with those jobs. Any way you cut it though, the situation in Ohio and Michigan is genuinely bad.
In Michigan, the average family of four had to make ends meet without an extra $8,672 had their state matched the real income growth of the three most successful states. Families in Michigan, Ohio and Illinois struggled not because they didn't work hard enough, long enough or smart enough. They struggled because too many of their elected leaders represented special interests rather than their interests.
Such as making it easier to send jobs overseas without suffering consequences? Oh wait- that was the republicans pursuing free trade at the national level. (an important counterargument to this is that, since it was national, it should have affected all the states. Well- it did affect all the states, but it only affected manufacturing jobs, and states with different degrees of manufacturing were affected differently.) (and yes- clinton did sign the biggest of those)
What explains this relative performance over the last 10 years? The simple answer is that governance, taxes and regulatory policy matter.
The “simple answer” also happens to be the wrong answer. The relative performance over the last 10 years is that the US population is growing older (baby boomers) and they moved to locations with warmer climate, lower taxes. Their expenditures then were spent in the employ of underpaid houseservants that upped the employment numbers in these regions.
In other words Phil Gramm’s solution to America’s Economic problems is to have rich foreigners move here and pay us to wipe their ass.
If this hypothesis was true, the average age of the populations of Illinois, Ohio, and Michigan would have increased at a rate slower than the average age of the population in Florida, Texas, and Arizona. Additionally, the income gap in Florida, Texas, and Arizona would have increased at a rate faster than Illinois, Ohio, and Michigan. Wonder if I’m right?
I checked the stats and it came out inconclusive, i couldn't find stats that filtered out illegal immigrants....
The playing field among the states was not flat. Business conditions were better in the successful states than in the lagging ones.
Because of :
a) weather
b) educated labor pool (and sadly- the migration of educated locals to states with desirable lifestyles)
c)regional convenience to major international trade as economies globalize
d)all of the above
Capital and labor gravitated to where the burdens were smaller and the opportunities greater.
In the case of Ohio, Michigan, and Illinois- I’m going to guess capital (and perhaps labor) gravitated to Canada! Nationalized health care removes a “burden” for both workers and employers.
It costs state taxpayers far less to succeed than to fail.
That was a brilliant statement. (/snark). To bad that by using the zero sum equation of ranking 50 states, 25 states have to “fail” no matter how well they do.
In the three most successful states, state spending averaged $5,519 per capita. In the three least successful states, state spending averaged $6,484 per capita. Per capita taxes were $7,063 versus $8,342.
There also appears to be a clear difference between union interests and the worker interests. Texas, Florida and Arizona are right-to-work states, while Michigan, Ohio and Illinois are not.
I still want to see increases of median earned income between these states before I agree with the statement.
Michigan, Ohio and Illinois impose significantly higher minimum wages than Texas, Florida and Arizona. Yet with all the proclaimed benefits of unionism and higher minimum wages, Texas, Florida and Arizona workers saw their real income grow more than twice as fast as workers in Michigan, Ohio and Illinois.
I’d like to see a comparison between earned wages and unearned investment income before I agree with that claim.
Incredibly, the business climate in Michigan is now so unfavorable that it has overwhelmed the considerable comparative advantage in auto production that Michigan spent a century building up. No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry. Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.
So what do the state laboratories tell us about the potential success of the economic programs presented by Barack Obama and John McCain?
John McCain better fire his economic advisor?
Mr. McCain will lower taxes. Mr. Obama will raise them, especially on small businesses. To understand why, you need to know something about the "infamous" top 1% of income tax filers: In order to avoid high corporate tax rates and the double taxation of dividends, small business owners have increasingly filed as individuals rather than corporations.
Small businesses pay dividends? Sorry I’ll shut up
When Democrats talk about soaking the rich, it isn't the Rockefellers they're talking about; it's the companies where most Americans work. Three out of four individual income tax filers in the top 1% are, in fact, small businesses.
Hmm- we should fix that. What if we gave the people in the top 1% deductions for legitimately operating a business? Oh that’s right, We already do. Small businesses get deductions that other individuals don’t, making their effective taxation lower than what is posted.
In the name of taxing the rich, Mr. Obama would raise the marginal tax rates to over 50% on millions of small businesses that provide 75% of all new jobs in America.
Note to Mr. McCain, do not let Gramm do opposition research. If you want him to make up facts- put him on foreign policy instead. (yes- more snark). For the record, Obama has not mentioned a number higher than 28% in reference to taxes (please feel free to post links if you find some)
Investors and corporations will also pay higher taxes under the Obama program, but, as the Michigan-Ohio-Illinois experience painfully demonstrates, workers ultimately pay for higher taxes in lower wages and fewer jobs.
(results not applicable to Nevada: 1st on low taxes, 48th on per capita income increase. www.alec.org/am/pdf/richpoor/nevada.pdf
California, 15th on income increase despite being 39th and 46th on personal and corporate income tax.
www.alec.org/am/pdf/richpoor/california.pdf
New York 29th in income increase despite 50th in tax percentile
www.alec.org/am/pdf/richpoor/newyork.pdf
Rhode island 13th in income increase despite 40th tax percentile
www.alec.org/am/pdf/richpoor/rhodeisland.pdf
Even Michigan breaks the mold. The income and marginal tax are ranked 25th, but their income increase is 49th.
Carrying over this analogy to the international scene is highly probl… stupid.
Investors move their capital, they don’t move themselves. Movement of capital is easy, and it doesn’t go to destinations based on the tax rate there, it goes there because of the promise of reward. Those with the luxury of living off of their savings have the choice to live where they want, and they still choose the US because of personal reasons (family, emotional attachment, can’t speak a second language). This doesn’t really make it fair to tax the hell out of them, but it does mean that lowering taxes nationally won’t improve anything.
Mr. Obama would spend all the savings from walking out of Iraq to expand the government.
Yes this is “change”. Bush expanded the government (HSA) while walking into Iraq!
Mr. McCain would reserve all the savings from our success in Iraq to shrink the deficit,
That’s funny- because it seems most of it is going to tax cuts
as part of a credible
www.bloomberg.com/apps/news?pid=20601068&sid=a.BrvyBtV8CM&refer=home
and internally consistent
the last only federal executive to shrink the budget in the last 28 years was a democrat
program to balance the budget by the end of his first term. Mr. Obama's program offers no hope, or even a promise, of ever achieving a balanced budget.
Keynesianism isn’t currently in vogue, but there is argument over whether significant government spending, even at deficit levels, is currently the only thing to keep the economy going while the private sector works out its credit kinks. Witness Bernanke. The argument shouldn’t be whether spending should increase, the argument should be WHERE to spend the money for maximum effectiveness.(note- i wrote this last friday before lehman's collapse)
Mr. Obama would stimulate the economy by increasing federal spending. Mr. McCain would stimulate the economy by cutting the corporate tax rate.
Both of these decisions add to the budget deficit. The only difference is whether we want spending power to be in the hands of elected leaders, or in the hands of corporate executives. As I said before: the argument should be WHERE to spend the money for maximum effectiveness.
Mr. Obama would expand unionism by denying workers the right to a secret ballot on the decision to form a union,
That’s the only thing stopping unionism?
and would dramatically increase the minimum wage.
How “dramatic” is this increase to the minimum wage going to be?
Mr. Obama would also expand the role of government in the economy,
About time! Oh wait- Bernanke’s already there. (and spending our money)(again.. written last friday, now paulson's doing it too!)
and stop reforms in areas like tort abuse.
Yes, because while the unemployment is at 6.1%, consumer spending just deficited, the (finally) strengthening dollar kills of the brief export increase, and the private economy goes through what alan greenspan called the worse monetary crisis in 50 or perhaps 100 years, the FIRST thing I want the next executive to do is take care of those damn lawyers that are fighting for my rights against a corporation that jsut ripped me off.
The states have already tested the McCain and Obama programs, and the results are clear.
Supply side economics doesn’t work?
We now face a national choice to determine if everything that has failed the families of Michigan, Ohio and Illinois will be imposed on a grander scale across the nation.
We’re going to make the temperature colder and force people to move out of the country?
In an appropriate twist of fate, Michigan and Ohio, the two states that have suffered the most from the policies that Mr. Obama proposes,
No wonder why everyone keeps saying Obama is inexperienced, he hid those years being an executive in Michigan and Ohio from us!
have it within their power not only to reverse their own misfortunes but to spare the nation from a similar fate.
Uh… if their track record is so bad, why are we leaving it up to them? Please Ohio, Michigan, and Illinios, improve your economy so we never have to listen to another Phil Gramm lecture.
online.wsj.com/article/SB122126282034130461.html?mod=opinion_main_commentaries
and it was crap
Despite the federal government's growing economic dominance, individual states still exercise substantial freedom in pursuing their own economic fortune -- or misfortune. As a result, the states provide a laboratory for testing various policies.
In this election year, the experience of the states gives us some ability to look at the economic policies of the two presidential candidates in action. If a program is not playing in Peoria, it probably won't work elsewhere.
By that logic, since gambling worked in Nevada- we should apply it everywhere? Logically speaking, if a program doesn’t work in Peoria, it will do BETTER elsewhere.(technically)(if it doesn’t do better elsewhere, then that means it did better in Peoria)(that would mean it worked in Peoria!)(isn’t logic fun?)(you think Gramm will take us on a few more circles?)
Americans have voted with their feet by moving to states with greater opportunities, but federal adoption of failed state programs would take away our ability to walk away from bad government.
After 8 years of W., I can SO relate.
I disagree with people voting with their feet though. If anything, it’s the RETIREES that move, not the workers.
Growth in jobs, income and population are proof that a state is prospering.
Growth in jobs and income are proof that a state is prospering. Growth in population is proof that abstinence only education is working. Or that you share a border with mexico. Ironically- this study says California lost a million people last 10 years. On a serious note population makes income per capita an uphill climb (kudos to the states that did raise both).
But figuring out why one state does well while another struggles requires in-depth analysis.
In other words, Phil Gramm just said “wait till you get a taste of this bull we are about to unload on you”
In an effort to explain differences in performance, think tanks have generated state-based economic freedom indices modeled on the World Economic Freedom Index published by The Wall Street Journal and the Heritage Foundation.
That’s nice. I’m sure you’re proud. And if a different think tank came up with a different affluency index, would you accept that as a counter argument? … didn’t think so. Guess we’ll just have to analyze what you guys screwed up.
www.heritage.org/research/features/index/chapters/pdf/Index2008_Chap4.pdf
The World economic freedom index is based on 10 economic freedoms:
Business Freedom-red tape
Trade Freedom- tariffs
Fiscal Freedom- taxes
Government Size- ah government: business’s competitor
Monetary Freedom- 0 inflation and freedom to set one’s own price
Investment Capital- freedom to lend
Financial Freedom- safe banks that won’t be meddled with from politicians (guess the US took a ding on this in regards to our recent bank failures huh?)
Property rights- right to property
Freedom from corruption- wonder how they quantify this.”perception of corruption”. Heh- want to know what my perception of republican business environment is?
Labor Freedom- What? Really? “ability of workers and businesses to interact without restriction by the state.” I’m going to have to remember this the next time a national guard is called in to break a strike.(they really mean minimum wage)
Ok- why did we learn that?
The Competitiveness Index created by the American Legislative Exchange Council (ALEC) identifies "16 policy variables that have a proven impact on the migration of capital -- both investment capital and human capital -- into and out of states."
The original 10 encompassed some rights that are pretty much non-negotiable in the US- “right to property” (unless you’ve just lost an eminent domain case). Monetary Freedom, trade freedom, financial freedom. The rules for these issues are determined nationally, they won’t fluctuate from state to state. Let’s see what the 16 are.
(www.alec.org)
1)top marginal personal income tax rate
2)top marginal corporate income tax rate
3)personal income tax progressivity
4)property tax burden
5)sales tax burden
6)remaining tax burden
7)Estate tax
8)recent legislated tax changes
9)Debt service as a % of revenue
10)Public Employees Per 10,000 of population
11)state liability system Survey
12) State Minimum Wage:
13) Avg. Workers' Compensation Costs:
14) Right-To-Work State?:
15) Number of Tax Expenditure Limits:
16) Education Freedom Index Score:
Not heartening to see that the first 2 factors in this index is the “top-marginal.” I sense Bias. Even more stupid- the first 9 factors could be summed up very simply. Government Spending as a percentage of state GDP.
State liability system survey is completely arbitrary, (being a lawyer is a job too you know- and like republicans like to say “you don’t want bureaucrats deciding which jobs should succeed)
State minimum wage is a good point of reference- more important would be a percentage of the workforce that is actually earning minimum wage.
Right-To-Work state is a binary question with a yes or no answer. A better measure for ranking purposes would have been a percentage of union workers to non-union.
Number of tax expenditure limits- another arbitrary measurements (in such flavors as 0 , 1 , 2 , and 3)!
And lastly- the education freedom index score measures things such as school vouchers and hometeaching? Why not just measure the rate of HS drop-outs- or measure the number of private students (and charter school students) to public students? Another arbitrary measure exposed to bias.
Its analysis shows that "generally speaking, states that spend less, especially on income transfer programs, and states that tax less, particularly on productive activities such as working or investing, experience higher growth rates than states that tax and spend more."
We’ll see about that.
Ranking states by domestic migration,
Phil Gramm doesn’t count mexicans
per-capita income growth
uh… capital income or wage income? Median or mean?
and employment growth,
good jobs vs bad jobs?
ALEC found that from 1996 through 2006, Texas, Florida and Arizona were the three most successful states. Illinois, Ohio and Michigan were the three least successful.
I sense a pattern already: Warm states good, cold states bad! I don’t suppose ALEC was smart enough to control for age factors?
The rewards for success were huge. Texas gained 1.7 million net new jobs, Florida gained 1.4 million and Arizona gained 600,000. While the U.S. average job growth percentage was 9.9%, Texas, Florida and Arizona had job growth of 18.5%, 21.4% and 28.9%, respectively.
Remarkably, a third of all the jobs in the U.S. in the last 10 years were created in these three states. While the population of the three highest-performing states grew twice as fast as the national average, per-capita real income still grew by $6,563 or 21.4% in Texas, Florida and Arizona. That's a $26,252 increase for a typical family of four.
What?
Did you catch that? Did you see what he did?
Phil Gramm thinks that if you have 2 kids, your income magically shoots up by $13,126.
$6,563 * 4 = “ $26,252 increase for a typical family of four “
Imagine if you had a 5th! Sorry Phil, I don’t know how many jobs you might have hooked up for your offspring, but the “typical” family of four does not have 2 employed child laborers.
This is one of the reasons why comparing Median income vs Mean income is important.
This is also a reason why comparing earned income vs unearned income is important.
This is the reason Phil Gramm is an idiot and thinks the US is a nation of whiners.
By comparison, Illinois gained only 122,000 jobs, Ohio lost 62,900 and Michigan lost 318,000. Population growth in Michigan, Ohio and Illinois was only 4.2%, a third the national average, and real income per capita rose by only $3,466, just 58% of the national average. Workers in the three least successful states had to contend with a quarter-million fewer jobs rather than taking their pick of the 3.7 million new jobs that were available in the three fastest-growing states.
And they also had to contend with fewer people competing with those jobs. Any way you cut it though, the situation in Ohio and Michigan is genuinely bad.
In Michigan, the average family of four had to make ends meet without an extra $8,672 had their state matched the real income growth of the three most successful states. Families in Michigan, Ohio and Illinois struggled not because they didn't work hard enough, long enough or smart enough. They struggled because too many of their elected leaders represented special interests rather than their interests.
Such as making it easier to send jobs overseas without suffering consequences? Oh wait- that was the republicans pursuing free trade at the national level. (an important counterargument to this is that, since it was national, it should have affected all the states. Well- it did affect all the states, but it only affected manufacturing jobs, and states with different degrees of manufacturing were affected differently.) (and yes- clinton did sign the biggest of those)
What explains this relative performance over the last 10 years? The simple answer is that governance, taxes and regulatory policy matter.
The “simple answer” also happens to be the wrong answer. The relative performance over the last 10 years is that the US population is growing older (baby boomers) and they moved to locations with warmer climate, lower taxes. Their expenditures then were spent in the employ of underpaid houseservants that upped the employment numbers in these regions.
In other words Phil Gramm’s solution to America’s Economic problems is to have rich foreigners move here and pay us to wipe their ass.
If this hypothesis was true, the average age of the populations of Illinois, Ohio, and Michigan would have increased at a rate slower than the average age of the population in Florida, Texas, and Arizona. Additionally, the income gap in Florida, Texas, and Arizona would have increased at a rate faster than Illinois, Ohio, and Michigan. Wonder if I’m right?
I checked the stats and it came out inconclusive, i couldn't find stats that filtered out illegal immigrants....
The playing field among the states was not flat. Business conditions were better in the successful states than in the lagging ones.
Because of :
a) weather
b) educated labor pool (and sadly- the migration of educated locals to states with desirable lifestyles)
c)regional convenience to major international trade as economies globalize
d)all of the above
Capital and labor gravitated to where the burdens were smaller and the opportunities greater.
In the case of Ohio, Michigan, and Illinois- I’m going to guess capital (and perhaps labor) gravitated to Canada! Nationalized health care removes a “burden” for both workers and employers.
It costs state taxpayers far less to succeed than to fail.
That was a brilliant statement. (/snark). To bad that by using the zero sum equation of ranking 50 states, 25 states have to “fail” no matter how well they do.
In the three most successful states, state spending averaged $5,519 per capita. In the three least successful states, state spending averaged $6,484 per capita. Per capita taxes were $7,063 versus $8,342.
There also appears to be a clear difference between union interests and the worker interests. Texas, Florida and Arizona are right-to-work states, while Michigan, Ohio and Illinois are not.
I still want to see increases of median earned income between these states before I agree with the statement.
Michigan, Ohio and Illinois impose significantly higher minimum wages than Texas, Florida and Arizona. Yet with all the proclaimed benefits of unionism and higher minimum wages, Texas, Florida and Arizona workers saw their real income grow more than twice as fast as workers in Michigan, Ohio and Illinois.
I’d like to see a comparison between earned wages and unearned investment income before I agree with that claim.
Incredibly, the business climate in Michigan is now so unfavorable that it has overwhelmed the considerable comparative advantage in auto production that Michigan spent a century building up. No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry. Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.
So what do the state laboratories tell us about the potential success of the economic programs presented by Barack Obama and John McCain?
John McCain better fire his economic advisor?
Mr. McCain will lower taxes. Mr. Obama will raise them, especially on small businesses. To understand why, you need to know something about the "infamous" top 1% of income tax filers: In order to avoid high corporate tax rates and the double taxation of dividends, small business owners have increasingly filed as individuals rather than corporations.
Small businesses pay dividends? Sorry I’ll shut up
When Democrats talk about soaking the rich, it isn't the Rockefellers they're talking about; it's the companies where most Americans work. Three out of four individual income tax filers in the top 1% are, in fact, small businesses.
Hmm- we should fix that. What if we gave the people in the top 1% deductions for legitimately operating a business? Oh that’s right, We already do. Small businesses get deductions that other individuals don’t, making their effective taxation lower than what is posted.
In the name of taxing the rich, Mr. Obama would raise the marginal tax rates to over 50% on millions of small businesses that provide 75% of all new jobs in America.
Note to Mr. McCain, do not let Gramm do opposition research. If you want him to make up facts- put him on foreign policy instead. (yes- more snark). For the record, Obama has not mentioned a number higher than 28% in reference to taxes (please feel free to post links if you find some)
Investors and corporations will also pay higher taxes under the Obama program, but, as the Michigan-Ohio-Illinois experience painfully demonstrates, workers ultimately pay for higher taxes in lower wages and fewer jobs.
(results not applicable to Nevada: 1st on low taxes, 48th on per capita income increase. www.alec.org/am/pdf/richpoor/nevada.pdf
California, 15th on income increase despite being 39th and 46th on personal and corporate income tax.
www.alec.org/am/pdf/richpoor/california.pdf
New York 29th in income increase despite 50th in tax percentile
www.alec.org/am/pdf/richpoor/newyork.pdf
Rhode island 13th in income increase despite 40th tax percentile
www.alec.org/am/pdf/richpoor/rhodeisland.pdf
Even Michigan breaks the mold. The income and marginal tax are ranked 25th, but their income increase is 49th.
Carrying over this analogy to the international scene is highly probl… stupid.
Investors move their capital, they don’t move themselves. Movement of capital is easy, and it doesn’t go to destinations based on the tax rate there, it goes there because of the promise of reward. Those with the luxury of living off of their savings have the choice to live where they want, and they still choose the US because of personal reasons (family, emotional attachment, can’t speak a second language). This doesn’t really make it fair to tax the hell out of them, but it does mean that lowering taxes nationally won’t improve anything.
Mr. Obama would spend all the savings from walking out of Iraq to expand the government.
Yes this is “change”. Bush expanded the government (HSA) while walking into Iraq!
Mr. McCain would reserve all the savings from our success in Iraq to shrink the deficit,
That’s funny- because it seems most of it is going to tax cuts
as part of a credible
www.bloomberg.com/apps/news?pid=20601068&sid=a.BrvyBtV8CM&refer=home
and internally consistent
the last only federal executive to shrink the budget in the last 28 years was a democrat
program to balance the budget by the end of his first term. Mr. Obama's program offers no hope, or even a promise, of ever achieving a balanced budget.
Keynesianism isn’t currently in vogue, but there is argument over whether significant government spending, even at deficit levels, is currently the only thing to keep the economy going while the private sector works out its credit kinks. Witness Bernanke. The argument shouldn’t be whether spending should increase, the argument should be WHERE to spend the money for maximum effectiveness.(note- i wrote this last friday before lehman's collapse)
Mr. Obama would stimulate the economy by increasing federal spending. Mr. McCain would stimulate the economy by cutting the corporate tax rate.
Both of these decisions add to the budget deficit. The only difference is whether we want spending power to be in the hands of elected leaders, or in the hands of corporate executives. As I said before: the argument should be WHERE to spend the money for maximum effectiveness.
Mr. Obama would expand unionism by denying workers the right to a secret ballot on the decision to form a union,
That’s the only thing stopping unionism?
and would dramatically increase the minimum wage.
How “dramatic” is this increase to the minimum wage going to be?
Mr. Obama would also expand the role of government in the economy,
About time! Oh wait- Bernanke’s already there. (and spending our money)(again.. written last friday, now paulson's doing it too!)
and stop reforms in areas like tort abuse.
Yes, because while the unemployment is at 6.1%, consumer spending just deficited, the (finally) strengthening dollar kills of the brief export increase, and the private economy goes through what alan greenspan called the worse monetary crisis in 50 or perhaps 100 years, the FIRST thing I want the next executive to do is take care of those damn lawyers that are fighting for my rights against a corporation that jsut ripped me off.
The states have already tested the McCain and Obama programs, and the results are clear.
Supply side economics doesn’t work?
We now face a national choice to determine if everything that has failed the families of Michigan, Ohio and Illinois will be imposed on a grander scale across the nation.
We’re going to make the temperature colder and force people to move out of the country?
In an appropriate twist of fate, Michigan and Ohio, the two states that have suffered the most from the policies that Mr. Obama proposes,
No wonder why everyone keeps saying Obama is inexperienced, he hid those years being an executive in Michigan and Ohio from us!
have it within their power not only to reverse their own misfortunes but to spare the nation from a similar fate.
Uh… if their track record is so bad, why are we leaving it up to them? Please Ohio, Michigan, and Illinios, improve your economy so we never have to listen to another Phil Gramm lecture.