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  • WSJ Vs.WSJ: The Pence Economy

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal's editorial board praised Donald Trump's running mate, Gov. Mike Pence (R-IN), for economic growth in Indiana during his time in office -- ignoring the paper's own reporting that the state's growth "resembles overall U.S. performance under Obama."

    The Journal’s editorial board heaped praise on Pence’s handling of the Indiana economy on July 20, pointing to the governor’s conservative policies as something “the rest of the country could emulate” -- dismissing President Obama’s economic record as part of the reason for the state’s success and ignoring the paper’s own reporting that the state’s growth “resembles” national trends. The Journal touted the point that under Pence, Indiana’s unemployment rate dropped from 8.4 percent to 5 percent, also noting that he cut income taxes from 3.4 percent to 3.3 percent and has amassed a budget surplus (emphasis added):

    President Obama visited Elkhart, Indiana, on June 1 to tout the state’s economic recovery, taking credit for its success and claiming that it represents the 2016 election’s basic policy choice. He’s right, but the economic lessons speak better of GOP Governor and vice presidential nominee Mike Pence and his predecessor Mitch Daniels than they do Mr. Obama’s policies.

    [...]

    All states have seen declines in the jobless rate, and Indiana’s has fallen to 5% in May from 8.4% in 2013 when Mr. Pence became Governor. The Indiana difference is that the rate has fallen even as the labor force has increased by nearly 187,000. Many states have seen their jobless rates fall in part because so many people have left the labor force, driving down the national labor participation rate to lows not seen since the 1970s. The Illinois workforce has grown by only about 71,000 in the same period, though it is roughly twice as large. Indiana is adding jobs fast enough that people are rejoining the workforce.

    [...]

    Mr. Pence has continued the progress, cutting taxes every year of his tenure even as the state has continued to pile up budget surpluses. He cut the individual tax rate to 3.3% in 2015 from 3.4% and it will fall to 3.23% in 2017, the lowest in the Midwest, according to the Tax Foundation. One reason the tax rate can stay so low and flat is because it applies to a relatively broad base of income with fewer loopholes than more steeply progressive tax codes.

    The Journal’s editorial board claimed the job growth seen in Indiana is “different” because “the [unemployment] rate has fallen even as the labor force has increased,” an idea dismissed by Politico on July 19, which wrote “the drop in Indiana’s unemployment almost perfectly mirrors the national trend. And the labor force has grown in all but nine states.” A report by the Associated Press (AP) also found that the state’s unemployment rate “largely paralleled the national mark.” The parallel unemployment trends can even be seen in the Journal’s own graph from a July 16 article that undercuts Pence's ownership claim of Indiana's recovery:

    The Journal’s rhetoric resembles praise Trump had for Pence’s handling of the Indiana economy -- which so closely mirrors the U.S. economy that MSNBC’s Steve Benen argued if Pence did a “great job producing economic results, by Trump’s own reasoning, it’s hard not to consider Obama an amazing success.”

    The Journal’s editorial board touted Pence’s income tax cut, but upon closer inspection by the AP, that tax cut works out to be a mere $85 for someone making $50,000 a year. The AP also called into question the budget surpluses the Journal praised, reporting that Pence’s surpluses drew criticism after an infrastructure crisis in which opponents blamed “a handful of roadway deaths on Pence’s desire to build a budget surplus at the expense of properly funding infrastructure.” (The willingness of Republican governors to raid infrastructure funding to fill budget gaps created by trickle-down tax cuts has been well-documented.)

    Pence has also been accused of politicizing Indiana’s health budget. On June 6, 2015, the Chicago Tribune reported on one of the Indiana towns facing an opioid crisis and how Pence’s “war on Planned Parenthood” inadvertently created an “exploding HIV outbreak” in his state. When Indiana Republicans cut funding for Planned Parenthood, they cost some parts of the state their only HIV testing centers, leading to an outbreak of the virus among intravenous drug users and their sexual partners and forcing the state to eventually provide emergency funding for needle exchange programs.

    Other Republican-led states have seen their economies falter after implementation of conservative policies; Kansas and Louisiana have been devastated by Gov. Sam Brownback's and former Gov. Bobby Jindal’s trickle-down economics -- Brownback’s Koch-backed tax cut program has been particularly destructive. Like Pence, Ohio Gov. John Kasich claimed his conservative policies led to an economic “miracle” for his state, but it is easy to demonstrate how Ohio’s economic recovery pre-dated his term of office and is also largely following the national trend.

  • Journalists Ridicule Lack Of Economic Policy During Trump’s “Make America Work Again” Convention Night

    Day Two Of The Republican National Convention Focused On Emails, Benghazi, And Clinton-Bashing

    ››› ››› CRAIG HARRINGTON

    The second day of the Republican National Convention (RNC) was billed as an opportunity to highlight Republican presidential nominee Donald Trump’s proposals to boost job creation and economic growth. Journalists blasted the RNC and Trump campaign after the speakers ignored the economy and instead attacked Hillary Clinton over issues like the Benghazi attacks and her use of a private email server.

  • Trump Economic Adviser Confirms On Fox Business That Campaign Tax Plan Still Isn’t “Finalized,” But Assures “You Are Going To Love It”

    Adviser Steve Moore Pushes New Round Of Confusing Talking Points About Whether Trump Tax Plan Exists

    Blog ››› ››› ALEX MORASH

    Economic adviser to the Trump campaign Stephen Moore responded to critiques of Trump’s published tax plan by underscoring that the campaign’s plan is not “even finalized,” while still pushing a series of confusing claims about the revised plan’s specifics. Moore assured Fox Business’ Charles Payne, however, that he would “love” the new plan.

    Moore, a conservative economist and Fox contributor, appeared on the July 15 edition of Fox Business’ Cavuto: Coast to Coast to discuss criticisms of presumptive Republican nominee Donald Trump’s tax proposals, which were first rolled out in September and are still currently detailed on the campaign’s website. Moore’s defenses of the plan largely consisted of repeating the Trump talking point that the plan is currently being “revised” and “finalized.” Protesting critiques of the Trump tax plan already made public, Moore complained “it’s like declaring the New York Yankees the winner in a game after the fifth inning -- I mean, the game isn’t over yet because we haven’t put [the plan] together.”

    Payne and Moore rehashed that Donald Trump would be “hands off” on entitlements and is not interested in cutting “social security, medicare.” Payne then claimed Trump “is going to double the size of the military” -- an assertion Moore was unsure about.  Moore claimed the Trump tax plan would stimulate the economy “from 2 percent growth to 4 percent” by slashing taxes and that these tax cuts will be paid for by that growth and by cutting federal spending dramatically:

    Moore argued that economists and critics pointing out that the numbers of the current plan don’t add up “don’t know what they are talking about,” because it is being revised. The plan, as it stands now, has been panned by economists.  

    Moore’s claim that tax cuts will be balanced by cuts in spending do not, in fact, add up: The nonpartisan Tax Policy Center (TPC) and the conservative Tax Foundation each scored the current tax plan and found that that it would explode the deficit by $9 to $12 trillion over the next decade, on top of the $9.4 trillion in projected deficits at current spending levels. Trump would need to cut almost one trillion dollars in federal spending per year, which is more than all non-military discretionary spending.

    The Tax Foundation’s analysis concluded that Trump’s current tax plan would boost investment and wage growth while creating up to 5.3 million new jobs, but those figures relied on a so-called “dynamic” scoring model that has been criticized for overestimating the stimulative value of tax cuts. According to a September 2014 report from the Brookings Institution, tax cuts do not necessarily create economic growth and they can even discourage growth by undermining economic incentives to invest. A September 2012 report from the Congressional Research Service (CRS), which was suppressed by Senate Republicans, similarly found no correlation between tax cuts and economic growth, but it did caution that tax cuts for high-income individuals “appear to be associated” with rising inequality.

    Moore has a long and well-documented history of distorting facts on the economy. Nobel Prize-winning economist and New York Times columnist Paul Krugman, who has spent years documenting Moore's repeated failures in economic policy, recently slammed the right-wing commentator’s "impressive lack of even minimal technical competence" upon learning the economist would be involved in re-working Trump’s tax proposals.

  • WSJ Misleads On Obamacare To Blast The "Radicalism" Of A Public Option

    Journal Hypes Co-Op Failures To Show Public Option Cannot Work, Failing To Mention Co-Op Funding Was Slashed

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal’s editorial board assailed President Barack Obama's call for a “Medicare-like” public health insurance option as "radicalism" that would "wipe out anything resembling private insurance," when in reality a public option would likely increase competition, lower costs, and expand access to health care for American consumers.

    In an article published by The Journal of the American Medical Association (JAMA) on July 11, President Obama wrote about the accomplishments of his signature legislation, the Affordable Care Act (ACA), or “Obamacare,” since it became law in 2010. The article, the first scholarly work ever authored by a sitting president, noted that the uninsured rate has dropped 43 percent (from 16.0 percent in 2010 to 9.1 percent in 2015), that the law has contributed to greater financial security for Americans and that it has actually led to better public health. But the president also noted that there is still work to be done on health care reform, including the need for a “Medicare-like public plan” that could compete with private insurance. On July 9, presumptive Democratic presidential nominee Hillary Clinton publicly reaffirmed her support for the “public option,” a policy she has championed since 1993.

    With the Democratic Party coalescing around the public option as the next step for health care reform, the Journal’s editorial board claimed the introduction of a publicly run insurer into the individual health insurance exchanges would lead to a “market exodus” by private insurers and eventually to a “government-run single payer” universal health care system. Hypocritically, the Journal claimed both that the public option would inevitably destroy private insurance and that the failure of several nonprofit health care co-operatives set up by the existing law stood as proof that government-run insurance systems could not work. From the July 12 editorial (emphasis added):

    Mr. Obama is re-endorsing what he had hoped in 2010 would be a way station for government-run single payer that would gradually wipe out anything resembling private insurance. Insurers can’t outbid a “free” program that is open to all or most and has the unlimited access to the Treasury that Medicare enjoys. A market exodus would be inevitable.

    Democrats claim this would merely be another choice, but they tried a trial-run public option with ObamaCare’s co-ops, which were given up-front federal cash infusions and then were supposed to operate like normal companies. Of the original 24 co-ops, only nine are alive—and most of the survivors are ailing.

    [...]

    Even after jettisoning the public option, ObamaCare passed the Senate with a bare 60-vote majority and the House 219-212, though Democrats commanded their largest majorities since the Great Society. Republicans couldn’t stop anything, but they did oppose the public option for the same reasons as the business community and moderate Democrats: Over time, its radicalism would annex all of U.S. health-care finance.

    The Journal’s fearmongering that competition from public option “radicalism” would usurp the private insurance market lacks evidence: Research suggests a public insurance plan would lead to lower premiums and reap enormous benefits for American taxpayers.

    According to Kaiser Health News, increasing competition in individual health care marketplaces has shown to lower prices for consumers, and less competition in a state can lead to “substantially higher premiums.” In an op-ed published by The Hill, Richard Kirsch of the Roosevelt Institute noted that a public option can keep costs down without limiting provider options, since the government already pays for care at most of the country’s doctors offices and hospitals for Medicare beneficiaries. Unlike private insurers with limited provider networks, a government-run plan would already have the infrastructure to provide low-cost competition nationwide.

    In addition to increasing competition and driving down costs, a public option could dramatically decrease government spending on health care, research suggests. According to an October 2009 policy brief by researchers at the University of California, Berkeley's Center on Health, Economic & Family Security, a public option would be so beneficial for the American health insurance market that it would “most likely both expand coverage and reduce costs to employers, individuals, and the government.” The Economic Policy Institute (EPI) came to the same conclusion in a March 2012 working paper, which included “a public insurance option” among progressive reforms that together could save the government an additional $278 billion over 10 years. Likewise, a November 2013 analysis by the Congressional Budget Office (CBO) predicted that adding a public option to existing Obamacare insurance marketplaces could actually reduce federal spending by $158 billion over 10 years.

    The Journal claims the introduction of a public option would lead to universal single-payer health care, but it fails to provide either any proof that the public option would do that or an explanation of why that would be detrimental. The Journal does use the problems faced by government-assisted nonprofit insurers -- called co-ops -- as proof that a public option would not work, but it doesn’t mention that Republicans in Congress cut co-op funding. Meanwhile, though the president has not advocated a national single-payer health plan, economist Gerald Friedman estimated that such a system could save the American economy as much as $592 billion a year, most of which would come from “slashing the administrative waste associated with the private insurance industry.”

    In 2009, when Congress was still vetting the public option for inclusion in what would become the ACA, opinion polling often showed large majorities in favor of the provision. Right-wing media outlets assailed the provision for months as part of their coordinated campaign to derail health care reform, but even after several years the abandoned option remains popular.

  • CNN Lets Paul Ryan Push Discredited "Welfare Cliff" Myth During Town Hall Event

    Ryan Hypes Right-Wing Media Fiction About “Benefit Cliffs” As “The Core” Of His Anti-Poverty Agenda

    Blog ››› ››› CRAIG HARRINGTON

    CNN allowed Speaker of the House Paul Ryan (R-WI) to use a town hall event to promote his widely criticized “Better Way” poverty reform agenda unchallenged, including the discredited “welfare cliff” myth long promoted by right-wing media.

    A member of the audience -- a Catholic priest and registered Republican -- asked Ryan what plans he had “to meet the basic human needs of the poor in this country, even if they’re here illegally,” during a July 12 town hall hosted by CNN’s Jake Tapper. The questioner juxtaposed the moral imperative to serve individuals “as human beings” without asking them “for their documentation” with presumptive Republican presidential nominee Donald Trump’s “inhumane” stance on immigration.

    Ryan’s initial response was littered with right-wing media talking points about President Obama’s supposed unwillingness to “secure the border” in order to fix the country’s “broken immigration system.” Ryan’s response then shifted to a supposed solution to poverty, which was also focused on myths frequently trumpeted by right-wing media, including how welfare “benefit cliffs” trap recipients in poverty. Ryan incorrectly claimed that the government’s “current approach” to poverty actually “perpetuates” it, and suggested that a “single mom with two kids” earning roughly $24,000 per year (barely above the federal poverty threshold) would rather live in poverty than get a raise “because of all the benefits she [would lose]” (emphasis added):

    PAUL RYAN: Let me get to the poverty point you mentioned. Please take a look at our agenda. This is one of the most important reforms that I think we’re offering. Which is a better way to solve poverty -- “A Better Way To Fight Poverty.” Go to better.gop -- better.gop is where we’ve released our agenda. I spent the last four years going around this country visiting with poor communities, learning about the poor, and the suffering, and better ideas for fighting poverty. We’ve put in a very aggressive plan to go at the root causes of poverty, to try and break the cycle of poverty, and I would argue our current approach at the government of fighting poverty treats symptoms of poverty, which perpetuates poverty.

    Our welfare system replaces work. It doesn't incentivize work. And as a result, we are trapping people in poverty. It's not working. So we think that there's a better way of reigniting what I call upward mobility, the American idea, and getting people out of poverty. Please take a look at these ideas. We have lots of them. I’d love to get into it if you give me time. But this is one of the things that we are talking about. Engaging with our fellow citizens, especially those who have slipped through the cracks, especially those that have no hope, that we have better ideas for helping them get back on their feet and converting our welfare system not into a poverty trap, but a place to get people from welfare to work.

    JAKE TAPPER (HOST): Give me one idea. One poverty idea.

    RYAN: Benefit cliffs. Right now, you stack all these welfare programs on top of each other and it basically pays people not to work. So you know who the highest tax rate payer (sic)? It’s not Anderson Cooper or Jake Tapper; it is the single mom with two kids making maybe -- earning $24,000, who will lose 80 cents on the dollar by taking a job or getting a raise because of all the benefits she loses. So, what happens is, we disincentivize work. We need to taper those benefits cliffs, customize welfare benefits to a person’s particular needs, and encourage work. So, you’ve got so much time to get these benefits, you have to have work requirements or job training requirements. Customize benefits to help a person with their problem. Whether it's addiction, whether it's education, or transportation.

    Catholic Charities, by the way, is the model that I'm talking about. This is basically the Catholic Charities model. Customize support to a person and always make work pay. Make sure that you take the principles that we’ve used for welfare reform in the '90s, which are no longer really working or in place these days, to get people from welfare to work. And that's the core of what we are proposing.

    The term "welfare cliff" was popularized by Pennsylvania's Republican-appointed Secretary of Public Welfare in a July 2012 report, which claimed a "single mom" could nearly double her net income by taking full advantage of nine distinct anti-poverty programs. But the concept of a trade-off between welfare and work dates back to a flawed Cato Institute study from 1995. One thing these studies have in common is the base calculation of benefits available to a hypothetical "single mom" with children. Most American workers aren't single mothers, most recipients of government benefits don't enroll in every single available program, and the value of federal benefit programs like welfare is less now than it was in years past -- facts that are not acknowledged in right-wing media discussions of anti-poverty programs.

    Right-wing media outlets have repeatedly promoted the fantasy that low-income Americans would rather live in poverty than risk losing supposedly generous government benefits, and Paul Ryan is known for loyally parroting right-wing talking points about poverty. In fact, Ryan’s entire “Better Way” anti-poverty agenda for 2016 is built on right-wing media myths, including the so-called “benefit cliff” talking point. Journalists and experts slammed Ryan’s poverty plan, calling it a “seriously flawed” approach “based on faulty assumptions,” and concluding it is seemingly “designed to make it much harder for people in need” to access poverty alleviation programs. The same was true of his much-heralded 2014 anti-poverty plan. Ryan is right that there is a better way to fight poverty, but research by actual economists points to a reform agenda more like the factually based plan put forward by the Center for American Progress than the rehashing of right-wing myths endorsed by Ryan.

    View the full exchange on poverty and immigration from CNN’s House Speaker Paul Ryan Town Hall:

  • New York Times Op-Ed Ignores High Cost Of Low Wages In Calling To Expand Tax Credit

    Manhattan Institute Scholar Peddles Right-Wing Media Myths In Call To Increase Taxpayer Subsidies Of Poverty Wages

    Blog ››› ››› ALEX MORASH

    A New York Times op-ed by a senior fellow at the Manhattan Institute pushed the debunked claim that raising the minimum wage would hurt business and American workers and promoted the expansion of tax credits for workers struggling with poverty. The op-ed failed to mention the high public cost of pushing more of the burden on taxpayers while letting businesses off the hook from paying workers a living wage.

    Manhattan Institute senior fellow Peter Salins claimed that raising the minimum wage constitutes “playing a kind of economic Russian roulette” in a July 6 op-ed in The New York Times, suggesting that instead of raising wages, policymakers should ask taxpayers to foot the bill for increased subsidies for poverty wages. Salins’ proposal, which is a common refrain among conservatives, would shield employers from paying a living wage to their full-time workers by expanding the Earned Income Tax Credit (EITC). Salins claimed that advocates for raising the minimum wage “fail to acknowledge” that low-wage workers have access to the EITC.

    Echoing a myth frequently promoted by right-wing media, Salins alleged that workers would be “priced out of the labor market by an unrealistically high minimum wage” and that the victories advocates for raising the minimum wage have already won may cause “grievous harm.” A $15 per hour minimum wage, in Salins’ estimation, could “reduce the total number of jobs nationally by three million to five million.” From The New York Times:

    In this campaign season, politicians across the country (including the presumptive Democratic presidential candidate and perhaps even the Republican one) have called for raising the minimum wage. Not just marginally, as in the past, but all the way to $15 an hour, more than double the current national level of $7.25. Even elected officials and candidates in states with higher minimum wages like New York have jumped on the $15 an hour bandwagon. Their justification: “You can’t support a family on the current minimum wage.”

    What the advocates fail to acknowledge is that minimum-wage workers with families to support are already eligible to receive a financial boost under a national program called the earned-income tax credit. This program, instituted in 1975 and expanded since then, paid benefits to 27.5 million low-income workers in 2014. (That same year, only three million workers fell at or below the federal minimum wage, so the credit also helped millions of other low-wage workers.) Technically, such payments are classified as “refundable tax credits,” paid to qualifying workers when they file their annual income tax returns.

    [...]

    That is the beauty of the tax credit; it helps low-skilled workers in proportion to their household need, taking pressure off the minimum wage as the only guarantor of a “living wage.” The credit thus performs a crucial function in a national labor market where one size most definitely does not fit all, a labor market that is enormously varied by region, by employers’ needs, by workers’ skills and by the potential for jobs to be replaced by technology. By allowing wages to reflect local economic and industry conditions, the earned-income tax credit makes it possible for all unskilled workers to have jobs — including those not eligible for the credit, like teenagers, single young adults or semiretired older people, who would otherwise be priced out of the labor market by an unrealistically high minimum wage.

    Salins advocated for policies similar to those recently endorsed by Speaker of the House Paul Ryan (R-WI) and identified Ryan in the op-ed as a supporter of expanding the EITC (Ryan’s proposals also ignore the possibility of raising wages or strengthening worker rights). Salins suggested that a hypothetical working mom in a minimum-wage job with multiple dependent children already stands to benefit from the EITC, even though those income supports combined with her low wages would still leave her entire family in poverty. Salins did not mention that progressive groups such as the Center For American Progress (CAP) support raising the minimum wage and expanding the EITC along with other tax credits targeted at low-income families. The EITC has been shown to assist families in poverty, but it alone does not solve the problem of poverty, which is why CAP supports a multipronged approach to assisting low-income families: expanding EITC, raising the minimum wage, increasing educational opportunities, and strengthening worker protections.

    While the EITC program can correctly be called “the most progressive” part of the tax code, expanding the credit would not be free -- and the federal government already spends $68 billion per year on the program. Whereas expanding the EITC would cost taxpayers money, simply raising the minimum wage would actually save money and shift the responsibility of paying a living wage onto businesses. According to a June 2016 report jointly produced by Oxfam America and the Economic Policy Institute (EPI), raising the federal minimum wage to $12 per hour would reduce federal spending on anti-poverty programs like the EITC by $17 billion.

    Low-wage industries create burdens on taxpayers; the notoriously low-wage fast food industry alone costs taxpayers nearly $7 billion annually. Salins’ claim that the American economy would lose millions of jobs from a $15 per hour wage is also suspect because he based his numbers off a model that did not predict jobs losses, but rather the potential for a slightly lower rate of job growth. Right-wing media have a long history of pushing the same unsubstantiated arguments that Salins parroted in the Times -- claiming raising the minimum wage will kill jobs, hurt low-wage workers, and harm the economy -- all of which economists have repeatedly debunked.

  • Wall Street Journal’s Argument For Trickle-Down Tax Cuts Debunked By Its Own Citations

    Blog ››› ››› ALEX MORASH & CRAIG HARRINGTON

    The editorial board of The Wall Street Journal cited two working papers from 2015 as proof that the United States needs to lower its top marginal tax rates to keep and attract successful workers and “help the economy grow.” But one of the studies the editorial referenced debunked the paper’s trickle-down economic argument while the other study stopped far short of hailing tax cuts as a silver bullet solution for economic growth.

    The Journal grumbled that the United States needs to cut federal income tax rates to keep and attract talent in a July 4 editorial titled “Why Everyone Needs A Tax Cut.” The Journal cited two working papers that investigated how top income brackets affected the migration patterns of the world’s top inventors and scientists -- one put out in March 2015 by economists with the National Bureau of Economic Research (NBER), and another released in December 2015 by economists with the Federal Reserve Bank of San Francisco -- to claim, “Lower marginal rates improve incentives and help the economy grow.” From The Wall Street Journal:

    The authors, in hilariously dry academic fashion, dare to note that these “migratory responses to tax policy might represent a cost to tax progressivity.” Imagine trying to attract the top 1% of earners instead of driving them away.

    [...]

    All of this is worth keeping in mind the next time you hear Hillary Clinton attack Donald Trump or House Republicans for their tax-reform plans. Lower marginal rates improve incentives and help the economy grow.

    The Journal failed to mention that its conclusions are not supported by the research it cites. The United States has the lowest top tax rate of the developed countries NBER researchers surveyed. Additionally, while the San Francisco Fed did conclude “that state taxes matter” in terms of the interstate migration of top-tier workers and corporations, there is little evidence that the “[l]ower marginal tax rates” the Journal supports would actually “help the economy grow.”

    NBER Research Shows Little Incentive For U.S. To Cut Taxes

    The NBER researchers the Journal referenced broke down their findings in a blog for the London-based Centre for Economic Policy Research, noting that they looked at the effect tax cuts had on retaining and attracting “superstar inventors” in eight developed countries -- Canada, France, Germany, Italy, Japan, Switzerland, the United Kingdom, and the United States. Of these eight countries, the U.S. had the lowest top tax rate and, according to the researchers, would experience the smallest gains in terms of newly attracted workers from cutting taxes. The authors argued that “labour, like capital, might be internationally mobile and respond to tax incentives,” but “language, distance to one’s home country, and career concerns” are other factors to consider when workers are choosing where to live:

    According to data compiled by the CIA, the United States ranks among the bottom quarter of countries in the world in terms of how much taxation it collects as a percentage of gross domestic product (GDP). The U.S. ranks 171st out of 219 countries, with just 18.1 percent of GDP going toward income taxes, consumption taxes, and tariffs. By this metric, taxation in the United States looks more akin to the Caribbean tax havens of the Bahamas (172nd) or Bermuda (176th) than to the developed economies of France (12th) or Germany (24th).

    Federal Reserve Paper Doesn’t Actually Account For Economic Growth

    On several occasions throughout the text, the San Francisco Fed paper makes the point that “[w]hile there are many other factors that determine where innovative individuals and innovative companies decide to locate … relative taxes matter.” This might seem to support the Journal’s embrace of the misleading “tax flight” myth commonly deployed by right-wing media against states like California and New York, which are known for their high taxes and Democratic-led state governments. Yet, as Nobel Prize-winning economist Paul Krugman argued in a July 29 blog for The New York Times, the high-tax states often targeted by conservative outlets are not being outperformed by low-tax states in terms of economic growth:

    Attracting such individuals as those the Fed paper deems to be “star scientists” is important, but the number of people likely to be involved is extremely small. The authors estimate that a 2006 tax cut in New York increased the number of “star scientists” in the state by 28 total individuals in a state with 19.3 million residents and more than 8.6 million workers.

    Right-wing media outlets, including the Journal, frequently complain about the high tax rates imposed on American workers and businesses, but the facts lead to the opposite conclusion. It is not clear why the Journal chose these papers as the basis for its argument, but the conclusion of most independent research on the economic effects of cutting taxes reveals no evidence that it spurs economic growth.

  • Slate Highlights How Trickle-Down Economics Wreaked Havoc In Kansas

    Kansas Transportation Secretary Resigns After Tax Cuts Put Agency In Financial Peril

    Blog ››› ››› ALEX MORASH

    Slate has joined The New York Times and The Kansas City Star in highlighting what’s wrong with Kansas’ “insane right-wing experiment” of drastically cutting taxes, explaining that the Republican-led state “is about to destroy its roads.”

    In 2012, Republican Kansas lawmakers led by Gov. Sam Brownback enacted a series of tax cuts -- described by the Star editorial board as “disastrous” and the Times editorial board as “ruinous” -- that deeply cut revenue streams without generating the strong economic growth conservatives promised would follow. Instead, the state has fallen into financial crisis leading to a painful credit downgrade, a massive budget shortfall, and a “negative” credit outlook for the future. Brownback’s tax cut policies were nonetheless endorsed by right-wing media personalities and created a model for other conservative politicians to follow.

    On June 30, Slate reported that Brownback had announced the resignation of his state’s secretary of transportation, Mike King, marking the latest casualty of Kansas’ failed experiment with trickle-down economics. According to Slate, the reason King is leaving may be that the state has taken $2 billion from the Kansas Department of Transportation’s reserve funds to close gaps elsewhere in the budget. Former Kansas transit secretary Deb Miller cautioned that the “weakened revenue stream” would be “more subject to political whim.” From Slate (emphasis added):

    Kansas has had trouble paying for much of anything since 2012, when conservative legislators decided to implement a bevy of right-wing economic policies—and lead their state into a fiscal crisis.

    In order to keep funding its government despite dramatically decreased tax revenue, the legislature has flipped all their piggy banks. One of them is the Kansas Department of Transportation—or what sarcastic Kansans now call “the Bank of KDOT,” for the stupendous quantity of money that has been diverted from its coffers to the Kansas general fund and state agencies.

    [...]

    On Wednesday, Brownback announced that Mike King, the secretary of KDOT, would be resigning this month. King, who was appointed in 2012, has presided over a rather unusual period in Topeka finance.

    Since 2011, according to the Kansas City Star, the state has diverted over $1 billion in “extraordinary” transfers from KDOT. If you include “routine” transfers, from 2011 through the 2017 budget year the total diversion from the Bank of KDOT will amount to more than $2 billion.

    That’s more than KDOT’s annual expenditures. It’s as if the state, which has the fourth largest number of public road miles in the nation, had taken away a full year of road funding.

    [...]

    King’s predecessor, Deb Miller, told the Topeka Capital-Journal this week that King “started as KDOT secretary at a time when the agency had a well-defined and solidly financed statewide highway program. He exits an agency deeper in debt and with a weakened revenue stream more subject to political whim.”

    Brownback’s legacy will be grander, but we could call this the Mike King doctrine: Plugging holes in the budget; leaving holes in the road.

  • A “Better Way” To Fight Poverty Based On Research, Instead Of Right-Wing Media Myths

    ››› ››› ALEX MORASH & CRAIG HARRINGTON

    Speaker of the House Paul Ryan’s (R-WI) new series of proposals -- released June 7 in a report commissioned by House Republicans titled “A Better Way to Fight Poverty” -- aims to restructure federal anti-poverty programs, but they heavily rely on myths commonly promoted by right-wing media outlets that mislead about poverty and shame the poor. On June 6, the Center for American Progress (CAP) released its own plan to reform and restructure anti-poverty programs in the United States, offering an example of what serious proposals look like when informed by serious economic research, rather than by right-wing media myths.

  • Journalists, Experts Slam Paul Ryan’s “Better Way” On Poverty

    ››› ››› CRAIG HARRINGTON

    In the week since Speaker of the House Paul Ryan (R-WI) and the Republican-led Task Force on Poverty, Opportunity, and Upward Mobility released their so-called anti-poverty agenda, titled “A Better Way to Fight Poverty,” journalists and experts heavily criticized the plan for rehashing “the same, stale, far-right ideas” pushed by Republicans in the past, and for ignoring basic facts about the inefficacy of these reforms.

  • Wall Street Journal Vs. Wall Street Journal: Puerto Rican Citizenship Edition

    WSJ Highlights Poll Showing Few Know Puerto Ricans Are U.S. Citizens Weeks After Slurring Them As "Refugees"

    Blog ››› ››› CRAIG HARRINGTON

    The disparity between The Wall Street Journal's objective news reporters and its right-wing editorial slant was on full display in a reporter’s blog post highlighting how few poll respondents can correctly identify Puerto Ricans as American citizens. The public's lack of awareness is no doubt fed by outlets like the Journal, which slurred Puerto Ricans as "refugees" in an editorial just five weeks ago.

    A June 9 blog post in The Wall Street Journal from economics correspondent Nick Timiraos surmised that one of the challenges members of Congress face as they debate bipartisan legislation to help Puerto Rico stabilize and restructure billions of dollars of government debt is that so few of their constituents realize that Puerto Ricans are natural-born American citizens:

    Pop quiz: What’s the national citizenship of people born in Puerto Rico to parents who were also born in Puerto Rico?

    If you don’t know the answer to that question, you’re not alone. Puerto Ricans are U.S. citizens, but only 43% of Americans answered correctly in a recent Economist/YouGov poll. Some 41% said they were citizens of Puerto Rico, while another 15% weren’t sure.

    The statistic underscores one challenge Congress has faced as it considers legislation to address the island’s debt crisis: The issue hasn’t been a high priority for lawmakers partly because their constituents aren’t aware that Puerto Ricans are U.S. citizens.

    There are many explanations for why 41 percent of respondents to an Economist/YouGov poll conducted in early May might have incorrectly thought Puerto Ricans are not American citizens. Perhaps the respondents had been reading The Wall Street Journal’s editorials, which on May 2 warned that the island’s debt crisis could create an “exodus” of “Puerto Rican refugees” to the United States mainland. The paper expressed outrage that these so-called “refugees” might “qualify for Medicaid, food stamps and public housing” and worst of all “be able to vote.”

    Because Puerto Rico is not a state, its millions of residents do not have any representation in the Congress that will decide their fate -- the same is true for hundreds of thousands of Americans living in other U.S. territories, including Washington, D.C. The editors of the Journal were stoking anxiety that foreign immigrants might move to the United States to steal jobs and skew elections, but the fact is American citizens have the right to live and work wherever they choose in their own country.

    Puerto Rico is an integral part of the United States and has been for nearly a century. Its residents have enjoyed birthright citizenship since March 2, 1917, thanks to the Jones-Shafroth Act. Full citizenship was later extended to “All persons born in Puerto Rico on or after April 11, 1899,” by the Immigration and Nationality Act of 1952.

  • Ryan's "Better Way" Poverty Plan Is Based On Myths From Right-Wing Media

    ››› ››› ALEX MORASH

    Speaker of the House Paul Ryan (R-WI) and the Republican-led Task Force on Poverty, Opportunity, and Upward Mobility released the GOP’s latest policy plan to cut government anti-poverty assistance programs. Many of the arguments in favor of Ryan’s proposed reforms are based on easily debunked right-wing media myths and poor-shaming. Ryan’s rhetoric in this poverty “reform” agenda -- titled “A Better Way to Fight Poverty” -- is gentler than in his previous policy proposals. But his plans are still based on myths, and his solutions once again are focused on gutting vital programs designed to assist Americans struggling to make ends meet and families in need.

  • Paul Ryan Parrots Right-Wing Media Talking Points To Smear DC’s Minimum Wage Increase

    Ryan’s Agenda To Lift Americans Out Of Poverty Skips Over Raising Sub-Poverty Minimum Wages

    Blog ››› ››› CRAIG HARRINGTON

    Speaker of the House Paul Ryan (R-WI) concluded a June 7 press conference meant to highlight his recent proposals to reform federal anti-poverty programs by confirming that he remains opposed to initiatives aimed at raising local, state, and federal minimum wages. Ryan’s stated opposition to the minimum wage recycles easily debunked right-wing media myths about the supposed negative side-effects of living wages.

    On June 7, the speaker released a report from the Task Force on Poverty, Opportunity, and Upward Mobility. The plan outlines a number of standard conservative proposals to “reform” anti-poverty programs in the United States, but one thing it almost completely ignores is the minimum wage. In fact, the lone mention of the word “minimum wage” appears as part of an argument pushing the debunked “Welfare Cliff” myth, the claim that low-income, single moms are so heavily subsidized by government benefits that they have no incentive to pursue professional advancement.

    At the conclusion of his press conference, Ryan was asked by two reporters to comment on a plan in Washington, D.C. to raise the municipal minimum wage to $15 per hour by 2020 and then index it to inflation. In just over a minute, Ryan proceeded to parrot numerous debunked charges commonly leveled against the minimum wage by right-wing antagonists. From CNN Newsroom:

    Ryan’s anti-minimum wage talking points are either misleading, or outright false. Ryan also missed basic facts of D.C.’s minimum wage initiative, which the Economic Policy Institute (EPI) estimates will result in increased wages for one-fifth of the city’s private sector workers.

    Increasing The Minimum Wage Does Not Hurt Entry-Level Workers

    Ryan claimed that raising the minimum wage “prices entry-level jobs away from people” before engaging in the common right-wing media tactic of reciting a story of his own youthful experiences working in the fast-food industry.

    Right-wing media frequently claim that minimum wage positions are meant to be entry-level jobs (usually just for teenagers), but the fact is that the majority of minimum wage workers are adults over the age of 25 and less than one-quarter of minimum wage workers are aged 16 to 19. Women make up a disproportionate number of minimum wage workers, and according to July 2015 research from EPI, stand to benefit considerably from an increased minimum wage.

    Fast-Food Jobs Were Never The First Rung On A Ladder Of Upward Mobility

    Ryan claimed that working at McDonald’s was “a great way to learn skills,” a wage and job mobility myth about fast food workers frequently parroted by right-wing media. But according to a July 2013 report by the National Employment Law Project (NELP), the fast-food industry is particularly bad at providing actual opportunities for advancement to low-wage workers. Entry-level workers account for 89 percent of fast food industry workers, and only a tiny fraction move on to management or ownership positions.

    Economic Growth And Job Creation Is Not Enough To Curb Poverty

    Ryan concluded his remarks by saying that he does not want to “cap” wages, he wants to “unleash[]” them, and institute policies that create “the kind of economy, and economic growth … that help get people better jobs, in a better economy, that has a more promising future for them.” Those claims echo a common right-wing media myth, that economic growth can indirectly lift millions of Americans out of poverty without the need for targeted programs.

    But the budget, economic, and tax proposals Ryan and his fellow Republicans repeatedly support do not generate the economic growth they promise. The trickle-down economic principles he has spent a career endorsing are a proven failure.

    If economic growth alone was the key to solving poverty and reducing economic inequality, both would have been wiped out decades ago. According to a January 29 report from the Brookings Institution, the relationship between economic growth and improved economic inclusion is “relatively weak” across the United States. The Brookings research seems to support a hypothesis endorsed by economists Jared Bernstein of the Center on Budget and Policy Priorities (CBPP) and Elise Gould of the EPI, who argue that economic growth alone is not enough to reduce economic insecurity in the face of persistent inequality.

  • Are Paul Ryan’s Poverty Reforms Still Trump-Endorsed?

    Media Should Question The Speaker And Presumptive GOP Nominee About The Compatibility Of Their Poverty Proposals

    Blog ››› ››› CRAIG HARRINGTON

    Presumptive Republican nominee Donald Trump and Speaker of the House Paul Ryan (R-WI) have engaged in a war of words regarding Trump’s racist attack on the federal judge presiding over two class action lawsuits against Trump University. Despite the recent infighting, Trump and Ryan seem to agree in principle on the latter’s vision for a complete overhaul of federal anti-poverty programs. Reporters need to ask the Republican nominee, and the speaker, if the Ryan reform agenda is truly Trump-endorsed.

    During an appearance on the June 5 edition of CBS’ Face the Nation, host John Dickerson asked Trump to comment on Ryan’s June 2 endorsement of his presidential candidacy. Trump responded that he found Ryan “appealing” because “he’s a good man” who “wants good things for the country.” Trump said that he expected to “agree on many things” with the highest-ranking elected Republican in the country, specifically citing Ryan’s positions on poverty:

    Trump’s decision to bring up Ryan’s supposed zeal to “take people out of poverty” was no accident, as it had been widely reported that the speaker planned to roll out his renewed poverty reform agenda in the coming days. On June 7, Ryan released a report from the so-called Task Force on Poverty, Opportunity, and Upward Mobility.

    The report was nothing new for Ryan, closely echoing the positions espoused during the speaker’s sham poverty forum in January and his appearance at the Conservative Political Action Conference (CPAC) in March. It struck a softer tone than the overt poor-shaming Ryan has promoted in the past, but it still pushed the same kinds of policies that MSNBC’s Steve Benen previously slammed as “brutal” for the poor.

    During Ryan’s June 7 press conference announcing the proposed poverty program reforms, he repeatedly stated that his plan would have “a better likelihood of passing” if Trump were president of the United States. From the June 7 edition of CNN Newsroom:

    Media outlets are notorious for stumbling into the role of Ryan’s public relations outfit, frequently portraying his budget, economic, and tax reform policies as serious proposals rather than right-wing agenda items. The instinct to treat Ryan as a voice of reason has been particularly pronounced since the speaker decided to zero in on poverty.

    Ryan has now formally endorsed Trump for president, and Trump has tacitly endorsed Ryan’s proposed reforms. Now that the final plan has been made public, reporters need to ask Trump if he actually endorses Ryan’s plan. And they should ask Ryan if he can accept the endorsement of a man whom he just accused of engaging in “the textbook definition of a racist comment” with his attacks on a Hispanic federal judge.