You know the old saying? Things may be bad, but they could always be worse. Well, that appears to be the Texas GOP’s campaign slogan this year. Here’s the line the GOP in Texas has been hiding behind [PDF] for a while now, “The Texas seasonally adjusted unemployment rate remained at 8.2 percent in July, unchanged from June, and continued to trend well below the U.S. seasonally adjusted unemployment rate of 9.5 percent.” (Emphasis added).
What Gov. Rick Perry appointee, and former Texas GOP chair Tom Pauken is trying to say, is that we should all feel grateful because things aren’t as bad as they are for others. The unemployment rate in Texas has moved little in the last 14 months, hovering between 7.9% and 8.3% since July of 2009. In a rational state, where incumbents are held accountable, that would mean bad news for the Republicans running for reelection in Texas, but I digress. Has anyone heard any ideas for lowering that number from the Governor, Lt. Gov., Speaker or Workforce Commissioner? Me either.
Another line Texas GOP has been been trumpeting is that our budget problems have not been as bad as other states. That is, if you exclude the $16 billion in federal money that was used to balance the budget in 2009. But Texas’ “lesser” budget problems are more about a system that was already punishing the weak, at the behest of the powerful, Texan Tall Tales.
What is true is that the Texas budget is in relatively good shape. That’s because recessions don’t do as much fiscal damage if you have a weak safety net, so expenses don’t rise much as people are plunged into poverty (because they don’t get any help), and a regressive tax system, so that revenues don’t fall much when incomes collapse.
What is clear is that in the upcoming legislative session we’re facing a budget freight train that’s about to go off the rails. The HChron had a piece last week that took the usual, left/right, D/R, perspective on the budget “debate” that has prevailed so far this election cycle, White, Perry not specific about budget - One talks tough on spending, the other of bipartisan compromise. Kuff details what’s likely to be cut, Them that has, gets, and it’s not the Texas Enterprise Fund. Here’s the short list:
Some of Texas’ most vulnerable residents – the very poor, the mentally ill, those suffering from birth defects, and children from troubled families – would lose state support and services under several new budget-cutting proposals.
Bill White, for his part, has only said that he would accept a local option tax bill. (A local option tax bill would allow local elections to raise taxes in that locality to pay for transportation projects). It’s also likely, in the event the likely GOP controlled legislature was to send a state budget with a tax increase to him, he would allow it to become law. With Perry that probably would not be likely. That doesn’t mean that taxpayers will get a break if Perry’s reelected, they’ll just be called fee increases, instead of tax increases. Both candidates will talk of scrubbing the budget, cutting waste, etc.. But the reality is, and everyone knows it, that if Texas wants to keep it’s current level of spending, including assistance to the weak and needy, then those with higher incomes in Texas will have to pay more taxes [PDF].
Since taking office in 2001 Gov. Perry has saddled Texans with $11.8 billion in transportation debt, where there was none when he took office. In Texas the Republicans are in charge and have been for the last 7 years. The education system, public and higher, is facing all sorts of trouble – quality down, cost up. Unemployment is roughly twice what it was when they took over. While our situation may not be as bad as other states, we must ask ourselves why are things so much worse since the GOP started running this state? It’s also likely going to get much worse, for those of us who aren’t on the high end of the wage scale, as long as they’re in charge.
These issues are just the tip of the iceberg. It’s no wonder Perry and his GOP cohorts are running scared from Democrats and the media.
In a fascinating article about the re-election campaign of Rep. Alan Grayson (D-FL), Slate reporter David Weigel touches on the tragic irony of the typical disaffected voter that is working to return the Republican party to the majority in the United States House of Representatives.
In 2008, (voters in the Orlando-area 8th Congressional District) voted for Grayson and the Obama-Biden ticket, narrowly, because of disgust with the Bush administration’s failures. It was tough to find a job then. It’s tougher now.
Republicans are blaming the weak economy on President Obama, Grayson and Congressional Democrats.
It’s a critique that appeals even to voters like Jeff Evans, 49, who was laid off from his trucking job in December 2009. He was receiving unemployment benefits until a Republican filibuster stopped them this summer, leaving him without a revenue stream for weeks. But even though Grayson and his fellow Democrats eventually restored his benefits, Evans isn’t sure he will support Grayson. It would do him more good, he said, and allow him to keep his dignity, if they “let the small businesses create more jobs.”
Meet Jeff the Trucker, a typical unemployed American who despite the direct negative impact that Republicans have wrought — namely a protracted filibuster in the United States Senate that interrupted the meager unemployment benefits that represented his only income — is supporting a Republican Congressional candidate. How can Americans be so easily misled into voting in direct opposition to their economic best interest?
Grayson knows how popular that argument is. The solution: Argue that Republicans have no credibility to make it. He pivots off of one of Webster’s ideas,a proposal to cut the budget to what it was in 2007. Webster suggests that Floridians were perfectly well off when the government spent at that lower level. Grayson prefers to ask whether voters realize that a cut like that would mean lower Social Security payments.
“It’s a stupid idea,” says Grayson. “Nobody has a time machine, OK? The world has changed a little bit since 2007. For one thing, there’re a lot of more people out of work.” Soon he’s on a roll, explaining how $12 trillion of capital disappeared in the “Bush implosion” of 2008. That’s who voters need to blame, he says. Why aren’t they as angry as he is?
“In 18 months, two centuries of work, the collective effort of millions of people, all gone,” says Grayson of the financial crisis. “So now the Republicans want to go back to 2007? It’s a little bit late for that.”
Joe the Trucker needs to wake up to his exploitation by Webster and the Republican Party, that has used the “Tea Party” moniker to replace their discredited brand, misled and exploited its followers who are feeling real pain, some of it caused directly by Republicans themselves. What we are witnessing is the counterattack of the nation’s wealthiest citizens to prevent even the slightest correction to the disastrous course that President George W. Bush and Congressional Republicans have led this nation.
Paul Krugman followed up yesterday’s blockbuster New York Times op-ed with a blog post today defending the fact that over the next decade, the GOP proposal to extend all Bush tax cuts, not just those going to the middle class as President Obama suggests, will line the pockets of the richest 0.1 percent of taxpayers with $3M each.
What’s at stake here? According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years.
Krugman points out that the TPC estimates that most of the money will end up in the pockets of the rich.
Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade.
Your choice in November is between a party that will responsibly navigate the country out of the financial wilderness created by decades of voodoo economics, and one that wants to open the doors of the United States Treasury to be looted by the wealthiest members of our society. Vote Democratic to continue down the path to recovery, or return to the policies of the Republican Party that led us into this mess.
It’s interesting to compare the economic situation over the last several years to those that occurred in during the Great Depression. I think this crisis had the potential to be as bad as that one but, so far, has been mitigated by the actions of the Democrats and President Barack Obama. What many forget about the Great Depression is that while the stock market crashed in 1929, (in Herbert Hoover’s first year as President), it took three more years of the federal government inaction, to drive the economy all the way into the gutter and bring our country to the depths of the Great Depression.
It’s very likely that the Great Depression wouldn’t have been so great if the federal government had taken some action during the first three years after the crash. Instead of a Great Depression, maybe it just would have been a great recession, as many have called the current situation. Even though it seems likely we will never know for sure. But it took nearly the complete destruction of our economy – for enough Americans to see the bankruptcy, literally, of Republican economic policy – before government action was finally taken. It put Republicans mostly in the minority, and their economic philosophy on the sidelines, for nearly 50 years.
When those 50 years were up, the next 30 were largely spent dismantling the structure that was put in place that created the largest middle class the world had ever known. Essentially returning us to a time before the Great Depression and the New Deal. One difference is that the economic situation turned bad at the end of an outgoing Republican Presidency instead of at the beginning of a new one.
President George W. Bush was not going to let the banks fail, and complete economic collapse happen on his way out the door. The Bush bank bailouts (TARP), the election of Barack Obama so early into the current economic downturn, and the modest, compared to what’s needed, federal stimulus have, so far, kept us from another Great Depression. But as Paul Krugman shows, Lost Decade Looming?, we may not have real economic recovery anytime soon. Not only have we forgotten our Keynes, Obama may be bound and determined to make the same mistake that FDR made in 1937, moving too soon to cut the deficit, and forcing the economy back into recession.
If Gov. Rick Perry has done such a good job running Texas, why does the future look so bleak? So much so that the specter of laying off state employees is now being discussed. Yesterday Dave Montgomery in the FWST had another article on the condition of our state’s finances, State budget cuts causing anxiety as agencies prepare to trim services.
As the belt tightens around state government in anticipation of a severe budget shortfall, many officials are already trying to trim spending by 5 percent with measures that range from buying energy-efficient light bulbs to scrapping trips and putting a hold on hires.
Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus, who ordered the reductions in January, have been reviewing agency plans for budget cuts and are expected to announce their decisions in early May.
A number of agencies and departments have asked for exemptions from some of the more painful cuts to avoid what they say could be a debilitating blow to public services.
But others, perhaps recognizing the inevitable, have already begun moving forward with their cuts, directing the savings into “lock boxes,” accounts being set up in the comptroller’s office. Fifteen had been established by late last week, comptroller’s office spokesman R.J. DeSilva said.
The reductions have spread anxiety among the more than 150,000 state employees. Andy Homer, director of government relations for the Texas Public Employees Association, said the downsizing and hiring freezes could affect thousands of employees, many of whom remember the 2003 budget crunch, which cut about 10,000 employees.
“Like people everywhere, the threat of job cuts is always worrisome,” Homer said.
Many of the budget cuts emulate those in households and businesses: delays in planned acquisitions and purchases of only essential items, for example. Scores of agencies have put a hold on hiring and are allowing positions to evaporate through attrition, though some say it may be difficult to avoid layoffs.
Looking over what was written and said back in 2006 after the tax swap, aka the budget shortfall creation act (BSCA), was passed, it’s clear the GOP in Texas knew that it’s plan would create a shortfall. They knew the bill wouldn’t create the money needed to make up for the promised revenue reductions, as did many others. But if you’ll recall back to 2006 something had to be done. Because it was an election year, and if something wasn’t done public schools were not going to open on time for the fall semester. And there a few better reasons to pass bad legislation than that.
The hypocrisy continues unabashed. Rep. John Carter appeared at the ribbon-cutting ceremony Friday of a park in Harker Heights claiming credit for bringing stimulus funds credited with funding the work. There’s only one problem. Carter repeatedly voted against stimulus funding, claiming it wastes taxpayer’s money without bringing jobs.
Which is it Carter? Which side of your mouth are you speaking out of today? Why do you insist on voting against policy that you admit is effective and beneficial?
UPDATE: A spokesman for Rep. John Carter contacted us to clarify that the funds to fix and reopen Dana Peak Park were part of the regular appropriations bill that was signed into law in 2008, well before the stimulus. Our source, the Killeen Daily Herald had reported, “Carter aided the area quickly by coming to visit the park after it flooded, Mullen said, thanking Carter for his work to secure stimulus funds for reconstruction.” Apparently the source was incorrect. We regret the error.
There’s a disconnect in this country of those most deeply affected by the current economic problems in this country, middle and working class Americans, and what’s to blame for it. Mostly it’s a disconnect regarding the causes. It didn’t start with Bush, Clinton, or Bush, it goes back to Reagan.
Paul Krugman does a great job today of showing the divide between the Democrats and Republicans on the most important of issues, the current economic situation. Senator Bunning’s Universe.
Consider, in particular, the position that Mr. Kyl has taken on a proposed bill that would extend unemployment benefits and health insurance subsidies for the jobless for the rest of the year. Republicans will block that bill, said Mr. Kyl, unless they get a “path forward fairly soon” on the estate tax.
Now, the House has already passed a bill that, by exempting the assets of couples up to $7 million, would leave 99.75 percent of estates tax-free. But that doesn’t seem to be enough for Mr. Kyl; he’s willing to hold up desperately needed aid to the unemployed on behalf of the remaining 0.25 percent. That’s a very clear statement of priorities.
So, as I said, the parties now live in different universes, both intellectually and morally. We can ask how that happened; there, too, the parties live in different worlds. Republicans would say that it’s because Democrats have moved sharply left: a Republican National Committee fund-raising plan acquired by Politico suggests motivating donors by promising to “save the country from trending toward socialism.” I’d say that it’s because Republicans have moved hard to the right, furiously rejecting ideas they used to support. Indeed, the Obama health care plan strongly resembles past G.O.P. plans. But again, I don’t live in their universe.
More important, however, what are the implications of this total divergence in views?
The answer, of course, is that bipartisanship is now a foolish dream. How can the parties agree on policy when they have utterly different visions of how the economy works, when one party feels for the unemployed, while the other weeps over affluent victims of the “death tax”?
Last night on Charlie Rose the differences couldn’t have been more stark as well. First up was Elizabeth Warren who is the Chair of the Congressional Oversight Panel (COP). Which was created to to “review the current state of financial markets and the regulatory system.” Warren is a champion of the Middle class. At the end of her discussion she made this statement:
It will not save us if a handful of Wall Street banks porsper and the rest of American fails. Our focus, our energy, our hear has to be on the reset of America.
She was followed by someone who thinks too much regulation is what caused our current economic problems, Dick Armey. Believer in the “free market”, who thinks anti-trust regulation is “unnecessary, superfluous, and conterproductive”, and he even brought up the failed “Joe the Plumber” wealth redistribution line. But the truth is “wealth redistribution” has been occurring in this country since Armey and his hero Ronald Reagan took office. Money has been being taken from wage earners and the middle class, in the form of tax increases, and been given to the wealthy, in the form of tax cuts. That’s what supply side/trickle-on-down economics was all about.
Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.
The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s.
2009-12-03-warren12.jpg
But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago — for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.
To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases — but it hasn’t been enough to save them. Today’s families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.
Through it all, families never asked for a handout from anyone, especially Washington. They were left to go on their own, working harder, squeezing nickels, and taking care of themselves. But their economic boats have been taking on water for years, and now the crisis has swamped millions of middle class families.
You can see the disparity in graphic form here. As has been chronicled here the investment of tax dollars in infrastructure, R&D, education is what fueled our economy and kept us out of deep recessions for decades. All of that investment is gone, and the infrastructure is either crumbling or too antiquated and needs to be replaced. We need that kind of investment again to fuel our economy in the future.
But there is a disconnect for many people as to the cause of our economic problems. Many do not understand, because politicians and the media won’t tell them this, and it’s likely they’re not learning about this in their History, Government and Economics classes. The middle class and working class have been decimated because the wealthy and corporations won’t pay their fare share. And many think the government is to blame. That’s the disconnect. The only question left is how bad does it have to get before they make the connection?
The main obstacle for the stimulus to overcome, aka the American Recovery and Reinvestment Act (ARRA), like many things, is that it hasn’t gotten a fair hearing in the media. If there is a problem with it, it’s that it was too small. Because it was too small to really do effectively end the recession, there are still many out of work , and therefore many who think it did not work as it was supposed to . It did and as this NYT article today shows, Judging Stimulus by Job Data Reveals Success.
Imagine if, one year ago, Congress had passed a stimulus bill that really worked.
Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.
If that had happened, what would the economy look like today?
Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.
Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.
[...]
The case against the stimulus revolves around the idea that the economy would be no worse off without it. As a Wall Street Journal opinion piece put it last year, “The resilience of the private sector following the fall 2008 panic — not the fiscal stimulus program — deserves the lion’s share of the credit for the impressive growth improvement.” In a touch of unintended irony, two of article’s three authors were listed as working at a research institution named for Herbert Hoover.
Of course, no one can be certain about what would have happened in an alternate universe without a $787 billion stimulus. But there are two main reasons to think the hard-core skeptics are misguided — above and beyond those complicated, independent economic analyses.
The first is the basic narrative that the data offer. Pick just about any area of the economy and you come across the stimulus bill’s footprints.
The Recovery Act has provided relief to everyday Texans in the form of tax credits, unemployment compensation extensions, increased food aid, and funding for specific projects to create jobs and promote economic activity. As a result, many Texas employers have shed fewer jobs and have begun
to create net new jobs in some sectors.
During the fourth quarter of 2009, ARRA programs generated an estimated 147,000 jobs in Texas, helping to more than offset ongoing job losses in various employment sectors. As shown in the graph, without ARRA relief, Texas employers would have shed an overall 98,000 jobs during the final months of last year. The previous quarter shows a narrower differential, but still a substantial impact.
In our state our governor and those in his party want to keep acting like the stimulus was a bad thing while all the evidence shows that it’s been very helpful to Texas. It’s time to get rid of those at the top of our state’s government. We need leadership in Texas again, that’s been lacking for quite some time at the state level.
The ‘Fearsome Four’ as they are called in this article are: Rahm Emanuel, the pugnacious chief of staff; David Axelrod and Valerie Jarrett, his senior advisers; and Robert Gibbs, his communications chief.
Read the whole thing. Its what we’ve all noticed–they absolutely dropped the populism and the effective grassroots organizing from the moment they got into the White House. I know there are people who are going to complain because people complain about the White House, Rahm, and the very notion of an overarching strategy to get things done but its pretty clear. The account of the Coakley debacle is exactly what I saw, on the ground, in MA. Now we just have the backstory.