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About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply...  (More)

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Begging to Differ

Uploaded: May 3, 2015
From our publication's doom-n-gloom department comes a report in brother Tim's blog that three 'economists' have ranked California near the bottom among states for what they call "business climate." When you consider the source, that's very good news.

In this arena, it's useful to recall the truth in the old joke about the mathematician, statistician and economist, each asked to solve 2 + 2. The first says 'four,' the second offers a small margin of error, and the economist replies, "How much do you Want it to be?" When evaluating economics assertions, it's crucial to know source and purpose: whose axe is it, and why is it being ground?

So it is that Tim's post also revealed their identities to be the creator of the so-called Laffer curve, and representatives of two intensely conservative advocacy organizations. This is not ivory tower stuff ? it exists for the purpose of pushing a point-of-view.*

Back in the 1980s, Arthur Laffer provided the tenuous theoretical chops for the Reaganomics proposition that cutting taxes on the wealthy actually redounds to the benefit of working stiffs. It was rightfully derided as 'voodoo economics' at the time. That it continues to hold such a place near the hard hearts of the Far Right suggests that it has also acquired an undead, 'zombie' persona. It is certainly in need of "brains."

The other two co-authors represent the Heritage Foundation and American Legislative Exchange Council (ALEC), two think-tank organizations that attempt to underpin their well-heeled sponsors' mythologies around "limited government, free markets and federalism" (per ALEC's website).

Their metrics and their conclusions must be seen through that lens. If you take the time to closely review their various initiatives, you'll note that "limited government" really means 'tax cuts' and service quality be damned, and 'free markets' means freedom from pesky requirements like clean air and water, and clean-up of industrial stains ? as well as rolling back the social welfare rights of workers in areas like wages, safety, and concerted action.

"Federalism" is trickier, since it is usually associated with states' rights and 'bringing government closer to the people.' What it really means, of course, is that it is oft-times easier to divide-and-conquer at the state level than to win in DC.

There has been a recent, complicating corollary added to the federalism concept, as the GOP has gained control of many statehouses and legislatures. Now, you see a coordinated push by ALEC and others to pre-empt the power of Local governments to regulate various commercial climatic matters within their territories ? issues like fracking or animal welfare, that the free-marketeers have rolled-back, or choose to ignore. Apparently governments should be 'close' to the people ? but not TOO close.

To summarize, these are very often zero-sum games. What's good for ALEC is too often bad for workers, breathers and local control by real, live citizens.

California has its challenges, including the effects of population, climate change, badly bargained public pensions and a very uneven distribution of opportunities to produce and enjoy the fruits (and veggies) of its economy. But those aren't at-issue in the ALEC study, and by many other measures, we're doing just fine, thanks. In job creation (for one of many examples), CA leads the nation, far outstripping likes of fair-haired Texas. Business Insider ranks this state's economic performance as second only to Colorado's.

And if you want to see a poster-child for The World According to ALEC, check-out Kansas. It is the anti-California, with GOP Governor Brownback enjoying friendly super-majorities in both Houses of its legislature. They've embarked on an antediluvian set of policies in a great experiment in low taxes and freedom. It is failing miserably, with recent economic performance well below that of neighboring states ? and numerous school districts that closed early this year for the summer, when they ran out of funds. Theirs are 19th century policies, turning-out students and citizens all primed for a nineteenth-century future. No, thanks.

The fact that our fair California ranks poorly in that ALEC-sponsored study, on both business climate and outlook is not only "unsurprising," as Tim puts it ? it's a veritable badge of honor.

* You know, even calling the authors 'economists' in this context is a bit of a semantic stretch -- like labelling a conference of Atilla, Genghis Khan and Stalin 'a gathering of statesmen.'
What is it worth to you?


Posted by Damon, a resident of Foothill Knolls,
on May 5, 2015 at 1:13 pm

Many conservatives have been declaring that California is economically finished for quite some time now. There was some conservative essayist who wrote a long article in newspaper or magazine recently (I forget which) in which he declared that he and his family were moving out of California due to high taxes, high housing prices, and the unfriendly business environment and that a lot of other people were, too. He made it sound like a mass exodus from California. His complaints reminded me of that old Yogi Berrism: "Nobody goes to that restaurant anymore - it's too crowded.".

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