Friday, January 11, 2013

Red State Hell

Has Dakinikat of Skydancing ever written a better-researched, more impassioned piece than this? Her target -- initially -- is her state governor, Bobby Jindal, who wants to rid Louisiana of state income taxes by raising sales taxes. Of course, that move would mean placing more of the burden on the poor, since sales taxes are regressive. The most quotable passage:
The one thing that I’ve really noticed about these granny starvers is that they could all play the part of some creepy Shakespearean villain. Paul Ryan, Eric Cantor, Bobby Jindal, and Rick Scott look the original templates for those lean, hungry men. They also remind me of the creeps that show up in the Dickensian tales.
Jindal and the other politicians skewered in this piece all take their orders from the American Legislative Exchange Council, ALEC, a conservative group that proposes Ayn Randism as the solution to all woes. The group's chief Big Thinker appears to be Arthur Laffer, of Laffer curve fame. (Some of you may recall that he first drew out his famous curve on a napkin while sharing a meal with none other than Dick Cheney, who always manages to be present when countries are ruined.) The Nation once described ALEC as a "collaboration between multinational corporations and conservative state legislators."

The important take-away here is that ALEC doesn't work. Dakinkat quotes this study which proves that ALEC-ized states do much worse than non-ALEC states.
...actual results are the opposite of the ALEC claim. The more a state’s policies mirrored the ALEC low-tax/regressive taxation/limited government agenda, the lower the median family income; this is true for every year from 2007 through 2011. . . . The relationship is not only negative each year, it also became worse over time: the better a state did on the ALEC Outlook Ranking, the more family income declined from 2007 to 2011. . . . The more a state followed the Alec-Laffer policies, the higher its poverty rate, every year from 2007 to 2011.
Will these results cause ALEC proponents to rethink? No. Libertarianism is a stage magician who keeps reaching into an empty top hat because theoretically it ought to contain a rabbit; the magician would rather keep exploring his demonstrably rodent-free chapeau than admit that a beloved theory might be wrong.

DKat's final observation mirrors a point I've made repeatedly:
What really makes this so shameful is that these Banana Republic-style agendas are being subsidized by Blue States. There are very few economically viable Red States in our country. They could not exist on their own as they are in worse shape than countries like Greece. They stymie policy at the national level and continue to subsidize their backward growth agendas with federal monies. However, they are not beyond complaining about government spending will sucking it in like a big ol’ black hole.
Even awful Ayn might have been honest enough to admit that the blue states are "producer" states while the red states are "leech" states. (She lived in NY, a productive blue state.)
NFP Joseph but just to point to an emerging Java scare.
I hadn't heard of the Cheney connection to the Laffer propaganda. Interesting! In the UK the idea that the filthy rich will pay more tax when their tax rates are lower started to be put out after 1979, spearheaded by the Sunday Times. That was also the epoch when exchange controls on capital were abolished, upon which members of the said stratum took many billions out of the country. Whoosh! You can guess what happened to domestic production and the effect on unemployment.

It has to be said, though, that the money of the very richest - the scum of the scum - has long been protected through trusts and is as fluid as they want it to be. Not talking about say a GP who has a paltry single million in an account in Dubai or Jersey and thinks he's Al Capone. The main features of English 'equity' law - mainly concerning trusts, or arrangements which can 'constructively' be so considered, have been adopted all over the world. This is a major global contribution by English culture. Nick Shaxson doesn't get this side of it, and needs a decent editor, but his book on 'Treasure Islands' is nonetheless superb.
Rabbits ain't rodents.

A "lagomorph-free chapeau" would be taxonomically more accurate.
We should push for an amendment that limits a state receiving no more than 110% of the money it sends to Washington. We can sell this to the rubes as "keeping our wealth at home". The Blue States could balance their budgets and the Red states would get what they wished for.
I like Mr. Mike's idea. Could you expand on the mechanics a bit?
Unfortunately, Mr Mike's idea would send us straight into the place the Eurozone is now. The mechanics are thorough federal income taxes too so it wouldn't balance the budgets in blue states. We have a way to transport the funds of savers to spenders ... actually, it used to work really well want it was a bit more functionally Hamiltonian. Read up on currency union theory.
I'm all in favor of the Red States starving to death. Federal money the Blue states get to keep would go into infrastructure like giant bridges across Red States. That way when we travel we don't have to enrich them in the littlest bit. Or a wall like the conservative want to be completed along our border with Mexico. We could do that.
Isn't Washington state considered blue? It has no income tax and higher sales tax. I just visited my son there. I remember thinking at first that the prices for things were very low and/or reasonable...until handed the bill. I think the stores, restaurants and hotels balance the high sales tax by shaving their prices a little.
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