Blog For Arizona

The Recession Generation

by David Safier
Bob Herbert's column in today's NY Times puts an unhappy face on our current economic woes.

Poverty and homelessness are increasing and, as Lawrence Mishel, the president of the Economic Policy Institute, said during an interview this week, “There are a whole lot of people who are going to be economically desperate for many years.”

[snip]

Mr. Mishel has been trying to call attention to the human toll caused by job losses on this vast scale. The institute estimates that the poverty rate for children is in danger of increasing from 18 percent, which is where it was in 2007, the last year for which complete statistics are available, to a scary 27.3 percent in 2010.

For black children, you don’t want to know. But I’ll tell you anyway. The poverty rate for black kids was 34.5 percent in 2007. If the national unemployment rate rises, as expected, to the vicinity of 10 percent next year, the poverty rate for black children would rise to 50 percent or higher, analysts at the institute believe.

[snip]

Dr. Irwin Redlener, president of the Children’s Health Fund and a professor at Columbia University’s Mailman School of Public Health, has referred to these youngsters as the “recession generation,” and has described what is happening to them as “a quiet disaster.”

Not good. Not good.

It's the children, stupid!

by David Safier

I understand the sad dilemma. When times are bad, people need more services, yet less money flows into government coffers, meaning there's less money for services. The feds can go in hock, but Arizona can't. So the choices are either Arizona gets more money from the feds -- which is happening -- and increases state taxes or we cut services.

Here are three headlines from yesterday and today:

• State's day-care center closes due to budget cuts;
• Pima County will consider charging fees for child care;
• CPS staff now below levels of 2004.

That's not just sad. It's wrong on more levels than I want to talk about. So let me just talk about one.

Whenever possible, we have to protect children and help them grow physically, socially and intellectually. People can talk all they want about adults who don't deserve help, who made their own bad choices, and so on. But there is no such thing as an undeserving child. Children are society's charges, and we owe them the best we can give them, both for their sakes and for ours. The quality of their future hangs on what their lives are like in the present. And our future depends on the quality of their present lives as well.

This bleeding heart, tax and spend liberal would love to see us do more than we do for children in the best of times. I want to see better schools, more services to parents, including helping parents learn how to help their children in school, better social services, more and better recreation programs, etc. But if I can't have that, at least let's do everything possible to maintain what we had as recently as last year.

I'm not usually a graph guy, but here are two I found on Matthew Yglesia's blog that give a clear visual picture of a few facts about our income disparity and tax levels. (If they're too small, click on them to see larger versions.) The first shows the growing gap between the after-tax income of the rich and everyone else from 1979 to 2006.

The second shows the effective tax rate on median family income from 1958 to 2006.

 

I draw two conclusions. One, the richest among us are doing just fine -- obscenely more than just fine -- even after they pay their taxes. If they were forced to pay more, they would still be doing very, very well. Two, the middle class is being taxed at a low rate in historical terms. While it may be a good idea to cut taxes for the middle temporarily, this group is not being over taxed.

Children's needs aren't less important in tough times like these. In many ways, they're more important. As a society, we have the wherewithal to protect and help our children. The real question is, do we have the desire and the will?

Deregulation is a wonderful thing, for awhile

by David Safier
Paul Krugman writes this morning about Ireland's recent riches-to-rags story. Not too long ago, Ireland was a shining star in the European financial world. Now, not so much. Krugman is worried we could go down the same road.

Here's the passage that jumped out at me:

Like its near-namesake Iceland, Ireland jumped with both feet into the brave new world of unsupervised global markets. Last year the Heritage Foundation declared Ireland the third freest economy in the world, behind only Hong Kong and Singapore.

Freedom from regulation. It can be a great ride, for some, as long as it lasts.

As much as I respect and listen to Krugman, I hope he's wrong that Obama is taking the wrong road toward economic recovery. I've read lots of debate among progressive economists, and I'm not knowledgeable enough to know whose analysis to believe. Unfortunately, it's hard to discount Krugman.

Ah, Robert, you dreamer you!

by David Safier
Robert Reich, writing on his TPM blog, says we're in a depression -- not as bad as the Great Depression, but not a recession any more.

So what should we do? Spend, spend spend. On the right things.

We should stop worrying about Wall Street. Worry about American workers. Use money to build up Main Street, and the future capacities of our workforce.

Energy independence and a non-carbon economy should be the equivalent of a war mobilization. Hire Americans to weatherize and insulate homes across the land. Don't encourage General Motors or any other auto company to shrink. Use the auto makers' spare capacity to make busses, new wind turbines, and electric cars (why let the Chinese best us on this?). Enlarge public transit systems.

Meanwhile, extend our educational infrastructure. So many young people are out of work that they should be using this time to improve their skills and capacities. Expand community colleges. Enlarge Pell Grants. Extend job-training opportunities to the unemployed, so they can learn new skills while they're collecting unemployment benefits.

Finally, accelerate universal health care.

It works for me.

The Dark Knight unmasks Bernie Madoff

by David Safier

I watched "Dark Knight" on DVD a few nights ago -- not my usual movie fare, but about as good as that kind of movie gets -- and my jaw dropped open during one bit of not-very-important dialogue early in the film. If the S.E.C. had seen the script when it was written a few years ago, they could have nabbed Madoff way back then.

Remember how Madoff promised his clients 10-12% yearly profits, and delivered? You can't do that. You make 25% one year, then lose 15% the next. Things jump around when you're really investing. Steady profits are a dead giveaway.

So, to the Dark Knight. I took a clip from the original script (Isn't the web the most glorious time waster in the history of humankind?). Someone proposed that Wayne Enterprises go into a joint venture with some Chinese investment firm. Here's the snippet of dialogue:

 

Steady 8% growth indicates a revenue stream that's off the books. Maybe even illegal.

A couple of Hollywood script writers know enough to use a company's suspiciously steady growth as an indicator of hanky panky. They figure it's clear enough even a Batman audience can follow it. And yet, when the S.E.C. was given this information by a very credible whistleblower (this was years ago), they said, "Nah. Forget about it. I'll tell you what. Let's go after Martha Stewart. She's a Democrat, isn't she?"

Jon Kyl, Professional Hypocrite

Arizona Senator Jon Kyl loves nothing more than an opportunity to denounce earmarks (and to insinuate that they are a Democratic phenominon). Unfortunately, Jon Kyl also loves him some earmarks.

Take a look-see:

Dr. Word says: Get yer Ayn Rand program here! You can't know yer references without yer Ayn Rand program!

by David Safier

Ayn Rand is back! The sales of "Atlas Shrugged" are soaring. Blame Obama and his socialist agenda for bringing her back to life. Who knows, maybe the spike in book sales will help revive the economy.

I've never read "Atlas Shrugged" or much else by Rand other than "Anthem." So if I get this some of this wrong, my excuse is, I'm getting it second hand.

Somewhere at the core of the book is a revolt of the "wealth producers" as a reaction to the socialistic ideology taking over the world, led by a guy named John Galt. They figured if they robbed the world of their expertise, they could bring it to its knees, or back to its senses, or something like that.

Michelle Malkin thinks it's an idea whose time has come. She calls it "Going Galt."

Rep. John Campbell (R-CA) apparently gives his interns copies of "Atlas Shrugged" when they leave, and he's finding the book increasingly relevant.

“People are starting to feel like we’re living through the scenario that happened in ‘Atlas Shrugged,’” said Campbell. “The achievers, the people who create all the things that benefit the rest of us, are going on strike. I’m seeing, at a small level, a kind of protest from the people who create jobs, the people who create wealth, who are pulling back from their ambitions because they see how they’ll be punished for them.”

I wish he'd point out the "achievers" who are voluntarily closing up shop to punish all these commies who have taken over Washington. Looks to me like lots of them are hanging on by their fingernails these days, hoping someone will throw them some of that socialist bailout money.

Our own Goldwater Institute has adopted the banner as well. In yesterday's email titled, "Obamanomics sending America reeling," is the line, "This is truly America's Atlas Shrugged moment -- but it is no time for productive Americans to go on strike." Good for G.I. We need to get all those investment bankers off the picket line and back behind their computers where they can help America get back on its feet again. (Though I'm afraid Ayn Rand would scorn their altruism. I sense a contradiction here.)

Next time you hear an Ayn Rand reference from an economic conservative or libertarian, you'll understand the context. No, please, don't thank me. That's what I'm here for.

Brooks (occasionally) gets it right

by David Safier

Columnist David Brooks is a sometimes conservative, sometimes neo-conservative. Lately it's been hard to figure out what he is. For the next few days and weeks, the best way to describe him might be Neo-bama. Brooks likes the new Prez, a lot, and he's disillusioned with his right wing buddies.

In a recent column, An Economy of Faith and Trust, Brooks says treasured economic models have broken down in the latest debacle. He goes after Republican economic ideology severely, basically saying they got it all wrong. He seems to think Democrats don't have it all right, but are closer.

Here's a paragraph about Republican economic myopia that, for me, is astounding in its insight:

For years, Republicans have been trying to create a large investor class with policies like private Social Security accounts, medical savings accounts and education vouchers. These policies were based on the belief that investors are careful, rational actors who make optimal decisions. There was little allowance made for the frailty of the decision-making process, let alone the mass delusions that led to the current crack-up. [emphasis mine]

He's exactly right. The social security privatizers said, "Who needs government to help us save for retirement? The market is moving ever upward, and we're all smart enough to get better returns by investing on our own."

If you want to check someone's sanity these days, ask, "So, does SS privatization still look like a good idea?" If the response is, "You bet it does!" smile, nod your head and back away slowly.

But to add school vouchers to that bankrupt economic ideology is a surprising leap for Brooks, who leans conservative when he writes about education. But he's absolutely right. Advocating that educational consumers -- parents -- should be given vouchers to spend at unregulated private schools in the belief that they will be rational actors is using the SS privatization model. It's just fine, so long as investors parents can tell the difference between sound investments good schools and bad investments bad schools sold to them by hucksters. Unfortunately, in the real world, things don't work out as neatly as they do in tidy conservative models.

Krugman nails it

by David Safier

Read today's Paul Krugman column, Fifty Herbert Hoovers. He takes apart the insanity of massive cuts in state budgets.

No modern American president would repeat the fiscal mistake of 1932, in which the federal government tried to balance its budget in the face of a severe recession. The Obama administration will put deficit concerns on hold while it fights the economic crisis.

But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.

These state-level cutbacks range from small acts of cruelty to giant acts of panic — from cuts in South Carolina’s juvenile justice program, which will force young offenders out of group homes and into prison, to the decision by a committee that manages California state spending to halt all construction outlays for six months.

Now, state governors aren’t stupid (not all of them, anyway). They’re cutting back because they have to — because they’re caught in a fiscal trap.

Krugman realizes the states have no alternative to cutting since, unlike the feds, they have to balance their budgets. But he also says cutting essential services when they're needed most is crazy. Likewise cutting public works projects when we have huge numbers of workers laid off in the private sector.

He doesn't give a completely satisfactory answer to the dilemma. But the first step toward fixing an absurd situation is recognizing its absurdity.

Words to the wise

by David Safier

From today's Bob Herbert column, Stop Being Stupid:

We have behaved in ways that were incredibly, astonishingly and embarrassingly stupid for much too long. We’ve wrecked the economy and mortgaged the future of generations yet unborn. We don’t even know if we’ll have an automobile industry in the coming years. It’s time to stop the self-destruction.

The slogan? “Invest in the U.S.” By that I mean we should stop squandering the nation’s wealth on unnecessary warfare overseas and mindless consumption here at home and start making sensible investments in the well-being of the American people and the long-term health of the economy.

And let's be clear. The "stupid" here are from the most educated classes, so it's not about bad education. They fell prey to a combination of self-delusion and greed. Better schools won't correct that. And among the "stupid" were religious, church/synagogue/mosque going folks, so let's not talk moral decay either. This is about some of the worst traits in human nature being allowed to run rampant and overwhelm our economy.

The New Testament has Jesus saying, "The poor will always be with us."

I'll say, the stupidly, self-delusionally greedy will always be with us. That's one of the reasons we have governments with regulatory agencies, police and jails. So our own greed and the greed of others doesn't trample us to death.

It's so crazy it just might work!

by David Safier

From a post on Daily Kos: Call Their Bluff! Tie CEO pay in the U.S. to CEO pay in Europe and Japan:

In 1950, the average pay of an S&P 500 CEO was less than 30 times that of an average U.S. worker; by 1980, prior to the "Reagan Revolution, the average pay of the S&P 500 CEO was approximately 50 times higher than that of an average U.S worker.  But by 2007, the average pay of an S&P 500 CEO had soared to more than 350 times as much as that of an average U.S. worker.

This is both immoral and unsustainable in a democracy.  By way of comparison, in Europe, an average CEO only makes 22 times as much as an average worker, and in Japan, only 17 times as much.

If America wants to be competitive again, we need to reduce CEO pay to a level comparable to CEO pay in Europe and Japan.  I know exactly how to accomplish this feat.  The UAW should agree to immediately lower U.S. union worker pay to a level equal to the level paid by their non-union, non-American competitors.  In return, auto CEO’s must agree to permanently lower their compensation to only 20 times that of an average union worker.

Developing story: Deposit-gate

by David Safier

Yes, Deposit-gate. Create a hypenated word with "gate" at the end, and everyone knows what kind of story it is (though, I wonder if people remember that Watergate had nothing to do with Water.)

Yesterday I wrote a story about newly elected Rep. Vic Williams (R, LD-26) not returning  a $400 rental deposit to Tasha, an Iraq vet and a single mother who rented his beach house in Newport. She took him to small claims court in early November (he didn't show), and the judge ruled that Williams had to pay Tasha $1845.20.

As of this moment, Williams has still not paid Tasha the money he owes her. When I spoke to him yesterday, he told me he and Tasha were in the midst of working it out, which was news to Tasha who hadn't heard from Williams since the court date.

Well, it looks like things are beginning to move, and I'm hoping Tasha and her five year old son Javier get their money in time for the holidays. That would be a wonderful, well deserved present for both of them.

I'll tell you more when I know more.

Business CEOs could learn something here

by David Safier

University Presidents don't make megabucks, but they do pretty well. Median salary is about $425,000 for presidents of public universities. A few make as much as a million dollars. Not a bad wage.

It seems like some of the higher paid presidents are voluntarily giving back part of their salaries or refusing raises.

Pat Callan, president of the National Center for Public Policy and Higher Education, said he had never heard of such a wave of givebacks.

“When you see a cluster like this,” he said, “it seems like sort of belated recognition that this presidential pay thing has gotten out of hand. People are getting tuition increases, some faculty are facing layoffs, it just doesn’t look too good for presidents, no matter how capable they are, to be getting so much money. Americans have had a touching faith in higher education; it’s losing its good image with the public.”

What a strange notion, refusing money which, according to today's business mores, you have every right to because someone offered it to you. Hell, the size of your salary is a nothing more than an indicator of what you're worth.

It looks like the voluntary salary cuts range from 10-15%. What would that amount to for Richard Adkerson, the CEO of Freeport McMoran Copper & Gold, which is laying off about 600 people from the corporation's Arizona mines? He makes about $65 million a year. That means he'd give back somewhere between six-and-a-half and ten million dollars.

That wouldn't hurt much, Richard, now would it? Your painless sacrifice could save at least a hundred jobs. Imagine how good and noble that would make you feel.

Until your fellow CEOs called you a chump, that is. Do-gooder! Wealth spreader! They'd probably take away your key to the club bathroom and make you golf alone.

One definition of obscenity

by David Safier

According to a Star article this morning:

Nearly 600 people at four of Freeport's Arizona mines were left jobless less than two years after breaking ground on the Safford mine — the first major new U.S. copper mine in more than 30 years.

Copper prices have dropped dramatically this year after reaching a peak price of $4.26 a pound on May 5. On Friday, the spot price for copper was $1.57 a pound.

The layoffs make sense in the boom-and-bust world of mining. If copper has lost almost two-thirds of its value recently, the need to pull the ore out of the ground has lessened.

This, however, makes no sense:

Freeport CEO Richard Adkerson is one of the highest-paid executives in the United States, with a base salary of $2,083,333 in 2007, Securities and Exchange Commission filings show. With stock options and other compensation added, his annual earnings are worth more than $65 million.

CEO Richard Adkerson makes $65 million, and the company is laying workers off right and left.

Imagine we cut Adkerson's compensation to the bone, say to the just-above-poverty level of $5 million. I know that would cause pain and suffering for his family, but hell, times is hard.

If we take the $60 million left and divide it into $60,000 chunks, figuring that's a salary-plus-extras package for a worker (it's probably less than that, but it's a nice round figure), it would keep 1,000 people employed without costing the company a penny.

Hamlet said, "The time is out of joint." See, English teachers have been right all along when we said Shakespeare is still modern.

Rio Nuevo or Bust

By Michael Bryan

I've been hearing a lot of hostility to Rio Nuevo from conservatives of late. Perhaps much of it is merely conservatives seeing an opening to attack the liberally-dominated Tucson City Council based on the legitimate criticism of how Rio Nuevo funds have been spent so far. Such criticism of implementation is certainly justified, and I have engaged in criticism of the lack of accountability and transparency in how that money is being spent myself, but it is not a reason to attack the funding of Rio Nuevo.

There are two issues here: the program and its implementation. You can support the program (using a Tax Increment Finance district to keep Tucson sales taxes in Tucson for downtown redevelopment) and criticize the implementation (how the City government is handling the planning and funds) without betraying Tucson and Pima County. If fact, by doing this you are trying to improve the program and helping Tucson and Pima County. But if you attack the program, you are attacking the vital interests of southern Arizona.

I worry that local conservative politicians may be tempted to backslide on their support for the continuance of the Rio Nuevo TIF given recent news coverage of how the first $77 million have been spent (or mis-spent). I recent heard Vic Williams, a candidate for the Republican nomination to the House in LD 26, on Emil Franzi's radio program responding to a caller who was attacking Rio Nuevo by allowing that he would be open to cutting off the TIF funds and putting them back in the general fund. I have also heard Jon Paton whispering direly about the possibility of the Maricopa know-nothings acting to kill the TIF. In other words, the "censervatives" may want to take Tucson's tax revenues away from Tucson, leading the Tucson City Council to hurredly commit the money into the future by using the future revenue stream to back new bonds, both to accelerate the spending schedule to build political support and to make it politically more dicey for the know-nothings to pull Rio Nuevo's plug. If "conservative" ire continues to build, it could spell disaster for Tucson.

To those southern Arizona politicians who are tempted to fail to carry their weight in supporting and defending Rio Nuevo I say this: DON'T YOU DARE. By failing to stand up for Rio Nuevo's funding against all comers you will betray your home... and you will betray conservative principles.

How is supporting Rio Nuevo an issue of conservative principles? Conservatives say they are for local control, local government, and making decisions about how to spend our tax money as close to the citizens as possible. I happen to agree with these principles. I don't think they are necessarily conservative (they are merely democratic - note the small 'd'), but few conservatives would hesitate to claim them. Conservatives claim to be for lower taxes and doing more with the taxes we have. Great. Rio Nuevo's financing doesn't raise a single additional cent of taxes; it merely allows Tucson to retain sales taxes collected locally to spend locally on improving Tucson, instead of sending it to the capital for a bunch of other, less accountable politicians to spend. Add to this the fact that whole idea of redeveloping our downtown is to make Tucson a better place to build a business and raise a family, and I don't see how any real conservative could want anything other than for Rio Nuevo to continue and be a huge success. Rio Nuevo is a deeply conservative program.

Southern Arizona voters should make support for the Rio Nuevo program and it's funding an acid test for any politician wanting to hold any office in southern Arizona. And indications are that they already have. Even criticizing the implementation of Rio Nuevo's TIF may have cost Ted Downing a seat in the Arizona Senate in LD 28. In hindsight, his concerns about Rio Nuevo's accounting practices for keeping track of how the money was to be spent, and how much was being spent on consultants, were clearly right on the mark. But for even looking askance the implementation while everyone else was focused on boosterism to get the program reauthorized, Downing was pilloried and his concerns were mischaracterized and his fidelity to Tucson's interests impugned.

Let Downing serve as a warning, conservatives. Criticize the City Council all you want. Call for the heads. Call for better management, oversight, planning, accounting, whatever. But call for, or even intimate that you will do anything but sacrifice your political life to defend the funding of Rio Nuevo, and southern Arizona voters will call for your head.

Vic, I await your comment winding-back your radio faux pas :)

 

Bee's Bad Business Synecdoche

Bee was recently endorsed by the U.S. Chamber of Commerce. No real surprise considering how often that organization (short-sightedly, IMO) endorses Republicans in an anachronic gesture to a long-defunct pedigree of economic common sense.

But Bee's endorsement predicts far less how the Arizona business community will actually vote and donate this cycle than Bee would have you believe:

"It is an honor to receive the support of the business community. In Washington, I will work to promote economic growth and job creation. A prosperous America begins with a strong economy. ”

It's highly debatable whether the Chamber's endorsement actually equates to "support of the business community." Bee is indulging in a figure of speech (i.e. a logical fallacy).

In reality, despite what the U.S. Chamber might think, the Arizona business community is far from bullish about Arizona's and America's economy: only 11% think the economy is good, and none rated it excellent. Yet Bee is relying on Bush and his allies for fund-raising firepower, and promising to continue the very Bush economic policies that have dumped our economy in the toilet... and flushed.

Business opinion leaders think the U.S. and Arizona economies are in serious trouble, and conditions for each are deteriorating at a rapid pace. The poll showed that 63 percent of Arizona small business owners think the U.S. economy is getting worse, while 57 percent thought local conditions are deteriorating. These folks are hardly likely to vote for more of the same from GOP pols like Bee. His willingness to throw his own caucus under the bus on the Arizona budget not withstanding...

Given such deep pessimism about what Bushies like Bee have wrought, to presume that business owners and business-minded voters will overlook these political facts on the ground on the strength of a knee-jerk Chamber endorsement is... overly optimistic.

Add together the devastating political environment for the GOP in general this year, the specific concerns of business leaders revealed by this polling, and the defection of a local eminence grise and moderate bell-weather Jim Kolbe (due though it may be to Bee's flirting with the agents of intolerance of the Right), and the sum is that Bee has serious trouble in the pro-business moderate wing of his own party and pragmatic Independents.

I still don't forsee a blow-out re-election for Giffords, by any means. She hews too close to the "Go Along to Get Along" DNC/Blue Dog playbook to inspire any real enthusiasm. She refuses to provide the sort of contrasts with Bee that could blow the race wide open. When she wins, it will be due to the GOP making stale dog food out of their own brand, and an enthusiastic Obama-inspired turnout in her district; and it will still only be an anemic margin (much less than that she achieved over conservative bete noir Graf in 2006).

Bee's continual stumbles and failure to distinguish himself from the failure of the Bush years and movement conservatism have ensured that he doesn't stand a chance of unseating her, though Gabby's own failings as a leader will ensure that he'll come closer than he has any right to.

Actually, It's the Taxes, Stupid

Greg over at Espresso Pundit is on the Taxpayer Bill of Rights (TABOR) soapbox claiming that the current budget crunch in Arizona is not the result of the GOP majority constantly hacking away at our tax base and shifting it to more cyclical revenues (like sales tax, which is also more regressive), but due to run-away spending. Not only is the idea that spending is out of control in Arizona risible, but his favored solution, a TABOR in Arizona, is a simply the latest disastrously irresponsible idea from a party best known of late for its disastrous ideas and tragically poor judgment.

Here's the neat-o graph Greg thinks proves something:

What we see here is actual Arizona state budgets (The blue line) compared to a TABOR-limited hypothetical budget limit (the green line with triangles) that caps state expenditure growth to population increase plus inflation. Greg thinks that this proves that a TABOR-limited budget would have imposed greater spending discipline.

He might be right that state government spending would be less, but TABORs tend merely to shift costs off the books, not to reduce overall governmental costs. Local governments, special taxing districts and mechanisms, and other accounting tricks are used to meet citizens real needs while producing the accounting targets the TABOR requires.

And what essentail services can't be hidden from the reach of the TABOR's meat axe are often just hacked into indiscriminately. Now, I suppose that's fine for some conservatives... until and unless their own preferred state services are affected. How about we let a bunch of felons out of prison to save on incarceration costs? How about we stop building needed roads and other infrastructure, creating a massive investment deficit that will cripple our economy in the long-term? How about we under-invest in our schools and leave an entire generation without the skills to compete in a global economy?

Taxes are how a society invests in itself and accomplishes goals and functions no private citizen can. Conservatives seem to have forgotten that.

The main reason a TABOR is a poor substitute for a democratically responsive representative body making decisions about the public interest and providing the revenue to meet societies needs is that the formulaic approach of a TABOR makes a key assumption that is terribly naive and misinformed. TABORs assume that the grow in population plus inflation is always sufficient to deliver vital services.

There are a number of reasons why (PDF) that central assumption is as dumb as a box of rocks.

First, “no existing measure of inflation correctly captures the growth in
the cost of the kinds of services purchased in the public sector, so the
inflation adjustment generally is not sufficient to allow the continuation
of existing services. State governments spend much of their money on
education and health care, which typically have cost increases greater
than the general rate of inflation. Within the Consumer Price Index
(CPI) itself, medical care and education have been growing at twice the
rate of the overall CPI.”

Second “the subpopulations that state governments serve tend to grow
more rapidly than the overall population growth used in the formula. For
example, while total population grew by 15.4 percent from 1990 to 2002
[in Colorado], total state prison population grew by 83 percent, disabled
children in schools grew by 35 percent, and the number of elderly and
disabled persons on Medicaid grew by 70 percent. Over the next 40
years, the elderly population will grow at twice the rate of general
population growth.”

Third, the population growth plus inflation formula “fails to take into
account the possibility that court, voter, or federal mandates may require
a state to take on new responsibilities. Mandates, whether internal or
external, may increase the responsibilities and costs borne by the state
without any proactive policy change on the part of state lawmakers.
Rigid tax and expenditure limits, such as those based on population
change and inflation, inadequately reflect the potential costs that may be
imposed on state and local governments.”

Fourth, “state governments inevitably face spending needs that cannot
be anticipated. Natural disasters, public health emergencies, economic
changes, and other such occurrences place expensive but unexpected
demands on state and local governments.”

And finally, because the “population growth plus inflation adjustment is
applied to the amount of actual expenditures or revenue in the prior
year,” when a states annual budget shrinks, a ratchet effect creates a
“new base [each year] to which the population growth and inflation
adjustment is applied [and in this case of a budget decrease] the level of
public services is permanently ratcheted down.”

TABORs are just simplistic and politically appealing suicide pacts. They destroy essential services and further infantilize our political culture by placing real desicion-making outside the reach of the political institutions where that power is supposed to reside. We should demand that our political leaders make real decisions regarding public revenue and expenditures, and be accountable for those decisions, instead of asking voters to so bind the government that it cannot even accomplish the basic function of deciding what revenue is needed to perform essential public functions.

In (Modest) Praise of Charter Schools and Microsoft

by David Safier

The link between charter schools and Microsoft is tenuous at best, but this is a grab bag post, so I decided to throw them in together.

1. Tucson's BASIS Charter School called best public school in the nation. You read that right. Newsweek has put the Tucson charter school in the top ten for a few years, but this year, BASIS moved to number one. These school ranking lists shouldn't be taken too seriously, but regularly making the top ten is a genuine accomplishment. The school and its students have every right to crow. This demonstrates the value of the charter school concept when it is applied well. (This year's graduating class is a whopping 18 seniors, I should note, so this isn't a school that's having a huge impact on Tucson's children. Nonetheless . . .)
2. Chicago study shows charter schools edge out traditional public schools. This is a serious study conducted by the RAND Corporation that works hard at controlling for variables, and it concluded that "attending a charter high school in that city boosts a student’s chance of graduating from high school by 7 percentage points and increases the likelihood that a student will enroll in college by 11 percentage points." Because the RAND folks are very careful, they make a point of saying no one should make too much of this one study. Actually, for me the most interesting finding is that the most successful charter schools had the same students from grades 6 through 12, and the study said this continuity, rather than the charter/traditional school difference, might have been the determining factor.
3. Microsoft joins the "One Laptop Per Child" program. The nonprofit education project, One Laptop Per Child, has created a small, sturdy, versatile laptop it sells for $200, but it believes it can bring the cost down to $100 soon. The computers are designed to be used in developing nations, with the countries' children in mind. The hitch has been, the computers run the Linux free operating system, which means that Microsoft wouldn't get on board. But the Micro-Softies have seen the light and will supply Windows for $3 a machine. Countries that were wary of buying computers running an OS they didn't know will now have a choice of either or both systems.

Tim Bee Working to Limit Impact Fees on New Construction

Link: Home builders push to limit impact fee increases - The Business Journal of Phoenix

What ever happened to Republicans being in favor of local control and smaller, less-intrusive government?

Now, it seems that they are only in favor of doing the bidding of big business in whatever way they can, by whatever means they can, with no philosophical justification whatever.

Tim Bee is now carrying water for Home Builder's Association of Central Arizona, forcing a two year delay before any new impact fees on new construction takes effect. These fees are far too low currently, not nearly recapturing the costs of infrastructure and services to new development. But Big Stucco doesn't like these fees, especially during a new home starts and sales downturn like we're now seeing. So Timmy is riding to the rescue by sponsoring a this new bill.

Is it because he feels that new growth in Tucson is already actually paying for itself with impact fees—in which case, he needs some schoolin'—or because he really, really badly needs to raise some major money, and the construction industry is one of the biggest sugar tits around for Arizona pols—in which case, isn't he putting the needs of McMansion builders ahead of the needs of his hometown?

The Star Fosters Discussion on Tucson's Future Growth

The Arizona Daily Star has recently filled a real vacuum in local civil society by encouraging Tucsonans to take a closer look at what kind of place they want to live in the future. I have quibbles, of course, but they are to be commended for acting as a catalyst and resource for a community faced with some serious choices. There are deep divisions about our future course between those who seek to manage growth (either more or less) and those who believe the facts indicate that we are far past their point where we can just grow smarter, we need to stop growing.

The Star certainly provided some interesting raw data to chew on from their survey earlier this month. Admittedly, some of the questions were intolerably leading and biased, or just plain dopey. But there is some gold in there. I found some insights into Tucsonans' attitudes toward water, transportation, and development.

Read more about what I see—and failed to see—in the data...