All Posts Tagged With: "economics"

Here’s a delightful little tidbit from John McCain’s interview with George Stephanopoulos, discussing the gas tax holiday (emphases added):

STEPHANOPOULOS: Not a single economist in the country said it’d work.

MCCAIN: Yes. And there’s no economist in the country that knows very well the low-income American who drives the furthest, in the oldest automobile, that sometimes can’t even afford to go to work.

STEPHANOPOULOS: But they all say that . . . the oil companies, the gas companies are going to absorb … any reduction.

MCCAIN: … they say that. But one, it didn’t happen before, and two, we wouldn’t let it happen. We wouldn’t let it — Americans wouldn’t let them absorb that.

STEPHANOPOULOS: How would you prevent that?

MCCAIN: We would make them shamed into it. We, of course, know how to — American public opinion. And we would penalize them, if necessary. But they wouldn’t. They would pass it on.

Wow. I mean, holy shit. A guy running for President said something that stupid. Jesus.

It should be required reading for every member of the Illinois General Assembly, particularly as they contemplate new and exciting ways to fleece the state’s producers.

At the end of 2007, the bipartisan American Legislative Exchange Council (ALEC) published a study done by noted economists Art Laffer and Steve Moore entitled “Rich States, Poor States”.

The study did two things. First, it provided an economic performance ranking over the past 10 years (1996-2006) state-by-state. Second, it provided an economic outlook ranking, again state-by-state, based on a comparative review of 16 separate economic indicators.

Am I boring you yet? Well, here’s where the information gets more stimulating:

The upshot for Illinois is that, over the past decade, we would have been better off with MC Hammer setting the state’s fiscal policy.

Illinois’ ranked 48th out of 50, ahead of only Michigan and Ohio, in economic performance over that time.

There were 727,150 people who got hip to this reality well before the ALEC report. That is net number of individuals who moved out of Illinois between the years 1996-2006. Only New York and California lost more population.

Besides contributing to Illinois’ incredible shrinking tax base, that population loss has Illinois slated to lose at least one congressional seat after the 2010 census. It is so bad here that not even waning political clout can motivate our Honorables.

As important as who and how many are leaving is who and how many are not coming in the first place. Illinois ranked 45th in the nation when it came to attracting college graduates to locate here (Federal Reserve Bank of New York – August 2007 study). The good news is we are poised to shoot past West Virginia, a state whose senior U.S. Senator is a former member of the Ku Klux Klan, for 44th place. Look out, West Virginia, we’re coming for ya!

Add to this that in our state’s largest public school system only 6 of every 100 high school freshman will go on to earn a bachelor’s degree (Consortium on Chicago Public School Research).

Thus, Illinois neither produces college graduates nor does it attract them. How’s that working out for us in the hyper-competitive, digital, global economy of the 21st century?

Just about how you think it might: Illinois is 44th in the nation in per capita personal income growth and 47th in job growth over the decade that was studied.

The bad news for Illinois is compounded with our high property tax burden (41st), an unfriendly legal liability system (46th), and a high minimum wage (44th).

Tally up those dismal numbers and Illinois’ 16-variable composite score gives it an economic outlook ranking of 42nd. In other words, the outlook is depressing or, perhaps more accurately, a Depression.

Edwin Moses could not clear all of the hurdles to economic prosperity state lawmakers have put in front of Illinois families and Illinois small businesses and therefore, the exodus.

Sans a crash course in Econ 101, this study is a message to Illinois lawmakers to identify their gut instincts when it comes to thinking about state economic policies and then do the opposite.

Wow. This is awfully embarrassing.

So I logged onto my google homepage today and was greeted with this story in my Top News Stories section. It’s a good article about how the average incomes for Americans have still not recovered to the highs 0f 2001. Particularly interesting was this passage:

“Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.”

So, anyone still wonder why people are pessimistic about the economy when for the first time in most working people’s lifetimes incomes have failed to rise?

An abstract from Larry Bartels, professor of Political Science at Princeton, in a study titled “Economic Inequality and Political Representation“:

I examine the differential responsiveness of U.S. senators to the preferences of wealthy, middle-class, and poor constituents. My analysis includes broad summary measures of senators’ voting behavior as well as specific votes on the minimum wage, civil rights, government spending, and abortion. In almost every instance, senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes. Disparities in representation are especially pronounced for Republican senators, who were more than twice as responsive as Democratic senators to the ideological views of affluent constituents. These income-based disparities in representation appear to be unrelated to disparities in turnout and political knowledge and only weakly related to disparities in the extent of constituents’ contact with senators and their staffs.

I never could have guessed.

(h/t: Ezra Klein)