Sunday, July 24, 2005

syc-o-phants, (n. pl.)

see also Eibensteiner and Hinderaker.

These two fawning conservative functionaries took turns tripping over each other today in praise of governor Timmy on the op-ed page of the StarTribune (July 24th). The object of the exercise was to blunt criticism of the governor by Mike Wigley and David Strom of the Taxpayers League who claimed that TPaw was not living in reality. Spotty has to admit that's pretty rich coming from C3PO and R2D2. However. RonJohn write:
We were there when Pawlenty stepped to the podium on election night.
Just like the shepherds and the baby Jesus, right? Spotty was there when the steaks fell off the Simon Delivers truck too, but he doesn't think it was a harmonic convergence or anything.
While he thanked all of his supporters and those who voted for him, he declared that he was going to be the governor of all the people of Minnesota.
Let's see, that's all people except public school students, people in need of health care, drivers and others who need get around, property taxpayers, smokers, and parents and citizens all over the state who don't like the proliferation of guns that people will carry in places like the Mall of America, downtown Minneapolis, the Metrodome, bars and restaurants, etc. and etc. Spotty is sure he has left some people out here, too. If that's a governor in Spotty's corner, he shudders at the thought of one who isn't.
And he has done what he promised, moving the state forward with pro-growth policies. Minnesota's economy is advancing strongly and steadily, with excellent job growth and just 3.7 percent unemployment.
Spotty cannot find the link, but he recalls an article in the StarTribune last week that said that Minnesota has finally got as many jobs now as it had four years ago. It is just too bad that people keep graduating from high school and college and moving to the state, expanding the work force. Median income has actually declined in Minnesota in the last available reporting period so the jobs are of a decreasing quality. And obviously tax collections are still off. Spotty doesn't say this is all the guv's fault, but he wishes RonJohn wouldn't try to give Timmy credit for a situation that doesn't exist.

There is also an opinion piece by David Hage entitled Gap between the rich and poor spurs new questions in the StarTribune today. He writes:
Traditionally, economists and market conservatives have answered the question this way: Inequality makes a nation richer and more productive. The fear of poverty and the promise of wealth inspire people to work hard, finish school, save money, invest wisely and dream up valuable new products like the iPod. Conversely, a nation that taxes success and subsidizes idleness is inviting economic stagnation.

The theory was summed up neatly by economist Arthur Okun in a little 1975 classic called "Equality and Efficiency: The Big Tradeoff."

But what if it's not that simple? What if there are other formulas for economic growth that don't require the poverty, disadvantage, civic alienation and social friction that Americans take for granted?

A spate of new research is raising exactly these questions. It doesn't exactly refute Okun's tradeoff, but it suggests that the United States might have chosen the wrong spot on the continuum, a place that accepts high levels of inequality without much economic payoff.

Consider the quasi-socialist nations of Europe, which make much greater use of public transfers to reduce inequalities that arise from the marketplace. They are widely considered to be economic basket cases, and most of them have higher unemployment and lower economic output than the United States.

But if inequality makes our economy more efficient, then we should be widening our economic lead over Europe, and we're not. Most European nations, including France, Italy, Spain and Great Britain, have had faster income growth than the United States since 1970. Economist Lawrence Mishel of the Economic Policy Institute points out that labor productivity per hour -- the linchpin of economic growth -- is higher in Italy, France, Germany and Norway than in the United States, even though they have higher taxes and more social spending.
Maybe the US advantage has more to do with geographic and natural resources than anything else. Hage continues:
In 2003 Christopher Jencks of Harvard University and Gary Burtless at the Brookings Institution studied 17 wealthy nations over the period 1980 to 2000 and found no evidence that higher inequality produced higher growth. In a recent study published by the National Bureau of Economic Research, economist Peter Lindert compared the United States to a group of 18 European economies and concluded: "It is well known that higher taxes and [government] transfers reduce productivity. Well known -- but unsupported by statistics and history."

How can such a compelling rule be wrong?

One theory is that material incentives -- the fear of poverty and the promise of wealth -- are only one part of the recipe for growth. A second part is social investment. A nation that provides quality child care, fine public schools and excellent vocational training can reduce inequality and raise productivity.
In other words, perhaps people are better off when they work cooperatively as well a competitively. Let's ask Lance Armstrong and his Discovery team what they think. Back to RonJohn:
Pawlenty was elected governor, not emperor. He has to deal with the Democrats. No budget can become law without passing the Democrat-controlled Senate, and Democrats were determined to raise taxes by $1.4 billion. Tim didn't give in to their budget-busting demands; he went toe to toe with them, to the point where Democrats walked out and shut down state government. If Pawlenty hadn't agreed to some kind of compromise, the government would be shut down still.
"Pawlenty was elected governor, not emperor," said RonJohn wistfully. It takes two to tango boys, and Spotty says that the Republicans bear as much responsibility for the shut down as anybody else. Remember, it was the DFL that passed a lights-on bill at the end of the fiscal year.
We have fought in the trenches for a long time for conservative values and Republican candidates. So has the Taxpayers League, which performed a great service for Minnesotans. But it is no service to divide the Republican Party, in search of an unattainable purity, at a time when Minnesota has the best governor within memory, Tim Pawlenty.
RonJohn yield to nobody in their fealty to tight-assed asceticism. But Spotty is going to reach back into his limited dog-years memory to find a better governor. It was easy: Arne Carlson. Arne was not only a good governor who had to deal with budget shortfalls, but he saved your sorry ass party, RonJohn, from shame and obloquy by stepping in as your candidate after the Grunseth pool caper. And how did you unctuous scrubs pay him back? By not even endorsing him as a sitting governor when he ran for a second term.

May that's where C3PO and R2D2 get their penchant for criticism.

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