Being a Nice Guy Isn't a Qualification for Governor

By all accounts, Phil Scott the Republican candidate for Governor of the State of Vermont, is a fairly moderate Republican.  Scott seems to be pro-choice, pro-LGBT, not adamantly against social programs, and acknowledges the existence of global warming.  There are however, a number of economic issues where Scott more or less tows the line ideologically for national Republicans.  I've read Scott's economic plan several times and a number of things strike me:

• Firstly, despite being 40 pages long the plan contains very little detail.  Scott outlines a number of vague policy proposals, some free-market buzz words, and a number of pictures of Scott and his family, but there is very little in the way of concrete proposals likely to create growth.  There are also a number of proposals that would presumably cost money, but there are no dollar figures attached to these policies nor any mention of how they will be paid for.
• Scott frequently mentions the increased spending that has occurred under outgoing Governor Peter Shumlin, but this spending is mostly the result of increased healthcare costs and increased pension payouts.  Scott hasn't said what he would cut but he has said he won't raise taxes.  This position necessarily demands that cuts take place so he would either have to gut pensions or cut spending in state government.  Cuts to state government would likely have the consequences of shrinking growth further, increasing unemployment, increasing downward pressure on wages, and cause further dysfunction within state government.
• Nowhere in his plan does Scott demand anything of employers.  He opposes increases to the minimum wage under the disproven notion that a higher minimum wage will drive up unemployment (it should also be noted that Vermont has an unemployment rate well below the national average).  He also says paid sick leave should be "voluntary" which it is now and would have no effect on exactly the jobs where there needs to be paid sick leave.
• Oddly, when it comes to the legalization of marijuana, a policy which would at the very least bring in some new revenue, Scott opposes it, saying it's not about money.  The "this isn't about money" standard is something Scott applies to none of his other policies.   The longer we wait on the legalization of marijuana, a policy with relatively few drawbacks and is inevitable at this point, the less economic benefit it will provide the state.

The biggest economic issue Vermont faces is the aging of the workforce and the shrinking of the tax base.  Things like providing a couple years of free community or technical college as Sue Minter is proposing would help bring and keep young people here.  An increased minimum wage would increase economic activity among the part of the workforce where it has the most room to grow and also decrease the pressure on college graduates to immediately find a job that can pay well (most likely out of state).  Scott also initially opposed taking in refugees and then reversed course.  Apart from the morality of this, it makes no sense economically.  These refugees have skills, the desire to work, and where immigration like this has happened like in Lewiston, Maine, it has been a boon to the local economy.

Scott seems like a good guy, but the policies that he is proposing work against the ends he purportedly wants.  I don't care if my governor is a nice guy, I want good policy.

Podcast 6/26/2016: Brelf-Harm

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In this episode, Vinny and I discuss the British exit from the European Union and the DEA.

*NSFW

http://www.podbean.com/media/share/pb-bh8ax-609cf9/download

Notes:

• Vinny mentioned the ability of the Scottish parliament to possible block exit from the EU. While it is true that an exit would require "consent" of the Scottish parliament, it's still unclear whether they would actually be able to block an exit.  I guess it if the Scottish parliament voted to block an exit it might provide a good excuse for English lawmakers to backtrack, but I don't know enough about British politics to make a judgment one way or the other. 
• We forgot to mention that a large part of Greece's financial crisis was exacerbated by Goldman Sachs aiding the concealment of debt from the rest of the EU.  Read a little about it here.
• The retirement age in Greece was 65 prior to austerity.  Not terribly different than other EU member states.
• The Greeks also work more hours than many other OECD states.  They work more hours per year than the Germans, the French, and the British.  The idea that Greece was in financial trouble because of an overly generous welfare state or lazy workers is mostly fiction.

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What a D!ck

 

From the man who built his life sucking on the teat of government, who wants to cut social security but spent his formative years collecting survivor benefits, wants to continue his assault on people who work for a living.  Speaker of the House and Alfred E. Neuman look-alike Paul Ryan has voiced his opposition to the Obama Administration's expansion of overtime raising the cap from $23,660 to $47,476 for those who work more than 40 hours a week.

Podcast 4/2/2016: The "Bernie or Bust" Movement and Minimum Wage

In this episode,  Vinny and I throw some cold water on the "Bernie or Bust" movement.  We then move on to discuss the political and economic justifications for a raise in the minimum wage.

http://www.podbean.com/media/share/pb-cavrx-5e1988/download

Notes:

• Zephyr Teachout is running for the House in New York's 19th Congressional district.  If you're serious about progressive policies then consider donating to her campaign or voting for her if you reside in the 19th.  She's from Vermont, for what it's worth.
• Russ Feingold is a progressive candidate for US Senate (and former US Senator) in Wisconsin. Again, the above applies.
• Tim Canova is challenging incompetent DNC chairwoman Debbie Wasserman Schultz in the Democratic Primary for Florida's 23rd congressional district.
• The minimum wage went from $0.40 in 1945 to $0.75 in 1950 to $1 in 1956.  
• From 1948 to 1960 unemployment was as follows (BLS): 

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

• 1948 3.4 3.8 4.0 3.9 3.5 3.6 3.6 3.9 3.8 3.7 3.8 4.0
• 1949 4.3 4.7 5.0 5.3 6.1 6.2 6.7 6.8 6.6 7.9 6.4 6.6
• 1950 6.5 6.4 6.3 5.8 5.5 5.4 5.0 4.5 4.4 4.2 4.2 4.3
• 1951 3.7 3.4 3.4 3.1 3.0 3.2 3.1 3.1 3.3 3.5 3.5 3.1
• 1952 3.2 3.1 2.9 2.9 3.0 3.0 3.2 3.4 3.1 3.0 2.8 2.7
• 1953 2.9 2.6 2.6 2.7 2.5 2.5 2.6 2.7 2.9 3.1 3.5 4.5
• 1954 4.9 5.2 5.7 5.9 5.9 5.6 5.8 6.0 6.1 5.7 5.3 5.0
• 1955 4.9 4.7 4.6 4.7 4.3 4.2 4.0 4.2 4.1 4.3 4.2 4.2
• 1956 4.0 3.9 4.2 4.0 4.3 4.3 4.4 4.1 3.9 3.9 4.3 4.2
• 1957 4.2 3.9 3.7 3.9 4.1 4.3 4.2 4.1 4.4 4.5 5.1 5.2
• 1958 5.8 6.4 6.7 7.4 7.4 7.3 7.5 7.4 7.1 6.7 6.2 6.2
• 1959 6.0 5.9 5.6 5.2 5.1 5.0 5.1 5.2 5.5 5.7 5.8 5.3
• 1960 5.2 4.8 5.4 5.2 5.1 5.4 5.5 5.6 5.5 6.1 6.1 6.6
 
• There were other things going on beside the minimum wage increase during this time like the baby-boom, soldiers returning from WWII, soldiers going to Korea, the G.I. bill, and the normal cyclical trends of the economy, but based on the above data I don't think it's necessarily reasonable to expect massive unemployment because of a minimum wage hike.
• During the same period of time as noted above inflation ranged from 10.2% in January of 1948 to -2.9% in October of 1949.  Again, there was a lot going on during this period of time. Since the 1920's the economy had been pretty volatile, so it takes a very selective reading of the data to pin it on a minimum wage increase (Inflation Calculator).  EDIT I just realized I cited the two extremes that occurred before either of the minimum wage increases.  Inflation from 1945-1960 was as follows:


• 1945 2.3 2.3 2.3 1.7 2.3 2.8 2.3 2.3 2.3 2.3 2.3 2.2 2.3
• 1946 2.2 1.7 2.8 3.4 3.4 3.3 9.4 11.6 12.7 14.9 17.7 18.1 8.3
• 1947 18.1 18.8 19.7 19.0 18.4 17.6 12.1 11.4 12.7 10.6 8.5 8.8 14.4
• 1948 10.2 9.3 6.8 8.7 9.1 9.5 9.9 8.9 6.5 6.1 4.8 3.0 8.1
• 1949 1.3 1.3 1.7 0.4 -0.4 -0.8 -2.9 -2.9 -2.4 -2.9 -1.7 -2.1 -1.2
• 1950 -2.1 -1.3 -0.8 -1.3 -0.4 -0.4 1.7 2.1 2.1 3.8 3.8 5.9 1.3
• 1951 8.1 9.4 9.3 9.3 9.3 8.8 7.5 6.6 7.0 6.5 6.9 6.0 7.9
• 1952 4.3 2.3 1.9 2.3 1.9 2.3 3.1 3.1 2.3 1.9 1.1 0.8 1.9
• 1953 0.4 0.8 1.1 0.8 1.1 1.1 0.4 0.7 0.7 1.1 0.7 0.7 0.8
• 1954 1.1 1.5 1.1 0.8 0.7 0.4 0.4 0.0 -0.4 -0.7 -0.4 -0.7 0.7
• 1955 -0.7 -0.7 -0.7 -0.4 -0.7 -0.7 -0.4 -0.4 0.4 0.4 0.4 0.4 -0.4
• 1956 0.4 0.4 0.4 0.7 1.1 1.9 2.2 1.9 1.9 2.2 2.2 3.0 1.5
• 1957 3.0 3.4 3.7 3.7 3.7 3.3 3.3 3.7 3.3 2.9 3.3 2.9 3.3
• 1958 3.6 3.2 3.6 3.6 3.2 2.8 2.5 2.1 2.1 2.1 2.1 1.8 2.8
• 1959 1.4 1.0 0.3 0.3 0.3 0.7 0.7 1.0 1.4 1.7 1.4 1.7 0.7
• 1960 1.0 1.7 1.7 1.7 1.7 1.7 1.4 1.4 1.0 1.4 1.4 1.4 1.7


• Other empirical studies (namely Card and Krueger), have shown little to no increase in unemployment even when wage levels differ in neighboring states.  In the case of Card and Krueger, the minimum wage increased in New Jersey to levels above that of neighboring Pennsylvania.  The result was no discernable loss in employment compared to Pennsylvania and no noticeable rise in prices in affected restaurants.

NSFW

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Dorf! Lessons in Self-Awareness

Jeffery Dorfman-Via Forbes

From time to time, a publication founded by a funny-faced multi-millionaire publishes something so tone-deaf and utterly detached from reality, that I feel a visceral need to subject the author to champagne-boarding until they admit supply-side economics is bunk.  The publication I speak of is none other than Forbes.  Today’s author is Jeffrey Dorfman P.H.D. and he explains to us why the student debt crisis is no biggie because people also owe auto loans.

The purported crisis of mounting student loan debt is one of the most overhyped problems of this young century. We were treated to thousands of news stories when student loan debt went above $1 trillion in total, more as it continued to rise, and a growing avalanche of stories designed to create sympathy for these poor indebted college graduates (and drop-outs). Yet, auto loan debt in the U.S. has now reached $1.1 trillion, up 30 percent from its pre-recession peak, without a similar mountain of press warning of the imminent catastrophe. This divergence in media coverage and analysis tells us much about how the student debt crisis is more manufactured than real.

Don’t worry everybody, even though these are two separate loans, for two separate purposes, with limited overlap, the comparison is still great.

The average college graduate who has any student loan debt graduates with between $25,000 and $30,000 in student loan debt. On a standard ten year repayment schedule, this means a monthly payment in the range of $280 to $330 per month. The average new car loan in the second quarter of 2015 averaged $28,500, was for five years, and carried a monthly payment of $483 month. Payments on student loans and auto loans both take up almost exactly the same percentage of income.

This argument is on shaky ground.  First, Dorfman is talking mean not median.  In both cases, the mean is likely driven higher by expensive outliers.  Second, I don’t think I know a recent college graduate, who can pay $483 a month for a car payment without major assistance from family.  Most recent college graduates that I’ve met are lucky if they can afford a 10-year-old Civic.  Third, there is not 100% overlap here.  I would speculate that someone buying a $20,000-30,000 car probably is, at least, employed full-time. Auto loans and student loans are also inherently different.  Auto loans can be forgiven in bankruptcy, cars can be repossessed, and the debt can be settled.  Student loans are not usually forgiven until full payment or death.  Furthermore, if they are also carrying $30,000 in student loans in a job that doesn’t even pay $12 an hour, they aren’t getting any new loan for much at all.

It's Tax Time!

 

It's time to do your civic duty and pay your taxes or rather for most of us, fill out a form to verify what the government already knows. It really is silly when you think about it, the IRS actually does your taxes exactly like you and if you make a mistake, they will correct it.  Hell, they'll even correct it if you made a mistake in their favor and then refund you for the correct amount.  So this begs the question, why do we need to file a return at all?  Can't they just send us what they think our income was and ask us to either verify it or dispute the amount?  Why all the extra confusing paperwork?  I don't know with certainty, but I would venture to guess that it has a lot to do with why our government often does silly nonsensical things: lobbyists.  Intuit Inc., the company that brings us TurboTax, ranks 702 of 16,793 in terms on campaign contributions according to Opensecrets.org.  Tax preparers like H&R Block also contribute substantial donations.

And the Plutocrats Continue to Grasp at Staws...

Against my better judgement I continue to scour through the Yahoo homepage news-feed or as I like to call it "bobbing for turds".  This week's search led me to an article titled "Why Elizabeth Warren Is a Threat to America’s Growth" by Liz Peek at the Financial Times.  Peek's poorly written and scatterbrained editorial focuses on Elizabeth Warren and why she believes that Warren is destroying the American economy particularly entrepreneurship.

If Your Forbes Editorial is Based on Kelso, You May Want to Rethink Your Career

I've noticed that over the past two years or so, the content of Yahoo's homepage has deteriorated rapidly, but as I am a creature of habit and a glutton for punishment, I continue to check it daily.  In my daily reading, I came across an editorial written by University of Georgia economist and Forbes contributor Jeffrey Dorfman called "When Did We Get Too Proud For Entry-level Jobs?"  Now admittedly, I read that title and was skeptical, but I decided to hear him out and keep an open mind.  Surely this economics professor would back up assertions with some hard data and force me to reevaluate my own biases.  In retrospect, I have far too much faith in the academic diligence of economists.