Tuesday, December 13, 2011

Shark on Lake Effect

My with Stephanie Lecci on WUWM's Lake Effect cand be found here. We talked about the Governor's initiatives on collective bargaining and the budget along with the aftermath. I closed by hoping that we can learn to disagree robustly - even sharply - but civilly.

A critique of my appearance can be found here - written by someone called Man MKE at Uppity Wisconsin.  The one thing I would point out to our friends at Uppity Wisconsin that the fact that, in economic terms, a union is a cartel is not controversial. A union is a combination of a suppliers of labor who agree to act in concert. The idea is that this will shift the supply curve for labor resulting in some combination of higher wages, lower employment, higher prices and (perhaps) lower profits. Cartelization is the theory behind labor unions and laws authorizing collective bargaining exempts it from law prohibiting agreements in restraint of trade that would otherwise apply.

What I supposedly got wrong is that Scott Walker did not raise taxes because of two small adjustments in the calculation of the homestead earned income credit that, considered alone, raised revenue. But the net impact of Walker's budget was to reduce and not increase taxes. I'll stand by what I said. It is rare that a budget bill will not include things that, standing alone, both increase and decrease revenue. We usually look at the big picture.

I am also apparently wrong in saying that Walker's collective bargaining reform did not save the state money. But here's the thing. You can't argue that there have been 1) devastating cuts that 2) didn't save the state money. We have - by the same measure that the state has used in the past - largely closed a huge budget gap without (as I said) an overall tax increase. Looks like someone saved money somewhere.

I did not say, as Uppity claims, that there were absolutely no reductions in state services. One could hardly expect to close a budget gap of that size without some staffing reductions. But I stand by my statement that those reductions have not been significant. I used the recent DPI survey as an illustration.

Finally, Uppity is upset because it's show skewed right. Really? Three of the five panelist in the opening segment are clearly to the left of center. I am not sure about Mr. Kass and Dave Haynes, who may or may not be more conservative than the average editor on State Street, is known as a fairly straight forward journalist. John Gurda has increasingly given over his column in the Journal Sentinel to paeans to socialism. I'm thinking they did OK.

What I find most interesting in Uppity's response is the reaction to my call for civility. Uppity rejects that call because Republicans "rac[ed] through complex legislation and voting on bills at midnight with constitutionally questionable and very minimal prior notice ...."

Well, no, they didn't. Even if you think that Republicans tried to pass the collective bargaining bill too soon, it wound up being perhaps the most debated bill in the history of the state. (In fact, much of what becomes law in this state is passed "at midnight" and with "very minimal prior notice" as part of the biennial budget.  Act 10 was a bit of an exception.) The venom we see has nothing to do with procedure.


Tom said...

I always get a good laugh when the claims of pushing through Act 10 without debate, too fast, etc. come out.

The Republicans could have done exactly what they did the very day the Democrats fled the state. The fact that they didn't, and the fact that they actually tried to dialogue with the Democrats out-of-state (a terrible idea, if you flee the democratic process, you've forfeited any right to participate), shows that this WASN'T a rush job.

RB said...

Since when is a reduction or elimination of a tax credit considered “raising taxes.” The Earned Income Tax Credit and Homestead Credits have been tools to redistribute wealth to lower income families. Under the changes made to these two tax credits, eligible tax payers will not be paying more in taxes, they will be receiving less back. It is also my understanding that even with the changes to the EI tax credit; Wisconsin still has one of the most generous EI tax credits in the nation. If you want to argue this hurts lower income families, fine. One could make an intellectually honest argument against these changes. But to call them tax increases is a stretch.

Let’s look at other tax credits. Federal energy tax credits for new windows are expiring this year. Will anyone claim in 2012 that without the credit, the President raised my taxes? There is a significant federal tax credit for expenses related to foreign adoptions. Let’s say I adopted a child from a foreign country in 2011 and used the tax credits when filing my 2011 return. I would not get that credit in 2012. Can I say the President raised my taxes? If I did, I would feel ridiculous. Or if I get a raise at work and it results in me paying more state and federal taxes than last year, do I claim the government raised my taxes? No. Again, I would sound ridiculous.

People seem to manipulate terms like taxes, tax rates, tax revenues, and tax credits in an effort to fuel their rhetoric. PolitiFact is a joke and an eager accomplice in this. What qualifies the authors to analyze policy? Do they have training and experience in finance, economics, or public policy? Can they even balance their personal checkbook?

John Foust said...

Apparently one can argue that cuts can be "significant" yet not cause "significant" reductions in anything those departments were supposedly delivering.

Somehow this reminds me of the way the WisGOP claims that almost anything they want "creates jobs."

Dad29 said...

The venom is wholly a result of invented "wrongs."

John Foust said...

I dunno, Dad29, when I read your blog, I see lots and lots of venom. Where does yours come from?

RB said...

Rick, I give you a lot of credit for trying to engage in some type of debate on this issue. I have to chuckle at the Uppity author characterizing Act 10 as “complex.” I read the bill when it was made public and I remember it only being forty some pages long. It seemed pretty straightforward. I would be interested in the author’s perspective about the process used to pass the national healthcare reform legislation that was over two thousand pages long. Or some of the way legislation was passed under Governor Doyle and the Democratic led legislature when they were in the majority. It would be nice for the author to clarify what exactly would have been an acceptable amount of time to wait on passing Act 10.