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The Facts Are In: GOP Governors Fail to Govern Well
Scott Walker, Chris Christie, Bobby Jindal, Sam Brownback rank at the bottom in job creation in their states. Reporters need to look at actual facts. GOP policies do not work; in fact they hurt people
By Paul Rosenberg
What do Scott Walker, Chris Christie and Bobby Jindal all have in common? They’re all sitting governors who’d like to be president, sure. But what else?
How about being embarrassingly bad at job creation? That’s right. From January 2011 through January 2015, Louisiana under Jindal ranked 32nd in job creation with 5.4 percent growth over four years. Wisconsin under Walker ranked 35th, with 4.85 percent growth. New Jersey under Christie ranked 40th, with 4.15 percent growth. This compares with a national average of 8.21 percent.
Even Ohio’s John Kasich, who’s worked more with Democrats—most notably by agreeing to Medicaid expansion under Obamacare—and thus tarnished his brand with conservative purists while puffing himself up with Beltway pundits — only ranked 23rd. He’s still under the national average, with Ohio’s 6.23 percent growth. Ohio has yet to get back to 2007 employment levels, “The nation and the majority of other states reached this benchmark in 2014,” said researcher Hannah Halbert, in a statement from Policy Matters Ohio.
And then there’s Gov. Sam Brownback of Kansas, once a 2016 hopeful cheered on by Grover Norquist and supported by supply-side icon Arthur Laffer in his crusade to slash (and eventually abolish) Kansas state income tax—a sure-fired job-creation move, according to the promises of all concerned. Justly dubbed a “failed experiment” for the massive deficits it has generated, the experiment also produced only lackluster job growth of 5.95 percent, ranking 28th in the nation—better than Walker and Christie, sure, but lower than its neighbors in Nebraska (25th) and Oklahoma (14th).
After years on end of House Speaker John Boehner whining, “Where are the jobs?” this is a singularly unimpressive lot of contenders, wannabes and dropouts. But its not an anomaly, as we’ll soon see. Nor is it an anomaly that the national press, so far, routinely ignores this abysmal record. But can they continue to ignore it going forward—particularly in the age of social media?
Historically, state governors have been the most credible candidates for president. Eight sitting governors have been elected to the White House, compared to just three sitting senators, and four vice presidents (compared to eight who took office after a president died). As chief executive of a state, governors can claim an experience most similar to that of president (though without the foreign policy part), and the potential diversity of that experience purportedly allows for an influx of proven practical state-level solutions to be ushered onto the national stage.
At least that’s how the political folklore goes. Now, however, it’s something of the opposite. With the off-year Tea Party wave of 2010 sweeping a large number of ideologically extreme politicians into office, decades of right-wing state-level institution-building reached fruition, and helped establish a high degree of uniformly mistaken economic practices—cutting taxes, public investment and much-needed services, all in accordance with a playbook that’s a proven loser. While individual presidential candidates can be expected to blow their own horns, the fact that their basic playbooks are all so similar opens them up to a broader attack: the entire framework of how they think about economic policy simply doesn’t work.
Of course, the GOP’s problem is much bigger than just its current crop of governors, but the pattern of their failures open it up to a new line of attack—provided those failures are seen for what they are. The GOP field can be thought of in terms of three main factions: The governors, all reelected, hence “proven”—with former governors Jeb Bush, Rick Perry and Mike Huckabee thrown in; the first-term (hence “green” and résumé-thin) senators (Ted Cruz, Rand Paul and Marco Rubio), and the assorted wild cards (Ben Carson, Donald Trump, Carly Fiorina, etc.) The senators enjoy the prominence of acting on a national stage, but doing so as part of a particularly dysfunctional Congress hardly sets them up to follow in the footsteps of Ronald Reagan, JFK or even Barack Obama. Moreover, their relentless attacks on Obama seem custom made to be turned back on them: Was he too young, in need of seasoning? Lacking in executive experience? A glib, superficial media star? Really, Tea Party children of Sarah Palin? Really?
Every cheap shot the freshman GOP senators have taken, endorsed or profited from directed at Obama is now a heat-seaking missile ready to turn back on them. The wild cards are there to make the senators look … well, senatorial, if not presidential. They are a sign of normal politics’ failure. The governors are supposed to be the remedy to all this—normal politics getting back on track, recalling the promise of George W. Bush, after the GOP’s Clinton impeachment fiasco (never mind the details of how that turned out….). That’s why this crop of governors’ not-ready-for-prime-time economic records are particularly devastating: this is supposed to be their strong suit, both as governors and as Republicans. Instead, it is neither.
It’s not just the embarrassing job-creation numbers, though that alone should be enough to disqualify the whole lot of them. New Jersey has just experienced its ninth bond downgrade under Christie, who may end up looking for a bridge to hide under. In Wisconsin, Walker, facing a two-year deficit that could go as high as $2 billion, has responded with $300 million in cuts for higher education, on top of billions in previous education cuts. Still, job creation was supposed to be Walker’s big thing—he promised to create 250,000 jobs in four years when he first ran in 2010, but came up short by more than 100,000 jobs. Making matters worse are the neighborhood comparisons. Wisconsin ranked between 29th and 41st in job growth over the last four years, the worst in the Midwest three of those years, and second worst the other. In fact, the state performed poorly on a whole host of indicators used by Bloomberg News, and suffers markedly in contrast with neighboring Minnesota, where progressive policies have that state’s economy recovering nicely.
Perhaps the pundits are still dazzled by these guys, but folks at home, not so much. Neither Christie nor Walker has any traction in beating Hillary Clinton in head-to-head home state matchups, probably the only kind of polls this early with any potential long-term 2016 value, since they involve figures well-known to the public being polled. Then again, Walker’s job approval fell to 41 percent in the latest Marquette Law poll (56 percent disapprove), which has plenty of other bad news for him as well.
In contrast, Kasich does show signs of life, but the modest dose of political pragmatism he’s shown is hardly what the GOP base is looking for, nor is he actually doing that well. Other ambitious GOP governors should really be thinking about reality TV. Bobby Jindal? (Budget cuts to higher education that “would set us back generations,” according to GOP House Speaker Chuck Kleckley?) Mike Pence? Sam Brownback?
To really appreciate how bad this field is, we need a bit more context. First, let’s be clear, the GOP’s perceived advantage on the economy is entirely a matter of illusion. In his book, “They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010,” investigative historian Erik Zuesse shows that “Democratic economic superiority extends not only to the performance of the stock markets, but also to employment, wages, economic equality, and all other major economic variables,” as he explained in a 2012 column for Business Insider.
The GOP stock market record is particularly noteworthy, since it’s the epitome of what they’re supposed to do best at. However, Zuesse notes, “each one of the nine separate studies (all of the studies that have been done) of the performance of U.S. stock markets under Republican versus under Democratic presidents and congresses, has shown consistent and overwhelming superiority of economic performance with Democrats in the White House, and also with Democrats in Congress, as compared to Republicans.”
There’s also a considerable gap between polarized economic policy debates in Washington and a relatively cohesive consensus among most econmists, as pointed out by economists Betsey Stevenson and Justin Wolfers, writing for Bloomberg in 2012 (“The U.S. Economic Policy Debate Is a Sham”). They reference an ongoing survey of leading economists conducted by the University of Chicago’s Booth School of Business, including economists of both parties as well as independents. They note that “92 percent agreed that the stimulus succeeded in reducing the jobless rate,” a point that Republican politicians routinely ridicule. (When repeated in 2014, 97 percent agreed.) “On the harder question of whether the benefit exceeded the cost, more than half thought it did, one in three was uncertain, and fewer than one in six disagreed,” they add. (By 2014, just 6 percent disagreed.) As for the “Laffer Curve,” and the GOP claim that tax cuts will pay for themselves by the growth they produce, Stevenson and Wolfers reported, “The Booth poll couldn’t find a single economist who believed that cutting taxes today will lead to higher government revenue — even if we lower only the top tax rate.”
Two other more recent results are worth mentioning. Democrats have long favored infrastructure spending as a way to stimulate the economy and raise average incomes. Before Obama took office, Republicans agreed, but no longer. In May 2013, 89 percent of economists agreed, just 5 percent disagreed. Later that same year, 91 percent agreed that a U.S. debt default would mean that “U.S. families and businesses are likely to suffer severe economic harm,” even as some Republicans said it would be a good thing to default. Just 3 percent disagreed.
The Booth expert polling results aren’t monolithic, nor are they necessarily infallible—orthodox economists were blindsided by the financial collapse in 2008, after all. But the degree to which key articles of GOP economic faith clash with overwhelming expert judgment is staggering—and there’s nary a hint of it in most of the media. It’s a disconnect reminiscent of global warming, but much less widely recognized.
Indeed, pundits as a class have internalized the notion of the GOP as the “daddy party,” the one that does best at all manner of male-stereotyped roles: fighting wars, running the economy, understanding how things work. The Democrats are supposedly the “mommy party,” the one that takes care of you when you hurt.
It’s utter balderdash, but voters tend to buy into it. In the same column mentioned earlier, Zuesse cited a Gallup poll headline “Obama Still Wins on Likability; Romney on the Economy.” The figures were telling: “By 54 percent to 31 percent Obama is the more likable candidate, but by 52 percent to 43 percent Romney would ‘better handle … the economy,’ and by 54 percent to 39 percent Romney would ‘better handle … the federal budget deficit.’”
The majority was wrong about Romney’s economic acumen. He promised to reduce unemployment to 6 percent by the end of 2016, a target Obama hit by October 2014. But it wasn’t just about top-line economic targets—it was his entire economic approach.
All the way back in January, 2012, Jim Tankersley wrote a piece for the National Journal, “The Romney Conundrum,” taking note of the disconnect between Romney’s economic plan and the recommendations of his top advisors—a disconnect paralleling the one noted by Stevenson and Wolfers: “Romney issued a 59-point economic plan with fanfare last September. The platform contradicts landmark findings on monetary and housing policies published in 2011 by his top two economic advisers: Glenn Hubbard, the dean of Columbia University’s business school; and N. Gregory Mankiw, a Harvard University professor and the author of the nation’s most widely used college economics textbook.” So Romney was to be trusted because he knew so much, had such smart advisers—who he completely ignored. Yet, somehow, Romney managed to muddle through the whole campaign without this glaring contradiction ever becoming a significant story in the media.
This is not a luxury that the current crop of GOP governors should take for granted. Sure, the press will continue to shill for them, repeating some version of “daddy party” nonsense, and repeating failed Clinton scandals ad nauseam, assuming Clinton wins the nomination this time. But outside groups and social media activists could mix things up a lot more this time around. And Clinton’s “listening tour” approach is custom-made for gaining ground-level traction, homing in on GOP failures of governance, and blowing up the prefab narratives on which the wannabes’ hopes are pinned. She’s already touched on a few highly popular proposals—supporting (however nebulously) a livable minimum wage and free community college, for example—and will obviously build on these over time. There are individual-level appeals to be made here, with significant public support.
But there’s also a wonk side to this unfolding story, which GOP governors are particularly vulnerable to. Not only are Democrats better for the national economy as a whole, they’re better for state-level economies, too. As far back as 2004, it’s been noted online that red states as a whole are takers of federal tax revenues, blue states are donors. Analyzing annual data from 2008 through 2014, red states consistently got more money than blue states, by anywhere from 36 percent to 73 percent. One result of this, naturally, is that red states can better afford to cut taxes, since they’re mooching off all the rest of us. And yet, blue states continue to do better, year after year, decade after decades.
One rough measure of this broad pattern was produced by David Wise, reported on the London School of Economics blog. Wise compared red, blue and purple states, based on presidential election votes since 1988, with special weighting for the two most recent elections. This ignores statehouse and state legislative control, which sometimes diverge, so it’s not perfect, but it does reflect dominant voter values and priorities. Wise combined rankings of dozens of indicators to produce two composite measures. First, he explains, “An Overall Economic Strength Index was based on each state’s performance for positive economic outputs in areas such as the following: per capita income, median household income, household net worth, the poverty rate, economic growth and jobs added over recent years, labor force participation, the human capital index, entrepreneurial activity, patents generated and manufacturing value-added.” Next, “A Social Cohesion/Dysfunction Index was designed to measure the quality of life and social cohesion in each of the states. This index included: life expectancy, infant mortality, literacy, the human development index, and the rates of drunken driving deaths, violent crime, teen pregnancy, divorce, incarceration, child abuse, domestic violence deaths and drug deaths.”
The differences he found were dramatic. Comparing the average ranks in economic strength, compared to the midpoint, he found that blue states averaged 3.23 above average, purple states averaged 1.19 above average, and red states averaged 3.67 below average. Looking at the top and bottom, he wrote, “Out of the top ten ranked states for economic strength there were four blue states, three red and three purple. Out of the bottom ten ranked states there were one blue, eight red and one purple.”
The average ranks in social cohesion and dysfunction showed an even stronger difference: of blue states averaged 6.16 above the midpoint, purple states 0.52 above the midpoint, and red states averaged 5.03 below the midpoint. “Against this index, six blue states ranked in the top ten along with two red states and two purple states. No blue state scored in the bottom 10 on this index although two purple states and eight red states did.”
I’ve already noted one potential source of “noise” in this data—the fact that it uses presidential elections to sort states into categories. But another source of “noise” is that economic policies vary over time and only represent part of what contributes to states’ economic performance—as well as their social cohesion. A more focused way of examining how well certain policies work would be to look at policy rankings, and see how well they correlate with economic behavior. This won’t eliminate the non-policy factors, but it tell us about the role of policy factors and the impact—good or bad—that they have.
A November 2012 study, jointly produced by Good Jobs First and the Iowa Policy Project, “Selling Snake Oil To The States,” does just that. It looks at the rankings and recommendations produced by rightwing economist Arthur Laffer (yes, that Laffer) for ALEC (the American Legislative Exchange Council) a once-shadowing, but now well-known group which helps drive the conservative agenda at the state level.
Laffer and others have created an ideologically-driven “State Economic Competitiveness Index” in a report titled “Rich States, Poor States,” starting in 2007. “Selling Snake Oil” found that ALEC’s report was actually a guide to what not to do.
As explained in the executive summary “Rich States, Poor Statesembodies the policy agenda that ALEC pushes to state legislators: reduction or abolition of progressive taxes, fewer investments in education and other public services, a smaller social safety net, and weaker or non-existent unions. These are the policies, ALEC claims, that promote economic growth.” Although the claim that these are good policies is an ideological one, the claim that they work to promote economic growth is not—it’s an empirical claim, and it can be tested, to find out if its true or false. As the report found “the ALEC-Laffer recommendations not only fail to predict positive results for state economies—the policies they endorse actually forecast worse state outcomes for job creation and paychecks.”
Specifically states that ALEC ranked higher, based on a set of 15 “fiscal and regulatory policy variables,” actually did worse over the period of years studied, while those that ranked lower on ALEC’s scale did better. “Selling Snakeoil” looked at all 50 states, so there could be no concerns about “cherry picking.”
First they examined change in state GDP, over five years, and found almost no correlation: 0.02, which was not statistically significant. Next, they examined growth in non-farm employment, and found a somewhat stronger correlation—but in the “wrong” direction: -0.09, meaning that “the higher a state was ranked on the A-L Index in 2007 the worse its job creation record over the next five years.” Things were similar, but even worse when measuring state per capita income: The negative correlation of -.27 was statistically significant. Finally, ALEC/Laffer claimed that states following their policy prescriptions would experience more growth and higher incomes, translating into greater government revenue. But again, the correlation was negative, the opposite of what was promised: -.16.
There was actually one measure which turned out as ALEC/Laffer predicted: population growth. But that’s not a measure of economic performance!
The study then went on to test the ALEC/Laffer ranking scale against two other obvious measures of state economic well-being: the median family income and the poverty rate. They examined the results on a year-by-year basis, median income first. “The relationship is not only negative each year, it also became worse over time: the better a state did on the ALEC Outlook Ranking, the more family income declined from 2007 to 2011. The correlation, -.30, is statistically significant.” The same pattern held, but the correlation was weaker (.21), though still “marginally statistically significant.”
There’s a lot more in the “Snake Oil” report. It looks at individual components of the ALEC/Laffer scale, and finds them equally unhelpful for their advertised purpose. It examines a number of key claims in greater detail, such as the arguments for lower taxes, fighting against unions and the minimum wage, and the claim that “state tax rates in many instances approach ‘Laffer Curve’ territory, where tax cuts would actually increase tax revenue.” Of course that claim is nonsense, as already indicated above.
The report also spends time discussing factors that do impact state economies, which ALEC/Laffer simply ignore, despite a substantial research literature. One of the most basic things they point out is that “[I]nstead of ALEC’s extreme policy recommendations, we find that the composition of a state’s economy—whether it has large or small shares of the nation’s fastest-growing industries—is a far better predictor of job and income growth.” More broadly, they state:
Overall, we find that Rich States, Poor States consistently ignores decades of published research, making broad, unsubstantiated claims and often using anecdotes or spurious two-factor correlations that fail to control for obviously relevant factors. Indeed, our analysis finds that the report repeatedly engages in methodologically primitive analysis that any college student taking Statistics 101 would be taught to avoid.
Because the “Snake Oil” report came out in late 2012, I reached out to one of the authors, Peter Fisher, research director of the Iowa Policy Project, to find out about any more recent developments. There has been some pushback from ALEC allies, but no signs of learning. “There have been two editions of RSPS since then, the latest coming out about 10 days ago,” Fisher told me. “They have not changed the methodology at all, so the criticisms still apply.”
In short, ALEC is treating it as a political battle—the exact sort of thing Stephenson and Wolfers were criticizing. And what about Laffer himself? Back in 2012, when Brownback gave Laffer a $75,000 contract to help sell his tax cut proposal, he was supremely confident:
Laffer told more than 200 people at a small-business forum at Johnson County Community College that there is a war among states over tax policy and that nowhere is that revolution more powerful than in Kansas. He said Kansas’ tax cuts and political shifts will produce “enormous prosperity” for the state.
“It’s not a left-wing, right-wing thing,” Laffer said. “It’s economics.”
He was wrong about the “enormous prosperity,” of course. But his second statement was spot on. The more that reporters look past the spin, and focus on the economic records of GOP governors running for president, the more informative the coming election will be. What better time to put the information back in the information age?
This article appeared at Alternet.
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