Post hoc or propter hoc? Public union malfeasance meets academic pusillanimity
A couple of days ago, in a column called “Phony Cuts/Real Taxes,” I reproduced here a chart from Connecticut’s Yankee Institute for Public Policy that contrasted the growth of the state’s population for the last several decades — only a tiny uptick — with the growth of state expenditures: Yes, that’s right, it’s up, up, up and away! The increase is prodigious all along, but it really gets going after the “temporary” (ha, ha) state income tax came on line in 1991.
Those politicians: they’re such cards. When it comes to taxes or other devices to convert the meum of individual wealth to the tuum of state appropriation, “temporary” always means “permanent.” Did I mention, by the way, two facts about Connecticut? 1. It has the highest per-capita indebtedness of any state in the union. 2) Every statewide office in Connecticut is held by a Democrat. All of them. In 2008, the pseudo-Republican Christopher Shays — the last Republican Congressman in New England — said sayonara; in 2010, the rest of the offices went blue. (Bonus question: what happened to New England? Most of it used to be staunchly Republican. Now most of it is deep blue, and even more deeply in debt.)
Is there a connection here? Here’s a hand-dandy chart, originally from Moody’s, reproduced by CNN that tells the story.
(Click on the link for a version in which you can mouse over to see just how much you owe.) So it’s states like Connecticut (your share: $4859), Massachusetts, New York, California, Oregon, Washington, Illinois, and Hawaii on one end of the spectrum and Wyoming, South Dakota, Texas, Nebraska (your share: $15), and Iowa at the other end. What are some differences between the two groups? Oh, right, states in the former group are overwhelmingly, some are exclusively, Democratic, the latter are heavily Republican. Is that an accident? Is the political complexion of a state irrelevant to its fiscal health? What do you think?
While you are pondering that, here’s another post-hoc-or-propter-hoc quandary. After “Phony Cuts/Real Taxes” was posted, I heard from Andy Cowin, Chairman of the Yankee Institute, who sent me a remarkable op-ed he had published a few weeks before in The Wall Street Journal. It’s entitled “Unions Try to Silence a Think Tank.” (The link, I regret to inform you, presents not the full article, but only an opportunity to pay for the full article, which, let me hasten to add, is worth doing.) In his op-ed, Mr. Cowin describes how public-sector union leaders in Connecticut had filed a complaint — what he aptly characterized as “a bizarre complaint” — against the Yankee Institute. Their tort? “That the Yankee Institute is critical of Union practices and that our funders share the same view.”
What is odd, is that almost all States have a balanced budget requirement; so how do they manage to get into so much debt?
Oh, and yes, Liberals play hardball. In every organization, the bad drive out the good, when the good do not drive out the bad.
Many states have been running deficits just like the federal government. Sure they may have a law requiring a balanced budget, but it probably doesn’t say you can’t borrow money to do it. Municipal bonds serve the same function for states that treasuries do for the feds.
Another way for states to accumulate debt is through failure to fund public-employee pension plans. I believe you would find the governments of most states with considerable debt have chosen to underfund their pension plans in deference to increased spending on social programs. My single-party (Dimocrat) state of Washington is one of these. Governor “Queen Christine” Gregoire and her Court (State Legislature) have never found a bleeding heart rathole that wasn’t worthy of dumping a load of taxpayer money into.
Well in Illinoisistan they play the games. They keep 6 months OR MORE of bills in accounts payable. So unpaid bills don’t count. Then to “fund” the pension plans they borrow money. You’d think they would appropriate money out of the general fund to pay the pensions, but then they couldn’t hire an army of government employees to keep voting Democrat. And it will all go on until the thing collapses.
One problem with your piece is the lack of illumination of hidden expenses; e.g. in MN a blue state one can purchase catastrophic health insurance covering a family for $60/month whereas my co-workers in KS (same company) are forbidden to buy such a thing. The result is that a “red” state can be red due to dumping of hidden health expense on to the individual where the blue state has a slightly better protection of the individual via a form of collectivism that works (i.e. a realistic implementation of insurance pooling.) Ultimately what this means is that if your spouse gets cancer in MN and you have the policy in hand you are not ruined financially as you would be in KS (where the health insurance costs about $1200 / mo for a family through your job.)
What this means overall is that while MN may tax/spend more per capita overall there are also fewer bankruptcies from health issues and more stable financial situations for the population as a whole. SD right next door to MN reports similar state budgetary numbers but also gets more federal $$ for health care. In sum red states appear to be doing better because the blue states are picking up the slack for them. Hardly anything to boast about. It’s manipulation of numbers in columns, not reality.
Health care is not the only metric but one I am familiar with. I’d like to see valid comparisons but I don’t see yours as being fundamentally any more intellectually honest than that from the left.
Gosh Random, I know the Democrat Underground talking points look good when you read them, but perhaps you should check out some REAL DATA like the study by City University of New York School of Public Health and Ohio University, Athens.
They concluded regarding the Massachusitts Health Care law;
● Massachusetts’ health reform, enacted in 2006, served as the model for the
2010 nationwide reform that will not be fully implemented until 2014.
● Although the Massachusetts reform has covered many of the uninsured, underinsurance remains widespread, and illness and medical bills still contribute to 52.9% of all bankruptcies in the state. The number of medical bankruptcies has not decreased.
● The recently enacted national health reform is unlikely to adequately address
the widespread problem of medical bankruptcy.
jd
My comment, which you failed to grasp, was that life in general costs $N per citizen regardless which state one lives in. What this means in terms of this discussion is that the notion of debt at the state level is impacted by accounting and policy regarding who pays and why.
There is and was nothing remotely leftist in anything I spoke of, that is, unless you think insurance pooling and actuarial tables are a commie plot.
What I’d like to see from Roger is detail as opposed to simplistic notions of red and blue. Of course, based on the comments replying or referring to me, I’m quite aware of why Roger chose the bumper sticker level.
Your analysis is directly from fantasyland.
Catastrophic health insurance at $60 a month is not the answer. Neither is your psychic reading of the charts that tell you that SD gets more medical funds from the government than MN. You have no details, and thus no insight to offer on those stats– you have simply conjured up a theory.
The federal government’s revenue sharing and medicaid and a whole host of other programs tend to be extremely complicated, and cannot be reduced to a chart to explain the flow of funds.
But it would not and could not be the case that states that are in financial trouble are in their predicament because the federal government did not give them as big a handout as some other states. Broke states are broke because of their irresponsible spending: California is high on the list of broke states, yet they just decided that illegal immigrants should get a college tuition discount. Lifeguards are paid over $100,000 annually in the land of fruits and nuts, and government employee union pensions and salaries/benefits have been a sham on taxpayers for decades.
The states that are broke are broke because of their politicians, not some unreceived, imaginary gift from the feds.
“to dumping of hidden health expense on to the individual”
Hidden? Umm, dont YOUR health care costs belong to ummm, YOU?
“That the Yankee Institute is critical of Union practices and that our funders share the same view.”
Sure, I remember Ben Franklin writing in “The Poor Unionized Worker’s Almanac” that “If the King doesn’t give us retirement at 45 with annual grog subsidies, we’re outta here!” You could look it up.
Love your name. Wish I’d thought of it first.
Progressive are to “rich people” as Blue states are to Red states.
For an addict in need of drug money, the person with money in his pocket has less “right” to the money than the addict.
Great combination: a thuggish union and an unprincipled college — nothing new there.
In the case of the northeast, what you’ve seen over the past 40 years is the tax-and-spend version of Pat Moynihan’s “Defining Deviancy Down”, in that politicians from states that benefited from the initial big government spending championed out of places like Boston and New York decided to emulate those cities and their parent states, and as a result are now in just as big or bigger holes.
In the run-up to New York City’s near-bankruptcy in 1975 one of the reason was the loss of the city’s corporate tax base to lower-tax nearby places like Connecticut and New Jersey. Both states gained corporate headquarters and middle-to-high income residents as a result of the city and New York State’s high tax, high spending policies. But Democratic politicians from both Connecticut and New Jersey over time have decided to take advantage of the increased sources of tax income to raise their own tax rates, to the point they’ve all but eliminated their past tax advantage.
Once that’s gone, there’s really no reason for companies to stay in a place like Connecticut, if it’s now just as cost-effective to move back to New York City or, if the job doesn’t even require locating in the northeast anymore, for corporate to simply move the business to a less tax-obsessed part of the country. It’s a lesson California is about to learn, too, though having ownership of 2/3s of the Pacific Coast line means the Golden State can abuse their businesses and residents and get away with it for a little longer than smaller northeastern states.
NO incoming governor ‘guts’ his/her state when seated. Every governor, either builds upon what he/she was handed from the predecessors blueprint or reforms bits and pieces. NO state is static one party or another these days. I grew up in a plains state that was democrat for longer than some of you’ve been on this earth. Now it goes back and forth and like neighboring states of the same background. They have have good years and bad years dependent on so many uncontrollable variables, no matter what party is in office.
Other states simply have long term problems beyond the reach of any one or two term governorship no matter the party in office because they, lost major economic bases, have horrible high density over populated pockets of poverty, high unemployment and essentially a state being in long term decay.
Bottomline? Take all the federal handouts from ANY or all of the states and watch them collapse in less than a heart beat.
You mean all those handouts that are really federal tax dollars taken out of state, massaged by the federal mafia which takes its cut, and then sent back as state entitlements? Yeah, terrible.
I have an idea. Let the states employ the 10th Amendment option, keep our own fed income tax money, and spend it where we think best. Even when it comes to welfare and Medicare, we know at the local level who’s the most needy and who’s the best at playing the system for selfish gain. Oops, that last part about playing the system for selfish gain sounds like prostiticians, too!
The best part of my plan is that Health and Human Services becomes mostly irrelevant. Cut it and we suddenly have a balanced budget.
Imagine that.
Hey! I’m all for the states receiving ANY federal government subsidies of any kinds! I’m also for NO domestic private sector commerce receiving ANY federal or state subsidies! In the first instance, good luck! The constitution allows for the federal government to act on behalf of the welfare of the nation as a whole. In the second instance the constitution allows NO mandate for federal government subsidies to commerce or regulating commerce in the manner it does, thus I’ve long advocated a constitutional amendment defining the original intent of the commerce clause…for which on here, I’ve been deemed a moron by most commenters.
But, the people have chosen the course for the nation and there are NO simplistic solutions in reversing their long chosen journey that got us here. Beyond their rhetoric the people will NOT choose sacrifice for themselves…but durn sure for others. Thus, nothing significant is going to happen anytime soon besides more arrogant and empty ‘political’ rhetoric.
Actually a typo! I meant to say states should [not] receive ANY forms of government subsidies!
Pure poppycock.
An electoral cycle change does not mean the state’s political culture has changed– Obama’s election did not mean the country wanted to turn socialist/Marxist, even though the left thought it did. Electoral swings occur everywhere, but that doesn’t mean they always throw out the baby with the bathwater.
And you continue to make completely unsupported (and untrue) claims that the federal government’s largesse is what keeps states afloat, financially. That is so bass-ackwards it is hard to believe anyone would suggest it.
The feds take the money from the citizens, waste a large portion of it on the massive bureaucracy that can’t manage its way out of a wet paper bag, then they lose more through fraud– and then they return the meager leftovers to the states– FROM WHERE THEY GOT THE MONEY IN THE FIRST PLACE. And that is just the programs where “revenue” (taxpayer dollars) are shared with the states. The waste and fraud of the the US government dwarfs anything the world has ever seen.
Your theory of “states collapsing” without federal subsidies is supported by nothing. It is made up out of whole cloth, and does not even begin to make sense, seeing as how the federal government has no money of its own– they get their money from the people who live in those states.
At least you got through a comment without blaming the Tea Party– so there is that.
No kidding, Hank!
Commenter T.T. tried to sell the USPS in being a private organization as well.. !
Show me one private company which bled red 66% of the time/2 out of 3 years since 1971 and still afloat by NO government ‘assistance’.
Even when T.T. admitted the overwhelming debt and ‘borrowing’ is due to USPS pensioners, it’s still ‘private’. Great stuff.
http://www.theoaklandpress.com/articles/2010/10/23/opinion/doc4cc3a237064f2250546497.txt?viewmode=fullstory
Try not to draw conclusions and make statements I did NOT conclude or say! Do you have such a capacity?
I NEVER made the statement that the USPS was a “private organization” as you claim! I did say however, that the USPS does NOT operate with federal funds.
Thats four times now!
USPS is losing billions, and will be broke by the end of this year. Estimates are that up to $238 billion in bailout funds will be needed over the next ten years.
Who do suppose will pay for that bailout? Any chance it might be the citizens of this country? Or do you think that $238 billion is also from the federal government’s “stash”?
Henry,
States would indeed collapse without federal spending, and I’m not defending the practice..
The truth is, in most states, its the employee/agency costs (inflated teacher salaries, bennies, administrators, overtime whores at the jails making six-figures, etc.) and all the unfunded pension gaurantees that are far above what the local population can actually bear in terms of real dollar cost.
The truth is, its the multitudes of local/state waste, fraud, mismanagement, cronyism, bid rigging, expense account padding, union vote buying, and make work no-show double dipping politicians, who are often holding simultaneous mayor/councilman/state rep/agency head positions, with multiple salaries and retirement bennies, that cost us the lions share of actual dollars in this country.
There are millions of them, probably tens of millons of them, in every city and state, all earning well above what the Private Sector would pay, for the same typr of work, with the same degree. All of them depend on Federal Lagesse to exist, as their local citizens simply cannot pay for this astronomical level of waste themselves.
Remember the federal “stimulus money” that went exclusively to local governments?
That was debt, my friend, debt piled onto our grandchildren, to keep these unsustainable local theives from having to face fiscal reality.
States can brag all they want about their “balanced budgets” requirements every year, but as long as its funded in large part with a debt laden credit card from Uncle Sam, its bullshit.
They know they cant operate this way without bankrupting us all.
They just dont care.
Folks don’t have the faintest clue how much and for what, they rely upon federal funds in their states and communites to maintain services for them that, they would scream to the high heavens should they loose them or have them reduced. All they’re capable of seeing in their minds are government employees.
Once again, you show just how much you don’t get it.
Does the federal government operate some kind of business that makes a profit, enabling them to share that profit with those “folks”?
Where do YOU think the federal government gets the money to provide to the “folks” ?
Sorry, but that theory is not supported by facts or logic.
The federal government does not have any money of its own. It gets its money from the citizens, in various disguises such as corporate tax, income tax, gasoline tax and revenue sharing programs with the states– who in order to participate must also reach into the pockets of citizens for money, since states don’t have any money of their own, either.
States and their citizens turn their money over to the feds, who then waste a large portion of it before returning some back to the states– How could it possibly be anything more than a parlor game?
It is akin to suggesting that a robber who sticks up the local hardware store twice a month, but then gives the store back half of the loot, is somehow helping the hardware store stay solvent.
If the federal government was unable to take money from the citizens, what would they do for cash? How could they possibly give money to states to save them?
henny…
Sorry, but that comment is not supported by facts or logic.
Blame lies equally with both parties, there old man? Guess that’s why the public employee unions love Walker and Christie so much, and Illinois, California, Connecticut, New York and Massachusetts are all doing so well. All of those states have been effectively controlled by Democrats and their union thugs for years, even when they have had nominally republican governors.
This size of government at the State level is no different than at the Federal level. It is like a cancerous tumor, it just gets bigger. These politicians can talk until hell freezes over, but the only two things you can be sure of is that governments will get bigger and taxes will go up. Short of a successful revolution, nothing else will ever happen.
Two measures that might fix the problem of states running out of cash to fund federal entitlement programs is to (1) prohibit the feds from levying income tax of any kind (direct or indirect, on capital increase or labor), and (2) require the feds to finance their entitlement programs strictly through federal revenues. These measures would put the states in the position of the feds fiscal policy-wise and focus the feds on their constitutionally enumerated tasks. Each state would then have to decide whether to enact and finance a local version of Medicare and Medicaid, and the consequences of those local decisions would be born locally.
Then again, politicians of every stripe are vile, irresponsible creatures who can turn any land of plenty into an economically stagnant wasteland, so no one can make performance guarantees in perpetuity.
Lavaux,
” require the feds to finance their entitlement programs strictly through federal revenues”
I agree with the frustration, but if this were done, every state would simply load everyone onto whatever Federal Program there is, regardless of fit:
Blind? Federal Welfare, plan ‘X” for you.
Young single mother? Federal Welfare.
Food? No state paid school lunch, its Fed X to the rescue.
Disabled?, Job training? X marks the spot.
Federal programs would be abused to death, and would (surprise) outspend the states “contributions” in Federal taxes, and force us to ultimately (surprise) fund every state with increasing Federal Debt…which is (surprise) what we are already doing.
No, it will take “blood in the limosines”, and lots of it, before any politician cares about debt.
It might just be a coincidence that Trinity College gave them the boot. I’d need more information before I could be sure. The recession has colleges scrambling these days, and they might genuinely need the space.
There is such an inherent conflict of interest in the votes of those being paid by the public purse that it should be illegal. That for one should stop the unions dead in their tracks.
“Are there any Trinity alumni among my readers? I hope you’ll ponder this story when you get your next appeal for funds from your Alma Mater. I know I’d think twice before giving them a penny. No, wait a minute: that’s not right: I wouldn’t have to think twice: I know straight off that I would never give them a cent, and I’d encourage you to do likewise.”
I really doubt that you will find a TC alumni reading PJM. After all, it is a “Liberal Arts” school.
Maybe Randomengineer went to school there???????
These actions are similar to those called for by “Cloward Piven” and are seriously in play through out the country. There are hundreds of Unions, a limited number of Courts and only one Yankee Institute.
These kind of lawsuits are financially and morally debilitating. They are meant to sap the energies of the defendants.
The unions are just scratching the surface. Just wait until this election cycle moves into full swing.
There is an aspect of out of control spending that most people are not willing to recognise. As a retired UK state school teacher I am aware that the vast majority of expenditure ends up in the payroll. In my career I never came upon a public employee who merited more than $70 000 per year. And no one needs a pension greater than $40 000 to keep body and soul together in their declining years, starting at the age of 67. Plus your Department of Education has been barking mad for the best part of two generations. There are also the frankly luddite EPA and Department of Energy which have recently fallen into Ecofascist hands. All this applies at Federal, State and City levels. And on both sides of the pond. So much work to be done and so little time left!
Excellent piece, Mr. Kimball. Thank you very much for the CNN Money link to that map, and for excoriating the idiot unionistas who think it’s legitimate to sue an entity for justly criticizing their thuggery and extortionary practices.
One question, though. You called Christopher Shays the last Republican congressman from New England, with all other seats going blue in 2010. Are you being satirical? Because speaking for NH, both of our House seats are Republican (Charlie Bass is a RINO like none other and needs to be primaried out, but Guinta has been a quality Repub thus far), and Kelly Ayotte was elected to fill Judd Gregg’s seat in the Senate, retaining Republican control of that seat. Also, fully 20% of the state legislature seats nationwide that went red in 2010 were in New Hampshire. So we’re not quite so deeply blue as our surrounding New England states, thank heavens. And Maine is showing signs of reemerging sanity again thanks to Gov LePage.
(And of course there’re the “Maine Sisters” from Maine and Scott Brown (R(ino) – MA) from Mass in the Senate, for what their worth as Republicans.)
So I really don’t know if you meant to be satirical or were making a point that completely sailed over my head when you made your comment about Christopher Shays being the last Repub congressman in New England. Did you mean to say “in Connecticut?”
OH, and stupidly I forgot to edit out the part of my previous comment where I mentioned Mr Kimball’s notation that all other seats went blue in 2010. He of course meant all other CONNECTICUT seats went blue in 2010, not all New England seats. I’m a twit for not fixing that before hitting POST.
Lies, damn lies and statistics!
Sir, you are using old data and selecting only the data that fits your hypothesis.
TX operates on a two year budget period and – as a result – Governor Rick Perry was able to hide the massive debt accumulating in TX for well over a year. It is now clear that CT debt (in dollars) per citizen is indeed higher than TX, however, CT debt to GDP ratio is significantly lower than TX.
http://www.usdebtclock.org/state-debt-clocks/state-of-connecticut-debt-clock.html
http://www.usdebtclock.org/state-debt-clocks/state-of-texas-debt-clock.html
Check out the debt per citizen (and debt to GDP ration) in this state:
http://www.usdebtclock.org/state-debt-clocks/state-of-alaska-debt-clock.html
which also happens to be one of the biggest recipients of Federal tax dollars.
Although there are some exceptions – in general – what you are calling RED states tend to have lower (or no) state income taxes relative to BLUE states. This is one reason why benefits in BLUE states tend to be better than in RED states (as noted by at least one previous poster).
Most revealing is the fact that – in general – RED states also tend to receive far more in federal tax dollars than they pay to the federal government, while BLUE states tend to pay far more than they receive, which is just one reason why debt per citizen tends to be higher in BLUE states than in RED states.
In other words, citizens of BLUE states tax and borrow more in order to provide better benefits, while citizens of RED states refuse to tax themselves, but choose – instead – to rely on federal dollars to provide mediocre benefits.
An interesting aside is that – in general – OBESITY rates also tend to be far higher in RED states than in BLUE states. Picture pigs feeding at the trough!
I am all in favor of a ‘balanced’ approach to solving debt, budget deficit and tax problems. I suggest starting with this approach: Federal dollars paid to each state should EQUAL federal dollars collected from each state. Because – frankly – I am sick of subsidizing a bunch of overweight rednecks in RED states that have nothing better to do that park their fat asses in front of their computers and whine about that which they know nothing!
“meets academic pusillanimity”
How much cowardice and how much fellow-traveling?
After all, most of the academics that I know are left-wing scum.