Tuesday, February 13, 2018

Silver Linings

Rep. Wendy McKamey is obviously on the right track when she urges Congress, in today’s Missoulian, to address the critical backlog of deferred maintenance in the nation’s national parks.  And folks down the Bitterroot are right to be alarmed by the President’s intention, in the budget he sent to Congress yesterday, to zero out an EPA program which restores degraded waterways and improves water quality. But as critical as these efforts are, the arguments that McKamey and the Bitterrooters are making for them are really pretty perverse.  For McKamey, the “silver lining” in the enormous task of restoring national parks is that it will create jobs - lots of jobs. For clean water advocates and activists in the Bitterroot, it’s the flow of dollars to contractors who repair roads that are sloughing off into creeks, or the nurseries that provide the plant stock for revegetating stream banks.

Now those are obviously good things. Construction workers need jobs, contractors need contracts, and nurseries need to sell plants. But in the final analysis, what the argument boils down to is this: these programs are a good thing because they will cost a lot.  The implication is that if we could somehow contrive to maintain parks and rivers without creating jobs or letting contracts or buying supplies, that is, without cost, these programs would be less worthwhile. 

What’s going on here is, of course, nothing new and it would be unfair to suggest that McKamey or the water advocates invented this fallacy. On the contrary, it’s standard operating procedure, when making decisions about the use of public resources, to choose the use that has the greatest economic impact. It’s far more politically astute and makes you sound far more hard headed and fiscally prudent to defend expensive programs because they will create jobs and sales, than to claim that they will have ephemeral benefits like historical preservation or access to wildlife viewing or healthier riparian habitat. 

But advocating for a public program because it has a fat economic footprint can take you down a blind alley.  There are a lot of environmental activists in Montana, for example, who argue that our stake in combatting climate change is the damage that will otherwise be done to our outdoor, agricultural and tourism economies. Obviously, they know that there is much, much more a stake than the jobs of fishing guides or motel workers or farmers, but it’s those jobs that they hope will get the attention of legislators and editorial writers. But walk down that alley and anyone can follow you. Once jobs become the only thing that counts, the loss of jobs for coal miners or oil rig workers becomes a perfectly plausible and appropriate reason for opposing any effort to arrest climate change.  

Indeed, if we’re going to arrest climate change, what’s to stop us from worrying about the loss of jobs for the construction workers who will move Miami to higher ground if sea levels keep on rising? That may sound crazy, but isn’t it something like what McKamey is implying? One of the “benefits” of neglecting maintenance and letting our national parks go to rack and ruin is the jobs that will be created cleaning the mess up!

What gets lost in this obsession with jobs is the fact that what both McKamey and the Bitterroot water folks are really talking about is the provision and maintenance of infrastructure. Not in tthe limited sense of bridges or roads or airports, but in the expansive sense of the stock of created and natural public capital. It’s stuff that contributes to our wellbeing just like bridges and roads do, and it needs to be attended to for that reason. But it’s not being attended to; it’s being abandoned, at least by the President. And he’s abandoning it at a time when he says, not very convincingly, that he wants to rebuild the national infrastructure. 

Ah well, looking for consistency in the intentions of Donald Trump, now that is a job.

Friday, February 9, 2018

A Parting of the Ways on Guns

I like all the candidates who are running for Congress in the Democratic primary. On almost every issue their hearts and brains are in the right places. I’ve worked closely with a couple of them in the legislature and respect their abilities.  Some are personal friends on whom I wouldn’t wish the onerous task of raising money, campaigning tirelessly, winning a primary, and taking on and beating Greg Gianforte.

But when it comes to the issue of guns, we reach a parting of the ways.

At a candidate forum in Missoula last night, when they were asked whether they would support expanded background checks for gun sales, all five Democratic candidates said that they would not.  All of them expressed appropriate alarm about gun violence and advocated for better enforcement of gun laws already on the books. But when it came to background checks for the thousands and thousands of guns sold privately or at gun shows, no deal.  As far as I am concerned, that’s an utterly indefensible position.

There’s no mystery, of course, about what’s going on here. I was sitting next to a veteran and venerable Montana political reporter at the forum, and when I began to gnash my teeth and mutter as one candidate after another caved in on the question, she looked at me like I had lost my mind. Never, in her experience, had a Montana Democrat been willing to risk challenging the NRA. There was nothing new to see here folks, so move along.

She’s probably right and I get that, but I am not convinced that what the NRA wants, and what the public thinks is needed, are the same thing. I’m guessing that for most people it is painfully obvious that tougher enforcement of existing background check laws, which apply to sales by licensed dealers, is going to do absolutely nothing to prevent people who we all agree shouldn’t have them from buying guns on-line, or through a classified ad in the newspaper, or at a gun show. In fact, stricter enforcement of existing laws will only lead to greater resort to those loopholes.

Part of the problem here is that we tend to view the issue of effective background checks through the lens of the terrible mass killings that have become a regular part of our national life. Every time some madman or abuser or deranged high school student shoots and kills churchgoers, or fires into a crowd at a concert or club, or murders  a classroom full of kids, we ask where the guns came from, and too often the answer is that they were purchased legally, or taken from the family gun closet, or bought on the street. And from this we shake our heads and sadly conclude, once again, that expanded background checks couldn’t have prevented this most recent mass shooting.

And it’s true: expanded background checks will not eradicate mass shootings. But that’s not the point. Mass shootings, as terrible and visible as they are, are the tip of the iceberg. There are about 30,000 gun deaths in the United States every year, including suicides. We have far and away the highest incidence of gun violence in the world, except for countries being run by drug gangs or torn apart by civil wars. It’s those countries whose company we keep when it comes to killing people with guns. And killing is just part of the story; there’s also armed robbery, drive-by shootings, road rage, intimidation, and the list goes on.

The fact is that the United States is awash in guns and there is a well documented and well understood process by which those guns flow from the hands of legitimate, law abiding owners into the hands of people who shouldn’t have them and will use them to commit crimes. Comprehensive background checks obviously can’t prevent gun crimes, but they can staunch that flow of guns into the wrong hands and reduce the astronomical rate of gun violence in this country. 

And that’s something I would hope any Democrat running for Congress could get behind.

Wednesday, October 18, 2017

A Perfect Storm

If you’ve been paying attention at all to the state’s current budget crisis, you already know that legislative Republicans have been doing their damnedest to deny any responsibility for fixing the mess, let alone acknowledging they created it in the first place.  As far as they’re concerned, it’s up to the governor to balance the budget with brutal spending cuts, and they refuse to recognize, or admit, that those cuts could do serious damage to essential government programs.

Earlier this week the Republican House leadership attempted to rationalize this remarkable callousness in a Missoulian guest column claiming that “Montana has a spending problem, not a revenue problem.” It was a valiant effort, I suppose, but what it produced was a perfect storm of shoddy reasoning, mangled facts and selective memory. This gets a little tedious, but bear with me.

According to these Republican luminaries, the “root cause of Montana’s budget challenges” is that the state is “simply spending too much money,” and by way of evidence, they cite the fact that since 2012, general fund revenue is up 14 percent while spending is up by 32 percent. Now if we are trying to figure out if we have a “spending problem” or a “revenue problem,” by itself this comparison is of no earthly use. The numbers no more support a claim that we are spending too much than that we are not raising enough revenue to meet our needs. 

And there’s another problem here: it’s always possible to cherry pick starting and ending dates for a comparison like this that tend to prove whatever point you are trying to make, and in fact, that’s what these guys did in this instance. Look at the top chart below, which shows General Fund revenue and expenditures since 2002.* In 2012 taxes exceeded expenditure, and this year, 2017, it was the other way around. Pick two years like that, and necessarily (it’s just arithmetic) expenditures are going to grow faster than revenue. But what the top chart also shows is that in the long run, expenditures and revenue track each other pretty closely. And how could it be otherwise? We are required by the constitution to balance the budget, which means, in the end, that we cannot spend more that we take in.

If a transitory imbalance between spending and revenue can’t really tell us where our “problem” lies, what can? Well, to me it seems reasonable to say we have a spending problem if we’re spending more than we need to or can afford, given the productivity of the state’s economy and the income it‘s capable of generating. And we have a revenue problem if the revenue we are collecting falls behind what we can afford and is needed to fund essential programs.

Republican leaders seem to kind-of get that, when they claim that revenue growth has been adequate because it has outstripped both inflation and the growth of population combined. But that combination is not a good measure of the level of economic activity, income, or what we can afford; those are best measured by gross state product, which is basically the total value of everything - goods and services - that we produce in the state and ultimately, the source of our material well being. Look at the second chart: since 2002, the growth of state spending and revenue has fallen significantly behind the growth of gross state product. There is no indication here that we have spent beyond our means; on the contrary, we could afford to do more, and we certainly can afford to do what we are doing now. 

The House leaders also claim that 14 percent growth in revenue since 2012 must be enough because  after all, “Most Montana families have not seen their income grow by 14 percent since 2012.” Where they got this factoid is anyone’s guess,** but it really doesn’t matter: the comparison of total tax collections to individual family incomes is meaningless. What is instructive is the fact that while total tax collections were rising by 14 percent, total personal income earned by Montanans rose by 19 percent.

The House leadership tries to explain the glaring disconnect between a high performing economy and sluggish revenue growth by invoking what they call the “long term trend of trading high-paying natural resource jobs for lower-paying service and tourism jobs.” We might imagine that that shift has reduced average earnings and depressed tax collections, except for the fact that average earnings have risen, not fallen, and income tax collections have risen, not fallen, with respect to personal income.***

In the end, of course, all this Republican nonsense about a “spending problem” is intended to rid them of any responsibility for going back to Helena and working on a reasonable solution to the current budget crisis. As they see it, if the problem is spending, the solution is cuts. And if it’s cuts we need, well then the governor has the power to make them and ought to get on with the job. All he has to do is fire some of those useless, unneeded state government employees, never mind the fact that the number of state employee positions funded has fallen since 2011. Look:

The real irony in all this Republican whining about a “spending problem” is that if we have one, it is the product of budgets created by Republican controlled legislatures ever since Steve Bullock moved into the governor’s office.**** If we are spending money on things we don’t need or can’t afford, or if there are too many people on the public payroll (and I don’t think any of that is the case) then the Republicans have only themselves to blame. But instead of blaming themselves they’re dumping the whole mess on Steve Bullock’s desk and shouting over their shoulders as they walk out of the room, “Here, governor, fix this because we sure as hell won’t!”

* All three charts in this post are from a report prepared by the Legislative Fiscal Division at the Montana Legislature.

** It may be right, of course. Given the growth of income inequality, it is true that a majority of Montana families experience below average growth in income. A disproportionate share of all income growth is captured by a relatively small segment of the population.

*** The impact on average earnings of the shift away from natural resource employment is really pretty small (shameless plug: see Post Cowboy Economics, by Tom Power and yours truly) and the Republican writers can only bizarrely defend their claim that the shift has crimped tax collections by citing budget director Dan Villa’s observation that “Timber mills paid property taxes. Hospitals do not.” Of course that has nothing to do with wages: hospitals pay lower property taxes because they are largely tax exempt. And in 2016, hospital pay per job was 143 percent of average pay per job across all industries, making them a pretty poor example of “lower-paying service and tourism jobs.”

****Please note: The budget passed by the 2017 legislature contains more spending than the governor asked at the start of the session.