Wanting to Govern

Greg Gianforte, whose gubernatorial campaign up until now has been soporifically bland, finally took an oblique shot at Steve Bullock this past week.  And really, if that’s the best that Gianforte’s got,  I don’t think the governor has much to worry about.

To be clear, Gianforte has yet to admit that his hat is in the ring. Rather, he has been conducting an “exploratory” campaign, which seems to involve running around the state glad handing the voters and asking them if they think he should run for real.  He’s been soliciting contributions to support this endeavor, which seems to me a bit odd - please support me so I can come round and ask if you support me - but what’s really up with this strategy appears to be that it allows Gianforte to campaign without saying anything of substance. Given the extremity of his views, that’s probably a good move, and he’s pretty much stuck to it. There have been a few bobbles, such as when he opined that “the concept of retirement is not biblical,” but generally he has avoided controversy by confining himself to uttering platitudes about the importance of good jobs.

So it was a departure from the norm when earlier this week Gianforte sent out an email (text below) announcing his support for Attorney General Tim Fox and his suit challenging the Clean Power Plan. And taking a whack at Steve Bullock, Gianforte said that had he been governor, he would have been standing right alongside Fox, unlike “some of our own state leaders” who are “silent … when it comes to taking a stand for Montana’s rights.”

Here's Gianforte's missive:

We all know the West is a special place - we make our living here.  Susan and I raised all four of our children here in Montana.

But the special beauty we’re privileged to enjoy makes special demands on our stewardship of the land - demands that are often misunderstood by DC bureaucrats and liberal interests.

Perhaps the first thing they misunderstand is that those who make their living off the land have the greatest incentive and obligation to protect it.

That DC does not understand this is, sadly, not a surprise. But how can some of our own state leaders be silent on the question when it comes to taking a stand for Montana’s rights?

Just last week, our Attorney General Tim Fox joined Montana as party to a lawsuit challenging the EPA’s new carbon regulations - regulations designed to cripple Montana’s coal industry and take jobs from our state. I can assure you, if I were Governor, I would have been standing alongside Attorney General Fox and his effort to block President Obama’s plan.

President Obama’s plan will shut down Colstrip, and high wage coal jobs all across the state. The threats from Washington must be defeated.

If I decide to run and become your next Governor, you can bet I’ll take a defiant tone in the face of EPA intrusion. I’ll fight wherever and however I can to ensure Montana’s future.

And the more I hear from you, the more encouraged I am to run to take on these challenges.

We’ll be holding our state’s leadership accountable as I travel the state and hear your concerns.

If you share my concern for the future of Colstrip and high wage mining jobs all across Montana, join me on Facebook and follow us on Twitter. Also, please sign this this petition to stand up for Colstrip and high wage Montana jobs.

And forward this email to like-minded Montanans - we need them to join the team.

Let’s demand more from our leadership, together.

Thanks as always,

Greg

Like Steve Daines, Gianforte seems to think that President Obama is shoving the Clean Power Plan down our throats just “to cripple Montana’s coal industry and take jobs from our state.” He doesn’t mention a single word about climate change and doesn’t seem to know that the Clean Power Plan would produce billions of dollars of public health and climate benefits. And he fails to recognize that unless the United States is committed to seriously reducing carbon emissions - and Montana, like other states, is prepared to do its part - we will never be in a position to demand international cooperation for climate action.

That’s all pretty standard stuff, but Gianforte rings the changes on the Republican message with results that are downright bizarre. For one thing, he appears to think that the Clean Power Plan has something to do with stewardship of the land!  It’s hard to believe that he has really gone that far astray - maybe all he’s trying to do is perk up the ears of the Sage Brush Rebels  – but either way, it’s worrisome. And then there’s this business about “high wage coal jobs all across the state." You’d think that after all that exploratory campaigning he’s done, Gianforte would know where the coal mines are and aren’t.

And what is he going to do about this terrible plan? Well, besides standing resolutely alongside Tim Fox, if Gianforte decides to run and becomes our next governor, we can “bet” that he’ll take a “defiant tone in the face of EPA intrusion.” Wow, that’ll help.

The fact of the matter is that Gianforte doesn’t really look like someone who wants or is able to govern. He doesn’t see the dimensions of the crisis we are facing; he is willing to cede the lead to the attorney general; he is prepared only to stamp his feet and just say no; he doesn’t appear to recognize the importance of coming up with Montana made solutions; he’s not sure he wants to be governor; and if he is, all he can tell us is that he’ll take a “defiant tone” with the EPA.  And in going up against Steve Bullock, he’s taking on a guy who not only wants to govern, but actually has; a guy that in the face of do-nothing opposition has brought on Medicaid expansion and campaign finance reform and the water compact and a bunch of other stuff. In short, Bullock has governed and Gianforte doesn’t even seem to know what governing is all about. 

Coal Tax Reality Check

When it comes to coal taxes, Duane Ankney needs to run a reality check.

Senator Ankney, who hails from Colstrip and is proud to be a retired coal miner, was in Longview, Washington this week promoting the construction of a terminal through which, he hopes, millions of tons of Powder River coal will someday be exported to Asia.

It’s easy to understand Ankney’s enthusiasm for this project. The coal industry has been taking it on the chin recently.  In the face of competition from renewables and, especially, natural gas, the electric power industry is moving away from coal as a fuel, and domestic coal consumption is falling. As the Clean Power Plan goes into effect and states are required to reduce their carbon emissions, the decline will almost certainly accelerate. So the only potential bright spot for coal – such as it may be - is exports.

Now nobody in their right mind is going to deny that coal exports will be good for the economy of Colstrip and Rosebud County, or for the miners and their families who Ankney represents. And it’s certainly okay for Ankney to be promoting those exports however he can – after all, all politics being local, the guy’s just doing his job.

But what’s not okay is for the senator to make a bunch of fanciful claims about the importance of coal to the whole rest of the state in order to scare people into propping the industry up, no matter what the consequences. And that’s apparently what happened in Washington. According to the Longview Daily News, Ankney told the local folks who are worried about the effects of the terminal on their community, that “Montana depends on coal taxes.” Those taxes “pretty much keeps the wheels greased and the Montana economy running.”

This is simply outlandish. In 2013, the last year for which I can find complete data from the US Census Bureau, the state and Montana local governments collected a total of about $3.85 billion in taxes. That same year, according to the latest Montana Department of Revenue Biennial Report, coal paid severance and gross proceeds taxes of a tad more than $76 million, or 1.9 percent of the total. That, by way of comparison, is about the same as smokers paid in cigarette taxes.

But wait, there’s more! Taxes are actually a relatively modest proportion of the total revenue of the state and local governments. There’s also boatloads of money from the Federal government, hunting license fees, University system tuition, interest earnings, property sales, etc., etc. Add all those revenues, including taxes, up, and you come up with a total for 2013 of $8.06 billion, about .9 percent of which comes from coal. In case you can’t quite wrap your head around that number, the picture above shows the total revenue pie, including the slice of revenue coming from coal. If you’re having trouble seeing that slice, well, that’s the point. And if you’re having trouble figuring out how we can possibly be dependent on that miniscule slice to "pretty much" keep the "wheels greased and the Montana economy running," that’s also the point.

Senator Ankney will no doubt want to argue that because some coal severance tax revenues are earmarked for programs like Long Range Building, those programs are dependent on coal taxes. But it’s not true. If the coal tax revenue we are collecting today were to disappear overnight, we could continue to fund every expenditure we are funding right now, and still have a hefty surplus and money in the bank.

I’m not denying that declining coal production means real trouble for coal miners and their families and communities. But in thinking about the future of coal and climate policy, we shouldn’t be stampeded into thinking that lower production spells disaster for the state’s economy or the public purse, because it just isn’t so.

Falling Off the Gravy Train

If, like Doyle McManus and a whole lot of other people, you are trying to understand the utter vacuity of the Republican presidential primary, listen to Bernie Sanders.

McManus, a regular on the Los Angeles Times op-ed page, is just plain perplexed by the Republican contest. Understandably so: there is a lot of weirdness floating around out there, including, but not limited to, the enormous size of the field, the presence of loopy candidates who have absolutely no prospect of winning, and, of course, the emergence of Donald Trump as the front runner.

But those aren’t the oddities that have McManus scratching his head. No, for him,

“The strangest thing about this year's Republican campaign (other than Trump) is how it's been hijacked by social issues: immigration, abortion, even whether a Muslim can serve as president. The issues most voters list as their biggest concerns — economic growth and jobs — have taken a back seat.

“Yes, the leading candidates all promise they'll spur the economy by lowering taxes and cutting government spending — standard conservative boilerplate.

“But except for Trump, Jeb Bush and Marco Rubio, none of them have said exactly how. “

Now I don’t want to take anything away from McManus - he’s got a point - but really, there’s no mystery here. The reason Trump, Huckabee, Fiorina, et. al. aren’t talking about economic growth and jobs is that they can’t, at least with a straight face. Because if they’ve paid any attention at all, they know that Sanders has got it right: since Ronald Reagan entered the White House 35 years ago, economic growth, wherever it came from, has benefited the average American household hardly at all.

You’ve no doubt heard how the Republican prescription is supposed to work. Cut taxes (especially for the rich), reduce the size of government, and get rid of all those pesky regulations, environmental laws and consumer protections, and we will liberate the private sector and the economy will flourish. And despite the fact we seem to be handing out all the goodies to the richest people in the country, everybody will be better off because they’ll all be riding on the same gravy train. Unless, of course, they fall off.

One part of this scenario played out as expected: the economy did grow. Between the end of 1980 (just before Reagan took office) and the end of 2014, real per capita GDP grew at an average of 1.7 percent per year. Whether Republican policy was responsible for that growth is another matter. Growth was just as robust under Clinton as it was under Reagan. The worst growth record was compiled by the senior Bush. The junior Bush and Obama come out about equal.* And over the entire 34 years since Reagan was elected, growth has been almost exactly the same as it was during the 34 years before he entered the White House.

The real problem, as Sanders tells us over and over again, is what happened to the distribution of income. Since 1980, as income grew, the share of income received by the least wealthy 80 percent of all US households went down, which of course meant that the share of the wealthiest 20 percent grew. And the farther up households were in that wealthiest 20 percent - up there in the lofty regions of the top 5 or the infamous top 1 percent – the more their share grew.**

Of course, when income is rising, the fact that a household’s share of income is falling doesn’t necessarily mean it’s getting worse off - one tenth of a 14 inch pizza is more pie than one eight of a 12 incher. But for people at the bottom of the income pile, loss of share pretty much offset total income growth. In 2014 households in the bottom fifth had almost exactly the same real income as they had in 1980. Over the same 34 years, income of households in the second and third fifths had grown 10 percent or less. At the other end of the scale, households in the top 5 percent saw their real income increase by more than 70 percent.

As the New York Times reported last week, to date just 158 families have bankrolled the campaigns of the current crop of presidential candidates, with the vast majority of the money going to Republicans. Needless to say, these are the people who have won the income distribution lottery, and they are not giving any of the jackpot to Bernie Sanders. And what are Republicans benefitting from this largesse supposed to do when the inconvenient issue of income inequality comes up? Well, as McManus says, talk about something else.

*That’s comparing the average annual rate of growth over 8 years for Bush (0.8 percent) to 6 years for Obama (0.7 percent). In the two years left to Obama, that average will no doubt rise (over the past year growth was about 2 percent), and the two Bushes will end up with the worst economic records in the past four decades.

** The share of the wealthiest 20 percent grew by about 7.2 percentage points, with three fourths of that gain going to the wealthiest 5 percent.