Sunday, June 18, 2017

GOP Healthcare Reform Is A Magical Mystery Tour

     Looks like the U.S. Congress is celebrating the golden anniversary of a great album (Magical Mystery Tour by The Beatles) by coming out with its own cover of it.  If there ever were such thing as a political "magical mystery
AKA GOP 
Healthcare Reform
tour," our reps in D.C. have created it.  I think they call this version of it "Obamacare repeal," but shrouded as it is in political mystery, I doubt that anyone really can put a title on it, much less define what it's actually supposed to accomplish. Our South Dakota congressional threesome, Noem, Rounds and Thune, seem to have a vague idea that they're tasked with repealing and replacing the Affordable Care Act that sprang to life during the Obama administration, but so far no specifics have emerged.  Actually, I don't think any generalities have emerged either.  This is mysterious and magical, all right.

    "Surreal" might also apply.  Just last week, President Trump disavowed a House of Representatives version of Obamacare repeal that passed in early May. He said it was "mean." Yet a month ago he was celebrating its passage in the House with a Rose Garden ceremony, vowing that "we want to brag about this plan."  Trump's surrogate in South Dakota, U.S. Representative Kristi Noem voted for its passage, saying the bill "reflected" the vision based "on the proposal we've been working on with President Trump."  Does Noem now share Trump's retrospective regrets about the bill and join in with the President, condemning the House product as "mean?"  I imagine she'll clam up on this one, even though she's been reflexively following his lead and his rhetoric on ending Obamacare every step of the way.
     Now that repealing and replacing ACA has been defaulted to the Senate, there isn't much clarity about the contents of the proposal in that chamber, either.  Long promised by President Trump, he repeatedly vowed to make repeal a "day one" priority, saying to a crowd in Florida just before the election "it's going to be so easy."  And how easy has it so far been in its political incubator in the Senate?  It's impossible to say.  There's no public dialogue about what the Senators are considering.  Our Senator John Thune claims that the internal "working group" meetings are "open to anybody," which doesn't square with reports that numerous healthcare organizations (the American Cancer Society, the Muscular Dystrophy Association--groups like that, about 120 of them) have been rebuffed in their efforts to meet with Senators working on the bill.  
     If the deliberations are as transparent as Thune claims, why are these organizations that are clamoring to be a legitimate part of the conversation being turned away? South Dakotans have every reason and right to get a sense of how our essential healthcare options are likely to be affected by discussions in the Senate.  Leaving all of us dangling like this is a poor excuse for representation.

Thursday, June 8, 2017

The Laffable Curve Flatlines In Kansas. South Dakotans, Take Heed

     In an eye-catching repudiation of the "Laffer Curve," the Kansas state legislature yesterday said "no thank you" to yet more of the economic self-flagellation that has driven that
Take Heed, South Dakotans
Brownback's A Huckster
state's economy into the ground.  
The pain started in 2012, when newly elected Governor Sam Brownback turned his state into a laboratory for litmus-testing Economist Arthur Laffer's theory that tax-cuts have a stimulative effect on the economy.  Laffer's "curve" reputed to show that lower tax rates boost economic growth, a dogma that is the centerpiece of trickle-down, Tea Party-ish economics.  Often dubbed a "miracle" by Brownback's devotees, the result after 4 years has been so disastrous for Kansas that Brownback's plan was trashed by his own heavily-Republican legislature.  State reps yesterday overrode the governor's veto of their plan to roll back those tax cuts, which have left a $1 billion hole in the state's budget.  

     Brownback's claims that his plan has boosted the Kansas economy are just as dubious as his promise that cutting taxes would increase state revenues.  Last October The Wichita Eagle did an item-by-item refutation of the governor's bragging points, which showed that the state's economy has been limping along, its economy growing at about half the national rate.  To me the final proof in that pudding is the sharp drop in anticipated tax revenues, which should have gone the other way if the state's economy was indeed doing well.  In any event, yesterday's legislative override couldn't be a starker assessment of how even devoted Republicans realize the futility of trickle-down economics.  There is no evidence, none, that shows tax-cuts have a stimulative effect on the economy and subsequent tax revenues.  In fact, using President George W. Bush's cuts as an example, exactly the opposite transpired.  Some say Reagan's worked well, but private sector job growth and tax revenue growth during the Reagan years were so-so at best.
     From our South Dakota perspective we should be wary of this nonsense on two levels. First,
We're Not In Kansas Anymore
We're In Brownbackistan

given our propensity for shortfalls in state revenues that occur because of our regressive sales tax/no income tax structure and its dependence on high commodity prices to stimulate our economy, we need to think about reforming our tax system in a way that doesn't rely on swings in world market prices for grain and livestock.  Next, our congressional delegation should be wary of jumping on President Trump's promise to supercharge the economy with tax cuts for high earners.  Last Fall our Congresswoman Kristi Noem breezily and uncritically touted a tax reform package of tax cuts that she claimed would result in a 9.1% growth rate, which showed that she knows neither History, nor Economics, nor what she's talking about. The Kansas growth rate under Brownback has been 1.2%.  Given that the Laffer Curve has been a floppola at both the national and state levels,  this notion that cutting taxes automatically does all of us some good is the kind of snake oil that sells well to rubes but in the end only makes its hucksters some money.  

Tuesday, June 6, 2017

Could Trump Be Any Worse For South Dakota?

     South Dakotans, who went 2-to-1 for Trump last November in an outburst of euphoric infatuation, will soon be sobering up as they consider what the Trump administration's budget
Indeed
Buyer's Remorse,  Anyone?
has in store for rural states like ours.  
We rank 4th among states in terms of how much of our state's revenues come from the federal government (at $1.6 billion, about 40% overall, amounting to nearly $2 thousand apiece in 2013, the latest year I could find). Trump's cuts in programs directed at South Dakota are a fine how-do-you-do to one of his politically friendliest states.  He's already shown serious disdain for South Dakota's economic interests, considering Trump's hostility toward international trade deals that have been a boon for our farmers and ranchers during the past few decades.  South Dakota's ag economy has much at stake in the world's markets for grain and livestock as Trump's new and severely constricted trading relationships evolve in coming years.  Major farm groups are already reacting with "shock and dismay" toward the possibilities in reports from ag information giant DTN. The recent fall of commodity prices will probably extend farther into the future if our NAFTA trading partners, Mexico in particular, turn to other sources for their grain imports should Trump's threats to dismantle that agreement play out.  

     As if that "drop dead" attitude toward our state's largest industry isn't enough to compel serious concern, the Trump administration's proposed budget looks to be a real kick in the rear end to South Dakotans.  If you're cheering the possibility of severe cutbacks in most areas of federal spending in order to raise extra money for the Defense Department, you should know that much more than our ag sector will be affected by Trump-o-nomics.  The budget cuts for rural programs overseen by the Department of Agriculture are more than mere snips.  In some cases (rural water and waste disposal, direct loans for single family housing are examples) the funding disappears altogether, amounting to amputation.  In others the cuts are merely severe: rural utilities will lose billions, rural business owners tens of millions.  Trump, who "loves the poorly educated"  will continue on his quest to expand that element of his base by zeroing out programs that fund community learning centers, literacy development, and other educational opportunity grants. 
     I suppose that some devoted guns-over-butter Trumpistas are willing to trade these programs in on another aircraft carrier or two, but for most of us rural denizens a bit of consideration seems to be in order at this point.  Our generally kowtowing Congressional reps are likely to feel some heat over their champion Trump's priorities, which is why the phrase "dead on arrival" is frequently applied to Trump's budget as it moves toward Congress for consideration.   Worthy outcome as that would be, there's a much more practical aftereffect, disclosing as it does the indifference that the Trump administration has for the impact of his rhetoric on the day to day lives of millions of rural Americans.  

Tuesday, May 30, 2017

Q For SD Senators Thune And Rounds: Why Do You Hate A Free And Open Internet?

     With their recent votes against implementation of an internet privacy rule that would have barred service providers from selling our browsing histories, Senators John Thune and Mike Rounds (both
The Future Of The Internet?
Ugly
R, SD) confirmed their  support for assaulting the neutrality of the internet.  A couple of years ago, when he lost his battle against maintaining the

internet's status as a public information highway, meaning the flow of information had to remain open and unfettered by service providers, Thune called a decision to retain oversight of the internet by the Federal Communications Commission "partisan . . . a power grab . . . and regulatory overreach." The telecom industry, which has provided Thune with $220,000 in direct campaign contributions since 2011 (placing the industry among his top ten contributors) took the political hit.  Its champion Thune dutifully responded.  Why Thune thought that allowing ISPs to create various channels of information with separate pricing for each of them would benefit us ordinary South Dakotans is still kind of a mystery to me.  The status quo lets us turn on our browsers and watch all the content that's out there without having to pay more for some information that's deemed "premium." I wish Thune would explain how his new set-up would be better for us.  
     I know the industry, via the new FCC commissioner, Trump-appointee Ajit Pai, claims that investment and innovation are stymied by the requirement that content should be provided on an equal-access basis.  Pai has repeatedly made that case over the years, and now that his political benefactor Donald Trump has ascended to power, Pai has his best chance ever at turning the internet into an online version of cable television.  When our Senator Thune (along with our Senator Rounds, whose $30k from Verizon makes that company his 3rd largest contributor) last month voted to repeal internet browser privacy rules set to go into effect (but delayed by the courts), the first shots were fired across the bow of consumer interests.  As to the lack of investment argument, it's really a bunch of hooey.  The telecom "group"  as of 2016 was by far the leading industry in terms of  spending, with the financial information giant Investopedia noting that in 2015 the industry "broke
out from the crowd" in terms of capital spending.  Meantime, using publicly available SEC data, The
The Fight Goes On
Keep It Free
Nation notes
that overall spending by the industry is up 5% in the past two years, with some areas of spending up as much as 50%. This is not an industry that lacks for growth and development opportunities.  

     What the industry lacks, and apparently sorely desires, is the chance to wrest control of the internet from public watchdogs like the FCC and turn it into their private universe of varying contents and speeds.  I don't get how allowing service providers to control content is an improvement on the status quo, and would like an explanation from our Senators Thune and Rounds as to why they believe it is. 

Sunday, May 21, 2017

Trump "Loves The Poorly Educated" So Much He Wants To Make More Of Them

   In its continuing crusade to weaken programs that help the poor,  President Trump's budget agenda wants Rapid City Area Schools to lose a significant chunk of  Title I funding. Title I of the
A Worthy Concept
It's Worth The Money
Elementary and Secondary Education Act, enacted in 1965 as one of President Lyndon Johnson's "War on Poverty" initiatives, provides direct federal money to schools and districts with significant concentrations of students from low-income families.  As Trump's proposed budget will cut Department of Education funding by about 14%, or about $9 billion, programs like Title I will follow suit, right down to the local level, with Rapid City public schools losing about $600 thousand from a $4.5 million annual grant.  This is in keeping with President Trump's budget, which will slash funding from 12 cabinet departments and increase it for three, Defense, Homeland Security, and Veterans Affairs.

      As a disabled vet I cheer the support for my brethren, but in the much bigger picture, I don't like this particular prioritization.  When it comes to veterans and defense, reducing support for our many economically-disadvantaged kids seems like a tough way to help our vets--and certainly a questionable method of paying for a Defense establishment that already spends more than the next 7 countries combined.  I wish the White House and our congressional reps would consider what we'd lose here in Rapid City (as well as every other school district in this state) if Trump's budget materializes.  Professional training and technology spending would be most immediately affected, taking away the extra attention and assets that are probably needed to give these disadvantaged kids an extra boost in school.
     Longitudinal (read:  follow-up) studies are probably impossible to find at a local level, but researchers have seen some correlation between Title I spending and individual achievement on a national scale.  Studies on academic success are a mixed bag, but a most interesting conclusion was reached in 2015 at the University of California, where researchers followed participants into their adult economic outcomes and found positive correlations between Title I funding increases and "higher earnings and work hours, reductions in incarceration" and reductions in poverty rates. The Trump administration, focused as it is on "jobs, jobs, jobs" should take note.  The link between poverty and poor academic achievement is a long standing reality in the world of public education, but as Trump, who "loves the poorly educated" should know, when it comes to economic success, the effects of good character are as meaningful as the effects of education.  If the UC researchers are correct, Title I and its strategies for developing self-motivation may have as much, possibly greater, impact on the former than it does on the latter.  
     The pedagogical magic of that connection seems clear enough to researchers.  It would be a shame to weaken an opportunity like that for South Dakota's neediest kids. 

Sunday, May 14, 2017

Some Dot-Connecting Between Fairness And Efficiency

   What, again?  Governor Daugaard last week ordered immediate cuts in state agency budgets because tax receipts this year have come up short by 10-15 million bucks.  In his typical
caretaker-like fashion, the governor is being re-active when what we need is pro-active leadership.
Daugaard
Banking On Tourists
The chronic problem with the falloff in sales tax receipts in this state isn't likely to get solved by doing nothing but cutting overhead, or, more to the point, by standing around and crossing our fingers that grain and livestock prices will reverse course, go significantly higher, and pull enough revenues into this state to get the cash streams flowing again.  This rather calcified process that masquerades as policy has been the bane of the Daugaard administration for years now.  In 2014, SD forecasts for sales taxes fell significantly short of estimates, much as they have this year, with no 2017 relief in sight beyond the hope of a strong tourist season bringing in a surge of cash to help the state pay its bills.  

     Even should that occur, we're continuing to rely on broad economic and market forces beyond our control to determine our state's fiscal destiny.  Twice now in the past 3 years, forecasters have gotten it wrong and there's no reason to expect their crystal balls to get any more prescient. Meantime, our sales tax revenues fluctuate with the whims of the commodity markets, which seems amazingly inefficient, considering that taxation based on personal income would probably be a much more stable alternative.  The ag sector in South Dakota now has 76% less money to spend than it did in 2011, to the tune of around $3 billion. That debacle, as noted by our elected officials, is probably the most responsible for our sales tax woes.  Meantime, I was startled to discover in a report from
Unfair
And Inefficient
the U.S. Commerce Department's Bureau of Economic Analysis that our  personal income--derived from a wide array of non-ag related businesses in South Dakota--during the decade from 2006-2016 grew at a compound annual rate of 4.2%, substantially faster than the U.S. growth rate of 3.5%. 

     We're too self-fixated on our status as a state with no income taxes, as I often hear, but I think some comprehensive tax reform that reduces sales taxes, puts a freeze on property taxes with strict limitations on annual increases, and initiates a progressive tax on income, both personal and corporate, merits consideration.  Ideally it would result in a tax shift, not a tax increase.  Using U.S. Census Bureau data, the financial information website 24/7 Wall Street reports that income growth in South Dakota households from 2011-2015 ranged from 5% in the middle levels to nearly 10% in the upper.  The story lists us as one of the 9 states in the country where the middle class is being left behind,  income growth disparity (definitely a subject worth pursuing in another post) being a good reason why. Given the trend, a graduated income tax seems like a reasonable way to expect people making good money here to bear their share of the burden, which they now escape given our regressive and bumpy sales tax-dependent system. The dots between tax fairness and smoother government revenue streams look connectable to me.  

Sunday, May 7, 2017

Repeal, Replace, Repent

      Giddy with the consequences of her recent vote to repeal and replace Obamacare, South Dakota's lone congresswoman, Republican Kristi Noem, was clear about what it meant to her.
Working?  Maybe
Thinking?  Um, I Doubt It
She said "it's a very significant day for me" because "I loved the fact that we repealed the mandates." Apparently, getting rid of those mandates was the main driver of her vote to toss ACA out altogether, circumspection about the full implications of her vote be hanged.  In their rush to create the appearance of a legislative victory for the Trump administration, Noem and her fellow Republicans in the House of Representatives abandoned all pretense of deliberation and put together a bill that even Noem acknowledges has its flaws.  She knows the House whipped up a batch of hasty pudding and even reiterates its pitfalls, particularly in the way it gives states so much leeway in developing requirements for insurers on matters like "essential services" and price protections for older and sicker folk. To questions about that, Noem plaintively responds, "I didn't get to shut the door to my office and write it myself."  Please.

     We South Dakotans have to hope that our GOP Senators Rounds and Thune can give this package a serious once-over before they go the Kristi Noem-esque rubber stamp route.  Besides the matters of making sure all of us get adequate and affordable health care, there are broader economic implications that seem to have whizzed right past the partisan heads in the House.  For one thing, the job-conscious Trump administration should consider that the growth in healthcare jobs (about 10% faster than the overall rate of job growth) in this country during the past few years has more than offset the loss of manufacturing and construction jobs.  Healthcare consulting firm Oliver, Wyman tells CNN "Obamacare was a de facto jobs program
Our Dynamic Duo
Rounds and Thune
whether it was intended that way or not." Researchers at Trump's alma mater UPenn say that the expected decrease in healthcare spending "will translate into a contraction in the healthcare sector."  


     Besides job losses, which are bound to hit South Dakota's 30,000 healthcare pros and technicians, there's the vulnerability of our rural hospitals to consider.  They've been having a tough enough time as it is, especially in states like South Dakota that have refused to expand Medicaid and bring more of its rural populations into that federal insurance pool, which would only add to the revenues of small hospitals. The National Rural Health Association notes that 70 rural hospitals have closed in recent years, with another 700 at risk as it appears that states are likely to get less federal money to treat the poor.  Can South Dakota make up the difference if that transpires? Given our perenially cash-starved fiscal status, I doubt it.  Maybe Rounds and Thune can explain what will happen to our poorer rural residents with the plan they have in mind.