Tuesday, February 14, 2012

ALEC's Junk Economics

Saw these two reports and thought I would share snips - the titles are linked..  (The reports aren't very long and an easy read.)

The American Legislative Exchange Council and Laffer are always pushing thieir statistics for economic growth around the Unietd States and the ALEC members are dumb enough to believe almost anything they are given.

Here's a couple of reports that prove that ALEC-Laffer economics is "junk economics".

A November 2011 report from the Oklahoma Council for Public Affairs (OCPA) in partnership with Arduin, Laffer & Moore, a consulting group headed by Arthur Laffer, explains the method that Laffer has been using to make the case that tax cuts lead to economic growth. The results he offers appear impressive, but his methods are flawed. Laffer is an economist whose work is disseminated through various free market policy networks such as the American Legislative Exchange Council (ALEC).

StatesOklahoma’s Governor, Mary Fallin, is hardly alone in proposing tax changes based on Laffer’s ideas. Kansas Governor Sam Brownback has proposed gradually repealing his state’s income tax, and Missouri voters will have a chance to repeal the state’s income tax through a ballot measure this fall. Meanwhile, the Wall Street Journal’s editorial board has written enthusiastically about the wave of interest in income tax repeal. In each case, the most common talking point in support of repeal has been the same type of economic growth arguments that Laffer has tried to bolster through the flawed regression discussed in this report.

By creating a bogus measure (federal and state tax rates combined) and mapping it onto an exceptional moment in economic history, Laffer creates the illusion that cuts in state tax rates between 2001 and 2003 fueled economic growth later in the decade.

These claims are based largely on misleading analyses generated by Arthur Laffer, long-time spokesman of a supply-side economic theory that President George H. W. Bush once called “voodoo economics” because of its bizarre insistence that tax cuts very often lead to higher revenues. Recently, Laffer’s consulting firm has been very successful (with the help of the American Legislative Exchange Council, Americans for Prosperity, and the Wall Street Journal’s editorial page) in spreading the talking point that the nine states without personal income taxes have economies that far outperform those in the nine states with the highest top tax rates.

ALEC is always worried about "junk science" - its time that someone started looking at the JUNK that ALEC is giving to our state legislators - which they then use to introduce ALEC legislation.

And Laffer’s “junk economic” are repeated over and over and over again -  leading to statement like this being made and then spread around the press:
By some measures, Maryland does in fact have the best public schools in the country. However, a study from the American Legislative Exchange Council suggests that the likely reason for this is that Maryland has a high median income, not because of its high tax rates.
Oh and by the way – the Mercatus Center (who wrote this) is supported almost entirely by Charles KOCH!
Be careful what you believe when you read something – be VERY CAREFUL!
Don't be fooled - anything that ALEC has a thumbprint on
- it's good for business and bad for you!

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