Sunday, May 27, 2012

Arthur Laffer and His Laffable Statistics for ALEC

This morning in the Tennessean – you will find an article on ALEC’s beloved Arthur Laffer - "author of annual ALEC “Rich States, Poor States” report, which features the ALEC/Laffer State Economic Competitiveness Index".

For the most part – even though it is skewed in it’s reporting – the article is informative – although wrong in the fact that it spends more time praising Laffer than investigating Laffer.

The Tennesean put this article in their "business section" - I would put it in the "laffable section".

But then – that is what today’s citizen journalist is supposed to do - investigate, show both sides of the story – even when we don’t get paid for it.

You can read the whole thing if you like  >>>HERE<<<
But the interesting part of the article that I found was how ALEC ALUMNI bring in Laffer through the back door – to destroy their states in an ALEC-supported type of way.

Snips from the Tennesean (my emphasis): 
Laffer’s return as the tax-cutting politicians’ favorite economist closely corresponds to  the tea party revolution that swept a wave of stridently fiscal conservative Republicans to power in statehouses nationwide in 2010.

Days after being elected, Florida Gov. Rick Scott named Laffer to a team of six economists who would help him devise his first budget. Kansas Gov. Sam Brownback similarly hired Laffer to advise him as he worked to reduce that state’s income tax, a plan that Brownback signed into law last week.

Laffer also contributed papers and research for think tanks in Missouri, Oklahoma and Tennessee. Those papers have echoed his annual “Rich States, Poor States” report, which features the ALEC/Laffer State Economic Competitiveness Index.

The index ranks states based on 15 policy variables. States with low taxes and business costs, small public sectors, little debt and laws that make it harder for workers to unionize rank the highest.

Oklahoma Gov. Mary Fallon, a Republican, wrote the foreword to the latest edition. Brownback calls the report “required reading for governors.”

And by the way - Rich States Poor States is not HIS ANNUAL REPORT - it is the ANNUAL REPORT DISTRIBUTED BY ALEC.
Rich States, Poor States
ALEC-Laffer State Economic Competitiveness Index
© 2011 American Legislative Exchange Council
All rights reserved. Except as permitted under the United
States Copyright Act of 1976, no part of this publication may
be reproduced or distributed in any form or by any means,
or stored in a database or retrieval system without the prior
permission of the publisher.
Published by
American Legislative Exchange Council

I really hate it when they use the phrase tea-party to refer to what happened in 2010.  What really happened is ALEC legislators got a strong foothold in our legislatures.  That is the real issue – not the pee tarty.

The article is not without criticism of Laffer – you will find one or two sentences of cirticism in what would probably be four or five pages type-written.

Among those limited statements is this.
But Carl Davis, a senior analyst at the Washington, D.C.-based Institute on Taxation and Economic Policy, says Laffer’s research is hokum.

“People just like the idea of tax cuts,” Davis said. “A lot of it is his saying things that people want to hear.”

Davis – noted above is with the Institute on Taxation and Economic Policy and has release multiple reports that debunk the ALEC-Laffer report (my emphasis).
Three New Critiques of Arthur Laffer’s Supply-Side Model Show Tax Cuts as Junk Economics
The reports analyze Laffer's underlying model that claims to show how his tax cutting proposals boost economic growth. The first takes on the misleading measures of economic health that Laffer uses and the second shows the distorted variables he includes in his regression analysis in looking at state income taxes. The third report breaks down Laffer's false claim that eliminating the estate tax can lead to job creation.

Too bad the reporter at the Tennessean didn’t bother to look a little bit deeper.
BUT like all reporters they are enthralled with the fact that they are sitting with a “nobility of our society” and forget about doing anything except reporting their encounter with greatness.

They wouldn’t have had to read the entire report at the  Institute on Taxation and Economic Policy either – Progressive States Network reported earlier this week:
For the fifth edition of their annual Rich States, Poor States report, the increasingly controversial corporate-backed group has once again partnered with notorious supply-side economist Arthur Laffer to rank the 50 states based on their “economic outlook.” To do so, ALEC once again uses a set of criteria intended, the authors write, to “highlight the policies that contribute to economic well-being in the 50 states.”

Yet one look at some of the criteria used to generate this survey reveals that ALEC largely values the “well-being” not of families or state economies, but of the very same corporate interests that fund ALEC.

For instance:

•Despite study after study showing that increasing the minimum wage provides an economic boost to state economies, ALEC and Laffer rank the state with the highest current minimum wage – Washington, at $9.04 – 50th out of 50 in one policy category comprising the rankings. States with no minimum wage laws at all share the number 1 spot.

•Analyses of the recovery continue to show state and local government job losses to be an unprecedented drag on the economy. Yet states including Maine, Alabama, and Pennsylvania that saw their legislatures turn in conservative directions in 2010, resulting in public sector jobs being slashed at a rate far outpacing the national average in 2011 (according to a recent report by the Roosevelt Institute), were rewarded by ALEC if those policies succeeded in decreasing the number of public sector jobs per capita.

Indiana dropped from number 16 to number 24 in this year’s rankings. But Hoosier one-percenters need not fear. They are set to rebound, the authors predict, noting that Indiana did not “get the benefit of its corporate income tax reduction or right-to-work legislation as of this publication.” Once these newly enacted fiscally irresponsible, anti-worker policies are accounted for, Indiana is expected to “recover from its steep drop” this year – and be deemed “richer” for it by ALEC in 2013’s report.

So while the Tennesean is giving you a glowing biography of Laffer they are misleading you with their one-sided  reporting just like Laffer misleads you with his rigged and laffable numbers and statistics.
misleading measures of economic health that Laffer uses
and the second shows the distorted variables he includes in his regression analysis in looking at state income taxes.
The third report breaks down Laffer's false claim

Oh my…………………….
America - be careful what you believe when you are reading the paper.

Reports on nobility are not always well-reported.

1 comment:

  1. This is a great analysis of Art's slimy hand-job he gives for ALEC, pun intended. I will be posting this on my blog. I read part of that Oklahoma study, thought to cross post, but never got around to it. Thank you from Kansas.