What California and the United States both have in common?
1) Both are world economies: The USA is the #1 economy in the world while California is the 5th largest economy of the world.
2) Both hold huge budget deficits: The USA holds over a trillion dollar deficit while California holds a 42 billion dollar deficit.
3) The top executives who managed the state economies in the last 8 yrs are republicans.
4) Both, the USA and CA, were in much better financial shape before the republican executives took over.
Just coincidence and bad luck or is this another example of how incompetent are republicans in managing the taxpayers resources?
Saturday, January 31, 2009
Thursday, January 29, 2009
Gallup: Dems lead in party ID in 44 states
http://crooksandliars.com/silentpatriot/gallup-dems-lead-party-id-44-states
Call it the Obama effect or call it the George Bush effect. Whatever you call it, its name is "bad news" for the Republican Party.
Gallup:
The political landscape of the United States has clearly shifted in the Democratic direction, and in most states, a greater proportion of state residents identified as Democrats or said they leaned to the Democratic Party in 2008 than identified as Republicans or leaned Republican.
As recently as 2002, a majority of states were Republican in orientation. By 2005, movement in the Democratic direction was becoming apparent, and this continued in 2006. That dramatic turnaround is clearly an outgrowth of Americans' dissatisfaction with the way the Republicans (in particular, President George W. Bush) governed the country.
With Democratic support at the national level the highest in more than two decades and growing each of the last five years, Republican prospects for significant gains in power in the near term do not appear great. But the recent data do show that party support can change rather dramatically in a relatively short period of time.
America a "center-right" nation? Give me a break.
Wednesday, January 28, 2009
The Truth About EFCA and Secret Ballot Elections
The Truth About EFCA and Secret Ballot Elections
Posted on January 29, 2009 by dsalaborblogmoderator
http://talkingunion.wordpress.com/2009/01/29/the-truth-about-efca-and-secret-ballot-elections/
by Dmitri Iglitzin
dmitriThe U.S. Chamber of Commerce has promised to spend $10 million opposing the Employee Free Choice Act (EFCA), the proposed federal law that would allow workers to form unions based on a showing of majority support, sometimes referred to as a “card check” election. Other big bucks are being spent by faux-grassroots organizations with misleading names such as the “Coalition for a Democratic Workplace” and the “Center for Union Facts.” President Barack Obama was not exaggerating when he said, recently, that the business community considers EFCA “the devil incarnate.”
The focal point of opposition to EFCA is the provisions that make it easier for workers to form unions without going through a secret ballot election. Opponents contend that without secret ballot elections, workers will be coerced by union organizers into signing cards or petitions. As one opponent, Rep. John Kline (R-Minn.), put it, “It is beyond me how one can possibly claim that a system whereby everyone – your employer, your union organizer, and your co-workers – knows exactly how you vote on the issue of unionization gives an employee ‘free choice.’”
But fatally undermining this argument is a dirty little secret known as “Wurtland Nursing.”
Wurtland Nursing provides rehabilitative, hospice, and long-term care to residents in Wurtland, KY. A local affiliate of the Service Employees International Union (SEIU), one of the nation’s largest and fastest-growing unions, has represented the maintenance and service employees at this facility since 1997.
In 2003 a Wurtland Nursing employee presented the company a petition signed by over 50 percent of the workers asking for a vote to remove the union. Wurtland Nursing immediately repudiated its relationship with SEIU and declared itself a non-union company.
The union filed a complaint with the National Labor Relations Board (NLRB), the nation’s chief arbiter of labor disputes, contending that Wurtland Nursing had no right to reject the union without a secret ballot election having occurred. Four years later, the NLRB decided in favor of the company, saying that it didn’t matter that there had not been an actual vote. The petition was all the proof the company needed to conclude that the workers no longer wanted to be represented by the union.
The U.S. Chamber of Commerce did not denounce this decision. Neither the Coalition for a Democratic Workplace nor the Center for Union Facts raised a stink. Despite the fact that Wurtland Nursing had stripped its employees of their union on the basis of signatures on a petition, rather than after a secret ballot election, no prominent critic of EFCA has ever criticized the outcome of that case.
Yet the principle supposedly being violated by EFCA, the need for a secret ballot, is violated as much by the Wurtland Nursing rule, which allows employers to repudiate unions based on petition signatures, as it would be by EFCA, which would allow workers to obtain union representation in the same manner.
The truth is that neither business nor labor genuinely doubts that signatures on a petition or on cards are a legitimate and appropriate basis for determining what the majority of workers want. It is high time for employers to acknowledge that truth, along with the fact there is nothing wrong with permitting workers to ask openly to be represented by a union, and for their employers to thereby become obligated to honor that request.
A December 2006 Peter D. Hart Research Associates survey found that 60 million Americans would like to join a union, but are discouraged from doing so by employer intimidation. An April, 2007 Institute for America’s Future study estimates that passage of the EFCA would increase union membership by 10 percent, providing an additional 3,537,625 people with health insurance and 2,773,045 more people with pensions.
In this time of economic crisis those numbers are a compelling argument for EFCA. In contrast, the argument that EFCA will undermine secret ballot elections falls apart in light of the Wurtland Nursing rule. And no amount of employer rhetoric can put that argument back together again.
Dmitri Iglitzin is a partner in the law firm, Schwerin Campbell Barnard & Iglitzin. His practice is centered on labor and employment law. Advising and representing labor unions in local, state, and federal proceedings,
Posted on January 29, 2009 by dsalaborblogmoderator
http://talkingunion.wordpress.com/2009/01/29/the-truth-about-efca-and-secret-ballot-elections/
by Dmitri Iglitzin
dmitriThe U.S. Chamber of Commerce has promised to spend $10 million opposing the Employee Free Choice Act (EFCA), the proposed federal law that would allow workers to form unions based on a showing of majority support, sometimes referred to as a “card check” election. Other big bucks are being spent by faux-grassroots organizations with misleading names such as the “Coalition for a Democratic Workplace” and the “Center for Union Facts.” President Barack Obama was not exaggerating when he said, recently, that the business community considers EFCA “the devil incarnate.”
The focal point of opposition to EFCA is the provisions that make it easier for workers to form unions without going through a secret ballot election. Opponents contend that without secret ballot elections, workers will be coerced by union organizers into signing cards or petitions. As one opponent, Rep. John Kline (R-Minn.), put it, “It is beyond me how one can possibly claim that a system whereby everyone – your employer, your union organizer, and your co-workers – knows exactly how you vote on the issue of unionization gives an employee ‘free choice.’”
But fatally undermining this argument is a dirty little secret known as “Wurtland Nursing.”
Wurtland Nursing provides rehabilitative, hospice, and long-term care to residents in Wurtland, KY. A local affiliate of the Service Employees International Union (SEIU), one of the nation’s largest and fastest-growing unions, has represented the maintenance and service employees at this facility since 1997.
In 2003 a Wurtland Nursing employee presented the company a petition signed by over 50 percent of the workers asking for a vote to remove the union. Wurtland Nursing immediately repudiated its relationship with SEIU and declared itself a non-union company.
The union filed a complaint with the National Labor Relations Board (NLRB), the nation’s chief arbiter of labor disputes, contending that Wurtland Nursing had no right to reject the union without a secret ballot election having occurred. Four years later, the NLRB decided in favor of the company, saying that it didn’t matter that there had not been an actual vote. The petition was all the proof the company needed to conclude that the workers no longer wanted to be represented by the union.
The U.S. Chamber of Commerce did not denounce this decision. Neither the Coalition for a Democratic Workplace nor the Center for Union Facts raised a stink. Despite the fact that Wurtland Nursing had stripped its employees of their union on the basis of signatures on a petition, rather than after a secret ballot election, no prominent critic of EFCA has ever criticized the outcome of that case.
Yet the principle supposedly being violated by EFCA, the need for a secret ballot, is violated as much by the Wurtland Nursing rule, which allows employers to repudiate unions based on petition signatures, as it would be by EFCA, which would allow workers to obtain union representation in the same manner.
The truth is that neither business nor labor genuinely doubts that signatures on a petition or on cards are a legitimate and appropriate basis for determining what the majority of workers want. It is high time for employers to acknowledge that truth, along with the fact there is nothing wrong with permitting workers to ask openly to be represented by a union, and for their employers to thereby become obligated to honor that request.
A December 2006 Peter D. Hart Research Associates survey found that 60 million Americans would like to join a union, but are discouraged from doing so by employer intimidation. An April, 2007 Institute for America’s Future study estimates that passage of the EFCA would increase union membership by 10 percent, providing an additional 3,537,625 people with health insurance and 2,773,045 more people with pensions.
In this time of economic crisis those numbers are a compelling argument for EFCA. In contrast, the argument that EFCA will undermine secret ballot elections falls apart in light of the Wurtland Nursing rule. And no amount of employer rhetoric can put that argument back together again.
Dmitri Iglitzin is a partner in the law firm, Schwerin Campbell Barnard & Iglitzin. His practice is centered on labor and employment law. Advising and representing labor unions in local, state, and federal proceedings,
Obama’s Statement on the House’s Vote
January 28, 2009, 7:36 pm
Obama’s Statement on the House’s Vote
“Last year, America lost 2.6 million jobs. On Monday alone, we learned that some of our biggest employers plan to cut another 55,000. This is a wakeup call to Washington that the American people need us to act and act immediately.
That is why I am grateful to the House of Representatives for moving the American Recovery and Reinvestment plan forward today. There are many numbers in this plan. It will double our capacity to generate renewable energy. It will lower the cost of health care by billions and improve its quality. It will modernize thousands of classrooms and send more kids to college. And it will put billions of dollars in immediate tax relief into the pockets of working families.
But out of all these numbers, there is one that matters most to me: this recovery plan will save or create more than three million new jobs over the next few years.
I can also promise that my administration will administer this recovery plan with a level of transparency and accountability never before seen in Washington. Once it is passed, every American will be able to go the website recovery.gov and see how and where their money is being spent.
The plan now moves to the Senate, and I hope that we can continue to strengthen this plan before it gets to my desk. But what we can’t do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”
Obama’s Statement on the House’s Vote
“Last year, America lost 2.6 million jobs. On Monday alone, we learned that some of our biggest employers plan to cut another 55,000. This is a wakeup call to Washington that the American people need us to act and act immediately.
That is why I am grateful to the House of Representatives for moving the American Recovery and Reinvestment plan forward today. There are many numbers in this plan. It will double our capacity to generate renewable energy. It will lower the cost of health care by billions and improve its quality. It will modernize thousands of classrooms and send more kids to college. And it will put billions of dollars in immediate tax relief into the pockets of working families.
But out of all these numbers, there is one that matters most to me: this recovery plan will save or create more than three million new jobs over the next few years.
I can also promise that my administration will administer this recovery plan with a level of transparency and accountability never before seen in Washington. Once it is passed, every American will be able to go the website recovery.gov and see how and where their money is being spent.
The plan now moves to the Senate, and I hope that we can continue to strengthen this plan before it gets to my desk. But what we can’t do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”
Democrats who voted against the Obama stimulus plan
http://www.congressmatters.com/storyonly/2009/1/28/184535/230/514/497
Allen Boyd (D-FL-02)
Bobby Bright (D-AL-02)
Jim Cooper (D-TN-05)
Brad Ellsworth (D-IN-08)
Parker Griffith (D-AL-05)
Paul Kanjorski (D-PA-11)
Frank Kratovil (D-MD-01)
Walt Minnick (D-ID-01)
Colliin Peterson (D-MN-07)
Heath Shuler (D-NC-11)
Gene Taylor (D-MS-04)
Allen Boyd (D-FL-02)
Bobby Bright (D-AL-02)
Jim Cooper (D-TN-05)
Brad Ellsworth (D-IN-08)
Parker Griffith (D-AL-05)
Paul Kanjorski (D-PA-11)
Frank Kratovil (D-MD-01)
Walt Minnick (D-ID-01)
Colliin Peterson (D-MN-07)
Heath Shuler (D-NC-11)
Gene Taylor (D-MS-04)
Bailout Recipients Hosted Call to Defeat Key Labor Bill
Bailout Recipients Hosted Call to Defeat Key Labor Bill
Tuesday 27 January 2009
by: Sam Stein, The Huffington Post
http://www.truthout.org/012809LA
Three days after receiving $25 billion in federal bailout funds, Bank of America Corp. hosted a conference call with conservative activists and business officials to organize opposition to the U.S. labor community's top legislative priority.
Participants on the October 17 call - including at least one representative from another bailout recipient, AIG - were urged to persuade their clients to send "large contributions" to groups working against the Employee Free Choice Act (EFCA), as well as to vulnerable Senate Republicans, who could help block passage of the bill.
Bernie Marcus, the charismatic co-founder of Home Depot, led the call along with Rick Berman, an aggressive EFCA opponent and founder of the Center for Union Facts. Over the course of an hour, the two framed the legislation as an existential threat to American capitalism, or worse.
"This is the demise of a civilization," said Marcus. "This is how a civilization disappears. I am sitting here as an elder statesman and I'm watching this happen and I don't believe it."
Donations of hundreds of thousands, if not millions, of dollars were needed, it was argued, to prevent America from turning "into France."
"If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to [former Sen.] Norm Coleman and all these other guys, they should be shot. They should be thrown out their goddamn jobs," Marcus declared.
Earlier he argued: "As a shareholder, if I knew the CEO of the company wasn't doing anything on [EFCA]... I would sue the son of a bitch... I'm so angry at some of these CEOs, I can't even believe the stupidity that is involved here."
Audio of the conference call, which was obtained by the Huffington Post, is excerpted throughout this piece to provide a clearer insight into the pitched battle surrounding the Employee Free Choice legislation. At one point, relatively early in the call, Marcus joked that he "took a tranquilizer this morning to calm myself down."
"This bill may be one of the worst things I have ever seen in my life," he said, explaining that he could have been on "a 350-foot boat out in the Mediterranean," but felt it was more important to engage on this fight. "It is incredible to me that anybody could have the chutzpah to try and pass this bill in this election year, especially when we have an economy that is a disaster, a total absolute disaster."
The legislation - which would allow workers to form a union either by holding a traditional election or having a majority of employees sign written forms - is virtually certain to face a Republican filibuster. Obama and Senate Democrats have stated their commitment to the bill, though the timing of the vote remains a topic of heated debate.
Weeks before the November election, Marcus, Berman, and others saw this ominous political landscape taking shape. Hoping to aid opponents of EFCA in the Senate, they pleaded with participants on the call, mostly stock analysts or individuals with investment portfolios, to urge clients to prop up the campaigns of endangered Republican candidates, including Norm Coleman of Minnesota, Gordon Smith of Oregon, Mitch McConnell of Kentucky, Elizabeth Dole of North Carolina, and Roger Wicker of Mississippi.
"If there are not enough Republicans operating as a firewall, after this election it is going to be very difficult to hold the line," predicted Berman. "The only way after these elections if we don't have a filibuster proof Senate... is to make this issue so hot in some states so that even a Democrat who is up for election in 2010 has to think twice about whether or not they are going to let this thing go by."
At one point, another individual on the call suggested that participants send major contributions to Berman's organization as a way of affecting the election without violating the McCain-Feingold campaign finance law. "Some organizations have written checks for $250,000, $500,000, some $2 million for this," said the man, likely Steven Hantler, the director of free enterprise and entrepreneurship at Bernie Marcus' Marcus Foundation.
Citing the massive war chests that unions have brought to the EFCA fight, Marcus asked participants to make campaign donations rather than lobbying payments. "Fire all these guys in Washington," he said of the K-Street operators, "they are worthless anyway."
In an interview with the Huffington Post, Berman said that there "was nothing on that call that spoke to funneling money to anybody." Indeed, at a separate point, Marcus discussed the need to contribute to issue advocacy and education activities. The call, Berman continued, was designed to explain some of the economic implications of passing EFCA and was "one of a series with people around the country who are connected to businesses."
"There has been, though it has changed in the last few months, a fairly significant deficit in terms of understanding what this law is about," Berman said. "I know a number of business groups have held calls with people about the impact of this legislation... The unions who are a proponent of this have not made it a high profile issue. I think they have learned from their polling that it doesn't poll well, which is why they don't' want to make it a public issue."
As for the business community, Berman added, "I do think that most businesspeople fully appreciate the damage that out-of-control labor leaders have caused for other businesses. There is no appetite for finding out if you are going to have to be the next business to deal with other labor issues."
A Bank of America spokesman declined a request for public comment, and the bank's representative on the call played a minor role. The conference call was referenced in a November 5 Bank of America research document, in which the company noted that EFCA "increases the likelihood that retailers would be unionized, which could drive higher labor cost at retail." On "the flip side," however, the document said the bill would increase the "spending power of lower income consumers as this would be a de facto wage and benefit increase."
As evidenced by its dual interpretation of the legislation, Bank of America's role in the EFCA fight is a bit murky. The company, as stated by an official there, hosted the call for the purposes of equity research, meaning that their goal was to represent the opinions of clients and not the bank itself. But their involvement in an effort to drum up support for defeating the labor-backed legislation, so soon after getting bail out funds from the federal government, left a bad taste in the mouth of some union officials.
"Bank of America is now not only getting bailout money. They are lending their name to participate in a campaign to stop workers from having a majority sign up [provision]," said Stephen Lerner, Director of the Private Equity Project at SEIU. "The biggest corporations who have created the problem are, at the very time, asking us to bail them out and then using that money to stop workers from improving their lives."
Tuesday 27 January 2009
by: Sam Stein, The Huffington Post
http://www.truthout.org/012809LA
Three days after receiving $25 billion in federal bailout funds, Bank of America Corp. hosted a conference call with conservative activists and business officials to organize opposition to the U.S. labor community's top legislative priority.
Participants on the October 17 call - including at least one representative from another bailout recipient, AIG - were urged to persuade their clients to send "large contributions" to groups working against the Employee Free Choice Act (EFCA), as well as to vulnerable Senate Republicans, who could help block passage of the bill.
Bernie Marcus, the charismatic co-founder of Home Depot, led the call along with Rick Berman, an aggressive EFCA opponent and founder of the Center for Union Facts. Over the course of an hour, the two framed the legislation as an existential threat to American capitalism, or worse.
"This is the demise of a civilization," said Marcus. "This is how a civilization disappears. I am sitting here as an elder statesman and I'm watching this happen and I don't believe it."
Donations of hundreds of thousands, if not millions, of dollars were needed, it was argued, to prevent America from turning "into France."
"If a retailer has not gotten involved in this, if he has not spent money on this election, if he has not sent money to [former Sen.] Norm Coleman and all these other guys, they should be shot. They should be thrown out their goddamn jobs," Marcus declared.
Earlier he argued: "As a shareholder, if I knew the CEO of the company wasn't doing anything on [EFCA]... I would sue the son of a bitch... I'm so angry at some of these CEOs, I can't even believe the stupidity that is involved here."
Audio of the conference call, which was obtained by the Huffington Post, is excerpted throughout this piece to provide a clearer insight into the pitched battle surrounding the Employee Free Choice legislation. At one point, relatively early in the call, Marcus joked that he "took a tranquilizer this morning to calm myself down."
"This bill may be one of the worst things I have ever seen in my life," he said, explaining that he could have been on "a 350-foot boat out in the Mediterranean," but felt it was more important to engage on this fight. "It is incredible to me that anybody could have the chutzpah to try and pass this bill in this election year, especially when we have an economy that is a disaster, a total absolute disaster."
The legislation - which would allow workers to form a union either by holding a traditional election or having a majority of employees sign written forms - is virtually certain to face a Republican filibuster. Obama and Senate Democrats have stated their commitment to the bill, though the timing of the vote remains a topic of heated debate.
Weeks before the November election, Marcus, Berman, and others saw this ominous political landscape taking shape. Hoping to aid opponents of EFCA in the Senate, they pleaded with participants on the call, mostly stock analysts or individuals with investment portfolios, to urge clients to prop up the campaigns of endangered Republican candidates, including Norm Coleman of Minnesota, Gordon Smith of Oregon, Mitch McConnell of Kentucky, Elizabeth Dole of North Carolina, and Roger Wicker of Mississippi.
"If there are not enough Republicans operating as a firewall, after this election it is going to be very difficult to hold the line," predicted Berman. "The only way after these elections if we don't have a filibuster proof Senate... is to make this issue so hot in some states so that even a Democrat who is up for election in 2010 has to think twice about whether or not they are going to let this thing go by."
At one point, another individual on the call suggested that participants send major contributions to Berman's organization as a way of affecting the election without violating the McCain-Feingold campaign finance law. "Some organizations have written checks for $250,000, $500,000, some $2 million for this," said the man, likely Steven Hantler, the director of free enterprise and entrepreneurship at Bernie Marcus' Marcus Foundation.
Citing the massive war chests that unions have brought to the EFCA fight, Marcus asked participants to make campaign donations rather than lobbying payments. "Fire all these guys in Washington," he said of the K-Street operators, "they are worthless anyway."
In an interview with the Huffington Post, Berman said that there "was nothing on that call that spoke to funneling money to anybody." Indeed, at a separate point, Marcus discussed the need to contribute to issue advocacy and education activities. The call, Berman continued, was designed to explain some of the economic implications of passing EFCA and was "one of a series with people around the country who are connected to businesses."
"There has been, though it has changed in the last few months, a fairly significant deficit in terms of understanding what this law is about," Berman said. "I know a number of business groups have held calls with people about the impact of this legislation... The unions who are a proponent of this have not made it a high profile issue. I think they have learned from their polling that it doesn't poll well, which is why they don't' want to make it a public issue."
As for the business community, Berman added, "I do think that most businesspeople fully appreciate the damage that out-of-control labor leaders have caused for other businesses. There is no appetite for finding out if you are going to have to be the next business to deal with other labor issues."
A Bank of America spokesman declined a request for public comment, and the bank's representative on the call played a minor role. The conference call was referenced in a November 5 Bank of America research document, in which the company noted that EFCA "increases the likelihood that retailers would be unionized, which could drive higher labor cost at retail." On "the flip side," however, the document said the bill would increase the "spending power of lower income consumers as this would be a de facto wage and benefit increase."
As evidenced by its dual interpretation of the legislation, Bank of America's role in the EFCA fight is a bit murky. The company, as stated by an official there, hosted the call for the purposes of equity research, meaning that their goal was to represent the opinions of clients and not the bank itself. But their involvement in an effort to drum up support for defeating the labor-backed legislation, so soon after getting bail out funds from the federal government, left a bad taste in the mouth of some union officials.
"Bank of America is now not only getting bailout money. They are lending their name to participate in a campaign to stop workers from having a majority sign up [provision]," said Stephen Lerner, Director of the Private Equity Project at SEIU. "The biggest corporations who have created the problem are, at the very time, asking us to bail them out and then using that money to stop workers from improving their lives."
Tax Cuts An Inefficient Stimulus
Tax Cuts An Inefficient Stimulus
Isaiah J. Poole's picture
CAF STAFF
By Isaiah J. Poole
October 27th, 2008 - 11:04am ET
http://institute.ourfuture.org/blog-entry/2008104427/tax-cuts-ineffcient-stimulus
A federal spending program that only yielded 37 cents of benefit for every dollar spent, or even less, would generate sustained demands from the conservative chattering class that it be shut down. So why does the right keep selling extending President Bush's tax cuts as an economic stimulus tool?
The argument that tax cuts are preferable to federal spending to stimulate the economy is effectively refuted by a new study by the Economic Policy Institute, which lays side by side the various effects of stimulus proposals from both the left and the right. What's clear, as you can see from the chart below, is that as a rule taxpayers get a fair better bang for their dollars through direct federal stimulus spending than they do from the tax proposals proffered by conservatives.
The main components of a stimulus package being formulated by a group of progressive leaders—which would be about $300 billion a year and would include infrastructure spending, extended unemployment benefits, and assistance to state and local governments—all give a positive return to the taxpayer.
Tax proposals promoted by conservatives as the core of their stimulus strategy—making the Bush tax cuts permanent, further cuts in corporate tax rates and accelerated depreciation—all yield a negative return to the taxpayer.
An economic snapshot report by EPI explains that direct spending is also more effective than the tax rebate strategy that was employed earlier in 2008. EPI's Ethan Pollack notes:
As money is spent, it creates beneficial ripples through the entire economy. The evidence is that most of the money from the recent tax rebate was saved rather than spent, thus blunting its stimulative benefit.1 By comparison, other options—such as infrastructure spending, aid to states, food stamps, and unemployment insurance (UI) benefits—are much more cost-effective because they target the needs most likely to channel money back into the economy. Mark Zandi from Moody’s Economy.com estimates that each dollar of refundable tax rebates only boosts GDP by about $1.26, while each dollar of infrastructure spending could provide a $1.59 boost. Not only are many of these stimulus options more effective, but they also have the added benefit of assisting those hardest hit by the downturn and tackling long-standing infrastructure needs that would lower transportation costs, decrease traffic, and increase business productivity.
Zandi’s analysis also shows what doesn’t work as stimulus: a variety of tax breaks for corporations and wealthy individuals, which cost over twice as much as they return to the economy.
EPI economist Jared Bernstein discussed these findings October 24 at a hearing of the House Education and Labor Committee. There, he noted that the past eight years of economic policy—based on the principle that the benefits of tax cuts for corporations and the wealthy would trickle down to working-class people—have been a failure for millions of ordinary Americans:
Much of the current recession/stimulus debate has stressed that recent recessions—the ones in 1990-91 and 2001—were both mild and short-lived, and perhaps the next recession will follow the same pattern. It is critical to recognize that these claims are based solely on real output growth, and not on job market conditions. The allegedly mild 2001 recession, wherein real gross domestic product barely contracted, was followed by the longest “jobless recovery” on record. Though real GDP grew, payrolls shed another net 1.1 million jobs. The unemployment rate rose for another 19 months and for almost two years for African-Americans. The pattern was similar, though not quite as deep, after the early 1990s recession.
Isaiah J. Poole's picture
CAF STAFF
By Isaiah J. Poole
October 27th, 2008 - 11:04am ET
http://institute.ourfuture.org/blog-entry/2008104427/tax-cuts-ineffcient-stimulus
A federal spending program that only yielded 37 cents of benefit for every dollar spent, or even less, would generate sustained demands from the conservative chattering class that it be shut down. So why does the right keep selling extending President Bush's tax cuts as an economic stimulus tool?
The argument that tax cuts are preferable to federal spending to stimulate the economy is effectively refuted by a new study by the Economic Policy Institute, which lays side by side the various effects of stimulus proposals from both the left and the right. What's clear, as you can see from the chart below, is that as a rule taxpayers get a fair better bang for their dollars through direct federal stimulus spending than they do from the tax proposals proffered by conservatives.
The main components of a stimulus package being formulated by a group of progressive leaders—which would be about $300 billion a year and would include infrastructure spending, extended unemployment benefits, and assistance to state and local governments—all give a positive return to the taxpayer.
Tax proposals promoted by conservatives as the core of their stimulus strategy—making the Bush tax cuts permanent, further cuts in corporate tax rates and accelerated depreciation—all yield a negative return to the taxpayer.
An economic snapshot report by EPI explains that direct spending is also more effective than the tax rebate strategy that was employed earlier in 2008. EPI's Ethan Pollack notes:
As money is spent, it creates beneficial ripples through the entire economy. The evidence is that most of the money from the recent tax rebate was saved rather than spent, thus blunting its stimulative benefit.1 By comparison, other options—such as infrastructure spending, aid to states, food stamps, and unemployment insurance (UI) benefits—are much more cost-effective because they target the needs most likely to channel money back into the economy. Mark Zandi from Moody’s Economy.com estimates that each dollar of refundable tax rebates only boosts GDP by about $1.26, while each dollar of infrastructure spending could provide a $1.59 boost. Not only are many of these stimulus options more effective, but they also have the added benefit of assisting those hardest hit by the downturn and tackling long-standing infrastructure needs that would lower transportation costs, decrease traffic, and increase business productivity.
Zandi’s analysis also shows what doesn’t work as stimulus: a variety of tax breaks for corporations and wealthy individuals, which cost over twice as much as they return to the economy.
EPI economist Jared Bernstein discussed these findings October 24 at a hearing of the House Education and Labor Committee. There, he noted that the past eight years of economic policy—based on the principle that the benefits of tax cuts for corporations and the wealthy would trickle down to working-class people—have been a failure for millions of ordinary Americans:
Much of the current recession/stimulus debate has stressed that recent recessions—the ones in 1990-91 and 2001—were both mild and short-lived, and perhaps the next recession will follow the same pattern. It is critical to recognize that these claims are based solely on real output growth, and not on job market conditions. The allegedly mild 2001 recession, wherein real gross domestic product barely contracted, was followed by the longest “jobless recovery” on record. Though real GDP grew, payrolls shed another net 1.1 million jobs. The unemployment rate rose for another 19 months and for almost two years for African-Americans. The pattern was similar, though not quite as deep, after the early 1990s recession.
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