Lehigh Valley Independent

Charlie Dent: Taxes Must Always Go Down, and Never Go Up

2010-09-08T01:21:00.000-04:00

Charlie Dent is out with his first TV ad, attacking John Callahan over a very good idea that unfortunately failed to garner enough support in Harrisburg.

Championed by Sal Panto and Bob Freeman, the proposal would allow counties to vote to enact a 1% sales tax, which would then be distributed to all municipalities and cities.

But the point was to help revitalize older boroughs and cities, to give them a steady revenue stream other than property taxes, the revenue from which fluctuates with the economy. Here's the key bit from the Express Times:

A plan to raise the state sales tax, which has been bandied about for 20 years, is garnering statewide interest as municipal officials search for ways to balance their budgets.

"It's a new pool of money," Easton Mayor Sal Panto Jr. said, "so we're not constantly relying on the property tax."

The County Commissioners Association of Pennsylvania, the Pennsylvania League of Cities and Municipalities, and the Pennsylvania state associations of boroughs, township supervisors and township commissioners are crafting legislation that would allow counties to raise an optional 1 percent sales tax.

The working proposal has 50 percent of the new revenue going to counties, 40 percent to municipalities within a county and 10 percent for shared municipal services, such as councils of government, municipal planning or public safety, according to Panto.

A distribution formula will take into account a municipality's tax burden based on population and its percentage of tax exempt properties, according to Panto. All municipalities would receive funding, but the intent is to assure older boroughs and cities receive a greater percentage, he said.

In the case of a county or city's share of the revenue, half must go to reducing property taxes and the other half toward general municipal services, Panto said. The 10 percent set aside for shared municipal services would be doled out as grants, he explained.

A county or municipality could choose to use its entire allotment to cut property taxes.

Last week I wrote about the issue of municipal finance, and how investment flows away from central cities over time. Cities are trapped because their revenue is based on property taxes, but high poverty rates in the cities hold down property values. This leads naturally to decline, and there isn't anything that city's government can do to stop it, because it is structural. Cities need a more flexible and reliable source of revenue. The benefits to the economy absolutely outweigh non-noticeably higher prices for consumer goods. Keep in mind, food and clothes aren't taxed in PA, so we're talking about mostly non-necessities.

So this was a great idea on the merits, which is really beside the point, since Charlie Dent's position appears to be simply that taxes should always go down, and never go up. Obviously that is not how any government works. If Dent thinks the city should provide fewer services, what does he think should be cut? The city budget isn't incredibly long.

Reporters should ask Dent what services he thinks Bethlehem should have gone without instead of ever raising anyone's property taxes. The Bethlehem budget isn't very long. It wouldn't take more than a day for the Dent campaign to come up with a list of specific services that Callahan should have cut instead.

As an aside, I also think it's funny that Bernie O'Hare - who just a few days ago was writing major man-crush posts about the great work Bob Freeman and Sal Panto have been doing on this very issue - would be pushing this particular attack from Charlie Dent on same. This is the kind of sloppy thinking you run into with such a politician-centric worldview. How do you decide who's right when you don't think the underlying policy outcome matters? Maybe a ranked list of Favorite Politicians?

More Policy Journalism Needed

2010-09-07T23:40:00.000-04:00

John Sides has a good round-up of the APSA panel on what political scientists can offer journalists. I think this topic is especially important for the Lehigh Valley's political news reporters who have turned in some coverage I have been disappointed with. I think Ezra Klein's daily Wonkbook would be a good baseline for the minimum amount of policy reading that reporters covering races for national office would ideally be reading every day. This stuff matters, because people need to know when candidates are right, and when they are wrong. Ezra is a liberal, but he does a good job of keeping this news round-up non-partisan, because his audience seems to be other journalists.

On a related note, I really wish more LV academics would get into blogging. Allentown is creating a think tank for the purpose that I have in mind, to tap the region's academic knowledge, and that's a great start. But outside voices are important too, because invariably, making policy recommendations involves pissing off different groups of people. We need to be getting independent second (and third and fourth!) opinions from people who understand this stuff to compare to what local and state governments are telling people about the local economy and budgets. Less horse-race reporting, please.

Bits and Bobs

2010-09-07T22:44:00.000-04:00

(Bob Freeman is not, in fact, scolding me.)

Good Chris Casey post on the sad state of local media. I would add that the failure to call a lie a lie when covering political debates has also added to the public's mistrust. My best guess is that he-said-she-said reporting on policy issues is often due to a failure to understand those policy issues on the part of reporters. Instead of sorting the facts, they retreat to lazy horse-race reporting.

Tom Corbett took six times more money from natural gas companies than Dan Onorato. Onorato supports a tax on natural gas, which every other state has, while Tom Corbett does not.

Jeff Pooley defends Mike D'Amore. I agree, and I would add that given the overwhelming majority of politicians who use their official capacity to actively make union organizing more difficult, I really don't understand what's wrong with an elected official using his official capacity to help union organizing. Let's not pretend that anti-union politicians are somehow neutral.

LVCI has awesome videos on labor history and union struggles in the US.

Allentown School District's new website looks great. I harp on this point all the time, but just throwing unorganized information at people does nothing to help democracy. Government needs to hire more web designers and give people info in ways that they can use it and visualize it, easily make Excel charts with it, etc.

Paul Krugman on what the bond market is really telling us.

Barack Obama campaigning for Joe Sestak in Philadelphia.

Some helpful background on the R&D tax credit

It was only a matter of time: Jim Gerlach plays the race card against Manan Trivedi, and the Republican party's long-term decline into an all-white regional Southern party continues apace.

Morning Call LTE provides good reasons Pat Toomey would certainly enjoy living in France.

Cities with declining populations need to consider the benefits of shrinking. This is largely why Pittsburgh has been successful. Any lessons here for Allentown?

Smart electricity meters are working in California.

Avenge Abe's!

Lew Bryson makes a good point about the necessity of addressing cultural problems that lead to excessive drinking as part of the solution to cutting down drunk driving. I think land use laws are important here too. Our culture of car dependence makes drinking much deadlier than it should be.

Does craft whiskey suck?

Liquor Privatization Round-Up

2010-09-07T22:32:00.000-04:00

Here's a quick round-up of some recent items relevant to the liquor privatization issue.

In a post on price increases at the state stores,Lew Bryson asks good questions about how the PLCB, a ward of the state, goes about pricing liquor. Better annual reports are needed. Unrelated, here's another Bryson post on cu

Republican activist Adam Lang at pa2010 has an item on PLCB reform in the Governor's race. Onorato doesn't want to change anything, but Adam says Keith Wallace of the Wine School of Philadelphia says anonymous Corbett advisors told him PLCB reform would be "an element of his administration." So take that with a whole shaker of salt. Adam finds a great quote explaining the mission of the PLCB as it was conceived by its creators: The Pennsylvania Liquor Control Board was formed when Prohibition was repealed by the 21st Amendment. The goal, as stated by Governor Gifford Pinchot, was to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” It’s always nice to hear a government success story, because it has been succeeding at that goal for over 75 years. Ugh!

Finally, the following picture proved to be worth, if not a thousand, at least a few hundred words when I posted it to my Facebook page from a grocery store in Maine this weekend:

The caption was "In Maine, they sell hard core alcohol in the grocery store with no evidence of chaos. The booze is across from the potato chips." I thought I'd post the text of the argument that ensued here (omitting the other gentleman's name) because I think it does a good job of illustrating my thinking on this issue. My comments in bold:

And the PA system, for better or worse, supports more than 3000 family-sustaining union jobs, and provides more than $250 million a year in revenue to the State. Please...let us liberals NOT destroy Union jobs and revenues that are DESPERATELY needed by the state.

Disagree with [commenter]. I think the aim of policy should always be to produce the greatest good for the greatest number of people. Seems to me that 3000 just isn't enough jobs to justify keeping in place a system that makes it absurdly inconvenient to buy alcohol. I don't know that I buy the claim about a large drop in revenue, but even if that's true, we should just make up the difference with higher taxes on alcohol.

Well, facts are facts. State after state that has moved to a more private system has lost considerable revenue. Currently, PA's taxes on liquor are relatively high, and increasing that will just make it even worse. Plus, you'll have to add in a markup for private companies profits.

Virginia is, at this moment, looking into how to move to a more private system and they're facing huge increases in taxes, and bigger markups per bottle, along with looking into a drink tax per pour in bars.

The current system DOES provide more than $250 million a year to the general fund of the state. The best estimates for privatizing show only $1 billion for that. So, after four years, at best, taxes have to be raised considerably somewhere to make up for the shortfall.

And, yes. I would keep those 3000+ union jobs over the WalMart jobs that would replace them, for the slight bother of driving an extra mile to get a bottle.

I think privatization needs to be considered as part of a package of reforms that would scrap the per capita formula for awarding liquor licenses (1 per 3000 people) and leave that decision up to regular zoning. That would make it much easier to open bars, and you'd have a much broader sales tax base for alcohol taxes. You'd also collect more in property taxes at the local level. That only gets you so far, but I have no problem making up the rest with higher taxes on booze.

As a matter of public health, higher taxes on alcohol is good public policy. Beer enthusiast that I am, it would be annoying for me, but I would support a higher tax on bottles and a tax on poured beer such as they are considering in VA. I think taxes are simply a better way to deal with the safety issues than trying to constrain the supply of alcohol by creating fake scarcity. I'm not sure what you mean about an additional private mark-up. Prices for liquor in PA state stores seem to be about the same as the market rate in states with private systems.

I think the jobs question needs to be dealt with as a separate issue because it is an economy-wide problem. If your position is that the shift toward a service economy, with low wages and crappy benefits, is a problem that warrants some kind of government intervention, I agree with that. But then those wage subsidies (or whatever we think the fix is) should be applied across the service sector nationwide. Having taxpayers continue to subsidize 3000 PA retail employees' wages doesn't do anything to solve the larger problem.

As an aside, I would actually prefer that PA continue to allow liquor stores instead of just grocery stores because I like that the employees are knowledgable about wine and liquor. Some teenage kid in the grocery store isn't going to be able to answer your questions. Seems to me these 3000 workers wouldn't have any problem finding jobs in private liquor stores.

And again, the reality is that states have shown that choice decreases, price increases for top end brands, beer and wine, and jobs are lost if services are privatized. I'm sorry that you have a personal interest in privatizing liquor, over other services that the state provides - education, prison, roads, etc.

I just ask that you are honest about your motives, your desires in this matter. To defend family sustaining jobs, then you must always do so, not just say, "oops, not in this case."

I give you credit, in as much as you're not toeing the usual line that "we'll get two billion dollars" by privatizing. On this Labor Day, respect Union Jobs, and the Union workers that are giving us good service, good choices, and protecting us from underage drinking. (A recentish study showed that PA folks are more than three times more likely to be carded than states with more private systems like NY, NJ, MD).

The reason I support privatization of liquor but not education, prisons or roads, is that alcohol is a consumer good with a very high profit margin, whereas the others are public services that cannot and should not be expected to make money. I think it is best left to the market to decide how many liquor stores there should be, what brands should be stocked, etc.

For instance, I highly doubt the current number of liquor stores is the same number as would be determined by the market. It seems just as likely that we would have more stores, and thus more liquor store jobs, if individual entrepreneurs were allowed to open them. Same with the number of bars. If the number of bars wasn't determined by a formula, it would be cheaper and easier to get a liquor license and I think you'd see a lot more younger entrepreneurs opening bars in the cities.

People are always scratching their heads wondering why kids that go to college in PA tend to leave after graduating. Part of it is the lack of professional employment options, but I'd have to say that a lack of entertainment options catering to that age group is also a significant factor. Many of the available licenses are tied up in older establishments who would, and probably should, lose out to more modern and relevant competitors if competition was allowed to flourish. That's good for consumers, but bad for incumbent bars.

And that's a miniature version of my larger point. Restricting the PLCB's mission solely to public health regulation is the best option for the largest number of consumers, while the current system is only good for a handful of public liquor store employees and rent-seeking liquor license holders.

The 2010 Elections in Two Images

2010-09-07T21:40:00.000-04:00

PA2010 Now With Fact-Checking

2010-09-07T14:33:00.000-04:00

Just when you thought pa2010 couldn't get any more awesome, the site announced today that they will begin fact-checking ads - a critical duty that papers like the Morning Call have neglected almost entirely in this election:

Here at pa2010.com, political junkies and insiders follow every little development and nugget of news that can possibly be squeezed out of campaigns. But the vast majority of voters, especially in a state like Pennsylvania, interact with candidates primarily through one medium—TV.

Television ads that beam into their homes are how voters learn about candidates, their biographies, and the policies they are offering. On these pages, we have most often focused on delivering to our insider audience timely—and often exclusive—news about what the new ads are and where they are running on TV. But with less than two months left until voters go to the polls, we will increasingly focused on assessing the veracity of these commercials in a dispassionate, nonpartisan, non-ideological way.

Embracing this watchdog role has taken far too long. But it’s an important role too often left unfilled by the mainstream media, and it’s better late than never.

In an effort to balance the need for breaking news with a commitment to aggressive fact-checking, pa2010.com has adopted the following procedures for covering TV ads. The procedures will also be applied to other paid political media whenever our resources allow.

Charlie Dent's Plan for Jobs

2010-09-02T01:07:00.001-04:00

(Charlie Dent poses with some firefighters he voted to fire.)

Charlie Dent has not voted for a single bill that would create jobs in the 111th Congress.

Not. One. Bill.

When irresponsible banks are in trouble, or tax cuts for the richest 2% are set to expire, or some off-the-books wars need hundreds of billions in deficit-spending, Dent spares no expense. Money is no object to him for these expenses, because they are emergencies.

But when 9.9% of workers in the Lehigh Valley can't get a job, Dent doesn't think that's an emergency. When workers need him to support spending on jobs, suddenly he can't find any more free money.

Charlie Dent's "jobs plan" is for the government to simply stand pat and do nothing in the face of 10% unemployment, because he believes incorrectly that we are in a "structural" recession, when the problem is that there is not enough demand.

I asked one of the economists who conducts the quarterly survey of Lehigh Valley businesses to weigh in here, on whether Lehigh Valley businesses are holding back because of uncertainty and structural problems, or if the problem is demand - that businesses are worried that consumer spending won't pick up. Here was the response:

"Uncertainty does increases cost of production, however, it in the current market, it is lack of sustained demand has been the primary detriment to higher production and thus higher employment."

If Charlie Dent disagrees with the reason the majority of Lehigh Valley business owners say they aren't hiring, he should explain why he thinks they are wrong.

He should tell Lehigh Valley business owners why he isn't voting to create more demand for their products, and why he thinks we should just do nothing and wait it out, even though the crisis could last 10 years!

Confronted with John Callahan's jobs plan, Dent could offer only a sad empty platitude:

"My plan on jobs is to support small businesses by keeping the federal government out of their pocket and off their backs."

Lower taxes for rich people and let corporations do whatever they want blah blah blah. Just more of the same boilerplate Bush economic agenda.

We tried it Charlie Dent's way for 8 years during the Bush administration and the result was the worst job growth on record. Republicans shouldn't get the chance to try it again.

John Callahan's Plan for Jobs

2010-09-02T01:07:00.000-04:00

We learned today that the Lehigh Valley's unemployment rate is now back up to 9.9%, but there's only one House candidate for the 15th district who believes that is enough of an emergency for the government to do something about it.

John Callahan has been hammering Charlie Dent for two days now on jobs, first releasing a 5-point plan to create jobs, and blasting the stand-pat incumbent for failing to take any action on jobs for 2 years, and prioritizing banks and outsourcers over laid-off workers in his district. Lynn Olanoff has the best report on the substance of the plan:

Incentives are key to job creation for small businesses, which create two out of every three jobs in America, Callahan said. His plan would remove fees for starting a business, allow small businesses to defer taxes in their first year and expand tax credits to hire new employees.

Better education also is important in job creation. The unemployment rate for people without a college degree is twice that of those with one, Callahan said. He proposes increasing college loans, training workers for 21st century jobs and adding more scholarships for people looking to become math or science teachers.

To pay for these programs, Callahan said, he would close tax loopholes for companies that outsource jobs or have out-of-country headquarters to avoid having to pay their "fair share" of taxes. His campaign manager, Justin Schall, said he didn't have exact estimates on how much money this would free up, but a recent New York Times article found closing the loophole on businesses with out-of-country headquarters would generate $37 billion.

"I think we can both fund these programs and cut the deficit," Schall said.

Also to cut the deficit, Callahan said, he would oppose any more bank bailouts, support pay-as-you-go rules and freeze all federal spending not for defense, Social Security, veterans affairs and Medicaid and Medicare.

Callahan also highlighted his Continuous Improvement program, which streamlined the process for small-business permits and saved $10 million for the city of Bethlehem. Callahan also took credit for creating 5,000 jobs in Bethlehem but couldn't cite a total for jobs created and lost since he became mayor in 2004.

Callahan touted a record of six balanced budgets, but his Republican opponent, Rep. Charlie Dent, disputed that, citing a recent city audit that found budget deficits totaling $8.5 million from 2008 and 2009. Dent also called Callahan's plan for tax loopholes a tax increase.

Let's get the Dent complaint out of the way first. Suppose that through some strange quirk in the tax code - perhaps an ill-conceived "may" in place of a "shall" somewhere in the knotty legal language - corporations figured out that they could pay a lower tax rate if they devoted some minimum percentage of time per year to punching old ladies in the face. The practice draws national scorn. Liberals whine about how immoral it is for corporations to take advantage of this quirk in the tax code, while conservatives correctly note that corporations have no moral obligations and can legally do anything the law doesn't expressly forbid, including activities that are morally reprehensible.

But it's precisely because conservatives are right about this that it follows that we need to use fiscal and tax policy to correct socially undesirable outcomes. If you get rid of the tax break for punching old ladies in the face, it's certainly true that this would be a "tax increase." But who cares? Most of us think the practice is wrong, and think gains accrued to a firm through cheating aren't real gains at all. In that instance we have to use policy to change it.

Similar logic applies to the topic of outsourcing. Yes, removing tax incentives for outsourcing would be raising taxes, but again, so what? The effect would be to redirect investment back into the United States, and that is what we want! Why does Charlie Dent think that's wrong? John Callahan puts it well here:

“No one wants to see our jobs go to Mexico or to China,” Callahan said. “It’s time for Washington to stop rewarding companies that engage in this culture of outsourcing.

On the substance, I asked Mark Price, a labor economist at the Keystone Research Center, what he thought of Callahan's plan, and this is what he had to say:

Long term the support for making college more affordable as well as increasing the amount of training in the economy is a wise policy priority and has great potential for helping address rising inequality as well as making manufacturing employers in the region more competitive on the global stage.

I tend to be skeptical of payroll tax credits since employers generally only expand employment when they can't meet orders with their existing workforce not because they might get a tax break.
The Economic Policy Institute put out a paper calling for a payroll tax credit, you can read more about it here.

Realistically there is more political support for payroll tax credits so to the extent that doing something is better than doing nothing then it is likely there may be more proposals like Callahans in the coming months.

While certainly better than the other candidates' plans to revive the economy by doing nothing, I think the plan's a mixed bag at best. The education and retraining plank is strong, but the rest is just needlessly small bore. We aren't going to get out of 10% unemployment because of a tax credit. We need much more aggressive federal action if we are ever going to close this gap:

The red line shows how much consumer spending there needs to be, and the blue/green lines show how much consumer spending there is. The primary problem we need politicians to fix is to get money to people to spend in the economy. The appropriate metaphor for the correct policy solution to this crisis is not a family tightening its belt, but a helicopter raining down money.

The short term deficit is not a concern, since we can borrow at ridiculously low rates and the bond market is cheering for a larger deficit. International investors know US Treasury bonds are safe high-quality assets, and they are not worried about our debt. There is no risk of inflation for a very long time.

So it is baffling to see the Callahan press release sell deficit reduction as an effort to "reassure financial markets." Financial markets are not worried about the debt. They are worried about anemic growth and deflation.

Callahan is flat out wrong that reducing government spending is going to create jobs, and his discretionary spending freeze proposal is just a dumb gimmick that isn't going to do anything to reduce the deficit:

Freezing discretionary spending, the spending that Congress reappropriates every year, at current levels will similarly yield only very small budgetary savings. The federal government spent a bit more than $625 billion on non-defense discretionary programs in 2009. The Congressional Budget Office projects that, in five years, the federal government will spend about $660 billion on the same programs. Freezing non-defense discretionary spending at current levels would therefore only produce a total savings of $35 billion in 2015. That year, the budget deficit is expected to be around $760 billion. Saving $35 billion would solve less than 5 percent of the problem. There may be some savings to be found in non-defense discretionary programs, but a spending freeze would accomplish extremely little in the way of measurable deficit reduction.

This is much more specific a deficit reduction idea than Charlie Dent has ever given, but the most important point here is that it's just not time to worry about the deficit yet. It won't be time to stop deficit spending until unemployment is down to 7% and clearly falling or interest rates start to go up, whichever comes first.

Callahan's other ideas are good, and we should by all means try them, but they are needlessly small bore, and not nearly aggressive enough relative to the enormous size of our unemployment problem.

The Enthusiasm Gap

2010-09-01T22:42:00.000-04:00

Political scientist Daniel Hopkins explains what is causing the "enthusiasm gap" between liberal and conservative voters:

Even before it took place, the rally was being discussed as another example of the “enthusiasm gap” between Democrats and Republicans leading into the 2010 midterm elections. I think a better name might be the “threat gap.” That’s because the Tea Party appears to be the latest example of a mobilization in response to a perceived policy threat—in this case, a Democratic policy agenda being pursued by at both ends of Pennsylvania Avenue. Nobel Prize-winning social science tells us that people are generally loss averse, meaning that we’re likely to be more worried about shifts away from our preferred policies than excited about shifts toward them. That’s exactly what political scientists Richard Lau, John Patty, and Joanne Miller and Jon Krosnick have separately argued: in motivating political behavior, threats are more energizing than opportunities. And that asymmetry hints at why there was no “Taxed Enough Already” movement driving the actual enactment of the Bush tax cuts in 2001.

Are such mobilizations in response to perceived policy threats rare in American politics? Not in the slightest: in October of 2002, January of 2003, and again in September 2005, many thousands of Americans of a very different political stripe came here to D.C. to protest against the War in Iraq. In fact, the quotation that opened this blog post, so seemingly at home in a discussion of the current right-wing mobilization, actually came from anti-war activist Cindy Sheehan at a 2005 demonstration. Yet strangely, discussions of the Tea Party almost never mention its recent left-wing analog.

Knowing this, it's not surprising that Obama's communications to his political base have mostly fallen flat. Their message to the base has primarily been "look at all the stuff we accomplished," rather than "think about how terrible it's going to be if Republicans control Congress." The latter seems much more likely to get people out to the polls.

Bob Rubin for the Estate Tax

2010-09-01T22:20:00.000-04:00

Bob Rubin and Julian Robertson make a strong case for Congress to reinstate the estate tax, which expired at the end of last year, immediately after returning from the August recess. The argument from economic efficiency is especially persuasive - insofar as we have to tax anything, we should try to minimize deadweight loss:

With a host of other issues behind it, Congress is finally turning its attention to the expiring 2001 and 2003 tax cuts. But there is one tax issue that should have long since been addressed: the federal estate tax. That tax expired at the end of last year, and there have been no estate taxes levied this year. If a new estate tax is not enacted as soon as Congress returns from its August recess, this void will continue until the end of the year…

We both believe that the estate tax should be a component of any federal tax system. Our government is always going to collect and rely on tax revenues to pay for the activities that our citizens want and need government to perform. A key criterion in choosing taxes is to have the least negative impact on economic activity. The estate tax, in our opinion, meets that test…

An estate tax can provide revenue—with little, if any, adverse supply-side economic impact—to fund deficit reduction, additional public investment or added assistance to those affected by the economic crisis. Used for public investment that has a rapid spend out, or applied to assistance for economically displaced citizens, the net effect will be to increase demand. That’s because roughly 100% of the funds would be spent, while part of any large inheritance is highly likely to be used for savings or debt repayment. And either deficit reduction or public investment will better position our country for future economic success…

Failure to restore a permanent and strong estate tax for this year has already cost billions of dollars in federal revenue. But there is still time for Congress to take action for the current year. By acting immediately, Congress can, at a minimum, solve the revenue problem the lapse has created for the remainder of the year. It could also consider going further by making the change apply from the beginning of this year.

This is Nothing Like Reagan's Recession

2010-09-01T17:01:00.002-04:00

Mike Konczal asks a very important question:

"Which one looks more like our situation right now?"

The obvious answer is that the US economy greatly resembles Japan's financial crisis in the late 90's, and looks absolutely nothing like the US economy of the early 80's.

Indeed, the problems are almost mirror images of each other. As such, when pig-ignorant politicians like Pat Toomey and Charlie Dent tell us we should Just Do What Reagan Did, we can say with a good deal of certainty that not only will their policy prescriptions fail to speed growth, but they will do great injury to the fragile recovery by crushing already-weak aggregate demand.

Long-Term Impact of the Recovery Act

2010-09-01T16:23:00.000-04:00

Important article in Time on all the important investments the Recovery Act made to put the economy on sounder footing going forward:

Yes, the stimulus has cut taxes for 95% of working Americans, bailed out every state, hustled record amounts of unemployment benefits and other aid to struggling families and funded more than 100,000 projects to upgrade roads, subways, schools, airports, military bases and much more. But in the words of Vice President Joe Biden, Obama's effusive Recovery Act point man, "Now the fun stuff starts!" The "fun stuff," about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. "This is a chance to do something big, man!" Biden said during a 90-minute interview with TIME.

For starters, the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world's largest venture-capital fund. It's pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet.

The only stimulus energy program that's gotten much attention so far — chiefly because it got off to a slow start — is a $5 billion effort to weatherize homes. But the Recovery Act's line items represent the first steps to a low-carbon economy. "It will leverage a very different energy future," says Kristin Mayes, the Republican chair of Arizona's utility commission. "It really moves us toward a tipping point."

The stimulus is also stocked with nonenergy game changers, like a tenfold increase in funding to expand access to broadband and an effort to sequence more than 2,300 complete human genomes — when only 34 were sequenced with all previous aid. There's $8 billion for a high-speed passenger rail network, the boldest federal transportation initiative since the interstate highways.

There's $4.35 billion in Race to the Top grants to promote accountability in public schools, perhaps the most significant federal education initiative ever — it's already prompted 35 states and the District of Columbia to adopt reforms to qualify for the cash. There's $20 billion to move health records into the digital age, which should reduce redundant tests, dangerous drug interactions and errors caused by doctors with chicken-scratch handwriting. Health and Human Services Secretary Kathleen Sebelius calls that initiative the foundation for Obama's health care reform and "maybe the single biggest component in improving quality and lowering costs."

Any of those programs would have been a revolution in its own right. "We've seen more reform in the last year than we've seen in decades, and we haven't spent a dime yet," says Education Secretary Arne Duncan. "It's staggering how the Recovery Act is driving change."

Pro-Market Regulations

2010-09-01T16:12:00.000-04:00

I would generally prefer to see more regulations take this form where possible:

The feds, eager to make fuel economy stickers easier to understand even as new technologies enter the market, suggest assigning all new vehicles a letter grade based upon their efficiency. The best fuel misers would, as you’d expect, get an A while the worst guzzlers would get a D.

Assigning each new car an overall grade based on fuel economy and greenhouse gas emissions would the biggest change to vehicle window stickers in 30 years. The proposal is one of two the Environmental Protection Agency and Department of Transportation are considering under a sweeping effort to revamp vehicle window stickers for the 2012 model year. That’s when electric vehicles and plug-in hybrids are expected to hit the market in (relatively) significant numbers.

Current stickers provide each vehicle’s fuel economy in miles per gallon and an estimate of its annual operating costs. Under one proposal, the feds would add a letter grade summing up a vehicle’s energy efficiency and greenhouse gas emissions. Under the second, current stickers would be updated to include comparison of various vehicles’ fuel economy and emissions.

The goal is to provide consumers with a simple, straightforward way to compare the energy consumption and environmental impacts of all types of vehicles, from internal combustion vehicles to electric and plug-in hybrid. Regulators want some public feedback before deciding which proposal to adopt.

Rather than trying to blunt the market dynamics in a way that makes the market less efficient, this approach works by making the market more efficient, creating conditions closer to perfect information. It makes it easy for consumers to quickly compare products in order to get what they want.

In this scenario, no one is making it illegal to buy a gas guzzler, if that's what a buyer wants, but I think you're going to see more people choosing cars that save them money on fuel. If that's the case, the makers of gas guzzlers will invest in new technology to adapt to the changing market, or they will sell fewer products.

This is similar to the approach the new Consumer Financial Protection Bureau will take to regulating financial products. The focus will be to make it easy for prospective borrowers to understand the real costs of various kinds of loans, so firms can't hide bad deals behind needlessly complex jargon.

Corbett: We're Going to Suffer

2010-09-01T00:31:00.000-04:00

Tom Corbett has a new ad boasting about his ridiculous and unworkable No-Tax Pledge he signed for Grover Norquist's Americans for Tax Reform lobbyist group.

Straight up, there's no way Tom Corbett or Dan Onorato can deliver on a promise not to raise taxes for 4 years, and taxes will almost certainly go up as early as next year. By 2013, the state is projected to be running a $3.6 billion deficit. The idea that anybody can cut that amount of spending without doing serious damage to the state's economy is totally nuts.

People complained about the deep cuts this year when the revenue shortfall was about half a billion. Imagine trying to cut an addition $3.6 billion. No one, not even the Republican Senate Majority Leader believes this is possible. Corbett himself does not believe it's possible. Corbett's ad riffs on this, suggesting it's about willpower or something, but the truth is that it is not only unwise by politically impossible. As Corbett himself acknowledges, his plan will result in unnecessary human suffering:

“We’re going to suffer the next two years,” Corbett said in an interview with Tribune-Review editors and reporters. He blames the looming crisis — a combination of multibillion-dollar deficits, the loss of federal stimulus money and a pending explosion in pension costs — on both parties’ “sins of the past.” Corbett is running against state Rep. Sam Rohrer of Berks County in the May 18 Republican primary.

Corbett said he would not violate his pledge not to raise taxes, so on his watch the state would have to cut its way out of a projected $3 billion to $5 billion deficit, even if the reductions prove so unpopular, he’s voted out after one term.

“We’re going to do what’s necessary. If we don’t get re-elected, I don’t care," Corbett said. “I’m at a beautiful stage in my life. If I get elected to governor and don’t get re-elected, I can go do something else. This wasn’t my ambition of my whole life, like I think (with) some people it tends to be.”

Translation: Fuck y'all. I'm going to do whatever I want, no matter how much people hate it, and I don't give a crap because I'm old and rich and "at a beautiful stage in my life." How nice for Tom that he is so well-insulated from the pain of the unemployed that he feels justified tuning out all the little people who are not lawyers.

Throw this on the mountainous pile of evidence that Corbett does not understand the economy. He incorrectly views the state's economy as some kind of morality play, where we need to inflict major pain on poor people in repentance for "sins of the past." In fact, that is emphatically not at all what is happening.

This rank ignorance and dishonesty is endemic to Republican politics, and I expected as much from Tom Corbett, but it really sticks in my craw to see that Dan Onorato's message is so dodgy and incoherent on the subject of revenue. Get out of the fetal position and lay down a clear contrast with this liar. Voters hate a panderer as much as they hate taxes, so you might as well treat them like adults.

Toomey: Corporations Should Pay Zero Taxes

2010-08-31T23:54:00.001-04:00

Joe Sestak launched his first TV ad with a devastating quote from Pat Toomey arguing on television that corporations shouldn't pay any taxes:

The 30-second spot, coming just over two months before Election Day, strikes a stridently populist tone, juxtaposing Republican nominee Pat Toomey’s previous statements about corporate taxes with news clips about falling tax payments by corporations. The ad uses a 2007 CNBC appearance by Toomey, who at the time headed the conservative Club for Growth.

“I think the solution is to eliminate corporate taxes altogether,” Toomey said at the time...

Noting that Toomey was called “Wall Street’s Congressman” by the magazine Derivatives Strategy, the ad says “he’s for them, not for us.”

The Toomey camp rushed out an uncharacteristically incontinent response claiming Toomey's remarks were taken out of context, which is silly because he couldn't have been any clearer about his position.

Daniel Malloy at Early Returns helpfully provides us some more context:

In the clip, Toomey clearly supports the elimination of corporate taxes, with no ambiguity: "Let's have a transparent system. Let's not tax corporations. Let's allow them to compete most aggressively on the global economy. It's better for our workers. It's better for our economy. It would attract more capital. I think the solution is to eliminate corporate taxes altogether."

Later, when pressed on the point by the CNBC host of whether eliminating the corporate tax would be legislatively feasible, Toomey seemed to acknowledge that his goal might not happen in Congress: "A rational discussion can only lead to the conclusion that we should have a simpler tax code and rates, at a minimum, much lower. I’d prefer none on corporations, but much lower would be better."

Soloveichik clarified for me in an interview that Toomey, should he get to the Senate, would champion lower corporate taxes, as the rates are now among the highest in the developed world (though, as Furman notes in the CNBC clip, myriad loopholes make the actual corporate tax burden among the lowest). "He knows it's not a realistic policy position and more an intellectual policy position than anything else," Soloveichik said of eliminating corporate taxes.

Toomey has supported the "fair tax" -- a national sales tax that would eliminate all income and corporate taxes -- in the past, though Soloveichik said he's often been skeptical of the idea and is interested more generally in simplifying the tax code, which is universally acknowledged to be a bear.

When asked what specific tax policies Toomey would support in the Senate, Soloveichik said he would like to see the Bush tax cuts made permanent, further reduction in income taxes and the elimination of the alternative minimum tax.

UPDATE: 6:20 p.m. The Sestak campaign helpfully passes along this segment from Toomey's book "Road to Prosperity," in which Toomey writes that getting rid of the corporate income tax would have been a better use of $787 billion than the stimulus.
For little more in lost revenue than was than was spent in that single bill, Congress could have eliminated all corporate income taxes for nearly for nearly three full years. America would have become by far the most tax advantaged country in the world. We would have attracted a flood of new capital investment, new start-up ventures, and expansions of existing businesses.

Toomey also supports full elimination of the estate tax. Add it all up, and we see very clearly that Toomey's ~~"intellectual policy position"~~ broader goal is to massively redistribute the nation's wealth from poor and middle class people to very rich people.

Toomey's TV appearance was during his tenure as President of Club For Growth, so this should give you a good idea of the sort of crazy nonsense CFG believes, and spending heavily to elect Toomey to the Senate.

To be fair, we all need to keep in mind that when moderate elected Republicans publicly reject this brand of hard right nuttery by endorsing Joe Sestak, it really just means that Sestak is tacking to the middle.

Why to Vote

2010-08-31T22:57:00.000-04:00

Economics blogger Tyler Cowen flagged this excellent standalone quote from Ezra Klein:

Campaigns are built to fool us into thinking that we're voting for individuals. We learn about the candidate's family, her job, her background -- even her dog. But we're primarily voting for parties. The parties have just learned we're more likely to vote for them if they disguise themselves as individuals. And American politics would work better if we understood that.

I actually think this is something conservatives understand more intuitively than liberals. You don't vote to elect your best friend. You vote for the guy who is going to get a person like you the most money/stuff. In a body as large as the House, you are not voting for a man, you are voting for a party, and the only reason to support a party is to get done the stuff that you want to see happen. As a species, politicians are generally pretty awful people, and there's just zero reason to focus on their personal attributes for more than handful of news cycles. The only question that has any value in the voting both is: would I prefer to have a liberal or a conservative cast the tie-breaking vote on a contentious issue?

Do I want the House to pass more left-wing bills, or more right-wing bills?

Do I want tax policy where rich people pay more taxes so that middle class people can get more money? Or do I want tax policy where middle class people get less money so that rich people can get more money?

Do I want the balance of power to tilt generally more toward workers and consumers, or generally more toward management and corporations?

Do I want Nancy Pelosi to be the Speaker of the House, or John Boehner?

Do I want gridlock, or do I want the government to continue to work at a time when some economists are already predicting a double-dip recession?

5 Stages of Municipal Death

2010-08-30T23:22:00.000-04:00

On Friday I went to the RenewLV Brown Bag lunch on Municipal Finance. The main speaker was Gerry Cross from the PA Economy League, but since State Rep Bob Freeman and Easton mayor Sal Panto were also in attendance, a good wonky exchange ensued.

The issues around municipal finance and municipal consolidation are very important, and bear on a number of the most critical political and economic issues.

But they are also very complicated, and very boring. So I will attempt to break them down over a series of posts, rather than try to cram it all into one.

The first thing you need to know is, as Gerry Cross put it, "everyone is in the same train, just in a different car." At the most basic structural level, there is a problem with the way Pennsylvania raises money to pay for local government functions.

Under the current system, every municipality, regardless of what its elected reps do, will see its financial position decline in a predictable way.

Here is the life cycle of every municipality in Pennsylvania:

1. Low taxes with prosperity

2. Gradually rising tax rates and increasing demand for services.

3. Plateau of tax base with reductions in non-core services

4. Insufficient taxes or tax base with reductions in core services.

5. Loss of tax base and distress

As investment moves further and further out from core cities into subsequent rings of suburban townships, each new ring will experience the above conditions.

Morning Call Wrong on Beck/Palin Crowd Size Estimate

2010-08-30T22:47:00.001-04:00

Colby Itkowitz has some 'splaining to do! Consider the following quotes from her Morning Call article on the Beck/Palin rally:

"More than 500 from Valley join hundreds of thousands for Washington rally"

and

"Hundreds of thousands from across the country — including more than 500 from the Lehigh Valley — flooded the National Mall here Saturday answering conservative heavyweight Glenn Beck's call to "restore honor" to America.

and

"Beck implored those at the rally – whose numbers were estimated to be as much as several hundred thousand — to pray on their knees with doors wide open so their children can see them worshipping God."

Then consider the official estimate commissioned by CBS:

An estimated 87,000 people attended a rally organized by talk-radio host and Fox News commentator Glenn Beck Saturday in Washington, according to a crowd estimate commissioned by CBS News...

AirPhotosLive.com gave its estimate a margin of error of 9,000, meaning between 78,000 and 96,000 people attended the rally. The photos used to make the estimate were taken at noon Saturday, which is when the company estimated was the rally's high point.

While there are several other numbers being spread around, the CBS estimate is the only one that isn't based on hearsay. That official estimate says the maximum number isn't even one hundred thousand people, let alone several hundred thousand people. This is just sloppy. I do not understand why the Morning Call would allow this wildly inflated number to be printed. I hope the paper will be printing a correction in print and on their website tomorrow.

Philly Wins Energy Innovation Hub Money

2010-08-30T22:27:00.000-04:00

Good news out of Philly. From the Brookings metro policy blog:

We’ve long liked the Department of Energy’s new Energy Innovation Hubs program, with its resemblances to our energy discovery-innovation institutes idea. And we’ve especially liked the plan for the third type of the hubs, which has called for supplementing a powerful research, development, and deployment (RDD) hub focused on energy efficient building technology with an array of additional resources intended to broaden the effort and better connect it to the local economy.

Now, a research consortium led by Penn State and based out of the Philadelphia Navy Yard has won the five-year, $122 million award for a building sciences hub and innovation cluster and it feels like a masterstroke. One of multiple truly inventive proposals from around the country, the winning Philadelphia entry epitomizes the power of a new era of smart, region-centered thinking and action about science, innovation, and regional development in America.

Centered on a new paradigm for doing hard-core translational science, the new Energy Regional Innovation Cluster (E-RIC) initiative has always been noteworthy because it shows the administration moving to complement a narrower research and technology program (the hubs) with a broader view of the real-world process by which truly game-changing, commercial-scale innovation occurs.

Unlike the other hubs, the cluster-oriented building sciences initiative represents an explicit acknowledgment of the powerful role of place, regions, and local industry clusters in the dynamics of innovation and commercialization. In that sense the building sciences hub with its energy regional innovation cluster (E-RIC) strategy has always been important as a marker of the growing recognition in Washington that regions matter and that local innovation clusters are a proven forum for technology transfer, knowledge spillovers, and efficient entrepreneurship. Making the project even more significant is that fact that the award will launch an important piloting of a new, multi-agency approach to federal programming that seeks to align disparate federal funding streams (in this case from six economic development agencies) behind a core development goal.

And yet what is especially compelling about the winning Philly project is the extent to which it places a gritty, physical urban place at the center of its plan. To be sure, the scientific program went through a rigorous review process with experts from the federal government, industry, and academia that vetted the scientific and technical merit of the project and the qualifications of the management team and personnel, which includes scientists from Princeton, Rutgers, the University of Pennsylvania, Drexel, and other institutions. But while the translational science was clearly impeccable, it is equally clear that the Philly Naval Yard’s extremely real and physical urban presence loomed large in the region’s win.

Bits and Bobs

2010-08-30T22:10:00.000-04:00

John Callahan is straight up wrong about Race to the Top. The federal government is absolutely right to use the power of the purse to push for more rigorous data-based evaluation of teacher quality. The initiative isn't perfect, but it's certainly a step in the right direction. This stance is just a pander to teachers' unions who want to make sure it remains hard to clean out bad teachers.

It's too bad Sarah Palin came all the way to Pennsylvania and didn't have any time to stop in the Lehigh Valley to campaign for Charlie Dent. I'm sure the Dent campaign did everything they could to bring the widely-admired Palin to town.

Bernie O'Hare catches the LV Conservative Voice PAC failing to disclose their donors.

Terrifying: Chris Casey is predicting a 54-46% win for Justin Simmons in the 131st District Statehouse seat. Again, is Mike Horton taking campaign strategy tips from Mat Benol?

You have probably never thought this much about what goes into planning for smooth traffic merging.

Andrew Kleiner draws our attention to the environmental externalities of Musikfest

You have probably never thought this much about what goes into planning where to put school bus stops. I wonder if someone has invented a computer program to determine an ideal central meeting place based on a list of addresses.

Arresting people for swimming naked is probably among the least efficient uses of law enforcement resources.

Businesses who identify with the Tea Party Exchange shopper loyalty initiative repel customers.

West Nile-carrying mosquitos turn up in Northampton County

Easton Farmer's Market neck in neck with Ohio for America's favorite farmer's market. Go vote!

Pennsylvania's stringent egg assurance program will be the template for strict new federal food safety regulations.

Michael Drabenstott updates us on the soon-to-open Hello Burrito in Bethlehem. Menu looks mostly great but WTF would anyone want an Asian Sesame burrito? Blasphemy!

Chris Briem has several Marcellus Shale news items. People following this issue should immediately put Briem on their RSS.

Matt Assad was pretty vague in describing the reasons for George Doughty being pushed out of LVIA. Am I right to interpret this as Stoffa and Cunningham wanting a less-crotchety Director?

Gizmodo says canned beer is the future of good beer

PA Legislature Website Still Horrible

2010-08-30T22:04:00.000-04:00

Scott Detrow reports on a new mobile website for the PA Legislature. It's a nice enough gesture, but it's not significantly more user-friendly than the horrible PA Senate website that looks like something I might have made on Geocities circa 1997. How hard would it be to spend a few thousand dollars to pay a good web designer to make an awesome user-friendly website?

Look how much better the New York State Senate website is. It looks like every advocacy website. You can get updates on issues you care about and there are all kinds of other cool features. There's no reason any website should still look like the PA Senate website in 2010.

Charlie Dent Campaigning on the Taxpayer Dime

2010-08-30T20:42:00.000-04:00

A Morning Call LTE from Ed Seidick reports on some thinly-veiled campaigning on the public dime by Charlie Dent:

I just received a very thinly veiled election mailer from U.S. Rep. Charlie Dent. In this flier, Congressman Dent extols his virtues, slams Democrats, and generally promotes his re-election. Basically the rhetoric we have come to expect from this career politician.

However, the real problem I have with this piece is that it was sent as a "constituent update" and was paid for with taxpayer money. Congressman Dent wants to save our jobs and lower our taxes. Well, Mr. Dent, start by not wasting our money with your political posturing. We usually see an influx of these mailers at this time of year, but this one is way out of bounds and he should be ashamed of himself for crossing this ethical line.

It's too bad that our political system allows incumbents so many unfair advantages in elections. If Jake Towne or John Callahan want to send a campaign mailer to all the residents of the 15th district, it's going to cost their campaigns a ton of money. But when Charlie Dent wants to send what is effectively a campaign mailer, taxpayers foot the bill. Who besides incumbent politicians thinks this is a good idea?

School Funding Shouldn't Depend on the Business Cycle

2010-08-29T23:13:00.000-04:00

Easton Area School Board looks unlikely to use federal money to hire back teachers, likely because they don't know whether they'll have to fire them again next year.

But is this really how we should be deciding how many teachers to hire? I think it's wrong for people to look at depressed revenue, and conclude that it means Easton has too many teachers. What if Easton has the ideal number of teachers it needs to teach kids properly?

The way to determine how many teachers to hire is to 1. decide how many kids you want in a classroom, and how many specialists you want to have, 2. hire that number of teachers and then 3. raise the appropriate amount of taxes to pay for it. Education is very important. You can't just be setting a firm revenue number first and then figuring out the size of your teaching staff. The right kind of school board member is going to say "we're not going to ruin our kids' education prospects just because some shadow banks screwed up the economy; we're going to spend whatever it takes to maintain the highest standards."

This is ultimately why you need state aid funding to be automatic, tied to the unemployment rate, rather than subject to approval by Congress. State aid is a case where the right thing to do from a fixing-the-economy standpoint is terrible politics. But politics or not, it still needs to get done, and that's why you want it to be automatic rather than leaving it to politicians. The other advantage of tying state aid to the unemployment rate is that voting to end aid is also a politically unpopular vote.

Charlie Dent's Priorities: Paying Companies to Ship Jobs Overseas While Laying Off Teachers at Home

2010-08-29T22:22:00.000-04:00

Charlie Dent is talking some serious nonsense trying to defend his vote to fire 300,000 teachers. Lynn Olanoff reports:

U.S. Rep. Charlie Dent and his Democratic opponent Bethlehem Mayor John Callahan are sparring over the merits of the recently approved federal bill to save teachers' jobs.

Callahan, speaking Thursday surrounded by three dozen teachers at Trexler Middle School in Allentown, said the bill saves jobs during an economic recession and will keep class sizes small.

Dent, R-Lehigh Valley, speaking Wednesday at a news conference at his South Whitehall Township campaign office, said the bill will cause permanent private job losses to only temporarily save public jobs.

The $26 billion bill gets $10 billion of its revenue by raising taxes on some U.S.-based multinational companies. Another $12 billion in funding for the bill comes from accelerating the phasing out of an increase in food stamp payments implemented in last year's economic recovery bill.

Dent objects to the increased taxes on businesses. While some, including Callahan, call the measure a way to close a loophole on companies that send jobs overseas, Dent said the bill hurts any U.S. company that exports.

This is as clear an indication of Charlie Dent's priorities as you're going to get.

To Dent, retaining a tax break that essentially pays multinational corporations to invest overseas and tilts the playing field against American workers, is more important than keeping 300,000 teachers, cops, and firefighters in their jobs to avoid a double dip recession.

The reason Dent needed to vote for this bill is that letting states lay off 300,000 workers would be a massive anti-stimulus that would cancel out the boost in demand provided by the Recovery Act. It would shrink the economy by lowering already-weak demand, depressing revenue even further, plunging us into a double dip recession.

Yes, this bill authorizes six months of spending. But if unemployment hasn't recovered in 6 months and state revenue still hasn't recovered, which is overwhelmingly likely, then you need to pass another state aid bill, and you need to keep passing state aid bills until employment recovers, because the alternative - letting states slash their spending - is much much more expensive and counter-productive as the result is slower growth.

It isn't going to be time to stop providing aid to states until unemployment is down to 7% and clearly falling. What we really need is to have automatic stabilizers in place so that these funds are triggered automatically based on the unemployment rate, unlike the current situation where we need to go back to Congress every 6 months to get them renewed.

Listening to Dent's industry-supplied talking points is ultimately a fruitless endeavor. There is one reason, and one reason alone, that he voted against the EduJobs bill: he is a Republican. Republicans don't care at all about the jobless and they want to make the economy as bad as possible by November so that they will perform better in the midterm elections.

Voters Want to Soak the Rich

2010-08-29T16:13:00.000-04:00

Deficit reduction is still much less popular than further expansionary spending on jobs.

But there's another reason Republicans might want to be cautious pushing deficit reduction - all the deficit reduction ideas that are most popular with the public involve soaking the rich:

A few months ago, Annie Lowery made a chart that illustrated the deficit reduction problem well. The blue bars show which cuts are most popular with the public, and the red bars show how much we actually spend in each area:

This is why conservative economist Bruce Bartlett predicts conservatives will eventually come around to support some kind of VAT - the only alternative with any momentum is to soak the rich, with cuts to military spending coming in second.