Riding the Campaign Trail – February 15, 2012. Given the presence of a number of presidential hopefuls in Idaho this week, I thought a brief digression into the field of presidential campaigning might be insightful, or at least entertaining. In reading the morning newspaper coverage of Rick Santorum’s Capital High foray, I noted with interest his suggestion that Idaho’s federal lands should be sold off to private parties, or, alternatively transferred to state control, since the Feds did not have the resources to properly manage them. Obviously he had failed to consult with the hook and bullet crowd as to the first alternative, and, presumably, was unfamiliar with the present condition of our state purse as to the second.
Somewhat ironically, as I was heading upstairs in the capitol rotunda while ruminating on these matters, I discovered the rotunda’s displays of the day were the many enterprises involved in the Buy Idaho program. Santorum’s call to Sell Idaho probably would not sit well with most of these purveyors of Idaho goods and services. Santorum’s style was clearly well matched with his audience, scuffed cowboy boots, jeans, open collar and a sweater vest. It will be interesting to see how Romney chooses to adorn himself for his Friday $1000 a plate dinner – clearly a different ambience from the overflow crowd at Capital High’s auditorium.
However both hopefuls are definitely on the same page when it comes to social issues, taking every opportunity to laud their big brother agenda – telling the fairer sex that they are not qualified to decide for themselves what is best for their bodies, that they should defer to their more worldly wise and more knowledgeable male, e.g. House Bill 530. It’s almost as if a Christian Taliban is evolving on the American political right, with the goal of relegating women to a second class status deemed unable to take care of themselves, at least in the manner their male contemporaries deem acceptable. Can mandatory headscarves be far behind?
People, Party, and Politics. February 10, 2012. While awaiting the commencement of the House floor session early today, I was tuned in to the audio feed from the Senate auditorium. The Senate State Affairs committee was holding its print hearing on the “Add the Words” proposal, RS 20877. This proposal would add sexual orientation to Idaho’s Human Rights Act and Civil Rights Act as a basis for prohibiting discrimination. Employers could no longer choose to fire, or refuse to hire, qualified individuals solely because of their sexual orientation. In simplest terms it would level the playing field for gays, bringing their workplace status up to that presently enjoyed by the “straights” in the workplace.
Since it was a print hearing, no public testimony was taken from the 150 plus attendees present for the 8:00 a.m. meeting. The only speaker was Senator Edgar Malepeai (D) Pocatello, the sponsor of RS 20877, who gave an impassioned presentation, stressing the fundamental fairness represented by his proposal, and the real need in the marketplace of jobs to afford that fairness to all our citizens, not just those conforming to a particular world view.
Unfortunately, the result was a straight party line vote, with all Republicans opposing and all Democrats supporting. The shocked silence following the vote was palpable. Most of those present were in disbelief that not only was the idea of sexual identification being of neutral significance in the jobs arena being rejected, but perhaps more disturbing was the clear inference was that such an idea was not even worthy of being considered in an open and democratic fashion by our elected representatives. In effect the message was clear that we know what is best for you out there in the hinterlands, don’t bother even trying to change our minds since to you they are closed forever. One would like to believe that times are changing, but clearly not in the majority party in Idaho where the glacial epoch appears to still be in its primacy.
Occupy Boise Redux. Feb 2, 2012. The Senate’s State Affairs committee took up H 404 - the anti-OccupyBoise bill - early yesterday morning following a packed house hearing in the Senate’s auditorium. All but one of the 25 people testifying opposed the bill. It became increasingly clear as the committee members discussed the bill that they had a number of serious concerns. Senator Bart Davis (R), an Idaho Falls attorney and Senate majority leader, echoed the items raised in last week’s piece, namely that the treating of personal property as litter, with no due process provisions being afforded to owners, impinged on fourth, fifth and fourteenth amendment rights protecting one’s personal property against an overreaching government.
Senator Brent Hill( R), the Senate Pro-Tem, who also sits on the committee, opined that the emergency clause included in the bill also deserved closer scrutiny, that facially there did not appear to be any crisis or equivalent warranting a rush to the Governor’s desk for its enactment. The upshot of this scrutiny and concern was that Davis made a motion to send H 404 to the Senate’s amending order. This would permit not only those senator’s voicing concerns to offer changes to the bill, but under the senate’s rules any senator could offer any amendment they chose. The vote to amend was one vote shy of being unanimous; Michelle Stennett (D) of Blaine county, the sole no vote, indicated that she felt the entire bill deserved to be tossed, that it was so bad no amount of amending could make it palatable to her.
My guess is that something will eventually come out of the Senate with some level of amendment; this will require that it be returned to House for their concurrence in the bill as amended. Unless they accept those amendments, it is possible that the House will amend it even further, causing it to return to the Senate for their consideration. At this point it would be akin to a wounded duck flapping from house to house, hoping for a mercy killing if nothing else. Kind of makes one tear up to see our elected representatives toiling into the night over what is clearly the most pressing issue facing our jobless and homeless citizenry.
“Oh what a tangled web we weave…”. January 26th, 2012. With apologies to Sir Walter Scott, a visit to the House side of the capitol is a case study in such consequences. Last week an ID badge turned up missing in the one of the representative’s cubicles in the garden floor office area. That same day members of the Occupy Boise group were given a tour by Representative Brian Cronin (D) of areas of the statehouse. Somehow Speaker Lawerence Denney (Boss Denney per Kevin Richert of the Statesman Editorial Board) concluded the two were connected, announcing that one from the tour group must have stolen the badge.
This insight produced immediate action on the Speaker’s part. He proceeded to order beefed up security on the House side, locking down all office areas, bringing in Idaho State Troopers and instituting an unheard of check in requirement in order for members of the public to call on their elected representatives. Additionally he announced to the media his conclusion that someone from Occupy Boise had lifted the badge. When it was pointed out to him that the tour group never even made it to the House side, apparently totally fascinated with the Senate’s home turf, he declined to change his story, facts apparently being of little moment .
House Bill 404, the House leadership response to the Occupy Boise movement, prohibiting camping on state lands not expressly opened for camping, came forward for debate on the House floor today, easily gaining passage by a 54 -16 margin. Both sides were in agreement that such a prohibition was constitutional; the question was whether it was necessary or prudent, or could be accomplished in a more accommodating fashion. The penalty is an infraction, essentially a civil violation as contrasted with the criminal alternatives, misdemeanors and felonies. The Republican sponsor of the bill, asst. majority leader Scott Bedke, emphasized that the bill was not intended to stifle dissent or protest, but merely to protect and safeguard state property, that the use of an infraction as a penalty expressed this.
To the contrary the penalty provision gives the state the right to seize and dispose of any personal property as litter, with no recourse available to the owner. I would point out that our current criminal laws provide that when a drug dealer is stopped and arrested on the street, his automobile is subject to seizure and disposition as well. He, however, first gets a notice and hearing before an impartial magistrate in order to contest the state’s right to such a seizure. It would appear the property rights of felony drug dealers in Idaho are deemed to deserve more protection than those of citizens’ exercising their rights to assemble and protest - an interesting policy message.
January 19th, 2012. Jobs and Tax Cuts – Which Come First? Like the proverbial chicken and egg, the current debate, both nationally and locally, hinges on this conundrum. Most conservatives vehemently oppose any attempt to raises taxes while strongly supporting business tax cuts, both income and property, as leading to job creation. Their basic argument is that increasing the wealth of business entities and those controlling them, will lead to an expansion of their enterprises and -voila! - more jobs. While facially appealing, it fails on at least two counts.
The first, discussed last week, is the lack of support in the historical record for such a result. While “tax cuts produce jobs” has been the mantra of the conservatives since at least the Reagan years, economist Ed Lotterman’s analysis conclusively rebuts this. The argument against their implied premise, namely, that to create more jobs one must cut the tax rate to produce additional resources, is an empirical one, grounded in personal experience and common sense. Having worked in a large and successful silicon valley corporation for ten years, and run my own small business for thirty years, I can assure you that the accumulation of earnings, money in the bank, was never the trigger for hiring, i.e., creating new jobs.
In both large and small enterprises the sole rationale for even considering initiating the hiring process was demand. Simply put, if people were buying our good or services at a rate approaching or exceeding our ability to provide them, adding people to the payroll as a response was front and center. If we had ample assets and resources to cover the costs of hiring, training, payroll, housing and support we could move forward directly down this path. If were short of such resources, we went to our friendly banker; if big enough or publicly traded we could perhaps sell bonds or seek additional equity funds from investors. Put simply, increased demand results in new jobs; cash on hand helps but just shapes the process; it is a means - not the end.
So – if one has funds earmarked for “tax relief, say $45 million or so, these resources would be far better spent in stimulating the demand side of the economy rather than using them simply to ease the process aspect. That money in the hands of consumers such as our state employees would do far more for economic stimulus than merely banking it in corporate reserve accounts. There it may well facilitate the hiring of new employees more rapidly or efficiently, but lacking additional demand, it is more likely to simply add to the CEO’s salary or the shareholders’ dividends. Hopefully our governor will stop, look and listen before he makes the call.
12, 2002. Voodoo Economics 2.0. Some ideas are like cats – no matter how often they appear to be dead, they somehow manage to revive and come back to life, apparently none the worse for wear. A great example is the notion that tax cuts somehow pay for themselves. During the last two sessions a proposal has surfaced, and will likely do so again this time, to cut the income tax rates for corporate and individual taxpayers. The proponents claim that such a move in a down economy is the sure way to stimulate economic activity, producing new revenues to offset those lost from the cut. Idaho's history from the 2001 tax cut to a $200 million deficit proves the point.
Their primary rationale for such a contrarian view is their claim that President Reagan’s administration accomplished this very result in the 1980s. While they are correct that Reagan did cut corporate income tax rates and that subsequently Federal tax revenues increased, they fail to point out that at the same time, Reagan increased substantially the federal payroll taxes – these contributed the lion’s share of such revenues. Ed Lotterman, in his syndicated financial column carried by the Idaho Statesman, presented a detailed analysis of the reality behind the claimed benefits of such cuts. He summarized the views of economists of all stripes as follows: Argue that low tax rates motivate more work and investment, all other things being equal, and thousands of economists will agree with you. Argue that the size of the federal government should be slashed and you will be among hundreds. But argue that tax cuts will increase tax revenues and you will find yourself in a small group of cranks, charlatans and cable TV entertainers.” Ed Lotterman. Idaho Statesman, March 26, 2010.
While Idaho’s 7.6 % corporate tax rate is nominally higher than many of our surrounding states, this is only a part of the story. We also have such a variety of business exemptions, credits and deductions that the effective rate, though varying by industry, is substantially lower. As Senator Brent Hill, the Pro Tem, recently observed, Idaho’s rather unique Investment Tax Credit (ITC) can alone halve the tax liability of many asset heavy industries. Ultimately this is reflected in Idaho’s very favorable Corporate Tax Index published by the Tax Foundation which has placed us consistently in the top twenty states over the last decade. To borrow a phrase - if it ain’t broke, don’t fix it.
