Schedule & Topics for Future Forums:
Economic Justice/Poverty/the Social Safety Net – 3/6
Housing 3/10
Environment 3/13
Public Safety & Criminal Justice 3/18
Misc – What Are We Missing? 3/23
Please share widely!
Reality-based commentary on politics.
nopolitician says
I think that when we talk about Economic Development, we have to focus on a wide spectrum of jobs, not just jobs for people with high education levels and high skills.
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p>Biotech may be great, but there aren’t a lot of currently jobless people in this state qualified to work at such companies. I think we should also focus on developing good jobs for people who currently need them.
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p>Not everyone is capable of becoming a neurosurgeon or lawyer. There will always be people who don’t go to college. Those people have few options, and wind up dropping out of society — or worse yet, turning to crime.
kbusch says
I’m much more interested in what Democrats plan to do with respect to economic growth, jobs, and workers’ rights in the next two years. So probably are citizens and voters.
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p>By framing the question in this manner, we are invited to an exchange of platitudes.
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p>I’m all for Democratic leaders and politicians talking about values more. It’s territory our party has ceded to the right. So please, yes, let’s do more of that. On the other hand, platform discussions of values seem deadly and unproductive. (“This is important.” “This is important, too.” “Yes, and this is also important.”) The result can only be unreadable mush.
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p>A platform will best reflect core values in proposed actions.
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p>I’d read that.
joes says
The State has economic development plans now.
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p>http://www.mass.gov/Ehed/docs/…
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p>Just make it happen in the Legislature.
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p>Using the ARRA funds to follow up on efforts already designated economic development opportunities would be preferable to just spending the money for short term results.
bostonshepherd says
I could hardly read this crap in its entirety. For the most part, it is simply meaningless policy-wonk gibberish. If this were submitted in the private sector as a business development plan, heads would roll.
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p>It’s chock-full of inter-agency spending platitudes devoid of any understanding of how the world really works, what motivates job creation, or what attracts employers to the state or existing ones to expand.
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p>Except for a couple of listed infrastructure projects (rail lines, tunnels, airport improvement, maybe broadband), the action plans are blueprints for more study, municipal hand holding, regional planning Kumbaya, and more study to find growth “drivers.”
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p>I did learn one thing — UMass R&D expenditures were $365,288,000 in 2005 (FY 2006.) Couple of questions: where’d the money come from, where did it go, what is the return on investment on those funds, and it’s already 2009 where’s the FY 2007 and FY 2008 R&D expenditures figures? Maybe some of those dollars can be diverted to improving UMAss’s tracking of R&D expenditures.
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p>At it’s heart is the belief that government can be the primary stimulus for economic growth. It can’t. It can only (a) retard private sector growth, or (b) act in a supporting role by keeping personal and corporate tax burdens low and proverbially paving the roads.
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p>If this is what passes as an economic development plan, we’re in deep shit.
kbusch says
Reference: http://braddelong.posterous.co…
bostonshepherd says
I don’t disagree with DeLong’s opinion of the Treasury View. And having been taught by both Fama and Friedman, I am loathe to pick sides.
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p>But I’ll pick Friedman, and his belief that “fiscal boost programs will not be very effective” (Page 9). Perhaps when you include a citation you should read and understand its conclusion before linking to it. In this case, you missed the author’s main point.
bostonshepherd says
Friedman’s argues against preferring fiscal stimulus spending as ineffective because of the contemporaneous and offsetting actions of other economic factors in Hick’s model which Fama, according to DeLong, fails to acknowledge.
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p>I would say that Ronald Reagan was a devotee of Friedman, and Reagan’s economic policy in the face of the severe recession of 1980 gives support to everything the Obama administration belittles, despite Reagan’s success. We shall see how it goes. (I am not hopeful.)
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p>I could be wrong, but Friedman’s (Nobel 1976) dynamic extension of Hick’s model (Nobel 1972), and other such notions when Friedman was still at U of C, may have been part of the basis of Bob Lucas’s Nobel-Prize-winning rational expectations theory (in 1995.)
seascraper says
Delong is basically wrong about the government and private enterprise because private enterprise expands the money supply by converting a capital resource into something that can be exchanged, by planting a seed in the ground and growing an ear of corn for instance.
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p>It is possible for government to do this too but I don’t think that’s what Delong is talking about is he? The government usually just takes some of the corn and gives it to somebody who has nothing to exchange for it.
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p>Government over-spending will result in higher interest rates not because the government crowds out private borrowing and investment, but because the government spending is less likely to pay itself off in higher revenues down the line. The government will therefore have to raise taxes to pay off the borrowing plus interest, or inflate the currency. Higher taxes as well as inflation are both business risks that the banks will have to hedge with higher interest rates.
joes says
http://www.mass.gov/Ehed/docs/…
bostonshepherd says
So I read this through. Lots of graphs, tables, speaking about “performance.”
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p>Number of minority/women-owned business certifications issued. Hotel lodging taxes collected. Grants given.
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p>This is what passes for economic development in the public sector.
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p>Check out Department of Business Development … they claim 13,482 jobs “created in CY08.” Of course, they actually didn’t create those jobs themselves, they assisted — I don’t know what that means — private industry in creating them. Can’t discern how. So what does that mean? Would those jobs NOT have been created had the DBD not been on the scene? I bet you could lop those jobs out of the state budget and never notice the cut.
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p>Big news from DHCD … 40R housing units added CY08: 305. Meaning? Developers took the 40R tax breaks and constructed 305 units. Nice. But that’s private capital building those units; sure, the extra $2,000 40R tax break helps, but is the state the driving force behind these developments? No. private sector demand for housing is.
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p>I don’t mean to belittle the Commonwealth’s efforts in assisting small businesses, giving tax breaks to real estate developers, or even flying to Hong Kong to pitch companies.
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p>But all this effort adds only a tiny sliver of economic activity to MA’s economy.
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p>The vast majority of jobs, and therefore tax revenues, come from the private sector.
joes says
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p>So it is a complex task of Government to facilitate those private investments without burdening the cost of business in the process. But it can be done.
bostonshepherd says
BMG is an interesting place to cocoon and reinforce your progressive, hyper-liberal notions, but you need to get out into the business world and talk to folks who ACTUALLY EMPLOY PEOPLE to get their opinion on how to foster economic growth and create jobs.
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p>I am one of those people. Here’s are a couple of suggestions:
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p>(1) Growth always increases tax revenues. Want more money to spend on social programs? Promote private sector growth. This is the lesson of both the Reagan and Clinton eras.
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p>(2) Stop believing the public sector can create jobs. It can’t. Hiring 20 more people at the MBTA is not “creating jobs.”
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p>(3) Ditto for what the public sector calls “investment.” Collecting tax revenues and redistributing them is “spending,” not investment.
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p>(4) In a recession, the private sector losses jobs, and tax revenues go down. Government has to fire state employees, cut wages, reduce programs, or issue debt. Raising taxes to raise revenue never works.
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p>(5) To attract business and commerce, reduce or eliminate/suspend for 5 years the MA corporate tax. You know this works because to entice Hollywood to come to MA they received all sorts of tax breaks, and they came. Ditto the sale tax holiday which increases sales state-wide … reduce the sales tax to 4% and I bet you’ll end up enhancing sale tax revenues.
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p>(7) For crying out loud, stop bending over for the unions. If you want to save 30, 40, maybe even 50% on state-funded construction projects, let non-union shops bid under prevailing wage rates. Please read Ron Cogliano’s op-ed piece in the 2/27/09 BBJ on the cost differences between the Worcester and Lowell municipal parking garages.
kbusch says
To put it mildly.
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p>What you advocate in #4 was tried by Franklin Roosevelt in 1937-1938 and it caused a reversal of the recovery.
bostonshepherd says
The 4 things I mention, which I mean to apply to the public sector, are the universe of actions the public sector can take, in addition to wrongly raising taxes. I concede government can do the opposite of each of those too — hire, increase wages, increase programs, retire debt, and lower taxes — although those would be hard to due in MA with a balanced budget requirement.
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p>And perhaps I should have said “Government can do one or more of the following in some combination …”
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p>What was it that you though I was advocating? And when you finish answering that, please give me some citations.
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p>
kbusch says
The verb form “has to” actually has more force than merely a recommendation. “Little Johnny has to go to the doctor” implies that the action is required not merely recommended. Here, I thought I was softening your stance.
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p>There are indeed some economists here and about arguing against a stimulus. There are even fewer economists arguing for an anti-stimulus, i.e. for a contraction of government spending.
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p>Hoover’s advisers agreed with this line of action, though.
bostonshepherd says
… how about we try this, Professor English:
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p>”… In order to balance their budget, required by statute in Massachusetts, government must either fire employees, cut their wages, reduce programs and transfers, issue debt, increase revenues, or some combination of these actions.”
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p>I’m not advocating policy here (except for avoiding tax increases in a recession.) I’m outlining the tools available to the governor.
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p>We’re both talking about the MA government, right? I don’t get either the anti-stimulus or the Hoover references. Can Deval can print money or impose tariffs now?
nopolitician says
Your position is very one-dimensional and dogmatic. You completely ignore the effects of lowering government spending, to be more precise, the effects of lower services.
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p>If “Raising taxes to raise revenue never works”, then why do we ever see price increases in the private sector? Raising prices in the private sector should follow the same rule, it should reduce revenue instead of increase it. Funny how businesses haven’t figured that out?
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p>While I agree that some of your ideas could have short-term benefits, going down that path without exploring long-term effects would be insane. Sure, we could eliminate the corporate tax for 5 years. Not sure how much that would take out of the budget, but we’d either have to reduce services or float bonds. If we reduce services, which ones should we reduce? What happens when those services disappear? Would it help or hurt our economy more than the elimination of the tax?
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p>You don’t seem to be willing to go the extra mile, so why should anyone take you seriously?
seascraper says
Raising taxes may raise revenue, but it also retards growth. There are times when taxes are so high that lowering them will improve revenue.
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p>Basically there is a point of diminishing return to raising tax rates. Generally governments calculate the amount they will take in simply by imagining what this year would be like with say a 10% income tax in Mass instead of a 5%.
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p>There are also differences in the kind of taxes you have, so a 40% top rate in income taxes might not be as depressive as a 40% top rate in investment taxes. This contradicts some standard economic theories which say a dollar taxed is just a dollar taken out of the economy. But if you look at the tax rates now, you will see that the government certainly believes that investment taxes should be lower than income taxes.
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p>I think this is because a dollar invested is intended to grow, and so seeks the most productive place to attach itself. A dollar spent is not intended to grow though.
bostonshepherd says
I guess economics is one-dimensional and dogmatic.
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p>Price increases in the private sector are not unilaterally set by producers. They are sent to meet demand. Prices often decline due to … lack of demand. Or increase in supply. The opposite happens, too. Supply and demand.
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p>If a producer increases the price of its goods out of the blue, indeed, his revenue will decrease.
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p>I use gasoline prices as an example. Every spring they skyrocket in the midwest because of the changeover from winter to summer fuel formulations. Demand increases as weather improves, but supplies dwindle because of supply chain restrictions (refineries, deliveries, station tank clean outs.) Prices soar. Congress holds indignant inquiries. Then supply catches up and prices return to normal. Happens every year. Prices are set by the market, not by the producer.
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p>The experience of both the Reagan and Clinton years is that the way to maximize government revenues is by growth, not high tax rates.
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p>When MA gives tax breaks to Hollywood to come to Plymouth, and it works, why doesn’t that same concept apply to other industries?
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p>Why won’t eliminating the corporate tax attract all sorts of companies to MA? How many new income- and fee- and sale-tax-paying jobs would it take to replace all that lost corporate tax revenue?
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p>Can you imagine Deval going on TV and picking up national press with an announcement that Massachusetts is eliminating all taxes on corporations? Why, I imagine plenty of industries would expand here, or relocate here. Why don’t we do that instead of raising taxes?
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p>Instead, $2 carbon tax for parking at Logan? That’s a sign of desperation.
christopher says
Hasn’t that theory been discredited yet? Especially your #2. Hiring 20 people at MBTA creates (gee, look at that!) 20 jobs – funny how that works. You must subscribe to the Michael Steele definition of what constitutes a job. As to #4 a recession is the LAST time governmetn should be doing what you recommend, at the very point more people may need to rely on them. I question some of your other assumptions as well, but those two stuck out the most.
liveandletlive says
Wow, this is good news (if he means it)
Obama orders overhaul of `broken’ US contracting
I can’t believe he even has to overhaul this, it should never have been any other way.
As far as cutting corporate taxes being the solution to everything, I find this completely laughable. The sorry tale of more jobs, better pay, better benefits due to lower corporate taxes is nothing more than a corporate lie. What they really want is more money in the CEO pockets and that is where every tax savings go. How do I know this? Because I live and experience this country every day as a plain old regular person. As I wrote out my check for groceries tonight I was furious because many items have increased in price just over the last month in spite of lower fuel prices (which was the big excuse for ridiculous price increases on everything over the last year.) In my opinion, prices should be falling not rising. So since these corporations are no longer footing the bill for high
fuel prices, these extra profits are going where exactly? If we give them a tax break do you honestly believe this will trickle down to the working class? I asked the grocery clerk if she had received a raise or bonus lately. What do you think her answer was? NO.
Really sick of hearing about those poor corporations. They will never have my support for tax relief. At least not until we start seeing better wages and benefits coming out of their huge profits.
I posted my input for Democratic Party Platform on a previous post but it belongs here so I am posting it again.
~We value strong, healthy, families, both traditional and non-traditional, so we believe that employers should provide schedule flexibility to those employees who have children and elderly parents who rely on them for support for physical and emotional needs.~
An employee should be able to be available not only to address family health issues but also to meet the emotional needs of children, in times of success or difficulty in their daily lives, (ex. be able to have work schedule flexibility so a parent can be available to address discipline issues or emotionally stressful periods in a child’s life. Also to be able to attend award ceremonies,concerts, field trips etc. This is so important because these children are our future, and so often when parents are faced with the choice of going to work or supporting a child, they choose work because there really is no choice.
Thanks so much for this opportunity to give input to the party platform and to the values of the Democratic Party.