A New Can Of Worms
09 August 2003
State Spending and the Light of Day

Policy Guy, John La Plante (whose permalink isn't working today) noted yesterday that:

"In fiscal year 2002, Washington DC sent more money to states than it spent on military defense. Rather than blaming the current federal deficit on the Bush tax cuts, in other words, critics ought to point to money sent to the states."

I find that eye opening.

This comes from a Greg Easterbrook piece in The New Republic this week on state spending.

It is becoming pretty widely known that Congress has not passed any federal mandates on to the states since 1995. Ending unfunded mandates was part of the Contract for America, as I recall. Now we have Easterbrook making the point that the federal government over collects taxes in order to send money back to the states in the form grants and aid.

There is a growing body of literature out there both in the state based think tank community as well as the national organizations on state spending. Eventually, this will begin to sink in. Springfield, IL has long been invincible to ideas (credit Joe Bast at the Heartland Institute for that line). It will be interesting to see how long the invincibility lasts as we (as in the center-right and the Illinois Policy Institute) begin to publicize these crititiques and market oriented solutions.
The IL GOP's Sleaze Factor

My buddy John Biver has a piece on Illinois Leader. I wish I could say I agree. John is an excellent analyst, but not here.

John believes that the way for a GOP US Senate candidate to distinguish himself is by running on the corruption issue a la John Cox. I'm not sure that's wise.

None of the current crop of candidates is in any way associated with the Ryan administration. They're all outsiders (except for maybe Rauschenberger & maybe McCracken). By running against corruption in the IL GOP these candidates will only remind independents and Republicans who nominally pay attention to politics that the IL GOP is corrupt.

In the general election the Democrat candidate will undoubtably tar any GOP candidate with the sleaze factor NO MATTER WHO THE CANDIDATE IS. By virtue of being a Republican, the nominee will face charges of guilt by association -- even John Cox. This is the climate that all the GOP candidates must contend with...well maybe not Chirinjeev Kathuria...

Voters care about what affects their lives. You may pick up a few primary votes on the issue among hard core politico's, but that's it. No one else cares.

I also think the Karl Rove card is a bit overblown. Karl Rove does not control the Republican Senatorial Campaign Committee and that's who determines which candidates will receive help. The RSCC is very independent of the RNC as is the Democrat coutnerpart. KARL ROVE IS NOT SVENGALI, by the way. People need to stop treating him as such. In fact, I doubt any one from DC is going to overtly pick a candidate from this field to support in the primary. Nope, this in an all IL show.

Steven Levitt Profile

Some of the most enlightening and least consequential work being done today in the field of social science is being done by University of Chicago economist Steven Levitt.

In The Probability That a Real-Estate Agent Is Cheating You (and Other Riddles of Modern Life) author Stephen Budner profiles Levitt for the NY Times. Here's a taste:

"It might seem absurd for an economist to dream of catching terrorists. Just as it must have seemed absurd if you were a Chicago schoolteacher, called into an office and told that, ahem, the algorithms designed by that skinny man with thick glasses had determined that you are a cheater. And that you are being fired. Steven Levitt may not fully believe in himself, but he does believe in this: teachers and criminals and real-estate agents may lie, and politicians, and even C.I.A. analysts. But numbers don't. "

Levitt has tried to draw empirical conclusions from the relationship between abortion and crime as well as guns and swimming pools. Levitt's counter intuitiveness is what draws me to his work. I think it is a guy thing.

Guys like to know how things work. Most of us gravitate toward the mechanical or engineering (building) types of interests. Some of us, I guess, are a little more abstract, but I think it is all comes from the same place. I think Levitt is definately in the more abstract category.

Thank you to AL Dailey for providing the link.
New Look Not Workin'...

I still, for the life of me, am unable to edit my own work. Typos on the blog continue... I just corrected another one... It carries over into work, too.... Last week I sent a fundraising letter to NFIB where in the second sentence I referred to NFIB as GM...I wasn't going to get anything from the IL NFIB, so it isn't a major problem... but still...

I'd be much better off if I spaced on the writing side rather than the editing.... I've got to figure that one out...
08 August 2003
No Child Left Behind May Have Teeth Afterall

This is all over Illinois papers this morning. The education establishment (administrators, teachers unions, ISBE) are squealing. They will cry, complain, bitch and moan and do everything they can to limit the disruption to THEIR lives caused by the modest proposals to bring some accountability to public education.

Take away the trough and the pigs squeal.
Another Shoe Is Dropping on the Hot Rod's Budget

Casino revenues drop 2.13 percent blares the headline in this morning's State Journal-Register. With no movement on the Thompson Center sale, the 10th casino license -- $550 million in so far non-existent revenues -- and casino tax revenues $3 million behind last year, shoes are beginning to drop all over the place on the Blagojevich budget.

"Blagojevich's budget is counting on the $200 million projected to come from the increased taxes, as well as other one-time revenues. But one Wall Street banker said he fears the new, increased tax structure will produce less revenue than under the old structure.

"It's a horrible lesson in upside-down economics," said Eric Hausler of Deutsche Bank Securities. "This will prove to be a failed experiment in economics."

The simple rule is that raising taxes never brings in as much as the tax eaters say it will and reducing them never costs as much as tax eaters claim.

07 August 2003

Somehow my link to the Sacremento Bee got screwed up earlier... I mean, geez it's not like blogger isn't idiot proof.

California Update

The way things are shaping up today there should be one of these every 15 minutes.

Issa (R) is out, Lt. Gov. Bustamante and Insurance Commish Garamendi (both are D's) are in. Bottom line is that Gray Davis is toast. My question is, what happens if Davis sees the light and resigns? Does that install Bustamante and end the recall election?
An Age-Old Strategy?

Is John Cox attempting to pit downstate vs. Chicago to win his Senate seat? Maybe, maybe not, but it sure seems like it:

"If elected, Cox vowed to continue Fitzgerald's fight against expanding O'Hare. Although a new state law may govern much of the expansion, Cox said federal approval and dollars will be needed.

Cox said he'd rather see the money spent on a third airport near Peotone, on high-speed rail or on expanding and improving the state's roads."

Jesse White Strikes Back

He can't recall him, but Secretary of State Jesse White is using a primary tactic of the tax eaters to strike back at Hot Rod.

Jesse has a number of cronies on his staff who do little to no work. He has a duplicative secretary of state police and generally just a whole lot of overhead. He won't cut the fat, though, Secretary White will punish the taxpayer by shutting facilities and generally working to make our lives harder and then blame the Governor.

Grover Norquist often says that when the money dries up, the tax eaters will begin to eat their own. I think this proves his point.
More farce in the Middle East

Atlantic Blog runs down the list of monarchies and dictatorships that make up the Arab League. The very same Arab League that I noted (here) were rejecting the Iraqi governing council as a member because it wasn't "elected." I would note that there are three nominal -- and that's a stretch -- democracies out of the 22 members.

It's a fun read.
Maybe He is Just Lucky In His Enemies

Of course with the opposition picking fights that they have no way of winning given the make up of the Statehouse, its no wonder the press focuses on bumper stickers...
Hot Rod Hits Speed Bump

IL GOP is getting mileage over bumper stickers at the IL State Fair. Reversing a reversal, Blagojevich to pay for stickers reads this morning's Chicago Sun-Times.

It's amazing about what sticks to this Governor. $700 million in tax hikes rate narry a peep. Something cheap likes this comes along and the press are all over it.

06 August 2003
Southern IL Mayors Calling For Income-Sales Tax Increases

From today's The Southern Illinoisan we learn of an effort by really, really downstate mayors to undo the Blagovjevich budget. But what they want is just as bad, if not worse:

"Marion Mayor Bob Butler said he agreed wholeheartedly with SIMA's newly-drafted resolution to oppose the state-assessed fees to municipalities, but said the organization needs to go a step further.

'We have to do more than that,' Butler said. 'I hate taxes. In fact, I deplore them,' he said. 'But I also recognize that there has to be adequate revenue to run a state government. I propose that we ask for a temporary increase in either an income tax, or a sales tax. That would be an alternative solution to what the state is proposing and would give the governor and legislature a way out of this mess.'

Butler's proposal was met with mostly an enthusiastic reaction from those in attendance. Moreover, SIMA members voted unanimously to draft a second proposal by the Sept. 27 meeting in Carbondale to support either an income tax rate hike, or sales tax hike after studying the benefits of both over the next few weeks, hoping that legislators would then rescind those fees which were assessed municipalities earlier this summer.

'I'm so damned tired of hearing people say, 'I'm against this, or I'm against that,' and when I ask them for an alternative solution, they don't have one,' Butler said. 'That's why it's important that we get behind what I'm proposing.' "

The problem as I see it, is that Governor Blagojevich has stuck these mayors with the tab for Illinois' spending binge over the last decade. The good mayor finds himself in the political hot seat and can't pass along the burden. I'm shedding crocodile tears.

Illinois's spending growth was at an 100 percent plus clip for the 90's. Illinois has a little more than half the population of Florida, God's waiting room for those who blame health care spending at the state level, and spends $2 billion more per year. Illinois, and I'm going back to 2000 (and by memory) here, spends about 24 percent of its General revenue funds on medicaid which is above average nationwide, yet pays out below average benefits when compared to the other 50 states. Looks like their may be some waste there. On the education front Illinois is 20th in the nation in per pupil spending, yet we drop to 39th when it comes to education dollars actually making it to the classroom. Seems to me there is more fat to be trimmed.

On the economic front, taking $700 million dollars from a struggling economy to pay for a bloated, inefficient and corrupt state government is bad for the state economy. Whether you do it by raising fees and business taxes, the Blagojevich plan, or by hiking sales and income taxes -- the Butler plan, the net is the same. Mayor Butler is just upset because he will blamed by the taxpayer and not the Governor for these stealth taxes.

And oh yeah, in the early 90's Republican Governor Jim Edgar imposed a temporary tax hike on Illinois. It's still here. It was made permanent about a year later. Does mayor Butler think taxpayers are stupid, that we have no memory?

Mayor Butler also claims to want solutions, but says no body offers any. We do, your Honor. You and Springfield just don't listen because you want to continue feed at the trough. Again, here are just a few:

- Across the board cuts in state spending. We have more than enough revenue to run Illinois. Earmarked funds need to go.

- Privatize, privatize, privatize. Most state services can be accomplished by the private sector at a lower cost AND a better quality of service.

- Next, how about a tax and expenditure limtation Act (or preferably, amendment) to thwart the boom bust cycle created by the balanced budget amendment. Reducing spending increases to population growth plus inflation during the boom times ensures state government won't be holding the bag during the economic down times.

These ideas have been tested and have worked all over the country. We should be looking to states like Colorado, Florida and Texas, not California for our answers. Mayor Butler, sir, you need to get out more.
Blogs to Avoid

James Taranto's OpinionJournal piece today warns us about some prominent Democrats attempting to blog.

Although, Ninedwarfs.com may have something....
Recall Madness

Lot's of good points in John Fund's Political Diary today.

First, Is Arnold in or out? Second, a leading Democrat, the CA AG no less, has warned Gray Davis about "puke politics" -- the name given to Davis' all out personal attacks. Finally, an Illinois connection has emerged in legal attempts to thwart the recall election.

Tonight we learn the true fate of Arnold and the ballot deadline is Saturday.
05 August 2003
Economic & Fiscal Commission Monthly Revenue Report for July has been posted.

It is a somewhat upbeat analysis on both the economic and revenue fronts, albeit a guarded one. The Commission cites the Commerce Department on growth -- 2.4 percent annually in the three months prior to June, 2003. That was more than expected. The unemployment numbers in Illinois have improved marginally when compared to last year and the work force has grown marginally, as well. That suggests to me that some jobs were created in Illinois and that unemployment figures reflect real growth, not more people dropping out of the employment pool.

On the revenue side Federal transfers to Illinois are down $320 million. That's bad. But I tend to focus on general income taxes (personal up $15 million, corporate up $3 million) when reading the montly reports. They are moving in a upwardly direction for a change. I look at general income because the decline in corporate income taxes, especially, has been the main driver of Illinois' declining revenue these many months. Keep in mind though that when you account for refunds owed, personal income tax revenues are still in the red and corporate income revenues are flat. Even with the modest good news on the economy the state finds itself short $766 million.

What's interesting and could undermine the Governor's budget is the drop off in casino revenues. The Commission has yet to speculate whether it is the new taxes, conjestion at the casinos (not enough spaces) or competition from other states. The Economic & Fiscal Commission is compiling a report on casino revenue for 2004. That will be a must read in September.
The Unintended Consequences of the Reimportation of Prescription Drugs

Amitiy Shlaes in today's Chicago Tribune has some wise words for those on the path toward the reimportation of pharmaceuticals:

"The treacherous part of reimportation is the romance of the idea. A populace that talks itself into believing that the laws of economics are passe and that Canada and Germany are health havens is a populace that is moving toward succumbing to some sort of national health arrangement. And that means the opposite of choice."

HL Mencken (spelling?) once said somthing to the effect that democracy means that people get what they want, and somtimes the people deserve to get it good and hard. Reimportation is probably one these cases.
This is Laughable

The Globe and Mail reports that the Arab League is spurning the US appointed Iraqi Governing Council. Here's lead:

"Arab League members decided Tuesday not to recognize Iraq's U.S.-appointed Governing Council, saying they will wait until a government is elected."

Of course, no where in the story does the AP reporter point out the number of other "elected governments" making up the 22 member league.

More Mileage for Hot Rod

AP reports this morning that Governor Blagojevich has asked state judges to drop their lawsuit over the veto of their COLA raise:

"Today I am asking, respectfully asking, the judges to step outside the courtroom for a moment and ask themselves, is it right to sue for a $13 million pay raise at a time when too many of our schools are having a hard time affording textbooks?" Blagojevich said Monday, also ticking off other issues such as health care and public safety.

"This is not the right time for the judges to ask for more pay. A cost-of-living increase, however you define it, means more pay," Blagojevich said.

An attorney for the judges said they would not stop their effort because the increases are a basic part of judicial salaries, and the constitution says judges' salaries should "not be diminished" while they are in office.

"The constitutional provision is much too important to abandon," said Kevin Forde, a Chicago attorney representing the judges. "It is not about money. It's about whether a governor can cut a judge's pay."

I believe the judges would have a leg to stand on had the Governor cut their pay as political pay back for losing a case or two. This was the intention when the clause was placed in the State Constitution, but pay back is not occurring. The justices' COLA is not being granted because of a state spending crisis. I don't believe there is a principle at stake here.

This makes the judges look horribly out of touch and raises the stature of an otherwise marginal Govenor Rod Blagojevich. Thanks, your Honor. It is stupid and it is part parcel of how the political establishment is unable to deal with the Governor. They keep trying to out punch Mike Tyson. Guys, it ain't gonna' work.

...There are other ways to beat him...
What A Terrible Waste
04 August 2003
On The Obesity Front

The FDA drops warning on olestra today:

"'We found that most studies couldn't even detect a difference from regular chips,' George Pauli, associate director for science and policy in the FDA's office of food additive safety, said. 'The effects that were reported were mild and really didn't have any effect on people's lives.' "

This must have these people hyperventillating.

More Evidence that Hot Rod is Ending Business in Illinois

The LasVegas SUN reports that Illinois is losing gamblers to Indiana. No surprise, here.

I've been supportive of some the governor's moves, however I've been very critical of the $700 million in business and fee hikes his budget imposes on businesses. These tax hikes won't bring in as much as the Governor would like and they are stealth taxes on consumers who will have the hikes passed along to them in just about everything they purchase.
Blagojevich on Marriage

AP quotes the Governor on the gay marriage issue:

"He says he opposes discrimination against gays and lesbians and he supports domestic partnership agreements.

But he says his view is that marriage should be between a man and a woman."

This debate has turned against the left since the Supreme Court ruled on Sodomy. No one, including President Bush, wants to be seen as bashing gays (a good thing), but then again no one wants to be seen as supporting gay marriages. All the top tier (if we can call them that) Democrat candidates for President have pretty much toed that line (I don't know about the bottom tier).

The governor's comments betray the debate's bottom line. Is marriage an important cultural and universal institution critical to survival of the state and society, or is marriage something you do to get benefits and priveleges from the state? Social security, insurance, inheritance have all been brought up as benefits that homosexual couples would like to have. These are important questions and it will be interesting to see how things shake out.
Populist John Cox?

John Cox is taking to the airwaves in an effort to build grass roots support:

"Too often political campaigns are funded by big money special interests. I think there is a better way,' Cox said in the television commercial. 'My goal is to have 100,000 voters contribute $20 to this campaign. If enough people help, I'll get our message out for job creation and an end to corruption and cronyism.' "

Here is the upside to the tactic: One, its tests his message regarding corruption and cronyism. If no one sends money, then his message is not resonating. Two, it is good for list building and volunteer recruitment. Three, it establishes his populist credentials while moving him out of the "millionaire category."
ArchPundit on Pork and Center-Right Politics

ArchPundit has posted an analysis of who is up and who is down in the Governor's eyes. Like any politician anywhere the Governor is using pork to punish enemies and reward supporters, so I don't believe there is anything news worthy here.

What is interesting is that ArchPundit seems to believe that Grover Norquist and Americans for Tax Reform are somehow behind the Illinois Center Right Coalition -- and more incredibly is allied with State Sen. Steve Rauschenberger:

"On the other hand, Senators Watson and Steve Rauschenberger (R-Elgin) are the key Senate Republicans trying to obstruct nearly everything in the budget. Their strategy is closely allied with the Illinois Center-Right Coalition which has been influenced heavily by Grover Norquist and his Americans for Tax Reform group (Note: fellow Illinois Political State Report contributor Jeff Trigg is affiliated with the Center-Right Coalition). The strategy is to not give an inch to Democrats and instead turn the political debate in Illinois to one of strong opposition instead of going along to get along."

Steve Rauschenberger and Grover Norquist engaged in a heated debate in San Francisco about 10 days ago on the Streamlined Sales Tax Project. The debate was heated and personal. And Steve did his potential senate campaign little good in playing to the liberal dominant audience in the room. I know because I was there as a guest of Americans For Tax Reform (ATR). David Hogberg of Confield Commentary and the Public Interest Institute was also at NCSL and wrote a very good piece on it for the American Prowler. The reaction by all the state tax activists and the think tank directors was visceral and negative toward Rauschenberger.

I thought that Sen. Rauschenberger's positon on the Streamlined Sales Tax was naive and I, as a freedom lover, believe that an efficient government is often the enemy of a free society. Governor Bill Owens of Colorado, who has much stronger fiscal record than anyone in Illinois, confirmed that for me in a new Center for The New American Century analysis on Internet taxes.

ATR's issue is taxes. They don't like them. State Sen. Rauschenberger is a primary national proponent of taxing Internet sales. He and Grover Norquist get along well enough, but that divide is fundamental. I don't believe ATR is too eager to be working with State Senator Rauschenberger, right now. And considering that Grover Norquist actively promotes the tax issue as the most critical issue for Republicans to own in order to win, I can't see Sen. Rauschenberger -- as much as I like him -- winning the issue back in Illinois a at the state or national level as long as Rauschenberger supports the Streamlined Sales Tax Project... So much for the alliance...

Grover Norqist did attend and speak at one ICRC meeting, the initial Oakbrook meeting in January. It was there that Dan Proft did pick up on the Center Right Coalition label from Norquist and Dan suggested it for the name of the group. Very few good ideas get by Proft. I was at that dinner because I'm the one that invited Norquist to talk about the Leave Us Alone Coalition meetings that we were just beginning to get off the ground in IL. That is about the extent of ATR's involvement with ICRC. Individual members of the ICRC do attend a weekly coalition conference call hosted by the Institute (that call is ATR's flagship activity in Illinois) but only a few. Rich Miller's misinformed column aside, the ATR-ICRC relationship is a stretch. Grover Norquist may be the inspiration of the group (that's probably a stretch, too), but as of yet, ATR and the ICRC are hardly "allied."
The Peter Pan Syndrome

Via AL Daily we have a Spiked piece by Frank Furedi on The children who won't grow up. This is just depressing:

"Society has come to accept the idea that people do not become adults until they are in their late thirties. As a result, adolescence has been extended well into the twenties. It is interesting to note that the Society for Adolescent Medicine, an American doctors' organisation, now states on its website that it cares for persons '10 to 26 years of age'. Recently the MacArthur Foundation has funded a major research project called 'Transitions to Adulthood', which situates the end of that transition at 34. Some social scientists claim that delayed maturity has become an accomplished fact. Stephen Richardson, a California-based social psychologist, argues that in our time we do not reach maturity until the age of 35."

There have been questions on when adulthood actually begins dating back to the turn of the 20th Century. Teenager for example, is post World War II phenomena. They didn't exist prior to the War as a separate cohort needing legal protections or designations. But 35??? Give me a break.

In my circle friends we have a word people described in this piece, losers...

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