Archive: Opinions

What passes for a February thaw feels adequate to the task. The groundhog has done his duty (what kind of tranquilizer do they give that rodent to keep him calm during his traumatic foray under the TV lights, held by an apparently drunk reveler in top hat?) And, my pipes un-froze. And, as I write I can be sure that winter has much more havoc to wreak before the tulips emerge.

Speaking of tulips, I walk seven or eight blocks in Fall Creek during early mornings to my 'temp' job and deer tracks are quite common in the snow on the sidewalks and street. In the middle of the city, no less. I wonder if dishonest money is to be made by going door to door selling 'guaranteed deer-proof' tulip bulbs...as if there ever were such a thing. But, how many might believe me? Grab the money and run from Fall Creek as fast as my old legs might run.

Here's a couple of thoughts on a news item that, again, doesn't seem to have gotten coverage, emerging from the morass of what passes for 'news' these days.

The headline from the Wall Street Journal on February 1st was: "States Embark on Spending Spree". Turns out that we seem to be getting differing views, depending on what source you are reading, on how the economy is doing in terms of jobs created, income levels, and, consequently, state revenues in what might be called 'poorer' states.

I was amazed to learn that West Virginia has a $244 million dollar surplus, its largest ever. The revenue in the first six months of 2018 grew 14%. The governor is proposing to use the surplus to shore up the state's public employees health insurance program, and the West Virginia teachers who struck last year for a pay raise are going to receive an additional 5% pay raise on top of the raise negotiated during the nine day strike. State employees are also scheduled for an additional five per cent raise. With all of the negative reporting going on about 'the economy isn't trickling down to the workers' and castigating last year's tax cuts, why isn't this news being trumpeted by the media? Perhaps it doesn't play well with the previous two years of negative reporting on the economy and tax cuts being just for the wealthy?

More? The combined tax revenue for all states rose a healthy 7% last year, the fastest since 2013. Unless you live in New York, of course, where Cuomo says we are facing a $2.5 billion shortfall in revenue. I wonder why, considering that the 'poorer' states like West Virginia, Mississippi and Idaho are seeing surpluses which are going to teacher raises, Colorado has a surplus which is proposed to expand their full day kindergarten programs and Oregon is contemplating turning $400 million into affordable housing. Interesting to note that these are considered 'low tax states' who benefited from the tax cuts with expanding jobs and increased business spending.

So, what could possibly be the explanation for these states' largess and states like New York, New Jersey and Connecticut in deficit situations? There's no doubt that part of it might very well be the tax situation, and increased job opportunities as well as business expansion. Did you note the headlines last week about IBM targeting $2 billion for new artificial intelligence jobs in the Binghamton area? They didn't just pull that money out of the bank. They reaped tax benefits from the reduction of business taxes last year and turned them into jobs. That wasn't New York state 'creating' jobs, that was private business that some in Congress said 'reaped a windfall they didn't deserve'. Thanks IBM, and a raspberry to Congressional nay-sayers.

There is no doubt that some of the states who are reporting new highs in revenues and jobs are the beneficiaries of the federal tax revisions and reductions of 2018. Our governor's blaming the reduction in state and local tax reductions (Known as 'SALT') is laughable, if it wasn't so off base, even patently untrue. It certainly didn't affect the states that have reported surplus and are sharing it with their constituents. It is no coincidence that these states are also known as 'low tax' states, such as Florida, with no income tax, who report that there is a significant uptick in real estate sales to New Yorkers.

New York did lose 50,000 residents in the latest count, and it appears more than a few of those souls went to North Carolina, Florida, Arizona, and other states who are creating jobs and luring people with low taxes and new opportunities that are becoming increasingly available with the new tax policies. The media doesn't seem to want to report this, including the fact that while mainstream media reported on a horrendous December in the stock markets, January turned around and reported the best results in the January stock markets since the mid-eighties. That story suffered the same fate as the job creations and state budget surpluses since the tax reductions for businesses and individuals. The only raises we see coming in New York are those for our 'part-time' legislators.

The American economy, at least significant portions of it, is growing and fascinatingly having minimal effect upon inflation while putting extra tax revenue in state coffers of the 'low tax' states. And, yes, one of the stories you have heard is that our refunds on federal tax are 'down'. Well, doesn't that mean more money in the pay checks last year and now? Imagine that. The glass is half empty, or half full, and mainstream media is reporting half empty, because it suits their agenda, it would seem.

Estimates of growth in the economy continue to be lower than the actual numbers eventually reported such as job creation, GDP figures, etc., astounding the nay-sayers. And I've been in the workforce over fifty years and I don't remember unemployment under 4%. Heck, in the 70's so-called 'full employment' was determined to be 3%, and theoretically unattainable.

I'll leave it to those who read economic tea leaves to continue to argue and prognosticate, I guess. It's an old story about Harry Truman who once said that he wanted a one-armed economist in the White House, figuring that that particular economist couldn't or wouldn't say "On the other hand...".

Positive things are happening, and there are a lot of people and more than a few state houses who recognize it, regardless of which party holds the power in those states. Corporations (like IBM) are spending more on research and development while our naysayers are carping about stock buybacks, as if that were the only thing happening in the world. There seems to be an ignorance about a simple fact that a stock buyback benefits the millions (I understand it is 60% of American households) of working and retired people who own retirement plans, 401K's and stock options in their place of employment. All of this seems due to what was derisively named 'trickle-down', or better and more accurately put, the 'Laffer curve' of the Reagan administration. Lower taxes eventually reap benefits, and certainly not just to the wealthy.

The United States seems not to be able to maintain the upward swing in the economic cycle, though it seems all we ever hear about is the down side and negative. Outside influences, oil prices, political turmoil in the rest of the world always seem to throw sand in our economic engine. But isn't it amazing that countries like Saudi Arabia, Red China and so many others still see the dollar and US Treasury bonds as stable, reliable, and a haven that is always 'there'.

So far, even I am amazed and gleefully watching the economic events and statistics that are befuddling the 'tsk tsk' crowd and the dismissive attitudes of the mainstream media. So far, Wall Street may be leading Main Street, and both are dancing the same tune. Doesn't happen often, and no one anticipates the punch bowl being taken away, with even the Federal Reserve Board saying "OK, it seems OK".

With only one wish: I wish I could interview Alan Greenspan at this moment in history. One, to ask him about Ayn Rand (he was, and I believe still is, one of her most enthusiastic acolytes), her belief in free market capitalism as well as his, and perhaps ask him about the Laffer Curve. That particular bit of economic theory in 1981 developed into the longest economic upturn in post-war history. Pooh-pooh'ed by the media, of course. And I always believed that the budget surplus of Bill Clinton's '93 budget was actually the result of Reagan's so-called 'trickle down'. It just took some time, as Greenspan might tell us. If he were giving interviews.

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