Was the Iraq War worth it?

Andrew Bacevich on the legacy of the Iraq War:

Central to that legacy has been Washington’s decisive and seemingly irrevocable abandonment of any semblance of self-restraint regarding the use of violence as an instrument of statecraft. With all remaining prudential, normative, and constitutional barriers to the use of force having now been set aside, war has become a normal condition, something that the great majority of Americans accept without complaint. War is U.S.

 

Alabama should stop caving to “job black-mail” & economic “shakedowns.”

Following the post from yesterday, the Atlantic Magazine today includes another article entitled The Folly of Corporate Relocation Incentives:

Governments offer companies nearly $50 billion a year in location incentives, designed to convince them to either stay put or move, Thomas says. Greg LeRoy, executive director of the research center Good Jobs First, which tracks corporate subsidies, describes the “subsidy industrial complex” of site-location consultants, industry groups and industrial realtors who track, arrange and promote deals between companies and governments.

The result doesn’t create any new jobs, but merely moves existing jobs around while fostering economic war between the states. Earlier this year Ohio was on the losing end of a bidding war over Chiquita, the produce company that’s moving to Charlotte, N.C., based largely on a $22 million relocation offer. In New Jersey earlier this year two companies—Panasonic and Pearson Educational—accepted a total of $184.5 million to move jobs from one part of the state to another.

“It’s job blackmail—threatening to leave and shaking down states and cities to stay,” says Thomas, whose book, Investment Incentives and the Global Competition for Capital, examines the subject. “Collectively governments are giving away all this money but it doesn’t affect the location of investment overall. There isn’t any possibility you’re creating new jobs. Ohio might get 6,000 new jobs (from the Sears deal), but Illinois loses them.”

Both the Tea Party and the Occupy Wall Street movements should oppose these deals as well:

There is also a libertarian argument against incentive packages, since the offers place governments in the position of choosing economic winners and losers instead of allowing the market to determine corporate success. “It’s economically moronic, even though it tracks a nationwide trend of Big Government handing over money to selected big businesses,” writes Thomas Patterson, chairman of the Goldwater Institute. “The subsidies are touted as necessary for job growth, to stimulate depressed regions and promote economic development. Unfortunately, they just don’t work.”

Thomas adds that the Occupy movement and concern over income inequality is shedding light on how tax policy often favors corporations. “You have average citizens and taxpayers subsidizing wealthy corporations,” he says, “and a lot of people object to that upward redistribution.”

For some alternative economic development strategies focusing on supporting and preferring locally-owned businesses, see the following:

• Are Alabama economic development packages windfalls instead of merely incentives
• Large employers create “jobs” but locally-owned businesses create wealth. 
• City of Richmond strives to be an Ownership Society
• ADO Greg Canfield promises AL will continue to pay extortion demands.
• Does Alabama want 27,500 jobs & $4.2 billion in new economic output? Then revive local food production
• Hello, McFly! Effective economic development emphasizes local. 
• At least we did not score an F.
• Employing the power of anchor institutions
• Oregon enacts bill to empower locally-owned businesses
• Let’s stop begging to be exploited.

 

Are Alabama economic development packages windfalls instead of merely incentives

This week we learned that state and local governments had given over $1 billion to ThyssenKrupp. I still wonder how much locally owned businesses and local communities could have used that $1 billion dollars. Nevertheless. a new report, as discussed in the New York Times, calls into question the sole operating philosophy of economic development in Alabama.

“We hope that states will fix their rules to make sure that their programs are creating lots of jobs, and good jobs, with wages tied to the economy and with health care, so companies aren’t getting paid to pull wages down,” said Greg LeRoy, the executive director of Good Jobs First, who added that such deals should be watched even more closely in a downturn. “There’s a real tension between economic development spending and the maintenance of vital services.”

States rarely have accurate measures of how many jobs such programs create, but they are discovering that many such programs fail to live up to their billing. Pennsylvania found in a 2009 legislative report that many business in its Keystone Opportunity Zone program “are not creating jobs or generating capital investment.” A recent study that New Jersey commissioned of its Urban Enterprise Zone program found that the $2.17 billion it spent over six years had produced “limited economic impact.” New York changed its old Empire Zone program, which was supposed to give tax breaks to companies to create jobs in poor areas, after auditors found that some businesses had received tax breaks but lost jobs, while others were being rewarded for hiring in wealthier areas.

“Over time, the programs get deregulated in ways that make them windfalls instead of incentives,” Mr. LeRoy said.

The new report singled out some states for praise. Nevada and North Carolina’s programs were applauded for having strong wage standards, requirements that employers provide health coverage and pay part of the premium, and requirements that subsidized facilities stay open for a set period of time.

The report from Good Jobs can be found here. Here are some more findings of the report.

Money for Something rates the performance standards and job quality requirements of 238 key subsidy programs from the 50 states and the District of Columbia. Each is rated on a scale of 0-100.  Findings:

• Only 135 programs have a performance standard relating to job creation, job retention or training of a certain number of workers.
• Fewer than half (98) of the 238 programs impose a wage requirement, and only 53 of those are tied to labor market rates.
• Only 11 of the wage requirements raise pay levels by mandating rates somewhat above existing market averages. Wage requirements vary from just above the federal minimum to more than $40/hour in limited cases.
• Only 51 programs require that a subsidized employer make available healthcare coverage, and only 31 require an employer contribution to premiums.
• The states with the best average scores among their programs: Nevada (82), North Carolina (79) and Vermont (77). The worst: the District of Columbia (4), Alaska (5) and Wyoming (10).

And if we are not going to invest in locally-owned businesses , continue being bullied around, and pay the extortion of the out-of-state corporations, let’s at least demand transparency and accountability.

 

State Sen. Gerald Dial interviewed on CNN about HB56

Here is the transcript from ALGOP State Senator Gerald Dial’s interview by Brooke Baldwin on CNN:

BALDWIN: In Alabama, you have got supporters of the state’s new illegal immigration law expressing some buyer’s remorse. It recently came to a head after police arrested a German who ended later turned out to be a Mercedes-Benz executive, Mercedes-Benz, a major employer in the state of Alabama.

Also then, a Japanese man was detained, and he turned out to work for Honda, another big employer. That prompted a paper in Missouri to invite foreign carmakers to relocate there. Take a look at the quote: “We are the Show Me State, not the show me your papers state” — “Saint Louis Post-Dispatch.”

Joining me now from Montgomery, State Senator Gerald Dial. He is Alabama’s Republican whip.

And, Senator Dial, thanks for coming on.

I know you supported this law, parts of which took effect back in September. It’s considered now — and I have talked to your governor, he agrees — the nation’s toughest. Are you, sir, having some second thoughts?

GERALD DIAL (R), ALABAMA STATE SENATOR: We certainly are. And we’re also looking at making some changes in this law.

We probably overreached. I think most people in Alabama agree that we overreached on this law. And we have met with Attorney General Luther Strange and look at some change that needs to be made to this law. And that’s the good thing about the legislature. The bill we passed last year, we can start in this legislative session and make some changes.

BALDWIN: We will talk about some of that overreaching and maybe potential changes in a minute.

But in terms of I guess the image, are you worried at all that your state is being branded as being hostile to overseas businesses, some surrounding states, i.e. Missouri, clearly eager to push that idea?

DIAL: Well, I certainly am.

And, you know, recruiting industry is one of the most competitive things in America. It’s worse than recruiting quarterbacks for your high school or college football team. And so we’re certainly concerned about this. And we have worked diligently in this state for 40 years to overcome some of the images that we have had.

And to see it certainly regress back to those images that are certainly not Alabama, that don’t portray the true and real Alabama certainly bothers all of us. So, we’re committed to making some changes so we can help to overcome those images.

BALDWIN: And just so I’m clear, sir, when you say make changes, we’re not talking repeal the law. You’re making tweaks. Is that correct?

DIAL: Well, we’re talking about some tweaks, but some major tweaks that we think will make this law more amenable to people of this state.

What we did, we overreached, and we — not only in trying to make sure we didn’t have illegal immigrants in this state. We also have penalized our own citizens who have lived here all their lives. All the hardships we placed on them are also hardships that we tried to place on illegal immigrants. And this was not the intention of this bill. It was not my intention.

And I made a mistake in voting on this bill as it is today, and I’m a person that will admit I made a mistake, and I’m committed to trying to correct those mistakes. And we’re working on those as you speak.

BALDWIN: All right. So, as you — you admit this mistake, how, then, do you craft legislation that would ensure your police officers don’t arrest more foreign executives whose firms provide jobs to the people of your state?

DIAL: Well, you know, that was a unique case and certainly one that probably could have been handled with a lot more compassion. But, you know, when with I go to Europe I have to have my passport to even check in a hotel.

So the individual should have certainly should have had identification with him. He made a mistake. I don’t know all the details, but he could have been a little more compassionate, say, send somebody to the room and get your passport and identify yourself.

We’ve put our law enforcement people in an awkward position of trying to enforce a law that’s not really that clear. I’ve met with the attorney general of this state, Luther Strange, last week. He has come forward with some suggestions in changing the bill, and some of these we’re going to encompass into a bill that we’re going to introduce early on in the session.

BALDWIN: So perhaps the toughest immigration law in the land may no longer be that way if you have a little something to do with it. We’ll stay on this, Alabama state senator Gerald Dial. I appreciate it. Thank you very much.

DIAL: Thank you very much.

 

A 72 hour rule, a public review requirement, could have aired many of HB56 “unintended consequences”

The GOP from top to bottom now has permission from Mike Hubbard to suggest revisions to HB56, the Alabama Anti-immigrant law. Irrespective of opinion on HB56, one thing has certainly been shown by this whole debacle: legislators and the public need time to read and study proposed bills before before a vote.

We learned how rushed HB56 was from Sen. Gerald Dial:

Sen. Gerald Dial, a Republican from Lineville, said, in comments to Centre, Ala.’s The Post on Nov. 16, that he got the immigration bill with just hours left in the legislative session and voted for it so as not to appear weak on immigration.

And Democrat Senator Marc Keahey (who voted for the bill too.)

Sen. Marc Keahey, D-Grove Hill, said the bill was rushed through the House and Senate because Republicans had the strength.

“This is a prime example of how a bill of this magnitude gets messed up when you only allow (Sen.) Scott Beason to read the bill,” Keahey said.

(Ignorance of the final version is no excuse for voting in its favor because the basic tenor and contents of HB56 was present in the pre-conference House and Senate versions.)

In the future, both the House and Senate should enact a 72 hour rule:  every bill will be posted online for at least 72 hours before it is presented for final vote. (Amendments for 24 hours)

 

By Cordray filibuster, GOP continues abuse of rules like no party in American history.

The GOP filibuster of an up-or-down vote on Richard Cordray nomination only follows the record-breaking obstruction by the GOP Senate.

Did Democrats do the same thing when they were in the minority? As shown by the numbers above:

This isn’t a subjective question on which the parties are entitled to different opinions. There are objective, often quantifiable, answers to the points Politico and Republicans are raising: are GOP senators “replicating” Democratic tactics? Were Dems abusing Senate rules in the Bush era to the same degree that Republicans are abusing them now?

The answer to both is “no,” and the false equivalence does little to advance the discussion.

The Senate keeps an updated table, charting cloture votes by Congress over the last nine decades, using three metrics: (1) cloture motions filed (when the majority begins to end a filibuster); (2) votes on cloture (when the majority tries to end a filibuster); and (3) the number of times cloture was invoked (when the majority succeeds in ending a filibuster). By all three measures, obstructionism soared as Republican abused the rules like no party in American history.

Consider this tidbit: cloture was invoked 63 times in 2009 and 2010, which isn’t just the most ever, it’s more than the sum total of instances from 1919 through 1982. That’s not a typo.

As I pointed before,

Remember when Sen. Richard Shelby thought the politics should be eschewed in the nomination process. For instance, in 2005, he proclaimed:

Far too many of the President’s nominees were never afforded an up or down vote, because several Democrats chose to block the process for political gain. Inaction on these nominees is a disservice to the American people.”

Or when in February 2005, Shelby specifically promised his constituents in Tuscaloosa that he’d do “whatever it takes” to confirm Bush’s judicial nominees, including killing the filibuster.

But this is all perfectly explained when you consider GOP Minority Leader Mitch McConnell’s admitted purpose:

The single most important thing we want to achieve is for President Obama to be a one-term president.

 

Attorney General Strange admits ulterior motive of Section 28 of HB56

Scott Beason always defended Section 28, the “your paper’s, please” for school enrollment provision of HB56, as quite benign:

According to Beason and other supporters of the law, Alabama taxpayers deserve an accurate assessment of how much they pay to educate the children of illegal immigrants.

I disputed this claim and suggested that the purpose was much for ambitious.

So it is not really just about statistics and when AG Luther Strange argued before a federal court that: “No child will be denied an education based on unlawful status,” he should have added “not yet.

The real purpose of Section 28 was to enable “a fresh challenge to Plyler v. Doe, and the idea that schools are obligated to provide a free education to illegal immigrants.”

Well, Luther Strange, the ALGOP Alabama Attorney General, admitted as much yesterday in his belated call to significantly revise HB56.

Section 28, which has also been blocked by the Eleventh Circuit, allows collection of data about the number of undocumented immigrants or their children in Alabama schools and requires a report of the costs of educating those students — both in fiscal terms and the effect on the quality of education on other students — to the Legislature, but makes it clear that those students cannot be denied a public education. Some have speculated that the purpose of this endless data collection was to eventually mount a legal challenge to various federal government requirements regarding who deserves a public school education, and the attorney general’s letter lends some credence to that argument.

“It is my understanding that the purpose of Section 28 was to collect data for future litigation involving the State,” Strange wrote. “As chief law officer for the State, my judgment is that the costs of gathering this data at this point in time, in terms of diversion of resources and the effect this section has had on the current litigation, far outweigh any need to gather data for future litigation.

Strange suggested that section should be repealed.

 

A map which shows why Mizzou should not be in the SEC.

They say Soda.

 

Sen. Dial says I don’t know what I am talking about.

Alabama  State Sen. Gerald Dial received a lot of press when he proposed the elimination of the grocery tax. (For instance see here and here and here) How progressive of a “conservative Republican,” right?

Upon greater analysis, his plan did not look so progressive or compassionate. “Sen. Dial’s plan calls for phasing out the 4 percent sales tax on groceries over four years while at the same time raising the sales tax on non-grocery items from 4 percent to 5 percent.”

The critique actually started when his fellow GOPer Represenatative Dwayne Bridges withdraw his support of Dial’s plan because he recognized the Dial proposal was actually a tax increase.

Ever since, the newspapers have piled on. The Mobile-Press Register editorial board wrote:

Our problem with the plan is that it may not accomplish what it’s supposed to do, which is to make it easier for the working poor to buy what they need. If eggs and milk are less expensive, but laundry detergent and toilet paper are more costly, then what’s the point?

The Birmingham News concurred:

For starters, removing the state sales tax on food and making up for it with a higher sales tax on other goods hurts those who stand to gain the most by getting rid of the food tax. Obviously, they buy other things, so the higher sales tax would cut into whatever gains they made by not paying a state sales tax on food. That defeats the purpose of eliminating the food tax, or at least some of it.

And the Huntsville Times questioned his proposal along the same lines:

Removing the state sales tax on groceries would save $4 on $100 worth of groceries a week, or $208 a year. The savings would be $312 a year for a $150 average weekly grocery tab.

That can mean a lot to a poor family. And remember, rich and middle class shoppers would get the grocery tax break as well.

But while milk and vegetables would be less expensive, the cost for shoes, shirts and toilet paper would go up. What, then, would have been accomplished?

An editorial in the Birmingham News was fairly blunt:

Democrats for years have tried to exempt food from sales taxes, hoping to make up for the lost revenue by nixing the federal income tax exemption. Republicans always balked, saying it would hurt the wealthy and the middle class. Now they turn around, in the name of the people, and heap more burden on … the people.

And the poorest of them, at that.

This is not about Republicans and Democrats. It is a scam no matter what party backs it. And it’s bad for Alabama.

Because like it or not, the people of Alabama still are Alabama.

Perhaps someday our leaders will realize that preying on the people is not the best way to lure new business or brainpower or opportunity. A state that fails to value its own citizens is not really an attractive destination.

So no, Sen. Dial. We’re not buying your disingenuous grocery bill. Not this time.

I had tweeted my criticism of this bill on November 27 and, that same day, even suggested to radio-talk show host Dale Jackson that we should eliminate the grocery tax and replace with a internet sales tax. I had also suggested such, in more detail, on an online Facebook forum called Clay County Politics. Senator Dial must not have liked my suggestion or criticism because he posted something along these lines:

Alabama already taxes internet and catalog sales if they have a physical presence in the state. The federal government will not allow us to tax others. Any lawyer that knew what they were talking about would know this unless they got their law degree over the internet. It is easy to sit in the stands and complain about those trying to make a difference.

(This is not the exact quote but very close; Clay County Politics went offline for some reason so I cannot retrieve the exact quote.)

(UPDATE: Here is the exact quote (sic): “We in Al require both catalog and Internet sale tax collection if the seller has a location in the state . The fed govt will not allow us to collect from others . I would think anyone with a law degree would know this unless their degree came from the Internet “.it is so easy to set in the stands and critics those who are trying to play-make a difference”)

Nevertheless, here was my response:

Sen. Gerald Dial, I will refrain from the snide retort for which your post deserves and get right to the point. The Supreme Court case on point is Quill v. North Dakota, which ruled that out-of-state retailers without a “nexus” with the state are exempt from that state’s sales tax. Today, stores such as Books-a-Million pay a state sales tax on internet sales because they have brick-and-mortar locations here. (Although their internet operations, I believe, still avoid county and municipal taxes.) However, Internet retailers such as Amazon and Overstock do not remit any sales tax under current Alabama law.

The National Conference of State Legislatures estimates that Alabama will lose $357 million in 2012 by un-captured internet sales tax. More modestly, a Tennessee study estimated Alabama will lose more than $170 million in 2012.

Amazon, Overstock, and, possibly, E-bay sales could be subject to Alabama sales tax though. A sufficient constitutional “nexus” does exist because they have “affiliate”/third-party sellers within Alabama. (Admittedly, e-Bay is not as strong a case.) Sen. Dial, appropriate state legislation is all that is needed to cure this. New York, Rhode Island, North Carolina, Illinois, Arkansas, Connecticut and California all have legislation which taxes Amazon and Overstock for sales through their websites. If the internet retailers have “affiliates” or affiliated companies based within their borders, these states require the online retailers to collect sales tax. To my knowledge, no court or state Attorney General, that has reviewed this type legislation, have agreed with your constitutional objection. (And if Amazon gets cute and tries to terminate the affiliate nexus, then include a requirement for the Amazons to report the sum of all purchases through them by Alabama customers to the Department of Revenue.)

So, Sen. Dial, contrary to your post, the legislative actions I suggest are perfectly constitutional and lawful. Not only that, I believe my suggestion accomplishes several goals: grocery taxes are largely lifted, not just shifted, off the poor, the state budget is not harmed, and the playing field between locally-owned retailers and internet retailers is leveled.

On the other hand, I question whether your proposal accomplishes the goal of removing taxes off the poor. As noted, by the Montgomery Advertiser yesterday:

“But Dial’s proposal really doesn’t do much to help low- and middle-income working Alabamians. And in fact, it could hurt the poorest of them. By shifting the sales tax to other goods, working Alabamians in the middle and at the bottom of the wage scales wouldn’t really gain much, if anything. Whatever they would save on sales taxes on groceries would be offset by the higher sales taxes on other items. But consider the impact on Alabamians with really low incomes — those who qualify for federal food stamps assistance. Groceries purchased with food stamps are already exempt from sales taxes. So these families would actually be hurt by Dial’s bill because they would get little or no benefit from removing the state sales tax on groceries, but they would have to pay the higher tax on other items.”

So while there may be objections to my proposal, the lawfulness and constitutionality is not one of them.

By way of example, here is a copy of the North Carolina statute:

Mail Order Remote Sales. – A retailer who makes a mail order remote sale is engaged in business in this State and is subject to the tax levied under this Article if at least one of the following conditions is met:

(3) The retailer has representatives in this State who solicit business or transact business on behalf of the retailer, solicits or transacts business in this State by employees, independent contractors, agents, or other representatives, whether the mail order remote sales thus subject to taxation by this State result from or are related in any other way to such the solicitation or transaction of business. A retailer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the retailer enters into an agreement with a resident of this State under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet Web site or otherwise, to the retailer. This presumption applies only if the cumulative gross receipts from sales by the retailer to purchasers in this State who are referred to the retailer by all residents with this type of agreement with the retailer is in excess of ten thousand dollars ($10,000) during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the retailer has an agreement did not engage in any solicitation in the State on behalf of the seller that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question.

 

Alabama lost 7% of construction jobs after HB56 went in effect (Facetiousness alert)

Remember when the ALGOP touted the October drop in unemployment as evidence that HB56 was working. I questioned then (1) could we extrapolate anything from a single metric and (2) if it proved that HB56 worked, then a lot more undocumented immigrants were employed in government and professional services than we thought.

If you listen to talk-radio, one sector which is evidently overrun with undocumented immigrants and should be impacted by HB56 is the construction. industry.  I am looking forward to Rep. Hammon, Sens. Beason and Sens. Taylor tout this report. According to the Birmingham Business Journal:

The Birmingham metro area was one of the 146 U.S. metros that lost construction jobs in October, according to a new report. . .

Statewide, Alabama lost 6,100 jobs in that same period, bringing construction employment down 7 percent to 81,900, AGCA said.

(Wink, wink: I am being a little facetious here. An isolated metric does not reveal much by itself and certainly does show a causal relationship. I still think cherry-picking a few metrics is poor economic analysis; however, if the GOP wants to play the game, so can I.)