The Exact Opposite Part VII

Conservatives can't balance a checkbook, why should we trust them on taxes?

by Baron Dave Romm

The Exact Opposite series:
Part I | Part II | | Part IV | Part V | Part VI | Part VII | Part VIII | Back to Political Links

these originally appeared on
Bartcop-E, and all links worked when posted

High taxes keep companies in Minnesota?

Here in Minnesota, the tax-dodging gun nuts keep making the argument that high taxes drive away businesses. The Taxpayer's League of Minnesota wields great political clout with arguments such as this Position Paper: Continuing to punitively tax those responsible for job creation, wage increases and productivity improvements only works to stifle creativity and hamper economic progress. They claim our high taxes are causing businesses to leave the state.

This makes sense on the surface: "gosh, those poor businesses, having to pay taxes to feed the poor rather than use the capital expand their enterprise". Go beyond the buzzwords and right wing political correctness and the argument makes no sense: The reason Minnesota has all these companies is that our highly educated workforce can drive to work from safe neighborhoods through clean air around beautiful lakes.

The exact opposite of the Republican talking point is true: Minnesota is business friendly because we have citizens willing to pay for the better things in life. Two OpEd pieces in today's conservative Startribune (5/20/07) make this point.

Do state taxes really make the wealthy walk? by Charlie Quimby and Dane Smith. Minneapolis StarTribune May 20, 2007 (the STrib doesn't keep stories online for long, so I'm going to quote a lot of it):

Those who claim a progressive tax system will drive away millionaires should look at the facts.
The rich are leaving! The rich are leaving!
We all heard those dire warnings trotted out to justify Gov. Tim Pawlenty's veto last week of an income tax increase on the wealthy that would have provided property tax relief.
If Minnesota raises the top income tax rate, goes this refrain, wealthy citizens will flee the state, businesses will take jobs elsewhere, and entrepreneurs will be discouraged from coming here.
Seductive low-tax states like Florida, Texas and Arizona are primed to pluck more of our most prosperous retirees, like the recently departed executive Bill Cooper. South Dakota is preparing welcoming parties for our beleaguered businesses. And thanks to the veto, we were spared the spectacle of caravans of limos, Hummers and Citations streaming over our borders -- "The Grapes of Wrath," Chateau-Lafite-Rothschild-style. But is it true?
Call it tried but not true, lacking in foundation. It's a worn-out argument that has always been thrown up against a more progressive tax system. But unless you already believe that taxes are the root of all evil, it's impossible to look at the evidence and conclude that an income tax increase at the top would set off a massive millionaire migration from Minnesota.
Take businesses leaving the state. It is such a nonproblem, the Department of Employment and Economic Development doesn't even track business departures. When it did measure business outmigration, for nine years in the 1990s, Minnesotans paid higher income taxes and about 1.5 percent more of our income for government services than we do today. If businesses were going to flee the state because of taxes, that was the time to do it.
Yet during that period, only 95 manufacturers moved out of state, totaling an approximate peak employment of fewer than 5,000 workers. Over the same nine years, Minnesota gained nearly 400,000 jobs. In 1996, when our price of government was near its all-time high, we ranked ninth among states for business expansions and 48th for business dissolutions. In other words, high-tax Minnesota offered very good conditions for business success.
A 1997 study by the conservative Center of the American Experiment identified 279 Minnesota manufacturing firms that had relocated, expanded or started business outside the state over a 27-year period. Ninety-six could not be found at the time of the study, so presumably some of the transplants did not go well. Was income tax a factor? The study doesn't answer the question directly. But more than half the companies cited moved to Wisconsin and Iowa, where income tax rates were not much different from Minnesota's.
What about small, nonmanufacturing businesses? Assistant House Minority Leader Brad Finstad, R-Comfrey, warned that the Legislature's proposal to raise the marginal tax rate on individual incomes above $226,000 "will affect 59 percent of Minnesota small-business owners and employers."
The effects will mostly be fright from overheated rhetoric.
Small-business owners typically report business income as personal income. In 2004, less than 4 percent of such returns filed in Minnesota reported more than $200,000 adjusted gross income from a business.
Small businesses typically rely on local connections -- their social networks, proximity to thriving companies and potential collaborators, intimate understanding of customers and ability to find good employees. How many successful owners would risk uprooting themselves from the source of their prosperity to save a few bucks on taxes?
Despite what the antitax echo chamber tells us, the world does not revolve around taxes. Life changes -- college graduation, decisions to have children, job opportunities and retirement -- are the real sparks to decisions about leaving a place. And good schools, access to health care, quality employers, functional infrastructure and a pleasant environment are reasons for staying.
We are already investing less of the state's income in maintaining these underpinnings of prosperity. If you think hanging onto a few retiring millionaires will keep Minnesota great, then there's some land in Florida you might want to buy.

One might think a real newspaper with journalistic integrity would incorporate facts in their news stories, but they tend to just sling whatever the right wing wants to. The front page of the STrib looks like a poorly designed Republican web site (complete with cursor and "feel good" stories taking up column inches). The shift to the right has cost the paper dearly: It's losing money and circulation (Minnesotans aren't that stupid), as are most of the conservative "news" media, and they are going to have to lay off people. Gosh, who will remain at the paper? The right wingers or the real reporters? Hmmm...

Governor Jesse Ventura wasn't the joke some thought he would be: He was a hard worker who did some good things. But ultimately, he failed to spark a third party alternative and he took the Minnesota budget from a billion dollar surplus to a four and a quarter billion dollar deficit. One of the prime architects of that huge deficit was Republican Party Majority Leader of the Minnesota House of Representatives, Tim Pawlenty. Pawlenty, riding the anti-tax sentiment that clenched so many sphincters, won the next election and became governor in 2002 and squeaked by to be reelected in 2006. He balanced the budget (as required by the state's Constitution) but with a lot of duct tape and promises for a bright future that hasn't materialized under the failed Bush budget. Pawlenty's been around long enough to see just how bad his leadership has been.

On the same Opinion Exchange page as the Quimby and Smith essay is a column by Lori Sturdevant, Weighed down still by budget cuts of '03. Star Tribune May 20, 2007. Again, the STrib doesn't keep pages up for long, so I'm going to quote much of it:

This legislative session, there was no escaping the long shadow of that big deficit year.
Rep. Nora Slawik lost sleep last week, trying to nurse early childhood education provisions into the final E-12 education bill. But the gloom in her voice at midweek bespoke more frustration than fatigue.
"All the innovation is gone," the Maplewood DFLer ruefully reported. When the little bit of money left for early ed was allocated, it would stretch only far enough to restore funding to pre-2003 levels for Head Start, School Readiness, Early Childhood Family Education.
Those are proven programs. They ought to be as least as robust as they were in 2002. Still, not being able to apply new ideas and money to an emerging need "feels like treading water," Slawik said. "It's not getting ahead."
The story was much the same as other big bills were put in final form last week. When shiny new ideas went head-to-head with embedded programs that had been hit hard in the big deficit year of 2003, the chrome fell off.
Four years and two general elections have passed. Yet still present in nearly every conference committee room this year were the spending cuts made by the 2003 Legislature and Gov. Tim Pawlenty to close a $4.5 billion deficit without raising state taxes. Those decisions were this session's inescapable context. The governor and some legislators want to push high school reform? Not so fast, said the school districts. You can't start something new until you repair the damage the 2003 freeze in special ed funding is doing to our bottom lines.
The Legislature's 2020 Conference likes cash incentives for families to care for frail elderly relatives? Not now, when the 2003 cuts have a third of the state's nursing homes on the brink of closure.
Pawlenty and the Private College Council have an idea for getting more high school kids to take college-prep classes? We can't put millions into an unproven scheme like that, and let tuition at state colleges keep climbing into the stratosphere, legislators said.
New ideas that build on an intact government-services infrastructure were stopped by evidence that Minnesota doesn't have one anymore.
"I keep hearing that we should be more like business, and that businesses both cut expenses and invest in new things," said Rep. Mindy Greiling, DFL-Roseville, the House K-12 finance chair. "I don't know. I don't think too many businesses let their whole plant crumble in order to improve the landscaping."
Her analogy would be more apt if the proposed investments were merely aesthetic improvements. They weren't. Several are responses to the biggest challenge this generation of lawmakers faces -- preparing for a future in which prosperity will depend more than ever on a well-educated workforce, even as the average age of the population becomes older than ever.

War In Iraq was supposed to pay for itself, but reality got in the way

Remember the war against Franco?
That's the kind where each of us belongs.
Though he may have won all the battles,
We had all the good songs.

-- Tom Lehrer, Folk Song Army.

Ah, but Lehrer was singing of a different war, a different quagmire, a different kind of protest. Here in the Aughts, the Loyal Bushies went to war in Iraq and claimed it would pay for itself. Few casualties, they said, and it would all be over soon and the US would be greeted as liberators.

The truth was far different. Were the conservatives merely incompetent, or were they deliberately lying to pull the wool over the eyes of gullible Republicans? In either case, the exact opposite of Loyal Bushie predictions has come to pass.

Cost of war? Cheap, they said. Collection of quotes on the funding of Iraq as compiled by the office of Rep. Jan Schakowsky (D-IL) (selected examples):

Budget Director Mitch Daniels: "The United States is committed to helping Iraq recover from the conflict, but Iraq will not require sustained aid." [Source: Washington Post, 4/21/03]
Deputy Defense Secretary Paul Wolfowitz: "There's a lot of money to pay for this that doesn't have to be U.S. taxpayer money, and it starts with the assets of the Iraqi peopleand on a rough recollection, the oil revenues of that country could bring between $50 and $100 billion over the course of the next two or three yearsWe're dealing with a country that can really finance its own reconstruction, and relatively soon." [Source: House Committee on Appropriations Hearing on a Supplemental War Regulation, 3/27/03]
Defense Secretary Donald Rumsfeld: "If you [Source: worry about just] the cost, the money, Iraq is a very different situation from AfghanistanIraq has oil. They have financial resources." [Source: Fortune Magazine, Fall 2002]

These guys are so incredibly inept and/or corrupt that they tried to convince YOU that a war in Iraq would make money for the US. The sad part is, many sphincter conservatives bought the whole thing, lock, stock and trillion US tax dollars. Here on planet Earth, the Iraq was has been an expensive, morally unjustified quagmire.

Cost of Iraq war nearly $2b a week. Boston Globe, Sept. 28, 2006:

WASHINGTON -- A new congressional analysis shows the Iraq war is now costing taxpayers almost $2 billion a week -- nearly twice as much as in the first year of the conflict three years ago and 20 percent more than last year -- as the Pentagon spends more on establishing regional bases to support the extended deployment and scrambles to fix or replace equipment damaged in combat.
The upsurge occurs as the total cost of military operations at home and abroad since 2001, including the wars in Iraq and Afghanistan, will top half a trillion dollars, according to an internal assessment by the nonpartisan Congressional Research Service completed last week.
The spike in operating costs -- including a 20 percent increase over last year in Afghanistan, where the mission now costs about $370 million a week -- comes even though troop levels in both countries have remained stable. The reports attribute the rising costs in part to a higher pace of fighting in both countries, where insurgents and terrorists have increased their attacks on US and coalition troops and civilians.
Another major factor, however, is ``the building of more extensive infrastructure to support troops and equipment in and around Iraq and Afghanistan," according to the report. Based on Defense Department data, the report suggests that the construction of so-called semi-permanent support bases has picked up in recent months, making it increasingly clear that the US military will have a presence in both countries for years to come. The United States maintains it is not building permanent military bases in Iraq or Afghanistan, where the local population distrusts America's long-term intentions.
But for the first time, a major factor in the growth of war spending is the result of a dramatic rise in ``investment costs," or spending needed to sustain a long-term deployment of American troops in the two countries, the report said. These include the additional purchases of protective equipment for troops, such as armored Humvees, radios, and night-vision equipment; new tanks and other equipment to replace battered gear from Army and Marine Corps units that have been deployed numerous times in recent years; and growing repair bills for damaged equipment, what the military calls ``reset" costs.
At least one lawmaker, referring to reports of equipment shortages in the war zones and at US bases where troops are training for combat, says some of the spending is misplaced. "While we are spending billions in Iraq to build and maintain massive bases, we cannot [effectively] repair our abused equipment or replace it," US Representative Martin T. Meehan , a Lowell Democrat and member of the House Armed Services Committee, said in a statement.

We're in Iraq for the long haul. So much for "shock and awe". The Sitting Duck Republicans want to have our brave troops cower behind fancy sandbags and unsafe Humvees. Indeed, the Bushies are so bad at protecting our troops that Humvee doors can trap troops and "The Army is fixing the doors of every armored Humvee in combat in Iraq because they can jam shut during an attack and trap soldiers inside". But that's a different essay, another sordid story from the ranks of the cowardly conservatives who waive the flag while sending ill-equipped soldiers to fight the wrong war. Meanwhile...

Some estimates say the War in Iraq could cost 2.6 trillion. The Age, Australia, back in January 10, 2006:

The cost of the Iraq war could top $US2 trillion ($A2.66 trillion), far above the US administration's pre-war projections, according to a new study. The study takes into account long-term costs such as lifetime health care for thousands of wounded US soldiers.
Columbia University economist Joseph E Stiglitz and Harvard lecturer Linda Bilmes included the disability payments for the 16,000 wounded US soldiers, about 20 per cent of whom suffer serious brain or spinal injuries.
They said US taxpayers will be burdened with costs that linger long after US troops withdraw.

Bush's first impulse is always to run away, and his second impulse is always to lie about it. Running away from 9/11 to invade Iraq, he simply lied about the cost of fighting the war and the long-term cost to the US. This doesn't take into account the loss of prestige and ceding the moral high ground to some very evil people.

The war is about, among other things, oil. Bush and his Saudi/Chinese handlers figured to get their hands on a large supply. The failure to get cheap oil was probably a major factor in the Democratic takeover of Congress. It's hard to believe that Rove and co. are really that stupid, but it's clear that they went into Iraq expecting a major oil boom and the exact opposite happened.

Iraq oil is not paying for US involvement. Indeed, Billions in Oil Missing in Iraq, US Study Says. NY Times, May 12, 2007:

Between 100,000 and 300,000 barrels a day of Iraq's declared oil production over the past four years is unaccounted for and could have been siphoned off through corruption or smuggling, according to a draft American government report.
Using an average of $50 a barrel, the report said the discrepancy was valued at $5 million to $15 million daily.
The report does not give a final conclusion on what happened to the missing fraction of the roughly two million barrels pumped by Iraq each day, but the findings are sure to reinforce longstanding suspicions that smugglers, insurgents and corrupt officials control significant parts of the country's oil industry.
The report also covered alternative explanations for the billions of dollars worth of discrepancies, including the possibility that Iraq has been consistently overstating its oil production.

(A Tip O' The Hat to and their Top 10 Conservative Idiots for pointing this one out.)

Also a Tip O' The Hat to Greg Palast, who has been doing real journalism while the US media has been reading Karl Rove handouts. Not only has the Iraq was already cost the US taxpayers half a trillion dollars, it's going to cost a lot more. Whenever someone tries to tell Bush, he's fired. W. claims to get good advice, but the exact opposite is true: He doesn't listen to anyone who disagrees with him.

Naked Neo-Cons: Perjury & The Big, Bad Wolfowitz Greg Palast, May 9 2007:

George Bush is trying to save Paul Wolfowitz' job as President of the World Bank even after the vulpine neo-con was caught slipping a load of World Bank loot to his love interest, Shaha Ali Riza.
Big deal. Yes, Wolfowitz shouldn't have been greasing his cookie sheet with government funds, but there are bigger reasons to toss The Wolf out the door.
Like, say, perjury and homicide? I haven't forgotten, Mr. Wolfowitz, that on March 27, 2003 you testified before the US Congress that the occupation of Iraq wouldn't cost the American taxpayer a penny.
You said, "There's a lot of money to pay for this that doesn't have to be U.S. taxpayer money." Oh, really?
When Wolfowitz laid down that line of jive, he and the Bushes knew that Americans just can't pass up a bargain, and here The Wolf was offering the sale of the century, a "free Iraq." Not "free" as in "self-governing" but "free" as in, we'll get their oil and their allegiance for nothing!
We can bomb Iraq and the Iraqis will pay for the bombs!
And where will the Iraqis, holding nothing but bushel-bags of Saddam dinars, get these billions of US dollars to pay for the Occupation?
Wolfowitz testified, "The oil revenues of that country could bring between $50 and $100 billion over the next two or three years."
Is that so?
Wolfie's claim was no small matter. It's hard to remember, but lots of the Congressional debate was not about Saddam's Weapons of Mass Destruction -- the New York Times had already found those for us. Senators were asking, What's this little war going to cost us? There was no way in hell Congress would have authorized Bush's big adventure if it cost $100 billion.
Indeed, $100 billion was the price projected by the President's chief economist, Larry Lindsey. The President corrected Lindsey's math: Bush fired him.
You know the punchline: The war has so far cost the U.S. taxpayer over half a trillion dollars - and counting.
But you weren't wrong, Wolfie. You were lying. And you knew it.
This is serious stuff. I can tell you, as a former government racketeering investigator: if you are wrong, well, stuff happens. But if you say one thing under oath but knew something very different, that, Mr. Wolfowitz, is perjury. Perjury's a felony, Wolf, and you know it. Indeed, your neo-con buddy, Elliott Abrams, was convicted in 1991 for lying to Congress about Reagan's arms-for-hostage swap.

Wolfowitz will soon be gone, resigning in disgrace eight days after Palast nails him, but will he ever have to face up to his crimes? Will he be a witness in George W.'s impeachment hearings? Too soon to tell.

Bush's tax cuts fail to create jobs

Gleaned from Diaries on the invaluable

Bush likes to tout his tax cuts for the rich as helping the economy, but the exact opposite is true. Most Americans spend more to get less. We are less secure, financially and otherwise. Bush has the lowest job creation record since Hoover.

Middle-Class Life Under Bush: Less Affordable and Less Secure. Democratic Policy Committee May 7, 2007 (selected points from a long article; I've removed the footnotes):

For millions of hard-working, middle-class families, life under the Bush presidency has grown less affordable and less secure. President Bush's record of fiscal incompetence and mismanagement, and Republicans' close ties with special interests, have helped lead to both lower wages on the one hand and skyrocketing costs for basic necessities like gas, health care, and college tuition on the other. Unfortunately, instead of producing solutions to the problems facing the middle class, Bush Republicans have ignored them and pushed for policies that would make matters even worse.
In addition to tightening the squeeze on families, Republican policies have made our entire nation less financially secure. Republicans increased our debt to nearly $9 trillion and have insisted on spending billions of dollars every year on budget-busting tax breaks for special interests and multi-millionaires. The Bush Administration also continues to compromise our economic security by increasing our reliance on foreign investment from in China, Japan, and Dubai.
Gas prices have climbed over $3 a gallon. Prices at the gas pump have jumped 107 percent from $1.47 per gallon the week President Bush took office in January 2001[3] to $ 3.05 in the latest week of energy price data. The price for a barrel of oil has more than doubled during the Bush Administration from $30.63 in January 2001 to $65.26 in April 2007. The average household with children will spend about $3,887 on transportation fuel costs this year, an increase of 104 percent or $1,984 over 2001 costs.
College education costs have risen by 44 percent. Average tuition, fees, room, and board costs at four-year private universities have increased by $6,786 from $22,240 in the 2000-2001 academic year to $29,026 in the 2005-2006 academic year. Tuition, fees, room, and board charges at four-year public colleges grew more rapidly between 2000-2001 and 2005-2006, after adjusting for inflation, than during any other five-year period since 1975. Total costs jumped from $8,439 in 2000-2001 to $12,127 in 2005-2006 an increase of $3,688, or 44 percent.
While families work harder, their wages continue to decline. Middle-class families are working harder and earning less today than they were at the start of the Bush Administration. According to the Wall Street Journal, "Since the end of the recession of 2001, a lot of the growth in GDP per person that is, productivity has gone to profits, not wages." Median household income, adjusted for inflation, has declined $1,273 from $47,599 in 2000 to $46,326 in 2005.
Worst job creation record since Hoover Administration. A growing economy should be good news for those seeking jobs. But over the course of President Bush's term in office, his Administration has the worst overall job creation record since Herbert Hoover more than 70 years ago.
Overall non-farm payroll employment has increased by just 5.2 million since President Bush took office in January 2001 compared with 22.7 million during the Clinton presidency. Overall employment growth has averaged just 70,000 per month under President Bush much lower than the approximately 150,000 jobs needed each month to keep up with population growth. It was not uncommon to see monthly job gains of 300,000 and even 400,000 during economic expansions under previous Administrations.

Even the extreme conservatives at the Wall Street Journal are getting worried that the Bush economy is the exact opposite of what was promised in 2001.

Bush Reorients Rhetoric, Acknowledges Income Gap Wall Street Journal March 26, 2007:

WASHINGTON -- Until January, President Bush seldom acknowledged the widening gap between the rich and the middle class. Then, in a speech, he declared: "I know some of our citizens worry about the fact that our dynamic economy is leaving working people behind. ...Income inequality is real." He has raised the subject several times since.
This isn't a sudden change in Mr. Bush's economic philosophy, but rather a change in tactics forced by the changing political environment, say current and former administration officials and outsiders in touch with the White House.

As always, Bush ran away ("seldom acknowledges") from the problem and eventually adds a dollop of truthiness to the make the spin come out as lies ("change in tactics").

A subscription required for full WSJ article, so here's the DailyKos Diary from Jerome a Paris, The one graph that damns the Bush economy. I'll let you look at the graphs. It's worse than you think.

The incompetence and corruption of the Bush administration is too much for one person

I've been doing political columns on Bartcop-E for seven weeks in a row, and my list of The Exact Opposite subjects is longer than it was after the first week. I wish there were real journalists in the US, or that they would pay me to do this full time.

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