Exile on Jones Street: Laffer out loud

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by Kirk Ross

Top Lists — those slideshow-driven studies of the best or worst places to do something or not do something — are not exactly the sort of scientific work upon which you want to base an opinion.

Producing this sadly ubiquitous form of journalism is cheap and easy — get an intern to scan the census data or some other study and, based on a set of three or four data points, compile a list of the top or bottom performers. Then you just pull a few iconic photos, put together a trite paragraph with some local knowledge pulled from Wikipedia or a town web site and you’ve got the 10 Best Places in American for Horse Feathers or whatever.

This maddening featurette has proven a wonderful source of self-congratulatory behavior on the part of local pols and public-relations people.

My first experience with the delusional results of these lists came in October 1999 while covering the Chapel Hill-Carrboro school district. School leaders seized upon a list of “Top Ten” high schools produced by a national relocation firm that cross-referenced the percentage of kids taking Advanced Placement Classes, SAT scores and local housing prices.

The list was published as a little infobit at the bottom left corner of the front page of the real-estate section in the weekend edition of the Wall Street Journal. In ninth place was Chapel Hill High.

You’ll never guess what happened next. Okay, you probably can.

Fifteen years later, real estate agents and school system officials still note with pride the prestigious newspaper’s wise analysis.

As these kinds of lists have proliferated you can find all sorts of examples of similar conflation. Last week, top list psychosis took another turn when the American Legislative Exchange Council’s “Rich States Poor States” report hit the streets, showing that due to fantastic new policies North Carolina has jumped from 22nd to 6th in economic competitiveness. Wow, huh?

Naturally, those responsible for the fantastic new policies shouted “Carolina Comeback!” from the rooftops. Since then, their assertions have gone mostly unchallenged.

Few stories on our amazing leap to the top of economic competitiveness included an actual economist or a detailed look at the methodology of the report, which is produced annually by a group led by supply-side guru Arthur Laffer. Laffer may not be the most impartial of sources since he’s been advising North Carolina political leaders on tax policy and advocating the adoption of policies used to determine the rankings. He even authored a tax plan for the state on behalf of the Civitas Institute. (Interactive: Insert your own Art Pope/ALEC/Koch Brothers conspiracy theory here!)

North Carolina’s jump in the rankings was trumpeted by the report’s sponsors and the report cover even featured shiny, new, downtown Charlotte juxtaposed with drab, downtrodden Chicago.

Even a cursory look at the 15 factors used to determine economic competitiveness, reveals a few assumptions worth debating. States score big points for low wages and Right-to-Work and anti-union laws. States lose points for having more public employees (including teachers), and for having progressive income-tax policies.

In short, the best states are those states that create a more stratified society, in which the wealthy are rewarded and those they employed have fewer rights and lower wages.

If you work for a corporate funded anti-tax, anti-regulation organization, well that probably does sound dreamy. But if you’re leading a state with a flagging economy, high unemployment and hundreds of thousands already struggling due to low wages and zero rights, you have no business buying into such nonsense.

The subtle irony of the title “Rich States Poor States” reveals a kind of nostalgia for the days when folks were hoodwinked into believing in the power of the trickle. Like the 1980s TV miniseries it references, there are winners and losers, or, if you will, makers and takers. But between the ’80s and now we’ve seen not just the failure of that idea to change life for those in the bottom 90 percent, but what happens when we’ve gone in the other direction and boosted the earnings of the middle class while making investments in education and anti-poverty programs.

The only thing that’s going to come back to Carolina under the ALEC strategy for competitiveness is another reminder that what they’re selling works for those at the top at the expense of everyone else.

 

  • Art Kainz

    Thoroughly enjoyed the 4/23 column by Kirk Ross. Intelligent, thoughtful and entertaining to read.
    Excellent addition to the Staff.