Archive for April, 2010

An ARRA Critic’s Flat-Earth Economic Views

April 28, 2010

Tom Pauken, the chairman of the Texas Workforce Commission, is causing a stir by challenging the Obama Administration’s recent claim that the Recovery Act is responsible for up to 2.8 million jobs through the first quarter of 2010. Pauken took particular umbrage at the estimate by the Council of Economic Advisers that Texas’s share was 205,000 jobs. “This claim is completely misleading and inaccurate,” Pauken declared. “There is no direct evidence that the Obama stimulus plan actually created any new private sector jobs in Texas.”

That last statement is a dead giveaway. It’s one thing to dispute the exact employment impact of ARRA. By claiming that the more than $11 billion paid out in stimulus funds in Texas (according to Recovery.gov) did not create a single job, Pauken is revealing himself to be a member of the hardcore conservative fraternity that believes government spending, because it depends on taxation, never creates jobs.

In fact, a few minutes of research reveals that Pauken, who was apparently speaking for himself rather than the Commission (its website press release archive does not contain Pauken’s ARRA statement), is in fact a rightwing ideologue. He worked in the Reagan Administration and later headed the Texas Republican Party. When Gov. Rick Perry named him to the Commission in 2008, Texas AFL-CIO President Becky Moeller blasted the appointment, saying that Pauken “has a long record of advocacy for right-wing views and even battled George W. Bush and John Cornyn because he thought they were too liberal.” His ARRA outspokenness may have something to do with the fact that Pauken has just published a new book called BRINGING AMERICA HOME that lays out his ultra-conservative creed.

Pauken’s personal views aside, it is worth noting that the Council of Economic Advisers admitted that its state-specific estimates of ARRA job impacts, which were issued separately from the Council’s formal quarterly Recovery Act report, should not be given too much weight, calling the disaggregated numbers “inherently more speculative and uncertain” than the national estimates. Remember that the Council is responsible for estimating national ARRA employment impacts using macroeconomic models, not counting warm bodies. The state breakdowns were apparently issued for political reasons.

You can question the specifics of the Council’s models and multipliers, but to state that ARRA spending has no positive employment effects on the private sector is flat-earth economics.

reposted from the STAR Coalition blog

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States Let the Public Follow the Money

April 13, 2010

Transparency of state government spending, once a matter of interest mainly to specialists, has become a hot issue in recent years. Under the banner of “Google government,” activists on the Right and Left have been pressing states to make it easier for the public to see how tax revenues are being used.

Conservatives tend to push the issue as an indirect way of reducing public spending, while progressives are more likely to be concerned about contractor abuses and tax-break giveaways, yet both can frame the demand for better disclosure as a matter of enhancing democracy.

U.S. PIRG, which has been active in this effort in various states, today published Following the Money, a 50-state assessment of the progress toward what it calls Transparency 2.0 – “a new standard of comprehensive, one-stop, one-click budget accountability and accessibility.”

The report divides the states into three groups. Seven states (Illinois, Kentucky, Minnesota, Missouri, Ohio, Pennsylvania and Texas) receive the highest scores (81-97 out of 100) and are described as leading the way; 25 states get lower scores (50-79) and are described as “emerging”; the remainder either have very low scores or do not yet have any online spending disclosure.

U.S. PIRG’s scoring system puts a great deal of emphasis on “checkbook level” spending data. While that information is helpful, it may be difficult to go from ledger entries to an adequate understanding of broader spending and revenue policies. The report, however, has a good overview of state best practices on fiscal disclosure overall.

In addition to contracting and grants, Following the Money looks at the extent to which the state Google government websites are tracking economic development subsidies. This is helpful – given the important steps that states such as Illinois and Kentucky have taken – but it should not be forgotten that in numerous states online subsidy disclosure occurs via specific agency websites rather than broad spending portals.

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