Conservatives Forced To Pull Back Tax Cut Ploy, Rishi Sunak Gets To Smile And Say ‘Told You’

Well, well, well…….

Faced with a growing political rebellion after days of economic chaos, Britain’s truly not-ready-for-prime-time-prime minister of less than a month has reversed course and now says she is abandoning a signature plan to cut taxes for the country’s highest earners. You know, the same stew she was pushing during her cheesy campaign for the office when economists were saying her plans were just plain silly.  Her now dramatic reversal comes just hours after this weekend when Liz Truss was slinging rhetoric like hotcakes at breakfast for the hungry conservative hordes.   Her radical economic agenda has met the resounding rebuke of the markets and mature pols. She is a national fool. All in less than 30 days.

Earlier this year I stood with Rishi Sunak in his bid to become the next prime minister of Britain.  In my post about his credentials for the job, I wrote “Add into the mix this person does not wish to fall into the consequences of a cheap theatrical tax cut pledge knowing such action will further harm the British economy. He should know, being a former Chancellor of the Exchequer.’

He is a conservative grounded in reality, which means he speaks candidly to the fire-eaters in his party. He stated his path would be as a frank prime minister—a gentle (or not) reminder that what preceded was a continuous liar—and that he would not be one who offered “comforting fairy tales”.

Conservatives fall, like they often do, like a pack of raccoons for the one who promises things that glitter.  What is playing out across the pond is simply too precious not to watch play out. Who could have guessed at this outcome…..? Hmm…was it Sunak?

I wrote the following in July.

Sunak has the very life story that Tories require if they are to make inroads into the diverse British society.  Born to Indian parents who had left East Africa, attended excellent schools, and rose to a high position in the government showcases the fact all are welcome in the nation.  And can lead the country.

Conservative leadership need not be grounded in the harsh racism and stale models of the past.

We see, again, what happens when they do.

President Biden Keeps Promise About Student Loan Forgiveness

Finally, after years and years of pressing the issue in election after election, action has now been taken on student loan forgiveness. College and university loans now account for more than 40% of outstanding consumer debt in the U.S., outpacing the amounts owed on motor vehicle loans, for example, by more than $477 billion. Ponder that fact for a moment.

I have argued since (what year is this?) that our economy is hampered by the millions of people redirecting income towards student loan payments rather than doing what works best in a consumer-driven economy. The fact is if someone is struggling to pay off their student loans, they are not buying things that workers are making in factories or assembly lines. The tax revenue from such transactions is lost.

We know education is a great investment for the future of the nation, and it should be viewed as a most valued commodity. I very much disagreed with shackling the ones who have the ability to learn and then turn their knowledge into ideas for the betterment of society, with lifetime financial burdens.

So I very much applaud President Biden for directing the Education Department to forgive $10,000 in federal student loan debt for nearly all U.S. borrowers, an unprecedented decision that will affect millions of borrowers with immediate financial relief. This action will now forgive $10,000 for every federal student loan borrower who earns less than $125,000 annually. The administration is also canceling up to $20,000 for those student borrowers who received Pell Grants, applying the same income cap.

Here’s what the plan includes.

$10,000 in debt forgiveness for all federal borrowers…Federal borrowers who earn less than $125,000 and did not receive a Pell Grant will be eligible to have $10,000 of their student loan balances forgiven. This will likely eliminate the balances of at least 15 million borrowers.

$20,000 debt reduction for Pell Grant recipients…Millions of borrowers who received Pell Grants during college and meet the administration’s income requirements will see 20,000 removed from their balances. Data shows around 7 million students receive Pell Grants each year.

Extends pandemic-related pause on student loan payments…The administration is also extending the federal moratorium on student loan payments for a sixth and final time. Payments will resume in January 2023, concluding the pause which has spanned more than two years and two administrations.

While I advocated for the move taken by the Biden White House for a portion of loans to be canceled, I still hold very much to the realization that incentivizing education by having students pay a share of the burden makes sense. When personal effort is required to gain an education a more strict adherence to the books results.

When some voters feel a resume is to be snickered at and expertise is not something to be valued we need to be reminded of what took Americans to the moon. It was not just rocket thrust, but the science and technology that allowed our flag to be placed on the moon. That effort was made possible by students first sitting in a classroom and learning.

In late 2021 a shocking amount of money was spent on our national defense. The House passed an authorization bill costing $768 billion. Certainly then, a person in middle America should feel the federal government can lessen the student loan burden by $10,000. It can be correctly argued that a keen mind and skills learned are as valuable to a democracy as a missile.

Thanks go to President Biden and his administration for this outcome today.

Campaign For Wisconsin Governor Must Address Labor Shortage, Need For Immigrant Labor

With the campaign for Wisconsin governor moving in full steam towards the November election voters are being offered an array of pretty much the same fare as past fall races.  This year there is alpha-male posing from Republican nominee Tim Michels while Tony Evers unveils a cheesy tax cut. Voters know aggressive masculinity does not equate to good governance, and that our transportation budget needs state funds far more than individuals do with an extra couple hundred bucks in their wallet.

Yes, we are now in that time when candidates will say and do anything for a point bump in the polls or a series of favorable headlines.  I understand the need to press all the buttons and make every effort to prevail at the polls, but there must also be a real conversation with the electorate about issues that matter.  One of those topics is something I have talked about for at least 20 years.  Count the number of graduates leaving high school in May and then count the new faces entering kindergarten in September.  We have a genuine worker shortage, in every business sector and in every region around the Badger State.

On Sunday Tom Still, who I believe should be in the kitchen cabinet for whoever wins the governorship, stated most clearly why there is a need to focus on our state’s worker shortage.

Economists and demographers in Wisconsin have been warning for decades that a shortage of workforce-age people was inevitable. The St. Louis-based research arm of the Federal Reserve reports Wisconsin’s “labor force participation” rate declined from 74.5% in late 1997 to 66.4% in June 2022. That rate reflects the number of all employed and unemployed workers divided against the state’s civilian population.

Stills also noted a sobering fact about the dismal rate of growth from those moving here from another state.

At a time when much of the United States is on the move, Wisconsin isn’t a leading destination. About 1.1 million people moved from one U.S. state to another in 2021, the conference was told, yet only 3,400 or so wound up in Wisconsin.

Among the various factors Still connected to the worker shortage, was the fact our state will need to view immigration in a different light if we are to meet the economic needs we face. Nine years ago, in 2013, he wrote a column about immigrant workers in the Badger State.

Immigration reform can help the Wisconsin economy at a time when the demographics of an aging society are chipping away at the state’s workforce, from its kitchens, farms and resorts to its research laboratories and tech companies.

In a global economy, Wisconsin looks much less international than even its neighbors. Compared to Illinois, Minnesota and Michigan, Wisconsin has a smaller share of foreign-born population and total labor force, as well as fewer foreign-born business owners.

During the primary season, there were countless television ads by Michels where “illegals” were mentioned. We learned that he aligned with Donald Trump concerning a wall at the Southern border. He ground down with campaign rhetoric about “no drivers’ licenses, no benefits, and no tuition” for immigrants.

We too often hear conservative pols use dehumanizing language regarding immigrants.  Over the past years, we have had too many truly sad examples of political discourse that was xenophobic and racist. The facts are of course that immigrants are human beings in search of a better life, fair wages, safety, and security.  Additionally, we know that Wisconsin requires their labor and skills.

While the usual theatrics of a campaign season is upon us it appears that once again the long-term problem of a shortage of workers in our state will be left behind.  Slogans and heavy rhetoric about red meat topics will not address the shortage of workers businesses confront year after year in the construction trades, farms, or on the manufacturing floors. Voters should be provided ideas by the candidates for governor about how our state deals with this pressing problem.

Inflation Is A Problem, But Not Caused By White House

Anytime there are economic pains felt across the nation the attempt to pin the blame on the occupant of the White House is the first action taken by the party out of power. Politically, I totally understand that phenomenon. Except in a few cases, however, that is not a logical way to view the factors that move the economy.

One instance of cause and effect between a president being reckless and the economic downturn which followed was in the 19th century. In 1832, Andrew Jackson ordered the withdrawal of federal government funds from the Bank of the United States, an institution he railed about and carped on endlessly. His actions are noted for what resulted during the Panic of 1837.

The consequences of the international implosion of so many aspects of numerous economies due to the pandemic were always going to be followed by some degree of inflation. Just based on the struggle to align all the parts of the supply and demand sectors would doubtless prove problematic. Regardless of who ruled in China, Germany, or Washington.

In the newspaper today a few solid paragraphs written by Josh Boak of Associated Press put some logic to the larger issue of inflation angst.

Consumers account for most U.S. economic activity, meaning they steer much of what happens with their collective choices. Their role tends to get overlooked in political speeches, which generally reduce the economy to talk about jobs, factories and other forms of production. Biden has gone so far as to say that his policies to promote port upgrades and domestic manufacturing will lower costs by improving production, a long-term fix to an immediate problem that can be reduced, simply, to demand exceeding supply.

“Fundamentally, the problem right now is the opposite of stagflation — it’s regular inflation driven by an economy operating at or even above its potential, with consumer demand outstripping the capacity of the economy,” Stevenson said. “I’m hoping that people stop digging into their savings and cut spending a little — not enough to slow the economy, but enough to slow the price increases.”

Stevenson also acknowledged that gas prices in particular might be driving the broader dissatisfaction, such that overall inflation could fall and do little to calm public anxieties so long as prices at the pump are high.

“Cars seem to be important to people’s sense of control and high gas prices for some might feel like losing your ability to just hop in your car and go where you want,” she said.

Despite the spike in prices, consumer spending increased faster than inflation during the first four months of this year. Whether consumers can maintain such robust spending will largely determine how the economy fares in the coming months.

I do not expect anything other than the continued political heat about inflation right through the midterm elections. Yes, if the GOP were in power the Democratic pols would be singing the tune the GOP now is using in races nationwide. None of that is shocking.

But it does underscore what I preach with frequency. Along with civics and history, our nation needs more time spent on economics education, too.

How Much Does Your Big Mac Cost? Higher In Northwest Arkansas Than Manhattan

I find an odd interest in certain economic stories. This post makes that point most clear.

Today Axios offered this nugget–no pun intended–about McDonald’s iconic signature sandwich. It is not a leap of logic to know that where wages are higher, the cost of a Big Mac generally goes up. Still, the numbers are of interest. Perhaps for you, too.

Data: Economic Policy Institute, Axios research; Chart: Simran Parwani/Axios

So…..Northwest Arkansas Big Macs cost more than in New York.

In Austin, Texas, where the minimum wage is $7.25 an hour, a Big Mac is $3.75.

A Big Mac in San Francisco, where the minimum wage is $16.32 an hour, is $5.79.

In New York City, where the minimum wage is $15 an hour, a Big Mac can be found on Broadway for $4.95.

But, but, but: In NWA, (Northwest Arkansas) where the minimum wage is $11 an hour, the price of the signature sandwich (no sides) is $5.19. That’s nearly a quarter of a dollar more than in Manhattan.

WIN: Whip Inflation Now

Here is another reason to pay heed to how books are aligned in your home library. Moving them about will perhaps give you an idea for a blog post. (I simply could not allow this space to be taken over today by the slap heard around the globe. Not giving an inch of this blog to drama queens and angry man-boys.)

Putting my White House Press Secretary books in a new order meant I had to move Ron Nesson’s book, It Sure Looks Different From The Inside, and of course, thumbing through it again was warranted. President Gerald Ford, like President Joe Biden today, was dealing with high inflation across the nation.

Ford had a plan to deal with inflation. Whip it.

On page 75 Nesson writes that Ford was earnest bout the WIN program, based on the home-spun notion that the average citizen, in little ways, could help whip inflation.

As I searched for a few photos about WIN on the internet I came across attempts to enlist people at planting a local garden to stave off high food prices. Given the small size of the seed packets, it seemed like terrace gardens were in mind. Back home in Hancock during this time period, like the years before and after, we had a massive garden with at least 40 potato plants each summer, rows of corn, tomato plants galore, and everything else that could grow in soil.

The reason to write this post, other than a trip down memory lane, is to alert us to the road we have traveled many times before, and the fact we made it through. We always do. High gas prices are not a new feature of life, nor the grousing about them.

The pandemic was most unsettling and for far too many deadly. The undermining of our economy from COVID remains staggering. But if we are smart we can traverse around new variants rather than needing to bluntly marshall the populace through them. Vaccines are still the best route to a robust economy.

Thankfully, in the United States, Africa, China, South America, and most of Europe, it can be said that we can be counted as among the fortunate ones. We can all say our homes are not being shelled by Russian invaders.

All of a sudden inflation is not so pressing.

And so it goes.

Inflation Not Issue With Democrats’ Job And Revenue Generating Proposals

The news has lately been filled with stories about price increases from gasoline to beef. But just as many stories have been reported that airlines are selling tickets galore and sales are percolating at stores. This morning the lead story above the fold in The Wall Street Journal was titled Shoppers Increase Spending, Despite Inflation.

U.S. consumers withstood rising inflation to power a burst of shopping ahead of the holiday season, with big retailers reporting higher sales and expectations for a solid finish to the year.

Sales at U.S. retail stores, online sellers, and restaurants rose in October by a seasonally adjusted 1.7% from the previous month, the Commerce Department said.

While it is possible to track the reasons for inflation since the pandemic, the supply chain disruptions, and the unemployment numbers or as it has also been termed the “mass resignations’, it must be noted why we must not throw away the chance to advance our society with policies that have been long sought. We need to understand that these proposed initiatives are not inflation-inducing.

When it comes to the Build Back Better legislation some partisans who desire to undermine President Biden rather than listen to the strong support from the public, as polls show, have used the fear of inflation as their rhetorical tool. But the facts and logic are not on their side.

This week at the signing of the massive and much-needed infrastructure bill Republican Senator Rob Portman spoke words that did not make as much news coverage as they warranted. His message was clear. Investing in jobs and revenue-generating ideas is a path towards a strong US economy.

“It represents a long-term investment in our nation’s hard infrastructure assets that will create hundreds of thousands of jobs, and make us more efficient, more productive and more competitive against other countries like China. Importantly, economists agree that by investing over time in hard assets, it adds to the supply side of the economy, and will be counter-inflationary at a time of rising inflation. And it does all of this without raising taxes on the American economy as we are coming out of the pandemic. In contrast, the partisan tax and spend Build Back Better plan will increase inflation through massive stimulus spending and hurt the economy through massive tax increases.

While it is easy to locate the latest screed from the likes of GOP Senators Ted Cruz or Ron Johnson it obviously makes far more sense to listen to the words of economists and learned individuals. Such as Mark Zandi who for years has been read and heard in this nation about economic matters. He is now the chief economist of Moody’s Analytics.

The hair-on-fire discourse over high inflation is understandable, but it’s overdone. … My inflation outlook could be Pollyannish, but only if inflation expectations — what investors, businesses, consumers and economists think inflation will be in the future — rise. If there is a widespread view that inflation will remain high, workers will demand higher wages to compensate and businesses will ante up, believing they can pass along their higher costs to their customers. This vicious wage-price spiral was behind the persistently high inflation we suffered 30 years ago. But there is no evidence that this is happening today.

All of this refutes the notion that the government spending and tax breaks to support the economy through the pandemic, including the American Rescue Plan this past March, are somehow behind the higher inflation. These factors certainly gave a boost to demand last spring, but that faded when the Delta variant gained momentum this fall. There is also no good way to connect the dots between the Build Back Better agenda, which is currently being debated in Congress, and higher inflation. The legislation provides support for public infrastructure and various social programs, and longer term, it is designed to lift the economy’s growth potential, which will ease inflationary pressures.

The fact is that inflation fears are being used by Republicans to confuse a certain segment of the nation and undermine the sitting president. They are not interested in, or understanding of the popular support for housing programs, climate-change policies, and a plethora of other matters contained in the Build Back Better legislation.

Fear may get them a headline now, but the nation is deserving of progress that history will long record.

And so it goes.

F-35s To Be Housed At Truax Field, Sun To Rise Tomorrow

The news today was good, even if not everyone as of yet understands why.

Members of the 115th Fighter Wing said goodbye to the first F-16 ever stationed at Truax Field as the Wisconsin National Guard continues preparing for the next generation of fighters to arrive.

In a post on Facebook, the Guard shared images of the jet, numbered 252, explaining that it first touched down in Madison in April 1993. At that time, Truax Field housed the A-10 Thunderbolt II and was starting its upgrade to the F-16s.

Nearly three decades later, the Guard is upgrading again, this time from fourth-generation aircraft to the fifth-gen F-35 Lighting II. Deputy Adjutant General Gen. David May described the upgrade as “moving from a flip phone to a smartphone” during an August groundbreaking ceremony for the base’s first major F-35 project.

It comes not as news to readers of this blog that I feel a shared responsibility as to the reason for my support of these jets. I expressed it in 2019.

We must take our responsibilities as citizens most seriously.   From voting, serving on a jury, or paying taxes it is our duty to step up and serve in a variety of ways.  That also applies to where the military trains, such as at Truax.  I do not know any person on a first name basis who is actively serving in our military.  So the least I can do is support the men and women who have accepted that role.  If I am advocating policies, such as no-fly zones in Syria, I then should also accept the placement of training for such missions near to where I reside. I am not one who suggests the F-35 be relegated to places like North or South Dakota.

This matter of the F-35 jets is not about noise, as many will try to argue.  A segment of the city and even in Dane County will try to spin their narrative about how their grandchildren will be scared–yes I have heard and read such arguments– but I suspect not since most play very violent video games where a jet taking off is the least dramatic event. To hear some of the dialogue about why people are opposed to the F-35s would lead one to conclude that deafening roars will shake windows from frames, and do everything but rattle the ground so much that caskets will pop out. 

Let us be honest and say at the heart of the matter is a deep disdain about the manufacture and use of the jets.   Madison is very averse to military policy and what has played out over the past couple years regarding these jets has alerted us, again, to that truth.

Here is the bottom line as to why we all need to care about that ginned-up rhetoric.

It is true that some of Madison loves to get caught up in their own self-generated hysteria.  This is what happens all too often and it takes a toll as when truly serious matters arise people are spent and not wishing to expend more energy.  The other half is so dismayed from the crying of ‘wolf’ they tune other messages out.

For the record I often hear the F-16s take off and land from Truax.  I assumed when moving into an urban environment, with an airport and military facility only a few miles away, that there would be sounds from aircraft.  The fact is that the military presence at Truax has proven to be a good neighbor for over 70 years.  Currently the 115 Fighter Wing flies F-16 jets, but those are to be replaced with 20 F-35 jets.

The first one will soon call Truax home.

And so it goes.