The GOP Plan to Flush Your State’s Economy Down the Toilet
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The GOP has plans for a comeback. But it may cost you a lot. The idea is to capitalize on recent Republican state takeovers to conduct an austerity experiment known as the new “red-state model” and prove that faulty policies can be turned into gold.
There will be smoke. There will be mirrors. And there will be a lot of ordinary people suffering needlessly in the wake of this ideological train wreck.
We already have a red-state model, and it’s called Mississippi. Or Texas. Or any number of states characterized by low public investment, worker abuse, environmental degradation, educational backwardness, high rates of unwanted pregnancy, poor health, and so on.
Now the GOP is determined to bring that horrible model to the rest of America.
In Kansas, the Wall Street Journal reports that Governor Sam Brownback is aiming to up his profile “by turning Kansas into what he calls Exhibit A for how sharp cuts in taxes and government spending can generate jobs, wean residents off public aid and spur economic growth.” In remarks quoted in the same article, Brownback announced that "My focus is to create a red-state model that allows the Republican ticket to say, 'See, we've got a different way, and it works.’ "
Brownback’s economic inspiration is Reagan-era supply-side economist Arthur Laffer and the folks at Americans for Prosperity, the conservative outfit backed by the deep coffers of the Koch brothers.
This new austerity talk focused on “fiscal innovations” is emboldening Republicans in other states that have been gerrymandered into submission to the GOP, including Indiana, Louisiana, Nebraska, Ohio, Oklahoma, and alas, my home state of North Carolina.
Republications have been eyeing the Tar Heel state with interest due to its recent swing status in presidential elections. The state was also the target of a gerrymandering strategy that worked out wonderfully for the Republicans, but not so well for democracy. Sam Wang, the founder of the Princeton Election Consortium, wrote recently in the New York Times about how Republican redistricting thwarted Democratic voters:
"Although gerrymandering is usually thought of as a bipartisan offense, the rather asymmetrical results may surprise you....I have developed approaches to detect such shenanigans by looking only at election returns. To see how the sleuthing works, start with the naïve standard that the party that wins more than half the votes should get at least half the seats. In November, five states failed to clear even this low bar: Arizona, Michigan, North Carolina, Pennsylvania and Wisconsin. ... In North Carolina, where the two-party House vote was 51 percent Democratic, 49 percent Republican, the average simulated delegation was seven Democrats and six Republicans. The actual outcome? Four Democrats, nine Republicans — a split that occurred in less than 1 percent of simulations. If districts were drawn fairly, this lopsided discrepancy would hardly ever occur."
The lesson of North Carolina tells you that the GOP red-state model is based, first and foremost, on efforts to flagrantly disregard the will of the people. NC’s discount-store mogul Art Pope, a longtime GOP donor and champion of free-market fundamentalism, has been appointed state budget director by the new Republican governor, Pat McCrory. In an incredible display of money buying political influence, Pope has gone well beyond his donor-counterparts in other states. Instead of just funding the politicians he wants, he has gone for direct rule by occupying government himself. Tax repeal is the centerpiece of his announced plans, but his hatred of public investment means he has much more than that in store for one of the most progressive states in the South. Pope is said to be more powerful than the governor, giving rise to the term “Pope administration” to describe the new political reality.
GOP pols are vying to out-do each other in extreme red-state programming. NC state senator Bob Rucho is pushing a plan to eliminate the state's income taxes altogether. Such plans go hand-in-hand with calls for increasing the sales tax. Because low-income people pay a higher proportion of their income in sales taxes, abolishing income taxes and raising sales taxes shoves tax burdens onto them. Obviously, the Republicans will not give up on their passionate desire to cut taxes on the wealthy and stick it to the poor and the middle class.
Pope’s ideological opposition to public investment is ringing alarm bells. North Carolina, a state where progressives have fought conservative forces tooth and nail to achieve an enviable university system and a reputation for high-tech and research, is now in danger of being thrown into a period of regressive darkness. University of North Carolina sociologist Andrew Perrin put it this way: “Public investment is part of what has set North Carolina apart from our neighbors in the South.”
But Pope is hell-bent on turning North Carolina into Mississippi.
The GOP economic plans not only subvert common sense and the lessons of history (being played out right now in places like the U.K., where austerity has failed dramatically), they also flip a giant middle finger at the American voter. Unable to win support at the national level for their foolhardy economic programs, Republicans have turned their attention to state-level action because that’s where gerrymandering really works wonders.
Red-state model proponents claim that their maneuvers will spark economic growth. But that was basically what George W. Bush had in mind when he supported a similar program for cutting taxes on the rich. That didn’t work out so well, and increased the very deficits Republicans decry.
But here’s the really scary part. Slashing taxes, squeezing workers and throwing out environmental protections can indeed lure businesses to states where they won’t have to pay their fair share and can get away with all sorts of abuse. If a state like North Carolina promotes such policies, businesses from nearby states like Virginia may indeed move their operations down the road. Unless you believe in the “Confidence Fairy,” as Paul Krugman calls the naïve GOP faith that making everybody poorer is the way to become rich, then you know that what results is simply trade diversion, not genuine growth. In other words, one state’s gain is another state’s loss. The result is a headlong race-to-the-bottom whereby the states losing business will be pressured to slash their taxes and burden their workers and ordinary citizens, too. Nobody wins in that game -- except the 1 percent.
The blue-state model, evident in high-income states like Massachusetts, has long been associated with high levels of state investments in education, transportation and other public goods. And guess what? It's also associated with economic strength. The red-state model, on the other hand, is linked to backwardness, second-rate educational systems and economic weakness.
What the GOP wants to do is create an image-problem for blue states where taxes have been raised to balance budgets and continue vital services and jobs by crying “Look, Ma! No taxes!” in the states where they’ve taken control.
They’ll soon be able to say, “Look, Ma! No economy.”