The Silliest unfunded mandate: Sacramento's General Plan

(c) by Mark Dempsey, (the original is pretty old...but not much has changed...so it's still relevant)

Sacramento County has begun soliciting citizen input to update the 1993 General Plan -- the document that supposedly guides land use and "zoning." State law mandates this review, but what it produces is so roundly ignored throughout the region that this review is just silly.

Whether inadvertently or by design, such "plans" produce little real civic guidance and less good development. What we get, by default, is more sprawl, increasing congestion, nonworking transit, and, not incidentally, increased dependence on imported oil.

Consistent with the surreal atmosphere of the review, the plan update's "input" process asks for no more than the cloud-cuckoo-land of the public's wishful thinking. These reviews seldom discuss fees or infrastructure costs -- things central to the real world of development.

One result: Although development using existing infrastructure (infill) is obviously cheaper for the county than outlying ("greenfield") development with new roads, schools, etc., nevertheless infill still costs developers more. Why, despite the county's much lower costs, is infill so much more expensive to develop than greenfield? Isn't this essentially an invitation to sprawl more?

Even psychics don't try to guess that: 

 The General Plan review is doubly awful because what it produces would never work even if it were enforced. Consider zoning. As currently conceived, zoning tries to anticipate marketplace realities 10 years or more in the future -- something even psychic Miss Cleo would avoid.

So it's no surprise that our city councils and supervisors regularly revise zoning. What choice do they have when plans so consistently have no connection to economic reality? We even have a cottage industry of consultants and attorneys who wheedle rezones (plan changes) from local governments.

Rezones are enormously profitable, too. Speculators can buy agricultural land for $2,000 an acre and -- presto! -- a rezone makes it worth $200,000 an acre. What other retailer gets a 10,000 percent markup?

We could tax this rezone profit -- the Germans do -- but we don't. We apparently prefer short library hours and record county budget deficits -- in short, an impoverished public realm. In effect, we subsidize land speculation by cutting services like parks, education and healthcare.

How completely is planning (zoning) ignored? One sign might be the amount of land proposed for rezone -- currently an astonishing 30,000 acres in the region. Another indicator: Hearings proposing changes to the reviewed General Plan start as soon as the update is "final." It's more of a "General Suggestion" than a plan.

Try zoning by intensity, not use: 

Instead of basing zoning on uses ("residential," "commercial," "industrial," etc.) as we currently do, it would be much more sensible to design cities around building sizes ("big," "medium," "little") or development densities. Such plans already exist (see http://smartgrowth.org/category/nav/information-resources/, for example).

Plans focused on size or intensity of development would produce neighborhoods that make sense; whether developers make offices, commerce or residences would depend on market conditions when they build. Such zoning could realistically prescribe what could be built, without rezones, even a decade in advance.

This would even make public works spending more efficient because the county could accurately anticipate transportation and infrastructure improvements -- things done haphazardly now.

Size-based zoning could also encourage transit- and pedestrian-friendly, mixed-use neighborhoods -- something we desperately need, but seldom build now. The results would look like anything from McKinley Park to Union Square. These are neighborhoods for which buyers pay premiums; in other words, the market likes them even better than sprawl.

A recipe for anger and sprawl: 

Meanwhile, current planning practices can only lead to more citizens angry that ad hoc rezones trump any prior planning agreement (by design!), and governments hamstrung by interminable rezone hearings full of angry citizens. Business-as-usual planning will also produce more pedestrian- and transit-unfriendly, single-use sprawl.

In sprawl, only auto trips connect residences, commerce, offices, etc., increasing congestion, pollution, ill health, and, not incidentally, maximizing our demand for petroleum.

Auto-dependent sprawl is at the root of most of our national appetite for petroleum. Transportation consumes roughly twice the petroleum of all other uses in the United States. In the rest of the world, the ratio is 1-to-2, not 2-to-1.

If that's not enough, among Sacramento's current dubious distinctions is that we have the fifth-worst air quality in the nation (about a decade ago we were seventh). If we keep doing what we do now, we can expect these less-than-optimum trends to continue.

Considering the consequences of the last decade's inaction, do we really have the time to waste on ineffectual reviews?

A version of this originally appeared in the Sacramento Business Journal.

The author is a former vice chairman of a Sacramento County Community Planning Advisory Council, and has more than a decade and a half of experience in the real estate business.

Everybody needs a hug

Bernie's response to Trump's State of the Union speech

Oddly enough, the "liberal" Bee covers an obscure Democratic congressman's response to Trump's State of the Union speech, but omits any coverage of the response by the most popular politician in America, Bernie Sanders. Here's from Senator Sanders' Facebook page.

Update: That Democratic Congressman is awfully corporate friendly. Excerpt from the linked story: "Records show opioid manufacturers and distributors and their allies lobbied for the Kennedy bill and later donated to his congressional campaign committee."

Diets and Health [warning: unlike the rest of this blog...😉...this is controversial]

 

The results of the standard American diet are all around us. A British travel writer writes of walking down the street in New York, observing "a parade of backsides, each one more tremendous than the next." We have epidemics of obesity, heart and artery disease, and diabetes.

I don't eat animals or their secretions, and my arthritis and other illnesses have been put on hold for several decades now. My own experience is not all there is, though. And the quacks are lined up to prey on the desperate.

It's not that I didn't enjoy meat, milk and cheese. On the contrary...no one ate more! I would consume a gallon of milk a week, and formerly lived in New Orleans--the meat capital of the world. One of their famous chefs--Paul Prudhomme--literally got around his kitchen in an electric scooter, he was so obese.

And I'll admit there was a bit of an adjustment when I switched from carniverous eating. Roughly like switching from whole milk to skim milk. Those who have done this know your taste buds change as your consumption changes, too. After about two weeks of drinking skim milk--which initially tasted horrible--it tasted fine, and whole milk tasted odd (like cream!).

After the period of adjustment, however, I found just as much satisfaction in eating a vegan diet as I did eating meat and milk. There are plenty of milk substitues (soy, almond, coconut, cashew, etc.), and other helpful things to make the transition, so not only do I not feel deprived, I'd say I've never eaten better!

So...there may be some bias that creeps into the material below, but it's bias in the good way. Oddly enough I was sick enough to need this change and appreciate the difference it made, but I'm certainly not the only one. See the testimonials of Dr. McDougall's star dieter here. There are some pretty dramatic stories, too.

Or just compare the appearance of the doctors here (click this link if the video below doesn't play). The guys promoting meat ("protein") are all fat. The vegans are all thin and fit.

After a conversation with someone in the medical field--but not a doctor--I looked into what our obsession with protein has cost our health. After our conversaction about diet and diabetes, she said to "do the reading," so here's my attempt to do just that:

Osteoporosis

 

First, results from Googling: "does protein prevent osteoporosis" Excerpt: "The Harvard Nurses’ Health Study of 77,761 women, aged 34 to 59 followed for 12 years, found that those who drank three or more glasses of milk per day had no reduction in the risk of hip or arm fractures compared to those who drank little or no milk, even after adjustment for weight, menopausal status, smoking, and alcohol use. In fact, the fracture rates were slightly, but significantly, higher for those who consumed this much milk, compared to those who drank little or no milk."

But this says dairy & protein are important (notice: no footnotes)...and it's enough of a "popular" rather than scientific website that the next story is "17 Celebrities You Will Never Guess are Muslim"

This...says animal protein causes lost dietary, rather than skeletal calcium. Excerpt: " Plant Protein is Preferable to animal protein for a variety of reasons (tends to have less methionine, is less IGF-1 promoting, etc.), but it’s not clear how much of an advantage it has when it comes to bone health."

This says: "All in all, adequate [my emphasis] protein is essential for bone growth, maintenance and renewal."

" a high protein intake would lead to bone loss. Cross-cultural studies, in fact, suggest that animal protein intake is positively associated with increased hip fracture incidence. Several worldwide surveys document that the countries with highest animal protein intakes are those with highest hip fracture rates. The proposed explanation of this relationship between animal protein and hip fracture incidence relates to the fact that animal protein is rich in acid-forming, sulfur-containing amino acids and low in base-forming precursors (such as vegetable sources of potassium citrate). Further, the contemporary cultures consuming a high animal protein diet also tend to under-consume vegetables, fruits, nuts and seeds, food high in base-forming precursors. This combination contributes to chronic low-grade metabolic acidosis and subsequent bone weakening."

"Higher proteins diets, in the context of a nutrient-dense overall diet — which includes high calcium, potassium and magnesium intake — need not necessarily be of detriment to bone. Such a diet could likely benefit bone if one consumed enough base-forming foods and nutrients to neutralize net endogenous acid excretion. "

Meanwhile...this cites studies affirming protein intake is highly correlated with worse bones. Then cites archaeological evidence proving the reverse. ("Osteoporosis is often associated with excess consumption of alcohol."!!!)

Excerpt: "March 25, 2002 -- Eating more protein could help your body absorb calcium, possibly putting a halt to bone-thinning osteoporosis, says a new study.

High-protein diets, such as the Atkins plan, have been controversial, since studies have shown that they can cause bone loss. Yet elderly people are supposed to eat more protein, to help wound healing and maintain muscle mass.

The study shows that -- when the body is already getting adequate amounts of calcium -- a high-protein diet can actually repair bone loss.

From WebMD  "Our results suggest that a higher calcium intake is going to be protective against any adverse effects of protein on bone, and may allow protein to have a positive effect," says lead author Bess Dawson-Hughes, MD, senior scientist and chief of the Calcium and Bone Metabolism Laboratory at Tufts University."

...
What Are The Stakes?

Worth remembering: The Meat & Dairy industries, not to mention big Pharma, have enormous stakes in this debate. This contentious, non-objective approach to dietary and medical science leads authorities like Marcia Angell to say "It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine."

The Diet Debate 

Finally: Here's a summary of McDougall's points about animal protein, some made when debating Barry Sears (Zone Diet) and a few other pertinent facts:

1. High protein diets cause bone loss and calcium deficiencies. McDougall has many articles that back up this assertion linked to this web page. Here's one comprehensive take-down of the desirability of protein in one's diet linked from that page.

2. He asks Barry Sears the following:

Barry Sears weighs 210 pounds and is 6'5" according to information from his book. His diet is based on 30% of the calories from protein, 30% fat, and 40% carbohydrate. He says he eats 100 grams of protein a day. He has been following his diet for 4-5 years. He says he is still on his diet because he still needs to lose more weight.

If Barry Sears eats 100 grams of protein that translates into 400 calories of protein (1 gram of protein = 4 calories). Since the proportions of the diet are 30/30/40, this means he also consumes 400 calories of fat, and about 500 calories of carbohydrate. His total calorie intake is therefore 1300 calories per day. A conservative estimate of his actual needs would be over 2300 calories a day, with only sedentary activity. This means every day he is 1000 calories short of his needs. Every week he comes up 7000 calories short, which must be made up from his fat stores. One pound of fat amounts to 3500 calories. Therefore, Barry Sears must lose 2 pounds of fat a week on his diet. Every year by calculation he loses 104 pounds. Since he says he has been on his diet for 4 to 5 years this means he has lost over 400 pounds.

At this point in the debate I asked him, "Barry Sears: A) Did you start your diet at over 600 pounds? B) Do you defy the laws of nature? or C) Is it that you cannot and do not follow your own diet?"

3. Is The Zone a true Low Carb diet? (Obvious answer: no)

4. If carbohydrates were bad for people then the Japanese living in Japan on a rice-based diet would be fat and sickly. When they moved to the US and switched to a lower-carbohydrate, higher-fat and -protein diet they would become thinner and healthier. The truth is the Japanese are among the slimmest, most energetic, longest lived, healthiest people on earth. Furthermore, they take on common American diseases when they change to the American diet. If high-protein diets, which means meat, egg, and dairy products, were so good for us then people who subsist on these foods (most Americans) would be the thin and healthy, and vegetarians would be fat and sick. In general, the opposite is the case.

5. One of the most important reasons for the popularity of high protein diets is they work--people lose lots of weight fast--but it's mostly water. Stored carbohydrate contains large amounts of water. Switching to a low-carbohydrate diet results in the loss of these stores and the associated water, with an impressive initial weight loss. In addition, if the diet is low enough in carbohydrate, like the Atkins diet, then the body goes into ketosis, causing suppression of the appetite, thereby you eat and suffer less. McDougall calls these "the make yourself sick diets," because they simulate metabolic changes that take place during illness--ketosis is a natural state that occurs when people are sick--a time when they shouldn't be gathering and preparing food, but rather recuperating.

A few other citations:

McDougall lays out the case for carbs at USDA:

Debunking South Beach Protein Diet 

A page of protein debunks: 

Protein Diet Fads

McDougall v. Atkins (and many others) 

(From this larger video McDougall at 1:44)

Colin Campbell debates diet (this is more than an hour debate. Very articulate opponent...worth a look.)

If you're unfamiliar, Campbell is a former Columbia biochemist, and the discoverer of aflatoxin, a mold-based carcinogen. He is also the author of The China Study--the largest-ever study of the connection between diet and health, commissioned by Zhou En Lai as Zhou was dying of stomach cancer.

Incidentally, you may read that there are serious dissents from the conclusions of The China Study, but those are typically based on the abbreviated presentation of the research in that book, not the entire set of data. Campbell answers his critics here.

Campbell himself grew up on a dairy farm, eating lots of meat and milk. He currently tours the country promoting vegan diets.

So... you may still believe that I have not adequately studied this issue. After all, I haven't read or viewed everything. What I have viewed and read, though, seems plenty adequate to me.

Here's my almost certain conclusion: Despite these (to me) fairly impressive facts and arguments, I'm betting you'll conclude "Oh that prejudiced person! He can't possibly know all I have read, and all the doctors I know have read!" ... and you'll continue to believe that you're doing the right thing in encouraging women to eat plenty of protein. Heck, you'll eat lots of protein yourself, and believe you're just fine. The resilience of the human body will allow you to do this for a good long while, too.

So...Feel free to ignore what I say. I have literally zero expectation that any of this will be enough to convince you. But then, what actually would be convincing? What would it take?

Diabetes

Meanwhile, here's McDougall on diabetes:

McDougall Newsletter

Video of McDougall lecture about the latest scams from the diabetes industry:

Career / Job advice

From the Washington Post:

“In 2013, Google decided to test its hiring hypothesis [that only technologists can understand technology] by crunching every bit and byte of hiring, firing, and promotion data accumulated since the company’s incorporation in 1998. Project Oxygen shocked everyone by concluding that, among the eight most important qualities of Google’s top employees, STEM expertise comes in dead last. The seven top characteristics of success at Google are all soft skills: being a good coach; communicating and listening well; possessing insights into others (including others different values and points of view); having empathy toward and being supportive of one’s colleagues; being a good critical thinker and problem solver; and being able to make connections across complex ideas” [WaPo].(quoted from Naked Capitalism)

How would Bernie's 2020 candidacy differ?

Here's the post evaluating Bernie's 2020 possibilities...very different from 2016.

An excerpt:

"Bernie Sanders is going to run in 2020. This fact has been all but cemented in stone....in 2016 — the Sanders campaign was forced to sign a contract with the Democratic National Committee that outlined several requirements in order for him to run as a democrat. One of those requirements is that he must endorse the candidate that wins the nomination. " ... not likely to reoccur in 2020...

Trump's solar tariff

You can see how ineffective is the solar tariff here.

An excerpt: "The new 30% import tariff just imposed on imported solar panels and solar cells is a protective tariff without benefit.

It will not revive the declining U.S. silicon solar cell industry. It will harm U.S. workers in factories manufacturing solar panels using imported solar cells. It will hurt the rapidly expanding U.S.solar industry, slowing down the rapidly growing adoption of solar across the U.S.economy and costing jobs. It will slow the reduction of green house gases and the replacement of coal and natural gas plants with cheaper, zero pollution energy.

In Jacksonville, Florida the city council has just voted for a $23 million dollar subsidy for Chinese company Jinko Solar to build an 800 worker modular production plant which itself will be subject to the tariff on solar cells. Similarly, the tariff will affect the Tesla giga-factory in Buffalo that uses imported cells.

The tariff will slow, but not stop, the expansion of U.S. solar. According to Green Tech Media there will be an 11% net reduction of solar installations over the next five years. This means the installation of 61.3 gigawatts instead of a projected 68.9 gigawatts, a 7.6 gigawatt shortfall. That’s the bad news, if the projection is correct...."

Is this part of coal magnate Robert Murray's wish list? Yes. (See here). From Murray's Wikipedia entry: "CNN specifically cited Murray's Illinois Galatia mine, which had almost 3,500 safety citations in the prior two and a half years."

Encouraging environmentalists to support some public policy changes

The following is from an email sent to the ECOS (Environmental Council of Sacramento) Land Use committee in response to its chairman's request for what we'd like to see ECOS do. What ECOS does currently is react to project proposals with comments, and even lawsuits. They have been doing this for decades now, yet the predominance of development proposed in the region remains auto-centered sprawl rather than the market-preferred alternative: pedestrian-friendly mixed use (AKA New Urbanism, Transit-Oriented Development, Smart Growth, Traditional Neighborhoods, etc.)

None of this is new, but it remains important. For one thing, if policies described below were actually implemented, they would significantly reduce both commuting and congestion.

Surveys say vehicle miles traveled (VMT) could decline 1/3 - 2/3 -- or let's say roughly half if pedestrian-friendly mixed use replaced sprawl. That would have enormous benefits in reducing emissions and in improving the health of the population. After all, Americans are suffering from epidemics of the diseases of chronic inactivity--obesity, heart disease and diabetes, to name a few--and even a 10-minute daily walk makes for a significant reduction in late-life health problems. There are other benefits (see Suburban Nation: The Rise of Sprawl and the Decline of the American Dream by Duany, Speck and Plater-Zyberk for more)

Here's the letter:

Hi all,

Thanks for the thought-provoking recent ECOS Land Use meeting. My thoughts have been slow to arrive, but that doesn't mean they aren't worth a look. Here they are:

Among other things, those present were less-than-pleased that for many projects, ECOS' comments often come too late, after the design decisions have already been settled. The alternatives considered often maximize profits in the most conventional way possible, but infrequently maximize public or environmental benefits. This can occur in any public planning process. Builders and developers arrive with their minds made up, ready to do battle--and in fairness, the process is often at least adversarial. See "Petrovich, Paul."

My humble suggestion is that the solution to this problem is to have ECOS lobby to change the process, not necessarily a specific project, although ECOS could still make project-specific comments.

ECOS has tried commenting on specific projects to the point of burnout, and has done so for decades. The most commonly approved big developments remain greenfield, not infill, and sprawl, not pedestrian-friendly mixed use. That is enormously profitable for land speculators, but it lengthens commutes, and is more expensive to maintain. Vehicle miles traveled for the sprawl, which is largely what the region builds, can be roughly twice those of pedestrian-friendly mixed-use (AKA New Urbanism, Transit-Oriented Development, Traditional Neighborhood Development, and Smart Growth).

The myth is that this is what the market prefers. Not so. The market actually prefers pedestrian-friendly, mixed use, and tolerates the transit-friendly densities far more in such neighborhoods than in sprawl. Density is necessary so enough patrons are within a walk of the transit stops. I’d also suggest that the Uber-bus idea now being tested by West Sacramento and Citrus Heights will encounter a need for density to be viable too.

In any case, the most valuable real estate in the region is not sprawl, it’s McKinley Park and its surroundings (old urbanism). This is true nation-wide, not just locally too--witness the premiums paid for neighborhoods like Seaside, FL (600%!), Orenco Station Oregon and Kentlands, MD (40%).

I've not heard ECOS mention launching a campaign to change the process, at least so far.

The three process-related areas that need change:

a. The current use-based planning is designed to fail. We must have form-based planning to have anything resembling a plan that can at least potentially work. Trying to decide uses (commerce, residences, offices, etc) decades before builders build real projects is simply not realistic. Form-based planning (deciding building size, but not necessarily use) is not some otherworldly, exotic request. Towns from Hercules, CA to McKinney, TX already use it. Smartgrowth.org even offers open source plans of this type, training, etc… The state already mandates complete streets, so that “pedestrian-friendly” piece is set for the future. Now, let’s lobby for form-based planning and mixed-use (residences, stores, offices, etc. in the same neighborhood). This cuts the VMT roughly in half. Density-favoring measures like 4- or 8-plexes even among single family homes is also something to encourage.

b. Building fees must match actual costs. This has its roots in Prop 13. Local communities must either collect for infrastructure, affordable housing, etc. up front or impoverish the existing population of their jurisdiction. As it stands now, every new house means worse schools, roads, etc. for everyone else. Building fees vary widely throughout the region, while prices for infrastructure do not. These fees are just a measure of how hard the BIA has lobbied, not an indication of actual costs. What are the actual costs? I’ve asked Sacramento County staff that question for decades. The response? [crickets]

c. Tax the unearned increment. When land speculators (many call them "developers," but I say call a spade a spade) can buy ag land for a few thousand dollars an acre, then resell it to builders after they get permission to develop the land for 50 - 100 times more than they paid, tax free (if they exchange out of the newly profitable land).

With these kinds of profits (5,000 - 10,000%!), no end to greenfield development is in sight. That kind of economic incentive means cockroaches will come out from under the baseboards to do land speculation.

These outrageous profits not only encourage the worst possible developments--floodplain surrounded by weak levees, large developments without water, etc.--they also provide an enormous temptation for elected officials to become lackeys of the speculators. After they’re out of office, the speculators bribe…, er, I mean “hire” them as “consultants.” The “revolving door” is not confined to the beltway or Wall Street.

One alternative: In contrast to the enormous economic rewards available for land speculation in California, German developers have to sell the ag land to the local government at the ag land price, then repurchase it at the up-zoned price. The public realm gets the money.

The Germans have nice infrastructure, an education system that is world-class, despite accommodating many immigrants and East Germans, single-payer healthcare and free college tuition even for foreigners. The arts budget for the City of Berlin exceeds the National Endowment for the Arts for the U.S. of A. In other words, the German public realm is well funded, while in our area, the public realm is on its last legs as austerity continues to be the recommended solution to virtually all public policy problems.

Notice, incidentally, that even the relatively enlightened Mayor Steinberg is proposing yet more (regressive) sales taxes to fill budget holes--which, incidentally, are inevitable since sprawl is so expensive to maintain--while all of the above provide benefits that at least approach the economically progressive.

Again, I've heard no move to campaign about process changes like a, b, or c, even if such a campaign amounts to a boilerplate declaration that accompanies ECOS' comments saying something like "Please read all of our comments below within the context of the following statement: Even if you adopted all of our project-specific comments on this particular project, it would not be sufficient to address the real underlying core problems with how this jurisdiction does all of its planning and approves all developments. The reality is that use-based planning does not and cannot work--we need to implement form-based planning. And fees must cover actual costs or existing neighborhoods will suffer in the current tax environment. Unless and until this jurisdiction changes how it does planning and approvals, no amount of modifications to specific projects will ultimately result in good outcomes for the community or region's people and natural resources.”

I’d even add that the unearned increment must be taxed out of existence before the planning process in any jurisdiction can be considered legitimate. Otherwise, it's just a racket set up to support land speculation.

“You Yanks don’t consult the wisdom of democracy; you enable mobs.” --Director of planning, Perth, Australia. (Quoted by Andres Duany)

Other process changes that actually would consult the wisdom of democracy:

1. Rather than hearing after hearing, the County could empanel what amounts to a grand jury about big projects and hold a single hearing. No CPACs, and no planning commission would insulate those making the decision from public outrage. In such “grand juries,” citizens could get educated and advocate for unbiased public good, rather than biased NIMBYism. This provides a disinterested perspective in hearings otherwise full to overflowing with bias and contentiousness.

2. Have facilitators summarize the arguments of the different sides in a hearing...pro, con and "Grand Jury"... Provide baseball hats of three different colors so policy makers can see the size of the crowds for each point of view. This avoids endless hearings in which dozens, even hundreds of citizens line up to say “I don’t like it!” again and again, while taking account of the size of public support or dissent. The current exhaustive redundancy grinds any intelligent policy making to dust.
...

And finally, ECOS should endorse public banking. Bankers have the final say about what's built. Frank Lloyd Wright’s famous saying “Form follows function” is currently (really) “Form follows finance.” The final decision about what’s built and civic design comes not from the political process, or the builders, or the developers, or the policy makers or public. It comes from the banks and their underwriting standards.

Current magical thinking guiding public policy naively believes that the marketplace really does all the real planning, and government merely meddles to make things inefficient. It’s a religious idea, really. God has an invisible hand, you see.

But the truth is that economic planning is absolutely necessary, and government traditionally provided some guidance for what was built, even for what was invented. The components assembled into the iPhone were based on government research into transistors, integrated circuits, touch screens, GPS, etc. Seventy-five percent of pharmaceutical innovation comes from government-funded research, not big Pharma.

I’ve read that the military and banks are the ones doing the real planning. Could one get financing to build that affordable housing over park-n-rides? Could builders finance residences over existing retail (that land is “free”!)? Getting that kind of financing would be pretty doubtful from private bank sources, but both would provide public service, and a potential source of more affordable housing.

Incidentally, the notion that builders can’t include smaller apartments in multi-family dwellings, or granny flats or multi-family dwellings among the mansions, or other “inclusionary zoning,” mixed-income solutions to avoiding a ghetto of the impoverished are all completely unbelievable. This is also true for the businesses complaining about taxes and regulations. Taxes on corporate America are at a 60-year low, profits are at a 60-year high. And … where are the jobs? All of that is just a distraction ginned up by business to cry poor mouth rather than solve real problems. Some of the complaining about regulations, and the wish for "streamlining" can have a just cause, or just be bad actors seeking to game the system. A "simpler" tax code is a common plea, but all the complexity serves to tamp down such bad acting. In any case, an ECOS focused exclusively on threats to litigate does nothing to discourage the illegitimate call for "streamlining," and may actually encourage it...another reason to encourage process-based solutions rather than litigation.

Objections from ECOS about endorsing public banking requested something more specific than simply ECOS saying it supported it--and I'm working on getting that specific stuff--but I'd also suggest that there's a wealth of specificity in existing planning practices that aren't enforced, so specificity itself is not guarantee of good behavior. As the above says, use-based planning is impossible to enforce, really. Specifics do not always deliver, and bad actors can sabotage virtually anything related to public policy, no matter how specific.

So endorsing something general, not specific, may actually be useful, especially if ECOS wants to get out of the business of arriving too late to have a design or policy impact. Personally, I don’t see how one can specify underwriting standards (who gets the loan) before a public bank study says what public service is missing from current banking when it comes to the public realm. Supporting a study of public banking would be a good first step. Oakland and several other cities (L.A., Seattle, etc.) are doing this now.

In any case, counting on the private sector to protect the public realm--which includes the protecting the environment (ECOS’ mission)--further undermines the public realm as long as profit is the only guidance for what is permissible. Public benefit needs to be at least as motivating as profit in guiding our economy, or we’ll simply continue to have more of the same, no matter how much we expect a different outcome. ECOS can monitor projects until the cows come home, but won’t have much impact without a well-funded public realm.

Unfortunately, the current, widely promoted “solution” to what ails society is austerity--lower taxes, and a smaller, less intrusive public realm...and privatizing everything. Everyone from Supervisor Frost to the Kochs are promoting this “anti-collectivist” meme.

The object is to make governance and public policy into supports for unrestricted private property rights and precious little else. But hey, who cares about a little pollution as long as you own the land, right? Ownership makes that not matter, right? The people downstream just need to suck it up!

Part of this agenda is to strip previously treasured public enterprises of funding and privatize them, as Margaret Thatcher did with England’s trains, and as some in U.K. government are proposing to do with the NHS (National Health Service). The privatized item can be schools, or roads, or healthcare, or pensions, or really any public good. Whether the proposed privatization is beneficial is of no consequence, at least to the austerians who seek to neutralize any threat from government, and extract all economic excess.

The object of austerity is to set up privatization by making these collective enterprises so ill-funded and incompetent that the public will clamor for a change. The oligarchs can then pick up these distressed public assets for dimes on the dollar--like the Wall Street firms who bought Sacramento’s (and Chicago’s) public parking revenues.

The economy then becomes a series of toll booths, with tolls collected by the 1%, the rentier class, while the rest of the population is reduced to debt peonage, and the environment predictably degrades. This is the intersection of social justice and environmentalism. Things like homelessness and even the draconian incarceration regime (the U.S. incarcerates people, per-capita, at about five times the world average) are public policy mechanisms to enforce the tyranny of the propertied classes. Yet such policies even sacrifices international economic competitiveness because the rentiers benefit from any economic excess, and hoard their winnings rather than reinvesting in productivity, human or mechanical. Ultimately it harms all of its practitioners…

So… please have ECOS start a campaign to change the process, in addition to its commenting about specific projects...and endorse public banks.

--Regards,
--Mark Dempsey

Sometimes a man stands up during supper

Sometimes a man stands up during supper and walks outdoors, and keeps on walking, because of a church that stands somewhere in the East.

And his children say blessings on him as if he were dead

And another man, who remains inside his own house, dies there, inside the dishes and the glasses, so that his children have to go far out into the world toward that same church, which he forgot

 - Rainer Maria Rilke (trans: Robert Bly)

Local Austerity

© by Mark Dempsey

I recently received my County Supervisor’s newsletter. Ms. Frost writes to express concern that Sacramento County has among the smallest financial reserves of any County in the state. This is yet another expression of Fiscal Responsibility™ -- the standard excuse for austerity that has been afflicting U.S. public policy as a whole for generations now.

But does austerity work? The results are in: America has gone from being a nation where infrastructure was first rate, where a single wage earner could buy a house, support a family, save enough to send his kids to college and enjoy a defined benefit pension until the end of life to a nation where infrastructure earns a D+ grade, and two wage earners can barely scrape by living paycheck to paycheck. Now, going to college means kids take on an enormous debt, and can only have defined contribution pensions (401Ks and IRAs) which are half as remunerative as the defined benefit pensions that used to cover 70% of the American workforce before corporations looted them to goose corporate profits and CEO compensation.

So austerity from a household might be prudent, but from government it has proven disastrous.

As I see it, the austerity-promoting County has two problems Ms. Frost fails to mention:

#1 Misallocation of money spent. (“We have a money shortage because we spent lots on non-working solutions”)

A good example is the prison / jail system. District attorney Anne Marie Schubert wrote that recent propositions to reduce jail populations are likely to prompt mistakes when they release inmates. I don’t doubt that the release system is imperfect, too, and some released prisoner will cause harm. Someone will revive the Willie Horton meme then, too.

What Ms. Schubert omits, however, is that the U.S. is world’s “leader” in incarceration, jailing more inmates in absolute or per-capita numbers than anyone else. In per-capita terms, the U.S. incarcerates five times more people than the world average. Could that incarceration binge be more damaging to families and communities by orders of magnitude than any mistaken releases? When do we hear about that?

But doesn’t jailing people work? Has incarceration led to a 500% reduction in crime, or (since a lot of it stems from the drug “war”) dramatic reductions in rates of addiction? Nope. U.S. crime rates are insignificantly different from demographically-identical Canada, whose per-capita incarceration rate is one seventh of ours.

Medical treatment for addiction--which is a disease, say all the twelve step programs--is one seventh the cost of incarceration, and far more effective at producing sobriety. What we do now with addicts is like incarcerating diabetics because they’re dependent on insulin. It’s not just ineffective, it’s medieval.

So Ms. Schubert gets money and power thanks to her version of tunnel vision. Meanwhile, acknowledging the bankruptcy of “lock-’em-up” policies, the population sensibly approved Proposition 47 which released prisoners whose felonies were reduced to misdemeanors. The measure promised to fund diversion and rehabilitation programs with the savings from lower prison expenses...but surprise! That promise has been sabotaged. Even though prison populations have decreased, the prison budgets haven’t, so no funds exist to start the (cheaper) programs, and released inmates must fend for themselves, making the prophesied release of “Bad Hombres” a self-fulfilling one. Public banking (#2 below) could solve this problem too. Meanwhile, “tough on crime” has turned out to be “sadistic and ineffective but expensive on crime.”

The one-sided, less-than-optimum point of view is not confined to prisons, either. Thanks to a well-funded propaganda campaign, it’s common knowledge now that the bulk of government spending is wasteful. Sure, fixing the roads may be cheaper than having everyone replace their tires and shocks, but Fiscal Responsibility™ requires us to save without any view to overall, societal costs.

Why in England, Margaret Thatcher “saved” the British public money by privatizing their railroads. As a result, the quality of service declined, and ticket prices rose. That’s what “saving” looks like in the austere world of Fiscal Responsibility™. What’s next for the U.K. is defunding its National Health Service so service declines and privatizing start to look like solutions there too!

So when Ms. Frost touts “saving” money she is not credible. We’ve been there and done that, and austerity has been far costlier to the general public, although it does favor the one percent who profit from private prisons, among other things.

#2 Unwillingness to pursue public financing.

As an alternative to higher taxes, and higher public infrastructure costs, the state of North Dakota has a public bank. Instead of the Fiscally Responsible™ solution of austerity--setting aside “prudent” reserves that defund schools, infrastructure and the indigent, North Dakota has a line of credit with its public bank as its reserve, and money readily available for public purposes.

The cost of financing is often half of the cost of infrastructure. Having a state or local bank means that loans are available for things private banks won’t fund--like affordable housing--and earnings stay within the community to be recycled rather than being exported to Wall Street.

Incidentally, governments are looking for high-yielding pension fund investments for the public sector’s remaining defined benefit plans, and that North Dakota state bank’s earnings were better than Goldman Sachs’. Could public banking solve that problem too?

In addition to providing a line of credit for reserves, a public bank could make dealing with homelessness more sensible. Current policy is basically hassling the homeless with police and taking them to emergency rooms for the most expensive kind of care. Homeless advocates say that it’s not only more compassionate to give them housing instead, it’s cheaper and actually can re-integrate such people back into society rather than kicking that can down the road.

Our region now spends roughly $40 million with the hassle-and-emergency room palliative treatment. The “Housing First” strategy could save 50-80% of that money (as Salt Lake City has demonstrated) and actually solve the homeless problem.

The problem with “Housing First” is that the costs are front-loaded. Buying or leasing homes and hiring transitional counselors would precede the arrival of savings. But local governments could repay a loan with the savings. And aren’t such situations why loans exist?

Unfortunately no bank will make that loan now. Could the County have its own bank? And is that pope fellow still Catholic?

...So those are the problems. Austerity--even austerity in service of Fiscal Responsibility™-- is a proven recipe for disaster. Let’s see if we can actually learn something from history, shall we?

National Debt is Our National Asset (or: America Needs a Balanced Budget Like A Fish Needs a Bicycle)

George Will writes in the Sacramento Bee Extra electronic version: 1/9/18 "America needs a balanced-budget amendment more than ever."

"No one knows at what percentage the debt's deleterious effect on economic growth becomes severe; no sensible person doubts that there is such a point."

Christopher DeMuth president emeritus of conservative think tank AEI. "argues that a balanced budget amendment is required because of the transformation of government from a provider of public goods (defense, infrastructure) to a provider of benefits (money and services) directly to individuals.

The answering editorial: (submitted 1/11/18)

National Debt is Our National Asset (or: America Needs a Balanced Budget Like A Fish Needs a Bicycle)

© by Mark Dempsey

Conservative pundits like George Will and his colleagues from the Koch-funded American Enterprise Institute want the Federal government’s budget to balance, just like a household budget. But there’s a fundamental distinction between Federal and household budgets. The Federal government makes dollars; households use them. Federal “Debt,” if we can call it that, is completely different from household debt if only because that obligation is to pay something the government can make virtually without limit or cost: dollars.

Federal “debt” is also the inverse of household debt, just as your assets in bank accounts are the bank’s liabilities. The headlines never read: Bank Depositors say ”Your debt to us [i.e. our accounts] is going to crush our grandchildren!”--that would be crazy. Nevertheless, there’s a well-funded campaign to persuade the American public that National “Debt” is harmful, even though that “debt” is, in fact, the population’s savings.

That’s right, the dollars in your wallet amount to checks made out to cash. They appear on the Federal Reserve’s books as a liability, just as your checking account is a bank liability. The common name for the total of all dollar financial assets in circulation: “National ‘Debt.’”

Reduce the “Debt,” and you’ll reduce the population’s savings--money available for emergencies, among other things. Historically, waves of loan defaults, asset forfeitures and foreclosures follow such “Debt” reductions. The false equivalence between households that use money and the government that creates it has persuaded American politicians to reduce National “Debt” significantly seven times since 1776. The last such reduction was the Clinton surplus. The time before that occurred in 1929. What follows such "Debt" reductions 100% of the time? A Great Depression-sized hole in the economy.

Reducing deficits produces disastrous results, and is the foundation of the non-working austerity policies we now enjoy. “Austerity was tried, and tried again--its application was not wanting--and it simply didn’t work. In fact, its repeated application made things worse, not better, and it was only when states stopped pursuing austerity that [their economies] began to recover.” (Mark Blyth, Austerity: The History of a Dangerous Idea)

This also means the Federal government is not funded or provisioned by its tax revenues; money is an unlimited public monopoly and taxpayers do not fund fiscal expenditures--meaning that we can have nice things like single-payer healthcare, and free college tuition without raising taxes, just as government funded multi-trillion-dollar bank bailouts and wars without raising taxes. Government spending is not constrained by money deficits, only by real resources.

Government must spend the money before it can ask for some back in taxes. Taxes make the money valuable, they don’t fund expenditures. Government leaves some dollars in the economy--it doesn’t tax them all--so we can conduct our business.

What do we call the dollars left in circulation? “National Debt”! Do we need to spend less on Social Security because we’re running out of dollars? Did the financial sector hear that when bank bailouts were the topic discussed? (Hint: no)

National “Debt”...we reduce it at our peril.

The movement to replace neoliberalism

An interesting read: The movement to replace neoliberalism is on the ascendency – where should it go next?

Excerpt: "neoliberalism – the broad set of political-economic ideas and policies which have dominated public life over the last 40 years – has failed, in both theory and in practice. It is in the wake of the global financial crisis that these failures have plumbed new depths. Financial instability looms over economies shackled by insufficient investment. Living standards stagnate and work becomes ever more insecure, shattering the implicit bargain of the entire endeavour. The human costs of this experiment have been enormous, with psychological and non-communicable ill-health becoming the hallmark of a system that cares for little but profit. Inequality, itself linked to ill-health, has grown to levels unseen since the nineteenth century, leading to large power imbalances throughout society. Socio-economic mobility has been further stalled by the erosion of the public realm, from universities to the legal system. Most pressingly, neoliberalism continues to rely on a growth model that is destroying the biophysical preconditions upon which it relies, increasing the chance of collapse in the climate and other natural systems."

In defense of Modern Money Theory

A dissenter let me know that one of the founders of Modern Money Theory (MMT), Warren Mosler, has no PhD in economics! And...MMT is a cult! Eeek!

Don't get me wrong: economics is rife with cultic activity. Take a look at the religious devotion to the gold standard of previous generations. Or look again at an article describing "How Economics Became a Religion." But given orthodox economics' lack of success predicting economic events like the Great Recession, current economic orthodoxy, including what's coming from credentialed economists, looks more like theology than science. But don't take my word for it! Who predicted the Great Recession? The orthodox guys, or the heterodox ones?

Mosler's own account of his 'discovery' of MMT goes like this:

The origin of MMT is ‘Soft Currency Economics‘ [1993] at www.moslereconomics.com which I wrote after spending an hour in the steam room with Don Rumsfeld at the Racquet Club in Chicago, who sent me to Art Laffer, who assigned Mark McNary to work with me to write it. The story is in ‘The 7 Deadly Innocent Frauds of Economic Policy’ [pg 98].

I had never read or even heard of Lerner, Knapp, Inness, Chartalism, and only knew Keynes by reading his quotes published by others. I ‘created’ what became know as ‘MMT’ entirely independently of prior economic thought. It came from my direct experience in actual monetary operations, much of which is also described in the book.

The main takeaways are simply that with the $US and our current monetary arrangements, federal taxes function to regulate demand, and federal borrowing functions to support interest rates, with neither functioning to raise revenue per se. In other words, operationally, federal spending is not revenue constrained. All constraints are necessarily self imposed and political. And everyone in Fed operations knows it. (from his website...comments there are worth a look, too.)

...So, it sounds as though Mosler lacked some knowledge of economics...by his own admission! What follows are some of the economic pronouncements that anticipated MMT--statements that Mosler himself says he didn't know--and some indication MMT isn't quite as monolithic as your run-of-the-mill cults, and while Mosler has certainly contributed, he is not alone in 'creating' that "new perspective." Those blessed with sanctified economics degrees said MMT-like things too.

Incidentally, throughout human history, something been "in the air" and discovered by more than one person (e.g. Leibnitz and Newton discover calculus in the 17th century)  MMT as formulated by Mosler followed the discovery of Chartalism, a word coined in 1905. MMT has been called "neo-chartalism."

If you're curious about what MMT says about corporate taxation (it's in the news) here's a recent paper. The authors say "In our view, corporate income taxes do not merely fail to deliver the purported benefits; they also have strong perverse impacts on corporate behavior."...although they stop short of recommending elimination of such taxes. Meanwhile, I'm not so sure there aren't "perverse impacts" from personal taxation, either, so maybe I'm a heretic.

That same paper discusses another precedent for MMT "[In] 1946...former President of the New York Federal Reserve, Beardsley Ruml, [observed] that, in the context of a sovereign government with a non-convertible currency with a floating exchange-rate, no foreign debt and its own central bank, 'taxes for revenue are obsolete...'" That's straight MMT, but coming from a source that predates Mosler's birth.

One common MMT policy recommendation is a job guarantee (preferred over the basic income guarantee--something even super-conservative economist Milton Friedman advocated). Hyman Minsky (1919-1996) predates Mosler in advocating that, too.

Minsky also said "Anyone can create money [as IOUs]...but the problem lies in getting it accepted." Minsky was a professor to Randall Wray. Wray wrote Modern Money Theory. One of Wray's shorter articles is recommend more than the MMT book. See here for more about Wray on Minsky, and for Minsky's departures from Keynes.

MMT's job guarantee--the possibility of full employment--predates Minsky and MMT itself, too. Polish economist Michal Kalecki (1899-1970) wrote about "The Political Aspects of Full Employment" in 1943. Kalecki essentially says that sovereign, fiat currency creators like those Beardsly Ruml cites could employ everyone without raising taxes, but if jobs were plentiful and labor scarce, it would empower labor. Business would prefer plentiful labor and scarce jobs to enforce "labor discipline." That's what we have now.

Kalecki's writing anticipates even Keynes' "demand-side" economics, but unfortunately Kalecki wrote that bit in Polish, so the world acknowledges Keynes, not Kalecki, for that discovery. From Wikipedia: 'Kalecki has been called 'one of the most distinguished economists of the 20th century" and 'likely the most original one.'"

As for dissents from MMT's cultic discipline, Steve Keen has some criticism of MMT in this 30-minute interview. For example, he says Mosler's description of imports as a net positive is very U.S.-centric, and doesn't really apply to nations who don't have the world's reserve currency. If nothing else, Keen demonstrates MMT isn't monolithic.

If credentials matter to you: Keen has a PhD. in economics and won the Revere Prize for predicting the Great Recession. He assembled the mathematics for an economic simulator that uses calculus rather than linear equations to make economic predictions. The program's name: Minsky. You can download it from the link and try it yourselves, if you're that ambitious.

Other credentialed MMT economists include Minsky, Wray and CSUS graduate Stephanie Kelton (Bernie Sanders economic advisor for the minority on the Senate budget committee). Notice that Mosler mentions Don Rumsfeld, and was advised by Art Laffer (both Republicans) while Kelton advises Sanders Democrats. MMT doesn't necessarily pick sides in the fight between team blue and team red.

So, it's true that Warren Mosler, does not have the academic credentials. On the other hand several others who agree with him are credentialed.  But...Mosler managed bank operations and hedge funds, is wealthy....and now has a cult following!

Incidentally, Mosler and his brother were mechanically inclined as youngsters. When he got the resources to do so, Mosler founded Mosler Motors to make race cars. The Moslers won often enough that the racing authority changed their rules to ban the cars. You may remember racing genius Jim Hall's Chaparral cars faced a similar fate.

I had thought Einstein was an example of un-credentialed genius--not precisely true--but one might also mention Ben Franklin, Thomas Edison ("Edison only attended school for a few months and was instead taught by his mother"- Wikipedia) or Henry Ford (educated as an "apprentice machinist"- Wikipedia).

Says Wikipedia: "In 1900, Einstein was awarded the Zürich Polytechnic teaching diploma." Wikipedia says "After graduating in 1900, Einstein spent almost two frustrating years searching for a teaching post. ... With the help of Marcel Grossmann's father, he secured a job in Bern at the Federal Office for Intellectual Property, the patent office,^[47][48] as an assistant examiner – level III.^[49][50]" So Einstein couldn't get a job in academia, but wrote his seminal papers while working for the Swiss patent office.

On the other hand, Mosler corresponds with me by email...so his judgment may be questionable.

(For those interested in related comedy: Nichols & May explore name dropping here.)

Warren Mosler on Modern Money Theory

Meanwhile, here's a not-so-simple lecture from Modern Money Theory founder Warren Mosler. Not easy listening, but really worthwhile.

Also...for those of you interested, here's the FCIC report about the financial meltdown Great Recession. It's online, it's free, it's more than 600 pages

Retail deals with debt (11/15/17)

About retail (from nakedcapitalism.com):

Retail: “Retailers are increasingly charging ‘personalized’ or ‘dynamic’ prices based on your online footprint. They manipulate prices, trying to charge you the max they think you’re willing to pay. You could be sitting right next to someone, looking at the same online product, and be charged more just because of a website you visited” [DuckDuckGo]. “You’re probably familiar with how common this practice is in the airline industry. That’s all thanks to Google’s ITA QPX Software, which provides solutions to airlines to price ‘by market segment, point-of-sale, channel and even user.'”

Retail: “In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year” [Bloomberg]. “But chains also said 6,800 would close. And this comes when there’s sky-high consumer confidence, unemployment is historically low and the U.S. economy keeps growing. Those are normally all ingredients for a retail boom, yet more chains are filing for bankruptcy and rated distressed than during the financial crisis. That’s caused an increase in the number of delinquent loan payments by malls and shopping centers…. The reason isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.”

...hmmm, so maybe not the internet vs. bricks-and-mortar!

Indian musical interlude #2

Modern...

Indian musical interlude

Traditional....

Drugs, Malls, Taxes potpourri (2017)

Judge Jim Gray is a former drug prosecutor who, at one time, held the record for the biggest U.S. bust. He was a Republican appointee to the Orange County judiciary, and has been a Libertarian Vice-Presidential candidate. Recommended reading: his Why Our Drug Laws Have Failed. I agree with him about de-criminalizing drugs, and use many of his talking points in coming to that conclusion. On the other hand, he wants a "balanced budget"...so we part company there.

From Bloomberg: Big Data Predicts the Death of the Mall. As stated in class, any reduction of local sales tax revenues, the only source of discretionary revenue for local governments since Proposition 13, could prove to be a serious problem. Look for local politicans to push for austerity that ignores the big subsidies discussed in our Land Use Planning class. This austerity wilol also pointedly ignore any inefficiencies in policing, prosecuting and jailing populations (70% of local budgets, says Ann) that are disproportionately poor and people of color (as described in our Prison class). Instead, we must hassle or hospitalize the homeless, and reduce public sector pensions and any de-fund diversion programs other than incarcerating the troublesome populations.

One reason for a little skepticism about the Bloomberg article: In it, computer guys ("Big Data") project that online commerce is going to win any competition against brick-and-mortar stores. There could be a little self-serving bias in their conclusions. On the other hand, Radio Shack's big box experiment ("Incredible Universe") and Radio Shack itself, Sears, K-Mart have felt the sting of online competition. Big box stores may be big, but their margins are incredibly thin.

Income Tax:

First, since 1975, U.S. income tax has included credits even for those who pay no income tax. From the IRS: "To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file."

Meanwhile, (from Fair) fear, not Debt keeps government from spending more freely on education and infrastructure "[Federal] debt service is [currently] less than 1.0 percent of GDP (net of interest rebated by the Fed), compared to over 3.0 percent in the 1990s."

And...the source of this graphic:

is the Institute on Taxation and Economic Policy (see the link above). FYI, tineye.com is a way to search for images, rather than text.

From Bloomberg: Washington’s Biggest Mystery: What’s in the Republican Tax Plan?

So...It may be hard to be too specific in saying what's proposed, exactly. But secrecy about what the repeal contained didn't stop the Congressional Budget Office from projecting how many would lose healthcare with the proposed Obamacare repeal.

More Trump Tax Trickery from David Cay Johnston: No, You Won’t Be Getting A $2,000 Child Tax Credit Check

...and as predicted: GOP Doesn’t Seem To Hate Debt So Much Now That It Wants A Tax Cut

Meanwhile, back in California: "The only proven way to improve an economy is to reduce the top marginal tax brackets" -- said Congressman Tom McClintock (on the radio). This statement is evidence of McClintock's allegiance to the "trickle down" theory of taxation. What it says is that if you un-tax the rich, their tax windfall will "trickle down" to improve lower brackets' income.

Trickle down is the "voodoo economics" tax advice Reagan followed in the 1980's, reducing the top brackets by half in the progressive income tax. Less well publicized: Between Reagan and Bush 41, payroll taxes increased eightfold.  (Source for that last statement: Ravi Batra's Greenspan's Fraud).

Proving that unintended self-parody can't be beat, McClintock went on to complain that we were so far beyond "American Greatness" that higher education now charges high tuition but used to be free in California. The parody? Reagan was governor of California and eliminated free college tuition at state schools. FYI, Germany offers free university tuition even for foreigners. Sweden pays even high schoolers to attend school (see here).

Meanwhile, to fact check McClintocks contention that reducing taxes on the top brackets produces better a economy, here are the images of GDP growth over the years. To see these, Google "u.s. gdp growth by year" then go to the Images tab.

First, GDP growth out of the Great Depression:

Note that '36-'37 is when FDR was persuaded to abandon "pump priming" in favor of austerity. A massive public works project called "World War II" finally pulled the U.S. out of the Great Depression. The top marginal tax rate was 95% in 1944.

Here's a look at a longer stretch of GDP growth, graphed:



Notice that the really big swings occur coming out of the Great Depression for the New Deal and World War II, and the post-war slump occured when government spending declined--as detailed in the previous graph. (Just what Keynesian economics says!)

In contrast, the well-marketed "Morning in America" (the Wall St. Journal's description of the Reagan recovery) produced by Reagan's tax cuts in the '80s looks like a roughly average business cycle recovery. It included a dramatic increase in national "debt," marked by lower-than-average capital investment, say Paul Krugman in Peddling Prosperity.

Completely off-topic: Check out the "Education Reform" initiatives real agenda. (Hat tip, Duane Campbell)