Trump gives Blue States the Blues

Blues singer Ma Rainey (1886–1939), the "Mother of the Blues"

From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com

It doesn’t take a genius to see that Trump is trying to punish Blue States.  After all, he’s never made much of an effort to suggest that he’s president of all the people. Almost all of his big speeches are before screaming hordes of  cultists/wishful thinkers (suckers) at MAGA rallies, with opiate- and amphetamine-rich West Virginia a favorite venue. There, many folks have long since stopped reading in favor getting their “news’’ from another New York crook, Sean Hannity.

Paula Dwyer, writing for Bloomberg Business Week, did a nice review of this the other day in “Trump’s War Against Blue States’’.

Among her observations about a few of our mobster-in-chief’s anti-Blue State policies, let’s just concentrate on GOP tax “reform.’’

“His tax overhaul has capped at $10,000 the federal income tax deduction that a homeowner can claim for payment of state and local taxes, affecting taxpayers especially severely in the Northeast and California,’’ which have higher taxes because they  generally have, to varying degrees,  better and more humane public services than the Red States and because the people in Blue States are bigger wealth creators. Because of the nature of the economies in the aforementioned Blue States, even middle-class taxpayers can reach the $10,000 cap fairly easily.

Red State Republican members of Congress  complain that letting Blue State folks deduct their higher state and local taxes results in Red States subsidizing the Blue ones.

In fact, it’s always been the opposite. As Ms. Dwyer notes, and as I said here before, Red States generally have low state and local taxes (except some have high sales taxes, which are regressive) because most have thin public services and generally rely much more than do Blue States on federal money. Consider that in the heart of Trump Country – Mississippi – the state gets about 40 percent of its operating money from the Feds, with much of it coming from the big federal taxes paid by Blue State folks.

Eight of the 10 biggest winner states in getting more money from the Feds than they pay are Red States, seven of the 10 biggest losers are Blue States, notably including the vast sums from New York and New Jersey. (Massachusetts was 13TH biggest loser but poor little Rhode Island was 18th in the states that get more from the Feds than they pay – because of poverty and, more happily, the big Navy-related facilities.) The figures are of course affected by poverty levels, and Red States do less to help the poor than do Blue States, thus necessitating more federal help to make up some of the differences. The presence and absence  of military bases  (e.g., Naval War College) and federal contracts also play a big role.

I have long thought that Trump  especially wants to stick it to New York because he knows how detested he is there.

To read Ms. Dwyer’s article, please hit this link.

Red States/Blue States: Taxes and poverty

From Robert Whitcomb's "Digital Diary,'' in GoLocal24.com:

President Trump and congressional Republicans have floated the idea of eliminating the deductibility of state and local taxes on federal personal-income-tax forms. (That would hit upper-middle-class people in southern New England hard.) Not coincidentally this would most affect affluent Blue States, most importantly New York and California, which have high taxes and extensive public services. It’s all part of a much broader plan to slash taxes for Trump and other very rich people, especially those who, like the president, have non-publicly traded companies that take in “pass-through’’ income that goes directly to the owners.

Because evenhuge blue New York and California have GOP congresspeople and they would join their Democratic colleagues in fighting for that deductibility, it seems at the moment that the changewon’t be made.

In any case, the issue reminds me of the gross differences in tax policies between the states. The Red States tend to have lousy public services, high poverty, no or low state income taxes but high sales taxes, which are regressive – they disproportionately hit the middle class and the poor.

Red States tend to disproportionately represent the interest of rich people and big business, who, of course, like most of us, seek to pay as little in taxes as possible. These interests have relatively more power in Red State legislatures and governorships than in Blue States, whose citizens tend to demand stronger state government roles in education, social services, the environment and some other sectors, and thus tolerate higher taxes.

And these better public services pay off: Blue States remain as a group much richer than Red States and with better metrics on health, education, poverty, environment and physical infrastructure, including water and transportation. Indeed, one of the surprises, perhaps, over the last few decades is how the politically powerful (they control the legislative, executive and (mostly) the judicial branches) Red States still lag way behind the Northeast, with its hefty income taxes (except New Hampshire), in so many socio-economic ways.

The fact is that most people are still better off in the Northeast, even as they complain about our taxes.  And the two greatestentrepreneurial, innovation and invention centers in America are Silicon Valley, in high-tax California, the Boston-Cambridge-Route 128 complex in high-tax Massachusetts, and the great wealth creator of very-high-tax, high-public-service New York City.

The worst poverty in America remains in the most Red States, and their tax systems, geared to the personalinterests of plutocrats such as the Koch Brothers, helps explain why.

Of course many well-off retirees will move to Florida from the Northeast for the weather and to avoid income taxes. They no longer need good schools for their children, who have long since grown. Then when get really old, many move back to be taken care of by their children and take advantage of social services, such as mass transit, that are lacking in Florida (which I suppose might be more precisely called a Purple State).

Robert Whitcomb: Blue State economics; overrated fracking; ugly Route 114

This is the latest "Digital Diary'' column from GoLocal24.

Two somewhat related stories: General Electric moving to Boston and the Red State-Blue State economic divide

For decades, we have heard about the glories of the Sunbelt, now often called the Red States. These generally Republican-run places are cited as exemplars of economic growth. Their leaders also like to assert that unlike the Democratic-leaning Blue States they’re centers of individualism, and not wallowing in tax-supported programs.

But in any event, the Red States continue, after all these years of air-conditioning, to have the nation’s highest levels of poverty, the worst health indicesand the worst sociological problems, such as violence, illegitimacy, drug addiction and so on. The Blue States are, generally, the rich states and with much better social indices.

That’s in large part because the rich folks who run the Red States do everything they can to keep their taxes low, and  thus, for example, favor sales taxes, which are regressive, over income taxes, which are not. Thus public infrastructure – in education, health, transportation and environment -- suffer.

Meanwhile, the Blue States, for their part, tend to put money into physical infrastructure, education and mass transit (in their metro areas) that help the locals keep churning out innovation. (Actually, if they want to get richer, they’d increase investmentin these areas.)

The suckers in places like much of the South follow the fool’s errand of electing anti-tax fanatics to keep the local lobbyists happy, with such political tools as touting the glories of guns to help distract the citizenry.

Because of federal policies that favor moving tax money from rich places to poor ones, Blue States heavily subsidizethe Red States, for all their latter’s whining about the Blue States’ ‘’socialistic’’ tendencies. After all, the people in the richer states pay more in federal income taxes than the ones in the poorer (generally the Red States) because Blue States’ policies have tended to make their citizens better paid than those in the Sunbelt. The real welfare states are the Red States. (An exception in all this is Utah, with its Mormon rigor.)

 I have written about thesocio-economicgap between the Red and Blue States for years.  And that gap seems to be widening again. Look at a new statistical analysis in an essay “The Path to Prosperity Is Blue,’’ by Professors Jacob S. Hacker and Paul Pierson in theJuly 31 New York Times using U.S. Census and other government data.

Which gets us to GE, whose management, led by CEO Jeff Immelt, is moving from one Blue State, Connecticut, to Boston. The main reason is the density of engineering and other talent in Greater Boston, which Massachusetts’s very good public education, healthcare and transportation infrastructure has helped to build up. (That many of GE’s up-and-coming stars don’t particularly like their current boring suburban office park also played a role in the decision to leave the Nutmeg State.  They want to be in an exciting city.)

Of course, while Connecticut’s infrastructure has been slipping it still is superior to most of the Red States’. Just the fact that it has lots of passenger trains gives it an advantage.

Massachusetts, under GOP and Democratic governors, has long accepted the importance of investment in infrastructure. That has helped make it and keep it rich – rich enough to send some of its residents’ income to Red States.

As Professors Hacker and Pierson note at the end of their piece: ‘’{W}e should remember that the key drivers of growth (and incomes} are science, education and innovation, not low taxes, lax regulations or greater exploitation of natural resources.’’

“And we should be worried, whatever our partisan tilt, that leading conservatives promote aneconomic model so disconnected from the true sources of prosperity.’’

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Speaking of “exploitation of natural resources,’’ some states, and parts of states, have had famous booms from fracking for natural gas. One of the selling points has been that because burning natural gas contributes less to global warming than burning oil or coal, that fracking is an environmentally better. But increasing evidence that fracking releases huge amounts of methane at and near the drilling sites suggests that it’s far from the wonderful transition fuel away from oil and coal that it has been made out to be.  Redouble efforts to boost wind, solar, hydro and geothermal, please.

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It’s clear that the cold killer Vladimir Putin’s Russia is engaged in a relentless cyberwar against the United States. Failure to find ways to push back to undermine the Putin regime will only embolden him further. Clouding everything is Donald Trump’s admiration for Putin and the developer’s business dealings in Russia.

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The Trump phenomenon and the return of the Clintons has of course elicited much denunciation of them. But why not more attacks on the people who hired them – the voters? Mr. Trump and Mrs. Clinton have been public figures for a very long time, and most oftheir strengths and dirty laundry have long been visible. In spite of that, Republican and Democratic primary voters gave them the nod, even when other candidates with good records in public service were running in both parties.

Perhaps this year’s primary campaign might encourage party organizations, in the states and nationally, to reduce the roles of the primaries, now conducted in electronic media echo chambers, and increase the influence of party elders. The idea would be to save the parties from an increasingly ill-informedcitizenry who wants to hear again and again the mantras that reinforce their wishful thinking.

Bring back the “smoke-filled rooms’’ filled with smart political operators insulated to some extent from the short-termism and demagoguery  that  some of the electronic media, in particular, facilitate.

Okay, this will probably neverhappen because it would be called “undemocratic’’ even though the parties legally have the right to determine their own rules for nominee selection. Indeed, the body politic would be healthier if the parties wrestled back the power and influence that they have lost to special-interest groups and hysterical media. The general election, of course, is quite a different creature.

And, while we’re at it, let’s bring back some of that pork-barrel spending, aka “earmarks’’ (a very minor part of government budgets) that has been a lubricant in getting legislation crafted and passed in the days before Congress became gridlocked.

Reform reform.

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Route 114 in Middletown,  R.I., on the way to the way to partly gorgeous Newport, is one of America’s uglier and more depressing stretches of strip malls and other commercial crud. Now that the Internet and middle-class wage stagnation are ravagingbrick-and-mortar stores, we can expect many more stores on this depressing stretch to close.

Hopefully, the abandoned commerce will be replaced by trees and other plants and such possible routes to a better future as solar-energy arrays or wind turbines.

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Providence needs more revenue but putting parking meters around the Thayer Street retail area has been a loser so far. The confusion and cost to drivers associated with the meters has scared away many customers, already inconvenienced  by the many parking spaces handed over to Brown as part of a desperate payment-in-lieu-of-taxes deal a few years back.

The money that the city makes from the meters may end up more than offset by lower real-estate taxes because of  commerce killed by themeters.  The city needs an agonizing reappraisal of this policy for Rhode Island’s Harvard Square.

Wayland Square,  a few blocks away, seems to have avoided the worst effects of the meter invasion. Nearby free street parking and some large parking lots are probably the main  reasons. Indeed, the square bustles with stores (some new) and eateries and lots of walkers and buyers.

In both places, denser and more frequent mass transit would help address the parking problem, and in a fiscally fairer way: The added sales tax that would go to the state from prospering stores and restaurants would help finance RIPTA expansion, in a virtuous circle.

Robert Whitcomb is overseer of New England Diary.

'Blue States' blues?

An article in The American Spectator predictably touts Texas and other Red States and whomps the New England states for their economic slow growth and fiscal problems, and, by implication,  all other "Blue States''.

It is an entertaining article, but it conveniently fails to note that the  major indices of  public well being and prosperity are higher in New England than the Sunbelt.  After all the years of hype about the economic glories of the Sunbelt,  the richest states in per-capita income continue to be those old lefty states in the Northeast. Also, health, education, public infrastructure (though that's decaying most everywhere). family stability and so on are better in commie New England.

Also, the writer is a bit behind the times on lefty California's economic woes vs.  righty Texas. In fact California' s  (land of Silicon Valley) economy and fiscal condition have been improving.