Rich States, Poor States, Red States, Blue States<\/a> by Laura Macomber in Bill Moyers Online.<\/p>\nThe Text:<\/strong> Last month, The American Legislative Exchange Council (ALEC) \u2014 a corporate lobbying group that Common Cause says is masquerading as a nonprofit charity \u2014 published its sixth annual \u201cRich States, Poor States\u201d report. The publication is coauthored by Dr. Arthur Laffer, often called the father of supply-side economics, and it ranks U.S. states according to their \u201ceconomic outlook\u201d \u2014 a measure based on 15 different ALEC-selected criteria. Basically, the lower a state\u2019s taxes, the fewer public services it offers and the less hospitable it is to labor unions, the higher it will be ranked. It also helps to have a really low minimum wage. Utah took this year\u2019s top slot, with Vermont landing at number 50.<\/p>\nMany local news outlets are touting the report as a concrete source for assessing their state\u2019s economic performance. But it appears that ideology is what gets a state to the top \u2014 or the bottom \u2014 of the rankings.<\/p>\n
Before we get to why that is, some background: ALEC \u2014 a self-proclaimed \u201cnonpartisan\u201d organization with an overwhelmingly Republican political membership \u2014 is where corporations and politicians can meet each other away from the prying eyes of taxpayers and voters. Together, ALEC\u2019s members draft model laws that promote a corporate, profit-driven agenda that simultaneously seeks to dismantle a state\u2019s public services and workers\u2019 rights. With this in mind, any \u201creports\u201d that ALEC issues must be scrutinized with a magnifying glass, lest the conclusions drawn from its hand-picked data be taken as objective reporting.<\/p>\n
<\/p>\n
For example, it\u2019s no surprise, given the nature of its model bills, that ALEC\u2019s report favors states offering low taxes and minimal government regulation. Whether or not those things create a strong economic climate, they are certainly favored by corporations. And red states \u2014 surprise, surprise \u2014 greatly outrank their blue brethren: of the ten states on which ALEC bestowed the honor of greatest economic outlook, all but Virginia have a Republican governor and a Republican-controlled legislature. (The Virginia Senate is split equally among Democrats and Republicans.) Eight of the report\u2019s lowest-ranking states are governed by Democrats.<\/p>\n
Some in the press are eating all this up. A recent Louisiana headline reads: \u201cState-By-State Economic Report Shows a Lackluster Louisiana,\u201d followed by an article that treats the state\u2019s economic ranking as emanating from a disinterested authority. (Louisiana came in at #28 on ALEC\u2019s list \u2014 the first time it hasn\u2019t placed in the top 25.) North Dakota\u2019s Jamestown Sun, claiming that \u201cthe assessment of North Dakota\u2019s business friendly economy is being made again and again by independent out-of-state analysts,\u201d cites ALEC as offering the latest of these \u201cindependent\u201d analyses. Maryland\u2019s WUSA9 essentially endorses \u201cRich States, Poor States\u201d in a short \u201cYour Money\u201d report, pointing to ALEC\u2019s recent \u201cbad report card for Maryland \u2013 especially for your tax credit.\u201d And then there\u2019s Utah\u2019s Deseret News, which exclusively interviews supporters of \u201cRich States, Poor States\u201d \u2013 without once mentioning any of the report\u2019s very vocal critics. (Utah, remember, is number one.)<\/p>\n
A state\u2019s employment numbers, population growth and gross domestic product are all used to arrive at its ALEC ranking. But since the first \u201cRich States, Poor States\u201d was issued in 2007, some groups have criticized the ALEC-Laffer criteria. Peter Fisher of The Iowa Policy Project is leading the charge. In partnership with Greg LeRoy of Good Jobs First, a nonprofit organization founded to promote accountability in economic development, Fisher recently released his own 2013 report critiquing the ALEC-Laffer rankings \u2014 and explaining why \u201cRich States, Poor States\u201d might just be a fool\u2019s gold treasure-trove of unreliable data. Fisher and LeRoy\u2019s \u201cGrading Places: What Do the Business Climate Rankings Really Tell Us?\u201d offers a counterpoint to the economic ranking criteria ALEC relies on in its report. That there\u2019s even such a thing as a measurable business climate is, the report claims, \u201cnonsensical.\u201d It explains: \u201cThe needs of different businesses and facilities vary far too widely. Besides, states are not the meaningful unit of competition ?in economic development: metro areas? are, and conditions can vary more among metro areas within a state than they do between states.\u201d<\/p>\n
\u201cGrading Places\u201d goes on to disparage using population growth, tax cuts, and anti-union \u201cright to work\u201d laws as measures for a state\u2019s economic outlook. Despite the ALEC-Laffer report\u2019s \u201caggressive claims,\u201d Fisher and LeRoy say that the document still \u201cfails to predict job creation, GDP growth, state and local revenue growth or rising personal incomes. Empirical evidence does not support its claims that estate taxes or graduated personal income taxes cause rich people to move and thereby retard economic development.\u201d Their report goes on to illustrate that small negative correlations sometimes exist between ALEC-endorsed economic policies and a state\u2019s positive economic outcome.<\/p>\n
Wisconsin is one of the more interesting examples to look to for such statistical disparities. ALEC ranked the state #15 for economic outlook, even as the Bureau of Labor Statistics gave Wisconsin the 44th spot on their ranking for private-sector job creation. The U.S. Chamber of Commerce was recently busy ranking Wisconsin at 44th, too\u2014this time, for overall economic performance. It might seem strange that a state that ranks so poorly on two separate economic rankings (one endorsed, as it were, by the U.S. government) would fare so well on a list disseminated by a \u201cnonpartisan public-private partnership of America\u2019s state legislators, members of the private sector and the general public.\u201d But a quick tour of Wisconsin\u2019s statehouse suggests a reason why: nearly one-third of Wisconsin legislators have ties to ALEC, and the state\u2019s governor, Scott Walker, is an ALEC alum.<\/p>\n
In the coming year, it wouldn\u2019t be surprising if certain legislators attempted to pass off the \u201cRich States, Poor States\u201d document as sound evidence in favor of changing their state\u2019s economic policies. But citizens might do well to beware: as Greg LeRoy recently pointed out: \u201cThe real agenda is a policy or political agenda. It\u2019s about trying to get states to lower taxes.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The Article: Rich States, Poor States, Red States, Blue States by Laura Macomber in Bill Moyers Online. The Text: Last month, The American Legislative Exchange Council (ALEC) \u2014 a corporate lobbying group that Common Cause says is masquerading as a nonprofit charity \u2014 published its sixth annual \u201cRich States, Poor States\u201d report. The publication is […]<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[259],"tags":[],"yoast_head":"\n
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