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30 August 2003

Do Republicans Manage the Economy Better than Democrats?

Poll results repeatedly show that Americans believe Republicans are better stewards when it comes to economic issues. Maybe it's the outcome from the preponderance of corporate media and conservative financial journals - because, the numbers simply don't bear out this truth at all. In fact, both the stock market and GDP have performed better under Democratic administrations. Ditto for House or Senate majorities.

What if the great depression era is excluded and years are tallied for the presidential party submitting the yearly budget? Still, the Democrats outshine the Republicans.

The economy grew in 19 of the 20 years in which Democratic Presidents submitted a budget and in 16 of the 20 years in which Republican Presidents submitted a budget.

For the twenty years for which Republican presidents submitted budgets, the average rate of GDP growth was 2.94%.

For the twenty years in which Democratic presidents submitted budgets, the average rate of GDP growth was 3.92%.

Well, many will argue, justifiably, that there is a lag time before economic and political policy can take root. So what if we looked at a two, three, four or five year lag? And let's examine inflation and unemployment too.

3 Yrs

4 Yrs

5 Yrs

GDP Growth
Democrats
Republicans

3.56%
3.35%

3.78%
3.16%

3.71%
3.21%

Unemployment
Democrats
Republicans

5.06%
6.16%

5.04%
6.18%

5.01%
6.21%

Inflation
Democrats
Republicans

3.33%
4.36%

3.07%
4.60%

3.20%
4.48%

No matter what time lag you choose, Democrats post higher GDP growth, lower unemployment, and lower inflation.

29 August 2003

Schwarzenegger's Fuzzy Math

While he is drawing attention for past groping incidents and orgy participation, Blockbuster movie star and California gubernatorial candidate Arnold Schwarzenegger's remarks on tax rates in California were notable - a signal that he buys the W. Bush neoconservative "take two tax cuts and call me in the morning" economic soulution catch-all.
"I feel the people of California have been punished enough," Schwarzenegger said last week, oblivious to the voters' self-inflicted wounds after decades of demanding adequate government services they're not willing to pay for.

"From the time they get up in the morning and flush the toilet they're taxed," Schwarzenegger wails. "When they go get a coffee they're taxed ... This goes on all day long. Tax. Tax. Tax. Tax. Tax."

But is this oft repeated mantra that the public readily accepts grounded in truth? Columnist Paul Krugman says it's fuzzy math and has published a set of numbers that prove otherwise. For all but a fifth in the top income bracket, the state and local tax burden for California residents is lower than the national average.

Group Nation California
Bottom 20 % 11.4 11.3
Next 20 % 10.3 10.2
Middle 20% 9.6 9.2
Fourth 20% 8.8 8.7
Next 15% 7.7 8.1
Next 4% 6.5 7.6
Top 1% 5.2 7.2

Nationally, state and local taxes are highly regressive, and have become considerably more regressive over time. California's system is regressive, too, but not as much so as the national average. The result is that the typical California family pays less than the national average, but the well-off pay more.

So this is an alternative explanation of Ahnuld's remarks about the burden of taxes: he wasn't just mouthing right-wing cliches, he was reflecting what he sees. The kind of people he hangs out with do pay substantially higher taxes in California than they would if they lived in a red state. But the great majority of Californians aren't wealthy, and they also aren't highly taxed by national standards.


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12 August 2003

A government action to address offshoring that makes sense

Finally, the mainstream media is awash in a rash of articles on the migration of white collar jobs to offshore locales. Here's a recent article that should get every American fuming - and it's a scenario that I've personally experienced in a previous job assignment.

Some of the proposed solutions to this epidemic would invoke more harm than good and would trigger a spate of unintended consequences. However, one idea that I've read seems logical, sensible and a sure fire way to put a clamp on the selling out of knowledge jobs in America.

Forbid, by law, the access and display of U.S. customer data outside the United States. If you use your American Express card, your account information is available to third world denizens not bound by U.S. law. Recently, I worked on projects related to health care privacy (HIPAA), but it seems a giant joke to put rules and restrictions on access to patient data when the computer systems that contain this data are easily accessed by foreign workers.

Why should foreign nationals and unscrupulous indivduals working in third world countries where bribes are made to achieve any official end (read this article on the "Living Dead" in India ) can provide your personal information to any unsavory agent?

Perhaps folks who don't feel sympathetic towards IT workers losing their jobs to offshore "transformation" (that's the word for outsourcing at the company I work at now ... well, at least for the next couple weeks), will agree that porting their personal customer data to the third world is not a prudent course.