From time to time I have to remind people about the patrician prevaricator for the plutocracy, George Will’s mini-me at the Arizona Republic, Robert Robb.
Robb ran his own public affairs and public relations agency for 13 years. Robb served on the executive committees and boards of directors for the the Phoenix Chamber of Commerce, and the “Kochtopus” Death Star, the Goldwater Institute for Public Policy Research. His column is frequently used to float trial balloons from these organizations. The ideas expressed are frequently not his own (think of his column as coded messages).
This occurred again in his column from Friday. Robb: Tax cuts have helped the Arizona economy (June 10,2016).
Yeah, that’s not even close to being true. The newspaper Robb works for has reported Arizona remains among worst in poverty (October 3. 2015), and Tax cuts have left Arizona short on cash (February 7, 2016). Howard Fischer reported State’s corporate tax cuts not proving to be economic stimulus (April 13, 2016). You get the point.
More importantly, what Robb’s recent column fails to disclose is that he is cribbing from the “Kochtopus” legislative think tank, the American Legislative Exchange Council (ALEC), which released this report Growth in the Desert – American Legislative Exchange Council just days before his column (June 7, 2016). Here is the opening graph from that report:
To paraphrase a line from an unnamed presidential candidate’s stump speech, Arizona taxpayers must be getting tired of winning. Governor Doug Ducey recently signed into law a $9.6 billion budget package that funds core government services and manages to cut taxes. By abandoning the tax-and-spend playbook and prioritizing sound budgeting, state officials and legislators continue to help Arizona separate itself from economically overburdened states like Illinois and Pennsylvania (neither of which has passed a budget for the upcoming fiscal year yet). With new policies ranging from reducing the income tax burden, to deregulating the “gig economy,” to pension reform, good news in Arizona is plentiful.
Robb’s “statistical slight-of-hand” in his column is that he redefines Arizona as only the state of Maricopa. Things are better in the home of the “Kochtopus,” but not so much in the rest of Arizona.
Arizona has never adopted a sustainable development plan for its urban and rural areas the way that the state of Minnesota did, a comparable state with a large urban population center in the Twin Cities and mostly rural counties. Minnesota Sustainable Development Initiative. The state of Maricopa is a “black hole” that sucks up development and population at the expense of all the other counties in the state, rather than share sustainable economic development throughout the state.
The ALEC report and Robb’s piece were part of the conservative media entertainment complex extolling the virtues of Governor Doug Ducey. The right-wing National Review also did a cover story on “Il Duce” last week. Doug Ducey’s Blooming, Booming Desert (subscription required). Notice a pattern here?
See how the cogs of the Mighty Wurlitzer of the right-wing noise machine all seamlessly work together?
Robert Robb is a pseudo-intellectual GOPropagandist who shills for the “Kochtopus” and the Arizona Chamber of Commerce and Industry, nothing more, nothing less.
Today the Arizona Republic published a guest op-ed in response to Robb’s column from an actual economist who actually knows what the hell he is talking about, Tom Rex with the L. William Seidman Research Institute at ASU’s W. P. Carey School of Business. My Turn: No evidence tax cuts have helped Arizona:
In his June 10 column “Tax Cuts Have Helped the Arizona Economy,” Bob Robb cites a lot of facts, but they do not support his conclusion. Robb argues that since tax cutting began in the early 1990s, the Phoenix area and Arizona have been among the leaders on such measures as employment and personal income.
While generally true, such facts do not lead to the conclusion that tax reductions have contributed to this fast growth. The Phoenix area and Arizona also were among the leaders on such measures as employment growth in the decades preceding the tax cuts — a period of time during which the tax burden in Arizona was average or even above the national average.
Taxes not the key in economic development
Further, many factors affect economic growth, and taxes are not among the most important location factors cited in surveys of economic developers. Instead, the quality and availability of the labor force is the top-rated factor. Education and training are key aspects of the quality of the labor force. The second-most important location factor is the quality and availability of the physical infrastructure.
Moreover, the goal of economic development is not simply to create jobs, but to improve the prosperity of the entire region, as measured by indicators such as per person gross product and per capita personal income. Gains in prosperity are achieved largely through increases in productivity; per employee measures such as earnings per employee are proxies for productivity.
Tax cuts have no impact on economic growth
A better way of testing the possible effect of the tax cuts is to compare gains in various economic measures in Arizona relative to the national average (or in the Phoenix area relative to other large metro areas) before the era of tax cutting to the relative increases since the tax reductions took effect. Such an analysis was conducted in 2013 and reported in the Grand Canyon Institute’s report “The Effects of Tax Reductions In Arizona: Significantly Reduced Government Revenue and No Apparent Impact on Economic Growth”.
That analysis has since been updated and expanded but the conclusion remains the same. The gains in measures of productivity and prosperity in recent years are not higher than in the period before the tax cutting began. On such measures as employment and personal income, gains have been lower in the more-recent period. However, one cannot conclude that the slowdown in such measures is due to the tax cuts, since so many other factors are more important.
Cutting taxes valid under only specific conditions
Indirectly, it is possible that the tax cuts have had the effect of slowing economic growth due to the reductions in funding for education and other public programs — such as infrastructure construction and maintenance — that have occurred as a result of the tax cuts. In today’s dollars, the tax reductions reduced revenue to the state government’s general fund in fiscal year 2016 by $4 billion, or 30 percent.
The results of the Grand Canyon Institute study are in line with the conceptual analysis presented in the report. Supply-side economics (cutting taxes) is valid, but it works only under specific conditions, such as indicated by the Laffer Curve. These conditions were not present in Arizona during the 1990s and 2000s when most of the tax reductions occurred. Among the reasons why tax cuts have not had a positive effect is that the tax burden in Arizona was not above average in the early 1990s and that the tax cuts through the 2000s focused on personal taxes — tax reductions to businesses are much more effective at stimulating economic growth.