In China, Slower Growth Is Acceptable to Tackle Debt, Smog


Click to enlargeChinatopix

China can achieve a goal of doubling the size of its economy by 2020 even if annual expansion slows to 6.3 percent, according to a senior Communist Party official, signaling a greater willingness to tackle debt and pollution at the expense of growth…

In its blueprint for 2016 to 2020, China set a minimum annual growth target of 6.5 percent for the five-year period to achieve the goal of doubling gross domestic product from 2010 levels…Over the weekend, Yang Weimin, an official from the Communist Party committee overseeing economic policy, said annualized growth of 6.3 percent in 2018-2020 would do.

Based on current economic performance, the 2020 target won’t be a “huge barrier,”…China is seen growing 6.8 percent this year and 6.5 percent in 2018, according to economist estimates compiled by Bloomberg…

Yang’s remark is “a heads up on how the new thought will be implemented,” said Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing.

There have been times when the United States was governed and advised by technocrats, economists and, yes, even politicians who understood the value of adjusting the course of government to benefit most of the people. Not just the moneybags who could afford to belong to the Fake President’s country club.

Canadian province puts up $40-million for workers losing jobs during the end of coal

❝ Alberta is putting aside $40 million to help workers losing their jobs as the province transitions away from thermal coal mines and coal-fired power plants over the next decade.

Labour Minister Christina Gray said the money will top up benefits to 75 per cent of a worker’s previous earnings during the time they collect employment insurance…

“Our government is going to provide workers with income support,” Gray said…

❝ “This income would insure that workers are better able to support their families as they transition to new employment training opportunities or retirement,” said Gray…

❝ Vouchers up to $6,000 over two years will help cover the costs of post-secondary education, like tuition, books and fees…

❝ Alberta, under its Climate Leadership Plan, is phasing out coal-fired electricity and moving to renewable and natural-gas generated electricity by 2030, aligning closely with a similar deadline set by the federal government.

Conservatives hate this. The Harper government had no compunction about closing down diminishing, backwards, energy systems. But, provision for retraining workers was out of the question. No doubt other ideologues will also find a creative way to hate change, hate means of helping working folks through qualitative change.

Of course, none of these problems exist in the GOUSA. There is no concept of helping workingclass families from our present government, our fake president.

New Mexico’s Republican Governor wants science education to retreat to the Dark Ages

❝…In an attempt to make it easier for states to handle science education a bit better, a group of prestigious scientific societies banded together to make their own science education standards. The resulting Next Generation Science Standards were offered to the states free of charge, allowing them to be adopted in their entirety or modified to fit a state’s needs.

❝ Last week, it became apparent that New Mexico’s modification of the standards was a bit extreme, eliminating references to climate change, the age of the Earth, and evolution. And this week, some New Mexico legislators are blaming it on a misguided attempt to “politically sanitize” the science…The problems came to light earlier in September, when New Mexico’s Public Education department released a formal notice that it was seeking input on new science standards…Mother Jones decided to have a look at some of the changes, and they were rather striking.

❝ For example, a mention of “Earth’s 4.6-billion-year-old geologic history” was chopped down to “Earth’s history,” neatly getting rid of the information about how old it is. A reference to the evolution of life was cut entirely. The clear rise in global temperatures was swapped out in favor of talk about temperature fluctuations. In short, the proposed new standards get rid of basic facts, specifically in areas that are politically or culturally contentious…for Republicans and other anti~science nutballs.

The one thing that was missing was why. This wasn’t a case of local politicians messing with science education as a part of their platform, as has happened in Texas and elsewhere…Two Democratic lawmakers have pointed the finger at the state’s Republican governor, Susana Martinez. The lawmakers, Bill McCamley and G. Andrés Romero…had been supporters of a bill that would see the Next Generation Science Standards adopted verbatim, a course that had been recommended by a panel of education experts organized by the state. The bill passed both houses of the state legislature but was vetoed by Martinez

You don’t have to be trapped by Know-Nothings in the American Confederacy to have children’s education threatened by bigots and superstitious fools. Martinez is governor by virtue of a Democrat Establishment throwing away easy electoral opportunities to satisfy a cabal more concerned with lineage in political power – than issues.

The Great Kansas Reaganomics Experiment Ends In Disaster


Yes, I’m responsible for that smell…Saul Loeb/AFP

❝ When a governor announces an economic theory as a solution to a state’s fiscal problems, while challenging all comers to observe the results, that’s something I want to pay attention to. And so for the past five years, I have been watching the public-policy experiment in Kansas with great fascination.

❝ With the state legislature now rejecting the governor’s experiment, we can move onto to the next phase: Not recrimination and blame, though there is lots of that going around. Instead, I want to look at how the experiment played out, and what lessons there are to be learned from it.

❝ A quick refresher: Kansas’s Republican Governor Sam Brownback pushed through a substantial change in the state tax code, centered around lowering rates. He promised it would lead to more growth, tax revenue and jobs. Instead, there have been persistent tax revenue shortfalls, huge spending cuts and disappointing job creation. As my Bloomberg View colleague Justin Fox wrote, Kansas is badly lagging its neighbors, all of which have similar economies. Even worse, people (especially young people) are fleeing the state. Kansas was one of the highest outbound migration states in 2014, 2015 and 2016. The vast majority of people who have moved out were either transferring when their companies left or were seeking employment elsewhere.

Before Brownback, this wasn’t the case. As recently as 2012 and 2011, Kansas didn’t make the lists of states with high migratory outflows.

❝ Incentives matter: There was a large behavioral incentive, but it was for financial engineering. Brownback eliminated taxes on limited liability companies and sole proprietorships. It isn’t surprising that lots of companies and individuals made these legal structural changes. But this was merely an alteration in form with no beneficial economic incentives.

Set reasonable benchmarks for success or failure: Brownback, despite making large promises, wasn’t specific in how success or failure should be measured…

❝ Have an exit strategy: Because Kansas didn’t focus on specific and measurable benchmarks, it had no way to know when to pull the plug. This is important, as the legislature was forced to wait until things were unequivocally bad and getting worse before taking steps to end the experiment. An exit strategy based on specific goals would have saved a lot of unnecessary austerity-induced pain for the people of Kansas.

❝ Share information freely: We knew the Kansas experiment was going badly when the executive branch decided to stop reporting economic news about it…

Win or lose, take responsibility: Broad proof of the failure of Brownback’s tax cuts led the legislature to begin unraveling them. Rather than admitting defeat, Brownback vetoed its actions. His refusal to accept a verdict reflects a failure to recognize and take responsibility for his own policies.

❝ By just about every measure, Kansas’ economic laboratory experiment is now over, and the results are in. Supply-side tax cuts as executed in Kansas don’t generate more economic growth or create more jobs. They reduce tax revenue and forced the government to cut spending on essential goods and services like roads and schools.

RTFA for more detail. Unless you’re a Republican True Believer the cause-and-effect relationships are clear. Evidence is a bear. That the mass of Kansas voters went along with Brownback’s incompetence for so long speaks only to their obedience, lack of independence, loyalty to ideology in the face of daily evidence of failure.

Barry Ritholtz is one of my favorite writers on matters financial in the United States. That he has a fey sense of humor, refers to himself as a Recovering Republican, allegiance to evidence and facts over ideology is icing on the fiscal cake.

Kansas Republicans end their disastrous Reaganomics experiment


Horse-and-buggy ideology doesn’t turn this into wind power

❝ Republican lawmakers in Kansas put an end to the state’s failed tax reform experiment on Tuesday, overriding the governor’s veto after three attempts to pass a tax-hiking bill this year.

The new law raises income and business taxes closer to pre-reform levels — a move Republicans had been resisting for years. But pressure had been mounting to do something. The drastic tax cuts enacted five years ago left the state in a fiscal mess, unable to balance its budget and properly fund its public schools.

❝ Gov. Sam Brownback’s signature tax reform closely mirrors the tax plan that President Donald Trump is trying to get through Congress. In fact, they were designed by the same supply-side economists.

❝ The fate of Kansas’s tax experiment provides many clues about what could happen if Congress goes along with Trump’s vision for tax reform.

❝ Economic growth predictions were wrong…

Instead, the Kansas economy tanked. For two years in a row, the state’s credit rating has been downgraded because of its budget problems. Job creation and economic growth is far below the national average. The state is facing a budget shortfall of about $889 million in the next two years…

❝ Moderate Republican lawmakers in Kansas are now in open rebellion, scrambling to find ways to roll back the tax cuts as the state looks for ways to balance its budget.

Republicans have been offering the same golden lies about trickle-down economics since the days of President Herbert Hoover. Failure has resulted every time voters and Congress hand over a chance to put theory into practice. Reagan came closest to succeeding for a year or two – only because he didn’t try to support the theories with the massive level of lying estimates of successful growth – and tax cuts – demanded by Brownback and Trump Republicans.

The inevitable still resulted. Recession, downgraded credit ratings, working families and their children get the bill – and screwed, as usual.