Pat Allen: The View from Right Field

Pat Quinn's Idea of Political Courage: Spending Money

I apologize for continuing to come back to this subject, and it is amazing that I have to, but Illinois Governor Pat Quinn gave another speech this past week about how Illinois needs to spend more money.  At a time when, according to Moody’s Investors Service, Illinois has the lowest credit rating of any state in the country (not tied for lowest, but lower than any other state in the union), Governor Quinn talked in his State of the State speech about the “political courage” necessary to spend money.  It’s almost like he hasn’t been paying attention for the last nine years.

His predecessor, and the person he ran with twice, came up with a great innovation on how to spend more money for programs but still keep your promise to not raise taxes:  Don’t pay the bills.  Which meant Illinois was going in the financial hole even before the economy collapsed in 2008.

So now Illinois has billions and billions of dollars of unpaid bills and its pension plans are the worst funded in the nation.  And what does Pat Quinn think it takes political courage to do?  Spend more money.  No, Governor Quinn, spending money is easy.  Political courage is paying the bills. 

Democrats like to talk about how they care for people, but what caring is there is not paying people who provide services or products to the state?  What caring is there in making small businesses or social service agencies take out loans (assuming they can even get one) to pay their employees because the state won’t pay them?  What caring is there in not funding a pension plan that has to make retirees wonder whether they really will get the pension they are counting on?  What caring is there in a Medicaid system whose patients doctors won’t treat because the state won’t pay them?

I will admit that Governor Quinn is not the only person who seems to think this way.  When Democrats were raising the state income tax after the 2010 election and before the people elected in that election could take office, some legislators from the Chicago area were complaining that they were raising taxes, so they wanted more spending for their constituents (here and here).  What?  They already got the spending.  The income tax was being raised to pay for money that was already spent.  It was like these legislators didn’t have a grasp of reality.  Like Governor Quinn.

Some people claim the problem is that Illinois can’t raise taxes on the rich because the Illinois Constitution requires a flat-rate income tax.  That may be a problem, but it can’t be changed without a constitutional amendment.  If, as Don Rumsfeld said, “you go to war with the army you have, not the army you might want,” then Illinois has to pay its bills with the taxes its constitution allows, not the ones some people might wish it could impose.

Many of the legislators, including some Democrats, wondered how Governor Quinn was planning on paying for all of these new programs.  Even the Senate President said that he “look[ed] forward to hearing how we can fund these important priorities within a balanced budget.”  But I hope people understand that “balanced budget” means more than just spending no more that what you take in.  In Illinois, because of our irresponsible spending over the last decade and more, “balanced budget” has to mean spending less than we take in.  Because we have to start paying the bills we haven’t paid and funding the pensions that we haven’t funded.

In other words, “political courage” isn’t spending more money when you don’t have it.  Political courage is paying the bills you already have while doing the hard work of trying to figure out how you can provide as many services as you can to the people of Illinois for the amount of money you actually have.

I realize that this post sounds like a rant, and to the extent it is, I apologize.  I would rather not do it.  I prefer more measured discourse (even if sometimes it doesn’t seem like it).  It is just that politicians who want to do the easy work of spending and promising without explaining how they are going to pay for their spending and promising drive me crazy.

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Update (2/4/12 4:15 pm): I changed the title of this post because the prior title, "Earth to Governor Quinn, Come In Governor Quinn" wasn't all that good for this post.  Sorry for any confusion.

Helping Isn't Easy - Or Free

Last Wednesday’s Chicago Tribune had an article entitled "As wages fall, workers slip from middle class / Amid the demise of manufacturing jobs, the birthright of a nice home, college for the kids is under siege."* The article talked about job losses and wage cuts in the manufacturing sector. The focus was on Delphi plants, plants that General Motors owned before Delphi and its parts business were spun off because GM could not afford them any longer.

While the article did a good job of describing the plight of these workers, it did not explain how and why this occurred. Without doing so, either in that article or another article, the whole story is not being told.

Basically, the reason this occurred is that customers were no longer willing to buy the products these workers made. The prices that had to be charged to pay the wages of these workers were too high. I know that sounds harsh, and I do not mean it to be, but it is true. I suppose it is possible, if management salaries were lower or if the company was willing to take a lower profit, that the prices could have been cut and more could have been sold. But it would not have been enough to make a difference.**

The fact is, unless we were going to not let people buy the products they wanted to buy and, effectively, force them to buy what these workers made, not enough people were going to buy the products these workers made. I suppose we could have raised tariffs or imposed quotas to keep out foreign goods, but that would not have helped where the other products were made in the United States. It was not just cars made in Japan that caused Detroit to lose all those jobs; it was cars made in Ohio and Tennessee and elsewhere in the United States. And it was not because those other cars were cheaper. They were better – or at least that is what the customers thought.

Even if we could pass enough laws and add enough rules to force people to buy the products made by the companies that employed these workers, either the customers would have to pay higher prices or the government would have to pay subsidies (or something else) to cover the wages paid to these workers. The effect of this would be to make customers pay some of their own wages (through increased prices or higher taxes) to support these workers so these workers could continue to get their old wages.

And the odds are that at least some of the people who would have to pay the higher prices or extra taxes to support these workers would be people earning less than what these workers were getting paid. I know it is unfortunate these workers cannot continue to earn what they used to, but is it fair to take money from people who are earning less to support the wages of workers who are earning more?

I understand it is sad for these workers, but that does not answer the question. When we say we want to help people, we also have to decide who is going to pay for the help. Help is not free, and if we are not going to do it personally, we ought to figure out who is going to have to pay for the help before we give it.

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* I am not going to get into the fact that, if "college for the kids is under siege," it is more a result of colleges raising tuitions much faster the rate of inflation (because they can get away with it) than it is because of falling wages.

** In most cases the company could not have taken a lower profit because the company was already losing money.

Is Lobbying Helping?

I may be wrong on this, but I wonder if anybody else finds the following a little odd: This past Sunday and next Sunday our church is participating in the "Offering of Letters" program being promoted by Bread for the World. According to the Bread for the World website, the idea of "Offering of Letters" is this:

"Members of a church congregation write letters to Congress in support of hunger-fighting legislation during their service and place them in the offering plate, dedicating the letters to God and saying special prayers for hungry and poor people."

Here is what I wonder: Is writing letters to Congress, asking them to pass more laws and spend somebody else’s money to help poor people, really the best way to help poor people? Or do we accomplish more if we give our own time and money directly to groups that really help poor people?

Is the church’s role to be just another lobbyist asking the government to do this thing or that? Is this all we have to do: ask government to do more? Does that fulfill our responsibility? Or are we supposed to do more, to use our own time and money to help those in need? (Our church does a lot of this, too.)

Obviously, government has more resources than any one individual does. But if you give your time or money to a group that directly helps poor people, you know something is actually getting done. Spending your time and money writing letters to Congress has the potential to result in a lot of nothing.

As I said, I may be wrong on this. I am just wondering.

"Who Really Cares"

Thomas Sowell reports on a new book, Who Really Cares, by Arthur C. Brooks. The book looks at what liberals and conservatives actually do, in terms of giving of their own money and time, in order to see who cares. Among the book’s conclusions, according to Sowell, are these:

"People who identify themselves as conservatives donate money to charity more often than people who identify themselves as liberals. They donate more money and a higher percentage of their incomes.

It is not that conservatives have more money. Liberal families average 6 percent higher incomes than conservative families. …

Conservatives not only donate more money to charity than liberals do, conservatives volunteer more time as well. More conservatives than liberals also donate blood.

According to Professor Brooks: ‘If liberals and moderates gave blood at the same rate as conservatives, the blood supply of the United States would jump about 45 percent.’"

Why the difference? Let me suggest one possibility. If you think, as liberals do, that it is government’s job to take care of the poor, provide for the sick, etc., then you do not need to do it yourself. You can take the view that you pay your taxes. Now it is up to the government.

Conservatives, however, either think it is not the government’s job to do all of this or they realize that government so often fails at what it tries to do. Therefore, conservatives know they have to help – because government programs can’t and won’t get the job done.