LONG ISLAND | Jobs Grow Just 0.4%

December 2017 Job Growth, Nassau-Suffolk – 0.4%.
Source: BLS (bls.gov), Feb. 6, 2018.

February 6, 2018 – If JOBS-JOBS-JOBS is the standard, the first year of the new Administration in Washington, D.C. has failed Long Island.

Nassau-Suffolk added only 4,900 nonfarm payroll jobs from December 2017 to December 2018, according to data released today by the BLS.

The growth rate of 0.4 percent is one-third of NY State's rate of job growth for the period, and less than half the rate of job growth in the entire tristate New York metro area. It is less than one-sixth of the growth rate in the other major area component outside the core New York City metro area, i.e., Dutchess and Putnam counties.

So what has the Republican Congressman representing Long Island's Eastern Half been doing about bringing jobs to Long Island? His latest post on the topic on his official website was during his last campaign year, 2016.

(For a general summary of Zeldin's political positions, go here. He rode in on the howdahs of the Tea Party Republicans. His votes and public statements peg him as a "libertarian conservative", an oxymoron since conservatives are anti-libertarian on social policies.

Zeldin thinks that Suffolk County, which depends on clean water and air for its tourism and leisure-living businesses, and was clobbered by the Meltdown of 2008, needs less environmental and financial regulation.

That doesn't seem to have worked so well for Suffolk County.

His New Idea in 2016 was...

• Make It Easier to Pollute and Rip Off Financial Customers by allowing Congress to block regulation of the environment and financial fiduciaries. 
• Make Environmental and Financial Regulation Harder for the Executive Branch to implement!

Read below, in its entirety, Zeldin's proposal in March 2016 for creating jobs on Long Island.

March 15, 2016  

Press Release 

Op-ed Written by Congressman Lee Zeldin (NY-01)

During my first 14 months in Congress, I have constantly heard from business owners on Long Island sharing stories about how various examples of bureaucratic red tape out of Washington has made it increasingly difficult to create more good paying, private sector jobs. The Department of Labor “Fiduciary Rule,” the EPA’s effort to put the motorsports and custom car industry out of business, and the attempt of federal regulators to impose overzealous Dodd-Frank regulations on auto lenders are just three of many new federal agency regulations that harm the business climate on Long Island and throughout our nation. As each new rule is passed, we are reminded of why it is so important for Congress to pass the Regulations for the Executive in Need of Scrutiny (REINS) Act (H.R. 427).

Under the REINS Act, every major rule or regulation with an economic effect of $100 million or more annually would be required to be specifically approved by the House and Senate, in addition to the President, before the rule takes effect. This legislation is about smart policy and balance of power. Here are three brief examples of why the REINS Act is so important:

Example #1: Many Long Islanders, when seeking something as critical as life insurance or retirement savings advice, want to go to a trusted broker who is a part of their local community. Planning for retirement and managing a family’s investment portfolio to save for college or buy a new home is an essential piece of the American dream. The Department of Labor, through its “fiduciary rule,” is shutting down that dream by overregulating independent financial advisors and life insurance brokers out of business. By imposing regulations and fees meant for larger, multi-billion dollar Wall Street firms, the one-size-fits all approach proposed by federal regulators would kill an industry that is run by small entrepreneurs and built on personal relationships. By the Labor Department’s own admission, in 2010, those individuals who did not seek or have access to investment advice suffered over $100 billion in financial losses through investment mistakes, which could have easily been avoided with the appropriate level of consultation. Saving for retirement is of crucial importance to American families and access to professional financial advice should not be hindered by an unnecessary regulation put in place by unelected agency bureaucrats creating rules that carry the force of law.

Example #2: The Clean Air Act has been a resounding success and in Congress I have been an outspoken advocate for clean air and clean water on Long Island [???]. The EPA is attempting to go around Congress, ignoring the Constitution by creating new interpretations of this law, which would hurt small and medium sized businesses. Current rules proposed by the EPA would effectively shut down the motorsports and car modification industry by imposing the same level of regulations meant for power plants and other major industries. By banning certain modifications made to cars and motorcycles, and applying these misguided regulations retroactively, hobbyists, who have invested countless time and money into their cars, would suddenly be in violation of a set of federal regulations that were never vetted by their representatives in Congress. Small and medium sized businesses on Long Island, like American Racing Headers, that supply specialty automotive parts to customers nationwide, are already seeing a reduction in business as a direct result of the threats surrounding these new rules. 

Example #3: The indirect auto loan market just surpassed $1 trillion, making it one of the most essential, and competitive financial markets in our economy. In a misguided change of policy, based on flawed statistics, the Consumer Financial Protection Bureau (CFPB) is attempting to shut down transparency in the auto lending market by mandating new standards that they falsely believe will increase fairness in the market. Consumers on Long Island should not be cut off from needed credit due to arbitrary government regulations. A transparent and competitive auto lending market means consumers will get the best rates, but bureaucrats in Washington want to impose strict Dodd Frank financial regulations meant for Wall Street that would shut down the indirect auto loan market so essential to main street Long Island. 

What has always made America so great has been the opportunity to succeed through hard work and dedication, but unfortunately today, economic opportunity is being stripped away with oppressive taxes and burdensome red tape on America’s businesses. President Obama’s first seven years have brought forth 468 regulations deemed “economically significant rules”, and that’s with just under a year still to go. (CEI) The Fiduciary Rule, the attack on the motorsports industry by the EPA, and the CFPB’s attempted overregulation of auto-lending, are just three of the rules that have made it harder for business owners to succeed in today’s economy.

To address this issue, I proudly voted for the REINS Act when it passed the House last year, as well as other essential pieces of legislation to shut-down job killing red tape. This critical legislation would give Congress more oversight over the most broad and harmful regulations being implemented by federal agencies. Allowing the executive branch to implement major regulations, without Congressional oversight or input, will only further hurt the ability of our job creators to expand and create more good paying jobs. Americans should demand that Congress take the REINS to help grow our economy.  [End of Zeldin Op-Ed]

If this is the best that Zeldin can come up with to create jobs on Long Island, no wonder jobs have grown only 0.4% during the year. Long Island needs better ideas.

Issues: 

Jobs and Economic Growth

TAX REFORM | Business Taxes

Sen. Orrin G. Hatch (R-Utah),
Chairman, Senate Finance Committee

The following is Update 205 from Dana Chasin, reposted by permission:

Sept. 19, 2017 – This morning, Senate Finance held its second hearing this week exploring tax policy. This time, the focus was on corporate taxes. 

The Committee heard testimony on topics such as pass-through rates, C-corp rates, territoriality, and options to raise revenue.

Chairman Hatch again asserted that a tax bill will be written by the Committee in a bipartisan way, insisting that the Secret Six will not force partisan changes since it doesn't legislate. 

Ranking Member Wyden took aim at the all-GOP Secret Six, whose tax-reform deliberations are the subject of intense lobbying and speculation, attacking purported GOP plans on pass-through taxation, and expressing outrage about the latest attempt to jam through health care repeal. 

What are the dividing issues here? Are these divides so great that Republicans will have to rely on reconciliation to move on a $1.5 trillion tax cut? Or does Hatch think bipartisan accord is possible? Best, Dana

1. Areas of Discord

Frequently, bipartisan differences on corporate tax proposals were aired, particularly regarding:

•  Pass-Throughs: Republicans defended pass-throughs as a way to support small businesses and spur economic growth by increasing investment.  Sens. McCaskill and Wyden were quick to refute these claims, arguing that the benefits of a pass-through rate cut would accrue mostly to the top one percent of earners, as pass-through income accrues to wealthy owners of larger businesses. 

•  Deficit Financing: Democrats emphasized the likelihood that tax cuts would be deficit financed. Precious few ideas have surfaced from Republicans about how to compensate for this revenue loss. Sen. Carper expressed concerns about deficit-financed tax cuts, particularly those disproportionately benefiting the affluent.

•  Dynamic Scoring:  Conservatives continue to cite this fiscal impact metric to mollify those concerned about adding trillions to the debt, saying that tax cuts will spur growth and in turn increase revenue. Not many serious economists think the government would get more than a dime out of the best designed tax cut dollar. Carper and others today called this trickle-down theory, recalling how similar corporate tax cuts of the past have increased deficits without generating growth to make up for them.

Sens. Brown and Stabenow excoriated trickle-down economic policies.   Stabenow suggested ending the tax subsidies that the five largest oil companies have enjoyed for over a century. She said eliminating the business interest deduction would harm workers, particularly in small businesses. Sen. Cantwell focused on the most vulnerable, highlighting the precarious situation of the Low Income Housing Tax Credit Program, a program with major implications for investment spending patterns of developers.

2. Areas of Potential Accord

The possibility of bipartisan accord is low, but a few isolated points emerged around which members may find bipartisan agreement, if and only if rate reductions are modest:

•  International Competition – Sens. Carper and Warner conceded that it may make sense to lower the corporate rate a few percentage points to increase competitiveness with other nations 

•  Pass-Throughs – Sen. Cardin noted that S-corps in his state plead for moderate reductions on pass through rates. 

•  The Interest Deduction – Two witnesses who did not agree on much else, Scott Hodge and  Donald Marron, concurred on the prudence of eliminating the business-interest deduction as a revenue source to bring in $1.2 trillion in revenue over the budget window. 

3. Reconciliation Process

If the GOP tax plan is so fiscally reckless and inequitable that no Democrats sign on, it will have a better shot if Republicans pass a budget resolution with reconciliation instructions providing for tax changes. No tax changes can add to the deficit outside of a 10-year budget window under reconciliation. A budget resolution that complies means the GOP would need only a 50 + 1 majority to pass the legislation; a filibuster requiring 60 votes to overcome, would not available to Democrats. 

There are a few obstacles to shepherding legislation by way of reconciliation.  Per the Byrd Rule, Senators can raise a points of order against an extraneous provision in a budget bill. A provision could be considered extraneous if it:

•  changes provisions for social security,

•  doesn't change the overall spending or revenue,

•  only incidentally changes spending or revenue,

•  is outside the jurisdiction of committee(s) reporting it.

4. Time Is of the Essence

Republicans must work with alacrity to create a product that overcomes the above obstacles to reconciliation. The window for using budget reconciliation will soon close. The Senate parliamentarian, who oversees the chamber’s arcane procedural rules, decided last week that the current budget reconciliation privileges would expire at the end of September, the last day of this fiscal year. 

The GOP badly wants to get a tax bill done this year, so as not to boot it to 2018, an election year. But it will be nearly impossible for Republicans to get this done by the end of the fiscal year.  

Just tonight, Sen. Corker, a senior Republican on Senate Budget, told reporters that the budget resolution that could unlock the process for reconciliation could be marked up in the coming week or two, depending on whether the Senate is focused on health care.

TRUMP | Why Run as GOP?

I received the following from a friend a few minutes ago and it seemed believable, although the reference to Fox News as a right-wing network in 1998 was fishy. I posted it before I checked it out because it seems to be circulating on Instagram and deserves comment and investigation regardless of its authenticity. I then proceeded immediately to investigate whether the quote is real (something I wish more people would do). My report is below and will be updated as needed.

I must report that People Magazine files do not include such a quote. Below are excerpts from Snopes.com, which rates the quote FALSE and notes that while Fox was ramping up between 1996 and 2000, it wasn't widely watched until the 2000 election of George W. Bush. Please email me at teppermarlin@aol.com if you have any other information on this topic. I will post what I learn. Otherwise I am moving on.

Here are actual quotes from People Magazine relating to Trump's political affiliations as provided by Snopes.com:

SNOPES: The image and quote attributed to Donald Trump began appearing in our inbox in mid-October 2015. Despite People's comprehensive online content archive, we found no interview or profile on Donald Trump in 1998 (or any other time) that quoted his saying anything that even vaguely resembled the words in this meme. ... Trump's political endeavors (or the absence of them) did rate some space on the magazine's pages, though. [Here are four actual People quotes:]

1. A December 1987 profile titled "Too Darn Rich" chronicled Trump's ... claims that he had been courted by both Democrats and Republicans:

House Speaker Jim Wright led a delegation to Trump's office asking him to chair a major fund-raising event for the Democratic Party. Trump is a Republican but gave the invitation serious consideration before bowing to pressure from GOP friends and turning down his Democratic suitors. Beryl Anthony Jr., the Arkansas Congressman who came up with the approach to Trump, was disappointed. "There's no question he was getting a lot of pressure from the Republicans," Anthony told a reporter. "It would have given him the opportunity to see if his temperament is sufficient, if he could stand the scrutiny."

2. In 1988, Trump launched into an impassioned political diatribe on Oprah Winfrey's daytime talk show, but he concluded by saying he "probably" wouldn't [ever] run for office. In 1998:

"My information is that Donald Trump has raised in the ballpark of $1 million for the Bush campaign and the Republican Party," said Sen. Steven Geller, president of the National Council of Legislators from Gaming States.

"I have heard from too many sources, including Republican lobbyists, that although Mr. Bush is denying it, the deal [to allow Indian casinos in Florida) has been cut," Geller said.

3. October 1999: Trump, ... announcing on CNN's Larry King Live that he was forming an exploratory committee with the intention of running for president, ... said:

I'm a registered Republican. I'm a pretty conservative guy. I'm somewhat liberal on social issues, especially health care, et cetera, but I'd be leaving another party, and I've been close to that party ... I think that nobody is really hitting it right. The Democrats are too far left. I mean, Bill Bradley, this is seriously left; he's trying to come a little more center, but he's seriously left. The Republicans are too far right. And I don't think anybody's hitting the chord, not the chord that I want hear, and not the chord that other people want to hear, and I've seen it.

4. In October 1998, Trump ran through his then-current political positions with NBC's Stone Phillips:

Mr. TRUMP: I'd like to see major tax cuts.

PHILLIPS: Along the line, for what the Republicans are talking about —eight hundred billion or so? Would you go that far?

Mr. TRUMP: Along the lines of that number, yes, approximately at that number, and could even be more.

PHILLIPS: Health care?

Mr. TRUMP: [I'm] liberal on health care, we have to take care of people that are sick.

PHILLIPS: Universal health coverage?

Mr. TRUMP: I like universal, we have to take care, there's nothing else. What's the country all about if we're not going to take care of our sick?

PHILLIPS: Abortion?

Mr. TRUMP: I hate the concept of abortion. I hate anything about abortion, and yet, I'm totally for choice. I think you have no alternative.

PHILLIPS: Gun control? Where do you stand on that?

Mr. TRUMP: If you could tell me that the bad guys, the criminals, wouldn't have guns, I'd be a hundred percent for gun control. But the fact is, if you have gun control, the only people that are going to obey the laws, are going to be the good guys. So the bad guys are going to have the guns, the good guys aren't going to have the guns, and what good does that do us? So, I'm not in favor of it.

As a factual matter, based on educational attainment in the 2010 Census , nine of the ten least well educated states voted Republican in the 2012 election.

Long Island Economy in an Election Year

Queens, Nassau and Suffolk Counties are comparable
economies, with 544,000 (Queens) to 640,500 (Suffolk) jobs.

With all of its U.S. reps in DC up for re-election in 2014, the latest quarter of data on jobs and wages is worth looking at with an eye to what it means for the political environment.

For example, in  New York's First Congressional District, which accounts for most of Suffolk County, both of the main candidates for the Republican nomination on June 24 (Lee Zeldin and George Demos) have announced that they plan to make their main issue the economy.

They plan to paint the incumbent, Rep. Tim Bishop, as a pro-regulation, pro-spending Democrat who has contributed to higher taxes in Suffolk County.

So it will pay to stay a step ahead of the electoral clamor and look at three counties that may help establish the context of the debate - Queens, Nassau and Suffolk. Their fourth-quarter 2013 jobs and wages data were just published by the Bureau of Labor Statistics this morning.

• The three counties are remarkably similar in economic size, with between 49,000 (Queens) and 53,300 (Nassau) establishments.
• Of the three, Suffolk County has the most jobs, 640,500. Nassau is in second place with 616,700 jobs and Queens with 544,500.
• It is true that the growth in jobs in Suffolk County compared with the fourth quarter of 2012 is the slowest of the three counties, 1.2 percent, behind Queens with 1.5 percent and Nassau with 2.3 percent. But Suffolk's growth is near the U.S. median for the 335 largest counties - it's not terrible.
• Meanwhile, on the wage front, Suffolk has done very well. The average wage per week in the fourth quarter was $1,079, an increase of 1.9 percent over a year earlier. This is in the top one-sixth of all large counties in the nation. Suffolk's weekly wage is nearly as high as that of Nassau, at $1,120.
• However, during the same year that Suffolk's wages were rising, Nassau's were falling by 1.5 percent. Both Nassau and Suffolk wages are higher than in Queens, which has a weekly wage of $955, a 2.1 percent increase over 2012.

The job and salary data do not provide a prima facie case that either Suffolk or Nassau County suffers from over-regulation or over-taxation, at least compared with the rest of the United States.

If prior elections are a guide, however, don't under-estimate the ability of campaigners to find data to support the economic case they want to make against an incumbent.

If you torture data enough, they will confess.

STATE PRODUCT | Few Thrived Under Bush 43

As the Democratic Administration wrestles with huge U.S. economic problems, elected officials can take comfort in the fact that they have an easy act to follow.

The numbers are in, and under Bush 43 only four U.S. states beat the average long-term growth rate.

The four "winner" states that did better than the long-term U.S. per-capita average annual growth rate of 2.5 percent were North Dakota, New York, Louisiana and Montana. (Louisiana wins on a technicality as is explained below.) The other 46 states grew at less than the long-term average growth rate.

The numbers are through 2007, but we know that 2008 was a recession year, so the final numbers by state will be worse.

The state records are on two charts prepared by my friend Professor Jurgen Brauer of the James M. Hull College of Business at Augusta State University in Augusta, Ga. His numbers are from the St. Louis Fed's FRED database, which vacuums population data from the U.S. Census and Gross State Product (GSP) data from the Bureau of Economic Analysis.

With Prof. Brauer's permission I am using his chart showing average annual real growth in per-capita GSP during the first seven Bush 43 years.

Among the top ten losing states, two showed negative annual per-capita GSP real growth during 2001-2007 (2000 being the base year): Michigan and Georgia. The next eight states all had real growth of less than one percent: Indiana, Colorado, South Carolina, Missouri, Ohio, Alaska, Illinois and New Hampshire. Professor Brauer observes:

Two of the bottom five states in real per-capita GSP average annual growth rates switched from “red” to “blue” in the November 2008 presidential elections.

On the upside, the top state in per-capita GSP real growth was North Dakota, with annual growth of about 3.5 percent. The next nine states were all in the 2-3 percent range on per-capita real growth: New York, Louisiana, Montana, Vermont, Oregon, Maryland, South Dakota, Iowa and Alabama. Professor Brauer adds:

Only four states in the nation beat the long-term per-capita average annual growth rate for the United States of 2.5 percent since the late 1920s. Louisiana is an anomaly for its growth is at least partially explained by the exodus of poor residents following Hurricane Katrina so that the improvement in its average growth rate for the remaining residents is a statistical fiction.

Prof. Brauer's second chart shows the state-by-state per-capita value of economic production in 2007.
The top ten states by per-capita GSP in 2007 are Delaware ($56,500 GSP per capita), Connecticut, New York, Massachusetts, New Jersey, Alaska, California, Virginia, Minnesota and Colorado (the District of Columbia is not included).

The bottom ten states are Mississippi (less than $25,000 GSP per capita), West Virginia, Arkansas, Montana, South Carolina, Oklahoma, Alabama, Idaho, Maine and Kentucky.

Should the weak economic performance of the states during the 2001-2007 years be a surprise?

Michael Kinsley, writing in the Washington Post in 2005, concluded that the Democrats did better since 1960 on the Republican ("Daddy"-party) criterion of economic prosperity.

From 1960 to 2005 the GDP in year-2000 dollars rose an average of $165 billion a year under Republican presidents and $212 billon a year under Democrats. Measured from 1989, or measured with a one-year delay, or both, the results are similar. [On the] average annual rise in real per-capita income, Democrats score about 30 percent higher.

Bush 43 did not reverse this weak economic record.

Obama Fundraising a First, Says Election Commission Chairman

Thanks to Congressional Quarterly for noting today ("Obama’s Operation May Become the Model of Fundraising") the comments of former Federal Election Commission Chairman Bradley A. Smith in a Washington Post op-ed piece a week before the election.

Brad Smith was commenting on the fact that the campaigns of both Barack Obama and John McCain had exceeded $800 million in combined spending two weeks before Election Day. The CQ story emphasizes that "It’s not just the amount of money that was spent but also the way it was raised — much of it online, in small chunks and, in Obama’s case, completely independent of the public financing system for the first time in the post-Watergate era."

Smith, in his op-ed, says: "I’ve studied all the great fundraisers of the past, from William McKinley to Richard Nixon to George W. Bush. American politics has never seen anything remotely like this before.”

Smith is overtly partisan - he was a Republican appointee. The online discussion of Obama's citizen "juggernaut" is all the more interesting. He thinks the system has worked, even though his candidate was losing. Here are some excerpts.

Arlington, Va.: Just to counter some of the paranoid posts -- I'm one of those small donors that you fear so much. In <> early September I became so disgusted with the McCain/Palin campaign that I went to Obama's Web site and made a donation. I since have made two additional donations. All three were responses to something that was said by the McCain/Palin campaign. In all I've given less than $100. I was born in the U.S. and have lived here all my life, and despite various Republican's claims I'm not a communist or anti-American. I'm just a regular person who has every right to vote and to support a candidate with my time and money.

Bradley A. Smith: I wish more people thought like you -- not your support for Obama ;-), but regarding your motives for supporting Obama and your willingness to back up your beliefs.

_______________________

Reston, Va.: McCain keeps saying that Obama is trying to buy the election. Isn't it more like the citizens are? They're the ones contributing the money.

Bradley A. Smith: Right on!

_______________________

Wilmington, N.C.: "Former FEC chairman." Given your obvious political leanings, I must say I find that very disturbing. Is that a partisan political post? Should it be?

Bradley A. Smith: The FEC has six commissioners, with no more than three from any one political party. Four votes are needed for most action. So one party can't dictate outcomes. I found that the Commission worked pretty well. But you've really hit the nail on the head -- how can you maintain over time a truly unbiased political police? That's why I generally would deregulate the system, or at least start in that direction. We need separation of campaigns and state, you might say.

_______________________

Maryland: The other day a friend and I were having a friendly argument. He was saying there should be more rules to limit how much a campaign can spend because $200 million is outrageous. I said "$200 million is rock-bottom cheap for a good presidential administration!" It's just a fifth of a billion dollars -- compare that to the cost of the Iraq war. Just saying.

Bradley A. Smith: You are right. Political spending needs to be kept in perspective. Americans will spend about $12 billion on potato chips this cycle. Coca-Cola will spend more on advertising this year than will be spent by all the candidates who have run for president combined. Auto makers will spend more than twice as much this year advertising cars as all political spending for federal office. It cost money to communicate, whether you are talking about cars, cola or politicians.