Wednesday, February 20, 2013

Traveled halfway around the world for this?

Just when I was starting to miss (recover from) some of the political back and forth back home, I came across this.

It's sort of like the comment section on Ed Cone's blog but with Aussie accents.

Tuesday, February 19, 2013

"Southernomics" in NC with a vengeance

Michael Lind at provides an insightful summary of the "southern" (read conservative) political economic strategy to disempower workers.
The purpose of the age-old economic development strategy of the Southern states has never been to allow them to compete with other states or countries on the basis of superior innovation or living standards.  Instead, for generations Southern economic policymakers have sought to secure a lucrative second-tier role for the South in the national and world economies, as a supplier of commodities like cotton and oil and gas and a source of cheap labor for footloose corporations.  This strategy of specializing in commodities and cheap labor is intended to enrich the Southern oligarchy.  It doesn’t enrich the majority of Southerners, white, black or brown, but it is not intended to.

... The essence of the Southern economic model is not low taxation, but a lack of bargaining power by Southern workers of all races. Bargaining power at the bottom of the income scale is created by tight labor markets; unions; minimum wage laws combined with unemployment insurance; and social insurance, such as Social Security and Medicare and Medicaid.
With the state's centrist to moderately conservative Democrats being replaced by radically conservative Republicans, North Carolina is seeing this strategy played out a vengeance.

Tuesday, February 12, 2013

The Audacity of Nope

Showing his own profile in discourage, North Carolina Governor Pat McCrory agreed with Republican legislators that the state should not expand its Medicaid program nor run its own health exchange. His feeble excuse is that the state is too feeble.
Gov. Pat McCrory doesn’t think the state is ready to expand Medicaid or ready to run its own health exchanges – two provisions of the Affordable Care Act.

McCrory’s office made the announcement Tuesday morning just hours before the state House is supposed to take up a bill that would bar the state from participating in those two actions. The Senate passed the bill last week.
According to the Governor, NC is not ready for better health and longer lives for hundreds of thousands of its most vulnerable citizens, tens of thousands of jobs, more productive workers, billions in economic output, and billions in savings in hospitals' uncompensated care.

Apparently, the Governor's last few years in the political wilderness have left him tanned, rested, and not ready.

Tuesday, February 5, 2013

Another job-killing measure from Raleigh

Along with its efforts to opt out of the Medicaid expansion, the Republican-led North Carolina General Assembly seems poised to score another own goal against the state's economy through its ill-considered plan to impose unprecedented, draconian cuts in workers' unemployment insurance benefits. The cuts are intended to speed the repayment of $2.4 billion in unemployment insurance debt that the state incurred during the Great Recession.

The legislation is punitive and removes important protections from NC's workers. But in addition, the legislation will substantially slow the already under-performing economy.

First, the state will forfeit hundreds of millions of dollars in federal extended unemployment benefit payments. Currently, state unemployment funds cover the first 26 weeks of unemployment insurance payments, and federal funds cover an additional 47 weeks in states with unemployment rates above 9 percent. Provisions in the federal program require states to maintain their programs in order to receive the extended benefits--the goal is to keep states from shifting unemployment insurance costs from themselves to the federal government. The upshot of this provision is that if NC cuts its unemployment insurance program, it will lose the federally-funded extended benefits. The loss will be devastating to the long-term unemployed, but it will also affect the broader economy by removing hundreds of millions of dollars.

Second, the state is setting itself up to pay off the unemployment insurance debt faster than it needs to. The early repayment of that debt removes hundreds of millions of additional dollars from the NC economy. The debt needs to be repaid, but by stretching out the payments, the state would push more of the "pain" into future years where hopefully the economy will be performing better and the payments would be easier to make.

The Republicans' plan will hurt vulnerable, struggling households in the state, but it will also hurt the state as a whole.

Monday, February 4, 2013

Medicaid expansion and jobs

"Own goals" in soccer occur when a team kicks the ball into its own net, resulting in a point for the other team. Own goals are usually accidents.

The Republican-led North Carolina General Assembly seems poised to score an own goal against its own economy--on purpose.

Legislation is moving forward in the General Assembly to opt out of the Medicaid expansion under the Affordable Care Act. The expansion would provide health insurance to people living in households with incomes below 133 percent of the poverty line. The federal government would cover 100 percent of the costs for the first three years and 90 percent of the costs thereafter.

Besides extending coverage to about 400,000 poor NC residents who wouldn't get health insurance otherwise, the expansion would bring in $40 billion on net (about $50 billion in total spending), which would jolt the economy and create jobs.

A new report by Regional Economic Models, Inc. forecasts that the expansion would add nearly 6,000 jobs to the NC economy in the first year of the expansion, as participation in Medicaid starts to grow, and 20,000 to 25,000 jobs in subsequent years, as participation stabilizes at a higher level. A figure showing the predicted job growth appears below.

Figure from REMI report "A Contrast: Modeling the Macroeconomic Impact of 'Medicaid Expansion' in North Carolina.
These are substantial numbers of jobs, especially for an economy that only managed to add 72,000 in total last year.