Burton’s Detail Oriented Approach is One We’ll All Miss

Charlie Arlinghaus

October 30, 2013

As originally published in the New Hampshire Union Leader

Ray Burton’s political legacy is unusual and unique. Burton made his mark over almost forty years as a public figure like no other in an institution that doesn’t exist anywhere else. While there is much other politicians would do well to copy, it is unlikely he will ever be replaced or duplicated and the state will be poorer because of it.

As America celebrated its bicentennial, Ray Burton was elected for the first of a record 18 times to an office that predates the United States and has now vanished in every other state. Ray’s attention to the details of politics mirrors the detail oriented focus of the institution he serves.

New Hampshire’s Executive Council is a vestige of the old royal councils that existed in England and all of her colonies. One by one the state’s around us eliminated their councils. Maine’s was eliminated in 1975. There is still a council in Massachusetts but it is largely ceremonial.

In New Hampshire, an executive council with five members elected in districts of about 265,000 people must confirm gubernatorial appointments not just for department heads but for hundreds of deputies, division directors, bureau chiefs and oversight board members. In addition, and uniquely, they must approve transfers of funds, contracts, and expenditures greater than $10,000 for the entire five billion dollar state budget.

That level of detail can be tedium for some but puts New Hampshire’s state government under the microscope at a more detailed level than most states.

Ray Burton has become legendary for embracing the detail to the benefit of his North Country district and for making that the defining aspect of his political life and reputation.

Today, most politicians carve out a name in one area and then jockey to parlay that into something else or try to climb the political greasy pole. In forty years, Ray Burton never had a shadow campaign for governor, a manufactured congressional boomlet, or seemed to be jockeying for some lucrative appointment. Instead he became known more and more as the voice and presence of the North Country.

Elected to represent the North of the state, he moved the field of play for the council from the old chamber inside the State House to the mountains and valleys of the state at large.

While the districts are equal in population, Burton’s district is geographically more than half the state. Nonetheless, it is not possible to attend an event of any sort with more than a handful of people anywhere in his district without bumping into Ray Burton. His presence at so many events should be surprising but has come to be expected.

Although Ray always campaigns “as if he’s five votes behind,” he hasn’t had a close election in decades and his frenetic pace is not electoral in nature. His election is assured but just as the council immerses itself in the details of the state so Ray immerses himself in the details of his district. He’s not running for re-election when he goes everywhere instead he’s like the mayor of a giant swath of territory making sure that every pothole gets filled and every bridge is on the list.

When most politicians enter a room people ask “what’s he running for?” and smile politely until that guy leaves and we get on with our business. But Ray’s presence was different. His speeches were never about him but about making sure people knew what was happening and that he could be counted on if they needed help. Tellingly, his retirement announcement this week makes sure people know they can contact his office for anything they need even as he’s battling cancer.

Burton’s humility and dedication to service is unusual in politicians today. It is easy to describe him as old fashioned as if he’s an anachronism and a bit of a switchboard operator in an iPhone world. But that misses what Ray Burton is entirely.

Attention to detail is what modern politics lacks. Ray Burton wanted to know every issue in every town he represented. When the state develops its highway plan, he makes sure small town bridges aren’t overshadowed by large superhighways.

Too often, the biggest and most dramatic projects crowd out little ones that can make more of a difference at lower cost. Too often, powerful people from the biggest cities move to the top of appointment lists over good people from tiny towns far from the media centers.

 

The Ray Burton approach to detail isn’t archaic, it’s detail oriented. It is the opposite of modern blow dry politics in every good way. Ray’s retirement leaves a hole that must be filled and a personality we’re all going to miss.

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It is Time To Treat Politicians Like The Children They Are

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Charlie Arlinghaus

October 23, 2013

As originally published in the New Hampshire Union Leader

The federal government doesn’t work because it doesn’t have to. Politicians are not capable of compromise in a natural state. They only compromise – or at least seek some vague common ground – when they are required to and have no other choice. Right now, competing politicians can’t even talk to each because they aren’t working on the same problem. State politicians aren’t nobler than the federals. They just have a common goal imposed on them externally.

Washington has long been a dysfunctional circus. Sometimes a new personality enters the mix but the broad insanity continues along more or less the same lines. In recent years, the same insanity seems to occur but slightly more frequently.

Every few months, we are treated to cable news channels blaring very serious with dramatic concern about the latest fiscal cliff or impending government doom. Tax cuts may be about to expire, some automatic spending cut may be about to take place, or perhaps 18% of the federal government might shutdown.

People should be forgiven for thinking each one of these scenarios is partly real but mostly exaggerated for the sake of ratings wars among the half of a percent of the population who bothers paying attention to cable news stations.

I want to believe these are real crises but we seem to have one every few months and they all sound about the same. One party or the other thinks we’ll have Armageddon if we don’t raise something or cut back something. And no one is quite sure the exact day of the supposed deadline. As the deadline approaches, someone clarifies that the actual deadline is a few weeks later than we first thought.

Ultimately, every crisis is averted. The solution is always about the same. As a temporary measure we do some slight variation of what we’ve been doing all along and it buys us another five or six months until we have the debate again. The cable channels will have new music and a new logo. The crisis will have a slightly different name but the big picture is about the same: nothing much changes.

Congress has some trouble changing because this is what they do. They all walk around a really nice old building surrounded by sycophantic staff holding their bags, an array of servants rarely seen outside Downton Abbey, and a very serious press corps talking to them in hushed tones about how statesmanlike they are compared to the other people who are causing the problem. It’s all very intoxicating and theatrical.

What they lack is an agreement on what exactly their job is. These fiscal cliffs all have a nominal deadline but it’s not clear what must be accomplished before the deadline. You would be excused for thinking they had to produce a budget, a balanced and binding document detailing spending and the revenues to pay for that spending. This is what states produce and it makes them functional even when they hate each other every bit as much as the federal patricians do.

But at the federal level we move from one stopgap to another, one temporary fix to another. There are no requirements or real deadlines.

This is their ultimate failure. They don’t act because they don’t have to act. For a politician, nothing is as painful as having to balance a budget. It involves saying no. Not everything can be done. Decisions have to be made, priorities balanced, and someone will be unhappy. No politician in his natural state wants to balance a budget. They do it at the state level because they are forced to. By a date certain, a balanced budget must be passed. No ifs, ands, or buts. If they fail, generally speaking the lower, pre-inflation level of spending for each agency and program continues. Saying yes to a couple of things always trumps saying no to everything so they act.

At the federal level, the consequence of not acting is happy. No decisions, fewer angry people, and all the hard stuff left for future generations. It is conventional wisdom among the establishment of both parties now that actually balancing the budget is both impossible and unnecessary.

Ultimately, federal politicians are children and they need to be treated like children. They need rules imposed on them from the outside. A balanced budget amendment shouldn’t be needed but it is. They need to have a goal imposed on them because they can’t be trusted to do anything responsible.

The sooner we start treating them like adolescents, the sooner they might clean their room.

 

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How Political Brinksmanship Will Lead to the Bland

Charlie Arlinghaus

October 2, 2013

As originally published in the New Hampshire Union Leader

We are treated this week to the news that federal politicians of both parties are quite often unable to discuss issues like adults. The quasi-shutdown of the government is the inevitable result of two groups trying very hard to disagree.

On Tuesday, the latest federal deadline came and went the Democratic Senate and Republican House unable to agree on a temporary budget extension. While some news stations treated this as if it were some sort of apocalyptic end of civilization, the truth is slightly less scary. Programs deemed essential, necessary for security, the protection of property, and most major entitlement programs operate unabated. More than 80% of federal employees will still be on the job.

Nonetheless, the country will operate for a brief period without a budget for the first time in 17 years. Although it’s worth noting that in the twenty years prior to that there were 17 shutdowns.

The fight between the House and Senate stems around whether the next temporary budget (Congress has trouble actually budgeting so we needs lots of temporary budgets) should be a clean bill or not. Bills in Congress are generally laden with all sorts of unrelated items, partly as a sort of compromise. To get you to support my idea, we add it into a bill with something else you may care about.

There is no obvious general rule about whether legislatures, federal or state, should govern this way. In divided governments of the sort we have in both Washington and Concord today, some sort of negotiation is necessary and the final product will rarely be ideal for both sides.

Politicians tend to want as narrow a bill as possible if they believe their opposite number can be forced by circumstance to accept something he doesn’t really want. I am fond of quoting Margaret Thatcher’s compelling lament about consensus: “To me consensus seems to be the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects.”

The difficulty in finding so-called consensus is just as Thatcher described. Generally, I expect you to abandon what you believe in so that we can do some subset of what I want. I don’t want compromise, I want to get a lot and give up nothing.

The debate over how narrowly constructed a bill should be is that sort of consensus-seeking. Quite often a politician insisting on a clean bill is just as intransigent as one trying to add his pet project to the bill. There is one thing I want to do and I won’t entertain a discussion of anything else.

Sometimes, a political or policy debate occurs in a cleaner environment. At the state level gambling is one of the issues. Gambling doesn’t have to happen and not doing it today doesn’t forestall the option of doing it in the future. There isn’t a window of opportunity we miss. So that debate tends to be self-contained.

Things like budgets and debt ceilings are different. At the federal level, there is a fixed deadline that causes a rush. It can be used by both sides. One side can insist on other issues of importance to them being dealt with in exchange for avoiding the latest fiscal cliff. The other side, because there is another deadline, can refuse the other discussion and insist that no other issues be allowed in.

If there is to be a deal, the deal probably can’t be clean. But it also can’t be a hostage negotiation where one side is asked to accept things they can’t possibly agree to or to which they are fundamentally opposed.

When both sides are relishing a fight, sometimes the honest deal gets lost. Republicans are eager to fight the next election on the very unpopular ObamaCare law and so continually inject it. Democrats refuse to consider anything because they think the partial shutdown will be blamed on Republicans and distract from the unpopular ObamaCare. Each side thinks it is served by its current course of action.

Ideally, every bill would be narrow and discretely focused with no gamesmanship. But that’s impossible in a world of divided government. A good compromise would include something we each want that doesn’t violate fundamental principles. Sadly, the usual path is the one Margaret Thatcher feared and we only agree on the futility of the final product.

 

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Picking Winners and Losers in the Exchange

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Charlie Arlinghaus

September 26, 2013

As originally published in the New Hampshire Union Leader

The government-sponsored insurance plan offered through the Obamacare exchange has come under fire this week for leaving behind some of the hospitals in the state to provide a competitive advantage to the others. People naturally bristle at the government picking winners and losers through its plan, but the situation is more complicated than it first appeared.

Under the new federal health care law, every state must have an “exchange” to offer subsidized health insurance. The latest public relations spin would change the name of these exchanges to “marketplaces” but recent events have revealed they aren’t marketplaces and aren’t subject to market forces.

In New Hampshire, only one company signed up to offer the policies to be subsidized through the exchange. That company, Anthem, is the dominant player in the regular market, issuing 56 percent of policies.

Some had hoped for competition in the new federal exchange, but there would be none. To make matters worse, the new plan, with its additional mandates and required coverages, would manage to find affordability only by limiting access to certain providers. If your doctor or hospital is in, you’re happy. But nearly half of the hospitals (and the doctors they own — most doctor’s practices are owned by hospitals) are left behind.

Let’s start by saying that limited networks are a perfectly reasonable way to save some money. Providers are limited as a way to get them to accept below-market prices. Even so, rates will increase for most consumers. Anecdotally, one consumer I know will see his rates double even with none of his doctors in the plan any longer. On the other hand, he’ll get new coverage he doesn’t want, but still has to pay for.

We’re told by Anthem that despite the increased costs over your old plan, the new, limited plan has costs that are 25 percent lower — not lower than what they were but than what they would have otherwise been.

So Anthem chose to offer a plan with limited providers who have all agreed to accept a much lower payment than they would currently receive for private insurance. Currently, Medicaid pays roughly 1/3 of the price charged to regular consumers. The new plan would be closer to Medicaid than regular insurance.

Why would a hospital accept lower payments? First of all, because if the new health care law is unchanged, the exchange will occupy a greater and greater share of the insurance market each year. It’s easier to be in from the beginning than to be left behind and try to claw your way in from the outside. Second, by leaving so many providers behind, those favored by the government-sponsored plan will get a greater share. A hospital can make less money on each patient if it has more of them and its regional competitors start to wither away.

There would be much less consternation about this plan if there were an alternative in the exchange. If one competitor chose to offer a limited network, consumers with such an interest could instead move to a perhaps more expensive but less-limited network. But consumers have no such choice. There is one company offering plans that vary slightly by deductible size. There are no alternatives, no choices, no competition.

At first, public reports seemed to indicate that the hospital left behind had opted out themselves because they chose not to accept lower rates. Instead, we learn that the opposite is true. Hospitals perfectly willing to accept lower rates were nonetheless not allowed in.

Last weekend on Josh McElveen’s public affairs show on WMUR-TV, we saw the head of the hospital in Rochester (New Hampshire’s sixth-largest community) tell Anthem’s CEO he was willing to accept her rates and ask to be allowed onto the list. She pointedly ducked the question, but the answer is clearly no.

The hospitals cut out of the plan are left with two choices: hope the new system fails miserably and is repealed, or quietly go out of business. Consumers like you and me can look forward to higher insurance rates and only hope that our providers make it onto the government approved list.

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Wanted: grown-ups in N.H. politics

By Grant Bosse

September 22, 2013

As orginally published in the Concord Monitor

In my grouchier moments, I often complain about how the New Hampshire Legislature wastes so much time and energy debating do-nothing resolutions, like designating the Official State Vegetable or Official State Color. These bills often stem from requests from Cub Scouts or elementary school classes, and I bemoan the fact that fourth-graders are in charge at the State House.

I’m beginning to think fourth-graders would be an improvement.

The immaturity and irresponsibility that passes for politics today is staggering. I’ve got nothing against snarky comments and the occasional stunt to draw attention to an issue. But it’s gotten to the point that we just can’t take politicians seriously.

Take for instance the false outrage when health care expert Avik Roy proposed a low-cost, high-deductible plan as an alternative to expanding current Medicaid benefits to higher-income people. Roy presented the broad outlines of such a plan before the Commission to Study the Expansion of Medicaid Eligibility, which you would think would be interested in studying the costs and benefits of various way to expand Medicaid eligibility.

Apparently not. Roy’s testimony hadn’t stop echoing through the halls of the Legislative Office Building before the high-pitched shrieks of Democrats drowned it out.

I’m not saying they have to agree with Roy’s ideas. They clearly prefer massive increases in federal entitlements to any consumer-based approach to lowering health care costs, and that’s okay. But people purporting to study such a complex subject should avoid instantaneous demonization of new ideas, unless they don’t care about their own credibility.

Perhaps the most juvenile political spat of the last week broke out following the announcement that Maryland Gov. Martin O’Malley would headline the New Hampshire Democratic Party’s Jefferson-Jackson Dinner in November. The Republican State Committee sniped that Democrats were bringing in a liberal income-tax supporter and “third-tier presidential candidate.” Democratic Party Chairman Ray Buckley responded by mocking a GOP fundraiser with former Massachusetts governor Mitt Romney. I wish they would both go to their rooms so the grown-ups could finish talking.

First of all, New Hampshire loves third-tier presidential candidates. They keep our hotels and political hacks in business. Second, O’Malley served as inspiration for The Wire’s Tommy Carcetti, one of the best television characters ever created. The smart, ambitious and casually corrupt Carcetti illustrated the failure of political institutions on a show dedicated to the failure of institutions. And finally, I don’t care enough about party heads bickering about ticket sales to have a third point.

Of course, the grandstanding isn’t confined to New Hampshire. In Washington, Sen. Ted Cruz is attempting to set the international indoor record. The Texas Republican has jumped out in front of the defund ObamaCare effort and promises to block any bill that keeps government running unless it also strips funding for the health care law.

Cruz has spent the past month building himself up as a champion of conservative principles beset by a herd of RINOs. But now he admits that he doesn’t have the votes to prevent Harry Reid and his Democratic colleagues from restoring ObamaCare funding to the continuing resolution passed by the House this week.

Lots of people have been trying to tell this to Cruz, but he wasn’t listening. Faced with certain defeat on the Senate floor, Cruz now insists that his doomed plan can work. If the House and Senate end up shutting down the government, Cruz thinks the public will blame President Obama for refusing a sign a bill that never made it to his desk.

Cruz is making it harder to get rid of a law that’s reached Michael Bay levels of disaster. ObamaCare should be defunded, delayed and eventually repealed. I don’t disagree with his goal. But his “hold my breath until I turn blue” parliamentary tactics discredit that position.

But even Cruz hasn’t been acting as childishly as our own Sen. Jeanne Shaheen. As former state senator Jim Rubens announced his campaign to challenge Shaheen next year, the Democrat’s camp was shamelessly peddling a groundless smear that Rubens blamed working women for a rise in mass shootings.

Rubens, a hardcore policy wonk known for his expertise on electric rates, school choice and gambling, wrote a book a few years ago called OverSuccess. It includes a chapter arguing that men face greater social pressure to succeed, and increased failure has contributed to increased male violence, among other social ills. I’m not persuaded by Rubens’s conclusions, but it’s a thoroughly researched, thoughtfully presented attempt to tackle real problems.

Shaheen’s camp responded by calling Rubens a sexist pig. Clearly, she’d prefer to be running against Todd Akin. She should be ashamed. But this is the same candidate who once – in a flap about legislation to ban “crush” videos – accused Sen. John E. Sununu of supporting kitten killing. Maybe she just doesn’t expect anyone to take her seriously.

– See more at: http://newhampshire.watchdog.org/12272/wanted-grown-ups-in-n-h-politics/#sthash.ddeljQHA.dpuf

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We Need to End Our Love Affair With Elections

Charlie Arlinghaus

September 18, 2013

As originally published in the New Hampshire Union Leader

Political reporters, like the rest of us, tend to be schizophrenic and our actions often belie our words. We pretend to hate the perpetual campaign cycle, profess a longing for the days of shorter campaigns, but we don’t really mean it. What we actually want is a never ending campaign and endless stories about political horse races to ensure that no one ever discusses public policy in any meaningful way again.

It is conceivable that I am guilty of a modicum of exaggeration here. But you’ll forgive me if I take a break from boring you with tirades about policy this week and instead attempt to make a case for trying to delay as long as possible a discussion of who’s running for what.

For decades we’ve heard stories about the perpetual campaign. It is supposed to be bad for democracy that campaigns never seem to end. The day after the last election, we start to speculate who will run in the one that is only 730 days away. Presidential exploratory forays for 2016 begin before the 2012 election results have been validated by the Electoral College.

Wouldn’t it be better, we’re asked, if the United States followed some European model where an election campaign is announced for a precise and very short period? The British election campaign in 2012 lasted precisely 30 days from when the writ was dropped (a wonderful, archaic expression) to election day. Never mind that the speculation and shadow campaign had been going on for years.

In state elections, so many political reporters (and perhaps also some policy wonks) express some degree of hope that electoral politics won’t interfere in the debates over budgets and gambling and other issues of the day.

Yet our actions suggest we don’t really mean it. No one wants to engage in substantive discussion. It’s boring and, if taken out of context, might be misunderstood and used against people in the next election. Instead, even here in New Hampshire where we pompously consider ourselves among the most noble of civic beasts, we speculate endlessly about elections and who’s running for what.

The next election is more than a year away but already one of the political parties is whispered about as being pathetic and disoriented because it doesn’t seem to possess announced challengers to major office incumbents, at least not ones who are household names.

We say we want the campaign to last a few months instead of more than a year yet we are already antsy when well known and well funded candidates aren’t running around and giving speeches 14 months before election day.

Yet campaigns don’t have to be long and drawn out affairs. In 1996, nothing much was happening until Steve Merrill announced in April that he wouldn’t run for re-election. It took a couple months for other politicians to sort themselves out, talk to staff and organize campaigns. No started hiring, raising money, or setting up shop much before June — a bare five months before the general election.

It was wonderful. We were spared a year of insider speculation, jockeying, and shadow boxing. Yet here we are nine months before that time period and there are many hands being wrung in despair all around the political world. No one has declared for governor. Familiar faces that are apparently considering running for Senate or Congress have yet to decide. None has hired staff or is running an active campaign.

Can you color me happy about this revolting development? I like to gossip as much as the next pathetic political junkie about who might run or not but I’m not proud of it. It is much too early to obsess about polls, elections, and horse races. Elections are not about the race and the winner. They are about what happens next or ought to be.

When I worked in electoral politics, I became enormously frustrated when a very effective and successful colleague said “I don’t care what these people do once they get elected, I just want the win.” It was maddening because I believe the only reason to care about elections is because they affect policy choices. I don’t want you to win unless it matters.

Yet the general public seems to have little potential for showing any interest in what exactly the government is doing. That seems unlikely to change anytime before we make Miley Cyrus commissioner of Health and Human Services.

None of the major election day races has taken shape yet. Huzzah. I hope you’ll join me in rooting for longer delays and shorter races.

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New Hampshire’s gloomy August jobs report

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Josh Elliott-Traficante

September, 2013

While the unemployment rate in New Hampshire dropped to 5.0% in August, the decline was not caused by an increase in employment, but by a decrease in the size of the workforce. According to the Household Survey, the number of employed residents dropped by 120, the number of unemployed residents dropped by 650, while the labor force as a whole shrank by 770.

The August data continues a trend, seen in the New Hampshire labor market over the last few months, of declining unemployment coupled with a shrinking labor force. This is not unique to the state however; this trend is seen in the national data as well.

This means that discouraged workers are still dropping out of the labor force largely accounting for recent “improvements” in the unemployment rate.

Turning to the Establishment Survey Data, the state had a net loss of 1,000 jobs. The total number of private sector jobs declined by 3,200 and the public sector grew by 2,200.  Areas seeing the biggest losses were Construction (-500), Professional and Business Services (-1,100) and Leisure and Hospitality (-1,100). Sectors seeing the most growth were Local Government (+2,400) and Wholesale Trade (+300).

The Manchester area saw no change in employment in the month of August, while Nashua added 700 jobs, Rochester-Dover: 200 and Portsmouth lost 700.

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Unemployment Drops in August for all the wrong reasons…..again

By Josh Elliott-Traficante

September 6, 2013

The August jobs report seemed rosy on the surface; unemployment dropped from 7.4% to 7.3%, and 169,000 jobs were added. Looking closer at the data we see that this is anything but good news.

While unemployment did drop by just shy of 200,000, the size of the labor force also contracted by 300,000 resulting in more than 500,000 people no longer seeking work. As detailed in earlier posts on the subject, all of the attempts to chalk up this decline to baby boomers retiring, or some other, non-economic phenomena can easily disproved by the data. In fact, most baby boomers are delaying retirement, resulting in an above average labor force participation ratio for that age band. So rather than dragging down the national ratio, they are helping to increase it.

The Labor Force Participation Rate, the measure of how many non-institutionalized, non-enlisted Americans are in the workforce, hit a record low of 63.2%. The last time the rate was this low was August of 1978. At the time, the rate was surging to new highs as many women entered the workforce for the first time. In 2013 on the other hand, the rate has been hovering at near, or hitting in the case of August, record lows. Some decent improvement had been made in the first half of the year; however, all of the gains made for the year have been given up and then some.

Turning to the alternative measures of unemployment, the U-4 rate decreased from 8.0% to 7.8%, U-5 from 8.8% to 8.7% and the U-6 from 14.0% to 13.7%

Oddly enough, the number of people “out of the labor force, but would like a job” actually dropped by roughly 335,000. Why this is the case is not clear. There are some indicators that suggest that it could be a ‘back to school’ effect, but the data is mixed.

The Establishment Survey showed that 169,000 jobs were created in August, of which 152,000 were private sector positions. Industries showing the biggest gains were Retail Trade (+44,000), Healthcare (+38,200), and Food Services (+21,200). Sectors seeing the largest losses were Information (-18,000) and Non-Durable Goods Manufacturing (-8,000). This continues the trend of small numbers of layoffs, combined with low levels of hiring. If the job growth seen in August continued uniformly, to return to 5% unemployment and a pre-recession labor force participation rate, it would take roughly 13 years.

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On economic stimulus, Sweden sets a good example

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Charlie Arlinghaus

August 21, 2013

As originally published in the New Hampshire Union Leader

Both the state and the country can better focus their efforts on budgets and economic development by following the example and the reasoning of that bastion of conservative economics called Sweden.

In the face of economic crisis, advocates of what they call “stimulus” suggest it is the only alternative to the horrible-sounding “austerity” — as if our only two choices are to give ourselves completely to bureaucrats and administrators to spend as they wish or to subsist on bread and water.

The finance minister of Sweden chose to reject both choices. Anders Borg of Sweden’s right-of-center Moderate Party looks like American magician Penn Jilette, complete with ponytail and earring. But he sounds like Milton Friedman (to be fair, on economics, so does the libertarian-minded Jilette).

While most of Southern Europe got into trouble following the advice of professional advice-givers like the International Monetary Fund, Sweden chose to focus on jobs. According to Borg, “we can see that very little of the stimulus went to the economy. But they are stuck with the debt.” Sweden chose to permanently cut taxes to bring its economy back. Their goal was to create a climate to attract business owners and entrepreneurs.

“Ownership is a production factor. Entrepreneurs are a production factor,” Borg noted. “It is problematic if you drive out entrepreneurs from your country because they are the source of job creation.”

Sweden cut taxes four times (and has proposed a fifth cut this week). After a 20 percent cut in its corporate tax rates, Sweden’s top rate is about half of ours.

The results are worth noting. Sweden’s economic growth has been dramatically higher than the rest of the Euro region’s despite labor costs that, while lower than the European average, are 20 percent higher than in Germany and 40 percent higher than in the United States. In the last two years, the Swedish Kroner has gained 35 percent compared to the Euro.

Borg doesn’t see growth and tax cuts as inconsistent with fighting deficits. His advice to “keep dealing with the deficit because deficits destroy everything else” is consistent with their experience. Swedish debt has declined by 50 percent as a share of the economy during a time when U.S. debt has more than doubled by the same measure.

This idea is neither new nor exclusively Swedish. After the relatively anemic growth of the 1950s and early 1960s, President Kennedy proposed a permanent cut to income tax and corporate tax rates in the United States. Kennedy said “every dollar that is released from taxation that is spent or invested will help create a new job and a new salary. And these new jobs and new salaries can create other jobs and other salaries and more growth for an expanding American economy.”

Kennedy specifically touted his 25 percent cut to the top rate as a means to turn budgetary deficits into budgetary surpluses. In fact, income tax collections went up by 85 percent in the first five years after the cuts came into effect. Real economic growth was twice the post-war average during the nine-year boom that followed.

What the Democratic Party’s Kennedy and the Moderate Party’s Borg have in common is a focus on job growth. More jobs for more people is a better stimulus than any plan to give this department or that commission some spending that was denied in the last budget debate.
At the federal level, this means taxes should go down, not up. At the state level, it means fewer programs and fewer regulations. The most innovative program is one that reduces barriers to entrepreneurs and job creators investing their own money here instead of somewhere else.

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New Hampshire Unemployment Remains at 5.1% in July

Underlying Weaknesses Remain

Josh Elliott-Traficante

The unemployment rate for New Hampshire was 5.1% for the month of July, remaining unchanged from June. According to the Household Survey, the number of employed residents fell by 390, the number of unemployed fell by 460, while the labor force has contracted by 850. This contraction in the labor force is represented in the .1 percentage point drop in the labor force participation rate to 65.7% from 65.8% the month prior.

The recent decline in the size of the labor force, as well as the labor force participation ratio in New Hampshire over the past several months has appeared in the national data as well.

A shrinking labor force is troubling because it indicates that people are discouraged at their prospects and have given up looking for work. While the state is doing better than it had been in the depths of the recession, the retreat is disconcerting.

The Establishment Survey showed the loss of 3,200 jobs across the state, reflecting the weaknesses seen in the Household Survey data. These jobs losses were largely concentrated in Retail Trade (-1,000) and Local Government (-4,100). Sectors seeing growth included Education (+900), Financial Activities (+500) and Construction (+400).

It is worth noting that the recent closures of all of the state’s Stop and Shop locations as well as the closing of 6 Shaw’s stores are not represented in this data. Due to the timing of layoffs, they will appear in subsequent jobs numbers.

Turning to the cities, Rochester-Dover gained 500 jobs, while Manchester and Portsmouth each added 400 jobs. Nashua on the other hand lost 300.

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