Senator Tom Harkin told the Des Moines Register and Radio Iowa today that he will vote against confirming Ben Bernanke to another term as chairman of the Federal Reserve. Radio Iowa quoted him as saying he’s “tired of being held hostage by Wall Street”:
“I just think Mr. Bernanke is going to continue the policy of The Fed of taking care of the big financial institutions and to heck with Main Street,” Harkin says.
Harkin faults Bernanke for the handling of the Wall Street bailout. “Mr. Bernanke gave away trillions of dollars of taxpayers’ money to AIG at almost zero percent interest rate, and then they turned around and they held their counterparties – French, Germans, Swiss and many others – harmless. They didn’t have to take a hair cut at all,” Harkin says, “They got paid off in full and yet we (taxpayers) lost trillions.” […]
“I’ve had it with being told that some bank is too big to fail and I’ve had it with being told that someone, some person is so important that we have to have that person in this position. That’s nonsense,” Harkin says.
Meanwhile, Senator Chuck Grassley told the Des Moines Register, “I think I made a decision [on Bernanke] […] But I don’t think I’ll announce it.” Grassley went on to criticize the Fed for doing too little to fight inflation, suggesting we could be on a path to hyper-inflation like we had in 1979.
With unemployment at a 26-year high, I’m surprised Grassley is so concerned about hyper-inflation. Economists, correct me if I’m wrong, but isn’t deflation a greater risk right now?
This month Democratic Senator Byron Dorgan predicted that the Senate will pass a stand-alone energy bill to expand energy production in various ways without capping greenhouse gas emissions. Unfortunately, you can count on the Senate to throw more money toward boosting fossil fuel production than renewable energy.
Last year dozens of environmental groups focused their staff energy and mobilized volunteers to advocate for a sweeping climate change bill. This year we need to focus resources on where the real battle lies. Instead of urging citizens to sign petitions and call their senators about cap-and-trade, which is looking like a dead letter, we need to fight for the strongest possible renewable electricity standard in the energy bill.
One complicating factor: some environmental groups have received grants to support advocacy on climate change legislation. I would encourage charitable foundations and other large donors to be flexible about how such money is spent. Cap-and-trade is going nowhere. Let environmentalists focus on the real fights in Congress this year.
Any relevant thoughts are welcome in this thread.
Final note: Murkowski is at war with the EPA even though she represents Alaska, one of the states most affected by global warming. Is she stupid, corrupt or both?
President Obama will propose freezing non-security discretionary government spending for the next three years, a sweeping plan to attempt deficit reduction that will save taxpayers $250 billion over 10 years.
When the administration releases its budget next week, the discretionary spending for government agencies from Health and Human Services to the Department of Treasury will be frozen at its 2010 level in fiscal years 2011, 2012 and 2013. […]
Exempted from the freeze would be Pentagon funding, and the budgets for Veterans Affairs and Homeland Security.
Instead of delivering his State of the Union address this week, Barack Obama may as well hold up a big sign that says, “I want Democrats to lose Congress.” Over at Daily Kos, eugene explains why:
That will be the equivalent of FDR’s boneheaded move in 1937 to pull back on government spending. The result was a major recession that caused conservatives to win a lot of seats in the 1938 election and brought the New Deal to an end.
Yet FDR had already won his second term. Obama, on the other hand, is embracing a policy that has been proven to fail even before the midterm elections.
If he thinks this is even a realistic or economically feasible policy, he is out of his mind. If he thinks this will save his and Democrats’ political bacon, he is very badly mistaken. Only greater government spending – MUCH greater spending – will pull us out of recession, create jobs, and produce lasting recovery.
Without greater spending, Obama is implying he is willing to live with high unemployment for the remainder of his first term. If one wanted to deal with the deficit, he could follow Bill Clinton’s model of producing economic growth that would close the deficit in future years.
Economically, this course would be a disaster, but politically it’s even a worse move. During the presidential campaign, Obama promised hundreds of times that we would be able to spend more on various domestic priorities because we wouldn’t be spending $200 billion a year in Iraq. With the escalation in Afghanistan, the combined cost of our commitments there and in Iraq will now exceed Bush administration levels, and Obama isn’t cutting fat from other areas in the Pentagon budget to make up for it.
It’s as if Obama wants Democrats to stay home this November.
A month ago, I would have said Republicans had a 10 to 20 percent chance of retaking the House and zero chance of retaking the Senate. The Massachusetts election has already prompted several Democratic incumbents to retire and prospective challengers not to run. If Obama puts deficit reduction ahead of job creation this year, I give the GOP a good chance of winning the House and an outside shot at taking the Senate (which would require a nine-seat gain, assuming Joe Lieberman would switch parties).
Obama told Diane Sawyer today, “I’d rather be a really good one-term president than a mediocre two-term president.” At this rate, he’ll be neither.
UPDATE: So some people are claiming this is no big deal because the spending freeze isn’t an across-the-board freeze, “would apply to a relatively small portion of the federal budget” and locks in a bunch of spending increases from last year. I am not interested in endlessly increasing the defense budget while holding the line on the EPA, Energy, Transportation, HUD and other areas. That’s not the agenda Obama campaigned on, and it’s not smart from any perspective.
Chris Bowers raises a better point, which is that “the people who actually write spending bills–members of the House Appropriation and Budget committees–say they won’t be freezing or cutting social spending.” So this is just window dressing for the State of the Union to show the wise men of the beltway that Obama is very, very concerned about the deficit. Still not the kind of leadership we need from our president.
The Iowa Renewable Energy Association announced Friday that it will receive $100,000 in federal stimulus money awarded by the Iowa Office of Energy Independence.
I-Renew will receive $100,000 under the training and information program to expand its staff in order to provide training related to wind, solar, and solar thermal in at least 24 workshops over the next two years. Introductory and advance level courses will be offered. […]
In addition, I-Renew will coordinate with Midwest Renewable Energy Association (MREA) to ensure that workshops ofÂfered by I-Renew fulfill the prerequisites for the MREA intermediate and advanced offerings.
For years, I-RENEW has run workshops for homeowners on installing renewable energy technology. The new workshop series will focus on training professional installers, who will be able to provide that service for many more Iowa homes and buildings. Lots of people who aren’t DIY types may be interested in having a wind turbine or solar panels on their property.
This program is only one small part of the federal stimulus bill, but it will yield long-term benefits in terms of cost and energy savings.
President Obama announced today that the Department of Energy will issue $2.3 billion in clean energy manufacturing tax credits from the American Recovery and Reinvestment Act (ARRA) – the vast majority of which will be used to spur more energy efficient buildings, and wind and solar power. 183 projects in 43 states will receive tax credits to help create tens of thousands of high quality jobs and increase domestic manufacturing of advanced clean energy technologies. Among the leading recipients in Iowa is TPI Composites in Newton, which will get 3.9 million dollars to expand its production of wind turbine blades. (A list of all Iowa's recipients is available here.)
TPI's Newton plant, formerly a Maytag washing machine factory, is symbolic of clean energy’s potential to transform and revitalize Iowa’s manufacturing base and was the site of the President's 2009 Earth Day address. American Railcar Industries in Fort Dodge hopes to follow TPI’s lead and will receive 5.35 million dollars to transform a local rail car plant to produce 500 steel towers a year for large-scale commercial wind turbines.
Eric Nost, Environment Iowa state associate, released the following statement in response:
“Energy efficiency, wind, and solar power have the potential to revive the nation's economy, create millions of good jobs, and stop global warming. The President’s announcement today will help Iowa continue to lead the way toward a new, clean energy future.
“While the Administration’s actions and the American Recovery and Reinvestment Act are substantial first steps, Congress must follow the President’s lead and take immediate action. In order to create jobs and heal our ailing economy, right now the Senate needs to pass comprehensive clean energy and global warming legislation.
“We thank Senator Harkin for investing in Iowa through the ARRA and urge him to work now to pass strong legislation that further encourages these kinds of clean energy projects and the jobs they create, makes us more energy independent, and cuts pollution fast enough to stave off the worst effects of global warming.”
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Environment Iowa is a state-wide, citizen-funded advocacy organization working for clean air, clean water, and open spaces.
I expected 2009 to be a relatively quiet year in Iowa politics, but was I ever wrong.
The governor’s race heated up, state revenues melted down, key bills lived and died during the legislative session, and the Iowa Supreme Court’s unanimous ruling in Varnum v Brien became one of this state’s major events of the decade.
After the jump I’ve posted links to Bleeding Heartland’s coverage of Iowa politics from January through June 2009. Any comments about the year that passed are welcome in this thread.
Although I wrote a lot of posts last year, there were many important stories I didn’t manage to cover. I recommend reading Iowa Independent’s compilation of “Iowa’s most overlooked and under reported stories of 2009,” as well as that blog’s review of “stories that will continue to impact Iowa in 2010.”
Following up on the diary I posted this morning, this post compiles links to Bleeding Heartland’s coverage of national politics from July through December 2009. Health care reform was again the number one topic. I wish there had been a happy ending.
It took me a week longer than I anticipated, but I finally finished compiling links to Bleeding Heartland’s coverage from last year. This post and part 2, coming later today, include stories on national politics, mostly relating to Congress and Barack Obama’s administration. Diaries reviewing Iowa politics in 2009 will come soon.
One thing struck me while compiling this post: on all of the House bills I covered here during 2009, Democrats Leonard Boswell, Bruce Braley and Dave Loebsack voted the same way. That was a big change from 2007 and 2008, when Blue Dog Boswell voted with Republicans and against the majority of the Democratic caucus on many key bills.
No federal policy issue inspired more posts last year than health care reform. Rereading my earlier, guardedly hopeful pieces was depressing in light of the mess the health care reform bill has become. I was never optimistic about getting a strong public health insurance option through Congress, but I thought we had a chance to pass a very good bill. If I had anticipated the magnitude of the Democratic sellout on so many aspects of reform in addition to the public option, I wouldn’t have spent so many hours writing about this issue. I can’t say I wasn’t warned (and warned), though.
Links to stories from January through June 2009 are after the jump. Any thoughts about last year’s political events are welcome in this thread.
Key Democratic lawmakers will push for new limits on payday lending during the Iowa legislature’s upcoming session, which starts on January 12. State Senator Joe Bolkcom, who chairs the Senate Ways and Means Committee, called for restricting the “loan shark rates” the industry typically charges. The Iowa Catholic Conference also supports limiting the interest rate for payday loans to 36 percent. That’s welcome news. Although 36 percent interest is still quite high, it’s a lot better than the 300 to 400 percent interest rates payday lenders are in effect currently charging customers.
In theory, it shouldn’t be hard for House Democrats to find 51 votes out of their 56-member caucus to pass payday lending reform. However, at yesterday’s press conference with Senator Bolkcom, State Representative Janet Petersen expressed doubt that an interest rate cap could pass the House Commerce Committee, which she chairs.
I hope we’re not in for another round of a few Iowa House Democrats blocking legislation that would serve the public interest. More thoughts on this issue are after the jump.
An alert Bleeding Heartland reader got a recorded phone call around dinnertime today (Monday), featuring former Governor Terry Branstad.
Apparently there were a couple of questions about how Governor Chet Culver is doing and his handling of spending and the budget. Branstad’s recorded voice touted his own record on economic policy.
The call also asked if the listener would support a constitutional ammendment limiting marriage to between one man and one woman, and if the listener would vote for Branstad in the upcoming Republican primary.
According to my e-mail tipster, the call said it was paid for by the Branstad for Governor comittee, and gave a phone number as well as the address for Branstad’s campaign website.
This particular household has two registered Democrats and no registered Republicans, and the homeowner has had the same phone number for more than 15 years. Either the calling firm was using a bad list, or Branstad’s campaign is reaching out to find Democrats who aren’t happy with Culver.
Have any other Bleeding Heartland readers received this call? If so, please post a comment with details, or send me an e-mail at desmoinesdem AT yahoo.com.
UPDATE: Another reader tells me he got the call but hung up on it, and there are two registered Democrats in his household as well.
SECOND UPDATE: If Branstad’s campaign is trying to identify Democrats willing to cross over to vote for him in the Republican primary, it makes me wonder what their internal polling says about Branstad’s prospects against Bob Vander Plaats.
THIRD UPDATE: State Representative Tyler Olson of Cedar Rapids got the call too.
Not content to push for a balanced-budget constitutional amendment in his own state, Minnesota Governor Tim Pawlenty has endorsed the idea of a federal constitutional amendment to require Congress to pass balanced budgets every year. The Wall Street Journal’s Amy Merrick observes,
Previous efforts to pass a national balanced-budget amendment have foundered in Congress. Many lawmakers believe deficit spending can help boost the U.S. economy during downturns, and calls to balance the budget sometimes fade as other priorities surface.
It would be insane to restrict the federal government’s ability to run deficits during a recession. That’s not just something many members of Congress “believe,” it’s a consensus view among economists. But don’t worry, Pawlenty isn’t entirely rigid on the subject of deficit spending:
Mr. Pawlenty’s proposal for a federal amendment would include exceptions for war, natural disasters and other emergencies. The U.S. has been at war for most of the past decade.
No self-respecting Republican ever let spending worries stand in the way of a blank check for war.
Although it’s tempting to laugh at Pawlenty’s proposal, I think highlighting the budget amendment could boost his standing in the 2012 presidential race. His idea isn’t outside the GOP mainstream; leading Republicans proposed a federal spending freeze instead of the stimulus bill Congress passed in February. Republican politicians in Iowa have also embraced Hoovernomics.
The idea could prove popular with the GOP rank and file too. Mike Huckabee gained a lot of traction in Iowa during the summer of 2007 by being the only Republican to endorse the so-called “fair tax.” That idea is even wackier than a federal spending freeze during a recession, but many caucus-goers embraced it.
Any comments about Pawlenty’s prospects or the Republican presidential field are welcome in this thread.
“Leonard Boswell spent 2009 helping liberal Speaker Nancy Pelosi push a massive government takeover of health care, a cap-and-trade energy bill that will increase costs for Iowa workers, and a massive $787 billion pork-laden spending bill that he called a stimulus but that has not helped the Iowa economy. Tell him your New Year’s resolution is to watch his votes in 2010 to make sure he is voting for Iowa families, not the liberal agenda of the Democrat party leaders in Washington.”
For years, Republicans have trotted out versions of this script against Boswell: blah blah blah Nancy Pelosi blah blah blah liberal agenda blah blah blah Democrat Party. It hasn’t resonated before, so why would it work now?
Specifically, I don’t think they will get far running against the stimulus package. Even in a weak economy, Boswell will be able to point to dozens of programs from the stimulus bill that benefited Iowa families. He has brought money to the district through several other bills passed this year as well. The Republican alternative, passing no stimulus and freezing federal spending, would have made the recession far worse.
The health care bill doesn’t even contain a weak public insurance option, let alone a “government takeover.” I don’t dispute that there will be plenty for the Republicans to attack in that bill, but Boswell will be able to point to items that benefit Iowans, such as new Medicare reimbursement rates to benefit low-volume hospitals (including Grinnell Regional Medical Center and Skiff Medical Center in Newton).
Boswell fought for concessions in the climate change bill that weakened the bill from my perspective but will be touted by his campaign as protecting sectors of the Iowa economy. Anyway, many people’s utility bills are lower this winter because the recession has brought down natural gas prices.
It’s fine with me if the NRCC wants to drain its coffers by funding robocalls like this around the country. I doubt they will scare Boswell into retirement or succeed in branding him as a Washington liberal.
Chanukah’s over, but there’s still time to shop for Christmas presents.
Blog for Iowa highlighted 12 great locally-owned places to shop in Iowa. Many of them feature locally-produced foods and hand-made crafts. For those heading to Prairieland Herbs and Picket Fence Creamery near Woodward, I would recommend driving 10 minutes up the road to Northern Prairie Chevre. Their little store carries items from many other local businesses.
If you want toys, clothes or accessories for babies or small children, try out one of these Des Moines-area businesses:
The toy store on the lower level of Valley West mall
After the jump I’m re-posting a diary I wrote last December on no-clutter holiday gift ideas. Another way to support locally-owned businesses is to buy your friends or relatives services or entertainment that they might not treat themselves to or can’t afford.
Also consider donating to a local non-profit that means a lot to your loved one.
The story of the year was a weak economy that could have been much, much weaker. Thank the man who runs the Federal Reserve, our mild-mannered economic overlord
I wish I were joking, but here’s more from Time:
The overriding story of 2009 was the economy – the lousiness of it, and the fact that it wasn’t far lousier. It was a year of escalating layoffs, bankruptcies and foreclosures, the “new frugality” and the “new normal.” It was also a year of green shoots, a rebounding Dow and a fragile sense that the worst is over. Even the big political stories of 2009 – the struggles of the Democrats; the tea-party takeover of the Republicans; the stimulus; the deficit; GM and Chrysler; the backlash over bailouts and bonuses; the furious debates over health care, energy and financial regulation; the constant drumbeat of jobs, jobs, jobs – were, at heart, stories about the economy. And it’s Bernanke’s economy.
In 2009, Bernanke hurled unprecedented amounts of money into the banking system in unprecedented ways, while starting to lay the groundwork for the Fed’s eventual return to normality. He helped oversee the financial stress tests that finally calmed the markets, while launching a groundbreaking public relations campaign to demystify the Fed. Now that Obama has decided to keep him in his job, he has become a lightning rod in an intense national debate over the Fed as it approaches its second century.
But the main reason Ben Shalom Bernanke is TIME’s Person of the Year for 2009 is that he is the most important player guiding the world’s most important economy. His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world.
Nate Silver thinks that thinks any Democrat who opposes it is “batflippin’ crazy.” He posts a chart showing how a family of four earning $54,000 a year would get much more in subsidies if the bill goes through than if no bill passes.
I discuss a few problems with the bill and Silver’s analysis after the jump.
Obama proposed new spending for highway and bridge construction, for small business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extend economic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.
Making homes more energy efficient would not only create jobs, but would produce huge collateral benefits, as A Siegel explains at the Get Energy Smart Now blog. Money that homeowners and business owners save on utility bills is money they can spend on other goods and services.
Populist Caucus Chairman Bruce Braley (IA-01) and House Trade Working Group Chairman Mike Michaud (ME-02) wrote to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer today, urging them to make sure the jobs bill contains a strong “Buy American” provision. From a press release Braley’s office issued:
“Recently, as America has suffered the worst economic recession since the Great Depression, unemployment has risen and is now around 10 percent,” the letter reads. “We believe that the shipment of American jobs overseas is a factor in this rising unemployment. If we are going to pass a strong job creation bill then it only makes sense to include strong Buy American provisions, to further ensure that the jobs created as a result of this legislation are created within the United States.
“We have an obligation to create jobs in America. While some would argue that Buy American is nothing more than a trade protectionist label, it is clear that these provisions would equate to greater investment, and greater job-creation, within the U.S. In addition, Buy American provisions are perfectly legal under current trade agreements and many other nations use similar mechanisms to protect their domestic manufacturers. Therefore, we feel that it is entirely appropriate that this language be included in any upcoming job-creation measure, and we believe that this provision is essential to creating and retaining American jobs.
If the upcoming jobs bill contains aid to state and local governments, as the stimulus bill did, that could help Iowa legislators close the gap in the fiscal year 2011 budget. Republicans keep complaining about Iowa Democrats using federal transfers to balance the state budget, but they ignore the reality that deep cuts in state budgets are themselves a drag on the economy. State employee layoffs have a ripple effect in the private sector. The Center on Budget and Policy Priorities has estimated that without additional federal fiscal relief, “states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.”
Many Iowans will be leaving work or school early today, or perhaps not going in at all, as the season’s first big winter blast rolls in. Here’s plenty of reading to keep you busy if you are stuck at home.
Global news first: The United National Climate Change Conference in Copenhagen opened yesterday. To follow news from the proceedings, I’m reading the team of Mother Jones bloggers in Copenhagen. The Open Left blog will also post regular updates from Natasha Chart and Friends of the Earth staff who are on the ground. If you prefer a mainstream media perspective, check out The Climate Pool on Facebook, which is a collaboration among major news organizations.
The state could base its spending on a multi-year average, such as the previous three years, or five years or seven years, said Jon Muller, president of Muller Consulting Inc., a public policy and business development consulting firm based in Des Moines.
“The way it’s always worked, when times are really good, we increase spending and we cut taxes,” Muller said. “And when times are bad, there’s pressure to increase taxes and decrease spending. And that all happens when the demand for government is at its highest,” Muller said.
The multi-year idea would flip, he said.
“In good times you would be squirreling money at way a little at a time. And in bad times, you could continue to increase spending to service the growing demands of a recession.”
It would require state lawmakers to not touch the reserves, even in times of plenty. But it would also reduce the need to tap into reserves just to get by during rainy days, the advisers said.
Regarding budget cuts, the Newton Independent reports here on a “plan to reorganize the Iowa Department of Human Services operations under two deputy directors, six rather than nine divisions, five rather than eight service areas, more part-time offices and the elimination of 78 currently vacant positions” (hat tip to Iowa Independent). Click this link for more details about the proposed restructuring.
On the political front, John Deeth analyzes possible changes the Democratic National Committee is considering for the presidential nomination process. Jerome Armstrong had a good idea the DNC won’t implement: ban caucuses everywhere but Iowa. No other state derives the party-building benefits of caucuses, but just about every state that uses caucuses for presidential selection has lower voter participation than would occur in a primary.
I haven’t written much on health care reform lately, because recent developments are so depressing. Our best hope was using the budget reconciliation process to pass a strong bill in the Senate with 51 votes (or 50 plus Joe Biden). Now that Senate Majority Leader Harry Reid has taken reconciliation off the table, we’re left with a variety of bad compromises to get to 60 votes in the Senate. I am not convinced the final product will be any improvement over the status quo. It will certainly be worse for millions of Americans required to buy overpriced private health insurance. If there’s a quicker way to neutralize the Democrats’ advantage with young voters, I don’t know what it is.
Speaking of things that are depressing, John Lennon was shot dead 29 years ago today. Daily Kos user noweasels remembers him and that night. Although Paul’s always been my favorite Beatle, I love a lot of John’s work too. Here’s one of his all-time best:
Share any relevant thoughts or your own favorite Lennon songs in the comments.
The editors of the conservative Fort Dodge Messenger are ecstatic about Terry Branstad’s gubernatorial campaign, and they got a little carried away in this Sunday editorial:
Iowa must return to a pay-as-you-go approach to budgeting. Government spending should be carefully aligned with anticipated revenues. As governor, Branstad rigorously adhered to that philosophy. He pledged it will once again become central to state budgeting if he is elected.
Who are they kidding?
Branstad’s sleight of hand on the budget was so notorious that as a three-term incumbent, he almost lost the 1994 GOP primary to Fred Grandy. That campaign centered on “the Mastercard governor” and his record of fiscal mismanagement, including keeping two sets of books to hide deficits.
As State Representative Chris Rants has noted, Branstad likes to take credit for budget reforms that were not his idea and were intended to prevent future governors from repeating his mistakes.
That’s to be expected from a politician, but I expect more reality-based commentary from newspaper editors.
By the way, did you notice how the Messenger editors suggested that Iowa is no longer doing “pay as you go” budgeting? That Republican talking point is supposed to make people believe that Democrats have borrowed money to fund budget line items. In fact, the I-JOBS state bonding program was for capital investment projects. Investors understood that distinction. That’s why the bonds were sold at lower interest rates, and the Bond Buyer daily rated I-JOBS one of the country’s top 10 best financing deals for 2009.
To find the cities that offer the most bang for the buck, we looked at the country’s 100 largest Metropolitan Statistical Areas–geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics– across these measures: foreclosures as a percentage of home prices; vacancies; unemployment rates; a three-year job-growth forecast; a three-year home-price forecast; housing affordability; median real estate taxes; and median travel time to work.
The Des Moines/West Des Moines metro area ranked fourth out of 100:
With low unemployment, at 6%, few vacancies and a promising home price forecast, the real estate market shows fresh signs of robustness. And its home prices make it possible for budget-conscious home buyers to get in the door–it scores above average for home price affordability.
The Omaha/Council Bluffs area ranked first on the Forbes.com list, and also ranked first on the list of cities “best surviving the recession. “No other Iowa metros were large enough to be considered for this analysis.
Click here and scroll down for more details on the methodology used to assess unemployment and healthy housing markets. Click here for the list ranking all 100 most populous metro areas. If you’re feeling down now that snow has arrived in Iowa, consider how much more affordable life is here compared to most of the sun belt cities.
Two-term State Representative McKinley Bailey, an Iraq War veteran, may face a tough Republican challenger next year in Iowa House district 9. The Des Moines Register reports that Stew Iverson, former Iowa Senate majority leader and Iowa GOP chairman, is thinking about running against Bailey. Iverson told the Register that he’ll make a decision “sometime after the first of the year”:
Iverson called Bailey “a nice young man.”
“It’s not personal,” he said. “I just think we need a change in direction, and that’s why I’m considering it. I have nothing against him, but this is about the state of Iowa.”
House district 9 includes all of Wright County, parts of Webster and Hamilton counties, and a tiny slice of Franklin County. Bailey lives in Webster City, which has suffered a tremendous blow during this recession. Appliance maker Electrolux plans to shut down a Webster City factory employing about 850 people. Bailey is one of the “six-pack” of House Democrats who blocked key legislative priorities for organized labor during the 2009 session, but as far as I know, no Democrat has been recruited to challenge him in the district 9 primary. (If you know otherwise, please drop me a line: desmoinesdem AT yahoo.com.)
The 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. The components include job, wage and salary and technology growth.
The list of smaller cities includes eight Iowa metros, and you can view the details here. My short take is after the jump.
Iowa has relatively good money-management practices and is among the states “least like California” in terms of budget problems, according to a report released yesterday by the Pew Center on the States.
In the report, Pew’s researchers identified factors that have contributed significantly to California’s difficulties, then determined the degree to which other states are experiencing the same challenges. These factors are: (1) loss of state revenues; (2) the relative size of budget gaps; (3) increasing joblessness; (4) high foreclosure rates; (5) legal obstacles to balanced budgets-specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.
Pew scored all 50 states using the best available data as of July 31, 2009. The snapshot captures an important juncture: the first and second quarters of 2009, the pressure point for governors and legislatures in the throes of crafting their budgets for fiscal year 2010 (which began on July 1 in all but four states).
Scanning the scorecard, I noticed that only one state has a better score overall than Iowa. The size of Iowa’s budget gap (as a percentage of total spending) ranks 15th. Only three states had a smaller change in the unemployment rate than Iowa. Only seven states had a lower foreclosure rate. We were among eight states that received a B+ grade for money-management practices (only five states received an A or A- in that category).
Republicans can complain about so-called fiscal mismanagement by Governor Chet Culver and the Democratic-controlled legislature, but compared to many other states, Iowa is weathering this challenging economy well.
Commenting on the Pew report yesterday, Mark Zandi of Moodys.com called for additional federal stimulus funding to support state budgets in fiscal year 2011: “In the past six decades, state and local governments have never seen the kind of tax-revenue collapse they are now experiencing, Mr. Zandi said.”
Culver is ordering all of the 3,258 non-contract (that is, non-union) employees in the executive branch “to take seven days without pay between now and the end of the fiscal year. I do not believe it is fair for any state employee to not contribute toward our solution.”
Culver approved spending cut plans submitted by 28 department heads and approved, with minor changes, spending cut plans submitted by 6 other department heads. The Des Moines Register’s Jennifer Jacobs summarized the impact:
Altogether, the 34 approved plans will save the state’s general fund about $520 million, he said.
The approved plans call for a total of 180 layoffs and the elimination of 229 open positions. The total job loss, so far, is 410.
Here’s where there the layoffs will be: 79 from the Department of Human Services, 35 from the Department of Revenue, 10.8 from the Department of Inspections and Appeals, 13 from the Department of Education, eight from Iowa Public Television, eight from the Department of Public Health, seven from the Department of Economic Development, seven from the Department of Cultural Affairs, four from the Department of Administration, four from the Department of Management, two from the Alcoholic Beverages Division, two from the Department of Veterans Affairs, and one from the Iowa Ethics & Campaign Disclosure Board.
Forty-three state employees tentatively set for layoffs in the Department of Commerce will be spared. The 10 percent across-the-board cut will not be applied to the divisions of banking, credit union, insurance and utilities divisions, which are agencies within the commerce department.
Culver rejected the $45 million spending reduction plans offered by the directors of the Department of Corrections and the Department of Public Safety, saying,
I reject these two plans because I am hopeful that we can find an alternative to laying off hundreds of correctional officers, state troopers and law enforcement personnel.
I am rejecting these plans because public safety is essential to our daily lives.
That is why yesterday I sent a letter to the state’s three bargaining units – AFSCME, Iowa United Professionals, and the State Police Officers Council – who represent more than 16,000 state employees – asking them to join me in negotiations for amending their current contract. This past Saturday, I met with AFSCME’s bargaining unit – which represents more than 13,000 state employees – to discuss ideas for moving forward. We followed that meeting with a three hour session yesterday morning and the talks have been very productive. And earlier today, I met with the State Police Officers Council representatives and those talks were productive. Finally, I will meet with the Iowa United Professionals union leadership as soon as schedules permits, but our staff has been in daily contact with their representatives.
I seek substantive discussions with all three unions on issues that may impact our state budget cuts. Our goal is to do everything we can to prevent layoffs related to essential public safety.
If we cannot reach agreement with the unions, then I will implement the layoff plans submitted by these two departments.
Unfortunately, we do not have an endless amount of time in which to reach an agreement and to have it ratified by each respective union. I expect to know by Friday, November 6 whether we will move forward in discussions with the unions or implement the layoff plans.
The president of AFSCME Council 61 issued a statement saying his union will negotiate with the governor in the hope of avoiding layoffs. Both sides are promising not to release any details about the discussion until the talks conclude, but no doubt some proposed alternatives to layoffs will leak out before then.
Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high that shows compensation is rebounding despite regulatory scrutiny of Wall Street’s pay culture.
Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal.
All they did was throw cash at the problem, without dealing with the underlying issues, which is why they didn’t manage (as Jerome points out) to kickstart ANY net private spending. They didn’t break up major banks. They didn’t allow bankruptcy judges to rewrite mortgages. Their mortgage program kept hardly anyone in the house. And their money for financial firms did not increase lending by one cent. […]
This is going to be the worst “recovery” of your lifetime, unless you’re in the financial sector at a relatively high level. Bank profits have recovered but ordinary people are not, in a generation, going to see a full recovery from this clusterfuck – employment will not recover to pre-recession levels before the next recession, and I don’t expect it to recover after that recession either.
At this point, in fact, I am expecting this to turn into a double dip recession-this “recovery” will not have any significant legs.
Continuing George Bush’s Wall Street bailout policy will prove to be a costly mistake for President Obama. Watch the Huffington Post Investigative Fund’s interview with Neil Barofsky, who “monitors a dozen separate bailout-related programs that now account for nearly $3 trillion in financial commitments.” Among other things, his research has confirmed that the bailout did not increase lending to the business sector.
Republicans pretend that Iowa Democrats are to blame for all our economic troubles, but the factors impeding employment growth are nationwide problems, like falling wages and major banks cutting back on loans to small businesses.
Iowa Senate Majority Leader Mike Gronstal discussed the film tax credit fiasco on this weekend’s Iowa Press program, and it sounds like defenders of the tax credit will be fighting an uphill battle during next year’s legislative session:
“I think we’re going to get this investigation from the Attorney General and from the State Auditor. I think we’re going to do a good evaluation of the program and if we can’t show a real benefit to the state of Iowa – and not just a few part-time jobs, but a real long-term benefit to the state of Iowa – I think it’s 50-50 as to whether this program continues.”
According to Gronstal, he and other legislators right now “see very little in terms of potential benefits” to the state from the film tax credits which have been awarded already. […]
Gronstal says he may regret having voted to create the program and he expects some political fall-out from this episode.
“People will be disappointed in that, but I think it’s the responsibility of the legislature – we try things in economic development. Everything we try doesn’t work and it’s perfectly o.k. to occasionally decide, ‘You know, we’ve (gone) down a road and that road doesn’t make as much as sense as we thought it made,’” Gronstal says. “And so we’re going to go back and change that.”
Gronstal also defended Governor Chet Culver, saying “once he found out about [problems with the film tax credit] he acted quickly and put the program on hold and got people to investigate.”
Gronstal expressed surprise that a flood of applications for film tax credits this spring allowed producers to get around the $50 million annual cap the legislature approved for the program. (Note to legislators: next time you cap a tax credit, make the law go into effect immediately on being signed by the governor.)
“If you can show that a tax credit creates a climate, for instance, the research activities tax credit – if you can show that that keeps an industry here in the state of Iowa and builds long-term jobs and high-wage, high-skills jobs in this state where there’s a net benefit to the state by having that set of jobs come along with it, yeah, that makes sense,” Gronstal says. But Gronstal says if you can’t show that, then the tax credit should be repealed.
A critical analysis of Iowa’s tax credits is overdue, but better late than never. State revenues continue to lag behind projections because of the recession. Repealing wasteful tax credits could reduce the size of state spending cuts during the 2010 fiscal year. Iowa Republicans would like to plug the budget gap entirely through spending cuts, but they forget that deep spending reductions by state and local governments can also be a drag on the economy.
The bill easily passed by a vote of 331 to 83, but as you can see from the roll call, Iowa’s House delegation was divided in an unusual way. Representatives Bruce Braley (IA-01) and Leonard Boswell (IA-03) were among the 17 Democrats who voted against the bill. They opposed it because unemployed Iowans would be ineligible for the extended benefits. Although our state has the eighth-lowest unemployment rate in the country, we also have pockets of higher unemployment, especially in rural areas.
After the jump I’ve posted statements released by Braley and Boswell on this bill. Boswell noted that four counties in the third Congressional districts have unemployment rates above 9 percent. Braley noted, “When you’re unemployed, it doesn’t matter to you what your state’s unemployment rate is. What matters is that you need to support your family.”
Representative Dave Loebsack (IA-02) did not vote yesterday, because he was meeting with Fema Administrator Craig Fugate and various state and local officials in Cedar Rapids to discuss flood recovery efforts. I contacted his office for comment on the unemployment bill. His spokesperson Sabrina Siddiqui told me that Loebsack had serious concerns about the way Iowans were excluded from the extended unemployment benefits, adding that Loebsack is working with House leaders to address the needs of unemployed Iowans in future legislation.
A memo from auditors investigating irregularities in a state tax-credit program for filmmaking paint a picture of movie producers and film executives taking personal advantage of the program and state administrators paying little attention.
The director of the Iowa Department of Economic Development, Mike Tramontina, abruptly resigned Friday after allegations of mismanagement of the program surfaced. The department oversees the Iowa Film Office. The manager of that office, Tom Wheeler, was placed on paid administrative leave.
The departure of Tramontina, who was appointed to the post by Gov. Chet Culver in 2007, came after preliminary findings from auditors looking into allegations that filmmakers had purchased luxury vehicles for themselves.
According to the memo obtained by The Des Moines Register, auditors found a long list of bookkeeping lapses and poor oversight in the program, which has spent $32 million on tax credits for 20 film projects since its inception in 2007. The program was aimed at promoting filmmaking in Iowa as a way to contribute to the local and state economy.
“I’m hearing nothing but complaints that workers are being brought in from other states” during film productions in Iowa, Courtney said. “I don’t imagine we have a lot of Clint Eastwoods running around, but with a little training, we could be doing many of those jobs.”
Michael Tramontina, the state’s economic development leader, said he couldn’t put a number on how many jobs are created, since many are temporary – from contractors used to build sets to caterers and “extra” actors.
“Anecdotally from the film industry, it ranges from 20 to 60 percent Iowans” employed on films produced in Iowa, Tramontina said. […]
Tramontina said the agency is working to develop “employment thresholds” for a film, but hitting a number is complicated.
Employment requirements should depend on the kind of film being made – whether it’s a feature film being made over three to six months or a TV series that might run for years. […]
Courtney said lawmakers might need to address closing what he called “an open door” in film tax credits if Tramontina’s agency is unable to do it. He said most Iowa economic development incentives carry job-creation requirements. “Iowa has a bright future in the film industry, but we have to help the people who live here.”
While Republicans harp on the need to cut spending further, it’s equally important to subject every tax credit to scrutiny. The Iowa Policy Project has found that expenditures on tax credits for business have “skyrocketed” in recent years, far outstripping the rate of increase in spending from Iowa’s general fund. These tax credits should be on the table as legislators look for ways to balance the budget.
Contact: Eric Nost, Environment Iowa, 515-243-5835, enost@environmentiowa.org
New Report: Strong Energy Efficiency Policies in Energy/Climate Legislation Would Save Iowa Families $282 per Year, Create 6,200 Jobs
Des Moines, IA – A new national report finds that Iowa households would save an average of $282 per year and 6,200 sustainable jobs would be created in the state over the next ten years if Congress acts now to include strong energy efficiency improvements in energy and climate legislation. The report, entitled Energy Efficiency in the American Clean Energy Security Act of 2009: Impacts of Current Provisions and Opportunities to Enhance the Legislation, was released by Environment Iowa and the American Council for an Energy-Efficient Economy. The efficiency provisions would prevent 5 million metric tons of global warming emissions from being released here in 2020 alone, the equivalent of taking over 900,000 cars off the road for a year. (The report is publicly available at http://www.environmentiowa.org)
Hope you’ve been enjoying the perfect Iowa weather during this holiday weekend. The U.S. Department of Labor and Blog for Iowa provide background on the history of Labor Day.
Organized labor doesn’t have a lot to celebrate right now, with more job losses in the manufacturing sector and unemployment rising across the country (though Iowa’s unemployment rate is significantly lower than the national average). The Iowa Policy Project finds that “the state of working Iowa” is not good. As in the previous recession, we are losing jobs with good benefits as wages stagnate for the people who still have jobs. We now rank 32nd in terms of median wages, and lower incomes mean less money for consumers to spend at other businesses. Click here for the full report, which also explains that “policy makers could do more to make work pay for low- and moderate-income working families and to insist upon job-quality requirements in economic development strategies.”
Iowa hasn’t adopted most of organized labor’s key legislative priorities in recent years, in part because of the “six-pack” of Iowa House Democrats that blocked those bills. On the plus side, Curt Hanson’s victory in the House district 90 special election means we haven’t lost any ground on this front. We only need to persuade one or two “six-pack members” (or defeat them in Democratic primaries) to find the 51st vote for “prevailing wage,” for instance.
I haven’t heard much lately about Senator Tom Harkin’s efforts to find a compromise on the Employee Free Choice Act. Getting 60 votes in the Senate for anything meaningful is likely to be quite difficult. The Service Employees International Union has some news related to the EFCA here.
Two years ago I attended the Solidarity Fest Labor Day celebration in Des Moines, featuring John Edwards and Hillary Clinton. The same event, sponsored by the South Central Iowa Federation of Labor, AFL-CIO, takes place today in the 4-H building at the State Fairgrounds from noon to 2 pm. Later today, the Friends of Iowa Midwives are having a family-friendly potluck picnic at Raccoon River park in West Des Moines (4 to 8 pm, suggested donation $5).
After the jump I’ve posted details for lots of other events coming up this week.
The U.S. House Transportation and Infrastructure Committee has been keeping track of how states are spending the stimulus funds allocated for roads. On September 2 the committee released a report ranking the states according to how much of the American Recovery and Reinvestment Act funding for highways and bridges had been put to work as of July 31. This pdf file contains the state rankings.
Iowa ranked second overall, having put 75 percent of its stimulus road funds to work by the end of July. Join me after the jump for more details from the report and analysis.
The $3 billion “Cash for Clunkers” program officially ends today, having helped generate at least 625,000 new car sales. Representative Bruce Braley, a key advocate of the program, is holding an event this morning in Bettendorf with John McEleney, Chairman of the National Automobile Dealers Association, and Gary Thomas, President of the Iowa Automobile Dealers Association.
Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.)
“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.
Replacing old appliances can significantly reduce a household’s energy use and utility bills, so this seems like a good use of stimulus money. However, some analysts are skeptical that the new program will be as successful as “Cash for Clunkers”:
“The cash-for-clunkers (program) had a discernible value proposition for the consumer, because he knows how much his (clunker) is worth,” says [Sam] Darkatsh, the Raymond James analyst. “With appliances, there is no trade-in. You can walk into Home Depot and get a great deal on a home appliance any time you want one. Why would it drum up sales now?” Laura Champine, an analyst with Cowen & Co., agrees. “I’m not sure if it will be as powerful as cash for clunkers because there is something compelling about that $4,500 discount,” she says. “Also, a new car is more fun than a new dishwasher. So I’m not sure if it will be as much of a driver, but any driver is welcome right now.”
With the economic recession continuing to drag down tax revenues, the 2010 budget that the Iowa Legislature approved in April is likely to require significant adjustments.
In June the Legislative Council agreed to cut more than 10 percent from the Legislature’s budget in 2010. The cost-saving measures “include a pay freeze for all legislative employees, reducing travel budgets, and cutting back next year’s legislative session by 10 days.”
A State Government Reorganization Commission will look for other ways to cut spending next year. It will be interesting to compare that commission’s proposals with the kind of cuts Iowa Republicans have been advocating. During the last legislative session, Republicans called for $300 million in spending cuts, but I have been unable to find a link to a document with details about that proposal. (Note: I’ll have more to say in a future post about the state budget reforms Iowa Republicans proposed yesterday.)
After the jump I’ve posted some links and analysis related to the budget constraints facing Iowa and just about every other state right now.
For a guy who wrote a short book’s worth of blog posts as “The Armchair Economist,” Republican gubernatorial candidate Christian Fong has been saying some boneheaded things about the state budget lately.
Two and a half weeks before the September 1 special election in Iowa House district 90, Republican Stephen Burgmeier’s campaign launched its first television commercial:
The producers fit quite a few misleading statements into one 30-second ad. The visual suggests Iowa has taken on “a billion dollar debt,” and the voice-over emphasizes the word “billion,” even though the I-JOBS infrastructure bonding initiative was for $830 million.
The commercial accuses “Governor Culver and his allies” of borrowing “almost a BILLION dollars to pay their bills.” However, the I-JOBS program was created to fund infrastructure projects and has nothing to do with meeting state government’s ongoing spending obligations. (Click here for a breakdown of how the money will be spent.)
During this recession, several other states have been forced to borrow money to pay their bills, but Iowa is borrowing for capital investments. Credit analysts and national institutional investors understand the difference, even if Iowa Republicans don’t. That’s why “investor enthusiasm and high market demand” drove down the interest rate on the I-JOBS bonds.
Next, Burgmeier’s ad shows a man saying, “That’s money taxpayers are on the hook for,” implying that taxes will go up to repay the debt. In fact, existing gaming revenues will provide the approximately $43.2 million in annual payments on the bonds.
The ad begins with a voice-over asserting that “red ink is rising in Des Moines” and later shows a woman saying, “Stop the red ink.” Those statements, along with the cartoon of red ink drowning Culver and the capitol, wrongly suggest that the infrastructure borrowing is deficit spending.
The second part of the ad promises that Burgmeier will vote for a new budget law “to make it harder to waste tax dollars.” I’d like more details about how such a law would work, and I’d also like Burgmeier to specify which of these investments he considers wasteful.
The ad promises Burgmeier will “serve as a check and balance to Governor Culver’s runaway spending” and closes by saying Burgmeier will bring “balance and spending restraint back to our government.” Iowa Republicans may believe Culver is very unpopular in district 90, or they may have decided to run against him in order to rile up their base. It’s notable that the ad never uses the word “Republican” and doesn’t identify the candidate’s political party. I guess the outside interest groups running the Burgmeier campaign don’t have much confidence in the Republican brand to carry the day.
The Iowa GOP didn’t announce the size of the ad buy, which networks would run the ad or which programs have been targeted. If you live in the viewing area for this district, let us know whether you’ve seen the ad, and if so during which television shows. If you prefer not to post a comment here, you can send me a confidential e-mail at desmoinesdem AT yahoo.com. Please also report on any radio ads you’ve heard.
I’m curious to see whether this will be Burgmeier’s only television commercial or if his campaign will mention other issues, including same-sex marriage, in later ads.
Having spent no time in this district lately, I have no idea whether Burgmeier or Democrat Curt Hanson has an edge. Political scientists will tell you that as a general rule, the party out of power does well in low-turnout by-elections and special elections. Both Democrats and Republicans are working hard to get out the vote in district 90. State GOP Chairman Matt Strawn and some other Republicans view this race as a must-win.
Similar to past releases of this report, the 2009 State Report Cards also provide five different outcome measures compared among the states for each year: (1) Incidence Rates, (2) Cases Missing Work, (3) Median Disability Durations, (4) Delayed Recovery Rate; and (5) Key Conditions: Low Back Strain. An essential requirement for production of this report was the proprietary crosswalk program that has been developed by Work Loss Data Institute, which converts OSHA-reported data into an ICD9 code format. More details on the methodology used are located at http://www.odg-disability.com/…
Iowa performed the best of all the states for 2006 and Minnesota came in a close second. Both states received a grade of “A+” based on an average of their 2006 scores in the five categories above. Illinois came in last, with Wyoming, Rhode Island and New York very close to the bottom. In total, nine of the 43 states received a grade of “F” in 2006. A summary of each grade for all states is shown on a U.S. Map Showing Grades by State, located at http://www.odg-disability.com/…
In terms of the tier ranking system, the Tier I states are Iowa, Kansas, Minnesota, Utah and Virginia. Tier I means that the state had an average grade of “B+” or better, and a trend going up or level. Those five states were doing great and continuing to improve.
Look for Iowa Republicans to keep claiming that this is a terrible place to do business despite the conclusions of independent analysts such as the California-based Work Loss Data Institute.
I liked Harkin’s idea to put income limits on this program, but the Senate wanted to get this measure passed before the summer recess. If the Senate had approved a different bill from what cleared the House last week, the funding would have been delayed until September.
The Senate vote went mostly along party lines, but four Democrats joined 33 Republicans in voting no, and seven Republicans joined 53 Democrats in voting yes.
I’m pleased to learn that most consumers who have taken advantage of this program have traded in a “clunker” for cars that get significantly better mileage. (Click here for lists of the most popular vehicles traded in and the most popular purchased with Cash for Clunkers vouchers.) The way Congress wrote the bill, people could have traded in SUVs and trucks for similar vehicles with only minimal improvements in fuel economy.
