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Please join us tonight for an evening of politics under the influence at the Seattle chapter of Drinking Liberally. We officially start at 8:00 pm, but some folks show up early for dinner and a drink. We meet at the Montlake Ale House, 2307 24th Avenue E.

[youtube]http://www.youtube.com/watch?v=Vme57vMRnB4[/youtube]

Not in Seattle? The Drinking Liberally web site has dates and times for 328 chapters of Drinking Liberally spread across the earth.

Yesterday’s post about how growth in the number of WA state government full time employees has remained flat relative to total population growth, prompted a debate in the comment thread regarding the impugned productivity of state workers versus those in the private sector.  It was a stupid debate… devoid of actual, you know… facts, but it was a debate nonetheless, and as it turns out, a useful springboard for discussing the nature of government expenditures, and why the right’s familiar “population plus inflation” formula is little more than a cynical gimmick intended to erode government services over time.

Implicit in the population plus inflation model is the notion that services delivered by the public sector are somehow representative of the economy as a whole, and thus the per unit costs incurred should generally rise in step with the Consumer Price Index.  This notion also forms the basis of the critique in the comment thread that looks to the population-proportional growth in government FTEs as an indication of zero productivity growth, and “a fucking testament to inefficiency.”

Of course, this notion is total bullshit.

To compare the inflationary pressures or productivity gains of the public sector to that of the economy as a whole would be as ridiculous as comparing that of one private sector industry to another. For example, according to the federal Bureau of Economic Analysis, the cost to consumers of durable goods has plummeted 14 percent since 2000, while the cost of consumer services has risen 29 percent.  Over that same period of time the Implicit Price Deflator (generally accepted to be the most accurate measure of inflation) has risen 21.6% for Personal Consumption Expenditures as a whole, but over 42% for State and Local Government.

Why has the inflation rate for state and local government services risen at nearly twice the rate as that for consumer expenditures?  According to a report compiled by the Washington D.C. based Center on Budget and Policy Priorities, productivity is indeed a major factor:

Proponents of TABOR-type tax and expenditure limits sometimes contend that a growth formula based on population plus inflation would be adequate to maintain public services at a roughly constant level. But researchers long have recognized that the services provided in the public sector, such as education, health care, and law enforcement, tend to rise in cost faster than many other goods and services in the economy in general. This analysis was first put forward by economist William Baumol, who pointed out that technology and productivity gains may make goods cheaper to produce, but the services that government provides are different. Baumol said public services typically rely heavily on well-trained professionals — teachers, police officers, doctors and nurses, and so on — and technology gains do not make these services cheaper to provide. It may take far fewer workers to build an automobile than it did 30 years ago, but it still takes one teacher to lead a classroom of children. (In fact, as education has become increasingly important, the trend is toward more teachers per pupil, not fewer.) Doctors generally still see patients one by one, and nursing care remains labor intensive despite technology.

In fact, we haven’t seen the same sort of productivity gains in the public sector as we have in the private, because there simply haven’t been the same inherent opportunities to improve efficiency overall.  In the same way that the price of consumer services rises even as the price of durable goods falls, the cost of providing most government services—even the exact same services at the exact same level—continues to rise substantially faster than the average rate of inflation across the broader economy.

It’s not that, compared to the private sector, government is inherently less efficient at delivering services, but rather that productivity in these sort of labor-intensive, high-skilled services is impacted far less by technological advances than, say, the manufacturing sector.  Indeed, when it comes to health care, quite the opposite has been true, with dramatic technological advances tending to dramatically increase costs.  (While at the same time, government health insurance programs like Medicare and Medicaid have consistently proven to be less expensive and more efficient than their private sector competitors.)

Population plus inflation may seem like an intuitive measure by which to compare growth in government expenditures, but it simply is not grounded in economic reality:  both simple logic and prior history proves that the long term cost of maintaining government services at constant levels rises faster than this rigid formula would allow.  And given this reality, it is hard to argue that today’s budget crisis is largely the result of profligate spending, when state spending has long trailed behind growth in demand and cost for the services it provides.

There has been some surprise in the media that under yesterday’s Senate budget proposal, the dollar amount of general fund expenditures from state revenue sources would actually decrease from the previous biennium, for the first time ever.  I suppose then, they will be absolutely shocked to learn in future posts that when measured by its ability to provide existing services at constant levels, Washington state government has actually been shrinking for some time.

The Seattle Times editorial board wants to educate our children, but not provide them any health care .  Well, it’s nice to see somebody making those tough choices… you know, as long as those choices don’t include any tax increases.

Lawmakers should cut the number of state employees more and education less. Every dollar spent on education represents the best possible social program and wisest long-term investment.  […] Other cuts are painful but, if education is the top priority, probably unavoidable. These include a cut of 40,000 people covered by the Basic Health Plan.

Hmm… I wonder if that either/or framing is intentionally clever, or just uninformed?  Note to Times: teachers are state employees, so attempting to frame this as a hard choice between wasteful state employees and, you know, state employees , comes off as a little bit stupid.

I don’t normally reprint emails without the authors’ express permission, but since this exchange seems to be making the rounds, and since it constitutes official correspondence with an elected official, thus making it a public record, I feel comfortable making an exception.

This afternoon Barbara from Sammamish mass emailed state legislators, citing a number of Biblical passages, and urging them to “Say NO to same sex marriage” or “be judged for all eternity.  And to his credit, Rep. Geoff Simpson (D-Covington) was quick to offer the following courteous and thorough reply:

From: Simpson, Rep. Geoff 
Sent: Monday, March 30, 2009 5:11 PM
To: [redacted]
Subject: RE: Say NO to same sex marriage SB5688

Barbara –

What is it in the bible that leads you to believe stopping gay marriage should top your political priority list? Was there some extra-special **emphasis**, italics, bold or bold italics in your bible that called your attention to one aspect of god’s law to be the thing you should contact your elected representative about? Or did God himself point you to gay marriage as the issue that should be your tip-top, number one political concern?

Jesus opposed the death penalty, saying “He that is without sin among you, let him first cast a stone at her” – yet George W. Bush set an execution record when he was governor of Texas, and boasted of it. I don’t recall ever getting a message from you opposing the death penalty as Christ did.

Why is your “Christian” political activism concentrated against gay marriage instead of against the death penalty?

In the interest enforcing the laws of the bible with regard to marriage, let’s not forget that; 

• It’s ok for marriage to consist of a union between one man and one or more women. (Gen 29:17-28; II Sam 3: 2-5)
• Marriage does not impede a man’s right to take concubines in addition to his wife or wives.(11Sam 5:13; 1Kings 11:3; 11Chron 11:21)
• A marriage is considered valid only if the wife is a virgin. If the wife is not a virgin, she shall be executed. (Deut. 22: 13-21)
• Marriage between a believer and a non-believer is forbidden. (Gen 24:3; Num 25: 1-9; Ezra 9:12, Neh 10:30)
• Since marriage is for life, nothing in the scriptures permits divorce.( Deut 22:19; Mark 10:9)
• If a married man dies without children, his brother shall marry the widow. If he refuses to marry his brother’s widow or deliberately does not give her children, he shall pay a fine of one shoe and by otherwise punished in a manner to be determined by law. (Gen 38:6-10; Deut 25:5-10) 

Finally, I need some advice from you regarding some of the specific laws contained in the bible and how to best follow them.

When I burn a bull on the altar as a sacrifice, I know it creates a pleasing odor for the Lord (Lev. 1:9). The problem is my neighbors. They claim the odor is not pleasing to them. How should I deal with this?

I would like to sell my daughter into slavery, as it suggests in Exodus 21:7. In this day and age, what do you think would be a fair price for her?

I know that I am allowed no contact with a woman while she is in her period of menstrual uncleanliness (Lev. 15:19-24). The problem is, how do I tell? I have tried asking, but most women take offense.

Lev. 25:44 states that I may buy slaves from the nations that are around us. A friend of mine claims that this applies to Mexicans but not Canadians. Can you clarify?

I have a neighbor who insists on working on the Sabbath. Exodus 35:2 clearly states he should be put to death. Am I morally obligated to kill him myself?

A friend of mine feels that even though eating shellfish is an abomination (Lev. 11:10), it is a lesser abomination than homosexuality. I don’t agree. Can you settle this?

Lev. 21:17-21 states that I may not approach the altar of God if I have a defect in my sight. I have to admit that I wear reading glasses. Does my vision have to be 20/20, or is there some wiggle room here?

I know you have studied these things extensively, so I am confident you can help. Thank you again for reminding us that God’s word is eternal and unchanging.

Geoff

Huh.  I wonder if Barbara will respond, and if so, how?  (In case you’re interested, I’ve included the content of her email below the fold.)

Personally, I think Geoff replied with all the respect the initial email deserved, and I’m particularly impressed considering he doesn’t even represent a safe Democratic district.  Bravo.

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So, the House transportation budget released today doesn’t just pull the funding from the state’s previously agreed to portion of Sound Transit’s I-90 crossing… it completely bars DOT from allowing Sound Transit to use the bridge at all:

(17) The department shall not sign the final environmental impact statement for the east link project or negotiate an airspace lease with sound transit for the use of the Interstate 90 center roadway for exclusive use by light rail until completion of an independent facility asset assessment by the joint transportation committee.

That’s right, even though ST Phase 2 was overwhelmingly approved by voters, and even if ST were to find the money to fund moving the HOV lanes itself, House Democrats intend to bar DOT from even negotiating an airspace lease to use the center roadway.  I mean… what the fuck?!!

Dollars to donuts, a few years from now, when ST is behind schedule and over budget on the I-90 crossing because the legislature intentionally knocked them off schedule and over budget, we’ll hear lawmakers opining about ST’s mismanagement in an effort to justify a “regional governance” package that would gut light rail and take transportation planning out of the hands of those who pay most of the bill.

(Hat tip Seattle Transit Blog.)

When Republicans and their editorial board surrogates argue for an all-cuts budget, they routinely decry the spurt in state spending over the past couple years as evidence that state spending is out of control.  Long term trends however, show quite the opposite.

Above is an OFM chart that tracks growth in the number of full time state employees versus growth in population, and as you can see, the two numbers track quite closely.  This is an imprecise metric, as demographic shifts impose varying demands on state government (for example, the current surge in K-12 enrollment dictates the hiring of more teachers), but it clearly doesn’t indicate a state goverment that’s out of control.

I’m just sayin’.

[youtube]http://www.youtube.com/watch?v=DuAstDdFA2M[/youtube]

I’m hearing scattered reports of problems accessing HA and Publicola today.  Everything is currently working fine via my Qwest DSL and my iPhone’s 3G connection, but Darryl can’t access it via his Comcast service at home, and I’ve heard from folks in Olympia with similar problems.  Not sure what’s going on, but it’s likely a DNS issue of some sort.

UPDATE:
My hosting company has provided the following response:

There is a connectivity issue with an upstream provider in California. Your web site and email service is up and running, but you can’t access it because of this problem with the upstream provider. It is only affecting certain isps and should be fixed soon.

Locally, this appears to be affecting mostly Comcast customers and some local government networks.  Not much I can do about it.

It’s B-Day in Olympia, and not likely a happy one, as the Senate introduces its general operations budget at 10:30AM, while the House introduces its transportation budget at noon.  The smart money is on an all-cuts budget coming out of the Senate, with, of course, Seattle and light rail getting screwed by House transportation planners.

We’ll soon see.

UPDATE:
The TNT’s Political Buzz blog wins the local prize for first word on the Senate’s budget proposal:

Senate Democrats just unveiled their budget proposals, documents that proposed to close a $9 billion gap between tax collections and planned spending by freezing public school and state workers’ pay, closing a prison, eliminating 7,000 state jobs and lowering enrollment at colleges by more than 10,000 students.

Still waiting to see the specifics.

I’ve written quite a bit recently about Afghanistan and the opium issue. There’s definitely a real danger of creating the same situation in Pakistan that we’ve already created in Mexico, with terrorist groups reaping massive profits from an illegal trade that we can’t stop. I’m hoping that this article on newly appointed Ambassador Richard Holbrooke is a sign that our policy is going to finally deal with reality over there:

So here Holbrooke was acknowledging the significance of the corruption issue, somewhat eloquently and candidly, yet he could not say how it might be addressed. As for Karzai’s government being “detached,” he didn’t go there.

Holbrooke is a wonderfully engaging character—an old-school power player. He schmoozes reporters, coming across as intelligent, crafty, and concerned. He is a charmer who knows his stuff. He won’t no-comment a tough question; he will compliment the reporter on posing an insightful query, show he fully understands the issue at hand (which he does), and then explain he can’t answer it—in a manner that can be convincing, not annoying.

But at the end of the briefing, Holbrooke did speak somewhat candidly about a vexing part of the Afghanistan problem: drugs. What to do about the opium flowing out of Afghanistan has always been a knotty element of US policy regarding Afghanistan. How much of a priority should it be? (Simply put, if you attack the the opium trade, warlords and locals get pissed off and join or support the other side.) Asked about the priority of drug fighting in the Afghanistan review, Holbrooke, as he was leaving the briefing, said “We’re going to have to rethink the drug problem.” That was interesting. He went on: “a complete rethink.” He noted that the policymakers who had worked on the Afghanistan review “didn’t come to a firm, final conclusion” on the opium question. “It’s just so damn complicated,” Holbrooke explained. Did that mean that the opium eradication efforts in Afghanistan should be canned? “You can’t eliminate the whole eradication program,” he exclaimed. But that remark did make it seem that he backed an easing up of some sort. “You have to put more emphasis on the agricultural sector,” he added.

I don’t envy Holbrooke at all. He has one of the toughest jobs of anyone Obama has appointed so far. Even if he succeeds at helping to rebuild Afghanistan (an extraordinary feat in itself), he could still end up with a major headache just across the border in Pakistan as a result.

For several years, groups like the Senlis Council have been advocating allowing Afghan farmers to contribute to a legal market for opiate-based medicines. If we do go that route, and it works to keep Afghan farmers from contributing to the black market, it doesn’t mean that the illegal market for heroin will just dry up. It will just move elsewhere. The most logical place for it to move to would be just south of the border. This is the root of why this situation is so complicated. If we succeed, we could still end up creating a situation that becomes far more dangerous to us.

This conundrum is just one more reason that we need to get more serious about the kinds of harm reduction techniques that can reduce the demand for illegal heroin in the first place.

Last week’s contest was as tough as I thought it was. No one was able to get it. The correct answer was the Jardin du Thabor in Rennes, France. This week’s should be a bit easier, good luck!

I’ve used the term “structural deficit” a lot over the past few years, only to have it pooh-poohed by the anti-tax/anti-government reactionaries on the right, so I thought it might be useful to spend a little time discussing exactly what I mean.

Washington state relies on the sales tax for about 56.5% of general fund revenues, one of the highest ratios in the nation, and yet as this study paper produced by Economic Opportunity Institute cogently explains, our sales tax base over time gradually represents a smaller and smaller portion of our overall economy.

The sales tax base is growing more slowly than demand for state investments and the economy overall. Historically, sales taxes have been applied to goods and not to services. However, personal spending on services is steadily growing, and spending on goods is falling as a percentage of personal consumption. Goods and services subject to Washington sales tax represented 32% of total consumer spending in 1959, but only 26% in 2000.

And when your tax base shrinks, you really have only three options:  expand the base, raise the tax rate, or shrink the role of government in our economy and society.  And despite all the rhetoric about state government growth in real dollars over the past two budgets, Washington lawmakers have largely chosen the third option over the past couple decades, steadily shrinking both revenues and spending as a percentage of our overall economy.

As the following chart prepared by the Washington State Budget and Policy Center shows, both state revenue and spending have fallen or remained flat since 1995, relative to the state economy.

(It is also interesting to note that the projected budget gap in the 2009-11 biennium is not due to an explosion in state spending, but rather to a precipitous decline in revenues.)

Yes, I know that for many of you on the right, this data may appear counterintuitive, but it is widely supported.  Indeed, even according to the conservative Tax Institute, the organization whose data Tim Eyman has long used to support his own anti-tax agenda, Washington’s state and local taxes as a percentage of personal income have fallen from 10.4% in 1994, when the Tax Institute ranked us at 17th nationally, to a 35th place 8.9% in 2008, well below the national average of 9.7%.

Different organizations may calculate different raw percentages, but they all generally report the same ranking and the same relative decline.  According to the Tax Institute, Washington’s 2008 state and local tax “burden” was exactly the same as that of Mississippi. That’s a fact.

And these numbers should come as no surprise.  Our over-reliance on a retail sales tax levied on an ever shrinking portion of our economy makes this long term structural deficit inevitable, and unless we reform our tax system to broaden the base, or permanently increase sales tax rates, the ability of our government to provide the services taxpayers expect and demand will continue to shrink in proportion to its revenue base.

There is a legitimate debate to be had over the proper size and scope of government… but we’re not having that debate.  Instead, even as Democrats dominate the Legislature and the governor’s mansion, the lower-tax/smaller-government Republican agenda is winning by default.

Matt Taibbi explains to AIG employee Jake DeSantis exactly how he can cry him a fucking river.