HorsesAss.Org

As I have repeatedly stated, there is no state budget deficit, despite the claims of Dino Rossi and his (perhaps unwitting) collaborators in the press. Our current budget is actually running a small surplus, and the next biennium budget will be balanced, as is constitutionally required.  The question facing voters is not if the budget will be balanced, but by whom, and based on what priorities.

To call a revenue forecast a “budget deficit” is thus inexcusably misleading, as when one thinks of budget deficits, most voters think of the enormous federal deficits (only made even more enormous by the Bush administration) in which our government borrows money to pay for expenditures that far exceed tax revenues.  That can’t happen here in Washington state, under any administration, and to suggest otherwise, even through semantic inference, is simply irresponsible.

And it is equally irresponsible and misleading to suggest, as the amen editorialists at the Seattle Times relentlessly insist, that this projected $3.1 billion revenue deficit—the difference between projected growth in state revenues and projected growth in state expenditures at current levels—is the result of profligate spending on the part of Gov. Chris Gregoire, when in fact, as the chart above clearly illustrates, it is simply the result of declining state revenues.

According to a policy brief prepared by the Washington State Budget & Policy Center, while remaining relatively flat for the past decade, state spending has declined from 6.6% of personal income in 1995 to 6.1% at present.  Meanwhile, state revenues as a percentage of personal income will decline from 6.6% to a projected 5.6% by 2011.

Yes, our revenue deficit has been exacerbated by a worsening economy, just as the problem was masked by the boom years, but the real culprit here is not out of control spending, but rather a long-term structural revenue deficit that results from a tax system that overly relies on a steadily shrinking segment of our economy: the sale of goods.

This is a fact—a fact that is constantly and conveniently ignored in press accounts of this issue—and unless we eventually fix this structural deficit, preferably by shifting to a fairer tax system that doesn’t leave WA the most regressive state in the nation, our state government, and the services it is able to provide, will steadily shrink, regardless of which party controls the legislature or the governor’s mansion.

If the Times is looking for a legitimate budget issue on which to attack the governor, it is not state spending, which during her administration has thus far grown in virtual lockstep with growth in revenues and growth in our state economy.  Rather, the most substantive critique of Gov. Gregoire comes from the left, where she has disappointed fair tax advocates by failing to take the lead on much needed tax restructuring.

First she’s up.  Then she’s down.  Now Gov. Gregoire is back on top again in the latest SurveyUSA poll.  And as Darryl has pointed out, Washington isn’t the only state that has seen a similar pattern in its gubernatorial race in the weeks following the national conventions.

Darryl attributes Rossi’s recent rise to a now fading “Republican Awakening;” others have dubbed it a “Palin Surge.”  But I think it’s starting to look more like a “Republican Bubble,” and as we’re repeatedly reminded, often quite painfully, bubbles have a tendency to pop.

At least, that’s what it looks like according to the latest ABC News/Washington Post poll which finds Obama up nationally by a 52% to 43% margin, an 11-point swing from McCain’s 49-47 lead in the days following the Republican convention.  Pop!

And what has led to such a dramatic swing in public opinion?

Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.

More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support.

McCain’s initial reaction to the financial meltdown was both baffling and befuddled, leading even conservative columnist George Will to question whether the senator has a temperament suited to the presidency. And McCain’s ham-fisted effort to pound a tenuous connection between Barack Obama and failed mortgage giant Fannie Mae’s former CEO Franklin Raines (apparently, they’re both black) is about to blow up in his face, with news that McCain’s own campaign manager has been on Freddie Mac’s payroll through the end of last month!

Since 2006, the federally sponsored mortgage giant Freddie Mac has paid at least $345,000 to the lobbying and consulting firm of John McCain’s campaign manager, Rick Davis, according to two sources familiar with the arrangement.

Freddie Mac had previously paid an advocacy group run by Davis, called the Homeownership Alliance, $30,000 a month until the end of 2005, when that group was dissolved. That relationship was the subject of a New York Times story Monday, which drew angry denunciations from the McCain campaign. McCain and his aides have vehemently objected to suggestions that Davis has ties to Freddie Mac—an especially sensitive issue given that the Republican presidential candidate has blamed “the lobbyists, politicians and bureaucrats” for the mortgage crisis that recently prompted the Bush administration to take over both Freddie Mac and its companion, Fannie Mae, and put them under federal conservatorship.

But neither the Times story—nor the McCain campaign—revealed that Davis’s lobbying firm, Davis Manafort, based in Washington, D.C., continued to receive $15,000 a month from Freddie Mac until last month—long after the Homeownership Alliance had been terminated. The two sources, who requested anonymity discussing sensitive information, told NEWSWEEK that Davis himself approached Freddie Mac in 2006 and asked for a new consulting arrangement that would allow his firm to continue to be paid. The arrangement was approved by Hollis McLoughlin, Freddie Mac’s senior vice president for external relations, because “he [Davis] was John McCain’s campaign manager and it was felt you couldn’t say no,” said one of the sources.

Huh.  I guess McCain should have talked to Davis before angrily denying that he had anything to do with Freddie Mac.

When asked about his own campaign manager’s associations with the mortgage giants, McCain, in an interview with CNBC on Sunday night, said that Davis “has had nothing to do” with the Homeownship Alliance since it disbanded and “I’ll be glad to have his record examined by anybody who wants to look at it.”

Or maybe, McCain and Davis were just plain lying?

Davis, in a conference call arranged by the McCain campaign Monday, said, “It’s been over three years since there’s been any activity in this area and since I had any contact with those folks.”

You know, except for his consulting firm cashing their checks.  (Only in DC would being paid for doing nothing be advertised as evidence of ethical absolution.)

Many have attributed the recent Republican Bubble to Sarah Palin, whose nomination undoubtedly energized the far-right Republican base, but I’d worried that much of the bounce was due to the surprising success of McCain’s facially ridiculous attempt to rebrand himself as a Beltway outsider dedicated to bringing sweeping change to our nation’s capital.  Well, if so, that success now appears to have been momentary.

As one of the Senate’s most fervent free traders and deregulators, McCain’s fingerprints are all over this financial mess, and he has surrounded himself with lobbyists who have enriched themselves on behalf of many of the failed companies now seeking a trillion dollar taxpayer funded bailout.  It is hard to imagine how the coverage gets any better for McCain from now through the election.

Meanwhile, one of Obama’s greatest weaknesses during the primary—the notion that he was a usurper with untested loyalties going up against a party stalwart like Hillary Clinton—may prove to be a great strength with independent voters trying to sort out who they can best trust to handle this crisis while protecting the interests of average Americans.  Perhaps I underestimate the power of images, but I just don’t think that ads showing that both Obama and Raines are black, and that they may have met each other once or twice, are enough to convince voters to pin the blame on the donkey.

And so it goes. Washington state Gov. Christine Gregoire (D) has re-taken the lead from Dino Rossi (“G.O.P. Party”), 50% to 48%, in the latest poll by SurveyUSA. The poll of 682 likely voters was taken from 21-Sep to 22-Sep and has a margin of error of 3.8%.

So, let’s recap the September poling. A week ago, a Strategic Vision poll gave Rossi a 48% to 46% lead. Before that, a Rasmussen poll had Rossi up by a remarkable 52% to 46%. Then in early September we had an Elway poll that gave Gregoire a 49.1% to 42.4% lead and a SurveyUSA poll that had Rossi up 48% to 47%. So what is going on?

Because I’ve been systematically collecting and analyzing state head-to-head polls for every gubernatorial, senatorial and presidential race with an OCD-like fervor this election season, I’ve noticed a very strong pattern. In numerous states, for all three race types, I see examples of a Republican bump in the polls during the first half of September, only to see it fall again in the second half of September.

Call it a “Palin surge,” if you will. I call this transient phenomenon: “The Republican Awakening.” And it has largely diffused over the last week in races all over the country.

We see it here in the Washington state gubernatorial race. That’s my story, and I’m sticking to it—at least until a more compelling hypothesis that better explains the data pops up. Back to the objective analysis.

Gregoire’s lead is, clearly, within the margin of error. We can empirically determine the probability that either Rossi or Gregoire would win an election held now using a Monte Carlo analysis.

A million simulated elections of 682 voters gives Gregoire 636,814 wins, and Rossi 353,324 wins. If an election had been held today, we would expect Gregoire to win with a 64.3% probability and Rossi to win with a 35.7% probability.

Here is the distribution of electoral votes resulting from the simulation.

The same SurveyUSA poll finds Sen. Barack Obama leading Sen. John McCain 54% to 43%. The +11% lead is even wider than a week-older ARG poll that had Obama up 50% to 44%. And compare that to the two mid-month polls: a Strategic Vision poll and a Rasmussen poll that each gave Obama a smallish single-digit lead (+5% and +2% respectively).

See how the “Republican Awakening” thing has melted away?

Founded in 1877, the nonpartisan Humane Society has never endorsed anybody for president it its entire 141 year history.  Until now.

I’m proud to announce today that the HSLF board of directors—which is comprised of both Democrats and Republicans—has voted unanimously to endorse Barack Obama for President. The Obama-Biden ticket is the better choice on animal protection, and we urge all voters who care about the humane treatment of animals, no matter what their party affiliation, to vote for them.

And yes, this did have something to do with the endorsement:

Join us at the Seattle chapter of Drinking Liberally for an evening of politics under the influence. Officially, we start at 8:00 pm at the Montlake Ale House, 2307 24th Avenue E. Some folks show up early to enjoy the fine cuisine.

If you find yourself in the Tri-Cities area this evening, McCranium shoud be announcing the local Drinking Liberally. Otherwise, check out the Drinking Liberally web site for dates and times of a chapter near you.

Seattle budget director Dwight Dively recommends taking the bulk of the $45 million settlement the city received from the Sonics, and use it to pay off the $34.2 million debt remaining on Key Arena’s 1995 remodel.

Yeah, I suppose we could do that.  Or, we could take the entire $45 million and buy bad debt from Key Bank at face value.  Perhaps our fiscally conservative Republican readers can chime in with their advice?

Ouch.

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

And that’s from conservative columnist George Will.  Again, ouch.

There’s been a lot of conjecture around these parts over whether doctors in Washington support I-1000. Carol Ostrom provides some hard data:

In July, the Washington State Medical Association (WSMA), which represents nearly 7,000 doctors in Washington, said it opposes the measure and that its “opposition was emphatically voted on” at last year’s meeting.

In fact, WSMA members never voted on the initiative.

And a survey WSMA commissioned last year actually found slightly more doctors approved of the provisions of I-1000 than opposed them.

In the survey, completed by Elway Research, 50 percent of doctors responding said they would support a measure like I-1000 while 42 percent would oppose it. Female physicians were more likely to support such a law.

In addition, I-1000 does not force dissenting doctors to certify patients under the law if they have moral objections to it. This is an initiative that respects choice for both doctors and patients. And this is why the similar law in Oregon has been so effective.

What the headline says.

A new CNN/Opinion Research Corporation Poll suggests that by a 2-to-1 margin, Americans blame Republicans over Democrats for the financial crisis that has swept across the country the past few weeks…

Hmm.  I wonder why?

Ouch.  All I can say is, ouch.

(FYI, you can view the entire discussion, unedited, here.)

When traditional journalists dismiss lowly bloggers like me as partisan and biased, while holding themselves up as oracles of objective, impartial, fair and balanced reporting, I generally respond by pointing out that for us mere humans, objectivity is an impossible, if at times an admittedly lofty goal.  Editorializing routinely creeps into the prose of even the most careful reporter… sometimes to the point that even their own editors sit up and notice.

Take for example the Seattle P-I’s Chris McGann, whose report on the Gregoire-Rossi debate in this morning’s paper appears to have sustained a few targetted snips from the initial report that appeared online Saturday night (via Google’s cache).

Saturday night McGann wrote:

The two sparred about crime, health care, and the environment in similarly harsh tones and for much of the evening the challenger kept the incumbent on her heals.

And this morning we read:

The two sparred about crime, health care, and the environment.

And on Saturday, McGann freely expressed his opinion that…

Gregoire’s manner came across as defensive, while Rossi seemed more able to stay on message.

While on Monday… well.. that bit of editorializing is entirely missing from the Monday edition.

Huh.  I guess McGann thought that Rossi decisively won this debate, which is not how I saw or it, nor how it was portrayed  anywhere else in the media. No doubt we can agree to disagree when it comes to matters of opinion—I just wish that more journalists would openly acknowledge that opinion informs everything they report.

McJoan recently spent a day with the Darcy Burner campaign, and writes about it over on Daily Kos.

It’s a smart campaign, and an innovative one. […] Darcy is willing to take quite a few risks in this campaign, but they’re strategic ones. As a “geek” and a former product manager, Darcy has a systems-based approach to the problem of taking on a popular incumbent. It’s led to much more unconventional campaign than the one she ran in 2006, partly because she has a higher degree of independence this time around. That’s largely because of the financial support she gets from the netroots. She doesn’t have to go to the telco lobby, or the pharmaceutical lobby, or the insurance lobby–she doesn’t have to necessarily dance to the DCCC’s tune this time around.

And you can trust Joan on this, because she’s credible.

There are dueling editorials in Seattle’s two dailies today regarding the projected $3.2 billion revenue deficit facing budget writers in the next biennium.  And if you’ve ever wondered why it’s necessary to have two dailies, well, this is a great example.

The Seattle Times leads off by intentionally misinforming their readers:

AFTER the deficit in the next state budget increased by $529 million Thursday, Gov. Christine Gregoire called on her director of finance to suggest $200 million in immediate cuts. It was a good move, if late.

Yeah, thanks for the backhanded compliment Frank, but as I’ve previously explained, there is no state budget deficit.  You can call it a “budget deficit” if you want, but that doesn’t make it so, and technically, you are absoposilutely wrong.

Had current revenues during this current biennium fallen below budgeted expenditures, that would have constituted a budget deficit.  But they haven’t.  In fact, we are still generating a small surplus.  What the Times is referring to is a revenue forecast that would project a deficit in the next budget should spending continue to grow at its current rate, which it won’t, because the state is constitutionally prohibited from running deficits.

The governor blamed the shortfall on the disaster in Wall Street and, by implication, on the Bush administration. That was not altogether convincing.

You know what I don’t find all that convincing?  An editorial page that routinely misleads its readers… you know, like the time you guys lauded Sweden for repealing their estate tax, without bothering to mention that they replaced it with a 1.5% annual wealth tax.  Or, you know, like when you label a revenue forecast a “budget deficit” when you know that it isn’t.

Whatever the cause of the Wall Street crisis — and we think most of the blame is in the private sector — some kind of economic downturn would have happened eventually, and Gregoire’s budget was not ready for it.

And eventually, our Sun will exhaust its supply of hydrogen, swell up into a red giant, and swallow the earth.  But that doesn’t stop me from planting a garden.

The point is, the governor could have let state spending continue to shrink as a percentage of our economy, socking away a few billion dollars for a rainy day… though the last time we tried that, Tim Eyman used the surplus as ammunition to pass his tax-cutting I-695.  Or, we could spend the money when have it, and then not spend so much when we don’t.  The latter option makes writing the 2010-11 budget more difficult, but in the meanwhile, class sizes have been reduced and tens of thousands of children have been given access to health care.

The rest of the Times editorial is filled with self-righteous I told you so’s and meaningless blah-blah-blah’s.  So let’s move on to the Seattle P-I, which offers a more concise, accurate and thoughtful approach to the issue.