Gas tax would aid economy, fund state programs

Published in The News Tribune, October 9, 2011

After what now seems like a thankfully long respite – four months was it? – state budget cuts are once again on the table.  And it’s the same old story.

The state’s chief economist Arun Raha once again erred on the side of optimism.  In truth, it’s more accurate to say that he was not pessimistic enough – no one dares be optimistic these days.  At any rate, the state budget is once again short — this time it is predicted to have $1.4 billion fewer revenues than when Raha last peered into his crystal ball. So back to the drawing board.  Back to negotiating more budget cuts. Continue reading

Strike has been resolved, but many problems remain

Published in The News Tribune, September 25, 2011

If you’re of a certain age, you’ll probably recall the cult film The Endless Summer.   We seemed to be living through our own version of that movie the last few weeks.  Summer ends when kids are back in school, and like the perfect wave in that movie, our waiting never seems to end.

It’s hard to think of a better example than a teacher’s strike of an event where everyone loses.  The only way the public can “win” is if the strike provides some lessons about the shortcomings of our school system.  I can think of three. Continue reading

9/11 wrongly lumped a whole group of people with terrorism

Published in The News Tribune, September 9, 2011

As we approach the tenth anniversary of 9/11,  let’s reflect on a group that may prefer to remain unnoticed.

And let’s notice them.

It’s pretty easy for most of us to associate Islam with terrorism.  While 9/11 is the most obvious cause for this, other events also spring to mind.

But in the spirit of reflection that 9/11 evokes, let’s consider this association. Continue reading

Maybe we really do get the politicians we unknowingly want

Published in The News Tribune, August 31, 2011

No matter what poll you believe, the consensus is that Congress is not doing its job.  In fact, only about one in seven of us think it is.  People express mildly more favorable opinions of the Democrat’s Congressional leadership than of the Republican’s.   But overall the blame for this summer’s fiasco seems to be pretty evenly spread around.

Yet blaming all of Congress for the mess it created while dealing with what should have been the relatively straightforward task of raising the debt ceiling doesn’t spread the blame far enough.

That’s because we’re all a part of a larger problem.  Yep.  You and me. Continue reading

The solution to the debt crisis really isn’t a solution at all

Published in The News Tribune, August 4, 2011

Which is better for our country do you think, low taxes or big government?

According to Republicans in Congress, this question captures the essence of our national financial dilemma.

The suggestion that each of us must choose between more money in our pockets on the one hand, and a bloated unresponsive government on the other is politically astute, but also deceptive and irresponsible. Continue reading

Task for new UW President: Make college affordable

Published in The News Tribune, July 8, 2011

The University of Washington has made an interesting choice for its new President.  Michael Young, who this week took over UW’s realm, does not seem to fit the liberal reputation of this institution.  But let’s hope he proves successful in addressing the conservative features of the University.  Such conservatism marks most of the nation’s public colleges and universities, and poses one of higher education’s largest challenges.

Some background is needed to understand this.  Let’s take what is fast becoming one of the most challenging issues in higher education:  providing an affordable education for the state’s students. Continue reading

Unfair distribution of wealth has nation going to the dogs

Published in The News Tribune, June 16, 2011

It’s not quite the dog days of summer, but dogs are making the news.

First came the story of the dog Trouble who just passed away.  Although she preferred to call her dog “Princess”, “Trouble” was the name the billionaire Leona Helmsley gave her beloved Maltese.  You may recall that Trouble gained fame four years ago after Helmsley’s death.  Leona, concerned that her dog might have to live out her life leading – well, a dog’s life — left Trouble a $12 million inheritance so that her dog could continue leading the life to which she had become accustomed.  Continue reading

State must not give up its role in affordable education”

Published in The News Tribune, May 26, 2011

For the next few years at least, the Legislature’s power to set tuition at the state’s higher education institutions has come to an end.  By ceding this authority, the Legislature recognized that it couldn’t drastically cut higher education’s support on the one hand, while also prohibiting institutions from turning to students for the difference.

Now that this is resolved, lawmakers should turn to policies re-establishing an affordable system of higher education in Washington State.  Continue reading

We need long term and short term debt strategies

Published in The News Tribune, April 29, 2011

When it comes to the economy, it’s hard to know what we should be worried about these days. Not long ago, most everyone agreed that demand –to be precise, a lack of it — was the key concern.  To shore it up, the federal government embarked on a massive spending spree.  The Federal Reserve also enacted a policy of “quantitative easing”, with the hope that this too would help convince us to spend more.

Seemingly overnight, however, the watchword has somehow turned from “demand” to “debt”.   The TNT (4-19) trumpeted this new concern across its headlines recently, referring simultaneously to the growing federal debt as well as the large state debt.    Republicans and Democrats in Washington, DC are now sparring over whose debt-reducing package is better.  Continue reading

Unions not to blame for problems with pension mess

Published in The News Tribune, April 15, 2011

Paying public employee pensions is costly, and will become more so. So we
better learn the right lesson.

In this state, two public pension programs are running out of money.  Unless
it changes current contracts, the state will have to significantly dip into
the general fund to meet its obligations.

The recent House budget addresses this problem by reducing future payouts to
retired workers. Yet even if approved, the changes still leave the two
programs billions of dollars short over the coming years. Continue reading

The case for energy taxes is even stronger now

Published in The News Tribune, March 30, 2011

Like many others, until recently I was a reluctant fan of nuclear energy.   I’d become convinced that it was a safe way of producing electricity.  The fact that one ton of uranium can be used to replace the burning of 16,000 tons of coal or 80,000 barrels of oil is still a strong selling point.    Yet that a nuclear disaster of the magnitude Japan is now facing could happen — in Japan of all places –is surely putting nuclear power’s future on ice.

This reduces the options for meeting our energy needs down to essentially three choices, one of which would be the far better one. Continue reading

Fiscal problems falling on the shoulders of children

Published in The News Tribune, March 15, 2011

In theory, local, state and federal governments operate like layers on a cake, each making separate and distinct contributions to the overall cake.  The federal government defends us from foreign enemies, state governments build roads, and local governments quench fires.  In practice, governments are related in ways making the analogy of a marble cake more apt.  For instance each state administers a distinct unemployment insurance program, but federal law and tax dollars make this a state-federal partnership.

Despite complicated relationships among our governments, the fiscal problems that each government now faces is addressed without  considering the collective impact of all the budget cuts.   And so, almost no attention is being paid to how our collective responses to governments’ fiscal problems are disproportionately harming children. Continue reading

Does the Tiger Mother allow for her Cubs’ Creativity?

Published with Mary Hanneman in The News Tribune, February 23, 2011

In case the state of the economy isn’t depressing  enough, now comes the news that we are lousy parents.  In her new book Battle Hymn of the Tiger Mother, author Amy Chua tells us that the “Western” parenting model allows kids to have too much fun and tolerates mediocre grades like an A-.   By contrast, “Eastern” parents require hours and hours of music lessons and academic drills, accepting nothing less than a perfect 4.0.

There is growing evidence that there may be something to this Eastern model.  The New York Times recently reported that some colleges find that half of their applicants from China have scored a perfect  800 on the math SAT – a score only one percent of American students attain. Continue reading

Leaders must find creative answers to budget crisis

Published in The News Tribune January 25, 2011

Budget woes are coming home to roost in Tacoma.  First came the announcement from Governor Gregoire that she wants to close the State History Museum in order to save $3 million.  Then, Tacoma Public Library announced it is closing two of its branch libraries.  The latest news comes from the Tacoma School District – Foss High School is being placed on the chopping block in order to save $2 million.

Given that all of these government entities are required by law to balance their budgets, cuts are inevitable.  But are these the right ones to make?  I won’t pretend to know the answer to that; but I think we can agree on two priorities. Continue reading

College cartel exploits football players’ talent

Published in The News Tribune January 7, 2011

Husky fans finally have something to cheer about. The Dawgs not only won a spot in a bowl game, they even won the game!  Indeed, college football’s “post season” treated Pac-10 teams well financially; together they split over $38 million in bowl revenue.    All told, 35 bowl games played over three jam-packed weeks allowed athletic programs around the country to rake in over $250 million. 

With this as backdrop, let’s turn now to a scandal that has rocked the college football scene this year. Continue reading

Government should help poor to save for retirement

Published in The News Tribune December 21, 2010

At a time of year when businesses everywhere are urging us to spend, the bipartisan presidential commission on reducing the national debt and Governor Gregoire’s proposed budget sound like Ebenezer Scrooge.  According to both, saving, not spending, is the order of the day.  One can’t help but wonder what Charles Dickens would say about the new-found cult of “austerity.”


As conservatives will point out, Dickens’ A Christmas Carol extols the virtues of private charity, and wasn’t intended as a guide to government action.   But the basic principle underlying Dickens’ classic is that we all owe a duty to the less fortunate among us.  Sometimes that duty is best performed by means of collective, governmental action. 


At the very least, the government should not pass up policies that could help the poor at little cost to anyone else.


But the presidential Commission missed an opportunity to do just that in its proposal for fixing Social Security.


The dilemma of Social Security is this:  Within a few decades the revenue flowing into the system will not be enough to cover the required payments.  We thus must either cut benefits, find additional revenue, or combine the two.   The bottom line for any reform should be that it protects the pensions of the most unfortunate among us. 


On this point, the Commission’s plan is not that bad.  First, it reduces everyone’s benefits by slowing cost-of-living adjustments and increasing the age at which we’re eligible for a full pension.   Second, it increases the amount wealthier individuals will pay into Social Security.  Finally, it restructures pensions so that those to the wealthy decrease and those to the poor increase. 


A good starting point.  But we should keep in mind that Social Security has always been meant to supplement citizens’ other sources of retirement funds.  For low income workers, Social Security provides about $10,000/year — not enough to get them over the official poverty line.  But these retirees as well as almost half of all retirees rely on Social Security for roughly four out of every five dollars of post-retirement income.   For many, then, the premise that Social Security is a supplement just doesn’t hold. 


We could of course beef up the size of the government’s pension to low income retirees.  This is what other rich countries do:  On average they provide their low income citizens with about 50 percent more retirement income than we do.   Or we could follow in their footsteps by providing greater income support.  Yet these policies are partly responsible for the budget problems plaguing European nations; and anything that increases our own budget woes during these austere times is a non-starter.


But here’s what we can do that wouldn’t be all that costly:  enact policies to promote savings and asset accumulation among low and middle income citizens.   In addition to low income, a lack of savings is what explains why too many citizens reach retirement without a nest egg to supplement their Social Security check.  


The federal government already has loads of policies that promote wealth accumulation.    Think of the home mortgage deduction, the favorable taxation of capital gains, and tax breaks for contributions to retirement or college savings plans.  But these policies, which collectively total  hundreds of billions of dollars in subsidies, are not targeted to those at the lower end of the income distribution; over 90 percent of these subsidies to wealth building go to those in the top half of the income distribution.   Not surprisingly, these citizens already own over 95 percent of the nation’s wealth.   Current subsidies thus encourage wealth accumulation among the wrong people.


We know from demonstration projects that given the right support, those with even very low income can and do save.  Through tax credits and other forms of government subsidies, it is possible to get low to moderate income households to build up assets.   By doing so during their working life, citizens gain the ability to plan, respond to emergencies, and pass on opportunities to their descendants – in addition to retiring with greater income security.


Promoting saving among poorer citizens is an idea that all Scrooges should like.

State revenue picture is better than you might think

Published in The News Tribune December 2, 2010

Despite front page doom and gloom on the state budget front, my column last week argued that things aren’t quite so bad.  Sure in the weeks ahead, we’ll suffer more budget cuts as the projected revenue for the rest of the fiscal year is once again falling short of what was previously forecast. .

But looking ahead, the Office of Financial Management (OFM) is forecasting record revenue for the next biennium – a full 16 percent above revenue expected this biennium.   By comparison with these last two years, the next biennium sounds like a piece of cake.  Perhaps with the exception of Tacoma’s City Manager, who among us wouldn’t  leap for joy if told that our income was going up 16 percent? Continue reading

Health care reform repeal takes us in wrong direction

Published in The News Tribune November 14, 2010

Bolstered by the election, Republicans are now renewing their commitment to repeal Obama’s health care reform act.  The government’s “takeover of health care” was a bad idea, they say.   Courts in the meantime are reviewing the Act’s constitutionality, with many arguing that the federal government cannot legally mandate insurance. 

Not being a constitutional scholar, I’ll take a pass on this legal challenge and instead say why mandating insurance is exactly what the federal government should be doing. 

Aside from a moral argument that everyone should have health insurance, the reason for mandating insurance is that without universal coverage, the health insurance market is unacceptably wasteful and unfair. Continue reading

I-1098 neither targets nor discourages innovation

Published in The News Tribune October 27, 2010

It’s the Innovation Era!  Creativity and ideas are what drive economic growth these days, not strong backs and the luck of geography.

So we should be especially interested in knowing what promotes “innovation” — and conversely what inhibits it.  If you listen to many opponents of the state’s income tax initiative (I-1098), an income tax on the wealthiest Washingtonians will do the latter.   

 “I-1098 would significantly harm the state’s ability to attract new businesses” is a common complaint.  Another critic writes that I-1098 harms firms “at the heart of the ‘innovation economy’”.

There may be good reasons for opposing I-1098, but that it will stifle innovation is not one of them. Continue reading

Paying twice for education: We’re spending a lot of money to help college students catch

Published in The News Tribune October 10, 2010

Imagine, if you can, using taxpayer money to build an expensive stadium, then before it is paid off you implode it so that you can build an even more luxurious stadium, again with taxpayer money.

OK, too much of a stretch?  How about this:  We spend millions of taxpayer dollars to build a highway that doesn’t quite meet in the middle.

Sometimes in the public sector is seems like the adage “Measure twice, cut once” should be “Pay twice, get once.” Continue reading

New education standards key to improving schools

Published in The News Tribune August 27, 2010

As a new school year rolls around, there is reason to be optimistic that our educational system might finally be headed in the right direction.

Let’s start first with the bad news, best summarized by a couple of statistics.  According to the federal government, among Washington’s 8th grade low income black students, only 8 percent have achieved 8th grade math proficiency.  Among the state’s nonpoor white students, about half meet this standard.

These statistics point to the two persistent problems facing both Washington and the nation:  the low overall quality of education received by students, and the “achievement gap” – differences in the quality received based on socioeconomic class. Continue reading

Ballot measure gives us chance to fix budget for good

Published in The News Tribune August 15, 2010

Should we be upset that Congress has just promised Washington an extra $526 million?  Not I nor, I think, will others whose kids go to our public schools, who use Medicaid for health insurance or have a parent in a nursing home, or who otherwise support the wide range of services the state provides:  This money will help assure their continuation.

According to Richard Davis, however, we would be better off without this additional federal dollars (“We missed a chance to really fix the state budget”, TNT 8/11).  Basically, Davis believes this windfall has allowed elected officials to temporarily avoid the hard choices ahead. Continue reading