Third and State
Special blizzard edition ... yeah we’re snowed in, but we know you’re just watching your email for our weekly news so here it is, delivered despite the weather.
Shoveling through a blizzard of extremism and misinformation … At KRC and PBPC we’re committed to providing you the facts and information that we all need to sort out which competing public policy proposals will fairly and adequately fund our schools, create good-paying jobs, and put our economy on a sustainable, solid footing. So, we speak up when we spot misinformation and policy positions based on extreme ideologies rather than facts. So we needed to respond to some egregious examples that recently appeared in the media.
In this letter to the editor KRC’s Steve Herzenberg called out Senator Wagner for repeating the flat-out wrong assertion that the budget that passed is balanced and responsible and for stirring up resentment towards the people of Philadelphia.
PBPC’s Marc Stier took to the opinion pages to object to Rep. Seth Grove’s personal attack on Governor Wolf.
And KRC’s Mark Price, who by the way has a Ph.D. in economics, took on the voluble Senator Wagner’s prediction that an economic recession is on the way in our Third and State blog.
We deeply appreciate this special recognition of our work ... KRC was honored to receive a Martin Luther King Social Responsibility Award from the Interdenominational Ministers Conference (IMC) of Greater Harrisburg for its “state-of-the-art research on economic issues facing Pennsylvania residents.” Dr. Steve Herzenberg accepted the award on behalf of KRC.
New Hampshire clearly needs us ... Steve Herzenberg journeyed north – bad call – to New Hampshire to testify before the Labor Committee of the state legislature aboutKRC’s new study on the impact of a proposed state law requiring that workers on state-funded construction projects be paid “prevailing” wage and benefit levels specific to each county and craft. As reported in the New Hampshire business press, KRC found that a prevailing wage law would help in-state contractors recapture market share from low-wage out-of-state contractors, creating several thousand more New Hampshire jobs. Pennsylvania is one of the half of states that already has an effective state prevailing wage law setting a floor on wages and benefits that benefits responsible Pennsylvania contractors.Don't wait til it's too late ... two weeks ago we began accepting registrations for our annual Budget Summit which is taking place on Thursday, March 3rd, at the Harrisburg Hilton, and we're nearly halfway to reaching our maximum capacity for this free event. Reserve your place now.
It's snowing in January, but June will come and bring us ... The 20th Anniversary Keystone Research Conference on June 8-9 at the Crowne Plaza in Harrisburg. We’re lining up great sessions and exciting speakers. Watch your email and social media for more details.
If you were getting bored by the never ending budget process, a flurry of colorful metaphors by “Fightin” Sen. Scott Wagner of York County added a more circus like element to the standoff. I just wanted to highlight an interesting argument in the Senator’s letter to Capitolwire about the current state of the economy. According to the Senator:
“I have been a private sector business owner for over 35 years and I can smell that a recession is beginning to develop”
Interesting, I always assumed that a dulled sense of smell was a key ingredient to a successful career in waste management, but then again I also never thought to smell a recession.
Predicting recessions or unending prosperity is a perilous business mostly because the predictions almost always turn out to be wrong. So mark your calendar - the Senator says a recession is developing. Let’s come back in six months and see how that turns out.
Now what might be bothering the Senator?
One of the few people to see the housing bubble, Dean Baker explains:
“For those who closely follow financial markets the first two weeks of 2016 have been the most fun since the financial crisis triggered by the collapse of the housing bubble. The market has lost more than 10 percent of its value since its late December peak, destroying more than $2 trillion of stock wealth…The fundamentals are not strong, but the economy is also not about to fall into another recession. The basic story is the one we were seeing before all the fun on Wall Street, we are looking at an economy that is growing slowly and still has not come close to recovering from the last recession. The rollercoaster ride on Wall Street has little effect on this picture.”
The Pennsylvania economy, like the national economy, is growing slowly. Job growth through November of 2015 is slower than in 2014 thanks to a bad year for durable goods. Specifically mining, construction and manufacturing all shed jobs through November. Is this a recession? Unlikely, but like I said, we will come back in six months and know much better. So stay tuned.
Now the Senator's prediction does provide a new interpretation of the state budget policies he favors -- more spending cuts which would drag Pennsylvania back to the bottom of the job growth rankings. So even if Wagner's prediction of recession turns out wrong for the nation, another state budget with deep cuts in spending like Gov. Tom Corbett’s first budget would most certainly deal a body blow to the Pennsylvania economy.