QUOTE OF THE DAY
Chicago Tribune: Alderman pushes through watchdog limits week after being probed
Ald. Patrick O’Connor quickly pushed through an ordinance Wednesday that limits the ability of the City Council’s watchdog to investigate aldermen’s campaign finances — a week after that investigator received permission to open an ethics probe of O’Connor.
The measure sponsored by O’Connor — Mayor Rahm Emanuel’s City Council floor leader — could hinder Legislative Inspector General Faisal Khan’s ongoing campaign finance probes, including the one of O’Connor.
That investigation, spurred by two sworn complaints to Khan’s office, involve allegations that O’Connor violated the city’s rules on soliciting campaign contributions, contract inducement, conflict of interest, improper influence and fiduciary duty, according to a confidential memo that Khan sent to the Board of Ethics seeking approval to launch his inquiry.
Reason: Are Tax Cuts Working in Kansas?
A Republican member of the New York State Assembly emails: “I read a number of breathless articles about the ‘failure’ of tax cuts in Kansas. … My concern is that the Left is winning the PR war on these tax cuts and will use this Kansas example against every governor who tries to reduce taxes if there is no push-back now. What are your thoughts on the Kansas tax cuts?”
Great question, assemblyman.
“Breathless” is exactly the word to describe the critics of the Kansas tax cuts, and indeed there are a number of them. For a flavor of the argument, one could check out a recent Paul Krugman column headlined, “Charlatans, Cranks, and Kansas,” asserting, “Kansas isn’t booming…the state’s budget has plunged deep into deficit, provoking a Moody’s downgrade of its debt.” Or one could consult the New York Times editorial headlined, “Kansas’ Ruinous Tax Cuts,” which described the tax cuts of Governor Brownback as “spectacularly ill-advised.”
NY Times: Tyler Cowen on Inequality and What Really Ails America
Is it misguided to focus so much attention on the vast income chasm opening between the very rich and the rest? Tyler Cowen, a professor of economics at George Mason University, evidently thinks so.
Earlier this year, Mr. Cowen published a pointed critique of the French economist Thomas Piketty’s tome on inequality, “Capital in the Twenty-First Century.” He declared himself unconvinced with Mr. Piketty’s interpretation of economic history and dismissed the “far-fetched plan” to impose a global tax on wealth to radically redistribute capitalism’s fruits.
Mr. Cowen has written a couple of columns on the topic for The Upshot, arguing that income inequality on a global scale is falling, not rising, and noting that theFrench seem less enamored of Mr. Piketty’s book than Americans.
Crain’s: State needs to open eyes wide before privatizing job-creation agency
One of the hotter ideas among the new crop of GOP governors in recent years has been to at least partially privatize their economic development agencies. The theory is that taking power away from slow-moving, politically influenced bureaucrats and giving it to business folks who know how to talk the talk and walk the walk gets more jobs and investment more quickly.
And it hasn’t been just Republicans either. With a push by both Mayors Richard M. Daley and Rahm Emanuel, Chicago has shipped much of the power to set and implement a jobs strategy to World Business Chicago, which the mayor chairs but which is pretty much run by a nonprofit board.
Now GOP gubernatorial nominee Bruce Rauner is saying he wants to do the same thing in Illinois. And it’s set off a furious counterattack from the Quinn administration and the folks at the state’s Department of Commerce and Economic Opportunity.
Washington Post: For Chris Christie, New Jersey pension battle presents a test for 2016
There was a faint ripple of applause as Chris Christie’s black SUV pulled up to the waterfront gazebo, and it was all but drowned out by a loudspeaker blaring the Beach Boys.
The turnout was modest as well, unless you counted the 200 or so grim-faced police officers and firefighters from across the state, who far outnumbered the locals.
The town hall meeting Tuesday was the New Jersey governor’s first stop on what is being billed as a summertime “No Pain No Gain” tour of shore towns. It is meant to prepare Garden State voters for what Christie warns are going to be agonizing fiscal choices, starting this fall.
Chicago Mag: What’s Wrong with Illinois’s Economy?
The Rust Belt is rebounding, led by manufacturing gains in the auto industry—and leaving behind the less car-dependent Land of Lincoln.
This tweet, from Cameron Tonkinwise, director of design studies at Carnegie Mellon, passed through my feed and made me a bit depressed.
Reuters: Federal Obamacare market still faces cost overruns, delays: watchdog
Ten months after the botched rollout of HealthCare.gov, Obamacare’s federal health insurance exchange is still dogged by cost overruns and technology delays that could hamper enrollment when it resumes in November, a U.S. watchdog said.
The total cost of HealthCare.gov and its supporting systems hit $840 million in March, according to a forthcoming report by the nonpartisan Government Accountability Office (GAO). Excerpts of the report were released on Wednesday by a U.S. House of Representatives oversight committee.
Part of the cost stems from the federal government’s work with Accenture Plc, the lead contractor for the HealthCare.gov website. The value of that contract soared more than 92 percent in less than six months, from $91 million in January to more than $175 million by early June, a GAO investigation found.
Chicago Tribune: Blogger sues CTA for documents related to Ventra contract
A blogger sued the CTA on Wednesday to obtain copies of the losing bids and other documents related to the transit agency awarding an almost half-billion-dollar contract in 2011 that resulted in the new Ventra fare-collection system.
Jason Prechtel filed the lawsuit in Cook County Circuit Court, contending that the CTA violated the Illinois Freedom of Information Act by providing him with “only a small and woefully incomplete subset of records’’ related to the contracting process that led to Cubic Transportation Systems Inc. being hired to run the Ventra open-fare system.
Cubic had previously won a CTA contract to manage the old fare system, which included the Chicago Card.
Josh Barro: ‘Pension Smoothing’: The Gimmick Both Parties in Congress Love
The Federal Highway Trust Fund is set to run out of money. If Congress does not put more money in the fund by Friday, the federal government will start reducing its payments to states for highway projects, and some construction might stop. So the House and Senate are fighting over how to get money in the fund, and the fight has boiled down to “pension smoothing,” a budgetary gimmick worthy of Rube Goldberg.
Here’s how it works: You let companies set aside less money in their pension plans. When they put less in their pension funds, they report higher profits and pay more in corporate tax. That generates a little extra revenue, which you can put in the highway fund. Over the long run, this policy doesn’t actually generate any added revenue, since in later years, companies will have to increase their pension contributions to make up for what they didn’t set aside today, and their tax payments will go down. But since Congress measures the costs of laws over a 10-year window, the added revenues in the near term count, and revenue losses far in the future don’t.
Forbes: McDonald’s Ruling By NLRB Counsel Puts SEIU’s Unionization Goal Within Reach
The Service Employees International Union (SEIU) has been funding and organizing protests by and in support of fast food workers. While the protests have focused publicly on the demand for a $15 per hour wage, the real goal of the movement is for the SEIU to unionize fast food workers. Yesterday’s ruling by the general counsel of the National Labor Relations Board is a big step toward the SEIU’s goal.
In response to some of the fast food worker protests a number of McDonald’s franchisees have taken actions against workers, including firing some. Workers, with help from the SEIU, have filed claims with the NLRB stating violations of labor laws and claiming that they really work for McDonald’s, the franchiser, not their actual employers.
The NLRB general counsel has just issued a ruling that the various separate claims can be treated together and that McDonald’s is a joint employer. Legally this is akin to turning the franchise owners into corporate co-managers and all the restaurant workers into employees of corporate headquarters in addition to their local small businesses.
CARTOON OF THE DAY
