Leader Blues

Wednesday, May 03, 2006

SAT 5-3-6 EDITORIAL >> Blame it on Clinton?

Arkansas ranks 48th in per-capita income, just a hair above Louisiana and Mississippi, the states that were decimated last year by Hurricanes Katrina and Rita. You have one guess about who is responsible.

Youíre exactly right! It was Bill Clinton again. See, he raised the Arkansas sales tax by a penny on the dollar in 1983 to give the schools more money, which he foolishly expected to produce financial rewards for Arkansas people.

That is the explanation anyway of the Arkansas Policy Foundation, a right-wing think tank formed in the 1990s by a group of second-generation rich men and funded by, among others, the Walton Foundation. You read about the groupís analysis of the floundering Arkansas economy Wednesday in David Sandersí column. Their goal is to shrink state and local governments and taxes and to get them off the backs of rich people. It believes that the public schools are particularly unworthy of the taxpayersí beneficence. Greg Kaza, the executive director of the Policy Foundation, said Arkansasí poor economic standing relative to other states was to a considerable extent the result of Clintonís naÔve belief that putting more money into the public schools would raise educational achievement and that this would develop the economy and raise personal prosperity. But it doesnít work that way, Kaza said. Twenty-three years later, Arkansas ranks about where it did then in per-capita income rankings. Only Republican Mike Huckabee among Arkansas governors, Kaza said, has recognized what Arkansas needs to advance, which is to develop durable-goods manufacturing.

Wait, since Huckabee has been governor and implementing his economic wisdom for almost 10 years, could he bear just a little blame? After all, the income gap between Arkansas and the nation as a whole has actually widened during that span. It narrowed some in the Clinton gubernatorial years and soon afterward, in his early years as president. We arenít privy to Kazaís explanation for those perversities, but we would guess that it would be that economic policies require many years to have an impact ó maybe 23. Young Kaza is brainy enough, but his is the failing of all doctrinaire policy organizations that are funded by interests with selfish agendas. They see only the statistics and trends that fortify their theories.

The analysis of Clintonís school-reform program suggests how it works. Clinton did justify the increased tax support of education in 1983 partly on the premise that Arkansas needed to compete with other states and other nations in the educational achievement of its children if it was to move forward. But while Arkansas took a modest step that year, and small ones later, in 1987 and 1991, most other states did even more. Arkansas was 48th in educational spending per student that year and it never got much higher. Last year it was 49th at $6,202 per student.

Kaza implied that there was little correlation between public school spending and per-capita income growth. But he will have a hard time proving it as those on the other side have proving that school spending leads directly to higher incomes.

Connecticut, Massachusetts, New York and New Jersey are at the top of the rankings in school spending and they also rank at the top in per-capita income. The states that are at the bottom in school spending are the familiar ones that are also at the bottom in per-capita income.

And did Clinton, as Kaza asserted, really not understand that durable goods were the key to real economic growth? He pushed through an economic program in 1985 that included tax and other incentives to do just that. For a period, Arkansas was among the few states in the country that increased manufacturing jobs and for a time it led the nation. Since Huckabee became governor in 1996, Arkansas has had a steady attrition in those jobs. So has most of the rest of the country.

But we would state this caveat: Mike Huckabee is not to blame! Nothing that he has done, as far as we can discern, has damaged the economic climate. He is neither villain nor savior. Clinton doesnít fit either category either, but on balance we think the statistics favor him.

Nationally, even the Arkansas Policy Foundation surely would acknowledge that all the important economic statistics favor his policies over the 10 years of the two Bush administrations, whose fiscal policies are precisely what the Foundation says will get the job done.

Itís back to the drawingboard for Kaza and his ilk.