Jindal-nomics Illustrated

In response to my graph of Louisiana GDP, Manfred asks:


…we have to define what Jindalnomics is or was.

I don’t know for sure, but as shown in this graph, it seems to include large corporate tax breaks.

And if Jindal had had his way, income tax breaks as well.

For completeness’s sake, here is Louisiana GDP, again.

Figure 1: Log real GDP, 2008Q1=0 for US (dark blue), and for Louisiana (chartreuse). Light orange shading denotes Jindal administrations. Source: BEA and author’s calculations.

Side point: Manfred has an interesting approach to economics; see this 2017 comment:


Why drop the ACA?
Because of liberty, because of free markets, because of competition, because of freedom of choice among many plans, that may or may not be the liking of techno-bureaucrats in Washington and at MIT.
I know that talk like this is anathema to many in this blog.
The ACA is suddenly popular? Of course, many people want free stuff, they like their Medicaid subsidies, they like the subsidies to their plans, all paid by “somebody else”.
Unfortunately, this mindset of free stuff combined with an anti-liberty attitude is becoming very pervasive in Econ academia, especially in some “Public Policy” Schools.

43 thoughts on “Jindal-nomics Illustrated

  1. pgl

    “Near the end of his eight years as Louisiana governor, Bobby Jindal, a tax-slashing conservative and presidential hopeful, acknowledged that the state’s business tax breaks had gone too far.”

    Now he admits he screwed up! Louisiana is rich in oil and natural gas resources. Jindal enters office during a commodity price boom. OK the boom is over but there was always plenty of income to invest in other sectors and for education. You note he squandered the opportunity to raise tax revenues. But is there available information on what happened to the state and local budgets for things like education?

    Reply
    1. pgl

      http://www.governing.com/gov-data/education-data/state-education-spending-per-pupil-data.html

      “The Census Bureau compiles data on education spending per pupil and elementary/secondary education revenues for each state. Nationally, the most recent data indicates $11,762 is spent on public education per student. Significant variation exists across states; New York spends more than $20,000 per student, while states like Utah and Idaho report spending about a third as much.”

      Louisiana apparently spent just over $11,000 per student, which is near the national average. And yet – its education system fares poorly.

      Reply
    2. pgl

      But wait – what happened to higher education under Jindal:

      https://www.businessreport.com/article/louisianas-higher-education-spending-per-student-state

      “But as The Chronicle of Higher Education reports, Louisiana’s four university systems will have a hard time shaking off nearly a decade of budget cuts. And more could be on the way with the state facing a roughly $1 billion budget shortfall that’s unlikely to be closed by raising taxes. Most of the higher education cuts were made during the administration of former Gov. Bobby Jindal, who reduced income taxes and used reserve funds to help balance the budget. Gov. John Bel Edwards signed off on additional cuts like last year’s TOPS reduction. More problematic: Louisiana lagged behind other states in education investment and degree attainment prior to 2008. Without question, other cash-strapped states forced universities to cut programs and consolidate administrative offerings, but a sizeable number have already begun to restore its funding of public higher education.”

      I guess Jindal thinks getting a high school degree is good enough for the kids in his state!

      Reply
  2. baffling

    in the aftermath of hurricane katrina, the new orleans area went full tilt into the charter school approach. it was a dismal result. schools were randomly shutting down, forcing students to become re-accomodated at new locations throughout the year. school failures did not correspond to academic calendars, so a first grade student may find themselves out of school in march, for instance, with no good plan to complete the school year. teachers also came and went at odd times of the year. this exposed the stoopidity of the conservative approach to using market forces to solve the education problem.

    higher education suffers from misplaced priorities from both the state government and the population as a whole. it is most important for lsu to compete for an sec or national championship, than to worry about the quality of their academic institutions overall. unfortunately that is both a democratic and republican problem in the state. the wealthy parents send their kids to tulane, or another out of state school, so they don’t really worry about the funding issues for the state schools. the state as a whole is rather provincial, which helps explain why it is not as forward looking as some other states in the republic. its a great place to visit, but the folks seem to be living in the past, which limits its growth in the future. the economic performance in the state is about what i would have expected overall.

    Reply
    1. pgl

      “in the aftermath of hurricane katrina, the new orleans area went full tilt into the charter school approach.”

      Thanks for this informative comment. The state spends $11,000 per student on public education as I noted earlier but it ranks very low in results. This helps explains how this could be. Of course Jindal made sure that the state spent very little on higher education so it all makes sense in a Paul Ryan sort of way!

      Reply
      1. Manfred

        pgl…

        The story of the Orleans Parish School Board (OPSB), and its switch to a charter system is much, but much more complicated that saying “in a Paul Ryan sort of way”.
        You have no idea what you are talking about, none, zero, zilch.
        And that is sad, because it means you simply do not give a damn about the school kids that had to suffer through the OPSB.

        The charter system is very popular, *especially* among the African American community.

        So please, do not speak stupidities. And by the way – the Recovery School District in New Orleans was created under a Democrat governor.
        Just saying.

        Reply
    2. Manfred

      baffling…

      “in the aftermath of hurricane katrina, the new orleans area went full tilt into the charter school approach. it was a dismal result. ”

      This statement is completely false, including the commas.
      I do not have the will nor the time nor the stamina to rebut this.
      But anybody who looks at the Recovery School District in New Orleans cannot make this statement, which is totally false.
      And then, you complain about fake news. Here it is. In black and white. Fake news spread all over.

      The story of the Recovery School District is very complicated and long. And it seems you simply do not give a damn about the kids who had to suffer through it.

      Reply
      1. baffling

        actually manfred, i was there. so i do know something about the charter system in new orleans after katrina. you are correct, it was a complicated situation. but for those of you trying to use it as an example of success, that is wrong. it failed many of the most vulnerable in the city. exactly what would have been expected of a market based education system in one of the poorer communities in the country.

        “And it seems you simply do not give a damn about the kids who had to suffer through it.”
        i do give a damn, which is why i have issues with this model. it need not be repeated again.

        Reply
        1. baffling

          manfred, you can read some other accounts of new orleans charter schools. since you don’t have time to explain, let me provide you with some additional details
          https://www.newyorker.com/business/currency/what-new-orleans-tells-us-about-the-perils-of-putting-schools-on-the-free-market
          https://www.washingtonpost.com/education/2018/09/04/real-story-new-orleans-its-charter-schools/?noredirect=on&utm_term=.c1c14ef10700

          has the charter system been an improvement over the previous school system? certainly. who could not improve over the worst school system in the nation. but the question arises: would the charter system have produced markedly better results than if the system had simply been rebuilt after the storm using the same amount of resources? the evidence suggests that a rebuilt school system would have performed about how the charter school system is currently performing. so the charter miracle is mostly a figment of where the previous system existed. but it failed a lot of poor students with school closures, teachers quits, bias in enrollment process (i.e. racism and socio-economic segregation), unequal treatment of disabled and special needs students, etc the list goes on and on. the system failed many of the poor students that remained in the city. it is not a framework that should be repeated in another city.

          Reply
  3. pgl

    FYI – Mike Pence is a liar:

    https://talkingpointsmemo.com/news/six-migrants-on-southern-border-terrorist-watch-list

    “For months, the Trump administration has sought to portray the southern border as a potential source of terrorism by falsely conflating statistics about so-called “known or suspected terrorists” who had been prevented from traveling to the United States with migrants and refugees seeking asylum on the southern border. On Monday, NBC News clarified the matter: In the first half of fiscal year 2018, according to Customs and Border Protection data obtained by the network, CBP agents encountered just six immigrants on the southern border whose names matched the Terrorist Screening Database — which itself is of dubious accuracy.”

    At best – we are talking about one per month. What was that VP Mike Pence:

    ““In the last fiscal year,” he said in an interview, “we apprehended more than 10 terrorists or suspected terrorists per day at our southern border, from countries that are referred to in the lexicon as ‘other than Mexico.’ That means, ‘from the Middle East region.’” But that was wrong.”

    Like I said – Mike Pence is a liar.

    Reply
  4. Manfred

    Menzie…
    I love the way to mix and match different issues, that have nothing to do with each other.
    You posted a diagram, and mentioned Jindalnomics, without defining it. Then, you quote me on the ACA. If you say that my approach to Econ is “interesting”, well, yours it at least as “interesting”.
    As for the diagram on tax exemptions and credits, etc. Yes, Louisiana has a huge number of tax exemptions and deductions and credits.
    They are collected in a publication called the “Tax Exemption Budget” – here is the latest one: http://revenue.louisiana.gov/Publications/TEB(2017).pdf

    If you look through the TEB, many, if not most, tax exemptions pre-date Jindal. These exemption come up regularly in the legislator, but nobody has the political will to reduce them or eliminate them. One big exemption was passed (I do not remember exactly the date) in 2008, which is the so-called “Stelly reversal”.
    The “Stelly Plan” had increased personal income taxes to the higher income (I am simplifying) in 2003 (it was actually a switch, lower sales tax for higher personal income tax) – a proposal was introduced in the legislator in 2007 to reverse this increase (but not reverse the sales tax reduction). Jindal first opposed it, actually – but when he was elected governor, he reversed his position and signed it.
    Another big tax exemption (again, if I recall correctly) was the sales tax exemption to machinery or something to that effect. This exemption was passed under Governor Blanco (a Democrat…)
    It is true that Jindal did not much to eliminate the exemptions. But no governor before him did, Republican or Democrat (most governors were Democrats).

    As for Jindalnomics: again, Menzie does not have a definition. What Menzie misses is that Jindal did not reduce taxes or tax rates (except for the Stelly reversal). Yes, he had a proposal (after his re-election in 2011) to eliminate the income taxes (personal and corporate). But that went nowhere. It died the first day of the legislative session. All proposals of income tax elimination were tabled and filed away the first day.
    As I mentioned, Jindal did not reduce taxes or tax rates (except for the Stelly reversal, which was passed in 2008). But after, he did not touch any of that.
    His major problem, in my view, is that he did not want to cut government expenditure. He wanted to have the same amount of government, with ever thinning resources. So much so, that he resorted to all sorts of tricks to fund the budget.
    In his last year, 2015, he did agree to support a temporary haircut to the exemptions, credits and deductions. It was a set of three bills, sponsored by a northern Louisiana state representative, Katrina Jackson (a Democrat), and he supported it and signed them into law. [There is more to the story, but not time to tell it.]
    But the big bill of his staunch anti-tax raising stance came when Governor Edwards came into office. But that is a story for another day.

    So, what is Jindalnomics? Menzie does not have a definition. In my view, it is that you govern such that you want always the same amount of state expenditure, but your tax revenue does not keep up. If you are not willing to cut (as Jindal and the legislator – let’s not forget the legislator in this game – were not willing), then you have an increasing problem. The bill came due in 2016, when the new administration came into office.

    Finally, does this really explain the evolution of Louisiana’s state GDP? This is were Menzie and I differ.
    I say no. The state budget is too small to influence the direction of state GDP. Louisiana’s state GDP evolves because of different variables, but the state budget is not one of them. The state budget is about 1/8 of state GDP (give or take), and thus, I am not convinced that the budget has anything to do with state GDP evolution.
    The oil price had some effect (we lost 20K jobs in the oil sector since 2014); education plays a role to employers, and thus, they do not come here; infrastructure in general is not up to par, and thus, investors look elsewhere; the tax code is Byzantine, incredibly complicated for a small state like Louisiana. These are only examples of why state GDP evolved in the way it did.

    Reply
    1. noneconomist

      Seems jindalnomics was also about Bobby Jindal’s ego and what he said he wanted to accomplish. Accomplish, no less, in a state with below par economic diversity, relying instead on untested conservative orthodoxy–and impressing the likes of Grover Norquist–to accomplish those goals.
      Seems Bobby J wanted to go do that voodoo that conservatives believe the know how to do so well. Cut taxes, really cut taxes, and cut taxes some more. And they will come. Or so he kept SAYING.
      Problem? He ended up being less popular in Louisiana than Barack Obama,.
      He was the guy Limbaugh called “the next Ronald Reagan.” Wrong Ronald. The next Ronald McDonald was more like it.

      Reply
      1. please_stop

        untested conservative orthodoxy

        This is false. It’s been tested for decades, and meaningfully fails to live up to every promise made. Promises like “Lower tax burden will increase government revenue through increased economic activity.” In America, this fails, has failed, will fail again.

        Reply
        1. noneconomist

          They desperately want to do that voodoo they can’t do. Stick either a fork or a pin in Bobby and jindalnomics. They’re both done.

          Reply
    2. pgl

      You don’t have time to address any of the data I provided on education or even Baffliing’s comment either. But you do have time to bore us with your endless ranting which comes down to blame the Democrats. Me thinks The Manfred is just another Trump troll. YAWN!

      Reply
      1. Manfred

        Yes pgl, and you (and many others) bore me with endless rants that blame the Republicans. And no, I am not a troll. I am just a guy with an opinion.

        Reply
        1. pgl

          “I may be incompetent, but so are you, too.”

          LOL! Your “opinions” have been approved by Team Trump. Manfred – you are a fraud and the more you comment here, the more obvious it gets.

          Reply
    3. pgl

      In the midst of your ramblings – your own attempt at providing data comes out as:

      “Server Error in ‘/’ Application.
      The resource cannot be found.”

      The Manfred is even incompetent at providing links!

      Reply
      1. Manfred

        pgl
        I may be incompetent, but so are you, too. So, let us join the club together.
        If the link did not work, I explicitly mentioned the Louisiana Dept of Revenue – any reasonably intelligent person could go to their website, look for any link related to “Publications” and look for the Tax Exemption Budget. Or just google Tax Exemption Budget Louisiana.
        But I know. It may difficult for you to comprehend.

        As for charter school in Nola: well, you may consider it a disaster – many people (not only me) disagree with you. Especially in the minority community, for which the charter system in Nola was a blessing.

        Reply
        1. pgl

          “I may be incompetent, but so are you, too.”

          Manfred – you are more than incompetent. This name calling is the behavior of a spoiled brat 2-year old. Listen – we have all figured out that you are nothing more than a Trump troll. So no need to pretend anymore as you have zero interest in real conversations. Move along to another blog where jerks like you are appreciated.

          Reply
          1. Manfred

            You just make me laugh, pgl.
            Your rants about me confirm that whatever you say about me (which may be true, I don’t deny), is also true for you.

    4. please_stop

      The state budget is about 1/8 of state GDP (give or take), and thus, I am not convinced that the budget has anything to do with state GDP evolution.

      But for the repeatedly successful observation that government spending that supports economic activity is a net good. (bridges, airports, accessible data infrastructure.)

      Reply
      1. Manfred

        If that is true let us tax 100% of all income, and devote it to bridge, airport, accessible data infrastructure building. There are some in the Democratic Party who want to go this route (AOC), and apparently Krugman is on board, too.

        Reply
        1. Menzie Chinn Post author

          Manfred: Please provide link to where either advocate 100% effective taxation (as opposed to, say, 70% marginal). What’s next? Do you have a list of Communists in the Commerce Department, etc.?

          Reply
          1. pgl

            Manfred is a student of Alternative Facts. Me thinks he learned his craft at the feet of the Master – Kelly Anne Conway!

          2. Manfred

            No Menzie, read my comment:
            My comment was a reply to:
            “But for the repeatedly successful observation that government spending that supports economic activity is a net good. (bridges, airports, accessible data infrastructure.)”
            If this is true – it is an “if” statement – why would 100% taxation not help?
            I made no claim that somebody asserts it.
            I trying to get to the economic logic.

            Because you know Menzie – things are sometimes more complicated. For an example see John Cochrane response to Krugman’s op-ed on optimal income taxation.

          3. noneconomist

            What, Manfred, is the “economic logic” of taxing “100 % of ALL income”? Your words. No mention of what was said or intended. Not an economist—same as you—but I’ve yet to hear one talk about a 100% tax on ALL INCOME.

      2. pgl

        It is hard to tell whether Manfred is incapable of grasping the obvious or whether he is nothing more than your standard Trump troll pretending that obvious facts do not exist.

        Reply
        1. pgl

          Employment is a mere 2.1% higher than it was in the summer of 2005. That’s really sad in terms of performance.

          One thing to note about Louisiana’s state income – it can fluctuate because of change in the price of oil and natural gas.

          Reply
  5. Manfred

    As for the charter system, that some commenters in this blog despise:

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543644

    Charters Without Lotteries: Testing Takeovers in New Orleans and Boston
    NBER Working Paper No. w20792
    Abstract
    Lottery estimates suggest oversubscribed urban charter schools boost student achievement markedly. But these estimates needn’t capture treatment effects for students who haven’t applied to charter schools or for students attending charters for which demand is weak. This paper reports estimates of the effect of charter school attendance on middle-schoolers in charter takeovers in New Orleans and Boston. Takeovers are traditional public schools that close and then re-open as charter schools. Students enrolled in the schools designated for closure are eligible for “grandfathering” into the new schools; that is, they are guaranteed seats. We use this fact to construct instrumental variables estimates of the effects of passive charter attendance: the grandfathering instrument compares students at schools designated for takeover with students who appear similar at baseline and who were attending similar schools not yet closed, while adjusting for possible violations of the exclusion restriction in such comparisons. Estimates for a large sample of takeover schools in the New Orleans Recovery School District show substantial gains from takeover enrollment. In Boston, where we can compare grandfathering and lottery estimates for a middle school, grandfathered students see achievement gains at least as large as the gains for students assigned seats in lotteries. Larger reading gains for grandfathering compliers are explained by a worse non-charter fallback.

    Reply
    1. pgl

      Gee – you learned to use the Google machine to find an article where you likely cannot articulate what it really means. Try this discussion:

      https://futureofchildren.princeton.edu/sites/futureofchildren/files/resource-links/charter_schools_compiled.pdf

      On average, charter schools perform at about the same level as traditional public schools. But an overall estimate disguises considerable variation in charter school impacts. Urban charter schools and those serving low-income and minority students, a number of which share a no excuses philosophy, tend to produce the largest gains. Expanding these highly effective charters and their practices may be a way to close achievement gaps. Research shows that charters can expand successfully and that traditional public schools that adopt charter practices (or are taken over by charter operators) can also make large academic gains. But to have a meaningful impact on nationwide achievement gaps, charter school approaches would need to be adopted beyond the charter sector itself. Any interventions that are built around using charter schools to close achievement gaps should focus not on the type of school but on the practices that work in the most effective charter schools.

      See plain English. And the author put her well articulated conclusions in yellow so a Trump troll like you cannot miss it!

      Reply
  6. pgl

    Kelly Anne Conway at her finest!

    https://talkingpointsmemo.com/news/kellyanne-conway-jim-acosta-smart-ass?fbclid=IwAR2jhZ0Cibge5Q8LO8s8eqdx2o-U1S7QVCk8pykUr_mpJ3Fb-1SS700UyVU

    Most people are focused on how rude she was to Jim Acosta and that remark about him being a “smart ass”. OK he is smart and she an ass. But skip that. The question was whether Trump will tell the truth tonight (easy one – he will not). She actually said that they have put out “Alternative Information”?! Alternative Facts.

    Kelly Anne Conway – rude, dishonest, and incredibly STUPID!

    Reply
  7. baffling

    manfred, there is an updated version of that paper.
    “Estimates for a large sample of takeover schools in the New Orleans Recovery School District show substantial gains from takeover enrollment.”
    this has been discussed in other works, and noted takeover statistics from new orleans are NOT representative of what would be seen in other communities. the school district was completely dysfunctional, so any marginal change would be seen as an improvement. but just as signficant, basically ALL schools in new orleans were taken over. this simply does not happen in other charter communities. the results are not transferable elsewhere.

    “A non-charter Boston turnaround intervention that had much in common with the charter treatment generates gains as large as those seen for takeovers”
    as i already said, if you put charter resources into restructuring the old system, you will get similar results. it is not necessarily the charter aspect, but the new resources, that provide the impact.

    “As for the charter system, that some commenters in this blog despise:”
    its not that the charter system is despised. it simply does not deliver as promised. and creates a whole new set of problems in the process-which tend to be ignored by the reformers. it can lead to academic segregation and class warfare in the cities. we tried to eliminate that 50 years ago, now we have policies to reintroduce the problem. foolish.

    Reply
    1. pgl

      You actually read the paper as well as the other literature. Manfred did the old PeakTrader trick – Google to find a string of words that he can spin. Words he did not truly comprehend.

      Reply
      1. baffling

        mostly i have simply observed the results of a market based system for education. how do you explain to a 2nd grader his school closed in march and he has no place to go? there may be a business model in that action, but it is a morally reprehensible action against an elementary school student. charter schools with a profit utility function, as steven is wont to say.

        Reply
        1. pgl

          “how do you explain to a 2nd grader”.

          Not sure how you explain the closing of a school to a 2nd grader but maybe we should ask Manfred as based on his comments he is still struggling to pass 2nd grade.

          Reply
  8. pgl

    The more I read Manfred’s right wing rants, the more I think he is another Peaktrader. As in this:

    “Because you know Menzie – things are sometimes more complicated. For an example see John Cochrane response to Krugman’s op-ed on optimal income taxation.”

    Like PeakTrader, Manfred is incapable of providing a link so let me help here:

    https://johnhcochrane.blogspot.com/2019/01/krugman-on-optimal-taxes.html

    The first thing anyone would notice is that old Grumpy threw in the kitchen sink, which is cool as optimal taxation is a complex topic. I seriously doubt Manfred understood any of what Grumpy went on and on about. I’m very certain that none of these considerations influenced that 2017 tax cut Trump is so proud of. This jumped out at me:

    “Even in Diamond, Saez, et Al, 70% is the total tax, not the federal income tax”.

    I’m all in favor of considering all forms of taxes including state and local. So why is it that conservative economists only present the Federal taxes when they pretend the tax code is progressive?!

    Reply

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