Common Cents (?) on the 2018 Governor’s Race

April 20, 2018, by John Norris

First things first…we hope to have our ‘podcast,’ for lack of a better term, fully operational by the end of June (if not a little sooner). As with most things in life, the devil is in the details if you want to do things correctly, which we do. I WILL say, the microphone I ordered is one of the higher rated for ‘podcasts,’ and the sound quality is phenomenal. So, stay tuned….bad pun, I know.

 

I have long maintained individual politicians, particularly chief executives, get too much credit for the good economic times on their watch, and too much blame for the bad. This is a general rule of thumb, but it is usually directionally accurate in countries like the United States which practice the ‘separation of powers’ in government. There are just too many players involved and too many levers to pull.

That doesn’t mean politicians can’t influence economic activity and business behavior; they most assuredly can. However, US politics is basically a perpetual 2-year popularity contest, meaning unfettered, long-term myopia isn’t as common as we might think out in the hinterlands. As a result, our governments are reflections of the contemporary mores of our local societies and communities, not the other way around.

So, I almost always cringe when I hear some public official ‘take credit’ for, say, job growth during a political campaign. Companies hire employees to meet a particular capacity need in the execution of their business model, NOT because an elected official said something clever/stupid behind the rostrum at a conference or played a game of 3-card Monte with the tax code.

Sound cynical? Perhaps I am, but perhaps I have reason to be. Consider the following table from the Congressional Research Service’s report on the membership of the 115th Congress, dated April 12, 2018…fresh data.

Table 2. Most Frequently Listed Occupational Categories

By Members, 115th Congress

At the beginning of the 115th Congress

Occupation

Representatives

Senators

Public Service/Politics

194

44

Business

179

29

Law

168

50

Education

79

20

 

Obviously, those numbers don’t “add up” to what they should (435/100). So, let me give you the bullet points the data complier, Jennifer E. Manning, felt compelling enough to include (and the formatting is awkward at times, although I tried to clean it up some):

  • 50 Senators with previous House service;
  • 101 Members have worked in education, including teachers, professors, instructors, school fundraisers, counselors, administrators, or coaches (85 in the House, 16 in the Senate);
  • 3 physicians in the Senate, 11 physicians in the House, plus 4 dentists and 3 veterinarians;
  • 3 psychologists (all in the House), 12 an optometrist (in the Senate), a pharmacist (in the House), and two nurses (in the House);
  • 8 ordained ministers, all in the House;
  • 43 former mayors (35 in the House, 8 in the Senate);
  • 12 former state governors (10 in the Senate, 2 in the House) and 7 lieutenant governors (3 in the Senate, 4 in the House, including 1 Delegate);
  • 15 former judges (all but 1 in the House) and 47 prosecutors (12 in the Senate, 35 in the House) who have served in city, county, state, federal, or military capacities;
  • 1 former Cabinet Secretary (in the Senate), and three Ambassadors (all in the House);
  • 266 former state or territorial legislators (44 in the Senate, 222 in the House);
  • At least 96 former congressional staffers (18 in the Senate, 78 in the House; including 3 Delegates), as well as 6 congressional pages (3 in the House and 3 in the Senate);
  • 3 sheriffs, one police chief and five other police officers, one firefighter, one CIA agent, and one FBI agent (all in the House);
  • 2 Peace Corps volunteers, all in the House;
  • 1 physicist, one microbiologist, and one chemist, all in the House;
  • 8 engineers (seven in the House and one in the Senate);
  • 21 public relations or communications professionals (3 in the Senate, 18 in the House), and 11 accountants (2 in the Senate and 9 in the House);
  • 6 software company executives in the House and two in the Senate;
  • 18 management consultants (4 in the Senate, 14 in the House), 6 car dealership owners (all in the House), and 3 venture capitalists (2 in the House, 1 in the Senate);
  • 18 bankers or bank executives (4 in the Senate, 14 in the House), 36 veterans of the real estate industry (5 in the Senate, 31 in the House), and 14 Members who have worked in the construction industry (2 in the Senate, 12 in the House);
  • 9 social workers (one in the Senate, eight in the House) and three union representatives (all in the House);
  • 7 radio talk show hosts (one Senate, six House); seven radio or television broadcasters, managers, or owners (two Senate, five House); eight reporters or journalists (one Senate, seven House), a public television producer in the House, and a newspapers publisher in the House;
  • 21 insurance agents or executives (4 Senate, 17 House) and 3 Members who have worked with stocks or bonds (1 Senate, 2 House);
  • 1 screenwriter and comedian and one documentary filmmaker (both in the Senate), and one artist and two speechwriters (all in the House);
  • 26 farmers, ranchers, or cattle farm owners (4 in the Senate, 22 in the House);
  • 2 almond orchard owners in the House as well as one vintner; and
  • 10 current members of the military reserves (9 House, 1 Senate) and 6 current members of the National Guard (all in the House).

While pretty interesting, or so I think, something kind of stands out to me: not as much practical/actual business experience as I would like to see out of the highest legislature in the land. However, there IS an abundance of folks with a “public service” career history. While the US needs all types of jobs to fully function correctly and not all of them in the private sector, one would hope the powers that be would have adequate experience in setting budgets, goals, and, dare I say, turning a profit in some form or fashion.

As Sen. George McGovern wrote after a failed hotel business venture after his time in the House and Senate:

“I wish I had known more firsthand about the concerns and problems of American businesspeople while I was a U.S. senator and later a presidential nominee. That knowledge would have made me a better legislator and a more worthy aspirant to the White House.”

With ALL of this in mind, someone asked me this week what I thought about the upcoming gubernatorial election here in Alabama. To be sure, this is for the top seat of power in our state, and no one is really talking about it. It is really kind of strange. After the disastrous, and I think that is an apt word, Bentley Administration, you would think voters here would be a little more passionate about this election. You would, but it simply is NOT the topic of much conversation or debate. In fact, this person’s question was the first I had received on the matter. As for debate, the incumbent hasn’t even bothered to show up to them.

So, what did I think? I told them I thought it would be an uninspired campaign, with the governor ‘running’ on the overall lifting tide of the last 12 months. She will likely win the GOP primaries, largely because she IS the incumbent and hasn’t done anything scandalous during her short time in office. Consider this snippet from an April 18, 2018, article on al.com by a John Sharp:

 

“But does Ivey consider any of the three GOP men she’s facing to be a “serious threat”? One political science professor suggests that if her campaign had reason to believe that one of them were, she’d be at the debates.

“I suspect she thinks at this point, all things being equal and no major snafus, that she has the advantage going into the primary,” said Sam Fisher, a political science professor at the University of South Alabama. “She has the name recognition and she hasn’t done anything that has irritated the voters that much. If she would go into a debate, I think it would signal there was a serious challenge. But at this point, that doesn’t seem to be the case.”

 

While Fisher might have a point, that hasn’t stopped Gov. Ivey from lauding the “lowest unemployment in state history” on here website. In fact, it is in all caps, bold, and larger font. Couple that with, as the website declares, “good paying 13000+ jobs created,” and it would very much appear as though she is taking at least some measure of credit for the good economic times on her watch. It is was politicians do.

But is it accurate?

Everything the website purports appears to be factually accurate. At the end of March, the unemployment rate in Alabama was a relatively miserly 3.9%, when rounded UP. Over the previous 12 months ending this past March, the local economy has actually created 20-22K new jobs, depending on which survey you use (household or establishment). Since Gov. Ivey took office on April 10, 2017, she might actually be understating the number of jobs created during her time in office! However, this information just came out this morning, so I imagine the website will change at some point.

Okay, so it is accurate. Is it fair? Hmm. That is a better question.

You see, according to the household survey, the number of jobholders in Alabama increased 1.04% over the 12 months ending in March. That isn’t too bad, and good enough to come in 31st out of the 50 states and DC, according to my calculations from the official BLS data. Across the country as an economic whole, the number of jobholders increased 1.318%. The median was actually higher, at 1.461%. So, our job growth has been less than the national average.

But how has our unemployment rate fallen as much as it has? Well, it seems fewer Alabamians are looking for work.

Over the last 12 months, 2,154 of ‘us’ quit participating in the official workforce. That was good enough for a 0.10% decline. Conversely, the workforce grew at a 0.88% clip throughout the remainder of the country, factoring out Alabama. Had our workforce grown at the same rate, 0.88%, AND created the same number of new jobs, our unemployment rate would be 4.8%. That would be much higher than the national average and median, which are both 4.1% when rounded.

However, how many people are actually going to go to the trouble of doing this math? Further, I imagine this so much ‘mental gymnastics’ for the average person on the street, at least at this time.

So much so, I imagine Gov. Ivey probably won’t have much trouble in the June 5th primaries unless the other candidates can pull some skeletons out of closets in a hurry. Given Ivey’s tenure in the public eye, this doesn’t seem terribly likely.

However, unless these economic numbers improve, I imagine the November 6th general election will be much more difficult than anyone is currently predicting, and will easily be the closest one since 2002. If I can knock these numbers out in short order on a Friday morning, you can rest assured the Democrats and the other Republican candidates will eventually get around it.

Taking it full circle; yeah, politicians tend to get too much credit for the good times and too much blame for the bad.