Friday, May 9, 2008

Personal Asides: Paul Vallas on My WLS Program Sunday…Why I Choose to Moderate Rather than Bloviate…The Wedge…and Finally a Note.


Paul Vallas, superintendent of the Recovery School District of New Orleans and former reform superintendent of the Chicago public schools, will be the guest this Sunday on my WLS-AM (890) program (8 to 9 p.m.). He ran for the Democratic nomination for governor of Illinois in 2002, losing narrowly to Rod Blagojevich. Since then, he was CEO of the School District of Philadelphia, presiding over the nation’s largest experiment in privatized management of schools, turning over the management of 40 schools to for-profits, nonprofits and universities, winning national acclaim. Regarded as one of the finest public administrators in the nation, he left Philadelphia when his contract was completed and went to work in New Orleans where today he reports directly to the governor, now Bobby Jindal. His contract will be up in 2008. He was also budget director for the city of Chicago and director of budgetary matters for State Senate President Phil Rock. He is renowned as one of the nation’s preeminent experts on public policy and administration. His family resides in Illinois and Vallas has always regarded himself as an Illinoisan.

Joining Paul to comment on the week’s news concerning Chicago and Illinois will be Jeff Berkowitz, the highly regarded ace interrogator of his own television show on CAN-Tv, “Public Affairs.”

Vallas appeared before the City Club of Chicago April 28 where the possibility of his running once again for governor in 2010 was mentioned. As his contract with New Orleans is still in effect, he declined to discuss the ins and outs of returning to political life but pointed out—significantly—that were he to run in Illinois (a) the only job that really would interest him would be governor and (b) he would make a key focal point of such a campaign reliance on vouchers. In the past as a Democratic candidate, he sidestepped the issue of vouchers. His announcement of his support of vouchers at the City Club was generally passed over by the news media but struck me as a very important step.


On my one-hour weekly program on WLS-AM, I choose to participate in a two-person discussion between a liberal and a conservative…which sometimes becomes a debate…rather than pontificate alone. Occasionally I am asked why. Three reasons: (1) I only have one hour which for pontification is far too short; (2) although many do not remember it, I held fort alone happily on WLS and two other stations for many years and have no objection to it—including stints lasting three hours daily on weekday evenings, on Saturday mornings. But on Saturday mornings on LS the last hour was devoted to what I called “Political Shootout” where I interrogated two guests with divergent viewpoints. When my time was shortened, I decided to go with “Shootout” entirely. Finally, (3) it is far easier to bloviate alone without fear of contradiction (the only divergent views being from callers whom you may silence by pushing a button, You may have heard on some national shows a divergent caller gets in, whereupon the host responds with alacrity and the caller is supposedly silenced with awesome respect. Not so: he is most certainly responding but he is talking to himself as he has been disconnected by the host). I find that instead of running my mouth, drawing conclusions from dual points of view serves as clarification of thought, for me and my listeners.

The Wedge.

Ok, ok, as Mr. Nofsinger is bored with economics talk, this will be the last of it. Here is what the wedge it.

When Henry Ford decided to raise his auto workers pay to $5 a day—then a very progressive step—he could be sure that 95% of this daily pay would be available to spend…and some of it on his cars. In other words, his labor costs were almost the same as the workers’ take-home pay. By contrast now the Ford Motor Company pays far-far more per hour for labor costs but the individual worker is lucky to take home a fraction of his own gross pay. The vast difference between the gross labor cost and the take home pay is known as “the wedge.” It consists primarily of federal income and payroll taxes plus the costs of special incentives, fringe benefits, pensions, health care etc., some paid by the worker and most by the employer –but all paid by the consumer. It is this wedge which supply-side economists contended pre-Reagan was the chief reason for our nation’s chronic bouts with inflation and recession—or stagflation.

They argue the combination of inflation and the bracket-creep of the “progressive” [sic] income tax automatically inflates this wedge even faster, forcing the economy to work harder and harder just to climb up the now famous “Laffer Curve” until real disposable income starts to sputter and the economy slides into recession again. Then, because the recession temporarily lowers the tax burden, there is temporary productivity and inflation relief—and recovery. But unless something is done to slow down the rising tax wedge, either through tax rate cuts or indexing, the whole deadly cycle begins again but at higher and higher levels each time. The long-term effect of this accelerating wedge incentives, lower basic productivity,, reduce real income growth and spur permanently higher inflation rates.

There. No more dismal science for a while. Incidentally, Frank, my father was a semi-pro baseball (and football) player and to the day of his death was saddened that his son never had either the athletic grace or the interest to be a sportsman.


If you’re occasionally unlucky, you will hit the Reader’s Comments of this website when, for a very short time, a scatological deviant writes in excreable bad taste, signing as his name the part of a woman’s anatomy which shows depravity bordering on the demonic. My webmaster quickly removes it. But if you find it in the brief interregnum before it is erased, know that this debased individual who lurks behind anonymity is a former supporter of Judy Baar Topinka, having gone to John Marshall law school where he returns to occasionally misuse a computer…one who has been offended since 2006 that I didn’t support her for governor. I didn’t because she is low rent (meaning of vulgar mien not economic status) which this heckler equals with his blennorrhea.


  1. I concur with your description of the historical but would add that the regulatory state(US) adds, on average, a 25% wedge on any product subjected to its snares. Evading that "wedge" by manufacturing in China, India, Mexico, etc is a quite significant factor, in addition to the wage differentials. Of course, we see in certain goods made in China the lack of regulation results in goods that kill people. The "protection" of people is always the wedge by which government grows itself. For instance, rational man, contemplating how best to protect himself against death or destruction by fire would not come up with a system in which people are expensively paid to sit around and wait for something to occur.

  2. McCain is the perfect candidate for Roeser's Gloomy Republican tribe. Roeser and his ilk are looking for Islamic wars behind every tree and under every bed so as to get the cudos from the Podhoretz's and Kristol's of the world. They are blissfully sending off good paying jobs to the low wage regions of the world like China. They are subsidizing Wall Street theft of taxpayer money through Wall Street inspired Fed welfare. They are trashing the value of the dollar and boosting the price of oil while blaming the American consumer. They are flooding the country with illegal welfare grabbing illiterats. A nice lot... these nouveau Republican allstars!

    Like Roeser's lament for a full Scooter Libby pardon as though Libby was some sort of hero. Talk about a perverted sense of political ideals. Hell Tom, your ideas in the political vain could not be more perverted. OK lets call them lavender Republican Conservatism.... a totally perverse Conservatism to placate the grand Neo Conservative utopia. Like rubbing the Bichon's nose in its poop on the rug, it is the fake conservatives like Tom Roeser who have brought the gloom to the Republican party and have left the base completely uninspired to vote for the prozac Presidential candidate McCain.

    No wonder Tom you are so cozy with the likes of Jack Franks that pro-abort guy in the Republican Illinois house.

    After all you are doing your part to knock it all apart so that Obama will have an easy win.

    Your ideas have ruined the Republican party and have turned it from a coalition building winner into a gloomy looser. And just think, Tom you are damn arrogant about it too, in your Harvard Kennedy School way.

    And then you have your Political Shootout which always turns into a Democrat victory party because your Conservative counterpoint is so perverted and week. Yup, Tom, you know exactly what you are doing! It is soooo obvious! Oh go on, join the rest of the Catholic who are liberals and democrats at heart.

    Deep down you WILL be toasting an Obama win in November, won't you...... you certainly are doing your part to put him there. What they have said about you IS true!