Friday, August 11, 2017

The Con That Is Foxconn or How Republicans Learned To Stop Worrying And Love Socialism For The Rich

Seems everyone is writing and talking about Foxconn possibly building a $10 billion factory in Wisconsin. Governor Walker has been talking up the jobs angle. Other lemmings are being good little boosters and putting slogans like "big league" and such out there to describe the situation and what is could mean for Wisconsin. 

Luckily, there has been some push-back. Hopefully we can muster enough resistance to sway opinion against this mega-corporate-welfare boondoggle.

I've written about economic development incentives many times before. To reiterate:
This whole incentive game is blackmail and is terribly inefficient. It makes cities bid-up giveaways to corporations dangling jobs in front of city leaders. It leads to less-than-optimal locational decisions, and often cities never recoup the subsidies. Local leaders, legislators, and public servants should be cooperating with national leaders to enact federal legislation banning such zero-sum games.
So what do we know about this latest specimen of corporate welfare?

Well, let's back up a bit first and add some context to the discussion. 

Republicans are always droning on and on (pretending to be economists and financiers) about the "free" market, capitalism and how, if government just got out of the way, the private sector will lead us all to the promised land.

As Barry Ritholtz wrote:
America’s titans of industry and finance work hard to convince us that they are masters of their fate, unbeholden to anyone or anything aside from the profit motive and whatever serves the greater good of business and free enterprise. 
If only it were so, because the reality is that too many of them are afraid of undertaking new ventures without government holding their hand for reassurance, tax abatements, loans, subsidies or -- in some instances -- all of the above. 
Last week, was a case in point: Wisconsin, a state controlled by that patron of free markets otherwise known as the Republican Party, announced a deal with Foxconn Technology Co. to give $3 billion in incentives for the Taiwanese manufacturer of iPhones to build a flat-panel TV factory within its borders. In exchange, Wisconsin got ... well, some nice words.
Here is yet another example of their blatant, self-serving hypocrisy. Republicans (the dutiful little servants of the top 1%) love socialism for the rich, but not so much for the little guy.

As with all corporate welfare, the first question should always be, "Why is the public providing money to millionaires and billionaires?" If they are so all-knowing, efficient and bottom-line oriented, shouldn't they be making locational and company decisions based on comparative advantage, labor force needs, and other business-specific concerns? If they are simply locating in the place offering the largest welfare package, how is that efficient or good for long-term business? 

Typically companies simply put out the idea that they have a few locations in mind to get those locations to start bidding up the welfare package against each other. As some have termed, the war among the states or the war among the cities. Yet, the companies actually already know where they'd like to build - based on actual quantified site selection variables. This dangling of potential jobs really just results in leverage for the companies in their blackmailing of cities and states. 

And, for Wisconsin, why would the state spend $3 billion to attract jobs when the state's unemployment rate is, as of April 2017, at 3.2%? 

So, now, what do we know about this latest specimen of corporate welfare?

Michael J. Bologna detailed, "WEDC said Foxconn would be eligible for up to $3 billion in tax credits over 15 years. That total includes up to $1.5 billion in state income tax credits for job creation, up to $1.35 billion in state income tax credits for capital investment, and $150 million for sales and use tax exemptions."

The Wisconsin Democracy Campaign also discovered, "The bill, which is expected to be voted on by the legislature this month, includes $10 million in tax breaks intended to keep Fiserv, a Brookfield-based company that makes products for banks and credit unions, from relocating its headquarters to another state." It's just raining corporate welfare in Wisconsin.

Regarding the Foxconn boondoggle, The Wisconsin Budget Project found:
  • The cost per job is somewhere between $200,000 and $500,000.
  • At a minimum, the corporate welfare will cost state taxpayers over $17,000 per job, per year, for 15 years.
  • The cost of tax breaks for manufacturers, with state taxpayers making a guarantee to cover up to 40 percent of local losses from spending for the project, and the unknown costs from unprecedented exemptions from environmental regulations. 
For some perspective, Timothy Bartik, of the W.E. Upjohn Institute for Employment Research calculated the typical subsidy, in these situations, is $2,457 per year. Thus, the Wisconsin project cost ($17,000 per year) would be 567% higher than the typical subsidy. “It’s a very, very costly package, and I’m skeptical that the benefits justify such big incentives,” Mr. Bartik said. “This is well beyond the typical deal.”

Bartik also elaborated:
Any benefit-cost evaluation of tax incentives needs to take into account that even without the incentive, a considerable portion of the incented activity would have occurred anyway, or that other substituted business activity would occur. For example, even without incentives, vacant buildings zoned for development will help attract new business activity. Incentives can help speed up this process, and may help target new development toward business activities with a higher payoff for state economies in increasing average earnings per worker. But this requires that incentives be carefully targeted and designed to maximize benefits while minimizing costs. 
Bartik has also argued that economic development incentives that are delivered in the form of customized services, such as customized job training and manufacturing extension services, are likely to be more cost-effective than most business tax incentives.
As Ben Lovejoy enlightens"The state would be paying for 30% of Foxconn’s total investment in the plant, and this wouldn’t be the end of it. In addition, like other manufacturers in Wisconsin, Foxconn would pay no corporate taxes on profits from sales on products made here. The incentives would cost the state about $200 million a year."

Patrick Marley and Jason Stein found, "The memo signed by Walker and Foxconn executives would: Lift caps on TIF deals and extend them for longer durations. Expedite government permit reviews for the project. Expand a tax credit program known as enterprise zones that the state uses for its biggest jobs deals."

Bruce Murphy revealed:
But the Foxconn deal will give away tax money in a style that makes the WEDC look like a piker. Rather than a tax credit for seven percent of payroll, Foxconn will get 17 percent, and for 15 years, not nine. In short, the state will get less than 30 percent of the tax credit back in income taxes paid by workers, losing a huge amount of money for 15 straight years.

But the Foxconn deal offers much more than this. The company also gets a 15 percent tax credit on all capital expenditures it makes for seven years. Since Foxconn, due to Walker’s Manufacturing and Agriculture Tax Credit, will pay little or no corporate tax, probably none of this giveaway will be recovered. Indeed, the company is being given “refundable tax credits,” meaning these are cash giveaways, not tax reductions. 
But the deal offers much more than this. Foxconn will get a state and local sales tax exemption on the cost of all building materials, supplies, and equipment and landscaping and lawn maintenance services, estimated to be worth $139 million.
But the deal offers still more. Local governments will be pressured to create special Tax Incremental Financing districts, and the subsidy is expected to be so massive that the Foxconn bill provides an exemption from the state law limiting the size of such districts and lengthens the statutory payback period from 20 to 30 years. 
But the deal offers still more. The bill would exempt Foxconn from some state requirements on: (1)discharging dredged or fill material into a wetland; (2)water quality certification related to discharges into wetlands; (3)construction, placement, or maintenance of bridges or culverts in or over navigable waters; (4)construction, dredging, or enlargement of an artificial water body that connects with an existing navigable waterway; (5)grading or removal of topsoil from the bank of a navigable waterway; (6) public utility projects consisting of high-voltage transmission line relocations.
In short, Foxconn will be able to operate as a kind of outlaw company that can simply ignore laws that regulate every other business or individual in the state. And that is because it promises to create up to 13,000 jobs in return for accepting $3 billion in tax subsidies or $585 per person for every adult resident in this state, not including the additional TIF subsidies, which have yet to be tallied. 
And what guarantee is there that Foxconn will create 13,000 jobs? None. The company could collect $345 million of the maximum $1.5 billion payroll credit for just the 3,000 jobs it promises to start with and grab the sales tax exemptions and TIF subsidies while using the $1.35 billion tax credit on capital expenditures to automate the factory and gradually lower the employment even further. With no penalty. And given the company’s reputation for embracing robotics at ever opportunity, that is surely the most likely result.
Murphy concludes, "But for every other legislator in the state, Republican or Democrat, there is no reason to vote for this unprecedented giveaway for a few thousand jobs, following a game plan that if applied to all businesses, would bankrupt the state and destroy its environment. This isn’t a sound conservative solution to economic development, it is fiscal liberalism run rampant."

David Haynes, of the Milwaukee Journal Sentinel, spoke with Kenneth Thomas about Foxconn and Wisconsin's subsidy package:
Kenneth Thomas, of the University of Missouri-St. Louis, has studied state and local subsidies for business and believes Wisconsin and other states hold more cards than might be evident at first glance. “Foxconn's fear of protectionism (probably well-placed) makes it want to be here, and the U.S. unemployment rate is finally well down, though we could certainly use wage growth. So my recommendation to Wisconsin would be, ‘Just say no,’ " he wrote me in an email. "There is no reason Foxconn should get a free facility plus whatever else it wants; what it wants most of all is to be in the United States. Moreover, a 3.1% unemployment rate is another reason for the state not to throw a lot of money at new jobs. ... If the state does yield to temptation, it should compare the proposed cost per job and percentage of investment paid by the subsidy package to packages given for other large manufacturing facilities, and try to spend less, given Foxconn's weak bargaining position.” And if the bidding gets too rich, the state should be willing to walk away.
Foxconn has done this song-and-dance before. They've gotten promises of millions of dollars and then failed to deliver the projects and the jobs. As Marjorie Kelly wrote, "Foxconn also has failed to deliver on similar deals in India, Vietnam and Pennsylvania." In 2013, Foxconn promised to invest $30 million and hire 500 workers in Pennsylvania, yet this has not materialized.

Luz Sosa listed the many broken promises of Foxconn, "In 2013, the company signed a letter of intent to invest up to $1 billion in Indonesia. Nothing came of it. Foxconn announced it would invest $5 billion and create 50,000 jobs over five years in India as part of an ambitious expansion in 2014. The investment amounted to a small fraction of that, according to The Washington Post’s Todd Frankel. Foxconn committed to a $5 billion investment in Vietnam in 2007, and $10 billion in Brazil in 2011. The company made its first major foray in Vietnam only last year. In Brazil, Foxconn has an iPhone factory, but its investment has fallen far short of promises. Foxconn recently laid off 60,000 workers, more than 50 percent of its workforce at its IPhone 6 factory in Kushan, China, replacing them with robots that Foxconn produces."

Sosa makes another great point, "Cyber component manufacturing with large numbers of employees has mainly occurred in low-wage, marginally regulated countries. Wisconsin can’t and shouldn’t compete with Vietnam and China for the lowest wages and intolerable working conditions."

The working conditions at Foxconn's factories are another cause for concern. As detailed by Jay Greene in 
Riots, suicides, and other issues in Foxconn's iPhone factories. "There have been employee suicides, explosions at two plants that make Apple gadgets, and reports of harsh working conditions."

As the New York Times reportedregarding Foxconn's Zhengzhou China plant, "The local government doles out more than $1.5 billion to Foxconn to build large sections of the factory and nearby employee housing. It paved roads and built power plants. It helps cover continuing energy and transportation costs for the operation. It recruits workers for the assembly line. It pays bonuses to the factory for meeting export targets."

Another big concern, for those questioning this giveaway, are the possible environmental issues. Air and water quality, and solid and hazardous waste standards, and wetland regulations should not be relaxed. Tourism is an important part of the Wisconsin economy. Wisconsin's lakes, rivers and woods are big business. To not only subsidize a company, but to then also allow them to degrade Wisconsin's environment is inexcusable. Foxconn should not be allowed to bypass an environmental impact statement (this is an analysis describing the positive and/or negative effects of a proposed project).  

As Rick Barrett notes, "The electronics industry has been called a major source of environmental pollution, and its large presence in China and South Korea has raised concerns about the environment and the health of workers there. The industry uses dozens of chemicals and heavy metals, including lead, in its processes."

Greg LeRoy remarked, “The states are orchestrating a process that benefits large, politically connected corporations and harms small employers, which form the backbone of the economy … President Trump is also blessing the ‘buffalo hunting’ school of economic development, in which a few companies get huge ‘megadeals’ while programs that benefit many employers suffer budget cuts, and small businesses and entrepreneurs get shortchanged … the ‘war among states’ way in which the United States allows even foreign corporations to extract huge taxpayer subsidies is a troubling reminder of how federalism undermines economic development in America.”

“We can only describe this as a gift from Wisconsin taxpayers to Foxconn shareholders,” Mr. LeRoy said. “This is a guaranteed loser for the state.” LeRoy continued, "At that price, the deal is a sure loser for Wisconsin taxpayers. That’s because there is no way the typical Foxconn worker will pay $230,000 more in state and local taxes than she and her family will consume in public services over her work time there. At that price, the deal can only be accurately described as a transfer of wealth from Wisconsin taxpayers to Foxconn shareholders."

Wisconsin lawmakers have said the incentive package will be pro-rated on how many jobs the company creates and how much it spends. This sound like an admirable claw-back provision. But the devil is in the details, and unless the public knows the details, we can't really be sure there are any teeth in those provisions.

Scott Walker said, “We are calling this development ‘Wisconn Valley,’ because we believe this will have a transformational effect on Wisconsin just as Silicon Valley transformed the San Francisco Bay area.”

Another glaring miscalculation from our inept governor. If Silicon Valleys could be reproduced in state after state, it would have already been done. The idea that you can subsidize and bribe your way to a competitive advantage and establish a long-term business and growth model is ludicrous. Also, manufacturing doesn't pay what it used to, employment is declining, much of the work is being automated, and manufacturing operates practically tax-free in Wisconsin. So it doesn't make sense to pile subsidies upon tax breaks to a dwindling sector that doesn't even pay its fair share of taxes.

To paraphrase a University of Wisconsin-Milwaukee Center for Economic Development research paper:
The subsidization/tax-incentive contribution to local economic development has been wildly exaggerated. Although it has become almost a cliché to boast of becoming “the next Silicon Valley,” a review of the historical record reveals that the celebrated success stories of economic development are more the exception than the rule. Far more typically, the investments have had little discernible impact in reshaping the economic trajectory of cities or regions. Nor have they produced the internal returns envisioned by proponents. The case for the tax incentives as a “game changer” or “driver” of local economic development is more chimerical than compelling.
Jon Talton explained, "These are all reasons to be skeptical of subsidies that pick winners - typically multinationals with huge profits - at the expense of existing tax-paying companies... Wisconsin doesn’t have a world-class flat-screen cluster supporting tens of thousands of jobs that it needs to protect from poachers...The Wisconsin paradox is that Walker refused $810 million in federal help for a higher-speed rail line between Milwaukee and Madison. Why? Because it came from Obama and because Republicans have a strange anti-rail fetish (Florida’s and Ohio’s governors did the same). In addition to offering more transportation options - including one with far fewer greenhouse gas emissions - the rail project would have provided large numbers of construction jobs, as well as good operating and maintenance jobs. The trains would have been assembled there, too, with the potential of billions in contracts to build trains for other states."

But, of course, Scott Walker's dutifully endless ass-kisser, Christian Schneider can't see anything wrong with the deal. As usual, his article in the Milwaukee Journal Sentinel simply dug into Democrats and anyone else who would dare question this "great" deal. According to Schneider anyone that would raise concerns over this massive corporate welfare is a "member of the deranged lefty echo chamber rooting against the state's economic success."

Here again we can see the gigantic hypocrisy of Republicans. When Republicans are the ones doling out public dollars, it's warranted, needed, proper and, of course, it will be a huge success. But when Democrats want money for infrastructure, health care, education, poverty, Social Security, etc., they're just wasting taxpayers hard-earned dollars. Just imagine if Jim Doyle (Democratic governor before Scott Walker) had proposed giving billions of dollars to not only a private company, but a Taiwanese one at that. Republicans would have gotten out their pitchforks and torches and hailed Doyle as a pinko-commie, socialist, another tax-and-spend liberal, giving away taxpayer money.

Schneider seems to be of the economic development school which believes that any development is good development. He mocks those who question if these are good jobs or if they pay a living wage. I guess Schneider's message is, "A job is a job, so just take it, be happy and shut up!"  

In passing, Schneider mentions, "The state has had a spotty record in providing tax subsidies to business." He doesn't go any further in his analysis. For Schneider, Walker, Republicans and their willing corporate welfare recipients, there is no need to analyze this deal - just get it done! Never mind this would be one of the biggest corporate giveaways in the history of the United States, nothing to see here. As Walker has said, critics can "suck lemons." Now that's diplomacy!

In another Orwellian fever dream, Republican Party spokesman Alec Zimmerman said, "Governor Walker's reforms have taxpayers back in charge while liberals like Dana Wachs would take us back to the days of special interest control in Madison." Dana Wachs is a Democrat planning on challenging Scott Walker in the next gubernatorial election. Yet, how the Republicans can make the claim that Walker is putting taxpayers in charge and cutting off special interests all while hoping to give away one of the largest corporate welfare packages in our nation's history is dumbfounding.

As the New York Times informed
Big companies like Foxconn possess leverage to extract concessions from state governments that smaller firms cannot, said Carl Davis, research director at the nonpartisan Institute on Taxation and Economic Policy in Washington. “This is not a comprehensive strategy for economic development,” he said. “If Wisconsin were going to offer this kind of subsidy for every employer within its borders, the state would be bankrupt.”
John McCormick, of Bloomberg, highlighted Walker's barefaced hypocrisy:
Walker’s embrace of taxpayer money for Foxconn is in conflict with his limited-government philosophy. He’s also previously backed public subsidies for a Milwaukee professional basketball arena and for Wisconsin-based companies such as Kohl’s, subsidies that would be described as "corporate welfare" by some in his party. “I believe people create jobs, not the government,” the governor said in an April 2015 speech in New Hampshire as he explored a presidential bid.
The New York Times also picked up on Walker's duplicity:
“It doesn’t fit with a governor that said we can’t spend much money,” said Martin Baily, a senior fellow at the Brookings Institution and a member of President Bill Clinton’s Council of Economic Advisers. “This is a guy who decimated the University of Wisconsin by budget cuts. On the one hand, he’s saying we can spend billions to pay Foxconn, but what about our own prized educational institution?”
Steve Deller, a University of Wisconsin-Madison professor of agriculture and applied economics, said in addition to the cost to state taxpayers, schools and local governments could also be pinched because deals to large companies often allow them to escape paying property taxes, which pay for some local services. This deal could not only increase the state's indebtedness, but it could also put schools and other services at risk.

Investments in transportation, greening of public buildings, upgrading energy and water infrastructure, critical environmental areas remediation, to name a few, are much better investments for cities and states looking for the best return on investment. We surely can do better than backroom deals, bribery and blackmail as our modus operandi for economic development policy.

For Further Reading:
Foxconn Bill Contains Another Big Potential Obligation For Wisconsin Taxpayers
Wisconsin Foxconn Deal Could Include $1 Billion To $3 Billion In Taxpayer-Backed Incentives
Foxconn Could Be Environmental Disaster
Show Us The Local Subsidies
Will Amazon Fool Us Twice?
Smart Skills Versus Mindless Megadeals
Shortchanging Small Business
Evaluating State Tax Incentives For Jobs And Growth
The Foxconn Con
Will Foxconn's Manufacturing Promises In Wisconsin Prove To Be A Con?
Wisconsin's Corporate Welfare
Site Selection Shenanigans
WEDC Not A Good Model For Deploying Scarce Resources
Tax Incentives: Costly For States, Drag On The Nation
One Take On How Tax Incentives Work
State By State Incentives Guide
Why Have So Many Cities And Towns Given Away So Much Money To Bass Pro Shops And Cabela's?
As Companies Seek Tax Deals, Governments Pay High Price
Foxconn, Wisconsin's Manufacturing Future?

Sunday, August 6, 2017

Wisconsin Reading

34% Of Walker Donations From Outside State
Highway Debt Up 87% Under Walker
Reality Differs From Walker's Economic Claims
What Walker Says, And What's Really Happening With The Wisconsin Economy
Scott Walker Is A Failed Governor
Gov. Scott Walker's Promise To Create 250,000 Jobs In Wisconsin Remains Elusive
Does Cutting Taxes And Spending And Beating Up Unions Spur Growth: The Story From Wisconsin And Minnesota

Sunday Reading

Why Private Equity Firms Like Bain Really Are The Worst Of Capitalism
Supply-Siders Still Push What Doesn't Work
The U.S Is The Sick Man Of The Developed World
Celebrating Greenspan's Legacy Of Failure
More Minimum Wage Distraction, Stuart Varney Edition
John McCain Is The Perfect American Lie
30 Firms Earn Half Of The Total Profit Made By All U.S. Public Companies
S&P 500's Biggest Pension Plans Face $382 Billion Funding Gap
Democrats Are Finally Waking Up To The Monopoly Problem
A New Deal For Wall Street

The Kansas Experiment: Another Supply-Side Failure

Greedy Bastards That Don't Give A Shit About Society

Sunday, June 18, 2017

Streetcar Or Safety

Looks like Milwaukee Alderman Tony Zielinkski might be setting himself up as a challenger in a run to be the Mayor of Milwaukee.

Current Mayor Tom Barrett recently announced he might have to eliminate some safety-worker positions (police officers, firefighters,nurses, code inspectors) due to budgetary constraints.

Zielinkski immediately ridiculed the Mayor, saying even mentioning the possibility of cutting positions as "reckless" and "unreasonable".

Zielinkski framed the discussion as being between keeping the positions and building the streetcar. Because those are the only two budgetary choices that can be made - keep safety positions or build a streetcar?

And, just for some context, Wisconsin has spent over a billion dollars on new stadiums for the Brewers, Bucks and Packers in the last decade. Private sport structures whose benefits go to their private owners. But Milwaukee spending $128 million on a streetcar to be used by residents, tourists and businesses is a waste?

Barrett, himself, even stated that cutting those positions is not what he wants. But sometimes, as Mayor, you have to make choices that won't please everyone.

I get that the streetcar is a bit of a lightning rod and certain persons with access to the media love to pile on about what a waste the streetcar is. Although every other major city has some sort of streetcar, light rail or similar. So, it seems more like, as usual, Milwaukee is behind the curve as far as what businesses and workers want in amenities and infrastructure. Local infrastructure is what creates jobs and draws businesses, residents and tourists.

In our current police-state era, funding for defense/police/safety can never be diminished. More officers and more guns, always. In 2013, 59% of the City of Milwaukee budget went to just the police (41%) and fire (18%) departments.

We've been doing this for decades now, it hasn't worked. To keep funding this imaginary, more-cops-is-the-answer paradigm, is simply throwing away money. Why, when it comes to defense or safety, is there no limit on the amount of people needed or the amount of money that should be spent? At the local, state and federal level, America's defense/safety budgets dwarf those of other nations. Yet, we're no safer. What is all this money being spent on? Seems like there is obviously a lot of efficiency that can be made.

The Police Association's President Michael Crivello stated, "We're going to do everything to keep this community safe, but we won't be as effective as we otherwise would be should we be properly staffed."  How is this quantified? What does "properly staffed" mean? What metrics is the Association using to determine safety, effectiveness, staffing, etc.?

Maybe we do need to keep the positions. But using fear and emotion to guide a decision is definitely not how policy should be made.

We should start by making a more scientific basis for these discussions and decisions. Platitudes and bumper-sticker slogans sound great, but they typically don't have the nuance and depth required for good public policy.

We could remove some exemptions, raise the local sales tax, add fees for certain services, collect more taxes, provide less incentives to private developers and businesses, and on and on. There are numerous ways fund the many services we all count on from our local government.

The saddest thing is that this is being pitted as a streetcar versus safety debate. It shouldn't be. These are not the only choices.

Saturday, May 27, 2017

Journalism Is Dead

A 7-part series on the making of a golf course?


Really, Milwaukee Journal Sentinel?

This is the in-depth, investigative journalism we need right now?

Sunday, May 7, 2017

Labor: Human Activity That Provides The Goods Or Services In An Economy

"If any man tells you he loves America, yet hates Labor, he is a liar." ~ Abraham Lincoln

Yet, this seems to be exactly the message of Wall Street, conservatives and capital investment, in general.

According to investors, workers don't really deserve the fruit of their labor.

What's wrong with giving out pay raises? Plenty, according to some Wall Street analysts
“This is frustrating. Labor is being paid first … again. Shareholders get leftovers,” wrote Citi analyst Kevin Crissey in a note to clients. 
Jamie Baker of Morgan Stanley downgraded American shares to “neutral” from “overweight,” saying the pay decision “establishes a worrying precedent, in our view, both for American and the industry.”
John Cotton condensed the Wall Street view:
"There’s always this tension between what companies would want for the long term and what Wall Street wants for the short term," said John Cotton, professor of management and director of the Executive MBA Program in the College of Business Administration at Marquette University. "As far as Wall Street is concerned, if you could pay minimum wage to everybody on every job, that would be great because that would leave more money for stockholder. 
"Wall Street, they don’t care so much long term," Cotton said. "They would rather have the company buy back stock than, say, invest in making their business more effective over the long term, because that’s not going to pay off in the next 90 days. 
"It is short-sighted, but then Wall Street almost by definition is short-sighted," he added. "If you could do something to jack up your stock price 5%, the fact that it’s going to hurt your company over the next 10 years is irrelevant."
 American Airlines CEO defended worker raises:
"As a service organization, investments in our team are investments in our product," Parker said during a conference call with analysts. "We think it's precisely this kind of investment in our people that is going to make the difference in our service. And while this won't happen overnight, we also think it's the kind of investment that will continue to drive revenue (growth) for American. And as that happens, all of you will be the beneficiaries of those returns."
For Wall Street, raises should be reserved for the CEOs that decide to fire workers and/or suppress wages.

If we want to address the increasing income inequality in our society, we need to break from this capital-worship paradigm.

"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." ~ Abraham Lincoln

Sunday Reading

Corporate Profits Are Way Up, Corporate Taxes Are Way Down
Trump's Tax Plan: Having A Laugh On Laffer
Water Bill Violate Constitution
U.S. Appeals Court Upholds 15-Miles Residency Rule For Milwaukee Cops, Emergency Workers
Hacked Records Show Bradley Foundation Taking Its Conservative Wisconsin Model National
Evaluating Trump's First 100 Days - On His Own Terms
New Study Suggests That Men Need To Drink With Friends Twice A Week To Stay Healthy Wisconsin ranks among U.S. states with the heaviest tax burdens

Trumpcare: Less About Health Care, More About Ideology

Monday, April 17, 2017


"Getting pretty tired of these guys walking around in cowboy hats and cowboy boots. You ever see these jack-offs? Can’t we kill some of these motherfuckers? Walking around in a fucking cowboy hat. Grown men. It’s not even Halloween for christ-sakes. I say “hey Tex grow up and get yourself a wardrobe consistent with the century you’re living in”. Why do certain men feel the need to dress up as mythic figures? You don’t see anyone walking around in a pirate costume do you? When was the last guy you ran into who had on a viking outfit? Make-believe cowboys… the closest they ever got to a cow, is when they stopped to take a piss at an Arby’s." George Carlin

Saturday, April 15, 2017

There Really Is No Escape From Conservative Duplicity

There Christian Schneider goes again.

Another classic from the Republican playbook - Blame the Democrats for outcomes of Republican actions.

It's well known, for Republicans, that everything wrong with the world is the Democrats' fault.

In his latest blaming the Democrats for Republican measures, Schneider proclaims There Really Is No Escape From America's Liberal Politics.

Yes, those damn liberals have politicized everything!

Put aside the Southern Strategy, Republican commingling of church and state, perpetual obstructionism, shutting down the government, the impeachment of Bill Clinton, the Tea Party, and the denial of a Merrick Garland hearing, to name a few.

As Schneider declares:
There is now no segment of American society to which one may retreat without being subjected to politics. Every corner of our lives is illuminated with talk of filibusters, health care strategy and minor cabinet appointees. It is as if the American economy now runs on demagoguery.
The cognitive dissonance is great in Schneider and the Republicans.

Is there any policy during Clinton or Obama that the Republicans didn't filibuster?

Republicans having been fighting against good health care for Americans since forever. They stonewalled Clinton's attempt and threw up every roadblock they could in attempting to stymie Obama.

Schneider's article then goes off on an odd tangent claiming that even sports are just liberal politics in disguise. Never mind all the jingoistic and militaristic events, language and imagery associated with sports. And, he uses the well-worn (paraphrased) Republican talking point of "Athletes and actors should just shut up. They don't know anything." Unless of course they're conservative, then they're glad to have them on their shows, write op-eds and appear at their events.

He goes on to complain of a cloud of inescapable "progressive condescension." He implies liberals are continually berating poor conservatives in all aspects of life. Is Schneider not familiar with Jesse Watters? Republicans have no other journalism other than gotcha journalism.

Republicans have been doing nothing but using fear and ignorance to politicize anything and everything they feel could possibly win extra votes.

Schneider then goes on to knock Jon Stewart and Seth Meyers - what do they know and no one cares what they have to say anyway. He's upset because even comedians are being political. Schneider must be new to comedy because politics has been a topic of humor for centuries.

Republicans have done all they can to dumb-down politics whilst politicizing everything in sight and now that their sledge-hammer approach has resulted in Trumpland ... it's the Democrats fault!

Keep on drinking that Kool-Aid and peddling your misinformation and hate, Mr. Schneider. And then keep on pretending you can't believe how things got the way they are or why they are that way.

If I wasn't living through all this I wouldn't believe it.

Weekend Reading

The results were clear: these basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages. To the contrary, in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase.
Filing Taxes Could Be Free And Simple. But H&R Block And Intuit Are Still Lobbying Against It
The makers of TurboTax and other online systems spent millions lobbying last year, much of it directed toward a bill that would permanently bar the government from offering taxpayers prefilled filings.
Fearing Germs Is Making Us Sick
We need to reconnect our kids with the microbes they need and, more generally, with the wild they need, however tiny that wild may be.
The Generation Of Nonsense In The Boston Globe
The main economic story of the last four decades is the massive upward redistribution of income that has taken place. The top one percent's share of national income has more than doubled over this period from roughly ten percent in the late 1970s to over twenty percent today. And, this is primarily a before-tax income story, the rich have used their control over the levers of economic power to ensure that an ever larger share of the country's wealth goes into their pockets. (Yes, this is the topic of my book, Rigged [it's free].) 
Anyhow, the rich don't want people paying attention to these policies (hey, they could try to change them), so they endlessly push out nonsense stories to try to divert the public's attention from how they structured the rules to advance their interests. And, since the rich own the newspapers, they can make sure that we hear these stories.
How Stephen Colbert Finally Found His Elusive Groove
On Nov. 8, Stephen Colbert was hosting a live election night special for CBS’s sister cable network, Showtime. A program that was built around an expected Hillary Clinton victory went off the rails almost as soon as it went on the air at 11 p.m. As election returns came in, audience members, who had been asked to shut off their phones an hour earlier, gasped as it became clear that Donald J. Trump could very well become president. Mr. Colbert looked dumbstruck. 
Sensing the gravity of the moment, Chris Licht, the executive producer of “The Late Show With Stephen Colbert,” walked over to Mr. Colbert’s desk during a musical performance. 
“Stop being funny and go and just be real,” Mr. Licht told the host.
Record-Breaking Public Subsidy Lures Hated Football Team To America's Gambling Capital
Clark County taxpayers will contribute $750 million to the new arena, a record for a sports facility—about $354 per resident, taken from an increased tax on hotel rooms. That tax currently pays for schools and transportation, in addition to tourism-related expenditures.

Stanford economist Roger Noll said it was the “worst deal for a city” he had ever seen.

That it came together at all is remarkable.
Here's The Real Rust Belt Jobs Problem - And It's Not Offshoring Or Automation
Many struggling U.S. cities and states compete fiercely with one another to attract and keep firms that offer jobs. Unfortunately, these are not the “good” jobs that Americans are looking for, jobs with middle-class pay, benefits and security. This race to the bottom drains public coffers, preoccupies local leaders and fuels voter cynicism. “America First” sidesteps the problem.

Friday, April 14, 2017

The U.S. Is NOT Overtaxed!

For Further Reading:
Sorry America, Your Taxes Aren’t High

The "Friendly" Skies?

For Further Reading:
Airline Deregulation #Fail

What Would A Dick Do?

If Scott Walker is worried about those receiving public aid being drug-free, then he needs to test everyone receiving public aid.

Walker Gearing up to Unveil Welfare Drug Testing Proposals
We may soon learn whether President Trump will allow Wisconsin to drug-test some people applying for federal benefits – including Food Share and Medicaid. Gov. Walker says he plans to submit a request, after he unveils his full proposal next week. Walker mentioned the move during his budget address in February.
Scott Walker wants Trump to let him drug test tens of thousands more poor people
Most recently, Walker is continuing his quest to drug test as many of the low-income residents of Wisconsin as he can, asking the Trump regime for permission to drug test Medicaid applicants.
So, this begs the question, when will Wisconsin start testing all recipients of aid?

If Walker's unfair and punitive proposal passes, I want to see Bud Selig and the Brewer's organization; Ted Thompson and the Packers; Wes Edens, Marc Lasry and the Bucks organization; the numerous developers throughout the state receiving public aid; Harley-Davidson; Mercury Marine; Johnson Controls; Brunswick; Kohl's; Northwestern Mutual; Quad Graphics; Marcus Corp. and all the other corporate welfare recipients, who've received greater aid than any low-income resident, lined up with their pee-cups in hand, ready to take their drug tests.


For Further Reading:

The Scott Walker Wrecking-Ball Crew Update

Fiscal bureau: Scott Walker's budget leaves $1.1 billion hole starting in 2019

Gov. Scott Walker’s proposal for the state’s next budget creates a larger structural deficit than previously thought, nearly $1.1 billion, in the ensuing budget cycle beginning in 2019, the state’s nonpartisan fiscal office said Thursday.

The Legislative Fiscal Bureau released the findings in a memo made public late Thursday.

It shows Walker’s plan for the 2017-19 budget, which back-loads spending and tax cuts into its second fiscal year, leaves a structural deficit of $1.1 billion that lawmakers would have to erase in crafting the 2019-21 budget.

Failed Presidential Candidate Scott Walker Wants to Hack Public Schools

But if we're talking about governors who easily dispose of public education, from kindergarten through graduate school, we have to go to Wisconsin. That's where Scott Walker, the goggle-eyed homunculus hired by Koch Industries to manage this particular Midwest subsidiary, has acted with unconcealed contempt for everything that Wisconsin once stood for in terms of educating its citizens. 

First of all, the man couldn't quite catch up to the B.A. that hung on my wall has determined that teachers should leave those kids alone! From The Washington Post:
A proposal in Walker's new budget plan calls for ending the state's current minimum requirements — 437 hours for kindergarten, 1,050 hours for elementary schools and 1,137 hours for secondary schools — and allowing school districts to do what they want in terms of seat hours for students. Districts and schools would then be judged on their state report cards, which are produced annually by the Department of Public Instruction, based largely on standardized test scores. During a recent visit to a school in Waukesha to talk up his budget proposal, he said: "To me, the report card is the ultimate measure. It's not how many hours you are sitting in a chair."
Gov. Scott Walker's budget proposal axes state farm-to-school post

The cafeterias in the Germantown School District take a decidedly fresh turn in the fall.

For as long as it lasts, food and nutrition director Shelley Juedes brings in a bountiful array of fresh produce: scrumptious apples from nearby Rim's Edge Orchard and fresh vegetables — broccoli, onions, potatoes and more — from longtime area farmer Lenny Semerad.

"What a major difference it is to have that fresh produce instead of getting it from a vendor where it might have sat in a warehouse for weeks," said Juedes, who would like to increase what she buys from local farmers if she could figure out how to do it.

"It's fresher. It looks more appetizing," she said. "It's great for the kids, and it benefits the local farmers, too. It's a win-win."

That win-win was exactly what the Legislature had in mind when it created the Farm to School office in the state Department of Agriculture, Trade and Consumer Protection in 2009.

Since then, advocates say, the Wisconsin office has become the gold standard for the farm-to-school movement nationally, connecting growers and schools, helping to secure hundreds of thousands of dollars in grants, improving children's nutrition and knowledge of agriculture, and pumping millions of dollars into the state's economy.

Now, they say, that may be in jeopardy.

Gov. Scott Walker has proposed cutting the office's now-vacant coordinator position and 15-member advisory council as part of his 2017-'19 budget, a move that would save $132,800 over the biennium.

If Wisconsin Gov. Scott Walker (R) has his way, the Badger State will become the first to stop requiring students in public schools to spend a minimum number of hours in class.

A proposal in Walker’s new budget plan calls for ending the state’s current minimum requirements — 437 hours for kindergarten, 1,050 hours for elementary schools and 1,137 hours for secondary schools — and allowing school districts to do what they want in terms of seat hours for students.

Districts and schools would then be judged on their state report cards, which are produced annually by the Department of Public Instruction, based largely on standardized test scores. During a recent visit to a school in Waukesha to talk up his budget proposal, he said: “To me, the report card is the ultimate measure. It’s not how many hours you are sitting in a chair.”

Scott Walker wants to let schools cut down on class time. That’s really risky.

Wisconsin Gov. Scott Walker doesn’t seem to care how many hours schoolkids are in the classroom, as long as they can pass standardized tests — a proposal that could go against the academic consensus that time in the classroom matters.

In his recent budget proposal, Walker called for state lawmakers to get rid of the minimum requirement for how many hours students spend learning each year. That would make Wisconsin the first state without any guidelines for how long students must spend in the classroom. Typically, states require at least 180 school days, and Wisconsin law currently requires 1,050 instructional hours for elementary school students at public and private voucher schools and at least 1,137 for middle and high school students.

Scott Walker Moves To Kill A Century-Old Nature Magazine, And Readers Are Furious

Wisconsin Gov. Scott Walker (R) plans to do away with a nearly century-old, state-run nature magazine, sparking outrage among critics who see it as part of an ongoing anti-environment agenda.

Walker’s 2017-2019 budget, which he unveiled in February, calls for suspending publication of Wisconsin Natural Resources next year. The magazine, a product of the state Department of Natural Resources, has kept Wisconsinites informed about hunting and fishing opportunities, species conservation, environmental issues and much more since 1919.

The Walker administration argues it doesn’t fit the department’s core mission.

“While the magazine has a loyal following and is supported by subscriptions, it became clear as our staff continued to examine what they did and why they do it ... that we at DNR are stewards of resources and not magazine publishers,” department Secretary Cathy Stepp said during a legislative hearing late last month. She added that her agency’s time is better spent focusing on digital communication.

But a former department secretary, two former editors of the magazine and dozens of Wisconsin residents have blasted the governor’s plan.

“Anyone that says communication and education is not a core value of a natural resource agency doesn’t get it,” George Meyer, who served as natural resources secretary from 1993 to 2003, told Wisconsin Public Radio.

Scott Walker’s Plan to Kill Nature Magazine Spurs Backlash

Dozens of Wisconsin residents have contacted the office of Wisconsin Governor Scott Walker to protest his plan to kill a nearly 100-year-old, self-supporting state magazine that has previously been purged of content touching on politically sensitive environmental issues, according to records obtained by The Progressive.

Walker’s biennial state budget, unveiled in early February, included a call to suspend publication of Wisconsin Natural Resources in early 2018. The bimonthly magazine has nearly 90,000 paid subscribers and is produced by the state’s Department of Natural Resources. Walker’s office claims that doing away with the magazine will let the DNR focus more on its core mission.

Sunday, March 26, 2017

Retired Wisconsin Law Professor's Supreme Court Case Could Save Democracy

Meet the man who may end gerrymandering: A retired Wisconsin law professor’s Supreme Court case could save democracy
The case with the most promise to deliver a lasting judicial remedy is Whitford v. Gill, from Wisconsin, which advances a fascinating standard called the “efficiency gap.” It is the brainchild of law professor Nicholas Stephanopoulos and political scientist Eric McGhee, but has an elegant simplicity that is easily understandable outside of academia. If gerrymandering is the dark art of wasting the other party’s votes – either by “packing” them into as few districts as possible, or “cracking” them into sizable minorities in many seats – the efficiency gap compares wasted votes that do not contribute to victory. 
In November, a panel of federal judges smiled upon this standard and ruled that the state assembly districts drawn by a Republican legislature in the Whitford case represented an unconstitutional partisan gerrymander. “Although Wisconsin’s natural political geography plays some role in the apportionment process, it simply does not explain adequately the sizable disparate” advantage held by Republicans under these new maps, wrote the court. 
The judges ordered new state assembly maps in time for the 2018 election – a big deal, considering these district lines have helped give Republicans their largest legislative majorities in several decades, despite years in which Democratic candidates receive more votes. But just as important, it accepted the “efficiency gap” rationale and sent it toward Justice Kennedy. If Kennedy finds it workable, it would become much more difficult for politicians to choose their own voters and rig maps in their favor.