Sunday, February 28, 2010

Sunday Reading

America Punk'd
O'Keefe and the Myth of the ACORN Pimp

Health Care:
Coburn-Ryan Health Bill Would Jeopardize Coverage For Many
Who Pays?

Scott Walker:
Why Won't Scott Walker Answer The Question?
Scott Walker Flip-flop Timeline

Blood on the Tracks

I've never been to Waterloo, and I'm sure its a quaint and beautiful town, but a high-speed rail line will not reduce property values and isolate neighborhoods, as a town alderwoman, Laura Cotting, states.

Mrs. Cotting, with typical NIMBYist attitude, is offering nothing but red herrings. Wisconsin's major metropolitan areas are one of only a few in the entire country that do not have some sort of regional rail transit. If Wisconsin's economic indicators - unemployment rate, job growth, etc. - were exceptionally better than the rest of the nation, such a belief may be justified. "They've all tried the rail thing, and they're doing worse than we are." But the opposite is actually the reality. Cities and regions which have instituted cohesive rail systems have seen the best and most stable growth.

John DeWitt, a developer offered his (misinformed) thought, "“Looking down the line there are so many different views on whether high-speed rail is good at all, and, to an extent, I think it’s hard to say.” The consensus is that rail is better for jobs, growth, and the environment.

Most of the country has actually decided rail is a good thing. And, most of the studies done on the subject have shown growth near transit stations and in the neighboring area, alongside increased property values.

For Further Reading:
Average Cost of Owning An Automobile
Economic Development & Smart Growth
Effect of Rail Transit on Property Values
Light Rail Can Turn Into Money Train
Milwaukee Needs to Lose Its Rail Phobia
Public Transportation Produces More Jobs
Trains and the City
Transit Oriented America
True Cost of Owning a Car
Why You're Better Off Not Owning A Car

Sunday, February 21, 2010

Partisan Promotion

OK. So you're supposed to be a credible "think tank". Heck, even the Journal Sentinel, when citing your writing, always prefaces the Wisconsin Policy Research Institute as non-partisan.

Is it common, ethical, or non-partisan for a think tank to come out, years in advance, plugging their preferred candidate, and for president no less?

For Further Reading:
More Unbiased Reporting
Stink Tanks

Saturday, February 20, 2010

Walking Off A Cliff

Scott Walker's idea of governance seems to be simply getting rid of government. And, whatever is left of it, he wants those jobs to be low-paying, pension-free employment.

As our crumbling infrastructure will attest - you get what you pay for.

Walker's attempt at running Milwaukee County has been merely passing the buck and cutting services, while (in typical Republican style) claiming superior vision, leadership, and accomplishment.

As Steve Schultze wrote in the Journal Sentinel, "Walker...favored parceling out county functions to the state, municipalities, private firms and independently elected parks and transit districts." His idea of County governance is having someone else do the work. If governor, what entities would he have do the work of the State? Obviously he doesn't want to actually govern.

His latest proposal calls for replacing County pension plans with a 401(K) system for new employees. Let's ask those whom were planning on retiring in the last few years how their 401K's held up during the 2007 downturn. Some plans lost over half of their value due to the mismanagement of the economy by these same hucksters that claim privatization will save us all.

Just imagine: we're still operating in this casino capitalism economy; defined benefit (pension) plans are now defined contribution (401K) plans; Social Security has been privatized; and booms and busts are as regular as the sun rising and falling. During the next downturn, millions of would-be retirees would have to find work to supplement the huge losses of their 401Ks. This would be compounded by the losses of the privatized (market driven) Social Security accounts. A massive double whammy for would-be retirees. Such a roadmap - such a change in how we fund and care for our our retirees - would subject a majority of them to impoverishment. I hope the aged remember this when they vote for our next governor.

The whole looming budget crisis meme being pushed by Walker (and many other self-serving politicians and business leaders) would be laughable if so many living wage jobs weren't at stake. We seem to always find the money for private projects, yet supporting our citizens with good paying jobs is too much.

Public employment should be the floor - of labor standards - for the entire labor force. A living wage, decent health care, and the assurance of retirement after a certain period of service, should be the goals of all employment. The Walmartization of our workforce is a competitive disadvantage and a sure path to ruin. And that's the path Scott Walker wants us to join him on.

Weekend Reading

After Voting to Kill Recovery, 100 GOP Lawmakers Tout Its Success
As Milwaukee's Economy Fails, How Can Public Schools Succeed?
Budget Deficit Scare Story and the Great Recession
Distinguishing Fraud From Failure: A Prosecutorial Primer
Free Market in Free Fall and You Pay
How to Spot a Deficit Peacock
How to Walk the Fiscal Tightrope
Instead of Jobs Tax Credit, Let's Fix Our Infrastructure
Questions About The Coming Wave of Second Mortgage Writedowns
Rank Hypocrisy on Subsidies
Richest 400 Taxpayers See Incomes Double, Taxes Halved
Slapped in The Face By The Invisible Hand
Toyota Recalls: Another Bush Disaster

Tuesday, February 16, 2010

Speaking of Tax Evasion

A truly horrible specimen of a person running for public office.

The 'lower taxes lead to job creation' claim is baloney.

And, don't forget it's the percentage of one's income paid in taxes (tax incidence) that matters (when trying to gauge the burden) not the total amount paid.

For Further Reading:
Corporate Scofflaws
Facts and Figures
Race To The Bottom
Tax Burden Illumination
Wisconsin Tax Truths

Sunday, February 14, 2010

More Corporate Tax Evasion

Edward Lump [what a fitting name], president and CEO of the Wisconsin Restaurant Association, in a recent Journal Sentinel article, rants against a proposed Wisconsin bill which he feels will threaten small business.

He throws out some small business stats, regurgitating the discredited idea whereby small business will save the day. "Small business employs more than 53% of Wisconsin's workforce and creates 75% of new jobs nationally," Lump claims without reference.

And then there is this dubious and confused claim, "Now more than ever, Wisconsin needs government that recognizes small business is a vital part of the local economy, not a bank from which it can withdraw seemingly endless funds. Instead of creating new taxes, shouldn't we look for ways to cut taxes so businesses can add jobs?"

Wisconsin government doesn't recognize the importance of small business? Where's the proof for this claim? Because small businesses are required to pay taxes, that supports the notion that Wisconsin doesn't appreciate small businesses role in our economy? Even if we cut taxes and save a small business, let's say, $5,000-annually, does Mr. Lump think that would really ignite a hiring flurry?

If that were the case, we'd never have recessions, nor would we ever experience anything other than full employment...since we've been cutting taxes since the '80s. Shouldn't the miracle market, combined with the elimination of so much taxation, have produced a Utopian wonderland by now?

But we know this 'full employment, stable economy' scenario has not been the result of the tax cut frenzy we've seen over the past few decades. So how can these hucksters, with a straight face, always claim cutting taxes is the answer.

Now we get to the bill - Assembly Bill 215 - which has made Mr. Lump so limp. The bill regards the valuation of billboards for assessment purposes and property taxation. Lump sees this as a threat to all small businesses. That's quite the leap of paranoid irrationality. [I found it very odd there were no citations nor even the name of the bill Mr. Lump finds so vexing in his article. But then one would be able to go read the bill and see the tenuousness of Mr. Lump's claims...and there would be no reason to print his article.]

He completely leaves out an explanation as to why valuation of billboards is an issue. He doesn't mention that if billboard owners pay their fair share of taxes on their property, the rest of us pay a little less. And, somehow, "There is nothing that would prevent cities from applying the same rules to other small businesses, such as restaurants."

The bill applies to, "...permits issued, leasehold interests, or other intangibles with regard to the outdoor off−premises advertising sign. In this subsection, “off−premises advertising sign” means a sign that does not advertise the business or activity that occurs on the site where the sign is located."

The State already has the ability to tax. If they wanted to tax restaurants more, they would. To paint this legislation as some type of nefarious, backdoor bill aimed at (in a very roundabout way) a tax increase on all businesses is fantasy. Again, if the state wanted to increase taxes on business they could. They wouldn't want the arduous legal battles involved in such assembly bills just for the fun of it.

To support his paranoia, Lump equates billboard valuation with valuing liquor and hunting licenses. He sarcastically squawks, "How would the value of a liquor license be determined? Would the assessment take into account the myriad variables that affect the profitability of a licensed establishment, or would it be one-size-fits-all? ... Think about how ridiculous it would be for the state to tax you on the "value" of your hunting permit...Or on the "value" of the deer you could potentially take home, whether you actually get a deer or not. Who knows what other licenses cities will decide to tax, once the state gives them this power?"

A billboard's value is in the income stream it can generate by exposing whatever it's advertising to more and more people. The reason for the bill - more specific legal language to capture the true value of billboards - is because they are quite different from the much simpler licenses Mr. Lump incorrectly, and purposefully misleadingly, tries to compare them to.

A hunting license doesn't produce an income stream to it's holder. It allows them to shoot a deer (catch a fish, etc.). A liquor license allows its holder to ship, manufacture, and import liquor. The hunter will pay taxes when he has the butcher process his deer. The liquor will be taxed when it is sold. These are direct links along the chain of commerce for these two examples which can be traced and taxed accordingly. When Clear Channel, CBS Outdoor, or Lamar (a few of the largest billboard companies) obtain an outdoor advertising permit for $175, this cost nowhere near reflects the income stream these companies expect to profit from such advertising.

As Dennis Hathaway comments at the Scenic America Blog, "The billboard companies fight tooth and nail against tax assessments that account for the value of anything other than the structure itself, but if one of their billboards has to be removed for a highway widening or other public works project, they will seek millions in compensation based on the value of the sign as a 'revenue' generator. This is a classic case of wanting it both ways, and hopefully governments will point that out in defending against these inevitable lawsuits."

And, maybe both of the fees on hunting and liquor licenses are too cheap, also. Granted, there is a point where costs become too prohibitive and potential users will stop buying the licenses. With the current value of billboards abysmally low (compared to their true market value), we're nowhere near the tipping point. Even with an increase in the taxes billboard owners will pay, not one of them will stop advertising on billboards...because they are all making more than enough money to justify the cost.

Just shut up and pay your fair share in taxes. So residents, workers, home-owners, and those not as fortunate can pay less.

Saturday, February 13, 2010

Road To Perdition

More Journal Sentinel boosterism for Paul Ryan's nonsense.

"We're not certain it leads to where Ryan says it does, but it at least represents an honest attempt at serious discussion.", it doesn't.

Venturing Aimlessly

John Torinus, Journal Sentinel conservative business writer, loves to ramble on and on about entrepreneurship being a boon to the economy. Many of the same mindset also spout off about the magic of venture capital. In a recent editorial, the Journal Sentinel jumps onto the "venture capital is the answer to growing the economy" bandwagon.

"Money is the fertilizer that young companies need to grow." And, supposedly we don't have enough money. Yet, MoneyTree, a source they cite, reports venture capital grew from $2.9 million in Q1 2009 to $8.3 million in Q4.

The Midwest received $160 million in Q4 2009, garnered 3.18 percent of all venture capital for the quarter, and totaled 63 deals. The median representative percentage among all regions was 3.34. The median number of deals was 30.

Wisconsin had 4 deals in the 4th quarter of 2009; the median number of deals among all states was 5 (this number includes California, which had 323).

Yet, the editorial then claims, "Businesses usually are hatched with the help of money from friends and family." So, does that mean we just need better paying jobs, to allow family and friends the ability to fund more ventures?

The editorial continues, "This matters because venture capital is a proxy for the future economic health of a region; venture investors are adept at identifying companies with the best chance of growing and producing jobs and tax revenue. There is a correlation between income in a state and the amount of venture capital a state attracts."

Josh Lerner, of Harvard, has found the number of exceptional venture capitalists is very small. Harold Bradley, of the Kaufmann Foundation, believes venture capitalists have plenty of money, but allocate it very inefficiently, and therefore should not be receiving additional public dollars with the hope of boosting a local economy. Bradley and Carl Schramm, in an article for Business Week, write that the current focus on fees has promoted start-up flipping rather than nurturing.

In the end, venture capital amounts to one very small component of the overall capital market. An effort to attract more dollars to boost our local economy is desirable, but to what extent we should see venture capital as the goose that lays the golden egg is debatable.

Friday, February 12, 2010

The (Coming) Razings

"The White House says 'Both programs [Save America's Treasures and Preserve America] lack rigorous performance metrics and evaluation efforts so the benefits are unclear.' ... Except that isn't true, there are performance metrics, that prove that the programs created jobs at 1/18th the cost of last year's stimulus programs."

Obama Cancels Building Restoration Programs.

For some to still claim Barack Obama is a socialist, or even a liberal, they really haven't been paying attention. Barack has acquiesced to the Rubin Wall Street cabal in record-breaking, Olympic fashion. The pettiness and mean-spiritedness of these budget cut items (as well as many others) are slaps in the face of the "liberals" that mobilized in record numbers and got President Obama elected.

The conciliation and/or foot-dragging by the Obama Administration is thoroughly disappointing.

For Further Reading:
Congress Will Pay For What It Spends
Democracy Now: Robert Kuttner & Michael Hudson on the Obama Adminsitration
Obama Loves Business
Obama Shares Wall Street's Delusions
Wall Street's Killer Instinct Spells Death Knell For Jobs
What Does The Prez Stand For?

The Repackaging

Privatize Social Security, voucher-ize Medicare, cut taxes, ...

Sound familiar? The Republicans, and their latest rebranding posterboy - Paul Ryan, are trying to sell the same worn out, discredited ideas as the cure for what ails us.

"It’s not just the fact that Republicans are now posing as staunch defenders of a program they have hated ever since the days when Ronald Reagan warned that Medicare would destroy America’s freedom."

"Mr. Ryan offers a plan for Social Security privatization that is basically identical to the Bush proposals of five years ago."

"...the crusade against health reform has relied, crucially, on utter hypocrisy: Republicans who hate Medicare, tried to slash Medicare in the past, and still aim to dismantle the program over time, have been scoring political points by denouncing proposals for modest cost savings"

Paul Krugman has more here.

Sunday, February 7, 2010

Growing Pains

James Rowen, at the Political Environment, has covered, in detail and with clarity, the expensive, sprawl-encouraging, Waukesha water diversion proposal. He also critiques the unthinking and misguided Journal Sentinel editorial page's support for such exurban development. Though the editorial does mention an environmental impact study, this seems more an obstacle than a true concern. There is no sense of caution for the underlying environmental issues. Growth is good, keep the sprawl train moving.

The editorial page's boosterism is surreal. They state the water diversion must be studied and done carefully. Yet, in their closing, "Growth in the region helps the entire region. And making sure Waukesha has a safe water source should be in everyone's interest." Basically, let's go through the steps, but, in the end, let's find a way to keep growing at the edges.

If only the Journal Sentinel were full of such vigor in pushing for improvements and pointing out the strengths of the City. How about editorializing for an more integrated public transportation system connecting inner-city poor with suburban job growth? What's good for the City is good for the region, too.

Encouraging enclaves of segregated growth only increases income inequality and solidifies the isolation between suburb and city.

For Further Reading:
More Suburban Shopping Lifestyle
The Suburbanization of Poverty

Saturday, February 6, 2010

All Things Economic

Dean Baker on:
Defense Spending
Government Spending
Small Business
Social Security & Medicare
Underwater Mortgages

"Only" $9 Million

Why shouldn't we tax the sh@# out of such ill-gotten gains?

The Sky is Falling

Paul Ryan is wrong again. And, as usual, the Journal Sentinel is spreading his drivel.

Paul Krugman addressed and debunked these fiscal fallacies and scare-tactics (such as those Paul Ryan purveys) in his latest column.

The economy is, historically, worse under Republican administrations. When conservatives are in power: deficits increase, wage-growth slows, and general socio-economic indicators worsen.

It's time we stop listening to these free market, government-is-the-problem, snake-oil salesmen whose only track-record is failure.

Basket Case

The sales tax used to help pay for Miller Park may be extended past it's 2014 sunset date to pay for Bradley Center replacement or renovations.

These money losers - stadiums, convention centers, etc. - always have boosters and proponents pushing for the use of public dollars to fund such private playgrounds. In such instances, these normally government-averse, anti-tax crusaders, become big government supporters and partners. Suddenly government spending is a good thing that will create jobs and be an economic catalyst for the region. Or so the well-worn story goes. In the majority of cases, the reality is just the opposite.

These stadium subsidizers are against well-paid public employees, a well-funded public transportation system, or a targeted tax to pay for park system maintenance. But hundreds of millions for a sports stadium, that's a wise investment? Which of these investments returns more to a city or region long-term? Seasonal, retail/entertainment establishments? Or the infrastructure and amenities that citizens and businesses count on in everyday life?

For Further Reading:
Bucks Need New Arena
Miller Pork
Misplaced Priorities
New Kings Arena Would Add 229 Permanent Jobs
Sales Tax Ending Between 2015, '18
Stadium Rip-off(s)
Stadium Swindle
Will A New Soccer Stadium Help or Hurt the Bucks?
Yanking Away Taxpayer Dollars