Thursday, December 22, 2011

Executive Disorder

Tom Barret, a Democrat, spoke like a Democrat, "I think it would be great if he [Scott Walker] could find another line of work," when asked about the impending recall of Scott Walker.

Chris Abele, Milwaukee County Executive and supposed Democrat, said, "I haven't been staying up nights thinking about it. It's not a driving thing." Asked whether he felt Walker should be recalled, Abele also demurred. "I don't know. It's not something I have a burning passion and opinion about."

The article notes, "Abele as county executive has sought to cast himself as an independent and a pragmatist for whom partisanship is secondary." This is not leadership.

You are a public servant...and you have no opinion on collective bargaining or the governor? As the county executive, you have no opinion about how the state is governed?

As Joseph McCartin states, "In 1959, Wisconsin became the first state to enact legislation recognizing the rights of government workers to bargain collectively." Overthrowing a 50-year labor standard for Wisconsin, a policy never mentioned by Scott Walker on the campaign trail, doesn't make Abele ruminate  even in the slightest?

Not to mention, Walker killing trains, broadband, windmills, numerous federal aid packages and a host of other productive policies and projects that were in the works until Scott Walker took over. Abele has no passion nor thinks about any of this?

Abele wasn't elected to parrot the right-wing with talk of no new taxes and cuts, cuts, cuts. Milwaukee County citizens would like some guidance and direction: provide good, efficient services to the taxpayers and speak to the most pressing and important needs of our community. This whole Walker debacle fits into the latter category, and Abele should be thinking about it.

Happy Holidays

Americans For Pretense

American's For Prosperity (AFP) is pushing to put and end to Tax Incremental Financing (TIF). They feel this tool of economic redevelopment gives the businesses in the tax incremental districts an unfair advantage over other businesses not in the districts.

I'm not going to discuss TIFs and their viability. (I am also somewhat skeptical of their efficacy and efficiency.) The thing about this situation that jumped out at me is the utter hypocrisy and obliviousness of AFP.

Do Americans For Prosperity feel that their million dollar political campaigns for their causes give them an unfair advantage over others whom can't afford to spend that much? I'm sure now that they've decided TIFs are unfair, they've also realized how unfair our pay-to-play political system is and they will be urging public financing of elections from now on.

I'm sure they now understand that because they can get access to politicians and lobby in favor of their causes, that they have an unfair advantage over those who can't. Seeing they seem so concerned with fairness, I'm sure they will be altering their mission and doing all they can to give a voice to the voiceless and the needs of the underrepresented 99 percent.

Buck You

The Journal Sentinel continues their advertising campaign periodic reporting for the Bradley Center. Don Walker writes, Operating Income Up, But Challenges Remain. (From fiscal year June 2010 to June 2011 operating income for the Bradley Center increased from $14.7 million to $16.3 million. A 10.9 percent increase.)

The thing that really irritates me about this whole stadium subsidization situation: these captains of industry, these entrepreneurs, these businessmen whom always complain about entitlements, aid to the poor, and workers wages (to name a few of their complaints), these same people have no problem putting their hand out and demanding taxpayer money for their private playgrounds and projects. They're so smart  and innovative, except when it comes to paying the costs of their own business.

Exemplified by Marc Marotta, the chairman of the Bradley Center board, "The next five to seven years, there has to be a public-private effort." Strange how the private sector believes the public sector exists to service them specifically. Yet, when these private players are asked to pay their fair share of taxes, excuses for why they shouldn't have to pay more could fill all the seats at the Bradley Center.

Workers need to sacrifice. They should pay for their own retirement and health care; employers should no longer bear any responsibility. Social Security, Medicare, and unemployment insurance should all be diminished...we just can't afford it.

But...we need a private-public effort when tax dollars are being redistributed upward. When unemployment is at double-digits, people are losing their homes, and others are going without needed medical care, we can't use those same tax dollars to help out. No, in that case, we're broke. But when you can afford a boardroom full of attorneys, we will find the money to help build your stadium. We can raise taxes to pay for Miller Park, but we can't do the same for our park system or public transportation.

And, it's odd that even though the NBA season started late this year, the City of Milwaukee didn't collapse without the Bucks playing their basketball games. According to all the blather being whipped up, one would have thought that the, roughly, 20 cancelled games would have left Milwaukee resembling Thunderdome.

Midweek Reading

An Inconvenient Truth
The Case For Congestion
The Corporations That Occupy Congress
2011 Milwaukee: Year In Review
The Origins Of Financial Innovation
The Past, Present, & Future Of Venture Capital
The Price of Extremism: Wisconsin's Economy Under The Walker Administration
The University & the Start-Up: Lessons From The Past Two Decades

Tuesday, December 20, 2011

U.S. Real Estate

Commercial Real Estate Prices for United States

Delinquency Rate On Loans Secured By Real Estate, All Commercial Banks

Loans Secured By Real Estate, All Commercial Banks 

Owners' Equity in Household Real Estate - Net Worth - Balance Sheet of Households and Nonprofit Organizations 

Real Estate - Assets - Balance Sheet of Households and Nonprofit Organizations

Sunday, December 18, 2011

Corporate Tax Dodgers

Citizen For Tax Justice has released an extensive report detailing corporate tax dodgers from 2008-2010.

Corporate Taxpayers & Corporate Tax Dodgers 2008-10

Press release with key findings:

A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author.  “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

The study examines 280 corporations, all from the Fortune 500 list.  All of the companies were  profitable in each of the last three years and provided sufficient and reliable information in their  financial reports about their pretax U.S. profits and their U.S. federal income taxes. Corporations are lobbying for lower corporate rates and an exemption for profits they shift  offshore. McIntyre, however, says “Our study provides proof that too many corporations are  already being coddled by our tax system.” Findings in the report include:

 The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.

 78 of the companies enjoyed at least one year in which their federal income tax was zero or less.

 30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.

 Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010.

 Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.

 Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period. Some companies within sectors fare worse than others. For example, the report finds that FedEx paid a 0.9 percent tax rate over the three year period while its competitor, UPS, paid a 24.1 percent rate.

 While retailers and wholesalers in the study generally pay average effective tax rates of about 30 percent, paid a rate of only 7.9 percent on its $1.8 billion in profits from 2008-2010.

 Financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years. More than half of federal corporate tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

 The top ten defense contractors saw their combined tax rate decline from 19.3 percent in 2008 to a mere 10.6 percent rate in 2010.

 U.S. corporations with significant (ten percent or more of their total worldwide profits) foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.

The Time Is Now?

Are you kidding me?

On the list of priorities for public dollars - where public investment should be steered - building a new basketball stadium shouldn't even make the list.

But Michael Hunt, of the Journal Sentinel, feels the time is now to address a new arena for the Bucks.

The article notes:

"Marotta, a former Marquette basketball player, is getting it started by evoking the name of former Wisconsin state Sen. George Petak, whose vote saved Miller Park.

"Where would we be without a guy like Petak? Here was a guy who cared more about doing the right thing than being re-elected," Marotta said.

"He lost his seat, but if he hadn't taken that vote, we wouldn't have the Brewers here. And Milwaukee would be a significantly diminished town. We do have a lot of challenges. There's no denying that. We have significant economic challenges within the city. We've got public infrastructure needs. We've got libraries that need to be funded.

"The way to continue to do that and grow as a community is to invest in our entertainment, cultural and sports assets. That's what attracts business to come and expand here. It makes it a great place to live and work."

Entertainment, cultural and sports assets sure do make a city more tolerable. But Milwaukee isn't Las Vegas - lets not pretend these are the economic engines of Milwaukee's economy. We may have tourist attractions, but our economy isn't driven by the tourism industries. Manufacturing; trade, transportation, and utilities; information; financial activities; professional and business services; and education and health services all employee more people than our leisure and hospitality industry.

It's fine to look at our stadiums and conventions centers at some point. Preferably, when our economy is on better footing, and taxpayers may be more receptive to such public investment. But, as far as bang-for-the-buck investments are concerned, in helping to get our economy growing again, stadium subsidization has a poor return on investment. 

The time is now for public investment in infrastructure. But it should be in public transportation, energy, water, and education, not sports stadiums.


David Rohde has an interesting article up over at the Atlantic, Free-Falling In Milwaukee.


"First, the numbers. From 1970 to 2007, the percentage of families in the Milwaukee metropolitan area that were middle class declined from 37 to 24 percent, according to a new analysis by the Southeastern Wisconsin Regional Planning Commission. During the same period, the proportion of affluent families grew from 22 to 27 percent-while the percentage of poor households swelled from 23 to 31 percent. In short, Milwaukee's middle class families went from a plurality to its smallest minority."

Roads, Roads, Everywhere

With a dying planet and a dying economy, the Wisconsin Department of Transportation decides to double down on pollution and antiquated energy and transportation sources.

DOT kills Hoan Bridge bike lane proposal.

Risky Business

The Journal Sentinel is promoting, again, venture capital.

"The State of Wisconsin Investment Board (SWIB) said it will commit as much as $80 million to Danville, Calif.-based Northgate Capital. This is the first time the $85 billion public pension fund has had the opportunity to invest with the top venture capital pools, which are willing to take public funds' money because the weak economy has made it more difficult for the funds to lure private investors."

"We believe the current venture environment offers an unprecedented opportunity to access top-tier funds and invest into a climate with favorable valuations," Chris Prestigiacomo, SWIB portfolio manager, said. "Both should translate into higher future returns that meet SWIB's fiduciary duty to the Wisconsin Retirement System beneficiaries."

The Whitefish Bay school district's trust fund (along with 4 other districts) wanted to 'get a piece of the action' and leverage funds with some Wall Street high-rollers, with the hopes of cashing in. 

"So an old-fashioned financial romance began: Supply (Wall Street’s hottest financial products) met Demand (school districts seeking to build up their OPEB trust funds). It looked like a perfect match."

"Their trust fund for retirees’ benefits could accumulate almost $9 million in seven years by borrowing and investing $80 million. These CDOs would pay them over 1 percent more than what it would cost to borrow the money. The more the schools borrowed, the more they would make. It was practically free money. What was not to like?"

It didn't quite work out that way. The Wall Streeters made their money; Whitefish Bay, not so much.

"Whitefish Bay and the other school districts got something substantial too: nearly all of the risk. The school districts are about to lose all of their initial $37.3 million. They will also lose another $165 million of the money they’d borrowed from Depfa. As soon as the default rate is reached, $200 million will go to pay insurance claims to the Royal Bank of Canada. And the schools still will owe the full $165-million Depfa loan, and they will still owe on the bonds they had issued to raise much of their $37.3 million in collateral. The risk of reaching total default currently is so high that Kenosha’s entire piece of the CDO investment ($35.6 million) was valued at only $925,000, as of January 29, 2009—a decline in value of $36,575,000. Now the school districts are paying hefty fees not just to bankers but also to lawyers, as they sue to unwind the deal and recover damages."

We've been warned.

Saturday, December 17, 2011

American Inequality

Standards For State Economic Development Subsidy Programs

Good Jobs First has released a new report, Money For Something: Job Creation & Job Quality Standards For State Economic Development Subsidy Programs.


"At a time when unemployment remains high and states and cities are spending an estimated $70 billion a year in the name of economic development, taxpayers are right to ask if such expenditures are creating a substantial number of good jobs. An analysis of major state economic development programs finds that many subsidy programs require little if any job creation. Fewer than half provide any kind of wage standard for the workers at subsidized companies, and fewer than a fourth require any sort of healthcare coverage."

"These findings come from a careful analysis by Good Jobs First of the most significant subsidy programs in all 50 states and the District of Columbia—238 programs in all, which together cost taxpayers more than $11 billion a year (amounts are not available for 20 of them). The programs include corporate income tax credits (for job creation, capital investment, and/or research & development), cash grants, low‐cost or forgivable loans, enterprise zones, reimbursement for worker training expenses and other types of company‐specific state assistance. (Subsidies that are enabled by state law but whose costs are borne by local governments, such as property tax abatements, are not among the programs examined.)"

"We rate each of the 238 programs on three primary criteria (and several derivative qualities): whether they require recipient companies to meet job‐creation or other quantifiable performance standards; whether the subsidized companies have to pay their workers above a certain wage level; and whether the companies have to provide their workers healthcare coverage or other employee benefits."

"Fewer than half (98) of the 238 programs impose a wage requirement on subsidized employers, and only 53 of those wage standards are tied to labor market rates, which are a more effective benchmark for economic development than fixed amounts that can stagnate in the manner of the federal minimum wage."

"Based on our criteria, the states with the best average program scores are: Nevada (82), North Carolina (79), Vermont (77), Iowa (70), Maryland (68), and Oklahoma (66). The worst averages are: District of Columbia (4), Alaska (5), Wyoming (10), Oregon (13), Washington (18), Hawaii (19) and North Dakota (19). Twenty‐three states score above 40, which is the average for all the states."

Average Hours Worked

h/t The Big Picture

We're Broke

CEO Pay Skyrocketed 27% Last Year

Weekend Reading

Competition Hasn't Worked In Health Care
How Did Fannie & Freddie Become Symbols Of The Housing Bubble?
How Finance Vultures Feed Off The Poor
It's Time To Tax The Church
Questioning The Benefits Of Curbing Short Sales
Rethinking Debt
The Top 1 Percent Since 1990: Getting Richer
Uncertainty & The Welfare Economic Of Medical Care
We Have More Doctors Per Capita Than Ever Before
Why Rich People Don't Create Jobs

Reality & Public Sector Compensation

With election season heating up, Republican myth-making and outright dishonesty can't be far behind. In anticipation of the next round of right-wing attacks on government and the public sector, here is some of the latest research completely debunking the Republicans' attempted deception on government size and public worker pay.

Are Wisconsin Public Employees Overcompensated?
Right-Wing Media Pushing Phony Public Sector Worker Stats
State Budget Deficits Are Not An Employee Compensation Problem
Wisconsin Has Lean Public Sector
Wisconsin Public Employees
Wisconsin Public Sector Workers Are Undercompensated

Race To The Bottom

The former head of Obama's auto task force, Steven Rattner, while speaking at a luncheon in Detroit, expressed that he wished he would have made the UAW sacrifice more.

Rattner also mentioned, "Friends on Wall Street were concerned by GM's earnings and communications with the market."

The three-tiered pay structure has the highest 900 workers making $29 an hour, $16 for those 200 workers in the middle, and $9 for those subcontracted at the bottom. Which means that the top worker has gross earnings somewhere near $60,000 per year; the middle worker somewhere near $33,000; and the bottom somewhere near $19,000.  

The article goes on to note that GM's North American division posted profits of $5.7 billion in the past nine months of this year. So, even though the workers are not making lavish amounts and the company is profiting handsomely, the Wall Street and Republican mindset is on full display - the rich deserve more, while the workers should sacrifice more.

This is class warfare people. Wake up! 

Sunday, December 11, 2011

Economic Engine or Albatross?

Marc Marotta, the board president for the Bradley Center, in the Milwaukee Journal Sentinel, declared the Bradley Center an economic engine.

Most of the workers are non-union, low-wage, seasonal and without benefits. Not the type of jobs most economic development aims to, nor should, create. Most of the millionaire athletes that play at the Bradley Center don't live in Milwaukee - their tax and spending dollars spillover outside Milwaukee. Often, the money spent on sporting events leaks outside the host region.

To be an economic engine, a project has to lure customers from outside the area that would not otherwise be spending money, or induce locals to spend more than they otherwise would. If people decide to go to the Bradley Center rather than a movie one night, there is no growth. This is merely a realignment of leisure spending. The majority of dollars spent at these events are simply a substitution of spending patterns (a basketball game rather than eating dinner out).

And, again, perplexingly, many whom would routinely be lumped in with the ultra-conservative, government-is-bad, no-new-taxes cabal are saying they need public dollars to continue their private entity. So...government can't do anything right, they don't know how to properly spend tax dollars...but when the government is giving millions to stadiums and arenas, they're investing wisely. Yes, screw public transportation, green energy, and modernized sewer and water systems. Sport stadiums are much more crucial to our economic future.

If extra-market forces (taxpayer subsidies) are good when it comes to stadiums, why aren't taxpayer subsidies good for public works programs, light rail, greening older buildings, or facilitating universal health care? Those subjects seem much more important to the average citizen than sporting facilities.

It's also very strange to claim the Bradley Center is an economic engine and then offer up nothing quantitative to back up that claim. But then again, actual studies looking into the effect of stadium subsidization have found that stadiums have little to minimal impact on the local economy.

For Further Reading:
Basket Case
Buck The System
Conclusions On Subsidies For Sports Franchises
Economic Impacts Of Tourism
Sports, Jobs, & Taxes
Stadiums & Convention Centers As Community Loss Leaders
The Stadium Gambit & Local Economic Development
Stadium Swindle

Republican Campaign Strategy #1: Lie

Walker's latest campaign/defense/promotional commercial is packed with lies. A blonde female school board member gushes Republican inanities.
  • Walker has reduced school costs and improved education.
  • Illinois and Minnesota raised taxes and hurt their prosperity.
Yet, actual educators have said Walker's policies are hurting schools. Yes, who would have guessed that removing millions in funding from our schools could actually be counterproductive?

And, according to the last jobs report, Illinois added the most jobs of any state, while Wisconsin lost the most. Again demonstrating that, in our current economic situation, austerity only leads to continued suffering.

Reality, indeed, appears to have a liberal bias.

Saturday, December 10, 2011


Johnson Controls reported record sales for the fiscal year ending September 30, 2011. Sales rose 9% in 2011. Earnings rose 19%.

As of September 29, 2010 Johnson Controls stock price was $25.94. One year later, September 29, 2011, the price was $27.40. This was a 5.6 percent increase.

As of December 9, 2010 Johnson Controls stock price was $37.93. One year later, December 9, 2011 the value was down to $31.95. A 15.8 percent decline.

The highest stock price for Johnson Controls, over the past 10 years, was October 22, 2007 at $42.74. Recently, July 11, 2011, the stock price reached $40.85. Considering the current value ($31.95), Johnson stock has seen a 21.8 percent decline since July 2011.

[On March 2, 2009 the stock was down to $9.13, the lowest since September 18, 2000 when it was $7.98.]

Steve Roell, Johnson Controls CEO, saw his total compensation increase from $17.56 million to $22.34 million for 2011. A 27.2 percent increase.

I'll let you decide whether this is a fair compensation. Or, whether "we're broke" and the rich "job creators" are unable to pay a small percentage more in taxes.

Weekend Reading

Bradley Foundation Builds Conservative Empire
For Business, Golden Days; For Workers, The Dross
House Prices & Current Account Deficits
Mackinac Center Emails Reveal True Motives
Quality Doesn't Follow Rise In Voucher Schools
$7.7 Trillion in Secret Federal Reserve Loans To Banks?
State Jobs Carried An Asterisk
Structure Of Excuses
Take A Stand Against School Vouchers
Why School Choice Fails

Why Aren't We Prosecuting Wall Street?

h/t Crooks & Liars

Sunday, December 4, 2011

Ronnie & The Right's Reality Problem

Everything conservative is encapsulated in the mythology of Ronald Reagan. But, as usual with Republicans, their talking-points don't mesh with reality. Most of what they claim to be the Reagan legacy is merely elaborate revisionism detached from actual experience. If we were to look at the list of conservative principles [as mandated by Grover Norquist] - no new taxes, shrinking the size of government, and an aversion to debt and deficits - Reagan would fail every one. 

It's actually funny that the party that hates Hollywood chose a former actor to be their posterboy for the Republican platform; nevermind that Reagan himself failed at this platform. As another election cycle begins to heat up, I thought it would be good to shine a light on the often repeated, yet completely false, right-wing Reagan talking-points.

"Ultimately, Reagan signed measures that increased federal taxes every year of his two-term presidency except the first and the last."

"Federal spending grew by an average of 2.5 percent a year, adjusted for inflation, while Reagan was president."

"The national debt exploded, increasing from about $700 billion to nearly $3 trillion."

"The number of federal employees grew from 2.8 million to 3 million under Reagan."

"During the Reagan administration the number of families living below the poverty line increased by one-third."

"His administration was responsible for numerous brutal actions in Latin America, including massacres in El Salvador and the war against Nicaragua."

"Unemployment jumped to 10.8 percent after Reagan enacted his much-touted tax cut, and it took years for the rate to get back down to its previous level."

"Reagan signed into law a bill that made any immigrant who had entered the country before 1982 eligible for amnesty."

"Reagan fought a proxy war with the Soviet Union by training, arming, equipping, and funding Islamist mujahidin fighters in Afghanistan."

Five Myths About Reagan's Legacy
Reagan & The Joy Of Myth-Making
Reagan Revisionism & Reagan Mythology
The Ronald Reagan Myth
Ten Things Conservative Don't Want You To Know About Reagan
Top 10 Reagan Myths

Saturday, December 3, 2011

Put That In Your Pipeline & Smoke It

We're broke.  We're drowning in debt. We must sacrifice.

We don't have money for living wages, improved transportation infrastructure, or green energy projects.

But we have - seemingly unlimited - money for continuing tax breaks for the wealthy, corporate giveaways, continued building of new roads to nowhere, and billions for filthy energy sources.

To help the already heavily subsidized fossil fuel industry, we (along with TransCanada) are now planning on building a pipeline to deliver crude from Canada down to the Gulf Coast.

"There will be jobs!"

Indeed. But not nearly the amount the boosters claim.

And, wouldn't green infrastructure jobs be a better investment for the future of the U.S.? Wouldn't such a green investment place the U.S. and our industries in a better competitive position? Couldn't such a green initiative be the leap forward (which the U.S. needs) to positioning America as an attractive place to live and work versus our global competitors?

We can continue subsidizing old, obsolete industries and maintain our steady downward spiral into insignificance. The other option is to actually put our money where our mouth is by building sustainable, efficient infrastructure and assuring the relevance of the U.S. into the next century.

For Further Reading:
Economic Value Of Green Infrastructure
Dirty Oil From Canada To Texas
Green Infrastructure
Green Water Infrastructure
Pipeline Bad For Environment

Weekend Reading

Death Of The Fringe Suburb
Double Taxation Of Corporate Profits & Other Fairy Tales
George Will Confused By Numbers At The Post Office
Mining Bill Rushed Before Governor's Office
Myth Of Profligate Euro Zone Countries
No New Drugs? Blame Wall Street
The Obama Spending Non-Surge
Skilled Jobs Go Begging? Not Quite
Small Business & The Millionaire Surcharge
The Squeeze On State Workers
Top 0.1% Of The Nation Earn half Of All Capital Gains
Walker's Union-Busting Bill Challenged In Court
Who Does Not Pay Taxes? Kimberly Clark, Brunswick, Rockwell, & Snap-On