Corporate Welfare

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[source]

[source]

[source]

Let The Poor Eat Mexicans

The Colbert Report
Get More: Colbert Report Full Episodes,Video Archive

The Most Precious Of All

Tom Barrett is walking a precarious line by talking about expanding Act 10. Barrett believes that by reining in the police and firefighters unions he could eventually aid both departments and make the city safer at the same time. A noble, yet circuitous and confrontational proposition.

The police and firefighters are holding to the rationalization that they are The Public Safety and thus completely different from and above other public employees.

James Palmer, the executive director of the Wisconsin Professional Police Association, bellows, "The mayor should understand that his public appeal for an expansion of Act 10 to police officers and firefighters ignores the reality that public safety employees are already paying toward their health insurance and their pensions in largely the same manner as general municipal employees. Since the 2011-2013 state budget was enacted, public safety employees can no longer negotiate over their health insurance benefits and costs. In addition, the vast majority of public safety contracts require police and fire employees to pay their share for pensions."

Other public employees also pay toward their health insurance and retirement, and they also can't negotiate their health insurance benefits or costs. And, these other public employees haven't seen the 3 and 4 percent raises the police and firefighters have seen over the last six or seven years.

Palmer goes on to decry, "Any assertion that expanding Act 10 will free up funding that could be used to hire more employees is without any reasonable basis."

If Act 10 can't free up funding, why was it a good idea when it was used to bludgeon the other public employees? Wasn't the initial point of Act 10 about saving money and saving budgets? Is Mr. Palmer admitting the Act 10 emperor has no clothes? Or is he just willing to throw other union members under the bus as long as police and fire members are exempted?

The police and fire protection departments are responsible for roughly 50 - 75 percent of most city budgets. These two departments are where most taxpayer dollars go. If there is anywhere to find efficiencies, these would seem to be the departments. In Milwaukee, police and fire account for nearly 59 percent of the budget. And, as we can also see, their budgets have increased almost 16 percent over the last decade.

Share of budget for general city services:

                                            2003            2013
Fire Dept.                            16.1%          17.9%
Police Dept.                         34.6%         40.6%
Protective Services total      50.7%         58.8%

Palmer persists, "It's important to recognize that public safety employees are unique, both in the challenges that they face and in the critical role that they play in our communities." Sure, but teachers, mental health care workers, social workers, engineers constructing our bridges, scientists providing our clean water supply, and a host of other public workers play a pretty critical role, too.

As James Rowen details, "The City of Milwaukee currently employs 6,865 employees. 4,168 are general city employees (including fire and police civilian staff). 2,697 are sworn fire and police employees...their average annual salaries. $41,361 for general city employees. $65,649 for sworn police employees. $67,554 for sworn fire employees." The average police officer or fight fighter makes over one and a half times as much as a general city employee.

Palmer's revisionist history continues, "He [Barrett] now appears to have abandoned the very principles that once drew WPPA's support, thus causing us to question whether that support was misplaced."

"...That once drew the WPPA's support"? Yeah, as I remember, the WPPA supported Scott Walker. Which is why they were preferentially carved out of Act 10. It seems the police and firefighter unions support whomever gives them preferential treatment. 59 percent of the entire Milwaukee budget already goes to these two departments, how much more do they want?

Maybe Barrett is on to something here. Maybe the police and firefighters should learn to live with the same rules as their other union brothers and sisters.

The False Promise Of The Entrepreneurial University

Minimum Wage

[source]

Midweek Reading

Concept Of "Limited Government" Is Right-Wing Bunk
Move To Ghost Job & Back Gives Capitol Police Chief Big Raise

Chief Dave Erwin — who has overseen a crackdown on Walker protesters at the statehouse — received an overall salary hike of 11.7%, to $111,067 a year, the same rate as his predecessor. That amounts to an $11,680 annual raise... 

Walker officials took similar steps to skirt civil service salary limits for Deputy Police Chief Dan Blackdeer. His pay jumped by 14.6%, to $96,048, on June 16.

Why Pot Makes You Feel Good
A Texan Tragedy: Ample Oil, No Water
Social Security A Model For Washington Budgetmaking
How The State Borrowed A Billion Dollars To "Cut" Your Taxes
Billion Dollar Blunder
Five Facts About Household Debt In The United States

Social Security

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Weekend Reading

Myth & Reality: The Low-Wage Job Machine
How Corporate Giveaways Suck The Lifeblood From Your Community
How A Secretive Panel Used Data That Distort Doctors' Pay
Reagan's Million-Jobs Month Revisited
The Great American Do-It-Yourself Retirement Fraud
8 Ways Privatization Has Brought Pain & Misery To American Life
Manufacturing Tax Break Gone Wild
Many New Jobs Are Part-Time & Low-Paying
In Climbing Income Ladder, Location Matters
Tax Incentives: Costly For States, Drag On The Nation
15 Things Americans Would Know If There Were A Liberal Media

7 Biggest Economic Lies

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Scott Walker Is FDR: F'ing Dumbass Redneck

It was all I could do to keep from falling out of my chair when I read Scott Walker's latest bullshit self-congratulatory rhetoric, Wisconsin A Model For Country, Scott Walker Says. [This despite the fact that the budget Governor Walker just signed also created a structural deficit of $505 million in the next biennium.]

"The position I pushed is not unlike the principle that Franklin Delano Roosevelt — not exactly a conservative — pushed as well when it came to public sector collective bargaining," Walker remarked at the annual Governmental Research Association policy conference.

FDR's opposition to collective bargaining, per se, was more against public workers striking or using quasi- militant tactics as a means to an end. He supported the public workers' voice in attempts at fair treatment. Roosevelt said, "It is one of the characteristics of a free and democratic nation that it have free and independent labor unions."

As the Library of Congress details:

Although the future of labor unions looked grim in 1933, their fortunes would soon change. The tremendous gains labor unions experienced in the 1930s resulted, in part, from the pro-union stance of the Roosevelt administration and from legislation enacted by Congress during the early New Deal. The National Industrial Recovery Act (1933) provided for collective bargaining. The 1935 National Labor Relations Act (also known as the Wagner Act) required businesses to bargain in good faith with any union supported by the majority of their employees.

Public works and unions became kind of a big thing specifically during FDR's time in office. For Walker to claim a parallel between himself and Roosevelt for doing the exact opposite during his reign as Wisconsin governor is batshit crazy.

[Above: FDR visiting the Allis-Chalmers factory near Milwaukee, Wisconsin during an inspection trip. Milwaukee, Wisconsin, September 19, 1942.]

Walker goes on to claim one of his major policy innovations was pension reform. Yet, Walker himself, in the Journal article, even states, "Our pension system is the only one in the country that's fully funded." As a Pew report, A Widening Gap In Cities, documents:

At the end of fiscal year 2009, the largest city in Wisconsin had the best-funded system among 61 American cities, with 113 percent of the money.

The report also found the State of Wisconsin, at the end of fiscal year 2009, had 100 percent of needed funding.

More great Scott Walker logic - reform the program (our pension system) that is performing better than any similar program in the country. So, if you're doing something better than anyone else, that's the thing you want to change, and for this, you should be heralded as a model for the country?

WEDC Not A Good Model For Deploying Scarce Resources

The Journal Sentinel actually had a good idea, Governors Should Swear Off Poaching. Our economy doesn't gain anything by Wisconsin stealing jobs from Illinois - the so-called war among the states. It merely realigns jobs without any growth occurring. 

Yet, once the Journal began drilling down further into their editorial's details, things got way off course.

Walker deserves credit for helping launch the Wisconsin Economic Development Corp., which is a good model for deploying scarce resources even if poor management at the agency resulted in a series of embarrassing mistakes.

Good Jobs First actually published The Risks of Privatizing State Economic Development Agencies in January 2011.

Transferring state business recruitment functions from government agencies to private entities is not the panacea that its proponents suggest. In fact, the track record of those few states that have taken the step is filled with examples of misuse of taxpayer funds, political interference, questionable subsidy awards, and conflicts of interest. Rather than making economic development activities more effective, privatization often is little more than a power grab by governors and powerful business interests...

Most of the seven states that currently make use of economic development PPPs have experienced a variety of performance problems. These include the following:

 Misuse of taxpayer funds (Rhode Island, Florida and Wyoming)

 Excessive executive bonuses (Virginia, Florida, Michigan and Wyoming)

 Questionable subsidy awards by the subset of PPPs that have a role in that process (Michigan and Rhode Island)

 Conflicts of interest in subsidy awards (Florida, Utah and Texas, which makes limited use of PPPs)

 Questionable claims by the PPP about its effectiveness (Wyoming, Florida, Utah and Indiana)

 Resistance to accountability (Florida and Michigan)

Why does the Journal continue to push an idea that has failed everywhere it has been tried? Why do they still defend such a bogus program, even after it has been shown to be an embezzling debacle here in Wisconsin?

Scott Walker Among Worst Governors In America

Group names Scott Walker among the worst governors in America

The Worst Governors In America 

Gov. Scott Walker (R-WI) was elected in 2010 and won a recall election in 2012. He is running for re-election in 2014. His inclusion stems from: (1) using his office to promote donors’ interests; (2) illegally using state troopers to track down his political opponents; (3) an investigation into illegal activity by his aides; (4) diverting money from a nationwide mortgage settlement; (5) an investigation into the state economic development corporation he chairs; (6) dismissing a political appointee for signing the recall petition against him; and (7) advocating for new voter identification restrictions.

Walker & Republicans Wrong On Budgets & Taxes

Gov. Scott Walker signs 2-year, $70 billion Wisconsin budget

The budget approved by the Republican-controlled Legislature includes all of Walker’s priorities, including a $650 million income tax cut, expansion of private school vouchers and changes to the state’s Medicaid and food stamp programs... 

The “biggest, boldest reform” in the budget was new work requirements for people on food stamps. Able-bodied adults must spend at least 20 hours a week working or getting trained for a job, or they will be limited to three months of benefits over three years. Walker described this as a kindness. 

“We say it’s time to get the training, and the access to training so that when a job becomes available, you are ready to get in the game,” he said.

Tax Plans for Wisconsin Go From Bad to Worse

Here is how the tax cut would be distributed among income groups: 

- The top 5% of earners alone, a group with an average income of $392,000, would receive more than 1/3 of the benefit of the income tax cuts.
- The top 20% of earners, a group with an average income of $183,000, would receive more than 2/3 of the benefit.
- The bottom 60% of earners – those making $60,000 a year or less – would only receive 11% of the benefit of the income tax cuts.
- The 20% of the Wisconsinites with the lowest incomes would receive just two cents out of every $100 in individual income tax cuts under this proposal.

Bad Budgets Become Law in Ohio and Wisconsin

The budget Governor Walker just signed also created a structural deficit of $505 million in the next biennium.

The Truth About State Taxes

The record suggests that taxes in Wisconsin were lower under Doyle than under any governor in the last five decades, as compared to other states...

One of the peak levels of taxation came under Republican Gov. Tommy Thompson, who increased taxes to the point that they took 13.1% of personal income in Wisconsin in 1996, when the state ranked 3rd in taxes nationally. The state still ranked 4th when Thompson left office...

Another way of measuring this is to look at total state-local spending. The WisTax figures show the 2011 state/local expenditures per person were $8,351 nationally and almost exactly the same, $8,383 in Wisconsin.

For Further Reading:
Legislative Fiscal Bureau 2015-2017 General Fund Budget
Budget Bill Turns Large Surplus into a $505 Million Hole in 2015-17 Biennium

Fiscal bureau: $500 million structural deficit in 2017 anticipated

Income Inequality

Did Sprawl Kill Horatio Alger?
A Tale Of Two Rust Belt Cities
Will SCOTUS Voting Rights Ruling Yield A Blue State Refund?

Without State Spending There'd Be No Google Or GlaxoSmithKline
Econ 101 Is Killing America
McDonald's Budget Plan Leaves Out Corporate Welfare
The Case For Paying People More
Mr. President, Have Pity On The Working Man
How Intellectual Property Reinforces Inequality
Is Productivity Being Translated Into Pay Increases?
Higher Productivity Used To Mean Higher Wages. Has That Broken Down?

Wages Fall At Record Pace
Walmart One Of The Major Welfare Recipients In America
Who's Dependent On Food Stamps? Cheapskate Corporations
Inequality In America: The Data Is Sobering

US Infrastructure Is A Disaster

• 1 in 9 of the country's bridges are rated as structurally deficient, meaning they require significant maintenance, rehabilitation, or replacement. 
• Of the 84,000 dams in the U.S., 14,000 are considered "high hazard" and 4,000 are deficient. It would cost $21 billion to repair these aging dams.
• 42% of the country's major urban highways are considered congested, and 32% of major roads in the U.S. are in poor or mediocre condition.
• Even though a third of Americans don't drive cars, 45% of households lack access to transit. 
• There are 240,000 water main breaks in the U.S. each year, and many water mains and pipes are over 100 years old.
• The Federal Aviation Administration anticipates that the national cost of airport congestion and delays will nearly double from $34 billion in 2020 to $63 billion in 2040.
• 90% of locks and dams experienced an unscheduled delay or service interruption in 2009. Barges being stopped for hours can prolong transport of goods and drive up prices.
• Congestion on rail lines is costing the U.S. economy about $200 billion a year, or 1.6% of economic output.
• Although public school enrollment is gradually increasing, national spending on school construction declined to $10 billion in 2012, about half of what was spent before the recession.
• National Park Service facilities saw 279 million visits in 2011 and has a deferred maintenance backlog of $11 billion.

10 Signs That US Infrastructure Is A Disaster

Expect Wage & Benefit Givebacks

Abele Dumps County Transit Company

County Executive Chris Abele has decided to award the $164 million dollar county transit contract to a new company, MV Transportation, and drop Milwaukee Transport Services (MTS), the non-profit operation that has run the county bus system for decades...

The not-for profit operator would be replaced by MV Transportation, a privately held corporation based in Texas, whose website says it “provides passenger transportation management, operations, and related services to jurisdictional and private entities around the world.” ...

However, once a new entity takes over, the contracts for all union workers would have to be renegotiated, and the new company may push for more efficiencies. Anticipating that, the bus drivers’ union, ATU 998, has been circulating a PowerPoint presentation opposing the move to a for-profit management firm. 

When asked if he expected wage or benefit givebacks, Abele said “I honestly don’t know. I can tell you that was not the goal. The goal was better services and to keep fares down.”

In this instance, Abele is being naive, stupid or devious. Or maybe it's just his typical cliched response/excuse, providing little insight into his actual thought-process, giving little explanation as to how he decided a major program change for the county. "How was I to know they'd save money by cutting corners and wages?"

Privatization is always about cutting benefits, decreasing pay, and/or breaking unions. I'd like the county executive to explain how he believes this move will "keep fares down" while providing better service.

Typically, in cases like this, the managers continue to receive lofty salaries (and more often than not actually get paid more), while the workers see their pay and benefits slashed.

It would be one thing if the pay and benefits of present workers were guaranteed to remain intact, whilst the new company was also making assurances of more routes and improvements to other services. But this seems like more of the hope-and-prayer variety of public policy decision-making.

Does Abele really believe lower-paid, disgruntled workers are going to provide better service? Otherwise, what exactly are the cost-saving methods this new company is going to initiate that are going to reap big rewards for the county? Are there any clawbacks or stipulations in the new contract?

I guess some politicians feel news-grabbing headlines prove they're doing something positive for their community.

For Further Reading:
Walker's Privatization Debacle

Sunday Shredding

Does The Universe Have A Purpose?

Correcting The Right-Wing Myths About Detroit

Don’t buy the right-wing myth about Detroit

In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium? ...

It’s a straightforward conservative formula: the right blames state and municipal budget problems exclusively on public employees’ retirement benefits, often underfunding those public pensions for years. The money raided from those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers’ pension benefits are blamed — and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis. Ultimately, the extra monies taken from retirees are then often plowed into even more tax cuts and more corporate subsidies.

Just How Generous Are Detroit's Worker Pensions for Retirees?

"My basic takeaway was that [Detroit's] pension system itself was not overly generous," said Jean-Pierre Aubry, assistant director of State and Local Research at Boston College's Center for Retirement Research... 

Retired general city workers, such as librarians or sanitation workers, received average payments of $18,275 a year in 2011, according to the Detroit General Retirement System... 

While retired Detroit firefighters and police officers receive more generous pension checks than auto workers -- checks averaged almost $30,000 a year in 2011 -- they often don't receive the added bonus of Social Security payments.

We Need A Federal Bailout for Detroit's Pensions

Does $1,500 a month after hauling garbage cans your whole adult life really sound like a fortune? ...

Retired Detroit employees didn't cause the financial crisis of 2008, which hit the pension plan's investment fund hard. Yet they're being handled as if they were morally equivalent to the Wall Street creditors who did. As the New York Times reports, the unelected city manager's plan would "treat bondholders the same as retirees" and ask them both to sacrifice... 

The average Detroit city pension is slightly less than $19,000 per year. For police and firefighters, pensions are their only source of retirement income. (They don't have Social Security.)

Five myths about Detroit

The real culprit in the city’s decline has been federal policies that put corporate health ahead of community health, such as free-trade agreements that sacrifice U.S. jobs for foreign trade...

Detroit’s major financial problem is that its shrinking tax base has meant years of declining revenue. Remember, the city has lost more than 1 million residents since its population peaked in the 1950s. Those who blame pensions confuse cause and effect — like blaming a personal bankruptcy on a pesky car loan after one’s salary was cut in half. The difference, of course, is that getting rid of a car you can no longer afford isn’t the same as reneging on a promise to 21,000 retirees.

Health Care Spending As A Percent Of GDP

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This Kitten Has Claws

City to block raises for many public workers who leave Milwaukee

For Further Reading:
Residency Requirement: Reading & Facts
Residency Requirements
Logic Requirement

The Dog Days Of Summer

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Republican Health Care Obstructionism

Open For Low-Wage Business

More Jobs, Less Pay

Wisconsin sees the largest month-to-month gain in a decade but most are low-wage jobs.

The good news: Wisconsin had a June jobs surge, a boost from May of 13,800 private sector jobs. State officials rightfully called it the largest month-to-month gain in nearly a decade. 

The bad news: Most of the growth—7,200 jobs—was in the “leisure and hospitality” sector, where average weekly pay was only $284 last year. That’s barely one-third the overall average wage in Wisconsin of $803.

Rewarding Failure: The Wisconsin Economic Development Corporation

Wisconsin Economic Development Corporation's CEO, Reed Hall, Gets 50% Raise

An agency embroiled in controversy (where is money being spent, how is it being spent, and what are the results of that spending?) seems unjustified in giving the CEO a 50% raise.

But that's how Scott Walker rolls. Ignore the questions swirling about efficiency, legality, underhandedness, and cronyism at WEDC. Just give the CEO a raise and pretend everything is going as planned. A perfect example of how the (quasi) private sector operates: regardless of results, those at the top are rewarded.

Sounds a lot like Scott Walker's political career. Even though he'e been a train-wreck in every office he has held, he keeps getting rewarded with higher offices.

Walker Selling Wisconsin

Developer wrote Scott Walker expressing interest in buying state buildings

One of Wisconsin's largest real estate developers wrote to Gov. Scott Walker to express his interest in buying several prominent state office buildings at the same time the Legislature was considering doing away with competitive bidding for such sales, according to newly released records. 

Terrence Wall offered his cellphone number in the letter, urging that the "appropriate person" call him to discuss possible deals for properties including the State Crime Laboratory, records obtained by The Associated Press show. Wall also offered his support for the change in the bidding process, an idea that originated with Walker. 

Wall sent the letter on June 10. The Republican-controlled Legislature agreed 11 days later to allow no-bid sales of state properties over the objection of Democrats, who argued that it opened the door for political cronies to be cut special deals...

Walker called for legalizing no-bid sales of state properties in the budget he proposed in February. The Republican-controlled Legislature agreed in June, after adding a requirement that any sale negotiated by the governor be approved by the budget committee. The state Building Commission, which Walker chairs and is controlled by Republicans, would also have to approve.

 Stay classy, Scotty.

More Wasteful Walker Spending

State Pays $1 Million To Defend Act 10

After nearly $1 million in expenses, the state is ending its contract with a Republican-aligned law firm that helped it fight litigation over the 2011 law that sharply limits collective bargaining for most public workers. 

From now on, the legal work will be handled entirely by the state Department of Justice.

Why wasn't the work handled by the state Department of Justice from the beginning?

Another False Idol: Venture Capital

There goes the Journal Sentinel again...continuing their never-ending venture capital boosterism.

As for Wisconsin, the state routinely pulls in less than 1% of all venture capital raised, and the numbers are so small that it's difficult to pull any insights from quarterly trends. In the first quarter, state companies raised $18.42 million of venture capital, the best showing to start the year since 2010.

Has the Journal ever shown any type of link between employment, poverty, or any other economic indicators and a particular place's venture capital? You know, something like: as such-and-such place increased their amount of venture capital over the last decade, they have also shown an increase in employment and a decline in poverty...and this is also true for the other places attracting the most venture capital. I don't recall much analysis of any kind. They just simply keep repeating this storyline of how much we need more venture capital, yet I haven't really heard any convincing arguments as to why.

As I've asked before, "Wisconsin ranks in the middle (25th) nationally in venture capital invested and, therefore, increasing venture capital must be a priority. There's no real discussion of the difference between the 25th ranking and the 10th ranking, nor any discussion of where the editors think Wisconsin should be. How big is venture capital in proportion to other investment options? Why must venture capital be the focused policy option?"

The Journal, and their co-conspirators, go on and on about venture capital, deregulation, anti-unionization, and even more vague measurements, like business climate, but none of these supposed panaceas are ever quantified.

Here is another area where actually looking at the data and what is already known regarding venture capital could go a long way in dispelling these myths and moving us toward truly good investments rather than this pie-in-the-sky cronyism.

Back in 2010 I wrote, "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."

Plus, as I recently wrote, "Venture capital provides just two percent of the capital for new businesses. More than half of new businesses are gone within five years."

In an earlier post I summed up the Journal's venture capital cheerleading thusly, "Scott Walker and the Journal Sentinel want venture capital to be a centerpiece, a major investment, of our economic development playbook. This disregards the fact that venture capital, overall, has been a bad/subpar return on investment. And, when it has been successful, only a very select few were rewarded."

None of this points toward venture capital being a crucial part of moving Wisconsin business and job growth forward.

For Further Reading:
A Steaming Pile Of Boldness
Venturing Wisconsin's Money

Elizabeth Warren 2016

It appears as though if we (Democrats, leftists, Labor, environmentalists, the reality-based, etc.) really want change, we need Elizabeth Warren leading the way. The strongest, most relentless, and most lucid voice of public service and public policy.

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Walker's Dirty Double Standard

Gov. Scott Walker decries protesters at proposed iron ore mine

Gov. Scott Walker says activities of protesters at the site of proposed iron ore mine near Lake Superior "has no place in Wisconsin."

Gov. Scott Walker blasts anti-mining activists

"The type of harassment and abuse we saw on the recent video of radical activists at Gogebic Taconite's proposed mine site has no place in Wisconsin. These extremists - who are disrupting work and causing harm to law-abiding employees - should be prosecuted to the fullest extent of the law," Walker said.

Was Scott Walker calling for the full prosecution of the Tea Partiers and other disruptors (during the last election cycle) who impeded, interrupted and scuffled at their opponents Town Hall meetings and other gatherings?

And, nevermind the environmental harassment caused by mining.

Seems Scott Walker likes his politics and his business really dirty.

For Further Reading:
Mining For jobs
Corps Of Engineers Questions Wisconsin Rewriting Mining Laws
A Fractured Process
Clean Coal Jobs?
Coal Job Promises Overblown?
Oil & Gas Industry's False Jobs Promise
Frac-Sand Mining’s Promise of Economic Prosperity Fails to Materialize

Shale Oil Jobs Vastly Exaggerated

Repairing Infrastructure & Interest Rates

From Barry Ritholtz:

What can we do as a nation to take advantage of these interest rates before they return to normal? Choose your favorite part of America that can be upgraded: 

• Our electrical grid consists mostly of wires strung between wooden poles, which may have been innovative in 1850 but is somewhat past its sell-by date today. After Hurricane Sandy, much of New Jersey, Long Island and Connecticut lost electrical service for two weeks. The entire grid needs to be hardened, upgraded against cyberattack — and buried underground. 
• We can make our road system “intelligent” by using sensors and software to move traffic more quickly and efficiently than the current “dumb” system does. The productivity boost and fuel savings make this a big return on investment. 
• Bridges that are well past their life expectancy should not simply wait to fail. We should be actively replacing these. The alternative is waiting for random events — like the truck crash that caused the Washington state Skagit River bridge collapse — to cause a disaster. 
• The United States’ cellular network is a decade behind Europe’s and Asia’s coverage and reliability. Mandate better minimum service requirements and make available cheap financing to wireless providers to do so. We can do the same with broadband as well. 
• The interstate highway system has been one of the lasting legacies of the Eisenhower administration. It is time for a full upgrade of this economic multiplier.

The Zombie Skills Gap Meme That Won't Die

Friday, On Real Time With Bill Maher, guest Mike Rowe got the ball rolling, continuing the mythical meme that is the skills gap.

We've all heard it - I know such-and-such company that just can't find any workers to do the numerous positions they are trying to fill. According to the proponents of this fairy tale, the U.S. just isn't training workers to do the jobs businesses need.

Yet, when we actually look at the data, a classic supply-and-demand explanation (with most of the blame on low wages) appears.

As UWM professor Marc Levine notes, "There is, in short, little labor market evidence – when we examine job openings, wages, hours, employment projections, or worker credentials— of a skills gap or structural unemployment...National data on wages, hours, job vacancies, and employment projections provide no evidence that a skills gap has caused high unemployment in the U.S. as a whole –- either before or after the Great Recession. This finding is consistent with the conclusions of a daunting array of research and analysis on the subject. As we have seen, these include: Studies by: a) Scholars from such top universities as Duke, Berkeley, Penn, Stanford, MIT, and UW-Madison; b) Economists from the Brookings Institution, the Roosevelt Institute, the Center for Economic and Policy Research, and the Economic Policy Institute; c) Economists at the Federal Reserve Banks of Atlanta, Boston, and Chicago; and d) Consultant-economists such as the Boston Consulting Group. In addition, articles and commentary by: a) Two recent Nobel Laureates in Economics (Krugman and Diamond); and b) Two former heads of the President’s Council of Economic Advisers (Tyson and Lazear), thoroughly reject the skills gap or structural unemployment as explanations for our underperforming labor market."

The U.S. does have a few industries, in a few locations across the country, where specifically-trained workers are needed. Do you know what happened in those few places? The already-employed workers saw their hours increase to meet the demand, to fill-in for the needed-workers. Wages also rose to attract workers to the job openings.

This structural malady is a small proportion of unemployment. As Rortybomb informs, "A report the IMF put out - The Great Recession and Structural Unemployment - which found find that structural unemployment is 1%-1.75% nationwide, with skills being 0.5%."

In most places, where some falsely claim a skills gap, wages for new hires have not risen, nor have the hours of those currently-employed increased.

Dave Alitg, in The Skills Gap: Still Trying To Separate Myth From Fact, stated, "We have yet to find much evidence that problems with skill-mismatch are more important postrecession than they were prerecession. We'll keep looking, but—as our colleagues at the Chicago Fed conclude in their most recent Chicago Fed Letter—so far the facts just don't support skill gaps as the major source of our current labor market woes."

As I've written, "In reality, this is simple supply-and-demand economics. People don't want to work at grueling jobs for low pay, minuscule benefits, and without a retirement plan. If these jobs were paying living wages and had some sense of security, people would be lined up around the block for the positions."

For Further Reading:
Skills Shortage Sham

Where The Jobs Are

From NPR's Planet Money:

To see how the jobs picture has changed since the start of the recession, we created the graph below. Here's how it works: 

• The size of the circle represents the number of jobs in each industry today. 
• The circle's position on the vertical axis shows the number of jobs lost or gained since the start of the recession. 
• The circle's position on the horizontal axis shows average hourly earnings for workers as of this spring. 

[source]

A few notes on some key sectors from the graph:

Manufacturing lost 2 million jobs during the recession. The sector has actually added back about half a million jobs during the recovery, and average wages are over $24 an hour. But many of the jobs that disappeared during the recession are probably gone forever. Even before the recession, automation and global competition led U.S. manufacturers to cut jobs, even as they increased output. That trend is likely to continue.

Construction is the other big sector that really got wallopped. This isn't surprising, given that the recession followed a massive real estate bubble that triggered an unsustainable building boom. Still, it's worth noting that even now, with the housing sector coming back to life and adding jobs again, there are nearly a million fewer construction jobs than there were a decade ago.

Health care is the big bright spot in the jobs picture. The sector has added 1.5 million jobs since the start of the recession, and average earnings of over $26 an hour are solid.

Leisure and hospitality mostly means jobs at restaurants and bars. The sector has more jobs now than ever. But average earnings, at about $13 an hour, are low.

Mining and logging includes the oil and gas industries, which have been booming, and where average hourly earnings are nearly $30 an hour. But, as the graph shows, even after strong growth, the sector has fewer than 1 million jobs. It just isn't big enough to make much of dent in the national jobs picture.

Professional and technical services includes a big swath of the tech industry as well as architects and lawyers and other skilled professionals. Not surprisingly, average hourly earnings are high, at about $37 an hour.

Flip-Flop Foot Murder

[source]

Why Visit Milwaukee?

From Twenty-Something Travel:

• Old Fashioneds
• Al Fresco Dining
• Harley Davidson
• Cool Architecture
• The Milwaukee Art Museum
• German Culture
• Summerfest

Midweek Reading

Why Government Is Virtuous
Can't Deny Global Warming After Seeing This Graph
Republicans Stopped Worrying And Learned To Love Government
Here's One Smart Way To Fight Big Box Stores
Highway Revolts Break Out Across The Midwest
Collapse Of Science, Not Housing, Ended The American Dream
Congress Has Only Itself To Blame For IRS Troubles
How Shareholders Are Ruining America Business
Wielding Derivatives As A Tool For Deceit
Consumer Debt Is Soaring. That's Good News (For Now)

State & Local Jobs Disappearing

State and local governments had 703,000 fewer employees in June 2013 than in August 2008, according to the jobs numbers released on Friday. That number has barely budged since January 2012 (see chart), meaning that in the last year and a half, states and localities essentially have made no progress in refilling the giant workforce hole that the recession caused. Although the days of drastic employment cuts seem over, state and local governments aren’t replacing the teachers, firefighters, police officers, sanitation workers, and many other critical employees that they lost in recent years.

[source]

Year-over-year change in employment.

[source]

Republican Anti-Intellectualism

The Republican War On Data

This is part of a long-term effort to eliminate data collection or pervert it so that policy is biased toward Republican priorities. For example, Republicans have:

• Forced the Internal Revenue Service to drop a program called the Taxpayer Compliance Measurement Program in order to make the extent of tax evasion harder to calculate. This has made it easier to cut the IRS budget. 

• Abolished the Office of Technology Assessment and the Advisory Commission on Intergovernmental Relations because they often produced widely respected data that conflicted with Republican dogma on issues such as global warming.

• Prohibited the federal government from collecting data on the cost of gun-related injuries and death in order to prevent it from being used by gun control supporters.

• Are currently attempting to defund a Census Bureau program called the American Community Survey. Among other things, it would eliminate the government’s ability to properly calculate the unemployment rate. Republicans claim it is too intrusive.

Government: The Mother Of (Much) Invention

Government - Not Business - Has Been The Source Of Breakthrough Innovation

The New York Times obituary for Douglas C. Englebart, identified as the “Computer Visionary Who Invented the Mouse,” is fascinating reading, in part because Englebart, an Oregon farm boy, was in many ways the father of modern networked computing. Beginning in the early 1960s, he put together a team of engineers and computer scientists, funded by the federal government, that developed a prototype for most of the computer tools we all take for granted today...

Mariana Mazzucato, a professor of economics at the University of Sussex, has been making the point very effectively in lectures and a new book, The Entrepreneurial State, that the real innovation engine in the global economy is not business, nor the market, but the government. A recent story about Mazzucato in Forbes cites her view that long-term, patient capital–provided by government–is the absolute prerequisite for breakthrough innovation.

“Her case study for myth-debunking is the iPhone, that icon of American corporate innovation. Each of its core technologies–capacitive sensors, solid-state memory, the click wheel, GPS, internet, cellular communications, Siri, microchips, touchscreen—came from research efforts and funding support of the U.S. government and military."

Inequality Was Created

Wisconsin Abortion Law Is Delayed

Wisconsin: Enforcement of Abortion Law Is Delayed

A federal judge on Monday granted a temporary restraining order blocking enforcement of a new Wisconsin law that bans doctors who lack admitting privileges at nearby hospitals from performing abortions. The order by Judge William Conley of Federal District Court will remain in place pending a fuller hearing on July 17. Planned Parenthood of Wisconsin and Affiliated Medical Services filed a lawsuit Friday. The suit alleged that the requirement would unconstitutionally restrict the availability of abortions in the state, violate the Constitution’s due process guarantee and unconstitutionally treat doctors who perform abortions differently from other doctors. The bill was introduced in the Legislature on June 4, passed nine days later and signed into law Friday by Gov. Scott Walker.

Worst State Highway Systems

20. Wisconsin

2013 Ranking: Wisconsin’s state highway system is ranked 31st in the nation in overall highway performance and efficiency.

Last Year's Ranking: It is a slight decline for Wisconsin which ranked 27th in the previous Annual Highway Report.

Problem Areas: Wisconsin ranks 7th in deficient bridges, 15th in fatality rate, 30th in urban interstate congestion, and 31st in disbursements per mile.

Total Spending Per Mile: $165,184/mile.

Government Continues To Shed Workers

Year-over-year change in employment.

[source]

Wisconsin Beer Drinking

5. Wisconsin: 36.2 gallons of beer consumed per person in 2012

Weekend Reading

Bernanke Was Clear, Fed's Crystal Ball Is Cloudy
The Strange Life Of John Menard
Citigroup Agrees To Pay $968 To Fannie Mae
EU Suspects 13 Banks Of Collusion In Swaps Trading
Labor's Declining Share Is An International Problem

The IRS Scandal Unwinds
America Doesn't Have The Richest Middle Class...We're 27th

10 Brilliant Pieces Of Bike Infrastructure
Why We Trail America In Jobs Growth

Entrepreneurial University Hype

Big League Broke

Over the past few years, here in Milwaukee, we've heard evermore rumblings regarding a new, or remodeled, basketball arena. The usual cast of characters has steadily increased their rhetoric. For them, the bottom line is that these arenas, stadia, etc. are economic engines. If your city wants to be "big league," every 20 to 25 years or so, the public must subsidize the remodeling of an existing arena or the building of a completely new arena.

Yet, Don Walker recently reported, Head of Wisconsin Center District Says It Has No Money For Arena. From the Wisconsin Center's website, "The Wisconsin Center District (WCD) is a government body created in 1994 to fund, build and operate the Delta Center in downtown Milwaukee, and continue operating the existing venues now called the U.S. Cellular Arena and Milwaukee Theatre."

I thought the boosters were claiming these convention centers and arenas were economic catalysts? How can these facilities be considered catalysts or game-changers if there isn't any money to show for them?

We're an important part of the economic fabric, business is booming ... nonetheless, we're broke.

Typical businesses have an accounting item called replacement reserves. It's just what it sounds like - a reserve of money to replace and fix things. It's an annual expense item, a reserve of money, just in case there are issues that need to be addressed to allow a continued income stream to the facility, building, etc.

Stadiums, and their ilk, seem to operate under the facade of being economic igniters, yet they have no money for repairs, nor do they have any (or hardly any) money for renovations. Wisconsin continually has pumped money into the Bradley Center, Miller Park and the rest of our white elephants. If you can't fund your own operations, you're not a game-changer, you're a charity case.

The cost to the public for these arenas does not support the return we receive on our investment. The public needs to get out of the business of being responsible for building the playing fields for professional sport teams.

Glass Boxes As "Iconic" Architecture

Maybe some of the professors from the School of Architecture need to provide UWM Chancellor Mike Lowell some information regarding the buildings that make up the University of Wisconsin-Milwaukee campus.

In a recent article, UW-Milwaukee Launches Research Center Construction, Chancellor Lowell (regarding the Kenwood Interdisciplinary Research Center, which will house the physics department) commented:

It's going to be a gateway to campus from the south on Maryland Avenue," Lovell said of the glassy five-story building. "We really don't have any iconic buildings on campus to showcase. This will be iconic.

Here's a refresher on some of the already iconic buildings on the University of Wisconsin-Milwaukee campus.

From an OnMilwaukee article:

Downer College, Hartford and Downer Avenues...Merrill Hall's battlemented tower and the ornate decoration above the entrance to Johnston Hall. Designed by Alexander Eschweiler and executed in red sandstone, terra cotta and brick.

Waymarking details:

MILWAUKEE-DOWNER COLLEGE, 2512 E. Hartford Ave., is a private school for women. Its eleven red-brick buildings in Tudor Gothic design stand on a wooded campus of 50 acres. In 1895 the school was founded through coalition of Milwaukee College, chartered under the auspices of the Congregational Church in 1851, and Downer College, chartered in 1855 at Fox Lake, Wisconsin. Milwaukee College, which had been started in 1848 as the Milwaukee Female Seminary, was reorganized in 1851 through the efforts of Catherine Beecher, sister of Harriet Beecher Stowe, author of Uncle Tom's Cabin, and of Henry Ward Beecher, abolitionist author and preacher. Although primarily a liberal arts college, Milwaukee-Downer has pioneered in art, home economics, and occupational therapy. ---Wisconsin, A Guide to the Badger State, 1941 

Today the college is part of the University of Wisconsin - Milwaukee. The Milwaukee-Downer moved to Appleton and joined with Lawrence College when UW purchased this property.

The Milwaukee-Downer "Quad" NRHP on the campus of UW-Milwaukee, at the corner of Hartford and Downer. This view is looking north at Merrill Hall (architect Howland Russel), with Johnston Hall (architect Alexander C. Eschweiler) to the right. Holton Hall is out of view to the left. [source]

Chapman Hall 2310 East Hartford Ave

Excellent example of Collegiate Gothic architecture. A large tower rises above the mutil-gabled building, which is faced with russet brick and brown sandstone trim. [source]

[source]

Sabin Hall 3413 North Downer Ave

Collegiate Gothic structure constructed of red-brown brick and sandstone.

Vogel Hall 3253 North Downer Ave

Red-brown brick college building designed in the English Tudor mode. Architect: Eschweiler & Eschweiler. [source]

Zelazo Center 2419 East Kenwood Blvd

Neo-classical synagogue with a cut Indiana limestone exterior. [source]

Mitchell Hall 3203 North Downer Ave

Educational building contructed in the Neoclassical Style, which was popular in public and institutional architecture of the early 20th century. The facade is red brick with contrasting trim and colonnade. [source]

Merrill Hall 2512 East Hartford Ave

Hefter Conference Center 3271 North Lake Dr

Mansion designed in a restrained Elizabethan mode; constructed of brown brick with stone trim. Architect: Fitzhugh Scott. [source]

Alumni House 3230 East Kenwood Blvd.

Constructed of Plymouth Stone Ashlar and a slate shingle roof. Outstanding Tudor mansion whose design adheres closely to historic precedent. The house is especially notable for the quality of materials and worksmanship, evident in the Plymouth stone walls, slate roof, carved stone trim, ornamental leaded glass, interior woodwork, and hand wrought hardware. Architect: McDonald Mayer and Fitzhugh Scott. [source]

For Further Reading:
Alexander C. Eschweiler, designer of HWTN homes and iconic Milwaukee buildings
UWM Building Directory 
UWM Projects & Planning