Thursday, November 24, 2011

Walker Losing Jobs

Wisconsin has more October job losses than any other state.

How can that be? We're open for business!

For Further Information on Recalling Scott Walker:
United Wisconsin
Recall Headquarters

Fund Fail

The Journal Sentinel in really pushing a venture capital fund for Wisconsin. It would create "a more vibrant entrepreneurial system."

It would be nice if the article mentioned how much the state already spends in this capacity. Or how much the state spends, in general, on job creation, corporate tax breaks, subsidies, and other giveaways that supposedly create a better business climate and thus jobs.

But no. 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?

Just saying something will work, or simply wanting it to, doesn't make it so.

For Further Reading:
Casino Capitalism
Cut Out The Private Sector Middle Man
Deja Vu
Doing Wisconsin

Weekend Reading

Are Wisconsin Public Employees Over-Compensated?
Can The Middle Class Be Saved?
Does 'Right-To-Work' Create Jobs?
Does The Middle Class Have To Take A Hit?
The Myth Of Income Inequality, Courtesy Of AEI
Scarce Job Opening In The U.S.
Skewed Economic Rewards In The U.S.
What Would Keynes Do?

Adversely Impacted

"Major League Baseball has commissioned a study that will look at the direct and indirect economic impact of Miller Park," reports Don Walker, of the Journal Sentinel.

"This study, presumably, would produce evidence of tangible economic benefits of a stadium."

It's not much of a study if you already know what your outcome and conclusions will be. Let's study Miller Park. Miller Park has a big economic impact. Our study will show Miller Park has large economic impact.

Sophisticated analysts have reached a consensus on the impact of stadiums - and it's nothing close to the glowing, overblown claims of stadium boosters and promoters. In fact, most studies have shown that money spent subsidizing stadiums would be better spent on other, more pressing and more stimulative investments.

For Further Reading:
An Examination of Sporting Event Impact Studies

This Week In Extraordinary Delusions

Walker says he's not responsible for recall effort against him.

For Further Information on Recalling Scott Walker:
United Wisconsin
Recall Headquarters

Thursday, November 10, 2011

Sunday, November 6, 2011

Sunday Reading

Biggest public firms paid little U.S. tax
Has America become an oligarchy?
How corporate tax breaks could hurt small business
Income inequality is not a myth
Making globalisation work for workers
Soaring suburban poverty catches communities unprepared
Social Security and the federal deficit

The Consumption Imperative

Insight from James Livingston:

  • Private investment doesn't actually drive economic growth.
  • Between 1900 and 2000, real gross domestic product per capita grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of G.D.P. What's more, in 1900 almost all investment came from the private sector whereas in 2000, most investment was either from government spending or residential investment, which  means consumer spending on housing, rather than business expenditures on plants, equipment and labor.
  • According to the Organization for Economic Cooperation and Development, retained corporate earnings that remain uninvested are now close to 8 percent of G.D.P., a staggering sum in view of the unemployment crisis we have.

Saturday, November 5, 2011


David Callahan has a great article, The Income Mobility Myth.

  • The majority of the new jobs created during the presidencies of Bill Clinton and George W. Bush were low-wage positions with no benefits.
  • Today, about a third of poor families with children include a parent who is working full-time.
  • The conservative mobility narrative trumpets the wealthy as "job creators" and agents of opportunity. But that story is exactly backwards in some respects. Corporations and the wealthy have embraced a set of strategies for improving the bottom line that have spelled downward mobility for many workers. For example, when a company moves its back office accounting work overseas, executives and shareholders in that firm may get a nice return as profits go up. But a bunch of college grads lose their jobs.
  • African-Americans and Latino households lost over half their median net worth during the most recent boom and bust - even as the Wall Street insiders who invented the subprime securitization machine and capitalized predatory lending outfits got unbelievably rich.
Go read the entire article.

Bluff Stuff

Articles regarding the bluff collapse in Oak Creek:
Bluff collapse came weeks after Congress rebuffed EPA on coal ash rule
Collapsed bluff got pass from state regulations
Bluff collapse at power plant sends dirt, coal ash into lake

For more on why we need the EPA and regulations on dirty industries like mining:
Tests find toxins at Flambeau mine

Journal Sentinel Likes Walker's Package

More astute pronouncements from the Journal Sentinel editorial board, Compensation package works for Wisconsin. They want to assure readers, "The Walker administration's compensation plan takes a reasonable approach to pay and overtime."

"It reduces the chance for overtime abuses, give managers the tools they need to reward the best employees and saves taxpayers money."I'd like to see what percentage of the budget "overtime abuses" actually account for. Overtime pay is part of a contractual negotiation reflecting the total compensation of an employee; if we looked at overtime recipients years of service and hours worked, what do those numbers say? It's easy to throw out a big number and get taxpayers riled. A job of the media is to put things within a larger context and give a true representation. This is merely sensationalism without context...scapegoating.

The editorial conveniently glosses over the pay for political appointees issue. That can be handled at a later date; it's not a big deal. Nothing to see (or talk about) here, move along. Even though they then, later in the article, while discussing merit pay, note that, "There is legitimate concern that merit pay could turn into rewards for political or personal favorites, but thats seems unlikely." Yes, Scott Walker has only tried to reward every crony he knows in his first few months in office. But such favoritism seems unlikely? The articles says, "As the plan is explained on the state's website, the work of an employee would need to meet certain standards." Oh, "certain standards." That clears things up. Now I feel better.

They then repeat well-worn woe for the long-suffering private sector, "Such increased costs for benefits and cuts in pay have been routine in the private industry for several years." Um, where the hell has this editorial board been? Public workers in Wisconsin have seen increased health care costs over the past few years, they've also been furloughed and laid off. This is on top the recent wage freezes, lay offs, and increased pension and health care cost mandates. And, this punish-the-public-workers sentiment completely ignores recent studies showing that a public sector worker's total compensation is LESS that similarly educated and experienced private sector worker. The Journal wants public sector workers, whom already earn less, to be the ones to sacrifice more, while also pumping more lies into the debate - that public workers haven't yet sacrificed and that they earn more.

And, since it's an editorial board standard, they commend the private sector, yet again, "As many in the private sector understand, merit pay hikes can be useful tool for increasing efficiency and productivity, and the overtime changes are especially warranted." Geez, one would think with this omnipotent and sensible private sector we would have eradicated poverty and unemployment by now.

Making sure no public worker is paid at a higher rate for overtime work is very important to the editorial board. This abuse must be stopped. Again, no numbers are given to support such apoplexy. And, even more perplexing, I never see the board pontificating about excessive executive pay, the millions made by CEOs whom have lost their company money or presided over a decline in their stock's price, the tax avoidance schemes of the well-to-do, or any of these abuses of the system. Always punishing the peasants, but never questioning the kings.

It Was Wall Street

Numerous cranks are continuing their efforts to revise the cause of our current economic downturn. They claim (wrongly and completely unsupported by evidence) that the government - Fannie Mae, Freddie Mac, the Community Reinvestment Act, etc. - was responsible for the economic recession.

It wasn't inept/crooked Wall Street, bankers, or ratings agencies selling junk mortgage-backed-securities and collateralized-debt-obligations.

New York mayor Michael Bloomberg, the 12th richest person in the U.S., is the most recent revisionist attempting to rewrite history.

The definitive takedown of this nonsense is David Min's Faulty Conclusions Based On Shoddy Foundations. And, the documentary Inside Job is a great primer on the real culprits behind our current crisis.

For Further Reading:
An Autopsy of Fannie & Freddie
An Obtuse & Deceptive Accounting
The Banker, In The Office, With The CDO
The Big Lie Goes Viral
Brooks Discovers It Was All Fannie's Fault
Did Fannie Cause The Disaster?
Dispelling More Campaign Myths
Drowning In Delusions
Fannie, Freddie, and You
Fannie & Freddie Did Not Cause The Housing Crisis
Fannie & Freddie Did Not Start The Crisis
Fannie & Freddie's Future
The Myth of Fannie, Freddie, Barney Frank & The Housing Bubble
Peter Wallison Discusses Fannie & Freddie For The American Spectator
Things Everyone in Chicago Knows
Why Wallison Is Wrong About The Genesis Of The Housing Crisis

Revenue, Not Spending

Thursday, November 3, 2011

Mining For Jobs

The Journal Sentinel editorial board opined support for relaxed mining laws for a possible mining site near Ashland, Wisconsin. They believe less regulation on mining will create jobs, and if done properly won't hurt the environment.

They admit the Wisconsin outdoors are a major source of pride, tourism and income. But the editorial board feels we can deregulate whilst protecting the environment.

And, if ifs and buts were candy and nuts, everyday would be Christmas.

By making mining laws weaker, we would be weakening environmental laws, and thus, harming the environment.

Yes, new mining would create jobs. But so would greener, sustainable projects, which wouldn't compromise the future of Wisconsin's environment. And, how long will the mining last? What are the guarantees? The article mentioned glowing projections for job numbers and pay, but will there be clawbacks or penalties for the mining company if they don't meet these goals?

The article states, "Too much red tape and too many bureaucratic delays can be deadly. That's why the state should change its laws." The "red tape" encumbered by mining companies was put in place because of the deadly consequences of their past actions. Mining is a filthy business. The disaster that occurred at WE Energy's plant (where hazardous materials ended up in Lake Michigan after a bluff collapse) in Oak Creek is another recent reminder that maybe we should take a pause before pushing forward with more potentially destructive legislation and deregulation all in the name of supposed job growth.

High unemployment should not force us into the dilema of weakening environmental laws for the sake of jobs. It's time we take a high-road strategy to development and jobs. This is the only planet we have.

Buck The System

According to the Journal Sentinel, Business leaders begin effort to help Bucks, Bradley Center.

"Last week, a small group of influential business leaders and the MMAC began talking in earnest about a more modest campaign to provide support for the Bradley Center and its biggest and most important tenant, the Milwaukee Bucks."

The article informs, "The group is in the process of finding ways to encourage MMAC members to look for sponsorship opportunities at the Bradley Center or buying tickets or suites at Bucks' games." The cynical side of me thinks this is just PR talk and they're merely setting the stage for asking the public to help fund a new stadium or for Bradley Center improvements.

Ted Kellner, a Bradley Center board of directors member, equates (wrongly) that MMAC "help" directly led to the Brewers to their recent success. MMAC pushed for Miller Park, it was built, and the Brewers made the playoffs.

[Funny, but aren't the business folks the ones always claiming throwing money at something doesn't solve anything. When it comes to schools, poverty, etc., more money is a waste in their opinion. But, it seems, when it's public money financing their own private playgrounds (stadium, convention center, etc.), more money equals success.]

The major reasons for the Brewers' success is a great minor league system, good scouting, and Attanasio's $90 million payroll. If new stadiums were the answer, every city would be a winner. Since 2000, more than 30 teams have new stadiums. Yet, they're not all winners.

Herb Kohl, owner of the Bucks, is the third richest member of the senate and worth hundreds of millions of dollars. It really puzzles me that we subsidize millionaire sports team owners. They are millionaires and it's their business. Let them pay for it!

Cut Out The (Private Sector) Middleman

State Senators Tim Cullen and Dale Schultz have jumped on the venture capital bandwagon. Their recent Journal Sentinel opinion piece touted a venture capital bill for Wisconsin. Venture capital is described by Investopedia as, "Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies or ventures with limited operating history, which cannot raise funds by issuing debt. The downside for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to a portion of the equity."

The jobs are right around the corner.

"We believe that properly structured and administered by non-politicians, the venture capital bill will be our most important long-term jobs legislation of the year," state Cullen and Schultz.

Huh? The most important jobs legislation? If that's the case, we're in real trouble. Venture capital is a small part of capital markets and much less efficient than the glowing mythology created by venture capital firms and the media.

Now, some of the caveats of the bill are laudable: making sure private money is invested before public dollars are committed and rejecting proposals that use a CAPCO investment structure.

But even those caveats don't mean venture capital is a panacea for job creation.

The authors also state, perplexingly, "We should not put public dollars where private dollars don't want to go." WTF?! Um, public goods and public investment are exactly that - the stuff businesses won't do because they generally can't see a clear and immediate profit from such (but nonetheless are still integral to our daily lives and counted on by all citizens). Business isn't going to build the Hoan Bridge or the Marquette Interchange, repair and plow the roads, nor ensure clear air and water. These types of costs are externalized onto the general public by businesses. They benefit disproportionately from such infrastructure, but aren't willing to decrease their bottom line for it. So, yeah, we do want public dollars to go where private dollars won't go. And it would also be nice of those parasites would pay their fair share.

For some reason, in the article, the state senators parrot the oft-repeated right-wing theme of bashing government, "The Legislature should reject any plan that presumes government can make better decisions with your money than investors can with their own money." Based on the fact that the majority of American citizens are ill-prepared for retirement (have been unsuccessful in investing for their golden years), this mantra falls flat in the face of the evidence. Ask Social Security recipients if they are happy with that investment program which allows them to invest during their working years (over such time their investment appreciates at a steady, reliable rate) and then receive a defined benefit when they retire.

How about a good old fashioned investment in a nationwide public works program? Post WWII, it created the middle-class and erected the infrastructure that made us the greatest nation and the envy of the world. Now other countries have passed us by, or at least have a plan for public investment and realize it's importance. Instead of directly investing through our government, to put our fellow Americans back to work, our legislators are selling the debunked idea of channelling such investment through private sector machinations. Venture capital funds (which may be a viable, small portion of government-initiated job creation) are, generally, a circuitous and inefficient route to job creation.

Wednesday, November 2, 2011

Walker World

An informative article by Scott Bauer cites numerous job-creation-failures of the Scott Walker administration:

"The Department of Revenue report released Friday predicts that by 2014, the state will have added only 136,000 jobs in the private sector compared with 2010. The job growth estimate was down 43,000 from the department's previous report released in June."

"Through September, the state added just 29,300 jobs since Walker took over in January. At that pace, there would be roughly 159,000 new jobs in the state by 2015."

And yet, Mr. Walker tries to justify public expense for his new website glorifying his administration's accomplishments?