Show Me The Money

Screenshots of Wisdom

Capitalists or Cronyists?

Capitalists or Cronyists?

Bucking Convention

Sorry to rain on the parade.

Milwaukee should be leery, careful and realistic with their assumptions and expectations regarding hosting the Democratic National Convention.

In general, events like this are a boom for some and a bust for others. And, if you're lucky, you'll break even. Yet, hosting these events is far from a no-brainer, win-win for everyone.

As U.S News reported:

According to economists Robert Baade, Robert Baumann and Victor Matheson – who looked at the effect of every national political convention between 1970 and 2005 – such events "have a negligible impact on local economies." They found that "neither the presence of the Republican nor the Democratic National Convention has a discernable impact on employment, personal income, or personal income per capita in the cities where the events were held."

As another researcher put it:

By focusing on the 'bright, shiny object' of a political convention, we might be losing focus on the real economic fundamentals that could bring long-term prosperity.

Milwaukee has already been transforming itself and the region - without an expanded convention center, without a political convention, etc.  The Democratic National Convention might be fun and lucrative for some, but don't expect long-term gains from this political circus.  At best, Milwaukeans should hope for infrastructure improvements coinciding with the convention - roads, rail, water, electric, etc. - that will also benefit the city as a whole.

For Further Reading:
Rejecting “Conventional” Wisdom: Estimating the Economic Impact of National Political Conventions 

Economic impact studies: Should journalists rely on them?

American Cities and the Politics of Party Conventions

Breaking with Convention

Union Decline Leads To Wage Decline For All

5 States Where the Middle Class Is Being Destroyed

Wisconsin: -5.7% 

The clear winner (or loser) in the race to the bottom has been Wisconsin, losing 5.7% of its middle class households since 2000. Average median income has dropped by roughly $9,000 annually, and costs of living have gone up as well. There have also been many political battles that have not worked in the middle class’s favor. Governor Scott Walker gutted many of the state’s unions — which has a big effect on the middle class — and all signs seem to indicate that he will aim to implement similar policies. Like Ohio, Wisconsin’s makeup was particularly vulnerable to a recession, and the proof is in the numbers.

Union Membership In Wisconsin Plummets In Wake Of GOP Measures

In 2015, 8.3% of Wisconsin workers, or 223,000 in all, were members of unions. That was down sharply from the 306,000 people, or 11.7% of the state’s workforce, who belonged to unions in 2014.

For Further Reading:

62 Richest People On Earth Hold As Much Wealth As The Poorest 3.5 Billion

Strong Unions, Strong Democracy

The Destruction Of Progressive Wisconsin

CEO Pay, Unionization & The Middle Class
Unions, Public Sector & Wages

Labor's Fair Share

On Labor Day, What About Labor’s Fair Share?

• According to the Economic Policy Institute, productivity went up about 25 percent from 2000 to 2012. How much did compensation increase? Only about 7 percent. 
• From 1979 to 2010 the top 1 percent of households saw their after-tax income grow by about 202 percent.

Social Security

[source]

Remembering The Bush Years (In Charts)

Closing The Book On The Bush Legacy:

• Consider first the median income. When Bill Clinton left office after 2000, the median income-the income line around which half of households come in above, and half fall below-stood at $52,500 (measured in inflation-adjusted 2008 dollars). When Bush left office after 2008, the median income had fallen to $50,303. That's a decline of 4.2 per cent. That leaves Bush with the dubious distinction of becoming the only president in recent history to preside over an income decline through two presidential terms. "What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession...working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office," says Lawrence Mishel, president Economic Policy Institute.
• When Clinton left office in 2000, the Census counted almost 31.6 million Americans living in poverty. When Bush left office in 2008, the number of poor Americans had jumped to 39.8 million (the largest number in absolute terms since 1960.) Under Bush, the number of people in poverty increased by over 8.2 million, or 26.1 per cent. Over two-thirds of that increase occurred before the economic collapse of 2008. When Clinton left the number of Americans in poverty stood at 11.3 per cent; when Bush left that had increased to 13.2 per cent. The poverty rate for children jumped from 16.2 per cent when Clinton left office to 19 per cent when Bush stepped down.
• The story is similar again for access to health care. When Clinton left office, the number of uninsured Americans stood at 38.4 million. By the time Bush left office that number had grown to just over 46.3 million, an increase of nearly 8 million or 20.6 per cent. 

 

 

  

 

Democrats: Better By The Numbers

Taxes & Income

[source]

Recent Work On Income Disparity

Some Big Corporations Don't Pay Taxes Either
Truth About Taxes: Just About Everyone Pays
U.S. Income Gap Rose

The Top 1% VS. The Average American

1% Vs. Average American

Two Americas

Some illustrative graphs from Dave Gilson and Carolyn Perot.

The Plutocrats March On

The financial industries profits are back at record levels.

Workers' share of national income at "its lowest level since the Bureau of Labor Statistics began keeping track of it in 1947."

Our decades-long trend of increasing inequality resumes it march.

But our problems are the fault of the government, it's entitlement programs, and those high-rolling public workers. Give me a break!

More Tax Graphs

And, check out this list of corporations with the most untaxed income.

Just Sayin'

We can't tax the rich. One is shouted down for even mentioning it.

Yet, as Robert Pollin and Jeffrey Thompson remind us, "Of course, the wealthy do not want to pay higher taxes. But during the economic expansion and Wall Street bubble years of 2002–07, the average incomes of the richest 1 percent of households rose by about 10 percent per year, more than three times that for all households. The richest 1 percent received fully 65 percent of all household income growth between 2002–07."

Getting Squeezed

In a great article, by Heather Boushey and Joshua Holland, they explain the falsity behind the message, being spread by Republicans, that we don't have money to afford a safety net any longer.

Read this article!

Here are some excerpts:

"The top 1% has grabbed most of the gains, seeing an impressive 250% increase in income between 1973 and 2005 from an economy that's grown by 160%."

"The share of federal revenues contributed by corporations has declined by two-thirds since 1962."

"The typical married couple works an additional 13.3 weeks per year - 533 hours - compared to a generation ago."

"The share of income going to wages is at the lowest level ever recorded, while the piece of the pie gobbled up by corporate profits is at its highest point since 1960."

Weekend Reading

A Million Here, A Million There
Recessions and Recoveries Are Not All The Same
Sad History of Trusting The GOP On The Economy
Tax Rates For Top 400 Earners Fall As Income Soars

Supply-Side Albatross

(As an appendage to the previous entry) the Milwaukee Journal Sentinel exclaims Job One: Focus on Growing the Economy and also highlights Report Calls for Overhaul of State Department of Commerce. Again they want the government to coordinate private market activity. To hold the hand of private speculators and guide them. They even encourage growing government with an expanded, more focused, and higher-paid Department of Commerce.

They want this expanded arm of the Commerce Department, a quasi-public agency, named Accelerate Wisconsin. Because just having that snappy name will surely go a long way.

This Journal editorial basically promotes a "provocative" study by Deloitte, spoon-feeding the conclusions, no questions asked, no counter opinions. The report includes such ground-breaking proposals as "prospecting harder," and "a vigorous marketing campaign." Oh, and they should try really, really hard.

The overall idea is to make the Commerce Department a massive economic development organization, "such as the Milwaukee 7." Yet, many observe that the Milwaukee 7 and similar agencies don't achieve enough for Milwaukee and often have misguided priorities. How this is the model for the state is a bit perplexing.

As evidence for the need for the new agency initiative, the Journal notes, Wisconsin, "once in the top twenty in per capita personal income...had fallen to 27th by 2008." (Wisconsin is the 20th most populous state.) They then talk of how such agencies help turn things around. They cite Indiana and Michigan as evidence of such positive experiences. Michigan is the 8th most populous state, it ranks 26th in per capita personal income. Indiana is the 16th most populous state, it ranks 37th in per capita income.

The unemployment rate in Wisconsin is 8.5%, it's 10.1% in Indiana and Michigan. If we look at median household income, Indiana ranks 32nd, Michigan 30th, and Wisconsin 21st. GDP change between 2006-2008 was -0.6 in Indiana (ranking 41st), -1.5 in Michigan (ranking 47th), and +0.7 in Wisconsin (ranking 27th). They are performing worse than we are, yet we should follow their lead?

Government should grow to aid private industry, but government is also bunglingly incompetent? Based on metrics, which don't even support the supposed conclusions, we should follow the same development strategies that are failing others? Government workers are overpaid and primarily useless, except for those aiding the private sector, which should be paid more?

Journal Sentinel, what an unsound, confused, and misinformed framework you provide to our community's policy debates. And your abhorrence to the public sector and government capabilities, except when taxpayer dollars are enabling speculative private ventures, is reprehensible. It would be nice if we could have an adult discussion in the community, beginning with the recognition that the public and private sectors both have important roles to play.

We have demonized the government for decades. We've cut taxes and deregulated. And, we've paid for it. Wages for the majority of workers have stagnated. Our society has pulled apart. Inequality is as large as it was during the Gilded Age. We are in the worst economic downturn since the Great Depression.

As we've taken a hands-off approach with government and put our full faith in the market, the volatility of our lives has increased. That wasn't part of the 'supply-side miracle' deal. HMOs were supposed to revolutionize health care, not nearly destroy it. 401Ks were supposed to increase retirement security, not obliterate it.

It's time to turn the car around.

Weekend Reading

Health Care:
U.S. Ranks Last In Health Care

Real Estate:
Biggest Defaulters on Mortgages Are The Rich

Oil:
As Oil Industry Fights A Tax, It Reaps Subsidies
What Oil & Gas Companies Extract - From The American Public

Corporate Loopholes:
Will The Carried Interest Loophole Finally Be Closed?
Loopholes For Subchapter S Corporation Will Not Help Small Businesses

Income & Taxation:
All Americans Pay Taxes
Art Laffer: Make Up Your Own Facts Here
CBO Data On Taxes And Income

Budgets & Unemployment:
What Is Driving State Budget Woes? Unemployment
Unemployment, Not Budget Practices, To Blame For State Woes

Science:
The Ten Most Disturbing Scientific Discoveries

Urban Issues:
Downtown Population Boom
Foreclosures Point To Waning Of The Suburban Era
Sprawling Cities Experience Hotter Summer Temperatures
Suburban Population Growth Slows

Eat The Rich

Great article by Sam Pizzigati, fellow at the Institute for Policy Studies, Have The Rich Won?

Excerpts:

• Americans in the bottom 90% saw their average incomes increase a meager $47 a year between 1974 and 2007.
• The top 1% households made 12 times more income than the bottom 90% households in 1974, 42 times more in 2007.
• In 1955, our 400 highest incomes averaged $12.3 million...they paid over half their incomes, 51.2% in federal income tax. In 2006, the top 400 averaged an astounding $263 million each in income...paid, after loopholes, just 17.2% of their incomes in federal taxes.
• Between the 1940s and the mid 1960s, America's richest faced at least a 91% federal tax rate on earned income over $400,000. The top rate today: 35%.

Pizzigati also mentions an interesting idea about a "maximum wage." He states, "With a maximum set as a multiple of the minimum, society's richest and most powerful would only be able to increase their incomes if the incomes of society's poorest and least powerful increased first...A maximum coupled to the minimum would instantly create a counter-incentive: the higher the wage at the bottom, the better for the rich - and the better, of course, for the bottom, too."