No, The Economy Didn't Suddenly Get Strong Under Donald Trump

No, the economy didn't suddenly get strong under Donald Trump

Nagging details about job growth Trump won't like

New data shows economic growth far short of Trump's boasts, promises

A Recovery Squandered

A Recovery Squandered

Despite a decade of steady economic growth since the Great Recession, America has done remarkably little to address underlying structural weaknesses in the country’s economy and society. The nation has squandered the recovery.

Buying Jobs Appears To Be The Scott Walker Job Creation Strategy

Looks like Scott Walker's jobs plan for Wisconsin is to merely bribe companies into staying and/or coming.

With another election right around the corner, alongside Walker's disgraceful record on jobs, he's going all-in with Wisconsin taxpayer money and buying all the jobs he can, at any cost.

He now wants to give Kimberly-Clark money to retain jobs in Wisconsin. Walker wants to work with the Legislature to approve an increase in the tax credits available for job retention from 7 percent in current law to 17 percent.

Seems Walker's plan is to run up the bill for Wisconsin taxpayers, under the guise of job creation, buying jobs for the State, just in time for his next campaign.

Not So Prime

Unfulfilled promises: Amazon fulfillment centers do not generate broad-based employment growth

What this report finds: When Amazon opens a new fulfillment center, the host county gains roughly 30 percent more warehousing and storage jobs but no new net jobs overall, as the jobs created in warehousing and storage are likely offset by job losses in other industries. 

Why it matters: State and local governments give away millions in tax abatements, credits, exemptions, and infrastructure assistance to lure Amazon warehouses but don’t get a commensurate “return” on that investment. 

What we can do about it: Rather than spending public resources on an ineffectivestrategy to boost local employment (luring Amazon fulfillment centers), state and local governments should invest in public services (particularly in early-childhood education and infrastructure) that are proven to spur long-term economic development.

Wisconsin Reading

Wisconsin Ranked 29th In Job Growth During 2nd Quarter
Should Milwaukee Annex Part Of Racine County For Foxconn-Related Housing?
Hey, Scott Walker: I Have A Few Ideas About Why Millennials Don't Want To Live In Wisconsin
Foxconn Subsidy Now Exceeds $4 Billion
Seattle Adds People Without Adding Traffic

Weekend Reading

The Reagan Boom, Kind Of Like The Ford-Carter Boom
The Washington Post's NAFTA Fantasy: 10 Years Later
Yes, Robert Samuelson Says It's Time To Cut Social Security And Medicare
Red Versus Blue States In The Job Recovery
Never Mind The 1 Percent, Let's Talk About The 0.01 Percent
The U.S. Economy Is Creating Millionaires At An Astonishing Pace. But What's It Doing For Everyone Else?

Streetcar Or Safety

Looks like Milwaukee Alderman Tony Zielinkski might be setting himself up as a challenger in a run to be the Mayor of Milwaukee.

Current Mayor Tom Barrett recently announced he might have to eliminate some safety-worker positions (police officers, firefighters,nurses, code inspectors) due to budgetary constraints.

Zielinkski immediately ridiculed the Mayor, saying even mentioning the possibility of cutting positions as "reckless" and "unreasonable".

Zielinkski framed the discussion as being between keeping the positions and building the streetcar. Because those are the only two budgetary choices that can be made - keep safety positions or build a streetcar?

And, just for some context, Wisconsin has spent over a billion dollars on new stadiums for the Brewers, Bucks and Packers in the last decade. Private sport structures whose benefits go to their private owners. But Milwaukee spending $128 million on a streetcar to be used by residents, tourists and businesses is a waste?

Barrett, himself, even stated that cutting those positions is not what he wants. But sometimes, as Mayor, you have to make choices that won't please everyone.

I get that the streetcar is a bit of a lightning rod and certain persons with access to the media love to pile on about what a waste the streetcar is. Although every other major city has some sort of streetcar, light rail or similar. So, it seems more like, as usual, Milwaukee is behind the curve as far as what businesses and workers want in amenities and infrastructure. Local infrastructure is what creates jobs and draws businesses, residents and tourists.

In our current police-state era, funding for defense/police/safety can never be diminished. More officers and more guns, always. In 2013, 59% of the City of Milwaukee budget went to just the police (41%) and fire (18%) departments.

We've been doing this for decades now, it hasn't worked. To keep funding this imaginary, more-cops-is-the-answer paradigm, is simply throwing away money. Why, when it comes to defense or safety, is there no limit on the amount of people needed or the amount of money that should be spent? At the local, state and federal level, America's defense/safety budgets dwarf those of other nations. Yet, we're no safer. What is all this money being spent on? Seems like there is obviously a lot of efficiency that can be made.

The Police Association's President Michael Crivello stated, "We're going to do everything to keep this community safe, but we won't be as effective as we otherwise would be should we be properly staffed."  How is this quantified? What does "properly staffed" mean? What metrics is the Association using to determine safety, effectiveness, staffing, etc.?

Maybe we do need to keep the positions. But using fear and emotion to guide a decision is definitely not how policy should be made.

We should start by making a more scientific basis for these discussions and decisions. Platitudes and bumper-sticker slogans sound great, but they typically don't have the nuance and depth required for good public policy.

We could remove some exemptions, raise the local sales tax, add fees for certain services, collect more taxes, provide less incentives to private developers and businesses, and on and on. There are numerous ways fund the many services we all count on from our local government.

The saddest thing is that this is being pitted as a streetcar versus safety debate. It shouldn't be. These are not the only choices.

Labor Market Progress and the Employment Situation

[source]

Wisconsin Ranks 33rd In Job Creation

Wisconsin ranks 33rd in job creation

Wisconsin gained 37,166 private-sector jobs in the 12 months from March 2015 through March 2016, a 1.58% increase that ranks the state 33rd among the 50 states in the pace of job creation during that period. 

Wisconsin continued to trail the national rate of job creation, as it has since July 2011. The United States created private-sector jobs at a rate of 2.1% in the latest 12-month period, according to the data from the U.S. Bureau of Labor Statistics. Wisconsin ranked fourth among its Midwest peers, ahead of Minnesota, Illinois and Iowa, but behind Michigan, Indiana and Ohio. 

Economists consider Wednesday’s job creation figures, known as the Quarterly Census of Employment and Wages, to be the most credible and comprehensive available. The census report breaks out data for the nation as a whole as well as each of the 50 states. It tracks the economy in rolling 12-month increments, measured every three months. 

The quarterly data are based on a census of 96% of the nation’s employers in the public and private sectors. That makes the figures far more reliable than monthly jobs data, which are based on a sample of only about 3% of employers, leaving monthly estimates prone to large margins of error.

Barack Obama's and The Democrats' Accomplishments

THE LIST OF 371 OBAMA ACCOMPLISHMENTS SO FAR, WITH CITATIONS

Barack Obama is officially one of the most consequential presidents in American history

Obama Accomplishments

If Only Slogans and Buzzwords Were Needed For Economic Growth

David Haynes, editorial page editor of the Journal Sentinel, opines a lengthy list of platitudes as a prescription for economic growth in the area. He holds up the Research Triangle in North Carolina as a best practices example or guiding post.

The Research Triangle area of North Carolina — with Durham, Raleigh and Chapel Hill at its vertices — has long turned good ideas into business enterprises. World class universities attract an enviable supply of talent. and a range of companies — from startups to Cisco, BASF and GlaxoSmithKline — keep that talent anchored. The Triangle has one of the highest levels of educational attainment in the nation.

The Milwaukee region is not the Research Triangle and shouldn't try to be. Southeastern Wisconsin has to call on its own strengths, starting with an economy forged by industry leaders such as Northwestern Mutual, Rockwell Automation, GE Healthcare and Fiserv as well as a growing research presence at its academic institutions.

Marc Levine addressed this leap of faith in The False Promise of the Entrepreneurial University:

In short, university research parks are anything but sure-fire investments in urban or regional economic prosperity. Success is relatively uncommon, as Wallsten’s impact study makes clear. “Game-changing” success – the kind that remakes a regional economy—is even more rare, the product of unique historical factors, good luck, and timing. For example, the North Carolina Research Triangle Park’s oft-cited (and oft-emulated) success, “was built around its first-mover status in the field of science parks,” generous state and federal funding, and a uniquely patient multi-decade commitment by political leadership – and even with all those difficult-to-replicate factors in its favor, it took more than 30 years to see evidence of the cluster development attributed to the park (Weddle, 2007, 7). Universities that cavalierly pursue and oversell URPs as “transformational” economic development investments risk creating white elephants and misallocating millions of dollars that could be better invested bolstering the core missions of their institutions.

Now, Haynes does say we shouldn't try to be the Research Triangle, but that we do need to foster more entrepreneurial activity, and then he uses numerous Research Triangle examples to illustrate the path we should emulate.

The region's poor entrepreneurial performance matters: Research has shown that new businesses account for nearly all net new job creation, according to the Kauffman Foundation, and they juice local economies by boosting competition and innovation. If a region isn't creating enough new companies, it will likely have sluggish growth.

A vibrant entrepreneurial ecosystem that supports people who want to take the leap from idea to business formation is one essential element of a strong ecosystem for business development. So is the support of business leadership in the community. These are deep strengths in the Research Triangle.

Research has also shown that new businesses account for most job loss.

The claim that most net new jobs came from new firms conceals the fact that existing firms added tens of millions of jobs in this 25-year period. Of course existing firms also lost tens of millions of jobs. We can say that the net job creation for existing firms was zero, but if we did not have an environment that was conducive for the job adders to grow (how many jobs did Microsoft, Apple, and Intel create after their first 5 years of existence?), then existing firms would have lost tens of millions more jobs.

And, of course, Haynes had to mention venture capital, another one of the economic-clubs pundits continually beat us with whenever they're trying to sell these unsupported ideas.

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

In 2013, The Legislature overwhelmingly voted Tuesday to provide $25 million in taxpayer money to start-up companies. And we all know the booming job creation the Scott Walker regime has presided over since then.

Haynes closes with, "That's thinking like an entrepreneur. And it's the kind of thinking we could use more of in Milwaukee."

Let's start with the fact that a lot of economic momentum for a city or region is impacted by state and federal policies. Scott Walker killing the train, which would have better connected businesses and citizens in the region, was definitely not thinking like an entrepreneur. That infrastructure investment would have improved efficiencies, bolstered existing businesses, encouraged start-ups and increased the attractiveness of the region as a place to work and live. It would have been an investment of more than a billion dollars into the economy. I think we would have seen quite a bit of venture capital, start-ups, entrepreneurial activity and the like with an injection of a billion dollars.

So, maybe when our leaders stop cutting off our nose to spite our face we can have a real discussion about what's best for job growth.

For Further Reading:
Another False Idol: Venture Capital
Starting Up More Trouble
Faulty Excuses
A Steaming Pile of Boldness
Venturing Aimlessly
Venturing Wisconsin's Money
Selling Entrepreneurialism
Starting-Up More Trouble 

The Soft Bigotry of Low Expectations or: How I Learned To Stop Worrying and Love Scott Walker's Incompetence

Gov. Scott Walker Holds Down Gas Tax - And Growth

In violation of conservative "pro-market" economic principles, Gov. Scott Walker has once again decided that Wisconsin's gasoline tax will not be raised. Instead, to finance road maintenance and repair, he prefers to borrow $850 million, adding that amount to the state's debt. Since even this large amount of borrowing will not be sufficient to finance the projects being planned for the coming year, he says that some will have to be slowed down or not even begun.

Shortage of Skills or Abundance of Excuses?

As most Wisconsinites know, Scott Walker has overseen anemic economic performance for Wisconsin. Job growth has continually lagged the national average.

Once again, Wisconsin job growth trails national pace

Of course, none of this, according to Scott Walker, is Scott Walker's fault. (Regardless that he was elected based on his claims that he could grow 250,000 jobs for the state.) It's the dreaded skilled worker shortage. The jobs are here just waiting for the right workers. 

The laughable link between the two - jobs and the right skills for those jobs - is job training. Another overblown talking-point of economic development hucksters. 

As Marc Levine informed,

As Gordon Lafer, one of the country's foremost researchers on job training, puts it: "Whatever the problem, it seems job training is the answer. The only trouble is, it doesn't work, and the government knows it. . . . Indeed, in studying more than 40 years of job training policy, I have not seen one program that, on average, enabled its participants to earn their way out of poverty."

This, directly debunking the recent drivel being peddled in a Journal Sentinel opinion piece.

Levine continued,

Work force development policy is based on the fallacious premise that Milwaukee's core employment problem is a shortage of skilled workers (a "jobs-skills mismatch"). ...

The jobs are already here? Hardly. Indeed, taking metro Milwaukee as a whole, there is a gap of 88,000 between the number of jobless (working-age residents unemployed or out of the labor force) and the number of job vacancies reported by employers. It is a job shortage, much more than a skills shortage, that plagues the region. ... 

No matter who controls job training programs in Milwaukee, they are doomed to failure unless this economy produces enough family-supporting jobs.

This isn't to say we shouldn't be offering some job training efforts. This also doesn't mean that at some time during the business cycle, the economy won't experience some structural unemployment. But these supposed panaceas of skills-improvement and job-training have proven largely uneventful over the last few decades.

The continued call for increased skills also ignores the fact that the Bureau of Labor Statistics estimates the majority of new jobs over the next few decades will require only a high school education or minimal on-the-job training. Secondly, its also implies that we, as a nation are becoming less educated; this, also, is false.

This skill-shortage talking-point merely allows most of the decision-makers to take the hands-off approach of blaming the victim. "We've got some tools out there. If individuals don't take advantage, that's their problem."

More effective policies include increasing the earned income tax credit, unionization, increasing the minimum wage and increasing job programs (directly employing individuals).

As long as we keep pretending the market has all the answers and our workforce is so woefully inadequate that we can't do or learn the majority of vacant positions, charlatans and other hucksters will continue to sell job training, skills shortage and other bumper sticker policies that do little to address the issues they claim to be so concerned about.

Wisconsin Reading

Scott Walker Destroyed His State: Wisconsin's Economic Cautionary Tale
Suburban Firms Moving Downtown To Attract And Keep Millennials
In College Column, Bradley Likened Abortion To Holocaust, Slavery
Who's Best On Budget And Taxes?
Wisconsin Uses Affordable Care Act But Rejects Funding For It
Milwaukee Faces Daunting Costs With Lead Water Pipes
Milwaukee County To Consider $184.3 Million, 10-Story Downtown Courthouse
Wisconsin's Pace Of Job Growth Continues To Trail Behind The National Average

Republican Public Policy Does It Again (And It's Not Good)

Poverty across Wisconsin reaches highest level in 30 years

Just a short list of the many Scott Walker failures:

• Slow job growth
• Budget deficits alongside giveaways and tax breaks for cronies
• Costing Wisconsin millions by refusing to expand health care under the Affordable Care Act; leading to less people having health care
• Increasing poverty

Scott Walker burst onto the scene and into the governor's mansion primarily on his self-proclaimed know-how for creating 250,000 new jobs. Wisconsin ranks 38th in private-sector job growth in 2015. So, we'll check that off as a failure on job creation.

Budget deficits were estimated at $1.5 to $2.2 billion when Walker first entered the governor's office. (The $3.6 billion estimate was from the Walker camp.) Legislative Fiscal Bureau analysis shows Wisconsin is back in the red for 2015-17, at $1.8 billion, which could grow to $2.2 billion. Wisconsin’s per-capita state debt has grown 2.9 percent during his tenure as governor, compared with a 0.34 percent decline nationwide over the same period, according to data compiled by Bloomberg. Looks like we're treading water here. But, Walker did come in claiming he was going to move hell and high water; I guess we'll have to check this off as a failure, too.

Walker's health care decision means that state taxpayers are paying more to cover fewer people in the BadgerCare Plus health plan. The decision to reject that federal money is estimated to have a net cost to the state of more than $100 million in the current two-year budget. The federal money would have allowed the state to cover an estimated 84,700 more people through BadgerCare. Failure ... check.

And now, due to the tax cuts and slow job growth, poverty is on the rise. Is that another failure? It sure is ... check.

Deregulation, tax cuts, supple-side economics, anti-unionism, anti-science, anti-environmentalism, privatized healthcare and underfunded education - the Republican policy playbook - are not the policy prescriptions for success. Republican legislation has proven this again and again.

For Further Reading:

Budget woes complicate Gov. Scott Walker's White House ambitions

There Is No Budget Surplus in Wisconsin

Wisconsin Is About To Make It Easier For Debt Collectors To Go After Consumers

A closer look at Wisconsin’s economy under Gov. Scott Walker
Scott Walker Saves More Money For Menard

Scott Walker Approves Obscure Tax Break For Furniture Company, Quickly Collects Large Campaign Donation

Special Interests Pig Out On The Taxpayers’ Tab

Deunionization In Wisconsin And Metro Milwaukee

Something tells me the decline in unionization has contributed to Wisconsin's terrible economic performance. I do know the accelerated decline in unionization and the terrible economy in Wisconsin are both the result of know-nothing Scott Walker.

[source]

For Further Reading:

7 State Doing Worse Than The Rest
Large Tax Cuts Haven't Spurred Job Growth

Large Tax Cuts Haven't Spurred Job Growth

[source]

For Further Reading:

Why State's Job Creation Strategy Isn't Working

State Job Creation Strategies Often Off Base

Under Sanders, Income & Jobs Would Soar

Under Sanders, income and jobs would soar, economist says

If Sanders became president -- and was able to push his plan through Congress -- median household income would be $82,200 by 2026, far higher than the $59,300 projected by the Congressional Budget Office.

In addition, poverty would plummet to a record low 6%, as opposed to the CBO's forecast of 13.9%. The U.S. economy would grow by 5.3% per year, instead of 2.1%, and the nation's $1.3 trillion deficit would turn into a large surplus by Sanders' second term... 

"Like the New Deal of the 1930s, Senator Sanders' program is designed to do more than merely increase economic activity," Friedman writes. It will "promote a more just prosperity, broadly-based with a narrowing of economy inequality." ... 

Friedman, however, argues that Sanders' plan would be more stimulative because it is pouring money into the economy, as opposed to cutting taxes. Several of Sanders' proposals -- such as spending $1 trillion on infrastructure -- will happen in the first few years of his administration.

Wisconsin Reading

Minnesota, Wisconsin Diverge As Twin Cities Outpace Northern Peers
Scott Walker Dramatically Rewrites Election Rules In Wisconsin
Wisconsin Ranks 32nd In Five-Year Job Growth Report
Medicaid Expansion Would Save State $1 Billion
Walker's Assault On Open Records
Walker Signs Bills Dismantling GAB, Overhauling Campaign Finance Law

Walker's Grasp On Reality Even More Tenuous Than Previously Thought

In an article for the Journal Sentinel, The Wisconsin Comeback, Scott Walker repeated familiar talking points and platitudes. According to Walker, Wisconsin is flourishing.

The Journal Sentinel has their own editorial, Another Lousy Wisconsin Jobs Report and Little Action on Job Creation.

A new government report shows that our state ranked 32nd in private-sector job growth among the 50 states in the five-year period that ended in June. That's the entire recovery period since the last recession. 

Private-sector hiring in Wisconsin grew just 7.6% during those five years, far behind the national growth of 11.2% and behind nearby Midwestern states. Michigan, Indiana, Minnesota, Ohio, Iowa and Illinois all did better.

Joel Rogers (the Sewell-Bascom Professor of Law, Political Science, Public Affairs and Sociology at the University of Wisconsin-Madison, and director of the Center On Wisconsin Strategy) added:

According to a recent report from the Pew Research Center, Wisconsin now leads the nation in destroying its middle class. Defining "middle-class households" as those with income 67% to 200% of their state's median, Pew showed Wisconsin leading all other states in the 2000-2013 period in its rate of loss...

Median worker wages here, for example, are now $17.38 an hour. In inflation-corrected terms, that's up only 71 cents from 35 years ago — equivalent to an increase of only 2 cents a year — despite a near doubling of worker productivity over the period. Job growth has been pathetic, among the worst in the nation. If Wisconsin had merely kept pace with the rest of the country's recovery from the Great Recession, we'd have 90,000 more jobs today than we do.

And job quality is through the floor. More than a quarter (27%) of Wisconsin workers now make $11.55 or less an hour. A full-time year-round job at that wage is not enough to keep a four-person family out of poverty, even on America's distinctively stingy definition of the poverty line.

In the sense that 'comeback' usually has a positive connotation, I don't think 'comeback' means what Scott Walker thinks it means. Hopefully Wisconsin can comeback from the Walker 'comeback'.