The Economic Impact Mythology Of Convention Centers

Milwaukee's Boondoggle Twofer
How Can Convention Centers Be So Dumb?
The Convention Center Shell Game
Convention Center Follies
It's A Race To The Bottom
Is It Time To Stop Building Convention Centers?
Case For Bigger Convention Hall Has Familiar Ring
The Realities Of Convention Centers As Economic Development Strategy
Debunking The Conventional Wisdom About Conventions
The Dubious Economics Of Convention Centers
Do We Really Need To Keep Building Convention Centers?
A Critical Review Of Convention Center Feasibility Studies
The Skeptical Study No One Ever Talks About
Convention Centers
Economic Impact Studies: Instruments For Political Shenanigans?

Sunday Reading

Too Big To Fail. Not Too Strong
The Koch Attack On Solar Energy
Recovery Has Created More Low-Wage Jobs Than Better-Paid Ones
Coburn Says Let Free Market Decide Race To The Bottom On Wages
Scalia Makes Huge Factual Error In Supreme Court Opinion
Do Fewer Unions Make Countries More Competitive?
There's No Evidence Privatization Works, But it Marches On
How Global Warming Is Scorching The United States
Charter Schools Fail: Report Calls Their Magic Into Question

Racing To The Bottom In Wisconsin

Wisconsin Republicans' Tax Plan Follows The Race To The Bottom

From the article:

"Vos proposes to reduce taxes on what he calls the “middle class,” but his definition leaves out nearly two-fifths of tax filers in the state — the 39 percent of households that earn less than $20,000 annually...

Figures from the national Institute for Tax and Economic Policy analyzed the total tax burden by state and found the bottom 20 percent of Wisconsinites pay 9.4 percent of their income in taxes. By contrast, the top one percent of Wisconsinites pay just 6.7 percent of their incomes in taxes...

Consider what the Republicans and Gov. Scott Walker did to taxes in their first legislative term. They passed $36 million in capital gain taxes and 46 percent of those breaks will go to the top 2 percent of earners in Wisconsin, according to the Legislative Fiscal Bureau. They also passed $49 million in tax breaks for those with Health Savings Accounts, again benefiting the well-to-do: the average income of someone with such an account is more than $100,000, according to the Government Accountability Office...

As for poor people, Walker and Republicans slashed the earned income tax credit. This provision was created under Republican Gov. Tommy Thompson and won bipartisan support as a way to reward work and help those whose wages were inadequate to support a family."

The Results Of The Reagan Revolution

The US Has the Highest Share of Employees in Low Wage Work

Midweek Reading

Are Wisconsin Public Employees Over-Compensated?
Child Poverty Rose Dramatically In Wisconsin Last Year
Does Right-To-Work Create Jobs?
Jim DeMint's Race To The Bottom
Milwaukee Income Drops 22% As Jobs Threats Continue
Smart Growth Law Would Be Gutted By Proposed Legislation
Tax Cuts Break The Bank
What's Wrong With Right-To-Work?
Wisconsin Has Lean Public Sector
Wisconsin Public Servants Already Face A Compensation Penalty

The Business End

The Colbert Report
Tags: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive

Home Team

Poor Harley Davidson has only seen a $91.4 billion profit over the past two years. Makes a lot of sense to see them threatening taking away jobs from cities if they aren't given a handout, and threatening their unionized employees with job loss.

In other local, prideful, business news, A.O. Smith (a company that has been moving jobs to Mexico since the early 1990s) saw its earnings rise 42 percent.

Two great examples of local corporate interests whose actions are directly responsible for the loss of many good paying jobs in America. All the while, they are raking it in alongside subsidies from the government.

It's class warfare alright. And the uber rich are winning.

Selling Our Soul To The Company Store

Michael Moore eviscerates capitalism in his new film, Capitalism: A Love Story. He finds it to be unworkable, evil, and needing replacement with true democracy. Now although there may be persuasive kernels of truth in Moore’s vision, I’m not inclined to go quite as far. I tend to fall more into the Robert Kuttner camp, whose ideas are presented in his book The Squandering of America. In which he describes a mixed economy – basically a regulated capitalist economy with progressive taxation (think our post-WWII economy up until the late 1960s). Although either vision would likely get us closer to the standard-of-living we covet rather than the present dog-eat-dog, increasing inequality paradigm within which we operate.

One-sixth of our economy is represented by sickness – the health care industry. The financial services industry (which as we recently witnessed, adds nothing of value) represents 20 percent of GDP. Over 13 percent of the population lives in poverty. 50 million have no health insurance coverage. In indicator after indicator, and study after study, the U.S. trails in outcomes and performance. The only categories we still lead in are delusion and boastfulness.

Maybe it’s time we actually reregulate – the banks, the polluters, Wall Street, corporations, etc. Let’s increase taxes on the wealthiest. It’s time to get rid of 401(K)s and bring back quality pensions. The solution to health care: Medicare for all. The answer to unemployment, job training, and our crumbling infrastructure: public works programs.

Yes, there is definitely a large cost to such an expansive initiative. But that’s what an investment is, it makes everyone better off in the long-run. Rather than just benefiting a select, wealthy, few right now. The kind of investment that “spreads the wealth,” builds/maintains transportation networks, provides clean air and water, in essence, the tools and techniques that enable a civilized society.

Demand as Economic Engine

If you build it, there is no guarantee anyone is coming. We’ve been sold a false fable whereby low taxes (which primarily favor the uber wealthy) enable our social betters - The Ruling Class - to make wise investments which will either create more market liquidity or produce much sought-after services. Which is true, if you think $12 trillion in bubble wealth is actual liquidity, or if by sought-after services one means convenience, impulse items.

We are a fast food nation, addicted to debt, over burdened with things, and being led astray by those whom could care less about our health, retirement, wages, and quality-of-life. The capitalists have put a giant wheel in each of our cages and told us if we run fast enough we can be like them. In reality, we just need to get off the wheel.

As Abraham Lincoln's quote (the subtitle of this blog) explains, Labor is the engine, not capital. One can produce and produce, unless someone actually wants or needs the service or product its useless. Valuing Labor and utilizing its skills and knowledge to make things desired and necessary is a sustainable and less volatile path. We, as workers in a supposedly representative democracy, should be exporting our step-up model (living wage, health care, pension) rather than allowing corporations to slowly drag everyone down to below subsistence wages.

Privatizing Away Equity

Privatization is not the end-all, be-all its boosters have claimed. In fact, numerous studies have shown privatization of public services usually ends up costing more. Not only does it cost more, the money now spent does not support living wages, quality health care, or a decent pension plan. Now that the service has been privatized, the workers’ are ravaged. This is part of the process of what academics have called the race to the bottom.

The race to the bottom is the continual search for cheaper inputs in the production process. And crushing Labor (wages, health, retirement) is at the top of the list. The primary flaw in the privatization schemes we’ve been peddled over the last few decades (coincidentally alongside Reaganomics) is that the savings never appear. There is merely a realignment of monies from worker to management. The CEOs and executives of the new private ownership make out like kings, while the workforce of this service provider is suddenly making essentially minimum wage.

Moving Forward

Obama stormed into office promising change. Change is exactly what we need. But based on the development over the last eight months, change may not be on the way. Health care is still overly controlled by insurance and pharmaceutical companies. Our economic policy is still enraptured with deregulation, the supply-side, and the status quo. Our environmental degradation and sprawling lifestyle has yet to even enter a meaningful realm of debate.

Here's hoping the threat of the 2010 election inspires Democrats to relocate their spines and do what is right for America and its workers, ignoring the typically destructive policies the conservatives continue to claim will (eventually) work despite the evidence.

For Further Reading:

Nike Is Leading Race to the Bottom

Race to the Bottom

Understanding and Preventing Privatization

Welcome To Walmart

The Journal Sentinel weighed in on the latest union-related negotiation (between the City and AFSCME) taking place, Ratify This Deal.

They claim, "it's a good deal for the city and the union." I assume they mean that by simply allowing the unionized workers to keep their jobs, that's a good deal. So much for the city being a standard, a model, for the private sector. Much like the private sector, all workers are expendable and should be happy with whatever crumbs are thrown their way. Yet we're also supposed to be the most innovative, educated and skilled nation on the planet. We just shouldn't be paid like we are or share in the rewards.

The Journal editorial also states that the union agreeing to concessions in this latest deal is, "a welcome recognition of reality by the union."

And that reality would be that the City would rather use taxpayer dollars on speculative deals, funding private developers who don't want to pay a living wage to workers on their projects. But, somehow, this subsidized race to the bottom, using public dollars, building projects with less-than prevailing wages, will lift all boats.

As public entities have become more involved in financing private ventures we've heard more and more over the years about the magic of the market, the wonders of privatization and private entities, and how a rising tide will result and bring prosperity to one and all.

Cities and states have plenty of taxpayer dollars for stadiums, parking structures, site remediation, and anything else private developers desire. But there is never money for transit, libraries, parks, road repair, or other infrastructural needs. Although, in the convoluted economic development logic of today; public dollars for private pursuits; privatization over public employment; and speculative, race to the bottom policies will result in a market-oriented wonderland...regardless of the fact that empirical data (reality) totally refutes this delusional view.

Our tax dollars can bail out banks and insurance companies, so they can pay millions in bonuses to the same individuals that brought down the world economy. Yet public or private unionized workers wanting their pay to merely keep up with inflation are budget-breakers.

As unionization has decreased, and as public dollars are used more and more to finance private speculation, we have seen workers wages decline, job security evaporate, health care costs skyrocket and coverage lost for many employees, retirement degraded into a defined contribution rather than defined benefit plan, and the ability of Americans to have lives unencumbered by debt becoming a false hope.

So as more unionized workers are given the "deal" of higher health care costs, lower/frozen wages, and less-secure retirements, non-unionized workers will feel these effects even more so. It seems that we, as a nation of workers, will only be able to fully grasp the decline in Labor's bargaining power and importance on our standard of living once we're all Walmart workers.

We should stop and reflect on the 40-hour work week, laws against child labor, unemployment insurance, the civil rights movement, Social Security, Medicare, OSHA, the EEOC, and a relaxing thing called the weekend. All of these are results of labor unions and their activism.

If we keep up this degradation of Labor, this lack of respect for actual work and doing/making something of value (as opposed to simply extracting money from the real economy through financialization), we will all need to get used to three words, "Welcome to Walmart."

For Further Reading:
Financialization
Milwaukee Department of City Development Business Toolbox
Milwaukee Economic Development Corporation
Private Sector Accountability