Questionable Economic Impact Claims

Wisconsin Department of Tourism claims $321 million economic impact from Republican National Convention. 

As Center Square clarified:

Economists who have studied the impact of national party conventions says a report from the marketing firm Tourism Economics does not accurately reflect the actual impact of the 2024 Republican National Convention in Milwaukee.

Economist Victor Matheson of College of the Holy Cross has studied and written on national conventions and large events, He called the release, which claims the event had a $321.5 million impact, a “promotional booklet/press release, not a serious economic impact study.”

Center Square, in other economic impact reporting, further noted:

Economists say the numbers produced by the marketing group do not follow economic study principals and are not reputable. The numbers are used by politicians and state tourism departments to justify spending.

“Viewing what ‘economic impact’ consultants do to be economics is like considering horoscopes to be astronomy,” economist J.C. Bradbury of Georgia’s Kennesaw State University recently wrote. “Newspapers are smart enough to put horoscopes next to the comics and Dear Abby, while economic impact ‘studies’ get banner headlines on the front page.”

Bradbury noted economic impact analysis is not something real economists do and there is a reason that work is not presented at conferences or published in journals.  

Economic impact is often claimed surrounding publicly funded sports stadium projects or sporting events.

The annual tourism reports are paid for by state tourism departments and national tourism agencies.

Urban Milwaukee reported:

But when the Common Council discussed the RNC in September, it wasn’t as favorable.

“It didn’t trickle into the neighborhoods,” said Ald. Marina Dimitrijevic of the economic impact.

In an email to Dimitrijevic, LuLu Cafe & Bar owner Cameryne Roberts said the RNC didn’t result in a business boom. “For what it’s worth, the RNC was a complete bust for us and most of the other Bay View business owners I spoke with, not to mention those in other parts of town.” 

Alderwoman Milele A. Coggs asked for the final report to include a geographic breakdown and diversity data. “I just want us, as a council, in case we’re asked again to sign on to anything like this, to be aware of its impact. And where things might not have been how we wanted it to be, or we might not have achieved the goals we were going to achieve, that we recognize that and that we work differently in the future to better achieve those goals,” said Coggs. The final report does not include the breakdown requested.

Reports during the convention highlighted how many businesses outside of the hard security perimeter were seeing lackluster business. Across the month of July, sales tax revenue in Milwaukee was actually down year over year. But the state, which collects the revenue, does not collect data by week.

Per usual, many of these economic-impact no-brainers (conventions, stadiums, Olympics, etc.) which are touted to be win-wins for cities and states are anything but.  

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

Why Visit Milwaukee?

From Twenty-Something Travel:

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

A Fractured Process

The Journal Sentinel reports, "A new study funded by the petroleum industry says Wisconsin firms employ 20,000 people supporting the unconventional oil and gas business - meaning sand mines, largely. The sand from western Wisconsin is used by drilling companies in North Dakota and other states to unlock underground natural gas and oil supplies in a controversial practice called hydraulic fracturing, or fracking."

Go figure. The industry that gains from fracking has released a study showing how wonderful it is.

Walmart employs people. Sport stadiums employ people. Yet, these are low-wage jobs, usually lacking health care and retirement plans. The mantra of "It creates jobs!" is short-sighted and overblown. Regarding fracking, if those jobs destroy land, water, and leave behind a barren wasteland, it's not really a long-term jobs plan. It's a short-term money grab for the parent company pillaging and plundering the land. Not to mention the negative public health consequences for residents. So yeah, again, not really a good nor sustainable jobs plan. And, definitely not a good plan for a state that prides itself on the natural environment and the beauty and purity of the land.

[source]

“Every year, large areas are continually becoming unfertile in spite of efforts to grow vegetation on the degraded mined land.” wrote Mrinal Ghose in the Journal of Scientific and Industrial Research.

As Ellen Cantarow reports, "Boom times for hydraulic fracturing began in 2008 when new horizontal-drilling methods transformed an industry formerly dependent on strictly vertical boring. Frac-sand mining took off in tandem with this development. “It’s huge,” said a U.S. Geological Survey mineral commodity specialist in 2009. “I’ve never seen anything like it, the growth. It makes my head spin.” That year, from all U.S. sources, frac-sand producers used or sold over 6.5 million metric tons of sand — about what the Great Pyramid of Giza weighs. Last month, Wisconsin’s Department of Natural Resources Senior Manager and Special Projects Coordinator Tom Woletz said corporations were hauling at least 15 million metric tons a year from the state’s hills. By July 2011, between 22 and 36 frac-sand facilities in Wisconsin were either operating or approved. Seven months later, said Woletz, there were over 60 mines and 45 processing (refinement) plants in operation. “By the time your article appears, these figures will be obsolete,” claims Pat Popple, who in 2008 founded the first group to oppose frac-sand mining, Concerned Chippewa Citizens (now part of The Save the Hills Alliance)."

There are better ways to grow an economy. Much better ways than destroying the land around you. Let's move toward a sustainable, equitable, and safe future for Wisconsin and it's residents. Let's tell the hydraulic fracturers to frack off.

For Further Reading:
Clintonville Booms Caused By Fracking?
The Evolving Truth About Fracking For Natural Gas
How Rural American Got Fracked
In The Name Of Fracking

The Time Is Now?

Are you kidding me?

On the list of priorities for public dollars - where public investment should be steered - building a new basketball stadium shouldn't even make the list.

But Michael Hunt, of the Journal Sentinel, feels the time is now to address a new arena for the Bucks.

The article notes:

"Marotta, a former Marquette basketball player, is getting it started by evoking the name of former Wisconsin state Sen. George Petak, whose vote saved Miller Park.

"Where would we be without a guy like Petak? Here was a guy who cared more about doing the right thing than being re-elected," Marotta said.

"He lost his seat, but if he hadn't taken that vote, we wouldn't have the Brewers here. And Milwaukee would be a significantly diminished town. We do have a lot of challenges. There's no denying that. We have significant economic challenges within the city. We've got public infrastructure needs. We've got libraries that need to be funded.

"The way to continue to do that and grow as a community is to invest in our entertainment, cultural and sports assets. That's what attracts business to come and expand here. It makes it a great place to live and work."

Entertainment, cultural and sports assets sure do make a city more tolerable. But Milwaukee isn't Las Vegas - lets not pretend these are the economic engines of Milwaukee's economy. We may have tourist attractions, but our economy isn't driven by the tourism industries. Manufacturing; trade, transportation, and utilities; information; financial activities; professional and business services; and education and health services all employee more people than our leisure and hospitality industry.

It's fine to look at our stadiums and conventions centers at some point. Preferably, when our economy is on better footing, and taxpayers may be more receptive to such public investment. But, as far as bang-for-the-buck investments are concerned, in helping to get our economy growing again, stadium subsidization has a poor return on investment. 

The time is now for public investment in infrastructure. But it should be in public transportation, energy, water, and education, not sports stadiums.

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.

The Hotel Of Dreams

Whether or not the proposed downtown Marriott is the no-brainer the Journal Sentinel claims (they claim any development is a win-win) is debatable. Will it bring more business travelers downtown? Will it increase the City's annual tax revenue by $2.2 million? How will a new hotel enhance the regions tourism and marketing efforts? How will a new hotel boost downtown development?

The constructions jobs are obviously a good (temporary) thing. The low-wage, seasonal jobs created by the hotel are jobs, but not the best. Any development will have a construction boost and create some jobs. Whether or not this is the most optimal, is the best location, and is worth destroying historic buildings, are questions that need answers.

If they plan on razing the historic buildings - something Milwaukee still has numerous examples of, which we should be maintaining - are the developers planning to build something that echoes a bygone era? Or, are they planning on building a modern, square, glass, monstrosity which will look completely out of place downtown? (We already have enough cheap-looking and out-of-character new condos.)

Business travelers come to a place because they have business to attend to. They don't travel to different downtowns to just stay a night at the new hotel. Likewise, tourists don't visit cities just to see the latest hotels. "There's nothing to see here, but our pillows are the softest!" I have yet to see a successful marketing effort for a city focused on hotels.

Improving economic opportunities for residents, creating places of interest, and having accessible and connected transportation routes attracts business, tourists, and creates a buzz. Supply by itself does not attract other development, nor assure success. Simply building a new hotel will not attract new development. The demand has to be here, or some signs of demand on the horizon, before a savvy investor would bet millions on a location or development. And, just because one development moves forward, this does not guarantee others will follow.

I'm not completely against this project, but neither am I completely for it. More questions need to be asked and more details provided. The Journal's marching ahead of any serious discussion and declaring this project a catalyst of development is cavalier and premature. Let's see the site plan, what kind of financing is entailed, and what the impact analyses are forecasting. It's one thing to move swiftly on a well-corroborated project, but quite another to haphazardly move forward on just hopes and wishes.

For Further Reading:

Regional Economic Impact Assessments

Southeastern Wisconsin's Share Of The Tourism Industry