Social Security Scare Tactics (Again)

I really wish the press would stop spreading the doomsday scenarios and outright lies about a program - Social Security - that is perfectly solvent, without any changes, until the 2050's. Second, it would also be nice if the press stopped lumping Social Security and Medicare together as of they were one program; they're not.

Getting health care reform - universal or single-payer - would solve many of the cost issues with Medicare. As Peter Orszag, White House budget director, and Dean Baker, co-director Center for Economic and Policy Research, have said, this is a health care problem not an aging problem.

Restricting corporate hegemony over our government, thus reducing volitility in the markets, would relieve any shortcomings facing Social Security, by assuring stabile employment and a more equitable distribution of earnings.

For Further Reading:
Budget For Fiscal Year 2009
Cutting Our Benefits
Facts and Figures
Long-Term Budget Outlook
Media's Social Security Deception
Medicare Choice Plus
Prophets of Doom
Social Security Byte
Social Security Is Fine
Social Security Isn't Broken
Social Security Program Solid
Social Security, The Wrong Retirement Crisis
Social Security WMD Story
Truth Behind Social Security, Medicare Alarm Bells

Ventura Frankness

Jesse Ventura telling it like it is to Larry King, on the View to Elisabeth Hasselbeck, and to Sean Hannity at Faux News.

Never Too Much With Rush

Adam Serwer, over at The American Prospect's Tapped blog, has a nice correction to the Wanda Sykes bashing over her remarks about the hallowed Rush Limbaugh.

Eat Endangered Species?

Hat tip to David Neiwert at Crooks and Liars for this post. I never thought someone could out-stupid Glenn Beck. Way to sink to the occasion, John Stossel.

Nuclear Waste

Shahla Werner, Sierra Club's Madison chapter director, penned an informative article in the Milwaukee Journal Sentinel, Nuclear Energy Too Risky When Efficiency Works. Nuclear energy shouldn't even be an option. We're supposed to be moving toward sustainability. Nuclear, coal, and oil are yesterday's energy.

Banning Development Incentives

Kenneth Thomas, associate professor of political science at the University of Missouri-St. Louis, wrote a telling op-ed for the St. Louis Post Dispatch on development incentives.

I just commented on this subject a few days ago.

One can only hope President Obama's Urban Czar moves forward on this issue.

Las Cucarachas

Here is an impassioned, well-written artile by John Drew, of UAW, about the travesty of taxpayers bailing out Chrysler - while they are now planning on building a new plant in Mexico, yet closing down the plant in Kenosha.

But this is exactly why the deal went through. American workers had to be expendable, production had to be allowed to use new cheaper (Mexican) labor. All in the name of competitiveness and cost reduction. Somehow, executive salaries are never part of this restructuring.

The middle-class American worker must continue to make sacrifices so that hedge fund managers and bankers don't have to.

Tax Boogey Man

An excellent article by Paul Weldman, from The American Prospect, putting taxes into perspective.

Retraining Is Good, But...

As Susie Madrik of Crooks and Liars states, what jobs are we training them for?

As I posted earlier, it's not as much a lack of skills as a lack of jobs that is the problem.

Retooling

Why can't the majority of our auto workers be retrained for producing green vehicles or other green technologies (solar, wind turbines, etc.), along with retooling the factories? The government could use stimulus money to establish a management team to retool the factories and workers for these new production possiblities (rather than just throwing money at Fiat and making the workers continue to experience paycuts and layoffs). Then after getting the new endeavors up and running, sell them off to the highest private bidders. This would be similar to what many have suggested we do with the banks (nationalization) to get them healthy again. We already have a defacto policy that does this, the problem is we (the taxpayers) have no control and only get to experience the losses rather than the upside.

Auto Asphyxia

Allowing the auto companies to slowly crumble (while bailing out financiers and banks) and their workers to be laid-off, or take substantial wage cuts, is having a devastating effect on communities countrywide, as predicted.

Will Power

Will Allen is an inspiration to Milwaukeans and citizens all over the planet. He has developed a successful and sustainable business. In the process, he is also revitalizing underused areas, creating jobs, and providing nutritious food. Kudos to an entrepreneur and visionary we can all be proud of.

Legalized Bribery

Rocky Marcoux, commissioner of the City of Milwaukee's Department of City Development, couldn't be more wrong in his Milwaukee Business Journal op-ed, City Should Offer Incentives.

"In the past, developers have criticized Milwaukee officials for being reluctant to provide incentives to get a development to occur in the city," states Marcoux.

So what? This whole incentive game is blackmail and is terribly inefficient. It makes cities bid-up giveaways to corporations dangling jobs in front of city leaders. It leads to less-than-optimal locational decisions, and often cities never recoup the subsidies. Local leaders, legislators, and public servants should be cooperating with national leaders to enact federal legislation banning such zero-sum games.

$5 million to Astronautics? $1 to $20 million to Boston-Power? What is the cost-per-job? How much does the subsidy offset the supposed tax-base maintenance? Are there any clawbacks in the agreements? Is there a minority or prevailing wage clause in any construction agreement? Are there any provisions that protect the taxpayers?

Marcoux declares, "Milwaukee must make sure it is offering whatever makes sense to retain and lure new business." Now there's a concrete development policy to get behind.

During the last presidential campaign all the candidates talked about small business being the incubators, the place where job growth occurs. Yet, for development policy we are supposed to subsidize large companies to lure and retain jobs, no matter what the cost? Why not just make more funding available for small businesses and small business entrepreneurs? [Although it must also be noted, small businesses aren't quite the job machines politicos make them out to be.]

The more large companies we base our economy on, the greater chance for catastrophic consequences when the economy experiences downturns and these large companies layoff workers, offshore jobs, or go out of business. Just as we've seen with the "too big to fail" problems of the present.

These policies are blackmail and bribery. Often the only ones benefiting are the company executives receiving the subsidy and the city development cadre strengthening their private sector connections.

For Further Reading:
Corporate Blackmail
Doing Development Right
Foreign-Owned: Yes. American-Owned: No.
Great American Jobs Scam
Investment Incentives
Miller Pork
Pabst Farms Mirage
Public-Sector Economic Development
This Is Economic Development
Walmart Propaganda

Wisconsin CEO Performance Evaluation

Below is a performance evaluation of Wisconsin CEOs; their company; total compensation; compensation change from 2007; and company stock value change between Jan. 1, 2008 and Jan. 1, 2009 [although a typical U.S. business fiscal year begins Oct 1st and ends Sept 30th].

Gale Klappa; Wisconsin Energy; $9,875,302; -16; -6
Jeff Yabuki; Fiserv Inc.; $6,119,720 ;-14; -29
Jeffrey Joerres; Manpower Inc.; $5,743,775; -41; -38
James Ziemer; Harley-Davidson; $5,625,595; 27; -56
Kenneth Manning; Sensient Technologies; $5,570,291; -47; -8
Timothy Sullivan; Bucyrus International; $4,801,383; 25; -60
Michael Sutherlin; Joy Global; $4,431,854; -25; -63
Paul Jones; AO Smith; $4,382,669; 14; -14
Nicolas Pinchuk; Snap-on; $3,957,423; 37; -18
Kevin Mansell; Kohl's Corp.; $3,488,721; 54; -21
Curt Culver; MGIC Investment; $3,118,969; -10; -81
Mark Furlong; Marshall & Ilsley; $2,346,665; -31; -48
Michael Crowley Jr.; Bank Mutual $2,175,820; 15; -3
Steve Smith; Journal Communications; $1,445,957; 22; -67
Thomas Florsheim Jr.; Weyco Group Inc.; $1,281,734; 60; 12
Douglas Gordon; Waterstone Financial; $1,096,665; -3; -75
Richard Meeusen; Badger Meter; $1,020,316; 16; -23
Kerry Woody; Ladish Co.; $876,528; -20; -61
Helen Johnson-Leipold; Johnson Outdoors; $795,278; -37; -70

Only 1 saw the value of his/her company's stock rise (Thomas Florsheim). Although, his compensation rose 60 percent, while the company's shares only rose 12 percent.

Of all 19 CEOs, only 3 saw their compensation decrease more than the company stock value. 8 saw their compensation rise even as their company stock lost value.

Yet more proof that CEO pay is not based on the performance of the company.

Although it can also be said that stocks are not a good indicator of the performance of a company because of the fraud, gimmicks, and accounting chicanery involved in their trading.

Obliged to Avoid Taxation

WOW! This is powerful stupid.

To correct Ms. Burnett, considering the tax burden rather than just the highest marginal rate, as a Center on Budget and Policy Priorities report found, "Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent."

For Further Reading:
Corporate Tax Avoidance in the States
Corporate Tax Decline & U.S. Inequality
Double Taxation Double-Speak
How Progessive is the U.S. Federal Tax System?
Most Firms Pay No Income Tax

Cousins Center

The Journal-Sentinel feels Cardinal Stritch backing away from their intention to build at the Cousins Center site is a blow to St. Francis and the area. They feel the proposal was a "perfect fit" for the site and all involved.

They highlight that the development would have provided "community benefits and jobs." But what about the community benefits of open space and tranquility. Not to mention a habitat for the wildlife of the area.

What is the obsession with growth, for growth's sake, and paving over all open space?

Couldn't redevelopment of brownfields or blighted buildings in the city, especially in the most depressed areas, be an even better development? This could involve the resuse of unused or underused existing facilities, a revitalization of an impoverised section of the city, and the maintenance of green space.

This converges nicely with the push for development of county grounds at the edge of the city for expansion of UWM facilities. Let's reuse existing buildings within the city before we bulldoze and pave green space.

Paranoia Overdose

It's almost become cliche here that whenever John Torinus or Patrick McIlheran write a column in the Milwaukee Journal-Sentinel I have to spend a post correcting their many fallacies.

Well, Pat has done it again. So here I go.

In his piece - Not against taxes, just an overdose - McIlheran mumbles on about teabaggers and deficits. Let's do a point-by-point critique of the many falsehoods, embellishments, and misdirections.

First, I'd like to point out McIlheran's go-to research group, The Tax Foundation. Their work has been discredited over and over by many much more thoughtful social scientists. His continual reliance on them in article after article only weakens his arguments.

He then refers to deficit spending as a "deferred bill". Deficit spending is an investment like any other. Corporations use internally financed capital expenditures to grow their businesses (Henwood, Wall Street, p. 3). When the private sector is not providing the demand stimulus in the economy, the only entity left to do such is the government. Deficit spending is an investment in the future. Conversely the Republicans' tax cutting has led to increased inequality, allowed our infrastructure to crumble, and increased deficits with no tanglible improvements to show for it.

Next, Pat tried to revive the story that the Teabag fiasco was a grassroots endeavor. This is a display of delusion and cognitive dissonance on a grand scale. (Maybe Pat needs a history lesson regarding the original Tea Party.) He goes on and on about citizens rightfully uprising over onerous taxation. The Teabag theater was organized by well-funded Washington lobbyist groups - Freedom Works (Dick Armey) and Americans for Prosperity (Newt Gingrich). And, most importantly, President Obama has not increased taxes on 98 percent of the population. To keep claiming the opposite of reality just so that these right-wingers can hear themselves speak really does a diservice to the country, and muddles any attempt at a civil discourse - which seems to be their aim.

McIlheran then goes on to compare all Wisconsin municipalities with Washington County to prove there can be good government with little cost. Pat also states that these people have no problem with the share of taxation consumed by the Fire and Police departments. In the City of Milwaukee, the proposed 2009 total budget for general city purposes is $590,058,363; total wages and salaries for the police department are $159,065,554 - 27 percent; for the fire department $71,126,450 - 12 percent. I doubt most people know that fire and police consume 39 percent of the total budget for general city purposes. Across the U.S. these two departments, on average, account for 25 to 75 percent of budgets.

Moreover, Washington County (pop. 129,277) doesn't have the population, amenities, infrastructure, and concentration of poor people, like the City of Milwaukee (pop. 602,191). If we expand to Milwaukee County, the population is 953,328. So, comparing Milwaukee to Washington County is deceptive at best. And, to think that the surrounding communites do not benefit from the many amenities - the stadium, Calatrava, the lakefront, the theater, the riverwalk, the festivals, etc. - provided by the City is ridiculous.

Mr. McIlheran then bellows about an "ever-growing, unlimited government". Talk about paranoid. Government runs up its largest deficits and expands in size the most under Republican administrations. It also performs the worst economically under right-wing rule.

He then goes on to make snide insinuations toward "nationalized health care and vast new energy taxes." I guess he feels our health care system that doesn't cover 50 million people and cost twice as much as any other industrialized nation is just fine. He also must think our dependence on foreign oil and the fact that its pollution is destroying the planet isn't anything to worry about either.

He routinely comes back to the (I'm paraphrasing) 'government is taking your money' mantra. The fact is, most people feel government is a necessary regulator of the market, a provider of base services and institutions, and a means to ensuring equality of opportunity among its citizens.

McIlheran closes his rant by complaining about "subsidizing, taxing, regulating, and bailing out every corner of life." This completely ignores the fact that a lack of enforcement and regulation enabled our current mess. It also ignores the fact that the majority of government subsidization is corporate welfare. Only 1 percent of state and local budgets go toward assistance to the poor. And, the ones bailed out thus far have been corporate behemoths and the largest banks...the (auto) workers have been the only ones whom have had to sacrifice.

It is really work to correct and keep up with all the misinformation Teabaggers like McIlheran can imagine.

Corporate Tax Crackdown

Another good move on the part of the Obama administration.

Performance Evaluation

The highest paid CEOs & their 2008 performance as measured by stock prices (from January 1, 2008 to January 1, 2009):

Chesapeake Energy, Paid: $112.5 million, Stock: down 56 percent
Motorola, Paid: $104.1 million, Stock: down 60 percent
Walt Disney, Paid: $51.1 million, Stock: down 23 percent
Goldman Sachs, Paid: $42.9 million, Stock: down 57 percent
American Express, Paid: $42.9 million, Stock: down 62 percent
Citigroup, Paid: $38.2 million, Stock: down 75 percent
Apache, Paid: $37.2 million, Stock: down 21 percent
Philip Morris, Paid: $36.9 million, Stock: down 11 percent
Juniper Networks, Paid: $36.1 million, Stock: down 36 percent
JPMorgan Chase, Paid: $35.7 million, Stock: down 32 percent

Regulating Hedge Funds

It's a start.

Small Salamander*

Unbelievable! Republicans are criticizing the White House press? Now? Suddenly the press is doing a terrible job and is a public relations wing of the White House? Are these guys for real?

The press is largely horrible, I agree. But to claim it's a one-way street favoring the Democrats is disingenuous at best. If anything the corporate press has been overly deferential to the Republicans, while being overly questioning of the Democrats.

And, really, who gives a @#$* about what Newt thinks anymore? Go away, *Newt!

Political Hack Boosterism

Is the Milwaukee-Journal Sentinel implicitly supporting Paul Ryan and Scott Walker in their attempts at advancement within the Republican party and on the national stage? It doesn't seem a day, or at least week, goes by without some glowing article about one of these characters in the paper.

In the article, Walker Gets Strong Support At GOP Convention, they report on Scott Walker's popularity at the state Republican convention, but no mention is made of his disastrous policies and performance for Milwaukee County.

Ryan Draws Inspiration From Family, Mentors is a big warm literary hug from the Journal to Paul Ryan. It's tells of his family, previous jobs, and his economic views. They mention his work at Empower America, a right-wing lobbying group, and for Sam Brownback, an ultra conservative Kansan. Of course none of this is put in context or given any weight, in that these experiences may give insight into how Ryan wants to or would govern. He has a degree from the University of Miami Ohio in economics, so this makes him a serious economist alongside Paul Krugman, John Keynes, and Joe Stiglitz. Or at least that's how the Republican party and the Journal-Sentinel have been selling the story whenever Ryan spouts something regarding taxes or deficits.

Ryan Shines As GOP Seeks Vision is the extended version of the Journal slobbering all over Paul. At one moment the article states, "Ryan has clearly made the bet that he can offer detailed, controversial, conservative ideas (personal accounts for Social Security; vouchers for Medicare; lower tax rates for the wealthy; freezing most domestic spending) and still prosper politically, as long as voters see him as substantive, civil, inclusive and attentive." But then the story primarily goes back to patting Ryan on the back, and doesn't really delve into the fact that this is the same old party line coming from a younger face.

A whole compendium of Walker falacies, errors, and other stories can be found at The Political Environment. They also have plenty on Paul Ryan. I, too, have a previous post on Walker's ineptitude, and two previous posts on Ryan (here and here).

To me, this supposed reporting is more correctly described as boosterism. Blatant boosterism from a media organization for political figures. It's as if they are reporting GOP talking points. I hope the Journal follows suit with glowing and loving pieces about Jim Doyle and whomever may be running against Paul Ryan next.

Twelve Bad Democrats

Twelve Democrats with some explaining to do:

Senator Max Baucus (D-MT) (202) 224-2651

Senator Michael Bennet (D-CO) (202) 224-5852

Senator Robert Byrd (D-WV) (202) 224-3954

Senator Thomas Carper (D-DE) (202) 224-2441

Senator Byron Dorgan (D-ND) (202) 224-2551

Senator Tim Johnson (D-SD) (202) 224-5842

Senator Mary Landrieu (D-LA) (202) 224-5824

Senator Blanche Lincoln (D-AR) (202) 224-4843

Senator Ben Nelson (D-NE) (202) 224-6551

Senator Mark Pryor (D-AR) (202) 224-2353

Senator Arlen Specter (D-PA) (202) 224-4254

Senator Jon Tester (D-MT) (202) 224-2644

Manufacturing

Some economists have purported the ideas that domestic spending has shifted away from manufactured goods, growing international trade is at most a minuscule reason for the declining manufacturing employment, and the decline in employment is a part of a natural, comparatively advantaged, order involving a rise in demand for skilled workers.

The last point was directly addressed in a previous post, The Skills Crisis and Job Training, "There is little evidence of absolute declines in cognitive or hard skills in the United States or generally poor performance relative to other advanced industrialized countries," as reported by associate professor Michael Handel.

Another relevant question is whether or not this supposed rise in demand for skilled workers was simply the by-product of having more college graduates available for the workforce. It's the chicken or the egg question. Also, even though a country moves toward higher skills and education among more and more of its citizens, does that necessarily mean that the productive use of the workforce also follows in-line by only providing services and offering more "professional" employment opportunities?

No matter how advanced a country might be, every citizen cannot be a lawyer, doctor, or CEO. As I reported in The Skills Crisis and Job Training, Marc Levine finds, "Over the next decade the Bureau of Labor Statistics projects the greatest job growth in occupations requiring a high school education and short-term, on-the-job training."

Manufacturing productivity has been consistently increasing throughout the years, but demand supposedly hasn't kept up. Josh Bivens dissects and dismantles this (and the other claims) idea of decreased demand in his report, Shifting Blame For Manufacturing Job Loss. He finds:

Trade imbalances in manufacturing accounted for 59 percent of the decline in employment.

Demand for manufactured goods as a share of total demand has grown over the past 10 years.

The rising trade deficit in manufactured goods accounts for 58 percent of the decline in manufacturing employment between 1998 and 2003.

The use of contract, part-time, and temporary workers by manufacturing companies also hurts wages and overall employment numbers. A development obviously connected to increased productivity and cost-cutting initiatives at firms (induced by global competition of cheaper labor).

Some also explain the (mythical) decline in domestic spending for manufactured goods with the supposition that goods have become cheaper. But this is a glaringly, sweeping generalization. Which goods? Cheaper for whom? Sure VCRs are relatively inexpensive, but cars are the second largest purchase for most families, and the price of most cars is near the yearly median income of most workers. And, let's not forget that wages have stagnated for the majority of workers since the 1970s.

Dean Baker writes, "At the end of the 1960s, nearly twenty-nine percent of workers in the U.S. were employed in manufacturing...part of the decline of manufacturing is attributable to the decisions of firms to move operations overseas...the U.S. has been running an annual trade deficit in excess of $150 billion for the last several years. If this trade deficit were eliminated it would create over two million additional manufacturing jobs, and increase of almost fifteen percent."

The trade deficit has been accelerated by the high value of the dollar versus other currencies.

"The American dollar had been high through much of the Bretton Woods period, but in 1979 it took off and rose some 60 to 70 percent...Manufacturing thus did not decline as a consequence of natural causes, but was hastened to the edge of the cliff and pushed off by the high dollar," concludes Jeff Madrick. As a share of overall employment in the Midwest, manufacturing has fallen from 29 percent in 1969 to 12 percent in 2007. Declines were pronounced during the Clinton administration because of Robert Rubin's high dollar policy.

Howard Wial and Alec Friedoff, in a report for the Metropolitan Policy Program at the Brookings Institution, found that, "Despite these job loses, manufacturing remains a major driver of the nation's economy and the economy of the Great Lakes region."

Manufacturing represents 20 percent of GDP in Europe, 14 percent in the U.S., 33 percent in China and 18 percent worldwide. David Huether of the National Association of Manufacturers, in a New York Times article by Nelson Schwartz, explains, "Manufacturing makes up two-thirds of U.S. exports and contributed more to GDP growth over the last 20 years than any other sector of the U.S. economy. Our share of global manufacturing output has remained steady at 20 to 23 percent over the past decade."

In a recent posting, Failure Bonuses, I noted that the Economic Policy Institute had found:

Of the 20 richest countries tracked by the U.S. Bureau of Labor Statistics, the United States ranks 17th in hourly pay for production workers in manufacturing.

Of the 16 nations with higher compensation for production workers in manufacturing, the United States ranks behind only Ireland (a nation with a manufacturing workforce less than 2% as large as that of the United States) in terms of “value-added per employee” (a rough measure of productivity).

The combination of relatively low compensation and high productivity means that U.S. manufacturing leads the world in terms of competitiveness of per unit costs of manufacturing output.

If the wages claimed by managerial and non-supervisory labor in the United States were the same as the median of comparable countries, U.S. manufacturing would have a 6.4% cost advantage over major trading partners.

Robert Scott elucidates, "Manufacturing supported 14 million jobs in 2007, about 10.1 percent of total employment...generating $1.6 trillion in GDP in 2006 (12.2 percent of total U.S. GDP)...gross output of $4.5 trillion in 2005, by far the most important sector of the U.S. economy in terms of total output." In Wisconsin, manufacturing generated 20.8 percent of GDP, $47 billion.

Manufacturing is a hugely important industry. It deserves our attention and support. To simply allow it to steadily decline is a failure of national, industrial, economic, and security policy. Manufacturing is an important element of our economy and a source of many well-paying jobs. Manufacturing also allows us, as a nation, to innovate and produce products sought after the world over. Doing nothing and allowing America to become a nation of service-providers leaves our choices to the whims of foreign producers.

After all that has happened since the economic collapse of 2008 (the fault of our "professional" financial service providers - Wall Street), I think it's time we rediscovered production of tangible objects. I'd much rather be helping assembly line workers get back on their feet and securing America's future building and providing things - such as wind turbines and electric cars, rather than seeing my money gambled on the black hole that is Wall Street.

For Further Reading:

If GM Was a Canadian Company It Would Be Asking For Help
Robert Rubin: Coward or Liar

The Bankers' Regime

Thoughts on American Manufacturing Decline and Revitalization

Who's Afraid of a Falling Dollar?

Will Robert Rubin Haunt the Next Democratic White House?

GOP Plan?

Ed Schultz has Grover Norquist on to discuss the GOPs problems and the Republican "plan" for health care. Grover gives the standard Republican boilerplate - tort reform (less litigation) and less regulation (less state health-care mandates) are the solutions to our health care conundrum. I'm glad at the end of the interview Ed points out that less than 1 percent of total cost of health care are due to litigation.

They also touch on the Republican's "new" group, the National Council for a New America, which consists of Newt Gingrich, John McCain, Eric Cantor, Bobby Jindhal, John Boehner, and Jeb Bush. A cast of fresh faces it is not. The same old guys spouting the same old rhetoric.

The Skills Crisis and Job Training

The myth of a skills crisis among workers sure has gained steam among municipal leaders, the business community, and even some (so-called) academics. Although, in reality, this phenomenon is more of an urban legend. As Marc Levine [a former employer], professor of history and urban studies at the University of Wisconsin-Milwaukee, reports in a Milwaukee Journal-Sentinel article, “Over the next decade the Bureau of Labor Statistics projects the greatest job growth in occupations requiring high school education and short-term, on-the-job training.” According to the Census Bureau, 80 percent of the City of Milwaukee population has at least a high school education. The total number for the U.S. is 84 percent.

Gordon Lafer, associate professor at the University of Oregon, in his expansive and definitive work on job training, The Job Training Charade, states, “Job training has served primarily as a form of political diversion. At both the federal and local levels of government, the rhetoric of job training has encouraged a discourse about poverty and unemployment which minimizes the public’s expectations of government. If poverty were viewed largely as the result of a shortage of jobs, and the government were held responsible as employer of last resort, scores of mayors and governors would have been thrown out of office in response to the dislocations of the past two decades. By instead promoting a view of poverty as largely rooted in the educational, cultural, and moral failings of poor communities, the assumptions underlying training policy suggest that the government could not be expected to provide more than marginal assistance toward solving this problem.” (212)

The market and the government are doing all they can or are able to do. The heart of the problem is the motivation, laziness, and inherent inabilities of poor people. Or some variation of this is what job training proponents would like us to believe.

As noted in this review of Gordon Lafer’s work, “The commonsense idea that there are plenty of jobs to go around if only the unemployed and the poor had the motivation and the skills to fill them…The number of decently-paid jobs that were available over the last twenty years has never been more than a fraction of the number needed to raise the poor beyond the poverty level…Except for certain professional positions that require specialized and highly controlled education and that compromise a very small portion of the labor market, variables such as gender, age, race, and whether or not workers are unionized, are more important determinants of the levels of employment and wages than are the levels of education.”

David Howell, professor at Milano The New School for Management and Urban Policy, observes, “In short, employers in the 1980s responded to increased competitive pressures by taking a low-road human resource strategy, one aimed above all at reducing current labor costs…In a great many industries, workers learned new skills to work with more advanced production technologies – but their higher productivity was not reflected in higher wages…In the 1980s, higher skills have simply not led to higher wages. In industry after industry, average educational attainment rose while wages fell.”

The disappearance of good-paying jobs has more to do with a decrease in collective bargaining (unionization) and anti-worker public policy initiatives rather than a lack of skills in the workforce.

Michael Handel, associate professor of sociology and Northeastern University, finds, “There is little evidence of absolute declines in cognitive or hard skills in the United States or generally poor performance relative to other advanced industrialized countries." (Annual Review of Sociology, Jan. 2003)

For Further Reading:
Bush’s Call For Job Training: Cruel Joke on Unemployed
Is There A Skills Crisis?
Worker Skills and Job Requirements: Is There a Mismatch?

Having It Both Ways

Republicans complain about Obama’s pump-priming: trying to get the economy moving forward with the only entity able to invest at this point – the government. They duplicitously complain that the taxpayers will end up paying for this. (Putting aside that this argument shows an obvious lack of understanding about investment and multiplier effects), this completely ignores the Republican’s own deficits that they’ve run up over the last three decades. This also completely disregards the fact that if the government were to do nothing: unemployment would be increasing even faster, more businesses would be failing or filing for bankruptcy, more people would be losing their jobs and filing for unemployment and in need of government aid for medical care – who do they think would be paying for these costs?

A Just Society

Some thoughts on wage equity, fairness, efficiency, and our societal structure during this period of budget cuts, cost-benefit analysis, and general search for cost efficiency:

I feel an honest day’s work deserves and honest day’s pay. Yet those with the most back-breaking, demeaning jobs are also paid the most demeaning wages. While those performing in the most reprehensible and unproductive ways (Citigroup, A.I.G., et al) are paid the most spectacular sums.

The wealthiest never have to worry about their health care. And they don't seem to realize the connection between their earnings and a healthy workforce. Single-payer or universal health care would allow a more healthy and productive workforce by enabling workers to see a doctor whenever they feel "under the weather," rather than struggling through illness, missing more work, and, in the end, losing more productivity than they otherwise would have. This would also help decrease the present astronomical cost of health care.

Next, we should strengthen Social Security, making it pay more of a livable stipend for retirees. This could be accomplished by removing the cap on the amount of income taxable for Social Security. Alongside this, we should reinvigorate the pension system as a supplement to Social Security. And, if workers chose, they can also put aside a percentage of their income in 401Ks. This would, no doubt, improve the stability of retirement for a majority of citizens. It would also permit many to retire sooner, allowing younger workers earlier entrance to decent paying jobs. This too would help cut costs. New workers are not paid as much as someone who has been on the job for thirty years.

Another easy cost-cutting measure is the removal of the bloated fringe benefits that now seem to come with every two-bit "management" position. Unless a person is on-call, needs to make communication every hour or so, needs to drive to various locations daily for their work, etc. – car and cell phone allowances are perks that could be immediately slashed from public and private budgets. Most working people already have a cell phone and a car. Those that drive occasionally can turn in an expense report for the miles of gas they use at those times. The same can be done when one makes a business call from their cell phone that is absolutely necessary.

We have deluded ourselves into the belief that we cannot get by without every pampering of modern-day society in every moment of our daily lives. Every manager, executive, council man, and the like, does not need a car allowance, an expense account, a business-paid cell phone, and on and on. This is terribly inefficient and encourages wastefulness. This is especially true in a country that preaches to the rest of the world about how cost-effective we are.

Next, there are managers and executives that are making five or more times as much as their underlings, usually simply because of seniority. Now, I agree seniority, time, and experience should count for something. But should they even make twice as much? The public sector seems to manage this somewhat well – because they have to directly answer to taxpayers. But the private sector is out of control (even though the public sector heavily supports them through exemptions, tax breaks, subsidies, etc.). What they add to the real economy in no way justifies their pay. How (by anyone thinking sanely) can millions of dollars in bonuses be given to the workers of a company that is essentially bankrupt (hello A.I.G.)? How is this justified?

The same can be said of most of the private sector which, unbeknownst to most citizens, is indirectly massively financially supported by taxpayers: oil companies, sports teams, the entertainment industry, Wall Street – to name a few.

We’ve essentially structured our own warped caste system here in America. The majority of workers – the 85 percent making under $100,000 – must continually pay more in health care costs or go without, take pay cuts or see no wage increase at all, and continually (due to our volatile economy) fear for the security of their job. Conversely, those at the top of the ladder are continually subsidized, given bonuses, bailed out, allowed to take huge pay-days (even when they oversee a fall in their company’s stock value), and make obscene amounts of money, that their workers (the ones actually allowing them to exist) can only dream of.

The solutions to this travesty are not complicated. It would involve the Masters of the Universe trimming back on their decadent lifestyles and redistributing some of the bounty, but since they also control governments and world markets, they will not allow this to happen. This is class warfare. Until people realize this and use their representative democracy to install politicians and policies that regulate and redistribute for a more equitable society, we will continue to see this volatile, topsy-turvy economy that benefits the few while punishing the rest.

Until we curb corporate greed, workers will be forced to make all the sacrifices and take all the hits. Until corporations are made to pay their fair share of taxes, workers will continue to bear the cost of a semblance of a just society. Until corporations are regulated in a manner consistent with our principles, they will continue to pillage and plunder, reaping all the rewards while leaving all their mistakes to be cleaned up by the taxpayers.

All Over The Spectrum

Fascism and Communism are at two different ends of the political spectrum. Those claiming that President Obama is a communist (extreme socialism) in one breath and a fascist (extreme conservatism) in the next are displaying their ignorance of this political science precept.

In its simplest form, the political spectrum looks something like this:

Communist ---- Liberal ---- Centrist ---- Conservative ---- Fascist

Also, fascism is primarily considered an alliance of state and corporate power – corporate governance (which seems to be the system the Republicans have being trying to construct for the last three decades). From someone who knew, Benito Mussolini stated, “Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.”

I, too, feel some of Obama’s policies – unquestioned, and apparently unlimited, aid for Wall Street while the auto industry must beg, plead, restructure contracts, and make cuts – are directly from the right-wing playbook and seem tilted in favor of rich capitalists. But would I label them fascist? No. George Bush’s many tax cuts for the wealthy, his allowance of self-regulation by big business, his numerous signing statements and assaults on the law, his use of torture, and his “you’re with us or you’re against us” attitude seem to fit much better with fascist tenets.

Would I label Obama's tax breaks for the middle-class, concern over the environment, aspiration for better health care, and desire for a more and equitable society as communist? No. These are all components of government’s role and a rightful attempt at resurrecting our tattered social contract.

Does Obama feel everything should be state-owned and also somehow corporate-owned? Does he believe government should be big and small at the same time? Does he believe in trickle-down economics while also believing in higher taxation and redistribution?

The right-wing needs to put a little more time and thought into these accusations they throw out so haphazardly. There needs to be some logical equivalence to their haranguing if they want to be taken seriously. Rather than just being seen as sore-losers ranting away with any allegation, and supposed slur, they can imagine. Better yet, they could actually develop a productive platform of their own from which to build the country, instead of just mudslinging all the time.

I know the Republicans are down-and-out, lacking any vision or new ideas, truly only care about the ultra-wealthy, and are willing to say anything unconstructive to smear their opponents…but can’t they at least have some consistency to their condemnation?

Down on the Farm

James Rowen, of the Political Environment, has the lastest on the disaster that is Pabst Farms in Oconomowoc.

For Further Reading:
Corporate Blackmail
Pabst Farms Mirage
Pabst Farms Pork

Death Trip

It's good to see Mayor Barrett opposing stimulus money being wasted on the sprawling suburban wastelands. Is this the DOT's idea of green stimulus? Investing the majority of the money on auto-centered development, while the city's infrastructure slowly continues to crumble? We need to amend the deferred investments in the city; to discourage sprawl and encourage high-density, walkable environments. There is no better place to start than the city.

"Is our children learning?"*

Stephen Colbert mocks the right-wing's disdain for education, textbooks, reading, learning, and thinking, in general.


* an actual quote from George W. Bush

Purchasing Power

Two informative pieces by Stacy Mitchell on buying locally and the cost to communities of business models practiced by corporations such as Wal Mart.

Seizing Ill-gotten Gains

An excellent proposal from Charles Intriago and Robert Butterworth.

Power to the People

Great article from Bob Herbert.

Equitable Development

Two excellent articles on economic development - what it should and should not be:

Big, Empty Boxes

Developing Jobs or Developing Real Estate?

Corporate Tax Game

This is an older, but good article from Business Week on corporate tax avoidance, and why corporations paying less leads to individuals paying more.

Soaking Sean

Olbermann challenges Hannity to actually back up his words. I'm sure there are plenty of people who would be willing to donate a few bucks to charity for the waterboarding of Sean Hannity. Hell, maybe this is our new stimulus plan - the weekly Hannity waterboarding fundraiser.

Knocking Napolitano

Another manufactured Faux News political storm...because the Republicans have nothing else to add to our public discourse. Who cares what Great Van Susteren, Faux News, Rush Limbaugh, or any of the other hacks think, especially when they're simply constructing falsehoods.

Karma

General Growth Properties business model is about saturating markets with subsidized and unnecessary developments, and they're tax cheats on top of that. Schadenfruede washes over me with the announcement of their failure.

Milwaukee Parks

Even though we've been starving our parks of funding and slowly diminishing their amenities, we've still got some of the best parks in the country.

Iran

This post (with reading material below) is meant, not to absolve Mahmoud Ahmadinejad from his delusional comments and periodic invective, but to inform that the history of U.S.-Iranian relations is more complex than its presented by the reflexive, anti-Iran politicians and pundits often frame the issue.

For Further Reading:
Military Action Against Iran
Revisiting Iran-Contra
The 1953 U.S. Backed Coup in Iran
The U.S. and Iran
The U.S. and Regime Change in Iran
U.S. Military Involvement in Iran
U.S./Iran Timeline
Win One For The Gipper

Whole Foods Paradox

It's nice to see Whole Foods generous spirit toward Bradford Beach here in Milwaukee. It would also be nice if they applied the same attitude towards their own workers.

Water & Sprawl

An excellent post by James Rowen of the Political Environment on Waukesha's thirst for Milwaukee's water and it's (apparently) never-ending appetite to sprawl.

Capital Gains Tax

From the Institute on Taxation & Economic Policy (ITEP).

Social Security Is Fine

From the Center on Budget & Policy Priorities (CBPP).

Taxes

Community columnist, for the Milwaukee Journal Sentinel, Matthew Gutierrez rambles on about decreasing property taxes by increasing other taxes.

Gutierrez feels, "Taxes should be increased on items that every Wisconsin resident spends money on," not just real estate. The perplexing thing here is that those other things already are taxed. We haves fees, the sales tax, sin taxes, the gas tax, and on and on. And, these taxes tend to take a larger portion of the non-wealthy's overall income - regressive taxes.

Gutierrez proposes a clothing tax. Again, this would only hurt those that he claims to want to help. The majority of homeowners would either pay more to clothe themselves, or they would have to go without replacing their clothing.

He then proposes raising taxes on gas and bus fare...we already do this. I agree gas taxes should be higher, to correctly cover the environmental costs and discourage sprawl. But raising bus fares primarily hurts, again, the non-wealthy. Similar arguments can be made against his call for an increased tax on food. It appears Mr. Gutierrez wants a tax on every single item in our society to discourage its use or to exclude it from those whom can afford it the least.

The reason the governor asks more from homeowners is because we allow him to ask less of corporations. There is a minimum of services we expect in Wisconsin, it's why we're a great state and beloved among so many of its residents and visitors, and that's why a certain tax level is needed to maintain our standard of living.

The best way to ensure fairness in the tax burden is to make sure we have plenty of auditors in the Commerce Department doing their job. Secondly, we need to remove the many exemptions and tax breaks which allow corporations to avoid so much of their tax responsibility.

It's The Environment, Stupid

Tom Brokaw has an op-ed in today’s New York Times. He basically makes the case for more regional provision of services as a cost-cutting measure during these tough times. This is not revolutionary nor is it a new proposal.

When discussing North and South Dakota’s 17 colleges and universities and why so many schools are unnecessary for such a small population he states, “They are a carry-over from the early 20th century when travel was more difficult and farm families wanted their children close by during harvest season.”

Both of these ideas - cheap travel and local farming - are two sides of the same coin, and two issues we need to address and think much more clearly about with regard to the environmental crisis we are facing.

Travel may be easier, but that is because it is heavily subsidized. We are encouraging environmental degradation with cheap fuel. Our jet-setting lifestyle is convenient for those who can afford it, yet this frivolously inefficient hyper-mobile culture is also destroying the planet.

Later Brokaw opines, “If this is a reset, it’s time to reorganize our state and local government structures for today’s realities rather than cling to the sensibilities of the 20th century.”

Today’s realities dictate that we concentrate more on local sustainability rather than global mobility. Certain places are naturally endowed to produce food and others have an abundance of natural resources. The last fifty years have seen a totally new development pattern – highways and exit ramp economies. We locate wherever we want regardless of the natural environment and then, because travel/shipping is cheap, we build and import whatever we need to make that place livable.

We dam and reroute rivers. We build over wetlands. We turn deserts into golf courses. We construct hundreds if not thousands of miles of irrigation systems and water supplies for farmlands and subdivisions that should never be.

I agree that service consolidation is an efficient idea. But we must also consider the environmental realities. We have built fantasy communities where they should have never been imagined – much of Arizona and Nevada comes to mind. Until we face the hard fact that some of these places are not sustainable and we come to grips with a more long-term, high-density lifestyle we’re really just spinning our wheels.

Facts and Figures

Courtesy of the Center on Budget and Policy Priorities:

Federal level:

Fewer than 3 in 1,000 estates in 2009 are expected to be subject to the estate tax.

About 11 percent of the federal budget in 2008, or $313 billion, supported programs that provide aid (other than health insurance or Social Security benefits) to individuals and families facing hardship.

Social Security provides benefits to 48 million Americans, with the average beneficiary receiving $10,500 per year. 10 million beneficiaries are adults below the age of 65, and 4 million are children. For one-third of the elderly, it provides nearly all of their income. Social Security is an extremely efficient program, with administrative costs equaling only 0.6 percent of retirement and survivors benefits.

State level:

Cash assistance to low-income individuals through Temporary Assistance to Needy Families (TANF) and some smaller programs, such as general assistance, makes up only a tiny share of state spending — about 1 percent or $13 billion.

Courtesy of the Wisconsin Legislative Fiscal Bureau:

The property tax is the largest source of combined state and local tax revenue in Wisconsin. It represents 28.1 percent of all municipal revenue.

In 2006 our property taxes per $1,000 of personal income ranked 9th, our property taxes per capita ranked 12th.

In 2007 residential property taxpayers accounted for 71 percent of total property tax collections, commercial property accounted for 21 percent. In 1970 residential accounted for 51 percent, while commercial accounted for 20 percent.

Tax Perspective

Here's a couple of interesting articles on taxes, money, debt, and the tax burden.

More Debt Bubbles

Richly Undeserved

Anti-Corporate Revolt

Thom Hartmann provides some historical information for all the Teabaggers out there. I thought it would be nice if they actually knew the historical circumstances they are supposedly drawing their inspiration from.

Auditors Wanted

Governor Doyle has been talking of cutting 32 full-time jobs at the Wisconsin Department of Revenue to deal with the state budget deficit. Unpaid taxes in Wisconsin are estimated at $1 billion (obviously part of the deficit problem). It seems we need those 32 employees, and could even hire more workers, to collect the owed taxes and to perform audits, making sure the state is getting the revenue it needs and verifying that everyone is paying their fair share.

Natural Law

Even the animals know taxes are for the good of all.

Shifting Tax Burden

How much of a tax burden do Wisconsin corporation's tax havens unfairly displace onto regular tax payers? $1,673,906,154

Bait and Switch

To paraphrase Dan Akroyd from a well-known SNL skit, "John, you ignorant slut." John Torinus, business-interest shill and Journal Sentinel "writer", spews forth yet another column of misinformation in his April 11th article, Cap-and-trade bill could devastate manufacturing. As usual, he derides anything regulatory toward business, and lectures about how cap-and-trade will be bad for business.

He is basically defending the do-nothing, status quo protecting, companies that have been too lazy and stupid to get their act together over these last few decades to address the sustainability and environmental challenges that are now at a breaking point.

David Yarnold, in an excellent commentary for McClatchy, discredits all of the lame excuses put forth by Torinus. All the proponents for doing nothing about carbon emissions incessantly scream about the cost and the (fictional) negative economic consequences. Strangely they never mention the negative economic consequences of destroying the planet. As Yarnold reports, the Department of Energy estimates a cap on carbon would cost just ten more cents a day. Roughly thirty-six dollars a year. A small price to pay to save the planet.

Torinus completely ignores that cap-and-trade could be an opportunity for Wisconsin's manufacturing capacity and comparative advantage, a chance to be leaders in the innovation and technology transformation to sustainable industries. This regulatory mandate alongside stimulus-bill infrastructure improvements (like light rail) are an opportunity for Wisconsin to lead in green-innovation, create living-wage jobs, protect the environment, and enable a favorable forward-thinking business environment for Wisconsin to grow and remain competitive into the future.

Energy is a pillar of modern society. It is a public good and should be a public utility. Otherwise, if it must remain in private hands (which have been unable to make advancements nor contain costs) the government should cap profits and rate increases substantially. (We have a hodge-podge system similar to this, but it works horribly and is inefficient.) Government could dictate an allowable profit margin while ensuring maintained infrastructure standards and quality service provision by the private provider.

Torinus then gives a woe-is-me for Serigraph, of which he is CEO, and the fictional costs they would have to endure if cap-and-trade were instituted. But maybe Torinus could use some of the money Serigraph is saving from not paying its fair share of taxes to cover those fictional costs.

He continues with the 'poor Serigraph' routine claiming they could not pass any additional cost onto their customers. But this is the cost of business, which is what business models take into consideration, and what managers are suppose to, well, manage. These considerations should be included in the real price of any service or product, rather than circumventing these costs onto the public through subsidies, exemptions, and loopholes, as is the typical route for most big businesses. Or is government supposed to do nothing, and benefit Serigraph, at the expense of the majority of citizens and the planet?

We're taught to believe that those with Ivy League degrees - John graduated from Yale - are incredibly smart, trained well, and can solve the tough questions our society faces. These are exactly the types of decisions (efficient and sustainable production methods) that CEOs should be making if they want to claim they are worth the millions of dollars they are paid. But, as always, it seems their solution is for government to change the rules for them, subsidize their continued misadventures, and allow these captains of industry to plunder and plod along.

Cap-and-trade will primarily induce sustainable efficiency. It will reward those companies which plan, innovate, and create. It will weed out the antiquated. The days of inefficient - economically, societally and environmentally - destructive business practices being allowed to continue to exist through subsidization and market manipulation is over.

Torinus also takes a jab at environmentalists, "Environmentalists assure us that the economic questions can be worked out. Not to worry." Somewhat reminiscent of how the CEOs and Wall Street executives assured us that they knew what they were doing and had conquered risk? Everything the business community claims to be, all the lofty jargon they emit, is false. Their emperor has no clothes. Thanks, John, but I think we'll listen to some entity other than the business community from now on.

He helps buttress his opposition's case by pointing out that the Midwest is 60 percent dependent on coal. What the hell have our politicians and captains of industry been doing these last thirty years? Then in an amazing show of inflexibility, obtuseness, and treachery, Torinus spouts off about the bogus "clean" coal. This is a finite, heavily-polluting resource. Torinus feels we are going to competitively move forward by investing in yesterday's energy source? And then, of course, he has to mention nuclear. But what do we do with that waste? The business community and their ilk seem to feel the solution to one problem (coal) is another problem (nuclear waste).

If a business can not get by without subsidization, the government manipulating the market in one's favor, exemptions, tax havens, or cooking the books, it should not be in business. We allow business to grow to enormous proportions, so enormous they're allowed to bet over fifty times their value. They are able to leverage billions and put whole communities and the economy in jeopardy. Businesses hire lawyers and buy politicians to write laws and devise tax breaks solidifying this privileged societal position.

It's time we actually have public policy for the public again, by following parameters constructed by government about what is best and how it will be accomplished. That is representative democracy.

For Further Reading:
Does Taxing Pollution Lead to Higher Prices and Lower Aggregate Output?
History of the U.S. Electric Power Industry
Jobs & The Environment: The Myth of a National Trade-Off
Regulation and Competitiveness

The Revolving Door Racket

Crony capitalism: exhibit A, exhibit B.

CEO Pay

Check out these ridiculous numbers.

Creative Snake Oil

Richard Florida has gained popularity and riches with his creative class hypothesis, even though it has been discredited. Let's stop printing and listening to what this huckster is peddling.

For Further Reading:
Creative Economists New Theory is Old News
Review of Florida's Creative Class
The Curse of the Creative Class
The Rise of the Creative Class
Who's Your Economist?

Unthinking Sheep

Where were all these sheep when Bush was spending the surplus he inherited and running up record deficits?

Tax Falsehood Rectification

Crooks and Liars encapsulates and corrects the Republican tax falsehoods.

Tin Foil Hat Time

The Republicans have become so irrelevant that they are now just fabricating to keep their party in the spotlight.

Arianna Huffington discusses the many Republican charades with Keith Olbermann. In his "Bushed" segment Olbermann then pleads for the Republicans to stop lying about taxes and the tax burden.

Ed Schultz delves into the Teabag theatrics beautifully in this piece (starts around 0:58). The second part of Ed's show - especially the "Psycho Talk" segment at 5:40 - on the same issue is also worth watching. [Another segment, in the second part, on the profits of the Hospital Corporation of America at 12:30 should also be viewed.] Jon Stewart parodies the Teabag debacle. Karl Frisch also weighs in on this topic. Art Levine has more on this faux grass roots Teabag fiasco and the absence of any mention of CEO pay and corporate tax avoidance within this 'we're mad as hell and we're not going to take it anymore' false consciousness.

Media Matters corrects the falsity of claims the Department of Homeland Security is targeting right-wingers. Olbermann also comments on this.

Eric Boehlert opines on the general paranoia of the right-wing.

Robert Parry writes about the right-wing and the media drive to destroy Obama.

City Attempting to Shaft Unionized Workers

Budget pressures may mean up to 1,400 job cuts, Barrett warns, by Larry Sandler, in the March 26, 2009 Milwaukee Journal-Sentinel, is not fully contextualized and seems to have the usual underlying tone from the media regarding workers in this country – take what you get and shut your mouth.

The article begins with doom and gloom reporting that up to 1,400 jobs may be cut from the city over the next four years. It then goes on to highlight factors weighing on the budget. Thereby setting the ominous scene for the article, implying that union workers must be insane to think their wages should at least keep up with inflation, especially during these tough times.

[Increasing taxes, removing exemptions, discontinuing business tax breaks, and other revenue-increasing options are not even mentioned in the article as a possible way to fill the budget gaps.]

Alderman Murphy and Mayor Barrett’s use of such words as - “astounded,” “unrealistic,” and “incredulous,” - regarding the contract demands is duplicitous and ridiculous. The contract in question (the old contract expired December 31, 2006) should have been resolved in 2007. The same time the aldermen were voting to give themselves and the mayor a raise. The article makes no mention of this hypocrisy.

When discussion about the aldermen’s contract (in negotiation back in 2007) began, the aldermen initially wanted a 12.3 percent increase over the 4-year term. Alderman Murphy referred to this as “fair compensation.” This is a 3 percent yearly raise. Inflation was 2.8 percent in 2007 and 3.8 percent in 2008. Is it wrong that workers are asking for their pay to keep up with inflation (which it seems the aldermen want for themselves)? Or do workers have to take pay cuts so that management can have their raises? City officials feel workers should receive no pension increase (the union is seeking a 2 percent increase) and a 2.5 percent yearly wage increase (7.5 total for the 3-year contract).

From a previous column of Sandler’s (Top cop’s pay closer to mayor’s), he notes, “The measure to increase elected officials' pay was approved, 10-4…That would raise the mayor's pay from $143,883 a year now to $147,336 next year and $158,665 in 2011. For most of the 15 aldermen, salaries would increase from $71,506 now to $73,222 in 2008 and $78,852 in their terms' last year. Pay for the council president would rise from $80,810 now to $82,749 next year and $89,112 three years later…Voting for the raises were council President Willie Hines Jr. and Aldermen Joe Davis Sr., Ashanti Hamilton, Robert Puente, Willie Wade, Jim Witkowiak, Terry Witkowski, Mike D'Amato, Robert Bauman and Murphy. Opposed were Bohl, Donovan, Dudzik and Zielinski.”

Sandler draws no connection nor discusses the flawed reasoning of city management in this matter. Why does management deserve a pay increase while city workers should go without?

The mayor’s pay initially increased 2.4 percent, but by 2011 it will have grown by 10.3 percent. The total percentage point increase over the life of the proposed 3-year contract for union members is 9.25 (as reported above, the City is only offering 7.5). What justifies this double-standard that city management can have their raises (on top of their salaries which are already nearly double the average unionized city worker), yet it is “unrealistic” for the workers to expect (near) the same?

How is it that the city has money for - or will create taxes to raise money for - TIDs, baseball stadiums, convention centers, motorcycle museums, private business parking garages, and a host of other private sector giveaways, yet they can’t find any money to pay city workers? Give me a break!

I hope the city workers remember the names of the alderman and council members who voted for their own raise but feel the workers shouldn’t get the same during the next election. I hope the city workers also remember Mayor Barrett and his unflinching contempt of city workers, in their want for a contract that keeps their pay in-step with inflation, during the next election. What kind of mayor and aldermen scorn their own workers, resist paying them, and simultaneously reward themselves?

Inflation & Valuations

I know people don't enjoy paying property taxes. But like any other investment or purchase, one must consider taxes (along with other expenses) when weighing the pros and cons of buying a property.

One factor that seems to slip most everyday homeowners' minds is inflation. This depreciates your home's value a few percentage points each year. Everything generally tends to cost slightly more each year. This process automatically lowers the values of properties. So even in the years when your property assessment valuation remained the same as previous years, you were actually losing money due to inflation. Some of this is offset during an appreciating market. But this can also be exacerbated during a downturn in the market, such as we're experiencing now.

Now one can always say, "I want the assessed value low so that my taxes are lower. I can always ask whatever I want, and get more than that, when and if I sell."

That is a bubble market mentality. "I can always get above the assessed value. Real estate doesn't depreciate." Savvy buyers, and those whom have been brought back to reality by our recent financial upheaval, would not pay a large amount above an assessed valuation - since it's based on sales of comparable properties. Hoping to pay a property tax amount below a property's fair share and then reaping large rewards later upon a sale is: 1) mostly a pipedream, 2) unfair to those paying their fair share, 3) hurtful to needed programs funded by property taxes, and 4) selfish.

Just something to think about as people complain about the [supposedly overly high] value of their properties. Do owners actually want to see their values decrease? It would be analogous to wanting your stocks to stay low in value (or decline) so you don't have to pay capital gains tax. Taxes are the price of civilization and we all need to be more aware of such when we make our investments and purchases...rather than complaining after we've overextended (bought too much house) ourselves.

For Further Reading:
Assessment v Property Tax
Tax Burden Shifting: Exemptions
Wisconsin Tax Truths in the Land of Tax Trickery

Communication Breakdown

While Journal Communications was downsizing it's staff (here and here), somehow it had to money to give bonuses to the CEO and four other top executives. Stay classy, JS.

Related: I'm starting a consulting firm specializing in firing costly workers. It seems that such business is booming the days, and it appears to be financially rewarding.

Grass Root Confusion

Stuart Varney, Faux News hack, works himself into quite an incensed state during this interview. The excuses, the attempts to put words into Steve Leser's mouth, the amnesia regarding Reagan and Bush I & II deficits, the continued lies about the Teabag spectacle being a grass roots uprising, blaming Obama for deficits (which is "pump priming," demand side spending necessary to jolt the economy back to life from the near-death experience of the Bush II years), and on and on.

I guess Varney can not tell the difference (since I'm sure he's never been involved in any type of activist project) between a movement started locally by people - what is usually meant as "grass roots" - and a movement dictated downward from right-wing Washington interest groups. Just because a few wingnuts latch on to the Teabag fiasco and have tea parties here and there does not make it a "grass roots" movement.

Grass roots start small and work their way to city halls, then to state capitols, then to Washington. They don't start with big names, think tanks, and large funding and work their down to people and localities.

Anti-Union Waukesha

Anti-union activities at Waukesha Electric.

Slashing Social Programs

There's plenty of money for bankers, Wall Street, and executive bonuses, but the poor need to "suck it up" and learn to do without. Disgraceful.

Tax Burden Illumination

Answers to Your Tax Day Questions.

Do the Rich Really Pay Over a Third of Their Income in Federal Income Taxes?

Guilded Age Taxation.

Is "Tax Day" Too Burdensome for The Rich?

Corporate Scofflaws

Two-thirds of corporations pay no taxes. We need to stop listening to the vested talking heads whom only report the marginal rates, while ignoring the effective tax rate (what they actually pay).

Mythical Excessive Litigation Claims

Todd Finkelmeyer of the Capital Times elaborates on a recent report discrediting the false claims (primarily by right-wingers) of excessive litigation.

CEO Pay Debate: Myths v Fact

Produced by The Institute for Policy Studies.

Crony Capitalism

I'm really tired of only hearing about price stability regarding the markets, our economy, and the Fed. The Fed has dual purposes; the other is full employment. Making sure those whom want to work are able to, is just as important, if not more, as monitoring the economy for possible price increases.

Thomas Palley expands on the Fed's brand of crony capitalism here.

This is an excellent piece by Robert Kuttner about Robert Rubin's involvement in the Wall Street takeover of our government.

Taxes: Our Friend. Republicans: Not.

Taxes, the perpetual Republican Boogey Man, supposedly hurt development and growth, or so their story goes. Yet, the post WWII period (primarily financed by government investment in employment and infrastructure - beginning in the mid 1930s and accelerating prior to WWII) until the early 1970s saw the highest growth rates the U.S has experienced. The paradoxical, as far as the "taxes hurt us" cabal is concerned, element to this is that during this period the U.S. also had it's highest marginal tax rates -- from around 63 percent in 1936 to 91 percent in 1963.

We've lived off the infrastructure built during this period, lessening inequality and creating a middle-class. But also, sadly, wringing every last bit of profit we could from it without making the necessary investments and improvements to maintain our standard of living. We spent less on our collective goods and services and allowed more and more of our profits to go to the bosses and the CEOs. Workers were producing more (and paying more in taxes) yet receiving less in services, and garnering less of the fruits of their productivity. All while watching the infrastructure - that made us so productive - crumble.

Beginning in the late 1970s and seeing it's full fruition with Ronald Reagan, a new individualist era of low taxes and uber free markets emerged. Since this, CEO pay is now roughly 400 times the average workers wage - in the 1970s it was only 40 times as much. Wages for the majority of workers have stagnated since then. Inequality has been steadily increasing. And, life, in general, has become much more volatile for the majority of wage-earners.

History seems to show us that taxes are good for everyone. With taxes at their highest, the economy was booming it's most. Business as well as workers benefited during this robust time.

The argument Republicans are trying to frame today - they would like us to believe it's about government spending badly, taxes being too high and hurting growth, and taxes generally inducing all-around inefficiencies - is really about who gains from productivity and what proportion. They want to make sure the "smart" guys, the Haves, concocting the lazy, usurious, corrupt money-making schemes (not the peon workers producing real things for the real economy) are the ones seeing all the gains and living a luxurious life-style.

The Republican platform represents and benefits the interests of roughly the highest earning 1 or 2 percent of the population. Their wish to kill the estate tax (which effects less than 1.2 percent of the population). Their obsession with continually lowering the capital gains tax (which effects only the top 5-10 percent of the populaton, the majority declaring capital gains). Issue after issue that they choose to fight over only matters to the most well-off among us.

Social Contract

Safety nets are a good thing.