Thursday, May 10, 2012

The big Walker "surplus" lie (Pt. 2)- ignoring Wisconsin's horrible economic stats

Now here's the second part, where I will explain the true faultiness of DOA Secretary Mike Huebsch's claims of a Walker budget "surplus." (check Part 1, where I concede that the tax revenues look good, but that the increase is far too fragile to claim the numbers will hold up for 2 more months, and the timing is sketchy if not downright cynical and desperate) .

Let's go with this Huebsch claim first
....the federal Bureau of Economic Analysis has issued data revisions that raised its estimates of personal income for Wisconsin. These revisions indicate that 2011 income growth was stronger than anticipated at the time of the February revenue estimates.
All I can figure that the "revision" Huebsch is referring to is the Personal Income report that was released on Monday, which showed Personal income up 0.9% for the first 3 months of 2012, and at a 3.65% rate for the year. This is barely above the LFB's February estimate of 3.5%, so that's hardly much of a revision, and certainly not worth any real change to your revenue estimates.

And more importantly, Wisconsin was DEAD LAST IN THE U.S. FOR INCOME GROWTH (see page 12) in the 4th Quarter of 2011. So who cares if U.S. personal income is going up if Wisconsin is falling behind that, because we're caring about Wisconsin state income, sales and corporate taxes, which are more likely to depend on local incomes instead of what's going on nationwide. So Huebsch is trying to use the Obama Recovery to cover for the failures in Fitzwalkerstan. I would characterize that as a COMPLETE FAIL.

The next Huebsch claim also tries to use U.S. trends to mask Wisconsin's reality.
Further, the federal Bureau of Labor Statistics has released its Quarterly Census of Employment and Wages. This reported stronger growth in employment for the third quarter of 2011 than previously estimated.
Well, it's certainly true that the U.S. economy grew quite a bit in the latter half of 2011, as 3rd Quarter jobs had slower but still steady growth, and then it picked up strongly in the last 3 months of the year. But the problem with applying that to Wisconsin is obvious- 3rd Quarter 2011 is when the bottom dropped out for the state's jobs, as you see the Walker jobs gap explode starting after Walker's budget became law on July 1.

Again, Huebsch is basing this rosy scenario on the increases shown by blue line, instead of using the reality in Wisconsin, which is shown by the plummeting red line. But as before, just because things are working under Obama doesn't mean "it's working" for Wisconsin under Walker, and it's pathetically cynical for Huebsch to ignore his administration's "worst in the nation" status for jobs.

So in order for you to buy that Wisconsin will run a budget surplus for the biennium over the next 14 months, you basically have to ignore the horrible economic performance of the state since Walker has taken office. Because it is dishonest for DOA Secretary Mike Huebsch to use strong national economic stats to pad numbers for Wisconsin when the Badger State has failed to reap the benefits of the nation's recovery over the last 16 months. Past is prologue here too, so why would you believe that Wisconsin would all of sudden start matching the U.S. under Walker when it has fallen miserably short as Walker's policies have taken effect?

And worst, they know better in the Governor's Office. but they assume the average citizen doesn't, and that they can release this tricked-up report close enough to the election that people won't be able to know the difference when they go to the polls. It's typically cynical Walker politics, and Exhibit A as to why he must go, because a politician that constantly tries to sneak something over on the public who pays his salary has lost the authority to govern.

Of course, the pro-Walker Journal-Sentinel takes the numbers at face value, which is exactly what scum like Walker and Huebsch are counting on. And the J-S especially should know better, because as James Rowen reminds us, Walker lied about his budget situation constantly in Milwaukee County for political gain, often overestimating revenues to make his budget balance, or creating fake budget crisies to force cuts that were never needed. This is no different, and as Peter Barca rightfully points out in the article, this "surplus" is an Administration release that's being done well ahead of anything the LFB will figure. Don't think for a second that's a coincidence, because the LFB can't "prove" the numbers to be lies until after the recall election comes, which allows RW radio to spread this lie further.

But people like me and you know better than to take souped-up numbers at face value, nor do we ignore the reality on the ground like the Walker Administration and the J-S do. If we play this right, we'll expose this fraud and expand Walker's already-monstrous credibility gap.

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