Saturday, September 30, 2017

Bad income and spending numbers indicate sluggish late Summer

Friday featured more US economic data that indicates we may have seen a late-Summer swoon, and that the 3.1% GDP growth for Q2 2017 won’t continue in Q3.
Personal income increased $28.6 billion (0.2 percent) in August according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $14.9 billion (0.1 percent) and personal consumption expenditures (PCE) increased $18.0 billion (0.1 percent).

Real DPI decreased 0.1 percent in August and Real PCE decreased 0.1 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent….

Real PCE spending in August decreased $8.4 billion due to a decrease of $20.2 billion in spending for goods that was partially offset by a $9.2 billion increase in spending for services (table 7). Within goods, spending on new motor vehicles was the leading contributor to the decrease. Within services, healthcare spending was a leading contributor to the increase.
That’s not good, as it made August the first month to have a real decline in both disposable incomes and spending since January 2016. In addition, both the June and July figures were revised down by small amounts, giving more evidence for an earlier observation I made that August and September may be a bit soft for the overall economy.

I still don’t think we are in recession or anything like that, and indeed some of these August and September figures could be held back a bit by hurricanes. But there are a couple of other statistics in this report that make these numbers concerning.

The inflation index that is part of the income and spending report was at its lowest level in nearly a year (1.4%). That isn’t going to last with oil prices on the rise in the last couple of weeks, which means spending and incomes have to pick up even more to keep pace.

The personal saving rate has consistently dropped in the last 2 years. It was at 3.6% in August and has been under 4% in each of the last 6 months. You’ve got to go back to early 2008 to see that, as the housing market was starting to implode and right before gas would spike past $4 a gallon that Summer due to a Wall Street bubble.

And while Donald Trump may be touting record highs in the S&P 500, Harvard’s Jeffrey Frankel sees warning signs abound, and is getting flashbacks to a decade ago. As Frankel explains on Econbrowser, there are several economic events that are in play which would give a serious jolt
· Bursting of stock market bubble. Major stock market indices hit new record highs this month (September 12), both in the United States and worldwide. Equity prices are even elevated relative to such benchmarks as earnings or dividends. Robert Shiller’s Cyclically Adjusted Price Earnings ratio is now above 30. The only times it has been this high were the peaks of 1929 and 2000, both of which were followed by stock market crashes.




· Bursting of bond market bubble. Alan Greenspan has suggested recently that the bond market is even more overvalued (by “irrational exuberance”) than the stock market. After all, yields on corporate or government bonds were on a downward trend from 1981 to 2016 and the market has grown accustomed to it. But, of course, interest rates can’t go much lower and it is to be expected that they will eventually rise. (worth noting, the 10-year note has gone from 2.07% to 2.33% in the last 3 weeks, and is up 10 basis points since Wednesday).

· What might be the catalyst to precipitate a crash in the stock market or bond market? One possible trigger could be an increase in inflation, causing an anticipation that the Fed will raise interest rates more aggressively than previously thought. The ECB and other major central banks also appear to be entering a tightening cycle….

The current risk-on situation is reminiscent of 2006 and early 2007, the last time the VIX [volatility index] was so low. Then too it wasn’t hard to draw up a list of possible sources of crises. One of the obvious risks on the list was a fall in housing prices in the US and UK, given that they were at record highs and were also very high relative to benchmarks such as rent. And yet the markets acted as if risk was low, driving the VIX and US treasury bill rates down, and stocks, junk bonds, and EM securities up.
I admit I’ve been wrong about the continued bull market and (now 8-year) economic expansion before, but I do see some data points that make me wonder how long the good times can (or should) last. And it’s not like there’s stable leadership in DC to right the ship or deal with things realistically if things do go wrong.

I’m not saying you need to put all your money under the mattress. I’m not doing that, (although like most people under 50, I don’t have much of a choice either). I’m just saying…

Friday, September 29, 2017

Pence comes to Wisconsin, proves every bit as dishonest and crooked as Walker

I usually roll my eyes and ignore what comes out of the tax-funded photo ops at campaign contributors that are part and parcel of today’s GOP. But I couldn’t pass up this whopper from the US’s Number 2 yesterday.
Vice President Mike Pence Thursday praised Gov. Scott Walker’s record on taxes as he touted the GOP’s efforts to overhaul the nation’s tax code, saying the model the guv created could be used at the national level.

“You’ve got a governor here who has cut taxes a bunch in Wisconsin and lots of economic growth has followed,” Pence told local business leaders, community officials and Wisconsin families at a stop in Waukesha this afternoon.

Pence, who was joined by Walker for a visit to welding and fabrication company Weldall Manufacturing Inc., was in Wisconsin to push the administration’s effort to overhaul the national tax code. He called the framework of the GOP package a “testament to the kind of policies that Gov. Walker and Wisconsin have been advocating.”
You sure you want the Wisconsin model, Mike? Let me introduce you to the Walker jobs gap, now at 127,000 jobs below the US rate.



For crying out loud Veep, look at how your own low-wage, lesser-educated state of Indiana has outpaced us (albeit with flattening after 2015), and the Hoosiers would have ran your ass out on a rail in 2016 if Trump didn’t get ordered to select you for VP. In fact, Walker's Wisconsin was 6th out of 7 Midwestern states for jobs in his first 6 years in office (Wisconsin is in red in this chart).



And it hasn't gotten any better for 2017. Wisconsin has fewer jobs now than it did in February, just lost 8,800 jobs last month, and has remained near the bottom for our region for jobs over the last 12 months.

Private sector job growth, Aug 2016-Aug 2017
U.S. +1.71%
Minn +1.62%
Iowa +1.46%
Ohio +1.30%
Mich +1.26%
Ind. +0.96%
Wis. +0.80%
Ill. +0.51%

Total job growth
Minn +1.52%
U.S. +1.45%
Mich +1.40%
Iowa +1.09%
Ohio +1.04%
Ind. +1.02%
Wis. +0.65%
Ill. +0.40%

So Mr. Vice-President, if you want a Midwestern state that the US should model, looks like Minnesota might be the one you want. Gotta warn you though, they raised taxes on the rich, raised the minimum wage, invest in public schools and took the Medicaid expansion. In other words, they did the opposite of Scott Walker's Wisconsin.

Oh, and if you're talking about "lots of economic growth" in recent years, I think the words you are looking for are “THANKS OBAMA!”. Not that we’d ever hear that fact from lying fake fundies like Walker and Pence, but that’s the reality.

Know what else is a reality? That manufacturer where you and Walker held your photo op just happens to include employees that have given over $110,000 to Republicans over the years, including more than $55,000 to Walker (most of which came from the Bahl family that runs Weldall). And I’m sure more has been given to GOP Congressmen and national groups by these guys, and even more has been promised to be given out in the future in exchange for more GOP "help".

But I’m those details are just a coincidence, and you guys totally chose Weldall on their merits.


I am so sick of the GOP’s crooked, shameless, fact-free cynicism. Why the media still puts up with this bullcrap is beyond me.

Thursday, September 28, 2017

GOP tax reform- Rich get a lot, the rest of us may get jacked

I wanted to touch on a few items in the recently-announced framework for tax "reform" from President Trump and the GOP Congress. And I want to start with explaining where things are, and where this might take us.

Today, different tax brackets kick in at a number of income levels, ranging from 10% on the first $9,325 of taxable income, to the 39.6% bracket that kicks in at $418,400 (this chart from the Tax Foundation gives a good explanation of where the 7 tax rates take effect). If you look at the 9-page outline released by the Trump Administration and the GOP Congress, the idea is to lower the amount of tax brackets, and the 39.6% top rate will go down.

Under current law, taxable income is subject to seven tax brackets. The framework aims to consolidate the current seven tax brackets into three brackets of 12%, 25% and 35%.
The framework gives no information at what income levels the 3 brackets would kick in, and gives a vague reference of “a more accurate measure of inflation” being a means of indexing the cutoff points for those brackets. Neither of those things are very reassuring.

There does seem to be some attempt to spread around the tax cut to non-rich Americans, in the form of a higher standard deduction and an expansion of the child tax credit. There also is reference to “a non-refundable credit of $500 for non-child dependents to help defray the cost of caring for other dependents,” which seems to lean toward helping individual take care of other family members.

But then you see typical GOP garbage like the removal of the estate tax, and you realize that it is mere window dressing. As has been mentioned before, you need to be inheriting a shitload in order to even qualify for the estate tax (the 2017 limit is just under $5.5 million a person, or $11 million for a couple). This means that the estate tax effects around 1 in 500 Americans, and when you consider that this deals with assets above that $11 million that have never been “cashed in” (and forced to pay tax when sold), that sure sounds like special interest bullshit to me.

Another awful about this tax “reform” package is the proposed repeal of the federal Alternative Minimum Tax. The AMT is estimated (in this great table by the Tax Policy Center) to have been paid by less than 3% of US tax units (generally individual households) in 2016. However, richer tax units are much more likely to pay the AMT than the typical American.



Likelihood of paying AMT vs others in US
$200K-$500K income- 10 times more likely
$500K-$1mil income-over 22 times more likely (!)
Over $1 mil income- 6.9 times more likely

So AMT repeal is an obvious giveaway to richer that very few everyday people will be able to take advantage of. Add that to the drop in rates for the rich and corporate, and this package is bad enough. With our massive and growing inequality, as well as the inevitable increase in the national debt and deficit leading to cuts in some other types of programs (which is the intelligence of the GOP’s design here), I have no reason to think these plans would lead will be any kind of sustainable, helpful growth for the overwhelming majority of Americans.

Then throw in the proposed cut of the corporate tax rate from 35% to 20%. Not that most corporations pay that amount anyway, but there's no word on what kind of loopholes will be closed in the corporate tax structure to keep this from being anything but a disgusting handout to businesses that don't need it. In addition, lowering the corporate rate to such a low level would seem to encourage even more reckless behavior from these soulless organizations while discouraging the paying of wages and hiring of workers as a means of growing a business.

The real question becomes “Will there be ANYTHING thayt helps those of us outside of the elite Club?” And what are the “closed loopholes” that could help pay for the giveaways in this “reform”? The Trump/GOP document deflects from this question, with this paragraph.
In order to simplify the tax code, the framework eliminates most itemized deductions, but retains tax incentive for home mortgage interest and charitable contributions. These tax benefits help accomplish important goals that strengthen civil society, as opposed to dependence on government: homeownership and charitable giving.
I’ll ignore the bullshit, loaded-language statement about “dependence” at the end, and go into what would likely happen to your taxes as a result. The most popular deduction that isn't mentioned in the Trump-GOP document, and therefore is likely on the chopping block, is the deduction many take for State and Local Taxes (SALT). This map from the Tax Foundation explains who uses the highest amount of SALT deductions, and you can see southern Wisconsin is among the darker shades on the map, showing higher deductions.



Getting rid of SALT means a sizable tax increase if you are a homeowner in Wisconsin, because the tax break you get from property taxes is GONE. In addition, if you are a higher-end earner but outside of the AMT (i.e., a typical upper middle-class Wisconsinite), the thousands you pay in state income taxes also won’t be written off at the federal level. This type of screw job is the way the Trump Admin and the GOPs can come close to not blowing the deficit sky-high with their other giveaways to the rich.

On a side note, as a student loan payer, I wonder if that writeoff of interest is going away. Me and my wife make enough to put us near the top limit of that writeoff as it is (we only can write off part of it), but it’s still a useful item that reduces our taxes by around $100-$200 each year. And I bet a lot of younger people just starting out get an even bigger benefit from the student loan interest deduction, since loans are bigger these days and their incomes are general smaller. If that goes away, they should be PISSED.

“But Jake, the Trump/GOP plan also doubles the standard deduction to $24,000 for married couples and $12,000 for single filers.” Well that’s generally nice if you’re at a lower level of income and/or don’t do things require much in terms of deductions (i.e., renter without much in investments or interest payments). But this doesn’t matter if you still get more deductions from mortgage interest and/or charitable contributions and/or whatever else is left, since you’d take the higher amount anyway.

There are also other economic side effects at risk, on top of the obvious point of richer people and corporations hoarding more of their gains. If more people are pushed into taking the standard deduction through tax “reform”, then it could be a strong disincentive for people to buy houses or live in certain communities because there is no tax benefit to paying property taxes. This is something that Madison Mayor Paul Soglin recently warned about, as fewer people wanting to own homes could depress property values, and raise tax rates for all people in the City.

Since 1913, taxpayers have been able to deduct state and local taxes from their federal income filings. It’s seen as an indirect federal subsidy to cities because it enables them to collect more from property taxes. Without it, Soglin predicts “tremendous pressure” to cut city services. A majority of taxpayers do not itemize their taxes, opting for the standard deduction. So proponents of eliminating the SALT deduction say it primarily benefits higher earners who are more likely to itemize. But Soglin counters that it will leave local governments paying for tax cuts for corporations and billionaires. If the mortgage interest deduction is eliminated, too, he says it’s a double-whammy to the city’s coffers.

“It would significantly lower the value of single, owner-occupied family residences which, in turn, means we would have to increase the mill rate to maintain existing revenues,” Soglin says, adding that homeowners would have to pay an average $3,700 more in federal income taxes.

“This is so important and nobody is talking about it. This may be one of the biggest ripoffs in the country’s history,” Soglin says. “Why don’t we have members of Congress reporting to their constituents what they are contemplating here? Why isn’t the governor explaining the enormous impact this would have on the state?”
Well Mayor, that’s because Republicans in Congress don’t give a fuck about anyone that’s not a lobbyist or a donor, which most homeowners aren’t.

There are other policy and economic complications. Would the removal of the deduction for high out-of-pocket costs for medical expenses mean some people don’t get the care they need (or end up taking a double-whammy because they don’t get the deduction for those extra costs)? And what happens if Congress actually does deform health care and makes more people uninsured and/or pay more out of pocket? In addition, will some people avoid furthering their education if there is no writeoff for either the tuition costs or student loan interest, leading to a lower-skilled work force?

This is why this tax package will definitely be a “devil in the details” situation, since we don’t know what the cliffs are for the new tax brackets and exactly which deductions stay and which will go. Since there is no bill spelling this out and few other specifics, it will be months before these tax items are even attempted to being voted on. But if the framework that was released is any indication, you can bet it’ll be a regressive pile of trash that won’t help anyone except the donor class and other plutocrats. Which is the point, of course.

EDIT- Not a good sign here.

Wednesday, September 27, 2017

GOP shell game may lower property taxes, but raises the rest of them


Apparently what the Wisconsin GOP and Governor Walker are going to try to sell to the state’s voters is a line of “lower property taxes and more money for schools”, if we’re to believe the latest bit of propaganda they’re trying to throw out over the radio waves.

While the new money for schools is nice, let’s not forget that all of that increase is based on per-pupil aid for this year, and given that more money is being funneled away from schools and into vouchers, the overall increase for many schools won’t even keep up for inflation (and that’s after several years of cuts, let me remind you).

Also not mentioned in those ads is that much of the “lower property taxes” are due to WisGOP decisions to spend more of our tax dollars to make that property tax cut happen.

Change in GPR to lower property taxes, FY 2019 vs FY 2015
School Levy Credit +$192.6 million
Lottery payment to retailers +$40.0 million
Forestry tax +$91.6 million
TOTAL COST OF PROP TAX CUTS $324.2 MILLION

This is extra state spending with no increased tax dollars set aside to pay for these gimmicks. It just takes from the current pot of available money, and relies on adding revenues from continual economic and population growth. If we get hit with a recession or some other needed spending ends up increasing (like if Congress screws over the states with budget cuts), then there’s even less money to deal with it because we’re blowing all these funds to give the GOP a lame talking point.

These figures aren’t including the $406 million a year we give to Tech Colleges to reduce property taxes, and the $74.4 million we’ll be sending to municipalities to make up for the cut that GOPs put on the personal property tax for businesses. Add those costs to the list, and we’re spending over $800 million in Fiscal Year 2019 alone.

Think we could fix a few highways or hire a few teachers for our schools with that $800 million? Or maybe give a bump in shared revenues to local communities and keep them from reducing services or to give them a better chance of improving social goods like parks and transit. And you could still have property tax limits to hold those homeowner bills in check.

These WisGOP gimmicks have directly led to numerous additional fees and local taxes that have been put in Wisconsin communities in recent years. The most obvious one has been the wheel tax, which is tacked onto your state registration fee for vehicles you own, and has become an increasingly common source of revenue for communities so they can fix roads and stay under the state property tax caps.

We’ve also seen Wisconsin counties that previously didn’t have a 0.5% sales tax have to give in and add it. Kewaunee County added a sales tax this April, Brown County will do so starting in January, and Calumet County’s Board just approved of one this week to start in April 2018. In addition, Manitowoc County is considering putting in a 0.5% sales tax for next year, and Racine County may well add one to help defray the costs of the Fox-con.

Even worse, those extra sales taxes and wheel taxes aren’t items that are generally written off on your federal taxes, while property taxes are (well, at least until Trump and the GOP Congress screws us out of the deduction as part of “tax reform”). So while lower property taxes might make for a nice headline in December, it’ll reduce your tax refund later that winter.



Walker and the WisGOPs are hoping that the average rube in Wisconsin won’t notice this shell game that is being played. But good luck with that when everyday Wisconsinites end up paying more to get their license plates or buy something at their stores (you in the 920 are especially going to feel this in 2018). On top of that, you’ll definitely feel the continued deterioration of the roads and the lessening of local services.

And when those things happen, think back to the hundreds of millions of dollars that the Wisconsin GOP is throwing out the window just to say “Your property taxes are $1 lower than 4 years ago.” Then get very angry that these people are that careless and cheap.

WisGOP anti-Milwaukee mentality is killing jobs and services

This morning, the Bureau of Labor Statistics released its jobs report for all metropolitan areas in the US. And Wisconsin’s largest metro area stood out in a very bad way.
The largest over-the-year decrease in employment occurred in Virginia Beach-Norfolk-Newport News, VA-NC (-4,500), followed by Milwaukee-Waukesha-West Allis, WI (-3,100), and Youngstown-Warren-Boardman, OH-PA (-2,100). The largest over-the-year percentage decrease in employment occurred in Beckley, WV (-3.1 percent), followed by Michigan City-La Porte, IN (-2.6 percent), and Cape Girardeau, MO-IL (-2.5 percent).

Over the year, nonfarm employment rose in 48 of the 51 metropolitan areas with a 2010 Census population of 1 million or more and fell in 3. The largest over-the-year percentage increases in employment in these large metropolitan areas occurred in Raleigh, NC (+3.5 percent), Orlando-Kissimmee-Sanford, FL (+3.3 percent), and Atlanta-Sandy Springs-Roswell, GA, and Las Vegas-Henderson-Paradise, NV (+3.2 percent each). The over-the-year percentage decreases occurred in Virginia Beach-Norfolk-Newport News, VA-NC (-0.6 percent), Milwaukee-Waukesha-West Allis, WI (-0.4 percent), and Rochester, NY (-0.3 percent).

That’s horrid enough, but take a look at how Milwaukee trails other Midwestern metros over the last 12 months. And take a look who’s Number 1!

Detroit +44,900 (+2.3%)
Twin Cities, MN +44,800 (+2.3%)
Cincinnati +29,900 (+2.8%)
Chicago +24,700 (+0.5%)
Columbus, OH +22,300 (+2.1%)
Indianapolis +19,200 (+1.8%)
Des Moines +11,300 (+3.1%)
Cleveland +9,700
Milwaukee -3,100 (-0.4%)

In addition, the Milwaukee area’s employment began flattening out in 2016 after a good runup in the previous 5 years, so the metro area is only 2,100 jobs ahead of where it was at this time 2 years ago.



So how is voting for race-baiting GOPs that defund and bad-mouth Milwaukee working out for you in the burbs? Talent doesn’t want relocate and live in a place with such a regressive reputation (both at the state and suburban levels), so your wages and job opportunities suck too. Add in vouchers stealing money from your local school districts, and the advantages you had of living a distance from your job are quickly going away.

But the MMAC and other Milwaukee corporate oligarchs continue to back the GOP that has been in charge of the state over the last 6 years, and want to double down on cronyist giveaways and wage-suppressing BS? It proves again that Tim Sheehy and his old boys’ club don’t give a fuck about improving the economy of the state’s largest metro area- they just want to grab more for themselves.

Even worse, the suburban-based, anti-Milwaukee GOP majority at the Capitol have imposed fiscal handcuffs off of the City because of ….self-serving arrogance and/or racism? (it sure isn’t improving outcomes) This squeezes the city into the horrible position of having to cut services in a time when they need them more than ever, because they aren't allowed to tax enough to provide the funding for the services a high-density city requires (especially one in a metro area that has such economic segregation with high pockets of poverty concentrated in the main city).

This is manifested in Mayor Tom Barrett's newly-released 2018 City budget, as Urban Milwaukee’s Jeremy Jannene reports.
The mayor, after stating that this was the most difficult budget his office has had to prepare, reiterated his recent campaign around “the Milwaukee dividend.” He noted that while state revenue has seen a 59 percent increase in the past 14 years in a row (sic) , the city continues to receive less back from the state than it contributes. The gap, which has grown tremendously in recent years, now leaves the city short tens of millions of dollars a year in revenue it previously received as part of the state shared revenue formula. The state shared revenue formula is used to return income and sales taxes collected by the state to the municipalities in which they’re generated. (it’s also supposed to try to keep certain areas of the state from falling behind others because it lacks tax base or population).

The budget, which reduces the number of police officers by 33 and fire fighters by 75, would not result in any layoffs. Illustrating the stark challenges the city faces in funding its public safety needs, the mayor’s budget anticipates raising $273.5 million from the property tax levy, while spending $293.4 million directly on the Milwaukee Police Department. The Milwaukee Police Department currently has a sworn strength of 1,888.

A big portion of the budget gap is caused by the need to increase the annual pension contribution. The city is required to keep the pension fully funded, and due to an actuarial change, will need to contribute an additional $22 million this year. In his address Barrett noted that 90 percent of those increased funds will go towards contributions for public safety employees, who are exempt from Act 10. So while the budget cuts the number of police and fire fighters, the amount the city is spending on the two departments will actually increase. The total pension contribution is $83 million.
The exemptions from Act 10 for cops and fire fighters were a political move by Scott Walker and Wisconsin GOP in exchange for their endorsements, and on top of those extra costs and the state’s reductions in shared revenue to Milwaukee have been combined with WisGOP’s tight property tax limits. Those limits are a direct result of WisGOPs wanting to sucker voters with a “lower property taxes” talking point regardless of the consequences of such a mentality.

So you end up with charts on Milwaukee's taxes and spending that look like this.



However, Milwaukee County is the largest attractor of tourist dollars out of any county in Wisconsin, so maybe we should allow the city that gets those tourists to SE Wisconsin be allowed to retain some of those dollars? That’s what Mayor Tom Barrett has asked for numerous times over the last year, as a means of maintaining quality of life in the City and easing the City’s budget issues. He repeated that request yesterday, in reaction to the public blowback to the proposed budget cuts.
“I said yesterday that there is a big difference between hope and reality and the reality is that we are not getting any additional state shared revenues, we have an $80 million employer pension obligation mainly for police and fire, and because of the lack of increases in state shared revenue there is too much pressure on the property tax.

“I would ask the critics to step up and take a long hard look at the City’s revenue structure. We are, as the Milwaukee Public Policy Forum has stated, “between a rock and a hard place.” There is no question that in order to address our current and future public safety needs the City must have a new source of revenue.

“Make your voices heard in Madison. Ask the legislature and the Governor to let Milwaukee voters decide whether or not to enact a half cents public safety sales tax. The citizens of Milwaukee should have their voices heard.
So what’s the reaction of Wisconsin Republicans to the bad jobs numbers and terrible fiscal squeeze that Milwaukee is in? The equivalent of a bully grabbing a smaller kid’s hands, whacking them in the face, and saying “Stop hitting yourself!” Read this piece of crap from Brookfield State Sen. (and US Senate candidate) Leah Vukmir.
“Mayor Barrett wants us to believe the only way we can keep Milwaukee safe is to raise taxes. It’s a lie. We’ve proven at the state level that you can both fund your priorities and keep taxes low. Leaving the city in a risky position by reducing the number of firefighters in addition to police officers is baffling.

“Unfortunately, Mayor Barrett’s budget priorities lack all common sense. When criminal behavior is on the rise and the carjacking epidemic continues to spread, he intends to cut police positions. The absurdity of this proposal is dumbfounding. In simple terms, Mayor Barrett will gamble with your safety in order to play politics. Inexcusable.
Vukmir follows with talk radio-based whining about the City’s streetcar project The streetcar costs very few City tax dollars for 2018 and doesn’t get a dime of state money, but the ALEC Queen somehow claims that it sucks up money that could be used for more police officers.

But if State Sen. Vukmir is so concerned about Milwaukee’s lack of officers, then she’ll be glad to sponsor a bill that would allow City voters to choose whether they want a sales tax that can ONLY be used for police and fire fighters, right? OF COURSE NOT! Because why would a suburba-GOP ever want to pay a higher tax into the City when they can pay nothing and still take advantage of the entertainment, careers and suburban hotel stays that result from Milwaukee? Instead, it’s much politically easier for 262 types to see Milwaukee decline, which allows them distract from the stagnant life that’s going on in their own soulless cesspool of mediocre whiteness.

As long as that mentality dominates suburban Milwaukee and as long as their representatives run things at the Capitol, then the Milwaukee metro and the State of Wisconsin will continue to be left behind. So can you 'burbans recognize that we are all tied together in this thing, drop the superiority act (you’re nothing special, anyway), do something constructive beyond your own front yard, and work together as a REGION to stop the slide?

Thanks in advance from someone who lives in the one area that’s keeping this state from going under (Madison, +2,800 jobs last 12 months and 11% job growth since 2011).

Tuesday, September 26, 2017

UW voter ID study + Russian hack attempts = serious Nov 2016 sketchiness

Wanted to drop in a couple of tweeted out findings from the recently-released study on voter ID and its influence on turnout in Wisconsin from UW Professor Kenneth Mayer.





Which of course, is the intelligence of the design of the voter-suppression plans of Scott Walker and the Wisconsin GOP. Those measures were targeted to casual voters with pro-Dem demographics (people of color, younger voters, and urban voters), and as I've pointed out in the past, they worked like a charm in reducing the amount of votes coming from key Dem cities.



A 2% drop in overall turnout would mean 60,000 fewer votes in Wisconsin. Add in the fact that the steeper dropoffs were in areas that Hillary Clinton and other Dems win by a 2-to-1 margin or more, that proved decisive in allowing Trump to win the state by 22,000 votes.

Oh, and we got an update from the US Department of Homeland Security at today's meeting of the Wisconsin Elections Commission.



That actually sounds worse, because why would the Russians be poking around looking for unemployment or worker training information? That almost seems like the unemployed and marginally employed were targeted for some reason. Is it because it is easier to screw those people because they have fewer options and are more likely to lack needed ID?

And let's also note this statement, in light of Gov Walker's veto last week of 5 positions at the Elections Commission in this budget.



Gee, it's almost like the Walker Administration wants the Elections Commission to be underfunded and more susceptible to hacking and Election Day confusion in 2018. Almost....

Something stinks really bad here.

Oh, and now here's another update from the US Dept of Homeland Security. Apparently the Russians' attempts didn't stop at DWD in Wisconsin.

New sales tax and tax-funded buildings already in Foxconn pipeline

For the second time in less than a week, The Wheeler Report just happened to have two different stories in the same local paper show up next to each other on their feed today which underlined the same point. The Fox-con is going to cost the people of this state a lot more than $3 billion, and even the local taxpayers in Racine County (where the facility would likely be…if it ever happens) could end up worse off as a result of this scam.

The first item in the Racine Journal-Times follows up from something we discussed last week, where a small amount of Foxconn employees are already doing planning work near the site (meaning incentives will be getting paid to Foxconn in this budget…and there’s nothing set aside in the budget to pay for it). They’re being sited at the local tech college in Sturtevant, and that school is preparing to give Foxconn another taxpayer-funded bit of assistance in the near future.
Gateway Technical College is preparing for a $5 million-plus expansion of the SC Johnson iMET Center so as to be able to train the employees whom a local Foxconn manufacturing plant would need.

Gateway’s Board of Trustees voted unanimously Thursday to apply for a $5 million state grant for the expansion, as authorized in the $3 billion Foxconn incentives bill Gov. Scott Walker signed on Sept. 18 at the iMET Center, 2320 Renaissance Blvd…

The envisioned iMET project would add roughly 28,000 square feet to iMET’s existing 58,500 square feet, or an expansion by slightly less than half. Like the existing building, the new area would be two stories tall and lie mostly to the west, with a smaller new area and a new entrance to the north, Whyte said.

The board’s resolution to apply for the expansion grant is going to the Wisconsin Technical College System Board, which next meets in November, Whyte said — although he wasn’t sure if that body must approve the expansion plan or not.
I keep hearing in these articles that this $5 million grant is part of the Foxconn package, but all I can find is $20 million set aside in 2019 to go to the Department of Workforce Development. Even worse, there doesn’t seem to be any requirement for that $20 million to be added to the Department of Workforce Development’s budget, which means that some other program or benefits could be cut to pay for it (given the nearly $1 billion structural budget deficit coming up, this is a very real possibility).

Funny how this reality doesn’t seem to be mentioned in the article.,, and neither is the reality that Gateway Tech likely has to hire more staff as a result of this, and has no extra money set aside to pay for it. Oh, and did people in Racine County know that they’d be seeing this headline in their paper 1 week after the Fox-con was signed into law? “Racine County sales tax increase considered in the wake of Foxconn.”
County officials remained mum Monday on a potential sales tax increase that could be enacted should Racine County be chosen as the site for the Foxconn plant.

The Foxconn bill, which was signed by Gov. Scott Walker on Sept. 18 in Sturtevant, contains verbiage granting the county that lands Foxconn the ability to pass an ordinance increasing the county sales tax by up to 0.5 percent.

The purpose of this increase would be “directly reducing the property tax levy,” according to the bill….

No official word on a location has been made, although Racine County, Mount Pleasant, Sturtevant and Racine Water Utility boards have met in closed session meetings to discuss a potential major development project.

Racine County officials on Monday were reluctant to give any details regarding the sales tax bill’s wording and intent, stating it is too early in the process for a discussion to occur.
Surrrre, a sales tax will be done to reduce the property tax. In reality, all a sales tax would do is try to prevent huge INcreases in property taxes in two ways.
It could cushion the problem of paying for extra costs in Racine and the rest of the county that will be a result of building all of this extra infrastructure to accommodate Foxconn (another nice subsidy for the company, by the way). And using sales tax funds to do so would keep these costs away from the strict levy limits that have been imposed on local governments by Scott Walker and the GOP-posers at the Capitol.
A sales tax also means that local property taxpayers may have less of a chance of paying more due to the fact that the Foxconn plant would be having its property taxes written off for up to 30 years under this bill.
Of course, that’ll come as little consolation for the locals who have been one of the few counties to resist instilling a 0.5% sales tax (remember, voters in this area recalled a State Senator for backing the Miller Park tax in 1996, which is 5 times less). And you can bet most of those people that will be paying the extra sales tax won’t be working at Foxconn, and won’t be getting much in terms of extra business due to the Fox-con.

So already, it doesn’t seem to be a good end of the Fox-con bargain if you actually live in Race-seen County. But if the people that area don’t want to pay an extra sales tax in addition to the general tax dollars that’ll be sent to directly benefit this boondoggle, and they don't want to be left on the hook for higher property taxes due to TIFs and other infrastructure. then maybe they should stop voting for Republicans like Robbin’ Vos, Walker, Wangaard, and Ryan. Just a thought.

Monday, September 25, 2017

Storms and slowdown in wages = late Summer economic slowdown

While the overall fundamentals of the economy seem to be in a good place, with 4.4% unemployment, job growth continuing and the stock market near record highs, there have been some hints in September that maybe things aren't going to end up as swell economically as we thought a month ago.

Take a look at the Atlanta Federal Reserve, who has been consistently revising down their GDP growth estimates for the 3rd Quarter in recent weeks. The Atlanta Fed now says growth for this quarter will be 2.2% compared to the high 3’s a month ago.



Yes, some of that slowdown is likely due to Hurricanes Harvey and Irma, as both have caused notable spikes in unemployment claims for Texas and Florida in recent weeks (Florida’s total claims doubled last week, according to the most recent report from the Department of Labor). On a side note, it does not look like Puerto Rico or the US Virgin Islands are included in the US GDP numbers, so the devastation in those American territories won't be seen in our stats. So while the storms should dampen things in this quarter, it seems unlikely cause much damage much beyond that, based on the experience of other calamities in the last 12 years. However, that might also mean that September’s jobs and spending figures could trend down.
"If the past is any guide, Q3 real GDP could be marginally weaker than expected due to the offline effects of the storm and the fact that Houston accounts for 3.2 percent of U.S. GDP, in addition to being a key energy and shipping hub," Joe Quinlan, managing director and chief market strategist at U.S. Trust, Bank of America Private Wealth Management, wrote in a research note Thursday. "To this point, in the weeks following Hurricanes Katrina and Sandy, unemployment claims spiked, industrial production dropped and higher gasoline prices dampened real personal consumption expenditures."

A common narrative in the immediate aftermath of Harvey's landfall was that the storm would wreak havoc on local communities but wouldn't materially hold down the broader U.S. economy. But as the days went on and the full extent of its damage was assessed, outlooks and predictions began to darken.

"The storm's effect on U.S. GDP is likely to be substantial, but substantial when it comes to large storms is measured in tenths of a percent rather than full percentage points," a team of researchers at UBS wrote in a research note last week. "The fall in U.S. GDP comes from an outright decline in employment as well as a curtailment of exports, especially exports of petroleum products."

In a more recent note published Thursday, UBS researchers warned that "Harvey's economic implications point to more downside risk to payrolls and near-term GDP growth than initially anticipated."
Here’s the worrysome part- we already were seeing some disappointing figures before the hurricanes hit. A couple of weeks ago, we had a subpar jobs report, with only 156,000 jobs added, previous months revised down by 41,000, and unemployment ticking up by 0.1%.

The jobs figure could be a late-summer blip, but other economic reports also gave some signs of softening. That same report said average hourly earnings were only up 0.1% in August and a lower work week made weekly wages drop by 0.2%. Then inflation figures came out last week and said that prices went up by 0.4%. That was the largest increase since January, largely due to sizable increases in the price of gasoline and shelter, and when combined with the wage numbers, it meant that real weekly wages fell by 0.6% in August. The rising inflation means that the increase in real wages is only 0.6% in the last 12 months, well below where we were last year. Stagnant wages could also be reflected in a surprisingly soft retail sales report that hit 10 days ago, where sales declined by 0.3% for August, with notable drops in auto sales, and the largest increase being in gas stations, reflecting higher prices over actually added activity.

Combine that with some suppression of economic activity this month due to the hurricanes, and gas price spikes in other parts of the country driving up inflation, and you can see where we might be back in a softer-than-expected patch for the economy. And even with the hurricanes heading out to sea, oil on the US market continues to go up. It rose $1.40 a barrel today, has risen 11.8% in September alone, and Brent Crude is at its highest level in more than 2 years. That's going to show up at the gas pumps in the near future, meaning that higher prices may be the rule and not the exception for the last 3 months of the year.

Now maybe rebuilding and more normal weather will cause a slight bump up at the end of the year, and maybe there will be some kind of wealth effect due to this still-bubbly stock market. The US economy has proven very resilient for the 8+ years of this recovery, and I can't see things slipping into recession any time soon. But the recent economic reports and events of recent weeks makes me think that the only place that we’re seeing a “Trump Boom” is on Wall Street, and not anywhere close to the real world.

Of course, I'm assuming the GOP WON'T screw up health care this week. If that happens, then all bets are off, given the chaos will result in the insurance market over the next few months.

More mergers, fewer startups. Not a good combo in US or WIsconsin

Yesterday, John Oliver’s in-depth segment “Last Week Tonight” dealt with something that we hear about in many fashions these days- corporate mergers. Oliver’s segment pointed out that from airlines, to beermaking, to casket makers(!), a diminishing number of large firms are cornering our markets. And that results in higher fees when you fly, less choices for consumers, and more money flowing to Wall Street instead of Main Street (as usual with Oliver's show, language may be NSFW).


You may well be angry with the service you get from airlines, but thanks to consolidation, they don't really need to give a shit about what you think." - John Oliver

Wisconsin is not immune from this 2010s trend. For example, in the next 2 weeks we will see how many PDQ stores end up closing and/or removing employees out of “efficiency” as their stores turn in to Kwik Trips. In addition, several Gordy’s Food Stores in the state have either folded and/or been converted to Festival Foods in recent months, and you can probably think of other industries in your town that have a smaller variety of outlets than it did in the past.

In a similar vein, UW-Madison grad student Ken Smith attended the panels on the Wisconsin’s economy at the first annual Ideas Fest on the UW campus, and filed this report in Urban Milwaukee regarding what executives and politicians were saying were the keys to get the state’s stagnant economy moving ahead. A common trend that came up in the sessions Smith attended involved the state’s horrible record at having new businesses start up, along with the state’s inability to attract and keep talent.
A majority of speakers in both panels spoke favorably regarding education and improving statewide entrepreneurialism through policy and investment endeavors. All panelists generally agreed the future of Wisconsin’s economy requires workers to have at least a two-year degree from a technical college or a four-year bachelor’s degree. “Wisconsin needs an educated workforce and research infrastructure, whether making things or selling ideas. It’s not just about education, classrooms, and students. It’s also about research,” [UW Chancellor Rebecca] Blank emphasized. In the subsequent panel, Kathleen Gallagher of the local tech-oriented nonprofit Milwaukee Institute, echoed a similar sentiment. “UW-Madison is ranked 11th nationally in computer science, we need to keep it there or bolster it,” she said.…

“I can’t find enough people in Eau Claire,” said [JAMF Software Founder Zach] Halmstad. JAMF, a developer of Apple software products, began in Eau Claire and while maintaining its Eau Claire operation, has moved its headquarters to Minneapolis. It is multinational and has additional offices in Cupertino, California; Amsterdam, Hong Kong, Sydney, and Katowice, Poland.

To bolster Wisconsin’s strengths, Joy Tang, urged Wisconsin companies enhance tech-based research and development. “Every big industry can create its own innovation center, there needs to be more innovation labs around big entities,” she stressed. Tang is the co-founder and CEO of the fashion app Markable, which began in Madison but now has a larger presence in New York City.

Kevin Conroy, Chairman and CEO of Madison-based Exact Sciences a developer and manufacturer of colon cancer screening tests, was critical of Wisconsin’s political climate. Conroy accused the state’s leadership of ‘starving’ state entrepreneurs of access to investment dollars. “Developing an economy isn’t really that complicated, but it’s hard. If you want job growth, all job growth comes from entrepreneurship, from young companies,” rather than giving tax breaks to legacy companies.

Conroy argued the state was investing in the wrong things and was critical of the state’s deal with Taiwanese electronics manufacturer Foxconn. “The notion of spending $3 billion on Foxconn is maddening. It’s as if Barnum and Bailey took over the capitol. There really isn’t money for the entrepreneurs, and we really have to change that.”
Conroy nails the problem at the end of that passage. Our GOP-run state government has devalued education and entrepreneurship in favor of taxpayer-funded kickbacks to established corporations who have donated to them. It’s a strategy that might grab a headline or two to fool a few rubes and help the war chest for election season, but it does nothing to help the overall state economy (and likely limits it long-term due to the lack of start-ups).

You can see where a situation when having a few individuals have outsized influence on an economy and its politics are leading to really bad things for 99% of the rest of us, whether that’s in higher prices for products, a limited range of options for consumers, a degraded environment, and slower growth that doesn’t reach the vast majority of us. And unless we change leadership to include a group of people that care more about the big picture over big money and consolidating power, it won’t get better for almost all of us.

Sunday, September 24, 2017

On kneeling, Packers rise in the face of Trump, others going low

I understand that Donald Trump's complaints about (mostly black) NFL players kneeling during the national anthem to protest injustice is likely a misdirection play. I mean, if your last, best chance to destroy health care is going down the tubes and the Russia investigation is getting closer to your doorstep, you might try to change the subject too. But I was a sports fan well before I was into economics or politics, and I feel the intersection of these two topics is something I have to talk about.

First of all, who is Five-Deferment Donny to speak about what is proper respect for the flag or the anthem? I mean, look at this shit from April.



Or this, from the GOP primaries.



In fairness, it could just be senility with Trump, but the bottom line is this guy has NO authority to decide what is proper conduct. And neither do the (overwhelmingly white) armchair warriors who try to claim that the anthem or the US flag is "respect for the troops" 1. If you gave a fuck about the troops you wouldn't elect morons like Trump who would throw us into a random war to make up for his...uhhh... inadequacies. 2. You don't give a damn about "freedom" or "diversity" in what you constantly claim is The Best Country in America.

Your talk of freedom is THE FREEDOM TO IMPOSE YOUR VALUES ONTO OTHERS. You love America if YOU get to set the agenda and morality. But everyone else in this great nation can go to hell, can't they? This comment from one-term fluke Congressman Joe Walsh sums up this white privilege mentality.



SO much wrong in this statement.

1. You DO care what color the person is. These people have been taking knees because they are not being treated equal due to the color of their skin. Which means America IS racist. And you don't want to think about that unpleasant truth because you don't have to deal with those bad things, and it reminds you of your white privilege.

2. Why are athletes of color supposed to be considered "ungrateful? Making money doesn't mean you are immunized from being given second-class treatment, and it doesn't mean you shouldn't accept second-class treatment. Go ask Seahawks Defensive End Michael Bennett if you don't understand that.

There is also a common theme of those who complain about Trump's disrespect to "shut up and play football." Which to me is completely backwards, and conjures up images in my mind of this sign from the past.



Far too many meatball fans want players to do nothing more than entertain them, and entertain them on their own (mediocre white guy) terms. But when the game ends on Sunday and/or their careers end later on, they couldn't give a flying fuck about those people. It's very much in the "Dance fool, Dance!" type of vein, and maybe athletes playing a violent game at the highest level deserve more than that.

Locally, the Packers have stepped up to the plate, and continued the Lombardian tradition of standing up against inequality and having the backs of their players and other team employees.



Now that's another reason why the Packers are the REAL America's Team. And if any of you small-minded, symbol-addicted posers want to turn in your tickets because that hurts your snowflake feelings- there's tens of thousands of us that will replace you in a heartbeat. And unlike you, we'll respect the players that represent the Green and Gold on the field.

While I'm cool with guys taking a knee or sitting on the bench during the anthem on their own, it looks like a common theme of what might be done today on NFL sidelines is a locking of arms or taking a knee in team unity. I think that may be the best message of all in light of our "divide and conquer" president trying to pass over injustices being inflicted far too many of our fellow Americans.



We can have athletes say things on their own and it serves a purpose in breaking people out of their comfortable cocoons and make some aware that far too many Americans are given second-class treatment. But having all 53 players and the coaches saying "WE ARE ALL BROTHERS AND WE ARE ALL TOGETHER IN THIS, AND NONE OF US WILL BE TREATED UNEQUALLY" seems more powerful.

Saturday, September 23, 2017

Russians did try to hack Wisconsin elections. Why don't WisGOPs care?

Late Friday afternoon, this item of information got dumped into public by the Wisconsin Elections Commission, making Wisconsin one of 21 states to be notified.
This afternoon, the U.S. Department of Homeland Security notified the Wisconsin Elections Commission for the first time that “Russian government cyber actors” unsuccessfully targeted the state’s voter registration system in 2016.

WEC Administrator Michael Haas has informed WEC Chair Mark Thomsen, who directed Commission staff to investigate why election officials were not notified earlier and report to the Commission at its meeting Tuesday.

“This scanning had no impact on Wisconsin’s systems or the election,” Haas said. “Internet security provided by the state successfully protected our systems. Homeland Security specifically confirmed there was no breach or compromise of our data.”
Yeah, but guess who did know? The Chair of the Senate Homeland Security Committee, who just happens to be Wisconsin's own Ron Johnson.

Let's go back to Bruce Murphy's excellent summary from January where he pieces together reports (since corroborated in the course of the Trump-Russia affair) that put Johnson not only in the center of the room where these hacking maneuvers are revealed.
As chairman of the Homeland Security and Governmental Affairs Committee, Johnson was one the so-called “Gang of 12,” the top 12 congressional leaders, who were invited to the meeting. (House Speaker Paul Ryan also attended the meeting.) Johnson later confirmed to Politico that he participated in the briefing.

“In a secure room in the Capitol used for briefings involving classified information, administration officials broadly laid out the evidence U.S. spy agencies had collected, showing Russia’s role in cyber-intrusions in at least two states and in hacking the emails of the Democratic organizations and individuals,” the Post reported.
And now we know Wisconsin ended up being a state where Russians tried to get voter registration data from. That may not have been part of this report, but I bet Johnson knew about it either before the election, or soon after, and he hasn't said shit about it. Even worse, Murphy documents how Johnson went along with Senate GOP Leader Mitch McConnell's plan to keep then-President Obama from letting the public know about Russia's attempts to interfere in our elections. Johnson then lied to the public about what he knew, to make it sound like the Obama Administration were the ones hiding information.
Johnson, in short, had an opportunity to be a patriot and condemn the fact that Russia was now engaged in such activities in the United States. But he issued no resolutions — in fact, not one word — on Russian’s cyber attacks on America.

Worse, he has engaged in his own pattern of misinformation on the subject. After the CIA publicly released a report in January concluding that Russia meddled in the presidential election to help Republican presidential candidate Donald Trump win the election, Johnson issued a statement to the Wisconsin State Journal saying he would “would need more definitive information before drawing further conclusions.” Johnson did not reveal that he had been informed back in September this was happening.

Johnson went on to complain to CNBC that the CIA refused to brief him on Russian hacking, saying “I have not seen the evidence that it actually was Russia,” while failing to note the CIA report’s echoed the briefing he’d received from other intelligence leaders in September.
The obvious question is "Why did Johnson not tell Wisconsinites about what he knew, especially if it might jeopardize their ability to vote? The obvious answer: BECAUSE RUSSIAN INTERFERENCE WAS HELPING HIM AND TRUMP WIN IN WISCONSIN.



And Johnson isn't the only Wisconsin Republican mixed up in this thing. We know House Speaker Paul Ryan was also in the room before the November election, and Ryan's SuperPAC used information obtained by Russian hackers in attack ads against Dems. Again, this doesn't mean there was collusion with the Russians, but Lyin' Ryan was glad to take the help that their hacking produced.

Let's also not forget this little tidbit from earlier in the 2016 campaign, as was revealed in this column by International Business professor Ruth May in the Dallas Morning News as well as other sources during this year.
Donald Trump and the political action committees for Mitch McConnell, Marco Rubio, Scott Walker, Lindsey Graham, John Kasich and John McCain accepted $7.35 million in contributions from a Ukrainian-born oligarch who is the business partner of two of Russian president Vladimir Putin's favorite oligarchs and a Russian government bank.

During the 2015-2016 election season, Ukrainian-born billionaire Leonard "Len" Blavatnik contributed $6.35 million to leading Republican candidates and incumbent senators. Mitch McConnell was the top recipient of Blavatnik's donations, collecting $2.5 million for his GOP Senate Leadership Fund under the names of two of Blavatnik's holding companies, Access Industries and AI Altep Holdings, according to Federal Election Commission documents and OpenSecrets.org.

Marco Rubio's Conservative Solutions PAC and his Florida First Project received $1.5 million through Blavatnik's two holding companies. Other high dollar recipients of funding from Blavatnik were PACS representing Wisconsin Governor Scott Walker at $1.1 million, South Carolina Senator Lindsey Graham at $800,000, Ohio Governor John Kasich at $250,000 and Arizona Senator John McCain at $200,000.

In January, Quartz reported that Blavatnik donated another $1 million to Trump's Inaugural Committee. Ironically, the shared address of Blavatnik's companies is directly across the street from Trump Tower on 5th Avenue in New York.
I've never heard Walker be asked about this interesting donation, and I also find it intriguing that when the story of Russians trying to hack Wisconsin election information hit the local newspapers yesterday, Walker's campaign wouldn't talk about the hacking attempt itself.
Tom Evenson, a spokesman for Gov. Scott Walker, said the announcement "confirms what we already knew, which is Wisconsin held an honest and fair election with no interference."
Tommy sure seems quick to want to say "Nothing to see here", doesn't he? In fact, yesterday's news confirms that there were attempts NOT to make the 2016 election "honest and fair" in Wisconsin, and there's absolutely NO confirmation that this was the only attempt to mess with Wisconsin's elections.

Then again, there's probably a reason that Walker's flunky doesn't want to discuss the need to protect against past and future attacks on our election system, which comes up after an ill-timed veto from his boss.
Friday's disclosure came a day after the GOP governor cut six jobs from the Wisconsin Elections Commission as part of the state budget. Evenson said the jobs were vacant and had nothing to do with cybersecurity.
And when Walker vetoed those extra positions on Thursday, he claimed that temporary staff could fill the extra needs for the state's elections as November 2018 comes closer. Yeah, because the average short-timer off the street is a match for international espionage.

But this goes back to what I mentioned earlier. The Wisconsin GOP had no problem with Russian interference in 2016, because it helped their side. And as I've mentioned before, lower turnout in the Dem-voting cities last November were a big key behind the close, surprising wins for Trump and Johnson.



To conclude, I'm not saying the Wisconsin GOP colluded with the Russians, but they were more than happy to reap the benefits of what the Russians did in 2016. And the fact that they don't seem too concerned over the alarming revelations that have come public in 2017 is a big red flag that demands more investigation by both legislators and media in DC as well as here in Dairyland.

Maybe it's all coincidence. But boy, that's a lot of coincidences that just happened to benefit one side.

Friday, September 22, 2017

Low income growth and increasing inequality. Welcome to today's Wisconsin!

Last week, the Census Bureau gave their annual release on health insurance, poverty, and income in America, as well as the comparisons across states for each of these stats. I mentioned Wisconsin’s standing on health insurance in this post, where I noted other Midwestern states have made better progress than we have in the Age of the ACA.

But I wanted to point out the income side of the equation here. Nationwide, real median household income went up by 2.4% in 2016, and was at $57,617 for the year. Wisconsin's median household income was slightl below that at $56,811. This places Wisconsin behind Minnesota and Illinois, in line with Iowa, and a few thousand above Indiana, Michigan and Ohio.



But if you dig deeper into the Census Bureau’s summary of income-related items in the American Community Survey (ACS), you’ll see that Wisconsin lagged well behind the rest of the country when it came to growing that income in 2016. For example, while Wisconsin joined most of America in having income growth above the rate of inflation in 2016, Wisconsin’s increase was only good for 39th out of the 50 states, and was dead last in the Midwest.

Real median household income 2015 vs 2016
Ind. +2.8%
Minn +2.2%
Iowa +1.9%
Mich +1.8%
Ill. +1.44%
Ohio +1.40%
Wis. +1.2%

After the Census Bureau information came out, Governing Magazine created a good interactive display for all of the states and their changes in income over the last year. They also take a look at how inequality has changed in the various states over the last decade. Measured by a stat called the Gini Index, this figure has increased by 3.9% nationwide since 2006. But in Wisconsin, the changes in inequality have become even more pronounced.

Biggest Gini inequality changes, 2006-2016
Montana +9.6%
Rhode Island +8.1%
Vermont +8.1%
Idaho +6.9%
Wis. 6.1%

This looks even worse when you realize Wisconsin’s population is at least twice the size of any of those other 4 states, which lessens the effects of boom towns or plant shutdowns or other outliers.

And this trend of increased inequality picked up even more in Wisconsin last year, leading to this dubious distinction that was part of the Census Bureau’s writeup.
The Gini index for the 2016 ACS increased in Louisiana, West Virginia, and Wisconsin. Massachusetts, Alaska, and Puerto Rico showed a decrease in the Gini index. The remaining 45 states and the District of Columbia showed no statistically significant changes between the 2015 ACS and the 2016 ACS.
That’s a STATISTICAL increase outside of the margin of error, and I don’t know about you, but I don’t want Wisconsin to be economically mentioned with West Virginia and Louisiana in anything.

So how are we dealing with this situation in the latest Wisconsin budget? By giving more to the rich and corporate while everyday people make less and pay more! This includes the rempeal of the state’s Alternative Minimum Tax (overwhelmingly paid by those making over $200K), a $74 million cut in property taxes paid by businesses (paid for by your tax dollars), the continued devaluing of the Homestead Credit for low-income Wisconsinites, and the removal of prevailing wage requirements on construction projects.

These things aren’t disconnected from each other, and they aren’t happening in a vacuum, people. And it won’t stop until you remove the politicians that made this increasingly unequal and stagnant Wisconsin economy happen.

While Foxconn region gets help, rest of the state is losing out

Three stories fell in a row on The Wheeler Report’s website today (and if you don’t read The Wheeler Report, you should). And it spoke volumes to me about the way things are (and aren't) working in Wisconsin these days.

The first is from Southeast Wisconsin, where we’re already starting to see employees come to town due to the Fox-con, as well as start to see the extra costs that are going to be part of the Fox-con that go well beyond the billions in tax breaks.
Several dozen Foxconn employees have temporarily moved into the SC Johnson iMET Technology Center [at Gateway Technical College in Sturtevant] located less than a mile from where the Taiwanese company is expected to build a huge display screen manufacturing plant…..

The Foxconn employees are made up of project planners and logistics managers, said Deb Davidson, the school's vice president of workforce and economic development….

Davidson revealed the existence of the newcomers at a Gateway Board of Trustees meeting Thursday morning at the Horizon Center in Kenosha.

At the meeting, the trustees gave tentative approval to a 50 percent expansion of iMET in order to accommodate Foxconn's training needs.

Expanding the building to the west will cost $5 million and be paid for by the state. Remodeling parts of the building and expanding the parking lot will cost $1.2 million, and be paid for by Gateway. The state's share was tucked into the incentives package.
Funny, I’ve looked at the Legislative Fiscal Bureau’s writeup of the Foxconn bill, and I don’t see anything that talks about giving $5 million to Gateway Tech (if I’m wrong, feel free to correct me).

There is language relating to having the Wisconsin Department of Workforce Development use $20 million “to facilitate worker training and employment in the state.” But that doesn’t start until 2019, and a Kenosha News story indicates that Gateway Tech’s Board of Trustees are seeking a (separate?) state grant. So is that ANOTHER $5 mil on top of the $20 million in the next budget? And are the Foxconn employees working out of Gateway Tech going to have 17% of their paychecks written off by Foxconn, which means seeing costs would go out the door in THIS budget (which wasn’t in the plans)? Worth keeping an eye on.

Meanwhile, the state’s 3rd largest city doesn’t have enough money to fix its roads.
The Green Bay City Council on Tuesday approved Ald. John Vander Leest's proposal to draft a resolution that would ask the governor and legislators from northeastern Wisconsin for additional state aid.

“If you go out and campaign and run for office, you know what the first thing that people say? ‘Fix the damn roads,’” Vander Leest said in an interview. “It’s a major issue.”

Overall state general transportation aid to the city has decreased from $4.1 million in 2011 to $3.5 million this year, according to data from the Wisconsin Department of Transportation.
And if GB doesn’t get that extra money (and they likely won’t, given the mess that the Transportation Fund is in), then a new $20 wheel tax is on the table to help to pay for road repairs in Titletown. They would join the NE Wisconsin city of New London, which became the latest community to add such a fee in recent years, with the extra $20 taking effect on January 1.

And late this week we got word that a large Fox Valley employer may be shutting down and throwing hundreds of people in the 920 out of work.
The future is uncertain for more than 600 employees of Appleton Coated, a paper mill in Combined Locks. Employees were notified Wednesday they were being laid off as the company, in receivership, is up for sale.

Even with one buyer ready to close a deal, local and county leaders are working to prevent the sale in hopes of saving the mill.
Appleton Coated has been part of the Combined Locks community for more than a hundred years. Now in receivership, the mill went up for auction earlier this week. As part of the bidding process, more than 600 workers were abruptly told Wednesday they were being laid off immediately as no buyers wanted to purchase that liability.

"We're all temporarily laid off 'til the closing date, and then they'll have more information whether it's permanent and they shut the mill down or if they try to run, so..." says mill employee Nick Weyenberg.
We’ll find out next week if a judge in Outagamie County allows other organizations to bid on and possibly re-open the plant, but it’s interesting that the WBAY news story says Outagamie Co Exec Tom Nelson is trying to keep the jobs, while Walker and WEDC aren’t mentioned at all.

These three contrasting items lend an obvious question- why are these places in Northeastern Wisconsin going through such troubles to fix roads, balance their budgets and keep jobs while hundreds of millions of dollars a year are being funneled down to the SE corner of the state for Foxconn?

What’s funny is that UW’s Katherine Cramer says a key part of the GOP’s electoral success in Wisconsin in the 2010s is based out of people in outstate Wisconsin seeing their tax dollars go elsewhere and not get much of a return on their tax dollars. Maybe these rurals should focus that justifiable anger on the REAL re-distributionists – the WisGOP politicians that voted for Scott Walker budgets that neglected their local communities while approving of a Fox-con that sends billions to one corporation and one area of the state.

Wednesday, September 20, 2017

Walker vetoes don't help much. Some take it from bad to worse

Here are a few things I caught from the Governor's 99 budget vetoes, which were released this afternoon.

1. True to what had been rumored as part of the agreement to get the budget out of the Senate, Walker used his veto pen to make for an immediate repeal of prevailing wage requirements on highway projects because Walker claims "I object to making the taxpayers of Wisconsin wait for nearly a year before the can begin to benefit from the cost savings" that result from screwing workers further. Because the real problem in this state is that workers are making too much (slams head on desk).

2. There is a common theme of "gimme what I said I wanted in this budget!" This includes Walker putting a $500,000 limit on awards for the Historic Rehab Tax Credit, despite huge usage throughout the state. It also includes Walker removing 5 positions from the State's Elections Commission (even though the Elections Commission indicated they needed the staff), and Walker getting rid of the Educational Approval Board, which oversees private colleges and universities in the state (a nice check from Betsy DeVos is sure to follow).

3. Walker's vetoes consistenttly remove oversight and reports that the Legislature tried to put upon him. The worst of these involves Walker's veto of a requirement put in by the Joint Finance Committee that required them to be notified of any transfers being made out of the Veterans Homes account to try to fill in budget holes in the Veterans Trust Fund. The Walker Administration has taken tens of millions of dollars out of the Homes in the last few years, and it has become all the more disturbing in light of the deteriorating conditions at King Veterans Home, including water that looked like this.



Walker vetoed the Legislature's desire to at leat OK the transfers before they happen, claiming
I object to the creation of a series of additional mandated reports which are administratively burdensome and redirects valuable staff time away from care for veterans. Further, I believe these requirements encroach on the executive branch's responsibility to manage state agency programs within the statutes and funding levels set by the Legislature.
Actually Scotty, you haven't been able to handle things "within statutes and funding levels," or else you wouldn't be raiding money that was intended to go to the Veterans' Homes to bail out your budget problems.

Walker also removed oversight in topics ranging from refusing to submit reports to illustrate the outcomes of his "pee in a cup" welfare "reforms" and the costs to continue those measures, and he refused to allow additional reports on costs and progress relating to the state's new STAR portal for human resources and finances, as well as information about whether Wisconsinites were being charged excessive fees compared to the cost of services.

4. There's also some pork projects that got stripped out with these vetoes. They include Legislature-added projects such as $1 million for unknown work in the basement of the Capitol, DOT projects enumerating work to expand I-94 in St. Croix County, and Highway 154 in Sauk County. But one other pork project did not get Walker's axe.


Hey, at least Scotty stays bought. You gotta give him that.

5. The worst of the vetoes involves Walker deciding not to give any relief to rural schools. The largest of this set of 3 vetoes is the removal of a provision that would districts limited by low tax bases to spend more money to get closer to parity to the rest of the state. Walker instead is choosing to rely on an election-year talking point of "lower property taxes" over actually helping these schools get by.
I am vetoing this section entirely because the result is a substantial increase in property tax capacity that school districts may exercise without voter input. In several school districts that would be eligible to raise taxes under these sections, referenda to exceed revenue limits already failed within the past two years. An increase in revenue authority from the state in these districts would circumvent purposeful, local actions.

It should also be noted that in some cases, the same districts that would have become eligible to increase their revenues with this adjustment have increased their base revenues at a rate higher than the state average. This brings into question the need for this adjustment and highlights the need for local taxpayer input before a revenue limit adjustment is made.

As a result of this veto, the low revenue adjustment level for school districts will remain at $9,100. School districts across the state will benefit from other significant education investments in this budget, including meaningful increases in per pupil aid. These per pupil increases are equal among all school districts. Additionally, school districts could pursue an increase in their revenue limit through a referendum as is the case under current law. In fact, numerous districts have already done so by asking taxpayers through a referendum. Increases to the low revenue adjustment can be discussed in future state budgets.
That won't help the small schools that are suffering today, and even Joint Finance Committee co-chair John Nygren was unhappy with Walker's veto.



In theory John, you could do something to deal with that. I think they call it an "override". Let's see if the GOP-run Legislature steps up to regain some control over this budget, or if they let Walker continue to enjoy a lack of accountability and continue to allow the schools in their districts to suffer.

Lots more to get to, but I got a Brewers game to wrap up and $1 Old Fashioneds tomorrow. Feel free to dig in and see what else you find.