Wednesday, April 18, 2018

If Dallet win in Supreme Court translates to November, GOP should be scared

Wanted to forward you to the great work by J. Miles Coleman of Decision Desk HQ, who has broken down the voting in every ward in Wisconsin from Rebecca Dallet's 12-point victory in the Wisconsin Supreme Court race earlier this month.

It was such a widespread victory that if the votes break the same way in November, Democrats would be likely in shape to control both houses of the Wisconsin Legislature. Feel free to click on these tweets to open up the pictures, which breaks down the numbers for each district.

Results like this statewide would flip 4 Senate seats and 22 (!) seats in the Assembly. Now, I don't count on all of that happening because of "Magic R" voters and other items that make a November electorate different from an April one. But it's also worth noting that Screnock won his home Assembly district (50th) by less than Dallet won hers (23rd), despite both being GOP-held, and Screnock won 6 districts by 51-49 or less, so it could have been even worse.

The geography of the win is remarkable. The Green Bay-Appleton media market had 8 GOP-Assembly held seats flip over to Dallet on April 3. 8 western Wisconsin GOP seats also went for Dallet, most being on or near the Mississippi River in an area of the state that turned hard towards Republicans and Donald Trump in 2016.

Seeing those areas of strength for Dallet is what has to scare the daylights out of Scott Walker for November. If the Fox Valley and Western Wisconsin even holds half of the shift that went from Trump to Dallet, Walker is in big trouble. Because a remarkable thing about the Supreme Court race is that the Republican WOW Counties turned out at a high clip from Screnock, while the pro-Dem City of Milwaukee took a lower share of the electorate than do in November races. That means that Walker is even MORE behind if you assume the blue-red split on the Supreme Court map resembles the field of play today.

And before people start saying "Well see, gerrymandering doesn't keep things from flipping," take a look at how much the Dem-favored candidate had to win by to get things to turn over. And this was for an open seat with candidates that likely weren't known much in most parts of the state. That's very different from trying to toss a protected GOP incumbent...unless the GOP becomes so hated by November that the casual voter says "THEY ALL MUST PAY!"

Certainly there's a long 6 1/2 months between now and November. But if you look at the strong work from Mr. Coleman pictured above, that's what the best-case scenario for Wisconsin Dems looks like, and it shows how things would look if we had an election in November that would go a long way toward eradicating the Age of Fitzwalkerstan. And that probably makes a lot of GOP legislators realize that they might have to work to keep their seat, and I bet quite a few of these doofii aren't good enough to do it, if things are made tough enough for them.

Let's make it so.

Why do we pay big money to keep old, sick people in prison?

I wanted to draw your attention to a great article in today’s Milwaukee Journal-Sentinel by Gina Barton that discussed the question of what to do with older and/or disabled Wisconsin prisonsers.

This is an offshoot of 1980s and 1990s “tough-on-crime” policies in the state (including the “truth in sentencing” law authored by a young state rep named Scott Walker), leading to an increasing amount of state prisoners are growing old and medically needy inside the walls of correctional facilities.

For these types of situations, Barton mentions that the state has a program that allows for early release of individuals. The only two conditions are that people with life sentences and convictions for serious violent crimes are not eligible, and a committee of corrections staff and social workwers agrees to do so.
To qualify, a prisoner must be at least 65 with five years served, or 60 with 10 years served. Prisoners with chronic health conditions also may apply regardless of age or time served if two doctors — either inside the prison or outside — certify the illnesses can't be properly treated in prison.

People convicted of some of the most serious felonies, such as first-degree sexual assault, are not eligible, nor are those serving life sentences.
But Barton says that only 25 individuals were released from Wisconsin prisons under this program from 2011 to 2017, while more than 1,200 people over the age of 60 were housed in Wisconsin prisons at the end of 2016.

One of the individuals profiled in the story is Nancy Ezell, who was sentenced 20 years ago for selling cocaine and trying to buy stolen goods. In the time she has been in prison, Ezell has suffered from many health issues.
Ezell, then 47, was sentenced to 65 years under the parole system, in which inmates become eligible for release after serving a quarter of their sentences.

Within about a year and a half of her arrest, Ezell had five angioplasties and underwent open heart surgery, according to a transcript of her sentencing hearing.

Ezell, who will turn 66 later this month, uses a wheelchair and a breathing machine. She takes some 30 pills a day to control more than a dozen health conditions including heart disease, diabetes and kidney disease, according to her medical records. Two years ago, she was diagnosed with breast cancer, which required a mastectomy.

Menace to Society

The article mentions Ezell's family figures her medical costs have been more than $1 million due to her many needed treatments.

And due to state law (and human decency), taxpayers have been on the hook for the medical care for inmates such as Ezell and others housed in the state’s correctional facilities. And that cost has been going up by a large amount over the last decade.
In 2007, the Wisconsin Department of Corrections budgeted $2,856 per inmate for health services, after adjusting for inflation. By 2017, that figure had grown to $4,712, an increase of 65%.

On top of the cost of prisoners' medical treatment, departments of correction must pay for transportation and staff time. They also must provide security, even for people who are incapacitated.
And those higher costs came home to roost in today’s Joint Finance Committee, as the committee had to deal with a Corrections shortfall of more than $10 million due to the costs of inmate health care and medical treatment. The Legislative Fiscal Bureau describes the specifics behind these extra costs.
Prescription Drugs. Pharmaceutical costs for the treatment of inmate health conditions in the last three fiscal years have increased. Corrections spent $25.4 million GPR in 2014-15, $25.9 million GPR in 2015-16, and $36.7 million GPR in 2016-17. For 2017-18, pharmaceutical costs are projected to be $35.8 million, a decrease of $900,000 from the previous year. According to the request, almost 60% of drug expenditures in 2017-18 involve three treatment categories: Hepatitis C Virus (HCV) medication, Human Immunodeficiency Virus (HIV) medication, and Biologics used to treat severe inflammatory diseases. Corrections indicates that there has been an increase in the number of prescriptions dispensed compared to 2016-17 (514,177 prescriptions dispensed between July, 2016 and February, 2017, compared to 531,059 dispensed between July, 2017 and February, 2018)….

Hospital Costs. Medicaid covers costs associated with hospitalization of inmates. However, the Department [of Corrections] is required to pay for inmates in "observation status" days, which is not covered by Medicaid. Observation status are hospital outpatient services given to help the doctor decide if the patient needs to be admitted as impatient or can be discharged. While the total use of observation days as a whole are fewer year-to-date in 2017-18 compared to a similar time period in 2016-17, health care expenditures have been impacted by increased costs of drugs administered to inmates while hospitalized (both under observation status and as an admitted patient) as well as hospital visits of the Department's aging population who typically require more medical care. Corrections expended $30.4 million GPR in 2016-17 and projects spending $32.2 million GPR in 2017-18 related to hospital expenditures.

Contracted Nursing Services. Corrections continues to utilize contracted nursing services to address continued recruiting and retention difficulties: "due to a variety of factors including but not limited to a statewide shortage of trained shortage of trained personnel, market pressures which raise salaries in rural areas, and driving distance to prisons from urban areas." According to the Department, contract nurses conducted 677,574 inmate medical visits in 2016-17 and are estimated to conduct approximately 700,000 in 2017-18. The Department has been able to cover a portion of contracted nursing costs with funding from health position vacancies, but projects spending $10.1 million GPR on contracted costs in 2017-18, compared to $9.3 million GPR in 2016-17.
So what is the Walker Administration reducing to pay for this $10 million deficit? I’ll let Wisconsin Public Radio tell you.
To help cover the shortfall DOC earlier this month asked the finance committee to transfer $5.3 million from the agency's contract beds account and $1.8 million from a fund that covers services for drunken driving offenders. Both accounts are projected to have surpluses.

The agency expects to fill the rest of the deficit by reallocating expenditures and with salary savings from vacant positions.
So we’re spending more tax dollars to keep older people locked up in our overcrowded prisons, and on top of that, we can only pay for their health care by lowering staff levels, having fewer juvies being housed, and reducing drunk driving services? Does that seem like a sustainable or sensible policy on ANY level?

Seriously, how is it better to have senior citizens and the disabled taking up space in our prisons instead of being in the community, possibly with connections to family and friends, and likely able to access health care at a lower taxpayer cost? Maybe that whole “lock ‘em up forever” mentality of the 20th Century needs to be thrown into the dustbin of history. Not only for humanitarian reasons, but because it has cost a whole lot of money for a corrections strategy that doesn't seem to have done much to improve society.

Tuesday, April 17, 2018

Paying to keep up the parks

One of the other items that the Joint Finance Committee will discuss tomorrow involves freeing up funds to pay for a variety of projects in Wisconsin state parks over the next year. These projects had originally been requested for the 2017-19 budget, but didn't survive the cut.
2017 Act 59 created a continuing appropriation from parks account revenues [(20.370(7)(hu)] and provided $1,000,000 in fiscal year 2017-18 and $1,000,000 in fiscal year 2018-19 in one-time funding for development and maintenance activities on state park properties. Under the request, an additional $2.2 million would transfer in the 2017-18 fiscal year from the balance of the parks account to the appropriation to be used for parks infrastructure projects including: (a) $1,308,600 to replace 15 four-unit vault toilets in campgrounds and high-use areas; (b) $239,700 for replacement of failing water lines, day-use flush toilet building upgrades, and replacement of indoor group camping siding at Wyalusing State Park; (c) $174,400 for projects at Perrot State Park, including adding an ADA-accessible restroom to a family campground area and renovating plumbing at various shower buildings; (d) $164,900 for repairs and upgrades to the Weborg Shelter at Peninsula State Park; (e) $96,400 for improvements to beach and swimming areas at Richard Bong State Recreation Area; (f) $69,700 to renovate toilet/shower buildings at Brunet Island State Park; (g) $42,600 for roof repair and reshingling at Lake Wissota State Park; (h) $32,900 to establish water supply at a shelter and playground area at Merrick State Park; and (i) $60,000 for contingency funding. While the Department's request originally included $340,000 to replace an existing high-voltage distribution system at Yellowstone Lake State Park, updated information provided by the Department includes this project as funded from general fund-supported bonding at a lower estimated cost.
This request deals with that $2.2 million, which needs JFC approval before the projects can get underway and be paid for.

You may remember that the GOP-run Legislature has removed all taxpayer-funded support from state parks in recent years, which means that the parks have to rely on paid admissions and other sources of funds. What the DNR is arguing with this request is that not only do they have enough money to spend this extra $2.2 million to improve the parks, but that the amenities to be added would make the parks and campsites more attractive, and thus it would let them raise more revenue.
State park admission and camping fees were raised in each of the last two biennial budgets to support parks operations with the elimination of GPR [General Tax] funding. It could be argued that the parks account is an operating fund and should be utilized minimally for capital development projects, if at all. However, 2017 Act 59 provided $1 million in each year of the biennium on a one-time basis, and the $2.2 million in requested funds would also be provided on a one-time basis and be available for expenditure until exhausted. Further, the Department argues these projects are critical to protecting visitor health and safety and should be completed during the 2017-19 biennium. Currently, the parks account is estimated to have an available June 30, 2019, balance of over $10 million. While sufficient funds are available in the balance of the account to support the request of one-time funds, an increase in ongoing expenditure authority exceeding $1.5 million annually could cause the account to have a structural imbalance by which authorized expenditures exceed anticipated revenues.

As noted, 2017 Act 59 provides $2 million from the balance of the parks account for parks infrastructure projects. DNR indicates this funding will be used for campsite electrification and various projects including signage, fire rings, picnic tables, parking lot expansion, and building repairs at Devil's Lake, Peninsula, and other state park properties as shown in the attachment. DNR reports these projects are expected to be presented to the Building Commission in the near future. However, the appropriation language states that these funds are provided "for parks development and maintenance on state parks property." This language is broad enough to encompass the projects for which the Department is requesting the $2.2 million in additional funds from the parks account balance. Further, some would argue parks infrastructure projects deemed critical should be addressed before additional amenities, such as electricity, are added. On the other hand, 2017 Act 59 also increased the statutory cap on the percentage of campsites in state parks that may be electrified from 30% to 35% and increased the nightly fee for electric campsites at five high-demand parks from $10 to $15. Additional electrified campsites would be expected to provide additional ongoing revenue to the parks account.

Yes, you will still be able to do this in 2018.

This all sounds very good, and moving some deferred projects up the chain sounds like a good move for the short and long terms. But if the horrid April weather holds down visitors to state parks for this year, those remaining funds could be depleted quickly, with not much left over for future years. It's not camping season yet, but it's coming up fast, and those 30 inches on the ground in the Northwoods won't go away all at once.

And given that Walker and the WisGOPs also pulled a stunt in the last budget where they took State Forestry operations off of the property tax, and filled it in with $181 million of tax dollars Those funds might not be available in 2019, especially after the Walker/WisGOP tax-cut-and-spending spree of the last 2 months.

STAR, Juvies, court fees, and other things we don't have enough cash for

The Wisconsin Joint Finance Committee comes back tomorrow for its first meeting in several months. The JFC will deal with several fund transfers and modifications of various funds based on needs and expenses that have popped up, and a sizable amount of the meeting will discuss overdrafts on several state accounts that are supposed to be self-sustaining (click here for a list of them), but are not, and sometimes they remain overdrawn for several years.

These overdrafts total $76.1 million, and by far the largest of them involves the state’s new STAR System. STAR added another $5.4 million to its deficit in Fiscal Year 2016-17, and is now nearly $35.9 million in the hole. As the Legislative Fiscal Bureau explains, STAR was a multi-year project that intended to consolidate many state agency operations.
Under 2007 Wisconsin Act 20, the Department [of Administration] was required to implement, operate, maintain, and upgrade an integrated business information system for all executive branch agencies for the following: (a) all financial services (including accounting and auditing of payroll); (b) procurement; (c) human resources; and (d) other administrative duties. The Department was authorized to provide these services to any executive branch agency as long as those services could be provided efficiently and economically. Legislative and judicial branch agencies were allowed to participate at their discretion.
After Great Recession budget issues and numerous discussions on what the STAR System would ultimately do, the Walker Administration gave it the go-ahead in 2013, with STAR being operated by agencies beginning in late 2015.

In the 5 years since the project got re-started, STAR has spent funds on implementation, setup and maintenance , but hasn’t gotten nearly enough of those costs back in the process. So to make up the $35.9 million difference, Walker’s DOA will start make other state agencies pay more for “their share” of the STAR project.
In its s. 16.513 plan, DOA indicates that, beginning in 2017-18, it "will begin to assess state agencies for the STAR Project costs in an amount necessary to fully recover project and financing costs incurred in its development" over a period of 19 years, phased in over three fiscal years in increasing amounts. In 2017-18, assessments to agencies for project costs will total $4,357,900. The assessment will increase in 2018-19 and 2019-20 and remain the same for each year thereafter. The Department will also continue to annually assess state agencies to recover ongoing maintenance and operations costs for the system, for which charges will total $11,370,700 in 2017-18. Each of the assessment amounts will be based on an allocation of costs according to each agency's percentage share of the following measures relative to totals for all state agencies: number of authorized full-time equivalent positions, procurement spending, and adjusted state operations expenditures.
This means that all state agencies will be kicking more of their funding back to DOA to pay for STAR, meaning they have less funding to help the general public. With $2 billion in deficits looming between the General Fund and the Transportation Fund for the next budget, that means even more service cuts than we were already looking at for 2019-21.

Among the other overdrafts that is intriguing to me is a $3.2 million overpayment for Juvenile Corrections services. The money for this account comes from counties and other state areas that send serious juvenile offenders to state facilities, and the most recent state budget made counties pay another $6 in an attempt to close this deficit, and will move around some other tax-supported funds to pay for juvenile corrections services.

Given that the State Legislature just voted last month to close the Lincoln Hills and Copper Hills juvenile facilities in 3 years and pass off those inmates to regional and local facilities, it makes me wonder if that issue will come up as a means to deal with this $3.2 million deficit. I think that the recent $19 million settlement that the state will have to pay due to Lincoln Hills guards ignoring a suicidal inmate’s requests for help is not part of this account. But tomorrow’s hearing seems like a proper place to find out if we need to prepare for another overdraft somewhere else in 2019 as a result of that horrible screw-up.

Another overdraft that’ll be discussed at tomorrow’s meeting involves the funding of various law enforcement duties via fee that is levied on various court proceedings.
Subject to certain exceptions, a $21.50 justice information system (JIS) surcharge is assessed with a circuit court fee for the commencement or filing of certain court proceedings, including: civil, small claims, forfeiture, wage earner or garnishment actions; an appeal from municipal court; a third party complaint in a civil action; or a counterclaim or cross complaint in a small claims action. Of the $21.50 received from the JIS surcharge, $6 is allocated to the Court System to support the operation of the Consolidated Court Automation Programs (CCAP). The remaining revenue ($15.50) is received by the Department of Administration's (DOA) justice information fee receipts appropriation (henceforth called the JIS surcharge fund). The JIS surcharge fund is required to lapse the first $700,000 it receives to the general fund to be recorded as GPR-earned. Subsequent JIS surcharge revenues received by DOA are transferred to state agencies to support various programs generally related to the criminal justice system.
The problem here is that what was sent out for these programs was $1.13 million more than the surcharge took in for Fiscal Year 2017, which raises its overall deficit to $3.47 million. So let’s see if JFC decides to raise the fees involved in these court proceedings, or if they have to use General Fund dollars to pay off the difference.

On a related note, Attorney General Brad Schimel may make an appearance before Joint Finance tomorrow to explain why the DOJ has a deficit of nearly $8 million for a similar fee that’s slapped on top of many state and local ordinance violations. Nearly $2.4 million of that deficit came in Fiscal Year 2017, and $6.3 million over the last 2 years, so it seems like some changes are in order. But all the LFB paper mentions is that Schimel’s DOJ and Walker’s DOA will determine how to fix this at some other time.

(Side note: It’s funny how Walker can throw away $3 million by extending the stupid sales tax holiday by 3 days, but actually paying for the bills we’ve rung up? Nah, let it ride).

So while tomorrow’s hearing on overdrafts at the Joint Finance Committee isn’t the sexiest issue around, it may be one that draws some unexpected headlines and actions due to the millions of dollars that need to be dealt with. Keep your eyes peeled on it, because it’s these little things that the officials don’t want to you to look at that often tell the larger story of how things are really doing.

Monday, April 16, 2018

WMC-GOP Axis of corruption, secrecy continues

You may recall that Wisconsin Manufacturers and Commerce ran a sleazy television ad before this month's Wisconsin Supreme Court election that ended up revealing the information of a child who was molested, and that WMC refused to pull the ad even after the family members of the victim asked them to. And just because Rebecca Dallet beat WMC's chosen puppet by double digits, it doesn't mean WMC should be let off the hook for what they did in that election.

On that subject, One Wisconsin Now Research Director Joanna Beilman-Dulin sent an open records request to Attorney General Brad Schimel and the Wisconsin Department of Justice asking if they had given info to WMC about the case, or discussed anything else in the 2 weeks before the Supreme Court election. It turns out that Schimel's Department of "Justice" wasn't too keen on answering that request, and One Wisconsin Now went public with their request and the DOJ's inattentiveness today.
On April 2 One Wisconsin Now requested records of communication from DOJ staff containing a handful of keywords related to the ad. After limiting their review to just seven employees and invoking attorney-client privilege and attorney work product exemptions, the DOJ provided a copy of an email exchange and a screen shot of a phone record from Attorney General Brad Schimel’s press secretary.

Beilman-Dulin fired back in a letter today, writing:
What WMC did in disclosing identifying information about child victims of a sex crime was despicable. I would have hoped that the DOJ leadership actions reflected a sincere concern for the parties who were re-victimized by a special interest group’s crass attempt to win an election. But with this wholly inadequate reply to my simple open records request, it appears the leadership of the Department of Justice is more concerned with protecting its own political self interests and those of the state’s big corporate lobby.

One Wisconsin Now has also renewed their original request for a full accounting of responsive DOJ records.
Huh, it's almost like Schimel doesn't want people to find out he and WMC might be working together on a political race. Almost....

Another effect of this WMC-WisGOP Axis is the "dark store loophole", a maneuver that WMC supports which allows retail businesses to save millions in property taxes while forcing local homeowners to pay more. And an increasing amount of Wisconsin communities are looking to take their case against dark stores to the voters.
Some Brown County leaders hope their constituents can do what they themselves have not: Convince state lawmakers to change a law they say places an unfair tax burden on homeowners and small businesses.

As a result, local ballots in the November elections could include a question asking voters if the state should close the so-called "Dark Stores Loophole," which enables retailers to have their businesses assessed as if they were empty buildings rather than active stores.

That loophole unfairly shifts the tax burden from "big box" retailers and national drug-store chains to homeowners and mom-and-pop stores, county officials say....

"The state doesn't listen. The Senate sat on their hands," said Brown County Board Chairman Patrick Moynihan Jr. "Maybe if they won't listen to us, they'll listen to the citizens."
Outagamie County has already put this question on their November ballot, and other places may soon do the same.

Save big money and spend more on property taxes, here at Menard's!

United Food and Commerical Workers union president John Eiden also took on the dark store loophole in this editorial in Urban Milwaukee. Eiden called out Walmart to task as a flagrant abuser of this method of assessing property values.
The dark store tax loophole allows big box retailers like Walmart to reduce their property taxes by appraising their property as if it was a vacant or “dark” store, thus resulting in a lower tax assessment. In Wisconsin, Walmart and other big box retailers used this loophole to try and cut their property assessments by a total of more than an estimated $700 million last year.

And when Walmart doesn’t get its way, it unleashes its team of lawyers on our towns, like it’s done in Plymouth, West Bend, Lake Delton, Franklin, and other Wisconsin communities. Since 2014, Walmart has taken our towns to court 12 times over assessment appeals in an attempt to reduce its property tax bill.

Earlier this year, State Senator Janis Ringhand’s bill, A.B. 386, attempted to close the loophole in Wisconsin and was supported by over 60 bipartisan co-sponsors and the League of Wisconsin Municipalities. But in the final days of the session, Assembly Leader Robin Vos and Senate Speaker Scott Fitzgerald blocked Ringhand’s bill and tried to push a “compromise” supported by business interests that, according to the League, was “worse than current law.” Because of Vos and Fitzgerald’s last-minute bait-and-switch, nothing was done to address the dark store tax loophole. Leaders Vos and Fitzgerald must not have homeowners in their districts, otherwise why would they place additional tax burdens on them while major corporations like Walmart get away with not paying what they owe?

Why does this matter?

In addition to Walmart’s corporate welfare, an estimated $6.2 billion in annual federal subsidies, and the estimated $205 million in cumulative nationwide state and local tax subsidies the retailer has already received, the Walmart Dark Store Tax Loophole creates a tremendous burden on our society. By fleecing local government out of much-needed revenue, our public schools, which heavily rely on property tax revenue, suffer the most. And when schools are underfunded, oftentimes taxes go up or new taxes are instituted, creating more of a burden for homeowners.
Let me remind you why that dark store loophole remained on the books after this legislative session - because Robbin' Vos felt WMC's needs weren't being attended to in any bill to remove it.

And let me also remind you on this tax day that every dollar in corporate tax cuts and WEDC handouts to WMC members and other well-connected oligarchs is another dollar of taxes YOU have to pay to make up for, or another dollar in service cuts that YOU have to deal with.

After the blowback from their disgusting ad before the Supreme Court election, WMC hid the names of the CEOs on their Board of Directors from their website. Fortunately, I've posted their names before, and can easily find it on this site. Given the events of recent days, I think it's time to re-run that LIST OF SHAME.

JAY L. SMITH, Chairman & CEO
Teel Plastics, Inc., Baraboo

STEPHEN D. LOEHR, Vice President
Kwik Trip, Inc., La Crosse

Wisconsin Manufacturers & Commerce (WMC), Madison

TOD B. LINSTROTH, Senior Partner & Past Member & Chair of Management Committee
Michael Best & Friedrich LLP, Madison

GINA A. PETER, Executive Vice President, Commercial Banking Division Manager
Wells Fargo Bank, Milwaukee

DARYL ADEL, Business President
Kerry, Beloit

SIDNEY H. BLISS, President & CEO
Bliss Communications, Inc., Janesville

DAMOND WILLIAMS BOATWRIGHT, Regional President – Operations
SSM Health Care of Wisconsin, Madison

Robert W. Baird & Co., Inc., Milwaukee

C.G. Bretting Manufacturing Company, Inc., Ashland

THOMAS A. BURKE, President & CEO
Modine Manufacturing Company, Racine

NATE CUNNIFF, Senior Vice President – Business Banking
BMO Harris Bank, Brookfield

DANIEL DEFNET, Executive Vice President, Commercial Banking
Johnson Financial Group, Racine

Baker Tilly Virchow Krause, LLP, Madison

JOHN N. DYKEMA, President/Owner
Campbell Wrapper Corporation; Circle Packaging Machinery, Inc., De Pere

PHILIP B. FLYNN, President & CEO
Associated Banc-Corp, Green Bay

JEFF T. FRENCH, National Managing Partner, Consumer & Industrial Products
Grant Thornton, LLP, Appleton

Beaver Dam Area Chamber of Commerce, Beaver Dam

Sargento Foods Inc., Plymouth

Hendricks Commercial Properties, Beloit

WPS Health Solutions, Madison

STEVEN H. JOHNSON, Factory Manager
John Deere Horicon Works, Horicon

WILSON R. JONES, President & CEO
Oshkosh Corporation, Oshkosh

Alliant Energy Corporation, Madison

J.J. Keller & Associates, Inc., Neenah

Waukesha County Business Alliance, Waukesha

Skyward, Inc., Stevens Point

JAMES M. LEEF, President & CEO
ITU AbsorbTech, Inc., New Berlin

WEC Energy Group, Milwaukee

SCOTT A. MAYER, Chairman & CEO
QPS Employment Group, Brookfield

JAMES J. McINTYRE, President and CEO
The Greenheck Group, Schofield

J. R. MENARD, Executive Vice President & Treasurer
Menard, Inc., Eau Claire

EMCS, Inc., Milwaukee

Prairie du Chien Area Chamber of Commerce, Prairie du Chien

Dairyland Power Cooperative, La Crosse

Waupaca Foundry Inc., Waupaca

JAMES J. OSTROM, President & CEO
Milk Source LLC, Kaukauna

Lotta cars bought in March, not a lot of other stuff

We’ve been looking for clues as to whether the Trump/GOP tax cuts were going to give a boost to consumer spending, now that withholding taxes have been reduced for 2 months. And if you buy that argument, the toplines of today’s retail sales report had to make you feel good.
U.S. retail sales rebounded in March after three straight monthly declines as households boosted purchases of motor vehicles and other big-ticket items, suggesting consumer spending was heading into the second quarter with some momentum….

The Commerce Department said on Monday retail sales increased 0.6 percent last month after an unrevised 0.1 percent dip in February. January data was revised to show sales falling 0.2 percent instead of the previously reported 0.1 percent drop.

Economists polled by Reuters had forecast retail sales rising 0.4 percent in March. Retail sales in March increased 4.5 percent from a year ago.
Sounds pretty good, until you dig into the actual retail sales report from the Census Bureau and realize that the increase was largely confined to one area of the economy.

Retail sales March 2018
Motor vehicles and parts dealers +2.0% (+$2.0 billion)
Everything else +0.2% (+$0.76 billion)

TOTAL CHANGE +0.6%, (+$2.76 billion)

That’s about all that was selling last month.

The big jump in auto sales was especially odd because autos had slipped badly leading up to that report, going down by 1.3% in February and only up 1.8% in the 12 months prior to March 2018. I’m going to need more than 1 positive month of car sales before I think the tax cuts changed anything for that sector.

And that 0.2% ex-auto figure is pretty soft, given that retail sales don’t take inflation into account. In addition, all retail sales (INCLUDING autos) were only up 0.2% total for the 1st 3 months of 2018. That’s a notable slowdown from 2017’s strong retail sales, where we saw a full-year increase of 5.1%. Those lower sales are a big reason why 1st Quarter GDP is likely to be hovering closer to 2%, which is well below the 3.3% that the Congressional Budget Office is planning on for this year.

So no, I’m not willing to say that the Piece of Shit tax bill is doing much to drive people to open their wallets more, at least not yet. And if it doesn’t happen soon, watch for the US budget deficit to open up even wider throughout the rest of 2018, because in a country that has 70% of its GDP tied to consumer spending, people need to buy stuff to keep economic expansions going.

Sunday, April 15, 2018

Brutal "Spring" weather will make road work even more costly

Here's what it looked like outside of my window today, April 15.

And we got off relatively light compared to many other parts of the state. Northeast Wisconsin got hit with nearly two feet of snow, leading to several roof collapses at homes and businesses, and the state's emergency management organization telling people to stay off the roads in much of Wisconsin.

We'll see what kind of effect this late-season snow and cold is going to have on jobs and other parts of the state's economy. It reminds me of April 2013, which was plagued with cold and rain, and delayed a lot of outdoors-related employment and projects. The result? A significant drop in seasonally-adjusted job growth for the month, reported as a drop of 24,000 at the time, and still ended up being a loss of nearly 11,000 after the "smoothing" effect of benchmarking. You can see that weather effect in the major, one-month decline in year-over-year job growth for April 2013 in this chart (depths we wouldn't see again until 2016), and the resulting bump up in year-over-year stats in the more-normal April of 2014.

With snow depths of 25-30 inches throughout most of the northern half of Wisconsin at this late point in the year, that means there will be a lot of melting and freeze-thaw potholes still to come, at a date far later than we are used to. This means that there will be even more road repair needs that have to be taken care of, with much less time in the year to take care of them. This makes an already-problematic lack of road funding an even bigger concern with Memorial Day and the traditional Summer driving season opening in 6 weeks.

At least some of the damage from prior major weather events is being mitigated, as Senator Tammy Baldwin's office announced late last week that $17 million in federal aid will be available to deal with damage resulting from severe floods in Wisconsin over the last 2 years.
The money comes from the Federal Highway Administration with most of it slated for federal road repairs in the Chequamegon-Nicolet National Forest and on the Bad River Band of the Lake Superior Tribe of Chippewa Indians Reservation. Just more than $10 million will go to the U.S. Forest Service to rebuild roads that have been washed out since 2016.

Chequamegon-Nicolet National Forest spokeswoman Hilary Markin said the money will be used to help fund permanent repairs.

"We actually have eight portions of roads that were closed where emergency repairs were not possible given the size and scope of damage," Markin said. "We do have a closure order in place for those roads."...

Nearly $5 million in federal highway funds will be spread among 22 counties.

Parts of northern and western Wisconsin were declared federal disaster areas after storms quickly dropped more than 10 inches of rain in both 2016 and 2017.
Of course, the Northland will need to have its roads thaw out before any work can get done with the $17 million in federal aid that just came through.

I did not see Governor Walker make a disaster declaration from this major snowstorm yet. But you would think something like this may be in line for some federal assistance to help, at least for the local governments that have to deal with all of the extra costs and overtime that'll result from having to clear the roads after such a heavy snow over a long period of time (Here is the information on how to get disaster assistance for snow).

Given that there could be serious flooding if all this snow melts at once, combined with regular April and May rains, it may not be the last weather-related complications to Wisconsin's infrastructure that we see in 2018. Which makes you wonder if this weekend's record snowstorm might cause a new emphasis on the needs to take care of our already-deteriorated roads.

Fox-con not even helping the locals, as reality comes to blight

This week featured even more questions and downsides being revealed for the Fox-con. And this time it involved the people that are the only ones that are supposed to be helped - residents of Southeastern Wisconsin.

The first came as residents in and around the Village of Mount Pleasant organized opposition to the local Community Development Authority's plans to blight the remaining parcels of land in the community, in order to speed the building of the Foxconn facility, even if people still live on those parcels.
The group cites Wisconsin State Statute 32.03(6), which says that condemnation through blighting can only be used if the property is not occupied by the owner of the property or a relative of the owner or the crime rate in, on, or adjacent to the property is at least three times the crime rate in the remainder of the municipality in which the property is located....

The area approved by the CDA is largely bounded by 90th Street to the east, Highway KR to the south, Highway 11 to the north and Interstate 94 to the west. According to Alan Marcuvitz, Mount Pleasant’s property acquisition attorney and expert, the village already owns two-thirds of that land. The initial Foxconn development is planned for the far southwest corner of the area designated on March 20 — from I-94 to Highway H and from Braun Road to Highway KR.

During the March 20 meeting Marcuvitz read a subsection of the law, which says that a blighted area can be “an area which is predominantly open, and which because of obsolete planning, diversity of ownership, deterioration of structures or of site improvements or otherwise substantially impairs or arrests the sound growth of the community.”

Village officials believe this definition allows them to define the area as blighted. Therefore, they believe they can use eminent domain to acquire additional land from holdouts in the area.

“Even though there may not be a single blighted property, the area may still be determined as a blighted area, which allows the acquisition of non-blighted properties,” Marcuvitz said at the meeting.
So in addition to running people off of the land, those remaining holdouts stand almost no chance of getting fair land values, because their community is literally considered a blight.

In addition, as of 2 months ago, the Village of Mount Pleasant had spent $22 to $23 million more than Foxconn had given it for land acquisition, so that debt will have to be repaid over the next several years. So the local homeowners of Mount Pleasant and southern Racine County are paying big money and facing a large amount of displacement due to the Fox-con, and those that are left are looking at higher taxes and congestion. Worth it?

We also found out this week that Wisconsin 's largest city wasn't likely to benefit much from this scam either. The Milwaukee Common Council held a committee meeting this week with Walker Administration officials to discuss connecting the city with the Foxconn campus 25 miles away, and as Jeremy Jannene reported in Urban Milwaukee, the general contractor for the construction of the Foxconn facility said they had some hiring goals for local workers and workers from specific racial and demographic groups.
Gilbane Vice President Adam R. Jelen told members of the Common Council’s powerful Steering and Rules Committee this morning that the lead contractors, in partnership with Foxconn, are hoping to hire Wisconsin-based contractors for 60 percent of the work, Racine County businesses for 10 percent of the work and a combined 10 percent of the work is expected to go to firms owned by minorities, women or military veterans.

As for project work hours, 70 percent of the hours are intended to go to Wisconsin residents, with an emphasis on Racine County residents. Ten percent of the work hours are intended to go to the combined group of minorities, women and military veterans. Vendors interested in working on the project’s construction or supply chain are encouraged to go the Wisconn Valley website.
Note the words "hoping to", '"intended to". There is no "WE GUARANTEE AT LEAST" in those statements, is there? And that's what Milwaukee Alder Bob Bauman noticed as well, and he wasn't happy to hear about it. He asked Walker Admin flack Matt Maroney why there weren't requirements or set-asides for Wisconsinites, similar to how there were certain requirements attached to the Bucks arena project.
Calling the presentation by Maroney “propaganda,” Bauman asked him why the state didn’t include mandatory hiring levels in their deal with the company. “Doesn’t $4 billion worth of subsidy give the state more than a little leverage to mandate certain things?” asked the alderman.

Maroney responded: “you can look at it like you can mandate everything, or you can look at it like a partner and try to achieve something greater.”...

Maroney also confirmed the state has no current plans for public transportation as part of the project, and would prefer any solution to come forward from local government. “Transit, housing, those are all long-term issues. We are early,” said Maroney.
Of course, Democrats such as State Rep. David Crowley demanded that transit funding be as part of the Foxconn package when it was debated last Summer, and Republicans blocked it. Now, it's a long-term issue that will cost us more be dealt with in the future.

But at least the Walker Administration sent one of their reps to this meeting in Milwaukee. Foxconn didn't even send anybody, and that's not the first time that the corporation has ducked public meetings to discuss the project that they are receiving billions of public subsidies to complete.

Given the details that keep coming to light on just how messy, disruptive and and costly this Fox-con is, does anyone think it would have gone through if these issues and the rest of the Fox-con had been discussed in detail in then State Legislature? Which explains exactly why Walker and the Legislature jammed this through before these details could be identified and dealt with, because they preferred headlines and PR stunts to an economic development strategy that actually leads to sustainable growth.

Saturday, April 14, 2018

This week in WisGOP corruption - its a big one.

It's been quite a last few days of corruption and anti-democratic statements for Wisconsin Republicans. Let's go over a few of the stories.

First of all, Jason Stein followed up from Thursday's bombshell where Wisconsinites found out Assembly Speaker Robbin' Vos went on an all-expenses-paid trip to London from a GOPAC's "educational fund". Stein told us on Friday that Vos and other WisGOPs had received big money from the payday loan companies whose lobbyists just so happened to also be on the trip.
Over the past decade, Wisconsin Republicans have received tens of thousands of dollars in campaign donations from the leader of a title loan company that sent lobbyists along with Assembly Speaker Robin Vos on a free trip to London.

Since 2008, Select Management Resources chief executive officer Rod Aycox, his wife and other family in Georgia have contributed $87,500 to GOP candidates in Wisconsin, state campaign finance records show....

Vos said again Friday that he had not been contacted by the FBI or other authorities or discussed any legislation with lobbyists on the trip, either during it or afterward.

The bulk of the Aycox donations — about $65,000 — went to help Republicans seeking seats in the Assembly, including a $20,000 donation in October 2016 to the GOP caucus campaign fund. As speaker, Vos oversees that leadership committee and campaign efforts for GOP Assembly candidates.

Among the others donations were $8,000 to the Senate GOP campaign committee in October 2016; $2,500 in March 2017 to Attorney General Brad Schimel; $5,000 to Gov. Scott Walker in October 2014; and assorted smaller amounts to individual lawmakers.
Of course those donations had nothing to do with Vos's GOP Assembly caucus voting in lockstep to exempt rent-to-own stores from Wisconsin consumer protection laws late in the night of the last Assembly session of 2018. Nor did it have anything to do with this scene that happened later that week, as they were deciding which Senate bills to agree to, and which ones to kill.

Just like how these skeletons falling out of Vos's closet had NOTHING to do with his surprising decision not to run for the House seat that Paul Ryan is vacating. Yeahhhhh....

You may have seen Attorney General Schimel's name on the list for those receiving money from the payday loan and rent-to-own guy. The crooked, dimwitted AG got himself back in the news yesterday by giving the definition of a "gaffe" - telling a truth you don't want people to know.
"We battled to get voter ID on the ballot for the November '16 election," Schimel told conservative host Vicki McKenna on WISN (1130 AM) on Thursday.

"How many of your listeners really honestly are sure that Senator (Ron) Johnson was going to win re-election or President Trump was going to win Wisconsin if we didn’t have voter ID to keep Wisconsin’s elections clean and honest and have integrity?"
Actually Brad, it's removed much of the legitimacy Trump or Johnson may have had, because there is no question that lower turnout in pro-Dem cities in Wisconsin were a key factor behind both those men winning in 2016.

Isn't it nice and telling that Schimel used Icki's show on KLAN radio 1130 to make that statement. "Voter ID keeps THOSE PEOPLE from voting" is a bedrock mentality within the racist RW BubbleWorld in Wisconsin, as we saw earlier in 2016 from another WisGOP doofus from 262-land.
The comments echoed ones U.S. Rep. Glenn Grothman (R-Wis.) made on the night of Wisconsin's presidential primary in April 2016.

"Now we have photo ID, and I think photo ID is gonna make a little bit of a difference as well," Grothman told WTMJ-TV in explaining why he thought Republicans would win that fall....

Trump won Wisconsin by more than 22,000 votes and Johnson won by more than 99,000 votes. Schimel did not say in his radio interview if he believed that many people would have fraudulently voted without the voter ID law, if he thought more Democratic voters would have turned up if the voter ID requirement were not in place or if he meant something else.
In addition to keeping THOSE PEOPLE from voting, we also found out yesterday that Schimel's Department of "Justice" had no problem wasting hundreds of thousands of taxpayer dollars to preserve another GOP advantage in elections.

Also from Bauer's AP story yesterday:
Wisconsin taxpayers footed a previously unknown $60,000 bill for an attorney to argue for 10 minutes before the U.S. Supreme Court in the state’s defense of a redistricting lawsuit, records obtained by The Associated Press show.

A summary of bills provided by the Republican leaders of the state Senate and Assembly through an open records request shows the law firm of Kirkland and Ellis was paid $60,000 to make the Supreme Court arguments in October. The cost wasn’t included in original contracts signed by Republican legislative leaders in February 2017....

The Legislature asked for time to present its position during oral arguments, which resulted in the $60,000 bill on top of $175,000 paid to the law firm for other work, Fitzgerald spokesman Dan Romportl said.

The solicitor general for the Wisconsin Department of Justice had 20 minutes of time to defend the maps in the oral arguments in addition to the 10 minutes given to the attorney from Kirkland and Ellis.
Let's also not forget all of our dollars that Schimel has thrown away in trying to fight against marriage equality, doing Walker's dirty work in trying to stop elections in 2 legislative seats, and as recently as 6 weeks ago, taking part in a new lawsuit trying to repeal the ACA through the courts, claiming that things are different after GOP sabotage efforts in Congress.

I think I'd take Homer as our AG today, and he isn't real.

Oh, and there's another case that the DOJ is using our tax dollars to take on that reeks of sketchiness, where these partisan Republicans are trying to "represent" State School Superintendent (and Dem candidate for Governor) Tony Evers in a case, even though Evers doesn't want their "help". 2 years ago, in a case called Coyne v. Walker , the Supreme Court held that because the State Superintendent was an elected position, Walker's Administration couldn't make it follow their orders in enforcing (or not enforcing) regulations.

Well yesterday, a suspicious decision by the conservative-controlled State Supreme Court allowed them to bypass an appeals court and fast-track a case for next month that basically rehear the Coyne case.
The case was brought by the conservative Wisconsin Institute for Law and Liberty (a Bradley Foundation-funded chop shop) against state Superintendent Tony Evers, who the group says violated a recent law, known as the REINS Act, that requires state department officials to ask the Department of Administration for permission to craft regulations.

Walker has denied Evers’ request for outside legal representation in the case. Evers, who is represented by Justice Department lawyers and is also a Democratic candidate seeking to challenge Walker in the fall election, asked the court to appoint an outside lawyer, but the court didn’t decide that issue in its ruling Friday. Instead it will hear oral arguments on the issue May 15....

The Coyne decision held that the state constitution gives the state superintendent authority to set education policy for the state. Bradley, Abrahamson and conservative justices David Prosser and Michael Gableman agreed.

Gableman, who is retiring, will be replaced this summer by Rebecca Dallet, who was supported by liberals. Meanwhile Prosser has been replaced by Walker appointee Dan Kelly.
Since Dallet doesn't take her seat until August, you don't think the righties on the court are trying to jam this case through to consolidate power in the Governor's office, do you? It would be a move that goes against the wishes of the voters of Wisconsin, who voted 61-39 last week to continue the State Treasurer's Office precisely because they DIDN'T want the Governor's office to grab more power.

I've called the Wisconsin GOP an organized crime syndicate for a few years now, and this week gave another great example of them living down to that reputation. It permeates all areas they have power in, from the Legislature, to the Attorney General's Office to the State Supreme Court. And I didn't even have to go into Governor Scott Walker's rampant pay-for-play corruption and general dislike of democracy.

FIRE THEM ALL in November.

Friday, April 13, 2018

Stocks crossed the streams this week. Just sayin'

If you follow charts (and it sure seems like the coked-up traders make decisions based on them), you’ll note that the 50-day moving average of the S&P 500 went below the 100-day moving average yesterday. Known as one of a number of types of “death crosses”, that’s often seen as a bearish signal on the stock market.

Despite a good rally on Thursday, the S&P stayed below its 50-day and 100-day averages, and despite a higher opening Friday, stocks retreated when it got near the 50-day average, and went back down. This kept the stock market in the relatively tight range that it has stayed in for the last 4 weeks.

If you look at that chart, it’s intriguing to see that the S & P slipped below the 50-day moving average on Monday, March 19, driven by the initial revelations that tens of millions of Facebook users had their information sent to pro-Trump data outlet Cambridge Analytica without their consent. And unlike the previous declines, the market kept dropping all that week and has stayed down below that 50-day mark ever since.

I’ve been wrong on the lasting power of the 9-year bull market the last few years, so I won’t say much now. But when you see the combination of the cross on the chart and the Federal Reserve and CBO both predicting higher interest rates and inflation, I do wonder what kind of catalyst can drive things higher. Even today's strong earnings from Wall Street banks were largely met with a shrug, which indicates that expectations of strong profit growth through corporate tax cuts are “baked in the cake”, and that it's more likely that earnings news will drive things down if they fall short.

And I will say that seeing the 50-day and 100-day “streams” crossing each other on the way down brought this to my mind, and now I’ll bring it to yours.

Tax cuts looking worse, as benefits go to foreigners, and deficit already rising

We already have had a good idea that the Piece of Shit tax plan that went through Congress in December wasn't going to help a lot of Americans and blow up the budget. And while the Congressional Budget Office said this week that economic growth might get a bump from the tax cuts in the next 2 years, it wouldn't be enough to make up for the revenue losses caused by the tax cuts, and the country's debt and interest rates would go higher as a result.

But it's likely worse than we thought, as the CBO also said this week that most of the benefits of any added economic growth from the tax cuts won’t stay in America.
President Donald Trump touted the economic growth triggered by his tax cuts in a speech Thursday afternoon, pointing out the projected growth of gross domestic product (GDP) over the next 10 years had increased because of the plan.

But 80 percent of the economic growth generated by the Republican tax cuts will eventually go abroad and benefit foreigners, according to a new report by the nonpartisan Congressional Budget Office.

The report found significant differences between projected GDP, which measures the level of production in the U.S., and gross national product, which measures the income earned by all Americans. If the economic impact from GDP is higher than GNP, the difference between the two is income generated in the United States but going to foreigners. According to the CBO, on average 34 percent of income from the economic activity driven by the tax cuts is flowing out of the country, and in 2028, when the full effects of the tax cuts are in place, that number will increase to 80 percent.

….Nearly one-third of the U.S. stock market is owned by foreign investors, which means they’re benefiting from the $238 billion increase in stock buyback authorizations since the tax law passed. An analysis of Fortune 500 companies found that corporations have spent 37 times more on stock buybacks than on American workers’ bonuses and wages. “Republicans had fair warning that a huge chunk of this economic boost would flow to foreigners,” said [Democratic Senator Chris] Van Hollen. “The bottom line is that foreigners own a large chunk of U.S. corporations and will get a big windfall.”

At the same time, U.S. deficits are projected to balloon because of the decrease in revenue being collected under the tax cuts. The CBO projects that federal spending will exceed revenues by $804 billion in fiscal year 2018, up from $665 billion in 2017. The national debt is now on track to be 100 percent of GDP by 2028. That means the U.S. will have to borrow money to make up for its shortfalls, and much of that money will come from abroad. The small gains to GDP will be offset by increased interest payments abroad.
And that deficit keeps growing, with this week’s US Treasury statement confirming an earlier report from the CBO saying that Uncle Sam spent nearly $600 billion more than it took in for the first half of Fiscal Year 2018.

As noted above, that deficit over 6 months is nearly as much as the deficit the country racked up for all of Fiscal Year 2017, and while the CBO estimated that the deficit will only grow by $204 billion in the second half of this year (largely due to tax payments being sent to the IRS in April), there is a worrying stat in the Treasury statement that makes me wonder if things might not even be worse.

February and March were the first two months of lower tax withholdings from the Trump/Ryan tax bill in DC, and revenues have dropped compared to what we saw a year ago as a result.

Withheld individual income taxes, Feb-March 2018 vs 2017
Feb 2017 $116.6 billion
Feb 2018 $110.7 billion

March 2017 $139.6 billion
March 2018 $132.3 billion

There’s also the question about what will happen with tax refunds, as many people accelerated their property tax and state income tax payments to the end of 2017 so they could take advantage of deductions that they might not get due to changes in the GOP tax bill that make those deductions less likely to be used in 2018. For February and March, individual income tax refunds were up 2.1%, basically the rate of inflation, so no big change yet, but when added to the lower withholdings, it definitely leaves a hole. .

But April’s figures might be the bigger indicator of what the new tax bill did to change people’s behavior, as that is typically a month where the Treasury runs its biggest one-month surplus of the year due to people sending in payments to DC ($182.4 billion last year). If we aren’t seeing figures near that $182 billion this year, then it’s time to worry, as it means we are likely heading toward a $1 trillion deficit even sooner than 2020.

So to review, the GOP tax cuts aren’t doing much to raise wages of everyday workers, most of its benefits will go overseas, and our deficits and interest rates are climbing higher than expected. That’s not a very good recipe for economic success, and it sure makes me think that 3.3% growth and 3.8% unemployment that the CBO is counting on for 2018 is going to be very hard to reach.

Thursday, April 12, 2018

Robbin' Vos hanging in London with payday loan lobbyists!

I wasn’t expecting to see this article from Patrick Marley and Jason Stein that hit the Milwaukee Journal-Sentinel this afternoon. But given that the story involves Assembly Speaker Robin Vos and lobbyists, I’m also not surprised.
The Assembly's top leader was among a national group of lawmakers who took a free trip with lobbyists to London — an August excursion that contributed to the resignation Tuesday of his counterpart in Ohio.

Wisconsin Assembly Speaker Robin Vos (R-Rochester) defended taking the free trip and said he followed state ethics laws in accepting it.

Cliff Rosenberger, the speaker of the Ohio House, said this week he was stepping down amid an FBI investigation that is reportedly looking at the four-day trip to England and other issues….

The Aug. 28-31 London trip was paid for by the conservative GOPAC Education Fund, one of a range of groups that help pay for educational conferences for state lawmakers, from the nonpartisan National Conference of State Legislatures to the liberal State Innovation Network and the conservative American Legislative Exchange Council. Though such trips are relatively common, a choice international destination like London isn't the norm.

The “free trip from GOPAC” part is bad enough, but Marley and Stein leave the real juicy connection to the end of the article.
Two out-of-state lobbyists for title lender LoanMax, Steve Dimon and Leslie Gaines, were also on the trip. LoanMax is not registered to lobby in Wisconsin, but the title loan industry has long lobbied in Wisconsin and in the past Vos has sponsored measures to loosen state regulations on the industry.
And that's why I call him ROBBIN’ Vos.

What can I sell off this time?

Oh, and note the timing of that trip – late August, when the Wisconsin state budget was 2 months overdue and the new school year was starting up without districts knowing how much money they’d get from the state. Nice to know what issues Wee Wobbin' found to be a bigger priority with at the time, isn’t it?

After this story, I definitely hope that weasel tries to run for Ryan’s seat in Congress. First, it seems likely that more Swampy deals from Vos’s speakership will be uncovered over the next 7 months, and drag down other Republicans in the Assembly. "Free trips from lobbyists from the payday loan industry" is also the kind of thing that makes a whiner like Vos with already-negative charisma become even more unattractive to casual voters in the rest of the state. That could be a big deal in a race that may well be in toss-up territory in November.

As I mentioned yesterday, clearing Ryan, Walker and Vos out of any role in Wisconsin politics by January 2019 would be a massive gust of fresh air for a state. And God knows we need things to be cleaned up, because Wisconsin has been badly defouled by these dishonest Reagan Youth sleazeballs throughout the 2010s. Let’s make it happen.

Wednesday, April 11, 2018

I'll let others do the talkin on Lyin' Paul Ryan

Me and my wife were heading to work today when we heard the news about how Speaker of the House Paul Ryan is wussing out of facing the voters this November, and retiring from Congress after this term. I wasn't all that surprised, but it still was great to see that lowlife be humbled and intimidated like he clearly has been.

Charlie Pierce is among the best political writers in America, and he joined in the numerous reflections of Ryan's career today. Like Ryan, Pierce is Irish-Catholic, but unlike Ryan (and fellow lifetime grifter Scott Walker), Pierce actually got an undergraduate degree from a Wisconsin university, and actually follows Christian values of caring and compassion for those going through tough times, and demands a government that does the same.

That's in strong contrast to Purty Mouth Pau-lie and Gov Dropout, who use their religion as a shield to hide behind, and try to injure those who are less fortunate. And that is perhaps why Pierce has always had an extra level of disgust for an already-disgusting man.
As a longtime connoisseur of Ryan’s public fakery, I may never decide what about him I find the most nauseating—the retrograde policies that he gussies up as concern for the poor and downtrodden, or the wet-eyed phony sincerity with which he sells them. Even in his press conference on Wednesday, Ryan expressed disappointment that, in his two decades in Congress, he didn’t get to fully gut Medicaid and Social Security. From C-SPAN:
Entitlement reform is the one thing, the one other great thing I spent most of my career working on. I’m extremely proud of the fact that the House passed the biggest entitlement reform bill in the history of the House of Representatives. Do I regret that the Senate did not pass this? Yes. But I feel, from all the budgets that I’ve passed, normalizing entitlement reform, and the House passing entitlement reform, I’m very proud of that fact. But of course, more work needs to be done. And it really is entitlements. That’s where the work needs to be done. And I’m going to keep fighting for that.
This would include, of course, “reforming,” probably out of existence, the Social Security survivor’s benefits that got him through high school and college before he could line up at the federal trough for the rest of his adult life.
Of course, when Ryan says he'll "keep fighting" to screw the old and the sick, he's hinting at his next job - as a highly-paid front man for some BS right-wing group like the Heritage Foundation or AEI or the Bradleys (or, if things really go right, all 3 of them), guaranteed to have those pretty blue eyes on Sunday morning TV continuing to sprout things that are proven to be completely false and/or absurd.

Pierce ends with a fitting flourish for the outgoing Speaker.
It would be great if every respectable Republican in the district ran and hid and left Nehlen as the party’s standard-bearer in the race to replace Paul Ryan. It also would be quite fitting. Ryan always served as one of the more “respectable” faces of a Republican Party that was steadily going mad. He didn’t care as long as the people who bought him dinner were happy with how he was rigging the nation’s economy on their behalf. Now, he’s going home to spend more time with his donor…er…family.

Soooooo punchable

Ryan was also rightfully ripped today by Paul Waldman in the Washington Post column. Waldman says that while Ryan is a vapid fool who believed in some awful ideas, that made him a perfect face for a Republican Party that talks a big game, but has no moral backbone, and no ideological or intellectual honesty.
During his news conference this morning, Ryan explained his departure this way: “I have accomplished much of what I came here to do, and my kids aren’t getting any younger.” So what did he accomplish?

For years, Ryan has presented himself as someone deeply concerned with fiscal discipline, committed to getting America’s books in order. As anyone with any sense realized, this was a scam: Like all Republicans, he used the deficit as a bludgeon against Democratic presidents, then forgot all about it while a Republican was in office.

At the same time, Ryan — a lifelong admirer of Ayn Rand, the philosopher of selfishness — dreamed of destroying the safety net, eviscerating Medicaid, privatizing Medicare, slashing food stamps, and generally making life in America more cruel and unpleasant for all those who aren’t wealthy....

Paul Ryan was always a fraud. He pretended to be a wonk’s wonk, but his budget and policy plans were full of sleight-of-hand and magic asterisks that fell apart on the most superficial examination. He pretended to be terribly worried about the deficit, but he happily jacked it up when he got the chance. He pretended to care deeply about the poor, but would have made their lives impossibly more miserable had doing so been politically tenable.

And he pretended to be scandalized by Trump’s repugnant words and actions but, after a few regretful words and a furrowing of his brow, would always go right back to supporting the president. So while he will surely be remembered as one of the least effective speakers we’ve ever had, you can’t say Ryan didn’t faithfully represent his party.

Let's play "Spot the minority!"

As for my thoughts about Paul Ryan, well, Jon Stewart and his choir said it better than I ever could have several years ago.

Ryan stepping down also means that within a span of 2 years, Wisconsin can be rid of Reince Priebus, Paul Ryan, and Scott Walker as "representatives" of our state in politics. Then add in the possibility of someone like Robbin' Vos getting his weasely self beaten in WI-1 by "Ironstache" Randy Bryce or Cathy Myers in November, and that would be one hell of a clean sweep out of scum for the state.


Wages, inflation good for March. But will gas, other prices sprout in Spring?

With all of the items going on in the news involving certain Wisconsinites and others, today's report on March's Consumer Price Index didn't get a lot of attention. But there are some interesting points that are lurking below that could come to the forefront that might have notable effects on our economy.

If you just look at the topline numbers in the CPI report, it would appear that inflation was slowing.
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in March on a seasonally adjusted basis after rising 0.2 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.4 percent before seasonal adjustment.

A decline in the gasoline index more than outweighed increases in the indexes for shelter, medical care, and food to result in the slight seasonally adjusted decline in the all items index. The energy index fell sharply due mainly to the 4.9-percent decrease in the gasoline index. The index for food rose 0.1 percent over the month, with the indexes for food at home and food away from home both increasing.
And this decrease in inflation enabled real hourly wages to rise for only the second time in last 8 months, by a robust 0.4%. Sounds pretty good, and does this mean that we’re heading toward a sweet spot of wage gains combned with lower inflation?

Don’t bet on it. Notice that 2.4% increase in prices over the last 12 months? It’s the highest in a year, and later in the CPI report you see that prices for most items actually went up last month, including a boost to th "core" CPI.
The index for all items less food and energy increased 0.2 percent in March, the same increase as in February. Along with shelter and medical care, the indexes for personal care, motor vehicle insurance, and airline fares all rose. The indexes for apparel, for communication, and for used cars and trucks all declined over the month.

The all items index rose 2.4 percent for the 12 months ending March, the largest 12-month increase since the period ending March 2017 and higher than the 1.6-percent average annual rate over the past 10 years. The index for all items less food and energy rose 2.1 percent, its largest 12-month increase since the period ending February 2017. The energy index increased 7.0 percent over the past 12 months, and the food index advanced 1.3 percent.
Those year-over-year and core inflation figures came out 2 weeks after the Federal Reserve's Open Market Committee indicated in their meeting that prices and the overall economy would go up in the coming months. We found that out today when the minutes from that meeting were released today.
All of the Federal Reserve's policymakers felt that the U.S. economy would firm further and that inflation would rise in the coming months, minutes of the central bank's last policy meeting on March 20-21 released on Wednesday showed.

The readout of the meeting, at which the Fed unanimously voted to raise borrowing costs by a quarter percentage point, also showed that policymakers were wary about the impact of the Trump administration's trade and fiscal policies….

Policymakers also see additional impetus from an economy in which the labor market is tightening, the dollar weakening and the stimulus from a $1.5 trillion income tax cut package and increased government spending yet to impact on the economy.
That likely will translate into rising interest rates from both the Fed and other places for the rest of 2018, and is similar to the outlook that the Congressional Budget Office gave on Monday.

Also, see that March drop in gas prices of 4.9%? Don’t get used to that either, because Oil futures were trading at their highest levels in 4 years after our president tried to distract from the worsening Trump/Russia scandal opened his big mouth about the Middle East this morning.
Prices began to rally as U.S. President Donald Trump threatened to fire missiles at Syria in response to a suspected chemical attack last week.

Prices climbed further as Saudi Arabia's air defense forces intercepted a missile over the capital Riyadh on Wednesday, Saudi-owned broadcaster Al Arabiya said, after at least three blasts were heard in the city.

Brent crude jumped to a high above $72 a barrel, its strongest since early December 2014, after Trump's comments, while U.S. crude rose above $67 a barrel. Gold (XAU=) rallied for a fourth day as investors ditched risk-linked assets such as equities.
That US crude figure is up nearly $5 a barrel since the end of last week, and I would think that would lead to higher prices at the pump in the coming weeks (well, that along with the typical Spring price spike).

And if inflation is on the rise, and if wages do not continue to rise like they did in March, any good will that some people may have for Trump and the GOP have on the economy will melt away in the next few months. And it's not like things look good for those guys these days, even with the country having low unemployment and continued GDP growth. What if inflation and higher interest rates leads to THAT reversing as well?

Tuesday, April 10, 2018

Trade deficits, tariffs and farming - where are we at?

Wanted to ramble a bit on tariffs and trade issues, since that's still looming as a major wild card for the coming months in the US economy.

We had an update on the US trade deficit just last week. So let’s go inside that release from the Bureau of Economic Analysis and see what it said.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $57.6 billion in February, up $0.9 billion from $56.7 billion in January, revised.

February exports were $204.4 billion, $3.5 billion more than January exports. February imports were $262.0 billion, $4.4 billion more than January imports.

The February increase in the goods and services deficit reflected an increase in the goods deficit of $0.3 billion to $77.0 billion and a decrease in the services surplus of $0.6 billion to $19.4 billion.

Year-to-date, the goods and services deficit increased $21.1 billion, or 22.7 percent, from the same period in 2017. Exports increased $22.4 billion or 5.9 percent. Imports increased $43.6 billion or 9.1 percent.
Not great numbers, with the $57.6 billion trade deficit for February is $13 billion more than it was just 6 months prior to that, and the largest deficit since the Great Recession.

The flip side is that both imports ($23.7 billion) and exports ($10.7 billion) have gone up for the US over those 6 months, and some might argue that reflects a strong economy on both the consumer side and on the Us exporter side.

The goods deficit in china has stayed on the high side, and was at an estimated $34.7 billion for February, and $70.2 billion for 2018 so far, an increase of 19% vs the first 2 months of 2017. Almost all of that increase reflects an increase in US imports of $11 billion, while exports of goods to China have remained mostly steady (a little over $21 billion for Jan-Feb 2017 and 2018).

UW’s Menzie Chinn has forgotten more about trade issues than I’ll ever care to know, and he brings up two intriguing possibilities on the effects that any US vs China trade war may have on Chinese consumers and American farmer (since agricultural products are the main ones that would be tariffed by China).

Chinn says a big question is how much American soybeans (as an example) are needed by Chinese consumers. In addition, given that products that have some parts made in other countries and go through China on the way to the US will be an especially hard hit on China.
For instance, a 25% tariff on US soybeans, could result in a 25% increase in prices of imported soybeans in China. Or it could result in 0% if the US is a very small supplier in global markets. Well, the US is pretty large (largest single exporter), so let’s say 15% of the tariff is reflected in Chinese prices. The other 10% is reflected in US prices, both domestic and foreign (as long as there is no other segmentation imposed). I wonder at the equanimity of those contemplate from the safety of afar what 10% price reduction means….

While the dollar amount trade covered by retaliation proposed by the Chinese is roughly the same as that of the US under Section 301 (around $50 billion), the tariffs of 25% is on gross value. This matters, since it’s likely for most of the imports from the US to China, the US value added is close to 100%. On the other hand, as noted in this post, roughly 50% of the value of US imports from China is foreign sourced. Taken literally, a 25% tariff on gross value works out to 50% tariff on Chinese value added. Of course, it might be that the Chinese value added in the imports covered by the Section 301 tariffs is a higher proportion than 50% (phones were excluded, for instance). Still, the nominal 25% tariff is likely to translate into a higher tariff rate on Chinese value added. So the pain inflicted on Chinese exporters targeted is higher than that on American exporters, ceteris paribus.
Prof. Chinn says another option might be for the Chinese not to put tariffs on American products, but to make the American products more expensive (and their products less expensive in the US) by dropping the value of their currency.
The preceding analysis abstracts from exchange rates. However, China has (still) a partially managed exchange rate. The threat that China would unload its Treasurys I always thought an empty one; the capital losses would be too large (of course stopping purchases would be an option that might not be as obviously costly; some recent estimates of impacts on Treasury yields here).

However, China could do the opposite, and buy more Treasurys, strengthening the dollar, i.e., weakening the yuan. There is substantial scope for depreciation, as shown in Figure 2.

…So, in order to restore competitiveness, all China needs to do is to engineer a depreciation/rebuild forex reserves. (Because the Fed does not have a bilateral trade balance mandate, I don’t think the US would respond, via interest rates, in kind.) A managed CNY depreciation would run afoul of charges of currency manipulation by trading partners, and perhaps put China on Treasury’s watchlist for manipulators. But then, you have to wonder: what more sanctions we could place on China for currency manipulation?

I also found this story from the week interesting, particularly in light of the possibility of tariffs being placed on certain US agricultural products by China and others.
U.S. corn exports jumped to the highest in at least 23 years [in the first week of April] amid adverse crop weather in the Americas and the threat of Chinese trade tariffs.

A persistent drought in Argentina has cut grain output, and dry weather into May may curb production of the second-season harvest in Brazil. Cold, wet weather in the next two weeks will crimp U.S. planting, increasing risks that Midwest crops will pollinate during hot weather in July, further reducing prospects for global supplies.

U.S. exports in the week ended April 5 jumped 60 percent to 1.94 million tons from a year earlier to the highest since the Department of Agriculture began reporting the data in 1995. Japan and Mexico were the biggest buyers with a small amount sold to China, which is embroiled in a trade dispute with the Trump administration.
So watch for the higher prices there when you’re at the store in the near future. I guess that’s one small bright side for farmers this year in a time when lower prices in many other areas are killing off large amounts of smaller farms.

Wall Street keeps ping-ponging back and forth depending on how seriously they take Trump's tough talk on trade, and on how severe (or not severe) any tariffs and other restrictions may be. But the bigger story may be what's happening now, as the trade deficit keeps rising along with our fiscal deficit, and the effect of that on the dollar, consumer prices and interest rates may affect the economy a lot more than any particular tariffs or other trade barriers will.