Friday, May 18, 2018

The Dark Lord (and massive prison OT) cometh

Hanging with friends and attending my first Dark Lord Day at 3 Floyds Brewery in Indiana. AssuMing I survive it, I'll have more to say later this weekend.

I do have one comment- No surprise that Walker/WISGOP idiocy is now biting taxpayers in the ass to the tune of $42 million in OT at the state's prisons and hundreds of vacant positions. You mean when you take away people's bargaining rights and continue to underpay guards while having 20th Century "lock em up" policies, you have understaffing issues? SHOCKER!

Add it to the pile of reasons the Age of Fitzwalkerstan must end, I guess. Have fun wherever you are at (all 5 of you!)

Thursday, May 17, 2018

Wisconsin with record April....and job loss. Be skeptical

The third Thursday of the month usually means a new Wisconsin jobs report, and sure enough, it gave our Governor a talking point on his re-election campaign.

Here are the toplines from the press release from the Wisconsin Department of Workforce Development, and I’ll italicize one bit of news that is likely as buried in your local press as it is in this report from Scott Walker’s Department of Workforce Development.
Place of Residence Data: Wisconsin's preliminary seasonally adjusted unemployment rate for April 2018 was 2.8 percent, a decline of 0.1 percent from the March rate of 2.9 percent. The April decline is the 3rd straight month that Wisconsin's unemployment rate has declined or stayed the same. Wisconsin's labor force participation rate also increased over the month by 0.2 percent to 68.9 percent. The number of people employed in Wisconsin also increased by 8,100 people setting a new record for the state with 3,086,100 individuals employed. The year over year increase of 42,700 people employed is statistically significant according to BLS methodology.

•Place of Work Data: Based on preliminary data, Wisconsin has gained 11,000 total non-farm jobs and 8,800 private sector jobs over the last three months. Over the month, Wisconsin's total non-farm job number declined by 1,000, and private sector jobs declined by 3,100. Over the year, Wisconsin has gained 27,900 total non-farm jobs and 26,100 private sector jobs, including a statistically significant 13,700 manufacturing jobs according to BLS.
We lost 3,100 private sector jobs last month? Seems kind of important, and we also had March’s private sector jobs total revised down by 700. Granted, some of that can be explained away by the record snows for April (the biggest job “losses” were in Construction, which lost 2,000 jobs on a seasonally-adjusted basis despite having 6,400 more people working overall).

But likewise, the household survey which lists the “record 2.8% unemployment” counted +7,000 in the work force on a seasonally-adjusted basis, while actually having -6,900 for the non-seasonal figure. Seems odd that you’d expect more people to be working in April, but also expect fewer people in the work force at the same time.

Those figures also go with DWD reports which show that unlike the rest of the country, the Walker DWD claims more Wisconsinites are looking for work than at the end of 2017, and even more found jobs in the first 4 months of this year.

Wisconsin household survey, Apr 2018 vs Dec 2017
“Employed” +28,700
Labor Force +17,300

The payrolls part of the report (which gives total jobs) isn't as strong, but is still pretty good.

Wisconsin payrolls survey, Apr 2018 vs Dec 2017
Change in all jobs +19,200
Change in private jobs +15,900

If those numbers are accurate, it seems like things are going great in Wisconsin, and you can choose to believe that if you want. But past history shows that these gains will likely be lowered once they are subjected to the “gold standard”- the Quarterly Census on Employment and Wages (QCEW).

We saw this same routine last year, where Walker’s DWD was claiming that the jobs market was off to a roaring starting in 2017, and it turned out not to be the case.

Change in all jobs Dec 2016-Apr 2017
Walker DWD +27,600
Revised total +11,200

Change in private jobs Dec 2016-Apr 2017
Walker DWD +27,000
Revised total +14,900

Change in “Employed” Dec 2016-Apr 2017
Walker DWD +58,800
Revised total +22,200

Change in Labor Force Dec 2016-Apr 2017
Walker DWD +32,400
Revised total +10,900

With that in mind, take a look at what the DWD was spinning reporting this time last year.
Place of work data: Based on preliminary data, the state added a significant 37,600 total non-farm jobs and a significant 29,300 private-sector jobs from April 2016 to April 2017. Wisconsin also added 7,500 private sector jobs and a significant 14,800 total non-farm jobs from March 2017 to April 2017. Other significant month-over-month gains include 5,100 jobs in Manufacturing.
However, when those figures were benchmarked to the “gold standard” report 2 months ago, the April numbers ended up being a lot smaller.

April 2017 Wisconsin jobs, DWD vs revision
April 2017 change in all jobs
Walker DWD +14,800
Revised total +400

April 2017 change in private jobs
Walker DWD +7,500
Revised total -2,100

Apr 2016-Apr 2017 change in all jobs
Walker DWD +37,600
Revised total +17,900

Apr 2016- Apr 2017 change in private jobs
Walker DWD +29,300
Revised total +21,600

In addition, who in their right mind believes over 50% of the state’s private sector job growth in the last 12 months has been in manufacturing – a sector that accounts for less than 1 in 5 private sector jobs? As recent history tells us, those alleged gains in manufacturing jobs are also not likely not hold up.

Interestingly, Walker’s DWD usually would include information on what they sent to the Bureau of Labor Statistics for that QCEW report along with the regular jobs report that came out today,a nd the tiem frame would show the year-end amounts for 2017. But that wasn’t in today’s press release, which reminded me that that they also hid those numbers this time last year. Why? So they could dump them on the Friday before Memorial Day because they revealed that 2016 had by far the worst job growth of any year Walker has been in office.

Will we see another bad performance for 2017, with another year of job growth below 1%? Figures that we’ve seen so far from the QCEW make that seem likely.

So will we see Walker’s DWD pull another pre-Holiday weekend news dump to bury those facts? That also seems likely. At this point, I’m going to assume any good jobs news from Walker’s DWD will be BS until we get backing data from a non-WisGOP source.

Either that, or DWD Secretary Ray Allen and the rest of the DWD higher-ups need to show their work and explain why it keeps getting the numbers wrong in a way that’s helpful to their boss in the Governor’s Office. And I hope I'm not the only one asking to see the spreadsheets and survey results at this point.

Wednesday, May 16, 2018

Walker's "0%" budget instructions somehow mostly meaningless AND damaging to roads, higher ed

I wantyed to take a minute to break down what our Fair Guv gave in his budget instructions yesterday.
All agencies should assume there will be zero growth in overall GPR appropriations in each fiscal year during the 2019-21 biennium, and specific program needs should be managed within this general constraint.

Note: Exceptions will occur only for K-12 school aids; required basic cost-to-continue needs for the state's institutions, i.e., the Department of Corrections and the Department of Health Services institutions; entitlement and related assistance programs in the Department of Health Services (e.g., Medical Assistance), the Department of Children and Families' Division of Safety and Permanence and Division of Milwaukee Child Protective Services, and the Department of Workforce Development's Division of Vocational Rehabilitation; and housekeeping adjustments like standard budget adjustments, fuel and utilities, and debt service.
Sounds like tough budget constraints to keep costs in line and identify base needs that need to be met.

Except those departments and programs that Walker said wasn't subject to the 0% limit are huge ones. K-12 school aids will be over $5.9 billion of General Fund money by themselves in the next fiscal year, and Medical Assistance is another $3.1 billion. Then throw in another $1.1 billion for Corrections and include all other debt service, which will take $517 million out of the General Fund next year (with more likely to follow in 2019-20).

Put that together, and we are already above 60% of $17.5 billion in General Fund spending for next year that is allowed to have their costs go up.

What may be worse is what DOES get frozen out at 0%. It includes a UW System that has been defunded and denigrated for Walker’s 7+ years in office. A 0% increase budget would mean that there would be $60 million fewer state tax dollars going to the UW System in 2021 than there was 12 years ago, in 2009. And that’s before inflation. Then add in 6 years of frozen in-state tuition limiting the ability of those schools to make up the difference, and you’ve got a system that would continue to wither and have the state’s economic competitiveness decline along with it.

The same freeze applies to the Technical College System, which has 20% fewer dollars for instruction and services than it did in a decade ago. That decision to defund the Tech College System sure seems to go against Walker’s most recent ad where he tries to talk up efforts to improve the state’s work force, particularly in the trades that the Tech College System specializes in.

(By the way, the workers in the ad are employed by Walker’s donors at Weldall. Coincidence, I’m sure).

But yet road funding and other DOT duties are supposed to be frozen at 0%? In a biennium when inflation is supposed to rise by a total of around 5% in that time period? With construction costs rising even faster than that these days?

Keeping DOT funding at the already-diminished levels of 2019 means there would be no options other than more cuts to that needed service (which means more potholes). Or it means more borrowing in a time of rising interest rates, adding more constraints to a Transportation Fund that already has an unsustainable and increasing amount of debt to pay off.

Permanent metaphor for funding of roads and UW under this guy.

These realities is what makes this “0% budget increase” pose to be such a boneheaded double-whammy. The 0% limit avoids so many departments that it’s largely rendered meaningless as a cost-controlling measure, but the items that ARE kept at 0% are ones that have already been defunded and damaged during the Age of Fitzwalkerstan, like roads and higher education.

Can we get an adult in charge that actually believes in governance, and recognizes that public goods need to be maintained and reinvested in. Also can that person understand that math and inflation aren’t “liberal plots”, but rules and concepts to be aware of and follow? Thanks.

Tuesday, May 15, 2018

Retail sales decent in April. So why did Wall Street freak out?

For the second time in a few days, I found myself confused over Wall Street’s take on an economic report. Today it was the retail sales report, which came out this morning to generally strong reviews in the financial media.
U.S. retail sales rose in broad fashion last month as bigger after-tax paychecks helped compensate for rising fuel costs, signaling consumer demand was off to a firm start this quarter.

The value of sales increased 0.3 percent in April, matching the median forecast, after a 0.8 percent advance in the prior month that was stronger than initially reported, Commerce Department figures showed Tuesday.

So-called retail-control group sales, which are used to calculate gross domestic product and exclude food services, auto dealers, building materials stores and gasoline stations, improved 0.4 percent after an upwardly revised 0.5 percent gain.
So the increase was in line with what was expected, and if you dig into the report, there really wasn’t any difference than what we’ve been seeing.

It’s worth reminding you that the retail sales figures are not adjusted for inflation, so given that the CPI rose by 0.2% for April, a 0.3% for sales is barely any kind of real increase. I suppose the stronger revision from March’s report means things are better than we thought, but it’s not like things are booming to another level of growth.

In fact, it’s the higher price of gasoline that is a main culprit, as gasoline sales were up by 1.3% vs March, explaining more than 1/3 of the overall growth in sales. In fact, higher gas prices is the main item that has prevented the growth rate of sales from declining noticeably from this time last year.

12-month change, retail sales
All sales
Apr 2018 +4.7%
Mar 2018 +4.9%
Dec 2017 +5.1%
Sep 2017 +5.0%
Jun 2017 +3.0%
Apr 2017 +4.6%
Dec 2016 +3.6%

Sales MINUS gasoline
Apr 2018 +4.1%
Mar 2018 +4.4%
Dec 2017 +4.8%
Sep 2017 +4.7%
Jun 2017 +3.3%
Apr 2017 +4.1%
Dec 2016 +3.3%

Regardless of what looks to me like “meh” retail sales numbers, Wall Street thought it meant that the economy would pick up, and that prices would pick up as well. And they weren’t happy about it.
The bond market sell-off began after the government said retail sales grew at a healthy pace in April, signaling the economy started the second quarter on a positive note. Relatively weak retail sales in February and March were revised higher, another sign of firmer inflation…

Although rates remain relatively low, the speed of the move spooked some investors. The 10-year Treasury started the day at just 2.99%. And as recently as September, it was just above 2%.

Treasuries have come under selling pressure this year because of concerns that faster inflation will force the Federal Reserve to raise interest rates. A rapid rise of Treasury rates in late January and February caught investors off guard, causing stocks to tank.
This is the exact opposite of what Wall Streeters were thinking last week, when they claimed a 2.45% year-over-year increase meant that inflation was under control (despite it being the highest increase in over a year), and stocks went up.

A minor rally in the last 15 minutes of trading limited losses in the DOW Jones to 193 points, and the 10-year bond yield dropped back to 3.07%. But it was still a notable change from the figures what we had going into today, and given the relatively steady-but-not-spectacular retail sales figure, I’m not sure why there was such a strong reaction.

That is, unless the “wise guys” are catching up to the reality that the average person really is getting pinched by higher gas prices, especially with wage growth not being any better than last year, and sold off because they think the economy and its inflated corporate profits are going to slow down soon.

What the retail sales report tells me is that despite 3 months of higher take-home pay, there is little evidence the tax cuts are making American consumers open up their wallets, except to pay more at the pump. Keep an eye on this in the near future to see if these higher gas prices and higher interest rates start affecting through other sectors in the economy in the coming months. If it does, hold on tight, because we may start losing altitude quite quickly.

Ex-DOT Secretary says Walker avoiding reality on funding and fixing roads

Today’s Capital Times has a long article by Katelyn Ferral that discuss Wisconsin’s transportation funding situation, and includes an in-depth interview with former DOT Secretary Mark Gottlieb.

Gottlieb was a former member of the Assembly that served as DOT Secretary from the start of Walker’s tenure in 2011 until he was forced out resigned in late December 2016. That end came after Gottlieb continued to answer questions candidly regarding the state’s deteriorating highways.

Gottlieb was echoing findings from Wisconsin’s Transportation Finance and Policy Commission, which took over a year to study the state’s entire transportation infrastructure and service needs, and released a report titled “Keep Wisconsin Moving” in January 2013.

Gottlieb says that when the Wisconsin DOT asked Walker to back up the report the findings with actual cash, it didn’t happen.
The commission, championed by Walker and created through legislation signed by him, had 10 members, eight Republicans and two Democrats. Members confirmed its findings unanimously.

In his agency’s subsequent budget request, Gottlieb, a Republican appointed by Walker, asked for money to respond to the commission’s findings.

“It was well understood at that time by the governor and other people in the governor’s office that that’s what we were going to do, that we were going to propose a budget that we felt addressed these issues. That’s what I thought we had been asked to do,” Gottlieb said. “It took the governor less than 48 hours to reject that budget.”
And why did Walker reject the need to add more funding for roads for 2014-15? Because Scotty was planning to run for president in 2016, and kissing up to anti-tax DC BubbleWorlders like Grover Norquist was more important to him than a minor responsibility like FIXING HIS STATE’S ROADS.

In each of the last two budgets, the Governor’s office and the WisGOP-controlled Legislature have talked about how they want to add more money for highways and local roads. But they have failed to come up with the extra money via taxes and fees to do so, leading to a total of $1.2 billion in borrowing and more delays on already-overdue highway projects.

As Ferral points out, even with this increase in borrowing, the amount used for highways is less than we were using before Walker took office.
Much of Walker’s “actual” dollars were borrowed dollars, according to LFB figures. And although local road aids have increased, they have come at the expense of total highway spending, which, according to LFB figures, is the lowest it has been in 10 years.

Total highway funding has been on a steady decline during Walker’s tenure, from $3.11 billion in the 2013-15 budget to $2.79 billion in 2015-17 to $2.54 billion in 2017-19, according LFB reports. Money allocated for the highway improvement program is down 8.8 percent from the last two-year budget, according to the LFB…

“Don't they claim to have cut taxes by billions of dollars? Taxes have been cut but there has been no corresponding increase in transportation revenue,” Gottlieb said. “This administration has prioritized not raising fuel taxes over maintaining the transportation system, and they need to accept the consequences of that decision.”

This map shows some of those consequences

As the instructions for Walker’s 2017-19 budget were developed, the Governor’s Office told the DOT that spending should be limited, particularly when it came to the Zoo Interchange and other heavily-traveled areas in Southeastern Wisconsin. Gottlieb said that was the last straw, because it wasn’t realistic.
“They wanted the department to submit a budget that pretended if we just went along like we were going along, everything would be fine," he said. “That is not the budget I would have submitted based upon my judgement of what was needed.”

Prescribing a specific cabinet agency’s budget request is atypical, Gottlieb and others familiar with the process say. It’s a move Gottlieb said shows how the DOT, once a relatively apolitical agency, has become increasingly politicized under Walker.

“We got to a place where the facts were being ignored in favor of political spin,” Gottlieb said.
Anyone who’s followed Scott Walker’s career knows that place is the only one he’s ever been in, where poses and politics matter more than policy and results. And that non-strategy of avoiding honest solutions continues in the instructions Walker released yesterday for the deficit-ridden 2019-21 budget.

Walker tells most agencies to assume no inflation for the next two years (when the Congressional Budget Office says inflation will get higher due to increased deficits coming out of DC), and spreads that order to the DOT, ruling out gas taxes or fee increases to pay for the roads.
• The zero-growth policy will also apply to the SEG-funded administrative operations appropriations in all agencies that are supported by the transportation fund, the conservation fund, the environmental fund and the lottery fund.

• Funding requests for other types of appropriations and other funding sources in both years should be limited to revenue availability and only the highest priority programmatic needs.

In 2017-19's budget, the funding for regular state highway repair was $225 million below what the Finance and Policy Commission said was needed, and $273 million below what the Commission said was needed for freeways outside of Milwaukee. That's on top of the shortfalls that we saw in 2015 and before then.

Also note that some projects got moved up the pike under Walker’s “leadership,” moving others even further back. Scotty had no problem with throwing $386 million to the Foxconn-sin region to upgrade those roads ($252 million for I-94 and having his DOT send $134 million to upgrade the two-lane roads in the region). But Walker wouldn’t enumerate an expansion of I-94 to 3 lanes in the fast-growing Twin Cities exurbs last year, despite the fact that the St. Croix County project wouldn’t have to be paid for until the next budget at the earliest.

Given the higher inflation and the $500 million in the hole on highways that we’re already in due to the needs that have been put off in previous years, a "0% increase" DOT budget means there we are guaranteed to see even more potholes, delays and borrowing for the next two years if the voters of this state are stupid enough to return Walker to office after November 2018.

Instead, maybe we should have a governor who recognizes that it costs money to fix the roads and have a 21st Century infrastructure, actually PAYS THOSE BILLS instead of putting it on the state’s credit card, and realizes that the full state needs to be invested in, not just the Foxconn-sin region. None of these things will happen under a 3rd term of Scott Walker, and the "politics over everything else" mentality behind of Walker's inaction have already set this state back plenty. We can't afford to lose even more.

Monday, May 14, 2018

Sports betting is legal outside of Vegas!! Well, not immediately, but maybe soon

I got a pleasant surprise from the news wires this morning. Sports betting can become legal throughout all of America! Thanks to a 7-2 decision from SCOTUS today.
Alito and six colleagues agreed, including all the court's conservatives as well as Justice Elena Kagan.

"It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals," Alito said. "A more direct affront to state sovereignty is not easy to imagine."

Justice Stephen Breyer agreed that the provision directing states to maintain sports betting bans should be stricken, but he said the whole federal law should not have been declared unconstitutional.

Ginsburg and Sotomayor went further, saying the the law should stand. "The court wields an ax to cut down (the law) instead of using a scalpel to trim the statute," Ginsburg said. "It does so apparently in the mistaken assumption that private sports-gambling schemes would become lawful in the wake of its decision."
What’s funny is that while I think the 1992 law should have been repealed by Congress and I’m very happy with the outcome, I also think Congress has the right to outlaw certain forms of gambling nationwide if they so choose, just like other activities.

The problem I have with that 1992 law is that is specifically carved out Nevada from enforcement- it should be all or nothing at the federal level (and I favor “nothing”). Not that I’m a lawyer, but if I were ruling on it, the Nevada loophole is what I would have pointed to in order to invalidate the law, and I probably would have taken the Breyer route of “betting’s legal, but mostly because the bill was written wrong.”

Coming soon to the Dells?

Here's a map of who might be looking to open a sports book in the near future.

I don’t see any Wisconsin proposal that was made in this session that even discussed legalizing sports betting here, although Wisconsin AG Brad Schimel apparently signed onto an amicus brief supporting New Jersey’s stance that the law be shot down (wait, I agree with Brad Schimel on something? Strange bedfellows, I guess).

But other Midwestern states have been preparing to make plans to get into the sports betting game. I do see that the Illinois Senate had a committee hearing on it in early April, and that MLB and NBA officials testified that they were OK with legal sports betting (as long as they get a cut, of course).

Indiana also had a sports gambling bill introduced back in January, and used input from MLB and the NBA to “ensure the integrity of its contests.” The Indiana bill had notable details about how the pro sports leagues would get their cut of legal sports betting, as ESPN’s David Purdum wrote at the time.
The leagues also would receive a 1 percent "integrity fee," paid quarterly by operators and based on the amount of money bet on a governing body's events.

For example, if a $100 bet was placed on an NBA game with a licensed Indiana bookmaker, the league would receive $1 from that wager, win or lose. The leagues would not have a cut on the outcome of the wager, only the amount of the bet. That could produce a multimillion dollar windfall for the leagues.

In Nevada, for example, $1.04 billion was bet on baseball in 2016. If Indiana generated the same amount of handle on baseball, Major League Baseball would be in line for approximately $10 million from a 1 percent integrity fee.
Interestingly, Indiana was coming back into a special session this week. But it looks to be limited to five bills mostly dealing with education issues (basically Indiana GOPs are doing ALEC bills “school security” BS that mirrors the sham we passed in Wisconsin).

Also interesting was this comment in January (also noted in the Purdum story) from the head of the American Gaming Association, who said that he thought the pro sports leagues were missing the real benefit from sports betting - driving up interest in the sports themselves.
American Gaming Association president and CEO Geoff Freeman says the leagues' opportunity to profit for legalized sports betting is by increased fan engagement, advertising and data rights -- not a straightforward cut of the action.
In addition, Freeman said the Indiana bill might cause some betting places to struggle to survive due to the extra expenses involved.
"They have an opportunity to make money in a host of different ways," Freeman said. "It's going to take a little bit of work. It's going to take some sophistication, but it's an extraordinary opportunity. Trying to con legislators into giving [the leagues] a direct cut of the amount that bettors wager is a lowest-common-denominator approach and actually undercuts the entire business of sports betting and will insure that we have more people going right back to the illegal market."
Which makes some sense, when you think about it. If 1% of the TOTAL AMOUNT BET is going to the MLB and another 1% to the NBA, then how much is the casino going to be able to keep in profit? The “vig” would likely go up, and might be too high for the typical bettor to want to do it (would you bet $120 to make $100 on a typical point spread vs the regular “$110 to make $100” vig?).

That, or perhaps the vig would be normalized at $110-100 in the hope gamblers would also take advantage of additional entertainment options in and around a sports betting place to make up the difference (like hotels, clubs and bars in Vegas).

According to today’s Indianapolis Star, Indiana won’t be likely to have legal sports betting until at least Fall 2019, if it all. Partly because the next group of lawmakers to figure out if and how to legalize sports betting may not be ones at the state level, but in Congress.
The big question moving forward is how the sports gambling industry will be regulated," said Nathaniel Grow, associate professor of business law and ethics at the Indiana University Kelley School of Business.

"Rather than rely on a hodgepodge of individual state laws, the four major U.S. sports leagues — Major League Baseball, the National Football League, the National Basketball Association and the National Hockey League — will likely seek new legislation in Congress regulating sports betting in a uniform manner across the country. Whether such a nationwide law will be passed or not, remains to be seen.”
So it sounds like I need to contact Mark Pocan and Tammy Baldwin and (yes even) Ron Johnson, and tell them that here is another case where they need to LEGALIZE IT!

Today's GOP will go as low as they can. In DC and in Wisconsin

As I've stated before Bill Maher is very hit or miss with me. But he may have had one of his best 'New Rules" yet this weekend, where he compared President Donald Trump to another type of Don. And not a cool one that could run a casino competently.

“What part of this isn’t mob-like? They’re using a legitimate front business – in this case the White House – to enrich the Family…

I always thought of [Trump] as an egomaniac and a blowhard. But I didn’t realize until this very year that he was a cheap hood all along. A common thug.”

Maher also says some words about a circumstance that has made me shake my head a lot in the 2010s. Why do people in the “honest, decent” Midwest, people who claim to live by morals and a strong work ethic, continue to support amoral grifters like Trump (and local versions like Scott Walker)?
“How did the “Salt of the Earth” people get messed up with the “Salt in the Wound” people? What happened to your values? What happened to good manners and monogamy. You’re the “My word is my bond” people. These guys lie just to stay in practice.

You’re all about an honest day’s work. Trump watches TV until Noon. You’re frugal. They spend like identity thieves who got your PIN number. You’re stoic. Trump’s a whiny bitch.”
It’s noteworthy that the “whiny bitch” and “common thug” lines got the largest applause from the audience. Most of us that oppose Trump and other GOP thugs do don't so out of fear or because we're waving blue Poms-Poms – it's because WE SEE THROUGH THEM, and are tired of waiting for justice and the average dope to catch up, and deal with the reality that's right in front of our faces.
The thuggery from Trump has clearly trickled down to today’s Wisconsin GOP. You may remember that US Senate candidate Leah Vukmir released this piece of trash last week as she defended torture-enabler Gina Haspell to head up the CIA.

Apparently in Leah Vukmir's world, being pro-torture is "American values", and opposing stupid wars and asking that all those accused of crimes still be given the presumption of innocence and to be treated humanely is "pro-Terrorist." Duly noted.

Bad enough, but you'd figure this type of inflammatory crap would get Vukmir cast out of any political party that had an ounce of decency. Instead, the Wisconsin GOP ENDORSED HER at their convention this weekend. So the clear majority of the Wisconsin GOP's biggest backers are cool with this type of divisive slime representing them. Again, duly noted.

Oh, and there was this tidbit from the convention late Saturday afternoon.

What Trump and Vukmir and the vote-suppressors in the Wisconsin GOP shows is that there is no central belief in today's GOP that's based on policy. Everything centers from grabbing and (ab)using power and money by any means possible. And they do not care who they hurt or what kind of damage is done to our economy or our democracy along the way.

The GOP “base’s” support of candidates like Trump, Walker, Vukmir and the associated crookedness and hatred that comes with it means there are no "good ones." They must not just lose this next election in November. They must be ERADICATED from our Capitols in Madison and DC for several years. All are guilty, because none have stood up to stop this authoritarian madness from happening. So ALL MUST GO.

And as Maher reminded us at the end of his segment on Friday, those who stick with Trump and Trumpists aren't tough in any way, shape or form. And they need to look in the mirror.
“This is what you get when you get in bed with the mob. And maybe that’s OK with you. Maybe you said to yourself, ‘This is the business we have chosen.’”

But I gotta say, if you sold your soul to get protection from these 2 grandmas (Nancy Pelosi and Hillary Clinton), the Big Pussy is YOU.”

Sunday, May 13, 2018

Dems would end WIsconsin voucher scam that keeps stealing from local public schools

Here's a good piece of Sunday reading from Molly Beck in the Wisconsin State Journal, which discusses the state's school voucher program, and what Dems might do to it if one of them would be elected governor in November.
Before Walker took office in 2011 and Republicans took control of the Legislature that year, there was just one private school voucher program, in Milwaukee. Today, there are three more: For students in Racine, students statewide, and students with disabilities.

After years of state budgets that cut or held funding for public schools flat, Walker last year proposed and signed an education funding plan that adds a record amount of money, not adjusted for inflation, for public schools through 2019...
And even that figure is misleading, since the funding is a pre-election move based on the amount of attendance a school has, and not through the state's equalization formula, which directs more resources to districts with fewer land values to level the playing field.

Given the $1 billion budget deficit that is looming in the next budget, there are going to be limited amounts of funds to pay for both the regular K-12 public school system in Wisconsin and the voucher program. And most of the Democrats running for governor say that the voucher program is going to be phased out in order to keep the public schools funded.
Seven of the top nine Democrats told the Wisconsin State Journal last week they would propose to end all four private school voucher programs — though not all agree on how to eliminate them.

Another candidate said Walker’s education policies created a need for options outside of the traditional public school system, and did not say he would end the programs (this would be State Rep. Dana Wachs, FYI). A ninth candidate said she would seek to end the statewide voucher program and the program for students with disabilities only (the candidate is State Sen. Kathleen Vinehout).

More than 35,000 students across the state attend a private school using a taxpayer subsidy — including nearly 28,000 in the Milwaukee program.
Even in districts as small as Baraboo, parents are using loopholes in the rules to get vouchers for their children, which takes money out of the local public schools in the process.
The Wisconsin Parental Choice Program requires students applying at certain grade levels to meet one of several enrollment stipulations from the previous year to qualify for a voucher that covers tuition costs a participating private school of their choosing. They must have gone to school in a different state, been home schooled or not enrolled, participated in a different school choice program or been on a waiting list, or attended a public school.

Wisconsin Department of Public Instruction spokesman Thomas McCarthy said some families have tried to skirt the requirement by enrolling their children in public school districts for short periods....

Baraboo School District Administrator Lori Mueller said so far this year at least one local family appears to have taken a similar route. She said a student registered with the district, attended class Jan. 12 and dropped out. Mueller said she doesn’t know what school the student is attending or if they will qualify for a voucher next year.

McCarthy said it depends if the student was present for one of the agency’s official enrollment counts. The DPI gets public school enrollment data from two tallies throughout the school year on the third Friday in September and the second Friday in January — which this year fell on Jan. 12.

Baraboo School Board member Doug Mering said the loophole is allowing some families that can afford private school tuition to skirt the system at the expense of local tax payers and public school districts. Mering testified on the issue and other budgeting concerns in March before the state Legislature’s Blue Ribbon Commission on School Funding.
Remember, under the current DeVos-backed voucher plan that the GOP has in place today, if a student takes a voucher, it is funded by taking the same amount of funding away from the public school district where the child lives. So in the cases described above, the student never really attended Baraboo schools, but Baraboo property taxpayers will have to make up the difference in the thousands of dollars of state aid that gets funneled to the voucher school that student now attends.

What I didn't see mentioned in either Beck's State Journal article or the one from Baraboo is whether any candidates for office will remove the tax deduction from private school tuition for parents that don't get vouchers. This tax break was sponsored by now-Congressman Glenn Grothman in 2013, gives a deduction of up to $10,000 for high school tuition and $4,000 for elementary schools, and has had most of the benefit go to the richest Wisconsinites.

Given that these individuals already get a tax deduction for property taxes for money that goes to their local public school, why are these people allowed to double-dip at the expense of the rest of us? (Actually we know this answer, because dirty money through DeVos and ALEC helped get GOPs elected in Wisconsin) I'd really like to see some Dems step up and call out this preferential treatment for private schools as well, because I bet a whole lot of Wisconsinites really hate seeing these religious schools get funding assistance and tax breaks that their community schools don't. Especially when people pay the difference in property taxes due to vouchers and reductions in general school aids (which will be no different in the next school year than they were in 2011...BEFORE inflation).

Scott Walker can go around talking about the increases in per-pupil aid that were thrown in for the school year that starts before the November 2018 elections. But the damage from 8 years of aid cuts and throwing hundreds of millions of dollars into religious voucher schools hasn't disappeared, as evidenced by Walker's own home district of Delavan-Darien cutting 39 teachers and closing an elementary school after a referendum failed last month. We've had nearly 30 years to see what vouchers have done as a factor in K-12 education. They don't really do anything to help outcomes for students, especially when you account for whether or not the parents care about their kids' educational outcomes, and the money would be much better spent on helping to alleviate the crippling poverty and economic apartheid that afflicts so many low-income students in this state.

At this point, it's pretty obvious that vouchers are nothing more than a political ploy to funnel taxpayer dollars to the operators of these schools who reward those politicians by kicking back some of those funds as campaign donations. It's a so a cheap play for votes from fundies and other anti-education types that despise the social changes of the 21st Century. This scam must be ended if Wisconsin is to restore its place as a state with high-quality education that makes young parents want to locate/stay in and raise their kids in. Dumping vouchers would be a real way to look forward, and leave the failed ideas of the past (and the politicians that prop them up) in the dustbin where they belong.

Saturday, May 12, 2018

"Record April surplus" doesn't change the reality of massive year-long US deficits

Given all of the talk about rising US deficits, this story from late this week seems somewhat surprising.
The federal government swung to a surplus of $214.3 billion in April, primarily reflecting the revenue from that month's annual tax filing deadline.

The Treasury Department reported Thursday that last month's surplus increased 17.4 percent from a year ago. The April surplus reflected both an increase in tax revenue and a decrease in the costs of certain health care and benefit programs that were pulled forward to March.

Federal income tax returns were due on April 17. The month usually generates a surplus even if the government is on pace to run a deficit for the entire year. The government collected $314 billion in individual income taxes in April, about $100 billion more than what it received from all its revenue sources in March.
Whoa, are the predictions of Steve Mnuchin and Paul Ryan coming true? Are we getting great growth that’s allowing these tax cuts to pay for themselves?

No, not really. If you look at the actual statement from the US Treasury, the “increased” surplus is simply a trick of the calendar.
Approximately $45 billion in outlays for Military active duty and retirement, Veterans’ benefits, Supplemental Security Income, and Medicare payments to Health Maintenance Organizations and prescription drug plans accelerated into March, because April 1, 2018, the normal payment date, fell on a non-business day.

Receipts were increased by approximately $19 billion over last April because of an additional day of collections in April 2018.
Take out that $64 million, and the surplus for April drops to $150 million, which is 17.6% less than the surplus we had the year before. That’s even more underperformance than we’ve seen for the 3 months that we have seen since the tax cuts started taking out less money from people’s paychecks in February.

Net deficit
Feb-April 2017 $185.8 million
Feb-April 2018 $209.7 million (+12.8%)

If that 12.8% year-over-year increase in the deficit holds over the last 5 months of Federal Fiscal Year 2018, you’d see a year-end deficit around $750 million, which would actually be better than the $804 million deficit that the CBO projected in March. And of course, the deficit gets even higher after that.

But if you look at the Treasury’s statistics on tax refunds for individual taxpayers, there’s reason to believe that the deficit will reach that $800 million CBO prediction for 2018. Particularly given that the tax cuts are not paying for themselves yet.

Withholding income taxes, Feb-April 2017 vs 2018
Feb-April 2017 $349.9 billion
Feb-April 2018 $342.4 billion (-2.1%)

In fact, the only reason that April revenues were relatively good is that there was barely any difference in the level of individual income tax refunds handed out this year vs last year.

Individual income tax refunds, Jan-April 2018 vs 2017
Jan-April 2017 $199.8 billion
Jan-April 2018 $202.7 billion (+1.5%)

But you know who has gotten bigger tax refunds? Corporations, which could well be a result of that PR blitz of year-end bonuses and other one-time stunts that were pulled after the GOP’s Tax Scam was put into law in December.

Corporate tax refunds, Jan-April 2018 vs 2017
Jan-April 2017 $21.1 billion
Jan-April 2018 $11.6 billion (+82.4%)

Because adding those year-end expenses at the higher tax rate means that there is less profit than otherwise would have been forecast earlier in 2017. So now corporations are getting some of their earlier payments back, while getting the write-offs and refunds at a higher tax rate, giving them an extra boost of profit on top of what the tax scam is giving them in 2018.

With all of the extra money coming from Congress and the Treasury, why would any corporations take the risk of adding onto their businesses or hiring more workers? Just take advantage of the giveaways and let the money roll in (and pay your fellow execs more money and buy up your stock along the way)! You wonder why I’m skeptical that we hit the 3.3% growth the CBO assumed for this year?

So while some ignorant financial writers and cynical Republicans might want to talk up the “record surplus” in April, a simple look inside the numbers (or at a calendar) will tell you there is nothing special to talk about. In fact, an honest examination of the numbers show that the Piece of Shit tax bill continues to cost well above the benefits it’s giving to the typical American, and that the deficit picture continues to worsen going forward.

"Foxconn will lose jobs?" Possible, while our taxes go into the pockets of Walker donors

I wanted to forward you to a great column by UW professors Charles Kroncke and William Holahan that appeared in Urban Milwaukee yesterday. The column is provocatively titled "Foxconn Deal Will Actually Lose Jobs," and starts with the assertions made by a consultant hired by the Walker Administration last year, who claimed that up to 13,000 jobs would be created as a result of the Foxconn project.
The consultant’s estimate for job creation assumes that the preponderance of Foxconn employees, their suppliers, and their suppliers’ employees will be from Wisconsin. But there is no guarantee that even a large fraction of their employees and suppliers will be Wisconsin tax-paying residents. Given the excellent freeway access to northern Illinois, surely many workers from out of state can be expected to commute to Racine for Wisconsin-subsidized jobs. Similarly, suppliers need not be in Wisconsin, as many of Foxconn’s needed electronic components can be shipped from anywhere in the world by air freight.

But, It Gets Worse
But assume for the sake of argument that all the suppliers and all the workers do reside in Wisconsin. Even then the estimate of 13,000 new jobs is still terribly misleading. That estimate is a gross job figure, not a net job figure. The correct way to determine the job impact of the subsidy requires the calculation of a net figure; the difference between the jobs expected at Foxconn minus the jobs foregone where the money came from. The subsidy is money diverted from Wisconsin locales where it could have been used on job-creating economic activity, such as in education, health, transportation, sewers, water, etc. That is, the jobs estimate must consider the most fundamental concept in economics: “the opportunity cost” of the money.
This is a point that voters seem to understand, but our media often doesn't mention. Funneling money and other resources down to Foxconn to upgrade their roads and infrastructure takes away money and job opportunities from the rest of the state.

Kroncke and Holahan continue by noting that sending out bags of cash to a corporation means that Foxconn will get the benefits of taxes all to themselves, while the Wisconsinites that actually pay for the taxes lose their opportunity to benefit from goods that everyone can utilize.
Free market principles offer an even sterner warning: it is the role of the market, not the state, to pick winning and losing firms through the profit and loss system. It is the role of the state to support the market by supplying those public goods — roads, infrastructure, educated citizenry, air quality, water quality, etc. — that the market cannot provide efficiently. Moreover, the state should finance these functions by collecting the needed taxes, employing user charges whenever feasible since these user taxes and fees embody another market principle: require people to pay for what they use. When the state reverses those roles and diverts tax dollars, as they do in the Foxconn subsidy, it is denying the state the benefit of the efficiency of the market system and of the efficient provision of public goods.

If the subsidy were spent on job creation elsewhere in the state, it is likely to produce several times 13,000 jobs; business writer John Torinus calculates the average subsidy per new job created in Wisconsin at about $23,000 per job. This is far less than the roughly $200,000 per job estimated in the Foxconn deal. At that rate, subsidizing other entrepreneurs with the $4.1 billion would yield approximately 90,000 new jobs. The diversion of tax money to the Foxconn subsidy results in a lost opportunity to add many more jobs to the Wisconsin economy and to add them over the entire state, not merely in its southeast corner.
Which brings me to the PR events Walker, Foxconn and WEDC pulled this week to commemorate the first $100 million of Foxconn contracts. It was a transparent campaign event to try to convince Wisconsinites that firms in other parts of the state will benefit from Foxconn. In addition to the fact that 23 of these 28 contractors were in SE Wisconsin and Illinois, what's not mentioned is that this inevitably pulls these firms off of jobs in their own home areas. And that will drive up prices for those projects, if they even come off at all.

Let's also talk a bit about those contracts. They were handed out by the contractor Foxconn chose - M+W Gilbane, a Walker/WisGOP mega-donor who One Wisconsin Now reported that Gilbane has given over $359,000 to Walker's campaigns over the years. And if you go to the Wisconsin Democracy Campaign's database of donations and plug in the names of some of those contractors, you'll see quite a few donations headed to Scott Walker and other Republicans. This includes Michels Corporation in Waukesha and Hoffman Construction in Black River Falls, both of whom Walker visited last week as part of this PR campaign.

All of those contracts seem to have been handed out without any documented public bid process, under the guise of the Foxconn facility being a private project. But because Foxconn is heavily subsidized by taxpayers, shouldn't the fair, public bid process be followed, and shouldn't the public have a chance to find out who their tax dollars are going to before they're handed out? We'd never accept a multi-billion dollar government project being done on a no-bid basis, but the Fox-con sure seems to be doing that. And what kind of criteria is being used to select which companies get these lucrative projects?

We'll send your money to whoever we like

As Holahan and Kroncke note at the end of their column, the Foxconn boondoggle is a lot of things, but don't call it free-market capitalism.
It may be too late to stop the Foxconn subsidy from going forward. It is not too late, however, for voters to reconsider voting for the politicians who put it in place and to oppose any future effort to use taxpayer dollars to bypass the competitive marketplace. The state would be much better served by truly following free-market principles.

Friday, May 11, 2018

As Wisconsin's uninsured rate rises, Walker flails to fix the problems he caused

The Gallup organization consistently has consistently polled Americans nationwide asking whether they have health insurance for several years, a statistic that has taken on extra interest after the passage and implementation of the Affordable Care Act (ACA).

Gallup does quarterly surveys and one large year-end operation to figure out this rate, and we started seeing warnings last year that the progress that had been made in reducing the uninsured rate since 2013 under the ACA was coming to an end. But this week Gallup put out their full-year report for 2017, which breaks the figures out by state, and things looked noticeably worse.
The uninsured rate rose by statistically significant margins in 17 states in 2017, the first time since the full implementation of the major mechanisms of the Affordable Care Act (ACA) in 2014 that any state had a rate increase. Also, for the first time since 2013, no states had a [statistically significant] lower uninsured rate than the previous year….

Nationwide, the uninsured rate climbed to 12.2% by the final quarter of 2017, up 1.3 points since the low point of 10.9% measured in the last quarter of 2016. Since Gallup-Sharecare's measurement began in 2008, the national uninsured rate reached its highest point in the third quarter of 2013 at 18.0%, and thus the current rate, although up, remains well below this level.

These data, collected as part of the Gallup-Sharecare Well-Being Index, are based on Americans' answers to the question, "Do you have health insurance coverage?" The state-level data are based on daily surveys conducted from January through December 2017 and include state-level sample sizes that range from 465 randomly selected adult residents in Delaware to more than 17,000 in California.
And yes, Wisconsin was one of those 17 states who saw a significant increase in their uninsured population for 2017.

In the "timing is everything" category, the Gallup report came out two days after Walker Administration officials were traveling the state claiming that their method of turning down the fully-funded Medicaid expansion and instead relying on the insurance exchanges to cover many of those people was a success.

We're not in the Top 10 anymore, John. Not only did Wisconsin have one of the largest increases in its uninsured rate (11th out of the 50 states), it slipped badly in a statistic it had previously done well in – keeping its citizens from being uninsured.

Wisconsin rate, ranking for least uninsured
2013 11.7% (8th)
2016 6.2% (Tied for 7th)
2017 8.3% (Tied for 15th)

I’ll give Kos the benefit of the doubt and assume he didn’t know this Gallup survey would make him sound stupid and make his claims wrong and outdated. It sounds better than the other theory- that Koskinen was flat-out lying to an outstate audience and media who wouldn’t check up on his claims.

Given that there were few other changes in health insurance conditions for 2017, the increase indicates that more people chose to go uninsured than pay the costs for an insurance program on the ACA exchanges last year. Which means the pre-election GOP sabotage of Obamacare (especially Marco Rubio’s bill to stop subsidizing risk corridors, which had previous encouraged companies to offer services and keep premiums down) was a key reason behind more Wisconsinites not being insured last year.

Exchange premiums rose more in 2018 due to other GOP sliminess, and that was especially true in Wisconsin, whose GOP-led insurance commission assumed (correctly) that the Trump Administration would do further damage by stopping $7 billion in cost-sharing payments to insurers. Much of those 2018 price spikes were offset by the tax credits, but the GOP's moves in DC made it likely that Wisconsin’s uninsured rate would rise again this year.

There’s one other complication going on that especially hits working poor Wisconsinites. Given that 5 out of 6 of Wisconsin enrollees on the 2016 ACA exchanges got tax credits (available to lower-income individuals) to offset some of their premiums, it seems likely that a lot of those individuals that lost their health insurance in 2017 would also be some of the 75,000 Wisconsinites that are susceptible to losing food stamps in the proposed GOP Farm Bill in Congress.

Passage of that Farm Bill would likely spiral this already alarming increase in Wisconsinites without health insurance higher, as losing SNAP assistance would understandably drive some people into dropping their health insurance in order for the families to keep eating.

Ironically, part of Scott Walker’s cynical goal behind refusing to take expanded Medicaid in the ACA was to see Wisconsinites suffer by having the exchanges be overloaded with high-cost, low-income individuals, and cause people to be angry with Obama and Democrats. Except that Wisconsinites signed up for the exchanges in big numbers (especially in Northern Wisconsin, where Sean Duffy’s district had the most exchange sign-ups in the state), and the state’s uninsured rate was nearly cut in half through 2016.

Now in 2018, Walker’s cynical plan is coming to fruition due to his own party’s chicanery, under a president that’s not Obama. And now Scotty has to face an increasingly uninsured electorate in November. OOPS!

This helps explain why Scotty and his Insurance Commission put together a scheme to pay insurers $200 million ahead of the October 2018 open enrollment period. The hope is that the insurance companies will offer lower premiums for people looking to buy coverage, and then the Feds will pay back most of the difference because they won’t have to pay back as much in tax credits.

But many of these problems and stresses wouldn’t have existed if Walker and the rest of the GOP hadn’t have messed with Obamacare in the first place (AND FOR WHAT, by the way?). Look, I don’t think the ACA was a magic pill that solved all of the problems the US has with health insurance costs and coverage (single-payer or at least a public option is necessary to do it right), but you can’t argue that it was better than what we had before 2010.

Now that the GOP’s own sabotage is threatening to cause major political problems for Republicans this November because of the higher premiums and increased number of people without insurance in the Age of Trump, it is both hilarious and disgusting to see people like Scott Walker try to come up with “solutions” to the problems that they caused.

We are sliding badly in Wisconsin because of Walker’s and WisGOP’s spiteful decisions, and dropping toward mediocrity on having our people covered by health insurance is something all of us should be sickened by. And it won’t get better unless we toss out these saboteurs in 6 months.

Wall Street says inflation tamer. But it's not, and wages aren't rising either

With the recently rise gas and other prices going along with a rise in interest rates in recent months, yesterday's report on the Consumer Price Index carried extra interest for today, And Wall Street looked at the toplines of the CPI report and said, “that’s not so bad.”
The Dow Jones Industrial Average was on track for sixth day of gains and the S&P 500 edged past a key technical level after tepid inflation data cooled worries of faster interest rate hikes.

A Labor Department report showed its consumer price index rose 0.2 percent, below the economists' expectation of 0.3 percent, as rising costs for gasoline and rental accommodation were tempered by a moderation in healthcare prices.

"This data lends to the argument that the Fed can normalize patiently, but the flip side is that prolonged policy accommodation has yet failed to accelerate inflation," Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York, wrote in a note….

Investors have been worried about a build up in price pressures and the pace of interest rate hikes, especially after a recent reading on inflation crossed the Federal Reserve's 2-percent target.
Then I looked inside the actual report, and said “What are the Wall Streeters looking at?” Because inflation continued to be on the rise in April, especially in some key areas, and is likely to get higher in the near future.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in April on a seasonally adjusted basis after falling 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.5 percent before seasonal adjustment.

The indexes for gasoline and shelter were the largest factors in the seasonally adjusted increase in the all items index, although the food index increased as well. The gasoline index increased 3.0 percent, more than offsetting declines in other energy component indexes and led to a 1.4-percent rise in the energy index. The food index rose 0.3 percent, with the food at home index rising 0.3 percent and the index for food away from home increasing 0.2 percent…

The all items index rose 2.5 percent for the 12 months ending April; this figure has been mostly trending upward since it was 1.6 percent for the period ending June 2017. The index for all items less food and energy rose 2.1 percent for the 12 months ending April. The food index increased 1.4 percent, and the energy index rose 7.9 percent.
That 2.5% year-over-year increase (OK, 2.45%) in overall inflation is the largest in 14 months. A 3.4% increase in shelter for the last 12 is months is the largest since it was 3.5% 12 months ago (which equals 7% total over the last 2 years), and the 12-month jump of 13.5% in gasoline is the largest since last November. Add in the 0.3% rise in food prices for April (the largest one-month increase in over a year), and it seems that the expenses that poorer people pay more of are the ones that are going up the most.

I also note that while gasoline was listed as going up 3.0% on a “seasonally adjusted” basis, the unadjusted price at the pump went up twice that amount, at 6.2%. Anyone that’s seen a gas station sign in the last 10 days can tell you May’s figures will higher, and while some will be deflated away again, not all of it will. And gas won’t be coming down soon, as gasoline and oil futures have taken significant leaps in the last month due to Commander Cuckoo Bananas in the White House and his clueless idiocy on Iran and the rest of the Middle East.

I also caught this tweet from our Wisconsin-based Speaker of the House.

We know unemployment only dropped due to people leaving the work force in each of the last two months, as the rate of hiring hasn’t really changed in the last 3 years. And “wages going up”? Not after you account for inflation, which the real earnings report did today.
Real average hourly earnings for all employees were unchanged from March to April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.1-percent increase in average hourly earnings being offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings decreased 0.1 percent over the month due to no change in both real average hourly earnings and the average workweek. (translation: real hourly wages actually went down, but by a fraction of a cent)

Real average hourly earnings increased 0.2 percent, seasonally adjusted, from April 2017 to April 2018. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.4-percent increase in real average weekly earnings over this period.
That inflation-adjusted weekly earnings gain adds up to $1.55 a week in 1982 dollars, or about $5 nowadays. Don’t spend all of that windfall in one place, folks!

What’s notable is that on a current-dollar level, the 12-month gain in average hourly wages have been in the same 2.3-2.7% range since November 2015. But the biggest difference is that 12-month inflation has steadily risen in that same time period, from 0.4% in November 2015 to 2.45% today.

So people are barely treading water in the Age of Trump compared to the gains they were making at the end of the Obama presidency. And do you think this “wage vs inflation” picture is going to get any better in the next 6 months?

So I’m perplexed by the rally in the stock market over the last week. Allegedly it’s based on a thought that inflation is being tamed, which’ll help corporate profits and keep interest rates down. But the actual data doesn’t say that at all, and it seems likely that the year-over-year CPI will reach 3% year-over-year in the next couple of months.

3% inflation is something we haven’t seen in more than 6 years, and unless wage growth breaks out of the mediocre range of mid-2% that it’s been in, there are a lot of Americans that will fall behind. And sorry Pau-lie, but that $1.50 in tax cuts won’t be nearly enough to help them.

Wonder what those voters will be thinking as they head to the polls in November, as they realize that despite an allegedly “thriving economy”, rising costs and stagnant wages mean they are not better off than they were in November 2016, and likely to get worse in the near future due to Paul Ryan’s and Donald Trump’s tax scam in DC.

Wednesday, May 9, 2018

"Stupid Watergate" boils down to the Benjamins

Seems like a fitting clip tonight, given what's going on with our Grifter-in-Chief.

Just like we saw 45 years ago, "Follow the money" explains a whole lot.

Need I remind you that Trump and the GOP Congress gave these titans of industry hundreds of billions in corporate tax cuts 4 1/2 months ago. "Job creators" are special you know.

With more job openings, why isn't hiring being given a JOLT?

You may have seen the headline this week that said "U.S. job openings hit record high, more workers quitting." And I wanted to go into this, because it gives an interesting insight into the state of our good-but-not-great jobs market.

The information came from the Job Openings and Labor Turnover report- or JOLTS. The JOLTS report gives extra insight into the jobs market beyond the net totals that get released in the early part of every month (including April’s report, which came out last Friday), as it breaks down the level of hiring, job leavers, and even how many jobs are available.

And it was the “jobs posted” part of the JOLTS report that got some attention in the financial news this week.
On the last business day of March, the job openings level increased to a series high of 6.6 million. The series began in December 2000. The job openings rate was 4.2 percent in March. The number of job openings increased for total private and edged up for government. Job openings increased in a number of industries, with the largest increases in professional and business services (+112,000), construction (+68,000), and transportation, warehousing, and utilities (+37,000). The number of job openings increased in the Northeast and Midwest regions.
The rate of construction openings (defined as current jobs + openings) is also notably more than this time last year (3.4% vs 2.5%), underscoring the needs. Health care/social assistance is also a place where there are notable shortages, with the largest rate of openings of any job sector in the country (5.6%), and 1.17 million openings overall.

But despite a large number of jobs being opened, hiring isn’t following. The rate of hires has barely changed in the last 12 months (3.6% vs 3.7%), and March actually had 86,000 fewer hires on a seasonally-adjusted basis than February did, and nearly 149,000 fewer than January. The areas with the largest number and best rate of hires were in high-turnover areas such as bars, restaurants, lodging, and entertainment (6.2%).

But will they actually hire someone?

Among more stable, full-time work, the JOLTS report indicates that the rate of hiring in mining/logging (5.2%) and durable goods manufacturing has picked up from what we saw this time last year (2.8% vs 2.2% in March 2017). Conversely, health care seems to be struggling to fill its many openings (2.9%).

The flip side of that is that manufacturing and mining are also seeing a rising amount of separations, which means that overall job growth is not that big.

The number of total separations was little changed at 5.3 million in March. The total separations rate was 3.6 percent. The number of total separations was little changed for total private and for government. Total separations decreased in finance and insurance (-34,000). The number of total separations was little changed in all four regions.

But a positive sign in that “separations” stat is that more people are leaving jobs because they retired and/or left on their own for other reasons (aka “quits”), which is better than layoffs.
The number of quits edged up to 3.3 million in March. The quits rate was 2.3 percent. The number of quits edged up for total private and was unchanged for government. Quits increased in other services (+71,000). The number of quits increased in the Midwest region. (See table 4.)

There were 1.6 million layoffs and discharges in March, little changed from February. The layoffs and discharges rate was 1.1 percent in March. The number of layoffs and discharges was little changed for total private and for government. Layoffs and discharges decreased in health care and social assistance (-35,000). The number of layoffs and discharges was little changed in all four regions. (See table 5.)

Compared to March 2017, March 2018 had 105,000 fewer layoffs but 200,000 more quits, which is what happens when a job market hits full employment and employers are still looking to hire.

Now the question becomes “Which pattern breaks first?” Employers claiming jobs are open but not hiring many people to fill them, and are not increasing pay (as shown by the mediocre 2.6% wage growth in the last jobs report). So will the pace of hiring pick up to match those openings, or will employers decide to pocket their now-higher profits due to the tax cuts in DC, and we see openings decline as hirings have done in the last 2 months?

I fear I know this answer (especially with higher inflation looming for materials), but the resolution of the “higher openings, higher quits, but not higher hiring” quandary is something to look for over the next few months.

Tuesday, May 8, 2018

Minnesota's economic dominance of Fitzwalkerstan gets national exposure

I've often harped on the fact that Wisconsin has consistently trailed Minnesota in economic outcomes over the last 7 years, and with good reason. The states are of similar size and demographics, and are right next to each other. Given that one state has had Republicans in charge in that time (Wisconsin) and one has had Democrats (Minnesota), it creates a good side-by-side comparison.

Well, today the Economic Policy Institute released a report on the two states, and showed that Minnesota has cleaned Wisconsin’s clock since the Age of Fitzwalkerstan began in 2011.

During his gubernatorial campaign, Scott Walker claimed that his policy agenda would create 250,000 new jobs in Wisconsin by the end of his first term in office (Associated Press 2011; Davey 2011). After taking office, the governor declared Wisconsin “open for business” and began implementing his agenda of deregulation, cuts to the public sector, and large tax cuts—with tax cuts for small businesses as well as cuts on capital gains taxes and individual income taxes (New Richmond News 2011). In Walker’s first term, Wisconsin cut taxes by $2 billion (Wisconsin Budget Project 2011; Stein 2013; Hovorka 2017). Nevertheless, the state did not come anywhere close to meeting Walker’s professed employment targets. In fact, as Walker nears the end of his second term, the state still has not reached the governor’s campaign goal.

Table 1 shows that Minnesota has had stronger job growth than Wisconsin since both governors took office. From December 2010 to December 2017, Wisconsin added 216,800 jobs—an increase of 7.9 percent. In contrast, Minnesota’s job growth from December 2010 to December 2017 was 11.0 percent, or a total of 292,100 jobs.

Wisconsin had lost 141,200 jobs (or 4.9 percent of total nonfarm employment) from the start of the recession (December 2007) to December 2010. Thus, by December 2017, Wisconsin had about 75,600 (or 2.6 percent) more jobs than it did a decade prior. Minnesota’s losses in the recession were not quite as severe, with the state losing 118,000 jobs (or 4.3 percent of employment) from December 2007 to December 2010. By December 2017, Minnesota had 174,100 (or 6.3 percent) more jobs than it did prior to the recession.
This underperformance also shows up in the Walker jobs gap, where Wisconsin is more than 130,000 jobs below the US rate since Walker took office in 2011. And that includes some sketchy claims of huge job gains in recent months by Walker’s Department of Workforce Development.

The wage side also looks bad for the Fitzwalkerstanis. Before they came to power, Wisconsin had seen decent gains in real wages throughout much of the 2000s, and the EPI says the gap with Minnesota for median wages had been cut in half between 2000 and 2010.

And then Walker took over, instituted anti-union policies such as Act 10 for public sector employees and right-to-work (for less) for private sector union members, and the results? Not so good.
After Walker and Dayton assumed office, the trends flipped: wages in Minnesota have taken off, while in Wisconsin, they have stagnated. Figure D2 shows that, since 2010, growth at every point in the wage distribution has been stronger in Minnesota than in Wisconsin. From 2010 to 2017, the median wage in Minnesota cumulatively rose 2.4 percent over and above inflation—meaning that middle-wage workers in Minnesota have had a measurable improvement in their living standards. Minnesota’s median wage growth was also stronger than the 1.6 percent the U.S. experienced as a whole over the same period. In contrast, from 2010 to 2017, the median wage in Wisconsin rose only 0.3 percent after inflation. In other words, middle-wage workers in Wisconsin are treading water, barely hanging on to the same buying power they had in 2010.
EPI also looks at the number of individuals with health insurance in both states. Like most places in America, both Wisconsin and Minnesota have seen their uninsured populations decline since the ACA has taken effect. But Minnesota cut their uninsured rates by a larger amount than Wisconsin, and didn’t spend hundreds of millions of extra state tax dollars to do so, because they took federal funds to expand Medicaid and set up their own state exchanges.
As shown in Figure G, from 2010 to 2016, the share of people without health insurance declined in both Minnesota and Wisconsin. This is not surprising given the improving health of the labor market—which, all else being equal, should allow more people to access employer-provided health care—as well as the creation of ACA insurance exchanges and the implementation of the individual mandate. However, the decline in the uninsured rate was markedly larger in Minnesota than in Wisconsin. In 2010 the share of the population without any health insurance was actually larger in Minnesota than in Wisconsin, at 9.8 percent and 9.4 percent, respectively (DeNavas-Walt, Proctor, and Smith 2011). But by 2016, Minnesota’s uninsured rate had fallen 5.7 percentage points to 4.1 percent, while Wisconsin’s uninsured rate fell 4.1 percentage points to 5.3 percent (Barnett and Berchick 2017). The difference between the two states may seem like a small gap, but if Wisconsin had the same coverage rate as Minnesota, it would mean an additional 70,000 Wisconsinites would have health insurance.

It is important to note also that Minnesota’s comparatively larger expansion of health insurance cannot be attributed solely to Governor Dayton’s decision to expand Medicaid under the ACA while Governor Walker did not. The share of people with public health insurance did rise more in Minnesota than in Wisconsin, by 3.6 and 1.8 percentage points, respectively. Yet at the same time, the share of the population with private health insurance also rose more in Minnesota (2.0 percentage points) than in Wisconsin (0.9 percentage points). In other words, denying low-income families in Wisconsin access to Medicaid did not appear to have led to any greater take-up of private health insurance.

Leave aside the corruption and numerous embarrassments to Wisconsin that have been part of the Reign of Error of Governor Dropout, and let me ask a simple question. How is getting our ass kicked by Minnesota in jobs, wages, and general quality of life acceptable in any way?

As I’ve said before in this space, if the Packers/Badgers were getting drilled by the Vikes/Gophers while staying below .500 overall, you wouldn’t give that coach a 4-year contract extension. YOU’D FIRE HIS ASS. So why shouldn’t Wisconsin do the same thing with Walker this November?

Monday, May 7, 2018

Walker Admin props up GDP report that shows Wis falling short

Late last week, the US Bureau of Economic Analysis put out the GDP by state, not only for the 4th quarter of 2017, but also for the whole year. And the 4th quarter results were quite good from Wisconsin.

That's pretty good, but I got a question. Why is the Wisconsin Department of Revenue copying in the right-wing hacks at WMC and at the Koch/Bradley-funded CROWE school at UW-Madison? It's almost like they're working together, and I don't think our tax dollars are supposed to go to spread right-wing propaganda as part of the Walker 2018 campaign.

It's also interesting that the Wisconsin DOR decided to post about the good 4th quarter numbers, but left out the year-long GDP figures for 2017. And they don't make Wisconsin look as great by comparison.

That 1.7% is below the US rate of growth of 2.3% for 2017, and was only 5th out of the 7 Midwestern states.

So why is there such a disparity between Wisconsin's strong Q4 results and our lagging full-year 2017 figures? Because WISCONSIN WAS IN RECESSION AT THE END OF 2016 AND START OF 2017. Wisconsin's GDP growth has never been that great since Walker and WisGOP came to power in 2011, but it slightly declined from Q3 2016 through Q2 2017, and it was only been in the last 6 months of last year that Wisconsin's economic growth resumed.

We'll see if those rosy GDP growth figures hold up as the "gold standard" jobs report gets registered for the end of 2017 and start of 2018 over the next few months (given previously lower revisions, be VERY skeptical). But it's noteworthy that the Walker Administration thought it was their job to promote that with tax-funded communications. And it's far from the first time these guys have done that.