Thursday, August 22, 2019

Wisconsin getting hit worse than most as US manufacturing goes down

We know manufacturing in the US has been struggling so far in 2019, and that especially seems to be the case for one of the most manufacturing-heavy states in America – Wisconsin.

Let's start with this headline that hit the wires today.

That comes from IHS Markit's monthly survey, and the reasons for the drop in manufacturing are especially concerning because future prospects look worse than the mediocre present , both in America and overseas.
The decline in the headline PMI mainly reflected a much weaker contribution from new orders, which offset a stabilization in employment and fractionally faster output growth.

New business received by manufacturing companies fell for the second time in the past four months during August. Although only marginal, the latest downturn in order books was the sharpest for exactly 10 years. Latest data also signalled the fastest reduction in export sales since August 2009.

Survey respondents indicated that a drop in sales often cited a soft patch across the automotive sector, alongside a headwind to manufacturing exports from weaker global economic conditions.
Those headwinds were already hitting the Upper Midwest, as the Milwaukee Business Times told us that a number of economic indicators show business conditions in Wisconsin's largest metro area were already in decline.
The Milwaukee-area manufacturing sector contracted for the second time in three months in July, according to the latest Marquette-ISM Report on Manufacturing.

The Milwaukee-area PMI dropped from 56.11 in June to 46.44 in July. Any reading below 50 suggests the Milwaukee manufacturing sector is contracting. The index has declined in seven of the last 12 months.

The 9.67-point drop is the largest decline in any month since December 2014. It pulled the index’s six-month average down by more than 2 points to 51.76. A 2-point drop next month would pull the six-month average into negative territory.
These are not good trends.

That supplements a report from a few weeks back that showed Wisconsin manufacturing falling faster than the rest of the nation.
Production workers in Wisconsin’s manufacturing sector averaged 39.7 hours per week in July, the lowest level for the month since 2009, according to Bureau of Labor Statistics data.

It was also the first time since February 2014 that production workers logged an average of less than 40 hours per week. The average number of hours worked has dipped below 40 just four times since the start of 2011.

The good news for production workers is that their average hourly wage increased to $21.59 in July, up 5.8% from the same time last year. In the first seven months of 2019, production workers in Wisconsin are averaging a 4.2% year-over-year increase in hourly wages.

The July hours worked number could be just a one-month dip below the 40-hour threshold, but it is the tenth straight month Wisconsin’s average has declined from the previous year.

In the past 12 months, Wisconsin has averaged a decrease of 1.14 hours compared to the prior year. The average decrease is 1.58 hours over the past six months. In both cases, Wisconsin has the sixth largest decrease among all states.
Along the same lines, last week’s Wisconsin jobs report showed manufacturers in the state shed 2,800 jobs in July, and have lost 4,100 total since January. It is reminiscent of the swoon that hit the state in 2015 and 2016, when 3,700 manufacturing jobs went away, and many blue-collars in Wisconsin turned to Donald Trump to turn their flagging fortunes around. Doesn't look like that gamble's paying off, is it?

Hmm, sure seems like Wisconsin's "Big Giveaway" tax cut to manufacturers isn't doing much to keep Wisconsin's factories humming these days, does it? We sure could use that $250 million a year to do something better than stuffing the pockets of "job creators" who aren't creating jobs or products these days.

Good luck having Trump and other GOPs showing up at factories to claim "we're tax-cutting our way to prosperity" by this time next year. Well, unless the workers in those factories are forced to show up at these photo ops in order to get paid.

Wednesday, August 21, 2019

Recent US job growth revised down 500K, and Wisconsin job growth lamer

Apparently there are fewer jobs in America than we thought.
The U.S. economy had about 500,000 fewer jobs in March 2019 than previously reported, government revisions show, suggesting that hiring was not as strong in the past year as it seemed. Hiring was weaker in retail, restaurants and hotels. The annual revision is much larger than is typically the case. The preliminary revision in 2018, for example, was just 43,000. Every year the Bureau of Labor Statistics updates its figures based on unemployment data that nearly all employers are required to file with the states. The current revision is one of the largest ever.

That news comes from the BLS’s mid-year benchmarking of total jobs, and complements today’s release by the “gold standard” Quarterly Census of Employment and Wages.

Worse, the current monthly jobs reports (the ones you hear the headlines on) claimed that there was a gain of 2.517 million jobs from March 2018 to March 2019. Now, the QCEW says the gain actually was 1.967 million jobs over that time period. That’s a decline in job growth of 550,000 jobs, and the monthly totals are now likely to be reduced by a significant amount next February, when the full-year benchmarking takes place.

A job growth rate of less than 2 million jobs is a growth rate of 1.4%. This may seem OK at first glance, except a 12-month figure of 1.4% job growth would place it as the lowest 12-month rate of US job growth in 7 ½ years.

UW's Menzie Chinn notes this downward revision is reported on job growth that had already slowed down during the Trump presidency. That slowdown came despite whatever stimulus might have come out the GOP's Tax Scam.

And oh yeah, that Tax Scam and the lower job growth led the Congressional Budget Office to tell us today that the US budget deficit will be even larger than the massive levels that were already projected.

Wisconsin also suffers in the QCEW report, as it says we only gained 3,395 jobs between March 2018 and March 2019. That’s less than what was being reported back in April, which was already a low 9,200 jobs, and ranks Wisconsin 46th in America for job growth over those 12 months.

It continues a disturbing trend where Wisconsin job growth has been consistently revised down for Scott Walker’s last year. In additions the year-over-year rate of growth for Wisconsin declined to the lowest levels since the jobs economy began its recovery in 2010.

Wage growth was also muted for Wisconsin in this report, with average weekly wages up 2.6% from March 2019, slightly below the US rate of 2.8%. Our neighbors to the south and west had average salaries go up slightly more on a dollar basis.

Change in average weekly wages, Mar 2018 – Mar 2019
Ill. +$34
Minn +$27
Wis. +$25

That expanded the wage gap that Illinois and Minnesota has had on Wisconsin. All 3 states had wages grow from March 2011 through March 2019 (as you'd expect due to inflation and economic recovery), but Minnesota and Illinois each had their weekly wages grow by approximately $60 more than Wisconsin over those 8 years.

March 2011 is a fitting benchmark, because that was the month that Scott walker signed Act 10 into law. Didn't really make us better off, did it?

We pretty much knew GOP policies weren’t working out for America, but today’s information shows things weren’t even as good as we thought in 2018 and early 2019. And we know things have gotten shakier in the 5 months since then. Hoo boy.

Monday, August 19, 2019

GOP Tax Scam did little in 2018. Dems should drag Trump/GOP in '19 and '20

Not that this should come as a surprise, but CNBC's John Harwood reiterated over the weekend that “Trump’s tax cut isn’t giving the US economy the boost it needs.”

There are a lot of reasons Harwood cites as to why the Tax Scam hasn’t done nearly what was promised. Much of it we already are familiar with -added growth wasn't close to filling the deficit hole created by the tax cuts, and targeting the tax cut to the rich a corporate played a big role in that.

But Harwood says another reason the Tax Scam fell short has to do with changes in how business is run in the late 2010s. These days, economic power is in fewer hands, and because those businesses would rather boost stock prices instead of actually grow their companies, there hasn’t been nearly the growth that one might expect.
The idea that lower taxes would boost business investment sounds intuitive. But in examining lackluster investment growth after the 2017 tax cut compared with earlier ones, International Monetary Fund economists this spring identified an explanation: corporate consolidation has freed dominant firms with high profit margins to invest as they choose with less regard for government tax rates. “In an environment of rising market power, corporate tax cuts become less effective at raising investment,” the IMF economists wrote….

The 2017 tax cut’s international provisions reduced incentives for U.S.-based multinational corporation to attribute profits to overseas subsidiaries taxed at lower rates. Trump had predicted that would jump-start the economy by bringing trillions of dollars back to the U.S.

But a Federal Reserve study of initial results found “no obvious spike in investment” among the 15 companies holding the most cash abroad. Those firms had easy access to investment capital before the tax cut, the study noted, and instead boosted stock buybacks to reward their existing owners.
Basically, Harwood’s article notes that there was a small, one-time bump from the Tax Scam in the first half of last year. And now that this has worn off, there is nothing left to sustain higher growth.
Most broadly, the tax cuts have not generated the promised growth of 3% or more – even in tandem with the additional stimulus of large government spending increases that Congress enacted separately. After an uptick in the second quarter of 2018, growth declined in the next two quarters to end up at 2.9% for the year.

Goldman Sachs economist Jan Hatzius says that second-quarter surge – initially measured at 4.2% but later revised down to 3.5% – represented the tax law’s peak impact. He expects it to vanish altogether by late this year or early 2020, as the economy returns to the same 2% growth levels Trump inherited from President Barack Obama.

Note that while the DC GOPs have given all of these tax breaks to the rich and corporate, they have done nothing to encourage wages to grow for the everyday Americans that need to consume in order to keep the economy moving. The GOP refuses to consider a minimum wage increase that passed the House last month, and the GOP is vehemently against encouraging unionization, which might allow workers to use bargaining power in a time of sub-4% unemployment and slow labor force growth.

Meanwhile, the US budget deficit will likely climb past $1 trillion next month, and while that hasn’t jacked up interest rates or inflation as of yet, it could tie the hands of policymakers for more tax cuts or other economic stimulus if/when we fall into recession in the near future.
So given that the Tax Scam is a failure in giving a sustainable boost to the economy, and because its distortions have put almost all of its benefits into the pockets of a group of people who didn’t need the help, maybe House Dems should consider using the upcoming budget debate for FY 2020 as a place to draw the line on this idiotic policy.

Oh, but now Trump and the rest of the GOPs have an answer as 2020 nears. MOAR TAX CUTS!

I know, I'm laughing too. But at least this time, the cut would be on Social Security taxes that are only paid on the first $132,900 of income, so at least it'll help all wage earners, and likely give a bigger benefit to lower-income Americans.

However, I don't see plan to offset this tax cut (likely because TrumpWorld just pulled it out of their backsides), which means our already-growing deficit would get even larger.

So if I'm the Democrats in Congress, I use the GOP's desperation as a way to start getting rid of the worst part of the GOP Tax Scam - the major cut in taxes for the rich and corporate. Remember, the FY 2020 budget needs to be passed by the end of next month. The "budget deal" from last month was just a framework to allow more spending, but it's not specific on what the taxes and spending should be laid out.

That happens with the full-year budget, and Dems should demand a dollar-for-dollar increase in corporate taxes for any payroll tax cut, or expand the cap for paying into Social Security. Why not double it up to $265,800, which likely would allow Social Security to pay full benefits well past 2033, while giving the overwhelming majority of Americans a tax cut? And if GOPs won’t agree to that, then let’s see how Wall Street and Trump like the possibility of another government shutdown.

Likewise, if there is any added spending to be had (as Mitch McConnell and Trump agreed to as an admission that they need government to keep spending to keep the economy growing), then make that a dollar-for-dollar trade in reversing some of the provisions of the Tax Scam that isn't working out, and make the GOPs publicly justify continuing the Tax Scam's money-funnel to corporates in a time of flagging wage, GDP and job growth.

So if the Trump Administration wants to juice the economy in a new way, let’s use that as an opportunity to level the field back to where we have an economy that grows for all. Beats where we're currently headed - having Wall Streeters and corporations grow asset Bubbles that drag the average American along, only to have those bubbles burst and have Americans crash to earth after being cut loose by those same rich, corporate greedheads.

If Kudlow says the economy is fine...then it's time to worry

As the Trump Administration realized they were losing the one item of substance that they might be able to run on in 2020, they sent their economic hacks advisors out to Sunday talk shows to claim “All is well.”

One of those advisors was Larry Kudlow, who showed up on both Fox News and “Meet the Press”, and as usual, Coke-low was cherry-picking and BSing to justify that things were fine.
Well, I'll tell you what. I sure don't see a recession. We had some blockbuster retail sales, consumer numbers towards the back end of last week. Really blockbuster numbers. And in fact, despite a lot of worries with the volatile stock market, most economists on Wall Street towards the end of the week had been marking up their forecasts for the third and fourth quarter. That echoes our view. You know, what we've got here -- consumers are working at higher wages. They are spending at a rapid pace. They're actually saving also while they're spending. That's an ideal situation. So I think actually the second half, the economy's going to be very good in 2019….

Just one theme. We're doing pretty darn well in my judgment. Let's not be afraid of optimism. Let's not be afraid of optimism. It's a sign of our times. And I think there's a very optimistic economy going on out there.
Well sure, the retail sales numbers from last week were decent, up by 0.7% for July. But wage growth isn’t all that great, as real average hourly wages have dropped 3 of the last 5 months, including July.

And I’d like to see who Kudlow is referring to on “economists marking up their forecasts” 3Q and 4Q. Goldman Sachs just knocked down their estimates for Q4 to 1.8%, for example. The only way I could see GDP go “up” this quarter is because prices collapse partly due to the inability to sell products overseas. That usually follows with layoffs due to a lack of profitability, which doesn’t seem like a formula for a strong economy to me.

Show your sources, Lar

Kudlow continued to plead his case to Chuck Todd thusly.
Well, I want to get back to the China thing because there are some positive developments, believe it or not, on that front. But actually, in terms of business spending and business investment spending, which as you know, is a key part of the economy, look, a lot of the slowdown that we've seen in so-called capex, capital investment, is really temporary because oil prices dropped down. And so the big oil patch, fracking, and so forth was not as rapid in the last year. We're down what? $55, $60 a barrel? Which is a good number, I might add. And for consumers, gasoline prices are very low. But the oil, gas, fracking boom has leveled off a wee bit. On the other hand, we're seeing a nice pickup I think in durable goods and manufacturing. And we're also seeing now I think intellectual property, which is scored in GDP, you know, that thing's growing at about a 10, 12% annual rate. Let me come back. The consumer part of this thing, 10% on an annual rate last three months. We're going to get a blockbuster number in the third quarter.
The “intellectual property” item Kudlow rambles about was up 4.7% in q2 and is projected to go up 6.4% for Q3 as it stands today. Plus, IP is a relatively small part of the economy, while the production of goods is 5 times larger. Increases in software development are not going to make up for a recession in manufacturing, a sector that is not “picking up”, as UW’s Menzie Chinn illustrated this weekend (look at the black and red lines in particular).

As for the “consumer”, good luck on that staying strong, as consumer confidence fell hard in August along with the stock market and the 10-year note’s yield. But trying to reverse that flagging confidence is why Kudlow was on TV Sunday, right?

This last part of Kudlow's appearance on Meet the Press, is especially hilarious, and is a great example how Republicans try to shift reality to fit their policies.
…And I must say the president is transforming and rebuilding this economy. He deserves enormous credit. A new policy of lower taxes, and regulation, and energy opening, and trade reform. You know, we didn't quite get to 3%. But, look, Chuck, the first two years of the Obama administration we were just a hair below 3%. We're moving in the same direction. And let's be honest here. We faced severe monetary tightening, seven rate hikes in 2017 and 2018. I don't think all that was necessary. It's a miracle we were able to continue as well as we're doing. And, again, bond rates are falling. 100-basis-point decline. That's good for mortgages. That's good for business. And I think the Federal Reserve is going to now be following through, lower interest rates at the low end, because the bond rates have fallen and that's the way that game usually works. And I think that's going to be a big help.
Maybe those lower interest rates work out if you’ve got a ton of debt, or plan to go into debt. But it sucks if you want to save any money, and if the economy really is as good as Kudlow claims it is, then these rate cuts will only succeed making housing and the stock market even more overpriced than it already is.

It’s also a good insight into the world view of Wall Street dimwits like Kudlow. To them, the “eCONomy” is a confidence game based on stock trading and other casino-like measures that leads to booms and busts, entirely controlled by a few oligarchs. They don’t have a clue about what actually makes an economy sustainable or how everyday Americans try to pay their bills and get by.

The main skill Kudlow and Trump and their ilk have is BSing and keeping the grift going as long as they can. Aaron Blake at the Washington Post ran down how Kudlow has been consistently wrong in the last year over both the ballooning budget deficit and the rate of economic growth.
Back in June 2018, Kudlow saw a declining deficit. “The deficit, which was one of the other criticisms, is coming down — and it’s coming down rapidly,” Kudlow claimed. “Growth solves a lot of problems.”

The problem was that the deficit wasn’t coming down, much less rapidly. So Kudlow clarified to CNBC’s Eamon Javers that he was making a prediction. “I was referring to future deficits,” he said, adding, “I think it will come down in 2018, and the big reductions will come in future years.”

This, yet again, has not come to pass. The deficit rose a full 17 percent in fiscal year 2018, to $779 billion, as projections suggested it was headed toward $1 trillion. That path has continued this year, and, in fact, the rate of growth has increased. So not only did the deficit not “come down in 2018,” but it almost definitely won’t come down in 2019. Any reduction in the deficit appears years away, if it ever happens during Trump’s tenure.

Kudlow also predicted in January 2018 that the GDP would grow to between 3 percent and 4 percent based on the GOP tax cuts. Since then (and including preliminary estimates for the last quarter), it has grown by 2.5 percent.

In April 2018, he said the GDP could hit 5 percent for at least a short period of time. The highest quarterly GDP growth since then was 3.5 percent.
Sure, the stock market has regained some of the losses of last week as Wall Streeters speculate that trade wars and economic instability are settling down for the time being (or they’re covering their shorts). But if Larry Kudlow is saying he sees no recession on the horizon, that tells me you should definitely worry that it’s coming.

Sunday, August 18, 2019

The states Trump needs to win are falling far behind for jobs

On Friday, we got more evidence that whatever job growth we have left in this country is largely leaving the Midwest behind. That came from the Bureau of Labor Statistics state-by-state report, which came out on Friday and noted that of the 25 states that have had statistically significant job growth over the last 12 months, exactly ONE is in the Midwest.

That one Midwest state? The "failing state" of Illinois!, at just over 1%. Meanwhile, there are 5 states in the Rust Belt/Midwest that Democrat Barack Obama won in both 2008 and 2012, but flipped to the GOP's Donald Trump in 2016. And all of them have seen their job growth stall out, especially compared to the rest of the nation.

Job growth, July 2018-July 2019
U.S. +1.51%
Iowa +0.64%
Penn +0.50%
Wis. +0.46%
Ohio +0.45%
Mich +0.40%

And all 5 of those states have either complete GOP control of government, or have gerrymandered GOP legislatures tying up any progressive moves to adjust those states' economies. Seems noteworthy.

UW economist Menzie Chinn followed up with this note at Econbrowser, which shows that the three closest states that Trump won in 2016 are all showing declines in manufacturing jobs in 2019. This is even while manufacturing jobs throughout the country have continued to grow (albeit at a slower pace) in 2019.

This is a story that Coastal corporate media doesn't see, but is quite obvious to us in the Heartland. And if Dems want to win big in 2020, they should hammer on Trump/GOP's economic policies, which might have made things better for the rich and corporate, but have left the Midwest even further behind the country than they were in 2016, when many rolled the dice with Trump to improve their stagnant lives.

That gamble's not really working out for those folks, is it? And it'll likely be worse by the time November 2020 rolls around, if 2019's declines in manufacturing and this week's drop in US consumer confidence is any indication.

Saturday, August 17, 2019

Weekend thoughts - Hey Dems, stop overthinking this!

All of these 3 minutes of Trevor Noah are perfect. Dems should stop listening to what pundits claim is more "electable," and VOTE FOR THE BEST CANDIDATE.

This goes along with a quick column that Esquire's Charlie Pierce put up earlier this week regarding how too many Dem voters are making their primary calculations.
Jonathan Martin's taking some heat online about this piece in which a bunch of people talk about how much they'd like to vote for Senator Professor Warren If Only...(Fill in pundit-driven banality here.) The criticism is a little off-target; these pieces get done during every campaign and, if there's one thing we've learned about SPW's campaign so far, it handles bumps in the road as smoothly as a turbo Porsche. But I would like to point out one amazing quote that does not fill me with confidence in my fellow citizens. It is the kind of quote you'd die for, and I am very jealous of Martin for having landed it.
“If it were completely up to me, I’d vote for her."
My fellow citizen, not to be too strident, but, it is fcking well completely up to you.
"I like this candidate, but he/she won't be able to win." I remember hearing similar words about a US Senator from Illinois around this time of 2007. Not saying Liz is Barack, but that sentiment is/was similar. Stop overthinking this.

I understand that there is a lot of PTSD out there from 2016, and the stakes of losing in 2020 are awful. But put the trauma away and look at things with clear eyes. Candidates are electable because more voters choose to vote for them. And voters don't respond to defensive postures and calculated centrism, especially when a corporate-friendly agenda isn't working for the vast majority of the country.

After all, it was a major drop-off of voters in Milwaukee that was a main factor behind Hillary Clinton losing Wisconsin in 2016. If you're voting on "electability", having an agenda of change based in core values that inspires non-voters into becoming voters needs to be a central part of your thinking.

On a related note, has anyone given a reason to vote for Joe Biden in the Dem primary that doesn't include the words "polls" (which are irrelevant 15 months before an election), or "Obama" (who isn't coming back, no matter who is on the ballot)? Because I'm not sure one exists. Any Dem candidate is better than Donald Trump, and if the economy falls as I think it will, any Dem will be heavily favored by November 2020. So vote for the one that resonates with you.

The second part of Noah's statement is also on the money. You can debate whether Trump is a white supremacist, but you can't deny that white supremacists are inspired by him, and that Trump is fine with them being inspired by him.

So why not say so, and stick it in people's faces. And if it hurts people's fee-fees that they might be seen as racist for supporting such a racist...

They can OWN IT, or look in the mirror and change. Those people need to put on the big boy and big girl pants, and deal with the orange ogre in the White House.

For the 2020s, you can come along with us on the path of decency, or you can go away. But you should not be pandered to. And we don't need to compromise what we believe in to win big next year, and start to reverse this country's moral, political, and economic decline.

Moscow Mitch's Russian business deal sounds very familiar to this Wisconsinite

I happened to tune into Rachel Maddow on Wednesday night, and caught this amazing opening segment, which explains why the Senate Majority Leader is rightfully known as "Mocow Mitch". But as she spoke about the deal that Sen. McConnell and a Russian aluminum manufacturer named Rusal that is owned by Kremlin-linked oligarch Oleg Deripaska, it was giving me some deja vu back in Wisconsin.

Here's the clip, and I'll be back to discuss this afterwards. The Deripaska stuff starts around 10:30 if you want to jump to it.

Maddow quoted heavily from this Time magazine article by Simon Schuster and Vera Bergengruen, which connects the dots between the recent removal of sanctions against Russian oligarch Oleg Deripaska and Deripaska following that up by announcing that Rusal would locate a $1.7 billion plant in Ashland, Kentucky.
But to some observers, the story of how a Kremlin-linked aluminum giant offered an economic lifeline to Appalachia is an object lesson of the exact opposite. Critics of the deal, both Democrat and Republican, say it gives Moscow political influence that could undermine national security. Pointing to Moscow’s use of economic leverage to sway European politics, they warn the deal is a stalking horse for a new kind of Russian meddling in America, one that exploits the U.S. free-market system instead of its elections. “That’s just what the Russians do,” says veteran diplomat Daniel Fried, who shaped U.S. policy on Eastern Europe at the State Department from the late 1980s until 2017. “They insert themselves into a foreign economy and then start to influence its politics from the inside.”

What worries national-security experts is not that Rusal, Braidy or Deripaska broke any laws in the deal. It’s that they didn’t. A TIME investigation found that Rusal used a broad array of political and economic tools to fight the sanctions, establishing a foothold in U.S. politics in the process. “You cannot go against them in a policy decision, even though it’s in our national interest, when they have infiltrated you economically,” says Heather Conley, who served as a Deputy Assistant Secretary of State under President George W. Bush. “They use our laws, our rules, our banks, our lawyers, our lobbyists—it’s a strategy from within.”
Basically, it’s buying off people with jobs and (questionable) promises so that the foreign country can seem like they're the good guys. Then, it becomes a lot harder to get tougher on them when they do other things that aren’t so cool.

Some in Kentucky are rightfully skeptical of this deal with Deripaska’s company.
But not everyone in Kentucky was excited about the Russians’ arrival. After Donets’ visit, a red billboard funded by a liberal group was erected on a busy stretch of I-75: “Russian mob money . . . Really, Mitch?” “The only reason Oleg is here is because Mitch McConnell opened the gate,” says Representative Kelly Flood, a Democrat from Lexington. “We are now all aligned with this criminal.” The deal created unease among some Republicans too. “I would not have taken the Russian money,” James Comer, the GOP Congressman representing Kentucky’s First District, said on the day the partnership was announced.
However, the unpopular governor of the state has to face the voters of Kentucky in 3 months, and not surprisingly, he is doubling down on his support of the Rusal project, to show that "help is on the way."
Yet even critics of the deal were leery of the fallout from killing it. In 2017, Governor Bevin had cut an unusual agreement in which the state directly invested $15 million in the new aluminum mill. At least 750 investors, most from Kentucky, put in money as part of the “crowdfunding” portion of Braidy’s common stock offering, Bouchard said. In effect, Kentucky taxpayers were partners in the project. “To pull out as a state now is to pull out on the people of Ashland,” says Flood….

On rare occasions, Russian oligarchs have even described how this strategy works. “What is a factory in a one-factory town? It’s what all life revolves around,” the billionaire Dmitry Firtash, a longtime ally of the Kremlin in Ukraine, told TIME in a 2017 interview. “We don’t just pay wages. We provide the social safety net. So people believe us.” When he and his factories put their support behind a political cause or candidate, “that influences people,” Firtash explained. “That’s what ensures electoral support.”
Sound familiar? It should.

As Maddow was continuing with her opening piece, I found myself saying “THIS IS FOXCONN” several times. Think about it – Scott Walker, Donald Trump and Paul Ryan were desperate to show job growth through increased manufacturing in Summer 2017, and wanted it to happen in a relatively depressed part of the state.

At the same time, Foxconn saw a way to get good PR for themselves and perhaps get an exception to any tariffs Trump might put on products from China or Taiwan. So why not promise a major factory that adds a large number of jobs, and put it in a state Trump needs to hold onto to stay in office. And time the announcement so it comes one year before the GOP governor faces re-election, and put it in the district of the Speakers of the US House and the Wisconsin Assembly. Win-win for everyone!

What a cynical, disgusting scam. And the same thing is happening in Kentucky with this proposed plant from Rusal. Mitch McConnell is a hated incumbent facing re-election in 2020, and Deripaska and other Russian business interests see an obvious opening. “Hey Mitch, if you get rid of our sanctions and stop Congress from looking into how we interfered in the 2016 election, we'll help you buy off a number of votes by bringing jobs to a dying town in Eastern Kentucky.”

Maddow connects the dots with this portion of her opening monologue.
The short story here about Mitch McConnell is that he, more than anybody else in Washington, has blocked U.S. efforts to constrain or respond to Russia`s recent attacks. That`s why they`re calling him Moscow Mitch now, right?

But in this particular instance, his state, an economically disadvantaged part of his state, got a $200 million investment from a Kremlin-connected oligarch immediately after McConnell personally stepped in to make sure sanctions on that oligarch were dropped, despite his role in what happened to our election in 2016 and despite bipartisan support even from his own party for their sanctions.
And if Congress tries to crack down on Russia before the 2020 elections, Maddow points out that Deripaska and Rusal have a new card to play. They can threaten Moscow Mitch with the jobs that they, as the Great Benefactor, have gifted his home state.
But now, Oleg Deripaska`s business activities, the health of his business empire, that`s part and parcel of the hard-scrabble economy in one of Kentucky`s neediest counties. I mean, this is a plant that`s over a billion dollars. It`s one of the biggest aluminum plants in the U.S. ever. It`s 40 percent owned by the company of this Kremlin-connected oligarch.

You`re not going to be able to sanction him no matter what he does to our 2020 election or whatever else he does at all. It would strangle Kentucky in the process. There would be hundred, if not thousands of American jobs riding on anything you did to that Russian guy`s company or, frankly, anything you did to bother him.

He now holds all of those American jobs in his hand. The U.S. government does anything to bother him, he can take them away at will. So, you can`t do anything to his company, not without him exerting that leverage over Kentucky in response.
And wouldn’t it be a bad thing for this plant to fall through before Mitch and Trump face the voters in November 2020?

The Time magazine article also mentioned that Rusal’s holding company had sent a letter to eight governors in April saying they could do for them what they might do for Kentucky. And the first governor addressed in that PDF of the letters?
Dear Governor Evers,

I am writing to you as Executive Chairman of En+ Group PLC, which is listed on the London Stock Exchange, We are the world's largest producer of aluminum outside of China and the largest private sector owner and operator of hydropower installations globally. We generate more than 15 gigawatts of hydroelectricity from which our metals subsidiary, Rusal, creates high quality, low-carbon aluminum. In total, we employ more than 100,000 people through our operations in 13 countries on five continents—from our state of the art smelters in Siberia, to our bauxite mines in Jamaica and West Africa to Europe's largest alumina plant in Ireland.

As part of our international growth strategy, we see significant opportunities across the whole aluminum industry value chain in North America. As you can see from the attached news articles, just this week we announced plans to become a cornerstone investor and strategic partner in the largest new aluminum rolling plant to be built in the US. in nearly forty years. Located in Kentucky, this $1.6 billion project is a first of its kind and will bring hundreds of new high-quality manufacturing jobs to the region.

This investment is just the beginning of our long-term ambitions. Given the growing global demand for high quality, low carbon aluminum and the opportunity for growth |n the U.S., we are eager to evaluate other opportunities around the country and in your state in particular. If appropriate, I would be delighted to explore these issues in more detail with you and your staff.
After the debacle of Foxconn, I would hope Evers told Rusal “HELL NO”. We already have one compromising boondoogle with a foreign company to deal with, and don’t need more.

In addition to the similarities to the empty promises and politically-motivated reasoning with Foxconn, Deripaska has another Wisconsin connection, and it comes from the Mueller report.
Trump campaign chairman Paul Manafort briefed Konstantin Kilimnik, a man with suspected ties to Russian intelligence services, about key battleground states in the 2016 presidential election, including Michigan, Wisconsin, Pennsylvania, and Minnesota, according to special counsel Robert Mueller's report.

The 448-page report, released on Thursday, laid out the findings of the special counsel's two-year investigation into whether members of the Trump campaign conspired with the Russian government during the 2016 presidential race. A key subject of interest in the investigation was Manafort's work for Ukrainian and Russian oligarchs and his interactions with these figures while he was Trump's campaign chairman.

The report noted that Manafort instructed his longtime colleague Rick Gates to provide Kilimnik with internal Trump campaign polling data and briefings on the campaign's strategies. For years, Manafort and Kilimnik worked together closely on political campaigns in Ukraine. Manafort even nicknamed Kilimnik his "Russian brain." The FBI has determined that Kilimnik, who was once a Russian military translator, has links to Russian intelligence services.

The Mueller report noted that Manafort expected Kilimnik to share the Trump campaign information with individuals in Ukraine and with Oleg Deripaska, a Russian aluminum magnate with close ties to Russian President Vladimir Putin.
Put this together, and any wonder why Homeland Security Chair Ron Johnson (who benefitted from Russian propaganda efforts in his election in 2016) doesn’t seem too keen on looking at whether this deal with Rusal in Kentucky has potential issues on national security? Me neither.

You can’t trust any of these oligarchs or the Republican hacks who are glad to do their bidding. They are rotten with bad faith to the core.