Monday, December 12, 2011

Midwest in recession and recovery

When I saw the treasure trove of data that came from that Federal Reserve "GDP By States" report that I referenced in the post that showed Wisconsin having the worst economy in the nation over the last 3 months, I had to look into it further. (Why? Probably because I am a pathetic geek on these things). I've mentioned before that Wisconsin handled the recession better than most of its neighbors, and this data will back most of it up, as well as show the Scott Walker effect that has taken away these advantages.

I wanted to show Wisconsin in comparison to its upper Midwestern neighbors, so we have a total of 7 states including Wisconsin in this study, as well as the U.S. numbers as a whole. The first chart shows GDP drops and recovery from 2008 (the U.S. started seeing the numbers drop in Jan. 2008) through today. You'll see that Wisconsin muddled through a lot better than any of its neighbors to the south and east (Michigan was so bad it literally went off the charts in 2009), and we were slightly better than the U.S. each year from 2008-2010. But in 2011, Wisconsin dropped below the U.S. for growth, and now trails by almost 1%. (click for bigger image)

Interestingly, Iowa and Minnesota are the clear leaders in this chart, and the two states that beat Wisconsin in our region. Minnesota in particular is almost back to where they were when the recession started. It's not the only way they've been beating Wisconsin in economic stats in the last couple of years - think this might have something to do with the Twin Cities being a lot more open to new ideas and new people than Milwaukee and the 262? If you don't, you should.

Now check the next chart, which shows how the economy has rebounded in the 2 years since Wisconsin hit bottom in October 2009 (we actually came out of recession 2 months before the country as a whole). You'll see Wisconsin continues to match U.S. growth as a whole and was solidly in the middle of the pack when compared to our neighbors...until Walker's budget was signed in June. Now, we're next to last in our group for growth in the last 2 years, and have gotten passed by Illinois and Minnesota, as well as the country as a whole. (again, click for the larger image)

You'll notice a few things here:

1. Michigan and Ohio had the highest increases, which isn't all that surprising since they were so far down to start. Likewise, Iowa is the only state to increase slower than Wisconsin in this time, but Cornholio didn't fall very far to begin with.

2. The U.S. economy has continued to steadily grow in the last 4 months, while Wisconsin has dove down.

3. The other state in clear recession in the Upper Midwest Region? Mitch Daniels' Indiana, continuing its underperforming trend under one of Scott Walker's political idols.

So there's more evidence of how Wisconsin is starting to trail and see the damage from Scott Walker's policies. And given the higher jobless claims over the last few weeks and the disastrous mill closings in Central Wisconsin announced last week, you can't expect it to improve much in the next few months. Now I'm going to go out on a limb and say we may have gained jobs in November, but it won't be much, and it won't get us back to where the rest of our region has been the last few months.

By the way, those new jobs numbers come out on Thursday and the state numbers will probably be on Friday. Between that and the inevitably larger property tax bills that are hitting people's mailboxes (and yes, they'll be up...or the home values will be down), you don't think there's a bit of flop sweat coming from DWD and the Walker Admin right now?


  1. One thing too many people do not understand is that even if your local politicians "freeze" our property taxes and the value of your house goes down. That means your property taxes are going up!

    We had that problem in cottage grove, by stealing park funds our village board "froze" property taxes and then ran on that yet the value of our housing went down probably 20%. Luckily we were able to make that case to the voters.,..

  2. Jeff- Well, if your town's home values are going down, they often raise your RATE to make up for it, which really screws people whose homes stay the same. They're the ones who end up paying more with no return on that investment.

    Cottage Grove was run by (n)Ass's pupetmaster Mikalsen for a while, wasn't it? Says a lot right there. Fortunately you drove that guy out by telling the truth - maybe the same will happen to Mr. Knutson for his paid-off lies and deceptions, eh?