Tuesday, July 31, 2018

Images of the day

This sums it up quite nicely, I think.

Scotty playing dress-up for Foxconn might even edge out this iconic image from his last campaign.

This guy is flailing and LOSING, both on the Fox-con, and in the election as a whole. It's also funny how this guy's campaign latches its ads about Foxconn onto my site because it thinks I'm interested (you views may vary). It's almost like they're trying to convince themselves AND any rubes who might be suckered in by their spin that the Fox-con somehow helps the rest of the state (it doesn't, in fact it takes away jobs and projects from the rest of the state).

It's toime time to bury this guy's career in that ditch 14 weeks from tonight, and stop the constant embarrassment that results from having this dimwitted grifter Dropout represent the state of Wisconsin.

Stock buybacks up, wages not so much. Just the way the GOP Tax Scam's oligarchs want it

Bloomberg’s Noah Smith wrote an article in Bloomberg News a couple of weeks ago that seems to have been ahead of the curve when it came to evaluating the GOP's Tax Scam. The article is title "Trump’s Tax Cut Hasn’t Done Anything for Workers", While Smith concedes that the tax cut has only been in place for a few months, it's not too early to start seeing if it's having any immediate effect.
But it’s also important to evaluate policies like Trump’s tax reform as quickly as possible. Not only is this critical for deciding whether to change course, but as more time goes on, the effects of a policy can become harder to assess. Two years from now, plenty of other things will have had time to affect the economy, including Trump’s trade war and natural economic forces. And now that the tax cut has been in effect for a half-year, the results are starting to trickle in.

First, the tax reform hasn’t yet resulted in appreciably higher wages for American workers. Real average hourly compensation actually fell in the first quarter after the tax reform was passed:

Smith also includes this next chart in the article, which is based on Pay Scale’s index of real wages, You may have seen it make the rounds in the last couple of weeks.

And this reality reflects the choices made by many corporations to “reinvest” their windfall from lower tax rates by sharing it among their fellow executives and other stockholders.
Some have expressed dismay that stock buybacks seem to have taken precedence over boosting capital investment. Since the tax cuts passed, companies have been using buybacks to return record amounts of cash to shareholders — more than $700 billion in the first two quarters. That naturally raises the possibility that companies don’t have good projects to invest in. If companies pass their tax windfall on to shareholders, those investors can choose to react by increasing consumption — meaning more of society’s resources go to the wealthy. They can also choose to invest the money in other companies with better growth prospects — but if those companies are also reacting by returning the money to their shareholders, rather than making capital expenditures, not much is getting accomplished.
Politico had an article out yesterday along that same vein, where evidence continues to point to the GOP Tax Scam resulting in "eye-popping" amounts of self-enrichment by CEOs.
A POLITICO review of data disclosed in Securities and Exchange Commission filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase, as Wall Street analysts expect buyback activity to accelerate in the coming weeks.

“It is going to be a parade of eye-popping numbers,” said Pat McGurn, the head of strategic research and analysis at Institutional Shareholder Services, a shareholder advisory firm….

Following the tax cuts, roughly 28 percent of companies in the S&P 500 mentioned plans to return some of their tax savings to shareholders, according to Morgan Stanley. Public companies announced more than $600 billion in buybacks in the first half of this year — already toppling the previous annual record.

Year to date, buybacks have doubled from the same period a year ago, Merrill Lynch said in a July 24 report, citing its clients’ trading activity. “Last week we noted that buyback activity [was] poised to accelerate over the next six weeks, and indeed, corporate clients’ buybacks picked up to a two-month high and the 6th-highest level in our data history,” the company said.

The correlation between corporate buybacks and insider sales is clear, according to SEC Commissioner Robert Jackson, a Democrat. He studied 385 buybacks since the beginning of 2017 and found that after half of them, at least one executive sold shares within the next month.
In fairness, one area that has seen an uptick in growth since the tax cut has been discussed seems to be in capital investment for items like equipment and buildings. Non residential fixed private investment (which reflects most business equipment and buildings, and is shown in yellow in this chart) has been a consistent source of growth to the economy in each of the last 3 quarters,

But note that residential fixed investment (homes and apartments, generally) has been basically flat if not declining in the last few quarters. That may be another sign of stagnant wages not translating into home sales, although diminishing affordability also seems to be a factor (which of course, reflects the stagnant wages).

Noah Smith notes that part of the reason tax cuts don’t add to the economy in the US the way they might have 40-50 years ago is simple - We’ve cut taxes numerous times since then, so we’re starting from a lower tax rate. Which means future tax cuts offer little bang for the bucks.
In the postwar period, with top marginal income tax rates at more than 90 percent, it made sense to cut taxes as a way of improving the economy’s long-term health. A series of big tax cuts, under presidents Lyndon Johnson and Ronald Reagan, might have boosted economic activity in their day. But the later tax cuts by George W. Bush were followed by years of underwhelming growth, implying that income taxes were no longer doing much damage to economic efficiency.

Corporate taxes were really the last hope for the tax-cutting strategy. But if even that doesn’t provide more than a small momentary fiscal stimulus, then we’ve reached the end of that approach’s usefulness.
My question is- when do enough people say “Time’s up” and start to reverse this hazardous funneling of money to the pockets of CEOs and other idle rich, and get the money into the pockets of the individuals with real jobs that are barely staying afloat? Because it needs to happen soon.

I know this song is about S&M, but I've long thought it to be a metaphor with how our corporatist economy really works. "It's a lot like life", and it's certainly what the Kochs and other oligarchs want as their endgame.

Monday, July 30, 2018

So how would this reinsurance thing work in Wisconsin anyway?

Over the weekend, the Walker Administration got good news from their allies in the Trump Administration, as the GOPs in DC signed off the Wisconsin plan to try to reduce premiums for Wisconsinites who receive their health insurance through the Obamacare exchanges.
Thanks to a federal waiver from the Affordable Care Act, the state will use $200 million in state and federal funds to cover some insurer costs.

The federal waiver was approved by the Legislature in February and then approved by the federal government. It will create a reinsurance program for people on the individual market and will cover some insurer costs.

"We just wanted to fix as much as we could. The problems that people face today and so presumably five years from now, there will probably be some changes we can adapt to, but in the meantime we want to give people meaningful relief so that premiums will go down," Walker said.
The idea is that the $200 million to the insurers would (hopefully) not have them put insurance premiums be as high as they otherwise would be, and much of that would be paid back by the Feds (I’ll explain that “Fed vs State” cost breakdown later).

When the bill was being debated in February, the Legislative Fiscal Bureau gave this summary of the reinsurance plan, and explained that this would replace the ACA’s original nationwide program that was done away with in 2016.
The ACA's transitional reinsurance program paid a portion of the medical costs (called the "coinsurance rate") above a certain threshold (an "attachment point") up to a maximum threshold (the "reinsurance cap"). DHHS was required to set the program parameters such that the total amount of estimated reinsurance payments would equal the amount of funding available for that purpose each year. The amount of funding available for reinsurance payments nationwide was set by the ACA at $10 billion in 2014, $6 billion in 2015, and $4 billion in 2016. This program was primarily externally funded, since the funding for making the reinsurance payments was collected using per capita assessments of all health coverage plans, including fully-insured and self-insured employer plans in the individual, small group, and large group market.…

The transitional reinsurance program under the ACA had the effect of reducing a participating insurer's risk exposure associated with high-cost individuals. But the program's externally-funded structure also had the effect of reducing the share of total costs paid by insurers and by individuals covered in the individual market. That is, a portion of the medical costs of high-cost persons in the individual market was, in effect, spread across the entire insurance market. Because the ACA's transitional reinsurance program was temporary, all costs associated with high-cost individuals within the individual market must now be funded internally within that market, through premiums paid by persons in the individual market. Current gross premiums in the individual market have increased in 2017 and 2018 in part because of the end of the external subsidy effect of the transitional reinsurance program.
So how does the waiver interact with the ACA? Here’s how the LFB explained it.
Section 1332 of the ACA includes a provision allowing states to experiment with alternative methods of providing for healthcare coverage. Under Section 1332, states may request a waiver of various insurance market provisions established by the ACA, and also request pass-through federal funds that would otherwise be spent for premium tax credits. In order to be approved, state proposals must not increase the federal deficit, must provide coverage that is at least as comprehensive and as affordable as plans offered through the exchange, and must provide coverage to at least a comparable number of state residents. States are required to pass a law implementing provisions of a waiver plan.

In addition to the Wisconsin proposal, other states have already or are considering the possibility of establishing a state reinsurance program to lower premiums and encourage insurer participation in the individual market. So far, Alaska, Minnesota, and Oregon have established programs under a Section 1332 waiver. Of these three, Minnesota's program is most similar to the Wisconsin proposal, with parameters that are also similar to the first year of the ACA's transitional reinsurance program. In 2018, the Minnesota reinsurance program uses an attachment point of $50,000, a reinsurance cap of $250,000, and a 80% coinsurance rate. In addition to federal pass-through funds, Minnesota designates state funding sources for the program, including proceeds of a health insurance premium assessment.
Basically, the Feds give the state a portion of the money they would otherwise have given to individuals for tax credits that help people buy insurance on the ACA exchanges, as a “thank you” for having the premium increases not be so high (and therefore, the federal government's subsidy isn’t so high).

Oddly, there is little change to the net cost of many people that make up to 400% of poverty for insurance they buy on the Obamacare exchanges, because they’d get that money paid back through subsidies anyway. It’s just less to pay up front with the tax credit being smaller (in theory). The biggest beneficiaries are contractors and others who make too much money to qualify for the subsidies, and now hopefully get their premiums lowered as a result of this reinsurance plan.

Of course, Citizen Action's Robert Kraig notes that there was a better way for Walker to reduce premium costs and would cover more people. If Scotty had just CHOSEN TO GO ALONG WITH THE ACA FROM DAY ONE, and put in other public insurance options for Wisconsinites would save more money than whatever people might save in premiums with the reinsurance plan.
1. Opening BadgerCare to everyone in Wisconsin as a public option would reduce premiums and deductibles by an average of 38%. It would also help people who buy insurance on their own and small businesses, most of whom cannot afford to provide coverage to their employees.

2. Reversing Walker’s decision to turn down the Medicaid expansion money in the ACA could reduce premiums by about 7%.

3. Reversing the Walker Administration's decision in May to continue to allow the sale of substandard “lemon” plans in Wisconsin could reduce premiums by as much as 10%.

In addition, although Walker has decided to tout what he is doing to stabilize the ACA, he approved the filing of a lawsuit by the Wisconsin Attorney General that would strike down the law, taking health care away to nearly 200,000 Wisconsinites.

Instead of acting like a governor and doing the right thing for his constituents, Scott Walker chose to impress the Kochs and other right-wing oligarchs, and messed with the ACA in Wisconsin once he took office in 2011 (he was also seen sticking it to the Black Man in the White House. Win-win!). Now that Walker is trailing the Democratic competition for re-election, with Wisconsin falling from 7th to 15th for having its residents have health insurance, and with the specter of new ACA prices rolling out right before the November election, he knew he had to be seen doing something.

So we have this reinsurance plan. Hey, maybe it will help for a year, and maybe we won't have 2.1% of our population lose health insurance this year. But we deserve a lot more than this one-time Band-Aid that is being putting out to try to cover the wounds caused by Republicans like Scott Walker and their willful sabotage of the Affordable Care Act.

Sunday, July 29, 2018

The other side, how Foxconn takes away from the rest of WIsconsin

Over the last couple of weeks, the Scott Walker campaign team has continued to try to improve bad poll numbers on the Foxconn project by claiming the company's plant (and tax funding) in Wisconsin will help the rest of the state. I even see digital ads from Walker pop up on this and other sites I visit trying to spread this claim, which underscores how vulnerable they think they are on this issue.

However, a closer examination shows that the voting public has been right all along - the Fox-con and its funneling of resources to that one company and the SE corner of the state really is taking away things from the rest of Wisconsin. Bruce Murphy in Urban Milwaukee called out the photo ops Walker and Foxconn have done in the last month where Foxconn says they plan to (key word - PLAN TO) buy buildings in Green Bay and Eau Claire and hire a few hundred people in "innovation centers"
All of which left me with some questions for the company. What is the economic advantage for Foxconn of having three different innovation centers spread around the state? And what is the company paying for these buildings in Green Bay and Eau Claire and when will they be closing on the purchase? Will it be after the November election when Walker hopes to be reelected?

Foxconn responded with a long email, declining to disclose the purchase price on the buildings, their owners or whether the purchase will occur before or after the November election. Most of the email offered a description of why so many mini-Foxconns are spreading across the state, and I must note their PR writing is getting better.

“Having a presence in different parts of the state helps us recruit potential employees, strengthens our ability to collaborate with entrepreneurs and start-up companies and gives us more opportunities to find value-added suppliers who can contribute to the project’s success,” the company wrote. “Not all the knowledge, expertise, talent and suppliers that will be associated with our significant project, and that are found in Wisconsin, reside in the south-eastern part of the state.”

No doubt there are potential employees and suppliers to be found in other parts of the state, but are we living in the age of plank roads and mule teams? Or are these potential partners too shy to use computers, email and cell phones or simply drive along those highway connections to Foxconn’s massive Racine campus that we taxpayers are financing. Why must the company instead create satellite connections all over Wisconsin in order to coax these elusive workers and companies from getting aboard the gravy train of the most publicly subsidized foreign company in American history?

Given the massive subsidy Foxconn is getting, it can probably afford to throw a little money at Eau Claire and Green Bay, even if those satellite centers are completely unnecessary. And Foxconn has every incentive to ensure that Walker wins reelection, given that all eight Democratic candidates for governor have condemned the deal and one, Matt Flynn, has promised to fight the deal in court. Foxconn, moreover, has a long history of backing out of projects it announces. If it could back out of deals in India, Vietnam, Brazil and Pennsylvania, why can’t it walk away from Eau Claire and Green Bay? It can merely explain, a couple months after the November election, that economic conditions have changed, or that it is having no problem getting the suppliers and employees it needs for its Racine plant, and so it won’t need those political outposts — sorry, innovation centers — that helped reelect their generous benefactor.

Don't worry, Foxconn is thriving in this Wisconsin town

What also needs to be noted is that with Foxconn using a tax-subsidized work force (and likely using the freed up cash from that and other tax writeoffs in these transactions), it limits the ability of other established and unsubsidized businesses from getting the same opportunity to locate in those facilities in Eau Claire and Green Bay. And that looks even worse if Foxconn is making an empty promise of job growth that never appears, because that's several months wasted on this charade instead of having actual business activity being generated.

Meanwhile, the construction at the the "main plant" in Racine County is clearly detracting from opportunities in the rest of the state. Terry McGowan is the president of the construction-heavy Operating Engineers 139 union, and told TMJ-4 that his workers in other parts of the state aren’t doing as much in their home areas because so much is being sent down to the Foxconn-sin region.
“Well the impact for us as a statewide union means that all this money, all the resources from the state have been pulled down to Southeast Wisconsin, I mean if I get north of HWY 21 my members aren’t real happy,” he said. “They feel like a lot of their infrastructure is being ignored up there.”

Motorists have definitely noticed the detours, slowdowns and upgrades on I-94, it might be a headache but it’s also a boom for the economy.

The union is working with its members in Northern Wisconsin to find work in the Southeastern part of the state….

There’s no timetable on when things will pick back up on fixing the infrastructure in other parts of the state.

The union says it all depends on when the next transportation budget comes out.
This is part of the analysis of the Fox-con that keeps getting missed – the added activity in and around Racine County is taking away activity in other parts of the state.

The reduced activity can take many forms. It can mean that investments in other parts of the state go by the wayside, as McGowan’s comments indicate and as shown by as much as $90 million in road projects not being done in this biennium to pay for Foxconn work.

Related to that, there’s only so many people that live in this state, and in a time of near-full employment, having a new project in one area makes it even more likely that it takes away from projects in another area (which makes the Fox-con an even dumber move to happen when it did), unless you think that the project is going to motivate a bunch of new people to move to the area permanently. And given the de-investment that Walker and WisGOP have done for schools, other services and quality of life, many people aren’t going to go for that.

There also is the prospect of higher taxes and/or spending cuts that we will all have to take on as a result of the subsidies given to Foxconn - deficits that are likely to be higher than projected, since it's increasingly likely that there will be fewer workers at the Foxconn plant, especially in the earlier years). This will cut into the ability for more work to be done in other parts of the state in the coming years, but that’s never mentioned when GOP hacks and corporate media talk about “the impact of Foxconn”.

Lastly, having Foxconn and the Walker Administration tied at the hip reveals that the GOP's talk about "free markets" is a complete fraud. They are using tax dollars to give Foxconn an edge over current Wisconsin businesses and projects time and again, and in addition to the taxpayer costs, the decisions to funnel so many limited resources to Foxconn is coming at the expense of many other people in Wisconsin who have often played by the rules and done things without a need for special exemptions and giveaways. And once Foxconn leaves us in the lurch before the state gets back its costs for this boondoggle, there might be fewer firms and resources available to pick up the slack. Which is why it's best that the Fox-con gets short-circuited and diminished ASAP, before the rest of Wisconsin ends up missing out even more.

Budget Guy: Paul Ryan has "checked out" and it could mean a shutdown in 2 months

Foe Sunday reading, I wanted to again recommend Stan Collender's writings in "The Budget Guy" blog, and yesterday's entry that illsutrated how "House Republicans are in Almost Total Disarray as Summer Recess Begins."

Collender rightfully notes that House Speaker Paul Ryan has "increasingly checked out" in a time when he needs to get to work, given that there is little time set aside in the House session to get a budget done.
The House only has 11 legislative days left before the start of fiscal 2019 but doesn’t seems to have any agreed-upon plan on how to avoid a government shutdown on October 1 except to hope that Trump doesn’t veto the continuing resolution that will be needed to prevent it....

When the House reconvenes, the GOP plans to devote a significant amount of the limited time it has left before fiscal 2019 begins to three tax cut bills that have no chance of being enacted any time soon because…wait for it…the Republican-controlled Senate has already said it’s not interested.

And none of this even begins to anticipate what the House Republicans who are running for reelection and think they will need to energize the Trump base will do in September as the Manafort trial and Cohen investigations continue and as the Mueller probe moves forward.

In other words, this year’s legislative crunch time is about to get very real but House Republicans have little leadership, no plan, a very divided caucus, are very likely to be distracted and are relying on a notoriously unreliable Donald Trump to do the right thing.

This is almost a textbook definition of political and legislative chaos.
Instead, Collender points out that GOP House members like Jim Jordan (aka "The Biggest disgrace to the UW Athletic Hall of Fame") are spending more time trying to shield President* Trump from the Mueller probe than they are in doing base duties like funding the government. And it's done with a wink and a nod from Ryan, who gives mealy-mouthed "I wish they didn't do that," type responses but does nothing behind the scenes to make those Bagger dimwits stand down and focus the agenda beyond obstructing the rule of law.

Sooo punchable. And sooo incompetent.

Dems should do nothing to bail these dingbats out in the next 3 months. There are plenty of reasons to boot out the Republicans in November, but the incompetence of Paul Ryan and the rest of the House Republicans should be near the top of the list. A government shutdown 5 weeks ahead of the midterms would cement that image of "these clowns don't know what they're doing" into people's minds.

Saturday, July 28, 2018

Walker down 13? May be too good to be true, but Scotty's still in BIG trouble

I had an idea that the Marist/NBC News poll for Wisconsin would look very good for Dems when it showed Donald Trump's approval rating falling to 36% in the state, and a heavy preference for Dems to control Congress after November's election.

But when Marist/NBC followed up with polls on the two big statewide elections for November, I wasn't expecting to see this.

To me, the bigger story is that only 34% of those asked think Walker deserves to be re-elected to a third term. And that's why I think only concentrating on Evers in head-to-head matchups is a big error by Marist/NBC. I really would have liked to have seen what the other matchups looked like, given that Evers is as close to "generic Democrat" as you can get, and it would have been intriguing to see if someone was an even better matchup, or if someone wasn't.

As the Wisconsin State Journal's Matt DeFour notes, Evers had the mpost support of Wisconsin Dems in this poll, but he has far from a majority of ironclad support for the August 14 primary.

Given that 40% of those asked by Marist/NBC gave no preference to a specific candidate, if one the other candidates catches fire and consolidates a lot of support, he/she could overtake Evers by Aug 14. And I think I'm far from the only voter that would like to see "head-to-head vs Walker" comparisons to help me finalize my choice.

As for the NBC/Marist poll itself, here's how they arrived at those shocking numbers.
Within each landline household, a single respondent is selected through a random selection process to increase the representativeness of traditionally under-covered survey populations. Assistance was provided by The Logit Group, Inc. for data collection. The samples were then combined and balanced to reflect the 2016 American Community Survey 5-year estimates for age, gender, income, race, and region. Results are statistically significant within ±3.6 percentage points. There are 906 registered voters. The results for this subset are statistically significant within ±3.8 percentage points. There are 355 voters in the potential Republican primary electorate. The potential Republican primary electorate in Wisconsin includes all voters who prefer to vote in the August Republican primary and those who identify as Republicans or Republican leaning independents without a primary preference. There are 466 voters in the potential Democratic primary electorate. The potential Democratic primary electorate in Wisconsin includes all voters who prefer to vote in the August Democratic primary and those who identify as Democrats or Democratic leaning independents without a primary preference. The results for these subsets are statistically significant within ±6.1 percentage points and ±5.3 percentage points, respectively. The error margin was adjusted for sample weights and increases for cross-tabulations.
So with that sample, here's what Marist/NBC had as a party ID and ideological breakdown.

Democratic 33%
Republican 25%
Independent 41%

Liberal/Very liberal 30%
Moderate 31%
Conservative/Very conservative 39%

Now compare it to those same statistics for the most recent Marquette Law School Poll.

Democratic 26%
Republican 28%
Independent 44%

Liberal/Very liberal 25%
Moderate 31%
Conservative/Very conservative 38%

So that 10 point difference in projected turnout from Dem +8 in the Marist Poll vs the GOP +2 in the Marquette Poll goes a long way toward explaining why those polls have seemed so different. The question is – who’s right about what that electorate will be like?

Well, let’s look at the recent history of the most recent heavily Blue Wave year in Wisconsin, and then the most recent midterm.

In 2008, a 14-point blowout for President Obama in Wisconsin, the electorate identified as Dem +6.

In 2014, a pro-GOP midterm that Walker won by 5.7%, the electorate was R +1.

In both polls, Dems held a slight edge in a question about enthusiasm, which is always a big deal in a midterm, when voter turnout isn’t as large.

How enthusiastic are you about voting in this November’s elections?

Marquette Law
Very enthusiastic
Democratic 65%
Republican 61%

Do you think November’s election for Congress is very important?

Marist/NBC Poll
Very important
Democratic 78%
Republican 76%

With that in mind, I'd say it is conservative to assume that the electorate will be halfway between the 2014 one and the "Dems killing it" figure in the 2018 poll. Which would leave us around Dem +3.

But the telling breakdown (and sign of change) to me is this one.

2014 exit poll
Independents Walker 54%, Burke 43%
Moderates - Burke 52%, Walker 46%
White Women - Walker 50%, Burke 49%
White college graduates - Walker 53%, Burke 46%

Compare that to the Marist Poll that had Walker down 13 to Evers.

2018 Marist Poll
Evers vs Walker
Independents Evers 53%, Walker 39%
Moderates – Evers 59%, Walker 36%
White college graduates Evers 56%, Walker 41%
Small city/suburban women (in Wis, this translates to a more-GOP sample of white women) Evers 64%, Walker 28%

And it looks even worse for Walker on the more generic "re-elect" question, which indicates people are in general sick of Governor Dropout.

Does Walker deserve to be re-elected governor of Wisconsin?
Independents No 61%, Yes 32%
Moderates – No 67%, Yes 26%$
White college graduates No 60%, Yes 34%
Small city/suburban women No 71%, Yes 24%

That is serious erosion in the constituencies that Walker can’t afford to lose any ground in, given that we can expect higher Dem turnout than in 2014, making things pretty near even before we even consider these swingier voters. It also shows a serious drop for Walker in those consituencies from July's Marquette Poll.

Marquette figures on Walker approval
Independents 33-46
Moderate 40-52
Women 42-50

Marquette didn’t break it down into WHITE women, but given that Walker performed better with white people in general, assume his approval rating was close to 50-50 with that group.

So if even half of that erosion across those demographics is true, that would likely put Walker down 5-10 points as a baseline. It also seems worthy to mention that between the more GOP-favorable Marquette poll and the pro-Dem findings in the NBC/Marist poll, we saw this.

Is it possible that stories connecting Walker and other Wisconsin righties like David Clarke to the NRA-Russia laundromat are having an effect? I think we should have more people in the field in America’s Dairyland to see if that’s the case.

And if Trump-Russia and its related corruption is rubbing off on Scott Walker and all other GOP candidates, any Dem not wrapped up in scandals involving pedophile priests (COUGH) will emerge from the August 14 primary in great shape to take out a badly damaged Scott Walker and Wisconsin GOP in November.

2nd Quarter GDP good, but we've been here before. In fact, Obama era was even better than we knew

A lot of attention was given to yesterday's first look at GDP for the 2nd Quarter of GDP. And it came in well, as the growth of 4.1% was the best in one quarter in nearly 4 years, and was largely the result of everyday Americans spending more in the Spring after a slowdown for the first 3 months of the year.
Friday’s report also showed that personal consumption in the second quarter grew at an annualized rate of 4%, a major jump from the 0.5% pace of consumption growth seen to start the year.

Meanwhile core PCE prices, a measure of inflation, grew 2% quarter-on-quarter, less than expected and a slight deceleration from the 2.2% pace of price growth seen to start the year.

The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports, a smaller decrease in residential fixed investment, and accelerations in federal government spending and in state and local spending, the BEA said in its release Friday.

These movements were partly offset by a downturn in private inventory investment and a deceleration in nonresidential fixed investment. Imports decelerated.

Interestingly, forecasts were for even stronger growth than 4.1%, and the lower-than-expected inflation number would have led you to think the real GDP number would be even higher. But it seems to have been limited by two main reasons.

1. A major shrinking of inventories (shown in pink on the chart above), reducing 1% from growth in Q2. This could also give a little support to GDP in the 2nd half of this year as shelves will need to get restocked.

2. The previous years and quarters were noticeably better, particularly during the Obama Administration.

We know this because today’s report also included several years of revisions to prior years and quarters of GDP results. And we found out that the US economy’s recovery from the Great Recession was a bit stronger and quicker than what was previously known (particularly in office buildings and equipment).

Interestingly, even though 2017 had an increase in the current dollar GDP, because the previous years were even stronger, the real annual GDP growth rate for 2017 actually dropped to 2.2% with these revisions.

In addition to the increased strength of the Obama Recovery, the part that jumped out at me in these revisions was notable upward revisions in income, not only for the mid-2010s under Obama, but also last year under Trump.
Personal income was revised up $95.0 billion, or 0.7 percent, for 2012; was revised up $107.4 billion, or 0.8 percent, for 2013; was revised up $173.6 billion, or 1.2 percent, for 2014; was revised up $166.6 billion, or 1.1 percent, for 2015; was revised up $196.4 billion, or 1.2 percent, for 2016; and was revised up $401.9 billion, or 2.4 percent, for 2017.

From 2012 to 2017, the average annual rate of growth of real disposable personal income was revised up 0.4 percentage point from 1.8 percent to 2.2 percent.
And because people had $205 billion more in income than we knew of last year, but actually consumed slightly less than the original figures showed, it means that the savings rate stayed high in 2017.
The personal saving rate (personal saving as a percentage of disposable personal income) was revised up from 7.6 percent to 8.9 percent for 2012; was revised up from 5.0 percent to 6.4 percent for 2013; was revised up from 5.7 percent to 7.3 percent for 2014; was revised up from 6.1 percent to 7.6 percent for 2016; was revised up from 4.9 percent to 6.7 percent for 2016; and was revised up from 3.4 percent to 6.7 percent for 2017.
The reported drop in the savings rate that we had seen throughout 2017 and 2018 was one reason I was fearing that we were back in 2006 in our economy, right before the housing Bubble popped under a mountain of debt. That take of mine now looks way off with this new information, because If the savings rate is maintaining at a decent level, then our economy is fundamentally stronger, and is less at risk of having our current housing Bubble being blown too far out of proportion.

But those improved income stats from 2017 also make the GOP’s Tax Scam all the more absurd, especially the tax cuts on the corporate side. Things were in decent shape at the end of 2017, with far from any need for extra stimulus. And so far, the Tax Scam has barely change the rate of growth of total compensation than we saw over the last 2 years.

6-month growth, total compensation Q2 2016-Q2 2018
2nd half 2016 +2.22%
1st half 2017 +2.28%
2nd half 2017 +2.21%
1st half 2018 +2.37%

The 1st half of 2018 also saw a pickup in inflation, so the real change in compensation is, if anything, less than it was when Trump was elected. So why blow up the deficit and encourage more profit-taking and job-killing “efficiency” moves by corporations through a lower tax rate? Well, other than pay-for-play corruption, of course.

The question going ahead is whether the tax cuts lead to a spiral of growth from increased consumer spending, or if this just pushed a few purchases forward. In addition to the tax cuts, another Trump move gave a slight bump to Q2, but likely will cost us in later quarters. Exports contributed more than ¼ of that 4.1% growth rate, and financial analysts indicate that those added exports may indicate a rushing out of items ahead of the Trump tariffs that were to hit in Q3.
"Anxiety around a global trade war has fueled a jump in U.S. exports ahead of tariffs," LPL Financial wrote in a note. The imposition of broad-based tariffs in early July created a deadline that many U.S. exporters raced to beat, as the narrowing trade deficit shows. "The increase in exports is primarily from increased demand as purchasers try to beat retaliatory tariffs, evidenced by soybeans and civilian aircrafts comprising almost all of the jump in exported goods in May," LPL Financial wrote.

While this boosts the second-quarter number, the increase is somewhat misleading, because it's essentially moving up activity that would have occurred later in the year.
And just like with the bump in exports, this “fastest growth in 4 years” seems likely to be a blip that fades in the near future with the higher deficit raising interest rates and cutting demand.
"That's likely to be a one-time deal," said LPL Financial's [Ryan] Detrick. "We think the second half the year is likely to be around 3 percent [GDP growth]. The exports are going to be a wild card that's going to make [the 2nd] quarter stick out like a sore thumb."

Thursday, July 26, 2018

Corporate tax cut in GOP scam only adding debt. And they want Tax Scam 2?

Even Mick Mulvaney and the rest of the Trump acolytes at the Office of Management and Budget (OMB) are now admitting that the deficit would be higher than they projected back in January, and would near $1.1 trillion next year.

And Jim Tankersley of the New York Times focused on a big reason why these tax cuts aren't "apying for themselves" - because corporations are paying much less to Uncle Sam.
The reason is President Trump’s tax cuts. The law introduced a standard corporate rate of 21 percent, down from a high of 35 percent, and allowed companies to immediately deduct many new investments. As companies operate with lower taxes and a greater ability to reduce what they owe, the federal government is receiving far less than it would have before the overhaul….

From January to June this year, according to data from the Treasury Department, corporate tax payments fell by a third from the same period a year ago. The drop nearly reached a 75-year low as a share of the economy, according to federal data.

“If we hadn’t changed our tax system,” said Kimberly A. Clausing, an economics professor at Reed College in Portland, Ore., who studies business taxation, “you would be expecting rising revenues.”
That’s especially true because corporations continue to book hefty profits, with pre-tax totals rebounding in Q1 after a decline at the end of Q4 (likely due to corporate write-downs and other moves to lower their profits for the 2017 tax year, when they were taxed at a higher rate).

We know the extra profits aren’t trickling down into wage growth, as hourly earnings growth is no better it was 6 months ago, with the only difference being an increase in inflation that eats up more of those raises.

On top of the lower corporate tax rates, Tankersley notes that other incentives tucked into the GOP Tax Scam encouraged other moves that cut corporate tax liabilities by favoring capital investments over hiring people and raising their wages.
Other factors could also be holding corporate tax receipts down. Some analysts believe the so-called expensing provisions of the new tax law, which allow companies to write off new investments immediately, may prove more popular than some forecasters anticipated. Companies, for example, could write off investments in software or machinery or new buildings.

If that’s true, “it means the government will lose more revenue than we all originally thought, especially in the short run,” said Kyle Pomerleau, an economist with the Tax Foundation in Washington, which forecast a large increase in economic growth from the tax cuts and the expensing provision. Such a scenario, Mr. Pomerleau said, would mean that growth should be even stronger than expected.
And yet the GOPs in the House of Representatives are planning to put this failing policy on steroids. Not only do they want to make the current tax cuts permanent (they were slated to expire in 2025 so that they “only” cost $1.5 trillion for 10 years), they want to vote on additional write-offs in the next 2 months.
House Republicans plan three pieces of legislation covering permanence, savings and business in hopes of reaping some success in the Senate. Other ideas, including a measure to protect capital gains on business investments from inflation, are also under discussion….

Additionally, the proposal would create “fully flexible” Universal Savings Accounts for families, allow education savings to be spent on apprentice fees and give new parents penalty-free access to retirement accounts for child expenses.
Stan Collender – aka “The Budget Guy” - called out House Ways and Means Chairman Kevin Brady's plan to double down on tax cuts as an unserious measure intended to grab campaign donations versus actually get passed into law.
It has nothing to do with taxes, fiscal policy or economics: Brady is using his new tax cut scheme to solicit campaign contributions from corporations and industries who want something in these bills.

The best way for corporations to get Brady to pay attention will be to contribute to him, the GOP’s campaign arms, other Ways and Means Republicans, the leadership political action committees and the Trump reelection effort, and to do it before the election.

Brady and the rest of the House GOP will be looking for first-time or increased campaign contributions/political tribute from three categories of tax cut supplicants:

The companies, industries and groups that didn’t get anything in the tax cut enacted last December.

The companies, industries and groups that didn’t get all they wanted in the tax cut enacted last December.

The companies, industries and groups that need a change from what they got last December (a so-called “technical correction’) because that bill was drafted improperly.
So there's no economic or pragmatic reason for Tax Scam 2, other than to pose for and kiss up to right-wing oligarchs who are already haven't done much to add to the real economy with all the giveaways in the first Tax Scam.

I find myself thinking of this song a lot these days when discussing the GOP’s regressive tax schemes and the inevitable failures of their cynical politics.

Wednesday, July 25, 2018

"Dead last for Midwest GDP" isn't something Walker agencies want to mention

You may remember our Wisconsin Department of Revenue tweeting this out in May.

I called that taxpayer-funded campaigning out at the time for its obvious cherry-picking, and how it forgot to mention the state’s underperformance for all of 2017 as well as the first 6 years of the Age of Fitzwalkerstan.

Well yesterday, we got a report from the US Bureau of Economic Analysis that gave the 1st Quarter GDP figures for Wisconsin and all other 49 states. So why didn’t I see that news being plastered on Walker Administration social media?

Oh, that’s why. Dead last for GDP growth in the Midwest for the first 3 months of this year (BEFORE we started losing jobs in Q2), and 40th in the US.

A big culprit in Wisconsin’s subpar showing was a significant loss in agriculture/forestry sector, which subtracted nearly 0.5% from Wisconsin's total by itself. I've got to wonder if it’s related to the increasing number of dairy farms going under at the time, a trend that continued through the 2nd quarter.

Despite the weak 1st Quarter, the last 12 months measured still has GDP looking pretty good for Wisconsin (4.5% for current dollar GDP, around 2.0 % in real GDP). But in the 7 years since Act 10 was rammed through the Legislature in March 2011, the picture continues to show a subpar performance in Wisconsin.

5th out of 7 Midwestern states, and well behind the US rate of growth. I'm guessing Scott Walker's taxpayer-supported campaigners won't be tweeting out that picture either.

Trump trade wars failing economically and in execution

I want to draw your attention to a wide-ranging article from Rick Barrett in yesterday’s Milwaukee Journal-Sentinel that discussed how President Trump’s proposed and imposed tariffs may affect numerous Wisconsin businesses and consumers.

Let me back up and mention that I am far from a believer in low-tariff, unrestricted trade. The greed of corporations have led them to use “free trade” as an excuse to shed American jobs over the last 30 years, and use the threat of outsourcing to lower the wages in the jobs that did stay. This has resulted in real economic problems that exist today.

But Trump’s answer to that real problem in 2018 is to slap tariffs on imported materials that US manufacturers rely on to make their products, instead of putting them on the final products to protect and potentially increase wages and jobs for the industries that are made here.

Targeting the tariffs to final products could give American manufacturing a chance to be more competitive on price without having to sacrifice more wages and jobs to do so. But the only area that the Journal-Sentinel article indicates that it this is potentially being “done right” is through the higher tariffs on imported vehicles.
In Milwaukee, Mike Darrow, president of the Russ Darrow Group of automotive dealerships, says sales of cars and trucks could hit a wall if Trump follows through on a threat to impose a 25 percent tariff on imported vehicles and parts.

It would raise the price of a typical new car sold in the U.S. by $4,400, according to the Center for Automotive Research in Ann Arbor, Mich.

That’s an estimated $2,270 for U.S.-built vehicles, since they have foreign parts, and up to nearly $7,000 for luxury imports.

But of course, if the higher prices cut into demand too much in the US, it can drag down an economy that’s 70% based on consumer spending. Which illustrates the tightrope that Donny Two-Scoops isn’t walking very well as of now.

As the J-S article also notes, another problem with the Trump tariffs is that suppliers are greedily taking advantage of the situation, which also hurts the businesses that are supposed to be protected from foreign competitions. An executive at Sheboygan’s Vollrath Company mentions that the higher prices that are now being demanded by American companies are ironically making them look to overseas suppliers.
“These tariffs are now forcing us to aggressively look at foreign sources and potential acquisitions abroad,” said company Chief Financial Officer Steve Heun.

“We have always purchased our raw metal from U.S. suppliers, not imports. However, once the tariffs went into place, domestic suppliers immediately raised prices,” Heun said.
And you can see where this spirals if you’re trying to have Vollrath keep buying from Americans, because then you have to chase where the foreign suppliers are coming from, and putting new duties on there.

Of course, Wisconsin farm businesses are also being endangered by the fallout from Trump’s trade policies, as countermeasures by overseas trading partners are hitting state farmers especially hard. Yesterday, GOP Rep. Dave Steffen and Dem Rep. Peter Barca sent a letter to Wisconsin’s delegation in Congress asking to “work toward a remedy to this situation before businesses in our communities suffer losses or entire industries are permanently damaged.”

As part of that letter, Barca and Steffen asked Wisconsin’s Legislative Council to give a list of state products that are currently on the list for retaliatory tariffs that are being imposed on US products by Canada, Mexico, China and the EU. Here’s a look at the top items that are on that list. (the Leg Council only included categories of $5 million or above)

Top Wisconsin exports subject to new tariffs
Paper products $231.0 million (Canada)
Meats and sausages $50.7 million (Canada and Mexico)
Various cheeses $47.0 million (Mexico)
Whey and Modified Whey $47.0 million (China)
Kitchen appliances and various fans $45.6 million (Canada, Mexico)
Bread and Pastry $45.6 million (Canada)
Cranberries $42.0 million (Mexico, China and EU)

A whole lot of agriculture along with our paper industry. And both of those industries might be getting taxpayer support to avoid going under in the late 2010s.

This includes the revived possibility of a Kimberly-Clark bailout in Wisconsin to prevent over 600 jobs from being lost in the Fox Valley due to “restructuring”. And it includes our president* and his administration announcing yesterday that they plan to give $12 billion to US farmers who are facing the double-whammy of fewer customers overseas, and plunging prices at home.
[US Secretary of Agriculture Sonny] Perdue and other USDA officials say the aid will be available in three forms; direct payment to producers of soybeans, sorghum, wheat, cotton, dairy and hogs; government purchases of fruit, nuts, legumes, and some meats for distribution to food banks; and development of new export markets.

Officials say they will be using a Depression-era program, the Commodity Credit Corporation, to secure money from the U.S. Treasury and will not need to ask Congress for the funds.
It is interesting to note that ag prices have bounced back a bit after yesterday’s announcement of a farm bailout, but they’re still way below where they were before the Trump Trade Wars began.

Oddly, we were adding a sold number of jobs back in manufacturing before the Trump Trade War was put in place (with growth of just over 20,000 a month since Trump took office). Sure, the wages still suck, but the added factory jobs is arguably the one item of Trump’s “America First” talk that has actually worked out. And now that dimwit is putting it in danger due to the reckless of his trade policy.

It is the mark of a man whose “business sense” has involved throwing Daddy’s money around by trading real estate, as well as working on other grifts. What Trump has little idea about are the steps and process of production, and that’s killing the US in this trade war. It also reveals a spoiled brat who has rarely been said “no” has a hard time comprehending that maybe the US doesn’t have the upper hand here, and that foreign countries can do better-targeted countermeasures that hurt us more than it hurts them.

And sure, the stock market was happy to see Trump and the EU trade rep claim this afternoon that they wouldn't impose further trade measures and would work toward "no-tariff policies." However, you should be skeptical, because as the Guardian put it
....while their remarks represent a breakthrough after weeks of stalemate, they were short of detail and given Trump’s mercurial record, the detente could easily come undone as negotiations begin in earnest.

Experts urged caution. Bart Oosterveld, director of the global business and economics programme at the Atlantic Council thinktank in Washington, said: “The avoidance of a disaster is not a success. What I think we saw is the resumption of some basic dialogue. Individual items like soybeans and LNG [liquefied natural gas] are not massively significant. I don’t think the EU would agree to a major revision of trade terms without steel and aluminium being taken off the table first.”
Exactly. Like most things Trump, this is big talk for a one-day headline, and little (if any) good is likely to come from it in the long run.

And if the bailout of agriculture and other flailing reactions from Trump and other officials are any indication, there will be plenty of extra costs in the Trump Trade War to come, beyond the damage that is already being done.

Tuesday, July 24, 2018

Schimel shift on "school safety" funding shows it to be a cynical sham

After spending $55 million of a $100 million program intended for safety-related upgrades in school infrastructure, apparently Attorney General Brad Schimel wants to change direction for the last $45 million.
The second round of grant funding, utilizing the remaining $45 million, will advance baseline mental health and physical security improvements made in the first round of grant funding through advanced training for teachers on mental health; the creation of local teams of educators, counselors, and law enforcement to develop School Safety Intervention Teams that will assess threats and identify students in need of support; and additional physical security upgrades. Schools interested in applying for the second round of grant funding must submit a mandatory “intent to apply” to the OSS by August 13, 2018.

Schools applying for the second round of grant funding must agree to send 10 percent of full-time teachers and counselors to DOJ-approved 12-hour Adolescent Mental Health training by August 31, 2020, and schools may use grant funds to pay expenses incurred (tuition, travel, lodging, meals, substitute teacher pay, etc.). Schools applying must also establish a School Safety Intervention Team (SSIT), based on a model set by the U.S. Secret Service, which will engage in behavior monitoring, threat assessments, and intervention. Funding will also be available for more physical security improvements….

Under the second round of grant funding, grant funding will be awarded on a perstudent formula, according to student enrollment as reported to the Wisconsin Department of Public Instruction (DPI). No awardee will receive less than $10,000 nor receive more than $2.5 million, in order to ensure all applicants receive sufficient funding to make meaningful physical security improvements. The final award amount will depend on the number and size of schools that apply. Interested schools can find more information on the DOJ Office of School Safety website.
That announcement comes one day after the Wisconsin Department of Public Instruction said it would ask for an additional $60 million in the next state budget to improve mental health services in school, and this sudden change for Brad (Politics and Donations Over Anything Else) Schimel doesn’t seem to be a coincidence.

That being said, I have to wonder if Schimel’s shift of $45 million into mental health services keeps with the spirit of this new program. Let’s see what the Wisconsin Legislative Council said about the School Safety grants when it was signed into law in late March.
Act 143 creates an Office of School Safety within the Department of Justice (DOJ), and creates a 1.0 FTE director position appointed by the Attorney General. The Act tasks the Office of School Safety with: (1) creating model practices for school safety, in conjunction with DPI and after consultation with the Wisconsin School Safety Coordinators Association and the Wisconsin Safe and Healthy Schools Training and Technical Assistance Center; (2) compiling school blueprints and geographic information system (GIS) maps, in coordination with schools and the Department of Administration; and (3) offering training to school staff on school safety, which may be provided by either DOJ or by a contracted party.

The school safety training offered by DOJ may include information regarding trauma informed care and how adverse childhood experiences impact a child’s development and increase needs for counseling and support. DOJ may charge a school for the safety training, if the school receives school safety grant funds for the training….

The Act specifies certain eligible expenditures, but does not otherwise limit DOJ authority to determine how grants are awarded or what expenditures are eligible. Eligible expenditures explicitly include: (1) expenditures for compliance with DOJ model practices for school safety; (2) expenditures for DOJ school safety training; (3) expenditures for safety-related upgrades to school buildings, equipment, and facilities; and (4) expenditures necessary to comply with requirements to submit school blueprints to law enforcement and the Office of School Safety.
So I suppose the repurposed $45 million falls into that part I bolded in the 2nd paragraph, but it sure seems sketchy to create a second round of grant applications and change the focus of what those grant dollars would be used for. If you go back to the first grant application, it was supposed to spend all $100 million on “security”.

One of the problems with the original grants for security is that districts were expected to put together their plans and proposals in a matter of a few weeks under criteria that Schimel’s Department of Justice drew up by themselves. This was one of the flaws I and many others identified with the original bill back in March. Why weren't these decisions on school safety being made by DPI, who funds and oversees most other items involving K-12 schools and knows how any changes might affect current services? That was a "tell' to me.

This tweet is another reason that I have strong suspicions that the biggest goal of the program isn’t school safety, but to serve as a thinly-disguised campaign ad for an unpopular AG.

And the fact that Schimel plans to hand out this $45 million in mental health funding to happen in the month before the 2018 elections shows the “school safety” to be an even bigger SHAM that uses taxpayer dollars to promote the campaign of GOP politicans. But again, when you have an incompetent crook in charge, why would we expect any type of strategy or plan with this program other than “get Schimel’s face in the newspaper and on TV?”

Get this bum out of the AG’s office, and get Josh Kaul in to restore integrity. I prefer to have my Wisconsin Department of "Justice" to use tax dollars for reasons that go beyond “make me look good” and “use my position to do the dirty work for my donors.”

Fearing voters, WisGOPs now want to revive bailout of Kimberly-Clark

Well this is an interesting set of dominoes in the Fox Valley. Maybe Kimberly-Clark won’t be shutting their Cold Spring facility near Appleton and laying off over 600 workers after all. This is after the corporation reached an agreement with the United Steelworkers that are employed at the plant last night.
“It’s a new collective bargaining agreement that would provide Kimberly-Clark with concessions that would allow the facility to remain open,” said Dave Breckheimer, president of USW local 2-482.

“But nothing happens unless the state comes through with the incentive package,” Breckheimer said. “That’s the next step towards this becoming a reality. Those tax incentives have to be available.” ….

Breckheimer wouldn’t say which concessions employees made in the new Cold Spring collective bargaining agreement negotiated over months with the company and approved Monday night.

But he did confirm that concessions were not as severe as previously stated.

In a prior story, Cold Spring employee Karmen Jones said K-C “was asking workers to make concessions that would cut their average labor costs by more than $20,000 per person.”
How surprising that workers get less so they might keep working at a multinational who said the main reason behind the planned layoffs because the Trump/GOP Tax Scam gave them enough extra cash so they could afford to "restructure" their company. Ah, 21st Century “capitalism”.

And Kimberly-Clark might be getting another tax break at the state level, as that tentative collective bargaining agreement revives the possibility of a Kimberly-Clark bailout from Wisconsin taxpayers. You may remember this coming up 6 months ago, when K-C initially announced its plans to shut down the plant.

The bailout plan would have given Kimberly-Clark writeoffs that were similar to the package given to Foxconn last year, including 17% cas0h back on all salaries and 15% back on any new equipment or facility renovations.

The State Assembly passed the Kimberly-Clark bailout in February (4 GOPs voted no, 1 Dem voted yes), But it didn’t have enough support to go to the State Senate when that upper chamber allegedly adjourned for the 2017-19 session in March.

Now Senate President Roger Roth (a Republican from the Fox Valley who is one of the most vulnerable GOPs in November) wants to get GOP Leader Scott Fitzgerald to call the senators back into Madison in order to pass the Kimberly-Clark bailout.
Roth said Tuesday that passing it through the Senate won't be easy -- adding that it may not be able to pass with support from GOP senators only.

"We'll need some Democrats to come to the table," Roth said.

Fitzgerald's office could not immediately be reached for comment Tuesday on whether he would reconvene the Senate.
Governor Walker also gave a statement of support of the K-C bailout and of “working with Senate leaders and the company”. Which is ironic since the main reason Walker gave for trying to block special elections to fill vacant seats in the Legislature was as follows.

Bit now Scotty and Senator Roth are asking Senate Dems, including newly-elected Caleb Frostman, to be part of a group that could jam through “Foxconn, Part 2” for Kimberly-Clark. In the process, the GOPs want to throw out even more money when we already are staring at a $1 billion structural deficit for the next budget.

It’s amazing to see how the prospect of job losses and a Blue Wave at the ballot box in 3 ½ months has turned “free-market” Republicans into believers of corporate welfare and the use of tax dollars to keep and add jobs, isn’t it? It’s almost like they aren’t tough on spending at all, but merely redirect where the tax dollars go - to their donors and to corporations in the hope that they might trickle down a few jobs.

And given how Gov Dropout is making ads that claim he’s “Mr. Education” these days, it’s almost like GOPs know that their prior austerity plans and privatization schemes have failed when it comes to improving the state’s economy, and that they need good ol’ fashioned government spending to stabilize things and make people's situations better before the November elections.

What a bunch of frauds.

Monday, July 23, 2018

Pro-corporate Dems know two things - big money and bad strategy

I read this article over the weekend, and it was very hard to keep my eyeballs from sticking to the top of my sockets.
Pragmatism may be a tougher sell in the Donald Trump era, but with the 2020 presidential race just around the corner, moderate Democrats know they are running out of time to reassert themselves.

The gathering here was just that — an effort to offer an attractive alternative to the rising Sanders-style populist left in the upcoming presidential race. Where progressives see a rare opportunity to capitalize on an energized Democratic base, moderates see a better chance to win over Republicans turned off by Trump.

The fact that a billionaire real estate developer, Winston Fisher, co-hosted the event and addressed attendees twice underscored that this group is not interested in the class warfare vilifying the "millionaires and billionaires" found in Sanders' stump speech.
Gee, why would a billionaire real estate sleazeball not want to discuss why so many are struggling and lack hope in a society that gives a lot of power to the rich and corporate? Apparently a mirror wasn't a good investment for Mr. Fisher.

Look, at this point, if you recognize that Donald Trump and the complicit GOP is bad for this country, but you might not vote Democrat in November because...everyone might get health care if you paid a few more dollars in taxes? That makes you a bigger deplorable than most of the hateful trash that wear MAGA hats, and people like that aren't worth being pandered to.

Here are some of the genius ideas this crew came up with.
Some of the key initiatives are a massive apprenticeship program to train workers, a privatized employer-funded universal pension that would supplement Social Security and an overhaul of unemployment insurance to include skills training. Other proposals included a "small business bill of rights" and the creation of a "BoomerCorps" — like the volunteer AmericaCorps for seniors.

Meanwhile, they say the progressive agenda is out of date. They dismiss, for instance, a federal jobs guarantee as a rehash of the New Deal.

"Our ideas must be bold, but they must also fit the age we are in," Cowan said. "Big isn't enough. If it's bold and old — it’s simply old."
Yes, let's have an economic policy based on the goodness of corporate America and make everyone else adjust their lives and grovel to get the scraps they choose to hand out. That'll do absolutely nothing to meet the needs of single parents making poverty-level wages and having to get by on food stamps. And it'll won't do jack for skilled workers who are having a hard time affording health care and seeing their jobs threatened by the profit-hoarding tactics of outsourcing and automation.

Care to answer why this happened, guys?

Dirty secret- Rich a-hole Donald Trump won votes from many less-fortunate Americans because he ran to Hillary Clinton's left on issues such as trade, valuing manufacturing jobs, and recognizing that Obamacare wasn't the be-all, end-all solution to people's ability to afford health care. A lot of these people were willing to roll the dice with Trump, because they knew the status quo that Hillary Clinton had to offer wasn't going to get them much. And yes, these voters are conservative on cultural issues like guns or religion or racism, but they are closer to Bernie Sanders than a calculated centrist when it comes to jobs and what government should do to help people make ends meet.

Sure, Trump had no clue about how to really fix these economic issues himself, and he and the rest of the GOP have made these situations worse in the last 18 months. And that should give an opening for the Dems to win back a sizable amount of voters that they lost in 2016, as well as gain new voters who were previously politically apathetic and/or indifferent between the two parties, but are now disgusted with both Trumpism and corporatism. Instead, these Third Way types want to tamp down on people's rightful disgust and angry responses because....it takes away the power from their inner circle?

As usual, Charlie Pierce recognized this BS for what it truly is, and wrote about it for Esquire's site today.
Big. Bold. Warmed-over Clintonism with a touch of delicately spiced Kempism, a lovely little time trip back to 1990, and almost perfectly designed political chickenshit at a time of national crisis. And absolutely nothing that will do anything about massive income inequality and the concomitant control that the corporate class has assumed over every institution of government....

I realize that as long as there are wealthy people who are not the Koch Brothers, and as long as there are television green rooms and newspaper editorial boards, this kind of don’t-disturb-the-horses politics always will have a constituency. But, while it may have had a place 20 years ago, it is utterly inadequate to the political circumstances of the day. There are no small-scale solutions to the gigantic structural problems that have grown in our economics and in our politics.

And, if there are answers to these, they won’t be found in yet another paean to the imaginary heartland voters who are just dying to join the BoomerCorps.
Charlie ends his column by going back into the NBC News column from oligarch-land, and points out this absurdity from a Northeastern "Democrat"
Rep. Jim Himes, D-Conn., the chair of the New Democrat Coalition, said members of his side are not "naturally arbiters of emotion and anger." "How we tell our story and put forward our polices in a way that makes people want to mount the barricades is one of the biggest challenges we have," said Himes, a former Goldman Sachs banker who represents Fairfield, Connecticut. He pointed to calls to "Abolish ICE," for instance, which he characterized as emotionally understandable but politically illogical. "It hurts us in areas where we need to win," Himes warned of "Abolish ICE" in the midterms. "You have now made life harder for the 60 or 70 Democrats fighting in districts where we need to win if we ever want to be in the majority."
Yes, because when I look for Democratic solutions to the nation’s rural problems, I look for leadership to a guy from a luxurious Connecticut zip code who used to work at Goldman Sachs. Yes, it’s a big tent, but somebody has to sit in the back. It’s these people’s turn now.
Precisely. These Third Way "problem solvers" don't have a clue about how and why these small-town white people vote. I'll give them a hint- left-right ideology has little to do with it, and top vs. bottom (or perceived top vs bottom) is the bigger separator.

The idiots who hate/fear brown-skinned immigrants aren't going to vote Dem whether they call to abolish ICE or not, and Dems should make clear that their party is not the one those dipshits should look for anyway. Meanwhile, we should be drawing attention to the numerous abuses that ICE is doing as the foot-soldiers for this outlaw Administration, and say "America is not about putting 2-year-olds in cages and making them testify in immigration court."

Speak to VALUES. Say "we're better than this" and speak out against corruption and corporatism. It will ring true, and gain more votes than it loses, especially from the "Independents" that we are told are the key to any election.

There must be something about the Coasts that make these types sound this foolish. Maybe because these ex-GOP suburbs are some of the few places in America where people are comfortable enough that they can afford to balance their interests between some more bucks in their pocketbook or their belief in science and a decent society.

But that's sure not true for much of the rest of us - we're just trying to pay our bills and hang on to what's left of democracy in light of the mess that the GOP is making of our state and our country. And that's why these Coastal Third Way types need to be kicked to the curb (or at least out of the decision-room) for a long time if Dems actually want to get back in power in most parts of America.

We are in a time to grab people in the gut, and validate to them that this shit is unacceptable. And it's not going to be fixed by playing nice with the bad guys and trimming a few things around the edges, while letting the unacceptable shit continue to rot our state and our country away.

Wisconsin birth rate lower, but bigger problem is that it's getting older

There's been some recent attention given in the news about the US's declining birth rate, which is now at 30=year lows, and the effects that might have on the economy and our society. And Wisconsin is not alone in this declining birth rate, which the
Wisconsin Policy Forum looked into in a recent report.
Over the past three decades, Wisconsin’s birth rate fell 22.3%, from 14.8 births per 1,000 residents in 1989 to 11.5 in 2016. (See Figure) The trend does not appear to be abating; Wisconsin’s birth rate has fallen in all but one year since 2007.

Less of these guys around in 2018

Most of the nationwide stories about declining borth rates center around the lower wages and larger debt loads that Millenial-aged parents have to deal with in 2018. Combine that with the lack of family leave in this country, the rising costs of child care (since both parents are working to pay off that debt and don't have the leave time), and the costs to have the baby at the hospital (even with state benefits, I was told it cost over out-of-pocket $2,000 to have that little guy), and it helps explain why fewer people are choosing to have children in the US.

But narrowing it down to Wisconsin, what’s interesting in the Policy Forum’s analysis is that the decline in birth rate has less to do with women not choosing to have kids. Instead, it has more to do with fewer younger women being in Wisconsin compared to other places.
These trends can be attributed in part to Wisconsin’s aging population. The decline in the birth rate over the years can be partially explained by the shrinking share of women between the ages of 15 and 44. While the total population of Wisconsin has continued to increase over the past three decades, the state has fewer women of child-bearing age now (1.08 million) than it did in 1989 (1.12 million). Similarly, because most births occur with mothers between ages 20 and 34, a drop in the share of women in those peak years can also lower the fertility rate…

Compared to other states, Wisconsin’s birth rate is relatively low, ranking 38th of the 50 states and 5.6% below the national average of 12.2 births per 1,000 people. Wisconsin’s fertility rate, by contrast, is only slightly lower (0.7%) than the national average of 62. Among the states, Wisconsin’s fertility rate is near the median, ranking 28th. States with the highest birth and fertility rates are scattered throughout the West, while those with the lowest rates are clustered in New England.

The decline in the state birth rate mirrors a national trend; since 1989, the U.S. and Wisconsin birth rates have fallen by 25.5% and 22.3%, respectively. When it comes to fertility, however, the state has recently diverged from the rest of the country. Although Wisconsin’s fertility rate remains slightly below the national average, the gap has narrowed substantially in recent years. (See Figure) As recently as 2002, the national rate exceeded the Wisconsin rate by 6.3 babies per 1,000 women of child-bearing age. By 2016, however, the gap had narrowed to 0.4%.

But the demographic issues still mean that Wisconsin has a lower birth rate in 2018. And that, combined with an increase of older Wisconsinites of all genders means that the state’s ability to grow its population has been limited.

The WisContext site from Wisconsin Public Radio and UW-Madison took on this topic of Wisconsin demographics in a recent article discussing the state’s low population growth in the 2010s. The article notes that Wisconsin is in the bottom ¼ among US states for the rate of population growth since Scott Walker and the Wisconsin GOP came to power in 2011 (39th), and has an uphill climb when it comes to adding people due to demographics.
Within these national shifts, Wisconsin tends to trail other states in population growth. The state generally has an older population, with a median age in 2016 of 39.3, compared to 37.9 for the U.S. as a whole. At the same time, Wisconsin receives fewer international migrants than other states — Wisconsin is home to 1.8 percent of the nation’s residents, but averages only 0.7 percent of its total immigrants.

Overall, Wisconsin’s population has remained fairly stable in the 2010s. Its total population change has been the twelfth lowest in percentage terms among all 50 states and the District of Columbia between 2011 and 2017.

Courtesy WisContext

A primary factor in Wisconsin’s modest growth rate in the decade is that the state has experienced a steady decline in its natural increase since 2007, the first year of the Great Recession. From its peak of 26,640 that year, the state’s natural increase has fallen 44 percent, to 14,810 in 2016. Wisconsin’s natural increase is ranked twenty-second [lowest] among the 50 states and Washington, D.C. in the period between 2010 and 2017.
Wisconsin also ranks in the bottom half of the Midwest for this statistic in the 2010s, only beating the even Rustier Belt states of Michigan and Ohio, and being notably slower than the two blue states that border us.

Annual “Natural Increase” per 1,000 residents, 2010-2017
Minn +5.17
Ill. +4.24
Ind. +3.56
Iowa +3.33
Wis. +3.08
Ohio +2.14
Mich +2.13

Think that strong number for Illinois and Minnesota may have something to do with offering higher wages along with a well-funded education system which encourages young families to live there? Sure, a lot of FIBs have been moving out as they get older, but if the exodus ever stops, you can see where they are poised to regain some of those population losses.

WisContext notes that Wisconsin did improve in 2017 when it came to population growth, adding over 20,000 people in a year for the first time since the Age of Fitzwalkerstan began in 2011. The main reason why was that we didn’t lose as many people to other states, and continuing a 2-year reversal of a trend where increasing number of people were Escaping from Wisconsin through 2015.

Courtesy Wiscontext

Also note that 2017 was the first year in the Age of Fitzwalkerstan that we more international immigrants came to Wisconsin than the net number of Americans that moved out, meaning the state gained people from that trade. With these 2017 figures in mind, WisContext says that Wisconsin may be well-positioned to get back toward the level of population growth that it had in the 2000s, when the state gained more than 320,000 people.

But like a lot of things during this WisGOP Reign of Error, the state has been set so far behind that any “recovery” in economic and population stats still means that we end up trailing most of our neighbors for this decade, and the country as a whole. And only a change at the top will lead to the higher quality of life, smarter investments and better wages that could turn around the state’s declining demographics and still-tepid population growth.