Monday, August 31, 2020

Budget crisis? What budget crisis?

For a while, we've figured that Wisconsin would have a sizable revenue shortfall due to the COVID-induced reccession and the related layoffs. Well, today we got the long-awaited estimates for revenues for the end of Fiscal Year 2020. So what's the damage?

Surprisingly, not much damage at all.
Preliminary information regarding general fund tax collections for the 2019-20 fiscal year is now available. According to the Department of Revenue (DOR), collections totaled $17,532.2million in 2019-20, which was1.1%higher than the previous year.

The final estimate of tax collections (projected last January and adjusted for subsequent law changes) was $17,644.8 million. Actual collections were $112.6 million, or 0.6%, below the estimated amount.
To be fair, estimates had already been dropped by more than $54 million due to previous actions in 2020 (mostly to match up state tax laws with changes in the CARES Act), but that's still a lot better than most of us were thinking. In fact, it's more tax revenues than what was projected when the state budget was signed into law in July 2019.

So not only was the revenue shortfall nowhere near as feared, the state of Wisconsin will actually make a deposit to the Rainy Day Fund of around $106 million. Along with that fund, we've got a lot of cushion carrying over for FY 2021, as even with the $167 million in reduced revenues, there still would be over $980 million left in the bank for next year.

So we're out of danger with no worries, right? Not exactly. First of all, it is highly likely that there will also be shortfalls in other state revenues, such as parking fees since more state employees are working from home. The amount of payments the state gets from Native American tribes will also likely go down, as casinos were closed empty and/or on lessened capacity for the last 4 months of FY 2020. But that will probably only be a few million more dollars of shortfall.

Looking ahead to FY 2021, there will be an odd reason for a decline in income taxes - the end of the $600-a-week unemployment supplement in July. Those payments often have state taxes taken out of them, and not only will the end of those expanded benefits likely lead to more stresses on social programs and reduce consumer demand due to the still-unemployed becoming poorer, but it'll also lessen the amount of revenues that come into the state in the coming months.

The bigger concern will be on the expenses side, as the state's Medicaid enrollment continues to grow, and the need for other social services also went up as the COVID shutdowns hit around the state.

CARES funds and other Federal bailouts is taking on much of those extra costs for FY 2020, but that doesn't seem likely to happen again in FY 2021. We've seen the unemployment funds already get slashed, and the Federal matching rate for Medicaid goes down by 6.2% at the end of December, meaning state taxpayers will have to make up the difference. Given the headwinds on demand, there is little reason to think that the state's economy will be better than it was at the end of July, and that level was far below what the LFB based its estimates on.

That means that FY 2021 is still going to be problematic from a budgetary standpoint, even with the large cushion, and we will likely need all of that money in order to pay the bills between now and the end of next June. But Governor Evers and legislators probably won't be forced to do much (if anything) more to repair the budget between now and the start of the next biennium on July 1, 2021. And I and many others would not have thought that was how this was going to shake out when August began.

No surprise that WisGOP chooses to stay on their taxpayer-funded vacation

Today was the opening of the special session that Governor Evers called for on policing and racial disparities, as he and the Milwaukee Bucks both asked for action after a police office shot Jacob Blake in Kenosha last week. Evers was asking the Legislature to take up bills that match the ones Evers put forth in mid-June.

The Republicans did nothing about it then, and they didn't do any real action today.

Because when you think of someone who can figure out ways to improve policing and deal with our state's massive racial disparities, you think of a man like Jim Steineke. A white Realtor from rural Outagamie County with no college degree whose background is selling homes. And not homes to a lot of Black people, given that his district was less than 1% Black when it was drawn up by the GOP in 2010.

And the fact that Evers has asked for the Legislature to pass these bills at other times makes this excuse that a Kenosha County Republican tried to pull on Adrienne Pedersen's weekend show questionable. At best.
In another segment, state Rep. Samantha Kerkman, R-Powers Lake, said she wished the governor would sit down with GOP legislative leaders to discuss a “bipartisan way to help move our community, our state, and our country forward.”

Pedersen asked her why lawmakers haven’t acted on police reform legislation the governor introduced months ago.

Kerkman said rushing into legislation sometimes has “unintended consequences.”

“The legislation will come in time, and we will do it right,” she said.
"Rushing into legislation", Sam? What have you been doing for the last 10 weeks? There hasn't been one committee hearing, any bills introduced until this week, or even a public input event to talk about these ideas.

COME ON WISGOP. You've been getting a paycheck from us in that time period, so you couldn't have spent a couple of hours to look at these bills? Or come up with any ideas of your own to deal with these real problems?

PA-THE-TIC, but not surprising. They'd rather the disparities and problems continue, while stamping their feet and jeering Evers from the sidelines.

It'll never get better while these do-nothings are in power and their gerrymanders are broken up.

Sunday, August 30, 2020

Same story on Wisconsin COVID. Less cases, less deaths, and less testing

For "this week in Wisconsin COVID", the trends were basically the same as we have seen in recent weeks. The number of new cases and deaths both continued to decline, although they are still at higher levels than they were 2 months.

But as we've seen in recent weeks, the lower amount of cases may not necessarily mean that we're making progress in eliminating COVID. That is because the number of unique individuals getting tests continues to go down, and are at their lowest amounts in more than 3 months. We also had our second straight week of more than 8% of those tests being positive, which hasn't happened since we were in the early weeks of the pandemic.

I assume that number of tests will increase for next week, as we get more results from students and UW-Madison coming back to campus. But it may also mean a bump up in cases for the state, and if we don't see either more cases or more testing, then it's a strong signal. But until then, Wisconsin and America keep muddling our way through a pandemic that has affected our public health and economy for nearly 6 months.

WisGOPs want violence and hatred. Dems need to speak up against it

Look at this garbage from one of our US Senators. He can't even say it is wrong for a 17-year-old kid to shoot two people. Despite the fact that the kid was out well after a city-imposed curfew and openly carrying long guns in a tense situation (which he was too young to legally do).

And look at what Ron Johnson's BFF on the radio was saying right before that kid went to Kenosha with his guns.

And now our Hater in Chief plans to go to Kenosha on Tuesday to talk to store owners and cops....but not local Black people about the tensions and police actions that preceded the violence. And I guarantee you Trump won't be condemning the kid shooter or the AM radio hosts and Facebook posts that encouraged the vigilantism that the kid carried out.

Why do these Republicans encourage this cycle of hate and destruction? Because they think it's their best chance to win elections. They cannot win on ideas and they cannot win on their records, so they try to stir up weak white people with resentment in order and repress the other side in order to try to stay in power.

I will add that that whoever is burning and vandalizing buildings is giving the repressors what they want. I don't care if it's people furious about the disparities or Boogaloo Boys trying to turn up the heat and ratfuck the protestors' cause, they need to be called out, exposed, stopped and arrested.

I also think that DC Dems have been slow on the uptake with this. A few tweets and statements against the violence and/or Trump isn't enough to cut through the RW noise machine, they need to be out in public visibly making statements and being shown meeting with the people in the community. I know that COVID-19 complicates this somewhat, but that's not an acceptable reason.

Especially when Barack Obama and Joe Biden and Kamala Harris are much more likely to be able to make people cool down and think more deeply about the issues, much like how the Milwaukee Bucks succeeded in drawing attention to the special session of the Legislature that is scheduled to start tomorrow.

Look at that picture (and I love the t-shirts of George Hill and Sterling Brown, the readers of the statement).

Then think about how effective a picture of Barack and/or Michelle Obama would be in doing the same, and demanding that our current President show leadership in bringing people together, condemning violence ("on all sides", if he must) and not taking the law into their own hands.

Our Lieutenant Governor was just on MSNBC this morning, and Mandela Barnes accurately described the disparities and violence as "AN AMERICAN PROBLEM". This hurts all of us, keeps us from reaching our potential, and the resentments/repressions that result make people keep people in power that have no interest in making this country grow and improve.

If Dems can do some jujitsu on WisGOP's attempts to drive the cycle of hatred and blame those protesting the racist system, and declare "Dems want to do something about this unaccepotable situation, while Republicans want it to continue. They want the violence, they want the hatred. We want to make this state/country better." But their delaying allows the GOP mlie machine to fill the gap, and they need to get out forcerfully in front the public NOW.

"Going high" and expecting people to naturally condemn GOP dog-whistles and violence isn't going to be enough. Sad to say, but a lot of white people in Wisconsin won't care too deeply, and would prefer to have order maintained regardless of what that order looks like. It is time to get down in the guts and show some righteous anger (without destruction, if possible), and drive others to give a damn about the violence that GOPs give a wink and a nod to.

PS- Want to attach this interview from Kenosha native and former Badger football player Melvin Gordon, who had an interview with ABC this weekend. In the interview, Gordon says he supports what the Bucks did, and talks about the need for things to get better in Wisconsin/America regarding racism. It's also odd to see the interviewer identify Gordon as a "young person", but at 27, he still is!

The interviewer doesn't shy away from asking some pretty deep questions, and Gordon gives some candid, straightforward answers.

Saturday, August 29, 2020

Another Trump scheme - wrecking Social Security and Disability

Another one of Trump's desperate pre-election moves on the economy was to try to "cut payroll taxes", in order to claim that Americans had more money in their paychecks. This seemed like a cheap stunt on the face of it, especially given that it was only for the 4 months between August and the end of 2020. But Trump did promise to try to get rid of it permanently if the country was stupid enough to re-elect him, which was immediately ripped as a way to cut Social Security by reducing the amount of money going in to the program.

But we didn't know how bad that would look until the Social Security Administration answered a request from Senate Democrats to outline what this move would do to the program's finances. And as reports noted, the damage would be almost immediate.
If President Donald Trump were to deliver on his promise to eliminate the payroll tax, Social Security retirement funds would be depleted as soon as 2023—an entire decade earlier than previously estimated, according to a report from the Social Security Administration.

The chief actuary for the cash-strapped agency warned in a letter to Congress on August 24 that if legislation were passed ending the tax as of January 1, 2021, the trust fund which supports Social Security benefits would be empty by the middle of 2023. Funds for disability payments would run out even sooner, the letter said.

"With no alternative source of revenue to replace the elimination of payroll taxes on earned income paid on January 1, 2021 and thereafter, we estimate that DI (Disability Insurance) Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter," wrote Stephen Goss, chief actuary of the Social Security Administration, in his letter to lawmakers.
So disability gets cut off next year and Social Security runs out in 3 years. Hey Boomers, you like how that'll work out for ya?

Of course, that's a bit misleading, as these benefits could be paid by borrowing money the same way that Uncle Sam borrows for roads or the military or stimulus payments. The only concern is through the iist of problems that can come with huge deficits and debt in general (higher interest rates, inflation, etc.) But claiming Social Security is "bankrupt" has been a long-time strategy of RW slime in order to wreck the program and make more people have to gamble on stocks and other assets for their financial security.

And I'll leave it to one of the authors of that recent letter to Social Security to explain more to you - with special appearances by Trump economic advisor Larry Coke-blow and Wisconsin's own Paul Ryan!

But wait, it gets worse! Not only does Trump's scheme screw up Social Security and disability, but it also has a giant tax increase looming for next year!

TrumpWorld is just making it up as they go along. Nice policymaking, guys.

In addition, the Trump Administration now says it's up to the employer to decide whether they want to take part in this deferral, which means Trump's "executive order" was nothing more than a symbolic suggestion. TrumpWorld assumed that people would fall for the scam and give him the credit before November before it came back to bite them 2 months later. Which is insulting as hell to those of us with an ounce of pride.

At this point, I would encourage all of you to contact your employers and tell them not to cut payroll taxes, in order to avoid getting a surprise tax hike in 2021. Not taking part in this scam would increase the solvency of the successful Social Security program, which lessens the chances of our retirement plans getting destroyed with the next inevitable stock market crash, forcing us to work even longer while the fat cats cash out their profits. And it would prevent those who are unable to work from going broke through no fault of their own.

Trump's unemployment scheme fizzling out, and keeping storm victims from getting help

Remember when Donald Trump announced some stunts 3 weeks ago to make some stimulative changes to the economy without having to go through Congress? I wanted to take a look at one Trump pulled on unemployment benefits, because the reality behind the flashy headlines is showing just how absurd (and counterproductive) those stunts are.

Trump made an announcement on August 8 of what was supposed to be a $400-a-week add-on to unemployment benefits. 3 weeks later, a lot is different than what headlines at the time implied. First of all, the stunt was flawed because it tried to require states to throw in $100 of that $400, and once governors and other state officials told Trump they didn't have the money to do that, they quickly backed off.
On Saturday, Trump approved an executive action that he said would provide an additional $400 per week in expanded unemployment benefits for Americans who have lost their jobs during the pandemic.

By Tuesday, senior White House officials were saying publicly that the maneuver guarantees an extra $300 per week for unemployed Americans - with states not required to add anything to their existing state benefit programs to qualify for the federal benefit.

The clarification came as the odds of a bipartisan stimulus package grew increasingly dim and state leaders clamored for the White House and Congress to approve new legislation that would more directly address the expiration of unemployment benefits.

Since then, a majority of states have signed up for the add-on, even though it leaves out individuals who get less than $100-a-week in benefits. This includes Wisconsin, where Governor Evers announced yesterday that he would send their request in to DC, even if they won't get that $300-a-week for long.
Gov. Tony Evers announced Friday he is seeking to provide an extra $300 a week in benefits to the unemployed under a temporary program recently established by President Donald Trump....

Funds for the new program come from the Federal Emergency Management Agency and are limited. If the agency approves the state's application, Wisconsinites would be eligible for the additional benefits for three weeks, and possibly longer, according to Evers.

The additional benefits would be retroactive to Aug. 1.

"While I am grateful to be able to provide an additional $300 to eligible claimants, Wisconsin needs Congress and the Trump administration to come to an agreement on a continued, robust response to the pandemic," Evers said in a statement.
The reason FEMA is handling this is that Trump paid for this unemployment stunt by stealing $44 billion from FEMA's disaster assistance program. It's also worth noting that nearly 27 million people are still getting unemployment benefits as of the middle of August, so if they all received the extra $300, that $44 billion would be gone with 6 weeks - around October 1.

Hmm, you think FEMA could use that $44 billion given what's happened with the weather in this country over the last 3 weeks?

We got 1 month left in the Fiscal Year, so that stolen FEMA aid is likely not available for people whose homes and assets have been damaged, or for the communities to repair the damage to infrastructure. So they'll likely be out of luck for a while (although I suppose you could print even more money to add to our already-record deficit for FY 2020).

See, this is the problem with "governing by press release". Unless you're extremely lucky, the desperation and lack of detail catches up to you after a few days, and then you have to scramble and do even more BS to try to fix the problems that you could have avoided in the first place.

That is, if these guys actually cared about anything beyond sneaking one over on the rubes and trying to trick them long enough so that they'll vote for you in November. And that is pretty much the Trump/GOP strategy today, outside of the racist hate stuff.

Friday, August 28, 2020

July income/spending shows recovery flattening. Now where does it go?

Wanted to discuss July's income and spending report that came out report. At first glance, it seems like it was pretty decent, with things still bouncing back from the major shutdowns in March and June.
Personal income increased $70.5 billion (0.4 percent) in July according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $39.9 billion (0.2 percent) and personal consumption expenditures (PCE) increased $267.6 billion (1.9 percent).

Real DPI decreased 0.1 percent in July and Real PCE increased 1.6 percent (tables 5 and 7). The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.3 percent....

The $200.6 billion increase in real PCE in July reflected an increase of $82.1 billion in spending for goods and a $121.2 billion increase in spending for services (table 7). Within goods, the leading contributor to the increase was spending for new motor vehicles, based primarily on unit sales from Ward’s Automotive Sales Report. Within services, the leading contributors to the increase were spending for health care as well as food services and accommodations.
Despite the overall increase in incomes, a lot of the stimulus measures were fading out as an income source in July. On the wages and salaries part of the income equation, the increase in July was less than in previous months, and we still have a ways to go to get back to February’s peak.

That last $485 billion in wages and salaries will likely be a lot harder to get to than the $550 billion bounce off the bottom. Because by the end of July, any COVID-related reopenings had largely happened (in fact, some places were starting to close back up as COVID resurged that month), and the $600 expanded unemployment add-ons ended. So any increases in income from here will be mostly organic and not stimulus-induced. And if it goes down from here, it'll prove that the real economy was still quite weak.

The spending side is a similar story. A nice increase of $216 billion in July (annual basis), but we are still nearly 5% below the overall levels that we had in February. What’s especially intriguing in that goods spending has actually gone up by quite a bit over those 5 months, but services spending is still significantly depressed.

And like a lot of things in America, a few fortunate/well-connected areas do really well, while the majority of us fall further behind. You can especially see that in services, where eating/drinking places, hotels, and health care isn't close to the level of business they had before COVID, even with an increase in July.

August will begin the real test of where our economy is going. We’re still well below where we were 6 months ago, and if things flatten out more, it won’t take much for the economic decline to re-start. We still have high levels of people being laid off with less government help to have them maintain spending and incomes.

I know stocks and home values are in a dangerous Bubble jumping in recent months, and maybe some people will use that as a justification to keep up their spending. But you can’t pay for bills or other expenses with stock certificates, so let’s see what happens as the COVID Summer drags to a close and schools (maybe) start back up.

The reality of where we’re going off of the new COVID-era baseline might not be recognized too much before the November election, but it’s sure going to go a long way toward determining what our economy looks like for 2021. Lots of Americans want to believe things are getting better and that things aren't much different than where they were at the start of the year. But they don't seem to recognize how far down we still are, and that there's not much in reality to keep things going from here.

Thursday, August 27, 2020

Powell says jobs > inflation,and so the money will keep pumping

With everything that's been going on in this state and country, the economic news hasn't been getting a lot of attention. But if you are interested in the field, these comments by the Fed Chair yesterday were a big deal.
Federal Reserve Chair Jerome Powell unveiled a new approach to setting U.S. monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come.

Following a more than year-long review, Powell said the Fed will seek inflation that averages 2% over time, a step that implies allowing for price pressures to overshoot after periods of weakness. It also adjusted its view of full employment to permit labor-market gains to reach more workers.

“Maximum employment is a broad-based and inclusive goal,” Powell said Thursday in a speech delivered virtually for the central bank’s annual policy symposium traditionally held in Jackson Hole, Wyoming. “This change reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities.”
The coked-up hedge funders took Powell's words and ran with it, ignoring the fact that 1 million more people filed new unemployment claims last week, continuing a rally that has had the DOW Jones jump more than 8% in the last month, and 12% since the end of June.

And while the total number of people getting unemployment fell a bit for the 3rd week of August, there are still around 25 million additional people getting unemployment compared to the start of March.

Those numbers help explain why Powell is planning to keep rates down for a long time.
In the new statement on longer-run goals, the Fed said its decisions would be informed by its assessment of “shortfalls of employment from its maximum level.” The previous version had referred to “deviations from its maximum level.” The change de-emphasizes previous concerns that low unemployment can cause excess inflation....

Calling the revised strategy “a robust updating,” Powell said that after periods when inflation has been running below 2%, monetary policy will likely aim to achieve inflation moderately above 2% for some time.
And I agree with Powell that we need to be concentrating on getting jobs back instead of caring about inflation at this point. Our nearly-$4 trillion budget deficit also isn't an economic problem by itself, because even with the recent bump up in longer-term rates, they're still absurdly low, still below 0.8% as of today.

Powell has said in the past that the Fed can only do so much to try to fight poverty beyond making interest rates lower (all the stock buying and related bailouts of corporations don't do a thing for those poorer Americans). And he has insisted that Congress and President Trump add more stimulus from the fiscal side if they want to drag us out of the economic pit that many of us are still in. But will Republicans, who desperately want to pretend things are "normal" actually do something to stop a double-dipper from happening? Current indicators say "No."

So while the low-interest rate Fed strategy is clearly causing the stock and housing markets to Bubble is nice if you have the money to invest in stocks and buy homes, it isn't so great if you're one of the millions of Americans facing eviction in the next week. And all of those people close to the edge are now losing their federal protections against eviction, and have had their unemployment benefits slashed in the month.

I keep wondering when the "hopium and free money" binge ends, our financial markets start to recognize that there's no real growth in most of the economy, and our Bubbles burst. But it hasn't happened yet, which will make the implosion all the larger, and lead to us falling further behind where we were at before COVID-19 broke out.

Wednesday, August 26, 2020

After more death in Kenosha, WisGOP goes low, and looks worse after MKE sports teams step up

It was distressing enough to wake up in the morning and find out that some 17-year-old decided to live out his Call of Duty fantasies in Kenosha.

Before we found out who this kid was, the Wisconsin GOP decided to concentrate on shifting blame onto Governor Evers than, you know, giving a care about TWO PEOPLE BEING SHOT.

Boy, these WisGOPs sure weren't saying it was "too soon to be playing politics" after this multiple shooting, were they? Such a trash act.

And it's wrong-headed, especially in blaming Evers for a militia nut shooting people, because Evers called for a special session to deal with gun violence last year. What did Robbin' Vos and Senate GOP leader Scott Fitzgerald (not) do?

Same thing happened in June when Evers wanted to have a special session to take up bills on policing reform after the death of George Floyd. And Evers has called a special session starting on Monday to revive some of those policing bills. Keep that in mind for later on.

Even though the kid was arrested just across the Illinois border today on tentative charges of first-degree murder, I will still boiling from how disgusting the WisGOPs were adding, as they used this violence to distract from having to deal with a two-tier society they are glad to maintain. And then around 2:45pm, another state-based organization responded to the violence.

And within minutes, it wasn't just the Bucks.

A couple of hours later, the other pro team based out of Milwaukee followed suit.

I will note that the Cubs (owned by Trump fundraiser Tom Ricketts) did not postpone their game tonight, although African-American Cubs player Jason Heyward chose not to play.

The Bucks took their wildcat strike to another level, demanding action and change when it came to policing in Wisconsin, taking their case to the highest law enforcement officer in the state.

So let's see if Robbin' and Fitz still pull the "gavel in, gavel out" routine next week after the Bucks pulled extra attention to the subject. And after a few more days of casual people having to think about racial disparities and police methods with the NBA and MLB not playing games.

Crazy, surreal time to be in this state. And not in a good way.

Tuesday, August 25, 2020

The eyes of America go to Wisconsin, reminding us how much better we need to be

You may have heard that it has not been a great last 48 hours in Wisconsin. Starting with a different Jake of a Different Color getting shot in the back in Kenosha and paralzyed, after cops responded to a domestic dispute that Mr. Blake was allegedly trying to break up.

The shooting was caught on camera, and it reignited protests that had largely calmed down over the last two months. All 3 head coaches of Wisconsin's pro sports teams made statements reiterating that Black Lives Matter and that things in our state needed to change for the better, as did Green Bay's future Hall of Fame quarterback, who called the shooting part of a "systemic problem."

And it wasn't just Wisconsin-based athletes speaking about the shooting.

Unfortunately, violence accompanied some of the protests in Wisconsin. Many local Kenosha businesses are total losses after last night.

A similar scene happened in Madison, where tear gas returned to the Capitol Square, dumpsters were set on fire, and numerous windows were broken out around downtown.

Take a guess what WisGOP chose to talk about today. .

After all, if you talk about violent reactions and whine about Governor Evers, you can avoid talking about why those people are angry in the first place, and actually having to do anything about it. You also don't need to do anything about Wisconsin having some of the largest Black-white disparities in America, or why a lot of people feel their position in society allows them to do whatever they want without consequence.

Which is why the feeling I have today (beyond seething anger at the racial violence) is weary resignation. Republicans in this state will not do anything about the real racial problems that exist here, and the reason why is because they think those disparities and the resentments that result helps them win elections.

The only answer is to blast them out of power (via the voting booth, people!), and to keep them out of power for years. It's the only way real steps can be made in correcting this horrid situation in Wisconsin, and allow things to get better. Or else we'll continue with this state's economic apartheid, and the inevitable bad incidents that follow, which leads to more uprisings and more destructive resentments.

There was only one thing from last night's activity in Madison that made me smile.

You shouldn't be trashing any place, and it's not helping the cause of racial justice. But if you feel you have to, at least focus on the people that worked to create the messed-up conditions that we are in today. State Street shopkeepers are not your enemy, but the oligarchs down the hill might be.

Monday, August 24, 2020

Two Wisconsins on COVID. Biggest places improving, Fox Valley and WashCo getting worse

It's been yet another week in Wisconsin where some parts of the state continued to see COVID-19 cases decline, while others saw more infections than ever.

In Milwaukee and Madison, the breakouts continue to lessen. And in a welcome change, Waukesha County also saw a notable decline in new cases over the last 7 days.

Some of this may be related to fewer tests, as the percentage of positive tests statewide is at their highest levels in several weeks. But at least these large-population counties are matching the state's decline in reported new cases. That is not the case for the 4th-largest population county in the state, which is home to a resurgence generating out of the state's Correctional system.
The number of positive COVID-19 cases this week at the Green Bay Correctional Institution has surged to 180, an increase of 123 above the number reported on Tuesday.

The state Department of Corrections said 57 inmates and six employees at the prison had tested positive within the last week. Since then, the National Guard was on hand to test all inmates, another 123 inmates have tested positive. The total number of positive cases is 12% of the 1,538 tests administered.

A department spokesman on Tuesday said the source of the outbreak is unknown. All cases are active, and no one infected with the virus has died.
Brown County ended up having 464 new COVID cases last week, levels that mirror the amount of new cases that we saw in food packing plants in and around Titletown in late April and early May.

Brown County wasn't the only part of eastern Wisconsin that saw increases in new cases. In fact, you could go right down I-41 between Green Bay and metro Milwaukee, and 3 of the counties you would go through were places that hit record highs for new cases last week.

The next few weeks will feature a sick sort of experiment. as students return to UW campuses with many being tested for COVID as they arrive. And then those students will be tested again in the weeks following, as they come into contact with others on campus, so we'll see if UW can handle the COVID World better than other campuses that have already stopped in-person instruction.

At the same time, younger students and their teachers will be starting school across the state, including in some communities that have been seeing higher levels of cases and lower levels of interest in adhering to the state's mask mandate. We've gotta be smart if we're going to crush this thing, and it only takes a couple of bad weeks to remove the progress that has been made in a lot of population centers of the state.

Sunday, August 23, 2020

The college kids are back in town...because UW and other schools need the money!

The current method of higher education in America was already in peril as many states chose higher priorities for funding and the needs of the economy changed. Throw in a GOP that seems outright hostile to smarter than them (especially if they give findings based on facts they don't want to hear), and it's made for a rough situation on campus for administration. But then COVID-19 hit and shut down many campuses from in-person instruction this Spring, leading to a significant change in how classes had to be presented.

Many hoped that COVID and the required changes in college life would be a one-semester anomaly. But COVID has endured far longer and more severely than many of us thought it would have back in March, and now a new school year looms (and has started in some places). And that has revealed a higher education setup in America that is in danger of falling apart with another year of COVID-related cutbacks.

As this excellent article from NC State's Brett Devereaux notes, a big problem with higher education in 2020 is that we emphasize a business model that doesn't think of higher education as a public good that benefits society, but instead it's just another product that treats students as customers with choices. As a result, Devereaux says this leads more of a university's money goes into "campus life" amenities and away from the costs teaching, at the detriment of the education "product" itself.
But even as tuitions rise, almost none of this money is funneled back into instruction or professors. Quite to the contrary, more and more instructors are poorly paid, overworked part-time adjuncts. In 1970, more than 77 percent of university faculty were full-time instructors. Today, 46 percent of faculty are part-time adjuncts; nearly 75 percent are non-tenure-track, effectively an inversion of the old system.

While most adjuncts (including this one) work hard and are skilled teachers, teaching heavy course loads at pitiably low pay makes it difficult to offer the sort of high-quality education they would wish to provide to students. In essence, the business model of education has led university administrators to cannibalize the core thing a university is supposed to provide. At the same time, the amenities arms race and the bloated administrations that come with it impose massive fixed operational costs on the university, compensated for by charging students more to attend, often in the form of fees for all of those on-campus amenities.
And our current system of financing higher education makes schools push toward having students get back to campus and attend in person for the Fall of 2020, despite the many COVID-related problems that come with having large numbers of 18-23 year-olds packed into a small space, because they need the money from tuition and dorm fees.
Now that universities face the emergency of a pandemic, they are stuck. Calling a halt to on-campus operations and going totally online, thereby waiving on-campus fees, was the right, moral choice. And yet it was the option that this reckless system could never take, because those inflated fees were needed to pay the fixed costs of the business model. Without sufficient state funds, universities are reliant on federal grant money, which requires students to enroll. If online courses drive away even a fraction of those students, the house of cards will collapse. For the university to do the right thing would be financial suicide.
You can see the importance of getting that tuition money when you look at the 2021-23 UW System budget that was just approved by the Board of Regents. Nearly 64% of the funds for instruction in the System are projected to come from tuition, as state tax dollars going to the UW continues to stay at lower levels.

And those state tax dollars are likely to be in short supply for the next two fiscal years, barring a large bailout from DC, as June's Wisconsin Economic Outlook projects that we won't back to 2019's level of employment until 2022. In addition, other needs such as Medicaid will take up more of the state's budget, if laws don't change in the next year (HINT TO GOV EVERS!).

In the Atlantic article, Devereaux adds that we need priorities to change at state houses and private college offices in order to make this flawed financing system more sustainable for the future.
The first step is to abandon the business model of education. States need to be willing to reverse the endless budget cuts that have left universities so reliant on stratospheric tuition. Any new funds, however, need to be flagged for instructional budgets and conditioned on tenure-track hires, not more rock-climbing walls, further adjunctification, or empty-chair administrators.

States should also move to cap tuition. Indexing the cap against a mix of inflation, instructional costs, and teacher pay (counted as an average per credit so that it fully reflects the pay of adjuncts and graduate instructors, not merely tenure-track faculty) might serve to tether tuition to the real cost of an education. That way, if universities do want to raise tuition, they will need to reinvest that money into their operational mission of education.
But the reforms Devereaux wants aren't going to happen for the 2020-21 season, which means that if students aren't able to be on campus due to COVID-19 breakouts, they might not enroll at all for the Fall, and they won't give the tuition funds that the university needs. Combine that with states not be able to make up the difference for that lost revenue, and higher education is facing a legitimate fiscal crisis where any COVID-related shutdowns may be the last straw before things collapse.

This helps explain why university officials are giving increasingly heated warnings to students against higher-risk behaviors that might make a COVID breakout more likely. Or as the Chronicle of Higher Education well-put it - "The Student-Blaming Has Begun."
Purdue University, one of the first to adamantly declare its intent to reopen in person, suspended three dozen students for attending a party that violated rules banning large gatherings and requiring masks. Pennsylvania State University suspended a fraternity for hosting a rogue party.

Penn State’s president, Eric Barron, asked students: “Do you want to be the person responsible for sending everyone home?”

The University of Maine’s chancellor, Dannel P. Malloy, wrote in a message to students that “the fate of the fall semester is in the hands of our students,” but that many were stepping up to the plate to lead health and safety initiatives.
Of course, the real problem is that we have a pandemic that isn't slowing down in its spread 6 months after it first broke out in this country, in no small part due to the lack of a unified strategy and honesty coming from DC to stop it. Likewise, universities have been put into a fiscal crunch due to years of defunding from state governments and an increasing arms race to stay ahead of the competition, and now they're in a predictable crisis once they're faced with possibility of fewer students being on campus.

In both cases, the lack of planning is causing the "leaders" to try to deflect from the mess they've been responsible for, and instead claim that the problems triggered by COVID are the fault of others below them.
Julia L. Marcus, an infectious-disease epidemiologist at Harvard Medical School, believes they should. “What’s happening on college campuses is a microcosm of what’s happening in this country, which is a deflection of responsibility from the top down to the individual,” she said in an interview.

“It’s unconscionable for these administrators to be shaming and blaming and punishing their students for what we all knew would happen. For any of us who take a minute to put ourselves back in our 18-year-old selves, asking students to essentially lock themselves in their rooms for a semester isn’t going to be an effective public-health approach.”
Got that right, which is why I'm likely steering clear of the campus area for a few weeks, including the Terrace. As much as I'd like to be there, I also know that 18-year-old Jake would not be hanging out in Witte during Welcome Week, and during the whole weekend. And even though indoor bars like the KK are shut down for now, you know the kids are going to be finding a way and a place.

And thus begins a school year like no other. Both for students on the ground and up in the administrative offices. This next month will be fascinating and scary to see what choices are made by both groups

Wisconsin COVID cases are dropping, only because testing is dropping.

At first glance, it may seem that Wisconsin continues to make progress in blunting the impact of COVID-19 as we get into the 2nd half of August.

But there's a big problem with assuming that we are doing better. Because the number of Wisconsinites getting COVID-19 tests has dropped sharply in the last 2 weeks, to the lowest levels in 3 months.

This means that the percentage of tests ending up positive was over 8% in Wisconsin for the first time since the start of May, when many fewer COVID tests were being administered.

And I have to wonder whether that reduction in testing is related to what we saw in this report from Wisconsin Public Radio from last week.
Secretary Andrea Palm of the Wisconsin Department of Health Services (DHS) said Thursday her agency has heard reports from hospital partners that say they've seen their supplies of coronavirus testing reagent diverted to other states.

This comes after Democratic Senator Tammy Baldwin sent a letter this week to Vice President Mike Pence, chair of the White House Coronavirus Task Force, seeking information on reports that the federal government sent COVID-19 testing supplies meant for Wisconsin to other virus hot spots.

In the letter, Baldwin specifically discussed Advocate Aurora Health. Last week, the nonprofit hospital system issued a statement saying it has been "forced to adjust" its coronavirus testing approach due to delayed shipments of testing supplies.

Advocate Aurora has suspended COVID-19 tests before some procedures in favor of enhanced personal protective equipment. It also temporarily closed most of its community testing sites in Wisconsin, including two in Sheboygan County.

This week, health officials there said they’ve encouraged symptomatic residents to travel to a community testing site in Calumet [County].

(PS- 25 million tests in 4 months in a country of 330 million ain't that much).

But even with the slowdown in testing reducing the number of positive tests in the state overall, some places are still continuing to see more cases of coronavirus. Mostly in the areas that tend to have politicians and locals who reject mask mandates.

I'd celebrate the fact that Dane County continues to stay at low levels. But now the college kids are coming back to UW, and I think I'll keep away from that area of town for a few weeks.

Buckle up, as the near future likely will tell us whether we make any progress against COVID-19 in the next 3 month, and whether people will feel more comfortable in going out and getting our economy back on track. Or not, and as of now, "not" sadly seems to be the more likely outcome. Especially if many parts of the state continue to be selfish and refuse to do the things that could help us crush the virus.

Saturday, August 22, 2020

Big companies and home values Bubble higher, but everything else is struggling. How does that last?

We keep seeing evidence that the US is having two different economies going on at the same time. For tens of millions of Americans, it's a struggle. 28 million people are still filing unemployment claims each week, and evictions from homes continue to rise and loom. Especially as expanded unemployment checks dwindle in August.
America had an eviction crisis long before this year, and even a stall in evictions does not signal good news for tenants. While evictions are down, other metrics of housing insecurity are up. A recent Census Bureau survey found that an estimated one third of U.S. renters expected to miss their August rent payment.

Most housing advocates say that it’s only a matter of time until evictions follow. By one dire analysis, more than 29 million Americans in 13 million households across the U.S. could face eviction by the end of the year. That’s the projection by the Covid-19 Eviction Defense Project, a Colorado-based group founded in March by economic and legal researchers, based on the census survey data; another analysis of the survey by the global advisory firm Stout puts 12 million at risk of eviction over the next 4 months.

Some tenants are only just beginning to emerge from the relative safety of government protections. The federal eviction moratorium expired on July 25, but property owners that were subject to that law must still give 30 days’ notice before they can file against tenants. The lapse of the federal moratorium leaves millions of renters — who occupy between 28% and 46% of rental units — newly exposed to eviction proceedings. Tenants covered by the federal moratorium, while fewer in number, are more routinely subject to evictions, especially by so-called frequent filers in cities such as Atlanta or Houston.

“The first two weeks of September are particularly worrisome, especially if Congress takes no further action,” says Peter Hepburn, associate professor of sociology at Rutgers University-Newark and research fellow for Eviction Lab, by email. Prospects for another federal eviction ban or bill to boost benefits appear bleak, with the Senate adjourned for recess through Labor Day.
In addition, many consumer spending sectors remain depressed below their pre-COVID levels, particularly food services and trvael-related industries.

But some retail businesses are doing great at the same time.

Since people don't have the desire to go to multiple places at once (if at all), big-box stores allow individuals to take care of their needs at one time. And they're more likely to have an online presence where items can be shipped directly to homes and/or picked up with little need to contact others.

Some of this is a secular thing that was already happening (especially in communities with few choices), but COVID World has likely sped this up, with the extra effort and precautions that individuals need to make leading to needed makin an even tougher situation for small businesses and their customers.

More of these big-box stores are also more likely to be publicly traded on Wall Street, which is another place where money is flowing to these days. While large swaths of America continue to face financial distress, the S&P 500 is setting new records 5 months after a massive crash. Free money from rock-bottom interest rates have led to stocks leaping despite no real overall increase in actual business, as shown by another record high, in the S&P Price-to-sales ratio.

I'll note that each new height in late 2018 and early 2020 was followed by significant market drops.

One other area of our economy that is bubbling higher with low interest rates is housing, which is booming back after a brief COVID-related decline.
Sales of single-family homes, condominiums and co-ops rose 24.7 percent across the U.S. from June to July and 8.7 percent since July 2019. The median sale price of existing homes also rose 8.5 percent from July 2019 to $304,100, according to the NAR, breaching $300,000 for the first time ever.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said NAR chief economist Lawrence Yun.

July marks the second straight month with a record-breaking increase in existing home sales, which rose 20.7 percent in June. Housing prices also rose in 174 of 181 metropolitan statistical areas, or 96 percent of all localized housing markets, according to data released by the NAR last week.
Some of this is likely related to COVID making housing needs very different, because people need to use their home spaces more, and commute times are less of a factor. Some also may now see downsides to being in a densely populated area, as you're in more contact with people (and increasing your susceptibility to the virus), and with nearby bars and restaurants being less safe and/or convenient, that plus of current location is now muted.

But I also have no doubt that it is related to the lower cost of borrowing - shoot, we've refinanced our home and paid off our HELOC in the last month. But this is happening at the same time when millions of Americans can't afford their current living situation, let alone pay more for a new space. Which makes me wonder how long it takes before the induced demand runs out and this bubble starts to burst.

The stock market growth isn't all it's cracked up to be either. Much like we saw in 2018, the records set in the larger company indexes are hiding the fact that a majority of companies are down in the COVID World.

This is not a sustainable situation. And I don't think that the Bubbly stock and home markets are going to get more people to go out while COVID continues to run through our country. So when something makes Wall Street and the home buyers deal with the lousy economic reality that much of the country is still dealing with, it feels like things can fall really fast.

Friday, August 21, 2020

Sure, unemployment claims are lower. But they're still at record levels

I wanted to give some more perspective on how many people have been laid off in the last 6 months, because I think COVID World makes us shrug and not make us realize how far in the hole we are, and that things are still bad for a lot of Americans.

I wanted to look at the number of new unemployment claims since COVID-19 broke out, and compare it to the last time we fell into recession and unemployment spiked in this country - the Great Recession. I decided to start the comparison with July 2008, as that was the first month where new unemployment claims went above (a seasonally adjusted) 400,000 a week, and then use March 2020 as my starting point for our current recession.

Even with our "lower" amount of new unemployment claims these days, we're still seeing almost twice as many people filing each week as they were in December 2008 - 3 months after Wall Street officially started to implode.

And while continuing claims have dropped a bit from their peaks in June, there still were nearly 28 million Americans filing some type of unemployment claims in the early part of this month (the last week we have for continuing claims in all of these programs).

An especially concerning part of that number is that the extended unemployment claims figure keeps going up. The extended unemployment benefits kick in after someone hits the regular state limit of no work (in Wisconsin this is 26 weeks), and gives an extra 3 months of assistance. The number of Americans receiving extended claims was at its highest level yet on August 1, at nearly 1.4 million, and it was 400,000 higher than what we had on July 4.

Long-term unemployment is where the real economic problems begin, as people's standard of living usually has to be changed even more than the initial layoff may have caused. And it's coming at the same time that the $600-a-week in additional unemployment benefits has been cut off, with any type of seasonal Summer employment starting to end.

We've been fortunate that more jobs have come back vs those that have been lost since April due to the reopening of several sectors of the economy, which is why we've added back millions of jobs in the last 3 months unlike the 2.8 million jobs lost in the last 6 months of 2008. But August has had no difference from July in terms of what sectors of our economy are open, and in fact, some sectors have become more restricted in recent weeks.

Which makes me wonder if the 3 months of recovery is on borrowed time. Partly due to the continued elevated level of new unemployment claims, partly due to the lack of sources of restored jobs, and partly due to the lack of stimulus coming to the unemployed from the federal government. Not a good combination, and that's why we need to pay more attention to the total numbers of unemployed compared to the "improvement" that a lot of media says is coming from a still-unprecedented amount of people filing unemployment claims.