Is the Wisconsin economy taking off and the U.S. flatlining?

A couple of reports out this week may lead some to think that the trends of the last two years are starting to turn around. In the U.S.'s case, the recent GDP numbers indicate that the recovery from the Great Recession may be slowing down in its 4th year, while in Wisconsin's case, a couple of reports showed signs of life ahead for the first time since the bomb was dropped in March 2011. Are these signs signal, or noise? We'll take a look here.

Let's first talk about the GDP reports, which came out today showing 2nd Quarter growth at 1.7%, but also with a boatload of revisions going back to 1929 (!) due to some new criteria being considered. These revisions don't change the overall picture too much, but it did reduce 1st Quarter growth from 1.5% to 1.1%, and it did modify the historical numbers a bit as well. What we now know is that growth was actually stronger in 2010 than first thought, and after a breather in 2011, there were strong year-over-year gains for 2012. However, it's been starting to stall out in 2013, and year-over-year GDP growth is now at its lowest levels since the end of 2009, under 1-and-a-half percent.



As has been the case over the last 3 years, government cutbacks have reduced overall economic growth. Since the middle of 2010, government cutbacks have taken $200 billion out of real GDP (2009 dollars), and while year-over-year private sector growth is also slowing a bit and also at their lowest levels since 2009, it still remains above 2%. In fact, private sector GDP is now $1.5 trillion above the depths of the recession in 2009's dollars.



So while we need to keep ourselves aware of this economic slowdown leading to stalling and falling, I wouldn't press the panic button quite yet. The job market seems to continue to grow, as evidenced by ADP estimating another 200,000 private sector jobs for the month of July, and the U.S. continues to see year-over-year drops in unemployment claims in the neighborhood of 10% for most weeks. The most recent unemployment claims report shows seasonally-adjusted claims at their lowest levels in several years, with the 4-week average dropping down toward 340,000.

Wisconsin also has been seeing some recent drops in unemployment claims compared to recent years, which as the purple line in this chart shows, is a notable difference from the increases we were seeing at the start of this year. (UPDATE: includes the most recent release as of August 1)



This recent change, along with higher-than-normal seasonal hiring, helps to explain the strong jobs numbers we saw in June (which I broke down here). If this drop in unemployment claims is a signal, we should see another month of job growth for the July numbers (although we don't see jobs added, so it's hard to make too definitive of a judgment). And it wasn't the only piece of good economic news that Wisconsin got this week, as the Philly Fed reversed the poor outlook it gave the state earlier in the year, and now says Wisconsin is poised to have the 2nd-best growth in the U.S. between June and the end of the year.

Not surprisingly, Governor Walker jumped on that report to give an "It's working" press release, and I suppose he can have his day, because we sure ripped the hell out of him when that same survey had Wisconsin's outlook among the worst in the nation a few months ago. Of course what's not mentioned is how much of a hole the state is due to the horrible economic record it's had in the first 2 1/2 years of the Age of Fitzwalkerstan, and as you'll see here. Right now, Wisconsin still remains in the cellar in the Midwest for growth since Walker took office in January 2011.



So even if we assume Wisconsin gets the 6% annualized increase in growth for the rest of the year that the Philly Fed projected, we'd STILL BE BELOW THE US RATE for those 3 years. Also worth noting, the collapse the Philly Fed predicts will happen in newly right-to-work Michigan.



Given that August and September should feature a large reduction in seasonal jobs that caused the big June increases in work, I think I'll cast off June's Philly Fed as noise that should be monitored, and not fool myself into thinking anything's turning around long-term in Wisconsin.

But just because I don't see a long-term change yet doesn't mean that the national and state economic indicators aren't telling a slightly different story than they were a couple of months ago. This makes the next couple of months may be more critical than your typical end-of-Summer information.

Solidarity Singers going at it all wrong

So says Tom Breuer, in an awesome column at InBusiness Madison.

But the Solidarity Singers do have options. They can form a multibillion-dollar transnational corporation and use a portion of their hefty profits to buy elections on behalf of candidates who are likely to bend to their will. You know, like a normal American.

All they need to do is funnel their unlimited cash (aka speech) through a Super PAC (maybe call it the Scott Walker Swan Song PAC), find a candidate to support and/or bribe, get him or her elected, and force the Capitol Police to call off the dogs. While they’re at it, they could pollute a watershed or two just for fun.

But until that day, the singers can be legally muzzled. That’s democracy in these United States in the Year of Our Lord 2013. And we should all be very proud of it, now shouldn’t we?

Exactly. You and others expressing yourself for free in a building that's open to the public, and not getting in the way of others? That's illegal. But spending money and keeping others from getting the same access, especially on the limited frequencies of the public airwaves? No problem!

And you wonder why I think things are upside down in this state?

P.S. I see that Dave WHAAA-ska handed out Twinkies at his meagerly-attended Astroturf event inside the Capitol today. Yes, making light of American bankruptcy and thousands of workers being screwed out of earned pensions and negotiated benefits. HILARIOUS! First class act you and Icki and friends have there, Dave. Can't figure out why the GOP is nothing more than a rumor in this county when guys like you represent it.

SHOCKER! WisGOP business owner deceives on Obamacare

Apparently Republican business owners have learned next to nothing from the elections we had 8 months ago, because they're still trying to trot out deceptions about Obamacare and the effects it'll have on their businesses. The latest example comes from a story planted on a Rhinelander TV station where the Trig's grocery chain in the Northwoods claims it would have gone out of business within a year because they would have had to actually offer their employees health insurance.

They reason Trig's said it decided not to hire people full-time because of the "freeloader tax" that Obamacare has for larger businesses, when those businesses have employees who work more than 30 hours a week that aren't currently getting health care benefits. Here's the one-sided story from WFJW.



John Peterson at Democurmudgeon has a good breakdown of Trig's cynical complaint, and why they're using Obamacare as their excuse for driving down wages in the name of maximizing profit. As John notes,

The locals should wonder what kind of community, small town business would screw them over like this. But the public has bought into the idea business can do any lousy thing it wants and get away with it.

It's ironic to hear a business complain about having more of the citizenry being insured outside of a job, because an employee that gets Obamacare keeps the business from having to pay for employees' insurance, which should raise the business's bottom line - well, unless you already are abusing the system like Trig's has been. In fact, many businesses already offload their employees health care benefits onto the taxpayer, as the Wisconsin Department of Health Services notes more than 174,000 Wisconsinites have jobs, but are still on BadgerCare. Walmart is the clear "leader" in this category, but it also includes many of the largest chains in the nation.

Largest number of Wisc. employees on BadgerCare, Q1 2013
Walmart 3,028
McDonald's 1,466
Aurora Health Care 1,030
Menard's 794
Walgreen's 713
UW System 708
Roundy's 706

On a quick tangent, the UW System number is remarkable, because the DHS notes that 5 years ago, in Q2 2008, the UW System was 46th in the same category. You think raising premiums with Act 10 and lowering pay of employees in the last 5 years might have been a reason? (Damn right it is)

Back to Obamacare, now. From the employee side, going using the Affordable Care Act also has its benefits. It can lower insurance premiums to the employee compared to being at the mercy of the private market, which that person should have more money to spend on products at a business instead of having those people's funds going to pay for medical care. It also lessens the chances that employee faces a financial catastrophe from suffering a serious illness while uninsured.

But there's another reason Trig's is complaining about Obamacare, and it's one that Channel 12 in Rhinelander left out, probably due to ignorance and laziness. The Wisconsin Democracy Campaign's database shows that the head honchos at Trig's (the Solberg family) are big GOP donors that have given tens of thousands of dollars to WisGOP and WisGOP candidates since 2010, including $10,000 to Scott Walker in 2010 and $2,500 more to Walker after Act 10 and the state budget was passed in 2011. These Baggers even gave more than $2,000 each to Northwoods morons like Kim Simac and Tom Tiffany, while not giving a dime to Democrats since 2009.

Let me put that choice into focus. Instead of paying their employees at their 5 stores in Northern Wisconsin a slightly better wage or helping to pay for their employees' health care, the Solbergs would rather pay off GOP politicians with their profits, and lower the hours of their current employees just to prove a political point. No wonder they parrot Walker's line about Obamacare being "unworkable", as they've invested a lot of money into trying to elect politicians that will screw up Obamacare's implementation in Wisconsin, and won't tolerate it succeeding, even if it helps their business and their community in the long run.

What WisGOP and their donors are actively pursuing is a strategy that the Washington Post's Greg Sargent accurately describes as "sabotage governing." As Sargent mentions, in 2013, GOPs don't care about the results of policies and legislation, just as long as they get their way.

...it goes well beyond Obamacare implementation and the relentless blockading of Obama nominees for the explicit purpose of preventing democratically-created agencies from functioning. We’ve slowly crossed over into something a bit different. It’s now become accepted as normal that Republicans will threaten explicitly to allow harm to the country to get what they want, and will allow untold numbers of Americans to be hurt rather than even enter into negotiations over the sort of compromises that lie at the heart of basic governing.

This is seditious behavior that should make anyone who practices it unfit for office, but the Solberg CEOs at Trig's and the Walker-type WisGOP politicians they support don't care. These guys want it all, and as part of that philosophy, they will gladly reduce the chances of survival for a large number of people and businesses as long as they think they can grab a few more dollars and consolidate more power. Even if it's a stupid fiscal or business decision (and the WisGOP decision to fight Obamacare certainly is that), in RW bubble-world, it is better to strike the pose than compromise, accept and succeed.

These are the type of fact-free sociopaths we're dealing with on the issue of Obamacare, and Channel 12 in Rhinelander is the type of lazy media that swallows this crap without investigating it. Know this, strike back with facts and force, and do it over, and over, and over. Because Trig's and other pro-GOP businesses will be lying over the next year over....and over....and over.

Which Wis, leggies are vulnerable in 2014? By the numbers

If Wisconsinites want to get their inner Nate Silver on, Daily Kos had a cool link to digest that came out about a week ago. It lists the 2012 election results for both president and U.S. senator by Congressional, State Senate, and State Assembly district. It's a really cool treasure trove of info, and can help you ID what it's like in your community (not surprisingly, my near-west side Senate and Assembly district voted for Obama and Baldwin by more than 3-to-1).

What this exercise also can do is help you identify who might be vulnerable to a big swing election in these post-redistricted districts, and who might be relatively safe. What I'm going to do is take a look at the vote for Obama and Baldwin in a given district, and then divide by 2 to get the "general" vote for Dems in that district. Then, I'll compare that number to the statewide average for those two candidates (which was 52.20%), and then see how far it deviated from the rest of the state. Then, I'll use that number to determine a "Wisconsin PVI" to see just how far off those districts are from the state average, and that'll tell you which districts may be most (and least) likely to tip in a statewide wave.

First up is the State Senate, and you'll find some interesting names on the list. As a reminder, a Dem +1 rating would mean that the Republicans would need to win the state by 1% to have an expected tie in a certain race, and likewise, a GOP +1 rating means the Dems would need to win statewide by 1% to have the expected result be a tie.

Most representative Senate districts
Lassa (D) GOP +0.4%
Hansen (D) GOP +1.0%
Vinehout (D) Dem +1.5%
Schultz (R) Dem +2.0%
Jauch (D) Dem +3.4%
Shilling (D) +3.5%
Ellis (R) GOP +4.1%
Gudex (R) GOP +4.2%
Moulton (R) GOP +4.7%
Olsen (R) GOP +5.0%
Petrowski (R) GOP +5.3%
Lassee (R) GOP +5.5%

With the state going Dem +2.2% in 2012, every race ended up as it "should" have, given that Schultz's seat wasn't up for re-election last year. You can see where the GOP's redistricting strategy comes in, as there are a whole lot of 55-45 districts that favor the GOP (and several more that I didn't list that are between GOP +6 and GOP +8) and only 6 of 33 districts in the entire state that are within 4 points of the state average. It's interesting to point out that 5 of the 6 districts that are closest to the average Wisconsin voter are represented by Dems, but the next 6 closest seats are all held by Republicans.

It's also worth adding that Dems only have to defend 2 of these seats in 2014 (Vinehout and Jauch) while the GOP has to hold onto Schultz's, Ellis's, Moulton's, Petrowski's and Lassee's. So there's an argument to be made that if there's a Dem wave that hits in 2014, you could see a major shift in power in the Senate. And Ellis's district being as close as it is helps to explain why State Rep. Penny Bernard Schaber announced this week that she was challenging the long-time Senator from the Fox Valley in 2014. It also didn't hurt that old Mike was sporting this look recently.



Moving over to the Assembly, the same pattern repeats, although there are many more closer seats (not surprising, there's 99 seats instead of 33 in the Senate), and there are more crossover seats in general, and GOPs hold almost all of the closest seats.

Most representative Assembly seats
Wright (D) GOP +0.6%
Brooks (R) GOP +0.7%
Bernier (R) GOP +1.6%
Tranel (R) Dem +1.6%
Nerison (R) Dem +1.8%
Doyle (D) GOP +2.0%
Ripp (R) GOP +2.6%
Bies (R) GOP +2.9%
Krug (R) GOP +3.0%
Klenke (R) GOP +3.7%
Vruwink (D) GOP +4.0%
Hintz (D) Dem +4.0%
Riemer (D) Dem +4.2%
Murtha (R) GOP +4.3%
Weininger (R) GOP +4.3%
Larson (R) GOP +4.5%
Smith (D) GOP +4.6%
Honadel (R) GOP +4.7%
Ballweg (R) GOP +4.8%
Marklein (R) Dem +5.0%

So in districts within 5 points of the state average, the total is GOP 14, Dems 6. With that in mind, if you had a year where Dems grabbed 55% of the vote, theoretically that would be enough for the State Assembly to flip, even with the GOPs having 60 seats right now. But even with that in mind, there are only 9 of 99 seats within 3 points of the state average, which helps explain why in a 2012 election that went Dem +2.2%, there was no change in the total composition of the Assembly (although Tranel and Nerison won in western Wisconsin when they technically "shouldn't" have, as did Vruwink and Smith further north).

What these numbers indicate to me is that the GOPs have mostly maxed out what they could get (barring a ridiculous landslide election), but the Dems need a big wave election to gain control of the Legislature in the coming years. That being said, that doesn't mean all hope should be gone if you're a Dem, as it proves again that a strong Dem year could lead to major pickups, especially once you get to Dem advantages of 53-47 and 54-46. This is especially the case to consider when you realize that many of the close seats are in the swingiest areas of Wisconsin, as I pointed out last year that the Milwaukee and Madison areas don't change very much in voting (it's all about turnout there), but the rest of the state can change quite a bit.

Keep this one out as a reference, cause I got a feeling I'll be heading back to it for a number of reasons in the coming 15 months. Plus, you can use it to impress your friends on Wisconsin voting geography, and you won't even have to give me or Daily Kos the credit!

Madison and Milwaukee booming? Or seasonal fluke?

As I was coming back from Vilas County, I saw an interesting stat jump out at me in the latest jobs report for local areas throughout Wisconsin, the most recent edition of which came out today for June 2013.

Change in jobs, May-June 2013
Milwaukee Metro- +4,400 seasonally-adjusted, +9,800 non-seasonally adjusted
Madison Metro- +5,000 s.a., +5,100 n.s.a

A couple of things jump out. First is the fact that the two biggest metro areas in Wisconsin added a combined 9,400 seasonally-adjusted jobs in June. That's more than half of the 17,500 added in the state, and goes against a hypothesis I had that many of the job gains might be in rural areas heavily-reliant on tourism. The second item is the fact that Milwaukee's numbers are deflated by 5,400 to reflect seasonal adjustments, but Madison's is only dropped by 100. Is there something odd going on here, and is this related to the UW calendar?

I decided to take a look at the May numbers for these places, and see if there was a similar correlation.

Change in jobs, April-May 2013
Milwaukee Metro- +3,900 s.a., +9,600 n.s.a.
Madison Metro- -5,000 s.a., +900 n.s.a

This time both Madison and Milwaukee have a major seasonal deflator, Milwaukee's is 5,700 and Madison's is 5,900. It also means that the Milwaukee area has added 8,300 jobs on a seasonally-adjusted basis for the last 2 months, while Madison has added 0. So Madison's "good" numbers in June could indeed reflect the later end of the UW-Madison school year, meaning Summer jobs started after the May survey was done, explaining the "loss" in May and "gain" in June compared to most years.

So is the Milwaukee Metro area all of a sudden taking off in jobs? And what is Madison's trend? Doesn't appear that way according to year-over-year numbers.

Year-over-year change in jobs
Milwaukee Metro- +8,500 s.a., +9,000 n.s.a.
Madison Metro- -500 s.a., +2,200 n.s.a.

This now means practically all of Milwaukee's added jobs in the last 12 months has happened in May and June (on a seasonally-adjusted basis), and Madison's also basically stagnated. It's also interesting to note that the non-seasonally adjusted number is higher than the seasonally adjusted one, which indicates seasonal jobs are more likely to be added than non-seasonal ones who don't get deflated in the seasonal adjustment.

This is especially true when you look at the state figures for the last 2 months.

Year-over-year change in jobs
Wisconsin May 2013- +5,400 s.a., +5,600 n.s.a.
Wisconsin June 2013- +24,600 s.a., +36,400 n.s.a.

Now here's an interesting difference. Both seasonal and non-seasonal adjusted jobs have big increases in the year-over-year number, but look at how the seasonal deflator expands from 200 in May to 11,800 in June. That same deflator was only 4,900 in June 2012. It tells you that a lot of the recent jobs increase is in seasonally-sensitive areas, and do not show underlying economic strength.

What it also means is that the real test is yet to come when it comes to figuring out if Milwaukee and Wisconsin's recent job increases are legit, because the jobs reports from July through September would see these seasonally-adjusted jobs go away as tourism season ends and students go back to school. If the jobs in other areas don't pick up you'll see the year-over-year jobs figures drop as larger-than-normal Summer job increase goes away.

And I do worry about how this plays out, because my Aunt and Uncle were mentioning that plenty of the folks up North were saying that the tourist season had been the slowest they'd seen in the last 3 years. Granted, this area could have had a slow start due to the cold, rainy weather in April and May that delayed seasonal hiring and could have also delayed tourists from heading that way. But it's worth keeping an eye on this area in the next couple of months, because a bad Summer season there could level off hiring when May and June 2014 comes around, and cause reported job "drops" in a time when Governor Walker won't want to see that kind of news.

Heading up North

Going on a 3-day sojourn to my family reunion in Vilas County this week, so instead of doing some blogging, I'll be looking at this for a few days.





And yes, scenery like this is the best economic stimulator that part of the state has, because who wouldn't want to visit a place like that? Look at the water in that second picture- you can see all the way to the bottom. This stuff MATTERS, folks.

I'll be back later in the week to talk about more of the numbers that will have popped up.

Great moments in Fitzwalkerstani corruption, continued

Not that we already didn't know that the Walker Administration is quite responsive to the desires of its donors, but we had another great example of it be exposed this week.

The AP's Scott Bauer had an excellent article on Thursday revealing failed GOP Senate candidate, mega-donor and Madison developer Terrence Wall called the Walker Administration with a business proposition.

Terrence Wall offered his cellphone number in the letter, urging that the “appropriate person” call him to discuss possible deals for properties including the state crime lab, records obtained by The Associated Press show. Wall also offered his support for the change in the bidding process, an idea that originated with Walker.

Wall sent the letter on June 10. The Republican-controlled Legislature agreed 11 days later to allow no-bid sales of state properties over the objection of Democrats, who argued that it opened the door for political cronies to be cut special deals.

This isn't T.Wall's first run-in with sketchiness. His lame attempt to run for Senate in 2010 was put down for good soon after One Wisconsin Now revealed first that Wall dodged $34,000 in property taxes by claiming development land he bought in Middleton was being used for "agriculture", and later showed that Wall paid zero state income taxes for 9 out of 10 years between 1999 and 2008, despite accumulating tens of millions in assets in that time.

So to believe T.Wall and Scott Walker would be involved in behind-the-scenes deal-making to put big money into their pockets at taxpayer expense isn't exactly far-fetched. The same apparently goes for Joint Finance Co-Chair John Nygren.

But Rep. John Nygren, co-chairman of the Legislature’s budget committee, said lawmakers would seriously consider any proposal.

“If he stepped up and made an offer we couldn’t refuse, we’d have to take a look,” Nygren said of Wall’s proposal.

Campaign finance records maintained by the Wisconsin Democracy Campaign show that Wall has donated $77,220 since 1993 to mostly Republican candidates, including $8,854 to Walker between 2005 and 2012.

Wall's donation history sure puts a new spin on the concept of "Offer you can't refuse," eh? Then again, these guys do kinda operate like the mob (with less class).

But that's not the only pay-for-play story that hit the news in the last couple of days. Bill Lueders was out today telling us that the Walker Administration has ended its no-bid contract with Michael, Best and Friedrich after giving MBF nearly $1 million to help the Administration defend Act 10 from lawsuits.

Michael Best was originally hired by Walker on Feb. 7, 2011, four days before he announced plans to impose sweeping changes to the collective bargaining rights of public employees. The original contract was for $50,000, and set a rate of reimbursement of up to $300 per hour.

The contract has since been amended several times to increase its duration and maximum payment amount. Prior to the recent amendment, the last revision was in March 2012, when the amount was raised to $850,000. The per hour fee has not changed.

Michael Best has long been state Republicans’ go-to law firm for outside representation. The firm has represented Republican lawmakers on legislative redistricting (including housing GOP staff at its Madison offices to try to get around open records laws while doing redistricting work) and has received $368,879 for legal services from Walker’s campaign, state records show.

Walker’s contract for representation over collective bargaining challenges was signed by Michael Best attorney Raymond Taffora, formerly chief legal counsel for Republican Gov. Tommy Thompson. Taffora worked for the state Department of Justice until January 2011, shortly before the first contract.

Ah yes, Ray Taffora, who I mentioned nearly 2 years ago after it was revealed he donated $4,000 to Attorney General JB Van Hollen's campaign, then left to go to MBF and land the Act 10 contract because the DOJ allegedly lacked the manpower and expertise to fight for Act 10 on its own. It's a classic example of "you pay me, and I'll pay you back" that has been a hallmark of the way this administration has operated from day 1.

And oh yeah, let's also point out that before he left the DOJ Taffora talked with Milwaukee County D-A John Chisholm in November 2010 about the John Doe investigation into Scott Walker's doings in Milwaukee County. Sure makes you wonder what ol' Ray talked about with his new client Scott Walker two months later, doesn't it?

It brings to mind this great speech from the sorely missed George Carlin on how corporate interests like T.Wall Enterprises and Michael Best and Friedrich get great insider deals at the expense of the rest of us.



"It's a big club, and we ain't in it."

P.S. Poster/Twitterer Gnarlytrombone reminds me that Taffora was also the guy who asked the Governor's office to have the state sue Madison-Kipp Corporation as a way to head off a federal lawsuit that could potential make Kipp liable for more damages as a result of contaminating the ground water of homes on the east side of Madison. Coincidentally, Kipp just signed an agreement this week to pay $7.2 million to homeowners due to their polluting.