Steve Prestegard.com: The Presteblog

We’re number 17!

July 12, 2012

The latest sign of the state’s slow improvement in business climate comes from CNBC.com’s America’s Top States for Business, which improved Wisconsin from 25th a year ago to 17th.

As I wrote here a year ago, this comparison “measures the states by their own standard: the selling points they use to attract business. We separate those pitches into the ten categories, which are then weighted in the study based on how frequently the states use them as selling points.”

Most business climate comparisons rate states based not on the seller’s perspective, but the buyer’s — that is, the perspective of businesses that have to deal with the tax and regulatory structures of each state, as well as the other things that go into a state’s share of the U.S. economy. The “buyer” is the one deciding to do business, or not, in a specific place, but it’s interesting to see how a state does what it claims to do, or be good at doing.

Wisconsin ranked below Minnesota (11th), Iowa (12th) and Indiana (14th), but ahead of Ohio (25th), Illinois (26th), Missouri (27th) and Michigan (33rd). Wisconsin also got closer to the three Midwestern states ranked better than Wisconsin while leaping over Missouri, which are positives.

Wisconsin’s 17th ranking is the sum of ranking 15th in cost of doing business, 43rd in workforce, 14th in quality of life, sixth (up from 22nd) in infrastructure and transportation, 34th (down from 22nd) in the economy, 10th in education, 20th in technology and innovation, 27th in business friendliness, 27th in access to capital and 23rd in quality of life.

CNBC explains the economy ranking thusly: “A solid economy is good for business. So is a diverse economy, with access to the biggest players in a variety of industries. We looked at basic indicators of economic health and growth.”

That suggests (besides being merely top third now overall) that a lot of work still needs to be done by the Walker administration and the Legislature. The corporate income tax rate of 7.9 percent gives Wisconsin (when added to the federal corporate income tax rate) one of the highest corporate income tax rates in the world. The 7.75-percent personal income tax bracket affects every owner of a subchapter-S corporation. As for “access to the biggest players in a variety of industries,” just nine of the S&P 500 has operations in this state.

The economy ranking also shows that state government did not do enough in 2011 to improve the state’s economy. Replacing the Department of Commerce with the Wisconsin Economic Development Corp. was only a start. Appointing more business-friendly administrators across state government was only a start. Creating job-creation tax credits doesn’t cost state government money if no jobs are created, but businesses don’t make job creation decisions based on job tax credits.

As for the workforce ranking, “We rated states based on the education level of their workforce, as well as the numbers of available workers. We also considered union membership. While organized labor contends that a union workforce is a quality workforce, that argument, more often than not, doesn’t resonate with business. We also looked at the relative success of each state’s worker training programs in placing their participants in jobs.”

That sentence about unions and business makes one wonder if a brave legislator can be found to introduce a bill banning closed shops in Wisconsin. The educational level measure is also interesting given that there are a lot of college-educated people among the unemployed today.

I’m not going to mention further the improvements in rankings, because this blog doesn’t exist to be a cheerleader for this state or for Gov. Scott Walker or Republicans. Wisconsin was ranked in the top five in no area. An eight-position overall jump didn’t warrant inclusion on CNBC’s list of most-improved states. Even Walker’s congratulatory news release admits:

“This improvement in our ranking shows we are on the right track,” Governor Walker said. “We’ve made great strides in improving the business climate in the state over the past year and a half, but there is more work to be done.”

There certainly is. For one thing, legislators need to create a mechanism to essentially prevent taxes from increasing in the way that Walker’s predecessor and the 2009–10 Legislature increased taxes. Everyone whose fingerprints are on those tax increases is directly responsible for Wisconsin’s poor business climate rankings up until the past year, because while business climate comparisons differ in what they measure and to what extent, every single one of them prominently includes taxes.

Does that require a Taxpayer Bill of Rights? A supermajority requirement or voter referendum to increase taxes? Do them all, as far as I’m concerned.

To finish in the top third among the states is better than finishing in the middle. (And it’s certainly better from the state’s 37th ranking in 2008.) But 17th isn’t nearly good enough. State government’s goal should be for the state to finish number one in the Midwest and, at a minimum, in the top five nationally, regardless of the business climate comparison.

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Presty the DJ for July 12

July 12, 2012

Music

Today is the anniversary of the Rolling Stones’ first public performance, at the Marquee Club in London in 1962. They were known then as the “Rollin’ Stones,” and they had not recorded a song yet.

If you’re going to record just one song that gets on the charts, ending at number one would be preferable, whether in 1969, or in the year 2525:

Today in 1979 was one of the most bizarre moments in baseball history and/or radio station history:

(more…)

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Facebook Graphic of the Day

July 11, 2012

US business, US politics

Three years ago, he who wants to end the George W. Bush tax cuts (and raise taxes on most Americans) said:

Oh wait, says the Washington Post:

President Obama on Monday called for an extension of the George W. Bush-era tax cuts for the middle class, setting up an election-year showdown with congressional Republicans and sharpening the contrast with Republican rival Mitt Romney on the crucial issues of taxes.

At an event staged in the East Room with working families, Obama announced that he would support a one-year extension for households earning less than $250,000, citing the tough economic times “when so many people are trying to get by.” But the president added that he supports allowing the tax cuts to expire at the end of the year for higher-income earners, putting him at odds with the GOP, which favors extending them for all income levels. …

The tax cuts dating to the Bush administration are set to expire for all income levels at the end of this year. And the debate over tax fairness has grown more pronounced with the looming deadline, this winter, of the “fiscal cliff” — a combination of mandatory spending cuts and tax increases agreed upon last year to tame the deficit that many economists believe could throw the country back into recession. …

House GOP leaders have scheduled a July 23 vote on a one-year extension of the tax cuts for all income earners, and they charged that the president’s plan would raise taxes on small-business owners.

“President Obama is still asleep at the switch when it comes to our economy and jobs,” House Speaker John A. Boehner (Ohio) said Monday. “In the wake of another weak jobs report, the president is doubling down on his quixotic call for the same small-business tax hikes that have been routinely rejected by the House and Senate.”

Interesting admission from the White House that “so many people are trying to get by.” Recall from Monday that since World War II no president has ever been reelected with the unemployment rate higher than 7.4 percent. It is now 8.2 percent.

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Presty the DJ for July 11

July 11, 2012

Music

Today in 1969, David Bowie launched “Space Oddity” …

… and the Rolling Stones released “Honky Tonk Woman”:

The number one song, alone, today in 1987:

(more…)

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Oh look! Rural people!

July 10, 2012

media, Wisconsin politics

It’s interesting to see those who don’t realize that most of Wisconsin is actually rural (that is, those who live in greater Madison or Milwaukee) to observe those who made America’s Dairyland America’s Dairyland.

Isthmus, of the People’s Republic of Madison, reports the observations of a UW professor:

At a forum last week hosted by the local chapter of the Society of Professional Journalists, political science professor Katherine Cramer Walsh made a stark observation, culled from five years of conversations with residents around Wisconsin. “In most communities,” she said, “the public workers are the ones who are rich.”

Not “comfortable” or “middle-class,” but rich.

Walsh’s comments came as she offered suggestions for what people on either side of the political divide need to know about the other in order to start mending fences.

For Barrett supporters, she said, “It’s useful to hear that, especially in smaller communities, public employees are the only ones making decent wages and getting insurance and benefits,” she said. For these residents, she added, “it’s a question of public employees versus private employees, not rich versus poor.”

Walsh claims to be a Wisconsin native and the daughter of two teachers. Her bio doesn’t say where in Wisconsin she grew up. Isthmus recounts the tale of Walsh’s visit to northwest Wisconsin in 2008:

She says that a group of loggers, most of whom were self-employed, believed that while schoolteachers may work hard during the year, they have cushy positions. Among the perks: great benefits, health care, summers off and an annual salary of about $50,000 a year. “Nobody in this town makes anywhere near $50,000,” says Walsh, paraphrasing comments she heard. “At the lumber mill, they’re making $20,000 and losing their fingers!”

Walsh says when she probes further, asking why people see a public employee/private employee divide and not a rich/poor divide, she gets stares of disbelief.

It seems to come down to what is tangible and what can be controlled. Private-sector workers, many of whom are struggling, perceive that a large portion of their taxes are going to pay for the salaries of public workers. A cut to public-employee wages and benefits would, at least in theory, mean lower taxes.

But these same people don’t see themselves as having any control over the salaries and benefit packages of CEOs in the private sector, says Walsh. Moreover, they don’t really see anything wrong with top executives making big bucks.

“There’s very little blame on the private market,” says Walsh. “It always comes back to government.”

Well … a large portion of the taxes of private sector workers are going toward public employee salaries. The biggest part of any unit of government’s budget outside state government is employee compensation. For state government, it’s second largest after shared revenue. And of course you know what funds government employee salaries.

Rural people learned well that the phrase “we’re from the government, and we’re here to help you” is a threat, not a greeting. The phrase “Damn Near Russia” as an alternative name for the Department of Natural Resources did not come from Madison.

Walsh helpfully debunks a claim of an ignorant Democratic legislator (but I repeat myself):

State Rep. Terese Berceau (D-Madison) says that Republicans have cultivated this “politics of resentment.”

She says that when she grew up in Green Bay in the 1960s, things were not always easy, but “we didn’t feel that the next-door neighbor was the enemy — that somebody had a job and we should hate them for it.” …

Walsh says the current GOP leadership in the state might have seized on simmering resentment about public workers, but they did not create it.

“The interesting thing to me, being here in Madison and watching events unfold, is knowing that a lot of the sentiments Gov. Walker and the Republicans tapped into were not manufactured, but were out there well before the governor [took office].”

By the way, if you’re wondering about Walsh’s advice to Walker supporters, it was this: “It would be helpful for them to sit down with public employees — to hear that they are concerned about the future, the financial well-being of their community, and that they also work hard.”

That last sentence is sort of a non sequitur. Walsh’s first two points about concern for the future and “the financial well-being of their community” is belied by the flood of government-employee retirements in the past year. (No private-sector employee jumped into retirement in their 50s over the cost of their benefits.) I never claimed government employees, particularly teachers, don’t work hard. Conservatives do not further their cause by harping about teachers’ summer vacations; looking at the number of hours a teacher works over the entire year is more to the point.

But private-sector workers also work hard, and for less pay and benefits. Small business owners work longer hours than their employees, pay 100 percent of their benefits, and have their entire financial fortunes tied up in their businesses. And you would have to look hard during Recallarama to find anyone with a title at the Wisconsin Education Association Council or AFSCME, or anyone with a D after their name, to acknowledge those facts. (For that matter, I wonder how many Ds from Madison or Milwaukee have ever milked a cow or shoveled manure … other than what comes out their caucus, that is.)

7 comments

More than just water

July 10, 2012

Culture, media

The Troglopundit is happy that two of his beverage choices have been affirmed by science.

I assume he starts in the morning with …

Oh, fine, it doesn’t cure cancer, but it might help prevent cancer:

Drinking more than two cups of coffee per day, or any other combination of caffeinated beverages, may lower your chances of developing skin cancer, a new reports says. The results included other caffeinated products such as soda, tea and chocolate.

The report in the journal Cancer Research found that caffeine potentially reduced the risk of developing basal cell carcinoma, a common form of skin cancer though generally considered less serious than melanoma.

“Our data indicate that the more caffeinated coffee you consume, the lower your risk of developing basal cell carcinoma,” said Jiali Han, Ph.D., associate professor at Brigham and Women’s Hospital, Harvard Medical School in Boston and Harvard School of Public Health.

Just look how long it took them to introduce Dr. Han. It must be true!

… and then finishes his day with …

According to a recent review of more than 18 studies on booze, beer is just as good for your heart as vino. Drinking a little more than a pint of beer a day could make you 30 percent less likely than non-drinkers to suffer from stroke, heart attacks, and heart disease, researchers found. Credit heart benefits to the alcohol itself, and polyphenols (antioxidants) in beer. And make sure to drink that beer with a smile.

I’m not going to get into the beer vs. wine argument. As you know, Benjamin Franklin spoke fondly of wine …

“We hear of the conversion of water into wine at the marriage in Cana as a miracle. But this conversion is, through the goodness of God, made every day before our eyes. Behold the rain which descends from heaven upon our vineyards; there it enters the roots of the vines, to be changed into wine; a constant proof that God loves us, and loves to see us happy.”

… though he and other Founding Fathers clearly enjoyed ale as well, most notably Thomas Jefferson:

“Beer, if drank in moderation, softens the temper, cheers the spirit, and promotes health.”

By the end of today, I suspect I will have ingested both.

1 comment

Presty the DJ for July 10

July 10, 2012

Music

Two anniversaries today in 1965: The Beatles’ “Beatles VI” reached number I, where it stayed for VI weeks …

… while the Rolling Stones’ “Satisfaction” was their first number one single:

(more…)

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Unemployment by 2013

July 9, 2012

US business, US politics

The Washington Post reports:

The news from the Bureau of Labor Statistics this morning that the economy added just 80,000 jobs in June and the unemployment rate stayed stuck at 8.2 percent suggests that any hope that President Obama will be able to run for reelection bolstered by an improving financial picture is rapidly disappearing. …

This is the third straight month in which the jobs report has underwhelmed. The 80,000 jobs added — well below expectations in the run-up to this morning’s report — comes after the economy added 68,000 and 77,0000 jobs in April and May, respectively. June’s 8.2 percent unemployment rate is the same as it was in May and a slight bump up from the 8.1 percent rate in April. …

And, remember that when it comes to the economy, it’s the trend line that matters. Ronald Reagan won re-election in 1984 not because the unemployment rate was at 7.4 percent but because that number represented a precipitous dropoff from where it had been 18 months earlier. Worth noting: No president since World War II has won re-election with the unemployment rate higher than 7.4 percent. …

To simply drop the unemployment rate below 8 percent before election day, the economy will need to add 219,000 jobs in each of the four jobs reports between now and then — a prospect that, given the last three months, seems very unlikely.

This graphic Ken Gardner posted on Facebook is, to quote Gardner, “brutal”:

Victor Davis Hansen is a historian, not a mathematician or a physician, but he has a formula:
After sharp recessions, we usually get more robust than average recoveries, but since June 2009, things have not recovered at all really, and we are in a sort of permanent European-style slowdown — sort of a recession, sort of a weak recovery.

If one wanted to ensure permanent 8 percent to 9 percent unemployment, one might try the following:

1. Run up serial $1 trillion deficits

2. Add $5 trillion to the national debt in three and a half years

3. Impose a 2,400-page, trillion-dollar new federal takeover of health care, with layers of new taxation, much of it falling on the middle class and employers, even as favored concerns are given mass exemptions.

4. Scare employers with constant us/them class warfare rhetoric about a demonized one-percenter class and its undeserved profits; constantly talk about raising new taxes and imposing regulations, ensuring uncertainty and convincing employers of unpredictability in regulation and taxes. You cannot convince a country to go into permanent near-recession, but President Obama is doing his best to try.

5. Appoint a bipartisan committee to study the fiscal crisis and then neglect all its recommendations.

6. Subsidize failed green companies, while denigrating successful gas and oil concerns, as well as putting rich oil-and-gas federal leases off limits.

7. Vastly increase unemployment insurance, disability, and food-stamp constituencies, while promising all sorts of mortgage, credit-card, and student-loan bailouts.

8. Borrow hundreds of billions for stimulus programs that are not shovel ready, but are rather aimed to bail out state budgets, pensions, and unions.

9. Federalize elements of non-profitable private companies, while threatening to shut down profitable plants for supposed union or environmental incorrect behavior.

10. Do not address changing the above policies, but rather blame others for such self-induced stagnation.

Do the above and you can pretty much always ensure something like the present slow-down. Both employers and consumers are convinced that these are uncertain times, when money is better hoarded and protected rather than risked, given the uncertainty of administration policy and the certainty that profit-making is looked upon as suspicious.