Paul Soglin: Waxing America

Wisconsin Bloggers: Individually and Collectively Inept, Inattentive, Incompetent

With one of the greatest blogging stories sitting right under their collective noses, Wisconsin bloggers sat on their collective behinds and allowed the mainstream media, the CBS Evening news with Katie Couric, to scoop them on the biggest stories of the departing year, the Shawano -SIST story of international intrigue:

Alleged Murder-For-Hire Rattles Small Town:Placid Midwest Town Turned Upside Down By Alleged Hit List And Secretive Group

All a reaction to news of an alleged hit list and claims by a so-called hit man, now telling his story for the first time.

"And I said, 'you want me to kill 60 people? You want me to kill the whole town of Shawano?" said Canadian businessman Bob Cameron.

Keteyian asked: "They were hiring you as a hit man?"

"Yes, they were," Cameron said.

"You're talking about the mayor, the city administrator, the city treasurer, the city attorney, the police chief, judges, investigators, fire commissioners," Keteyian asked.

"Uh huh," Cameron assented

Cameron says in late October he received $175,000 in wire transfers from people known to be part of a secretive group long run out of a house near Shawano called SIST.

Its is a story that could never be fabricated. The cast of characters are from the next great movie, a combined effort of the Coen Brothers and Quentin Tarantino.

The mayor (Kathy Bates) tops the list of sixty potential local victims. The Canadian hitman (Martin Short) was trying to do no more than collect some unpaid bills from the local cult when asked to wipe out half the town. The cult leader (Samuel L. Jackson in a reprise of his role of Jules in Pulp Fiction) is responsible for the investment of over $15 million in local real estate.

The real estate holdings fail and the county treasurer (Johnny Depp) is now foreclosing. The sheriff (Ben Stiller) and his deputy (Owen Wilson) manage to keep the town on edge as they tail two SIST members (Mike -Wayne-Meyers and Dana -Garth- Carvey), who prowl the city streets with a camcorder filming anyone they suspect is in cahoots with the town leaders.

SIST spokesman and attorney (Johnny Depp or should that be Robert Downey Jr.?) manages to bring some semblance of reality to the entire story claiming this was all a misunderstanding.

Sanity is maintained. The FBI agent (Brad Pitt) brings calm and peace to Shawano.(Pronounced Shawn-o as in Shauno of the Dead).

All this going on in plain view. Badger bloggers are writing about Republican committee assignments in the legislature, the performing arts, and Lake Michigan.

Phooey.

                

The United States Needs An Automobile Industry

Despite the selfishness of the U.S. automobile industry, despite their own crass stupidity, the manufacturers must be saved and their house put in order.

Systems are not self contained. The impact they have on a nation, on an economy, is not limited to the silo of their ledger books or their assets.

Communities like Janesville do not deserve plant closings when they faithfully supported the manufacturer with an intelligent workforce, purchasing the manufactured product, and providing economic concessions.

When the United States entered World War II, the existing American automobile industry was quickly transformed for a wartime economy which meant manufacturing vehicles for the United States Armed Forces.

While I do not, and would not hope, that there is ever a reason to convert our automobile manufacturing plants into wartime production units, the point is made that having the resources, industrial and human, is a national asset that cannot be measured through conventional accounting methods.

One of the reasons for our present recession is the transfer of wealth through consumer spending to foreign countries. Workers are no longer in highly paid jobs allowing them to act as effective consumers which further grows the economy.

The decline of the automobile industry is part of the problem.

The automobile manufacturers have not served themselves or us well in the last forty years. Their efforts to destroy public transit systems, to refuse to take the challenge of foreign manufacturers seriously, their refusal to build quality vehicles, more importantly fuel efficient vehicles, and their efforts to make money by joining the banking industry by making money through financing cars rather than building them, are all reasons to tell them they are getting what they deserve.

Unfortunately there are larger issues to consider in this discussion than simply payback to some well-heeled executives.

We need to fix this industry even though the managers who got us into this mess do not deserve our sympathy.

Wisconsin Manufacturers & Commerce: What Will It Take?

WMC: What WIll It Take?

 

Wisconsin Manufacturers & Commerce - Repackaging the Outfit

Despite denials and protestations, Wisconsin Manufacturers and Commerce (WMC) spent the better part of the year wracked with internal strife and dissent. First, the loss of the membership of Foley and Lardner as well as TDS Telecommunications was followed by the highly publicized withdrawal of Cullen Construction. Then came retiring UW Chancellor Wiley's article in Madison Magazine, which characterized WMC as the biggest impediment to economic growth in our state.

As the summer wore on and the fall elections approached, WMC leadership came to the following conclusions:

• A significant portion of the membership was deeply concerned about WMC's image and was threatening to leave if reforms did not take place.
• The reformers, mostly retailers with a presence in food, financial services, and health care, were a critical base of the organization and had to be taken seriously if WMC was to remain a potent political force.
• It was not possible to save a Republican majority in the Assembly.
• Given WMC's horrid public image, it was best not to do the Willie Horton style ads of previous elections, thus avoiding  more bad will and saving resources for the spring Supreme Court race.

As a result WMC adopted a strategy for this fall:

• Stay out of most of the legislative races
• Through a 'lend lease' program of money and talent, let surrogates like All Children Matter do the hatchet job on Democrats like Trish O'Neil in the November elections.
• Save resources and goodwill for the Shirley Abrahamson race, when the outcome really mattered and the rewards were greater.

There was more. The election strategy for 2008-09 needed a compliment of goodwill. The WMC image was tarnished and needed rehabilitation. WMC is now involved in a series of 'listening sessions' and discussions which are designed to further its goal of being a team player and softening its image.

As the winter goes on we will review WMC's plan to ratify its agenda, as WMC goes through the motions of 'gathering input' and "listening" to focus groups.

 

Milwaukee Talk Radio

Bruce Murphy nailed it in his summary of the Milwaukee talk radio tempest, Why We Went after Talk Radio:

Conservative talk radio is a different animal entirely. Both Sykes and WISN afternoon host Mark Belling, the two top rated such hosts in town, have expressly declared they are entertainers and not journalists, and have no obligation to present both sides of an issue. Their appeal arises precisely from a lack of good will toward certain segments of the community...

Following the national format used by Limbaugh and the others dating back to the 1980's, these formerly effective mouthpieces built an audience on two bases, the extreme right wing, and undecideds who were looking for intelligent political commentary to guide their decisions.

The last four years through a variety of techniques from providing an alternative progressive radio voice to public exposure of these charlatans the base diminished.

Murphy notes, relying on Dan Shelley's original article, "Secrets of Talk Radio", that the hosts of right-wing talk radio have no intention of engaging in rational dialog.

The nice thing is that the audience for Sykes and Belling is diminishing to the point where no one listens to them, except the true believers and those of us looking for an occasional chuckle or fodder for our blogs. 

Wisconsin's Financial Crisis

Sunday's Wisconsin State Journal published an insightful article  State budget blame game, plenty to go around

At least $1.6 billion of the state’s massive budget shortfall stems from a spend-now, pay-later attitude pervasive in both political parties in the state Capitol, analysts said.
Gov. Jim Doyle and other state leaders have blamed the two-year projected budget shortfall, which threatens everyone from taxpayers to students and the poor, on the country’s souring economy.

There will be the usual budget cuts.

The only way to solve this problem is to increase taxes, end the accounting techniques that mask the problem, and institute a quality management program that improves the effectiveness and efficiency of Wisconsin government.

Before any of this happens, legislators from both parties must demonstrate the will to fix the structural problems.

If Republicans hang back, hoping to pin a tax increase on the Democrats, nothing will happen. If Democrats refuse to insist upon tax increases that are both progressive but also give consideration to Wisconsin's business environment, nothing will happen.

The difference is most other states are better prepared for the economic crisis, having set aside in rainy day funds and reserves an average of 11.5 percent of yearly spending from their main accounts, the report found.

By comparison, as of June 30, Wisconsin had set aside just $130 million in reserves, or less than 1 percent of the $13.5 billion of state spending that year.

It was Republicans in the legislature who prevented the adoption of a budget with realistic estimates for the 'rainy day fund.' It is those same Republicans who insisted upon cutting taxes when a tax increase was needed.

We all know what happened with the so-called 'hospital tax' that was killed by the extreme right wing in the Assembly last session.

Now it is up to the Democrats to apply pressure to these Republicans and insist that they be part of a realistic solution.

The Partnership for Wisconsin

The Partnership for Wisconsin is a collaborate effort of business, labor, professional, and academic leaders committed to a sound Wisconsin economy. The Partnership is a non-profit organization whose members share a common value, namely the importance of education for the growth, security and happiness of the individual, the family, and society.    The participants share a common belief that a highly educated and trained workforce is a critical element in making Wisconsin a better place to live, work and play.

The Partnership for Wisconsin acknowledges the benefits to the individual and society of an education.

A safe and healthy community is one that provides economic security and ensures economic opportunity for all of its members. Studies show that education is indispensable if individuals and their families are to fully realize the benefits of their labor.

Male college graduates earn well over $60,000 a year from the age of 35 to 60. High school graduates in the same age range earn under $40,000. The differential for women is similar. Women college graduates will earn over $40,000 a year while female high school graduates earn about $23,000 a year.

Society also benefits form the earning power of education.  Depending upon race and gender, the additional taxes paid by a college graduate compared to a high school graduate is between $200,000 and $400,000 in the course of a lifetime.

The benefits are not as stark, but still significant, if a high school drop out  were to finish school, or if a high school graduate were to have just one or two full years of higher education.

For example the public benefit of a high school education is $209,000. That amount represents the combination of greater taxes and reduced cost to the public of a high school graduate as opposed to a high school drop out.

From society’s perspective, it always pays to invest in education.

Add to this, the demands of Wisconsin business and industry for what one major employer who described his highest priority as a “need for an intelligent workforce.” Employers need workers who can contribute productively and intellectually.

The Partnership for Wisconsin recognizes that to provide for a sound education system there must be a fair and equitable system of taxation. In encouraging public support for education, the Partnership is committed to a Wisconsin taxation plan that not only adequately funds education, job training, and workforce development at all levels, but fairly distributes the cost among all of the parties who benefit.

The Partnership for Wisconsin recognizes that adequate investment in human capital and infrastructure are critical to stimulating private investment. For that reason, we are committed to encouraging a dialogue between the public and private sectors to set an agenda that acknowledges the many direct and indirect benefits that come from such strategies.

As its first commitment, the Partnership will focus on:

• Ensuring adequate financing of public education in all districts throughout the state of Wisconsin.
• UW System education. Financing adequate so that:
  • no in-state student has to pay more than % of their tuition
  • out of state tuition is not more than 100% of the cost of educating the student
  • Faculty salaries at the Madison campus are commensurate with other Big ten Schools
  • UW system Schools are (needs elaboration from academicians)…..
• A workforce development program through the VATC System  (more detail needed)….
• A tax structure that will most likely require an increase of existing taxes, the expansion of the tax base, and or the adoption of new taxes in order to adequately finance….(identification of educational and workforce development needs) 

The Partnership feels that our state must not only have an educated workforce but that we have an enlightened citizenry that understands the externalities and the consequences, or lack of consequences, from not giving full consideration to appropriate investment in human capacity as well as the learning environment.

For that reason the Partnership for Wisconsin is committed to supporting programs that are designed to provide economic opportunity to all Wisconsinites. A healthy state economy is predicated on strategy that encompasses all areas of the state, urban, rural, and suburban.

The Partnership, from time to time, may support the work of others or engage in its own research and policy development in areas related to education, workforce development, or which support the individual’s ability to further their education and training.  This may also include the examination of collaborations with employers, both for profit and non-profit, that are in need of an ever expanding educated workforce.

The Partnership recognizes that many factors enter into the decisions of investors to locate businesses in a community. Reputable studies show that public safety, efficient transportation systems – both public and private, a sound environment, cultural and recreational opportunities, along with fair taxation and a friendly attitude towards economic development are all critical elements that affect decision making.  For that reason the Partnership for Wisconsin, will convene workshops and forums throughout the state to discuss how to improve the economic climate.

Particular attention will be paid to how the international economic environment impacts Wisconsin business and the need to create sustainable industries that can compete in an economy that will afford greater opportunity to businesses that are ‘green.’

Dr. Martin Luther King Jr., noted for his leadership in the civil rights movement could have found an alternative career as a leader in the quality movement when he said “All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.”  The Partnership for Wisconsin joins in Dr King’s sentiment and is committed to urging both business and labor to collaborate to the greatest degree possible in providing fair and decent wages and benefits, working conditions and hours, and at the same time appreciating the contribution to improvement that every employee can make.

While the Partnership will not become involved in disputes between employers and organized labor, it will urge that resolution of differences be made with an eye to the long term consequences as well as the short terms needs of both parties.

Wisconsin has a long tradition of utilizing the research capabilities of its universities for the advancement in health, science, nutrition, safety, technology, culture, societal organization, and a greater understanding of the human condition. For that reason the Partnership for Wisconsin is committed to supporting research and academic freedom in all of our institutions of higher learning.

 

author's note: This is a draft written six months ago and now available on another web site. Over the past year I met with many Wisconsin business leaders. They were unhappy with Wisconsin Manufacturers and Commerce (WMC). They felt that WMC should be ignored and that a new organization established in our state. Based on what they were saying and my discussions with labor and academic leaders, I drafted a plan for the Partnership for Wisconsin.

 

I will post next week its origin  and why it relates to our state's economy.

Wisconsin's Three Billion Dollar Hole

It is fun winning elections. It is no fun running a government in miserable economic times. The Milwaukee Journal Sentinel tells us: State Democrats face $3 billion budget hole

Capitol Democrats, you just got what you wished for. Are you still sure it's what you want?

For at least two years, you'll have to run state government - and it's in a deep financial hole.

...crafting the next two-year budget. That won't be easy because Doyle has said that budget faces a deficit of more than $3 billion.

The problem goes back a decade to flush times when the Republicans spent without limit, cut taxes, and failed to save for a rainy day. Then came the economy collapsing when the dot com bubble burst and the subsequent stock market collapse following 9/11.

The Democratic majority is inheriting a structural problem that goes back to when the Republicans controlled the Governor's office and at least one if not both houses of the legislature. 

In recent years the best Governor Doyle and the recent Democratic Senate majority could do was jerry-rig temporary solutions and hope the economy would recover so that sales taxs and income tax revenues would increase. Assembly Republicans made sure there were no permanent solutions. Matters only got worse.

There are some tough choices facing the legislature and the Governor next session. Fail to raise taxes, and the state's infrastructure collapses and the budget deficit worsens to the point where it can create permanent damage to Wisconsin's economy.

Raise taxes imprudently, and Republicans will exploit the crisis by appealing to beleaguered home owners on fixed incomes. The irony of course, is that the Republicans and WMC enacted numerous tax cuts in the recent years that benefited the wealthy and shifted the responsibility of paying for government onto middle class families with incomes well under $100,000.

Revenue collections must be increased.

The worst way to do it is is to follow the Republican-WMC model by shifting costs to the property tax. Most desirable is increasing the income tax rates and make it more progressive. That combined with modifications to the sales tax open up creative solutions.

Democrats must come to understand that expansion of the sales tax may not be all that regressive. Especially when we consider that a significant portion of it is paid by out of state residents. The legislature must look at increasing the rate, especially to help pay for education, and expanding what it covers while leaving the exemptions for health, shelter, and food, along with modifications to the income tax.

Keep in mind that while WMC bellows about Wisconsin being one of the highest taxed states, that claim is misleading. Government gets revenue from two sources - taxes and fees. Wisconsin is a very low fee state. When fees and taxes are combined, total government revenues collected by Wisconsin put us in the middle of the 50 states.  A reasonable increase in sales and income tax revenues will not change our competitive position.

As for the continual loss of manufacturing jobs, that is a product of Republican-Gingrich-Norquist based trade policies that contend that there should be free international markets even though Asian competitors pay slave wages and their industries are heavily subsidized by their governments.

When Washington fixes the trade problems, Wisconsin will do just fine as long as we have an educated, well-trained work force.

Wisconsin Manufacturers and Commerce: Attitude Adjustment. Not

This week's Isthmus says, Wisconsin Manufacturers & Commerce tones it down a notch.

Correctly noting that the tone of this fall's election television advertisements designed to elect Republicans are by WMC's own admission, "reposition(ed)." Erik Gunn reports:

Such ads are a departure for WMC, which is better known for its spots trashing state Supreme Court Justice Louis Butler as "Loophole Louie" or, earlier, portraying Gov. Jim Doyle during his successful 2006 re-election bid in a green, toxic haze to suggest he is a crook.

We recall that it took enormous pressure to get WMC to make these modifications to its political message. They only did so  when the image of the individual members was tarnished by the trash they produced in previous elections.

Left to their own devices, WMC would resume creating more "Willie Horton" style messages.

It is clear that WMC's market position was assumed by such groups as the Coalition for America's Families, the Club for Growth and All Children Matter which continues to produce WMC-style attack ads.

All Children Matter is running nasty spots that have nothing to do with children or the truth.

The Government Accountability Board may or may not get the power to regulate these ads so that the public knows who is paying, but the WMC misinformation machine will continue to roll.

These public advertisements are just one face of the WMC propaganda effort.

When the new session of the legislature opens next year, expect WMC to continue to publish distortion and after distortion about Wisconsin tax levies, expenditures for compensation packages of public employees, and of course, the record of Wisconsin Supreme Court Chief Justice Shirley Abrahamson.

WMC is not going to go quietly into the night.

The Price of Gasoline A Year Ago; A Barrel of Oil Drops to One Year Low

Today, oil reached its lowest price in a year, trading below $80 a barrel in London for futures delivery, though the current price is still $83. I filled up the tank and payed $3.35 per gallon in Madison.  A year ago, the average price for regular was $2.86.

Here are some sample prices by state for a year ago and today.

State   2007     2008

AL      2.66      3.45

CA     3.02       3.51

NJ     2.61       3.09

TX     2.64       3.20

                                      

Do not hold your breath waiting for pump prices or home heating costs to drop to 2007 levels unless that becomes the silver lining in a depression, not recession, that rivals 1929.