Paul Soglin: Waxing America

Why We Lost The Cold War

As a child growing up in the nineteen fifties there were plenty of reminders about the never-ending battle against Soviet Communism.

In and out of the classroom we knew of the value of our democracy, the freedoms we enjoyed as Americans.  We had open and free elections, though blacks could not vote in the South where the poll tax ensured the rule of whites. We could travel across our great country without having to show identification or answering to anyone as to our purpose, so long as there was no probable cause to stop us.

The differences were not limited to democratic values.

The virtues of capitalism were everywhere. In Poland, peasants stood in line for hours for a loaf of bread. In Moscow it took weeks, no months, to have a telephone installed. And the Soviet airline Aeroflot was a joke, United States Airlines Compete With Aeroflot - And Win :

At the height of the Cold War, Americans indulged in self congratulations when comparing our airline industry to the Soviet's Aeroflot. The rickety communist propelled travel provided images of a sweaty, husky commissar boarding an oversold but underfueled airplane, burdened with packages and a bottle of carry-on borscht.

As he worked his way into the seat, storing his chickens in the overhead compartment and his goats under the seat in front of him, he settled in next to an equally husky and sweaty peasant with a crying, soiled child -one  under each arm. If they were lucky, they would arrive at the scheduled destination city, and perhaps within twenty-four hours.

Onward

After the first of the year I was shopping at a big box store. The lines indicated it would take a half hour to check out. I asked the manager why there were so few clerks, "With the holidays over, no help to be had?" The response was frank and honest, "No, after the new year, we were instructed by regional to reduce our staffing to these levels."

My Facebook friends know that I spent over an hour on hold Monday with a life insurance company, a health insurance company, and a telephone company.

It was my fault trying to reach them on the first Monday after the holidays. Of course, I tried reaching them last week to no avail. There are only so many minutes one can waste on a cell phone.

Maybe the free-everything capitalists are right. We need competition. We need competition from the Communists. Then American corporations will start providing service.

Some of my friends probably think that the destruction of our Constitution under the second Bush reign with warrant-less search and seizures is a disaster. They probably think the telephone company turning over their phone records to the government without any legal authority is a travesty.

Screw the Bill of Rights.

The real travesty is the telephone company not answering the phone.

Praise Nordstroms. Praise the local Sundance 608 movie theater. Praise the Nitty Gritty. Praise the local Sentry.

 

 

 

Overture Center: Where It Went Wrong

When Jerry Frautschi announced his gift to create the Overture Center almost ten years ago, he had no firm opinion as to the structure that would operate the facility. In fact he assumed that the new facility, built on the site and concept of Madison's Civic Center, would continue with City of Madison control.

Then mayor Susan Baumann wanted no part of the facility. Her concern was the responsibility of the new performing arts center, both managerial as well as financial.

She informed Frautschi the gift was welcomed, but that he would have to find an alternative to the city when it came to ownership and management of Overture.

She informed the pubic of something different.

She told members of the city council and the press that the eventually adopted Madison Cultural Arts District (MCAD) was a condition of Fratuschi's gift. Actually MCAD served the needs of then Civic Center director Robert D'Angelo, who was looking for a structure that would guarantee him the benefits of public employment without the the inconvenience of an elected executive who might keep an eye on him.

It was a condition, not imposed by the donor, but by Baumann.

That condition set in motion a series of events and decisions which lead to the untenable situation MCAD experiences today.

The worst of all public structures is a legal public body with no constituency. 

MCAD, like Wisconsin school districts or municipalities, is a creature of the state. It is established by state law and its powers are derived from the state. Unlike the school boards and the municipalities, MCAD does not have elected leadership.

That does have some advantages. Its board, appointed by state, city and county leaders, does not have to worry about a meddlesome public.

There is a downside. There is no public electorate that cares what happens to MCAD.There are no stakeholders to turn to in a time of crisis.

Now Overture, despite performances booked and tickets sold, is facing a crisis which needs public support, but cannot obtain it. Laying off public employees may save a modest amount in operating costs, but fails to solve the larger problem of public engagement.

When Baumann made her decision, she deprived the people of Madison of a free and open debate as to how the new Overture might be operated and managed. The outcome might be the same, the MCAD.

However, it was more likely city management would continue. which then would have set in motion an entirely different set of decisions, which may have avoided today's crisis.

author's note: Wisconsin has similar structures such as the area technical colleges. Fortunately for them, there is an active public since they have the ability to tax; there are area-wide constituencies that support, or oppose, what they do.

Overture Employees Take a Holiday Hit For Failed Leadership

In an editorial that misses the mark, Cooperate to reform Overture,  the Wisconsin State Journal commends the leadership of the Overture Center for laying off employees and calls upon public officials to renegotiate the labor agreement with the union that represents the employees.

Mayor Dave Cieslewicz and the City Council should respond by reopening the city contract... to allow center management to control pay and benefits...Labor costs are by no means the only part of Overture that deserves an overhaul. But they compose the largest expense item in Overture's budget. The city's pay structure is out of line in several places...

...For example, a study found that an Overture ticket cashier earns $18.34 an hour, compared to a statewide benchmark of $10.30.

The pay structure is not out of line.

Out of line were the decisions that led to the design of Overture and the Wisconsin State Journal editorial.

The original design problems will be dealt with in a separate post, for now I will deal with the editorial.

For over twenty years the pay structure for Civic Center and subsequently Overture worked just fine. That pay structure is based on the workload and responsibilities of the staff ranging from ticket sellers to electricians.

An examination of the job descriptions is a good place to start. A ticket seller at Overture has far more responsibilities than a ticket seller in Wausau.

Next, the State Journal repeats the same mistake it committed last summer when it attempted to demonstrate that the way to deal with the financial losses at the city public swimming pool was to lower the wages of life guards. Wisconsin State Journal's Goodman Pool Editorial All Wet.

Madison pools lose money because the revenues, not the wages, are out of line.

If Madison charged individuals and families the same rates as the suburban pool operators, there would be no deficit.*

The same is true with Overture. While salaries do comprise the largest expenditure in Overture's budget, the greatest discrepancy is in the largest budget item, revenues from performances - that would be ticket revenues for the producers.

The ticket revenues are not sufficient to maintain the facility and pay the bills.

This is not about  'tough love.'

This is about a series of mistakes made in the automobile industry, the financial services industry, and in the Baumann administration's decision to turn over the operation of the Civic Center to a body with no obligation to the public. The Overture board has no constituency and never did.

As a result the employees suffer in a organizational structure that was cobbled together to meet the needs of the previous Civic Center director and those who had his ear, namely the then mayor.

The Wisconsin State Journal notes,"The economic downturn and some boneheaded financial decisions have left Overture troubled..."

Yes, I would say troubled. The fund is over $20 million lower than it should be.

Less than one percent of the losses (not the principal), would cover the cost of the slashed workers wages for another ten years.

Which gets us to the real issue. There must be a reason that the State Journal repeatedly attacks reasonable workers' wages whenever there is a financial crisis.

They are preparing for the obvious at the newspaper. The day the layoffs and the cuts come.

As Roger Ebert noted in analyzing the crash of the troubled Chicago Tribune, the problem is not the staff but the enormous debt that paper faces because its current owner, Sam Zell, bought the company on credit.

*Madison charges the lowest daily fee for a child at $2.25 while it is $2.75 in Middleton, $3.00 in Sun Prairie and a nifty $6.00 in in Shorewood for a daily guest pass (3.00 for a grandchild).

And in Madison the amenities and the recreational options are far greater than at any of these other pools.

A family membership in Madison for the season is  $145 (non -residents $285); in Middleton it is basically the same for residents and $355 for non-residents. In Shorewood it is a whopping $437 and $582. Only Sun Prairie undercuts Madison at $90/135.

Madison and Miami Suffer Winter Arts Blues

...the new performing arts center here, one term became something of a mantra among the project’s boosters: world-class...

...Center for the Performing Arts, is in administrative upheaval and struggling financially... the project was built too big and too soon, and without enough certainty that the city could even support such an ambitious venture. They say the center is yet another case of...overreaching...

“Miami is a land of speculation,” said Mary Luft, founder and executive director of Tigertail Productions, a performing arts production company. “They want it big, they want it fast, they want it now. And they got it!”

...a prominent civic activist, calls the center,... “a total misappropriation of money,” given the pressing social demands of the city, which has one of the highest poverty rates of any major city in the country.

“It’s a building inappropriate to the scale and need of the place,” said Mr. Farago...

The center was designed by Cesar Pelli and... But when the center opened ...it was already in something of a public relations and financial hole.

It opened...about $100 million over its budget at groundbreaking in 2001.

Some artists and cultural groups complained that money for the center could have been channeled into existing organizations and performing arts companies in desperate need.

The quotes above are from the New York Times.The link to the entire story which appeared December 27, 2007 is below.

We all know the consequences of certain Madison leaders failing to understand the economics of operating the Overture Center.

 Shows are booked into Overture on a regular basis. Most shows are well attended. That tells us that the facility was overbuilt.

 Layoffs will take effect January 16, 2009. Those affected are being notified today. Most of the staff affected will have the right to move into other City of Madison jobs.

 

There are simply not enough dollars in the pockets of south central Wisconsin residents to pay to keep the facility operating. There are not enough open dates or open seats to make up the operating deficit.

Raising ticket prices will only drive away more customers who are already finding it difficult to pay ticket prices and the accompanying fees and surcharges.

Meantime in Florida we learn:

Fits, Starts and Painful Bumps for Carnival Center in Miami

WMC: Wisbusiness.com Covers Changes - consensus on state business climate

Mike Schramm was kind enough to remind me that the new WMC strategy is reported in wisbusiness.com by Brian E. Clark

WMC effort looks for consensus on state business climate

With Democrats soon to control the state Assembly, as well as the Senate and governor’s office, the state’s largest business lobby is shifting gears to deal with what it calls the “new political landscape."

Wisconsin Manufacturers & Commerce, which has often been at odds with Gov. Jim Doyle, is reaching out to diverse groups -- including labor -- to develop plans to stimulate the state’s slumping economy....

Wisconsin Manufacturers and Commerce: Moving Wisconsin Forward

This past week we discussed Wisconsin Manufacturers and Commerce's (WMC) new program, Moving Wisconsin Forward, which is described in their publication What Will It take?

While WMC refers to improving or growing the Wisconsin economy and improving the business climate, which are not the same, their new program is a significant departure from previous WMC government relations ventures.

In past legislative sessions, WMC attempted to unilaterally drive through the legislature new laws, or even constitutional provisions, such as TABOR. They took no prisoners.

The reality of Republican minorities in both houses of the legislature set in and now WMC speaks of "reaching out,'" "building coalitions,'" and "collaboration."

Regardless of the motive, the new approach is refreshing and welcome.

The real test for WMC is demonstrating that it comprehends that an improved Wisconsin economy is not synonymous with lower taxes and less environmental regulation.

Wisconsin needs investment in infrastructure and and investment in human capacity. That means more transportation systems, more energy, more workforce development, and more education.

Unlike the federal bailouts, which come with virtually no oversight or regulation, growing Wisconsin must be put in perspective.

Just as some knee-jerk liberals say, "no' to anything that is good for business development, WMC must realize that they cannot say "no" to oversight or regulation that demands green technology or that extends education and training into poor neighborhoods.

There may be public investment that creates new jobs and builds factories, but it is not unreasonable to stop that programming if the jobs are located in suburbs with no public transit. There are solutions - build in the inner city or minimally require access to public transit.

Workers need training and education.  It costs more money to educate young men and women who are in households below the poverty line. In rural and urban areas WMC must support access to education, even if the cost is significant. The cost of not doing so is too expensive.

One of the biggest wastes of taxpayers dollars is the price of incarcerating so many of our state's residents. WMC must participate in discussions and solutions to end the rising crime in our state and that means more than conventional law enforcement. Real community policing is expensive.  Providing the childcare, transportation, job development, health care, and economic literacy training is costly. Again, not doing so is even more expensive.

We have highlighted some of the shortcomings of WMC's approach. We also recognize the value of WMC changing its strategy, its agenda, and broadening the discussion.

WMC, welcome to twenty-first century Wisconsin.

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?

 

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.

No Bailout for Automakers Unless...

I will not support a bailout for the U.S. automakers, General Motors, Ford, and what is left of Chrysler,  unless provision is made to stop them from lobbying and influencing elections and public policy.

It is that simple. That is the price for public money. Without proper restraints, the automakers will continue with membership in organizations like the United States Chamber of Commerce, the Institute for Tort Reform, and even Wisconsin Manufacturers and Commerce (WMC). Like bankrupt (fiscally and morally) AIG, millions of dollars will be funneled into these organizations.

AIG sent $23 million to the US Chamber.

These dollars will be used to lobby Congress, purchase television ads supporting the reelection of Republicans like Norm Coleman (R-MN), and issue ads designed to elect their friends to Congress.

More often than not these ads will elect anti-choice, anti-public education, anti-gay officials at the national and state level.

It is unconscionable that if the public, you and me, take a stake in owning the automakers, that our companies, our investment, be used to advance a right wing political agenda.