Posts Tagged ‘Stimulus Watch’

Examining a Federally Funded $6 Million ‘Green Jobs’ Boondoggle in Wisconsin

Less than Two Dozen Jobs Created

MacIver News Service | January 4, 2012

[Madison, Wisc...] The problems with ‘green job’ creation and the incompetence of the federal government are both evident when analyzing how a “Stimulus” program failed to produce jobs in Wisconsin.

Other than a couple government administrators and about a dozen tech college instructors, the Recovery Act’s Green Jobs Program has not created any jobs in Wisconsin.

Wisconsin received a $6 million award for its version of the green jobs program called Sector Alliance for the Green Economy (SAGE). The stated goal is the “greening” of Wisconsin’s workforce. On paper, the US Labor Department expected the money to help place 2,120 Wisconsinites into permanent jobs.

Wisconsin shouldn’t have too much trouble accomplishing that goal because the only people allowed into SAGE already have jobs. The program works exclusively with the apprenticeship program, and in order to be an apprentice, you need to have a job.

So, at best, this ‘green jobs’ program was about turning regular old non environmentally-friendly jobs green. At worst, it was merely seen as ‘free’ money from the feds.

Interestingly, Wisconsin’s grant application for this money stated SAGE would provide the existing workforce necessary training to fit into the allegedly emerging green economy, “including many who lost their jobs due to Wisconsin’s decline in manufacturing jobs, such as auto industry losses in Rock and Kenosha counties.”

That would have fit in with the intent of the Recovery Act. In his first State of the Union Address, President Obama stated “Over the next two years, this plan will save or create 3.5 million jobs. More than 90% of these jobs will be in the private sector – jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.”

The Labor Department’s Inspector General recently completed an audit of the program and stated “The purpose and principle of the Recovery Act was ‘to assist those most impacted by the recession,’ and to expend funds ‘as quickly as possible consistent with prudent management.’”

Yet, the Inspector General also noted the purpose of the Green Jobs Program was to provide green jobs training and collect green jobs labor data. Therefore its not surprising that nationally, the $500 million program has only resulted in 1,336 people being placed in permanent jobs out of the 69,717 goal. See: What the heck is a green job anyway?

Wisconsin’s $6 million share of the program is being spent exclusively in coordination with the Bureau of Apprenticeships. The funds are being spent on green job training expenses among the trades and the tech colleges for the apprentices.

Some of the items the money is being spent on include a virtual paint booth ($65,000), a wind tower mock up ($20,000), and various laboratory equipment ($58,000). However, only $247,000 of the grant was marked for equipment.

Most of the funds were to be spent on instructors. A weatherization technician was budgeted at $400,000 over three years.

An energy auditor was planned to cost $150,000 for one year.

A wastewater treatment operator would make $120,000 for the first year.

In all $1.7 million was spent on 15 instructors, most of whom would only work for one year. It would cost another $450,000 to train the instructors.

Regardless of how one judges the merits of paying the instructors that much money, one thing is certain. These “stimulus” funds did not create the thousands of jobs that were promised, green or otherwise.

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Posted in News | January 4, 2012 | | Comments Off

President’s Estimates Meet Reality

Click here for the full article

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Posted in mi fast facts | September 12, 2011 | | Comments Off

From John Taylor’s blog, Economics One, A Comparison of Two Recoveries

Go to Economics One to see the entire article.

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Posted in mi fast facts | June 24, 2011 | | Comments Off

Welcome (Back) to Wisconsin, Mr. President (Again)

Tuesday, September 28, 2010

Dear President Obama,

Welcome back to Madison, Wisconsin—the site of one of the largest 2008 campaign rallies in support of Hope and Change.

Madison is home the Wisconsin State Capitol, the University of Wisconsin and is the heart and soul of the Democratic Party of Wisconsin. Madison is the bluest of blue cities and is the seat of Dane County, the most liberal of Wisconsin’s 72 counties. The tens of thousands who greet you today will warmly embrace you and vocally support your policies. You are always welcome in Wisconsin and, although you were here just three weeks ago, we are happy you have chosen to come to America’s Dairyland, yet again. We realize there are dozens of other places where you could appear before an adoring crowd, many in this country, even.  We are honored that you keep coming back to our state, and to our capital city, in particular.

As we are sure you are aware, Madison is also home of the John K. MacIver Institute for Public Policy, the Free Market Voice for Wisconsin. In fact, our office is a mere mile or so away from the site of your event today. So, we would be remiss if we didn’t proffer a few questions we hope you will answer during your exciting political rally.

Where are the jobs you promised?

Not only does the liberal hotbed of Madison guarantee you a favorable crowd, there is another benefit of coming to Dane County. Thanks to steady, taxpayer-funded employment provided by the largest public university in the state, and the jobs directly and indirectly tied to state government, unemployment in Dane County is a mere 5.4 percent. Had you chosen to visit Rock (10.2), Kenosha (10.1), Milwaukee (9.6), Marinette (10.3), Rusk (10.0) or Marathon (8.2) counties there would have been plenty of people with free time to come fill the seats, but the crowd may not have been as friendly. Since your Inauguration, Wisconsin’s economy has actually lost 111,500 jobs.

Should we be concerned that your economic team is bailing from the White House?

White House budget director Peter Orszag resigned in June. Christina Romer, chairman of your Council of Economic Advisers, has left her post. Economic Adviser Larry Summers has announced he is leaving soon. Rumors abound that Rahm Emanuel, your Chief of Staff, will soon take his Chicago-style politics straight to the Windy City itself in a bid to replace the departing Mayor Daley.

Some would see this as evidence your Administration is in disarray. We prefer to take the glass half full approach. Perhaps this is an opportunity for you to turn away from the failed Keynesian policies that are choking all growth potential in our economy.

If you are serious about spending, can we just bank the unspent stimulus funds, including the billions slated for a unneeded hodgepodge of high speed rail projects?

Your budget director, before he resigned, boasted about the Administrations efforts to control spending. In an entry dated May 24th, Orzag wrote: The Reduce Unnecessary Spending Act of 2010 alone is not enough to cut waste, streamline government operations, and create a government that is more responsive to the American people. Rather, it is part of a larger effort the President has undertaken to rein in wasteful spending.

According to the official Recovery.gov website, more than $250 billion  of the $787 billion stimulus funds have yet to be spent.

Much of this spending is for the construction of dubious projects like the little-used Milwaukee to Madison train line.

Can we agree to stop the ‘stimulus’ spending, today, and focus on ‘needs’ instead of funding a wish list of ‘wants?’

One last thing… about that push for education reform?

Just last November, you launched the Department of Education’s Race to the Top right here in Madison. While Wisconsin failed in that race (not once, but twice) we were still proud you chose us to host the announcement. The stated goal of the RTTT program is to encourage and reward states that are creating conditions for education innovation and reform. Yet, at MacIver, we’re concerned that your treatment of Washington, DC’s school choice program could be construed as evidence that RTTT is merely about spending more on an existing system rather than fundamentally improving the educational outcomes for children.

Proposed regulations on for-profit education will stand to shut down another avenue of innovation and reform for Americans as well. This will essentially choke out hundreds of institutions in order to create a less crowded playing field for public run institutions. However, if competition breeds the best environment for change, progression, and the evolution of a product, how can the removal of a key player be seen as a step forward for American education?

In any event, we do, sincerely, welcome you to Wisconsin. Today marks your sixth visit to this state since your Inauguration and your third this year.

Having long established itself as a progressive stronghold, many observers are surprised that you have felt compelled to come back so often. Yes, this state is bleeding jobs. Yes, the Tea Party movement is strong here. Yes, there is a growing discontent over out-of-control spending in general and the Milwaukee-Madison train boondoggle in particular. Yes, there is evidence that public employee unions, especially the teachers’ unions are losing their grip on power here. Still, we’re surprised to see you again, having just hosted you on Labor Day. (This year’s Labor Day, less than a month ago).

Don’t get us wrong, we are happy to receive the attention. However, if you keep showing up here every three weeks, we have to wonder whether you will make it to all 57 states before the end of your term.

In any event, Welcome. We will be on hand to hear your answers to these questions today. And if you can’t make it up to the Capitol Square this afternoon to stop in for a tour of our modest offices, maybe you can squeeze it in some other time. Perhaps when you come back here next month???

Sincerely,

Brian Fraley
Communications Director
The John K. MacIver Institute for Public Policy
www.MacIverInstitute.com

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Posted in mi perspectives | September 27, 2010 | | 3 Comments

MacIver Institute: Analysis of New Data Shows MPS on Verge of Bankruptcy

[Madison, Wisc…] An analysis of data provided by Milwaukee Public Schools paints a bleak picture for the financial stability of Wisconsin’s largest school district.

A report issued this week by actuaries at Gabriel Roeder Smith & Company shed light on a $2.398 billion unfunded liability when it came to Other Post-Employment Benefits (OPEB) in Milwaukee Public Schools. These funds, which cover items like health and life insurance, are applicable to thousands of retirees who won’t set foot in the classroom this year, and thousands more candidates who never have.

“Our continued analysis shows that MPS does not suffer from a shortage of taxpayer funding,” said Brett Healy, President of the John K. MacIver Institute for Public Policy. “Rather, the children of Milwaukee are suffering from the politicians’ inability to say ‘no.’”

MacIver’s review of the data found:

  • MPS’s actuarial liability, the unfunded debt created through providing OPEB funds, is growing at an alarming rate as well. From July 2007 to July 2009, this shortfall increased from $2,222.7 million to the current figure we have today – a gain of nearly $175 million in just two years. While retirees are making use of their benefits, the District is failing to cover the bill, instead deferring much of the cost for future payment because of budgetary concerns. While this removes the problem from the spotlight in the short term, it creates a looming cloud of debt that may cripple MPS in the future.
  • However, these benefits, which cost hundreds of millions of dollars annually, don’t exclusively go to teachers. The wide scope of OPEB reaches to spouses, secretaries, mechanics, lunchroom workers, custodians, and even board members – who need just eight years of service to qualify for full benefits. While 12,143 active and retired teachers (and their spouses) claimed benefits, 5,030 of the individuals served by Milwaukee’s OPEB have never taught a class in MPS.
  • At an average annual cost of $10,939.71, these non-educators covered by MPS’s pension benefits added over $55 million to the district’s burden between 2009 and 2010 alone.
  • This obligation comes from a funding disparity that allows OPEB costs to be set aside and accumulate debt, essentially creating a larger burden for future generations to deal with. Employer contributions to this fund have historically fallen way short of annual OPEB costs, covering only 29.8% of the actual price of insuring retirees over the past three years.
  • These obligations, which hover between $175m and $200m annually, present a major burden on educational budgeting, and each year that the full cost is not met shifts a greater expense to be paid at a future date. As a result, approximately $388 million in obligations have added up in the past three years alone.

Click here for MacIver’s analysis.

“The depth and breadth of retirement benefits at MPS is staggering,” said Healy. “To have school board members qualifying for full benefits after just 8 years and over 5,000 individuals in the system who have never taught a single day in their lives yet are in line for a lifetime of health benefits, is astonishing.”

The Governmental Accounting Standards Board (GASB) is the body that sets the accounting standards for state and local governments. In 2004, GASB imposed regulations forcing local governments, including school districts, to provide full transparency of their future health care liabilities. As a result, these units of government were forced to provide accountable reports detailing where and how health care funds were being spent and where the money was coming from to foot the bill. On Tuesday, a committee of the MPS Board received the latest actuarial assessment of their non-pension related obligations.

“The children of Milwaukee deserve better,” said Healy. “To saddle their future with this level of debt is unfair and just plain wrong and if the school board does not make dramatic changes soon to stem the benefit tsunami, MPS will have no other option but to declare bankruptcy.”

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Posted in News | August 26, 2010 | | 2 Comments

Hearing from the People Re: Milwaukee to Madison Rail Project

I had the pleasure of meeting many of my neighbors the other night and enjoyed a lively discussion on the topic of the so-called high-speed rail line between Milwaukee and Madison.

We came with questions. Many also came with something to say.

The meeting Tuesday night before at Brookfield City Hall got off to an inauspicious start when the overflow crowd was informed that “This is not a public hearing,” and that as is customary for all City Council meetings there would be 15 minutes set aside before the Council meeting began for the public to offer comments.

Fortunately, and to his credit, Mayor Steve Ponto waived the formalities and gave all those in the assembled crowd the opportunity to speak for a few minutes, providing they did not repeat comments or assertions made by previous speakers.

Well done, Mr. Mayor.

Because of Ponto’s rational decision, the crowd of more than 100 heard from a dozen or so speakers who expressed their opinion on the train in general, and the question of a proposed station in Brookfield in particular.

One woman hit the nail on the head early on in the evening,

“My main concern is for the city of Brookfield. I am really concerned about this cost and everything this is going to do to the taxpayers of this city,” she said.

While I have larger concerns with the project as a whole, as a Brookfield resident, homeowner and property tax payer, I echo her comments.

After about 40 minutes of public testimony (the crowd was approximately 80 percent opposed to the train) the Council began their meeting with a briefing by a few of the State Department of Transportation representatives who are working on the Milwaukee to Madison rail project.  They provided a summary of the August 3rd public hearing held in Brookfield and also provided answers to questions previously posed by the public and members of the Council.

Here is some of what was said, some of what was learned and some of the questions that remain unanswered in the wake of the meeting.

  • The DOT has been all over the place as far as what the required size of the Brookfield station would be. Whether the proposed station would cost 17.9 million or as much as $30 million would depend on the parking requirements (which have ranged from around 250 to as high as 550).
  • The state will only commit to paying $5 million toward construction of the station. This includes roadway and safety upgrades as well as land acquisition costs.
  • Brookfield would be stuck with annual maintenance costs for the station, which could range from a low of $30,000 annually to a high in excess of $100,000 a year.
  • Due to the fact the train will share tracks with freight trains, the train will not be high speed for some time.
  • The DOT claims traffic disruption on most cross streets would be no more significant that a typical stoplight, although it would take ‘a little longer’ at the intersections closer to the station.
  • DOT anticipates but would not guarantee the labor to construct the line would be from Wisconsin-based companies.
  • City officials do not anticipate the need to widen Brookfield Road to accommodate any increase in traffic.
  • DOT officials estimate 124,000 passengers per year will either get on or get off the train in Brookfield.
  • No figures were available for the increased cost of road maintenance or police protection that would be necessitated by the foot and car traffic due to the development of the Brookfield station.
  • The fare costs are unknown. (However, in its application for federal funds the state estimated the cost of a ticket from Milwaukee to Madison to be between $22 and $33 each way.)
  • The amount of annual state subsidies to operate the train is unknown.
  • The per-passenger mile cost of the route is unknown.
  • Any federal monies spent on the plan would have to be returned if the line and station is not operational for 20 years.

I’ve now attended a few meetings regarding the Madison to Milwaukee rail project and a pattern has developed.

What is known is the amount of federal taxes will be used (up to $810 million).

What is known is how much the state taxpayers will pay to construct the station in Brookfield ($5 million).

But there are so many unknowns. Including, it has to be noted, whether the new Governor will go through with the project. Barrett says he will, Walker has been adamant that he will not (to the point of even running television ads about that pledge) Neumann has agreed with Walker.

Given the uncertainties, why would local officials green light the use of even one dime of precious tax dollars on this boondoggle, at this time?

The full Council may take up measures relating to the construction of a rail station in September.  If Tuesday night’s feedback was any indication—and I’d bet my shirt it is, if they decide to follow the will of the people of Brookfield, a station will not be built in my hometown.

But why take my word for it? I’ve only been a resident of Brookfield for two years. That, and my attendance at last night’s meeting may leave me with an incomplete or inaccurate picture of the will of the people.

So let’s do this right.

How about a referendum this November?

SHALL THE CITY OF BROOKFIELD EXPEND PUBLIC RESOURCES TO DESIGN, DEVELOP, CONSTRUCT AND/OR MAINTAIN A TRAIN STATION TO SERVE AS A STOP ON THE MILWAUKEE TO MADISON RAIL LINE?

Let’s give the people the chance to express their opinion.

While Mayor Ponto’s accommodation at Tuesday’s meeting was generous, the referendum would be the ultimate public hearing.

What say you, residents of Brookfield (and for that matter Oconomowoc, Watertown, Milwaukee and Madison)?

Why not hold referenda in each city this November to see if local residents want to pay for local costs associated with the Milwaukee-Madison rail project?

By Brian Fraley
A MacIver Perspective

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Posted in mi perspectives | August 18, 2010 | | 8 Comments

Son of a Stimulus Advances!

We hate to say we told you so, but we told you so.

Back in June, The MacIver Institute warned taxpayers that a second stimulus package was making its way through Congress.  At the time, the media was reporting that the package had “failed to gain the necessary support” to pass the Senate.

We suggested taxpayers might still want to hold on tightly to their wallets.

Wednesday, The Wall Street Journal is reported that the Senate voted to end debate on the bill to “provide $26 billion in emergency aid to state and local governments to expand Medicaid and avoid teacher layoffs.”

The bill provides approximately $16 billion in funding to states to help cover their rising costs due to an expansion of the Medicaid program and $10 billion to school districts to avoid the layoffs of teachers this fall.   Democrats believe the bill will save 140,000 teacher jobs.

The Son of a Stimulus package will supposedly be paid for with an $11 billion dollar tax increase on corporations, the repeal of the “advanced earned-income tax credit” and $12 billion dollars in cuts to food stamp benefits.  The food stamp benefit cuts are not scheduled to go in to effect until 2014.

This new spending bill passed despite estimates from the National Debt Commission that “the nation’s federal debt next year is expected to exceed $14 trillion — about $47,000 for every U.S. resident.”

We would do our “I told you so” dance if our exploding debt wasn’t such a serious threat to the future of our country.

Read our original prediction here.  Click here for the latest Washington update from The Hill.

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Posted in mi perspectives | August 4, 2010 | | Comments Off

Twin Lakes Street Rehab Makes List of 100 Worst Stimulus Projects

MacIver News Service | August 3, 2010

A landscaping project in the village of Twin Lakes, Wisconsin has made the list of the 100 worst projects funded by the Stimulus Act.

United States Senators Tom Coburn (R-OK) and John McCain (R-AZ) have issued a report, Summertime Blues, which details 100 projects funded by the American Recovery and Reinvestment Act of 2009.

“When Congress passed the $862 billion American Recovery and Reinvestment Act in 2009, otherwise known  as the stimulus bill, it passed with assurances that it would stem the loss of American jobs and keep the economy from floundering,” the Senators write in the report’s introduction. “Eighteen months since the law’s passage, millions of jobs are still gone and the economy is as uncertain as  ever. The only thing getting a boost is our national debt – the stimulus has helped push it 23 percent  higher, to $13.2 trillion, a new record.”

The Twin Lakes projects was ranked 22nd, and was included in the list because the project ccaused economic hardship at the worst possible time.

“Worst of all, some stimulus projects are actually costing jobs and hurting small businesses.  By largely closing off access to local shops to build some of the stimulus projects, some business owners have had to cut staff hours, and let people go,” the Senators wrote.

From the report:

Several local business owners in the Village of Twin Lakes, Wisconsin were surprised to learn that a beautification project on East Main Street in the heart of downtown would begin the week before July  4th weekend.  That’s because it intersected with the town’s annual Libertyfest, whose parade route passes their stores, driving good business their way.  Unfortunately, East Main Street has been closed down until the end of October to complete a stimulus project.  Adding insult to injury, the parade was rerouted to another part of town.

The report notes the project adversely impacted the very business owners it was supposed to help.

In the case of Jane Bodi, owner of  Bodi’s Bake Shop, her shop on Main Street was dealt a heavy blow when  the road in front of her store was  closed.  “Business was way down the first week,” she noted with frustration.  Since the project began, she has had to reduce employee hours  and offer special discounts just to try and account for the lost business.

At a local pub, a single mother of three who waits tables has also felt the impact of the project.  Aside  from having her hours and pay cut, she says she was forced to list her house for sale and look for a new  home 26 miles away, where prices are more affordable.  According to this waitress, who wished to  remain anonymous, July is the biggest time of year for business in Twin Lakes because it features both  Libertyfest and Country Thunder.

The list of 100 worst projects includes putting in new windows at a vacant government building, replacing a new sidewalk with an even newer one, and spending money for a park that is only accessible by boat or plane.  

Coburn and McCain said that some projects that appear in the report may have merit, but are being mismanaged or were poorly planned.  They cite a biomass power plant that was awarded hundreds of thousands of stimulus dollars, but may close in months, and a rail line to two professional sports stadiums— that is hundreds of millions of dollars over budget and only “shovel ready” because it was years behind schedule when funding came available.

See the entire report, here.

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Posted in News | August 3, 2010 | | 2 Comments

President Obama In Need Of Reality Check

Racine Town Hall with President Obama

President Obama has once again showed that he is in desperate need of a lesson in economic reality. I am referring to the latest instalment of ignoring economic reality by the President during his ‘town hall’ style speech, and question and answer session yesterday in Racine. The three main topics were economic stimulus, financial regulation and clean energy (with the President downplaying that the latter is mainly driven by his belief in catastrophic anthropogenic global warming). The underlying theme was that unregulated markets (aka Big Corporations) cause recessions, financial impropriety and environmental degradation and, thus, strong government action is needed.

At the base of the President’s fundamental economic beliefs appears to be the lack of a full awareness of the economic reality that wealth and prosperity are created by free people and free markets. This is the ‘fixed pie’ fallacy often believed on the Left. The key to the growth of wealth and prosperity for all Americans is entrepreneurial innovation and evolution. It is the minds of those who create new and better goods and services and ways of doing things for profit, subject to the pressures of competitors and consumers, that create and grow wealth and prosperity…not the poorly thought out actions of intrusive, self-righteousness, unaccountable, non-transparent and arrogant government. The President would do well to remember what the Founding Fathers intended government to do – ie to protect free people and markets from those who would initiate and inflict harm on other’s person and property…including from government itself!

Although he was certainly quite charming and likeable during his speech and the Q&A session, the President once again strongly highlighted his ongoing denial of economic reality and his embrace of economic mysticism.

The President’s original economic stimulus policies were aimed at creating between 3 and 4 million jobs by the end of 2010, and that unemployment would hit its high of 8% in 2009. Instead, unemployment peaked at 10.6% in January 2010 and only fell to 9.3% by May. The latest jobs and unemployment figures are scheduled to be released on July 2nd, and most economists are not optimistic. This pessimism, according to the Cato Institute, is mainly driven by businesses reluctance “to invest or hire because they’re concerned that the President’s Big Government agenda will mean higher taxes and more onerous regulation”. This is backed up by a recent National Public Radio poll which showed that only 37% of voters in Democrat controlled districts believed “President Obama’s economic policies helped avert an even worse crisis, and are laying the foundation for our eventual economic recovery” and as many as 57% believed “President Obama’s economic policies have run up a record federal deficit while failing to end the recession or slow the record pace of job losses”.

The President’s financial industry regulation is based on the flawed premise that the financial meltdown was caused by the greedy and misleading financial industry. Bad financial industry decisions and the like was largely the symptom not the cause of the financial meltdown. The Fed, government social engineering policies (eg Freddie Mac and Fannie May), and government over and poor regulation, was largely to blame. Of these, it is the Fed that is the real ‘elephant in the room’. The Fed is essentially a government mandated monopoly which essentially dictates the price of money (ie interest rates)…and, as central planners always do, they always get pricing wrong, with huge ramifications in the supply and demand of money throughout the entire economy! Like all central planners, the Fed suffers from the ‘we know what’s best for everybody else’ delusion. They don’t know what is best, nor could they (even in theory), as they will never have the proper information and incentives that decentralised consumers and competitive markets have. This line of thinking is backed up by great economists like Hayek, and by many recent studies by the Institute of Economic Affairs and the Ludwig von Mises Institute.

The government-driven clean energy revolution desired by the President, which uses Spain as its template, is based on wildly exaggerated expectations of the amount of jobs to be created and ignoring the predicted net job losses. As pointed out in a study last year by economics professor Gabriel Calzada of King Juan Carlos University in Madrid, “the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created.” These sorts of studies are, of course, not cited as part of the reason for resistance against this noble cause, instead the President alleged that clean energy has no powerful backers. A study sponsored last year by the Science and Public Policy Institute, entitled Climate Money, would suggest otherwise. This study, by only beginning to scratch the surface, showed that Federal Government expenditure alone in response to global warning alarmism was of the order of $79 billion…versus ‘Big Oil’ expenditure in support of global warming scepticism/realism of $23 million. It is very important to remember that the President’s push for clean energy is still largely driven by global warming alarmism, which is in turn driven by so-called science that continues to be shown, by the Heartland Institute and many others (citing such recent revelations as Amazon-gate, Climate-gate, Glacier-gate, and NASA-gate), to be at best wildly exaggerated and at worst fabricated. It is worth noting a typical self-contradiction of environmental policies reported last month by the Institute for Energy Research. They reported that “fossil fuel consumption and CO2 emissions are increased, not reduced, with the introduction of wind” and more specifically that “at wind penetrations of about 3% (as is the case in the Netherlands), the savings are zero, and at 5-6% (as for Colorado and Texas) the savings become negative, that is, emissions actually increase due to the presence of wind power”.

Let me remind the President of the major lever that the Executive, the Legislature and the Judiciary have of helping to improve the economic environment for economic growth – mainly through getting out of the way of free people and free markets, especially through seriously reducing government regulation like that recently passed in health, and that being attempted to be passed in finance and global warming (the latter including clean energy). A relatively easy way to start would be putting a freeze on further job-killing regulation (of any kind, be it stimulus, financial or global warming) and to start to get serious about subjecting any and all further regulation to proper, independent and transparent processes of benefit-cost analysis (BCA) centered around allocative and dynamic efficiency – which is by-and-far the best way to start to properly balance the often conflicting objectives of social justice, the environment and the economy. Perhaps the Government Audit Office could play some role in this, including in ex post as well as ex ante BCAs of regulations and regulators (eg the Fed, EPA, etc).

The President once again stated that we need to move forward not backward. Only embracing economic reality and letting go of economic mysticism can move us all forward. Of course, it will be the people of the greatest democracy in the world that will be the ultimate judge of all this come November and beyond!

By D. Brady Nelson
Special Guest Perspective for the MacIver Institute
D. Brady Nelson (d.brady.nelson@mac.com) is an Australian-American freelance economist with over 15 years experience in economic regulation and policy.
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Posted in mi perspectives | July 1, 2010 | | Comments Off

Beyond the Spin, State Employment Numbers Dismal

Next vacation, I’ll tour government offices…

I did my part for the Wisconsin economy. Last week the Lovely Doreen from Waukesha and I ventured to the Wisconsin Dells with our children, doing our part to pump dollars into the local economy. We took full advantage of the increase in the seasonal employment in Wisconsin as tourists. I even got a picture of myself wearing a funny Moose hat.

Seasonal employment is the key. Every May, Wisconsin adds jobs to ready itself for the summer tourism season, ramping up for construction, and other industries that require the warmer weather. Indeed, the numbers are out for May unemployment and in numbers not seasonally adjusted, leisure and hospitality added 10,700 new jobs last month.

With the release of the May unemployment numbers, the state announced a reduction in unemployment last month and the creation of 32,000 jobs, according to the unemployment figures not seasonally adjusted. The champagne corks were popping and the governor celebrated as the state’s unadjusted unemployment rate dropped 0.5%.

Governor Jim Doyle released the following statement:

“The tremendous drop in the May unemployment rate and the state’s addition of tens of thousands of jobs reflects our hard work to help communities across the state recover from the national economic crisis. I will continue to do everything possible to make sure that as this national economy turns around, Wisconsin is in a position to come roaring back.”

Unfortunately, every silver lining has a cloud attached to it.

When we take into account the seasonal adjustment, instead of adding 32,000 private sector jobs, the Wisconsin economy lost 7,900 private sector jobs in May. The net change from a year ago is a loss of 37,400 jobs in the private sector.

Even the hospitality industry is worse off. In seasonally adjusted terms, 3,700 jobs were lost in May and 6,700 jobs were lost since last year. Using the terms the governor would prefer, in non-adjusted numbers leisure and hospitality may have added jobs in the last month, but there is still a loss of 7,500 jobs since last year.

Overall, Wisconsin’s economy in May added 1,600 jobs in seasonally adjusted terms, not the “tens of thousands” that the governor claimed. 

According to the seasonally adjusted unemployment numbers, the number of government jobs in Wisconsin grew by 7,900. The net change in seasonally adjusted government jobs is plus 9,500. The other economic sectors that have seen any job growth in the last year are waste management and administrative services (5,500), educational services (3,100) and health care and social assistance (2,900).

State government alone added 3,100 jobs in the last month, although Department of Administration Deputy Secretary Dan Schooff says the numbers used by the federal Department of Labor “can be easily misconstrued.” Schooff says the actual number of state jobs increased only by 222 positions from April to May. 

The federal government added 3,800 jobs using seasonally adjusted figures, while the local governments added 1,000 jobs using seasonally adjusted figures.

Using figures not seasonally adjusted, government jobs went up 8,200. Of them, 4,100 were federal jobs, 2,900 jobs were at the state level, and 1,200 jobs were at the local level.

It is not known how many government jobs are the result of stimulus spending, nor was it clear how many of the jobs were census-related. However, the state’s relied upon over $3.4 billion in federal stimulus money to attempt to bring the state budget into balance last year (see the MacIver Institute’s $13 Billion of Bad). When that federal money goes away so will many of these government jobs. The alternative is higher state and local taxes, further hurting the private sector and reducing the number of private sector jobs.

Far from celebrating, Wisconsinites should be concerned about the continued wrong direction for the state’s employment figures. When we continue to have a net loss of private sector employment, and we add in a shaky funding foundation for future government expenditures, the result is likely to be more economic trouble and continued high unemployment.

That will continue regardless of how many funny hats I buy.

By James Wigderson
Special Guest Perspective for the MacIver Institute

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Posted in mi perspectives | June 21, 2010 | | 1 Comment
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