And here we go again in Wisconsin…of idiots and ideologues

Hear me, people: We have now to deal with another race – small and feeble when our Fathers first met them, but now great and overbearing. Strangely enough they have a mind to till the soil, and the love of possession is a disease with them. These people have made many rules that the rich may break, but the poor may not. They take their tithes from the poor and weak to support the rich and those who rule. (Chief Sitting Bull, Powder River Conference, 1877)

Is there a better processional for the parade of idiots and ideologues in the 2013 Legislative Session? The People who were here long before Wisconsin became a state were led by visionaries that understood the motivation of a white man corrupt with power.

A Mining Bill is poised to pass out of both committees this week, on the fast track to a swift vote within weeks. A bill which would mean devastation to one of the world’s great supplies of freshwater. Water which means life not only to an indigenous people, but those who have since settled and call the Bad River watershed and Lake Superior Basin home. But damn the torpedoes, science, and those inconvenient geological facts…full speed ahead Mr. and Ms. Chairman/Woman, we have (paying) corporate constituents to serve.

The only hope for defeat of this bill lies in the Republican-controlled Senate, and the possibility that four of its members still listen to a little voice most of us hear as a conscience. Dale Schultz, Mike Ellis, Robert Cowles, and Luther Olsen may be the only sane Republicans left in this biennial assemblage of insanity we still call a “Legislature.” This writer holds out hope that the smokescreen of empty jobs promises is wearing thin in a state moving closer to honorable entry into socio-economic “Dixie”…and further away from its progressive roots.

Has there been a time in our state’s recent history which more closely resembles oligarchy than democracy? The unholy triumvirate of Walker, Fitzgerald, and Vos…let’s face it, in 2010 Jeff Fitzgerald was nothing but a figurehead. Vos is, and has been pulling the strings all along. I digress. This triumvirate has the state government in lockdown, controlling the message in and out, controlling debate, the media, and god forbid anyone should sing in the Capitol. Every moment of every day is a campaign. Public policy is built on a campaign strategy, and supported by money. Lots of it. If you are on the right (literally) side, the money pool is almost unlimited. If you are on the wrong side…well, money doesn’t follow losers. And no money, no access.

Even the Capitol press corps is being kept on a short leash, with passes and access being strictly controlled by the powerful few. Say the wrong thing, write the story the wrong way, come across as the least bit partisan (read – report what we tell you to), and no access for you. End of story, end of job as a Capitol correspondent. This sort of power concentration is rare in Wisconsin. Scott Walker has power, and he is using it.

Walker is raising unprecedented amounts of money, and spending a lot of it on his legal defense fund. Let’s all be honest here…something stinks about the way Walker has campaigned, raised money, and conducted his business in and out of office. His administration is loaded with insiders, fixers, and power mongers. No interest in governing, just power and money. Crooks, liars, sharks. The smart money is that there is something illegal here…but that same money doubts the political will of a Milwaukee County DA to take on the Walker machine. But the Feds? Reminds me of something…

Richard Nixon in 1972. Re-elected, destroying McGovern in a landslide. Everyone knew, but few said it, that Richard Milhous Nixon was a crook. The media knew – but sat on the story until after the election. Once there was blood in the water, the media went in for the kill. Before Watergate, Nixon was untouchable, and had concentrated more power than almost any other president in history. The scary part is, once the scab was ripped off, no one knew how bad the wound was, or how long it would take to heal. Maybe it never has…and maybe we failed to learn the lessons of too much power in the hands of a man like Nixon…or Scott Walker. And so here we go again…in Wisconsin.

There is some light, in this dark time of plutocracy. There are voices rising above the din, who don’t rely on a Capitol press pass. We are getting one back tomorrow. John “Sly” Sylvester is back on the air Monday, February 4th from 3 – 6:30 pm. Sly will be on one of the last remaining locally owned and independent stations in the entire country – 93.7FM WEKZ. He’ll now have a three state reach – Wisconsin, Illinois, and Iowa. Sly will also be contributing to the good fight against Democrats who are mere posers in our neighboring states – like Rahm “NAFTA, TIF King, Kill Public Schools” Emanuel, and Pat “screw the pension fund” Quinn. Station link to listen live here.

I’ll be listening. Why? Because in this time of incredible propaganda, Sly is honest about what he says and believes. He’ll question and confront both Republicans and Democrats who turn their back on Wisconsin working families. And that is important.

The new debate on economics and education will continue to demonize teachers and other public employees. It will perpetuate the myth of impending fiscal doom to preserve the wealth of those paying to spread that myth. Scott Walker will continue to do what Sitting Bull warned about in 1877: They take their tithes from the poor and weak to support the rich and those who rule.” It is voices like Sly’s we need to call out the Walkers, Fitzes, Vos’ Emanuels, Ryans, and Johnsons of our time for what and who they are. Greedy, power-hungry, sharks and fixers who are out for blood. The life blood of Wisconsin – its people and resources in exchange for money and power.

A final quote before sign-off…a warning shot across the bow of our fragile democracy:

When democracy granted democratic methods to us in times of opposition, this was bound to happen in a democratic system. However, we…never asserted that we represented a democratic point of view, but we have declared openly that we used the democratic methods only to gain power, and that, after assuming the power, we would deny to our adversaries without any consideration the means which were granted to us in times of our opposition.

No, that was not from a Walker secret conversation with Robin Vos.

It was Dr. Paul Joseph Goebbels, 1935 propaganda pamphlet, quoted in Vol. I “Nazi Conspiracy and Aggression,” US Government Printing Office 1946 

Vigilance. Always vigilance.


Facts elude Scott Walker…along with the truth

Scott Walker’s press release on August 29th fired a shot across the border at Illinois Governor Pat Quinn. Credit rating agency Standard & Poor’s downgraded Illinois from A+ to A with a “negative outlook.” From the Walker press release:

There could not be a more stark contrast between Wisconsin and Illinois. Political leaders in Illinois kicked the can down the road, raised taxes, and ignored fiscal realities.  Now, they’re realizing the consequences of their actions: credit downgrades and negative outlooks. Wisconsin balanced a $3.6 billion budget deficit without raising taxes, reducing services, cutting Medicaid, or engaging in any massive public employee layoffs.  We enacted long‐term structural reforms, which led to another bond house giving our current budget a “credit positive” outlook.

Walker omits the critical part of the story, resulting in a lie of omission. His attempt to take credit for an already sound fiscal policy has been completely missed by Wisconsin media. The Chicago Tribune gets it right:

The agency lowered the state’s credit rating from A+ to A, citing a “lack of action” on changes aimed at lowering the pension system’s unfunded liability that could hit $93 billion by next summer if nothing is done.

The downgrade was regarding the Illinois pension fund – which had been raided to offset budget deficits over a period of several years. The Walker Administration, desperate to receive positive press, is taking credit for a sound state pension fund which Walker inherited; and whose policies to date have had zero impact on. Walker omits this critical piece of information in his press release. The Wisconsin press corps has yet to call out Walker on this lie of omission. 

This is consistent with Walker’s behavior in making public statements throughout his term in office. At the GOP Convention last night, Walker repeated the persistent lie of Barack Obama being responsible for the Janesville GM plant closing. In this case, Rachel Maddow, Ed Schultz, and Al Sharpton call him out on national television; letting Walker paint himself into an uncomfortable corner – all the while maintaining the lie.

The record is clear. GM officially closed the Janesville plant on December 23, 2008; laying off 1,200 workers. A small crew of several dozen workers stayed on to complete a small order of trucks under contract to Isuzu. Yesterday’s Politifact (August 29, 2012) makes this clear, rating Ryan’s assertion false; including the assertion that Obama “promised” to keep the plant open.

Perhaps the Wisconsin media misses this because the status quo is Walker lying. Watch for headlines when he actually tells the truth…or is indicted and forced to admit to the truth.

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Scott Walker is controlling the message…literally

Emails obtained by Badger Democracy confirm what has long been speculation. Conservative talk show hosts in Wisconsin, particularly the Metro Milwaukee market, get their talking points directly from the office of Governor Scott Walker.

Two sets of email chains specifically name Charlie Sykes, Vicky McKenna, and Jerry Bader in statewide broadcast radio; and former TMJ4 television Executive Producer Julie Pearl. The reach of these media outlets through syndication is virtually statewide; and is a flagrant use of on-air broadcast as a full-time campaign mechanism for the Walker Administration – outside of the campaign.

The first set of emails is from Walker spokesman Cullen Werwie to Governor’s staff, and Walker himself; though the email is redacted along with one other email address. The email is dated June 7, 2011:Important to note the contact is initiated by Cullen Werwie to Charlie Sykes on Monday, June 5; soliciting an appearance for Walker on June 9 to explain how his reforms are already “producing positive results.” Sykes confirms, and Werwie replies on June 7, sending an attachment titled “6.9.11 Bader Sykes McKenna briefing”

The “Meeting Briefing” for the radio hosts is an outline of talking points, strategically planned for not only Walker’s interviews; but for the hosts themselves.

The audio archive of Sykes’ show from June 9, 2011 shows that all major points from the above briefing were discussed – many with Walker himself. The CEO ranking and “job creators” message, supposed savings for local schools, and the Middleton/Cross Plains teacher arbitration issue were all discussed in the Walker interview. Sykes touches on the other primary points during the balance of his show.

The Jerry Bader show from June 10, 2011 was staged as a “call-in” show for Walker’s segment. The points covered during this segment encompass most of the memo. Walker’s fiscal reforms already working, increased pension and health premium contributions by teachers saving districts money, local government savings, and the favorable CEO rankings/”job creators” message were all discussed during this call.

Badger Democracy was unable to obtain audio archive of Vicky McKenna’s June 9, 2011 show – a Clear Channel staffer informed BD that older podcasts had been removed.

WTMJ television producer Julie Pearl receives a solicitation on June 1 from Werwie for a Walker appearance on the morning show. This after Werwie gives a “no comment” to the status of Act 10, after Judge Sumi struck down the law in May, 2011. Just days after the “no comment” response, Werwie replies to Pearl – “Julie, can you give me a call when you get a chance today? I think I’ve got an offer TMJ might be interested in. Give me a call on my direct line (redacted).”

On page 2 Werwie gives Pearl a full briefing on the event, and includes Tonette Walker in the appearance:

On page 3, same day, Pearl replies “Would love to have them on.” Werwie promises exclusivity, noting it is the Walker’s first joint appearance since inauguration:

Page 4, same day (June 1), and Pearl expresses her gratitude: “Thanks Cullen! And thank you for giving us the opportunity to have the Governor and Tonette on. It means a lot!” The email also brings in Tonette Walker’s scheduler Annie Nolan for the final itinerary:

Just days later, June 7, as Werwie is also coordinating the radio media blitz for Walker, he again solicits an appearance from Pearl – this time with a friendly “smiley face” for emphasis. Pearl replies in kind, saying “Definitely want this.” How professional…

In the final exchange from June 8-9, 2011; Werwie expresses thanks for having Walker on the morning show. Pearl responds in kind, and offers a spot for Tonette Walker to talk about “how she’s dealing with things – dealing with the attacks on her family re the collective bargaining law.” The email is forwarded to Nolan and Tonette Walker (email redacted).

The emails reveal a blatant use of mainstream media posing as news organizations; for campaign purposes posing as state business.

In a statement to Badger Democracy, Democratic Party spokesman Graeme Zielinski raised grave concern over this practice:

If it is not illegal it certainly is unethical for these broadcast corporations to be providing propaganda support in a scheme straight out of the Kremlin’s playbook. The employers at WTMJ and the other stations should explain how they are independent of the Walker administration and how their hours and hours of slavishly positive-and now, we see, coordinated-coverage fits within their own ethical guidelines and the rules and laws of Wisconsin and the United States.
The idea that the government can so directly control broadcasters who use public airwaves represents a major crisis for Wisconsin journalism.
As long as reporters and broadcast “journalists” are in collusion with conservative politicians like Walker, reporting political agenda as news, democracy is in serious trouble. Zielinski also points out that progressive talk show host John “Sly” Sylvester is never given “talking points,” and has, on many occasions, disagreed with Democratic Party officials and candidates.
For the record, a WTMJ spokesperson referred Badger Democracy to corporate counsel – no response has been received. WTAQ station manager referred Badger Democracy to Jerry Bader who is solely responsible for his content. Bader is in Tampa and has not responded to emails. WIBA also had no comment beyond stating that the memo represented basic show preparation for McKenna.
An explanation should be required by WTMJ, WISN, WTAQ, and their affiliates. Don’t hold your breath as the hypocrisy continues…
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WMC, Corporate Conservatives pushing the lie of government regulation costs

A filing with the Wisconsin Public Service Commission this week requested the deregulation of public utilities. In its filing, the “Compete Coalition” cites the need for “free market” principles to reduce costs to consumers:

“Electricity consumers can only win if Wisconsin takes steps to reduce the adverse impact of protected monopolies and adopts laws and policies allowing competitive market forces to provide incentives for increased efficiencies, lowest available costs, and environmental improvements.”

The Compete Coalition is a front group for Washington DC lobbyists affiliated with three powerful firms – Wexler & Walker PPA, The Nickles Group, and Covington & Burling LLC. Each of these firms individually spend tens of millions of dollars annually on behalf of corporations looking to influence energy, health, and financial legislation. In addition, Compete Coalition members contribute millions more to this lobbying effort. The group’s request with the PSC is, in reality, self-serving, and holds no benefit for taxpayers or consumers. Further study reveals this to be the case with Wisconsin Manufacturers and Commerce (WMC) and conservative lawmakers’ calls for regulation reform.

In its 2011-2012 Legislative Policy Agenda, WMC lists “foster a competitive regulatory environment” as first priority. According to WMC, regulation easing and reform:

…will improve the business climate by
reducing the costs and barriers to business expansion and job creation, imposed by government.

On July 26, 2012, WMC praised Congressman Reid Ribble’s (R-WI 8th CD) “Midnight Rule Relief Act,” passed by the House as part of the “Red Tape Reduction and Small Business Jobs Creation Act” (HR 4078). Ribble’s Act would serve to:

…have an economic impact of $100 million or more annually with the exception for emergency health, safety, criminal, and national security purposes.

Just one day before, Ribble spoke in support of the bill; citing the high cost of regulation and impact on job creation. In the remarks, Ribble speaks from experience as a small businessman – suggesting that data to the contrary be ignored in favor of his anecdotal testimony.

Yesterday (August 23, 2012) Green Bay Rep. John Klenke (R-88th) issued a statement praising an activist Appeals Court opinion striking down EPA authority to strengthen coal emissions standards. According to Klenke’s statement:

These mandates are also costing thousands of jobs yet provide marginal  environmental benefit.”

Conservative think-tanks and “scholars” have published their own studies supporting policy advocates like WMC, and conservative legislators like Klenke.  The most highly regarded and cited study was commissioned by the Small Business Association Advocacy Office in 2010, “The Impact of Regulatory Costs on Small Firms” by Nicole V. Crain, Lafayette College. The study quantifies the regulatory costs to business at $1.75 trillion. For conservative legislators and corporate, free market advocates, that number is gospel. In reality – it misses the big picture, ignoring significant data. Just how does regulation impact jobs and the economy?

For the first time, in 2011, The Office of Management and Budget (OMB) issued a report to Congress on the costs of regulation and unfunded federal mandates. The key findings show that current regulation benefits far outweigh the costs to taxpayers:

1. The estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 2000, to September 30, 2010, for which agencies estimated and monetized both benefits and costs, are in the aggregate between $132 billion and $655 billion, while the estimated annual costs are in the aggregate between $44 billion and $62 billion.

2. Some rules are estimated to produce far higher net benefits than others. Moreover, there is substantial variation across agencies in the total net benefits produced by rules. For example, the air pollution rules from the Environmental Protection Agency (EPA) produced 62 to 84 percent of the benefits and 46 to 53 percent of the costs.Most rules have net benefits, but several rules have net costs, typically as a result of statutory requirements.

To reiterate – the benefit to taxpayers of current regulations and mandates far outweighs the costs – particularly EPA regulations. Benefits measured include medical/health benefits as life expectancy and cost savings, environmental safety and protection, and actual costs of programs. These benefits include protections and benefits to business – not just consumers.

But government regulations are “job killers…” Are they? The Bureau of Labor Statistics (BLS) documents statistical reasons for business closings and layoffs. In the most recent release of Mass Layoff Statistics (MLS) (August 14, 2012), the numbers clearly show that government regulation has a very small impact on employment.

In 2011-2012, Government Regulation/Intervention  accounted for 8 of 3,100 Mass Layoff events (.2%). By contrast, 301 layoff events were caused by “insufficient demand” (10%).

In 2011-2012, Government Regulation accounted for 1,218 separations (individuals) out of a total of 563,447 separations (.2%). “Insufficient demand” caused 38,788 separations (7%).

A five-year study published in 2010 by the BLS shows the data is consistent. From 2006-2010 there were 3,815 Mass Layoff Events; 26 were a result of Government Regulation (0.7%). Of 851,767 separations, 7,843 were a result of regulation (0.09%). This data is based on surveys of the affected businesses.

The facts do not bear out the argument against necessary regulation; nor do they support deregulation as a cost/job saving mechanism. In fact, the very Crain/SBA study being cited by conservatives as proof of economy – killing regulatory practices appears to be a fraud.

Sidney Shapiro, Professor of Law at Wake Forest Law School, examined why the $1.75 trillion regulatory costs  cited in the Crain/SBA study (link above) far exceeded the $62 Billion cited by the OMB study (link above).

Crain’s calculations for the regulations not covered by OMB’s report appear to be based largely on a decidedly unusual data source for economists – public opinion polling, the results of which Crain and Crain massage into a massive, but unsupported estimate of the costs of “economic” regulations.

That’s right – they extrapolated data not from actual statistics, but opinion polling. The skewering of the study continues.

Crain and Crain have refused to make their underlying data or calculations public – apparently even withholding them from the Small Business Administration office that contracted for the study — it is difficult to know precisely how they arrived at the result that economic regulation has a cost of $1.2 trillion dollars, comprising more than 70 percent of the total costs in their report.

Secret data based on opinion polling. Not a good source for an economic “study.” It turns out even the source of the poll used disputes the validity of the data from the poll.

…their numbers are based on the results of public opinion polling, specifically a poll concerning the business climate of countries that has been collected in a World Bank report. The authors of the World Bank report warn that its results should not be used for exactly the type of extrapolations made by Crain and Crain, because their underlying data are too crude.

The self-serving attacks by the corporatic Robber Barons aimed at regulation have no valid place in a responsible debate on governance. The very studies they commission and cite are a fraud. The data are sifted and sorted to support a foregone conclusion, receive no peer review, and are used for one purpose – to influence gullible, ideologically driven legislators.

As Ronald Reagan once said, “…facts are stubborn things.” Things too ignored today by conservatives.

(BD note: WMC and Congressman Ribble were contacted for a response to this article by phone and email on August 22, 2012. They did not respond)

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Current Job Drought is disastrous for economy, Wisconsin…and disproves Walker, GOP ideology

Wisconsin lost 11,700 private sector jobs in June. Including 1,500 jobs lost  in the Government Sector, the total is a dismal 13,200 – the most in 11 months. The unemployment rate is poised to rise from 6.8% to 7.0%:

The report clearly had an impact on the Walker Administration. Department of Workforce Development (DWD) Secretary Reggie Newson sent a letter to Bureau of Labor Statistics Commissioner John Galvin, blasting the agencies accounting methods – in essence, because they make the Walker Administration look bad:

“From the college graduate contemplating which state to launch a career to the business owner analyzing whether to expand at home or elsewhere, people across our state and nation are making major life decisions based on this information and, collectively, these decisions have an impact on our overall economy.”

Walker, his administration, and Conservative Republicans will never solve this unemployment or economic crisis. They will instead continue to distract; casting doubt about the survey methods previously heralded by Walker, when those numbers makes him look good. The facts, however, are this – Walker and conservatives nationwide are staking their economic policy about job creation on a lie. The result will be a deepening economic, and worse, unemployment crisis.

The economic myth that says “lower taxes on the job creators” will result in job creation is at the forefront of GOP campaigns this year. US House Majority Leader Eric Cantor has the claim on the “jobs” page of his website:

Fix the Tax Code to Help Job Creators:

  • Increase American competitiveness to spur investment and create more American jobs by streamlining the tax code and lowering the tax rate for businesses and individuals including small business owners to no more than 25%.

The right-wing answer to our chronic jobs problem is to cut the top rate to 25%. Here’s the problem – tax rates for the wealthy and “job creators” have been decreasing for decades. This writer (and other’s) question to conservatives…Where the h*ll are the jobs? There can be no more doubt that this economic philosophy is a failure.

In a recent blog, Paul Krugman summarizes the fundamental issue:

Tax rates for the super-elite, the top .01%, have fallen in half since Mitt Romney’s father ran for president; or to put it differently, after tax income for this group has doubled due to policy alone. And bear in mind that the US economy flourished just fine under those 60-70 tax rates

A table from a 2007 study published in the “Journal of Economic Perspectives” shows the “job creators” benefitting from decreased progressivism in the tax code:

Noteworthy is while the top tax rates have been cut nearly in half, the tax rate for the middle 60-90% (the functional middle class) has INCREASED by 25-33%. In Wisconsin, Scott Walker made tax cuts for the wealthy and corporations his first priority as Governor. With all this additional income in the hands of the “job creators,” where are the jobs? Wisconsin in particular has had a trend of lowering tax rates on top-tier earners. The top marginal personal income tax rate from 1979 – 1985 was 10%. In 2009, the rate was 7.75% (Legislative Fiscal Bureau). This represents a combined (state and federal) 42.25% tax cut for the top-tier earners since 1979.

The current unemployment situation reflects that additional income in the hands of top-tier wage earners has done nothing to spur job creation – in fact, in Wisconsin, there is virtually zero growth in jobs. Evidenced by the recent BLS data, there are 15,200 fewer people employed from May 2011-May 2012; and only 8,000 more than May 2010:

State employment 2010-2012

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 2716.9 2714.5 2718.0 2725.3 2728.0 2723.0 2727.2 2731.5 2729.4 2740.9 2743.0 2740.8
2011 2744.8 2750.2 2754.5 2753.4 2751.5 2742.5 2738.8 2729.0 2734.0 2731.2 2719.4 2719.8
2012 2725.0 2735.1 2737.9 2733.7 2736.3

 The unemployment rate ticked up to 6.8% in May, and as reported above, to preliminary 7.0% in June:

State unemployment rate 2010-2012

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 9.2 9.1 9.0 8.8 8.6 8.4 8.3 8.2 8.1 8.0 7.9 7.8
2011 7.7 7.6 7.6 7.5 7.6 7.6 7.6 7.6 7.4 7.3 7.1 7.0
2012 6.9 6.9 6.8 6.7 6.8

The Walker Administration has pointed to the decline in the RATE as being the benchmark that his policy is  “working”, but there is data which disputes their claim. The “Labor Force” data points to a bigger problem – chronic long-term unemployment. People dropped from the system due to benefits expiring; or those who do not qualify for benefits are not reported in the unemployment rate. The Labor Force data for Wisconsin shows this is a real and persistent problem. Since 2010, the number of people in the eligible workforce has remained basically flat. There have been modest gains and losses, but no expected trend upwards:

State Labor Force 2010-2012

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 3096168 3099651 3099906 3096209 3089619 3082208 3075845 3071277 3068599 3067648 3067750 3068342
2011 3069656 3070780 3070312 3067707 3063898 3060386 3058088 3057357 3057366 3057248 3056534 3056367
2012 3054610 3059442 3064447 3069130 3075391

Wisconsin averaged a .9% annual increase in workforce population over the past two years (US Census Data), roughly 1%. A drop in labor force of over 14,000, when population increases would predict an increase of 60,000 means one thing – more people are dropping out of the workforce, and are not reported in the unemployment rate. Any job growth is not keeping up with the increase in workforce, and it leads to one conclusion.

The arrogance and ideology of Scott Walker and the conservative Republicans are preventing them from admitting to economic policy failure. The reduction of taxes for the “job creators” has been occurring for decades. High taxes on “job creators” is not our problem. As previously stated by economists worldwide, the deficit is not our primary problem – weak consumer demand and unemployment are our problems. Put people back to work and increase demand for goods among the middle class, and the economy will recover; deficits will decrease, the economy will recover.

A note to Walker and his allies. You can’t run government like a business. Managing a “micro” economy like a corporation (no matter how large) is no comparison to running a complex, interconnected, “macro” economy of a state or national government. Many people have trouble grasping the difference in complexity between even the largest business and a national economy.

The U.S. economy employs 120 million people, about 200 times as many as General Motors, the largest employer in the United States. Yet even this 200-to-1 ratio vastly understates the difference in complexity between the largest business organization and the national economy. A mathematician will tell us that the number of potential interactions among a large group of people is proportional to the square of their number. Without getting too mystical, it is likely that the U.S. economy is in some sense not hundreds but tens of thousands of times more complex than the biggest corporation. (Harvard Business Review, January/February 1996)

Stop fighting about the numbers and govern…but we won’t hold our breath. We’ll be looking for your replacements.

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Economic Recovery…as easy as accepting truth – and rejecting the austerity lie

Scott Walker, Mitt Romney, Paul Ryan, Ron Johnson…and any other right-wing ideologue need do one simple thing to really begin moving this economy forward. Accept the economic facts of our current situation, and admit to the failure of austerity – ever. Easier said than done. To the likes of Ryan et al, the cause of austerity is a religion. A religion being written and funded by the few multi-billionaires who stand to amass further power and influence; all while the middle class collapses under the weight of an entirely preventable depression. How else does one justify their behavior in light of fact? Ideology and religious crusade are the only explanation to the blind faith of austerity they now follow to the cliff.

We need not plunge into the abyss – economic recovery is a relatively simple matter. There is historic precedence, and some of the best economic minds in the world have defined the solution recently.

A MANIFESTO FOR ECONOMIC SENSE” was published last week by Jonathan Portes, Paul Krugman, Barry Eichengreen, Simon Wren-Lewis, Brad DeLong, and John Van Reenen. The “Manifesto” is written to dispel the factual and historical inaccuracies behind worldwide austerity measures. Proponents of austerity have relied on 1930’s economic policy, which is rife with “profound errors” about the causes, nature, and response to the current crisis.

The CAUSE of this crisis is not (as the right supposes) “irresponsible public sector (government) borrowing”, with very few exceptions (one being Greece). The factual CAUSE was excessive, unregulated  PRIVATE sector borrowing and lending, and over-leveraged banks. The collapse of this private sector “bubble” led to massive falls in output (tax revenue). The current large government deficits are a consequence, not the cause of the crisis.

The NATURE of the current crisis is being mischaracterized by the extreme right. When the worldwide bubbles burst, the private sector immediately slowed spending to pay down its past debts. A rational response for individuals – but (as in 1930), COLLECTIVELY this is self-defeating. In a national economy, one persons spending is another person’s income. Private sector spending cuts, coupled with recent public sector spending cuts have resulted in a spending collapse – and economic depression. This has worsened the public debt situation. Again a consequence of the crisis.

The right-wing RESPONSE in this crisis is misguided. To further push austerity at a time of economic depression (the stagnant nature of this “recovery” has been termed a “depression” by the authors of the manifesto) is, again, self-defeating. When private sector spending is collapsing, public sector must stabilize to sustain spending (again, a lesson from 1930). Continuous public sector spending cuts (as Mitt Romney, Paul Ryan, Scott Walker, etc. advocate), or middle class tax increases (as Scott Walker’s Act 10 results in) will worsen the depression as revenue continues to plummet. We are seeing this effect in Wisconsin – as projected revenues are contracting and job growth is stagnant.

With interest rates near zero, monetary policy can only do so much. The focus has to be on increased employment, before long-term unemployment becomes endemic. This long-term unemployment problem leads to the flaws in austerity proponents’ arguments:

Flaw #1 – “Austerity will increase confidence; deficits will dampen that confidence and cause interest rates to soar.” There is absolutely no evidence to support this claim. On the contrary, many governments have record deficits and record low interest rates – where there is a functioning central bank. In Japan, debt is 200% of GDP, yet Japan has low interest rates. Moreover, the credit downgrades in Japan have not resulted in higher interest rates.

The IMF has studied 173 cases of austerity budget cuts in individual countries – the result has ALWAYS been economic contraction. Austerity measures have NEVER resulted in economic growth.

Flaw #2 – “There are structural ‘Supply Side’ issues in output.” As evidenced from 1930-1940, this is wrong. Industry and business are currently highly productive – there is simply not enough consumer demand to drive a long-term recovery. The lack of well-paying jobs and employed individuals has led to a contraction of spending – all CONSEQUENCES of the current crisis.

The deficit is simply not our greatest economic threat. In this time, we have the historic knowledge and facts to end this depression. It is only ideology and greed that is stopping us. In this day, it should be unacceptable to all of us that mistaken and misguided fears over deficits and interest rates “outweigh the horrors of mass unemployment.”

This economic truth deserves to be front-and-center for the coming months. Visit the website (, sign the manifesto, and share this information with everyone, politicians, candidates, and media. Next time you see Paul Ryan, ask him to name a time in history when austerity led to economic growth…and watch his head spin.

The $3.6 Billion Walker lie continues…all the way to Ireland (pass the potatoes)

Scott Walker made certain the projections were bleak, bordering on the catastrophic, and the media ate it up. In the Milwaukee Journal Sentinel on February 7, 2011 Walker spokesman Cullen Werwie was quoted as saying:

“Bill collectors are waiting at the door of the state Capitol. Without taking action to reduce the deficit in the current fiscal year, thousands of Wisconsin children and families could lose their health care coverage through BadgerCare, and there would need to be even more aggressive spending cuts in the future.”

Before presenting a budget, Walker had succeeded in creating a $3.6 billion deficit panic. The mantra continues today, as it continued on the campaign trail. Even across the border as Walker addressed the Illinois Chamber of Commerce in April.  The Romney Campaign is embracing Wisconsin as the role model for the nation. Scott Walker is the hero that conquered the deficit beast, and America must embrace the austerity measures to save itself – as they have saved Wisconsin.

The entire budgeting premise upon which Walker based his “deficit crisis” was a lie. Having been a legislator in Wisconsin, he would have known this, or he is a complete idiot. We also now know what these “austerity” measures do to a national economy, yet it is being largely ignored by the media. Should the Walker policies continue to expand, and Romney wins the White House in November pass the potatoes – because Wisconsin will look more like Ireland in two years than the state we all know and love. Read on for details.

Walker’s $3.6 Billion deficit was based on the 2011-2013 State Agency Budget Requests . Representative Mark Pocan (D-Madison) received and released a Legislative Fiscal Bureau memo from February 16, 2011 – but no media were paying attention. Scott Walker was intervening in the budget process prematurely – for the purpose of creating a fiscal emergency. As shown in the memo, the final Agency Budgets are never funded at the levels requested by the agencies. There are constant negotiations and compromises in both revenues and expenses during the budget creation process – much of which happens in the Legislature. The 2011-2013 requested increases of 7.2% contributed to much of the reported deficit, and would have been greatly reduced in the legislative budgeting process. The Agency appropriations for 2009-2011 actually received a cut of 2.6% from the baseline, due to one-time federal stimulus payments. This so-called “deficit” existed only on the paper from the Agency Funding Requests.

On January 31, 2011 (before the Walker “deficit emergency” took hold in the media) the Legislative Fiscal Bureau (LFB) sent a memo to Joint Finance Chairs Robin Vos and Alberta Darling. Based on the 2009-2011 Doyle budget in place, the LFB forecast a year-end SURPLUS of over $56 Million. This had actually been a revision of the Doyle Administration’s earlier forecast of a $112 million surplus due to several reasons:

1. Lower tax collections.

2. Debt payments being made in 2010-2011.

3. Budgeted Minnesota reciprocity lapse payment.

4. Some increase in department revenue and lapses.

That’s right citizens – before Scott Walker took office, Wisconsin had a budget surplus. In addition, the Agency appropriations had not been addressed as part of the budgeting process. The truth is, the $3.6 Billion “deficit” was only on paper – it was not functional. The lie persists; the result being an affirmation of Walker’s austerity measures. Where has that gotten us? On a road paved with intended and known consequences – known because we have an economic precedent.

The February 9, 2012 LFB memo submitted to Vos and Darling on  shows the effects of austerity. Unlike any DOA or DOR analysis, the LFB is the only truly non-partisan budget analysis taking in factors from all fiscal agencies, and using a consistent measure. Wisconsin is now faced with a $208 Million + deficit by the end of 2013. The memo specifies the effects of laws enacted in 2011 to decrease revenue, and increase the burden of state expenditures on a shrinking middle class. The memo also cites the decrease in tax revenue being collected and pursued from large corporations; a function of greater loopholes and deregulation of corporate taxes and collections.

As the GOP has already indicated, the answer to this decrease in revenue will be to cut, cut, cut – more austerity. A word of warning, which, based on the recall election may be too late. Wisconsin’s economy is only being bolstered by a slightly improving national economy. While we rise in the “business friendly” and “economic freedom” indicators of the Heritage Foundation, there are severe consequences for the policies we are pursuing. In the absence of any stimulus, Wisconsin would have gone from stagnant to depressed. The model exists for Wisconsin under Scott Walker and a potential Romney presidency. It is Ireland.

In an interview on the Colbert Report, June 18 2012, Paul Krugman put the Ireland economic example in perspective. In response to the suggestion by Colbert that electing Mitt Romney president would solve our economic problem, Krugman sates:

“Ireland is Romney economics in practice. They’ve laid off a large portion of their public workforce, they’ve slashed spending, they’ve enacted extreme austerity programs, they haven’t raised taxes on corporations or the rich at all. They have 14% unemployment, 30% youth unemployment. Ireland is what the US economy would be under Romney.”

In 2008, Ireland was ranked as the 3rd best economy in the world for “economic freedom” by the Heritage Foundation. Low corporate taxes, little regulation, the “Celtic Tiger” was a model capitalist state – having achieved its economic freedom and prosperity over a decade of free market growth. By 2009, the economy was in shambles, and Ireland was the first and most aggressive European nation to adopt austerity measures. In April 2009, Paul Krugman sounded the warning to us and Europe:

Unfortunately, we didn’t save for a rainy day: thanks to tax cuts and the war in Iraq, America came out of the “Bush boom” with a higher ratio of government debt to G.D.P. than it had going in. And if we push that ratio another 30 or 40 points higher — not out of the question if economic policy is mishandled over the next few years — we might start facing our own problems with the bond market.

Not to put too fine a point on it, that’s one reason I’m so concerned about the Obama administration’s bank plan. If, as some of us fear, taxpayer funds end up providing windfalls to financial operators instead of fixing what needs to be fixed, we might not have the money to go back and do it right.

And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks.”

That is precisely what we are doing – the overall economy is suffering to save the banks, multinational corporations, and wealthiest among us. While Euro-zone leaders hail Ireland’s continued austerity, the people are suffering – 14% unemployment, wage cuts, healthcare cuts, public services slashed, and nearly 40,000 have left the country for greener pastures. On June 17, 2012, Paul Krugman addresses the “success” that the International Monetary Fund considers Ireland:

“…this was a statistical illusion, reflecting the fact that very capital-intensive industries, especially pharma, had weathered the crisis better than labor-intensive sectors. Meanwhile, the real thing — slight wage decline in Ireland while wages rise in Germany — has been proceeding at a relatively glacial pace. And the promised payoff in increased market share is still invisible.”

Continued austerity will have the same effect here – decreased wages, high unemployment, decreased revenues, the list goes on. So does the GOP austerity train…

The lie of the deficit emergency, if allowed to persist as the greatest threat to our state and nation, will have dire consequences for the ever-shrinking middle class. Either Scott Walker, Paul Ryan, Mitt Romney and the GOP powers know and want this – or they are idiots.

Stock up on corned beef, cabbage, and potatoes. Pass the Jameson. We’ll need good whiskey for the revolution.