Public Union Backing A Mixed Blessing?

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An Associated Press story today indicates that Milwaukee Mayor Tom Barrett is ahead of the initially union-backed former Dane County Executive Kathleen Falk-

Milwaukee Mayor Tom Barrett is showing signs of pulling ahead of the Democratic competition in the race to determine who faces Wisconsin Republican Gov. Scott Walker in a recall election that has become a nationally watched battle over union rights.

Polls show Barrett with a lead less than two weeks before election day, and a labor group supporting his chief opponent, Kathleen Falk, recently pulled its television ads off the air. A state teachers union that backed Falk now says it will support whoever emerges from the Democratic primary on May 8.

Most of the state’s major unions, including the statewide teacher union, have backed Falk, the former county executive from the liberal capital city of Madison. Traditional Democratic backers including the Sierra Club, immigrants’ rights groups Voces de la Frontera and the Young Progressives of Wisconsin have also campaigned extensively for her. She has promised to veto any state budget that didn’t restore public workers’ bargaining rights.

Barrett, who has clashed with unions during his eight years as Milwaukee mayor, refused to make the same promise. But he is much better known across the state as the result of his 2010 campaign and is considered more acceptable to moderate Democrats.

The unions now face a predicament as Barrett appears to be leading the field. A Marquette University poll earlier this year showed him leading Falk 36 percent to 29 percent, and two recent polls have shown him with a solid lead. Two other Democratic candidates, longtime Secretary of State Doug La Follette and state Sen. Kathleen Vinehout, have failed to gain traction.

From what I’ve seen of these candidates, Barrett seems the most “polished” politician, but also the least exciting and perhaps the most slippery in terms of substance. I was impressed by a brief interview of Kathleen Vinehout that I saw on Wisconsin Public Broadcasting’s “Here and Now” a few weeks ago, but she seems to face an uphill battle in terms of name recognition. The fact that Barrett is leading despite Falk’s being backed by public unions suggests that he might be leading in part because of Falk’s being backed by the unions. It might have been wiser for the unions not to throw their weight around at least prior to the general election, since Democrats are not insensitive to the appearance of corruption presented by unions helping to elect their political bosses.

I think that full bargaining rights for public unions should be reinstated, but that such unions should not negotiate with elected leaders. Ideally, there should be some intermediate, politically neutral agency (if such a thing is possible) with which public unions could negotiate. Of course, setting up such an agency would likely require amending the state constitution, but if the Democrats win, a willingness to enter into such a process could help to end the political civil war that has been ravaging Wisconsin over the past year.

Let’s Play Spin The Statistics

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In his recent political ads, Governor Walker has been proudly trumpeting the fact that there has been a fall in the unemployment rate over the last year, from 7.6% to 6.8%. Unfortunately for Wisconsin (and for the Governor, if the Democrats are smart enough to counter his positive spin with ads of their own), there are more ways to account for this decline than by a growth in the number of jobs: it could result merely from a shrinkage of the number of people looking for work, or from thousands of unemployed people leaving Wisconsin to look for work elsewhere.

The full story won’t be known for a while, but a further statistic found in the latest Bureau of Labor Statistics report indicates that Wisconsin was the only state to actually lose a statistically significant number of jobs over the last year. To keep his promise to add 250,000 new jobs in four years, the Governor now has add 273,900 jobs in three years. That is, if he has three years left on the job, rather than six weeks. As JSOnline summarizes-

Wisconsin is the only state that had “statistically significant” job losses over the most recent 12-month period, according to the U.S. Bureau of Labor Statistics. From March 2011 to March 2012, Wisconsin lost 23,900 jobs. That was the largest decrease in percentage terms in the country. Those job losses came from both the public and private sector, but the public sector job losses (17,800) were larger than the private-sector job losses (6,100).

At the same time, Wisconsin was one of 18 states that had a statistically significant drop in the unemployment rate during the same period, from 7.6% to 6.8%. Wisconsin has experienced both job declines and a drop in unemployment at various times over the past year. The two indicators come from different surveys, and the decline in the unemployment rate has also reflected a decline in the number of people looking for work.

If you’re the kind who’s able to read a BLS report without falling asleep, or if you can’t quite manage that but you need to fall asleep anyway, you can find the original report here.

Did The Stimulus Stimulate?

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According to an investigative story on the front page of last Sunday’s Oshkosh Northwestern, the answer is most definitely “yes”: although it operated invisibly to most taxpayers, the stimulus was key to getting many Wisconsin businesses through the Great Recession. In keeping with their penchant for appearing politically “balanced”, the paper “buried the lead” as best it could by using the headline “Stimulus loans oversight lacking” and by citing a number of minor gripes, including the fact that the stimulus money funneled needed credit to low-wage small businesses in addition to high-wage small businesses (isn’t it the Republicans who are constantly defending low wage jobs as being better than no jobs at all?)-

The Small Business Administration-backed loans ranged from a low of $5,000 to a high of $5 million — the most allowed under the program. In all, more than 6,000 loans were made in Wisconsin, for a total of $1.8 billion, including $260 million lent to retailers.

SBA officials say the loan program is accomplishing what it set out to do: making cash available to businesses when bank loans have been hard to come by. That did help an aluminum company in Manitowoc and a pet food factory outside Madison, for example, to create new manufacturing jobs.

But the money also was borrowed by businesses and industries with some of the lowest wages in the state.

“The SBA program was huge,” Chaudoir said. “If government didn’t do this, who knows what would have happened. People who are still debating whether the program was a success have to put themselves back to how they felt at the beginning of 2009, how afraid they were about the future.”

Some loans without question helped create jobs and trigger spending, particularly in manufacturing, the business sector that received the greatest proportion of SBA money.

Skana Aluminum Co. bought a Mirro plant in Manitowoc out of receivership and turned it into a thriving business that expects to ship 30 tons of metal this year. Skana borrowed $5 million of the $438 million lent to Wisconsin manufacturers, growing from zero to 75 employees in nine months and prompting Obama to praise the results in a 2011 visit. Skana in March employed 108 workers and was operating two shifts.

“The people of the community appreciate hearing stories like ours,” said Steve Gallimore, a Skana spokesman. “Things are looking good for us and for Manitowoc.”

Mequon-based Fromm Family Foods, recipients of $2.7 million in loans, took a dormant feed mill northeast of Madison and converted it to a facility that creates 600 tons of gourmet pet food each week. In Howard, near Green Bay, Centerline Machining & Grinding Inc. expanded into a new plant in 2010 after borrowing $817,000.

Adjustments to the loan program under the stimulus made more money available and made it easier for businesses to get loans, said the SBA’s Ness. Some fees were eliminated, and struggling businesses that met certain standards were given longer to pay.

“The stimulus was the first time we broke the $500 million mark (in one year) for loans in Wisconsin,” he said. “We clearly helped some companies stay in business, and we helped others to grow.”

Was the stimulus perfect? Of course not. Was it in some ways wasteful and inefficient? Seems likely. But when you’re trying to put out a dangerous fire, you probably shouldn’t worry too much about wasting some of the water you’re spraying on the flames.

UPDATE 4/17/12-

In an editorial in today’s paper, the Northwestern clarifies why it sees the glass as half-empty. The basic complaint seems to be that the SBA has failed to collect certain key data that would allow the paper (and taxpayers) to evaluate the overall success or failure of the stimulus-

…the devil’s not always in the multiplicity of details, but the one’s that are missing. The story in Sunday’s Oshkosh Northwestern examined federal loan money authorized in the stimulus and administered through the Small Business Administration.

The SBA … maintains an impressive amount of information about the loan program in Wisconsin. For example, we know the total value is about $1 billion for more than 6,000 loans ranging from $5,000 to $5 million for companies of widely divergent sizes and specialties. Some of the businesses expanded and created jobs; others refinanced and saved money and jobs, while some folded. We produced an equally impressive database and map that can tell you all kinds of spiffy things about loans, but the report failed to answer one very fundamental question: “Is it working?”

The failure wasn’t for the lack of asking. It was for the lack of tracking and oversight by the government for the facts that matter. To be sure, no conclusive answers can be drawn over such a short time frame. The goal of keeping capital flowing when banks were not lending money is a sound one. For all the facts and figures, basic information is missing. Facts that would allow citizens to make informed judgments on how their tax money was being spent, such as loan default rates, the number of jobs saved or created and businesses behind on payments.

In short, information that delivers on pledges of transparency and draw conclusions deeper than the government borrowed, loaned and declared mission accomplished.

Transparency is a good thing, as is full information. But notice that the sort of transparency the Northwestern is seeking would necessarily involve the sort of “government intrusion” into business that Republicans usually decry. Note also that news organizations as large as Gannett should not have to make do with the graphs and tables found on government web sites! Whatever happened to the days when large news organizations would collect the missing data for themselves, even if only by polling a sample of businesses that received stimulus loans?

Don Ross: Upright And Locked Position

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I haven’t been posting lately; just been too damn busy. I’ll probably remain so for a while. But to begin to make amends, here’s a delightful little ditty from Don Ross’s new album, aptly titled “Upright And Locked Position”.

Enjoy!