PS427: Be Bold Wisconsin

UpFront with Mike Gousha had a great segment on economic development today with Cory Nettles (former Dem Commerce Secretary) and Bill McCoshen (former Rep Commerce Secretary). They have been part of a new study producing a set of recommendations, including a complete restructuring of the Commerce Department to focus it on economic development.

Here is the link to the segment as it aired.


And here is a link to the "web extra" that extends the conversation.


The full report is here. Read every word and comment below.

Compare with the Wisconsin Technology Council report you read a few weeks ago.

PS427: Wisconsin Budget Outlook

Two good sources for analysis of the Wisconsin state budget.

On the right, Wisconsin Policy Research Institute:


Wisconsin's State Budget Outlook: The Worst is Yet to Come

On the left, Wisconsin Council on Children and Families:

Wisconsin Budget Basics Guide.


For NEXT week, July 18, base your weekly memo on these two pieces.

Are there broad points of agreement, or do the analyses take fundamentally different assumptions?

Are there prescriptions here, and if so do they agree or differ?

PS427: New Jersey Budget, Christie vs Dems

The New Jersey budget faced an $11 billion shortfall. Newly elected governor Chris Christie drew attention by taking on state employee unions, especially teachers, and pushed throw a budget with major cuts, numerous fee increases, and elimination of tax-rebates. Republicans are looking at Christie as a model for budget cutting while maintaining popular support. Dems are concerned.

This is a striking contrast with the situation in Illinois where little progress seems to be at hand in dealing with state bills that can't be paid. Or in California which as of today (July 4) still lacks a state budget.

Here are a series of excellent articles covering the NJ budget process and the current "near-deal" on limiting property tax increases, which may or may not be a done deal (see reservations by the assembly speaker.)

This is a GREAT overview of the entire budget process and negotiations. Bravo to reporters Claire Heininger and Josh Margolin for an article that covers the complexity so well.

Here is the article on the budget passing. Note the chart on where the money comes from and where it goes. I wish it were a little more detailed, especially on what state agencies spend what but otherwise useful information.

This is a piece that puts Christie's budget in the perspective of what previous governors did to bring the state to its current situation.

And here is where the property tax issue stands today, with an agreement in the senate and some uncertainty in the assembly.

Not all are happy, and here is a piece on groups opposing the budget deal.

Some earlier coverage in the run-up to the budget include:

State worker protests. (Note the likely cuts to state worker benefits in Wisconsin as well. Pensions and benefits are inviting targets. (Why?)  And not just for Reps. Gov. Doyle recommended more or less the same increase in state worker contributions to retirement funds last year that GOPer Scott Walker now supports.)

Universities and colleges take $173M in cuts, plan tuition hikes.  In what ways is that a good thing and a bad thing? Discuss.

Christie fighting with teachers unions.

Oh my! Christie urges towns to reject school budgets without a wage freeze!

Subsequently, 53% of such budgets are rejected. Quite an impressive show of support for the Governor's position. Quite a lack of success for the teachers unions.

Here is a comical attempt to spin the results in favor of the teachers unions.

And here is a good non-partisan overview of Christie's conflict with the teachers and the subsequent votes.


Wow. I could go on and on. The Newark Star Ledger deserves huge praise for their detailed coverage and for a page offering the entire chronology. I wish Wisconsin papers would follow their lead in coverage and organization of that coverage on their web pages. This is a model of good work.

Here is the Star-Ledger's overview page.

Read JUST THE HEADLINES on the overview page. Read from bottom to top so you see it in chronological order. Make note of the issues, areas of cuts and revenue increases, and ESPECIALLY how each interest group howls in protest when their ox is gored. Note also in the budget article above how Republican legislators are very troubled about voting for cuts to THEIR suburban school districts. Concern for YOUR ox is bi-partisan indeed.

This is textbook stuff about budget making. The most amazing part is how Christie marshaled the political skill to get the budget through the legislature, where Democrats control both houses, and how he had to struggle to maintain GOP unanimity of support for his plan.

I don't have a dog in this fight. There are good arguments on both sides of budget debates. But as just plain fascinating politics, this case in New Jersey deserves to be widely studied.

PS427: A big day for economic analysis

The latest employment data are out this morning, prompting a binge of analysis.

The NYT's Economix blog is particularly active with some excellent analysis and graphics. Here are the links:

Is job growth being underestimated? Maybe.  This from the day before the new data arrived.

Is the recovery losing steam? Gloom.  Note the focus on employment. There is much more to the economy than just jobs, so this is a rather narrow view. Looking more broadly might be worse or better, but at least look.

Comparing the recession with the previous ones since 1970.  This includes one of the most elegant and clear graphics showing the depth of the current recession in terms of jobs lost.

Long-term unemployment is the distinctive mark of the current recession. Is this due to structural change in the economy, or as some argue the continuing extension of unemployment insurance? Would more have found a (probably lower paying) job if they didn't have continuing unemployment benefits to fall back on? Will the current GOP blockage of yet another extension of unemployment benefits ultimately force some to take a job less good than they would wish? And for bonus points, as a political matter, can GOP candidates successfully campaign on having "stood against more deficit spending" if it means they did so by blocking extended unemployment benefits? Can Dems campaign for extending benefits even if they must therefore take the blame for more deficit spending?

The 1981-82 recession was the worst post-war recession until this one. Is this one worse, even though unemployment rates hit higher peaks in 1982?  And here is the full report that was the basis of the NYT Economix report.

PS427: Two Budget Analysis Sites

Here are two sites that do interesting budget analysis work.

Leaning left is the Center on Budget and Policy Priorities.  We took a look at some of their work earlier.

And leaning right/libertarian is the Mercatus Center at George Mason University.

Both have a variety of interesting analyses, and it is useful to compare how and why their conclusions sometimes differ (and where they agree.)

PS427: Stabilize the National Debt Yourself

As we are talking about budget choices at both the state and federal levels, here is a nifty exercise in seeing what you care to cut to get the federal debt under control.

Ezra Klein writes about some of the issues here.

And more fun, the Committee for a Responsible Federal Budget has the budget simulation here.

See what it takes you to get to 60% of GDP.

Discuss: What choices did you make?

What political obstacles would arise in getting your choices passed by Congress?

Who do you think should pay for reducing the deficit? The rich through higher taxes, the poor through reduced services, the elderly through Medicare and Social Security cuts, the middle class by removing income tax deductions for homes and state taxes, the military by ending defense spending as we know it? You choose, but explain your choices.

PS427: The Anti-Stimulus, State Responsibility and WFA

Ezra Klein at the Washington Post is an interesting journalist with a wonkish policy focus. This week he published a piece on state budget problems as the "anti-stimulus", amounting to a huge amount of money not being spent that can equal or even exceed the size of the federal stimulus package.

See his article here.


Some reader's subsequently object (quite correctly) that federal aid to the states amounts to enabling their bad budget management and just encourages them to delay confronting the basic shortcomings of their budgeting. Klein raises that issue and presents some counter evidence, along with a link to an academic analysis of the state budget short fall and its roots in unemployment levels:

That link is here.

And finally, what are the roots of government (state and federal) deficits and can't they be readily cured by eliminating Waste, Fraud and Abuse (WFA). The public seems to think so. See this piece by Democratic pollster Mark Mellman.

Link to opinion about WFA here.


Discuss:

Is Klein's empirical argument one that both lefties and righties should (in principle!) be able to agree on, even if they differ on policy solutions? Or is there an underlying ideological debate about the fundamental point Klein is making, which means that no such empirical agreement is possible?

What role do you think public attitudes play in state and federal efforts to address budget deficits and revenue?

Why does the public continue to believe that such large portions of government revenue is wasted and therefore could be cut without any consequence?

If it is so easy to do, why has NEITHER party made significant headway in cutting spending? (Consider the record of the 1990s and the federal surpluses that resulted as both a positive and a negative example.)