Category Archives: Economy

Time to let college athletes be compensated

Here is my full column that ran yesterday in the Washington County Daily News.

I had occasion last week to visit my alma mater, Texas A&M University, to celebrate the 125th anniversary of the Fightin’ Texas Aggie Band, in which I marched. The days were filled with old friends, old stories, and meeting with legions of Aggies past, present, and future.

As part of the activities, we were offered a tour of the newest addition to Kyle Field, now the largest stadium in the state of Texas. Opulent does not begin to describe it. The Hall of Champions, luxury suites, amenities, training facilities, locker rooms, etc., are truly superb. A look to the west at the baseball field, track facilities, soccer field, basketball arena, etc., will find equally magnificent facilities. Many of these facilities, including the newest addition to Kyle Field, were built mostly with private money, but they really show how much money flows through college athletics.

While I could use any university as an example, the numbers from Texas A&M are a good example. Last year, Texas A&M Athletics took in $212.4 million in revenue against $165.8 million in expenses, resulting in a 22% profit of $46.6 million. Many private companies would be delighted to see such positive financial performance. On any given home football game day, 60,000-plus people flood into town. They stay at hotels, eat at restaurants, buy merchandise, rent cars, and have a staggering economic impact on the little city. Jimbo Fisher, the football head coach, is being paid $75 million over 10 years. The media companies make millions broadcasting the games on television and radio. Companies like Nike, Adidas, and Under Armor make millions selling athletic gear with college logos on them.

Everybody is making money — big money — in college athletics except the athletes playing the games. That needs to change.

For years, it has been forbidden for college athletes to earn or accept money. The rationale is that the purpose of college athletics is to be an extracurricular activity that attracts kids to college and provides some of those kids with access to higher education through scholarships. If college athletes can earn money for playing a sport, then they blur into professional athletes competing for a school instead of an amateur college kid just playing while he or she is earning a degree. Such notions seem almost quaint when college sports has become a multibillion-dollar industry.

While much of the attention is focused on the tiny number of high-profile athletes who are destined for national fame in professional leagues, the vast majority of college athletes do not fit that mold. In all of Division I athletics, only 69% of athletes receive some kind of scholarship, and a smaller percentage receives a full scholarship. Even then, the scholarship does not cover expenses outside of school. For athletes from financially disadvantaged backgrounds, the prohibition from being able to earn money if they play a sport might keep them from playing the sport at all.

Furthermore, only a handful of college athletes will ever go on to compete at a professional level, and only some sports even have a professional league where athletes can earn good money. Most college football, baseball, basketball, and hockey players never make it to the pros, and the average track, volleyball, or lacrosse player will never be able to earn a living competing in their sport.

College athletes are adults. It is fundamentally unjust for thousands of people to make money off of their talent while they are prohibited from doing so. This is especially true considering that the athlete is assuming all of the risk. How many times, for example, has a star college athlete destined for the pros suffered a career-ending injury before they were ever able to earn a single dollar for all of their work and talent?

Whether universities should actually pay athletes a salary outside of scholarships is certainly questionable. Universities are not in the business of sports and public universities, in particular, should not use tax dollars to pay athletes. But if a local car dealership, law firm, or restaurant wants to pay a prominent college athlete to use their likeness in their advertising, why should that be prohibited? Who is harmed by that transaction? Nobody.

Several states and the NCAA are already moving to allow college athletes to earn money for themselves as they are earning money for everyone else. Wisconsin should be the next state to do so.

Time to let college athletes be compensated

My column for the Washington County Daily News is online and in print. Here’s a taste:

Everybody is making money — big money — in college athletics except the athletes playing the games. That needs to change.

[…]

College athletes are adults. It is fundamentally unjust for thousands of people to make money off of their talent while they are prohibited from doing so. This is especially true considering that the athlete is assuming all of the risk. How many times, for example, has a star college athlete destined for the pros suffered a career-ending injury before they were ever able to earn a single dollar for all of their work and talent?

Whether universities should actually pay athletes a salary outside of scholarships is certainly questionable. Universities are not in the business of sports and public universities, in particular, should not use tax dollars to pay athletes. But if a local car dealership, law firm, or restaurant wants to pay a prominent college athlete to use their likeness in their advertising, why should that be prohibited? Who is harmed by that transaction? Nobody.

Several states and the NCAA are already moving to allow college athletes to earn money for themselves as they are earning money for everyone else. Wisconsin should be the next state to do so.

 

CBD Glut

The market is still trying to find equilibrium.

About 65% of U.S. hemp farmers lack a buyer for their crop this season, leaving them few alternatives, according to a July survey by Whitney Economics. Hemp has less infrastructure than other crops, so farmers cannot rely on selling their crop to a local grain elevator.

“People entered in on speculation,” said Chase Hubbard, hemp commodities analyst at The Jacobsen, a price reporting agency. “The results could be tragic for some small farmers.”

The 2018 Farm Bill coincided with a boom in the market for food, drink and cosmetic products laced with CBD, an industry that Wall Street firm Cowen & Co has estimated to grow to $16 billion by 2025.

Enticed by projections that hemp would bring $750 in profits per acre – well above the $150 or less from a typical acre of soybeans – farmers placed their bets on a crop that had been illegal for most of their lifetimes.

Last April, as farmers planted, a pound of hemp biomass sold for about $40. Now, as farmers harvest and take their crops to market, the same amount sells for $18-$25, according to PanXchange, a commodities platform.

Fed Pumps Money into Market

Inflation to come.

The Federal Reserve Bank of New York is boosting the amount of temporary liquidity it is willing to make available to financial markets starting this week, the bank said on Wednesday.

It said that as of Thursday, the minimum size of its overnight repurchase-agreement, or repo, operations will rise to $120 billion, from what had been at least $75 billion. Longer-term operations will rise from a minimum daily offering size of $35 billion and go up to $45 billion in interventions scheduled for Thursday and Oct. 29. The longer-term repo operations are scheduled to carry over into November.

The Fed said it was raising the minimum operation sizes “to mitigate the risk of money market pressures that could adversely affect policy implementation.”

Fed repo operations add liquidity to financial markets by loaning cash to eligible banks in return for taking in Treasury debt, which effectively functions as collateral for the loans. The Fed restarted large-scale repo operations a month ago when confronted with unexpectedly big swings in money market borrowing rates.

Interest rates spiked ahead of the September Federal Open-Market Committee meeting for a number of factors. Much of it was due to tax payments and Treasury debt settlements. But as part of an effort to tamp down on market volatility, the New York Fed have made large-scale repos a regular occurrence again.

No New Jobs for Inner City Milwaukee

Ah, the classic American tale. Company wants to move into the inner city to create jobs and build the community; protesters crap all over it; company takes its business elsewhere. Nice job, Milwaukee.

Strauss Brands announced Monday they will not be relocating from Franklin to Milwaukee — taking with them up to 500 potential jobs.

[…]

In September, the city announced Strauss Brands would be moving its headquarters — and meat processing facility — to the city’s northwest side. The company was planning to build a 170,000-square-foot building on 20 acres, and planned to slaughter 500 cows every day starting in 2021.

Milwaukee city officials celebrated the ability to get a large production facility to move into the struggling business park.

Alderman Khalif Rainey, who represents the district where Century City is located, was in support of Strauss Brands moving into the area. He said those jobs were needed.

But after intense criticsm over the slaughterhouse, the common council decided to revisit the proposal, planning to do so Tuesday, Oct. 29.

WILL Sues On Behalf of Parents

Indeed. It’s stunning how arrogant the schools are to think that they, and not the parents, should guide kids through something as serious and life-altering as a gender transition. Perhaps if a kid isn’t mature enough to discuss something like this with their parents, then they shouldn’t be doing it.

A conservative legal group is challenging a Madison School District policy that the organization says could leave parents in the dark about whether their children are transitioning genders at school.

The Wisconsin Institute for Law & Liberty, or WILL, wants the district to repeal a “guidance document” for teachers and staff to follow when dealing with questions of students’ gender identity. The guide prohibits staff from revealing to parents if their child is transitioning genders unless the student gives permission.

“Our problem is with the systematic exclusion of families, even to the point of instructing district employees to actively deceive families,” said Rick Esenberg, president and general counsel for the Milwaukee-based organization.

Nass Sticks up for Farmers

Governor Evers wants to impose onerous and expensive new restrictions on farmers. Thankfully, Nass is sticking up for the farmers.

A key Republican lawmaker vowed Wednesday to block new state restrictions designed to protect farmers’ neighbors from the stench of manure following a flurry of complaints from Wisconsin’s agricultural community.

The Department of Agriculture, Trade and Consumer Protection has spent the last three years drafting revisions to farm siting regulations. The latest version calls for dramatically expanding manure storage facility setbacks from neighbors’ property lines for new farms and farms looking to expand.

Sen. Steve Nass, R-Whitewater, co-chairman of the Legislature’s rules committee, issued a terse statement Wednesday accusing department “bureaucrats” of ignoring the industry’s concerns and making life harder for farmers. He promised to do everything he can to block the rules if they reach his committee in their present form.

I don’t remember who first said it to me, but whenever I am in the country and that manure smell wafts through my nostrils, I say, “mmm… smells like money.” That smell represents the hard work that farmers do to feed their families and ours. Instead of trying to make farms smell better for the sensibilities of suburbanites and city dwellers, let’s educate people on the importance of farming, because nobody cares about the smell of shit when they are starving.

UAW Strikes Against GM

It could be because they have a legitimate dispute with GM about labor contracts. It could also be an orchestrated distraction to distract their members and the public from their own corruption. And now if anyone pokes deeper into the corruption, the UAW can accuse them of strike busting. Slimy people.

DETROIT – About 48,000 members of the United Auto Workers union went on strike early Monday as contract talks with General Motors broke down.

Union members walked out of factories and set up picket lines at 33 plants across the nation as well as 22 parts warehouses.

The strike, depending on its length, could easily cost GM hundreds of millions of dollars. The last time the union declared a strike at GM was in 2007. The two-day work stoppage was estimated to have cost the Detroit automaker more than $300 million a day.

The called strike comes despite GM saying it presented a “strong offer” to the union that included the addition or retention of thousands of jobs and more than $7 billion in new investments over the next four years.

[…]

The circumstances add to the tension of already unprecedented negotiations, following UAW Region 5 Director Vance Pearson, a member of the union’s International Executive Board, being arrested and charged by federal officials Thursday with embezzlement of union funds, among other charges.

The affidavit detailing the charges also reportedly implicated UAW President Gary Jones and former UAW President Dennis Williams, whose homes were raided along with Pearson’s by FBI, IRS and Department of Labor agents two weeks ago. Pearson, who joined the UAW in 1981, succeeded Jones as director of UAW Region 5.

[…]

“This union exists to support our local unions and this strike is about our local union members,” he said. “We will not be deviated from that because that is what is in their interest, that is what they want and that is what we will do.”

 

Walmart Stops Selling Some Ammo and Nags Customers

It seems that Walmart misunderstands their customers.

Walmart said Tuesday it will discontinue all sales of handgun ammunition and sales of short-barrel rifle ammunition that can be used with military-style weapons, following two “horrific” shootings at Walmart stores this summer. It will also stop all handgun sales in Alaska, marking its complete exit from the handguns category.

The biggest retailer in the world also is asking customers at Walmart and Sam’s Club to no longer openly carry firearms in stores, in states where “open carry” is allowed, unless they are authorized law enforcement officers. Open carry legislation is currently on the books in more than 26 states, Dan Bartlett, executive vice president of corporate affairs, said during a call with members of the media.

I doubt that very many people who shop at Walmart will boycott over this. But for the gun owners who used to buy their ammo there, they are going to have to buy ammo – and likely all of their other shooting supplies and accessories – somewhere else. If I were Bass Pro Shops, I’d announce a sale on handgun ammo by the end of the day.

Foxconn to Partner with Johnson Controls for Smart Buildings

Cool!

MILWAUKEE — Johnson Controls will collaborate with Foxconn to transform building data analytics through artificial intelligence and machine learning to advance smart building and smart-city technologies and achieve comfort, security and sustainability goals, according to a Wednesday announcement.

As part of the global technology strategic partnership, Johnsons Controls will become the preferred provider of building management products and solutions at Foxconn’s planned manufacturing facilities in Mt. Pleasant and potentially extend to Foxconn’s global footprint. The buildings will incorporate smart, safe, and sustainable technologies provided by Johnson Controls and enhanced by Fii’s industrial AI and Smart manufacturing technologies.

“We look forward to this collaboration with JohnsonControls, a global leader in building technology, to apply their expertise to leverage our expertise in Artificial Intelligence to further advance into

the next generation of smart technology solutions,” said Brand Cheng, Fii CEO.

The smart buildings and cities of the future will rely on buildings with a highly predictive network of integrated data analytics and artificial intelligence applications, combining building data with external data such as utility pricing, energy storage use, social media tracking and weather data to help consumers manage their home environment, home security, lighting and a host of other in-home functions.

Foxconn Continues to Grow in Wisconsin

All of the lefties sure have gone quiet on Foxconn.

WAUKESHA — Foxconn has hired nine more subcontractors for ongoing work at the Wisconn Valley Science and Technology Park, many of which are from southeastern Wisconsin.

The combined total contract value for this bid package exceeds $15 million. The total value of all subcontractor awards to date is more than $175 million.

Equal Pay for Equal Work

Indeed.

Now USSF President Carlos Cordeiro is pushing back. He wrote an open letter explaining that he directed U.S. Soccer staff to conduct “an extensive analysis of the pa st 10 years of U.S. Soccer’s financials.” He said the analysis was “reviewed by an independent accounting firm.” The analysis showed that the women’s team was paid more than the men’s team.

The fact sheet includes bulleted information about the different pay structures for the men’s and women’s teams. USSF claimed that it paid “women $34.1 million in salaries and game bonuses and we paid our men $26.4 million — not counting the significant additional value of various benefits that our women’s players receive but which our men do not.”

For example, the women’s team has a guaranteed salary thanks to their collective bargaining agreement with USSF. They receive a base salary of $100,000 each year and an additional salary of $67,500 to $72,500 for playing in the National Women’s Soccer League. Male soccer players do not have such an agreement.

That agreement means women soccer players earn a guaranteed salary of $167,500 to $172,500 each year. On top of that, they are paid bonuses. The men’s team only earns bonuses. Yes, those bonuses can be larger, but that’s because they don’t have the guaranteed base salary. The women’s team, according to USSF, also receives benefits including a 401(k) plan and health insurance, as well as maternity leave and injury protection. The men’s team does not receive any benefits.

Finally, USSF points out that the “hypothetical per game comparison” making the media rounds isn’t even plausible. Neither the men’s nor the women’s teams have ever played 20 friendly matches in a year, yet this is what the hypothetical scenario is based on.

“That said, if the men and women ever did play in and win 20 friendlies in a year and were paid the average bonus amount, a women’s player would earn more­ from U.S. Soccer than the men’s player — the women’s player would earn at least $307,500 (WNT and NWSL salaries, plus game bonuses) and the men’s player would earn $263,333 (game bonuses only),” USSF claimed.

No More Sales Tax Holiday in Wisconsin

Thanks, Governor Evers.

Since back to school shopping can get pretty expensive, Wisconsin held its first tax free holiday for shoppers in early August last year. During that time, shoppers could buy select clothing, technology, and other supplies without paying the 5% sales tax.

“I think they should have the tax free weekend because it helps a lot of parents. Especially when they only have one income and grandparents have to help,” said Callahan.

[…]

But Democratic Gov. Tony Evers has confirmed that the state will no longer participate in the event this year. He said it was a one-time deal enacted under the former Republican Gov. Scott Walker.

“I think parents are going to be purchasing school supplies whether they have an incentive or not. I just don’t think the incentive actually worked,” said Evers.

I agree that the sales tax holiday doesn’t work as an economic stimulant, but it sure was nice for parents and teachers who are spending hundreds of dollars on school supplies.

Dollar Store Backlash

Darn those stores for offering products people want at competitive prices.

New York (CNN Business)As dollar stores sweep across America, they are facing growing scrutiny from opponents who argue that discount chains stifle local competition and limit poor communities’ access to healthy food.

Dollar stores have never been more popular. Yet a wave of cities and towns have passed laws curbing the expansion of Dollar General (DG) and Dollar Tree (DLTR), which bought Family Dollar in 2015. The companies are the two largest dollar store operators in the country, combining for more than 30,000 stores throughout the United States, up from under 20,000 a decade ago. By comparison, Walmart(WMT), America’s largest retailer, has 4,700 US stores.
Advocates of tighter controls on dollar stores say the big chains intentionally cluster multiple stores in low-income areas. That strategy discourages supermarkets from opening and it threatens existing mom-and-pop grocers, critics say.
“The business model for these stores is built on saturation,” said Julia McCarthy, senior policy associate at the nonprofit Center for Science in the Public Interest and a critic of dollar stores. “When you have so many dollar stores in one neighborhood, there’s no incentive for a full-service grocery store to come in.”
Opponents also express concerns that dollar stores don’t offer fresh produce. Dollar General and its dollar store rivals mostly sell snacks, drinks, canned foods and vegetables, household supplies and personal care products at rock-bottom prices.
However, Dollar General and Dollar Tree argue that they benefit communities by offering shoppers convenient places to grab food and essentials at low prices.
“In rural places without existing grocery stores, having a Dollar General might be viewed as an asset,” said Christopher Merrett, director of the Illinois Institute for Rural Affairs at Western Illinois University. Dollar stores bring in new sales and property tax revenue for cities, create jobs and expand shopping options for customers, he added.

Kewaskum Looking for New School Board Member

The most interesting part is that he sold his home in 2 hours! Housing is still hot.

KEWASKUM — The Kewaskum School Board is looking for a replacement after member Jay Fischer resigned Monday.

He wrote a letter to board President Mark Sette and fellow board members explaining his decision, and asked for a day to call the members himself before the information was shared.

“The reason for my resignation is that we will be downsizing our home situation and relocating out of the district,” he wrote. After another child graduated and moved out, he and his wife wanted a smaller home, and sold theirs in less than two hours.

West Bend to Add New Industrial Park

Excellent.

WEST BEND — The city could pay nearly $3.15 million to buy a swath of rural property off its southeastern border for a future industrial park — something city leaders have said West Bend needs but that some neighbors have said they don’t want.

The Common Council on Monday night approved a purchase agreement authorizing the city to pay $20,500 an acre for the targeted roughly 153.5-acre plot near the corner of River Road and County Highway NN.

Closing on the sale could take place in January, and Mayor Kraig Sadownikow noted the final sale price could depend on the land’s precise acreage,

which has yet to be officially platted. The seller, meanwhile, would keep a small portion of property near the River Road-County NN intersection.

City Administrator Jay Shambeau had previously said West Bend would combine the newly acquired land with a neighboring 63-acre parcel the city annexed earlier this year. That would give the city room for a new, roughly 215-acre industrial park — which Shambeau and other city leaders have said West Bend badly needs.

Of course, this is not without controversy. There is a lovely little neighborhood next to this parcel. It is farmland now and contributes to a nice, quiet, rural-like neighborhood. That will change when there are a bunch of light and heavy industrial businesses popping up. That’s a shame, but it’s no reason to retard the city’s growth. This particular site is ideally located with easy access to the interstate, a railroad spur, and across the street from several other businesses that run semi trucks up that road all the time.

Taco Bell Hotel

With industrial commodes.

Taco Bell’s latest marketing venture, a pop-up hotel, opened at 10 a.m. Pacific Time on Thursday. The rooms sold out within two minutes.

The resort has been called “The Bell: A Taco Bell Hotel and Resort.” It’s located in Palm Springs, California.
The company is taking over the V Palm Springs hotel for an extended weekend in August. The plans for an exclusive, Taco Bell-themed resort were released in May.

Facebook Money

It’s an interesting plan and Facebook certainly has the wherewithal to try it. The greatest flaw I see is that Facebook is, perhaps, the least trusted company on the planet. They are continually getting caught lying and abusing their users. Currency is all about trust that the value tomorrow will be consistent or predictable – with acceptable variances. Who is going to trust a Facebook currency?

Facebook Inc. unveiled plans for a new cryptocurrency called Libra this week. When it launches in 2020 or later, it will be a stablecoin–a digital currency that doesn’t fluctuate much because it’s supported by established government-backed currencies and securities.

The world’s largest social media company published a 12-page white paperon Libra and has more than 20 partners for the project. But there are still many questions. After a week of analysis, here’s what Bloomberg reporters and editors know about Libra, along with key unknowns that remain:

Joe Weisenthal, executive editor: digital news at Bloomberg:

For sure: Libra is being touted as a cryptocurrency, so it’s natural to use existing cryptocurrencies like Bitcoin and Ethereum as mental models for what it could be. But it’s probably better to think instead about traditional peer-to-peer payment networks. Whether you’re talking about PayPal, Venmo, Square, WeChat, or even Western Union, all of these networks are in some way layered on top of the traditional financial system in order to ease some type of transaction (e-commerce, check-splitting, remittances). The problem is that these networks aren’t interoperable, and in many cases the fees can be quite high. Like all these other networks, Libra will be layered on top of the existing financial system, since each coin will be backed by traditional money in the bank to support a stable price. Unlike these other networks, however, there is an opportunity to create payments unification on a global scale, and at potentially a much lower cost. And in theory, anyone will one be able to build payment applications on top of Libra. Some might focus on friends splitting the cost of dinner. Others might be focused on remittance payments to developing markets. In the most extremely successful version of Libra, it’s not so much a cryptocurrency, but a global operating system for moving fiat money around.

China Threatens US Over Rare Earth Metals

It is not impossible, but it is very difficult to win a trade war against a totalitarian regime. Their leaders can withstand decades of a down economy because they never have to stand for election. That doesn’t mean that we shouldn’t try for vbetter terms and look for alternative trade partners. China only controls about a third of the known rare earth metal deposits, but that’s mainly because they are willing to take on the high cost and negative environmental consequences to mine them. If China pulls back, it opens the market for other countries to get in. Unfortunately, that will take years.

A Chinese state-run newspaper has warned the U.S. not to underestimate Beijing’s capabilities with its resources of rare earth minerals during a trade war between the two countries.

People’s Daily, the mouthpiece of China‘s ruling Communist Party, hinted serious consequences to the Trump Administration using a diplomatic term usually reserved by Beijing to signal the start of an armed warfare.

‘Don’t say we didn’t warn you!’ The newspaper said in a commentary today as it commented on the possibility of China suspending its exports of rare earths to the U.S.

Wisconsin Unemployment Drops to 2.8%

Seriously. With 2.8% unemployment and thousands of jobs that employers can’t fill, why is anyone on our welfare roles?

MADISON – The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of April. The data showed that Wisconsin’s unemployment rate declined to a new record low of 2.8 percent. Wisconsin’s labor force participation rate remained at 67.5 percent in April.