Category Archives: Economy

Favorite Protest Sign of the Day

Share the Pain. Cut Government.

Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one; for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer. – Thomas Paine, Common Sense

I keep hearing how we are “all in this together.” Are we? The folks in Madison who are making the decisions to destroy our businesses, obliterate our savings, and take away our jobs seem to be doing just fine. They are all still employed with full pay. The government employees at the state and local levels are all still working. They still have their guaranteed pensions and great benefits. Evers is still enjoying the mansion that we provide for him and a full staff of people to do his thinking.

The Coronavirus response is really highlighting the Two Americas. On the one hand we have government employees, who are being insulated from the full impact of the lock down orders. On the other hand, we have the private sector employees, who are feeling the full brunt while also paying for the government employees. Where are the furloughs in government? Where are the pay cuts? Where are the cut backs on benefits? Evers is issuing edicts and just telling private employers and employees to “deal with it.” Why isn’t our government sharing the pain?

Take a look at the list of State of Wisconsin agencies. How many of those could be shuttered right now and furlough or lay off the entire staff? We could live without the Historical Society for now, right? What about the Arts Board? Surely the Department of Tourism is pretty useless right now. State Fair Park? Women’s Council? Trials and prosecutions are being postponed, so can we furlough all of the expensive lawyers and investigators at the Department of Justice? What about judges? Are they being paid when there aren’t any trials happening? Legislative staffs? Legislators? Several agencies could be closed immediately and indefinitely – just like they are forcing many private businesses to do.

For those agencies that do need to remain open, how many employees are non-essential and could be let go? Why can’t we implement an immediate 25% across-the-board pay cut for all government employees right now – even if they are essential? Why can’t we pull back on some of the benefits? Many private employers are being forced to cut back on pay and benefits to stay alive during the government-forced lock down. Where is our government sharing the pain?

This goes for local governments too. Nobody wishes ill on our neighbors and friends, but it’s frustrating to be lectured by a government teacher or police officer about the need to lock down when they are enjoying their full compensation and benefits. The rest of us are suffering major cutbacks and job losses. If we are all in this together, then let’s actually be in ALL of it together.

Remember, too, that with all of the job losses and shut down of the economy, government revenues are WAY down. We can’t afford all of this government anymore. And even if they come back and seek to jack up taxes to pay for everything, who is going to pay it? The 20%-30% of Wisconsinites who are on unemployment?

We need our government at all levels to immediately make substantial spending cuts in line with what is being asked of the private sector. Yes, it will hurt. Yes, government employees will have to work harder and make do with less. Yes, government employees’ may have to work later in life before retiring. That is what is being asked of the private sector. We should expect nothing less from our government.

22 Million Unemployed

Reopen the economy. It’s time for the carnage to end. How many of these people will die due to stress, lack of access to healthcare, suicide, etc.? How many more have their quality of life destroyed? These things matter. People getting sick and dying from Covid are important too, but they must not be the only people being considered when making public policy.

Protection measures against the coronavirus continued to tear through the employment ranks, with 5.245 million more Americans filing first-time claims for unemployment insurance last week, the Labor Department reported Thursday.

That brings the crisis total to just over 22 million, nearly wiping out all the job gains since the Great Recession.

The total was a bit worse than the 5 million expected from economists surveyed by Dow Jones.

Though the most recent count, for the week ended April 11, represented a drop from the previous two weeks, it showed that the damage to the U.S. labor market remains profound.

“As we fully know the current state of the labor market with mass waves of layoffs, the key question turns to how many of these people will be rehired when the economy starts to reopen,” said Peter Boockvar, chief investment officer at the Bleakley Group. “We can assume it will take a long time for that to happen but hopefully we’re getting closer to at least getting started.”

Business Owner Is Losing Business to Evers’ Lockdown Order

NSFW… if you still have work and work at an actual workplace.

Evers’ Economy = 20+% Unemployment

This is not accidental or caused by Covid. This is the result of our governor intentionally shutting down our economy.

“If projections suggested in the national financial press are that 29 percent of privately held establishments will be shut down, and we assume shutdowns are proportionately distributed across firm employment size, then 48,619 Wisconsin business establishments would be closed,” Tichenor said in an email.

Those closings would affect 724,362 employees, he said.

That figure, combined with a February statewide workforce number of 3,109,100, results in an unemployment rate of 23.3 percent.

Then, if the 108,900 Wisconsin residents already unemployed in February are added, the unemployment rate would increase to approximately 26.8 percent, Tichenor said.

Global Economic Downturn

Ouch

“Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020,” she said.

“Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.”

She added: “In fact, we anticipate the worst economic fallout since the Great Depression.”

A devastating cure: Weighing liberties, security in the age of coronavirus

I’m going to repost my column from a few weeks ago. As our government continues to tighten the screws, it seems even more apropos.

In the future, when we remember the liberties we once had and explain to our grandchildren why we surrendered them, some old man will slowly look down at his shoes and mutter, “We did it out of an abundance of caution.”

The global Coronavirus pandemic is a severe health concern that requires a response from our government. We need our government to aggressively work toward a vaccine and treatments, inform the public with the latest prevention methods, act to provide resources where needed, and provide the legal and regulatory safety net for the private sector to join in the fight. We do not need or want our government to arbitrarily suppress our civil rights, undermine the rule of law, and intentionally destroy our economy and our livelihoods.

It is breathtaking the speed at which our government leaders resorted to totalitarian extremes to combat the spread of a disease. The government ordered thousands and thousands of businesses to close indefinitely. This has forced millions of people out of work. Many of them do not have the financial cushion to get by without an income for weeks on end. Many small-business owners are losing their life’s work and their families’ entire net worth by order of the government.

With millions of people are struggling to get by, the inevitable wave of foreclosures and bankruptcies will follow. The government may try to halt this by decree or throw stimulus money at the problem, but the financial realities make the long-term impact of these decisions unavoidable.

Meanwhile, some governments are ordering people to remain home, forbidding people from assembling, and even closing churches. In California, people who are caught outside of their homes for nonessential reasons are subject to arrest, fines, and imprisonment for violating the order. At the same time, jury trials (a constitutionally protected right) are being postponed, elections are being delayed, prisoners are being released, and the government is ignoring private contracts — for example, the government ordering that landlords can’t evict people — in lieu of the judgment of politicians.

The impact is more than just financial or an inconvenience. The government restrictions have caused a massive shortage in donated blood for hospitals, crime is sure to rise, people are postponing necessary medical care for fear of leaving their homes, and an increase in depression, addiction, and suicide will result from mass unemployment and economic destruction.

Americans should be following the recommendations of the Centers for Disease Control to maintain a physical distance from others, cover sneezes, avoid touching faces, wash hands, sanitize surfaces, and reduce unnecessary travel. But there is an abyss between free Americans taking steps to mitigate the spread of Coronavirus of their own free will and our government using police power to enforce those steps. In most cases, it is a single man — a governor — making these incredible decisions to upend our lives.

If the response to Coronavirus has taught us anything, it is that our government officials will strip us of our liberties at a moment’s notice on the justification that it is for our own good. Instead of relying on the collective wisdom of a billion individual decisions made by free people, our government officials instantly supplanted their own judgment for that of the people they were elected to represent. They immediately assumed that they know better and are not only empowered, but obligated, to micromanage our lives “out of an abundance of caution.” And then, when the inevitable negative effects are being felt, these same people will mortgage our grandchildren’s future too with another boondoggle trillion dollar stimulus.

This is a very old debate about the balance of government power between liberty and safety. The way in which so many Americans surrendered their liberty for the dubious promise of safety with little more than a shrug and a muffled bleat is testament to how far we have strayed from our roots. For all of the “don’t tread on me” stickers and “live free or die” machismo, too many Americans have become fat and docile.

Coronavirus will ravage the world and leave devastation in its wake, but we will find workable treatments and a vaccine. It will pass. The devastation to our economy and liberties will be far longer lasting.

Uncertain Pace of Economic Recovery

I agree that it won’t snap back as fast as it fell.

“Anyone who assumes we’re going to get a sharp snapback in activity isn’t thinking about how consumers are going to feel. They’re going to be very cautious,” said Nariman Behravesh, chief economist at IHS Markit. “Households and businesses have seen their finances deteriorate. People are buying groceries on their credit cards.”

To understand the consequences of a sudden negative shock on the economy, Behravesh studied how many people returned to flying after the Sept. 11, 2001, terrorist attacks.

“It took two and a half years for airline passenger traffic to go back to previous levels,” he said.

The other thing to remember is that many Americans lost 25%-50% of their net worth through the decline of the equity markets, loss of jobs, etc. They are more likely to spend much more cautiously as they rebuild their assets for the next few years. With an economy driven by consumer spending, the recovery will proceed at the same pace as the people’s willingness to spend.

Rate of Jobless Claims Decline as Totals Rise

Brutal

Jobless rolls continued to swell due to the coronavirus shutdown, with 6.6 million Americans filing first-time unemployment claims in the week ended April 4, the Labor Department reported Thursday.

That brings the total over the past three weeks to more than 16 million.

The most recent number represents a decline of 261,000 from a week ago, which revised up by 219,000 to nearly 6.9 million.

The ongoing surge in filings for unemployment insurance has been exacerbated by the expansion of those who can file claim. The CARES Act has expanded the group to include the self-employed and independent contractors.

Prior to the social distancing efforts used to combat the coronavirus spread, the jobs market had been strong. In the six-month period prior to a shutdown that has taken offline much of the U.S. economy’s capacity, nonfarm payroll growth had averaged 221,000 a month.

One Small Business Impact

I spoke with a small business owner this morning. It was a heartbreaking story. The owner’s business is an “essential” business, so they are still open. But they rely on customers coming in for service. Because many people are afraid of venturing out, their business is down 80%.

Like most small businesses, the owner doesn’t have a giant capital reserve other than private assets like a house and cars. According to the owner, they paid the rent for this month and are taking it day by day. They can take out a SBA or personal loan to float the business, but they would have to use their personal assets as collateral. If they do that and the business never recovers, the result would be loan default and personal bankruptcy. The other choice is to close the doors at the end of the month, minimize personal expenses, and try to get a job to pay the bills. That would be tough, but at least they could maybe stave off bankruptcy. Would they ever have the money to restart the business? Maybe, but not for a while.

I suspect that this is a story being repeated thousands of times across Wisconsin and the nation. The longer the shutdown lasts, the more sustained the economic damage will be. This one owner can maybe hang on until the end of the month – if business starts to recover – but not until June.

Please, if you are still working and still have some disposable income, consider supporting some local businesses. They don’t want charity. They want customers. Be one.

Markets Surge After Communist Drops Out

Excellent. I did think that the presence of Bernie as a viable candidate was putting downward pressure on the market for months. I guess this proves the case.

Stocks surged on Wednesday after Sen. Bernie Sanders dropped out of the presidential race, relieving some of Wall Street’s political concerns.

The Dow Jones Industrial Average gained 474 points, or 2.1%. The S&P 500 climbed 2% while the Nasdaq Composite advanced 1.7%.

The major averages hit their session highs after Sanders made his announcement. Some of Sanders’ policy proposals, including Medicare for All, raised concern among several business owners and investors who feared taxes would go up under his presidency.

Wave of Americans Hit the Unemployment Line

I am more and more convinced in my opinion that not only is this government-enforced recession a massive infringement on our rights, it is a massive overreaction. That is not to say that Coronavirus isn’t a serious issue that needs to be managed, but our collective response to it has been madness.

New York (CNN Business)Millions more Americans filed for unemployment benefits last week, as businesses continue to lay off and furlough workers amid the coronavirus outbreak.

6.6 million workers filed for their first week of unemployment benefits in the week ending March 28 — a new historic high. Economists polled by Refinitiv had expected 3.5 million claims.
A week earlier, 3.3 million Americans filed for their first week of benefits, which was the largest number ever at the time.

Nobody’s Hiring

The economic wreckage of our government’s overreaction to coronavirus will be felt for years.

In addition to widespread layoffs, hiring has collapsed, which will also drag down the overall job numbers. A Moody’s survey of companies that typically finds 40% of firms hiring has fallen to a record low of just 6% of businesses adding jobs, Zandi said.

“Not only are we seeing big layoffs but obviously no one’s hiring at this point,” he said.

$1.6 Billion in School Referendums on Ballot

Given that most of these are for buildings and all of the kids are at home… no. Oh, AND, we are entering a government-forced recession and we shouldn’t raise our taxes when thousands of our neighbors are losing their jobs, savings, and businesses. Oh, AND, even if both of those things weren’t true, it would still be a waste of money.

As the COVID-19 coronavirus pandemic has upended daily lives, bringing with it economic uncertainty, voters in 48 Wisconsin school districts — including in two of the state’s largest school systems — will decide next month on referendums totaling more than $1.6 billion.

[…]

But voters in the state’s largest district, Milwaukee, and fifth-largest, Racine, have big asks before them — permanently raising operating funds by up to $87 million and spending up to $1 billion on school projects over the next three decades, respectively.

The referendums in districts throughout the state come as thousands of people are out of work and businesses shuttered to prevent the spread of COVID-19. Whether the economic impact of the public health crisis will hamper the success of school referendums is uncertain.

 

Prominent Epidemiologist Revises Death Estimates Sharply Down

Hopefully he’s right this time. If so, this is positive news.

Epidemiologist Neil Ferguson, who created the highly-cited Imperial College London coronavirus model, which has been cited by organizations like The New York Times and has been instrumental in governmental policy decision-making, offered a massive revision to his model on Wednesday.

Ferguson’s model projected 2.2 million dead people in the United States and 500,000 in the U.K. from COVID-19 if no action were taken to slow the virus and blunt its curve.

However, after just one day of ordered lockdowns in the U.K., Ferguson has changed his tune, revealing that far more people likely have the virus than his team figured. Now, the epidemiologist predicts, hospitals will be just fine taking on COVID-19 patients and estimates 20,000 or far fewer people will die from the virus itself or from its agitation of other ailments.

Ferguson thus dropped his prediction from 500,000 dead to 20,000.

Businesses React to Evers’ Economic Shutdown

It’s good to see some sensible voices rising above the fray.

The outdoor power equipment industry, including Ariens Co., Briggs & Stratton Corp., Kohler Co. and others employs tens of thousands of people in Wisconsin. Headed into spring, it normally would be cranking out products to be shipped around the world.

“With the number of jobs in this industry, from Milwaukee to Brillion to Kohler to Tomah, I would consider it essential,” Ariens said, adding that he was sending the governor a letter pleading to keep the plants open.

“I am telling him that we will take care of our employees as we care for our families by following the CDC best-safety practices and advice. We don’t need to have the government teach us responsibility,” Ariens said.

Wisconsinites Head to the Bread Lines Thanks to Government-Forced Economic Downturn

This is just the beginning. After this comes the bankruptcies, foreclosures, increases in crime, suicides, and general crap show of a steep recession. The surest path to societal peace and prosperity is a thriving economy and work for everyone.

The social distancing measures and bans on large gatherings put in place by Gov. Tony Evers to combat the spread of coronavirus has created challenges for a number of industries. Many restaurants, including Punch Bowl Social and The Bartolotta Restaurants have had to close for the foreseeable future. Some retailers, including Kohl’s Corp., have shut down stores and some manufacturers, including Harley-Davidson, have suspended production.

The 69,342 initial claims filed last week marks a sharp uptick in unemployment in Wisconsin. For weeks ending in 2020, the state averaged 6,250 initial claims per week for a total of 56,252.

According to non-seasonally adjusted data from the U.S. Department of Labor, the highest one-week total for Wisconsin was 49,267 at the end of 2001.

Even during the Great Recession and its immediate aftermath, only one two-week period at the end of 2009 saw more than 70,000 initial claims. Most two-week stretches during that downturn saw fewer than 60,000 initial claims.

GOP Leaders Ask Governor to Not Close More Businesses

It’s about time we started having a public discussion about how far we should go in killing our economy, our livelihoods, and our financial and societal stability.

MADISON – Republican leaders of the state Legislature are asking Gov. Tony Evers not to place any further restrictions on Wisconsin residents’ ability to spend money, warning of an economic collapse.

Evers has ordered the closure of schools, bars, restaurants, hair salons and limited gatherings to 10 people or fewer to lessen the chance that the coronavirus spreads like wildfire throughout the state, endangering thousands of lives.

Other states, including Illinois and California, have gone further and codified advice by ordering all of their residents to stay in their homes — a measure Evers has said, for now, he isn’t taking.

Senate leaders Scott Fitzgerald of Juneau and Roger Roth of Appleton and Assembly leaders Robin Vos of Rochester and Jim Steineke of Kaukauna said Saturday they agree with the governor’s position, saying more restrictions are unnecessary in Wisconsin.

“The consequences felt by citizens and small businesses around the state has already been tremendous,” the lawmakers said in a statement. “As we move forward together in this fight to defeat the virus, we must keep in mind that the people we serve need the jobs they have today to help weather this storm. Continued economic activity will not only help us in our fight against this virus today, it will also ensure that we don’t have to fight to recover from economic collapse tomorrow.”

Emphasis mine.

Guide to Local Restaurant Services

Conley Media has put together a nice list of restaurants in the W.O.W. counties and the services they are offering. You can check out the whole list here.

The Kingdom Sets Sights on U.S. Oil

This is a strategic threat to the United States. Saudi Arabia is trying to force the U.S. to be dependent on their oil again because they have lost the sway they once had.

When Saudi Arabia, OPEC’s de facto leader and most influential member, decided at its latest meeting in Vienna to break its recent strategic oil partnership with Russia and adopt a new policy to maximize production levels, oil prices crashed — posting their biggest slide since the Gulf war in 1991.

But even more importantly, this new policy recalibrated global oil markets, giving Saudi Arabia the long-term advantage. This move marks a big change for the world’s largest oil exporter, which has in recent years attempted to manage the global oil markets by altering production levels, while garnering the difficult cooperation of Russia. Crown Prince Mohammed bin Salman has finally decided to pursue a long-term policy that not only preserves and ultimately increases the kingdom’s market share, but also may signal the end of OPEC as a united functioning organization.
This decision is very unpopular with most oil exporting countries, international energy companies and American shale producers because collapsing prices will drastically decrease their revenues and, in some cases, force them into bankruptcy.
[…]
On April 1 or shortly thereafter, Saudi Arabia will most likely surpass Russia to become the world’s second largest producer. But this oil price war won’t end until Saudi Arabia takes back the global production crown from the United States, which should happen within the next two years.