What Gov Walker Didn't Want To See, Wisconsin's Austerity Plan Has Failed, Big Time!

By Giles Goat Boy in the Daily Kos:

Last week I posted a simple chart from the U.S. Bureau of Labor Statistics (BLS) showing that between March, 2011 and March, 2012, Wisconsin was the only state in the nation to have a statistically significant decline in the total number of jobs. Here it is…



I didn’t make up the numbers. I just copied the image and posted it here on DailyKos, on bluecheddar.net, and on facebook. Please share it with others. I'll explain why below the croissant d'orange.

The chart didn’t get a lot of attention on the blogs, but the facebook reactions were fascinating. Before I discuss those reactions, here is my understanding of the table. It counts jobs in the state, not the number of people working. It is an estimate based mostly on surveys that measure non-farm payroll.  Every instance of someone on somebody’s payroll in that month is counted as a job. If someone in Milwaukee works at a Milwaukee McDonalds during the day and a Milwaukee Burger King at night, two jobs are counted for Wisconsin. If a person lives in Racine, Wisconsin but commutes to Chicago to work, that is not counted as a Wisconsin job. Again, the report measures jobs, not people.

There is another report put out monthly by the BLS at the same time that estimates the unemployment rate by state. It is based on different surveys from the ones described above. It is a ratio of the number of residents in a state who are working compared to the size of the state’s workforce. Those numbers are not related one to one. If the number of people working stays the same in a month but the size of the labor force goes down because people moved, died, or retired, the unemployment rate can go down even though the same number of people are working. If our imaginary worker from the previous paragraph is laid off from his night job at Burger King, he is not considered unemployed because he still works at McDonalds during the day. If the Racine worker loses her job in Chicago, she counts as one of Wisconsin’s unemployed because she lives in Wisconsin. The report measures people, not jobs.

In summary, the two reports are significantly different. Among other differences, one report is based on where the jobs are, the other is based on where the person resides. Neither is inherently better than the other, but they are not two ways of measuring the same thing, which is the way many lazy journalists describe them.

I’m not a statistician or an economist, but if you are either of those, please correct me in the comments if my understanding of these reports is way off base.

The numbers come from a reputable source with a long track record. The job loss in Wisconsin is a cold, hard fact that anyone can see in this chart that is devastatingly simple.  That’s why it causes brain cramps and cognitive dissonance among the Walker faithful. Scott Walker promised that Wisconsin would create 250,000 private sector jobs by 2015 if he were elected. He is taking Wisconsin backward while every other state in the nation is gaining jobs or staying statistically even.

Please copy this image and share it wherever you think it might catch the eye of a Walker backer or any other Tea Party zombie. It’s very effective. You don’t even have to comment much about it. It speaks for itself.

ORIGINALLY POSTED TO GILES GOAT BOY ON MON APR 23, 2012 AT 07:08 PM PDT.

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MY THOUGHTS:

This is another example of how Austerity policy has failed.  Gov. Scott Walker passed a very radical and deep cutting budget that has caused the termination of thousands of public employees, privatizing some of the services and busting most of the public labor unions. The result of his austerity plan is clearly indicated in the graph shown above. Why so many losses?  Well when you remove the money generated by government and government employees, you reduce demand for services from the private sector that this money pays for, and in turn, these companies terminate employees because they don't need them with the loss of demand, now these fired employees don't have money to purchase what they need, so other companies see a drop in demand so they fire some of their employees, and the cycle continues.

The only way to change this cycle is for the only entity that has the ability to infuse money into the market is Government. Based on most economic textbooks, the way you do this is to borrow or print more money by the federal government, because they own the money, and give the money to state and local governments to retain their employee and services as well as to hire more companies to build infrastructure that is needed or rebuild that which is decaying. Yes, you increase debt doing this in the short term, BUT as you increase demand for good and services, thus companies hiring more workers, these workers purchase stuff, which in turn increases demand from other companies, so they hire more employees.  All these newly hired employees pay taxes on that income, so tax revenue increases without having to raise the tax rate on these workers, with this increased tax revenue, you hold expense flat and use the surplus to pay down the debt.

This is exactly what Bill Clinton did to create the huge surplus we had when G. W. Bush assumed the office and reversed this trend to pay off the national debt within a decade. Instead he spent us into bankruptcy.

Now the USA is not broke in that we don't have net worth in the country to pay its debts. It is still the riches country on earth at this time, we just need to invest in infrastructure and get people working, the rest will come along by following the Clinton doctrine. We also must shift our economy away from fossil fuels to renewable energy. The sooner we can do this, the sooner we will have more revenue to pay off our debt, both government and personal. It is doable, it just need politicians with forethought and courage to do what is best for the nation and not what's best for corporations.