This morning’s De Pere at Dawn was a great panel of William Lepley, Associate Professor of Finance, School of Business Administration, University of Wisconsin, Green Bay; Wendy Scattergood, Assistant Professor of Political Science, St Norbert College; and Kevin Quinn, Associate Academic Dean and Professor of Economics, St. Norbert College discussed the economic outlook for the next bit of time based on the results of the election. It was fun, fascinating and informative plus we gleaned a few tidbits about our panelists too!
So — from my notes!
Wendy Scattergood led off discussing the policy side of the election. This just in … Wisconsin is a swing state. Shocked. You’re shocked aren’t you?? If you were like me (and admittedly I’m a bit of a wonk so I just *may* have followed all of this a bit too closely for my own mental health), but you were probably under the impression the “white male” voter was a staunch Republican and the “over 65” demographic was Democratic. WRONG!! Those white male voters, largely 65 and over, college degree holding and living in the suburbs are switch-voters and just slightly more Republican. And the 65+ demographic? Welll .. in 2004, they voted largely Democratic; in 2008 they were split and in 2012 they were the only age demographic carried by the Republican Presidential ticket. The 30-44 year old demo was largely split. Minority voters were more Democratic and it was the first time in Wisconsin for minorities to be enough of a block to swing an election. Some other wonk-y things of note: Urban (large cities) voted Democratic; mid-size cities (Green Bay/Appleton) voted Democratic and suburbs & rural voted Republican. In state legislative races, redistricting was viewed as a factor, but not the only factor. The reality of legislative races in Wisconsin is we know our legislators and vote based on knowing them – not their party affiliation.
You may have noticed Wisconsin has an electoral split-personality of sorts. At the federal level, Wisconsin elected Democrats Barack Obama and Tammy Baldwin and at the state level gave both houses of the legislature to the Republicans. The other new factor in Wisconsin is the “straight party” voting option no longer exists (and you may not have noticed this on your ballot). The theory is that with that off the top of the ballot, voters chose by individual in the “down tickets” races and party affiliation, as a blanket, was removed from the equation for voting.
Dr. Scattergood also shared the perspective that 2010 was a case of “retrospective voting,” where the voters look at the economy as they felt it at that time, said “no,” and changed directions. She also talked briefly about the Friday deadline for Wisconsin to decide if the state will set up the health care exchange or let the federal government do so. The feeling was Wisconsin will design its own.
Fun fact about Wendy – she is a cellist and plays with the Manitowoc Symphony as her great escape!
Dr. Kevin Quinn was next up and is not only an interesting economist with a great sense of humor, but was fascinatingly understandable too! With a quick nod to Europe’s past and current problems (Greece, Spain, Ireland, Italy…) He started with the old adage of “In war, truth is the first casualty,” (Aeschylus Greek tragic dramatist 525-456 B.C.) expanding it include the new old adage that in politics, like war, truth is the first casualty; but when it comes to economics in politics they don’t just lie, they make things up. Kevin shared that really, the Great Recession of 2008, really had its beginnings much earlier in the decade and became very visible in 2005-2007 when all the growth was in the housing sector and that, “turned out to be illusory.”
ed note: my favorite word of the day! Illusory (adjective): causing illusion, deceptive; misleading. Of the nature of an illusion; unreal. I love college professors!
Dr. Quinn then talked about the “fiscal cliff,” which he believes we will look back on as this year’s Y2K panic. He reminded us that over about the last decade, the US has run up a debt of about $15 trillion (FYI that is 15,000,000,000.00 and is the first time, in round numbers, since World War II that our debt has equaled our GDP), about a trillion to China and most to ourselves (2 wars, drug benefit for medicare and tax cuts). He summed it up that we lowered our income while we increased our spending then put a very large bandage on a very hairy part of our National anatomy and the time has come to pull it off! When is that time? Well, approximately January, but then the debt ceiling conversation is due again in February/March. Kevin is optimistic that, in the end, we will resolve this issue nationally and the hand-wringing will be largely much ado about nothing. He does think there is a chance we will go “off the cliff,” but will do so attached to a bungie cord and bounce back up.
Bill Lepley reminded us of all the things that were not the fault of bankers! (Much to the delight of our bankers in attendance!!) He talked about the health care legislation, a/k/a the Patient Protection and Affordable Care Act or Obamacare, as well as the Dodd/Frank Act that are both now laws-for-certain and not for-maybe-until-Inauguration Day. Interestingly, he described Dodd/Frank as a framework of “we want to look like …” and then pushing it to the regulatory authorities to write the law. That said, with certainty, we will all now move forward.
Fun factoid about Bill! Not only does he LOVE baseball (only 5 1/2 months until baseball season!), but he plays too!
After a question regarding the health care implementation and would it be an increase or drag on the national economy, the panel talked about the long-term result of the health care changes. First that providers will be paid more on quality therefore likely seeing a much greater use of “evidenced-based” medicine. This lead to a bit of a discussion that paying doctors for the health results of their patients is often viewed with the same eyes as paying teachers for the test scores of their students. (a discussion that fascinates me!) The other synopsis is that the most likely positive is that we will see a lowering in the rate of increase of health care costs. Did you follow that bouncing ball? Costs won’t go up as much. Not a great slogan true, but sounds like could be real money.
All in all, even if I couldn’t get Bill to bite on giving his stock market response prediction … it was a fascinating morning and I’m very appreciative to our panelists for their time, talents and humor and to their institutions for loaning them to us for the morning!