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!
Readers of my blog know that I’m an unabashed patriot. I love my country, while I’m not always in love with my government, and this time of year my thoughts turn very close to home. Lately, many of us both professionally and personally are thinking, talking, worrying and dreaming (or bad-dreaming!) about the economy. The good news is there is some good news, at least at local levels.
Today’s entry is an article from the National Main Street Center at the National Trust for Historic Preservation on some trends:
By Linda S. Glisson | From Main Street News | June 22, 2011 |
Are entrepreneurs growing on Main Street? How is Main Street doing compared to big-box stores and strip malls? Do people want to live downtown?
Every year, the National Trust Main Street Center conducts a survey to discover the latest trends on Main Streets nationwide. This year, the picture, as shown by the responses of 500 local Main Street programs, is one of high energy in a slow economy, with lots of innovation, ranging from strategic uses of social media to cool “green” projects. Here are some of the major trends.
Strong business growth. Despite the cash crunch that is preventing small businesses from getting needed financing to expand, Main Street districts reported surprisingly strong growth in new businesses after a big drop last year. More than 5,000 businesses opened on the Main Streets of responding communities, nearly equaling the 10-year peak reached in 2006.
Competing with the strip. Half of all Main Street programs reported that the economic health of their commercial districts was on par with nearby communities. Even more impressive, however, is that 35 percent are doing better than surrounding commercial centers, and nearly 30 percent reported the closure of at least one big-box store in their area.
New entrepreneurs. Nearly 50 percent reported new entrepreneurs in their districts. From boomers to women to those under 30, Main Street is attracting new business owners, many from outside the community. In Woodville, Mississippi, the Main Street program’s track record in heritage tourism and preservation inspired a couple from New Orleans to buy a building on the courthouse square. As a tax credit project ¾ the Woodville Loft and Studios ¾ will soon bring 12 storefronts and condos to this small town. And in a great homecoming story, a 21-year old native of Sidney, Nebraska, came back after college with the dream of opening her own business. So Historic Downtown Sidney connected her with a retiring business owner, and helped with her first six months rent. This way, the Main Street program found a way to re-energize an old business, while creating a future for a new entrepreneur… one of its own. And in the northwest, Oregon City Main Street launched a video marketing and recruitment campaign for creative professionals who are interested in growing their business in a funky downtown setting. Their campaign kicked off last year and brought in eight new businesses in the first few months.
Living downtown. Housing on Main Street seems to be gaining steam as a niche for historic commercial districts. A recent National Association of Realtors Survey shows that 77% of homebuyers are seeking central locations with the type of pedestrian-friendly features found on Main Street. This year’s Trends Survey confirmed that demand for housing might be outstripping current developer interest. In Nacogdoches, Texas, for example, the Main Street manager gets constant inquiries from people looking for that downtown lifestyle. Only 8 housing units are currently under construction, but the manager says the downtown market could easily absorb 50 more this year.
“Hot Green.” Where are the hottest innovations right now? Where are young people focusing their attention? What types of organizations are gaining members? The answer: if it’s green, it’s growing! The sustainable communities movement is laying the foundation for a major shift in the way we use land and other resources and the way we plan cities. Sustainable innovations to watch out for include form-based codes, energy codes, and “location efficiency.” What’s that you say? A new study by EPA confirms what we in the preservation field have suspected all along: that where we construct our buildings has just as big an impact as how we construct, in terms of energy consumption. This new paradigm is called “location efficiency”, and is beginning to make the case for dense, walkable districts, such as Main Street. For the first time, guidelines and funding priorities may shift in favor of preservation and Main Streets, simply because of our “efficient” locations!
The bottom line for this year, Main Street is not only holding its own as the economy slowly recovers; it is moving ahead with great energy, optimism, and innovation.
On Monday, the Wisconsin Assembly’s Partnership for a Stronger Economy will be holding a meeting in Manitowoc with business leaders, lawmakers, and state officials. Representative Tom Nelson has extended an invitation to both myself and our members to be part of this work group.
The Partnership is a bipartisan working group that has been charged with finding ways to make Wisconsin a better place to do business. Additional information about the Partnership and Monday’s meeting is below. I’ve extended invitations to many people individually since I received it yesterday, but, please let me know if you would like to attend by emailing me at email@example.com or commenting here.
Information on the meeting is below:
Partnership for a Stronger Economy (PSE) hearing from 1:00-3:30 p.m. on Monday May 24th in the auditorium at Orion Energy Systems 2210 Woodland Drive in Manitowoc.
- Welcome and Introductions: Orion Energy Systems
- Economic Development Needs of NE Wisconsin
- Legislation Session Wrap Up
- Department of Commerce: continuity and consistency
- Wisconsin Competitiveness Study
- Follow-up on Ideas from Previous Meetings
- New Initiatives
- Next Meetings: 1 p.m. Friday June 25th and 1 p.m. Monday August 30th
There is website on the Partnership that includes information such as biographies of members, upcoming meetings, and media articles. The link is: http://legis.wisconsin.gov/assembly/committees/wipartnership/index.htm
The previous meetings are on Wisconsin Eye. Click on “Video Archive,” “Around the State,” and “Public Meetings” to reach the Partnership video links (the meetings were in December and November of last year, scroll down the page to find them).
It’s time for a re–think and reboot for many marquee manufacturing corporations, as they report their 2009 earnings.
Prompted by the economic recession, major manufacturers are re–evaluating their businesses to remain competitive and profitable. In some cases, this means shedding operations. One example is Dow Chemical which is selling its basic chemical factories –– a $2 billion operation –– in favor of more profitable specialty chemicals. The company is closing six chemical plants in Louisiana and Texas as part of this strategy. Whirlpool is also retrenching: it reduced its manufacturing capacity by 10% in 2009 and moved some operations to lower cost Mexico in response to a 9.6% sales decline. Jeff Fettig, Whirlpool chief executive, recently summed the situation up succinctly, “We are emerging from one of the most challenging economic environments we’ve seen in decades.”
For others, it means expansion. Intel Corporation sees opportunity in semiconductors–– it made headlines in the midst of the recession by announcing an aggressive two–year $7 billion investment in facilities in Chandler AZ, Rio Rancho NM and Hillsboro OR.
Analysts point to several broad changes currently underway across the manufacturing sector. First, many companies are shifting away from heavy sectors like automobiles and chemicals toward higher–tech products. Second, companies are being forced to adapt to lower demand for products; the auto industry, for example, is projecting sales between 11.5 and 12.5 million cars and trucks in 2010, well below the peak 17.5 million units sold in 2005. Third, manufacturers are controlling costs by relocating facilities to lower cost locations. This trend is already evident in the chemicals and appliance sectors. Peter Huntsman, chief executive of chemical manufacturer Huntsman Corporation, offers this blunt assessment: “The chemical industry is leaving the United States and it won’t be back. When demand picks back up, they’ll build new capacity overseas.”
The numbers are startling. U.S. industrial capacity fell by the largest year–to–year decline in history –– a full 1% decline in 2009 as the goods–producing sector lost 2.3 million jobs in just one year. Overall, the U.S. capacity to produce autos and chemicals fell 4.4% and 1.7% respectively –– the largest declines since 1949, according to the Federal Reserve. Yet, U.S. capacity to produce semiconductors grew 10.4%.
Economists are watching the manufacturing sector closely because responses by manufacturers in a post–recession world will determine when job growth resumes.
“Radical Shifts Take Hold in U.S. Manufacturing,” by Mark Whitehouse. The Wall Street Journal. February 3, 2010.
From UW Extension’s Bill Ryan and Chuck Law
There are compelling reasons to be optimistic about the ability of Wisconsin’s small
town business districts to rebound from the economic downturn, according to experts
from the University of Wisconsin-Extension.
“Downtowns can take advantage of consumer, economic and environmental trends that direct activity back to their central business districts,” says Bill Ryan, community
development specialist with the University of Wisconsin-Extension. “While downtowns are all different, opportunities are out there.”
According to Ryan, downtowns have historically met important needs, such as housing, office and retail space and entertainment. Unlike shopping centers developed for
national retail chains (which are now experiencing vacancies), downtowns serve different
functions that allow one sector to rise even as another declines. “Many downtowns have recession-proof draws,” says Chuck Law, community planning and design specialist with UW-Extension.
“While high-priced restaurants and live theatre might be patronized less in a recession,
farmers’ markets and children’s museums will still be on the list of local outings. And many
downtowns’ focus on education, health care and government services further insulates
them from consumer spending swings.”
Downtown housing continues to be an important component of the retail mix. While condo development and sales have slowed, the market for rental housing is strong in many markets. Long-term, demographic trends remain favorable for downtown living given both older and younger people’s growing preference for urban, amenity-rich living.
Ryan also points out that downtowns are benefiting from a growing interest in supporting
local economies. In many cases, consumers are focusing more on value than price,
factoring in the cost of travel and the service of local retailers. Personal attention, unique
products, and outstanding service and support– often the hallmark of downtown retailers– will continue to attract new customers seeking a local economic connection.
Supporting downtown retailers can even be considered “green,” Ryan says.
–Downtowns are centrally located and convenient and trends indicate they will become
even more accessible with better bus and light rail systems. Local governments are
paying attention to strengthening public transportation systems with support from
the federal government, which is seeking to reduce dependence on fossil fuels.
–Volatile gas prices are causing people to rethink their driving and how much fuel they
can save by working or doing business with establishments conveniently located downtown.
–Environmental benefits accrue from reusing and improving structures rather than planning new development. Significant opportunities exist to retrofit existing buildings with green technology. Both energy-efficient improvements and weatherization of housing
and public buildings are included in the American Recovery and Reinvestment Act of
2009. While new construction has slowed, the remodeling industry has been less affected
by the economic downturn. More and more communities are finding creative uses
for existing buildings. Support for entrepreneurs is another plus provided by central business districts.
“Downtowns are places that truly support entrepreneurship,” says Ryan. “The environment provides social and business interaction, diversity, authenticity and amenities that appeal to people with various talents.” And families are turning more to pedestrian-friendly activities close to home, frequenting local libraries, museums, theaters, parks, athletic facilities, civic buildings, schools, coffee shops and retail establishments for entertainment.
“Downtowns offer a ‘sense of place’ that is increasingly important to residents,” Law
notes. “The community’s natural, social and cultural amenities, places to worship, dine,
shop, and relax, and the histories and memories associated with those elements, are often
found in and around downtown.”
Ryan advises communities to take full advantage of their downtowns’ competitive
strengths. “Community leaders can build upon downtowns’ diversified mix of uses,
contributions to the local economy, promotion of sustainable development, support for
entrepreneurship, and sense of place.”
For more on UW-Extension’s work to support and revitalize Wisconsin’s downtowns,
go to http://www.uwex.edu/ces/cced/downtowns/index.cfm