In This Issue | 1. Farewell GM, Hello
Posers
2. WI Economy Grows
At Half National Rate
3. Turning Milwaukee's
Economy Around
4. WMC a Tale of Two
Houses
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Farewell GM, Hello Posers
 Last Tuesday, Governor Jim Doyle addressed the workers at Janesville's General Motors plant. The workers had just found out that plummeting SUV sales have forced GM to shut down the Janesville plant in 2010, due, in large part, to high gas prices. Doyle expressed solidarity with the union workers in attendance and vowed "revenge" on GM. Doyle thinks General Motors should have known sales of gas guzzling SUVs were going to drop, and adjusted the Janesville Assembly line accordingly.
Grand theater for sure, but while Doyle questioned GM's lack of foresight and business planning, perhaps he should have looked in the mirror and asked himself a few questions first.
It was just a few years ago the state granted General Motors $10 million to keep making Sport Utility Vehicles in Janesville. If it was so obvious that SUV sales were going to drop, why did Doyle give GM so much cash? Why it is only now that we know the plant is closing, does Doyle plan on getting the balance of the money back from GM?
In August 2005, Doyle bragged about how the money he sent to GM would be spent making brand new SUVs.
"Governor Doyle announced the state will provide $5.4 million to General Motors Corporation to help offset the cost of training associated with the production and launch of a new line of sport-utility vehicles. This funding brings state investment in GM since Governor Doyle took office in 2003 to $10 million...
In January of 2004, GM announced it would invest $175 million into Janesville Assembly for production of new full-size SUVs, known in the auto industry as the GMT900 series. The plant is currently in the middle of preparations for the launch of these new models. To encourage GM to make this investment in Wisconsin, Governor Doyle announced on January 28, 2004 that the state would provide the company with an incentive package, including a $2.6 million grant from the Department of Commerce, $1 million from the Department of Workforce Development, and $1 million from the Department of Administration to help with the cost of acquiring new, energy-efficient technology."
So there you have it. It was so obvious to everyone that SUV sales were going to plummet that Jim Doyle gave them $10 million to make more of them.
Furthermore, one of the reasons SUV sales have dropped so quickly is the rising cost of gasoline. Yet just last year, Doyle proposed a new "oil franchise fee" that analysts estimate would have raised the cost of gas by 5 to 7 cents beginning in September of 2007. Naturally, the higher gas tax would have accelerated the drop in SUV sales, which would have forced the plant to close even earlier. How would Doyle have explained to GM's workers the fact that, had the Legislature not killed his gas tax plan, they would have been out of work even sooner?
Yet Doyle's empty rhetoric about Janesville pales in comparison to that of Democratic Presidential nominee Barack Obama. As Patrick McIlheran points out, Obama politicizes the plant closing by blaming it on George Bush, and then claims the closing resulted from a policy that does not promote more fuel efficiency. In other words, the Janesville plant should have been closed a lot sooner, and people shouldn't have been able to purchase the cars they so dearly wanted, which kept those workers employed for the last several years.
The only other option would have been for the government to reach in years ago and dictate the type of cars people could purchase and how much they should pay for them. In doing so, auto manufacturer profits would have taken a bath, and more workers would be out of a job today.
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Wisconsin Economy Grows at Half National Rate
 It should be news to no one in Wisconsin that the state's economic growth has slowed to half the national rate, growing by only 1% in the past year. According to the figures recently released by the U.S. Bureau of Economic Analysis (BEA), Wisconsin ranks 39th out of the 50 states in economic growth over the past year.
Figures like these are common in Wisconsin, which currently ranks 12th in the U.S. in total tax burden. While the state dropped out of the top 10 in the past year, it did so only because other states raised their taxes significantly, pushing Wisconsin further down the list. In fact, Wisconsin's total tax burden increased, despite falling in the rankings.
It should be no surprise that Wisconsin's economy continues to flounder when so much of our state's wealth is tangled up in wasteful taxpayer programs and excessive regulation.
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Turning Milwaukee's Economy Around
 A new report by the Wisconsin Policy Research Institute offers some valuable recommendations for re-energizing Milwaukee's economy. The report, written by George Lightbourn and Sammis White, Ph.D., details many of Milwaukee's daunting challenges; including too many under-educated people and too few college-educated workers; a recent spike in violent crime; a culture in which businesses fail to routinely work together; and an under-sized entertainment sector.
Some of the report's suggestions include:
- Increase the flow of capable workers into high-end manufacturing.
- Increase the number of high school graduates.
- Increase the number of college graduates, including making a concerted effort to get graduates of the University of Wisconsin campuses to either stay in or move to Milwaukee. Increasing the number of foreign-born college graduates in Milwaukee also is recommended.
- Lowering the crime rate. "Unless Milwaukee is able to reduce its violent crime rate, all other economic development strategies will prove fruitless," the report says. It recommends increasing police patrols and incarcerations.
- Increasing the population of downtown Milwaukee. "A healthy region needs a healthy city core," it says. It recommends doubling, to 2%, the proportion of the metropolitan area's residents who live downtown.
The full report can be viewed here.
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WMC: A Tale of Two Houses
 This week, Wisconsin Manufacturers and Commerce issued a pamphlet that details the stark legislative differences between the Republican-controlled State Assembly and the Democrat-controlled State Senate. The pamphlet, entitled "Wisconsin Legislative Session 2007-2008: A Tale of Two Houses," highlights the aggressive anti-business climate pursued by the Senate, while also listing many of the oppressive economic Democrat policies that were eviscerated by the Assembly.
Included in the list is the "Healthy Wisconsin" proposal put forth by legislative Democrats, which would have raised taxes by $15.2 billion, more than doubling the current state general fund budget. Such an increase would have been the largest tax increase in any state in the nation's history, and was removed from the state's biennial budget by the Assembly. The Assembly was also able to kill Governor Doyle's proposed oil company tax, which would have raised taxes on gasoline by 7 cents per gallon - at a time when we're seeing record prices at the pump.
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