Marketplace of Ideas Blog

From WisPolitics.com Monday:

Assembly Speaker Mike Sheridan (D–Janesville) announced the creation of the Partnership for a Stronger Economy today, a diverse group of business and workforce leaders who are at the front lines of job creation and economic development in Wisconsin. The Partnership will be tasked with developing new strategies to build on current legislative efforts to stabilize and strengthen the state’s economy.

“Wisconsin’s Partnership for a Stronger Economy will bring smart, creative people together, no matter their political ideology, to talk about what we can do to keep Wisconsin on the right track as the nation recovers from its worst economic crisis in generations,” said Speaker Sheridan. “The Partnership is a new way of doing business in Wisconsin.”

Wisconsin’s Partnership for a Stronger Economy was formed in order to conduct a meaningful, long-term dialogue between the people who create jobs, train and retrain workers, and educate our future workforce. Legislators will participate and facilitate Partnership meetings, but will focus the Partnership on other members in order to move beyond rhetoric and encourage a candid discussion about what Wisconsin’s economy needs. Partnership members will be added throughout the year and will be encouraged to recommend other individuals for membership who will bring new ideas to the discussion.

Some of the challenges Wisconsin’s Partnership for a Stronger Economy will address include:

• Finding ways to make it easier to do business in Wisconsin by identifying obstacles that hinder economic development and create an unstable environment for business.
• Examining opportunities and industries that will make Wisconsin’s economy stronger for years to come.
• Discussing strategies that will enable the state to nurture existing companies and attract new companies that will create family supporting jobs.
• Finding ways to better prepare our workforce for the jobs of both today and tomorrow.

This is a positive, though overdue, step. One could suggest it is redundant given the work the Wisconsin Jobs Now group did earlier this year, except that Sheridan’s fellow Democrats have generally (with one major exception) panned the idea that, for instance, our personal and corporate income tax structures “hinder economic development and create an unstable environment for business.”

These next three quotes, though, present an interesting cross-section of apparent involvement:

“The Partnership will help improve communication between Wisconsin businesses and state lawmakers,” said James Buchen, Vice President of Wisconsin Manufacturers & Commerce and a Partnership member. “Working together, we can create a better business climate and grow Wisconsin’s economy.”

“Innovation has served Wisconsin well in the past, and is responsible for the surge in biotechnology businesses opening or relocating in our state,” said Dr. Laura Strong, President and COO of Quintessence Biosciences and Partnership member. “To innovate you need to create the right environment for ideas to grow and become a reality. I believe The Partnership for a Stronger Economy will create that environment.”

“A major goal of any economic recovery has to be keeping our workforce strong and prepared for the jobs of the future,” said Phil Neuenfeldt, Secretary–Treasurer and Legislative Director for the Wisconsin State AFL-CIO and Partnership member. “Having an open and honest dialogue with the other representatives in the Partnership will only strengthen those efforts.”

WMC’s involvement is similarly interesting in that, again, Democrats and others have panned WMC as being stooges of and for the state GOP. (Or vice versa; I forget which.) Recall the Wisconsin Business Council, which is supposed to focus on “policy, not partisanship.”

The involvement of organized labor is a positive step. The Mercury Marine story of this past summer included too many quotes from Mercury union employees that displayed real ignorance about how business works. Perhaps union involvement will teach union members that unprofitable businesses don’t employ their members for very long. Anything that results in honest improvements in labor–management relations is a positive step.

Quotes like this, though, make me have second thoughts about this effort:

Reps. Peter Barca, D-Kenosha, and Louis Molepske, D-Stevens Point, will co-chair the effort, which will hold hearings around state in the hopes of, Sheridan said, soliciting ideas to spur economic recovery. Assembly Dems touted 47 companies already signed onto the effort and said they’ll work to bring more on board.

“A lot of these businesses … are hiring, expanding, or actually moving into the state,” said Sheridan, D-Janesville, crediting the latest state budget for helping their efforts. “We’re starting to see the signs of an economic recovery.”

Sorry, but in no way does $2 billion in tax increases, half of which were pointed right at businesses and their owners, improve the state’s business climate. Moreover:

Wisconsin’s Partnership for a Stronger Economy is the latest extension of the legislature’s efforts to boost business and support Wisconsin workers. In the face of a $6.6 billion budget deficit and a record $3 billion in spending cuts, Assembly Democrats demonstrated their commitment to both stabilizing and growing our economy by authorizing over $200 million worth of new job creation incentives. Wisconsin is already seeing the success of these efforts at businesses like Mercury Marine and Oshkosh Truck, among many others.

Since the state Department of Commerce still hasn’t revealed what aid the state is giving Mercury Marine, that is an assertion without proof. (I know what aid Fond du Lac County is giving Mercury Marine, because as of April 1, I’m helping pay for it.) And unless you know one of the furloughed state employees, you haven’t noticed any evidence at all of those “record $3 billion in spending cuts.” (Had that been $5 billion in spending cuts and zero tax increases, I would have been impressed.)

But then again:

“Ultimately, the state can only help create jobs, and businesses do the hiring,” Sheridan said.

Buchen, whose group represents the state’s business interests, said he’s confident the hearings will identify problems in Wisconsin’s business climate. While he said his members may not agree with Democrats on many tax issues, WMC will work toward help with state regulation and business incentives.

“We want to position Wisconsin to lead the way out of the recession,” Buchen said. “We want to lead the parade.”

The state does indeed need help with state regulation and business incentives; the gross excess of the former and the lack of the latter are two reasons why Wisconsin has done poorly in state business climate comparisons for years.

It is impossible to improve the state’s business climate without dealing with taxes. Our state tax system is not designed for wealth creation, which is a problem in a state that needs more wealth. A tax system that was designed for wealth creation would not tax estates or corporate income, nor would it tax savings, interest, dividends or investment income. A tax system designed for wealth creation would be more of a consumption tax than an income tax, but not a new or bigger sales tax — essentially a tax on income minus savings. A Legislature and governor interested in job creation would not increase taxes on those who create jobs, as the 2009–11 budget does.

Here’s one concept for Sheridan’s task force: As I’ve said before, I think Wisconsin’s politicians do want business to stay in Wisconsin and locate in Wisconsin, but on their terms, not necessarily on a business’ terms. That is analogous to going to a car dealership and being able to buy only one car, whatever the dealership wants to sell you, at whatever price the dealership wants to charge. That’s not a customer-centered attitude, but that is an approach that is not working.

Getting the principals in the same room to talk is a positive step. It is only talk, however, until something emerges that the Legislature passes and the next governor signs into law.