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“Competing Traditions And A Series Of Scandals”: Wisconsinites Running The RNC Double Down On Walker Recall Fight

It’s not just because the attempt to recall conservative Gov. Scott Walker is a ground-game test case that foreshadows the super PAC–funded fight between big business and big labor in the fall presidential election.

It’s because the Wisconsin GOP dominates the Republican National Committee right now. This is a time of national influence for Badger State conservatives—and this recall effort is a personal challenge not just to Scott Walker, but to Republican Party Chairman Reince Priebus and his team at the top of RNC.

Priebus was the chairman of the Wisconsin Republican Party from 2007 through 2010 while also serving as the RNC’s general counsel. Under his leadership, the GOP took control of the Wisconsin statehouse as well as the Governor’s mansion. Walker and Preibus are personally close, talking and texting frequently, with a friendship that goes back more than a decade to when Walker served in the State Assembly and Preibus ran unsuccessfully for the State Senate.

Politics is about personal relationships, and the Wisconsin ties within the RNC run deep right now. For example, RNC Political Director Rick Wiley served as executive director of the state party. RNC counsel Jonathan Waclawski previously was finance director and chief counsel of the state party. Press Secretary Kirsten Kukowski worked as communications director of the state party. And National Field Director Juston Johnson was the campaign manager for Wisconsin Sen. Ron Johnson (no relation) as well as political director of the state party. The august offices of the RNC are now a paradise for Cheeseheads.

None of this is unprecedented or improper. It’s common for executives to bring in trusted team members from their home state. But the disproportionate influence of Wisconsin Republicans reflects how personally invested members of the RNC apparatus in this Tuesday’s recall results. This is personal—an ideological fight playing out on their home turf. And it shows how the national Republican Party has been uniquely well positioned to push back on attempts to undo the 2010 election results, beginning with state Senate special elections in April 2011.

The Republican Party’s history in Wisconsin, is deep and reflects the party’s competing conservative and progressive traditions. The GOP’s birthplace is regarded as Ripon, Wis., where it was formed in a small schoolhouse an antislavery alternative to the Whig Party in 1854. In the early decades of the 20th-century, “Fighting Bob” LaFollette and his sons were nationally known as Republican senators and leaders of the progressive movement. But a different, darker Republican tradition also emerged in Wisconsin by the mid-20th century, characterized by conservative Sen. Joe McCarthy and the establishment of the John Birch Society in Appleton, Wis. Rabidly anticommunist and reactionary in ways that helped give rise to both the book and term “The Paranoid Style in American Politics,” their influence on mainstream debates faded after McCarthy’s deserved disgrace. But in the 1990s, the Wisconsin Republican Party came back into national prominence with the pioneering welfare reform initiatives of Gov. Tommy Thompson, who won reelections by nearly 60 percent margins. And even before the elections of 2010, perhaps the brightest rising star and intellectual leader of the Republican Party was Wisconsin Rep. Paul Ryan.

But Scott Walker’s election in 2010 signified a decided shift to the right for statewide Republican candidates, and his collective bargaining reforms for public-sector unions—which he didn’t mention on the trail but introduced just after taking office—spurred weeks of protests at the state capital. The petition effort required to get a recall effort on the ballot returned more than a million signatures—twice the number needed. By early April, a stunning 46 percent of state residents strongly disapproved of his performance in office. The latest polls show Walker, despite marinating in sky-high disapproval numbers, with a slight edge over his challenger, Milwaukee Mayor Tom Barrett—but it’s all going to come down to the ground game on Election Day.

Buoyed by his national ties, and the national prominence of Tuesday’s recall contest—Walker has raised almost $15 million from out-of-state donors, as well as $10 million from those within Wisconsin. As of May 1, Walker had raised more from donors in Texas, Illinois, Florida, California, Missouri, and New York than Barrett had raised in total. Among the highest profile big-dollar Walker donors are Newt’s onetime super PAC sugar daddy Sheldon Adelson, who cut a $250,000 check, and Rick Santorum’s super PAC benefactor Foster Friess, who kicked in $100,000.

But while national prominence and connections have helped Walker’s bottom line, a series of local scandals threatens to add to the recall momentum. A “John Doe” investigation into improprieties when Walker was county executive is still being conducted, and six onetime Walker aides have been confronted with criminal charges and 13 individuals granted immunity. The public charges range from evidence that a separate wireless email router was installed in the county executive office to allow campaign-related business and fundraising to be conducted on government time to the far more serious and salacious charge that onetime Walker deputy chief of staff and economic development director Tim Russell embezzled more than $60,000 from a veterans charity.

To date, Walker has transferred $100,000 from campaign funds into legal defense funds. The ongoing nature of this investigation could continue to dog Walker and his allies even if he passes the recall text on Tuesday. Wisconsin Republican politics is a small world, and indictments could affect local figures well known to the Badger State crew running the RNC. This is the considerable downside that comes when local politics reaches the national level.

All the more reason to watch the results of Tuesday’s recall in Wisconsin closely.

While Wisconsin is regarded as a swing state that leans Democrat in presidential elections, progressive forces’ focus on pushing back against the Tea Party in this particular state could seem ill-timed and ill-advised in retrospect. The national party’s strong ties to Walker and knowledge of the state’s politics helps account for why Democratic efforts, first to stop Walker’s policies and then to push him from office, have been unsuccessful to date despite the governor’s extraordinarily polarizing presence. This RNC team knows Wisconsin cold and has helped direct national resources to what might have been otherwise a remote local fight in 2015.

The Republican Party’s history in Wisconsin, is deep and reflects the party’s competing conservative and progressive traditions. The GOP’s birthplace is regarded as Ripon, Wis., where it was formed in a small schoolhouse an antislavery alternative to the Whig Party in 1854. In the early decades of the 20th-century, “Fighting Bob” LaFollette and his sons were nationally known as Republican senators and leaders of the progressive movement. But a different, darker Republican tradition also emerged in Wisconsin by the mid-20th century, characterized by conservative Sen. Joe McCarthy and the establishment of the John Birch Society in Appleton, Wis. Rabidly anticommunist and reactionary in ways that helped give rise to both the book and term “The Paranoid Style in American Politics,” their influence on mainstream debates faded after McCarthy’s deserved disgrace. But in the 1990s, the Wisconsin Republican Party came back into national prominence with the pioneering welfare reform initiatives of Gov. Tommy Thompson, who won reelections by nearly 60 percent margins. And even before the elections of 2010, perhaps the brightest rising star and intellectual leader of the Republican Party was Wisconsin Rep. Paul Ryan.

But Scott Walker’s election in 2010 signified a decided shift to the right for statewide Republican candidates, and his collective bargaining reforms for public-sector unions—which he didn’t mention on the trail but introduced just after taking office—spurred weeks of protests at the state capital. The petition effort required to get a recall effort on the ballot returned more than a million signatures—twice the number needed. By early April, a stunning 46 percent of state residents strongly disapproved of his performance in office. The latest polls show Walker, despite marinating in sky-high disapproval numbers, with a slight edge over his challenger, Milwaukee Mayor Tom Barrett—but it’s all going to come down to the ground game on Election Day.

Buoyed by his national ties, and the national prominence of Tuesday’s recall contest—Walker has raised almost $15 million from out-of-state donors, as well as $10 million from those within Wisconsin. As of May 1, Walker had raised more from donors in Texas, Illinois, Florida, California, Missouri, and New York than Barrett had raised in total. Among the highest profile big-dollar Walker donors are Newt’s onetime super PAC sugar daddy Sheldon Adelson, who cut a $250,000 check, and Rick Santorum’s super PAC benefactor Foster Friess, who kicked in $100,000.

But while national prominence and connections have helped Walker’s bottom line, a series of local scandals threatens to add to the recall momentum. A “John Doe” investigation into improprieties when Walker was county executive is still being conducted, and six onetime Walker aides have been confronted with criminal charges and 13 individuals granted immunity. The public charges range from evidence that a separate wireless email router was installed in the county executive office to allow campaign-related business and fundraising to be conducted on government time to the far more serious and salacious charge that onetime Walker deputy chief of staff and economic development director Tim Russell embezzled more than $60,000 from a veterans charity.

To date, Walker has transferred $100,000 from campaign funds into legal defense funds. The ongoing nature of this investigation could continue to dog Walker and his allies even if he passes the recall text on Tuesday. Wisconsin Republican politics is a small world, and indictments could affect local figures well known to the Badger State crew running the RNC. This is the considerable downside that comes when local politics reaches the national level.

All the more reason to watch the results of Tuesday’s recall in Wisconsin closely.

June 4, 2012 Posted by | Wisconsin | , , , , , , , , | Leave a comment

Record Shows Gov Scott Walker’s Office Stonewalled DA Inquiry Of “John Doe Criminal Investigation”

Milwaukee County prosecutors opened the secret John Doe criminal investigation more than two years ago after being stonewalled by Gov. Scott Walker‘s office when he was county executive, according to a newly released record.

The document appears to cast doubt on some of Walker’s claims about his role in launching and cooperating with the investigation.

On May 5, 2010, Assistant District Attorney Bruce Landgraf filed a petition with court officials asking if his office could initiate a secret investigation into what happened with $11,000 in donations intended for Operation Freedom, an annual event honoring veterans.

By making it a secret John Doe investigation, Landgraf wrote that prosecutors might get better cooperation from Walker’s office, which had been “unwilling or unable” to turn over records and information needed in the investigation. He said he would need to subpoena county records and officials.

“It may be the County Executive’s Office is reluctant to provide information to investigators due to a fear of political embarrassment,” Landgraf wrote, noting that Walker was then running for governor.

But Ciara Matthews, spokeswoman for the governor’s recall campaign, said the filing was inaccurate.

In 2009, Matthews said, Walker had his former chief of staff, Tom Nardelli, contact the DA’s office over concerns about what a local chapter of the Military Order of the Purple Heart had done with donations it received from the county for Operation Freedom.

“Multiple follow-ups were made by the chief of staff to the district attorney’s office to offer assistance in that investigation, and any statement to the contrary is not correct,” Matthews said.

The document was included in a court filing this week by the lawyer for Timothy Russell, a former top-level Walker aide who has been charged with embezzling more than $25,000 intended for Operation Freedom and two political candidates. His attorney, Dennis Krueger, wants a judge to dismiss the charges against his client because they involved matters that reached far beyond the original scope of the John Doe probe.

The investigation has led to criminal charges against three former Walker aides, an appointee and a major campaign contributor.

On Thursday, Walker’s former county spokeswoman, Fran McLaughlin, was granted immunity as part of the investigation. She is the 13th individual to receive immunity in the case.

Walker’s current spokesman, Cullen Werwie, also has been given immunity to testify behind closed doors.

Records show McLaughlin was given immunity after she invoked her Fifth Amendment right not to answer questions to avoid self-incrimination. Her attorney, Michael A.I. Whitcomb, refused further comment.

“I can’t say anything,” Whitcomb said.

Landgraf’s 2010 petition provides new information about the origins of the two-year probe, much of which is veiled in secrecy.

Walker has repeatedly brushed aside questions about the John Doe by claiming credit for launching it.

“Another interesting thing for people tuning in tonight is to know,” Walker said during last week’s recall debate, “this investigation started because my office asked for it nearly two years ago.”

Prosecutors have previously acknowledged that investigators met with Nardelli and another Walker aide in 2009 over Operation Freedom. Nardelli told the DA’s office that Purple Heart’s treasurer had refused to provide any records or accounting of the event’s finances.

But Landgraf’s filing is the first public suggestion Walker’s office later reversed course and quit cooperating.

“As part of the pre-Doe investigation, Investigator Jeffrey Doss sought to obtain documentation that would form the basis of tracing the funds from Milwaukee County to the Order,” Landgraf wrote in his May 2010 petition. “The Office of the County Executive has been unwilling or unable to provide such documentation. It is unclear at this juncture why the Office of the County Executive has not produced (or has not caused another Department to produce) these records.”

Landgraf noted in the petition that the media also would be interested in the investigation if they knew about it, adding that Walker was then running for governor. In fact, the Journal Sentinel wrote about the missing money a month later.

He said publicity about the probe could be “particularly unfair” to Walker.

“It is therefore my opinion that the formality and the secrecy of a John Doe proceeding will increase the likelihood of complete and frank statements by persons who may – in an informal, non-secret setting – feel uneasy about providing a candid, voluntary statement,” Landgraf wrote.

Earlier this year, prosecutors charged Kevin Kavanaugh, a former Walker appointee to the Milwaukee County Veterans Service Board, with five felony counts alleging he embezzled $42,232 from his Purple Heart chapter, for which he was treasurer. The money was supposed to help underwrite the costs of Operation Freedom.

Kavanaugh has pleaded not guilty.

Other records in Russell’s filing this week show that former Appeals Court Judge Neal Nettesheim, who is overseeing the John Doe investigation, agreed to expand the scope of the investigation at least seven times between May 11 and Nov. 30, 2010. In fact, prosecutors first expanded the investigation just three days after the case was opened, presumably in response to a No Quarter piece about a Walker staffer posting favorable comments about her boss on blogs and websites while she was on the job.

“To expand the scope of a John Doe proceeding to include investigating illegal campaign activity and a subsequent theft allegation unrelated to the time, circumstances and witnesses to the original 2006 theft clearly exceeds the scope and intent of the John Doe statute,” wrote Krueger, Russell’s attorney, in his motion asking Milwaukee County Circuit Judge David Hansher to throw out his client’s charges.

Krueger also said in his filing that prosecutors have informed him that Russell remains a target of the investigation, despite having been already charged earlier this year.

By continuing to investigate his client in the John Doe after charging him, Krueger said, prosecutors increase their ability to “leverage the defendant into accepting a plea or (face) the prospect of defending against additional charges.”

Landgraf declined to comment on the filing, saying he had not yet read it.

 

By: David Bice, No Quarter-Milwaukee Journal Sentinel, May 31, 2012

June 2, 2012 Posted by | Wisconsin | , , , , , , | Leave a comment

“Where In The World Is Blago?”: Scott Walker Transfers $160,000 In Campaign Contributions To Mysterious Legal Defense Fund

Wisconsin Gov. Scott Walker (R) is diverting campaign donations to bankroll his legal defense fund. For what charges does he need a legal defense? He won’t say.

Walker’s latest campaign finance report reveals that he recently made two transfers totaling $100,000 toward a fund meant to protect him from a “John Doe” corruption investigation.

The three-year long investigation is targeting Walker employees who may have committed a host of corrupt activities — accusations include embezzlement, coercion, and use of taxpayer funds for campaign work. According to the Huffington Post, “Mike Tate, the chair of the Democratic Party of Wisconsin, says state law permits Walker to set up such a fund only if he is charged or under investigation for election or campaign violations.”

No one knows exactly if any allegations have been leveled against Walker, or what those might be. However, at the beginning of this year, a Walker appointee and staffer were both arrested and charged with felony embezzlement. Another Walker supporter — one of his funders — was convicted with exceeding campaign spending limits. Whatever Walker’s legal exposure, he is concerned enough to divert substantial campaign funds to his legal defense just days before the election.

Walker previously made another huge transfer of cash into the fund to pay his legal defense. The AP reports:

Walker’s latest campaign finance report filed with the state on Tuesday shows transfers of $70,000 and $30,000 out of his campaign account to the Scott Walker Trust. He previously transferred $60,000 into the account.

His Democratic challenger in Tuesday’s recall election Tom Barrett has repeatedly called on Walker to disclose who is paying for his legal defense fund. Walker has refused to say.

The Governor is required by law to have donors sign off on a transfer of funds, but the Walker campaign will not reveal who those people are. It has been a contentious issue in the lead up to the June 5 recall election, in which Walker has recently found himself in a dead heat, according to some polling. Other pools show Walker with a narrow lead.

 

By: Annie-Rose Strasser, Think Progress, May 30, 2012

May 31, 2012 Posted by | Wisconsin Republicans | , , , , , , | Leave a comment

“We’re Just Educating Folks”: Koch’s Americans For Prosperity Say They’re Not Supporting Scott Walker In WI Recall

DC-based special interest group Americans for Prosperity (AFP) is busing-in out-of-state Tea Partiers and spending millions on advertisements, rallies, and phone banks in the weeks before recall elections for Wisconsin Governor Scott Walker, Lt. Governor Rebecca Kleefisch, and four state senate seats. But the group founded and funded by New York-based oil billionaire David Koch insists their activities have nothing to do with the campaigns or elections.

“We’re not dealing with any candidates, political parties or ongoing races,” said AFP-Wisconsin Director Scott Hilgemann about AFP’s four-day, ten-city bus tour taking place the week before Wisconsin’s June 5 election.

“We’re just educating folks on the importance of the reforms,” he said.

The “reforms” Hilgemann is referencing include Governor Walker’s contentious attack on public sector collective bargaining and his austerity budget, which AFP touts as having saved taxpayers money — but which Walker’s critics say have crippled public schools and led to Wisconsin being dead last among all 50 states for job growth. Those controversial reforms also compelled over 900,000 people to sign petitions for Walker’s recall.

Since at least November, AFP has staged an aggressive pro-Walker campaign while claiming to be focused merely on promoting Walker’s “reforms” rather than the candidate himself or the recall election. The group has been one of Walker’s top allies since he introduced his divide-and-conquer legislation in February of 2011.

Continuation of AFP “It’s Working!” Campaign

Just as Walker’s opponents started collecting recall signatures in November 2011, AFP began running a series of slick TV and web ads claiming “It’s Working!”, and alleging that Walker’s fiscal policies have been good for the state (while ignoring all the bad news). The campaign has reportedly cost at least $2.9 million so far — nearly three times as much as Walker’s opponent Tom Barrett has raised.

The ads come from the “charitable” side of AFP — the AFP Foundation — which as a charity organized under Section 501(c)(3) of the tax code, has an absolute prohibition against intervening in political campaigns. The ads were produced in collaboration with another 501(c)(3), the Bradley Foundation-funded MacIver Institute, which has the same prohibition. As the Center for Media and Democracy has reported, the ads push the envelope on Internal Revenue Service (IRS) rules about nonprofit participation in political campaigns, never mentioning Walker or the election but advancing a message consistent with Walker’s electoral strategy.

The AFP-Foundation and MacIver “It’s Working!” campaign has also included a series of townhall events across the state in November and December to have a “respectful discussion on why we must maintain the reforms that have saved hundreds of millions for Wisconsin taxpayers,” according to an AFP press release. The implication is clear — the election of a governor other than Walker would threaten the “reforms,” and his reelection would maintain them. And according to AFP, “we must maintain the reforms.”

But, AFP claims the campaign is not about the elections — indeed, if it were, the organization could lose its nonprofit status.

The Wisconsin Democracy Campaign believes the AFP / MacIver ads really are about the elections, and filed a complaint with the IRS accusing the groups of violating IRS rules.

“Stand With Walker”

In February and March of last year, hundreds of thousands of people occupied and marched on the capital in protest of Governor Walker’s policies, including his Act 10 proposal to limit public sector collective bargaining. At the start of the uprising’s second week, Walker accepted a phone call from a person he believed to be David Koch, who asked how the governor’s efforts to “crush that union” were going. The caller was actually Buffalo Beast blogger Ian Murphy, who recorded and publicized the conversation. Among other things, Walker asked that Koch have “his guy on the ground” – presumably an Americans for Prosperity leader – organize rallies and encourage people “to call lawmakers and tell them to hang firm with the governor.”

Regardless of how AFP received the request for help, the group seemed to have met Walker’s request. The same day that Walker chatted with the fake David Koch, Koch’s AFP began running “Stand With Walker” TV ads across the state, along with promoting a pro-Walker petition. As the anti-Walker protests heated up, AFP launched a “Stand With Walker” website and a “Stand With Walker Wisconsin Bus Tour,” and organized a “Stand With Walker” counter-rally at the state capitol.

Months later, Walker himself adopted the “Stand With Walker” slogan for his election campaign. (The slogan also appeared to inspire this face-melting rock video).

Not about the Election?

In 2012, AFP appears to be ramping-up its campaign to aid Walker as his recall election grows near. AFP kicks off the “A Better Wisconsin Bus Tour” in Waukesha on May 30, visiting ten Wisconsin cities before rendezvousing in Racine with out-of-state AFP members. As part of the tour, 70 staff members will be recruiting volunteers to call voters and canvass neighborhoods. In recent weeks, the group has also been organizing phone banks.

Although Governor Walker likes to complain that out-of-state union bosses are behind his recall, AFP has been recruiting plenty of support for Walker from outside Wisconsin. State AFP chapters around the country have been organizing organizing “Freedom Phone” phonebanks for “patriots throughout the nation” to make phone calls into Wisconsin to tell Wisconsin residents to “support[] the Wisconsin reforms.” The AFP chapter in Illinois is busing out-of-staters “to rally and canvass neighborhoods in [Racine] Wisconsin on June 2” (three days before the election) to “make our voices heard in support of the Wisconsin reforms.” The effort appears to be well-funded — attendees are charged cost only $5 for a round-trip bus ticket with lunch and dinner provided. By comparison, a round-trip commercial bus ticket from Racine to Chicago would cost $47, lunch and dinner not included.

AFP-Wisconsin’s director insists the effort has nothing to do “with any candidates, political parties or ongoing races,” despite photos from recent events prominently displaying pro-Walker campaign propaganda and one of AFP’s top field coordinators being a current Vice-Chair and Executive Board Member of the Winnebago County Republican Party. Additionally, many AFP staffers have long ties to the GOP, such as AFP Director Luke Hilgemann, who until recently worked as Assembly Majority Leader Scott Suder’s Chief of Staff.

It is not clear whether the bus tour, phone banks, and canvassing are operating via the 501(c)(3) AFP-Foundation, which is officially prohibited from any political campaign activity, or through AFP’s 501(c)(4) wing, which can participate in a limited amount of election work, but cannot act as a Political Action Committee.

Regardless of which AFP wing is advancing the campaign, it stretches the imagination to believe AFP’s claims that organizing bus tours, phone banks, TV ads and out-of-state canvassers — in the weeks and months before the election — has nothing to do with the election. Particularly when AFP chair David Koch, who has not given any money directly to Walker’s recall campaign fund, has recently said “we’re helping [Walker], as we should” and “we’ve spent a lot of money in Wisconsin. We’re going to spend more.”

 

BY: Brendan Fischer, Center For Media and Democracy, May 27, 2012

May 27, 2012 Posted by | Wisconsin Recall | , , , , , , , | Leave a comment

“Challenging The Spot Of The Ball”: Scott Walker Magically Turns Wisconsin Job Numbers Into Pre-Election Miracle

With Wisconsin suffering the worst job loss numbers in the nation for the calendar year 2011, Governor Scott Walker promised yesterday that he will reveal newly revised numbers this week that will, effectively, change water into wine on the Wisconsin job front.

And he’s done it just in time for the June 5th recall election.

So, just how is Walker about to turn Wisconsin’s dismal job numbers from lemons to lemonade?

The Governor has simply decided to ignore the system used by the Department of Labor —and every other state in the nation —to measure job growth (or loss) and elected instead to go with a different set of numbers that makes things in Wisconsin look better.

Who knew it could be so easy to solve a jobs crisis?

With Wisconsin’s lagging job growth now driving voter sentiment as the state heads towards the June 5th election, Walker’s Chief Economist, John Koskinen, offered a presentation last week to Walker staff members and state economic officials wherein he made the case for an alternate system of measuring job creation—one that would be ‘unique’ to the Badger State.

The presentation is available for viewing on YouTube, under the title “Challenging The Spot Of The Ball”. For those of you who are not football fans, ‘challenging the spot of the ball’ refers to a football coach’s complaint to the referee when the coach doesn’t think the referee has been fair about where he places the ball on the field after a play.

Koskinen’s essential pitch is that the Establishment Payroll Survey—the Department of Labor (DOL) survey conducted each month to produce the jobs numbers—is an unfair way to go about counting jobs in Wisconsin. Why? Because the numbers look worse for Wisconsin under this method of counting than they would when the state relies upon on a different survey done each month by the DOL entitled the “Current Population Survey.”

The problem is, whether convenient to Wisconsin or not, the Establishment Payroll Survey is the metric used by the DOL —and the system relied upon by every other state in the nation— to measure job growth.

Here’s the difference between the two approaches-

The Establishment Payroll Survey involves the DOL calling workplaces-both private and government- and asking how many people are employed. The results of this survey, on a national basis, is the jobs number reported every month for non-farm employment.

With Wisconsin suffering the worst job loss numbers in the nation for the calendar year 2011, Governor Scott Walker promised yesterday that he will reveal newly revised numbers this week that will, effectively, change water into wine on the Wisconsin job front.

And he’s done it just in time for the June 5th recall election.

So, just how is Walker about to turn Wisconsin’s dismal job numbers from lemons to lemonade?

The Governor has simply decided to ignore the system used by the Department of Labor —and every other state in the nation —to measure job growth (or loss) and elected instead to go with a different set of numbers that makes things in Wisconsin look better.

Who knew it could be so easy to solve a jobs crisis?

With Wisconsin’s lagging job growth now driving voter sentiment as the state heads towards the June 5th election, Walker’s Chief Economist, John Koskinen, offered a presentation last week to Walker staff members and state economic officials wherein he made the case for an alternate system of measuring job creation—one that would be ‘unique’ to the Badger State.

The presentation is available for viewing on YouTube, under the title “Challenging The Spot Of The Ball”. For those of you who are not football fans, ‘challenging the spot of the ball’ refers to a football coach’s complaint to the referee when the coach doesn’t think the referee has been fair about where he places the ball on the field after a play.

Koskinen’s essential pitch is that the Establishment Payroll Survey—the Department of Labor (DOL) survey conducted each month to produce the jobs numbers—is an unfair way to go about counting jobs in Wisconsin. Why? Because the numbers look worse for Wisconsin under this method of counting than they would when the state relies upon on a different survey done each month by the DOL entitled the “Current Population Survey.”

The problem is, whether convenient to Wisconsin or not, the Establishment Payroll Survey is the metric used by the DOL —and the system relied upon by every other state in the nation— to measure job growth.

Here’s the difference between the two approaches-

The Establishment Payroll Survey involves the DOL calling workplaces-both private and government- and asking how many people are employed. The results of this survey, on a national basis, is the jobs number reported every month for non-farm employment.

The Current Population Survey, favored by Governor Walker, involves calling households to ask people if they are working. This is the survey that gives us our monthly unemployment number—the number that is consistently attacked by Obama foes because it is impacted by factors such as how many people have dropped out of the hunt for a job, expiration of unemployment benefits and other events that skew the numbers. In other words, when people give up looking for work, it actually has a positive impact on the unemployment rate because these people are removed from the counting base, allowing for a better ratio of people who are working to those who are not. This produces a more favorable, but far less accurate, measurement of how many people are unemployed.

The Current Population Survey (household survey) is particularly tricky when applied to determining the job numbers for a state because of the many people who live on the ‘edges’ of a state who are employed across the border in a different state. By way of example, someone living in Racine, Wisconsin may be able to answer in the affirmative when asked if she has a job. However, what is not asked is whether the respondent is employed in Wisconsin or driving across the border into Illinois to go to work. This makes such an individual’s response useful in determining how many people are working on a national basis but perverts the numbers when attempting to determine how many people are actually working in Wisconsin.

For these reasons, the Establishment Survey has long been the primary tool for measuring how many jobs exist in a given state rather than the household survey.

Yet, when Scott Walker delivers his ‘good news’ this week using his version of the ‘real’ numbers of job growth in 2011, he will not be using this traditional standard. And should we insist that the Walker Administration stay within the same metrics everyone else uses so as to get a true measure of where Wisconsin ranks vis-a-vis other states?

No worries —The Governor is ready for that one.

In the presentation noted above, Mr. Koskinen argues that were the DOL to use the old benchmarking readjustment standards (the Labor Department uses up-to-date data each year to go back and make adjustments to earlier estimates), involving making corrections to the 2nd quarter job numbers of the previous year rather than the current standards of readjusting the 3rd quarter of the previous year—it would also look better for Wisconsin. Accordingly, Walker is choosing to use the old standards because…well, I think the reason is sufficiently obvious.

Still, every single other state in the union uses the current standards of readjusting 3rd quarter benchmarks and it is that number which is used to compare relative success or failure among the 50 states.

According to Laura Dresser, a labor economist at The Center On Wisconsin Strategy at The University Of Wisconsin, Walker’s new numbers are little more than an incredibly transparent effort to create a false reality just in time to mislead Wisconsin voters who will cast their ballot in a few short weeks. Pointing out just one of the flaws in the ‘new and improved’ Walker method of measuring job growth, Dresser says, “It seems that they’re attributing employment growth in other states to Wisconsin.”

Dresser further points out that even if we were to go along with Walker’s preferred metrics, despite their being completely out of synch with the remainder of the country, we simply end up “dancing around zero.” While the Establishment Survey puts the numbers of jobs lost slightly below zero, the alternative survey preferred by the Walker people puts them just above zero. At the end of the day, we’re talking about zero job growth—even under Walker’s favored, if completely unorthodox, approach.

The numeric wizardry has not gone unnoticed by Governor Walker’s opponent in the coming election, Milwaukee Mayor Tom Barrett who said,””They brought in a fiction writer. They don’t like their numbers. They’re going to make up their own numbers.”

There is always a way to spin bad news and we can always count on politicians-of all stripes-to do their best in this regard. However, when one considers that Governor Walker, for the first 15 months of his term, was content to utilize the same system of measuring job growth accepted by the remaining 49 states and the federal government, it seems stunningly disingenuous to toss the metric aside now that he faces recall.

The question that remains is whether those who support the Governor, and the few remaining Wisconsinites still on the fence, will be willing to forgive so blatant a diversion or will respond to the Administration’s attempt to insult the voters by ‘changing the spot of the ball.’

Should the voters of Wisconsin throw their own red flag on Walker’s ploy and demand a review of the play, it’s a good bet that the people are not going to like Scott Walker’s call on this one.

 

By: Rick Ungar, Contributing Writer, Forbes, May 15, 2012

May 16, 2012 Posted by | Wisconsin | , , , , , , , | Leave a comment

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