7 Rivers Region Economics

Consumer Sentiment Spring 2011

2011-08-10T12:48:00.000-07:00

The first week of April I distributed via email the semi-annual consumer sentiment survey to 1466 past participants in programs related to the Seven Rivers region. I received 353 responses for an overall response rate of 24.1%. The table below provides all the data since the inception of the regional survey. We see from August of 2010 to April 2011 the regional overall consumer sentiment index increased slightly from 79.0 to 80.5 overall, while the national index fell slightly over the same period. The Expectations sub index has turned mildly more optimistic rising to 75.5 from 70.9, while the national expectations index over the same period actually fell.

Consumer Sentiment: Fall 2010

2011-03-31T10:24:00.000-07:00

The August 2010 data is below. We can see the Seven Rivers Region consumer sentiment index fell slightly from 79.2 to 79.0 while the national index fell more significantly from 73.7 to 69.6. The April 2011 data will be released at the Economics Indicators Breakfast May 4th.

Dating the Recession

2011-03-06T18:11:00.001-08:00

I was asked by the local newspaper to comment on the recession. Has the recovery begun locally? The article is here, and my thoughts are here.

Wisconsin 2010-2011 General Fund Appropriations

2011-02-22T21:54:00.001-08:00

This is data from Table 10 from Act 28.

This link which takes you to the "Many Eyes" website in order to have a bit more room to play around with it.

Metrics

2010-09-23T17:48:00.001-07:00

The state has produced some metrics for the seven rivers region. Available here.

Sept. 2010

2010-09-22T11:07:00.001-07:00

Sept 2010 final

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Foreclosure Maps

2010-08-27T10:25:00.000-07:00

Two Maps.

Update: Consumer Sentiment

2010-08-12T13:11:00.000-07:00

In February 1,344 Seven Rivers Region participants were again contacted to participate in the consumer sentiment survey. 301 of the participants responded. The over all index increased to 79.2 from 75.2.

April Presentation

2010-04-13T06:51:00.001-07:00

My latest:

April 2010 final

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Fewer New Cars

2010-03-03T06:59:00.001-08:00

A permanent decline in new vehicle registrations?

MADISON, Wis. - New vehicle registrations in Wisconsin are nearly half of what they were in 2000.

Registrations dropped 46 percent - a hit that's felt well beyond the state's auto dealerships.

Thousands of jobs have disappeared as auto plants and their suppliers deal with the fractured auto industry.

The auto statistics service Cross-Sell shows the number of new vehicles registered in Wisconsin in 2009 was nearly 172,000 - down from nearly 320,000 in 2000.

Since 2000, 107 auto dealerships have closed in Wisconsin, including 56 in 2008 and 2009.

The Journal Sentinel reports state employment in auto parts manufacturing fell 44 percent from 2000 to 2009. Parts factories such as Tower Automotive and Delphi in Milwaukee and Lear and SSI in Rock County closed.

Economic Development Spam

2010-02-26T08:09:00.001-08:00

Here is an email (read span) I recently received (here is a similar link):

DPC Special Report & Video | Promoting Travel and Tourism Will Create Jobs

Hello All, I wanted to alert you to the fact that the DPC has released a one-pager on the Travel Promotion Act (link and full text below), outlining the significance in passing this importance piece of legislation. As the Senate continues to debate a series of bills in the coming weeks that will create jobs for the American people that need it most, as part of its jobs agenda, it is important to keep in mind that this bill is a jobs bill—as the U.S. Travel Association projects it will create nearly half a million jobs. Moreover, the Congressional Budget Office estimates it will reduce the federal deficit by $425million over the next decade. It is not often that we see both of these things accomplished, in one piece of legislation. I encourage you to take a look at this report, as it quite clearly lays out exactly what this bill will do. In addition, I have included a clip from Senator Dorgan, who has been very active on this issue. While speaking on the Senate floor, he focuses on the idea that by passing this bill and funding a national campaign that will promote travel to the U.S., it could ultimately strengthen America’s standing around the world—an idea that is truly tough to put a price tag on. As always,please be in touch if you would like to discuss in more detail. Many thanks.--Kati

Really? So If I travel to your state and spend 1,000 dollars that I would have spent in my own state, on something like home improvements, and you travel to my state and spend 1,000 you would have spent in your home state on home improvements, we will create jobs? Wow, that is literally the dumbest thing I have ever heard, its not even beggar-thy-neighbor. It creates ZERO net change in economic activity, thus it creates ZERO net jobs.Oh, but maybe this line gives us a hint as to who thinks its a good idea:

as the U.S. Travel Association projects it will create nearly half a million jobs...

And they don't care about the half a million jobs which will be lost in the home improvement sector. The fetish with gross "job creation" needs to end. If we care about jobs it is about NET jobs.

Budget Data

2010-02-19T18:14:00.000-08:00

Visualizations of the federal budget from various sources:

The Washington Post.
The New York Times.
The Wall Street Journal.

Update.

I missed:
The Guardian.

Update: Consumer Sentiment

2010-02-16T08:33:00.000-08:00

In July I again conducted the consumer sentiment survey using a web based survey. 1,344 people received an invite to complete the survey. The group represents past participants in 7 Rivers Region economic development events, including the semi-annual indicators breakfast meetings. There were a total number of 294 responses for a response rate of 21.9%. Consumer Sentiment for both the region and the nation increased with most of the increase coming from the subset of questions which measure expectations. The regional consumer sentiment index rose from 59.7 in February to 75.2 in July, while the national index rose from 56.3 in February to 66 in July.

Keeping Them Honest

2010-02-16T06:23:00.000-08:00

Both sides of the political aisle are prone to exaggeration and convenient amnesia. Recent discussions of Obama's plan to allow the Bush tax cuts to expire have included references to socialism. Below you will find the historical top marginal income tax rates, color coded by party. Another take is here. [Data Source].

Vital Signs

2010-01-13T09:09:00.001-08:00

Economic vital signs for Milwaukee.

The Debt

2009-10-28T06:15:00.000-07:00

I'm often asked about the "problem" our debt represents. Below is a largely good video explaining who holds the debt and the "problem" it presents. One VERY important caveat. While the author gets the idea correct that what matters is publicly outstanding debt, since inter-government debt is merely a wash, he does not accurately address this same issue when talking about bonds as financial assets. Remember that a US government bond is an asset to the holder, but a liability to the tax payer. We care about our net position as tax payers. Also, from an economic perspective, bond holders and tax payers are not the same people, so there are distributional consequences to changes in the level of the debt. But with that said this might help somewhat.

Great Questions

2009-10-25T05:09:00.001-07:00

Pulled from Marginal Revolution:

What will result from the intersection of two possible trends: insistence on a greater equality in health care outcomes, and the development of new technologies -- some at the genetic level for the individual -- which will lead to a greater inequality of health care outcomes?

Sales Taxes

2009-10-21T04:19:00.001-07:00

The Tax Foundation has updated their data on state and local sales tax here.

Credit Scores

2009-10-20T07:29:00.001-07:00

Credit Scores by email address. Google beats Yahoo.

Finances Altered?

2009-09-28T09:17:00.000-07:00

I believe the findings of this survey, support what I have been saying.

"This new survey points to a profound shift in the way people think about their saving and spending," said Eric Eve, senior vice president of global community relations at Citi. "The current economic environment is altering, perhaps permanently, the way we think about spending money."

Taxes

2009-07-18T10:04:00.000-07:00

Bruce Bartlett interviewed by Ezra Klein on taxes here. The most frustrating thing for economists, is the truism of this statement:

One reason I've been more sympathetic to a carbon tax than other conservatives is that if you did it right it would be pretty close to a VAT. One of the objections a lot of us have to cap-and-trade is that it's too easily manipulated. It sounds good in theory, but once in the political meat-grinder, its failures become overwhelming.

How many times can we say that? Its a good idea in theory, but the political process will make a mess of it. When will demand our politicians take the time to understand a little economics?

Consumer Sentiment

2009-07-13T00:01:00.000-07:00

The recent consumer sentiment figures were not good.

Its preliminary index of confidence for July fell to a reading of 64.6 from the final reading for June of 70.8.

July's preliminary reading was well below economists' median forecast for 70.5 and the first fall in the index since February.

In April I presented the results for the local consumer sentiment index:

La Crosse Economic Forum

2009-06-07T16:19:00.000-07:00

Here are the slides from my presentation.

Kapanke 2009

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New Google Feature

2009-04-29T09:35:00.000-07:00

Want to see the current unemployment rate for La Crosse plotted against previous observations? Simply type "unemployment rate la crosse" into google and the first hit will produce a google chart. Or hit the link here.

Hat tip: Lifehacker.

Job Losses

2009-04-19T17:44:00.000-07:00

Are actually a recent phenomenon in the 7 Rivers Region. Check out this animation from Slate.

Economic Recovery Dashboard

2009-04-05T20:12:00.000-07:00

Keep an eye on our recovery here.

Geography of a Recession

2009-04-05T10:43:00.000-07:00

Excellent interactive graphic from The New York Times.

April 2009 Slides

2009-04-01T12:18:00.000-07:00

Thanks to everyone who came to the Indicators Breakfast. My slides can be found below.

April 2009 Final

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Foreclosures

2009-03-28T10:30:00.000-07:00

Matt Kures, GIS specialist, from UW-Extension put together some maps with foreclosures for each county.

La Crosse

click on picture for full size.

Other Counties can be found here.

Hunger Task Force

2009-03-18T15:59:00.001-07:00

The Slides from a recent presentation to the Hunger Task Force Conference.

Hunger Task Force 2009 Final

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December 2008 Consumer Sentiment

2009-02-22T11:34:00.000-08:00

In December of 2008 I conducted the semi-annual consumer sentiment survey for the 7 Rivers Region. Approximately 1,100 current and past participants in 7 Rivers Region events were emailed a link to the survey. 238 responses were received. The overall index for consumer sentiment in the 7 Rivers Region actually rose slightly in December 2008 to 70.9 from 69.9 in August 2008. Whereas the rest of the nation experienced a decline in overall sentiment from 61.2 to 60.1. According to Bloomberg:

“It’s a difficult environment for households right now,” Dean Maki, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in an interview with Bloomberg Television. “The job market is weighing on confidence. We are seeing activity just falling off.”

The confidence index was forecast to rise to 61.9, according to the median of 54 economists surveyed by Bloomberg News. Estimates ranged from 60 to 65. A preliminary report earlier this month showed a reading of 61.9.

A Commerce Department report earlier today showed the economy shrank at a 3.8 percent pace in the fourth quarter of 2008, the weakest growth pace since 1982. Consumer spending contracted at a 3.5 percent rate in the last three months of 2008.

Turning to the current conditions index, based on a subset of questions which ask respondents how they are doing now and how they have been doing over the last year. Again, we appear to have done a bit better than the rest of the nation. The 7 Rivers Region current conditions index rose from 76.5 in August of 2008 to 87.0 in December of 2008. The national index fell from 73.1 to 69.5 in August.

Turning to future expectations. The local expectations index appears to have taken the biggest hit, with the index of future expectations from 65.6 to 60.6. The national number rose from 53.5 to 57.8 over the same interval.

Regional Differences

2009-01-25T11:03:00.000-08:00

Regional Differences can persist for a very long time. From Andrew Gelman

The Entrepreneurship Myth

2008-12-07T13:39:00.000-08:00

The Entrepreneurship Myth an interview with Scott Shane about his book The Illusions of Entrepreneurship.

Some things that aren't surprising.

Describe the typical startup that you found.
The median startup is a business that's capitalized with about $25,000. The financing of that business comes from the entrepreneur's savings. The business is a retail or personal service business, a hair salon or a clothing store, that kind of thing. The founder doesn't have expectations of a very high growth business, in fact [the entrepreneur is] probably thinking a goal of $100,000 a year of revenue is a good goal.

And it's most likely to be organized as a sole proprietorship and to have no employees besides the owner—is that correct?

That's right. And in fact we're getting close to half, very close to the median would even be home-based.
Why do you think the myth of entrepreneurship, the image that you're debunking, is so popular?
Part of it is we have a belief that entrepreneurship is good because it's associated with things that we like to believe about Americans: being independent, doing your own thing, going your own way. The other part of it is that paradoxically, there is one really, really good thing about entrepreneurship that people don't talk about, which is dominant and we have lots of evidence to support: People who run their own businesses have greater job satisfaction than people who don't. I think part of it is that we're trying to make sense of this paradox—that we really like it, but financially it isn't so great. So we create a myth that says because we like it and it makes us happy, it must also make financial sense, because otherwise there's a kind of conflict we can't resolve.

Some things that are surprising are the conclusion the author makes. Rather inappropriately from my perspective. I think the government's track record of picking winners and losers is pretty poor. The best strategy is always one that lowers costs for everyone, rather than favoring one group over another.

You write that "encouraging startups is lousy public policy," based on the data you've examined. What would you propose as policy alternatives?
The part that's lousy public policy is the idea that entrepreneurs, regardless of what kind, are good, and if we just have more of them, it's better. But what's a good public policy is if we picked certain kinds of startups, and we emphasized the increase in those. But the way the policies are set up, they don't encourage the specific high-potential startups. Most of the policies are: More entrepreneurs—just let's get volume. It's a very volume-oriented strategy. That's bad public policy.
You collect a lot of data in your book and come to some counterintuitive conclusions about entrepreneurship. What would you say is the biggest illusion?
I think the biggest myth entrepreneurs have is that the growth and performance of their startups depends more on their entrepreneurial talent than on the businesses they choose. I hate to deflate egos, but on the other hand I want people to have a realistic understanding of things. The industry a person picks to start a business has a huge effect on the odds that it will grow. If you go back 20 years or so, about 4% of all the startups in the computer and office equipment industry made the Inc. 500, 0.005% of startups in the hotel and motel industries made that list, and 0.007% of startups in eating and drinking establishments. So that means the odds that you make the Inc. 500 are 840 times higher if you start a computer company than if you start a hotel or motel.

Wealth Effect

2008-11-12T07:20:00.000-08:00

I seldom agree with Dean Baker, but here he has a good point.

This is truly incredible. Homeowners have lost more than $5 trillion in housing wealth. There is a very well established wealth effect whereby $1 of housing wealth is estimated as leading to 5 to 6 cents of annual consumption. This implies that the loss of wealth to date would cause consumption to fall by $250 billion to $300 billion annually (1.7 percent to 2.0 percent of GDP). If you add in the loss of around $6 trillion in stock wealth, with an estimated wealth effect of 3-4 cents on the dollar, then you get an additional decline of $180 billion to $240 billion in annual consumption (1.2 percent to 1.6 percent of GDP).

These are huge falls in consumption that would lead to a very serious recession, like the one we are seeing. This would be predicted even if all our banks were fully solvent and in top flight financial shape. Even the soundest bank does not make loans to borrowers who it does not think can pay the loans back (except during times of irrational exuberance).

Visualizing the Election

2008-11-10T14:05:00.000-08:00

CNN and other news outlets would have you believe this is still a divided country with red states and blue states.

But a better visualization would shade the areas based not upon who won the state, but by the degree to which they won the state. And the states themselves shouldn't be represented as a function of their geographic size, but rather the size of their population. Here we have just such a picture, and its clear, we are all purple now. More can be found here.

Kondratieff Cycles?

2008-10-19T09:59:00.000-07:00

A regular attendee emails:

Just curious… Do you think that the current economic state is merely a “normal” manifestation of the Kondratieff wave? I was first exposed to the theory in 1989 in a marketing seminar as the economy was ramping up toward the unforeseen, at that time, DOT BOMB in 2001. Just thought it might be something interesting to weave into your next presentation. Any thoughts?

My Response:

I am familiar with Kondratieff waves, but I must say I’m pretty skeptical. That our economy - and capitalism in general - is prone to cycles is pretty clear. That those cycles have a regular periodicity is not so clear. In order for me to find any plausibility in theories which claim to have identified some regularity in the cycle it would have to have good predictive power, with fairly sharp predictions. The Kondratieff cycle hypothesis does haven’t very sharp predictions. What you really have is an ex-post justification for the data that we see, and even those that ascribe to the theory, don’t really agree on their identification of the phases of the cycle, making it a less plausible idea. At the end of the day cycles are a function of the collective, yet often idiosyncratic behavior of individuals. I have a hard time believing there is any mechanism that causes these things to occur with predictable regularity. I think you’ll find that this idea appeals to the econo-physicists much more than to any social scientist-economist.

Tax Math

2008-09-16T03:59:00.001-07:00

Higher taxes are most likely in our future, regardless of who we elect:

Douglas Holtz-Eakin, a former Director of the Congressional Budget Office and current chief McCain economic advisor, is an honest man--which means he's something of a liability on the Straight Talk Express. A few months ago, he admitted to my colleague, Michael Scherer, that Barack Obama's economic plan would reduce taxes for most people. And now, in a forthcoming book by Fortune columnist Matt Miller, he makes it clear that the next President is going to have to raise taxes.

"If you do nothing on the spending side, you're going to have to raise taxes whether you're a Republican, a Democrat or a Martian," he tells Miller...and then he immediately makes it clear that the "spending side" part of the argument is nothing more than a political fig-leaf.

And the futures market is also betting on rising taxes according to Mankiw.

The top income tax rate is now 35 percent. According to the betting at Intrade, the probability that the top income tax rate in 2011 will exceed 38 percent is 0.87. Call this P(tax hike).

Barack Obama has made such a tax hike part of his campaign promises, and there is no reason to think the Congress won't deliver for him. So let's assume Obama is certain to get the tax hike if he wins. That is, P(tax hike / Obama) = 1.0. (If this assumption is wrong, and this conditional probability is less than one, then my conclusion below would be even stronger.)

According to Intrade, the probability of Obama being the next president is 0.53. Call this P(Obama). And P(McCain) = 0.47.

Now we can calculate the probability of a tax hike conditional on McCain winning. It comes from the formula

P(tax hike)
= P(tax hike/Obama) P(Obama) + P(tax hike/McCain) P(McCain),

and plugging in the above numbers. It tells us that

P(tax hike / McCain) = 0.74.

Foreclosure Filing Rate and The Unemployment Rate

2008-08-30T06:37:00.000-07:00

The graph below shows the county's unemployment rate, and the foreclosure filing rate, with the size of the bubbles proportional to the population of the county. A larger version can be found here.

Property Taxes

2008-08-23T21:44:00.000-07:00

We recently finished the semi-annual consumer sentiment survey for the 7 Rivers Region. The upcoming September meeting concerns the Wisconsin Way initiative. In preparation we asked our participants some of the questions that have been asked around the state. In particular we asked:

When you think about the property taxes you or your landlord pay on the home in which you live and the services you receive for those taxes would you say property taxes in Wisconsin (or your state of residence) are much too high, somewhat too high, about right, somewhat too low or much too low?

I've joined the following answers and created a word cloud.
a. Much too high
b. Somewhat too high
c. About right
d. Somewhat too low
e. Much too low
f. Other

The fact that you can not find Much Too Low or Somewhat Too Low in the graphic is not a mistake.

Hollywood Subsidies

2008-06-23T10:18:00.001-07:00

La Crosse was initially in the running to become one of the locations for the new Johnny Depp "Public Enemies" movie. Wisconsin was chosen for several reasons, one of which was probably the newly passed tax considerations. Maybe we should look at the evidence and research done by other states. This headline says it all:

Rich stars pocket subsidies, state says
The analysis by the Department of Revenue this week estimated that at least half the film-industry payroll spending will go to out-of-town residents, mainly actors, directors, and producers commanding salaries of more than $1 million each. The Revenue Department assumes they will spend only a fraction of their paychecks in Massachusetts, limiting the benefits to the local economy.

The Revenue Department noted its analysis is consistent with a 2005 report on Louisiana's film tax subsidies, which estimated 60 percent of spending eligible for tax credits would go out-of-state. And when The Providence Journal reviewed records for a Wesley Snipes film subsidized by Rhode Island, it found just $1.9 million of the $11 million in production expenses went to local residents and vendors - less than the $2.65 million in tax credits issued to support the 2006 movie, "Hard Luck."

But in this week's report, the Revenue Department found the subsidies probably wouldn't generate enough money in income taxes and other revenue to offset the cost of the incentives, forcing the state to cut other government spending. Assuming $100 million a year in incentive spending, the state said it would only be able to recoup $18 million to $23 million in other tax revenue.

Mayo

2008-04-13T10:24:00.000-07:00

The Economist has a good article on the impact of large hospitals on their surroundings. In particular they discuss the impact of Mayo. This is a mixed blessing.

The good:

The size of the health giants ensures that their reach extends far beyond the examination room. Each, for example, has made its city something of a destination for “health tourists” (people who come for operations or check-ups) and conferees. Rochester received 2.5m visitors in 2007; about 70% of these came to visit Mayo. At the last count, Rochester had the same number of hotel rooms as nearby Minneapolis, which is about four times as large.

The not so good:

For all this activity, community relations remain a work in progress. Mayo has dominated Rochester for so long, donating to a host of local programmes, that the mayor—himself a former Mayo employee—calls the clinic “a gorilla, but...a very nice gorilla”. The Cleveland Clinic's relationship with its city is more complex. Cleveland is much larger than Rochester and much more racially diverse; the city has an industrial hangover and the attendant headaches of poverty and urban decay. The clinic itself sits in a poor neighbourhood where few employees live, preferring to drive in from the suburbs.

Liability and Entrepreneurs

2008-03-20T08:10:00.000-07:00

Marginalrevolution has a post on firm size and liability.
I would like to tile my front porch steps and have been shopping. Lowe's and Home Depot have plenty of tile but although they advertise installation they won't install it outdoors. The salespeople, however, will surreptitiously recommend small family contractors. Call Jose, they tell me handing me a number. Why won't the big firms install outdoor tile?

As best as I can figure the answer is liability. A few slips, falls and an enterprising lawyer or two and Lowe's could be out millions of dollars. The revenues aren't worth the risk so small firms step into the breach. The key, of course, is that the small firms won't be sued because they are judgment proof.

Roberta Romano was here yesterday and offered another example. The big auditing firms won't do SOX audits for small firms because the revenues are low relative to the risks. The smaller firms must turn to judgment proof auditors of less reliable reputation.

In one sense, this is a good workaround for a liability system that seeks out deep pockets. Consumers are better off than they would be if neither Lowe's nor the judgment proof firms offered services and they are also better off than if Lowe's was required to offer services, because the price at which Lowe's would do so voluntarily would be prohibitive (consumers would be forced to buy insurance they didn't want at the price).

But more deeply the resulting system is inefficient. Consumers don't get the insurance that the liability law is supposed to provide and they must turn to lower quality, higher cost service providers even when they would prefer larger firms with solid reputations.

So small entrepreneurs appear to be in some part an answer to our often litigious society.

How To Make An Entrepreneur

2008-02-16T17:30:00.000-08:00

Two different views on how entrepreneurs are made.

Tyler Cowen:

A Brazilian entrepreneur, that is. First and foremost, entrepreneurship is predicted by family characteristics, most of all having other entrepreneurs in the family and coming from a large family. What predicts finding a successful entrepreneur?: "the individual's smartness and higher education in the family." Entrepreneurs are not more self-confident than non-entrepreneurs and overconfidence is a big danger. Social networks predict who becomes an entrepreneur but not who becomes a successful entrepreneur. Entrepreneurs in Brazil exhibit more trust but this result does not seem to generalize across countries.
Here is the paper, from the World Bank. I thank Russ Roberts for the pointer.

Chris Dillow:

In other words, what makes an entrepreneur is access to capital - the sort of access that comes from having a wealthy background. This is consistent with two other papers. David Blanchflower suggests here that lack of access to credit explains African-Americans low rate of entrepreneurship, whilst he and Andrew Oswald say here (pdf) that:
.....
Now, why do I stress this whilst Tyler picks out "family characteristics"? The difference between us, I suspect, reflects a widespread difference between supporters and critics of capitalism. Whereas supporters of capitalism look for personality-based explanations of differences in people's behaviour, critics look instead for more impersonal, structural factors - though of course these influence (determine?) personality.

And funnily enough, we can both easily find what we're looking for.

Wisconsin Entrepreneurs

2008-01-21T13:51:00.000-08:00

Wisconsin Entrepreneurs:

Roughly half the people in Wisconsin are thinking about starting a business or have started a business, according to a new study of the state’s entrepreneurial climate. The study, “A Medium for Growth: The State of Entrepreneurship in Wisconsin,” (Download the complete report - 5 meg PDF) reported the strikingly high figures after surveying 1,144 randomly selected households across the state last year.

Distance and the City

2008-01-16T14:44:00.000-08:00

Via the Economist Blog, channeling Ed Glaeser and Gaicomo Ponzetto.

The past forty years have seen a remarkable range of urban successes and failures, especially among America’s older cities. Some places, like Cleveland and Detroit, seem caught in perpetual decline. Other areas, like San Francisco and New York, had remarkable success as they became centers of idea-based industries.

In this paper, we suggested that these urban successes and urban failures might reflect the same underlying technological change: a vast improvement in communication technology. As communication technology improved, it enabled manufacturing firms to leave cities, causing the urban distress of Detroit or Manhattan in 1975. However, declining communication costs also increased the returns to new innovations, and since cities specialize in idea-production, this helped invigorate some cities.

The model suggests that future improvements in information technology will continue to strengthen cities that are centers of innovation, but continue to hurt cities that remain oriented towards manufacturing. Certainly, there is every reason to think that the free flow of people and capital across space will only continue to increase the returns to new ideas.

The important question for the future of cities is whether urban areas will continue to have a comparative advantage in producing ideas. The great challenge to urban areas therefore comes from the possibility that innovation will also leave dense agglomerations. While this is possible, there is a remarkable continuing tendency of innovative people to locate near other innovative people. Silicon Valley, for example, is built at lower densities than New York, because it is built for drivers not pedestrians, but it is certainly a dense agglomeration. As long as improvements in information technology continue to increase the returns to having new ideas, then the edge that proximity gives to innovation seems likely to keep such agglomerations strong.

Rather ironic isn't it? Improved communication technologies leads some people to locate CLOSER to each other. They do - if I understand the argument - precisely because they are better rewarded for their ideas since improved communication technologies increases the size of the audience for those ideas. Yet those same ideas are easier to generate when physical proximity is close.

I don't believe this bodes well for our region. As a professor of mine used to say: La Crosse is centrally isolated. It will be hard for knowledge workers in our region to avoid the pull of the magnets of Chicago and the Twin Cities.

Start Ups

2008-01-15T18:46:00.000-08:00

The Governor of Wisconsin is encouraging Entrepreneurs. Here are the details:

The mission of the Governor’s Business Plan Contest is to encourage entrepreneurs in the creation, start-up and early-growth stages of high-tech businesses in Wisconsin. Participants have the chance to win seed capital, valuable services that will help them launch their businesses and a Grand Prize worth $50,000. Since its inception in 2004, more than 1,000 entries have been received and nearly $650,000 in cash and in-kind prizes has been awarded. In 2007, 12 finalists won cash prizes.

Produced by the Wisconsin Technology Council and a growing list of partners, the Governor's Business Plan Contest engages contestants in a six-month process that includes mentoring and comments from judges on selected plans. It will also lead to valuable public and media exposure for the best business plans submitted by contestants and spur economic growth in Wisconsin. In addition, past finalists have raised a reported $11 million in private equity, such as angel and venture capital.

The statewide contest is an opportunity to compete for cash and in-kind prizes, but it's also a chance to get constructive feedback on your business plan and to help move it from a virtual business to a reality. In 2008, contestants will once again have the opportunity to win upwards of $200,000 in cash and services!

More Foreclosures

2008-01-12T11:29:00.001-08:00

Here is a post with an excellent graphic on the national distribution of foreclosures as a percentage of housing units.

Not least, the crisis is harming the neighbors of people in foreclosure, even those who aren’t having trouble making loan payments. According to one academic study, every foreclosure reduces the value of all other houses within an eighth of a mile by about 1 percent, as the sight of vacant property scares off potential buyers. Combine that with a market already in decline, and neighborhoods that begin to have troubles can go off the cliff.

Entrepreneur Radio

2007-12-24T13:02:00.000-08:00

NPR has a show on entrepreneurs called From Scratch. I caught the episode on Bear Naked while listening on satellite radio, and I'm left wondering a few things:

1. How many similar stories of business start ups do we not hear about because they end in failure?

2. If there are important differences between failures and successes, what are they?

3. Why don't they have a show dedicated to failed start ups?

Education and Entrepreneurs

2007-12-13T08:34:00.000-08:00

William Baumol is one of the leading economists who has done research on entrepreneurship. Here is a google scholar list of his work ion the area.

His article/book titled: Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements captures an important empirical fact:

This paper explores the following hypotheses on the appropriate education for innovating entrepreneurship: a) breakthrough inventions are contributed disproportionately by independent inventors and entrepreneurs, while large firms focus on cumulative, incremental (and often invaluable) improvements; b) education for mastery of scientific knowledge and methods is enormously valuable for innovation and growth, but can impede heterodox thinking and imagination; c) large-firm R&D requires personnel who are highly educated in extant information and analytic methods, while successful independent entrepreneurs and inventors often lack such preparation; d) while procedures for teaching current knowledge and methods in science and engineering are effective, we know little about training for the critical task of breakthrough innovation.

Japan and Entrepreneurs

2007-12-10T13:51:00.000-08:00

According to this article in the Economist entrepreneurs in Japan have had a hard time.

Japan scores poorly on almost every measure of entrepreneurship. It has the second-lowest level in the OECD of venture-capital investment as a share of GDP, and what little venture capital is available goes disproportionately into existing firms rather than start-ups. Venture-capital investment in Japan amounts to some $2 billion a year, around a tenth of the figure in America. Start-ups account for 4% of all firms, compared with 10% in Europe and 14% in America. Japan also came last in the International Institute for Management Development's rankings on entrepreneurship and second-last in the Global Entrepreneurship Monitor's ranking of early-stage entrepreneurial activity (defined as the proportion of people of working age who are involved in such activity). Why?

Cultural factors are a big part of the explanation. As a hoary old Japanese saying has it, “the nail that sticks out is hammered down.” Conformity is valued over individualism. “Students work hard at school, but they learn how to take tests, not how to think,” laments Sakie Fukushima of Korn/Ferry. And unlike American culture, which venerates the maverick self-made millionaire and is tolerant of failure, Japan frowns upon public displays of wealth and stigmatises business failure.

Although innovation doesn't just happen in start ups. If the culture, incentives, and environment are right, it can be just as likely to occur in large corporations. Look at Google for a good example. They allow their staff to commit 20% of their time to any project of their choosing.

Given the innovative prowess of Japan's industrial giants, does it matter if start-ups have a hard time? The Economist Intelligence Unit, a sister company of this newspaper, ranked Japan first in a recent study of innovation, based on the number of patents awarded per million people. Japan generates 51% more patents than America in absolute terms, which works out at around 3.5 times as many patents per person. It also has more scientific researchers per million people (5,900 compared with 4,200 for America) and a higher research and development (R&D) intensity, at 3.4% of GDP compared with 2.8% for America.

But things may not be as rosy as these numbers suggest. Patents are an imperfect proxy for innovation; Japan's armies of researchers spend more time than their foreign counterparts on non-research activities such as administration, which reduces their effectiveness; and a report by the Cabinet Office found that the effectiveness of Japan's private-sector R&D—the ratio of operating profits to R&D expenditure—declined throughout the 1990s (see chart 7).

Akira Takeishi of the Institute of Innovation Research at Hitotsubashi University has investigated why Japanese firms are highly competitive in some industries (carmaking, electronics, imaging products, video games) and less so in others (personal computers, software). He concluded that Japanese firms did best in manufacturing industries with closed product designs that do not require collaboration with the rest of the industry, and worst in fields based on open standards and modular architectures. So if the nature of innovation has changed, and it now depends on collaboration with other firms around the world, Japan could be in trouble. Japanese patents with foreign co-inventors accounted for less than 3% of the total, compared with 12% in America.

If government is going to try to steer the process it is extremely important to create a level playing field for ALL industries and not favor one over another. After all 10 years ago who would have predicted the composition of products we'll see this Christmas?

Another concern is that too much government effort to encourage start-ups and promote innovation is concentrated on manufacturing and technology rather than services, which is arguably where change is most needed. To keep the momentum going, the OECD recommends reductions in capital-gains tax to encourage venture capital; more portable pensions and performance-based pay for researchers to encourage mobility between academia and industry; a broader educational curriculum; and the promotion of cross-border trade and investment, since good ideas often come from abroad. Changing Japanese attitudes to entrepreneurship will take time and further reforms, but at least the wheels have started turning.

Entrepreneurship

2007-12-09T13:22:00.000-08:00

The next Economic Indicators Breakfast meeting will be April 2nd and we'll be discussing entrepreneurship. In preparation, I'll be linking to a lot of the research I come across on the topic. Here is a paper which is part of a larger publication coauthored by Dean Karlan from Yale.

Can one teach entrepreneurship, or is it a fixed personal characteristic? Most academic and policy discussion on micro entrepreneurs in developing countries focuses on their access to credit, and assumes their human capital to be fixed. However, a growing number of microfinance organizations are attempting to build the human capital of micro entrepreneurs in order to improve the livelihood of their clients and help further their mission of poverty alleviation. Using a randomized control trial, we measure the marginal impact of adding business training to a Peruvian village banking program for female micro entrepreneurs. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly or monthly banking meeting over a period of one to two years. Control groups remained as they were before, meeting at the same frequency but solely for making loan and savings payments. We find that the treatment led to improved business knowledge, practices and revenues. The microfinance institution also had direct benefits through higher repayment and client retention rates. Larger effects found for those that expressed less interest in training in a baseline survey have important implications for implementing similar marketbased interventions with a goal of recovering costs.

Stern and Stadiums

2007-12-08T07:32:00.000-08:00

Looks like even David Stern realizes stadiums are difficult to justify on purely economic grounds.

NBA commissioner David Stern is putting the screws to Seattle in his attempts to get the community to provide taxpayer subsidies that are lucrative enough to keep the team from departing the "Emerald City" to even greener fields in Oklahoma.

Stern blasts city officials and the overwhelming majority of voters in the city for passing a law requiring (gasp!) that any funds used to help build an arena earn the same rate of return as a treasury bill. "That measure simply means there is no way city money would ever be used on an arena project," Stern said. Effectively, Stern has just confirmed what sports economists have known all along: taxpayer spending on sports infrastructure is unlikely to provide significant returns on the investment.

Mortgages

2007-11-27T10:23:00.002-08:00

Some evidence that my prognostications were correct:

The areas studied, and the gross metropolitan product growth expected next year, include Appleton at 2.7 percent, Duluth, Minn.-Superior 2.6 percent, Eau Claire 2.8t, Fond du Lac 3.1, Green Bay 2.9, Janesville 3.3, La Crosse 3.1, Madison 3.4, Milwaukee 2.5, Oshkosh 2.7, Racine 2.3, Sheboygan 2.6 and Wausau 2.6.

Diffley said the result is better in Wisconsin because area prices and mortgage values did not climb as much or as rapidly as in other parts of the country.

Even a blind squirrel finds an acorn once and awhile.

Bonding

2007-11-27T09:54:00.001-08:00

I was just interviewed for a piece on WSLU/WPR concering this article in the Journal Sentinal.

According to the Legislative Fiscal Bureau, the state had $8.28 billion in general-obligation, transportation and environmental debt in mid-2006; the same debts totaled $4.41 billion in 1996.

The 87% increase was three times the U.S. inflation rate over that period.

Figures show that debt rose the most - by $1.8 billion- under Thompson between 1996 and 2001, when he resigned to become a cabinet secretary for President Bush. Debt increased by more than $1.5 billion in Doyle's first three years.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said the growing debt is another risky budget decision governors and legislators have made to benefit themselves politically.

Also rising is annual debt-service payments on those bonds: Principal and interest payments on general-obligation bonds will exceed $700 million for the first time this year; and payments on transportation bonds will cost an additional $174 million.

That $874 million is cash that can't be used for other important programs. By comparison, that amount is close to what it cost to run the state's prison system last year.

There are two real issues. The first is that the increase in bonding burdens future generations, which is alright if they are the ones who benefit. The second issue concerns the state's bond rating. As it falls debt service costs rise, crowding out other budget items.

The article could have been improved by publishing the debt as a percentage of the state economy, as it has grown by 50% over the last 9 years. That makes the outstanding debt about 2.9% of Gross State Product in 1997 and about 3.6% in 2006. Not exactly an enormous increase.

Stadium Memo

2007-11-10T16:32:00.000-08:00

Below is a memo I've written on the stadium:

DATE: 11/07/2007

TO: Interested Parties

FROM: Taggert J. Brooks

Associate Professor of Economics

RE: Memo on Stadium Finance Request

I’m writing this in response to questions I have received regarding my letter to the La Crosse Tribune editor dated October 26^th, 2007: In the letter I note that academic research by economists finds little support for the idea that stadium projects have a positive net economic impact on their communities. That is not the same thing as saying they always have a zero net economic impact, and it is not the same thing as saying all money invested in such projects has a zero rate of return.

My comments in the rest of this memo will pertain directly to the request for the county to provide $250,000 to the UWL Stadium plan.

If we consider that an alternative investment for the county might earn a 5% annual rate of return, then a one time investment of $250,000 would return $12,500 annually.

How might the new stadium project achieve this? The main return for the county will happen through increased county sales tax revenue due to attendance at stadium events and its associated tourism. In order for this return to have a positive net impact it must have a net increase in sales relative to the alternative scenario. There are many possible alternatives that could be considered.

More specifically in order to generate an additional 12,500 in sales tax revenue, there needs to be an increase in annual county wide taxable sales of $2,544,529. This represents an increase of 0.13% over sales for the entire 2006 year. It is only a 1.58% increase in the amount of sales in an average month.

One important note, there are many different things the county can do with 250,000 it is up to the elected officials to evaluate the relative merits and therefore relative returns on those alternative projects.

Below are the details of these calculations.

250,000

County Investment

5.00%

Annual Rate of Return

12,500

Dollar value of annual return

0.50%

County Sales Tax

1.75%

DOR take on county sales tax

0.4913%

Net county sales tax after DOR take

$2,544,529

Required increase in taxable sales to generate 12,500 Dollars in additional tax revenue

$1,932,219,847

December 2006 Retail Sales for Previous 12 Months

0.13%

Required increase in sales as percentage of total annual sales

$161,018,321

December 2006 Retails Sales Monthly average for prev 12 months

1.58%

Required increase in sales as percentage of total monthly sales

This position is not inconsistent with my earlier statements. I still believe the economic impact of the project will be quite small, however it need not be very large to justify (from a return on investment standpoint) the amount of money the county is being asked to commit.

I am free to answer any questions anyone might have of me. You are also free to share this memo with anyone you wish, so long as it is shared in its entirety.

Sincerely,

Taggert J. Brooks

Lessons From Buffalo

2007-10-26T13:55:00.000-07:00

Ed Glaeser has an excellent piece on the past and the future of Buffalo but the best piece of advice for the economic development folks is:

The truth is, the federal government has already spent vast sums of taxpayer money over the past half-century to revitalize Buffalo, only to watch the city continue to decay. Future federal spending that tries to revive the city will likely prove equally futile. The federal government should instead pursue policies that help Buffalo’s citizens, not the city as a geographical place.

The Editing Floor

2007-10-26T07:20:00.000-07:00

My letter to the editor on the stadium can be read here. What I actually wrote is below. Notice the additional reasons to contribute to the stadium which were cut.

If you are planning to donate to the stadium project do so because you like to go to UW-L home football games. Do so because your son has the opportunity to play his high school football games there. Do so because you want the opportunity to watch your daughter compete in the state track meet in her hometown. Do so because you are an alum who takes pride in the appearance of his alma mater, or do so because you enjoy running around the track on your lunch hour.

But do not contribute to the stadium because you think it is going to bring jobs and economic growth to the area or even a return on tourism dollars which “alone will far exceed the investment”. Unfortunately with the latter statement the co-chairs of the UW-L Stadium fundraising campaign fall victim to an economic fallacy economists have been debunking for years. It turns out sports stadiums (and here we are talking about professional sports stadiums) do not tend have a statistically positive economic impact on the surrounding community. And in countless other studies academic economists have been hard pressed to find any evidence that hosting a professional league championship such as the World Series, the Superbowl or an All Star game brings a return through tourism dollars. Even as large as the WIAA state track meet is, I think we can all agree it is smaller than any of the those events.

But surely all of those people who come to town and spend their money must have some impact? The right question to ask is what is their net impact? How many other people would have come to La Crosse but didn’t because the state track meet was happening? How many people left town to avoid the crowds of the track meet? I think you’ll find the answer is that in the end there isn’t a big net change in the number of people in town from what there would have been without the track meet, and that means their isn’t much of a return on investment in terms of tourism dollars.

This is not an argument against donating to the stadium effort. Rather it is merely an argument against some of the arguments made in favor of donating to the stadium. Even so you won’t see my name on the list of donors, unless new plans suddenly include a velodrome, in which case my check book is open.

Economic Impact of Stadiums

2007-10-22T06:43:00.000-07:00

Most everyone is aware that donations are being sought for a new stadium at UW-L. The tribune has an opinion piece from the co-chairs of the fundraising campaign.

The new Veterans Memorial Field Sports Complex will enhance the region’s already-strong position as a premier destination. The return on tourism dollars alone will far exceed the investment. Conservatively, the estimated impact of the three-day WIAA track meet alone is $3 million. Many who visit the area for events held at the stadium return to enjoy vacations and day trips.

Economists are in agreement that:

On the sports facility side, numerous researchers have examined the relationship between building new facilities and economic growth in metropolitan areas. (Baade and Dye, 1990; Rosentraub, 1994; Baade, 1996; Noll and Zimbalist, 1997; Coates and Humphreys, 1999) In every case, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development (Siegfried and Zimbalist, 2000). This stands in stark contrast to the claims of sports teams and leagues who assert that the large economic benefits of professional franchises merit considerable public expenditures on stadiums and arenas.

And on the issue of the impact of hosting large events:

As in the case of sports facilities, independent work on the economic impact of mega-sporting events has routinely found that the effect of these events on host communities is either insignificant or an order of magnitude below the figures espoused by the sports promoters. In a study of six Super Bowls dating back to 1979, Porter (1999) found no increase in taxable sales in the host community compared to previous years without the game.

Take a look at La Crosse county sales tax revenue, can you find a spike associated with the track meet?

I'd cite the litany of research such as this piece or this one, but the reader can just go to google or google scholar and type the economics of sports stadiums.

Seasonal Effects In Home Sales

2007-09-28T06:35:00.001-07:00

Econbrowser has some bad news about the current housing market:

In a typical year, most new home sales occur between March and August. In each of those months we usually might expect 35% more homes to be sold than at the seasonal low in December. This August, home sales were actually less than in December, the first time that's happened in the 44 years these numbers are available.

For comparison, using MLS data on home sales, the 7 Rivers Region saw 102 listings sold in December of 2006, while August of 2007 saw 155 listings sold. That is a 52% increase. Although August 2007 is 11% below August 2006, at least its not below December of 2006!

Milk Prices

2007-09-10T11:57:00.000-07:00

According to this NYT piece:

Driven by a combination of climate change, trade policies and competition for cattle feed from biofuel producers, global milk prices have doubled over the last two years. In parts of the United States, milk is more expensive than gasoline. There are reports of cows being stolen from Wisconsin dairy farms.

I've heard as little as a few years ago, all dairy farms in Wisconsin were cash flow negative. I guess this means things have turned around.

For an interesting look into the economics of the dairy industry read this fedgazette piece which covers the price problems of 2002-2003. And this piece discusses the economies of scale disadvantage most Wisconsin farms face.
Technological advances in dairy production—from automated milking parlors to computer systems and management protocols—have dramatically increased dairy productivity, the number of pounds of milk a cow can produce. The average cow can produce four times more milk today than in 1930. But those technologies are most economical on large-scale operations, and small farmers have been unable or unwilling to grow large enough to incorporate them. A 1998 Minnesota State Colleges and Universities analysis of Minnesota dairy farms found that small dairy herds (under 100 head) averaged 17,699 pounds of milk per cow per year, whereas cows in large herds (300+) produced 21,284 pounds.

Time To Refinance?

2007-09-05T20:57:00.000-07:00

When interest rates were falling, did you wonder as I did if it was the right time to refinance? I remember hearing a rule of thumb, if the interest rate had fallen by over 1% and you expected to be in your home for more than 5 years, it would most likely make sense to refinance. As an economist this answer was never precise enough for me. So I should have sat down and calculated the exact rate at which I should refinance, but the procrastinator in me always put it off. Now thanks to my good friend Sumit Agarwal, I don't need to do any heavy lifting or mathematical computation.

Sumit and his co-authors have a nice little calculator up at the NBER website.

Optimal Time to Refinance Calculator

Wow. Rates never fell low enough for me to refinance, so it looks as though my procrastination paid off. Well, it saved me the time it would have taken to calculate the optimal rate anyhow.

HPA

2007-08-31T13:36:00.000-07:00

HPA or Home Price Appreciation has clearly slowed and for the first time is actually negative. But the truth is it came along at the right time.

According to Michael Donihue and Andriy Avramenko of Colby College:

During the period from 1990 to 2002, U.S. households experienced a dramatic wealth cycle, induced by a 369 percent appreciation in the value of real per capita liquid stock-market assets, followed by a 55 percent decline. However, despite predictions at the time by some analysts relying on life-cycle models of consumption, consumer spending in real terms continued to rise throughout this period. Using data that include the period from 1990 to 2005, traditional approaches to estimating macroeconomic wealth effects on consumption confront two puzzles: (i) econometric evidence of a stable cointegrating relationship among consumption, income, and wealth is weak at best; and (ii) life-cycle models that rely on aggregate measures of wealth cannot explain why consumption did not collapse when the value of stock-market assets declined so dramatically. We address both puzzles by decomposing wealth according to the liquidity of household assets. In particular, we find that significant appreciation in the value of real estate assets that occurred after the peak of the wealth cycle helped to sustain consumer spending from 2000 to 2005.

And what fueled the HPA? Well, low interest rates, and rising income of course.

The widespread nature of the recent international house price boom suggests that the underlying forces behind this sustained price increase may be common across countries. Many OECD countries have, over the past decade, witnessed sustained increases in living standards while housing affordability has further improved in recent years with the low interest rate environment experienced by many of these countries. In this paper we propose a theoretical model of house price determination that is driven by changes in income and interest rates. In particular, the current level of income and interest rates determine how much an individual can borrow from financial institutions to purchase housing and ultimately this is a key driver of house prices. The model is applied to a panel of 16 OECD countries from 1980 to 2005 using both single country-by-country and panel econometric approaches. Our results support the existence of a long-run relationship between actual house prices and the amount individuals can borrow and we find plausible and statistically significant adjustment, across countries, to this long run equilibrium.

It seems they miss an important factor in the recent HPA. The willingness of banks to take on clients they previously would not have. The so called sub prime market has really just been fueled by an increased willingness to lend given an particular interest rate and income level, or what the authors call an ability to borrow. Many more people were able to borrow during this boom, thus further fueling the home price appreciation. I do not know if this was an international phenomenon, and I'm not sure I could immediately produce a variable which captures that idea.

Hat Tip: The New Economist

Foreclosures

2007-08-24T08:24:00.001-07:00

A recent tribune article reports foreclosed properties are up from 2006 for La Crosse county.

Home foreclosures in La Crosse County this year are up by nearly a third over the pace in 2006, mirroring a statewide rise of nearly two-thirds.

Fifty-two La Crosse County properties have been foreclosed on through July of this year, with another 17 scheduled for foreclosure. That’s well ahead of the 40 foreclosures at this time last year, according to the La Crosse County Sheriff’s Department.

Of the 52 completed foreclosures in La Crosse County so far this year, 28 were in La Crosse, 10 in Onalaska, six in Holmen, five in West Salem, two in Bangor and one in Coon Valley.

Foreclosures statewide are up 63 percent this year to 5,925, compared with 3,627 filings in the first half of 2006.

Nationally, foreclosures are up 56 percent, according to a report by RealtyTrac, an online marketplace for foreclosure properties.

By my calculation there were 127 filed from 1/1/2007 to 7/31/2007 whereas there were 114 filed from 1/1/2006 to 7/31/2006, an increase of about 10%.

The difference could be merely definitional. The article cites data from the county sheriff and discusses foreclosed properties whereas I'm using court filings.

The chart below depicts foreclosures in the Wisconsin counties of the 7 Rivers region (Jackson, Juneau, La Crosse, Monroe, Trempealeau, and Vernon). The data for the remaining part of 2007 is estimated, but we appear to be on the same pace as last year. Thus making this year relatively unremarkable compared to last, which is when we saw the large spike. Hopefully that means we are through the worst of it.

Introduction

2007-05-08T07:17:00.000-07:00

Welcome to my new blog. I'm an Economist at the University of Wisconsin - La Crosse. I generally make two presentations a year to the 7 Rivers Region Economic Indicators Breakfast Meetings. The research I do for those meetings is sponsored State Bank Financial, and the presentations are sponsored by State Bank Financial, The La Crosse Tribune, and The College of Business Administration. This 7 Rivers Region Economics blog will contain the ideas and writings which may or may not end up in the publication provided at the breakfast meetings. I will use it largely as a means for tracking different topics and collecting my ideas. Of course the views expressed in this blog are mine alone, they do not necessarily reflect the position of my employer, The University of Wisconsin - La Crosse, the UW System or the State of Wisconsin.

250,000	County Investment
5.00%	Annual Rate of Return
12,500	Dollar value of annual return

0.50%	County Sales Tax
1.75%	DOR take on county sales tax
0.4913%	Net county sales tax after DOR take

$2,544,529	Required increase in taxable sales to generate 12,500 Dollars in additional tax revenue



$1,932,219,847	December 2006 Retail Sales for Previous 12 Months
0.13%	Required increase in sales as percentage of total annual sales



$161,018,321	December 2006 Retails Sales Monthly average for prev 12 months
1.58%	Required increase in sales as percentage of total monthly sales