Tuesday, July 20, 2010

Reason #2 why Waukesha's Lake Michigan diverson scheme is dead....

...The Top 5 percent in income earners — those households earning $210,000 or more — account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody’s Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data. According to Gallup, spending by upper-income consumers — defined as those earning $90,000 or more — surged to an average of $145 a day in May, up 33 percent from a year earlier.

Then in June, that daily average slid to $119. "I think a lot of that feeling that the worst was over has sort of abated," said Dennis J. Jacobe, Gallup’s chief economist.
....
Sam Pizzigati, associate fellow at the Institute for Policy Studies, a left-leaning research center, cautions against simply boosting the spending power of the rich through tax cuts or other measures. “Otherwise, we find ourselves in an ‘Alice in Wonderland’ world,” he said, “and the solution to the hard times that the economy is going through is to help the people that are not going through hard times.”
Motoko Rich NY Times, 7/19/2010
And now the rich have started tightening their belts.

The nearly $800 billion stimulus package, "cash for clunkers," the credit for new home buyers, the $1.2 trillion in mortgages the Federal Reserve purchased--they're all gone, used-up, finished. Those props that gave glimmers of hope for a turnaround will not be repeated. Because they failed.

The turnaround has made another turn, a U Turn; odds are it is in a very long downward slide. We'll need a conservative, low-cost fix that takes the water we have and fiddles it sufficiently to meet the standard, at a price we can afford. We will not need any extra water; we no longer can afford sprawling growth. The money markets continuing to offer impossibly low interest rates will not last (The Federal Reserve is keeping them so low they can't get any lower), meaning municipal bonds to finance the diversion infrastructure will push the price way beyond the lowball figure of $165 million.

People in Waukesha will be wanting littler houses on smaller lots, older houses they can buy at a reasonable price and fix up, houses in walking distance to schools and shopping. There is a glut of "upscale" (that word makes me gag, always has) houses--tract mansions built of chipboard and vinyl. All of this means that the tax base of Waukesha will continue contracting.

City government, including the Waukesha Water Utility, will need to put itself on a diet. And water diverted from Lake Michigan will be like a big gooey dessert--definitely off the list.

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Of the biblical allotment of three score and ten I have lived only three of them more than a bicycle ride from one of the Great Lakes. I grew up ten blocks from Lake Erie in the (once Irish/Italian ghetto, now newly-hip) "Near West Side" of Cleveland. I can still cycle to the Milwaukee lakefront in an hour and a half; but, a round-trip has always been more than I would (noror ever did) attempt. -0- I'm a "...somewhat combative pacifist and fairly cooperative anarchist," after the example of Grace Paley (1922-2007). -0- I'm always cheerful when I pay my taxes (having refused--when necessary--to pay that portion of them dedicated to war). -0- And I always, always vote.