In an earlier posting, I noted that until I come up with a better "hook," I will refer to the next ten years as the decade of tectonic shifts (I don't like that phrase; it's too much of a cliche) but it will have to do for now.
The decade of tectonic shifts -- 2011 - 2020 -- follows the "
lost decade." (Interestingly enough, the fault line for the United States may have been the 2010 election).
There will be several tectonic shifts between now and 2020. One of them, and my primary interest, of course, is energy. The shift will be a realization on Wall Street that after a decade of talking about renewable energy, the real money this decade will be made in fossil fuels. In just the last two weeks, we've seen reporting how GE and T. Boone Pickens have shifted their strategy. A lot of money will be made in solar and wind energy, but the big stories will be about fossil fuels this decade.
Another tectonic shift will be, of course, the events currently unfolding in the Mideast, events which will undoubtedly spread. Already there are headlines saying that the "Cairo" effect has moved to Madison, Wisconsin.
That brings me to another tectonic shift: the realization by property owners and taxpayers that their states truly are broke. Unlike the federal government, the states cannot print money. Regardless of which side of the issue you are on, I am not convinced "we" really comprehend how big the problem is.
But this one observation speaks volumes. All that "noise" in Wisconsin is about
an emergency measure that is said to be needed to save $300 million over the next two years to help close a $3.6 billion budget gap.
If that much "noise" is being generated by attempts to save what amounts to only eight (8) percent of the entire budget gap, property owners and taxpayers (and municipal bond investors?) have not seen anything yet.
It's my understanding that Wisconsin is in better shape than many other states because Wisconsin has been more forward-leaning in tackling some difficult budgetary issues. If so, I can only imagine what "we" may see in Illinois, California, New Jersey and New York.
By the way, with an average pay and benefits package worth $50,000/year for a state employee, 8,000 jobs = $400 million. According to an unverified source, the number of state and local government employees in Wisconsin in 2008 was 280,000. Eight thousand of this total represents a little less than three percent. One could argue that attrition alone would save the aforementioned $300 million.
Wisconsin would then only have to worry about the other $3.3 billion gap.
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[Update: wow, was I wrong on that compensation figure. It turns out
the average pay and benefits package for a Milwaukee, Wisconsin, teacher exceeds $100,000/year. Generally speaking, a school year is about eight months long, once holidays, school breaks, etc., are taken out.]
*****
Wisconsin
February 21, 2011: This is quite incredible. The Republicans are one vote short of reaching a quorum so that business can be conducted. The Wisconsin Democrats take advantage of that and flee the state. Now, the
Associated Press says it would take only three Republicans to stand up to the governor to reach a compromise. Say what! Three Republicans. It would take only one Democrat to come back to work for the legislature to get back to work and debate the issue. The liberal, union-supporting bias of the media is over the top.