Sometimes, you just gotta tip your cap – even to the philosophically misguided.
Like now, for instance. In this episode, I doff my fedora to Former Wisconsin Superintendent of Public Education/Current Governor Tony Evers, for pulling off what, to my knowledge, is one of the slickest moves in the uber-trickster history of government funding ploys.
Not sure if you saw this, but it’s one for the ages. To understand the brilliance here, one must be aware that not only does the Wiscy Gov have a line-item veto, but has the ability to eradicate individual words, and even single characters, from budgetary proposals that reach his desk. This makes him something of a God in the realms that stretch from Kenosha to Superior, from Platteville to Gills Rock.
This bit of legislative sleight of hand has been deployed many times, to be fair, by Chieftains on both ends of the political spectrum. But never with the audacious aplomb evidenced by Gov Tony this past week.
Specifically, and after an acrimonious budget battle, an appropriations bill reached his desk allotting an additional $325 per student through “2024-2025”.
Now, I’m not sure what can be done with an extra 3 Benjis plus change per pupil, and the Gov wasn’t satisfied. So, what does he do? He removes both 20s and the hyphen from the quotation sequence above, whereupon the $325 bump per year is extended to the year 2425.
And then signs the bill into law.
That’s right. Each year for the next 16+ generations, the school system will receive an additional $325 for every backpack carrying/PBJ eating little darling in the whole damned state.
I did some quick math here. America’s Dairyland (which a few years ago was passed in dairy product output by – you guessed it – California) has about 900,000 scholars in its K-12 programs. Next year, and as explicitly agreed, there’ll be another ~$300M devoted to their erudition.
OK, fair enough. But I doubt that even those slippery progs in the Madison Statehouse extrapolated out four centuries. So, let’s wind the clock forward to 2425 – a full hundred years before the apocalyptic period musically immortalized by one-hit wonders Zagar and Evans. The per-student tally rises from its current level of ~$13K/year — by ten-fold. Taking the total new outlays to ~$120B/year.
Now, to put this figure in perspective, in 2023, my Badger bureaucrats are expected to collect and spend approximately $20B. So, by MMCDXXV, they’ll be spending six times that amount on education alone.
And that’s just if the population stays stable. At current growth rates, it could easily double or more, taking the aggregates to a cool $300 Bil.
Per year.
It is, as with so many other things, exemplary of our times. I alternate between being singularly amused and livid. I think what gets to me most is the absolute infantile nature of it all. No doubt, the Wiscy wokesters are high fiving each other to death, but everyone knows it’s bullshit. It is a cynical political ploy, and one that will backfire, perhaps sooner rather than later, but the longer it goes on, I suspect, the bigger will be the backlash.
It also, of course, is a song in the same key as that of the recent SCOTUS debt cancellation decision. Both are tied to education funding, but what really ties the room together for me is the obfuscation of the identity of the true beneficiaries. These will goose tuition, fatten endowments, increase salaries and other perks. Few outside this matrix will benefit. In Wisconsin, teachers will get raises; maybe Evers gets re-elected, but will the educational experience improve up there?
I have my doubts.
But I will offer this opinion: if a single government official can successfully transform an expanding obligation – crafted for 1 year — into one that persists for four centuries, then we’s all in trouble.
Meantime, the markets remain a confusing mess. The ADP jobs number was a blowout, while the official government tallies came in light. Risk Asset valuations trimmed themselves a bit – all in advance of the crescendo information cycle, which, next week alone features bank reporting AND the two most prominent inflation metrics. These may provide some clarity. Or not.
Meantime, if one is looking for trouble (and of whom, can it be said, is not?), the Fixed Income markets are a good place to start. Madame X (10 Year Yield) has pitched a very womanly hissy fit, and now, at slightly above 4%, resides at her highest threshold since those days of relative innocence in 2006:
This chart may not look that menacing, but a close review reveals it to be more than a double in two years. High yield and Investment Grade Debt are dropping in sympathy.
Mortgage rates, as could only be expected, have followed suit:
15 and 30 Year Mortgage Rates:
I won’t get into the details of the vexing corner into which the Housing Market has painted itself. Bravo to anyone who had the good sense to re-fi (or, for that matter, fi) in the interval leading up to last summer, but they do face the problem that if they wish to swap their pieces of the residential rock, they must do so at approximately double the mortgage rates available a short five quarters ago.
So, no one is selling, and, hence, no one is buying.
Hope, perhaps springs eternal that an entity such as the Fed may provide some relief. But the betting markets are laying >90% odds that those curmudgeons are gonna raise rather than cut rates in a couple of weeks.
A good deal can happen in the interim. As mentioned above, there’s earnings, inflation, GDP and other statistics to contemplate. And nobody seems to have any informed opinion as to what will, or even ought to, happen next. I don’t see much cause for a collapse as the summer unfolds, but neither, on the other hand, can I gin up a framework for a giddy rally. I reckon us mere mortals will simply have to grind it out.
About the only bit of alchemy that I can conjure up would be a mass migration to Wisconsin, where one year becomes 400, where a $300M appropriation magically transforms into one that exceeds $100B – all not even at the stroke of a pen, but rather, the smudge of an eraser.
I’ve lived there. It’s cold in the winter, buggy in the summer. But the people are nice, and, of course, the beer, none of it sponsored by woke activists, moves from hops to kegs to bellies in a highly fluid fashion.
And your children’s children’s children’s children – times 4 — will have oodles of cash allotted to their erudition. And, to boot, if they get to the State’s flagship university – my alma mater – they should be in a position to utter the trademark phrase – fuck ‘em Bucky – like never before.
TIMSHEL