Michigan Politics

Michigan Political considerations.

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Michigan’s February Unemployment Rate Redux

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When You Fiddle Data Series, Fiddle All The Correlated Data Series

George Orwell-During Times of Universal Deceit
Remember the startling unemployment announcement from the Michigan Department of Management, Technology, and Budget (DTMB) last month?

  • That Michigan’s February 2015 seasonally adjusted (SA) U-3 unemployment rate had dropped to 5.9% from January’s 6.3%?
  • That the 5.9% February 2015 SA U-3 unemployment rate was down 1.9% from Michigan’s 7.8% February 2014 SA rate?
  • That 88,000 more ‘seasonally adjusted’ Michiganders were working in February 2015 than one year earlier?
  • That the not seasonally adjusted (NSA) 12 month increase in Michigan employment was even better at 101,000?

Well, there is a little problem with these goal-seeked, U.S. Bureau of Labor Statistics (BLS) X-13ARIMA-SEAT massaged unemployment statistics. They simply are not true.

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Clash of Titans, A Right Plan of Action

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RightMI Counterattacks!
Part IV – A Right Plan of Action

So how should average middle class Michiganders engage in this electricity debate? What should they demand in the 2015 legislation on electricity? Can they prevent the titans from looting their family budgets?

First and foremost, Michiganders should demand an end to hybrid deregulation. All electricity consumers should be under the same regulatory scheme, with equal options to escape. No favoritism. This aligns the interests of politically potent, large electricity consumers with those of the average Michigander. This creates an effective counterbalance to the political power of the utilities; political power purchased with your electricity payments. Even full regulation is preferable to our current hybrid deregulation scheme.

Michiganders should further demand full deregulation of our electricity market. As regulated entities, utilities have a ‘cost plus’ mindset which relentlessly drives prices higher. Regulatory bodies limit themselves to dampening this drive for higher prices, but do not drive efficiencies which would genuinely control energy costs. Competition-driven efficiencies are very important to Michigan’s economy, which still has a significant, energy-intensive industrial base. Also Michigan’s utilities have not demonstrated any special competence operating their electrical power stations, so competition in the supply of electricity will promote best practices there and lower costs as well. Ultimately, a deregulated grid properly managed is more tolerant of supply shocks because more actors will be supplying the electricity.
wind turbine fire close-up
The RPS should not be renewed at any level. Renewables should not be forcibly subsidized by any ratepayers, overtly or covertly. The current PA 295 regulatory scheme has residential electricity consumers subsidizing renewables through skyrocketing rates, while large consumers escape this burden.  As renewable energy sources become cost effective, they will be welcomed by all parties.

If environmental wackos want their own electricity to come from RPS renewables, let them pay the full cost including base load backup costs. Most renewable sources are intermittent and require expensive base load backup capacity for periods where they cannot generate electricity. The Midwest Independent Transmission System Operator (MISO) historical record shows that Michigan wind power, by far the most significant current RPS component (883 turbines, about 58% of RPS power), was only available 31.5% of the time (termed ‘capacity factor’) during 2011 and 2012. During two months, July and August of 2011, wind was available only available 16% of the time. Most evaluations of the cost effectiveness of wind and solar generation pointedly neglect the costs of base load backup capacity to keep the lights on.  Essentially, wind power capacity has to be backed up by 100% of its rated capacity with fossil-fueled base load capacity to prevent blackouts during zero wind periods, so why bother install wind power (or solar, for that matter) in the first place?  Ratepayers subjected to RPS get to pay the capital costs for twice the generating capacity they actually need.

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Clash of Titans, Viewed from Below

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King Kong 1
Part III – Clash of Titans, Viewed from Below

Fortunately, the greed political acumen of DTE and CMS Energy is coming to your rescue. Both utilities are seeking full reregulation of Michigan’s electricity market. They are issuing thinly veiled threats about brownouts ‘reliability’ of supply unless Michigan forces the fortunate 10% back into our utilities’ waiting arms. And with President Obama’s hobbling of coal-fired power stations ramping up, they actually have a point. So the fortunate 10% will have to seriously reengage in Michigan’s electricity rate debate or their electricity costs will skyrocket.

The environmental wackos haven’t been idle either. The new model, term limited, Governor Snyder has evidently made up with our ur-RINO and is now endorsing a 40% RPS by 2040. To keep Michigan’s serfs in line – and avoid impeachment – he is specifically not calling for this to be a mandate, rather calling it a ‘goal’. Coming from Michigan’s Governor, this is a distinction without a practical difference. Snyder appoints the three MPSC commissioners who oversee electricity policy and MPSC operates under the aegis of LARA. Think Governor Duggan, Snyder’s designated successor, will change this policy? Other Michigan politicians are splitting the difference, proposing RPS mandates intermediate between 10% and 40%.

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Conservative News, Democrats, Michigan, Michigan Politics, Rent Seeking, Republicans

Clash of Titans, EPA Wrecks the Electricity Grid

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Feds Step In, Things Get Much Worse

godzilla electrical lines 2
Part II

Things may have quieted down in Michigan after Proposal 3’s demise in 2012, but President Obama’s EPA were furiously developing their ‘War on Coal’ to dramatically increase the cost reduce pollution of electricity generation. The Mercury and Air Toxics (MATs, also known as MACT) rule requires scrubbers on all coal-fired power plants nationally, costing something north of $ 1 million per steam boiler. The Cross State Air Pollution Rule (CSAPR) requires Michigan coal-fired power plants to reduce their thermal efficiency during peak summertime generating periods to reduce oxides of nitrogen at a yet to be determined cost.

In 2014, EPA’s ‘Cooling Water Intake Structures’ rule finally went into effect after a decade of legal wrangling, requiring that Michigan’s electrical utilities take some very expensive steps over 8 years to protect the Great Lakes’ beloved zebra mussel and round goby populations.

At the end of 2014, EPA imposed newly restrictive rules on the disposal of coal combustion residuals (CCRs), commonly known as coal ash, from coal-fired power plants. Almost unique in the history of Federal regulation, EPA admitted in their final CCR rule that it had a negative cost-benefit ratio. Fly ash, the most abundant CCR, is actually a remedy for the alkali-silica reaction (ASR) which causes premature failure of many MDoT concrete structures. So EPA managed to simultaneously increase Michigan’s cost of electricity generation and reduce the lifespan of our roads and bridges. An Obama ‘two fer’.

EPA expects to finalize its ‘Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category’ in September 2015. Known by the acronyms SEEG or ELG, these rules will change the way all electrical power stations handle cooling, process, and steam condensate water. These rules cover all steam powered turbine operations, but will most severely affect coal-fired power stations whose MATs required scrubbers and CCR required ash handling systems will generate a lot of waste water.

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Clash of Titans Coming to Michigan

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After Proposal 1, After Plan B, Electricity Front and Center

godzilla-biollante
Part I: Background

Later this year, Michigan’s electrical utilities are expected to satisfy the 10% Renewable Portfolio Standard (RPS) requirements of PA 295 of 2008. Partial reregulation of electricity in Michigan under the same PA 295 of 2008 denied choice of supplier on 90% of electricity consumption, while exempting large, politically potent, electricity consumers. At the same time, the U.S. EPA is progressively tightening their noose around the neck of the coal industry with an array of ever more restrictive regulations upon coal-fired power plants. A political clash of titans is looming in Michigan.

Taken together, these circumstances will trigger a wild four-way donnybrook pitting electrical utilities, electricity consumers, and environmental wackos against one another later this year. But this is only three parties, so why do you say four-way? Large industrial consumers have substantially escaped the consequences of PA 295, while smaller Michigan consumers – including residential consumers – have experienced the fifth highest rate of electricity cost increases in the nation. These two electricity consuming groups’ interests do not coincide.

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Elections, Michigan Politics, Proposal 15-1

Troy City Hall Tax Day Protest – NO to Proposal 15-1

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TAX DAY PROTEST AGAINST SALES TAX HIKE!

Will you let Michigan’s sales tax increase this spring? Join fellow taxpayers on April 15th to protest the tax hike!

 taxday

Who: YOU & fellow taxpayers who think taxes on your family are high enough already!

What: A public protest against the May 5th vote to raise the state sales tax from 6 cents to 7 cents (a 17% increase) that will cost the average MI family $500 in new taxes next year if passed.

Where: 500 W. Big Beaver Road (Metro Parkway) In front of the Troy City Hall (just east of I-75 & Big Beaver Road intersection in Troy).

Park at Troy City Hall.

Why: Tax hike supporters are spending millions to pass this increase at the May election.  This rally is the best way for you to say, “No way!” .

When: Wednesday, April 15th from 5:00PM – 7:00PM.

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Say No To Proposal 15-1 Rally April 15

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Opposing proposal 15-1 are the overtaxed citizens from BOTH sides of the spectrum.

Traverse City-Protest

Photo from actual Traverse City Protest.

It could possibly be an unusual gathering April 15.

Given the fact that most conservative Republicans and the left-of-center Democrats agree that the May 5th proposal is an unmitigated disaster, its possible they might actually walk side by side at 11AM in Front of the Traverse City Post Office on Tax Day. If one watches the polling results, follows through by reading the comments on the major media pro 15-1 shill attempts, one might walk away thinking the only the political class centrists are the ones who really really want this garbage.

Holding breath on working together? Not entirely.

However, what a treat it would be to shove this bad medicine down the throat of the cronyist Snyder and his milquetoast minions.  The mantra of there being “no plan B” is worn out already.  Putting taxpayers into a corner might elicit thoughts of the wolverine that is threatened once this play is done.  Higher taxes hurt the left as much as the right, and passage of this boondoggle is a constitutionally guaranteed increase of taxes every single year.

Where:  In front of Traverse City Post Office on Union and State St. 
When:   11 am till 1 pm or as long as you can.  April 15th tax day (Depending on size we may walk to the Parkway and Union St.)     Appropriate signs please.

If you are in the area on April 15 at 11AM, join 15-1 opponents to say NO to higher taxes.

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Michigan Budget At A Glance

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As we go forward, these tools will be made available for a spot check on the Governor’s priorities.

This chart represents most of the Michigan spending based on Rick Snyder’s 2015 budget. The only section missing is the $5 million spent on the executive office.  The amounts shown here represent the TOTAL spending in any one area.  Additional charts showing more complete breakdowns of moneys spent and the sources will be made available as there is time.  The chart will also be modified to note the changes from the time Snyder took office in 2011 all the way through the 2016 desired numbers. (click on the image to enlargen)

Mi-Budget-3year

Note the significant increases in the community health (medicaid expansion), Treasury (MEDC, revenue sharing)  and school aid areas.

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February Michigan Unemployment 5.9% – Really?

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Philadelphia Federal Reserve Bank Questions BLS State Level Employment Data Revisions

Philadelphia Fed Website 2015-04-06

Kurt Weiss at the Michigan Department of Technology, Management, and Budget (DTMB) reported on March 25th that Michigan’s February 2015 seasonally adjusted unemployment rate dropped to 5.9% from January’s 6.3% figure. This was followed on April 2nd by the DTMB release of non seasonal adjusted employment data for February 2015. This quite large one month drop is great news for Michigan workers, if it indeed reflects our labor market. But does it?

Twelve Month Discrepancies Between Seasonally Adjusted and Unadjusted Data Differentials

The DTMB Michigan non seasonally adjusted (NSA) employment report for February 2015, at the bottom of page 6, showed that Michigan’s civilian labor force declined by 33,000 workers over the twelve preceding months. But the seasonally adjusted (SA) employment report for February 2015 at the top of page 2 showed that Michigan’s civilian labor force increased by 7,000 workers over the same twelve months. The growth of Michiganders employed over the same twelve month period also shows a 5,000 worker NSA/SA discrepancy: 101,000 not seasonally adjusted versus 96,000 seasonally adjusted. And the shrinkage of Michigan’s unemployed worker population over the same twelve month period shows a 46,000 worker NSA/SA discrepancy: 134,000 not seasonally adjusted versus 88,000 seasonally adjusted.

Valid seasonal corrections should produce twelve month differentials which agree with comparable item non seasonally adjusted differentials over the same twelve month period. Here we have a 0.85% discrepancy in Michigan’s total civilian labor force, a 0.1% discrepancy in civilian employment over the same twelve month period, and a 12.5% discrepancy in the shrinkage of Michigan’s unemployed worker population over the same twelve month period.

How did this happen?

The DTMB turns its employment data over to the U.S. Department of Labor’s Bureau of Labor Statistics for X-13ARIMA-SEAT seasonal adjustment. BLS also adjusts underlying data periodically for changes in the Michigan population estimates of the U.S. Census. The two (SA and NSA) February 2015 DTMB employment reports both reflect substantial BLS revisions undertaken in early 2015. A note at the top of page 2 in the DTMB February 2015 SA employment report:

Note: The data in this release reflects recently revised historical estimates. Seasonally adjusted labor force estimates for 1976-2014 for Michigan and 1990-2014 for the Detroit-Warren-Dearborn MSA were revised. Previous published data should be replaced with this new series. In addition, seasonally adjusted payroll job data was revised for 2010-2014. For newly revised data, please contact DTMB at 313-456-3090.

The DTMB February 2015 NSA employment report bears a similar note on its first page noting that it was also subjected to substantial revisions.

So Michigan’s employment data has been subjected to substantial revisions at BLS which produce seasonal adjustments that do not cross check against comparable item non seasonally adjusted data over the most recent 12 month period.

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