WISCONSIN July 2012: Issue 3 Official magazine of Wisconsin Manufacturers & Commerce Bad for Business? Dodd-Frank Act: Two Years Later Inside: Working on the Workforce Paradox Public vs. Private Sector Problem Solving Senator Miller and Representative Vos: Questions that Matter to Wisconsin Businesses WISCONSIN From the Editor Wisconsin’s economy is a bit like predicting a coin toss. BUSINESS VOICE There is good news one day and bad the next, which makes it difficult at best to In this issue determine if the economy is stagnating or recovering. WMC’s latest economic outlook survey showed Public vs. Private Sector Problem Solving more than half of the companies surveyed Kurt R. Bauer, WMC’s President/CEO, explores the inherent conflict plan to expand in Wisconsin in the next 24 2 between job creators and rule makers on the left side of the aisle. months - the highest rate in 10 years. And June 5: The Voters Reiterated 73 percent are expecting moderate to good 4 WMC Senior Vice President James Buchen recaps the recalls. growth this year. That’s encouraging. How a Bill Becomes a… War on Women? But we also know that overregulation has Rebecca Hogan, WMC Director of Health & Human Resources a profoundly adverse impact on job growth 6 Policy, reviews how some issues can quickly be misunderstood. in Wisconsin and nationally. Our member surveys cite the Environmental Protection Business Friend of the Environment Award Winners Agency, National Labor Relations Board and Nine companies were honored during the 23rd Annual Business Friend the Affordable Care Act as the biggest factors 8 of the Environment Awards. of “uncertainty” that cause businesses to Healthcare: A Guest Editorial from Wisconsin Hospital delay major investments. 9 Association Another is the Dodd-Frank Act. In its purest Regardless of the Federal Healthcare ruling, Wisconsin is moving form, Dodd-Frank was intended to protect forward with value-driven reform. consumers by preventing another financial crisis and the need for additional government Made in Wisconsin Feature From horseradish to hunting bows, Wisconsin manufacturers create bailouts. But as some warned at the time of 10 some well-known products. its passage, Dodd-Frank may turn out to be one of the leading factors keeping companies The Time to Support Pro-Business Lawmakers is Now from investing in their businesses. In fact, Jim Pugh, WMC Director of Public Affairs, touts the importance of The Wall Street Journal recently said Dodd- 11 supporting pro-growth candidates this fall. Frank’s “signature achievements are higher Workforce Paradox: We've Only Just Begun costs, reduced opportunities and weaker WMC Foundation President Jim Morgan continues his quest to help banks.” 12 solve Wisconsin’s workforce paradox. This edition of Wisconsin Business Voice Tort Reforms Moving Wisconsin Ahead takes a look at the impact of Dodd-Frank Jason Culotta, WMC Director of Tax & Transportation Policy, reveals on Wisconsin financial institutions and the 14 tort reforms adopted during the 2011 legislative session that are businesses they lend to. helping Wisconsin businesses. Feature: Dodd-Frank Act – Bad for Business? The federal financial regulatory reforms of 2010 are still causing 16 uncertainty for the nation’s financial sector as Wisconsin companies try to sort through the legislation. America’s Self-Defeating Energy Policy Katy Ryder Pettersen WMC Director of Environmental & Energy Policy Scott Manley talks Editor, Wisconsin Business Voice 24 about our country’s desperate need for an energy policy overhaul. [email protected] Safety: The Survey Results are In Wisconsin Safety Council Director Janie Ritter reveals the results of the 26 recently completed annual safety survey. Ask Wisconsin’s Legislators Senator Mark Miller (D-Monona) and Representative Robin Vos 30 (R-Burlington) answer questions that matter to Wisconsin’s businesses. Wisconsin Business Voice is published quarterly by Wisconsin Manufacturers & Commerce (WMC), a statewide trade association Is the Free Enterprise System Under Attack? representing businesses of all sizes and from every sector of the Forward Janesville, Inc. President John Beckord breaks down the free economy. Send address changes to WMC, P.O. Box 352, Madison, 32 enterprise system. WI 53701-0352. All other contacts should be sent to WMC, 501 E. Washington Avenue, Madison, WI 53703, (608) 258-3400. This publication is proudly printed on paper made in Wisconsin. Kurt R. Bauer, WMC President/CEO Katy Ryder Pettersen, Editor ([email protected]) Jane Sutter, Designer ([email protected]) Public vs. Private Sector Problem Solving Kurt R. Bauer, WMC President/CEO oth major parties in the U.S. have For example, the government sector unions tend to want moved to the far edges in recent to expand government, which means they want more taxes Byears. That shift toward what party to pay for it. Under Doyle, taxes and fees rose by $3 billion. activists would term ideological purity Most of that was aimed at businesses through combined arguably hurts Democrats more than the reporting and raising the capital gains tax. Doyle also added Republicans because Americans typically a new personal income tax bracket for the “rich.” But an stand just right of center on the political increasing high percentage of businesses are S Corporations spectrum. or another form of “pass through” entity. That means that That is certainly the case with the business shareholders pay the taxes, not the corporation. community. Although we don’t specifically Trial attorneys want more opportunities to sue businesses. A ask the question in our surveys, I think recent example is the supposed “war on women” as it relates it is fair to say the majority of WMC’s to the deceptively named equal pay law. The law was enacted member CEOs lean conservative, at least when Doyle was governor and Democrats controlled both on business issues and fiscal matters. houses of the Legislature (see Hogan’s column on page 6). It What we do ask in our surveys may offer proof. In June was repealed during the most recent GOP-led legislature, an 2011, just six months after Governor Scott Walker took action WMC supported along with 15 other business trade office, an incredible 88 percent of WMC members said associations. The trial attorney lobby led the fight against Wisconsin was headed in the right direction. That was repeal because the law made it easier to sue businesses. up from just 10 percent a year earlier during the waning By the way, the Milwaukee Journal Sentinel reported in a months of the Doyle Administration. By June 2012, the PolitiFact article that the equal pay law had never been used “right track” number improved to an astonishing 95 percent. while it was on the books and repealing it still leaves women Clearly, Walker’s budgetary and pro-job reforms resonated who are legitimate victims of workplace discrimination three with the results-obsessed business community, who other avenues to seek redress. sometimes view politics as a bizarre parallel universe. A For their part, environmentalists want more regulation major reason why is that in business, failing to and often oppose major job-creating economic solve problems can cost you your job development projects like the proposed and threaten the viability of the In a nation made great $1.5 billion iron ore mine in northern enterprise itself. But in politics, Wisconsin. I discussed the incredible the opposite can be true. Politics by free enterprise, it is a shame growth of business regulations in doesn’t usually reward bold that success is ridiculed instead of my previous column, but it bears action. It too often encourages repeating especially as it relates to timidly that largely preserves celebrated and the title “CEO” has how regulations drive up energy the status quo. become a pejorative to some. costs. Wisconsin gets nearly 70 The best dramatization of the very percent of its energy from coal, which different approaches to public versus private is the EPA’s and the environmentalists’ most sector problem solving is the Wisconsin recall. If Walker hated source. EPA’s anti-coal policies are a major were the CEO of a corporation instead of governor and threat to Wisconsin’s economy (see Manley’s column on turned a proportionately sized loss (or deficit in government page 24). accounting terms) into a profit (surplus), he would be on Another dividing line between Democrats and business the cover of every major business publication in the country. has been the Occupy Movement. Making businesses, Instead, Walker nearly got fired. i.e., employers, the scapegoats for the recession and the TAX, SUE AND REGULATE slow recovery may be good short-term politics, but it is a poor strategy for longer-term economic growth and job The business community also frequently finds itself at odds creation. Not to mention that in a nation made great by free with the policy agendas pursued by government sector enterprise, it is a shame that success is ridiculed instead of unions, trial attorneys and environmentalists. Those interest celebrated and the title “CEO” has become a pejorative to BV groups happen to be the most powerful members of the some. Democratic Party’s coalition, making conflict between Democrats and businesspeople all but inevitable. Follow Kurt on Twitter @Kurt_R_Bauer 2 Decision 2012 Series ith the important elections of 2012 upon us, WMC launched the Decision 2012 Series providing high-level public policy programming by bringing inW leading experts, policymakers and political candidates to address Wisconsin business leaders. In April, U.S. Congressman Paul Ryan (R-Janesville) spoke to a large crowd of WMC members in Milwaukee about the United States’ increasing debt stating that politicians need to address this issue and stop reckless spending. Congressman Ryan also took questions from the audience and addressed the recall Congressman Paul Ryan addressed the election of Governor Scott Walker saying “courage is on the ballot.” attendees.