VERONA, Wis. – Democratic gubernatorial candidate Tom Barrett unveiled a job creation plan Thursday that relies on targeted tax breaks, a reorganization of economic development programs and an emphasis on helping startup companies.
Barrett did not have a cost for the plan, saying that would hinge on how much money is available under the state budget. The Milwaukee mayor said his goal would be to create at least 180,000 jobs in his first term, which is roughly how many have been lost since the recession began two years ago.
"This is the blueprint for the house," Barrett said at a news conference inside Full Compass, a Madison-area audio-visual equipment supplier. "We'll have more specifics as we move forward."
One of his main ideas is to create a new job creation office within the governor's office that would be responsible for consolidating and organizing economic development efforts across state government. Barrett said the plan would be modeled after programs in Oklahoma and Texas.
Barrett wants to streamline the regulatory approval process so companies will not be lost in a sea of red tape awaiting approval on projects. He also proposed creating a $100 million venture capital fund over five years that could be used to assist startup companies.
Barrett also voiced support for expanding the state's film tax incentives, a program that current Gov. Jim Doyle gutted in his budget last year.
Most of Barrett's proposals would require legislative approval, although some could be done administratively.
State Sen. Jon Erpenbach, D-Waunakee, was at the news conference and said he thinks the Legislature would be receptive to the plan.
"Anything that is going to spur job growth immediately is a good thing," Erpenbach said.
The Legislature is currently controlled by Democrats, but the makeup for the new governor will be determined following the November election.
Even though it lacks an overall price tag and details in many areas, Barrett's 67-page economic development plan is by far the most expansive of any of the three major candidates for governor.
Milwaukee County Executive Scott Walker and former U.S. Rep. Mark Neumann, the two main Republicans running, have broadly discussed their economic development ideas.
Both have supported repealing tax increases approved by the Legislature in the past two years that raised taxes on large businesses and people earning over $300,000 a year. Barrett supports keeping those taxes in place.
Barrett's plan did not include any tax increases.
Walker has said that his six-point economic development proposal would create 250,000 jobs within four years. Walker's plan calls for lowering taxes, improving health care, education and infrastructure, ending frivolous lawsuits, and reducing regulations.
Neumann, who supports cutting taxes and government spending, has not put a number on how many jobs he could create if elected.
Tom Barrett: http://www.barrettforwisconsin.com/
Mark Neumann: http://markforgov.com/
Scott Walker: http://www.scottwalker.org/
NEW YORK – Oil prices plunged nearly 8 percent Thursday, tumbling to their lowest level in 10 months as concerns over the European economy sent traders rushing out of oil investments.
"Fear has obviously gripped the market, and we're trading accordingly," analyst and trader Stephen Schork said.
Benchmark crude for June delivery lost $5.34 at $64.53 a barrel on the contract's final trading day on the New York Mercantile Exchange. If that holds, it'll be the sharpest one-day drop since April 2009. Prices tumbled as low as $64.24 earlier in the day, the lowest price for oil since July.
Most of the trading already has moved to the July contract, which lost $3.52 at $68.96 a barrel.
The steep drop in oil prices should give Memorial Day travelers a gift at the gas pump as they head out for the holiday weekend. Gasoline prices dropped Thursday for the 14th day in a row, and they'll be pushed even lower as oil prices continue to tumble.
Futures contracts for most energy commodities slumped as financial troubles in Europe and weak jobs numbers in the U.S. forced a sell-off on Wall Street. The Dow Jones Industrial Average lost about 250 points, or 2.4 percent, in early afternoon trading.
Prices for heating oil, gasoline and natural were down more than 3 percent.
"People are saying it's time to get out," said Michael Lynch, president of Strategic Energy & Economic Research. Earlier this year, Lynch stood out from many of his peers by predicting that oil prices would fall.
"The market has gotten way ahead of itself," Lynch said. "People kept saying that soon demand will go up and inventories will go down. But that's not happening."
Traders started getting nervous as the debt crisis unfolded in Europe. U.S. government data showing that Americans continue to have a relatively weak appetite for fuel have sunk energy prices even further.
An EIA report on Thursday added to those concerns, showing that the country's stockpile of natural gas has ballooned to nearly 17 percent more than the five-year average.
If the world doesn't start sopping up excess supplies, oil prices may fall into the $40-per-barrel range this year, Lynch said.
At the pump, retail gasoline prices dropped 1.2 cents overnight to a new national average of $2.84 a gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 1.9 cents cheaper than it was a month ago, but it's 50.6 cents more expensive than a year ago.
Experts say gas prices have likely peaked already this year, and it should cost less to fill up this summer than in the summer of 2009. That's good news for the travel industry as Americans get ready to hit the highways over the Memorial Day weekend, the unofficial start of the summer driving season.
On Thursday AAA estimated that more people will take leisure trips during the holiday weekend than last year. About 32.1 million people are expected to head for the highway or the airport. The travel club's report said most people probably will watch their wallets more closely, however, spending about $809 during the weekend this year compared with over $1,000 last year.
In other Nymex trading in June contracts, heating oil fell 7.76 cents to $1.8676 a gallon, and gasoline lost 9.14 cents to $1.9238 a gallon. Natural gas dropped 6.9 cents to $4.089 per 1,000 cubic feet.
In London, Brent crude July contact gave up $2.84 to $70.85 a barrel on the ICE futures exchange.
Associated Press writers Barry Hatton and Alex Kennedy contributed to this report.
BERLIN – German Chancellor Angela Merkel urged the world's economic powers to send a "signal of strength" by agreeing to stronger global financial regulation, tough words that did not dispel market doubts about whether she and other European leaders have a handle on the continent's debt crisis.
European stocks and the euro slipped Thursday, unnerved by a unilateral German move to ban some speculative trading practices. That was taken by some as a sign Merkel and other European leaders are not coordinating their efforts to shore up government finances in the 16 countries that use the euro, despite their agreement on a $1 trillion loan backstop for governments in danger of defaulting.
The package has given markets respite from fears of immediate collapse, but long-term worries about the European economy continue to depress sentiment. Britain's FTSE 100 was down 2 percent, while Germany's DAX slid 2.3 percent and the CAC-40 in France was 2.9 percent lower. The euro sagged 0.8 percent to $1.2325, well down from $1.51 late last year before debt worries intensified.
Merkel recalled that, at the height of the global financial crisis in 2008 when governments had to plow billions in taxpayer money into propping up banks and other financial institutions, the Group of 20 rich and developing nations agreed "every product, every actor and every financial center must be regulated — we promised people that."
"Now, after one and a half or two years, people are saying: what came of that?" she said. "At some point we have to provide the proof and say, 'come here, we've done it.' This point shouldn't be too far away."
"My appeal is: let us send a common signal of strength at the G-20 summit" in Canada next month, Merkel said at a conference on regulation.
Across Europe, leaders have shown an increased resolve to regulate in response to the global financial turmoil of the past several years, which recently has centered around fears of government default in Europe.
On Tuesday, EU governments overrode British objections and U.S. worries to tighten rules for hedge funds, and Germany's securities regulator unilaterally announced curbs on traders of government debt and bank stocks.
Germany's trading limits, however, took markets by surprise, and unsettled investors. It was interpreted by some as a sign that European leaders were not united in their approach, and that Europe's underlying problem was too much debt, not market practices.
Europe's top trade official said in Stockholm that the practice should be regulated on a European rather than national basis. "I fully encourage European governments to adopt this kind of governance and regulations, to adopt such a decision at a European level, not on unilateral basis," Competition Commissioner Joaquin Almunia said.
Investors didn't like it.
"The question of EU unity following Germany's unilateral naked short-selling ban has investors particularly on edge, along with concerns on the sustainability of the European rescue package and the potential dampening effect that fiscal tightening could have on global growth," said UBS analyst Geoffrey Yu.
Merkel, leader of the eurozone's largest economy, has stepped up calls for tighter regulation of the financial sector as Germany and its European Union partners assemble a $1 trillion eurozone rescue package aimed at containing the continent's crisis over heavy amounts of government debt.
The rescue package remains unpopular with German voters who object to paying for other countries' mistakes, and Merkel is now emphasizing world leaders' promises to respond with new rules to prevent more financial turmoil — and arguing that market misbehavior has made the current trouble worse.
In response to the global economic crisis, the G-20 — which combines traditional leading industrial nations with rising powers such as China and India — has been designated the key forum for economic coordination among countries.
Merkel has pushed hard to shape the agenda as Europe struggles to cope with market fears that governents will not be able to pay their debts. She insisted on tough conditions for a joint EU bailout of Greece, and called for new rules to prevent governments from undermining the euro with reckless spending, saying violators should be kicked out of the euro.
Germany earlier this year also announced plans for a levy on banks, which would pay into a fund to cover the costs of future financial crises. Merkel this week has advocated some form of financial market taxation, perhaps on transactions.
She urged counries that have been unenthusiastic about tighter rules to recognize the need for them. Canada, Australia and Japan have argued that their banks didn't suffer massive failures and therefore shouldn't have to bear the burden of new taxes.
With European and even U.S. backing for the idea of a bank levy, "if there are again three countries that say, 'but we're not affected by that,' then that's extremely frustrating and ultimately can't move us forward,'" she said.
Tiff Macklem, a deputy Canadian finance minister, argued at the same Berlin forum that there was no "one-size-fits-all solution" to that particular issue.
Chin Dong-soo, the chairman of the Financial Services Commission in South Korea — which currently holds the G-20 presidency — also underlined the sense of urgency.
He said that "the market hates uncertainty; therefore we need to expedite decision-making on the key financial regulatory reform issues."
South Korea was relatively unscathed by the financial crisis, and so does not have "a direct vested interest in certain financial regulatory reforms," he added, making it well-suited to the role of "honest broker."