Data Centers Do Not Make Iowa a High Tech State

Dave Swenson

The news out of West Des Moines last week was that Microsoft will add a third data center. At first glance, a data center cluster looks to be popping-up in Iowa. We have the three Microsoft projects in West Des Moines, Facebook’s two complexes on the other side of the metro in Altoona, Google’s two projects in Council Bluffs, and a smattering of smaller centers scattered about the state.

“Microsoft could build these centers anywhere in the world,” said West Des Moines Mayor Steve Gaer, as quoted in the Des Moines Register, but they’re building them right here in Iowa. A map of data centers across the U.S. tells us, though, that data centers of all sorts and sizes are just about everywhere there are people. In short, Iowa isn’t that special. Don’t tell West Des Moines.

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Beth Townsend's embarrassing defense of phony job numbers

“Phony number” graphic created by Dave Swenson

I was encouraged when Beth Townsend became Iowa Workforce Development director early this year. The previous director, Teresa Wahlert, was one of Governor Terry Branstad’s worst appointees; I suspect her record for legal entanglements involving an agency director for the State of Iowa will never be surpassed. In contrast, I’d heard consistently good feedback about Townsend’s work as executive director of the Iowa Civil Rights Commission. The new director has taken several steps to bring Iowa Workforce Development’s operations in line with federal labor laws.

Which makes it even more disappointing to see Townsend sell one of the biggest lies of Branstad’s long, long stint as governor, first in her agency’s annual budget presentation, and now in the editorial pages of Iowa’s largest newspapers.

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Branstad replacing Teresa Wahlert as Iowa Workforce Development director

Sidestepping what looked like an unwinnable battle with Iowa Senate Democrats, Governor Terry Branstad announced in a press release today that Teresa Wahlert will retire as head of Iowa Workforce Development. Apparently Wahlert informed Branstad on January 9 that she would step down, effective today. Iowa Civil Rights Commission Executive Director Beth Townsend will take over as acting director of Iowa Workforce Development. After the jump I’ve posted background on Townsend as well as today’s press release about Wahlert’s retirement.

Wahlert’s tenure was rocky from the start, as she only barely was confirmed to lead the agency in 2011. Iowa Senate Democrats objected to the planned closure of staffed Iowa Workforce Development offices all over the state, a policy that Wahlert later carried out despite lawmakers’ efforts to keep the offices open. (The Iowa Supreme Court eventually ruled unanimously that Branstad acted improperly when he struck language about the field offices without vetoing the money allocated to fund them, but the offices were never reopened.)

Wahlert’s conduct is also mixed up in two lawsuits filed by former senior state employees. As if that weren’t enough, an arbitrator ruled in November that Wahlert “overstepped her bounds when she promoted a judge who had been demoted after complaints that she created a hostile work environment.” For those reasons, she certainly would not have received the 34 yes votes she needed in the Iowa Senate, had Branstad re-appointed her to her current job. Today’s official press release does not acknowledge any of the controversies surrounding Wahlert’s work. Instead, the governor and Lieutenant Governor Kim Reynolds praised her leadership on worker training and job creation.

Final note: words attributed to Reynolds today greatly exaggerate the number of jobs created during Wahlert’s years in state government. No matter how many times real economists dismantle this zombie lie, the Branstad administration is hell-bent on counting only gross jobs created (a “fake” number), not net jobs created (which accounts for job losses as well). Townsend could do all Iowans a service by getting her new subordinates out of the fuzzy math business. As Mike Owen of the Iowa Policy Project argued here, the “political tainting” of Iowa Workforce Development is unacceptable: “IWD should be trying to determine and illustrate the actual job picture facing our state, so policy makers can make decisions in that light.”  

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Weekend open thread: Computation errors

What’s on your mind this weekend, Bleeding Heartland readers? I’ve been thinking about math, or rather, the inability to do math. This fascinating article by Robert Charette exposes the “myth” of an alleged shortage of STEM (science, technology, engineering, and mathematics) workers. The real problem in the U.S., Charette argues, is “a STEM knowledge shortage.”

To fill that shortage, you don’t necessarily need a college or university degree in a STEM discipline, but you do need to learn those subjects, and learn them well, from childhood until you head off to college or get a job. Improving everyone’s STEM skills would clearly be good for the workforce and for people’s employment prospects, for public policy debates, and for everyday tasks like balancing checkbooks and calculating risks.

Speaking of public policy debates, Congressional Republicans are poised for another showdown over the debt ceiling, armed with phony concern about a “growing” federal deficit. In fact, the deficit is falling at the fastest rate in decades, but very few Americans realize that, and self-appointed fact-checkers bend over backwards not to acknowledge it.

Speaking of the inability to count, Governor Terry Branstad’s administration has touted misleading “job creation” numbers for a long time, but the latest propaganda is “inflated” even if you accept the governor’s “bizarre” practice of counting only jobs created while not subtracting jobs lost.

Politicians aren’t the only ones who let ideology interfere with basic numeracy. This must-read piece by Chris Mooney summarizes findings from a new study: “people who are otherwise very good at math may totally flunk a problem that they would otherwise probably be able to solve, simply because giving the right answer goes against their political beliefs.”  Regardless of party affiliation, research subjects with higher math skills were better at solving a problem about the effectiveness of skin cream. When the same numbers were presented as evidence related to handgun bans, liberal Democrats and conservative Republicanss were more likely to arrive at the wrong answer if the correct answer went against their opinions about gun control and crime.

This is an open thread.

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Weekend open thread: Jobs and prosperity

What’s on your mind this weekend, Bleeding Heartland readers? The Bureau of Labor Statistics released a better than expected jobs report on Friday, but not all the numbers were encouraging. States have continued to cut jobs even after the end of the “Great Recession,” and the “sequester” federal budget cuts will lead to more public-sector job losses later this year. Disappearing state government jobs are a drag on the national economy.

Surprise, surprise: the Iowa Chamber Alliance thinks shoveling more taxpayer dollars to large corporations is the best way to create jobs. The Iowa Policy Project disagrees and points out that Iowa is already writing large subsidy checks to some companies that paid no income tax in 2012. UPDATE: Forgot to mention that Iowa just agreed to give the Principal Financial Group $22.5 million in tax credits for its $285 million renovation plan in downtown Des Moines. Why should Iowa taxpayers underwrite office remodeling for a profitable company? That’s part of the cost of doing business.

Conservatives who think high tax rates can’t coexist with economic prosperity should explain why “the average Canadian household is now richer than an average American household for the first time ever.” My guess is the answer is related to Canada’s efficient, single-payer health care system (no medical bankruptcies or huge out of pocket costs because of health problems).

Senator Tom Harkin has introduced a bill to raise the minimum wage from $7.25 to $10.10 over three years before “before indexing it to keep up with the rising cost of living.” Indexing the minimum wage to inflation should have happened a long time ago.

This is an open thread.

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