Secondary Sources: Small Business Job Creation, Fiscal State of the Union ... - Wall Street Journal (blog)

A roundup of economic news from around the Web.

–Small Business Job Creation: John Robertson looks at the connection between small businesses and job creation. “Economic research published last month by John Haltiwanger, Ron Jarmin, and Javier Miranda provides some compelling evidence on the relationship between firm size and job growth. It turns out that the age of a firm is important independent of its size. In particular, the paper finds no systematic relationship between net job growth rates and firm size after controlling for firm age? This finding doesn’t imply that firm size is irrelevant, but size matters mainly because, conditional on survival, young firms grow faster than older firms and tend to be small. In other words, because start-ups tend to be small, most of the truth to the popular perception that small businesses create the most jobs is driven by the contribution of start-ups to net job growth.”

–Fiscal State of the Union: Len Burman says the president should be give an annual explanation of the fiscal health of the nation. “The problem with our fiscal challenges is that they aren?t news. We have a large unsustainable debt burden, just like we did yesterday and the day before and will have tomorrow. It?s news when we run exceptionally high deficits, as we have for the last couple of years, or when we achieve surpluses, as we did briefly at the end of the Clinton Administration. But there?s no event that captures the media?s and the public?s attention, and the problem will only grow worse as giant deficits become old news. There?s little chance for the media to educate the public about the debt and possible solutions. An annual Fiscal State of the Union Address would change that. There would be news coverage. There would be serious discussion of the causes, consequences, and possible remedies to the problem of too much debt. There would be pressure on the president to have some good news to announce as part of the speech, and enough media scrutiny to guarantee that it wasn?t just smoke and mirrors. There would be pressure on the opposition to put forward a coherent plan to do better than the president, not just warmed over rhetoric and platitudes.”

–Economics of Lobbying: Jordi Blanes i Vidal, Mirko Draca and Christian Fons-Rosen examine how political connections are valued for lobbyists. “Lobbying in the US, as well as other democracies, is big business. This column investigates the extent to which former government officials ?cash in? on their political connections when working as lobbyists. It finds that once the politician for whom they worked leaves office, their revenue falls 20%, or $177,000 per year, suggesting that lobbyists are paid more for ?who they know? than ?what they know?.

Compiled by Phil Izzo

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Census: Child health coverage rises in Illinois - BusinessWeek

By CARLA K. JOHNSON

CHICAGO

In the midst of an economic downturn, Illinois children were slightly more likely to be covered by health insurance in 2009 than the year before, according to newly released U.S. Census Bureau figures.

The numbers suggest government safety net programs, including former Gov. Rod Blagojevich's "All Kids" expansion of coverage, are helping some children when parents lose benefits along with jobs.

The census data released Tuesday show the percentage of Illinois children with health insurance grew between 2008 and 2009, from about 94 percent to about 95 percent.

Macon County had the highest rate of uninsured children of the 23 largest counties in Illinois. The 2009 census data show nearly 14 percent of Macon County children were uninsured that year.

Among Macon County residents of all ages, about 15 percent were uninsured, the census data show, making it one of the highest county rates of uninsurance in the state, along with Cook and Kankakee counties. The overall rate of uninsurance in Illinois was 13.3 percent in 2009.

"We very much live paycheck to paycheck," said school bus driver Kim Bennett, 49, of Decatur in Macon County. "By the time we pay for everything, there isn't enough money left to get insurance."

The loss of manufacturing jobs in Macon County left many families without health coverage, said Barbara Dunn, executive director of the Community Health Improvement Center in Decatur. The county's high uninsurance rate for children will spur her health centers to be more aggressive in urging parents to cover their kids, she said.

"We are going to push them harder," Dunn said. "We're going to ask, why are they uninsured?"

Illinois was the first state to promise health insurance to all children. Blagojevich's expansion of insurance to illegal immigrant children and children whose family income is too high for traditional government insurance cost $70 million last year.

The children added under "All Kids" - about 94,500 children in 2009 - aren't eligible for federal funds, so the program's cost falls on state taxpayers.

The new census data show other states with child insurance rates as high or higher than Illinois. Massachusetts, the model for the new national health law, did the best with 98.5 percent of children insured.

Others with high rates of insurance for kids in 2009 were Connecticut, the District of Columbia, Hawaii, Iowa, New Hampshire, New York and Vermont.

In Illinois, depending on family income, parents can pay from zero to $300 per child per month for coverage under All Kids. A family of four making $72,000 a year can pay $140 a month for two or more children, or $70 a month for one child.

Some parents don't insure their children because they don't want to pay the premiums, said Dunn, who runs several safety net health clinics in central Illinois. Others neglect to do the paperwork or are embarrassed to sign up for a government program, she said.

At about 5 percent, Illinois' rate of uninsured children is far better than the national rate of 9 percent uninsured children in 2009.

"Illinois is proud to be among the top states in covering children, and is thrilled that the new data shows that 95 percent of all Illinois' children have health insurance of some kind," said Illinois Healthcare and Family Services Director Julie Hamos.

The figures come from the American Community Survey, which is sent to about 3 million households each year. The survey started asking about health coverage in 2008.

Nationally, the number of people covered by private health insurance fell from 201.0 million to 194.5 million from 2008 to 2009, according to the Census Bureau. The number covered by government programs climbed from 87.4 million to 93.2 million.

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Ohio adds stimulus jobs, but it's a 'drop in the bucket' - The Morning Journal

By BRANDON C. BAKER
Special to The Morning Journal

Stimulus funds are making jobs, like this road work in Mentor, but the effect has been called only a 'drop in the bucket' for Ohio. (Photo special to The Morning Journal)

The American Recovery and Reinvestment Act shares at least two similarities with other large-scale federal undertakings of recent years. Like the war in Iraq or health care provisions, the debate regarding its merit and the justification for its creation will likely never end. And, people will have to wait several years to definitively know whether the stimulus package’s goals will be fully or partially accomplished.

That latter parallel is especially painful for some Ohioans, given the second word of the $800 billion-plus package’s proper name. By far, jobs are the chief concern of citizens tracking the ARRA. Through June, or the end of the quarter with the most recent available data, the number of jobs in Ohio created by the act amounts to a little more than 15 percent of the state’s unemployed population.

Since the stimulus was enacted nearly 20 months ago, Ohio has created 91,726 recipient-reported jobs funded by the contracts, grants and loans awarded to employers. The state’s 25,896 new jobs in the April-through-June quarter of this year were good enough to rank the state seventh behind the likes of California, Georgia, New York and Virginia.

Though Vice President Joe Biden released a report defending the program in recent weeks, many have soured on the stimulus, including 52 percent of Americans polled in a USA Today/Gallup study this summer. Most economist estimates have the ARRA creating at least 2.5 million jobs since last February, but some deem the package less effective here.

In the most recent quarter, Lorain produced 32 new jobs and Elyria had a robust 136 jobs during the three-month period. But the job impact was much lower for many communities west of Cleveland. The same was true east of Cleveland, where Painesville, Euclid and Richmond Heights were the only municipalities with recipients reporting a total greater than a single-digit new job count.

Predictably, most of the jobs, along with the biggest awards, went to agencies near the center of the state’s bigger cities, especially Columbus, with more than 20,000 jobs last quarter. Cleveland created about 830 jobs between April and June with its awards.

“Looking at those numbers, that’s only a drop in the bucket,” said Patricia Hoyt, dean of Workforce Development and Continuing Education at Lakeland Community College in Kirtland. “A lot of those jobs are seasonal, but are any of those jobs sustainable?”

It can’t be much of a surprise that smaller counties like Lake and Geauga would receive $62.6 million and $13.9 million, respectively, compared to Cuyahoga, Franklin and Hamilton counties, which all received $400 million or better. Still, that money has gone toward jobs, infrastructure projects, educational aid, health care and energy and environmental spending that did not previously exist.

Here are a few awards given to public and private entities in Lake and Geauga counties, large and small. In some cases, all of the funds may not have been received yet.

• The Navy awarded Willoughby-based Pinnacle Construction and Development Corp. about $2.5 million for the demolition, minor asbestos abatement, architectural repairs, roofing, plumbing, lighting, HVAC renovation and construction and other modernization work at the Navy’s operational support center in Cincinnati. The firm selected a couple of small area firms for two of its sub-contracts. Russell Flooring Co. of Willoughby will receive $78,500, and Summit Painting in Eastlake will get about $1,000 more than that for its work.

Overall, 33 jobs have been reported for the project. A Pinnacle executive declined to discuss the award.

• The City of Mentor received $512,200 from the Department of Energy to retrofit traffic signals, street and parking lot lighting throughout the city with high-efficiency LED bulbs.

Mentor Public Works Director Matthew S. Schweikert said that money was presented to the city in spring 2009 for any projects it wanted to undertake that would conserve energy. The city has some funds left over to take bids for a boiler at its civic ice arena, but “a good chunk” of the funds went toward energy efficient lighting at the city’s 85 signalized intersections.

The city will do some of the installing but also contract some of the work, Schweikert said.

• The Department of Housing and Urban Development’s ARRA Capital Fund Program paid for the Geauga Metropolitan Housing Authority to renovate the parking lot and road surfaces at its Chardon facility, along with money to make various repairs at low-income housing facilities throughout the county.

The reward totaled about $432,000 and created about four jobs. The work is mostly complete, including replacing the building exit doors at Harris House in Chardon and replacing the exterior electric meter boxes at Cloverdale Estates in Middlefield and Strickland Arms in Bainbridge. The funds also covered concrete driveway and sidewalk replacement at Scranton Woods in Newbury Township and the administrative costs for the ARRA projects.

The projects were on the GMHA’s five-year plan, with some deemed shovel-ready, but the stimulus funding helped to expedite the process, said Mel Kirschnick, the agency’s modernization coordinator.

“You want to be a high performer, maintaining that status,” Kirschnick said. “HUD comes out every other year to look at our physical properties, and we get rated on that, and that’s part of a score that determines if we’re high performers or not. This parking lot, it was kind of an embarrassment before. That was really a project we were thankful to get done.”

One doesn’t have to travel far to see physical manifestation of the ARRA, as the familiar green signs with stimulus notation are scattered throughout Ohio’s interstates, routes and bridges.

“In Ohio, we look at the stimulus as something very important,” Ohio Department of Transportation District 12 spokeswoman Jocelynn Clemings said. “The governor and our director always say, where you see orange barrels, you should think jobs. It’s clear we’re putting people to work and folks who wouldn’t otherwise be working because of these dollars — not only people who we have on (construction) sites, but people behind the scenes, like haulers of materials, producers of materials, those who have a hand in fabricating, welding or doing things that you don’t see on a day-to-day basis.”

There were 11 ARRA-funded road projects between Lake and Geauga counties.

They are part of the $44.2 million share that the Northeast Ohio Areawide Coordinating Agency got from ODOT’s ARRA funds, NOACA spokeswoman Cheryl Onesky said.

The most expensive project is easily a Regional Intelligent Transportation System to include seven counties in the greater Cleveland and Akron areas.

The $21 million system will include traffic cameras and the informative, real-time highway message boards motorists have seen in other cities and states.

The cameras and radios provide the information for the boards and Web platforms that will give drivers an idea of congestion before they leave home or work. The system will be completed by the end of 2011.

“The system has been up and running in other cities, but ours is the best of the best, most updated and light years ahead of other systems,” Clemings said of the Dynamic Message Boards, manufactured by Brookings, S.D.-based Daktronics, which produces LED billboards and sports scoreboards.

That project is one of the 388 stimulus-funded transportation construction initiatives in the state, Clemings said. As of mid-September, 146 of those projects have been completed, including the $9.3 million rehabilitation of Interstate 271 from Wilson Mills Road to Interstate 90 and the resurfacing of State Route 700 in Troy and Burton Townships, worth $987,570 of ARRA investment.

Everybody, from the funding agencies to the recipients themselves, is aware of the criticisms of the ARRA and the perception that some of the projects are not important in today’s economically-depressed United States of America.

GMHA Executive Director Nancy Sadler knows those opinions will probably be coming her way as more people learn about the funds her agency received for the parking lot and facility repairs in Geauga County.

She has very different thoughts about the stimulus, at least as it affects her community.

“It’s actually brilliant when you think about it, for HUD, especially,” she said. “They’re actually dumping the money into their own federal assets.

They’re killing two birds with one stone: Supplying jobs and investing in their own properties. I really think that’s smart. It flowed just like it should have.”

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Bentley hits home stretch leading Sparks - Gadsden Times

At a mid-afternoon campaign stop across from the Chilton County Courthouse featuring a few local and state candidates, Bentley shook hands and answered questions in the cool fall weather that set the stage for what promises to be a hot campaign leading up to the Nov. 2 general election.

Without preamble, Bentley applied the “L” word to his opponent, an unflattering reference in conservative Alabama.

“I'm running against the most liberal Democratic candidate that's ever run for governor,” Bentley said of Sparks.

Bentley went on to label himself as pro-life and anti-illegal immigration. And as a physician, Bentley said he opposes nationalized health care, while “my opponent favors it.”

“I believe in state sovereignty,” while Sparks does not, Bentley charged.

In a race that pretty much has avoided personal attacks, Bentley's reference to Sparks ratcheted up the rhetoric and prompted a reply from the two-term agriculture commissioner from Fort Payne.

“I'm conservative,” Sparks said. “I'd like to know one thing that I've done to consider me the most liberal in the history of this state. I've created jobs, I'm fiscally responsible and I've helped business, helped consumers.”

Sparks said Bentley's campaign is about “rhetoric, sound bites and gimmicks.”

“If I didn't have a plan, I'd be saying that, too,” Sparks said last week. “There's not one thing you hear in one of this speeches that ‘I'm going to move Alabama forward, I'm going to educate children and build highways.'”

Bentley's campaign is as much about Washington, D.C., and Democrats in charge, including President Barack Obama, as it is about Alabama.

“He ought to be running for Congress because everything he does is a federal issue,” said Sparks, who is counting on bingo and lottery income to help the state reverse recession-affected finances. “I'm talking about things a governor can do.”

Bentley is a 67-year-old retired dermatologist and two-term lawmaker from Tuscaloosa who emerged from a back bench in the House where his party is in the minority to become the frontrunner in the 2010 governor's race.

Bentley stumbled briefly when a campaign ad nearly claimed he was a Vietnam veteran when, in fact, he served stateside during the Vietnam War as a physician in North Carolina. Sparks is a Coast Guard veteran.

Bentley's campaign was helped significantly by an all-out ad war against Bradley Byrne financed by the Alabama Education Association. A lawyer, former senator from Baldwin County and two-year college system chancellor, Byrne was unacceptable to the AEA leadership.

In his party primary runoff, Bentley defeated establishment candidate Byrne by campaigning as an outsider within his own party.

Buoyed by the post-primary bounce, Bentley led Sparks in the polls by up to 20 percentage points. But by mid-September Sparks had cut the lead to 13 percentage points, 52 percent to 39 percent, give or take 4 percentage points, and 9 percent undecided, in one poll.

In this era of political outsiders, tea parties and mavericks, Bentley is forcing the GOP hierarchy to accept, or at least, support him.

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Bentley

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State GOP Chairman Mike Hubbard, R-Auburn, who served with Bentley in the House, appeared at a party unity luncheon shortly after Bentley had dispatched Byrne.

Capital Survey Research Center pollster Gerald Johnson said polls show that Bentley, unless he blows his lead, is the favorite to win.

Johnson added, however, that with a month to go until the election, anything can happen. Sparks' star can rise if voters realize the choice facing them is more school funding cuts or accepting Sparks' pro-bingo taxation plan, and they may choose bingo, Johnson said. (Johnson's polling group is part of the AEA that supports more school funding and which declared Bentley and Sparks as acceptable candidates.)

Bentley's political star rose last year during a Business Council of Alabama forum where he surprised attendees. Then he was featured in a widely read political blog as a candidate to be reckoned with.

Bentley kept plugging, shaking hands and delivering his anti-Washington message, all on a mostly self-financed campaign, until the runoff. His money worries are over relative to Sparks, with one more finance report due in late October.

In their latest campaign finance reports filed in mid-September, Bentley reported raising an astonishing $4.2 million since last year, including $3.3 million since winning the runoff.

Sparks reported raising $2.2 million since last year. Not once did his contributions top $1 million for any reporting period. But that hasn't kept Sparks from the campaign trail.

“I'm out here working with my hair on fire trying to get votes,” Sparks said.

Bentley was aided early by his association as a delegate for 2008 presidential candidate Mike Huckabee, a former Arkansas governor.

Huckabee took the state in the presidential preference primary, and Bentley also got a boost from the Christian Coalition of Alabama and its vast e-mail list. Earlier this year, Bentley hooked up with Huckabee campaign experts after discarding his hometown campaign leadership.

Dr. Randy Brinson, chairman of the Christian Coalition of Alabama, met Bentley during Huckabee's campaign.

“I was impressed with his whole demeanor and passion and concern for moral issues,” Brinson said.

Brinson said his organization's database helped Bentley reach millions of voters in 2009 when he was trying to introduce himself. Also aiding Bentley was Republican gubernatorial candidate Kay Ivey switching to the lieutenant governor's race. Then there was the anti-Byrne campaign by the AEA, Brinson said.

“We sent 9 million e-mails on his behalf last year on issues or events,” Brinson said. “It was very important to get his name ID out.”

Brinson said Bentley carved out a plausible stand on electronic bingo gambling “where people need to vote on it even if he's against it.”

“He took a position on health care, which I liked as a fellow physician,” Brinson added.

Bentley said he opposes nationalized health care because he believes it will reduce access to medical care and ultimately force physicians to accept government insurance. Bentley predicts that many doctors will refuse to participate and become cash-only businesses.

Terri Connell said she came to Bentley's Clanton rally to meet him. A medical field employee, Connell said Bentley is “well-respected in the medical community.”

“As governor, he will be able to go along with other states against Obama-care,” Connell said.

Harold Jarman of Clanton said Bentley is “for the hard-working family person,” is “honest” and has “integrity.”

“I think he will hold people accountable and make them work for the benefit of the people,” Jarman said.

“He's an outsider campaigning against the system,” said Becky Hayes of Clanton. “He's not for big government. That's important to me.”

Bentley describes himself as a populist who appeals to party outsiders.

“Common, ordinary people voted for me,” Bentley said.

Bentley said he is not a tea party member but has unwavering views about government's role.

“I want government to get out of the way,” he said.

But populism can be a double-edged sword, Brinson said.

“He needs to be more specific on solutions because what's going to happen is we have a tremendous budget failure and we have to get more revenue,” he said. “Being anti-Washington is a popular stance, but the reality is how is this going to relate to the state?

“People want to hear anti-establishment rhetoric, and that resonates with a lot of people right now but you still have to have solutions to all these problems because the challenge of the next governor is you have to have the support of people as you come into office,” Brinson said. “You need strong support of business and the public.”

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Blue Cross tests 'medical home' model - Omaha World-Herald

Improving patient care and curbing rising health care costs are among the goals of an effort Blue Cross and Blue Shield of Nebraska is launching on Friday.

The six-month trial program involves primary care doctors, clinics and patients in nine Nebraska cities including Omaha, Lincoln and Kearney.

The program is intended to test the effectiveness of the “medical home” model. Under that model, a primary care doctor is established as the main provider and coordinator of a patient's health care needs, said Dr. Bill Minier, vice president and chief medical officer for Blue Cross.

The primary care doctor not only will provide routine exams, but also will coordinate the care that patients receive from outside specialists, he said.

The goal is for the primary care doctor to ensure that the patient is getting necessary care and that needed tests and follow-up exams are not falling through the cracks.

The medical home model is an idea that has received attention during the health care reform debate as a way to strengthen doctor-patient relationships.

The primary care doctors will use an Internet program that creates medical checklists that are tailored for each patient. The checklist will help the primary care doctor know, for example, if it's time for a certain immunization or preventive screen such as a mammogram.

The pilot effort will focus on 1,200 diabetic patients but providers can use the Internet program for all their patients.

After the program ends, it will be evaluated based on a number of factors, including days spent in the hospital, emergency room visits and adherence to medications.

Minier said the medical home approach can curb costs by keeping patients out of the hospital and out of the emergency room.

Medical providers in the pilot program will be eligible to receive incentive payments totalling $3,000 to $5,000 from Blue Cross based on how well their patients' diabetes is managed, Minier said.

Other communities involved are Auburn, Geneva, Grand Island, Lexington, Nebraska City and West Point.

The Blue Cross medical home program is endorsed by such groups as the Nebraska Academy of Family Physicians and the Nebraska Medical Association.

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