Sunday, March 29, 2015

And now...it's time to shake things up in Indy!

What a second half for UW last night. What a likable group that represents my alma mater so well on and off the court. It's mind-boggling to think of back-to-back Final Fours, but I definitely BELIEVE IT!



So now onto Indy (and yes, I will be there). As you may be aware, there have been a bit of a hullaballoo going on in Indiana this week, as dimwitted Governor Mike Pence is getting hammered for signing a bill that basically allows businesses to install Jim Crow rules against gay people. And don't tell me that's not what the law is about- just check out this passage from today's story where Pence says he wants a new bill to "clarify" the just-passed "religious freedom" law.
Asked if that legislation might include making gay and lesbian Hoosiers a protected legal class, Pence said, "That’s not on my agenda."
Well Mike, if that doesn't happen, then I'll guess the NCAA will decide that they don't want any more Final Fours in Indianapolis, and the NFL won't have any more Super Bowls there. And good luck getting young people with talent to keep choosing Indy and NW Indiana as places they want to live in.

But I do think this Final Four is a good spot for equality groups to draw the media's attention to this stupid and hateful law. And if someone asks the UW their thoughts on it, all they have to do is point to this video that they made last year, and a similar video that they played for 80,000 people in Camp Randall every football Saturday. It includes appearances from Athletic Director Barry ALvarez, football's Chris Borland, basketball's Nigel Hayes, and numerous other UW players, coaches and personnel.

Saturday, March 28, 2015

Bucks arena would be straight taxpayer cash, homey

It was hidden through a number of other headlines in the week, but the Wisconsin Legislative Fiscal Bureau released their rundown of how the state's part of funding for a new Bucks arena would work. And some of the answers the LFB gave is quite different than what we've been told.

First of all, there is no specific "jock tax" designated for the arena, as had been characterized by most people previously (including me). Instead, the money borrowed for the arena will simply be paid back through regular General Fund taxes, with the assumption that there will be more of those taxes because the Bucks are still paying big money to its personnel.
No, the proposal would not create a new tax. The "jock tax" refers to the state individual income taxes paid by professional athletes who perform in Wisconsin under current law. Nonresident professional athletes pay taxes on a portion of their compensation for services rendered to the team, based on the share of the individual's "duty days" in Wisconsin relative to his or her total duty days. However, Wisconsin does not tax the wages of individuals who are residents of states with which Wisconsin has an income tax reciprocity agreement (Illinois, Indiana, Kentucky, and Michigan). The state also taxes income earned in Wisconsin by professional entertainers who perform in this state. All income taxes are deposited into the state general fund. None of these provisions would be affected by the budget bill. There would be no specific set-aside of either existing or future taxes from the Milwaukee Bucks or other National Basketball Association (NBA) teams for any purpose.
In fact, the LFB goes on to say that the package is a lot more like the incentives done by local governments to encourage businesses to build or stay in their community, with the Walker Administration arguing that the damage from the potential loss of the Bucks in 2017 is worth the investment of taxpayer dollars.
The rationale advanced by the administration is similar to the arguments used at the local government level in support of using tax incremental financing to pay for infrastructure improvements to support private development. Some have raised a concern that the proposed financing may set a precedent at the state level in that other businesses wishing to improve their facilities or operations may ask the state to subsidize their infrastructure needs using the income tax revenues from their employees to pay for cost of those improvements in exchange for them either retaining or expanding their operations in the state.
Another question that comes up in the LFB's analysis has to do with the Walker Administration's plans to backload much of the payments on the arena's debt, which the LFB says will more than double the ultimate bill that taxpayers shell out.
The bonding scenario outlined...demonstrates that, due to the negative amortization associated with the deferred interest, the total interest costs associated with financing the $220 million would be $268.4 million, including $53.1 million in deferred interest. As a result, under this scenario, the total fiscal effect to the state associated with financing a $220 million grant would be an estimated $488.4 million. The administration's policy decision to structure the proposed bond issue so that the amount of debt service due each year on the bonds would be notionally tied to, or mirror, the additional income taxes results in an amortization schedule that cannot meet the interest due on the bonds in the early years of the transaction and back-end loads the repayment of principal to the later years of the transaction. This results in the bonding transaction having higher overall costs than if the amortization schedule had more uniform annual debt service payments.
There are a couple of alternative schedules floated by the LFB in this paper which includes level payments of $12.7 million over 30 years, which would cost nearly $107 million less in the long run, and a 20-year repayment plan that costs $16.2 million a year, but ultimately saves $167 million over the Walker proposal.

But there's a catch with not going to the Walker plan for borrowing with the arena. The Administration's plan only spends $900,000 in the 2015-17 budget toward the arena, compared to those annual payments of $12.7 million and $16.2 million, respectively. Going with the cheaper long-term plans for the arena will drive up costs in the short term, and as I've mentioned, there are already huge budget constraints and unmet needs- adding these costs would limit things even further.

And if you're thinking that choosing not to pay for the Bucks arena is going to lead to massive savings for the upcoming state budget, that's not quite right. The LFB notes that the Walker budget sets aside over $25 million for debt payments for the arena in 2016-17, but at the same time it expects to give most of that back at the end of the year.
Because there could be principal and interest payments scheduled in 2017-18, the GPR appropriation in 2016-17 ($25,234,500) would be set at a higher level than expected debt service in that year ($2,800,000). Therefore, an estimated $22,434,500 of the appropriated funds would not actually be expended in 2016-17 and would lapse (revert) to the general fund.
So if there was no money sent aside for the Bucks arena in this budget, all that would be saved from the state side is $2.8 million. The real savings comes in the later years (up to $37 million in 2045-46), but the theory is that NBA salaries will keep going up, going beyond the huge ballooning of the salary cap that will hit in the 2016-17 season.

This LFB paper would seem to indicate there is a whole lot of discussion on this issue to come, with financing details to be hammered out, and it may not be able to be resolved by the time the final budget is voted on in May or June. The Bucks still don't have a site and total plan in place as of this time, although the area just north of the arena near the old Park East freeway seems to be the likely spot, with more development associated with it than just the arena. It's at least a step in the right direction so we can see what the whole development is, but these things need to be nailed down fast, because with a tight (okay, deficit-ridden) state budget filled with potential deficits and public unhappiness, using even a few million of regular tax dollars on the Bucks arena project at the expense of needed services is not likely to be looked on favorably.

Vegas on short end of this week's Great Moments in Gambling History

Funny note from Vegas from last night's action in hoops, from the always fun-to-read ESPN Chalk gambling segment. This definitely qualifies high on the list of Great Moments in Gambling History.
Duke guard Quinn Cook made one of two free throws with 0.7 seconds remaining, capping the Blue Devils' 63-57 victory over Utah on Friday in Sweet 16 action in Houston. Duke closed as a 5-point favorite at the majority of sportsbooks, which were rooting for the underdog Utes.

"It caused a million-dollar swing with parlay liability, to the bad," MGM vice president of race and sports Jay Rood told ESPN.

With Duke leading 62-57, Cook rebounded a missed 3-pointer from Utah forward Jordan Loveridge with 10 seconds to play. Utah defenders tried to tie up Cook to force a jump ball, but nothing was called, and it appeared time was going to run out. The Utes started walking off the court. The Blue Devils began celebrating. But officials whistled a foul on Utah guard Brandon Taylor as the horn sounded. The refs went to the monitor and put 0.7 seconds back on the clock, before calling players back onto the floor for Cook's free throws. The senior missed the first one but made the second to give Duke a six-point win.

The favored Blue Devils were a popular public bet. Two hours before tipoff, 82 percent of all bets and 77 percent of the money wagered was on Duke at the William Hill sportsbook. Other books reported similar heavy action on the Blue Devils.
Thursday's Badger game had a similar ending, where the Badgers were 6.5 favorites, but were only up 5 in the last 10 seconds when UNC missed a 3, Frank Kaminsky got fouled, hit both free throws, and then UNC missed a three at the buzzer to give the Badgers a 7 point win, AND THE COVER.

Been a crazy ride for the books this tourney, as they had an incredible opening day of the tourney, but now things have settled back with many favorites not only winning, but covering.

Hopefully that trend of favorites barely covering doesn't hold up today, as Arizona is favored by 1.5 over Bucky in tonight's Elite 8 matchup. Then again, I recall Arizona was a slight favorite going into last year's Elite 8 game with UW, and that ended up OK.



C'mon Bucky, let's do it again!

Friday, March 27, 2015

If GOP leggies want to reduce cuts, where's the money coming from?

So now I see that even the GOP goofballs in the Wisconsin Legislature are signaling that they're going to abandon some of Gov Walker's unnecessary overhauls. This includes plans to keep Senior Care operating as it currently does, as revealed in this story yesterday.
Gov. Scott Walker's proposal to require enrollees in the popular SeniorCare prescription drug program to first sign up for Medicare Part D coverage is dead, the Republican co-chair of the Legislature's budget committee said Thursday.

Walker's idea ran into bipartisan opposition in the Legislature, and the AARP and other groups representing senior citizens strongly disapproved of it. They feared the changes would increase costs for prescription drugs making it difficult for cash-strapped older people to make ends meet....

"I wouldn't say changes are off the table," Nygren, of Marinette, said of SeniorCare. But he said the current structure of the program will be maintained. SeniorCare members whose annual income is less than $18,832 pay $30 per year, as well as co-pays of $5 for generic drugs and $15 for brand name drugs. Costs increase along with a person's income.
Also this month, Assembly Speaker Robbin' Vos and other GOP legislators have indicated that they want to reduce the size of Walker's proposed $300 million in cuts to the UW System. These legislators are starting to understand that they'll have to deal with the consequences of Walker's pose-filled budget, and public blowback and self-preservation are starting to outstrip party loyalty.

There's one problem with the GOP legislators' plans to restore these programs - WHERE ARE THEY GOING TO PAY FOR THIS? If you look at the numbers in Walker's budget, it's held together by a string, even with all the cuts to education and Senior Care and other programs, and with increases in tax revenues of 4.7% next year and 3.8% in 2016-17. I haven't heard those Republicans say anything about raising taxes or even closing any loopholes to raise revenues, so where are those funds going to come from?

Not that I'm really one to help the WisGOPs, but I do have a suggestion if they want to restore some of these funds in order to head off a mass revolt at the polls in 2016. The Wisconsin Budget Project noted that a Walker and WisGOP-supported tax cut for corporations and agribusiness has cost the state much more revenue than anticipated.



The Manufacturing and Agriculture Tax Credit gradually reduces income tax rates for businesses engaged in manufacturing or agriculture. When the credit is fully phased in in fiscal year 2017, many businesses engaged in those activities will not have to pay any state incomes taxes at all, and others will have their income taxes reduced by at least 95%.

The projected cost of virtually eliminating income taxes for manufacturers and agricultural producers has ballooned since lawmakers passed the measure in 2011. This year, the tax cut is slated to reduce taxes for businesses by $152 million, more than twice as much as was originally estimated. Once the tax cut is completely phased in, the credit will cut taxes for business by a whopping $285 million per year, a price tag $156 million higher than originally expected...

Given the poor design of the tax cut and its burgeoning costs, the best thing for lawmakers to do would be to eliminate the tax credit entirely. However, the Legislature’s focus on cutting taxes makes outright repeal unlikely. It would be more politically palatable for lawmakers to compromise by simply halting the phase-in of the credit at the 2014 level. That move would increase state revenues by $226 million over the upcoming two-year budget period, and still give manufacturers a hefty tax cut.
The state's revenue collections for February continue this trend of declining corporate revenues, as they were down 23.2% compared to February 2014, and are now down 9.35% for the fiscal year to-date. A 9.35% decline for the entire fiscal year would leave corporate revenues $60 million below the already-lowered revenue estimates that were in the LFB estimates 2 months ago, and start the state in a lower base, making it even harder to come up with the revenues to reduce Walker's budget cuts.

Regardless of what type of bubble-world Scott Walker and other right-wingers live in, the fact remains that there needs to be some kind of revenues to allow for state agencies to function, and for Wisconsinites to get the services they expect. And barring some kind of unforeseen massive windfall in revenues from tax season (coming from people who hire folks to avoid paying those taxes), there will not be the money available to restore those funding levels under current law. Which sure makes you wonder what other shell game or cuts in other areas can be cooked up by the Legislative GOP to avoid the cuts that their constituents are telling them not to allow.

Wednesday, March 25, 2015

The real damage in Wisconsin- bad wage growth

A lot of attention has been given to Wisconsin's lousy "40th place in the U.S." jobs record that came out as part of last week's release of the Quarterly Census on Employment and Wages (QCEW). And rightfully so, as Scott Walker was elected in 2010 on a promise to improve the state's economy, and is trying to avoid this fact as he talks up his record to out-of-staters as he campaigns for president. But the other element to that report might deserve even more attention, as Wisconsin was even worse when it came to wage growth (42nd in the nation), with average wages barely keeping pace with inflation, and Wisconsin's middle class being hollowed out. And Walker's recent signing of (right-to) work-for-less legislation will only make this trend of lagging Wisconsin wages even worse.

Here are four statistics form the QCEW that illustrate Wisconsin's awful record on wage levels, and its lack of wage growth.

Average private sector weekly wage, Sept 2014
Ill. $982
Minn $971
Mich $881
Ohio $846
Wis. $809
Ind. $797
Iowa $783

Change in avg. weekly private sector wage, Sept 2013-Sept 2014
Iowa +3.87%
Ohio +3.30%
Ill. +3.15%
Minn +2.75%
Mich +2.44%
Ind. +1.79%
Wis. +1.76%

Sure doesn't look like skyrocketing wages were a problem in Wisconsin, were they? Sure makes you wonder if that was a reason why the Legislature and Walker slammed through work-for-less in the rushed manner that they did. Or maybe it was Walker's desperate attempt to curry the favor of the oligarchs at the 21 Club in NYC, since he and the Legislature changed course on work-for-less right after Scotty hung out with them on one of his campaign trips.

This is especially true when you look at Wisconsin manufacturing, which already paid some of the lowest wages in the Midwest, and those wages weren't going up by very much. In fact, these lists might help explain the fictional Wisconsin "wage gap" that greedy business owners constantly harp about, because the problems these places have in finding workers are really a reflection of the better wages that are paid Wisconsin's neighbors in Illinois and Minnesota attracting talent.

Average weekly wage, manufacturing, Sept 2014
Ill. $1,189
Minn $1,167
Mich $1,157
Ind. $1,050
Ohio $1,048
Wis. $994
Iowa $986

Change in avg. weekly manufacturing wage, Sept 2013-Sept 2014
Ill. +4.76%
Ohio +2.85%
Iowa +1.97%
Ind. +1.94%
Minn +1.92%
Wis. +1.84%
Mich +0.35%

Hmm, how's that "work-for-less" thing working out for Michiganders that work in manufacturing? Oh wait, it's working EXACTLY how the greedheads want it to.

Now combine the weak wage growth with the numerous about of corporate tax cuts that have been handed out by Walker and the Wisconsin GOP over the last four years- tax cuts that are leading to higher-than-expected rent-seeking, and exploding budget deficits. Combine that with the weak wage growth, and it tells you that Wisconsin workers were already being ripped off, with the gains from their productivity being redirected to their bosses, even before work-for-less passed.

The result is the speeding up of a bad trend of increasing inequality in Wisconsin since the start of the Bush years, resulting in the Pew Charitable Trusts releasing information this week showing that Wisconsin has lost more people out of its middle class than any state in the nation since 2000. This "middle-class" figure is defined as households that make between 2/3 and 2 times the median household income, and as you can see, despite real median household income dropping, we still saw this large exodus out of the middle class.

Median household income, Wisconsin, 2013 dollars
2000 $60,344
2013 $51,467

% of households with "middle-class" income
2000 54.6%
2013 48.9%

So explain to me how this trend of stagnant wages and higher inequality is going to be reversed by doubling down on the same anti-worker, trickle-down BS that landed us in the mess we stand in today in Wisconsin? Someone should ask that of our fair Governor as he galavants around the country, since he still, you know, pulls a paycheck from us.

Tuesday, March 24, 2015

In politics, Menard's gets a great deal from you!

Isn't it sad that it takes national writers to give the real story about what is going on in Wisconsin during the Age of Fitzwalkerstan? That example was borne out today with this story from Michael Isikoff in Yahoo News, who gave us more information about the source of money that was behind Gov Scott Walker's survival in the recall election of 2012, and why there's a John Doe investigation against Walker and his buddies today.
So a little more than three years ago, when Menard wanted to back Wisconsin Gov. Scott Walker — and help advance his pro-business agenda — he found the perfect way to do so without attracting any attention: He wrote more than $1.5 million in checks to a pro-Walker political advocacy group that pledged to keep its donors secret, three sources directly familiar with the transactions told Yahoo News.

Menard’s previously unreported six-figure contributions to the Wisconsin Club for Growth — a group that spent heavily to defend Walker during a bitter 2012 recall election — seem to have paid off for the businessman and his company. In the past two years, Menard’s company has been awarded up to $1.8 million in special tax credits from a state economic development corporation that Walker chairs, according to state records.

And in his five years in office, Walker’s appointees have sharply scaled back enforcement actions by the state Department of Natural Resources — a top Menard priority. The agency had repeatedly clashed with Menard and his company under previous governors over citations for violating state environmental laws and had levied a $1.7 million fine against Menard personally, as well as his company, for illegally dumping hazardous wastes.
Yes, that $1.8 milllion in "special tax credits" that Menard's got was through the Wisconsin Economic Development Corporation (WEDC). Keep that in mind for later.

Isikoff's article goes on to describe the money-laundering operation that Wisconsin Club for Growth ran for Walker, as well as the oligarchs that chipped in to help the cause, without having to sack up and put their names behind their donations.



Now you can't tell me that the Madison and Milwaukee newspapers that have been covering John Doe and WEDC for 4 years didn't have a clue about this. Which makes you ask "Why didn't they report the story?", and did that reason have to do with the promises of millions of dollars of Scott Walker ad money? (looking at Journal Communications' blowout Fourth Quarter earnings from 2014, I'd say signs point to "YES.")

It also reiterated two other themes I have constantly hit on during this disastrous reign in the Age of Fitzwalkerstan.

1. John Doe 2 at its core is a money-laundering case, with the extra bonus of hiding the names of campaign contributors, which keeps people in the dark when they get kickbacks like WEDC tax credits. That's why Club for Growth is fighting it so hard- because any charges and trials that come from it would reveal the money train, and expose the cycle of "campaign donation- tax cut- additional donations" that have helped to increase inequality in this country over the last 35 years.

2. WEDC is an absolute mess, both ethically and in competence of operations. Yes, those paying attention knew that already, but Walker made an incredible statement to the Journal-Sentinel today on the subject (in a story that's conveniently buried in their news feed and off the front page).
In 2013 and 2014, the Wisconsin Economic Development Corp. chaired by Walker awarded Menard's namesake chain of hardware stores up to $1.8 million in tax credits. The governor and his aides responded that he had not been directly involved in those awards.

"I haven't engaged in any of that and there's going to be lots of stories going forward," Walker told a reporter after a meeting of the state Building Commission.
Walker's spokesmodel also is quoted in the Isikoff article claiming that the donation to Club for Growth and the resulting tax cuts were total coincidence. The problem with those statements is that Walker is THE CHAIR OF THE WEDC BOARD and has been since it started in 2011. How the hell wouldn't he know about what he was approving of as the head of the group that signed off on those tax credits. And not having a clue what's going on under your nose really isn't an attractive attribute for someone asking to be president, isn't it?

By the way, WEDC is still literally throwing millions of taxpayer money away without having a clue where it went or what it was ultimately used for, as we saw again last month.
Assembly Minority Leader Peter Barca, D-Kenosha, issued a letter Thursday urging the Wisconsin Economic Development Corp. to hire an acting chief financial officer after previous CFO Stephanie Walker left in January. She was the organization’s fourth CFO since its creation less than four years ago.

Barca said the hire is critical because WEDC has had problems tracking state loans and grants. A May 2013 audit found the quasi-public agency was not following state law in how it was keeping tabs on millions of dollars in taxpayer subsidies, and earlier this week the Milwaukee Journal Sentinel reported that the agency continues to have difficulties despite assurances that the problem had been addressed.
Hmm, untraceable donations to Walker turn into unaccountable millions handed out to Walker donors corporations through WEDC. And as Isikoff's story from today shows, WEDC is still proving to be a nice source for Walker contributors to see some return on their investment, which makes me wonder just how much info is in the unreleased parts of the John Doe investigation that will be discussed before the Wisconsin Supreme Court next month.

Not that I expect the paid-off Wisconsin media to draw these connections too deeply, but maybe Isikoff's article is a sign that the national media will ask the questions that have gone dormant far too long, and perhaps we will see pay-for-play corruption brought into the light that we previously only saw from Illinois (once upon the time, we took pride in our politics being cleaner than what those FIBs did). And if Walker's presidential run starts faltering as the state's economy and budget has faltered, is it possible that some big-name GOPs might throw Scotty overboard before he destroys the GOP on the national ticket in 2016.

Monday, March 23, 2015

A strong dollar and lower rates? Not all that good

A couple of good articles on Econbrowser I want to point you toward from recent days dealing with the always-nerdy but often-important issue of foreign exchange and interest rates.

The first is from UW Professor Menzie Chinn, who talks about the strengthening of the US Dollar over the last 8 months, and why that may not be as good for the economy as that connotation sounds.
The US trade deficit has shrunk considerably since its peak of 5.9% of GDP in 2005Q4. It was 3.1% of GDP as of 2014Q4 (second release). The non-oil trade deficit has exhibited a much smaller decrease; the 3.8% deficit has shrunk to 2.1% as of last quarter. Notice that the real value of the dollar, lagged two years, has an inverse relationship with the trade balance. Hence, eventually, it makes sense that the deficit will eventually deteriorate (relative to counterfactual) as a consequence of the recent appreciation....

As in previous instances, I rely on statistical models of trade flows, taking into account at a superficial level vertical specialization and heterogeneity. Imports depend on domestic GDP and the real value of the currency; exports depend on foreign economic activity and the real value of the currency. Since oil imports and agricultural exports are primarily denominated in dollars, I omit these flows from the calculations. In this paper, I find the long run (in a statistical sense) elasticity of nonagricultural exports of goods with respect to the real exchange rate is 0.690 (Table 2), and nonpetroleum imports of goods elasticity is 0.446 (Table 3). These estimates are obtained using dynamic OLS (DOLS), following Stock and Watson (1993). Assuming the 20% appreciation is sustained, then exports are about 13.8% lower than they otherwise would be, and imports about 8.9% higher.

Given that nonagricultural exports are 1349 billion Chained 2009$ (SAAR), and nonpetroleum imports are 1976 billion Chained 2009$ in 2014Q4, then such changes would be equivalent to 174 and 184 bn Ch.09$ at annual rates. This implies about a 2% decrease in the level of real GDP, relative to what it otherwise would be (assuming a multiplier of unity). Obviously, the impact of the 20% appreciation would take some time to affect flows, so the impact on GDP growth would be relatively small per quarter.
Simply put, the stronger dollar makes imports cheaper, which encourages more of them to come in, and lowers exports for US businesses. We may already be seeing some of that, as January 2015 had a drop of $3.7 billion in exports compared to January 2014, with very little change in overall imports to offset it. To boot, those exports figures were down $5.5 billion (around 4%) on a seasonally-adjusted basis from December 2014. That may be just a one-month blip, but with the dollar staying strong through the middle of March, lets see if February holds up with that trend.

Also on Econbrowser is James Hamilton from UC-San Diego, and he mentions last week's meeting of the Federal Reserve, which cheered markets by seeming to take a wait-and-see approach on raising interest rates off of its current near-zero level.
It’s also worth noting that the median FOMC “longer run” interest rate prediction came out at 3.75% from both the December and the March meetings, though the distribution of the individual “dots” from the latter has clearly drifted down. With a long-run inflation objective of 2%, that implies an equilibrium real interest rate of 1.5-1.75%. Compare that to the yield on a 10-year Treasury inflation-protected security that is now below 20 basis points.

All of which raises the question: does the Fed know something the market doesn’t, or vice versa? Tim Duy concludes “it is now clear the bond market is not moving toward the Fed; the Fed is moving toward the bond market.” But my answer to the question is: a little of both. Based on the historical evidence reviewed here I think it’s reasonable to expect an equilibrium real rate significantly above 0.2% and significantly below 1.5%. But given my own (and everyone else’s) uncertainty about exactly where the number is within that range, it makes sense for the Fed to wait a little longer before raising rates.

And as Menzie pointed out last week, international developments are leaving the Fed little choice. One important channel by which monetary policy can influence the Fed’s targets for output and inflation is through the exchange rate. A higher interest rate in the U.S. than in other countries means a stronger dollar. That makes it harder for the U.S. to export goods and makes imports more attractive, both of which mean a drag on U.S. GDP. And insofar as a stronger dollar means a lower dollar price for internationally traded commodities, it also takes us farther below the Fed’s 2% inflation target. When other countries are lowering their interest rates, that by itself tends to bring down U.S. output and inflation, and mitigates any argument for raising U.S. interest rates.
And note that the yield on the 10-year note has been diving over the last 2 1/2 weeks.

10-year T-bond closing yield
March 6 2.24%
March 23 1.91%

We're now closer to the low of 1.67% that we saw on Feb. 2 than the 2.24% high of March 6. But the strong dollar would indicate that interest rates should go up (because it makes foreign investors less likely to buy our more expensive debt). So does that mean the dollar goes down to match the lower interest rates, or the dollar stays strong, and rates eventually slide up? Or is there a third option, that shows that the economy is slowing down and that there's more slack in the labor market than the Fed originally thought, so they have to keep things low and keep the cocaine party on Wall Street rolling.

I think we're going to find out pretty soon, but there's been an odd push and pull in the currency and debt markets in recent weeks.