Nov 20, 2010

Stuck in Low Gear: Job creation languishes as recession lingers

The economic recession in Pennsylvania leveled off last spring, but results of the Fall 2010 Keystone Business Climate Survey reveal the recovery has not yet begun. The drop in sales that plagued Pennsylvania businesses through 2009 and into early 2010 has slowed, however employers continue to shed jobs as they try to minimize losses and perhaps turn a profit.

One year ago the survey found owners and chief executive officers in a dour mood over the state's business climate. At that time a record 64% said they felt business conditions in Pennsylvania had gotten worse in the previous six months. The spring 2010 survey found some improvement with 43% saying they viewed the economy has having gotten worse. There was no change in the recently completed October 2010 survey with 43% again saying business conditions in the commonwealth had deteriorated over the past six months.

The number of owner/CEOs saying the state's economy has improved over the past six months increased slightly from 13% last spring to 17% in the fall survey. That is also an improvement from one year ago when just 1% viewed the economy as improving. Forty percent in the Fall 2010 survey said they viewed the state's economy as having remained about the same over the past six months.

Looking ahead, 38% expect the state's economy to remain about the same over the coming six months, 34% forecast a continuing decline in economic conditions, while 27% expect the Pennsylvania economy to improve.

The bad numbers come in the area of employment. Twenty-nine percent report that employment levels at their company are lower than they were six months ago. Last October, 25% of the companies reported declining employment. The good news is that 17% percent in the current survey say employment levels at their company have increased, that is up from the 11% that reported increasing employment levels a year ago. Fifty-three percent say employment levels in October remained at about the same level as they were last March.

Pennsylvania likely will have to deal with stubbornly high unemployment for the immediate future. Over the coming six months employers project essentially the status quo in the number of people they employ. Sixty-four percent say they plan to keep employment at the current level for the next six months, 18% forecast a decline in employment while 18% expect to add employees.

The bright spot, to the degree there is one, comes in the area of sales. In March of this year 52% of the companies surveyed by the Lincoln Institute reported sales had declined over the previous six months. That number dropped to 40% in the October survey. The companies reporting sales increases rose from 21% last spring to 25% in the current poll. Thirty-five percent of the companies said their sales remained constant throughout the year.

As we look ahead to the coming six months, 32% say they expect sales at their company to increase, while 20% forecast a decline. A plurality, 46% say they expect sales to remain level.

Pennsylvania's generally poor business climate relative to other states has prompted a number of companies to consider moving from the commonwealth. Fourteen percent say they are considering moving at least some of their operations to other states, while 3% say they are considering moving all of the Pennsylvania operations elsewhere.

Job Approval Ratings

Elected officials generally speaking got negative job performance reviews by the business owners and CEOs surveyed by the Lincoln Institute. U.S. Senator Arlen Specter, who was defeated for in the May Primary by Congressman Joe Sestak received the highest negative rating at 78% and only 12% giving him a positive review.

President Barack Obama and his economic team also were given poor job performance reviews. Seventy-four percent have a negative view of the President's job performance with 20% expressing approval. Sixty percent disapprove of the job being done by U.S. Treasury Secretary Timothy Geithner Forty-five percent held a negative view of Federal Reserve Chairman Ben Bernanke relative to the 32% who have him a positive rating.

On the state level, Governor Ed Rendell also is held in minimal regard. Seventy-four percent expressed a negative view of the governor's job performance with just 18% giving him positive marks. Sixty-two percent gave negative ratings to U.S. Senator Robert P. Casey, Jr. The only statewide elected official to receive a majority positive job performance rating was Attorney General Tom Corbett, who chalked up a 58% positive rating against a 19% negative rating. Auditor General Jack Wagner earned a 21% positive rating and a 17% negative rating, with 62% holding no opinion. Sixty-seven percent voiced no opinion on the job being done by State Treasurer Rob McCord, with 11% giving him a positive job performance rating and 22% a negative rating.

Legislative bodies also are viewed in a negative light by Pennsylvania employers. Ninety percent hold a negative view of the job being done by both the U.S. Senate and the U.S. House of Representatives. Seventy-seven percent hold a negative view of the Pennsylvania House of Representatives and 72% voiced a negative view of the job being done by the Pennsylvania state Senate.

National Issues

President Barack Obama's proposal to stimulate the U.S. economy by spending $50 billion on infrastructure improvement projects such as highways, airports and railways was opposed by a two-to-one margin by the employers and CEOs who participated in the Fall 2010 Keystone Business Climate Survey. Sixty-one percent said they oppose the stimulus plan while 38% offered support. If, as suggested by many Democrats in congress, projects implemented under the proposed stimulus were subjected to project labor agreements (PLAs), meaning only unionized labor could be used on the projects, then opposition to the program skyrocketed to 89% and approval dropped to 9%.

On the subject of the Bush-era tax cuts which are set to expire at the end of this year, 68% said they favor extending all of the tax cuts while 21% want to extend the tax cuts for those making $250,000 per year or less and 9% do not want to see any of the tax cuts extended.

State Issues

Conventional wisdom holds that roads and bridges in Pennsylvania are in such bad shape that they constitute a transportation crisis. Results of the Lincoln Institute's poll of business owners and CEOs found less of a sense of urgency. Forty percent rated the condition of the state's roads and bridges as poor, but 43% rated them as fair. Fifteen percent say the roads and bridges are in terrible shape, while 1% say road and bridge conditions are excellent.

Sixty-eight percent say they are not willing to pay higher gasoline taxes to fund improvements to Pennsylvania's roads and bridges, while 27% say they would pay higher gasoline taxes. Thirty-eight percent expressed a willingness to pay higher vehicle and/or driver license registration fees, but 60% objected to higher fees.

Among the options being considered to raise tax revenue are additional taxes on companies drilling in the Marcellus shale reserve. Fifty-two percent said they would agree with a severance tax on gas drilled in the Marcellus reserve, while 45% opposed such a tax.

Education funding remains one of the largest expenditures in the Pennsylvania state budget each year. A plurality of 34% of the employer/CEOs polled say spending on K-12 public education in Pennsylvania is at about the right level; 25% think spending is too low and 24% think it is too high.

And what are we getting for the money we spend on public education? Forty-six percent say despite the additional spending the quality of K-12 education in the commonwealth has remained about the same over the past five years; 30% say it has gotten worse and 14% say the quality of public education has improved. When asked to give K-12 public education a letter grade, 10% assigned it an "A," 35% a "B," 26% a "C," 16% a "D," and 6% an "F."

When asked if they think it is possible for the next governor of Pennsylvania to balance the state budget without raising taxes, 75% said they think that it can be balanced without new/additional revenue, while 22% think it cannot. Further, the employer/CEOs polled believe the level of spending by state government has an impact on the Pennsylvania business climate. Fifty-eight percent said state spending has a significant effect on the state's business climate; 30% say it has a moderate effect, while 9% think it has no impact.

General Economic Climate

Among the difficulties businesses face in expanding and creating new jobs is access to credit. Forty-three percent of the respondents to the Fall 2010 Keystone Business Climate Survey said access to credit has gotten more difficult over the past six months. Only foour percent said they found getting credit to be easier; and 37% said access to credit has remained about the same. Another 13% said they do not access credit.

Cutting jobs and hours has been a key tactic for many businesses in dealing with the effects of the economic recession. Fifty-one percent said they have had to reduce employees work hours while 42% say they have laid-off employees. Changes in pricing have also played a role in coping with the effects of the bad economy. Thirty-seven percent said they have cut prices, 29% increased prices. Another 14% have reduced their product lines while 7% have closed or consolidated facilities.


Ninety-four percent of the business owner/CEOs participating in the Lincoln Institute poll say they plan to vote in the upcoming November General Election. In the race for the U.S. Senate, 68% say they plan to vote for Republican Pat Toomey while 15% expect to cast their ballots for Democrat Joe Sestak. Republican Tom Corbett is the choice of 70% of the respondents for governor of Pennsylvania, while 13% say they will vote for Democrat Dan Onorato.


The 2010 Keystone Business Climate Survey was conducted electronically by the Lincoln Institute of Public Opinion Research, Inc. from September 27, 2010 thru October 18, 2010. A total of 181 individuals participated in the poll of which 67% were the owner of the business, 23% were the Chief Executive Officer and the balance the state or local manager of the business. Complete numeric results are available at

Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His email address is

Nov 6, 2010

Paterno Wins 400 Hundred! Penn State Defeats Northwestern 35-21

Wow what a week this has been here in the Commonwealth Pennsylvania! First Pennsylvania republicans win big on Tuesday winning the Governor's race, an open US Senate seat, the state house, and end up flipping four Congressional seats. Now today the people of Pennsylvania can celebrate another major victory with Penn State Coach Joe Paterno. Penn State defeated Northwestern today 35-21 to notch JoePa's 400th victory. Unbelievable!

Coach Paterno won his 400th game today with class. His team overcame a 21 point deficit to become the first Division I coach ever to hit the 400-win plateau! (A couple non-DI coaches have also done it.) The Penn State legend reacted after the game with his typical modesty, saying it was just another win, but with his wife, Sue Paterno, by his side and the Nittany Lion faithful going nuts, you know that couldn’t be true!

400 victories by Coach Joe Paterno officially cements his legacy as the greatest football coach of all time at any level. The magnitude of this accomplishment combined with the number of lives he has molded over years is simply too great to not place him at the top of any coaching list.

I remember watching the 1986 National Championship game against Miami when I was 10. Penn State's classic victory inspired me to always want to play football for Coach Paterno and Penn State someday. That was always my dream. I wasn't good enough to play at Penn State, but Coach Joe Paterno still had a big impact on my life.

The story of Coach Paterno reminds us how great America truly is. As Joe would say, It's time to "Turn the boys into men"! It is time to stop looking back and time to focus on what is ahead of us. We need new leaders in the mold of Joe Paterno that inspire us to accomplish more than we ever imagined. That believe in us more than we believe in ourselves! Let's all focus on our next victory and turn America around!

Coach Paterno is the father of Pennsylvania football. Paterno's steady, conservative approach to the game and life has lasted the test of time. Congratulations Coach Paterno! Republicans win and JoePa gets his 400th victory now the country is finally moving in the right direction.

Joe Paterno - 400 Wins Tribute Video

More Links: As the times change, Paterno remains true to his values (Philadelphia Inquirer)

Paterno's 400th victory comes in dramatic fashion (Pittsburgh Tribune-Review)

Paterno records 400th win as Penn State beats Northwestern (Pittsburgh Post-Gazette)

Penn State rallies to win No. 400 for Paterno (Allentown Morning Call)

America's Forensic Election

Guest Column by G. Terry Madonna & Michael L. Young

Regular elections determine who represents us in our representative democracy. But some exceptional elections do much more. These “forensic elections”—for that’s what they are—hold an electoral stethoscope against our body politic, gauge our civic vital signs, and offer both diagnosis and prognosis for any political malaise we may be experiencing.

We had a forensic election on November 2nd. And the lessons it taught about contemporary American politics promise to resonate loudly over the next two years in the run-up to the 2012 election.

Here’s our short list of five of them whose shelf life easily reaches November 2012.

1. The Economy Is THE Issue: Bush got it too late. Obama didn’t get it at all. And so voters in 2010 found themselves again sending a message they thought had been sent before: fix the economy and produce jobs.

The primacy of the economic issue in recent times is perhaps unrivalled in its intensity. Not surprisingly, candidates this year focused almost exclusively on the economy and jobs, suggesting that the political establishment has gotten the message at last.

Nevertheless, how the new Congress and the president approach the jobs issue—and their success in handling it—is likely more than any other factor to determine the outcome of the 2012 presidential election. Voters expect action on job development. And if they don’t get it, the voter wrath of 2010 will become the voter rage of 2012.

2. “Change” Has Become the Unchanging Impulse in American Politics: This is now the third consecutive election in which voters rejected the status quo. These three “wave” elections have all been about change. First, in 2006, it was opposition to the Iraq war. Then, in 2008, anxiety about the economy produced a second wave. Finally, in 2010, came a stunning rejection of Obama’s recession policies.

This is no passing phase in our politics. For almost a decade, voters consistently have indicated that the country has been moving in the wrong direction. Currently two thirds of the nation holds that view. Moreover, voters overwhelmingly give unfavorable job evaluations to Congress, the president, and the political parties. Voters want change in Washington. This change motif has become the political zeitgeist of our times.

3. The “Politics of Subtraction” Is Real and Lasting: Explosive federal spending under both Bush and Obama has crystallized political opposition to larger deficits and increased spending. The Tea Party movement is grounded in the notion of cutting spending and reducing the role of government, and a solid plurality of ordinary Americans agree. In poll after poll over the past two years, reducing the federal deficit and paring down national debt have consistently ranked among the top five problems facing the nation.

The politics of subtraction inevitably will produce that perfect storm of political pain: the need to raise taxes while reducing benefits. Congress is likely to confront that nasty reality when it tackles the emerging Medicare and Social Security crisis.

4. The Center Continues to Disappear from American Politics: Moderates or centrists have become about as trendy in American politics as pegged pants and hula-hoops. To compromise may be human, but to polarize has become divine.

This election has materially accelerated the trend to obliterate centrist influence in Congress. For Democrats, the loss on Tuesday of many of the 54 mostly moderate “Blue Dog” Democrats, along with retirees, will leave their party even more sharply liberal. On the GOP side, the addition of Tea Party Republicans will make the congressional Republicans ever more conservative.

Moderates and centrists are increasingly missing from both parties. This lack of a middle in American politics makes agreement on critical issues, such as entitlement reform and tax policy, difficult if not impossible. Incredibly, another shut down of the federal government such as happened in 1995 cannot be ruled out.

5. Divided Government Becomes Deadlocked Government: Washington next January will be described in many ways. One appellation that will not be applied, however, is “one big happy family.” At least not unless one thinks of the Hatfields and McCoys that way. The Congress that convenes in January will be one of the most unruly, polarized, and politicized Congresses in modern history.

Congressional Republicans will be pulled to the right even more by Tea Party activists who have already warned party leaders that compromise on spending, taxes, and regulation will not be tolerated. On the Democratic side of the aisle will be a solid phalanx of liberal Democrats that have been carping for months that Obama surrendered the liberal agenda by not pushing vigorously all of his 2008 reform promises.

The practical consequence is likely to be ever increasing incivility amid legislative deadlock on almost every important issue, putting in doubt the future of the Obama presidency and his ambitious agenda.

Closing the books on 2010, we move from one critical election to the next critical election in 2012. Indeed, since at least 2002 we have had a series of these pivotal elections. Nor does it seem we are done with them. Beyond doubt, we are in the midst of a turbulent transition in national politics as we move from the relative stability of the late 20th century to the relative instability of the early 21st.

Meanwhile the 2012 presidential election looms, an election that seems more and more likely to be remembered as one of the defining elections in American history.

Politically Uncorrected™ is published twice monthly, and previous columns can be viewed at Copyright © 2010 Terry Madonna and Michael Young.

Nov 3, 2010

Pennsylvania: The newest red state

Pennsylvania no longer has the blues.

After trending Democratic in the 2006 and 2008 election cycles, Republicans stormed back in a big way on Election Day 2010.

The Republican tide that swept across the nation Tuesday included Pennsylvania, where Republicans made significant gains at all levels of government.

Let's take a look at how the political landscape changed overnight in Pennsylvania: A Republican replaces Ed Rendell as governor; a Republican replaces Democrat Arlen Specter in the U.S. Senate; Republicans ousted five Congressional Democrats and held all current Congressional seats; Republicans held control of the Pennsylvania Senate by a 30-20 margin and Republicans regained control of the Pennsylvania House of Representatives with a solid majority of at least 110 seats in the 203-seat body.

A Republican will move into governor's mansion with Attorney General Tom Corbett defeating Ed Rendell-clone Dan Onorato. Republican Pat Toomey defeated liberal Joe Sestak for the U.S. Senate seat being vacated by Arlen Specter.

Pennsylvania voters tossed out five incumbent Democratic members of Congress from Pennsylvania, helping the GOP retake control of the House in Washington, D.C. Republicans will hold 12 of Pennsylvania's 19 Congressional seats come January.

Among Election Night highlights from Pennsylvania: Hazleton Mayor Lou Barletta defeated 26-year career politician Paul Kanjorski and Republican Pat Meehan beat Democrat Bryan Lentz in the race for the Congressional seat being vacated by Sestak.

All of this took place in Ed Rendell's back yard in a state where Obama and his minions campaigned heavily for incumbent Democrats.

The message sent by Pennsylvania voters Tuesday was loud and clear: The Democrats agenda of deficit spending and higher taxes has to stop.

Nov 2, 2010

Election Day Predictions: Nationally, GOP Trounces Democrats

After today's election Pennsylvania will no longer be considered a "Blue State" on the nation's political landscape. In all of my time covering politics, I have to say that the results of today's election are the easiest outcomes to predict in our nation's history. Yes folks today is going to be a monumentous GOP party landslide for sure.

This is contrary to various polling firms and national media personalities who seem to be desperately trying to convince the American People that various races around the country are tightening. There is no doubt that the American People are angry and this political reality will become apparent in today's elections results. Obviousley, President Obama and the Congressional Democrats overreached after taking control of Washington in 2008. Liberal Democrats pushed through their agenda from the perspective that only they know what is best for the American People instead of reaching out to republicans and listening to the concerns of their constituents. This by far was their fatal mistake and their group think/narcissistic approach to governing will cost them tremendously today.

I predict nationally that Republicans will gain close to 70 seats in the House of Representatives and come within 2 seats of taking over the majority in the Senate. I believe that there is a hidden 5% support for Republican candidates not being reported in various polls when you take in consideration the way specific voting demographics are breaking for republican candidates. Look at the number of independents in various polls who now identify themselves as conservative who have been influenced the most by the Tea Party movement. America's business calls made up of both democratic and republican voters and who have been negatively impacted the most by President Obama's failed economic policies are breaking hard for GOP candidates.

With these factors in play there is no doubt the GOP wave is coming. You also have to consider that democratic voters who voted for Hillary Clinton in the Democratic Presidential Primary election are more likely to vote for the GOP candidate or simply stay home and sit out the election. So any race that shows a Republican down by five percentage points among likely voters has a high probability to be actually a win for republicans

Pennsylvania Election Predictions:

Pennsylvania Governor Race: Corbett 54, Onorato 46
Result: Corbett 54.5, Onorato 45.5

Pennsylvania Sentate Race: Toomey 53, Sestak 47
Result: Toomey 51, Sestak 49

Congressional District 3: Kathleen Dahlkemper (D) 48, Mike Kelly (R) 50
Result: Kathleen Dahlkemper (D) 44.6, Mike Kelly (R) 55.4

Congressional District 4: Jason Altmire (D) 49.6, Keith J. Rothfus (R) 50.4
Result: Jason Altmire (D) 50.9.6, Keith J. Rothfus (R) 49.1

Congressional District 6: Jim Gerlach (R) 55, Manan Trivedi (D) 45
Result: Jim Gerlach (R) 57, Manan Trivedi (D) 43

Congressional District 7: Patrick L. Meehan (R) 52, Bryan Lentz (D) 48
Result: Patrick L. Meehan (R) 55, Bryan Lentz (D) 43.9

Congressional District 8: Patrick J. Murphy (D) 49, Michael G. Fitzpatrick (R) 51
Result: Patrick J. Murphy (D) 46.3, Michael G. Fitzpatrick (R) 53.7

Congressional District 10: Chris Carney (D) 48.5, Tom Marino (R) 49.9
Result: Chris Carney (D) 44.9, Tom Marino (R) 55.1

Congressional District 11: Paul E. Kanjorski (D) 48.4, Louis J. Barletta (R) 51.6
Result: Paul E. Kanjorski (D) 45.5, Louis J. Barletta (R) 54.6

Congressional District 12: Mark Critz (D) 51, Tim Burns (R) 49
Result: Mark Critz (D) 50.8, Tim Burns (R) 49.2

Congressional District 13: Allyson Schwartz (D) 49, Dee Adcock (R) 51
Result: Allyson Schwartz (D) 56.4, Dee Adcock (R) 43.6

Congressional District 15: Charlie Dent (R) 53, John Callahan (D) 47
Result: Charlie Dent (R) 53.5, John Callahan (D) 39

Also Republicans will win back control of the state house by gaining 7 to 9 seats