Monday, March 27, 2006

Bought Any Steel Lately?

If you have, you probably have noticed that the cost has risen 23% in the last year alone—that’s to go along with similar increases in the cost of other related major construction materials.

If you haven’t, then you’re like every other consumer in Wisconsin.

Steel, of course, is not among the items in the normal “basket of goods” purchased by consumers in this state or any other one, which is what determines the consumer price index. To be sure, it’s unlikely you’d ever hear the line: “Honey, could you please remember to stop and pick-up some steel on your way home from work today?”

But for governments, steel is among the materials necessary for new construction, particularly involving transportation infrastructure. Anyone who has driven through the Marquette Interchange in Milwaukee recently can attest to that.

The problem with sharp increases in the cost of construction materials like steel not being included in the consumer price index is that the proposed constitutional amendment to restrict public revenue in Wisconsin uses the rate of inflation to limit the growth of government. It’s a situation of comparing apples to oranges, but the state Republican proponents of the amendment don’t seem to care much.

According to the estimates some conservatives are tossing out, the government would be allowed to increase at an annual rate of 4% under the amendment. Construction costs--which are increasing at annual rates higher than 20%--would alone do governments in under the amendment’s strict growth formula, although they are not the only costs that deviate from the inflation rate.

I wonder how Wisconsin Manufacturers and Commerce would react to the requirement that all of its construction company members limit the increase in their prices to 4% per year. I mean, the thought alone smacks of commie pinko socialism, does it not?


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