Category: Economy

My sig line, which I’ve displayed not-so-proudly for the past year is “Another day, another devalued dollar.”  It seemed appropriate at the time I decided to place it above my name in each blog comment I make, but it seems more and more appropriate with each passing day.  

Not only is our economy now in a recession, not only are home foreclosures at an all time high as well as new home sales at an all time low, not only are lending establishments NOT lending money unless people put up their first born along with some other serious collateral, but the latest bad financial news about our banking industry here in the US may have us wondering about the safety of the money you have deposited at your own bank!

This from CNN:

In the past year there have been four bank failures.

And the chairman of the Federal Deposit Insurance Corp and banking industry experts foresee many bank failures down the road.

“Regulators are bracing for 100-200 bank failures over the next 12-24 months,” says Jaret Seiberg, an analyst with the financial services firm, the Stanford Group.

Expected loan losses, the deteriorating housing market and the credit squeeze are blamed for the drop in bank profits.

The problem areas will be concentrated in the Rust Belt, in places like Ohio and Michigan and other states like California, Florida and Georgia.

The number of institutions categorized as “problem” institutions by the FDIC has also grown from 50 at the end of 2006 to 76 at the end of last year.

YIKES!  Ever since Bu$hCo was installed into the American Government by the Supreme Court in 2000, for America and Americans, if it wasn’t for bad luck, we wouldn’t have any luck at all.

John and Elizabeth Edwards may not be on the 2008 presidential campaign anymore, but they are on a different campaign: making connections between the costs of the Iraq war and our weak economy.  

Elizabeth Edwards, who is good about making constructive criticism of the media, observed that reporters

“certainly don’t cover the connection between the issues,” she said the American people see there is “undoubtedly a connection between oil, the costs of transportation in this country, and this war.”

(source: Will Thomas, HuffPo)

Thus, a new cause to spotlight, and the Edwardses are back fighting for the American people.

More under the fold…

Archival posting of One America Comittee blog

BruceMcF in Arguments & Analyses, 7/06/2006 at 7:15 AM EST

This last Sunday, I was reading the local paper, and was surprised to “learn” that the proposed rise in the Minimum Wage would cost the Buckeye State 12,000 jobs.

The source was a study from the “Employment Policies Institute”. I do not know their story, but they appear to be opponents of minimum wage increases.

And then I looked into the details. And when I looked into the details, it turned out that the formal and professional looking report was built on a foundation of sand.

Pic: Strategy: Get the Employment Impacts in Fast Food wrong, then apply statewide

(NB. This is not the image from original OAC posting)

Archive post from OAC blog, shutting down today

BruceMcF in Arguments & Analyses Feed of

8/17/2006 at 9:24 AM EST

(Original picture: Graduation at Maysville Community and Technical College,

no idea where this one is from)

There are two sides to public funding of tertiary education. One is education as a requirement for career opportunities. To the extent that education is required for entry into “good” careers, then our American ideals demand public funding of those without the means to go proceed with tertiary education on their own. Otherwise higher education becomes a means of establishing a permanent class system, and ends the dream of a land of opportunity.

This diary is not about that aspect of public funding to tertiary education. It is about the other aspect: education as a tool of economic development.

I am proposing a system here to identify skills that we need to develop sustainable competitive advantages, and then to help fund the education of most qualified candidates for those programs.

When I refer to it as the Tertiary Education Contribution System, I am making three references. First is a reference to the Australian HECS (H is for Higher) system, from which I borrow freely (but not entirely). Second is a reference to the Student Contribution portion of the program. Third is a reference to the Contribution that the successful students will make to their Nation’s Economic Independence.

Archived from the OAC Blog, shutting down today

BruceMcF in Arguments & Analyses

4/18/2006 at 1:13 PM EST

Why are the experts wrong so often about the impact of “free trade”?

What is wrong with “fair trade” agreements?  Why is it that the North American Free Trade Agreement (NAFTA) was sold as a job creator but turned out to be a destroyer of jobs both North and South of the border?

Its very simple.  The arguments for these so-called “free trade” agreements are about how the agreements work in a make-believe world.  The make-believe world is different from the real world in very important ways.  So when set loose in the real world, the predictions turn out to be false.

Why should ordinary people care about “fair trade”?

The thing is, there is a lot to like about that make-believe world.  If we could move the real world closer to the make-believe, it would benefit America.  And that’s what I call a fair-trade agreement — a system that tries to actually deliver the benefits that so-called “free trade” agreements can never deliver.

Hey all,

Wanted to post this random thought. I read zwoof’s diary about living in China and it made me think of my job.

I am a Dog Obedience Instructor at Petsmart and I own 3 cats. Many of you may remember the pet food recall awhile ago, the more recent lead in toys and the date rape drug in kids toys , all from products made in China. I am not really going to go into whether it is bad or good to import so much stuff from China etc. but what I am going to talk about is the little bit I do to help US companies in my store.

When it is slow at work, I read labels, I read labels on new dog toys, read food labels. I find out what products are made where. If they are made in the USA I promote them. I have a fair percentage of people who ask me if there are products made in the USA. Even when they do not ask, I tell them anyway. We got a new line of dog toys made by a company called GoDog..You can see them here. They are guaranteed for life, have new “Chew Guard Technology” and from what I can tell are made in the USA. I recommend them to all the customers at the store who are in the market for new soft chew toys. Everyone is willing to try them especially when you say  “They are made in the USA.” So to anyone out there who works retail, you CAN make a small but over time an exponentially huge difference to small companies in the US. Customers are always looking for new things to try, they WANT to shop MADE IN THE USA, but very few read all the labels. I think too it is depressing to read label after label that says “Made in China” etc.  So use your position to make recommendations of products that are made here. The more we sell, the more they can make.

Chaos

I live in rural Columbia County, New York.  Columbia County is about 25 miles SE of Albany, New York, in the Hudson Valley.  It abuts Berkshire County, Massachusetts.  And it’s really beautiful.  It’s also experiencing the same recession as the rest of the country.

The current recession has already thrown the real estate market into a deep freeze, so that home sales are very, very slow.  Fortunately, there have not been a huge number of subprime mortgage foreclosures, though there have been a few.  Gasoline is down to $3.21/gallon today.  Heating oil is $3.389/gallon.  There was an announcement last week that the state was going to close the Hudson Correctional Facility, the second largest employer in the county, within a year.  The Correctional Facility employs 277 workers.  Local politicians of all stripes are fighting the proposal; I’m not optimistic that those jobs will be spared.  Most likely, the jobs will be moved away.

Two decades ago Columbia County used to be filled with dairy farms.  Those farms disappeared during Reagan’s dairy farm liquidations.  There are few dairy farms left.  This has resulted in huge herds of deer, which browse land that was formerly pasture, and a large growth of second homes for people from New York City, New Jersey, Long Island, and Boston (all about 2 hours away).  Two decades ago Columbia County had factories.  Now there are very few.  Mostly, the county is filled with rural, second homes, people who provide services, or telecommute, or commute to Albany, or to Hudson.  There is no Starbucks in Columbia County.  There is a Wal-mart.  There is no Home Depot or Lowes.  There is no large mall though one is planned.  There is a lovely, new food coop in Chatham.  There are many restaurants. There is theater, and an excellent film festival, and art and sculpture.  There are amazing, organic farms.  But I digress.

Who cares who won the Democratic beauty contest in Florida?  Well, Clinton supporters, of course. What the returns indicate is that if there had been no campaign anywhere in the country, Hillary Clinton would have won easily.  But we knew that. (That’s why we have campaigns, and not just polls.)

Here’s the worst news:

From the WashPost blog, The Trail:

Early network exit polls out of Florida show the economy is the breakaway issue, with nearly half of GOP voters and more than half of Democrats calling it the nation’s top concern…  

Among Republicans:

Top issue: economy 47%, terrorism 19%, immigration 17%, Iraq 13%

Among Democrats:

Top issue: economy 55%, Iraq 25%, health care 17%

Why would that be?

As many of you know, I am currently on vacation in the Philippines — a working vacation of sorts, if you count life work, in that I have met for the first time my five stepchildren, two stepgrandchildren, father-in-law, the sole remaining sib of my wife’s whom I had not met in the States, and about 150 other relations whom my wife has absolved me of the need to keep straight.  (I’ll meet them when they visit — which I’m told they all will, if they can help it.)

I also met my wife’s friend, principal of the school that my stepkids attend, which is evidently (having been chosen because of how much my wife values education) among the best in Pampanga.  (That is the province containing Clark Air Base, which — until Mt. Pinatubo erupted after having waited until the Cold War was safely over — was along with Subic Bay the major U.S. base in the region.)  The friend is turning 60, so competent that the school’s owner has begged her to stay, but is going to emigrate to the U.S. instead.  After all, she said, you’re supposed to retire at 60.

Oh really, I said, and after some stupid blundering on my part it came out that you were supposed to retire by 60 but had to retire after 65.  “Had to” as in “cannot legally work.”  Cannot take jobs away from the younger people who need them.  I had lawyer’s questions about how truly true this was — what if you are self-employed, I don’t think I thought to ask, but there were others, and from both her and my wife the answer was firm.  Cannot work.  You lived on savings, on the support of your family, on the kindness of charity — or not at all.

That graph was posted alongside this article in the NYT, and it pretty much captures the unprecedented nature of the credit crisis we’re going through this autumn. In several sectors of the financial world, lending quite simply stopped. Leveraged buy-outs, the big story of the past 18 months, no longer exist. Asset-backed paper is seen as “toxic waste”, and no longer provided – it continues to exist in so far as banks would rather roll over paper that cannot be repaid rather than make all the underlying losses appear in plain sight.

As lending prior to that had been extravagantly exuberant, this is not having an immediate impact for many companies, which have sound balance sheets and advantageous existing credit lines, but as it drags on, the real economy will start to feel the pinch as it needs to finance or refinance its normal activities, let alone investment.

Now that the economy is heading south, worries are being increasingly expressed about the great unwinding, and one sees increasingly frantic attempts to rewrite the economic history of the past few years.

On the eve of the famous Black Friday, one of, or the busiest shopping day in the year, I’d like to point out a column written in the Financial Times, Europe’s main English language business paper, which attempts to spin current worries about the economy on a grand scale. As the author, John Plender, explicitly writes about the “Anglo economies”, I feel it is appropriate to incorporate that in my “Anglo Disease” series (see the links at the bottom for earlier instalments).

This was posted on DailyKos yesterday, but may be worth a read for those of you that have not seen it. It was originally posted on European Tribune.

I’ll keep this short. I want to read Roberto Bolano’s new book The Savage Detectives. Really I do. I love Latin American literature.  And Amazon says this big novel is one of the top ten novels for 2007. But there’s a small problem.  And it’s not the author’s fault.

Friday I was in Ithaca, New York. I stopped in the Cornell Store and saw that they were selling the book for the list price, $27.00. This seems like a lot of money for a book, even though it’s new and hardcover and I want it. When I got home, I found in my email box an advertisement from Amazon offering me this very book at 40% off, for $16.20. And I could get free shipping if my order totaled $25.00. How could this be? I wondered.

So I went to abebooks.com, my favorite used online bookseller, and I found used copies of the book beginning at $16.79 plus shipping.  In other words, the used books (probably review copies) were more expensive than the new book from Amazon delivered to my mailbox.

I want to support my local, independent bookseller.  That would be The Bookstore in Lenox, Massachusetts, which has been a community institution for more than thirty years.  I love that bookstore.  I have given readings there.  I have attended readings there.  Matthew, the owner, has good wine at readings.  He has a great selection of books.  He stocks books people love.  And he’s succeeded even though Barnes and Noble opened a store nearby.  But I digress.  I want to support my local bookseller.

But as far as Roberto Bolano’s book is concerned, is my commitment to independent bookstores worth $11? For this one book? I’d like to think it was, but frankly, I can hear padlocks snapping shut on the front doors of most independent booksellers near here. That would be a terrible.

And now that Christmas, Chanukah, Kwanzaa, etc. are approaching, and the gifting season is upon us, people who give gifts probably want to stretch their gift-giving funds.  I’m worried.  Because all of that desire to save drives people to Amazon and B&N.  And that’s is a real danger not only for my friend’s bookstore, but also for the lovely, lively, local, independent institution of bookstores generally.

Please think about this briefly before you shop. I don’t want bookstores to go the way of the small town hardware store.