Archive for Recession
Froma Harrop gets down to it:
Suppose the U.S. government had posted a budget surplus in 12 of the past 13 years. Suppose not a single major American financial institution had failed or needed a government bailout. Suppose the U.S. economy grew at an annual rate of 6.1 percent in the first quarter of this year, rather than at 2.7 percent.
Canada did, Harrop instructs, explaining that “What Canada had was a civic culture that wanted government to regulate financial activity.”
It’s not exactly apples and apples. Harrop runs down a few of the differences. Canada’s vast mineral wealth. America thinks it’s our job to provide military security for the rest of the world, “a job that other countries are all-too-pleased to give us,” she notes. Kinda runs up our costs (and tax burden). But Canada’s regulatory structures help keep the foxes out of the hen house.
How much are Canada’s businesses suffering? Harrop reports that Toronto’s large cap index has outperformed the S&P 500 so far this year by 27 percent. Anytime new regulations are proposed here, American foxes yelp in Pavlovian fashion about how regulation will make them an endangered species.
No, that’s the American Middle Class.
What we have is an elite willing to risk everyone else’s economic security to enable a few hotshots to win big at the casino of recklessness and fraud — while maintaining a variety of taxpayer backstops to reduce their risks. The joint never gets closed, also thanks to the large numbers of ordinary citizens trained to holler “socialism” every time the government tries to set a ground rule.
So okay, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were at Netroots. (Harry Reid got the less warm reception.) Sen. Al Franken closed out the conference. But the real rock star treatment went to TARP Congressional Oversight Panel chair, Prof. Elizabeth Warren, who perhaps got more applause and support than anyone.
A close colleague was so pleased to meet Warren that she asked if I would post the picture.
Manufacturing was a hot topic at the conference. We met these guys from the Alliance for American Manufacturing at the conference in Las Vegas. Executive Director Scott Paul mentioned the possibility of holding a forum on manufacturing in Western North Carolina. Rep. Heath Shuler, he noted, is a strong supporter.
I recognize the venue for the America’s Future Now! conference in some shots in the AAM video, so I’d say those segments aren’t exactly man-on-the-street interviews. Their data and presentation nonetheless raised eyebrows.
Nancy Pelosi addressed American manufacturing on Saturday after delivering a special taped message from President Obama:
Pelosi spoke about “Making It in America,” the Democrats’ manufacturing agenda that she said would roll out in coming weeks to help restore and create industrial jobs. “Jobs, jobs, jobs is very important, but we have to get it done,” Pelosi said. “People have to see the difference between what the Republicans want to do about this — nothing — and what we are advocating.”
No, Madame Speaker, people will have to see what we are *doing* about it if jobs, jobs, jobs is to be anything more than a slogan.
from Netroots Nation in Las Vegas, where it’s 6 a.m. and downstairs a woman is dancing on top of a bank of slot machines
Inventor Charles Kettering once said, “If you have always done it that way, it is probably wrong.”
I’ve been loudly critical of WNC’s ability to attract good-paying jobs to the area for a reason. When I moved to Asheville in 1990, people told me “Asheville is a great place to live, but a tough place to make a living.” Twenty years later they are still saying “Asheville is a great place to live, but a tough place to make a living.” Yes sir, that’s progress.
Pointing that out makes local and regional movers and shakers uncomfortable. It should make us all uncomfortable. The course we chart reflects to a large degree our collective wisdom about where we want WNC to go. But in some ways, we are so cautious about preserving what we have here that the more we tighten our grip, the more we risk having it slip through our fingers.
We saw some data posted here recently – percentages of local efforts devoted to attracting high-paying jobs. It’s a pretty standard response by now. Ask why we aren’t seeing better results, you get statistics on our marvelous efforts. And they may be marvelous efforts. But this isn’t like field day at the Montessori school where everyone gets a ribbon just for participating. It’s the results that count.
People born and raised here are being priced out of the market. I wrote about the phenomenon awhile back, drawing on the example of Daufuskie Island, SC. Families who had lived there since the Civil War – many, descendents of slaves – were being forced to sell out and leave. High-dollar resort development came to the remote coastal island, driving property values up beyond the ability of the local subsistence farmers and fishermen to pay. Developers, of course, touted how resort development would bring jobs to the island. Lordy, yes sir, boss, that’s progress.
But that brings me back to the Kettering quote: “If you have always done it that way, it is probably wrong.” If after twenty years of business development efforts, people are still saying “Asheville is a great place to live, but a tough place to make a living,” something isn’t working.
If after twenty years of efforts, people have to hold down two and three jobs just to get by, something isn’t working.
If after twenty years of efforts, middle-aged Ashevillians have to advertize for roommates on bulletin boards, something isn’t working.
If after twenty years of efforts, we’re down to awarding gold stars to merchants who pay their staffs a “living wage,” something isn’t working.
If after twenty years of efforts, new development groups have formed because the traditional ones haven’t gotten the job done, that should be a clue – something isn’t working.
It is past time to chart a new course.
Granted, the real estate bubble has taken a toll. And granted, there is a younger, low-skilled segment of our populace that moved here because it’s a hip place to be. If they are having a tough time, that’s to be expected. But the natives are weighed down under the burden of the high cost of living too. Some of them used to have better-paying jobs that have since gone away and haven’t been replaced with much they can build careers and stable home lives on. Twenty years of development efforts haven’t put to rest the “tough place to make a living” meme I heard upon arrival.
By that metric and by the others listed above, C-minus for results.
So what should we be doing differently? It’s your turn to provide the out-of-the-big-box thinking. No more excuses.
[It's now 3:30 p.m. and they just got the -- very slow -- conference wireless working so I could post this. The hotel wireless wasn't working either. Bandwith problems throughout the hotel. The perils of tech. Good panel this morning on how jobs -- manufacturing jobs -- are a top issue this year. Check out this video.]
There’s a new company in town — an L3C. Okay, it’s not here yet, but as soon as Gov. Perdue signs SB 308, North Carolina will join Michigan, Vermont, Illinois, Wyoming, Utah, and (in 2011) Maine in allowing this hybrid business entity that appeared first in Vermont just two years ago. It is the kind of vehicle we could use to help put workers displaced by plant closings back to work in WNC. Wikipedia describes the L3C this way:
The L3C is a low-profit limited liability company (LLC), that functions via a business modality that is a hybrid legal structure combining the financial advantages of the limited liability company, an LLC, with the social advantages of a non-profit entity. An L3C runs like a regular business and is profitable. However, unlike a for-profit business, the primary focus of the L3C is not to make money, but to achieve socially beneficial aims, with profit making as a secondary goal. The L3C thus occupies a niche between the for-profit and charitable sectors.
N.C. Senator Jim Jacumin, a Republican who represents Burke and Caldwell Counties, introduced the Senate bill which passed in the House on Thursday without a single No vote. The N.C. Center for Nonprofits described his intentions:
N.C. Senator Jacumin envisioned L3Cs as collaborations between local nonprofits and failing furniture or textile businesses. These L3Cs would use investments (direct investments, grants, or low-interest loans) from private foundations, businesses, and individuals to purchase and upgrade factories to make them more energy efficient and less expensive to operate. The L3Cs could then lease these factories to manufacturers at competitive rates that would help keep manufacturing jobs in local communities.
The purpose of the L3C is to assist small businesses that might not be able to get off the ground if they had to pay investors a commercial rate of return. Like MOOMilk, a local organic milk company in Maine. Like small-business start-ups in struggling towns with high unemployment. Or to renovate existing factory space. Or newspapers big and small, for example. For the socially responsible investor, this is a way to do good — including put people back to work — and make a few bucks along the way. The L3C’s creator, Robert Lang, CEO of The Mary Elizabeth and Gordon B. Mannweiler Foundation, Inc., calls it “the for profit with a non profit soul.”
Rush Limbaugh calls it an idea thought up by liberal “wackos.” Rush believes “this is social engineering … designed to pervert capitalism” and “propagandize the American people in the name of the Obama administration.”
Where do I send the check?
Then again, maybe Ashevillians should just invest in more high-priced condos?
“A city is made of brick, Pharoah. The strong make many. The weak make few. The dead make none.”
– Charlton Heston as Moses, after feeding the slaves in The Ten Commandments
As in Cecil B. DeMille’s Egypt, today’s Royals take a dim view of feeding slaves. Thirty-eight Republicans voted this week in the U.S. Senate to cut off unemployment checks for the long-term unemployed. Plus Ben Nelson (D-NE). (Did someone give Nelson a hat with elephant ears, like something on an early Disney TV show?) Congressional Republicans have suggested that those out of work in the worst unemployment since the Great Depression are druggies, bums, lazy and animals.
Huffington Post noted earlier this week that this would be the first time unemployment benefits have been allowed to expire when the unemployment rate was above 7.2 percent. But as Nevada Republican Senate nominee Sharron Angle explained, support payments have “spoiled” our
slaves citizenry. They just don’t want to get out there and take “entry level” jobs when government unemployment pays more (it doesn’t). Angle continued, “There are jobs that do exist. That’s what we’re saying, is that there are jobs.”
Mark Zandi, chief economist of Moody’s Economy.com contradicted that assessment just one month ago:
“I mean, just a statistic, for every one job opening there’s five people that are looking for work. That is incredibly unusual, so therefore its premature to give up on those emergency benefits.”
For some perspective on the kind of low-lifes that refuse to work at jobs they think are beneath them, I give you Scott Talbott, chief lobbyist for the Financial Services Roundtable, who last year expressed strong reservations about restrictions on executive compensation:
Executives may quit banks that fall under the new $500,000 pay limits, he warned.
“I don’t think the issue is a dollar amount. It’s being paid what you’re worth… Would you be willing to work for less than what you think you’re worth?” Talbott asked.
So … druggies, bums, lazy or animals?
Conservative Talking Point: Liberals believe they know what’s best for you.
Conservative Action Item: We believe what’s best is for us not to help you and your family with your own tax dollars … during the country’s worst unemployment since the Great Depression.
Rachel Maddow lets GOP leaders make their case in their own words:
Is that really what Christ meant by “Go, and do thou likewise“?
Rep. Alan Grayson (D-FL) stated the progressive viewpoint just recently [timestamp 8:13]: “We’re following a 3,000 year-old imperative … That’s very simple. It’s to feed the hungry, to shelter the homeless, and to heal the sick. That’s what we believe in.”
On health care this week, Grayson observed: “The nation is divided between people who want health care and people who don’t want other people to have health care.”
The differences couldn’t be plainer, or put more plainly. Go, and do thou likewise.
… another instance of misfeasance left over from the Bush administration to be swept under the rug.
Brian Beutler of Talking Points Memo is reporting that the Bush administration “may have worsened the crisis and resulting economic fallout by delaying the call for congressional action.”
As the financial crisis unfolded last September, Bush officials had a contingency plan they had prepared months earlier — knowing it would soon be needed — but had failed to brief Congress. It was Nancy Pelosi who called them first, Beutler writes:
… some two weeks, she reminded me, after Barack Obama accepted the Democratic Presidential nomination in Denver. Lehman Brothers had just filed for bankruptcy four days earlier and the Federal Reserve had authorized the New York Fed to lend up to $85 billion to insurance giant AIG. That afternoon, she called Paulson to ask for a full briefing the next morning.
“They said, ‘That will be too late. That will be too late. Tomorrow morning, 9 o’clock will be too late,’” Pelosi recalled.
In a meeting that evening with Congressional leaders and staff, Paulson, Fed Chairman Ben Bernanke, and others offered a dire assessment, and made an appeal for intervention that ultimately resulted in TARP. Bernanke and Paulson beseeched the legislators to act quickly, warning that, the entire U.S. economy might collapse in days without rapid intervention. But Pelosi had a question. “I asked them, and said, ‘Why am I calling you – why didn’t you call me?,” Pelosi said.
In our initial conversation, that’s where Pelosi stopped: “You go ask them what their response was to that question.”
After TPM failed to get a comment on that question from Paulson — a spokesperson stated no one felt “constrained” from communicating with Congress — Pelosi answered the question for them:
“Here’s what they said. They said, ‘We were not allowed to tell Congress, but since you called, we’re going to answer your questions.’”
Some time after the TPM story posted, former Bush Deputy Press Secretary, Tony Fratto, responded:
As soon as the fallout was clear — and, in fact, in ways no one anticipated (like the money markets breaking the buck), they went first to the President, and then directly to congressional leaders.” [Emphasis mine.]
It’s primary election day. Nominate leaders better that these guys.
The financial crisis in four minutes (Updated below):
[h/t Matt Taibbi]
Almost forgot this one from ThisLife.org, even shorter at one minute thirty:
Goldman’s rigging online polls, now?
From the Telegraph of London on Thursday:
Goldman Sachs is investigating claims that one of its computers was used to rig a public vote on the introduction of a so-called â€œRobin Hood taxâ€ on bankers.
From Business Insider on Friday:
A few days ago robinhoodtax.com, asked the public to vote on a “tiny” tax on bankers that would donate no more than .05% of each banking transaction to the poor.
Robin Hoodâ€™s security team said that it traced the erroneous votes to two computers, one of which is allegedly registered to Goldman, according to The Telegraph.
From the Digby on Sunday:
Unbelievable. Why in the hell are people entrusting all this power to such a bunch of babies?
On the other hand, if they are forced to pay a .05% tax on transactions it goes without saying that they’ll all hold their breath until they turn blue because it just won’t be worth it to work anymore. And then where will we be?
It seems that somebody at the great vampire squid isn’t too keen on the idea of the banks that brought the world economy to its knees owing anything to the commoners who bailed them out. It’s not a European notion they’d like to see spread to the U.S.
Tell us again how that personal responsibility stuff is supposed to work, how about it?
[h/t Crooks and Liars]
Or Reagan, Bush (I & II), Clinton, Heritage, Cato, Hudson, Manhattan, and Grammâ€“Leachâ€“Bliley, for that matter?
From this morning’s Washington Post:
The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation’s growth.
It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism — there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.
There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.
That pretty much sums it up. Nothing that WNC can’t solve by building a few more hotels and McMansions. That’s worked out pretty well so far, hasn’t it?