Tag Archives: National Economy

Buffalo, Steady As She Goes

6 Jan

The Metropolitan Policy Program at The Brookings Institution publishes a quarterly document titled The MetroMonitor.

The MetroMonitor is a quarterly, interactive barometer of the health of America’s 100 largest metropolitan economies. It examines trends in metropolitan-level employment, output, and housing conditions to look “beneath the hood” of national economic statistics to portray the diverse metropolitan trajectories of recession and recovery across the country.

Essentially, this report serves as a planning resource and a measurement tool for metropolitan progress.  While the Brookings Institution is the home of the dreaded “third way Democrats”, their data collection and research on metropolitan areas is valuable in innumerable ways.

Surprisingly, the upstate cities of Buffalo, Rochester and Syracuse fair pretty well in all measures.  The data can be interpreted to demonstrate that since the cities of Upstate New York did not participate in the “boom” of the last twenty years, we didn’t really have a bubble to burst.  Or it can be interpreted to show that other cities have fallen so far that we now have an opportunity to differentiate ourselves from Southern boomtowns and initiate a slow growth cycle.

You can read the full report here and you can read a more focused report on the Great Lakes region here.

Here are some infographics built from the data in the report:

This first graphic demonstrates data based on four factors: “employment change from peak; unemployment rate change from one year ago; gross metropolitan product change from peak; and housing price index change from one year ago.”

This graphic explains change in unemployment rates:

And this one demonstrates straight up current unemployment rates:

This final chart shows the change in Gross Metropolitan Product (GMP)–the total value of goods and services produced from each metro area’s peak GMP quarter to the most recent quarter, measuring the extent to which output has recovered from the recession’s full impact.

As to the last chart, this is where one sees how the data are interpreted as “no boom = no bust” as our historic metro GMP has been at the low end of the spectrum for over two decades.

I think the trend lines in this document are telling and can serve as a precursor to a larger discussion about our regional strategic priorities and how we can best position Buffalo for the coming new economy.  We see that the bust is hitting Florida, California, and the entire Southeast and Southwest especially hard.  We see that many areas around the Great Lakes and Midwest are relatively stable.  Is our predictability an asset?

If we had a big picture Mayor or County Executive, we might be chewing on the data and building a strategy focused on how to best position ourselves for growth.  Unfortunately, we’re (as usual) mired in petty political battles and barking at who gets to eat the last crumbs on the table.  If we had a proactive business community or regional development authority, we might be putting together a list of priorities to capitalize on weakness in other regions of the country rather than simply seeking public funding for pet projects.

Since none of the above is likely to happen due to our habit of (generally) electing mouthbreathers and half-wits to public office, how do we make sure that we begin a period of slow growth rather than continue our decades long decline which has slowly morphed into a weird stasis of FAIL?

If I were Mayor, I would start by identifying our differentiators from the regions glowing in red and marketing ourselves to the people and businesses of those regions.  I’d start to align our public policy, planning documents and zoning code to capitalize on the opportunities presenting themselves and assemble a team of tacticians who can best build a better future for Buffalo.  I’d lean on the local University talent to help build a blueprint for success with measurable goals over five years.

Does this data tell you anything interesting?  How do you see it as presented?

The Story of Stuff

28 Dec

With the chaotic consumerist orgy of Christmas now behind us, I thought I’d take a minute to share with you one of my favorite web videos of all time, The Story of Stuff.

Now, before you get started, this video is firmly in the tradition of polemics and you might want to quibble with some of the facts in the video.  However, the primary principles in the video are what I’m interested in sharing with you.  Our cultural need to consume and the corporatist influence which powers that consumer culture.  It also touches on some topics you might have forgotten since your last economics class in college, things like planned obsolescence, perceived obsolescence and externalized costs.  These issues inform our current societal structures and the decisions we make as citizens and voters and ultimately, the decisions made by elected leaders.

Watch it, process it, and let me know what you think.  Knee jerk libertarian counterpoints will be summarily dismissed and ignored, you bore me.

This can’t be good . . .

11 Jun
Photo courtesy Buffalo News

Photo courtesy Buffalo News

It took exactly a year for Bob Wilmers to hop off the sinking ship. Dennis Mullen, the former head of the Rochester equivalent of the BNE, has been named his replacement. But Mullen has received several promotions lately, as he was just named CEO after downstater Marisa Lago left less than a week ago.

I don’t claim to know the inner workings of the Empire State Development Corporation. But isn’t it bad if both the CEO and President leave within days of eachother? At a time when the Senate is feeling Banana-Republic-y, and the Governor is scared to leave the state? I bet Yahoo is feeling pretty secure in their big decision right now.

The Rochester Democrat-Chronicle thinks Mullen’s appointment will be good for Rochester. Having Wilmers at the post sure paid off for Buffalo. . .

Hatred is Hatred. Violence is Violence. Terrorism is Terrorism.

11 Jun

This morning CBS interviewed the young son of the security guard who was shot yesterday by a lunatic Nazi at the Holocaust Museum, of all places. The little boy was so sweet, wearing glasses that were a bit too big for him, and he was about 7 or 8 years old – a bit young to understand the implications of all of this, but old enough to know something horrible had happened to his daddy. My oldest daughter is the same age.

What von Brunn did was senseless, tragic, and fed by years of hatred. Frankly, what happened shouldn’t have come as any surprise, having read a lot of what this idiot wrote. But seeing that little boy, whose father died yesterday for no reason whatsoever, filled me with rage.

Even if you believe, as von Brunn did, that the Jews were in a conspiracy with the Blacks to keep the white man down – a frankly insane, paranoiac belief to have – what would possess you to bring a rifle to a museum and start shooting random people? This guy was no stranger to the Nazi movement. He was an active, inflammatory spokesman for anti-Semitic causes and fringe “the Fed was set up by the Rothschilds to control world banking for the Jews” ideology. He had once gone to jail for 6 years after an aborted attempt to kidnap Fed members, including Paul Volcker, back in the 80s. Online, he agitates against Jews and Blacks and calls on “Aryans” to take violent action.

If the “only thing we have to fear is young brown men with elaborate names written in squiggles” crowd is serious about wanting to detain people indefinitely, perpetually and in perpetuity without charge, then I suggest we add people like von Brunn to that list. Why isn’t he and his ilk at Guantanamo? They’re as ideologically dangerous and prone to violence as any Qaeda member.

Either that or a “Rockefeller Law” type penal code that puts terrorists who commit, conspire to commit, or incite violence like this away for life without parole. In which case this madman could have continued to spout his BS behind a few feet of concrete and bars.

I’m not advocating for this – I’m just wondering why those who do aren’t treating equal things equally.

There’s another Timothy McVeigh out there right now. He listens to fringe right-wing shit on the internet. He probably watches Glenn Beck, and listens to Limbaugh. He talks to his co-workers about typical conservative talking points, but occasionally freaks out his more mainstream conservative buddies with a slip of the tongue revealing his anti-Semitism or racial animus. They brush it off, figuring he’s just a bit whacked. He attends gun shows and has amassed a veritable arsenal that he tends to like a pet. He owns copies of insane books like the Turner Diaries and figures it’s a handbook for direct citizen action. The current economic crisis may have affected him somehow – lost job, lost house, lost wife – it has only made him more desperate. Someone is to blame, and in his sick mind it’s the Federal Government, international Jewry, the Illuminati, the Council on Foreign Relations, the UN, and other easy targets. He already attends tea parties, but was disappointed they don’t advocate taking up arms. He posts to all sorts of bulletin boards, including Stormfront, Free Republic, Beck’s 9-12 project, and says some whacked out things that range from using direct to indirect language to advocate for immediate violent action.

These people are out there – this guy is out there – and he hates you and everything you stand for. These people are as dangerous as any Qaeda terrorist, even though they didn’t train in Waziristan and don’t make people uncomfortable on that short domestic hop from Baltimore to Orlando.

Why are these serious threats being treated differently?

And when imbeciles like Glenn Beck incites his mouth-breathing viewers to go to war against the US Government, will he be held accountable when someone bombs a federal building? When Rush Limbaugh incites further hatred by questioning Barack Obama’s place of birth and highlighting his race, will he apologize for doing so when some tragedy happens? No. They’ll both wrap themselves around the 1st Amendment rights guaranteed them by a government they hate.

$11.6 Trillion

19 Mar

The United States government has spent $11,600,000,000,000 of your money to “bailout” the economy.

This all began back in December of 2007 when the Federal Reserve, in coordination with other global central banks, established a Term Auction Facility to inject liquidity into banks that had stopped lending as the leading indicators of a coming subprime mortgage crisis began to mount.

It continues to this day with regular capital injections to banks, the continued implementation of TARP and yesterday’s announcement that the Federal Reserve would spend $1,000,000,000,000 on the purchase of long term treasury bonds and an effort to lower mortgage rates and other commercial loans.

Yet, with all of that money pouring out from the central banks and the bailout progressing at a breakneck pace, what issue dominated the news cycle?  $165,000,000 in bonuses to employees (current and former) of AIG’s Financial Products Division.  And today we will most likely focus on which members of Congress received campaign donations from AIG or AIG connected donors.  This is a total media distraction designed to rile up the populist feathers of every American who is either struggling in difficult economic times, opposed to “bailing out the bums” or free marketeers who loathe the very idea of a bailout for anyone.

$165,000,000 is a number that is small enough to get pissed off about. Hell, it’s less than A-Rod’s latest contract with the Yankees.  It’s even easier to get pissed off that AIG gave $111,875 to Sen. Chuck Schumer over the past two decades. It’s easy to draw a line of complicity between those donations and the current crisis and fill 24 hours of cable verbal diarrhea with righteous indignation.

While we’re certainly right to be angry that AIG executives have taken money from the public trough to compensate many who were responsible for creating the bailout in the first place, we should be talking about the big picture.  Shockingly, one of the few voices who is doing just that is former New York Governor Eliot Spitzer.

Why can’t Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion capital infusion, and aren’t they sitting on more than $100 billion in cash? Haven’t we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn’t they have accepted a discount, and couldn’t they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?

Spitzer is essentially saying, “Where is the fucking oversight?”  Good question, the Congressional appointed TARP Oversight Panel has some questions it would like answered.

Damon Silvers, the oversight panel’s deputy chairman, told the Joint Economic Committee that he and other panel members are waiting for Treasury Secretary Geithner to appear before them to explain how the Obama administration plans to help failing banks. Among the things the panel still needs to know is how the administration plans to deal with the toxic assets like failed loans and foreclosures that are bogging down banks, panel members said.

The oversight panel had asked Henry Paulson, Treasury secretary in the Bush administration and the chief architect of the Troubled Asset Relief Program, for the same information but never heard back from him, Silvers said. The bottom line, panel members said, is that even though about $300 billion has been spent and another $350 billion has been made available to bail out financial institutions, those who are supposed to be overseeing the program lack the information they need to perform their duties, Silvers said.

As I see it, the larger problem is that the majority of the American people do not have neither a basic understanding of the problem nor the solutions that have already been implemented.  Thus, they don’t know what to get angry about and focus on matters like AIG executives pulling down bonuses.  It is a systemic failure of the establishment media that most Americans have not been properly educated about the crisis.  For instance, it’s shocking to me that there is little discussion of the Maiden Lane enterprises and their role in subverting much of what Congress intended for TARP.

During Tim Geithner’s confirmation hearings, we heard a lot more discussion about his mastery of personal income tax software than we did about his involvement with TARP design, implementation and administration or his role in creating the oversight dodging Maiden Lane III while head of the New York Federal Reserve, didn’t we?

The media takes the easy way out on stories rather than doing the heavy lifting and explaining the scope of the issue and that’s the shame of it all.

The Economic Meltdown and You

14 Mar

gaussian_copula_formula

Zimbabwe?

13 Mar

If the Governor of South Carolina doesn’t want to take, and doesn’t feel the need to help his people or his economy through taking his state’s $2.8 billion of stimulus money, that’s all well and good. Given that South Carolina has the country’s second-highest unemployment rate, I’m sure Governor Mark Sanford is confident that he knows what he’s doing.

But to suggest that the US will end up like Zimbabwe as a result of Keynesian pump-priming is a bit silly.

The Zimbabwean economy was based on agriculture (it was known as Africa’s bread basket), and party political kleptomania on the part of ZANU-PF. Its economic failure was triggered by, and is sustained in large part by, the tragic “land reform” expropriation of professionally-run farms that took place during the last decade.

I’d like to think that the US economy is a bit stronger and a bit larger, more resilient, and more diversified than Zimbabwe’s, but what do I know.

Rick Santelli: Jackass

21 Feb

I work with a lot of smug, MBA fratboys at my day job.  They are unrepentant and smug about the wool they pulled over the eyes of the American Public when it comes to the MBS and CDO market.  They laugh about how mooks like you blame the homeowners and borrowers while they count the hundreds of millions of dollars they and their companies made off the biggest economic fraud in American history.  They laugh at you and how easy it is to convince you that union workers making $30 per hour and working class folks who bought into the hyped market to realize the “American Dream” and bought homes lenders convinced them they could afford are the problem.  That investment bankers making $750K per year off fraudulent mortgages and CEO’s making nine figures are the good guys here.

Rarely do you get a glimpse at the unchecked arrogance and general disdain those people have for you.  Until a humongous douchebag like Rick Santelli comes along and pulls back the curtain.

santelli_rick

Click to watch the video.

Essentially, Santelli (CNBC analyst and former derivatives trader) stands on the floor of the CME amongst traders from banks who are still afloat because of the TARP money given them in the first phase of the bailout plan and has the temerity to demand a revolt over bailing out homeowners.   A bailout plan that is for people who are in the midst of foreclosure actions and those who live around those who are struggling with foreclosure.  A bailout plan which requires homeowners to continue payments on their mortgages and requires responsibility on the part of the borrower.  Of course, those people are “losers” in Santelli’s world and don’t deserve an opportunity to keep a roof over the heads of their families.  He’s rather people lose their homes and buy their properties at foreclosure at pennies on the dollar.  That’s the free market after all!

This country has lost its bearings when a guy like this resonates.

The Credit Crunch Explained

20 Feb

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Consumption

19 Feb

art-sd_consumptionIt kills off the very environment that sustains us while poisoning our souls with shallow, boring, product-based fantasies. It lulls us into a drunken state of complacency, where we feel safely shrouded in airbags as we drive off into a volcano. And now, we’ve finally found out, our addiction to consumerism has bankrupted our economy.

Ship Us Your Bling

What I’m getting at here is that old school “economic stimulus” ain’t gonna get us out of this mess. It’s too complex. An economy based on endless growth and insanely euphoric consumer confidence is not sustainable economically or environmentally. The earth can’t take it. We’ve been ducking simple facts of physics. You can only pack so many people and so much garbage into one room—or planet. And the economy, like the environment, can’t take it. How sustainable did you think a service-based economy, where we basically manufacture weird conceptual “financial instruments” while the rest of the world ships us their bling, would be?

We’ve been on life support for a while. We’ve medicated our dying planet with a junkie’s dose of denial, buying McMansions and Ford Expeditions with make-believe dollars. And we’ve hidden the insolvency of our economy by tossing debt around like a game of hot potato, repackaging dung in candy bar wrappers. Through denial and fraud, we managed to keep the party careening into the 21st century as phrases like “tipping point” and “peak oil” became de rigueur. It’s not a coincidence that the global economy and environment both seem to have climaxed at the same time.

Digital Crack

“Economic stimulus” isn’t a magic voodoo fix. If it works, it’s really just digital crack. Yeah, it would feel good—we’d be stimulated. We can go back to working and shopping, consuming things that shouldn’t be ours, with money we haven’t yet earned, while all the fundamental life signs of our economy and environment continue to tank. Crack. Feels real good at the moment. Seems like all your problems are gone—for the moment. Eventually it kills you and sickens everyone connected to you. We’ll borrow money so we can continue doing what we’ve been doing to get to this uncertain juncture in human history.

Don’t get me wrong—I haven’t given up hope. Only my version of hope doesn’t mean we return to the stupor we were in. Hope means we sober up as a culture. We may not want to save an auto company, like Chrysler, who welcomed the new century by dropping all fuel-efficient small cars from its lineup just as “peak oil” started to set in and global warming started slamming us with weirder and weirder weather. Hope doesn’t mean saving banks that went insolvent issuing predatory loans and underwriting the McMansion boom.

The Cancer Model

Our fiscal emergency, or “collapse,” is predicated upon just a few percentage points of economic contraction. Yet, for the global environment to survive, our economies, which are basically measured by their material output of things, must contract. We have to abandon the old formula that mandates endless economic growth. Cancer enjoys endless growth—until it consumes its host. Historically, economic growth has always meant more pressure on the environment, with more resources consumed and more waste produced. This is not sustainable and we shouldn’t try to go back to the cancer model. Our economic collapse has given us some breathing room—time to get sober and reflect on our collective insanity. It’s given us opportunities to reboot not only the economy, but the culture. In this way it gives us hope.

Hope means we face the challenge of fiscal and environmental collapse and deal with both problems as the one sickness that they represent. We need to feed people, house people, educate and care for them. We don’t need to, and should not, get the SUV assembly lines back up and running.

This doesn’t mean we forget about auto workers and the millions of other people who have lost their jobs recently. A sane response to the current crisis would be a New Deal type jobs program that puts people to work—not back to work building gas guzzlers for a publically bailed out private equity firm, but building a sustainable, modern transportation and energy infrastructure. The recent stimulus bill contains some of these provisions, but it also funds new highway construction, which is an old school response, and the Senate almost added funding for new nuclear power plants, which would be a just plain insane handout to one of the most irresponsible industries the last century produced.

Tax Me

Putting people back to work building a 21st-century infrastructure isn’t going to be done with tax cuts. Tax cuts are designed to get people—historically the wealthiest among us—back into the malls and auto showrooms. That’s what got us into this mess. Getting people back into the SUV showrooms at this time, when they’ve finally gotten out of the showrooms and have finally stopped buying an endless stream of new cars, is not a good thing. We can no longer afford the “me me me,” only-baby-in-the-crib, gotta-have-it-all mentality. No. To hell with tax cuts. I’m very thankful that I have a job, and as part of an interconnected society where my well-being is tied to that of my neighbors, I think those of us who still have jobs should be happy to pay more taxes to hopefully put those who don’t back to work—so they too can one day pay taxes and ultimately help pay down the national debt.

Of course we need to be vigilant about how our tax money is spent. For starters, we shouldn’t just bag it up and hand it over to the same bankers and CEOs who got us into this financial and environmental mess. And we shouldn’t incinerate it along with hundreds of thousands of people in Bush’s still simmering zombie wars.

The current economic strategy, which the Obama administration inherited, is indeed a bailout. It squanders badly needed public funds in an attempt to prop up otherwise insolvent megabanks that have so far used bailout funds to gobble up smaller, healthier banks that subsequently become infected by the toxic debts and strategies of their new owners.

Not-So-Innocent Investors

I understand the strategy here is to prop up financial markets and protect people’s investments. But let’s talk a bit here about personal responsibility. People invested irresponsibly, both with regard to their own finances and with regard to the social impacts of their investments. Investors got used to expecting double-digit returns, acting as if they actually earned this money or otherwise had it coming to them through some lineup of the stars. They avoided any questions as to where the money was coming from, and the human, social, and environmental costs related to this mysterious transfer of wealth. Such irresponsibility is what brought us to this juncture. The free market worshiped by so many investors is now making a u-turn and punishing its most devoted adherents. Perhaps, if we let people take responsibility for their own mistakes, they’ll invest more responsibly in the future.

I am concerned about people who have lost their pensions through irresponsible decisions to which they were not a party. Protecting the retirement savings of hard-working innocents and preventing the ensuing social meltdown that the loss of such pensions would cause is one of the most important functions of government. Bailing out rich greedy bankers is not.

Yes, we can put everyone back to work. The wealth is still here. But let’s not put them back to work in offices selling and collecting debt to and from each other, building useless and destructive products, or figuring out how to break unions and temporarily fatten Wall Street. Let’s put people back to work building the infrastructure we need to save us, rather than the one that is killing us.

Then, once everyone is working once again, we can get down to the serious business of figuring out an equitable way to reinvent our society so we can ultimately work less, produce less, consume less, live better, and maybe leave a sustainable planet for future generations.