Political Economy category archive

At SFGate dot com, the San Francisco Chronicle’s website, Leland Faust, a man who has gotten rich investing, considers what’s wrong with the Wall Street banksters. Using Jon Corzine’s ill-fated stewardship of MF Global as an example, he cites ten failings.

1. The cult of a Wall Street superstar.
2. Gambling disguised as investing.
3. The bail-me-out syndrome.
4. Enormous conflicts of interest.
5. Leverage on a grand scale.
6. Failure of regulators and the reform law.
7. Misappropriation of client funds.
8. Worthless rating agencies.
9. Golden parachutes soaring high.
10. Breakdown of morality: Even if something is legal, that doesn’t mean it is right.

Follow the link to see the examples supporting each point.

At Comically Vintage.

Still under 400k.

The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed today in Washington. Applications (INJCJC) rose for the first time in a month in the week ended Dec. 24, climbing by a more-than- forecast 15,000 to 381,000.

(snip)

The number of people continuing to receive jobless benefits rose by 34,000 in the week ended Dec. 17 to 3.6 million. Those figures do not include the number of Americans receiving extended benefits under federal programs.

The number of workers who’ve used up their traditional benefits and are now collecting emergency and extended payments fell by about 7,800 to 3.5 million in the week ended Dec. 10.

As usual, no attempt to quantify how many persons have fallen off the grid and no longer qualify for benefits of any sort.

Still the same old party.

Via BartCop.

Still slight improvements.

The number of applications for unemployment benefits unexpectedly dropped last week to the lowest since April 2008, a sign that the labor market is strengthening heading into 2012. Jobless claims fell by 4,000 to 364,000 in the week ended Dec. 17. The median forecast of 45 economists surveyed by Bloomberg News projected an increase to 380,000.

We’ll see what happens when retailers lay off their Christmas help.

Also again too once more, they still need a new set of experts.

Oh! that reminds me–the classic definition of an expert:

X = Unknown quantity.

Spurt = Drip under pressure.

Expert = Unknown drip under pressure.

The United States was happily selling its excess chicken feet (which are pretty much all its chicken feet) to China, until China slapped a duty on them.

Then suddenly last year, it all went awry. China began imposing stiff duties — including a tax of more than 100 percent — on those American chicken parts. The move was in response to a request by Chinese chicken farmers and manufacturers, who claimed the U.S. government was unfairly subsidizing the American poultry industry through low feed prices and then selling the “chicken paws,” as they’re known in industry parlance, into China at below-market cost.

The Chinese move raised an interesting legal question: How can the United States be dumping an item at below cost in China when that item is considered virtually worthless at home?

I haven’t decided a policy opinion on this, but I find the story has a bit of irony, as almost everything in a typical American consumer-goods store is made in somewhere else.

The local rag has a long, detailed story about the proposal to shovel money to a developer to build a hotel adjacent to the Convention Center so as to magically materialize tourists.

It reminds us that, for their previous trick, consultants predicted that the Convention Center itself would magically materialize tourists.

That hasn’t worked out so well:

Like the Pavilion before it, the convention center has never made money. The city spends about $5.8 million a year to operate it and takes in $3.6 million in user fees, leaving an annual city subsidy of about $2.2 million. (The city further pays $15.1 million a year on debt service for the facility, money that comes from the Tourism Investment Program, which is derived primarily from hotel, restaurant and amusement taxes).

Believers in developer magic are doing the same thing that believers in magic tricks have always done, as illustrated by the paragraph that preceded the one I quoted above:

They are listening the magicians’ patter rather than watching their hands.

“The center’s success should be measured by its overall impact on the community,” said Courtney Dyer, convention center manager. “It draws people to the city who wouldn’t otherwise come, it fills hotel rooms during our traditional slow season, and the space is there as a resource for local groups.

“I’d say it’s doing what it’s supposed to do.”

Yes indeedy-do it sure is. It’s filling developers’ top hats with money.

This magic act will be same as the Convention Center and the Pavilion that preceded it: Developer magic will appear another white elephant while disappearing the money.

How touching the faith in developer magic.

This is funny.

In other news, the late night horror show goes primetime.

If this keeps up, it may turn into a trend.

Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 366,000, the Labor Department said. That was the lowest level since May 2008.

The prior week’s claims data was revised up to 385,000 from the previously reported 381,000.

(snip)

The four-week moving average of claims, considered a better measure of labor market trends, fell 6,500 to 387,750 — the lowest since mid-July 2008.

The number of people still receiving benefits under regular state programs after an initial week of aid edged up 4,000 to 3.6 million in the week ended December 3.

Once more, the story does not mention how many persons have fallen off the chart.

Slightly better. According to the story, it’s unclear how much of the decrease can be attributed to seasonal jobs.

Jobless claims dropped by 23,000 to 381,000 in the week ended Dec. 3, the fewest since February, Labor Department figures showed today in Washington. The median forecast of 47 economists in a Bloomberg News survey called for a drop to 395,000. The number of people on unemployment benefit rolls and those getting extended payments also decreased.

(snip)

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 211,600 to 3.31 million in the week ended Nov. 19.

I mentioned developer magic last week in conjunction with the scheme of some in Virginia Beach for the city to fund a developer’s construction of a new hotel.

A refresher on how it works: the city gives money to a developer to pull a rabbit out of a hat, magically making tourists favor Virginia Beach over, for example, Ocean City or Myrtle Beach.

The developer disappears the money and the rabbit stays in the hat.

Meanwhile, the hotel sits half-empty, surviving on the city’s guarantees, until comes another developer to promote another “public-private partnership” (see below) to convert the site to condominiums or retail space or something, promising that, like a weekend in the Bahamas, it will restore the magic. &c.

Here’s the latest in the story.

The resident curmudgeon at the local rag tore into this issue yesterday, and she had facts and figures. Unlike City Council’s numbers, they are based on facts, not on developer’s projections. A snippet:

Sanders is the author of academic articles with titles like “Convention Center Follies,” “Convention Mythology” and “Flawed Forecasts.” But what does Sanders know? He’s just a graduate of Johns Hopkins with a doctorate from Harvard, a member of Phi Beta Kappa and a guest scholar for the Brookings Institution.

“This is not an ideological issue for me,” Sanders told me Tuesday. “I don’t oppose public spending on the stuff that makes sense…. But it’s the same script and the same scenario everywhere.”

From coast to coast, in cities large and small, politicians salivate over inflated visions of convention business. They build magnificent facilities and then chase conventions by slashing their fees and pouring public money into ancillary projects designed to give their centers a competitive edge.

After years of studying the convention industry, Sanders says he’s not surprised to find municipalities that are struggling to balance budgets and pay teachers that can miraculously find money to throw at their convention centers. These exhibit halls inevitably come with overblown promises of stampeding visitors, millions in tax receipts, and hotels packed with conventioneers.

Travelers don’t go to cities to visit hotels.

Travelers go to hotels to visit cities.

All the rage right now.

Here’s how they work:

A legitimate governmental function needs doing, such as, say, an expressway needs to be built. Instead of the building the expressway directly with tax money, the government gives the tax money to a private company, which uses it to pay for executive bonuses and country club memberships.

Years later, a new sidewalk is christened.

With toll booths.

Jay Bookman, while discussing some proposals in Georgia, sums up the underlying methodology.

They (the state–ed.) want to take money out of your pocket and give it to other people who don’t need it as much as you do.

Robert Reich recalls Henry Ford’s decision to pay his employees enough to buy his cars, then remuninates on refusing to learn from the past. A snippet:

In the years leading up to the Great Crash (1929–ed.), most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929, the debt bubble popped.

Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.

The latest data on corporate profits and wages show we haven’t learned the essential lesson of the two big economic crashes of the last 75 years: When the economy becomes too lopsided – disproportionately benefiting corporate owners and top executives rather than average workers – it tips over.

In other words, we’re in trouble because the basic bargain has been broken.

Mixed, but, for all practical purposes, status quo ante.

Jobless claims climbed by 6,000 to 402,000 in the week ended Nov. 26 that included the Thanksgiving holiday, Labor Department figures showed today in Washington. The median forecast of 43 economists in a Bloomberg News survey called for a drop to 390,000. The number of people on unemployment benefit rolls and those getting extended payments increased.

(snip)

Today’s data showed the four-week moving average, a less volatile measure than the weekly figures, rose to 395,750 last week from 395,250, which was a seven-month low.

The number of people continuing to receive jobless benefits climbed by 35,000 in the week ended Nov. 19 to 3.74 million.

Via BartCop.

Brave New Films contrasts the defense war industry’s claims about their role in providing employment with economic facts.

Surprising result: It ain’t necessarily so.