Political Economy category archive

Down three percentage points.

The number of people who signed up for state unemployment benefits fell 16,000 to a total of 453,000 in the latest week, the Labor Department reported Thursday, leaving the level of new claims back where they were at the start of 2010.

Big deal.

Via Down with Tyranny. Follow the link and read the post.

Zandar reports on the breadlines.

ThePoliticalCat, in a post entitled “I Pay Taxes So the Rich Don’t Have To”:

The right question we should all be asking is how much do the rich pay as a percentage of their income? Warren Buffett has famously said that he pays less as a percentage of his income than his secretary does and he says that isn’t fair.

Read the whole thing.

. . . is missing.

Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York.

GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 marked “urgent.” Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to immediately stop evictions, cash- for-key transactions and lockouts, according to the document, addressed to GMAC preferred agents.

No indication yet as to what the “corrective action” may be.

The local rag reports in contributions to candidates for Virginia Beach City Council:

Beach real estate and construction interests were the biggest givers overall, handing out about $80,000 of the $200,000 given to 13 candidates running for five contested seats. The Tidewater Builders Association spread $12,000 among six candidates, making the group the largest contributor to Beach races.

People and businesses from the Oceanfront area – the 23451 ZIP code – forked over about $79,500, about 40 percent of all contributions.

Vivian Paige breaks the campaigns’ financial status out in a list.

Take the quiz.

Via Vivian Paige.

Bloomberg reports on a study by Moody’s which indicate that they stimulate the rich–stimulate them not to spend their tax cut money. Moody’s, by the way, is hardly a leftist media source:

Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.

The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.

Follow the link for a summary of the actual numbers.

Down from last week, but still high:

Initial jobless claims dropped by 27,000 to 451,000 in the week ended Sept. 4, the lowest level in almost two months, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance was little changed, while those getting extended payments rose.

Deborah Orr, writing in the Guardian, takes a look at the growing respectability and visibility of pawnshops.

I suspect that much of what she has to say applies also to the States. Pawnshops appear to moving into the mainstream of commerce. Locally, there is one large pawnshop that is running a series of TV commercials touting its friendly service and attractive shop adjacent to a major mall.

In theory, bank loans have never been cheaper, with interest rates as close to zero as one could wish. Except that the banks are not lending and people are still borrowing. Since 2003, the number of pawnshops in the country has increased from 500 to 1,300, holding a loan book of around £192m. Britain’s biggest chain of pawnbrokers, H&T, last week announced a 71% leap in half-year profits, up to £14.5m from £8.5m in the first half of 2009. While the majority of customers are seeking loans of less than £100, and more than two-thirds live on a household income of less than £300 a week, industry insiders also report an increase in custom from businesspeople.

And the ghastly truth is that the Telegraph is right. Pawnbrokers are these days a comparatively solid option. If you go to a pawnbroker, then monthly interest payments range from five per cent to 12%, with a loan of £100 over six months attracting an APR of 70% to 200%. If you have nothing to pawn, though, and you instead go to a pay-day loan company – otherwise known as a “legal loan shark” – you could find yourself faced quickly with an APR approaching a stratospheric 3,000%. The appalling truth is that these companies too have proliferated in recent years, offering loans over the internet or via the mobile phone, and filling the gap left as bank loans became harder to secure.

The bright side would be that, when you deal with a pawnshop, you are bargaining over real stuff, not over bags of air derivatives and other financial instrument of self-immolation.

Still high:

Initial jobless claims fell by 6,000 to 472,000 in the week ended Aug. 28, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. Applications exceeded the 463,000 average so far this year.

Employment is stagnating as businesses, uncertain sales will hold up, delay adding workers. Federal Reserve policy makers, who cut growth forecasts for the second half of 2010, indicated they were concerned lingering unemployment and “elevated” claims were limiting consumer spending, the biggest part of the economy.

Not just sales. Bosses are not rewarded for increasing the employment rolls.

Michael Tomasky remembers a dinner table conversation from before teabaggers were teabaggers. It helps him parse some of the internal contradictions in the intellectual structure of teabaggery. A nugget:

The two problems here are, first, that while they think they owe government nothing, they actually owe government a great deal. If they’re small business people, they depend on the freight rails and the roadways and the utilities and the regulation of interstate commerce and the laws that keep their crooked competitors from undercutting them and the courts’ abilities to enforce those laws. Without question the government is an annoyance in their lives in dozens of ways. But they don’t see any of the good, only the bad. If you tote it up, the government helps them a lot more than it hurts them, and if they think not, let them go open a hardware store in downtown Mogadishu and see how that works out.

The second problem is the one I saw manifest at that dinner that night. Everybody in this country isn’t like you. Yes, you worked hard to get where you are. But the vast majority of people work hard. Some have good luck, some have bad. Some stay healthy, some get sick. Some make only wise decisions, some make an unwise one. Some benefit from free-market oddities and inequities, some lose. And yes, some, because of history or birth circumstances, started the race at a starting line several paces back from the one where you started. Part of citizenship, a crucial part of citizenship, is standing in their shoes for a few moments – as they must stand in yours, and understand your point of view too.

Is “fewer governments” the same as “less government”:

City leaders have been using the “D” word (disincorporation–ed.) for a few weeks now as they try to persuade voters to pass Measure K, a one-cent sales tax increase that would help the city balance its budget with an extra infusion of $1.4 million per year for the next seven years.

Dissolving Half Moon Bay — handing the city’s budget, operations and services to San Mateo County — would be an absolute last resort, but the city may not have many other options left, City Councilman John Muller said.

I’ve never been to Half Moon Bay, though I have been to Santa Cruz, just down the coast from it (CA-17 is one scary road, especially in a rental car at dusk after a five-hour flight).

Nevertheless, I suspect Half Moon Bay needs more in the way services than do the mountain ranges that make up most of San Mateo County.

This is another result of taxpayers wanting to want without wanting to pay.

The days when you could go over the next ridge, build a cabin, and hitch up Old Dobbin to the plough, and be self-sufficient are long gone.

Get foreclosed:

The number of homeowners in Hampton Roads who owed more on their mortgages than their homes were worth slid to just below 70,000 at the end of June, according to a new report.

That’s still more than one in five local mortgage borrowers – 21 percent – who are “underwater” on the loans, according to CoreLogic, which is based in Santa Ana, Calif., and tracks mortgages across the country.

Although the number of underwater homes has fallen by about 2,000 since the end of 2009, the firm attributed the decline to lenders foreclosing on previously underwater properties rather than home values stabilizing or going up.

There. Problem solved.

Republican congressional candidate Scott Rigell agreed to sign a seven-part pledge today that was developed by local Tea Party activists and includes promises to vote against any tax or fee increase, to oppose amnesty for illegal immigrants and to work to overturn the recently approved health care overhaul legislation.

I wouldn’t have bought a used car from him anyway, even before he signed up with the forces of living in a past that never was.

Rigell’s running to the right because the incumbent is thunderingly moderate and he has an independent challenger who is resoundingly teabaggish.

The incumbent, Glenn Nye, is certainly more moderate than he would be if I got my druthers.

In fact, the incumbent is so moderate that some of my more leftie acquaintances are threatening not to vote, rather than to vote for him.

I can’t understand their position. Not voting for someone who is okay-not-great while giving someone who is definitely not okay an advantage mystifies me.

This is Virginia, for Pete’s sake, not Vermont.

In a story which looks into the background of the egg saladmonella story (follow the link to read it–it finds a common ingredient in all the different salads), appears this line:

“You have to wonder where the USDA and FDA inspectors were.”

Paul Waldman answers the question, citing this article from 2007–they fell victim to the Republican campaign against “the dead hand of regulation.”

Between 2003 and 2006, FDA food safety inspections dropped 47 percent, according to a database analysis of federal records by The Associated Press.That’s not all that’s dropping at the FDA in terms of food safety. The analysis also shows:

• There are 12 percent fewer FDA employees in field offices who concentrate on food issues.
• Safety tests for U.S.-produced food have dropped nearly 75 percent, from 9,748 in 2003 to 2,455 last year, according to the agency’s own statistics.
• After the Sept. 11 attacks, the FDA, at the urging of Congress, increased the number of food inspectors and inspections amid fears that the nation’s food system was vulnerable to terrorists. Inspectors and inspections spiked in 2003, but now both have fallen enough to erase the gains. “The only difference is now it’s worse, because there are more inspections to do — more facilities — and more food coming into America, which requires more inspections,” said Tommy Thompson, who as secretary of the Department of Health and Human Services pushed to increase the numbers.

Because, as Republicans tell us, regulations are unnecessary overhead because no business person would ever do anything improper.

I have to go now. Pigasus, my flying pig, is ready to take off for his daily flight to Washington via Richmond.

Will Bunch considers the legacy of Republican Economic Theory. A nugget:

But earning power for middle-class Americans has barely budged since the dawn of the Reagan era. So in order to take part in the great festival of materialism that Ronald Reagan called “Americanism,” people borrowed. The 40th president tried to make that easier by deregulating the savings-and-loan industry — which proved to be a massive boondoggle that cost taxpayers $160 billion even as policy makers failed to learn the lessons of the S&L debacle. Still, people found many ways to borrow and buy, mainly on credit cards. In 1980, the typical American saved 10 percent of what he or she earned, but by 2004 that plunged to zero. Household and consumer debt went from 100 percent of the U.S. GDP in 1980 to 177 percent today. If you’ve been around for the last 25 years, you saw how this was accomplished through the chasing of bubbles, first on Wall Street and then in the housing mania of the mid-2000s. Now, with falling home prices and record foreclosures, there are no more bubbles to inflate, which is why the Reaganist chickens of our unsupported spending binge are finally coming home to roost.

Read the whole thing.

And buy Will’s new book.

Warning: Mild (well, these days it’s mild) language.