Political Economy category archive

You can bank on it.

Foreclosure activity nationwide also jumped last month, as 349,519 properties received foreclosure notices, up 14 percent from November and 15 percent from a year earlier. The national data include notices of default, the first stage of the foreclosure process after a homeowner has missed mortgage payments.

Looking for handouts because Republican economics just doesn’t work.

Governor Schwartzenburger’s swan song (emphasis added):

The governor announced that he would declare a fiscal emergency and immediately call the Legislature into a special session to make budget cuts. His plan includes no new broad-based tax increases. It relies instead on seeking billions of dollars in new federal money and on steep reductions in education, healthcare and social services, as well as cuts in mass transit, state worker pay and environmental programs.

“California is not Washington. We don’t have the luxury of printing money or running trillion-dollar deficits,” Schwarzenegger said at a news conference Friday morning.

Note the misdirection play at the end of the quotation.

Californians have rendered themselves ungovernable and their legislature incapable of levying reasonable taxes to help pay for the services those same Californians want. They wanted government for free.

It’s not working any more.

So not they want to suck at the federal teat because they are unwilling to pay for what they want.

I certainly have no problem with Federal assistance to states–some needs are too big to be addressed on the state or local level–but I do think the state or locality to show some desire to help itself.

California is a fiscal drunk that wants someone else to pay its bar tab.

It’s IMF material.

After all, the concept of human dignity and privacy has nothing to do with anything, does it?

The Transportation Security Administration said yesterday that Boston’s Logan International Airport is among the airports slated to receive a controversial scanning machine that can detect substances hidden under clothing, potentially thwarting terrorist attacks like the near-disaster on a Detroit-bound flight on Christmas Day.

Meanwhile, back in reality.

Reinstate Glass-Steagall The banksters are, of course, whining.

“The impact on Wall Street would be severe,” Wayne Abernathy, an executive vice president at the American Bankers Association, said in a telephone interview.

My heart bleeds.

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No last minute Christmas shopping for these folks, but the overall total sinking from previous weeks:

A . . . report from the Labor Department showed initial claims for state unemployment benefits fell 28,000 to 452,000 last week. That was the lowest level since early September 2008. Economists had expected a drop of only 10,000.

In other news, orders for durable goods up.

California Governor Arnold Schwarzenegger, anticipating a $21 billion budget deficit, plans to ask President Barack Obama to ease mandates and minimums on social programs to save as much as $8 billion.

Given that years of Republican misrule have rendered California unable to provide basic services, it must be tempting just to send them to the IMF, which specializes in ungovernable third-world countries.

From Eschaton, a reminder:

Total spending on health care, per person, 2007:
United States: $7290
Switzerland: $4417
France: $3601
United Kingdom: $2992
Average of OECD developed nations: $2964
Italy: $2686
Japan: $2581

But anything would be better than what we’ve got (unless your business model is based on denying health insurance claims).

Bell ringers recently discovered two potentially rare coins — a 1799 Draped Bust, Heraldic Eagle Dollar and a 1878 Morgan Dollar — in a Salvation Army red kettle near Berlin.

The coins have not been authenticated. The story goes on to say

The U.S. Hobby Protection Act, first enacted in the early 1970s, requires that replica coins — a popular novelty item — be marked with the word “COPY” on the surface of the coin, Tiso said.

“The coin has to say ‘copy,’ otherwise it’s illegal,” said Tiso, the president of G.R. Tiso Numismatics, who explained that it’s a violation of U.S. federal law to sell unmarked replicas.

If only persons had inspected credit default swaps and “securitized” debt futures as thoroughly.

It occurs to me that, with the coins, at least there’s something to inspect.

Still under half a mil:

Figures from the Labor Department showed jobless claims increased to 480,000 last week from 473,000 a week earlier, indicating the labor market will take time to strengthen.

Some other indicators looking up a bit.

No Lucas Electric here. From MarketWatch:

The U.K. government will not compromise on its planned 50% bonus tax, and may extend the rules to catch firms with unusual tax years, even as more firms reportedly consider moving high-paid staff overseas.

U.K. Chancellor Alistair Darling has refused requests to relax the terms of the tax — which would be paid by banks on all bonuses over 25,000 pounds ($40,600) — as firms claim it would raise far more than the 550 million pounds the Treasury estimated, the Financial Times reported.

The Treasury claims that the solution is for the banks to pay out less in bonuses, rather than to relax the tax rules, it added.

It’s an interesting report; it defines value as something other than country club memberships:

The New Economics Foundation said today that a study of the social impacts of several jobs revealed that City workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste-recycling industry gave much more to the country than they took out.

(snip)

The report said tax accountants were the most destructive, laying waste to £47 of value for every £1 they created. Elite City bankers (earning £1m plus bonuses) destroy £7 of value for every £1 they create and advertising executives wreck £11 of value for every £1 they are paid.

On the other hand, the report judged that waste-recycling workers generated £12 for every £1 spent on their wages. Childcare workers create between £7 and £9.50 of value for every £1 of pay and hospital cleaners create more than £10 in value for every £1 they receive in pay.

To see a description of how the “value” estimates were reached, follow the link.

Krugman:

Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown. It’s a universe in which government-sponsored lending agencies triggered the crisis, even though private lenders actually made the vast majority of subprime loans. It’s a universe in which regulators coerced bankers into making loans to unqualified borrowers, even though only one of the top 25 subprime lenders was subject to the regulations in question.

Oh, and conservatives simply ignore the catastrophe in commercial real estate: in their universe the only bad loans were those made to poor people and members of minority groups, because bad loans to developers of shopping malls and office towers don’t fit the narrative.

Speaking of catastrophes in commercial real estate, as I traversed the Jersey Turnpike this weekend, I saw the number of vacant warehouses has increased since my last trip up that way, and office buildings which had been occupied by the same folks ever since I first traveled that road [mumble] years ago are now for rent, cheap.

One sign by a warehouse park touted “1,000,000+ Square Feet Available!” Three of those is a square mile.

And I only went from Exit 7A to Exit 11.

Still under half a mil. The stimulus may be having an effect. Bloomberg:

The average number of Americans filing first-time claims for unemployment benefits over the past four weeks dropped to 473,750 last week, a one-year low, indicating companies are gaining confidence the economy will recover, figures from the Labor Department also showed today. Initial jobless claims, which are more volatile, unexpectedly rose by 17,000 to 474,000 in the week ended Dec. 5.

I heard on the radio that continuing claims dropped also, but the story left out how many of those folks had simply run out of unemployment compensation. That is a statistic that seems routinely not to make the news, and I’m too tired, after a 250 mile drive today, to go digging.

Passing the bucks:

Senate budget hawks on Wednesday unveiled a proposal that aims to get the national debt under control by forming a bipartisan commission to make tough decisions that they do not trust Congress to make on its own.

No mention is made in the story that most economists think that, right now, the national debt is not the issue; the recession is. Radio Times considered this issue last week. From the website:

All estimates point to a growing economy, but the recovery is not quite fast enough for average Americans to feel the improvement. We talk about economic policies – what’s worked and not worked and what it will take to get Americans working and spending again. Our guests are economists JAMES GALBRAITH and LARRY MISHEL.

Go to the website and search the archives for December 1, 2009, Hour One, or listen here (mp3).

Afterthought: This is the RepubliBlueDog way:

Be scared. Think small.

The whole darn system of tying health insurance to employment was absurd from the git-go; that may be why every other industrialized company does it differently.

A house built on sand and all that, dedicated to the proposition of paying insurance company execs’ country club memberships and Wall Street Banksters trading fees.

Now it is falling apart, and we can see who is more important to our elected representatives incongruously assembled: rich folks or rickety folks.

Look what happens when COBRAs are unleashed:

The government’s COBRA subsidy will expire this month for many people who lost their jobs between September 2008 and February of this year and are still out of work. The federal subsidy, adopted in March in the midst of the deep recession, paid 65 percent of the cost of monthly insurance premiums for up to nine months.

An effort has emerged in Congress to extend the aid, but deficit concerns may make that a tough sell. The end of the subsidy would be a major blow for people battling extended joblessness.

The cost of maintaining the average policy was $398 per month for a family and $144 for an individual, according to the Kaiser Family Foundation. Once the subsidy expires, that cost jumps to $1,137 per month for family coverage and $410 per month for individual coverage.

Commercial real estate–the other shoe is still dropping:

It’s just a hint of the harrowing state of affairs in commercial real estate, where vacancies are on the rise across virtually all sectors, rents and property values are dropping, building owners are low on funds, and financing options are drying up.

And bad as things are, they’re expected to get worse – the next slide in the snowballing economic crisis that began with the collapse of the housing market and continues to claim casualties.

(snip)

For instance, a property bought in 2005 for $10 million with a $7 million mortgage now might be valued at $6 million, said Steve Blank, a senior fellow in finance at the Washington-based Urban Land Institute.

Since these folks are losing their Armani shirts for whole shopping centers and office buildings, rather than for one bungalow or condo, there will be no shortage of state and local government help for them and no pundits calling them deadbeats for taking out the loans in the first place.

No, they are merely victims of the economy. It is only the poor who are responsible for their own fates.

Unemployment figures less bad this week. Bloomberg:

Recent readings on claims for jobless benefits signal firings are slowing as the economy grows. The number of Americans filing first-time claims for unemployment insurance unexpectedly declined by 5,000 to 457,000 in the week ended Nov. 28, the fewest since September 2008, figures from the Labor Department today showed.

“The labor market is turning,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. “We are set to break into positive job growth over the next few months. The recovery is proceeding on schedule.”

I do find the quotation in the second paragraph to show the hubris one would expect from a Master of the Universe.

Where, praytell, is this schedule of which he speaks?

Addendum:

Bonddad.

Still under half a mil. Must have been a difficult Thanksgiving for these folks:

Initial jobless claims declined to 466,000 in the week ended Nov. 21 from 501,000 a week earlier, Labor Department figures showed today in Washington. The number of people collecting unemployment insurance dropped in the prior week, while those getting extended payments also declined.

(snip)

The report showed the four-week moving average of initial claims, a less volatile measure, dropped to 496,500 last week from 513,000 the prior week.

Continuing claims declined by 190,000 in the week ended Nov. 14 to 5.423 million.

A caller to the Diane Rehm show (about 38 mnutes in):

My question is . . . why it is that our legislators can find a way to turn over $900 billion dollars a year to our Department of Defense to discover new and better ways to destroy people, yet there is a hue and cry from many of them over spending $900 billion over a 10-year period to help the people of this country.

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