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Posted to youtube.com
The Coming Collapse of the Middle Class
http://www.youtube.com/watch?v=akVL7QY0S8A&feature=youtube_gdata
- Tags:
- economy
- education
- Class
- bankruptcy
- middle
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Posted to michael.silverton.palo-alto.ca.us
40.6% Structural Unemployment? Somebody …
http://feedproxy.google.com/~r/packets/~3/3017wqTeNOI/
40.6% Structural Unemployment? Somebody better check this math http://bit.ly/40point6
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Posted to google.com
1929 Versus 2007: Employment Change (via feedly)
http://feedproxy.google.com/~r/TheBigPicture/~3/6wNenfLnqw4/
Shared by @silverton: Even you'd have to concede "YET" ... right Barry? This is very good context for Where We Are; but surely you're not presenting this as some kind of "proof" for Where We're Going?
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This chart makes it pretty clear that the current recession is no Depression: >Data from 1929 is not seasonally adjusted, Current 2007 data is SAAR > Sources: NBER Database http://www.nber.org/databases/macrohistory/contents/chapter08.html NBER History http://www.nber.org/macrohistory/ Hat tip Rob
[extracted from 1929 Versus 2007: Employment Change via feedly]
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- employment
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Posted to google.com
No Sunshine In Florida
http://feedproxy.google.com/~r/AtlanticBusinessChannel/~3/VOOJXDmL0S8/no_sunshine_in_florida.php
Shared by @silverton: File once again under: "It's the Structural Unemployment, stupid." http://bit.ly/structuralunemployment
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I've been very surprised over the past year how few articles I've seen on how bad things are in Florida. But the New York Times had an article over the weekend about Florida's troubles. Its economy was strongly correlated to the housing boom, so obviously its economy has been decimated by this recession. Things are worse there than even common statistics suggest. I have probably been a little more sensitive to Florida's problems than the average Washington journalist, since it's my home state. I still visit often and have many friends and family that reside there. As a result, I've seen just how rough a time the state is having.The Times article explains one of the reasons for Florida's problems -- its real estate market is atrocious:
It is a mess of immense volume: In the first six months of this year, 268,064 properties in Florida received a foreclosure filing, up nearly 42 percent from the first half of 2008, making it the second worst state in total foreclosures nationwide behind California. And for those convinced that recent, positive sales figures signal a brisk recovery, consider this: foreclosures outpaced sales of houses and condos in the same period (99,010) by a factor of nearly three. If every home in Boston received a foreclosure notice, the total would still be less than Florida's.
To make matters worse, Florida has long relied on real estate as a major component of its economy. The Times also notes:
Real estate and fast money, after all, have defined this peninsula since the '20s, when empty lots of swamp could be flipped for a profit between martinis. Florida has generally relied far more on growth than its counterparts: in 2004 and 2005, housing construction's share of the state economy was close to twice the national average, according to the Bureau of Economic and Business Research at the University of Florida.
Another factor affecting Florida has less to do directly with real estate, but more to do with a global economic contraction. During a recession, tourism tends to feel a lot of pain. That's pretty much Florida's only major industry besides real estate. One of the first discretionary costs people feel they can delay during a recession is a vacation. Those who do not cancel vacations altogether probably spend less than they would have. This effect has certainly been felt by Florida.
The state's problems aren't well-reflected based on its unemployment rate alone. According to the June monthly statistics (July isn't available until Friday), Florida's unemployment rate was at 10.6% -- only about 1% higher than the national average for the month. That's certainly bad, but only the 13th worst.
I think it is helpful if you go a little deeper into the unemployment numbers. The Bureau of Labor Statistics released an "Alternative Measures Of Labor Underutilization" report a week ago. For some odd reason, they average these percentages from the third quarter of 2008 through the second quarter of 2009. But they're interesting nonetheless. Two of these statistics are especially telling.
First, Florida is tied with Oregon for the 6th worst duration of unemployment. That means those unemployed in Florida are having a tougher time finding jobs than in most other states. Second, total unemployment including all marginally attached workers and those forced to work part time shows Florida as the 7th worst state. This is likely a better indicator of economic hardship than the better known unemployment statistic, since it shows the true percentage of workers who would like full-time employment, but can't obtain it. For Florida, that number was 15.6%.
Even these expanded unemployment statistics fail to show how bad things are in Florida, because there's another reason Florida's unemployed are being under-reported: many are fleeing the state. A recent article from the St. Petersburg Times notes this very disturbing trend (hat tip: Real Time Economics):
University of Florida demographers will report Friday that the state shed about 50,000 residents between April 2008 and April 2009. That should knock the number of Floridians down a notch from the previously reported 18.3 million.
It's the first time since 1946 that Florida has been a net population loser. Even during the Great Depression, new residents swept into the state in search of work and leisure. But the severe housing contraction, combined with the sputtering of Florida's job creation machine, has eclipsed the state's former gravitational pull.
The New York Times article also reports a similar finding, and blames Florida's approach to basing its economy on its real estate market:
Weaknesses in the approach emerged quietly, even before the bust, as overdevelopment and rising costs started pushing people away. Some were "halfbacks" -- retirees originally from the North who ventured "halfway back" to Georgia or the Carolinas -- but young families fled, too. In 2005, Broward County lost 1,756 students, in a district that thought nothing of adding 10,969 in 2001. Since 2004, enough parents have left to shrink the student body by 6 percent.
It's obviously not the weather that's got people leaving: it's the job market. The reason I decided not to return to Florida after college was due to the dim job prospects: it really has little industry beyond tourism and real estate. This stacks up worse than some other ailing states. California, for example, with all its problems at least has technology in Silicon Valley, the entertainment industry in Los Angeles and a sprinkling of other corporate centers throughout the state. Florida has no such industries to pin the hopes for its future on.
That might also partially explain why, according to the WSJ, Florida ranks last in stimulus money per capita, while ailing California and Michigan rank 5th and 6th, respectively. Other than creating new infrastructure-related jobs in construction, there isn't any kind of government spending that can help Florida, unless you try to somehow stimulate tourism.
Earlier, I mentioned Florida ranks 6th worst for unemployment duration. I would expect that ranking worsen steadily. Those states with real industry can eventually improve their employment levels as the economy gets better. The real estate market in Florida might not recover for a long time; it may never recover if the state continues to see its population decrease. Moreover, tourism will likely be one of the last industries to improve -- nobody will begin traveling again, or spending a lot when they do, until employment improves, and they feel the economy has made a full recovery.
In the meantime, if you're looking for cheap real estate or great vacation deals, then you can probably capitalize on Florida's misery. The state would certainly welcome your business.
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Posted to google.com
Unemployment Rate Could Take Decade to Return to 6% (via feedly)
http://feeds.wsjonline.com/~r/wsj/economics/feed/~3/jE1-MS6FiZ0/
Shared by @silverton
As we've been saying all year boys-n-girls ... Structural Unemployment leads to requirement for Basic Income ... particularly considering that the numbers here are HALF of the U6 Full Unemployment Reality. That means, this research is saying TOTAL unemployment is unlikely to return below 12%!
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An end to the recession is unlikely to bring any improvement in hiring in the U.S., a new paper from the Federal Reserve Bank of Kansas City argues
The research, made available on the bank’s Web site, affirms the widely held view that hiring is unlikely to spike much even if the recession ends, as most believe is imminent, and warns things could be worse than now thought. Persistent levels of high unemployment could also change how the Fed assesses inflation pressures, with important and as yet unsettled implications for monetary policy. Written by Edward Knotek and Stephen Terry, the paper asserts two main forces explain why something akin to a jobless recovery is likely to follow the end of the recession. First, there have been changes in the structure of the economy that make employers more reluctant to take on new hires. And second, recessions begat by banking crises tend to cast longer shadows on recoveries, depressing the pace of job growth. The paper’s authors project what they believe will be the course of joblessness, adjusted for structural changes in the economy and the impact of the banking crisis. That path sees unemployment breaching 10% and staying there through 2011, after which it “slowly drifts” down to 8% by 2014 and 7% by 2016. Even a decade down the road, unemployment could be above 6%, the paper warns. This outlook is considerably worse than what would be expected based on a normal post-war recession, or even the aftermath of a recession like those of recent experience. The paper was published after last Friday’s release of July hiring data. That report showed a moderation in the pace of job losses and an unexpected move down in the unemployment rate. While economists and investors took comfort in the report, there was a sense that the unemployment rate decline was a quirk of falling labor force participation, and that it’s pretty likely that measure will again begin to rise. Economists have for some time been anticipating job losses, even as they see modest growth returning to the economy. What is now a 9.4% unemployment rate is seen as peaking at 9.9% in December, according to The Wall Street Journal’s most recent survey of forecasters. The paper’s authors allow their worst-case scenario may not play out. Their estimates rely in part on data from other countries that may not fit the American experience closely enough. The somewhat unique U.S. system for credit allocation, which relies more heavily on markets over banks, could also skew the data in unexpected ways. The forceful response of government — extraordinary Fed policy actions coupled with huge government stimulus efforts — could also work to create a less ugly outcome. The study warns changed labor market dynamics could also skew the so-called natural rate of unemployment toward a higher level, which in turn means the lower levels of unemployment could create the sort of inflationary forces the Fed would be forced to deal with. But there’s uncertainty on this point. “Estimates of the natural rate are likely to be an important topic for policy makers for the foreseeable future.”[extracted from Unemployment Rate Could Take Decade to Return to 6% via feedly]
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Posted to michael.silverton.palo-alto.ca.us
US unemployment is 18.2% counting “the old-fashioned way”
http://michael.silverton.palo-alto.ca.us/packets/?p=1166
The unemployment timebomb is quietly ticking. One dog has yet to bark in this long winding crisis. Beyond riots in Athens and a Baltic bust-up, we have not seen evidence of bitter political protest as the slump eats away at the legitimacy of governing elites in North America, Europe, and Japan. It may just be a matter of time. SOURCE: Telegraph.co.uk. Do keep in mind that in America, some of the “governing elites” may inhabit Washington, D.C. but the vast majority do not. So, for the sake of those who would like to turn back the clock to some mythical Good Old Days, which never were, you might be surprised to find the ol’ rose-colored lenses a bit more — how shall we put this sensitively — brownish in hue, compared to what you thought you recalled: The Centre for Labour Market Studies (CLMS) in Boston says US unemployment is now 18.2pc, counting the old-fashioned way. The reason why this does not “feel” like the 1930s is that we tend to compress the chronology of the Depression. It takes time for people to deplete their savings and sink into destitution. Perhaps our greater cushion of wealth today will prevent another Grapes of Wrath, but 20m US homeowners are already in negative equity (zillow.com data). Evictions are running at a terrifying pace. [Emphasis mine].
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Posted to michael.silverton.palo-alto.ca.us
May Mass Layoffs & Initial Claims Highest on Record
http://michael.silverton.palo-alto.ca.us/packets/?p=1116
The latest Mass Layoffs news release (http://www.bls.gov/news.release/pdf/mmls.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below. ————————————————————————— In May, employers took 2,933 mass layoff actions involving 312,880 workers. Mass layoff events and initial claims rose to their highest levels on record. Over the year, manufacturing layoff events and initial claims more than doubled. Thirty states reached program highs for May average weekly initial claims.
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Posted to michael.silverton.palo-alto.ca.us
Long-Term Outlook - Shilling’s INSIGHT - March 2009
http://michael.silverton.palo-alto.ca.us/packets/?p=946
Courtesy of the relentlessly intrepid Big Picture thinking of Barry Ritholtz:
The deepening recession and spreading financial crisis is the beginning of the unwinding of about three decades of financial leverage and spending excesses. The process will probably take many years to complete as U.S. consumers mount a decade-long saving spree, the world’s financial institutions delever, commodity prices remain weak, government regulation intensifies and protectionism threatens, if not dominates. Sluggish economic growth and deflation are the likely results.
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Posted to youtube.com
Chomsky on the economy
http://www.youtube.com/watch?v=kTtPYM8RSDE&feature=youtube_gdata
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Posted to youtube.com
Authors@Google: Richard Florida
http://www.youtube.com/watch?v=khQ9BaXZAjM&feature=youtube_gdata
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Posted to michael.silverton.palo-alto.ca.us
Just for the Record
http://michael.silverton.palo-alto.ca.us/packets/?p=786
States’ Funds for Jobless Are Drying Up - NYTimes.com We told you so: Progressives were right about the financial crisis but were ignored. Will they be listened to now? - Salon.com
Both of these articles thanks to @wa8dzp!
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