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Apartment vacancy rate improves, but “rental affordability crisis” at worst level ever

Apartment vacancy rate improves, but “rental affordability crisis” at worst level ever

Over three years ago HUD warned of “the worst rental affordability crisis ever,” citing statistics that

About half of renters spend more than 30 percent of their income on rent, up from 18 percent a decade ago, according to newly released research by Harvard’s Joint Center for Housing Studies. Twenty-seven  percent of renters are paying more than half of their income on rent.

This is a serious real-world issue. I have been tracking rental vacancies, construction, and rents ever since.  The Q2 2017 report on vacancies and rents was released last week, so let’s take an updated look.

After stopping for a year, in the second quarter median asking rents zoomed up over 5% from $864 to $910.  Meanwhile, surprisingly weekly wages declined from $865 to $859.. The combined effect is that rent has become more unaffordable than ever.
The big jump in median asking rents in the second quarter can be easily seen in the below graph:

Here is an updated look at real. inflation adjusted median asking rents, showing that after abating a bit for a year after Q1 2016, rent pressures on household budgets spiked in the second quarter:

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The Masters Always Deal Themselves the Trumps

More Feargus O’Connor (1844) on labour’s objections to machinery:

And now, sir, let me state my principal objections to the unrestricted use of machinery. First, it places man in an artificial state, over which the best workman, the wisest man and most moral person, has no control. Secondly, while it leads to the almost certain fortune of those who have capital in sufficient amount to command those profits, made up, as you admit, by the reduction of wages; upon the other hand, it leads to uncertainty in the condition of the employed, against which he is incapable of contending. Thirdly, it disarranges all the social machinery of which formerly individuals were necessary items, families formed branches, and small rural districts important sections of the one great whole. Fourthly, the present fluctuations give rise, in good trade, to an augmentation of artificial classes, if I may so call them, who have no natural position in society, but are merely called into existence by present appearances, trade upon nothings, traffic in fiction, and, like your order, speculate upon what they may retire upon when trade begins to flag. Hence we find each fluctuation in trade followed by a new race of shopkeepers, who are grasping in prosperity, compound when appearances change, and retire when adversity comes, leaving a vacuum to be filled up by the next alternation from panic to speculation. 

… 

And now, as the thread of our dialogue has been somewhat broken, I beg to submit a summary of my objections to machinery. Firstly, the application of inanimate power to the production of the staple commodities of a country must inevitably depreciate the value of manual labour; and every depreciation of the value of man’s labour in an equal degree lowers the working-man in the scale of society, as well as in his own esteem: thus making him a mere passive instrument, subservient to any laws that the money classes may choose to inflict, to any rules the owners may impose, and satisfied with a comparative state of existence. I object to machinery, because, without reference to the great questions of demand and supply, the masters can play with unconscious labour as they please, and always deal themselves the trumps. I object to machinery, because it may be multiplied to an extent whereby manual labour may be rendered altogether valueless: I object to machinery, because under its existing operation you admit the necessity of emigration, better ventilation, education, improved morality, manners, habits, and customs of the working classes, thereby showing that a slate of recklessness, ignorance, want, and depravity exists; which, as I before said, you admit to be consequences of the present system.

While the inevitability of each of O’Connor’s objections is subject to debate, the crucial issues at stake for him are the sociological and psychological effects of the unrestricted use of machinery on communities and individuals, under its existing operation. The specter of the “job-killing robot” plays a minor and only contingent role: “it may be multiplied to an extent whereby manual labour may be rendered valueless.” Even that objection can readily be interpreted as more significantly about a loss of social status and psychological esteem rather than a wholesale elimination of jobs.

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Wisconsin Buys Foxconn Facility for Kenosha

FoxconnI picked up this version 4 BS lies of Trump and Scott Walker’s Imaginary Foxconn Factory on Tom Bozzo’s facebook page where I stopped to see what he had to say as of late. While it is a great attention grabber, a link caught my eye in Wonkette’s article leading to this America and the Foxconn Dream . This morning Ken Thomas has his very thorough analysis Foxconn Cashes in for $3 Billion-Plus: Analysis up. The first being the wonkier, the 2nd is a Bloomberg discussion, and Ken’s is an analysis on a topic he pursues, government subsidizing business. And this one ??? I am not sure yet.

You look at the picture and you see Ryan smirking in the background, a smug looking Trump smug face, and Mr. Terry Gou in a slight bow looking directly at Trump. I have seen the look before. Typically, this look comes from an Asian associate when they have taken what they want at your expense. Trump has been beating the protectionist drum loudly these days when talking to our neighbors Mexico and Canada. He has threatened China and other countries as well.

Mr. Terry Gou the CEO of Foxconn said he would only come to the US if the chosen location met Foxconn’s demands, which of course Walker with the aid of Paul Ryan did do. The facility is located in Paul Ryan’s backyard. And the threat of having tariffs placed on Foxconn products has dissipated. Foxconn will invest $10 billion in a factory some say will be 20 million square feet and create 3000 jobs of roughly 6600 square feet for each US worker. Sounds more like a warehouse to me even if they stuck 160 foreign made robotic manufacturing cells (Tesla did such) in it. More than likely, this will be an assembly operation with components and assemblies coming from Foxconn and Foxconn suppliers. The value-add will be out of country.

So what does all of this get Wisconsin for shelling out $519 per Wisconsin constituent and the US also?

According to Bloomberg’s Tim Culpan; “Wisconsin is paying as much as $1 million per job, which will carry an average salary of $54,000. The state’s economic development corporation is selling the project to taxpayers with a claim that it will create 10,000 construction jobs for building the facility and another 6,000 indirect positions. It is expecting $3.3 million of investment per employee from the Taiwanese company”.

Foxconn does not have a history of doing what it says and agrees to do. In Pennsylvania, Foxconn pledged $30 million to build a plant and hire 500 workers. It never happened. A pledge of $1 billion to build a plant in Indonesia dissipated also. Foxconn’s division Hon Hai has not spent 10 billion in any single year on infrastructure nor has it spent as much if one combines the last five years. Walker’s boondoggle may be mostly hype and a way to insure he is reelected in 2018.

I wonder why Walker is not in the picture with Ryan and Trump? Maybe out building his used car business for when he is not reelected?

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Crowding Out and the Social Overhead Costs of Labor

Crowding Out and the Social Overhead Costs of Labor

Another strange twist in the convoluted lump-of-labor saga. Chartist leader Feargus O’Connor refuted the “Treasury View” — aka “crowding out” — in 1844. O’Connor’s tract is long-winded and sentimentalized an idyllic past but it also contains some cogent analysis of why workers were (and should still be) wary of the exploitative use of technology by capitalist firms.

O’Connor’s critique took the form of a dialogue, which parodied and refuted an earlier dialogue, “The Employer and Employed,” that had been published in Chambers’s Miscellany of Useful and Entertaining Tracts. In the Chambers dialogue, the mill owner, Mr. Smith explains to a worker, Mr. Jackson, how the immutable laws of economics harmonize their interests. Smith’s elaboration of the doctrine of wages was described elsewhere as “right orthodox, and admirably clear too.” I will return to O’Connor’s rebuttal in more detail later, but first I would like to set the stage by briefly reviewing the contemporary relevance and the historical background of the central argument in the two dialogues.

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Lack of Hope in America: The High Costs of Being Poor in a Rich Land

(Dan here…I found Yves intro more appealing than the research…)

Yves here. While this article gives a very good high-level summary about how inequality is becoming institutionalized in American and the costs to those who see themselves as having lost the most, I wonder about the emphasis on hope as a remedy. Perhaps this is such a strong cultural bias in the US that there’s no escaping it as a motivator for most people. But I take to heart the interpretation of the Pandora’s Box myth that Hope being at the bottom of the box of all the evils she let loose was not a show of mercy by the gods, but simply a torment in disguise.

It’s not hard to imagine that the psychological damage done by loss of mobility and the relative status decline of lower-middle class individuals, particularly in rural areas, is made worse by media. Not only does TV show how the better-off half lives, TV and the movies regularly depict characters living in better circumstances than the incomes that go with their jobs would allow. One reason is that it’s almost impossible to shoot a scene in anything smaller than a pretty big room, so Americans (outside those meant to be upper class) in movies and TV look better housed than they generally would be in their real lives. And of course they all have great teeth.

Lack of Hope in America: The High Costs of Being Poor in a Rich Land is worth a quick read but I agree it is only a conversation starter for this blog. However, how our expectations are set and what we ascribe to ourselves and others is telling.

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Extreme Contempt

Extreme Contempt

Donald Trump has engaged in so many outrageous statements and conduct that it has become very difficult to remember which of  those were really the most outrageous, the most morally contemptible, the ones that should have led his supporters to have abandoned but they did not, the ones that merited above all others the most Extreme Contempt.

The events of the last 24 hours have clarified for me what was the moment in 2016 when Trump crossed the line, when he committed an act of Extreme Contempt that should have lad to every Republican worth anything above a sewer of morally contemptible and disgusting garbage to have rejected this worst of all people to have occupied the White House.  That moment was when he dissed John McCain as a loser for having been captured by the North Vietnamese during the Vietnam War.  I think the only way fervent Trump supporters can justify their existence on this planet after that particular outburst is to simply ignore it and forget about it, which is what I am sure the vast majority of them have done,  But the events of the last 24 hours have brought this matter back into focus, and while I really do not know, I think that it is quite likely that when we get to the bottom line, and we are indeed now at a very serious bottom line, Donald Trump’s ultimate desecration of any moral  consciousness when he dissed McCain for becoming a deeply tortured POW has come back to haunt him and defeat his pathetic and incoherent effort to overturn the Obama health care legacy.

Let me be clear that I have many disagreements with McCain, and many things he has done personally.  But the man’s days are now shorter than most of ours.  Yeah, maybe it will all go away and he will still be a Senator a decade from now.  But more likely he will follow the late Ted Kennedy, who apparently had the same sort of “aggressive” brain cancer he has, and, well…

So, let me confess that I know John McCain.  About a decade ago I sat next to him on a long airplane flight and we discussed climate change.  He had a reasonable view in my mind, and indeed when he ran against Obama, his position was only marginally less progressive/reasonable than Obama’s.  I actually gave him my card offering to give advice, although I never heard from him later.  Of course he has gone silent on this issue more recently as his party has gone off the deep end on denying the very existence of global warming, on the  list of many others where, well, tsk tsk.

So, let us get to the really serious. McCain has been going back and forth on the heath care issue, a man about to die and having surgery on taxpayers money, a man who is by far the most serious Republican senator there is currently by several orders of magnitude, and not just because he is a former presidential candidate of the Republican Party in 2008.  No, he is serious beyond all of them for  his experience, much bragged about by his party in 2008, as a POW in Vietnam, where he experienced Extreme Torture, leading him to stand unequivocally and without a shred of doubt that torture is completely unacceptable, morally and practically.  I applaud his declaring and maintaining this position throughout the Bush admin when torture got approved during the Iraq War.  On this matter he has absolute and unassailable credibility beyond all critics, and I applaud him for this.  I shall add that this is a matter that is personal. My wife was tortured by the former Soviet government, and I have also been tortured in a distant land I shall not name and of which I shall not speak. Unsurprisingly, my wife and I have deep personal support for McCain’s unequivocal position on this matter to totally oppose torture in all circumstances everywhere period.

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LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….

LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….

Since this year the Doomers haven’t even been able to rouse themselves up enough to call for OMG recession imminent!!!, they have had to settle for how slow the growth in the economy has been.  Their favorite theme has been the alleged divergence between the “soft” consumer confidence and ISM survey data, and the “hard” data, like industrial production:

Oh, wait!  Never mind …

Well, then, how about durable goods?  Since it was just updated this morning, let’s take a look at that:

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Minimums of understanding

Update on Wells Fargo

Via Reuters Wells Fargo drags feet:

Wells Fargo last September settled with three regulators after revelations that branch staff set up as many as 2.1 million accounts without customer authorization in order to hit sales targets. Since then, the bank has replaced its CEO and other top executives have either resigned or been fired.

The bank has been hit with several regulatory inquiries and lawsuits.

“The extent of fraud at Wells Fargo was stunning,” Stringer said in a statement sent to Reuters on Thursday. “Executives have been held responsible — but now directors must answer for their part… This board needs to be refreshed — today.”

 

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Wisconsin and Foxconn…

Via the New York Times Wisconsin and Foxconn:

Foxconn’s plan for a $10 billion factory in Wisconsin is certainly good news for President Trump and Republican politicians Gov. Scott Walker and Speaker Paul D. Ryan, whose district the plant would call home.

But the deal with Foxconn, the Taiwanese electronics supplier, comes with a heavy price tag for Wisconsin taxpayers: $3 billion in state tax credits that dwarf the typical incentive package companies receive from local governments.

Even as Mr. Walker celebrated the news with Foxconn executives at a rally at the Milwaukee Art Museum on Thursday, experts on the political left and right alike said the rewards were not justified by the cost of the tax breaks.

Over all, the subsidies for the Foxconn plant, which would produce flat-panel display screens for televisions and other consumer electronics, equal $15,000 to $19,000 per job annually.

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