Relevant and even prescient commentary on news, politics and the economy.

Notes on the government shutdown

Notes on the government shutdown

I have a post on the housing market pending at Seeking Alpha. If and when it goes up there, I will link to it here.

In the meantime, here are a few important notes on the shutdown.

I can’t find the quote now, but about a week ago it was floated that Trump could “save face” by declaring an emergency, starting to build the wall, and then allow the government to open. Then Trump indicated that if he declared a state of emergency, that wouldn’t mean that he would open the government even then. This is a win-lose capitulation transaction, and Trump is bound and determined to show dominance over the Democrats.

Aside from the fact that there is a large portion of the GOP that is taking advantage of this to “drown the government in a bathtub,” now that a Federal judge has turned down government workers’ “involuntary servitude” challenge, Trump has a ready-made force of de facto slaves that he can recall — or not — depending on whether he wants a particular government program to work or not:

Rank-and-file Democrats reject Trump’s invitation to shutdown talks, back Pelosi in opposition to border wall

The nearly 50,000 furloughed federal employees are being brought back to work without pay — part of a group of about 800,000 federal workers who are not receiving paychecks during the shutdown, which is affecting dozens of federal agencies large and small. A federal judge on Tuesday rejected a bid by unions representing air traffic controllers and other federal workers to force the government to pay them if they are required to work.

Don’t hold your breath waiting for SEC workers or those necessary to issue food stamps to be recalled.


Comments (11) | |

Getting Ever More Surreal

Getting Ever More Surreal

I am referring to a comment Sean Hannity made on his show earlier this evening in his monologue. The reports tht  President Trump was under  investigation by FBI Counterintelligence as being a possible “Russian asset” supposedly taking orders from Vladimir Putin has pushed uber Trump defender Hannity to ever more surreal forms of defense, in this case one especially bizarre given the cloase association in Trump’s early career between him and Roy Cohn, the lead attorney for the late anti-communist scourging Senator Joseph McCarthy of Wisconsin.

This new more surreal position has Hannity after declaring that “the walls are closing in” on former FBI Director James Comey over his supposed role in this investigation, although apparently it was the circumstances around Trump’s firing of Comey that initially triggered this reported conterintelligence investigation, Hannity then compared Comey to the late anti-communist scourge, J. Edgar Hoover, FBI director for 48 years.  In particular he pinpointed Hoover’s investigation of the late Henry Wallace in 1948 for his reputed ties to the Soviet Union, highlighting that Wallace had served as vice  president during FDR’s third term (and was pushed out of that position to be be replace by Harry Truman in FDR’s fourth term by conservative Democrats worried about his perceived to be friendly attitude to the Soviet Union).  In 1948, when Hoover was making his investigation and allegations, the Cold War was starting, and Wallace was the candidate for president of the Progressive Party, running heavily on a platform of opposing the Cold War (and certainly the anti-communist positions of McCarthy).  The sight of Hannity of all people praising and defending Wallace against the supposedly evil Hoover was quite a spectacle.

As it  is, I am sympathetic to the view that Wallace was unfairly treated and smeared.  Also, the Progressive Party and Wallace supported many, well, progressive policies that were and remain reasonable, such as national health insurance.  All of that adds to the irony of Hannity now defending him as he has no use for such policies.  The exact nature of Wallace’s relations with Soviet leaders and of the connection between the Progressive Party and CPUSA remain controversial to this day, but but ceetainly Wallace opposed the incipient Cold War and publicly supported Soviet positions in 1948.  I do not know if it was possible to avoid the Cold War or not, and it is impossible to know what would have happened if Wallace had won, especially given that he came nowhere near dong so.  As it was, Hoover was correct that Wallace was very friendly with various Soviet leaders and agreed with their views, for better or worse.

Comments (3) | |

Flying blind

Flying blind

The government shutdown is affecting some important economic indicators. All of the series published by the Census Bureau, including retail sales, manufacturers’ and wholesalers’ data, personal income and spending, new home sales and housing permits and starts, are not being published.  It appears that GDP is not going to be published by the BEA either.

In the past I have created work-arounds for a few economic series, in particular new jobless claims and industrial production, neither of which appear affected at this point, as the former is published by the Department of Labor, and the latter by the Fed.

If the government shutdown continues — and a long shutdown, until there is widespread pain or an avoidable disaster (like a plane crash or widespread food-borne disease outbreak) looks like the most likely scenario for now — I will attempt serviceable work-arounds for at least some of these series.

For starters, retail sales was scheduled to be released this Wednesday. Almost certainly that isn’t going to happen, so on Wednesday I’ll publish a guesstimate that hopefully will at least get the direction correct, and capture some of the strength or weakness of that direction.

But, make no mistake, not having access to reliable economic data isn’t just a drawback for me, it’s a cost to any enterprises attempting to make decisions. Some of those businesses are going to postpone making a decision — on hiring as well as spending — until they have more clarity. And the postponement of spending decisions means a drag on GDP and employment.
Unfortunately it appears that the spate of short shutdowns in the past several decades have caused Washington to “learn” that, at least in the short term, nothing too bad happens when government is closed. Thus, flying blind will continue until we crash into something.

Comments (8) | |

The Key to Gentrification

The Key to Gentrification

In the world of urban politics, there is probably no more potent populist rallying cry than the demand to halt gentrification.  Activists have fought it on multiple fronts: zoning, development subsidies, permitting, rent control—every lever housing policies afford.  But what if they’re mistaking cause for effect, hacking away at the visible manifestations of the problem while leaving the problem itself intact?

Pivot to an important article in today’s New York Times, reporting on recent research David Autor  of MIT presented at the economics meetings in Atlanta earlier this month.  It’s all summed up in this set of charts:

As you can see from the tiny print at the top, the data are being read horizontally within each chart, from less dense regions (rural areas) on the left to high density cities on the right.  The question being asked in the article is, if you live in a rural area or a small town, how much benefit can you get from moving to a big city?

Comments (0) | |

Value of the Chrysler Building and California Property Taxes

Value of the Chrysler Building and California Property Taxes

The big news in New York City is that the Chrysler Building is for sale:

New York City’s iconic Chrysler Building has appeared in dozens of movies and remained an Art Deco jewel of the Manhattan skyline for decades. Now, the 89-year-old skyscraper can be yours. Located on 42nd Street just east of Grand Central Terminal, sale price estimates for the famed Chrysler Building vary, but its majority owners, the Abu Dhabi Investment Council, hope to recoup the $800 million it paid for their stake of the building back in 2008.

They hope but some think the building might go for as little as $650 million and that does not cover the value of the land:

the land beneath the building is owned by New York’s Cooper Union School and the lease last year came to $32.5 million.

If we assume a 5% discount rate, the present value of annual lease payments like these might be another $650 million if one wants to know the value of the land and the building. But is it reasonable to assume a 5% discount rate? Let’s return to this after noting some grumpiness from John Cochrane towards something Paul Krugman wrote:

I try very hard not to get in to the business of rebutting Paul Krugman’s various outrages. The article “The Economics of Soaking the Rich” merits an exception. I will ignore the snark, the… distoritions, the … untruths, the attack by inventing evil motive, the demonization of anything starting with the letter R, and focus on the central economic points … Diamond and Saez made a big splash precisely because their estimates were so novel and so much higher than the prevailing consensus. For example, Greg Mankiw, also a previous CEA chair, and not a fraud, writing the excellent “Optimal Taxation in Theory and Practice” in the Journal of Economic Perspectives … Krugman and company are proposing a 70% top federal rate on top of all the others, which is … a bit deceptive relative to the 70% total marginal tax rate even in his cherry-picked sources.

OK – I cherry picked much of this rant so read the entire long winded thing for yourself. Optimal taxation is indeed a controversial topic and I applaud the notion that we should go beyond Federal taxation. Can someone tell Mankiw that before his next oped on how progressive the Federal tax system is? Cochrane followed this by some claim that we should include property taxes in the calculus of calculating the marginal tax on income:

How much is the property tax? In Calfornia, we pay 1% per year. That doesn’t seem bad, except that property values are very high. You can’t get a tear-down in Palo Alto for under $2 million. If you buy a house that costs 5 times your income — say someone earning $200,000 per year buying a $1 million house — then that is equivalent to 5 percentage points additional income tax. On top of 42% federal, 13.2% state, 9% sales, and other taxes, it’s part of my view that we’re past 70% top marginal rate now.

Maybe it is because so many of us in New York City choose to pay rents but adding the tax on property to the tax on income strikes me as odd. I’ll leave to others to weigh on this debate but I would be amiss if I did not note Peter Dorman’s latest post:

In the world of urban politics, there is probably no more potent populist rallying cry than the demand to halt gentrification. Activists have fought it on multiple fronts: zoning, development subsidies, permitting, rent control—every lever housing policies afford. But what if they’re mistaking cause for effect, hacking away at the visible manifestations of the problem while leaving the problem itself intact? Pivot to an important article in today’s New York Times, reporting on recent research David Autor of MIT presented at the economics meetings in Atlanta earlier this month.

Cochrane had an odd calculation of the present value of property taxes:

A 1% property tax at a 1% interest rate is equivalent to a 100% tax on houses. That $1,000,000 house is really going to cost you $2,000,000!

Wait, wait – I’m assuming a 5% discount rate and he assumes a 1% discount rate? OK, he continues:

What is the right rate? We can have a lot of fun with that one. The current 30 year TIPS (inflation indexed) rate is 1.19%. The 30 year nominal Treasury rate is 2.97%. In California, under Proposition 13, you pay 1% of the actual purchase price per year, but that quantity never increases. (This fact results in the paradox of extremely high property taxes on new purchasers, older people staying in huge old houses, and low property tax revenues.) So you might say that the nominal rate applies.

You might say? If the nominal cash flow is not indexed, then you should use the nominal risk-free rate as your starting point. So I started with a 3% rate and then added 2% more. Why the extra 2% you ask? Well I have read the seminal paper on leasing by Merton Miller and Charles Upton that note we should add a premium for bearing the risk of obsolescence. A lot of research would put that premium at 2% but I guess Cochrane wants to pretend owners of property should discount cash flows at the risk-free rate, which reminds me of that book by James Glassman and Kevin Hassett entitled DOW 36000. Never mind having fun with the appropriate discount rate – who did Cochrane rely on when teaching his students finance – Glassman & Hassett or Merton Miller?

Comments (16) | |

How did they get so rich ?

I hope and trust that this will be an amusing display of my ignorance. I don’t hope to reach David Graeber’s level

David Graeber: Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages…

1. How did Jeff Bezos get so rich ? His wasn’t a subtle idea.
The first point is that Amazon went for years without turning a profit. I think his strategy was partly based on new entrant predatory pricing. I would guess that are many B league Bezoses whose firms went bankrupt. In the field of innovative low margin retail, survivor bias is a bitch.

But also, books were a good place to start. There are lots of different books. They are durable. They aren’t so heavy (even pre-kindle).

Then there is big box one stop shopping.

2. Yeah what about the Waltons ? At first (in the 80s I think) I was very puzzled to read the name Sam Walton on a list of the super rich, because I had never seen a Walmart. In fact, that was when I first read “Walmart”. Retail is a very competitive low margin sector. How could anyone become super rich in discount retail ??? My guess is that he was the first to realize how much big cars had changed the game. The long cars of pre-1973 had big trunks, but I guess they just aren’t in the same league as pickups, SUVs and minivans. It is notable that Walmart started in the huge vehicle belt (which I think has a lot to do with belt size if you get my drift).

3. Brin, Page and Google. OK look the original product is actually excellent. Also giving stuff away (including 1 gigabyte e-mail boxes) was smart.

Comments (5) | |

How Shocking Was Shock Therapy?

How Shocking Was Shock Therapy?

In 2007 Naomi Klein got quite a bit of attention and mostly favorable comment for her book, Shock Doctrine. It promulgated that global elites used periods of crisis around the world to force damaging neoliberal policies derived from the Chicago School and Washington Consensus upon unhappy populations that suffered greatly as a result. This was “shock therapy” that was more like destructive electroshock than any sort of therapy. There is a lot of truth to this argument, and it highlighted underlying ideological arguments and outcomes.

The argument largely seems to hold for the original poster boy example in Chile with the Pinochet coup against the socialist Allende regime. A military coup replaced a democratically government. While Chile was experiencing a serious inflation, it was not in a full-blown economic collapse. The coup was supported by US leaders Nixon and Kissinger, who saw themselves preventing the emergence of pro-Soviet regime resembling Castro’s Cuba. Thousands were killed, and a sweeping set of laissez-faire policies were imposed with the active participation of “Chicago Boys” associated with Milton Friedman. In fact, aside from bringing down inflation these reforms did not initially improve economic performance, even as foreign capital flowed in, especially into the copper industry, although the core of that industry remained nationalized. After several years the Chicago Boys were sent away and more moderate policies, including a reimposition of controls on foreign capital flows, the economy did grow quite rapidly. But this left a deeply unequal income distribution in place, which would largely remain the case even after Pinochet was removed from power and parliamentary democracy returned.

This scenario was argued to happen in many other nations, especially those in the former Soviet bloc as the Soviet Union disintegrated and its successor states and the former members of the Soviet bloc in the CMEA and Warsaw Pact also moved to some sort of market capitalism imposed from outside with policies funded by the IMF and following the Washington Consensus. Although he has since expressed regret for this role in this, a key player linking what was done in several Latin American nations and what went down after 1989 in Eastern and Central Europe was Jeffrey Sachs. Klein’s discussion especially of what went down in Russia also looks pretty sound by and large, without dragging through the details, although in these cases the political shift was from dictatorships run by Communist parties dominated out of Moscow to at least somewhat more democratic governments, although not in all of the former Soviet republics such as in Central Asia and with many of these later backsliding towards more authoritarian governments later. In Russia and in many others large numbers of people were thrown into poverty from which they have not recovered. Klein has also extended this argument to other nations, including South Africa after the end of apartheid.

Having said all that it must also be recognized that in some parts of the book Klein overstated her argument even to the point of including outright false information:

The case that really sticks out in this regard is Poland, arguably especially important as it was the place where the term “shock therapy” was first used. As it turns out, many observers have an inaccurate perception of what happened there, with Klein’s account not helping. It is understandable that many might be misled given that it was the Polish finance minister during the worst of the crisis and shock in 1990-91 when economic output fell sharply and unemployment rose, Leszek Balcerowicz, who coined the term and said that it was being applied in Poland. But this turns out to be an exaggeration, with much of what he wanted with the support of Jeffrey Sachs and the IMF at the time not happening due to an election in 1993 that threw out the shockers and mitigated the policies substantially. The upshot ultimately was that Poland ended up performing better than any other of the former socialist transition economies of the former Soviet bloc, becoming in fact one of the best economic performers in the entire continent of Europe, the only nation there not to go into recession in 2009 and now further ahead than any of the others economically. While inequality and unemployment are somewhat higher than in 1989, they are not dramatically so while many other economic variables are strongly better. The unemployment rate in August 2018 was 3.4%, higher than the less than 1% of 1989 but lower than in the US or most other European nations. The Gini coefficient is now somewhere in the .32 to .34 range, higher than ..25-.28 of 1989, higher than in Sweden or the Czech Republic but about the same as in Germany and much lower than in Russia, the US, or China.

The vast majority of the population is unequivocally better off economically now than in 1989. Comparing 2013 to 1989 as a ratio, real per capita GDP in Poland was 2.98, higher than any Soviet bloc transition economy aside from Turkmenistan (whose data is unreliable), with Russia at 1.44, the Czech Republic at 1.68, Hungary at 2.17, and Moldova at 0.82, now Europe’s poorest economy falling below Albania at 2.55. Poland suffered an inflation rate of 6905 in 1989 but this is was brought down fairly rapidly and is now barely above zero. It had the least level of graft of any of these economies as of 2013, There has been major environmental cleanup, especially in its southwestern corner, formerly part of the “dirty triangle,” one of the most polluted locations ever on this planet. The ratio of measured happiness between 2013 and 1989 is 1.44, higher than in any of the other transition nations.

A particularly controversial issue is that of the poverty rate in Poland, for which there are competing measures. Depending on the measure, the poverty rate in the 1980s was probably in the 5-10% range. In 2012, 6.7% of the population was below a living wage level, while alternative measures had it at around 11% or even as high as 16%. The poverty rate certainly rose sharply as did income inequality in the crisis years of 1990-91, but then fell and rose again before falling afterwards. A low point after the transition was 2003, the year before Poland entered the EU and began receiving substantial agricultural subsidies that helped the poor largely rural southeastern region long marked by small unproductive farms (Poland had mostly private farm ownership throughout the communist period), with by one measure the poverty rate possibly getting as high as 24%.. This is a point where Naomi Klein’s analysis basically went completely off the rails. Her story on Poland basically stops with 2003, which can be understood given her book came out in 2007. But she claims a poverty rate in 2003 of 59% (pp. 241-242), and declares strongly that the economic quality of life in Poland had completely collapsed. This is simply false, a wild exaggeration,

So, how did Poland end up doing so well, actually one of the best performing economies in Europe over the last quarter century? Crucial is that in fact it did not follow through on important parts of its supposed shock therapy, although most people (including Naomi Klein) do not seem to know this. Very important was that it did not undo its generous social safety net, especially its generous pension system. This was a central issue in the 1993 election, with both Blacerowicz and Sachs unhappy about this outcome. I remember well the 1994 ASSA convention at which Sachs gave a major speech in which he basically whined about this election outcome and essentially accused the Polish people of being a bunch of spoiled brats for wanting to hang onto their supposedly overly generous pension system. I note that he has since changed his tune and now recognizes the stabilizing and human nature of maintaining a decent social safety net in these economies.

The other area where Poland did not follow through on its shock policies involved privatization, which was supposed to be rapid and complete. It was not and has never been completed. Indeed, today Poland has the highest rate of state-owned production in its economy at around 30% of GDP of any OECD economy, another little-known fact. Privatization was resisted, especially because of fear of German companies taking over Polish firms, and what privatization that happened tended to be gradual, with a large part of the private sector consisting of brand-new firms owned by Poles, arguably the most dynamic part of the economy. In this areas, Poland actually resembles China substantially, a comparison made by a number of careful observers. The current populist government of the Law and Justice Party has if anything tightened restrictions on foreign ownership of banks and land, if not having engaged in any outright renationalization as we have seen in Russia and Hungary.

Given that much of the shock therapy program did not happen or did not do so shockingly, where was there shock therapy. This did indeed happen with respect to macro policy, driven by the problem of getting the incipient hyperinflation that had developed by 1989 in largely market socialist Poland under control. This did involve sharp pain with falling output and rising unemployment and poverty in 1990-91, but Poland was the first of the Soviet bloc transition economies to turn around, with most still having declining output in 1994 and quite a few until well after that. The pain in Poland was sharp, but it was short, and the longer run state has outperformed the others and put Poland far above where it was in 1989.

The politics of all this has been quite complicated and involved some important and curious twists and turns. From 1989 on there has been a broad “left-right” split with probably the most important constant in this being attitudes towards the Roman Catholic Church in famously devout Poland, with being pro-Church being on the right, with people coming out of the old Communist Party veing on the left. But the positions on economic policy regarding these groups have changed over time. in the 1989-93 period, the supporters of the shock therapy were on the right, although including the workers of the Solidarity movement. However, by now the rightist Law and Justice Party that is in power and attacks its rivals for being leftover communists and also strongly opposed Russia (in contrast to the populist rightist regime of Orban in Hungary who is friends with Putin), has in it populism become more the defender of both the social safety net and supporting the state-owned enterprises compared to the supposedly crypto-communist left, now out of power.

Needless to say, there is much discussion about how it is that Poland has been by so many measures so economically successful, yet since 2015 has come to be ruled by a reactionary populist party that has been restricting media and judicial independence, although it may be that it is going to hold back on some of this compared to Russia, Hungary, and Turkey. I think two things are important. One is that although Poland avoided going into recession in 2009 (largely due to staying out of the euro and also being strongly linked into the supply chains of neighboring Germany), its growth rate has slowed in more recent years while remaining positive, something happening throughout all of Eastern Europe, which has stopped catching up to Western Europe. And the second is that the frame of reference has changed. Whereas Poland has done well compared to its formerly socialist neighbors, the population now compares themselves to those in Western Europe, especially neighboring Germany, whom they are clearly well behind. Many young Poles have left for the West, with a cliché in the Brexit debates in UK being about the supposed problem of “the Polish plumber” coming in to take away British jobs. The Poles may be much happier than they were 30 years ago, but the bloom is off the rose as the transition has been long over. Where they will end up is unclear.

A final irony is that for all his advocacy in 1989-93 (and later as Director of the Polish central bank) for the hardline version of shock therapy many think happened in Poland, Balcerowicz himself at one point advocated something pretty much like what came to pass, a gradual privatization and maintaining most of the social safety net while advocating shock monetary policies to bring inflation under control. This was before the transition started and the Communist Party was still in control. Indeed, I met him in this period and heard him advocate pretty much this approach, which he also advocated in print. It was 1988 and I was teaching summer school at the University of Wisconsin-Madison when he showed up in town as part of a general wandering around the US talking to people and giving talks. We had some beers on the famous Union Terrace there by beautiful Lake Mendota. I confess thinking him a naive dreamer with all his plans for Poland that at the time seemed so unlikely and utopian. But that was one of those lessons for me: one should never discount a wandering prophet without position. He can end up running the show and making at least some of his dreams become reality.

Barkley Rosser

Comments (1) | |

Good news from the employment report: workers are finally getting raises!

Good news from the employment report: workers are finally getting raises!

When it comes to jobs, if there is one trend that really set apart 2018 from any prior year of this expansion, it is that ordinary workers are finally getting decent raises.

Let’s start by looking at the monthly % change in average hourly wages for non-managerial workers for the entire duration of this expansion. Since this has averaged about +0.2%/month, I’ve subtracted that so that any month above 0 is an above average increase in nominal hourly pay for ordinary workers:

Look at the far right. In ten of the last twelve months, average hourly wages have increased by more than the norm for this expansion.

As a result, YoY nominal wage growth in the last two months has been a little over 3.3%:

Comments (7) | |

Newsy Stuff

2018 – The Year of the Complicated Suburb, Amanda Kolson Hurley, CityLab

In the past several years, a much more complex picture has emerged—one of Asian and Latino “ethnoburbs,” rising suburban poverty, and Baby Boomers stuck in their split-levels. 2018 really drove home the lesson of when Americans say they live in the suburbs (as most do), the suburbia they describe are vastly different kinds of places where people of every stripe live, work, pray, vote, and vie to control their communities’ future.

A century and a half after Frederick Law Olmsted laid out one of the first planned American suburbs in Riverside, Illinois, and seven decades after the builders Levitt & Sons broke ground on the ur-tract ’burb of Levittown, New York, we haven’t fully mapped the contours of modern suburbia—not just who lives there and why, but the role that suburbs play in politics and society.

“A continuum of densities” correlates closely to suburban politics. Rural-suburban areas are strongly Republican; urban-suburban places are overwhelmingly Democratic. But sparse and dense suburbs are more divided—and these were the battleground of the 2018 election. On November 6, Democrats picked up at least 22 seats in sparse- and dense-suburban districts. A suburbanite is now twice as likely to be represented in Congress by a Democrat as by a Republican.

Deciding who we throw away, Cassady Fendlay, Medium

“When millions of us showed up to march, there was a prevailing feeling among women of color, especially black women, that the white women who were showing up to march were not really ready to be allies in this fight. They brought signs with fiery quotes from black feminists and reminded us that the suffragettes didn’t want to march with Black women, didn’t care about their right to vote. The image of activist Angela Peeples, looking cynical with a lollipop and a sign about the 53% of white women who voted for Trump, went viral for its perfect encapsulation of this uneasy suspicion of the “well-meaning” white women.

This moment, with Alyssa Milano, is exactly the type of thing black women were expecting. Alyssa is acting in accordance with the tradition of white women who use the labor of women of color when it’s convenient for them, and then use their power to trash those women when it becomes more expedient. Without being invited to speak at all, Alyssa brought up a 7-month-old controversy in an attempt to force women of color to do exactly what she wants them to do. Yet these things weren’t a problem for her last month, when she was posting pictures of herself in D.C. protesting Kavanaugh at demonstrations organized in large part by Women’s March.”

The Year of the YIMBY, Kriston Capps, CityLab

A few weeks ago, Minneapolis made zoning history when its city council endorsed a comprehensive plan that would enable denser housing development across the city. Elements of the Minneapolis 2040 plan still need to be passed into law, so it falls short of an outright ban on single-family housing, as both supporters and critics have described it. But it’s still the most progressive legislative push by any city yet to face up to the affordable housing crisis, and it’s turning heads in Philadelphia, Dallas, Seattle, and other cities.

“Such an ambitious, large-scale overhaul of zoning rules is practically unheard of in U.S. cities, where single-family neighborhoods with their rows of houses set behind landscaped front yards have typically been off the table during discussions of citywide ‘Smart Growth’ and affordable housing,” reads the Los Angeles Times editorial board’s green-with-envy endorsement.

Differences Bernie Sanders versus Elizabeth Warren, David Dayen

I happen to like Elizabeth Warren more so than I do Bernie Sanders. So, if this comes off in a manner favoring Warren, I apologize. As Dayen notes, “Warren and Sanders are hardly identical progressives. They have different approaches to empowering the working class. In the simple terms, Warren wants to organize markets to benefit workers and consumers. Sanders wants to overhaul those markets and take the private sector out of it. This divide, and where Warren or Sanders’s putative rivals position themselves on it, will determine the future of the Democratic Party for the next decade or more.”

The differences I think you can pick up in the New Republic article I linked to so I will not try to detail them here. Again, as Dayen notes the two progressives are on a collision course and could conceivably split the Democratic vote. In Michigan alone during the 2016 election, it accounted for the state voting for a Repub candidate (first time since 1990), low voter turnout, and a historical high vote for Communist and Libertarian candidates. The same occurred in Wisconsin. Pennsylvania is another state which goes Dem in national elections even though pundits cast doubt upon how it will go.

Watch ‘House Hunters’ to Understand Segregation Natalie Y. Moore, CityLab

House Hunters is on in my home as it is a source of entertainment. Other than the Flip or Flop now divorced couple (she remarried [to keep you up to date]), you can expect to see this at night. I kid my wife about both as it is more like watching the soaps and the dialogues sounds too contrived. Who knew, you could redo a complete bathroom for $5,000 and it always takes 7-weeks to remodel the most ancient of homes? Then too the economics of these shows has given rise to a series of other taunting couples searching for homes or flipping houses just as quick as they can. I guess there is money in those shows.

As the author points out in one episode, “a couple, both in their 20s, paid $1 million for a home in a tony (stylish) North Shore suburb with no backyard . . . insane.) Naturally, we viewers are not privy to the Hunters’ bank statements or financial portfolios, although a few Twitter parody accounts take note.”

I guess if you are born halfway up the ladder, you have a much bigger head start in life than many others of which minorities make up a substantial part. The chances of you slipping backwards on the ladder lessen dependent upon where you are on it. The Center for American Progress in “Understanding Mobility in America” discusses the impact of intergenerational mobility and the degree to which the economic success of children is independent of the economic status of their parents. There is a vast racial wealth and income gap which finds that a U.S. family earning the median black household income of $39,466 would be able to afford fewer than half of all homes listed for sale last year in 17 of the country’s 50 largest markets. The show is a reminder of the impact of US policy towards minorities.

SCOTUS Takes up Electoral Map Disputes, Lawrence Hurley, US News

Partisan gerrymandering is becoming more extreme with the use of precision computer modeling to the point that it has begun to warp democracy in certain states by subverting the will of voters.

June 2018 and SCOTUS failed to issue definitive rulings in cases from Wisconsin and Maryland which election reformers hoped would prompt the high court to crack down on partisan gerrymandering.

In the case in North Carolina, Democratic voters accused the state’s Republican-led legislature of drawing U.S. House of Representatives districts in 2016 in a way that disadvantaged Democratic candidates in violation of the constitutional guarantee of equal protection under the law. A lower court sided with the Democratic voters.

In order to assure reasonable Congressional Districts to eliminate packing and the deliberate construing of boundaries to give one party an advantage over the other, the Congressional Districts will still have to be gerrymandered as they are too large.

Dollar Stores Tanvi Misra, CityLab

“While dollar stores sometimes fill a need in cash-strapped communities, growing evidence suggests these stores are not merely a byproduct of economic distress,” the authors of the brief write. “They’re a cause of it.”

Like Walmart before them, these retailers present themselves as creators of jobs and sources of low-cost goods and food in “left-behind “areas—both urban and rural. The 2008 recession bolstered their numbers, simultaneously restricting the resurgence of traditional grocery stores and swelling the potential customer base. Middle-class shoppers started frequenting these stores. In 2009, the New York Times picked up on the trend: “Those once-dowdy chains that lured shoppers by selling some or all of their merchandise for $1 are suddenly hot.”

Restaurants are Scrambling for Cheap Labor, Leslie Patton, Bloomberg

In 2019, it is expected fewer teens will be in the workforce reducing the number of job seekers for low-wage work. Due to the shortage they are helping raise the pay rates needed to woo those who are. Minimum wage increases for lower-skilled workers at companies such as, Walmart, and Target have made it more difficult for restaurants to compete for talent and forcing them to try everything from social media campaigns to quarterly bonuses to entice applicants. “The last 18 to 24 months, it’s been very competitive, no matter what time of year.”

Bjorn Erland, vice president for people and experience at Yum Brands Inc.’s Taco Bell chain. “I don’t think it’s going to ease up much just because the holidays are over.”

Why Not Hold Regular Union Representation Elections? , Andrew Strom, On Labor

Citing polls (NLRB) showing many non-union workers would like to have a union at their workplace, each year only a tiny fraction of workers get a chance to choose whether or not they want union representation.

When the Obama NLRB modernized the Board’s election rules and eliminated some unnecessary delays, employers characterized the result as “ambush elections.” The companies insisted they would no longer have enough time to wage their anti-union campaigns.

The NLRB found substantial evidence that employers are generally aware of union organizing drives long before an election petition is filed. A solution as Samuel Estreicher and Michael Oswalt have previously suggested and to give even more notice is to hold regularly schedule representation elections the same way we regularly schedule elections for political office. There is no magic number to how often the elections should take place, but every three years might be optimal. The elections would occur both at unionized and non-union facilities.

Tags: , Comments (10) | |

December jobs report: 2018 goes out with a bang

December jobs report: 2018 goes out with a bang

  • +312,000 jobs added
  • U3 unemployment rate rose +0.2% from 3.7% to 3.9%
  • U6 underemployment rate unchanged at 7.6%

Here are the headlines on wages and the broader measures of underemployment:

Wages and participation rates

  • Not in Labor Force, but Want a Job Now:  declined -70,000 from 5.397 million to 5.327 million
  • Part time for economic reasons: declined – 124,000 from 4.781 million to 4.657 million
  • Employment/population ratio ages 25-54: unchanged at 79.7%
  • Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.09 from  $22.95 to $23.05, up +3.4% YoY.  (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
Holding Trump accountable on manufacturing and mining jobs

 Trump specifically campaigned on bringing back manufacturing and mining jobs.  Is he keeping this promise?  

Comments (0) | |