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

Voting your pocketbook?

by divorced one like Bush
Update below.

The other day, reading the comments got me thinking about the relationship of peoples income vs their presidential candidate choice. I think it was about how the economy is doing. Well, we all say it is bad because all these big, humongous finance institutions are having troubles. But, my perspective is that the economy is about you and me. It exists for us. But, not much is being looked at from that perspective, except for the home mortgage sector. Simultaneously we hear how we (you, me and thee) have to learn to save more while being asked what can be done to revive the consumer economy. You know, get it back to the good old days. Yes-er-y, that’s a solvable puzzle. Which good old days do they want to recreate? The saving days or the consuming days? If they want both, I would say ok, but we will have to reverse the income shift.

Anyway, I decided to see if I could create a movement to focus the issue of the economy back onto how you and me are doing. It’s a monumental task, but I’m game. I’ve gotten a little help from McCain in that he has tied the fundamentals of the economy to you and me, the American Worker (stand up and salute!). As much as “fundamentals” are not considered the worker, the reality is we the citizens are the fundament factor in an economy. No you and me, no exchange of valuable stuff.

So, I have created a chart because I don’t know how to produce one of those neat colored USA maps of all 50 states, their unemployment rate, hourly wage, 1 yr change of wage, hours worked and 1 yr change of hours worked. The data is from here. I then color coded the state name based on the polling map as of 9/16/08.

How do you like it? I’m rather proud of my self.

The color for the states are blue, light blue, red, light red and black. I assume the red/blue shades are obvious. The black are toss-up states. The data in blue are numbers that did worse than average for the variable to the detriment of the citizen. If the unemployment was higher than average, it is blue. If the wage change and hourly wage was less than average it is blue. Those in red are negative. The hours worked and change in hours worked greater than average are in blue. I view having to work more a negative. I do not want to have to continually increase my time in the rat race. Though, some I’m sure would look at the opportunity to work more as a positive. You get to earn more. Well that’s relative to your opinion of what your free time is worth. One state has green…Utah. It’s hourly wage and work hours have gone down. But, hey the unemployment rate is very low.

There are 8 undecided, 18 blue or leaning blue and 24 red or leaning red.
14 of 23 states with unemployment below average are voting or tending to vote McCain. Three undecided have lower rates. 8 states of the 23 are voting or tending to vote Obama. 61% red and 44% blue are below the average unemployment.

12 of 22 states with above average hours worked increase are red or leaning that way. 8 of are blue.
6 of the 12 state with negative increases in hours worked are red, 4 are undecided which leave 2 blue.

9 of 26 states that saw negative, zero or less than average 1 year hourly wage increases are red or leaning such. 7 are undecided and 10 are blue or leaning such. 3 of the 6 states with negative hourly wage growth are red, one is undecided and one is blue.

21 states of 30 who have an average hourly wage less than the national average are red or leaning that way. 5 are blue or leaning such and 4 are undecided.

18 of the 24 states that work more than the national weekly average hours are red or leaning such. 3 are undecided and 3 are blue.

6 of 9 states who are working more than the average work week and did not see their wage increase the average amount are red or leaning red. 2 are undecided and 1 is blue. 2 states saw their hourly wage go down and their hours worked go up, both are red.

Ok, so what are we to make of the voting your pocketbook thought?

Update: Ran some numbers. Red states average $19.41/hr and 35.73 hours per week for a gross pay of $693.52. Blue states average $22.68/hr and 34.38 hours per week for a gross pay of $779.74. Earn more, work less. Now that is the way to get out of the rat race!

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In the eye of the beholder

Came across a couple of videos. This first one is an issue of perspective on the thought of what is terroism or what is a terroist act.

This second one is just plain funny (at least to me). It spoofs on the Annie Oakley comment by Senator Obama.

On the economy side of things using my GFP (gross flower production), things were not as good as last year. What started off as a year with a bang, is now looking to be equal to last years numbers. We were up 21% end of March. End of April we were up 4.7%. As of Mother’s Day, 2.6% on the year. Interestingly, looking at credit card use for the holiday months Valentines was up 23%, Easter was up 13% and now Mother’s Day is down 27%. This is the shift I saw starting last August. But, cash sales are up for May 33%. They were up for January and February, but cash sales were down both March and April.

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The Longest Recession Ever!

The other day Spencer posted a chart that Cactus had sent and then Cactus posted the link to the data. After looking at the data, and considering the question being asked: Are we seeing a recession? I thought, maybe looking at just median weeks of unemployment or number of unemployed is not going to capture the true picture.

During a recession or in determining a recession would not the amount of idle labor be more of a factor? If we have 5 of 10 people unemployed for 5 weeks, is that worse than 6 of 10 unemployed for 4 weeks?

For this chart I used average weeks unemployed times the number of unemployed looking at the first day of the first month and the first day of the seventh month to come up with a factor we can call Person Weeks Unemployed: PWU.

As you can see, our economy has been performing worse as time goes on. The Y axis number need to by X1000.

We are leaving a lot of work on the table and the swings have gotten larger. Larger swings in labor sitting idle is the opposite of what we are praising in the GDP swings. And, note when the big swings started, right when we de-coupled the rise in productivity from the rise in wages: 1974 Up until that time, the lost labor fluctuates around the 50,000 mark. During the first oil shock, we hit a new high of 125,000 person weeks. No wonder the mood sucked during Carter’s years. At least it came back down to the upper end of the range we had been in since 1958. Unfortunately, since we decided to focus on money (yes Reagan) we seem to waffle around 125,000. A full 75,000 person weeks of lost work.

However, what is more interesting is the peaks of PWU in relation to the official recession dates.
Recession 11/48 to 10/49 but the PWU peaks 1/1950 3 month delay
Recession 7/53 to 5/54, PWU peaks 7/1954, 2 month delay
Recession 8/57 to 4/58, PWU peaks 7/1958, 3 month delay
Recession 4/60 to 2/61, PWU peaks 7/1961, 5 month delay
Recession 12/69 to 11/70, PWU peaks 1/1972, 14 month delay
Recession 11/73 to 3/75, PWU peaks 1/1976, 10 month delay
Recession 1/80 to 7/80, PWU peaks 1/1981, 6 month delay
Recession 7/81 to 11/82, PWU peaks 1/1983, 2 month delay
Recession 7/90 to 3/91, PWU peaks 7/1992, 16 month delay
Recession 3/01 to 11/01, PWU peaks 7/2003, 20 month delay (updated to correct math error)

Some may say: Hey, Reagan did good! But, if we ignore the blip of economic reprieve it is 30 months from the end of the first recession to the peak of PWU after the second. And he set it good, going from a previous high of 125,000 to 223,000!

So what do you think? I think that what matters to people regarding a recession is whether they are working and not when the government states the turn-around began. Thus, the peak of a recession is in the eye of the beholder. If you’re a person earning money from labor, a recession these days can last a very long time. This data would suggest that what we are seeing in the Spencer post is not a decreased risk but a lull before the storm. One other thing. It appears the Republicans fail again. As a group they have the longest turn-around to seeing a reduction in lost labor. In fact, the recent Bush years could be considered the longest lasting recession ever based on my PWU metic.

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Free trade, Republican’s no like (along with others)

From a poll by the WSJ/NBC reported in October, 2007 comes:

While 60% of respondents said they want the next president and Congress to continue cutting taxes, 32% said it’s time for some tax increases on the wealthiest Americans to reduce the budget deficit and pay for health care.

Can you imagine? They have started to figure out that their pocketbooks matter.

In a December 1999 Wall Street Journal-NBC poll, 37% of Republicans said trade deals had helped the U.S. and 31% said they had hurt, while 26% said they made no difference.
The new poll asked a broader but similar question. It posed two statements to voters. The first was, “Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers.”
The second was, “Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products.”
Asked which statement came closer to their own view, 59% of Republicans named the second statement, while 32% pointed to the first.

I don’t think these questions are the best framed. They seem kind of load in that it states “foreign trade” instead of Free Trade, or NAFTA. But, the qualifications I’m sure are what the people responded to.

From Fortune Magazine, January, 2008:
This is a poll of the general public.

With much of the country worried about the state of the economy, many (67%) Americans say they now closely follow news about US trade policy with foreign countries. Americans see the current trade policy as a reason for the economic woes the US is currently facing.
Almost 7 in 10 (68%) Americans believe international trade benefits other countries more than it benefits the United States.
International trade is seen as having a largely negative impact on American workers (78% negative) and the Untied States as a whole (63%).
Eight in ten Americans (79%) feel the US Government has not done enough to help workers who have lost their jobs to increased foreign competition. A majority of Americans would support the following proposed policies aimed at helping workers who have lost their jobs to foreign competition and outsourcing:

Policies with the greatest amount of support include: providing special training programs (90% support), providing tax incentives for companies to relocate to areas where workers have lost their jobs because of foreign imports (84%), allowing imports only from countries that ban child labor (82% support), and allowing imports from countries that meet certain clean air and water standards (78% support).
About two-thirds (64%) of Americans are willing to pay more to keep down foreign competition.

There is a disconnect in the above responses. 90% want training, but in another question about boosting the economy, 41% opposed extending unemployment benefits. Though 67% support public works projects. This shows me that the public has not made the connections between our current trade environment and the economy. But, how about that 64% would pay more to keep down foreign competition. Can you get a more patriotic response? I don’t think the Republican’s had this kind of patriotism in mind.

When it comes to China:
Where a product is manufactured does not impact Americans’ purchasing decisions except when that product is made in China.
Nearly three-in-five (57%) Americans are less likely to buy a product if it is made in China.
When products are manufactured in other areas, such as Eastern Europe (57%), Western Europe (55%), Canada (53%), India (52%), Africa (51%), Mexico (48%), Japan (47%), and South Korea (46%) nearly a majority say it doesn’t matter.

I can ‘t imagine that people are specifically boycotting Chinese made goods. Walmart et al would be in trouble. I think this is more of a gut response.

Over all, the public is waking up and seems more sophisticated in their understanding than I believe the Beltway crowd is willing to accept. But, I believe some work needs to be done so that they connect the dots of the US economy as a function of trade policy. I would like to see a de-emphasis of the fear and a disconnecting of foreign trade equals free trade policy. I really don’t believe anyone is against trading, they just have a major problem with the current rules and the referees.

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