Tuesday, July 28, 2009

Sites And Services Continue To Fold As Problems Mount.

Sites And Services Continue To Fold As Problems Mount.

It’s the Jobs Stupid!!!!

Here’s a trajectory for POTUS to chew on from the recently released statistics on Industrial Production and Capacity. This is a key indicator of an economy’s well being. It’s down again. There’s something about Obama’s use of the words “right trajectory” on Anderson Cooper the other night that makes me think he should ask Harvard to give him a bit of a refund on that ‘education’. How hard is to understand that when production keeps falling that is not a good trend? He’s had to have the inside scope on these numbers for at least a week. Why give Cooper and the world the impression of something else?

Industrial production decreased 0.4 percent in June after having fallen 1.2 percent in May. For the second quarter as a whole, output fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent. Manufacturing output moved down 0.6 percent in June, with declines at both durable and nondurable goods producers. Outside of manufacturing, the output of mines fell 0.5 percent in June, and the output of utilities increased 0.8 percent. The rate of capacity utilization for total industry declined in June to 68.0 percent, a level 12.9 percentage points below its average for 1972-2008. Prior to the current recession, the low over the history of this series, which begins in 1967, was 70.9 percent in December 1982.

The graph (which uses seasonally adjusted data) comes from Brad Delong’s “Bad News About Industrial Production”. I would imagine his education taught him the right frame for what is the ‘right trajectory’ and the ‘wrong trajectory’ when discussing macroeconomics with his UC Berkely Students. I know my economics professor Campbell R. McConnell taught me well at the more humble University of Nebraska where I cut my economist baby teeth. Now, I know we’re supposed to be a service economy and that things like manufacturing, transportation and mining aren’t supposed to be relevant to us any more. I still can’t help asking how many young people with nothing more than a devalued high school diploma would rather face a life building cars than mowing the lawns of Goldman Sachs Bankers? Is any one beginning to have similar questions on the mythical hope and change meme of last year? Is it still just you and me? The Sinoperuvian lesbians of hillbilly America?

Today, even the editorial page of the Gray Lady even asked the right questions.

Unemployment is rising. Foreclosures are surging. Lending is still constrained. So why exactly is the Obama administration waiting to act?

Their answer is not so different from mine of the past two days.

If wait-and-see is anything other than a near-term tactic, it’s bound to be a miscalculation. The need for expanded relief and recovery efforts is compelling. Rather than avoid those fights, the Obama team must win them.

The Index of Industrial Production is a key leading indicator of macroeconomic health. It is released monthly by the Fed. “The indicator measures the amount of output from the manufacturing, mining, electric and gas industries. The reference year for the index is 2002 and a level of 100.” It is sitting now at 95.4 (which of course is less than 100) which means it’s lower than it was when the index was set. It measures REAL production output. This means were producing less stuff and of course, that means there are less people necessary to hired to produce less stuff. That’s not good.

Another number was released today. That would be the measure of Consumer Price changes (CPI) or the measure of inflation faced by households. This has another unhelpful trajectory. It is up and mostly by way of higher gas prices, clothes, and other things. High petroleum prices also play into higher costs for businesses which will adjust production downward when faced with higher transportation and energy costs. While this index doesn’t address the prices faced by businesses directly, there is of course some carry-over when businesses face retail gas prices and electricity prices. Here’s some info on that from the WSJ. There’s a pretty good break down there of what exactly you are paying more for. Automobiles are not one of those things. Their prices fell at annual rates not seen since the Truman years.

While up, the increase in prices is not going to trigger Fed Inflation fears yet since it within their boundary of acceptable levels of inflation. I’m not sure that’s worth much to most of us however, given this:

In a separate report, the Labor Department said the average weekly earnings of U.S. workers, adjusted for inflation, plunged 1.2% in June, an indication that paychecks didn’t even come close to keeping pace with consumer prices.

So, let’s get this all into a little package we can deal with. You’re being paid less, but your basic expenses are going up. You’re really fortunate to have a job right now and even more fortunate to have health insurance. But don’t count on these too much, because both of those situations will get worse before they get better. You could potentially buy a new car, if you had a job or if you weren’t swimming in record levels of debt already for all those Chinese goods you bought by credit a few years ago. You used to feel pretty good about your retirement and the nest egg you have in your house, but the last ten year’s of their appreciation and return just disappeared. You’re facing higher taxes, but it’s not because you’re getting huge bonuses unless your working for Goldman Sachs which is made money this year on the bargain basement sell off of AIG stuff to them using tax dollars we know don’t have to pay for unemployment insurance, social security, and Medicaid and Medicare. There will be fewer policemen and firefighters on the street. Your younger children will sit in much more crowded classrooms. The banks are still profiting from the incredible student loans your will be saddled with through most of their adult lives by attempting to get up there to something remotely resembling middle class life.

Oh, and there’s this.

With inflation seemingly under wraps and the economy still mired in recession, Fed officials are widely expected to keep official interest rates near zero into 2010.

But then, that makes no difference because the banks are killing you with fees and your credit card companies are kicking up your interest rates because they couldn’t figure out good risk from bad. You have to pay twice over for their bad decisions and their political contributions. It also means if you attempt to save, you might as well do it in a mattress because you’re not going to get any rate of return. If you look at bonds, beware, because low interest rates mean high bond prices, and you don’t want to be caught buying high priced bonds whose value falls when interest rates do start rising.

Meanwhile, Paul Krugman explains it all yet again in his blog post “Deficits saved the World.” Do we need a second stimulus? Hell yes! Chew on this quote for awhile then go look at the supply and demand curves if you really want to do it in the wonk zone. Automatic Stabilizers means all those programs like unemployment insurance that didn’t exist prior to FDR and the Great Society programs. This says it all. It’s not the Obama stimulus package that has kept us near the edge, it was the programs put into place way back then that have kept us from going all the way over like we did in the 1930s.

That’s an interesting way to think about what has happened — and it also suggests a startling conclusion: namely, government deficits, mainly the result of automatic stabilizers rather than discretionary policy, are the only thing that has saved us from a second Great Depression.

Just imagine what it would mean if we really had a visionary in the office? Meanwhile, some one needs to send a message to the White House. It’s the JOBS stupids!!!!!!

Sad Announcement:

Northland Poster Collective is closing. As an organization that has struggled on for thirty years and three months, we have enjoyed long and deep relationships with many organizers, activists, students, teachers, leaders and rank and filers in unions, immigrant rights, nationalist, GLBTQ, farmer, women's and too many other movements and groups to enumerate. We have worked community strategy sessions, union and labor dissident conferences and picket lines. We've designed demonstrations with high-schoolers and taught screen printing behind bars. We have friends for whom Northland has always been there and others who have just discovered us. We have friends who discovered us when they were rank and file activists and who are now national leaders.

Given these ties we have tried, once the decision was made, to close Northland in a deliberate, transparent and respectful way that will preserve some of the services that you have come to appreciate (see Life After Northland).

We don't have to tell you that maintaining a small, insurgent political art organization, without institutional backing or grant funding for thirty years in a capitalist economy is a struggle. That we did it for so long is an achievement we can celebrate. A couple of years ago we engaged in a major fundraising effort that retired a mountain of old debt and set us -- or so we hoped -- on a course toward long-term stability. Given a few more years of steady growth without any global financial meltdowns we may well have gotten there. We didn't get an opportunity to find out. After years of doing our part to undermine Wall Street, the darned thing fell on us!

When you helped us to raise the funds for another try, we committed ourselves to making a concerted effort to make it work, but one that would not subject us to missed paychecks or creeping debt. We already knew what that was like. While Goldman Sachs managers have been making off with billions, many of the people who are our constituents are not in as good shape. It became clear that we would face many years of ups and downs and that we didn't have the buffer to ride out the downs without being sure if the ups were going to return. That's the summary account.

There's a bigger story that is worth noting that has to do with the way the cultural struggle for a better world is carried out. In short, the right wing is very aware that political power grows out of people's beliefs and hopes and dreams and they support their cultural warriors unstintingly. Our side thinks in terms of "issue campaigns" and leaves its cultural workers to work second jobs or take out mortgages to support their projects. We may wish to rethink this strategy.

We are working to keep as much of our past production and art and union printing services as possible, available in new forms. How that shakes out will become clearer in the months to come. It's been a wild and exhilarating thirty years! While we close a chapter with the closing of Northland, be sure that we're not going away any more than you are. See you on the picket line!


We've told you before that Pennsylvania Sen. Arlen Specter consistently has voted Democratic since he left the GOP. But now a new analysis shows that the veteran senator has become an even more reliable vote for the Democrats since a primary challenger surfaced.

Nate Silver of FiveThirtyEight.com crunched some numbers and found that Specter voted with Democrats 97% of the time since May 29 on "Contentious Votes" -- a floor vote in which the majority of each party splits their votes.

What's the significance of May 29? That's theday Rep. Joe Sestak said he intends to run against Specter in the 2010 Senate primary. Before then, Specter had voted with Democrats about 69% of thetime on these votes, according to Silver.

(However, it's worth mentioning that Sestak has publicly talked about running against the five-term senator since at least early May, as we've written here.)

Specter has "basically been behaving like a mainline, liberal Democrat," Silver writes. The senator voted with Democrats about 44% of the time during the first few months of the year, when he was still a Republican.

Specter is all but certain to face a primary challenge from Sestak, and the two men have already exchanged biting attacks on each others' party loyalty, as the New York Times neatly sums up here.

Republican Pat Toomey, who almost took out Specter in the 2004 Republican primary, seems settled as the nominee on the GOP side of the aisle. He and Specter are essentially tied in the latest Quinnipiac Poll, which wipes out a 20-point lead Specter had over his Republican rival back in May.

(Reported by USA TODAY intern Seung Min Kim)

Voting Rate Fell Slightly In 2008 | Turnout Of Whites Declined 1 Point

Tuesday, July 21, 2009 2:57 AM

By Hope Yen

WASHINGTON -- For all the attention generated by Barack Obama's candidacy, the share of eligible voters who cast ballots in November declined for the first time in a dozen years. The reason: Older whites with little interest in backing either Barack Obama or John McCain stayed home.

Census figures out yesterday show that 63.6 percent of all U.S. citizens ages 18 or older, or 131.1 million people, voted in November.

Although that represented an increase of 5 million voters -- virtually all of them minorities -- the turnout relative to the population of eligible voters was a decrease from 63.8 percent in 2004.

Ohio and Pennsylvania were among those showing declines in white voters. Obama carried those two states.

"While the significance of minority votes for Obama is clearly key, it cannot be overlooked that reduced white support for a Republican candidate allowed minorities to tip the balance in many slow-growing 'purple' states," said William H. Frey, a demographer for the Brookings Institution, referring to key states that don't notably tilt Democrat or Republican.

"The question I would ask is if a continuing stagnating economy could change that."

According to census data, 66 percent of whites voted in November, down 1 percentage point from 2004. Blacks increased their turnout by 5 percentage points, to 65 percent. Hispanics' turnout improved by 3 percentage points, and Asians' by 3.5 percentage points, each reaching a turnout of nearly 50 percent.

Tomgram: The Face in the Mirror

[Note for TomDispatch readers: Last year, at my birthday, I wrote "When I'm 64...," a post about war and (lack of) peace in my time. Another year has rolled around, as it tends to do, so think of what follows as further scribbled notes, stuffed in an e-bottle, and set afloat, all part of a future memoir I'll never write. If you finish and have the urge to know more about a Cold War childhood (and many other matters), check out the updated edition of my book,The End of Victory Culture. If you enjoy my description of my early reading experiences, then consider picking up a copy of my 2003 novel, The Last Days of Publishing, which, sadly, turned out to be prescient when it came to the problematic present of my lifelong business and avocation. Tom]

Borrowed Time : The World at 65 : By Tom Engelhardt

"Being an historian, I am jotting down these notes out of habit; but what I saw and experienced two days ago I am sure no one else as civilized as I am will ever see. I am writing for those who shall come a long time from now."

So began "The Prophecy," a mock futuristic fantasy set after some great Cold War cataclysm, which several members of my high school graduating class collaborated on back in 1962. It was, of course, for our yearbook and made fun of the class, A to Z. It was also a classic document of the moment, written by representatives of the first generation of "teenagers" who, crouching under their school desks as the sirens of an atomic-attack drill howled outside, imagined that no one in their world might make it.

"First of all, let me introduce myself," "I" continued. "I am Thomas M. Engelhardt, world renowned historian of the late twentieth century, should that mean anything to whoever reads this account. After the great invasion, I was maintaining a peaceful, contented existence in the private shelter I had built, and was completing the ninth and final volume of my masterpiece, The Influence of the Civil War on Mexican Art of the Twentieth Century..."

Okay, so they had me pegged. Not only, in those years, did I read whatever post-nuclear pulp fiction I could get my hands on -- you know, the kind with landscapes filled with atomic mutants and survivalist communities -- but I was a Civil War nut. Past disasters and future catastrophes, and somehow it all made sense.

I was, in fact, a nut for the American past generally, in part, I suspect, because the familial past wasn't available. My parents, typically enough for second and third generation Americans, were in flight from their own pasts, from all that not-so-distant squalor and unhappiness, or just plain foreign-ness, much the way, once upon a time, so many other Americans had fled small towns for the Big City.

Click here to read more of this dispatch.

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