Welcome to the pre-Trump economy

Summer sucks. There’s no way around that.

As a freelance web developer, I’m always in search of the next gig. There’s never quite so much work that I’m not always thinking of where my next meal will come from. And in the summer time, things tend to be pretty dry. No one is hiring. No one is looking to build things.

But all things being equal, this is about as bad a summer as I’ve seen in a long while. And I’m reasonably certain I know why. As a business owner, the idea of hiring someone when I have absolutely no idea what the future holds seems like lunacy. Even building new websites when I don’t know what happens in the fall seems like maybe saddling your business with the last straw. And if you actually hire someone? Well, you might be volunteering to pay their UI come January.

Because I don’t think there’s anyone in the business world (save for Trump himself) that doesn’t think Wall Street’s going to lose it’s shit if Trump manages to become President of the United States. Even if you support him – even if you’re the sunniest optimist about Trump’s America – you can’t expect that his election won’t be a huge disruption to our economy.

Every Middle Eastern businessman or shop owner knows his business if not his happy home is on the line. Every other business attached to his or hers is also in jeopardy: suppliers, contractors, craft service companies, everybody. Same goes for every Latino in business. And businesses not owned by a ethnic group regularly demonized by the Trump still need to worry about the next flap of Trump’s enormous butterfly wings.

So buckle up, America. It’s about to be a very lean several months. If not years.

Journalism Politics

Politico Discusses Skewed Polling About an Arbitrary Debt Ceiling

It must be hard to report on non-facts about arbitrary arguments in Washington, but that didn’t stop one Politico reporter from giving it the old college try. Still, the following story is riddled with silliness:

Debt ceiling story drives media numbers – Keach Hagey –

So far, the only clear winner in the debt ceiling negotiation story is the media.

Public interest in the story continues to climb, according to new data out Wednesday morning from the Pew Research Center for the People and the Press, with 38 percent of study respondents saying they followed the story very closely last week, up from 34 percent the previous week. The debt talks were the top story for both the public and the news media both weeks.

To start with, Pew’s own reporting on its weekly news poll says, “Debt Stalemate Top Story, But No Surge in Public Interest.” So while the story is obviously the top respondent choice, that may just as easily be because this is a slow time in news. More on that later…

Moreover, there is a small problem with the idea of “interest polls,” in that while they might indicate what people believe aught to be the most interesting story, they probably don’t indicated the story that is in fact most closely being watched. For example, economic news always ranks very high in these polls, but my own (admittedly non-scientific) research on what links get clicked tells a different story. I don’t see any reason to think people’s interest in economic news is not very strong at all. And after all, they don’t call economics “The Dismal Science” for no reason at all.

It is equally silly to say that, “A Wall Street Journal/NBC News poll last week found similarly strong engagement on the issue, with 55 percent of respondent saying that failing to raise the debt ceiling would be a serious problem.” First, because people regard the outcome as a serious issue does in no way indicate that they’re paying closer attention to it. Nor does it suggest that the media is “winning” the issue by getting more eyeballs and advertisement revenue.

And in the silliest of silly bits, the article goes on to describe how often Fox and MSNBC discussed the debt debate, then says this is the reason for the concurrent rise in viewership over the weekend. I guess this reporter just plum forgot about the Oslo bombings on Friday?

Economy Politics

New York State’s Population Archipelago

With Cornell University’s new New York State demographic factbook just recently released, I’m sure that we’ll find lots and lots of discussion on our changing population. Some new, some merely confirming long-held beliefs. But in my first pass at this document, the thing that has struck me the most is Figure 1.2 and its companion Figure 2.5, showing the population density and change of our counties:

Upstate New York in Profile.

It seems that, in addition to a more general egress of population to other states, there also appears to be a very specific egress of people from rural and semi-rural areas of New York. Some of those leaving rural counties are doubtless headed for another state, but at least two counties bordering major metros appear to have gained population.

The result is a sort of population archipelago, with major cities taking in more and more of the residents of the state, while rural areas become seas in between. That strikes me as important for a number of reasons, but one big one is that perhaps a deeper discussion of what charms of rural life are waning might lead to a better understanding of the overall “brain-drain” and how we might best mitigate against it.

Not that I have any ready answers, of course. But I wonder if someone more influential than me is seeing the same thing I am?

Economy Politics

What, Precisely, is an Online Job Listing? is reporting this afternoon that “Online job listings up locally, nationally.” That’s great, but what does that mean? The report offers no hint as to the quality of the listings nor the means by which they are included:

Online job listings up locally, nationally | Business First.

There are two immediate questions that spring to mind as a person who was only just recently unemployed and who is entirely too familiar with “online job postings”:

  1. Are the jobs actually local, or are they those “work from home” sales jobs that just advertise locally?
  2. Are those jobs unique? Many staffing agencies will post the same job with different titles and descriptions, but they’re the same job. Five companies all trying to book a single gig are not the same as five jobs.

Pardon me whilst I keep my enthusiasm in check.


Space: Maybe Not, Indeed

Christian Science Monitor has an article up on their online edition featuring the top nine priorities for planetary exploration as expressed by the National Research Council. Perhaps the National Research Council should have cross-checked with the bean counters at NASA before they went to press with this info, as the top priority of a joint EU/US mission to Mars is already in jeopardy.

Europa or bust? Maybe not. Top 9 priorities for planetary research missions – Mars Astrobiology Explorer–Cacher: MAX-C –


In an Economy with 9.2% Unemployment, We’re Arguing Over How to Lay More People Off?

Oh, I’m sure I’m oversimplifying. Heaven forfend.

But that seems to be the largest news-maker across the country: how to lay more people off. Governor Cuomo’s latest proposal seems to be getting positive reviews from the AFL-CIO of New York. But it does strike me that our state government and others across the country have basically abandoned the idea that generating revenue and keeping people employed is a good idea.

Capitol Confidential » Cuomo to propose statewide LIFO reform bill.

As for LIFO, I think the entire concept of firing teachers for under performance is exactly backwards: if anybody can put up with the years of grueling, largely thankless work of being a teacher, that person should be thanked. Yes, thanked. Ask any hiring manager at any other company what its like to see someone last more than five years.


The Libyan Disruption

So, now that prices at the pump have risen to the level the national media has decided is worth investigating, maybe we aught to see it in the context of other disruptions to the oil flow. And what is the result of that analysis? Well, Business Insider gives us the chart of the day:

CHART OF THE DAY: Where Libya Ranks Among The Worst Oil Disruptions Of All Time.

I notice that neither Katrina nor the Gulf Oil Spill rank. But it does rank above the Iraq War, and we know what that did to oil prices.


Score Another One for Poll-Based Leadership

I find surveys, polls and all things opinion as fascinating as anyone, but there is really a problem when we begin to take the voice voter as so expressed too seriously.

For example, if you were asked if you would rather have root canal surgery or be dunked naked into a pool full of puppies, you are much more likely to want to get the canine tickle fest. Its only natural. And if you’re asked if you’d rather see someone else lose their job, raise state revenue by leeching off the addicted, or pay more in taxes, I don’t think anyone is going to be shocked that the most common anonymous answer is “no new taxes.”

So, here we have yet another example. Quinnipiac conducted a state-wide survey in Pennsylvania, asking among other questions, how the state’s revenue problems might best be eased. Raising taxes, legalizing gambling in the state and laying off workers are all presented separately as options. Entirely unsurprisingly, the results are a tortured amalgam of “no new taxes.” No shit, really?

It might (I stress might, because I am hardly an expert in the ways of thinking) be better if they asked, “laying off workers would save X dollars but mean not getting X services. Raising taxes by X percent would raise the average income by X amount. Which would you prefer?” But of course, they do not ask that kind of question.


Rick Perry Did Not Lie to You.

Reason Magazine’s FaceBook page posted this article, discussing the reasons for Texas’ current budget short-fall. Paul Krugman used the state as an example of how cutting taxes did not raise revenues. Reason shoots back that, no, the problem is not that they’re cutting taxes, but that they’re spending too much money:

It would be opportunistic to dismiss Texas as a big government failure now, after using it as a model of fiscal restraint, but don’t these numbers cause the same problem for the Krugmanites? From what little I know of Texas geography (isn’t it next to that countryCantinflas came from?), I gather Austin is less in thrall to “the complete dominance of conservative ideology” than the rest of the state. Texas contains multitudes. Could it be the nightmare of austerity Krugman claims, and also a nightmare of public profligacy the spending figures indicate? Can Razzles be a candy and a gum?

This gets at the heart of a problem Conservatives have explaining their way around the Bush Administration, as well. Namely, that cutting taxes and spending exhorbitantly do not seem to be separate practices, but invariably and demonstrably linked halves of an inseparable whole.

In my gut, I do not believe Rick Perry lied to me or to his constituency. I don’t believe George Bush did, either. I don’t believe that all those Republicans who were elected on a platform of reducing the government and lowering taxes got together in a cabal and discussed how best to screw the American people by cutting taxes… and raising spending. Ronald Reagan, that soothsayer of old, had a similar problem.

I think the problem may be this simple: if you don’t change the oil in your car, sooner or later, you’re going to have to rebuild the engine. Responsibility is an expensive thing. And when you try to cheap out on every little thing – and we know George Bush’s administration did just that – you end up spending more to fix the shit you broke. It also does not help that, in the case of state budgets, when the Federal government does not meet its obligation to help pay for things like Medicare, the state has no choice but to pony up the balance.

None of this is to say that Texas, like New York, couldn’t stand a bit of restructuring in the way it does business. I’ll betcha there’s lots of money getting hidden under desks all over the state, just as it appears happens here in New York. But let’s not dance around and pretend that there is some conveniently non-threatening excuse for a predictable pattern.


Compromising Our Way Into Debt

Compromise. It’s what we all say we want out of our leaders in Washington.

But what is the current compromise on the Bush Tax Cuts? Well, not to resolve the issue, certainly. Better to simply kick the can down the road two more years – continuing to borrow money for rich people’s tax cuts, in other words – while at the same time extending unemployment benefits yet again.

How much worse could a compromise possibly be? Not only is it “Not 100% of What [Barack Obama] Want[s] or What the Republicans Want,” its really not anything that either side wants at all. For Democrats, its kicking themselves in the ass in two years time – when another election coincides with another vote on raising taxes – in exchange for a few extra months of unemployment insurance that is a practical vote of no confidence in their ability to lead. For Republicans, its a capitulation on unemployment insurance in exchange for a continued higher national debt.

On the other hand, there is no scenario under which taxes increase that doesn’t make Democrats look bad as the majority party. Paul Krugman‘s idea of letting everything expire and then letting the Republicans try to talk their way out of it ignores the fact that this is precisely what they’re good at.

The dysfunction in Washington seems to have no bounds whatsoever.


911, Subprime and the Zero Bound: How the Terrorists Really Are Winning

Its an uncomfortable thought, to be sure. But reality is not rooted in our personal comfort levels and an honest assessment of the situation says that, while Osama bin-Laden certainly could not have imagined it would actually work out this way, the attack on 911 really did strike a far more serious blow to our nation’s economy than we knew.

Certainly it was the stated goal of al-Qaeda to disrupt our financial centers. Certainly, we know that this much happened at least for a few days: the Stock Market stayed shuttered for several days before finally reopening and air travel was disrupted for a full day. But what followed was a very clear overreaction on the part of the Federal Reserve, knocking interest rates down to never-before-seen levels, bottoming out very near to Paul Krugman’s “zero bound” even before our current economic crisis. And interest rates never really did get back to pre-911 levels, or even half that.

The actual sub-prime mortgage fiasco, however, was not of post-911 origins. It’s origins are rooted well before 911 in the mid-90’s when a President Clinton looking to find ways to work with an intractable Republican Congress signed deregulatory laws that removed fetters in place since the Great Depression. And the derivative markets feeding off mortgage-backed securities was gaining a healthy head of steam well ahead of President Bush’s election.

But look what happens when you put together a down economy, an increasingly hungry securities market based on mortgages and an extremely low interest rate! There is no other sector of the economy that improved so much or displayed so many pro-political statistics than the housing sector throughout The Aughts. Every single Bush SOTU address hyped the increasing numbers of home owners. Fanny Mae and Freddy Mac took steps to actively encourage lower income home-ownership – indeed, as has been their charter for decades. And in the midst of this, what possible reason did anyone have to raise interest rates? Sure, it’s a proof against inflation – and what gains the interest rate made were precisely for this reason – but pressure to keep the markets happy and the good news coming made the White House extremely interested in convincing the Fed to keep the rates as low as possible.

Neither do I especially blame the Bush White House for this: we see now in the Obama Administration what happens when the economy dives. The simple lizard brain of politicians has to find that prospect unacceptable when an easy solution is at hand.

But now that the derivatives bubble has burst, a recession falls upon us as many such recessions fall upon us. Though undoubtably, it is a much bigger recessionary event than any I’ve ever seen in my lifetime. And in such a recession, the solution to the problem is easy: have the Fed lower interest rates. Lowering interest rates makes borrowing money more attractive, businesses make capital investments, spend money, hire workers and before you know it, the economy is back on track. Lowering interest rates also tends to lower prices on consumer goods, making purchases easier for consumers and the lowered interest rates encourage them to buy houses, cars and televisions. All good news for an economy in trouble.

Except there’s no place for interest rates to go: they’re up against a nearly zero-percent interest rate and cannot possibly go lower. The primary tool in the fight against a recession is completely robbed from us. We are not powerless to stop the rising tide of unemployment nor to hold ourselves up against the looming threat of deflation that economists worry is the next step. But we certainly are without our best set of tools, and we certainly won’t be getting out of our current economic hole for a reasonably long period of time. I’d be amazed if we got anywhere near 5 percent unemployment in the next three years, though I’m not an economist.

And so I suspect that writers of history books a century from now will note with diminishing counter-argument that the events of September 11th were hugely developmental to the dark economic “Great Recession” or “Depression” that we now live in.


The Top 5 Monroe County Stimulus Award Winners

The list below includes links to the searches of each of the five top recipients in Monroe County. These are complied from the current list (August 27, 2010) of top NYS recipients.

  1. The University of Rochester, $45,846,317 (link)
  2. The Rochester City School District, $38,180,286 (link)
  3. The County of Monroe, $26,319,233 (link)
  4. The Monroe County Water Authority, $23,730,887 (link)
  5. Regional Greater Rochester Transit Authority – RGRTA, $20,915,542 (link)