I’ve seen a number of bloggers address the home ownership rate, which at 66.5% is down to 1998 levels. But Susie Madrak highlights another number: an 11% vacancy rate. According to the CNBC post she points to:
The number of vacant homes for rent fell by 493 thousand, as rental demand rose. 471,000 homes are listed as “Held off Market” about half for temporary use, but the other half are likely foreclosures. And no, the shadow inventory isn’t just 200,000, it’s far higher than that.
So think about it. Eleven percent of the houses in America are empty. This as builders start to get more bullish, and renting apartments becomes ever more popular. Vacancies in the apartment sector have been falling steadily and dramatically, why? Because we’re still recovering emotionally from the toll of the housing crash.
Younger Americans have seen what home ownership has done to their friends and families, and many want no part of it. Credit has become very nearly elitist. Home prices, whatever your particular data provider preference might be, are still falling.
Like the New York Times article I wrote about yesterday, this is another piece of evidence showing us how profoundly our economy—indeed our country—has been changed by this recession and by the decades of growing income inequality that preceded it.
Enormous income inequality became the new normal. Then came this recession—we haven’t reached a post-recession new normal, but lots of signs suggest that what we’re moving toward is something that just a few years ago seemed unthinkable. That we have unemployment near or over 10% and the government doesn’t treat that as an emergency, that banks are allowed to just throw people out of their homes based on fraudulent paperwork, that the middle class is under a sustained attack.
The question is, where’s the tipping point at which the mass of working people in this country either accept that this is it—that their jobs, health care, and retirement will always be insecure; that they can’t expect to provide a better life for their children—or instead of accepting it, fight back, whatever that fight looks like?
I know I’m a broken record on this, but there is no great mystery why the Dems are looking at potentially major problems in November. The economy is truly atrocious and has been for a long time. I remember just before the ’08 election – almost two years ago – betting a friend that unemployment would rise above 7.6%. At the time to many people 7.6% seemed to be a pretty crazy number, even in the middle of the unfolding crisis. Soon after the administration projected that unemployment would peak at 9% from Q1-Q3 2010, and then start declining without any stimulus. It’s now been above 9% since May 2009, including 3 months where it was 10%+. If I had traveled back in time to warn them of this state of affairs, they would have been more likely to believe the time travel part.
President Obama gives another great speech—great not just because he’s a compelling speaker but because he’s laying out so much about what’s wrong with the economy.
Excerpts:
I ran for President because for much of the last decade, a very specific governing philosophy had reigned about how America should work: Cut taxes, especially for millionaires and billionaires. Cut regulations for special interests. Cut trade deals even if they didn’t benefit our workers. Cut back on investments in our people and in our future -– in education and clean energy, in research and technology. The idea was that if we just had blind faith in the market, if we let corporations play by their own rules, if we left everyone else to fend for themselves that America would grow and America would prosper.
And for a time this idea gave us the illusion of prosperity. We saw financial firms and CEOs take in record profits and record bonuses. We saw a housing boom that led to new homeowners and new jobs in construction. Consumers bought more condos and bigger cars and better TVs.
But while all this was happening, the broader economy was becoming weaker. Nobody understands that more than the people of Ohio. Job growth between 2000 and 2008 was slower than it had been in any economic expansion since World War II -– slower than it’s been over the last year. The wages and incomes of middle-class families kept falling while the cost of everything from tuition to health care kept on going up. Folks were forced to put more debt on their credit cards and borrow against homes that many couldn’t afford to buy in the first place. And meanwhile, a failure to pay for two wars and two tax cuts for the wealthy helped turn a record surplus into a record deficit.
I ran for President because I believed that this kind of economy was unsustainable –- for the middle class and for the future of our nation. I ran because I had a different idea about how America was built.
And
I believe government should be lean; government should be efficient. I believe government should leave people free to make the choices they think are best for themselves and their families, so long as those choices don’t hurt others. (Applause.)
But in the words of the first Republican President, Abraham Lincoln, I also believe that government should do for the people what they cannot do better for themselves. (Applause.) And that means making the long-term investments in this country’s future that individuals and corporations can’t make on their own: investments in education and clean energy, in basic research and technology and infrastructure. (Applause.)
That means making sure corporations live up to their responsibilities to treat consumers fairly and play by the same rules as everyone else. (Applause.) Their responsibility is to look out for their workers, as well as their shareholders, and create jobs here at home.
And that means providing a hand-up for middle-class families –- so that if they work hard and meet their responsibilities, they can afford to raise their children, and send them to college, see a doctor when they get sick, retire with dignity and respect. (Applause.)
That’s what we Democrats believe in -– a vibrant free market, but one that works for everybody. (Applause.) That’s our vision. That’s our vision for a stronger economy and a growing middle class. And that’s the difference between what we and Republicans in Congress are offering the American people right now.
To roads being turned to gravel, senior year of high school being made optional, public bus systems being shut down and libraries being closed, add another effect of state and municipal budget crises: firehouse brownouts.
Fire departments that can’t keep all their units open at any one time are instituting “rolling brownouts,” in which today the firehouse down the block from me might be closed and tomorrow it will be open while the one in your neighborhood across town will be closed. According to the New York Times, this is increasingly widespread—the article mentions Philadelphia, Baltimore, Sacramento, San Diego.
Firehouse closures don’t just affect the response time for fires. Increasingly, emergency medical response teams are part of fire departments, so people in cities with brownouts don’t just have to worry about facing a relatively rare fire. Much more common medical emergencies are suddenly a far graver concern: A heart attack, a fall down the stairs, being hit by a car. Or choking:
The risks of cutting fire service were driven home here last month when Bentley Do, a 2-year-old boy who was visiting relatives, somehow got his hands on a gum ball, put it in his mouth, started laughing and then began choking.
“It blocked the air hole,” said his uncle, Brian Do, who called 911 while other relatives frantically tried to dislodge the gum ball. “No air could flow in and out.”
It is only 600 steps from the front door of the neatly kept stucco home where the boy was staying to the nearest fire station, just down the block. But the station was empty that evening: its engine was in another part of town, on a call in an area usually covered by an engine that had been taken out of service as part of a brownout plan.
The police came to the home within five minutes and began performing cardiopulmonary resuscitation, officials said. But it took nine and a half minutes — almost twice the national goal of arriving within five minutes — for the fire engine, with a paramedic and more medical equipment, to get there. An ambulance came moments later and took Bentley to the hospital, where he was pronounced dead.
Maybe that little boy would have died anyway. But wouldn’t you rather the question wasn’t out there? His family would, and they’re publicizing his story to draw attention to the problem.
State and municipal budget crises bring the overall economic crisis into sharp focus. If we can’t look at gravel roads and disappearing public transit and closed libraries and firehouses and see that something needs to be done, will Bentley Do’s story be enough? How much more of this will our government tune out before acting to end the crisis?
A slowdown in the housing and construction markets contributed to a sluggish outlook for the economy Thursday, highlighting the significance of government stimulus and job creation.
According to new statistics, pending homes sales and construction both declined in May. In addition, figures showed that while manufacturers recorded some gains in June, the pace of activity in that sector slowed last month compared with May and also came in slightly below estimates.
New-vehicle sales in the United States slowed in June, automakers and analysts said, raising concerns that the market’s recovery could be stalling after months of slow but encouraging gains.
The jobless sure are messing things up for the market’s recovery.
This isn’t likely to change any time soon. The hiring outlook isn’t good:
The weak private sector job growth, coupled with the loss of more than 200,000 census jobs in June, has economists surveyed by Briefing.com forecasting an overall loss of about 100,000 jobs for June. The government will release those figures Friday. The unemployment rate is expected to rise to 9.8% from 9.7% in May.
The Senate failed again to pass an extension of unemployment benefits.
Lurking beneath the deficit concerns for some members is the suspicion that the extended benefits discourage people from looking for work — even though there are five people vying for every available job and a full third of the 15 million unemployed don’t actually receive the benefits.
If Congress eventually does reauthorize the aid, people eligible for extended benefits during the lapse will be paid retroactively. Failure to do so would be unprecedented: Since the 1950s extended federal benefits have never been allowed to expire with a national unemployment rate above 7.2 percent. The current rate stands at 9.7 percent.
The deficit peacocks claim that extending benefits will increase the deficit. No word on how the deficit will decrease with even more people out of work living in poverty.
I’m sure it’s partly my mood, but wow is the news depressing this week. I’m just going to do some quick links until I can wrap my mind around all this, accept that it’s actually where we are right now, and come up with something to say.
In 2010, the Obama administration has estimated, school districts across the country might lay off as many as 300,000 employees, many of them teachers. That would be five times the number of layoffs in 2009, and ten times the number of layoffs in 2008.
-snip-
The teachers and other public-sector employees might be just the start. The CBPP has estimated that if states cut their spending from 2009 to 2010 the same level they did from 2008 to 2009, it might cost as many as 900,000 public- and private-sector jobs — swelling the ranks of the unemployed by five percent or more.
Did you know the national debt would stabilize if Congress did nothing? Because nothing includes things like the Bush tax cuts for the wealthy expiring—and who thinks Congress will let that happen?
And, of course, jobless workers around the country are still waiting for that unemployment extension we keep talking about. And they’re going to keep waiting. Thank you, Senate!
Responding to a PhD economist who thinks bloggers and op-ed writers shouldn’t bother trying to explain what’s going on in the economy, Matt Yglesias does an excellent job explaining why we should try to explain exactly that:
But perhaps you’re a citizen of a liberal democracy who speaks English and tries to keep abreast of political controversies. Well you’ve probably heard politicians talking a lot about jobs and the economy. You’ve probably noticed that voters keep telling pollsters that jobs and the economy matter to them. Jobs and the economy may matter to you! You may have seen that political scientists have found that presidential re-election is closely linked to economic performance, and thus deduced that the fate of a whole range of national policy issues hinges on economic growth. Well then I bet you are probably interested in the fact that a wide range of credible experts (with PhDs, even) believe the world’s central banks could be doing more to boost employment.
-snip-
Completely apart from the fact that the “science” of economics is a good deal less developed than what you see in real sciences, the fact is that economic policy is economics plus politics. For example, according to Ben Bernanke, the Fed could reduce unemployment by raising its inflation target but this would be a bad idea because it runs the risk of causing inflation expectations to become un-anchored. That’s a judgment that contains some “economics” content but it’s largely a political judgment. It’s part of his job to make those judgments, but it’s the job of citizens to question them.
We don’t all have PhD’s in economics, nor should we. The world benefits by having people with different academic training thinking about the same large-scale problems from different angles and by having people be interested in more than one thing, even if that means they aren’t highly credentialed in everything they ever pay attention to. For instance, Jared Bernstein, Vice President Biden’s economic policy advisor, doesn’t have formal training in economics, yet he’s held jobs at a think tank and under two presidential administrations doing economics. Clearly a PhD is not the be-all and end-all of understanding the economy.
Also, as Yglesias says, the world benefits by having citizens who question “experts” and fight to ensure that the government identifies the problems that plague working people and implements solutions that actually help working people. That is the essence of democracy.
The fishing ban in the Gulf of Mexico has been expanded:
The National Oceanic and Atmospheric Administration greatly expanded the fishing ban in the Gulf of Mexico on Tuesday in response to spreading oil from the BP well blowout. The prohibited area now covers 19 percent of the gulf, nearly double what it was, according to the agency.
the impact of the spill is beginning to kick in:
Officials are already seeing some impact on fish and wildlife in the region. Rowan W. Gould, the acting director of the Fish and Wildlife Service, said 156 sea turtle fatalities had been recorded in the gulf since April 30, about 100 more than usual at this time of year.
Mr. Gould also said that a small number of oily birds, 35, had been recovered, including 23 dead birds directly linked to the spill.
“It’s important to note that the visibly oiled birds are a small part” of the effects of the oil spill, Dr. Gould said in a teleconference on Tuesday.
“What concerns us most is what we can’t see,” he said, adding, “We are preparing for the likelihood that it will exist in the gulf ecosystem in years to come.”
The economic impact is already being felt along the coast. In Pensacola, FL:
The spill has scared off charter fishing customers at the marina here, even though the water they’d normally trawl is still open. The 30 boats were almost all tied to their slips Tuesday and Jerry Andrews, the captain of the Entertainer, had the dock to himself.
“Usually you’d see 15 or 20 people walking up and down out here asking about the fishing. Three-fourths of these slips would be empty,” said Andrews, a Pensacola native who has been fishing here for 34 years.
and
Andrews said before the spill he was getting between 30 and 40 calls and e-mails a day asking about chartering his boat and his customers were catching their full quotas of vermilion snapper, triggerfish, amberjack and grouper.
But in the month since the spill, he gets hired for one or two trips a week, tops. Most of his customers, who come from Alabama and Georgia, are now going to the Carolinas.
In Louisiana many of the fishermen hired by BP to help try to contain the spill are getting frustrated:
Louisiana fishermen, thrown out of work by the massive oil spill that has closed coastal waters, are jockeying for jobs to contain the mess. But just who gets those jobs is a source of mounting tension. Some workers are getting paid to go out on the water multiple days in a row, while others aren’t allowed to go out at all, according to some fishermen.
They said that BP, which had promised to pay each fisherman $5,000 a month for compensation, is dallying on handing out checks. And they said that men who haven’t fished in years are getting paid to work on prevention teams, even though they’re not affected by the oil spill.
“It’s all about who you know,” said fisherman Oliver Rudesill, who was sitting in the shade beside the St. Bernard Parish home of a friend on Sunday. He has not earned a cent since the spill started, he said, while others are making hundreds of dollars a day.
His friend, David Palmer, a 33-year old fisherman with three kids, has been told his turn won’t come until June. “It’s so messed up it’s not even funny,” said Palmer, whose home sits on pylons to avoid the swampy grasses. “A person can’t wait 30 to 40 days to go work.”
No one can say with any certainty how this disaster will impact the gulf coast. The long term impact could be devastating:
If the oil penetrates deep within the estuaries around the Mississippi delta, it could devastate the salt marshes and bays that support as much as 90 percent of commercially fished species in the Gulf. That would spell long-term disaster for Louisiana’s $1.8 billion fishing industry, not to mention the other Gulf Coast states.
“You have to question what is going to come from this,” said David Wyld, a professor of management at Southeastern Louisiana University in Hammond. “Not just during the next few months, but also during the next few years and even a decade out.”
On top of it all, there’s the economic ripple effect. No fishing means fewer people chartering boats, and closed beaches lead to abandoned vacation plans and cancelled hotel bookings. All of that may only deepen the future economic misery for Gulf Coast residents to the tune of billions of dollars in lost revenue.
All the more reason to push for more job creation and more economic stimulus money to help states that have been hard hit, and aid the unemployed.
Folksingers have occupied a noble place in our history, singing about economic hard times, mining disasters, exploitation of workers, and of course, the Great Depression. In the great tradition of folk singers like Woody Guthrie and Pete Seeger, NH musicians Beverly Woods and Seth Austin have written a song called Deepwater Horizon Disaster:
The New York Times’ Floyd Norris spends more than 1,200 words wondering why on earth people aren’t more cheerful about the economy. Well, not people. Specifically, President Obama. Norris thinks that since economists say that the recession is over, Obama should take up that message and go forth with it, talking it up in his speeches. Since Obama is not doing that, Norris is looking for explanations. Or, as he puts it:
But there are, I think, a number of reasons for the glum outlook that are unrelated to the actual economic data.
So his explanations for this mysteriously “glum” decision to ignore “actual economic data”?
First, the experts didn’t see the recession coming, and
Having been embarrassed by missing impending disaster, there is an understandable hesitation to appear foolishly optimistic again.
Second,
Both Republicans and Democrats have good reasons to be negative. Republicans are loath to give President Obama credit for anything, and no doubt grate when he points to his administration’s stimulus program as a cause of the good economic news, as he did in North Carolina.
Democrats would love to give the president credit. But much of the Democratic Party wants another stimulus bill to be passed, notwithstanding worries about budget deficits. Chances for that are not enhanced by the perception the economy is getting better.
Dear Mr. Norris: Without getting into the partisan slant of those two paragraphs, I would propose a third reason people are not optimistic.
THE UNEMPLOYMENT RATE IS 9.7%Fifteen million people are unemployed. More than 9 million people are working part-time when they want to be working full time. More than 6.5 million people have been jobless for six months or more.
Basically, the issue is that Floyd Norris doesn’t give a damn about working people, and he’s bewildered by the things President Obama is saying…because he doesn’t get that at least some of the time, that’s who Obama is talking to. And when people are barely keeping their heads above water, unemployed or without the full-time work they need in many cases for more than half a year, and the Treasury Secretary has said that unemployment is going to be “unacceptably high for a long period of time,” you don’t go to them and say “well, economists tell me that the recession is over! Problem solved!” The problem is not solved for tens of millions of people. So unless you just don’t think those people matter, the question “why so glum” is not one that really needs to be asked. The answer is obvious.
The Center on Budget and Policy Priorities recently released a report on state budget cuts caused by decreasing tax revenues. Over 45 states have already made deep cuts, and in 2011, another round of cuts is expected:
With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have made spending cuts that hurt families and reduce necessary services. These cuts, in turn, have deepened states’ economic problems because families and businesses have less to spend. Federal recovery act dollars and funds raised from tax increases are greatly reducing the extent, severity, and economic impact of these cuts, but only to a point.
The cuts enacted in at least 45 states plus the District of Columbia in 2008 and 2009 occurred in all major areas of state services, including health care (29 states), services to the elderly and disabled (24 states and the District of Columbia), K-12 education (29 states and the District of Columbia), higher education (39 states), and other areas. States made these cuts because revenues from income taxes, sales taxes, and other revenue sources used to pay for these services declined due to the recession. At the same time, the need for these services did not decline and, in fact, rose as the number of families facing economic difficulties increased.
These budget pressures have not abated and, in fact, are increasing. Because unemployment rates remain high — and are projected to stay high well into next year — revenues are likely to remain at or near their current depressed levels. This is likely to cause a new round of cuts. Based on new, gloomy revenue projections, governors have begun issuing their budget proposals for the 2011 fiscal year (which begins on July 1, 2010 in most states), and the proposed cuts go even further than those that states have enacted to date.
So, as the need for services increases, the budgets for programs that help those who are most vulnerable are cut.
This slideshow gives a brief and helpful overview of the situation, and an idea of how long it’s likely to take to dig out of this.
This website has a lot of useful information, including a look at the ABC’s of State Budgets, an intro to the Federal Budget Process and some all round helpful information and definitions of terms that we hear all the time, (like Pay as You Go, Budget Reconciliation, or Earned Income Tax Credit) but may not fully understand unless we are budget geeks.
Bottom line – the news isn’t good, and the only way out is to create jobs, as quickly as possible.
