Friday, December 31, 2010

2010 in Review

Well, not really. Besides, what's to review? I have 28 posts in 2010, not counting this one. That's the least I've blogged since I started. (Those 2 in 2005 are right at the end of the year as I set this up. Plus, I was blogging at a now defunct site that year too.)

I've had a lot going on this year despite my continued unemployment. So I guess I shouldn't be too surprised. In fact I'm not.

I also have no idea what I'll do here next year, if anything. I have plenty I'd like to write about but I just don't have the uninterrupted time to do so. Also I have other writing projects I'd like to do, but again, no time.

So I guess I will continue to putz along, posting when I can. Not that anyone is left to read this other than me. Hell, even the Chinese spam-bots haven't hit me in a while.

SO I guess I will end this year of weak blogging with a weak post.

Sunday, December 19, 2010

Does this look like an economic recovery?

My wife, my mother and I have been shopping the last couple of weeks. We've been shocked by the lack of shoppers we've seen. The only places I've seen a good deal of activity are the grocery store and Sam's, and neither place has seemed any more busy than usual.

But don't just take my word for it. I was at Target yesterday, the Saturday before Christmas, and I snapped some pictures. These were all taken between 12:48 PM and 1:40 PM on 12/18/2010.

First the front end of the store.



Not terribly busy. Let's check Electronics.

Hey, that almost looks like a crowd. But not really. Mostly it's just four people walking by in the foreground. Here's what it looked like about ten seconds later.


Now for the back end of the store. First we're looking from the halfway point back towards the grocery section.


Now from the same spot looking towards the toy and sporting goods section.


Pictures don't convey everything. People could have been in the smaller side aisles that don't show up in these pictures. And some were. But not that many. The store just wasn't that busy. Neither the Electronics section nor the Toy section were crowded, not even on the Saturday before Christmas. (And the section of Christmas decorations looked like it had just been put up. Not many people were buying decorations either.) Not that long ago I remember when the Target I shopped at was busier than this on a random weekday in the middle of summer.

Also note that none of the carts look particularly full.

These pictures are from a Target on West Colonial Drive in Orlando. Admittedly it's only one store. And West Orlando isn't doing terribly well even by Orlando's standards. (The U-3 unemployment rate in the Orlando Metro area was 11.9% in November, up from 11.3% the previous month. More on this in a moment.) I'm sure the local Walmart is doing better business.

Our leaders insist we're in a recovery. I'm not convinced. As I mentioned the local employment situation got worse in November. But let's look at the broader picture of the whole state of Florida. From an article in the Orlando Sentinel last Thursday:
The statewide figure [of 12.0% U-3 unemployment] represents about 1.1 million jobless in a labor force of about 9.2 million. Total non-agricultural employment grew by 300 jobs from the previous month.
Three hundred jobs! Let's say we want the unemployment rate in Florida to get down to 5%, which is actually higher than it was pre-recession. That means that 640,000 currently unemployed Floridians (on net) need to find a job. At 300 jobs a month it will take approximately 2,133 months for the U-3 rate to return to normal. (That's over 177 years.)

Now you can accuse me of looking at the worst case. You would be wrong (we could easily lose jobs), but I can find a better case from the same article.
Since last year at this time, Florida has added 36,200 jobs – an annual growth rate of 0.5 percent. The national growth rate over that time has been 0.6 percent.
Okay, so the monthly average job gain of the last year has actually been a little over 3,000. So that means that it would take only about 213 months, or over 17.5 years, for the employment numbers to improve. And none of that takes increases in population into account.

And it's not just Florida. Consider California - the Golden State is turning into the Lead State. The most recent monthly unemployment report shows that unemployment in California is now as bad as Michigan. Michigan!

Then there was this sad story about letters to Santa Claus - increasingly children are asking for warm coats for their parents and money for the electricity bill. It's really sad, so I don't recommend the story for everyone. But here's the paragraph I found most telling.
Though many considered last year to be the toughest financially since the economic downturn began, Fontana said, it appears that more people are struggling this year, judging both from the letters and the decreased number of volunteers who sign up to fulfill some of the writers' wishes.[emphasis added]
I ask you again, does this look like a recovery?

UPDATE: My mother-in-law reports that the stores seem quite busy in Palmdale California. No reports on whether or not people are buying lots of stuff, but she did say that the Best Buy was missing several of the items she wanted - apparently sold out. I'm still not buying this as a recovery. Does anyone else have any observations?

Tuesday, December 07, 2010

Extending the Bush Tax Cuts

I've been having a conceptual problem with the politics involving the extension of the Bush tax cuts.

The argument for extending the tax cuts for income over $250,000 has been that increasing taxes at that level will hurt at the margins for small businesses. This seems sensible.

The argument for allowing the tax cuts to lapse has been that millionaires and billionaires don't need the break. I get that to a certain extent, although someone making $250,000 isn't necessarily a millionaire, and they're certainly NOT making millions in any given year. After all some Wall Street jerk making a $10,000,000 bonus isn't going to get hurt by a few extra percentage points on his income taxes.

I don't see why a compromise (prior to Obama's announcement yesterday) couldn't have been reached whereby tax rates wouldn't be raised on those making less than a million a year. (Or two million or three million... The idea is the important part, the level is negotiable.) That would help the smaller businesses at the margins and still tax the real whales. It would at least be an attempt at fiscal prudence.

I did hear that idea floated a couple of times but it didn't seem to catch on. The whole thing has been proposed as a strict dichotomy - either extend the tax cuts for everyone, or only for those making less than $250,000. No room for negotiation, just those two ideas. The whole thing makes me suspicious that both sides have actually been planning on extending everything but wanted the show to set up their talking points for the next election cycle.

...

I have one other thought about these extensions. Suppose the tax cuts are allowed to expire for the wealthiest segment. Are the Buffets, Gates, and Brins of the nation really going to pay that much more income tax? Or will their tax attorneys and accountants merely find different ways to shelter their money?

...

The more I think about it the more suspicious I get of the whole thing. It seems like nothing more than show.