Governments Go to Extremes as the Downturn Wears On

Governments Go to Extremes as the Downturn Wears On

Plenty of businesses and governments furloughed workers this year, but Hawaii went further — it furloughed its schoolchildren. Public schools across the state closed on 17 Fridays during the past school year to save money, giving students the shortest academic year in the nation and sending working parents scrambling to find care for them.

Many transit systems have cut service to make ends meet, but Clayton County, Ga., a suburb of Atlanta, decided to cut all the way, and shut down its entire public bus system. Its last buses ran on March 31, stranding 8,400 daily riders.

Even public safety has not been immune to the budget ax. In Colorado Springs, the downturn will be remembered, quite literally, as a dark age: the city switched off a third of its 24,512 streetlights to save money on electricity, while trimming its police force and auctioning off its police helicopters.

Faced with the steepest and longest decline in tax collections on record, state, county and city governments have resorted to major life-changing cuts in core services like education, transportation and public safety that, not too long ago, would have been unthinkable. And services in many areas could get worse before they get better.

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The New York Times reports on the continuing pain of penury wracking local government. And when local government catches a cold, it can seem like the flu in Privatopia where the tax base is much smaller and there is no help from bond revenues and federal government bailouts. One plus: HOAs don't have to worry about meeting employee pension obligations.

US national park faces sale | World news | The Guardian

US national park faces sale | World news | The Guardian
Wyoming Governor Dave Freudenthal says he will sell off a 1360 acre piece of Grand Teton National Park at auction, for an estimated $125 million, unless the Obama administration ponies up money to pay for public education.

Another HOA flag flap -- film at 11

Family fights to keep flags

A family in a northwest San Antonio neighborhood is fighting to keep their flags against the will of their home owners' association.

Supreme 'Double Rainbow': Two Marriage Equality Rulings Head Toward High Court

Supreme 'Double Rainbow': Two Marriage Equality Rulings Head Toward High Court
It does look that way.

Portland lemonade stand runs into health inspectors, needs $120 license to operate | OregonLive.com

7-year-old girl's Portland lemonade stand runs into Multnomah County health inspectors, needs $120 license to operate | OregonLive.com
Your government at work.

Fannie Mae: Home Prices To Decline Into Next Year

Fannie Mae: Home Prices To Decline Into Next Year: "Home prices will decline into next year, Fannie Mae said Thursday, reversing earlier projections that the housing market would stabilize this year.

Former Federal Reserve Chairman Alan Greenspan said Sunday on NBC's 'Meet the Press' that a so-called double-dip recession was possible 'if home prices go down.'"
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The administration's housing policies have failed. Period. End of debate.

And that means the economy is not in a recovery, no matter what anybody says. I don't see how there can be an economic recovery worthy of the name unless and until the housing market turns around.

Watch for the administration to do the magic "disappearing mortgage principal" thing in order to buy some votes for the November election. But it is all smoke and mirrors and making us pay other people's mortgages in addition to our own.

What it comes down to is this: the Obama administration and the congressional Democrats who are running this nation have no idea what to do about the housing market and that means they can't fix the economy. Maybe nobody can, but that hasn't been proven yet. We do know for sure that this crop of Democratic leaders can't. I'm no fan of the Republicans these days, but where else are the voters supposed to turn?

Scientists find sea sponges share human genes

Scientists find sea sponges share human genes
That explains a lot of what I saw in the Gurnee Mills shopping mall yesterday.

Megan McCardle: Housing Insanity

Housing Insanity - Business - The Atlantic: "If you want to know why us libertarian types are skeptical of the government's ability to prevent housing market bubbles, well, I give you Exhibit 9,824: the government's new $1000 down housing program.

No, really. The government has apparently decided, in its infinite wisdom, that what the American economy really needs is more homebuyers with no equity."
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Incredible.

Camden Closing Library System

Camden, NJ, Closing Library System
And that includes getting rid of all the books, which would be a fire hazard in the buildings they are going to close.

Friday's Jobs Report: Outlook Darkens for Economy, Obama - Yahoo! Finance

Friday's Jobs Report: Outlook Darkens for Economy, Obama - Yahoo! Finance

Net of inventory adjustments, the economy demand for goods and services
is growing at only 1.3 percent a year.

In the second quarter, consumer spending; investment in new structures,
equipment and software; and government purchases added 4.1 percent to
demand-but as imports grew much more rapidly than exports, the trade
deficit tapped off 2.8 percent.

The difference, 1.3 percent, is annual growth in demand for U.S.-made
goods and services. That has been the pace since recovery began in July
2009.

Businesses can accommodate up to 2 percent growth in demand by improving productivity and not adding workers. Unless the rapid growth in imports can be curbed, the U.S. economy is headed for very slow growth and rising unemployment.

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A driver of deflation is excess capacity in the economy and too few dollars
changing hands too slowly to absorb it. The tepid 1.3 percent rate of growth in demand shows the economy is at risk for deflation at worst and slowly slogging along for several years at best -- the price of recovery from the horrible hangover from the mortgage industry/Wall Street blowout of the 2000's.

City bond rating downgraded :: CHICAGO SUN-TIMES :: City Hall

City bond rating downgraded :: CHICAGO SUN-TIMES :: City Hall
It's only the third largest city in the US. Nothing to see here. Move along.

An August Surprise from Obama? | Analysis & Opinion |

An August Surprise from Obama? | Analysis & Opinion |
Speculation based on rumors that Obama is going to order Fannie and Freddie to forgive a ton of mortgage debt for people who are underwater on their mortgages. This would be aimed at influencing the election in November, of course. The date to watch is August 17, says the author of the post (he's Reuters' Money and Politics columnist, James Pethokoukis). The Democrats are absolutely desperate so this would not surprise me, and besides--Obama learned his politics in Chicago, and that's the way government works here.

California consumers carry massive debt loads into bankruptcy | California Watch

California consumers carry massive debt loads into bankruptcy | California Watch
Fred Pilot says that if you look at this map you will see where the heaviest debt loads are: Privatopia. All the Sun Belt states where people have been buying into gated communities and condos.

Study: Cut in delta water use needed for fish

Study: Cut in delta water use needed for fish: "The amount of water pumped out of the Sacramento-San Joaquin River Delta would have to be cut in half if vulnerable fish populations are going to be preserved for future generations, a state report declared Tuesday."
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The Central Valley of California, one of the nation's most productive agricultural areas, is covered with brown fields because a judge in the delta smelt case ordered the water flow from the delta reduced. That massive litigation continues. Meanwhile, here is the state water board saying it is necessary to cut the flow by half, permanently.

I think water wars are going to be front and center in US and international politics for a long time, and what is happening right now in California is part of the front line.

Record number of Illinois families on food stamps - chicagotribune.com

Record number of Illinois families on food stamps - chicagotribune.com: "CHAMPAIGN, Ill. — More Illinois families are receiving food stamps than ever before as a result of the deepest recession in decades, state officials said Monday.

More than 780,000 Illinois families got food stamps in June, up 11.9 percent from a year earlier, the Illinois Department of Human Services reported. Nationally, 40 million Americans -- 18.7 million households -- use food stamps."
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And because the state legislature hasn't even started to get realistic about cutting the budget, the fact is that this state's economy will continue to get worse for at least another two years.

Interactive map of unemployment since 2007

multimediafinal
This is why the Democrats are panic stricken about the November elections.

Forget What We Said About Inflation, Say Big Investors -- It's DEFLATION You Should Be Worried About

Forget What We Said About Inflation, Say Big Investors -- It's DEFLATION You Should Be Worried About

Over the past six months, the smart money has gone from trying to cash in on the coming hyper-inflation the US will suffer as the Fed desperately tries to re-inflate the economy and destroys the dollar in the process...to reversing course and trying to cash in on a coming deflation.

For example, here's PIMCO guru Bill Gross in the Wall Street Journal:

"Deflation isn't just a topic of intellectual curiosity, it's happening," says Mr. Gross, who runs the $239 billion mutual fund Pimco Total Return Fund, citing an annualized 0.1% decline over the past two years in the U.S. consumer-price index. "It's an uncertain world that's tipping toward deflation."
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This article shows sophisticated investors with no experience with deflation and who worried about inflation their entire lives are having trouble wrapping their minds around the notion that prices can also enter a downward as well as an upward spiral. Federal Reserve policymakers have also been grappling with the depressing prospect of deflation. Their challenge is like that of pilot trying to precisely determine how much throttle to give a plane on the verge of stalling -- which is where the economy is now. Too little and the aircraft stalls and begins falling to the ground. Too much throttle and the engine races out of control, overheating the economy and setting the stage for another crash.

AP analysis: US economic stress heads back up

AP analysis: US economic stress heads back up

After easing for four months, the nation's economic stress worsened in June because more bankruptcies in the West and foreclosures outside the Sun Belt outweighed lower unemployment, according to The Associated Press' monthly analysis of conditions around the country.

The setback halted a drop in month-to-month stress readings that had begun in February. In May, economic stress had declined from the previous month in 33 states. And in April, stress fell in every state but two.

But in June, bankruptcy rates rose in Utah, California, Colorado and Idaho. Higher foreclosures spread to the Midwest, particularly Illinois. This occurred even as foreclosures eased in states that have suffered most from the housing bust, such as Arizona, California, Florida and Nevada.

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It's an economically stressful summer in Privatopia -- the states where the misery index is highest.

A Camry or a Condo?

Condos that cost less than cars

The housing bust has taken down the national median home price by about 23% since 2007, according to the National Association of Realtors (NAR). But condo have fallen even further, down about 25%.

In Sacramento, Calif., condo prices have fallen 59% from what they averaged in 2007, according to NAR. Miami condo prices have plunged 65%, and in Las Vegas they are off 66%.

Prices of individual units are down even more. One condo in Deerfield Beach, Fla., that sold for $115,000 five years ago now lists for $25,000. That's a drop of nearly 80%.

Much of these price drops can be attributed to over development during the boom. Much of that came in Sand State markets such as Las Vegas Miami and Phoenix, where prices for all properties are have fallen precipitously.

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This tends to happen in a down real estate market. Condos end up going for about the same as a vehicle.

Have jobs become a leading indicator?

Have jobs become a leading indicator?

"Employment typically lags the business cycle, but that doesn't have to be the case," said Karen Dynan, a former Federal Reserve economist now at the Brookings Institution. "The loss of momentum in labor markets in recent months was one of the signals that we weren't entering a self-sustaining recovery."

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Employment is classically a lagging indicator of improved economic activity. But it can also be a leading indicator of continued economic weakness and a W shaped recovery as this article posits.

Layoffs to gut East St. Louis police force

Layoffs to gut East St. Louis police forceGang activity. Drug dealing. Cold-blooded killing. Tracy worries that a decision to shrink the police force by almost 30 percent will bring more of everything.
The pastor voiced his concern on Friday at a raucous special City Council meeting at which East St. Louis Mayor Alvin Parks announced that the city will layoff 37 employees, including 19 of its 62 police officers, 11 firefighters, four public works employees, and three administrators. The layoffs take effect on Sunday.
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East St. Louis is a high-crime city to begin with. laying off 1/3 of the police force is the last thing they need. I notice they only got rid of three administrators.

So long, middle class - NYPOST.com

So long, middle class - NYPOST.com: "Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing rules, regulations and taxes that make it even more difficult to conduct business here. What has developed is a situation where the people at the top are doing quite well, while the average family barely gets by. Entitlement programs are expanding at unprecedented rates, but it is the people in the middle — who shoulder the costs of these programs, while their salaries stagnate — who are being squeezed in a sea of depressing statistics."
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No kidding--and I get the feeling that a whole lot of these middle class folks understand that they have a big bulls-eye on their chest.

New playground rules: No lone adults - Miami Beach - MiamiHerald.com

New playground rules: No lone adults - Miami Beach - MiamiHerald.com: "Beginning Sunday, anyone 18 or older could face a fine -- or at least get shooed away by police -- if found in a Miami Beach playground without a child.

Intended to protect children from predatory adults, the new rule is part of a national trend -- a municipal corollary to kids-required policies for grown-ups at children's museums."
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Interesting--the article goes on the say that New York City and San Francisco have laws like this already. Hard to see why San Francisco would bother. There are hardly any children there to protect. It's basically just the homeless and the yuppies and their dogs. All the kids seem to be in the Exploratorium, but I saw plenty of "unaccompanied" adults there...very suspicious.