Slouching Towards Oblivion

Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Wednesday, January 31, 2024

Econ 201

Capital is free to go where the highest profit potential is.
Labor is chained to the country of its origin.



Opinion
If you want to know where the world economy is headed, look at the bottom of this toy car

What if I said you could read real world history on the underside of your kids’ Hot Wheels?

In my Philippine childhood in the 1970s, my brother Hector and I played with die-cast toy cars. I remember the first time I looked at the underside of these cars, soon after I had learned to read, and realized they had been made in different countries in different years. Some were made in the United Kingdom and the United States; the newer ones were made in Japan. Decades later, as my work as an economist brought my family to the United States, my two children got toy cars nearly identical to mine — first made in China and, later, Vietnam.

We now have a small collection of these cars, and occasionally I use them as a teaching tool. I ask students in my economics classes to inspect the cars’ undersides, and together we trace the gradual movement of toy car manufacturing: from England and the United States in the 1960s to Japan in the mid-1970s, from South Korea in the mid-1980s to China in the late 1990s and Vietnam after.

I tell them the process of making die-cast toy cars is nearly unchanged since the 1960s and has been steadily passed from one country to another, marking the beginning of the transformation of entire economies. We observe how toy-export data mirrors worldwide trends in industrial sector employment over the past 60 years: the gradual rise of toy manufacturing and toy exports in developing economies, the expansion of light manufacturing in those countries, followed by the growth of more complex production and the entire industrial sector, soon dwarfing the traditional agriculture sector and lifting people out of low-paid, low-productivity work.

And then we see, almost as rapidly, the decline of the industrial sector in a now-richer economy, as production at lower prices becomes available from the next industrializing country. In the graphical representation of this phenomenon, individual countries’ data looks like hills all over the world and over time; it is a beautiful, astonishing understatement of how countless lives have been changed in the process.

This much world history reflected in a handful of toy cars.

Several years ago, at the end of those class conversations on economic transformation, I would boldly tell my students: If you would like to know where the world economy is headed, go to a toy store and look at the underside of a die-cast car. I was confident they would find some from Vietnam, considering my children’s cars and the country’s rapid industrial transformation. Or maybe from fast-growing Bangladesh or Ethiopia.

I was wrong.

Then came the covid-19 pandemic, and the industrial world reeled from massive supply chain disruptions. In early 2022, Mattel — which makes Hot Wheels and Matchbox toy cars — made a move to “near-source” some production, bringing its supply chain closer to the United States and away from Asia and China: It announced an injection of $50 million to its factory in Mexico. So I expected to start seeing toy cars manufactured in Mexico.

Wrong again. In two years, sometimes things change, sometimes things remain the same.

This past holiday season, my children and I took turns visiting the toy section of a large store just outside Washington. It was like a game: find a random car, take a picture of the box and the car’s underside, send it to our group chat. We found none from Bangladesh, Ethiopia or Mexico. They came from Malaysia, Thailand and, surprisingly, China, still. In the journey toward the inevitable transformation of economies, it seemed the world had taken a few detours.

It turns out that near-sourcing is more complicated than expected, as recently documented in the case of Mexico. Part of the difficulty involves scaling and coordination: As more businesses seek nearby production facilities, the nearby economy, with its limited human and infrastructure resources, is quickly overwhelmed. And just as critical pieces in toy manufacturing are still imported from China, inputs from China more generally are integral parts of more sophisticated global supply chains.

In addition, toy manufacturing reflects not only the promise of industrialization but also its disappointments. In late 2022, Mattel commemorated its 40th year of manufacturing in Malaysia by announcing the growth of its Hot Wheels factory there, the world’s biggest. This was a positive development, but Malaysia’s economy reached middle-income status decades ago; in the familiar pattern, it would by now have progressed to manufacturing more complex, profitable products. Instead, the country has remained in what economists Indermit Gill and Homi Kharas defined as the “middle-income trap” — caught between developing and rich nations.

As my children and I inspected this generation of toy cars, I struggled to explain what we were seeing. Not because toy cars do not tell us something about the world but because they do. They reflect the world’s reality, including its surprises.

Saturday, January 27, 2024

Workin' For A Livin'

I was never a fan of unions. Growing up in the 60s, there was always the perception that unions were mobbed up, and there was just something kinda dirty about the whole thing.

Then in the 70s, when things started to come apart, unions were seen as being a big part of the problem. They weren't really, but the prevailing narrative was that we were paying too much for everything because the unions were feather-bedding the crap out of American manufacturing, so the noble capitalists had no choice but to say 'fuck this shit, we're moving it all to Indonesia'.

Working people have been always been the targets of cynical manipulators who tell us the wrong thing is the problem, and that we need to blame the wrong people for it.

Maybe we're finally start to get wise, and maybe the pendulum has started to swing back in the other direction.



Union membership is growing in the state after years of declines.

Employee walkouts, work stoppages and union drives seemed like a big part of 2023. But you may not know it from national data released earlier this week. The U.S. Bureau of Labor Statistics said union membership was “little changed” last year, comprising 10% of the national workforce. In 2022, it was an iota higher, 10.1%.

Rates, of course, don’t tell the whole story.


“I can say that both phenomena are true: There has been a lot of union activity over the past year and the unionization rate hasn’t changed much,” said Johnnie Kallas, director of the Labor Action Tracker, which tracks work stoppages and other labor actions nationwide. The tracker, which Kallas helped develop while at Cornell University’s Industrial and Labor Relations School, documented 451 labor actions in the U.S. last year, 414 in the prior year and 270 in 2021.

A key explanation? “There were nearly 200,000 more union members in 2023 than 2022, but those increases did not keep pace with considerable job growth last year, hence a stagnant or very slightly decreasing unionization rate,” said Kallas, now an assistant professor at the University of Illinois School of Labor and Employment Relations.

While there have been worries of a recession for the past couple of years, there was no recession in 2023. The nation’s economy grew 3.3% annually in the fourth quarter and 3.1% for the year, according to the U.S. Commerce Department update Friday. And overall job growth continued to surprise economists.

Colorado experiencing more union activity

But Colorado was different. The state’s union membership rate ticked up, at least from a low point in 2021. Last year, the number of union members increased 6.2% to 189,000 workers. Union members make up 6.9% of the state’s employed population. A year earlier it was at 6.7%, which is below the national average.

The state added 11,000 union members last year, and 13,000 in the prior year. Those included baristas at Starbucks and staff at Urban Peak, the first unionized shelter for unhoused people in Colorado. Momentum, especially among service workers, continued this month with more filing with the National Labor Relations Board to start a union, including 238 employees at the Denver Art Museum, about 180 workers from Alamo Drafthouse Cinema locations in Westminster and Denver and five at the CobbleStone Car Wash in Lakewood.

But few, if any, actually have a contract.

“It takes a tremendous amount of new organizing to translate into increased union density,” Kallas said. “In some cases, workers have made important organizing gains, but have had difficulty achieving a first contract.”

Membership has thrived at the Service Employees International Union Local 105, which has increased membership by 50% in 10 years. About 70% was new growth of workers at companies seeking representation, said Stephanie Felix-Sowy, who helped 3,000 Kaiser Permanente health workers in Colorado get a new contract after a three-day strike in October. Local 105 also represents janitors, security staff and other service workers, including more recently, about 2,000 who work at Denver International Airport.

“Colorado historically is not a super union-dense state,” Felix-Sowy said. “Being able to do that work within those particular industries has been really game changing for our members and their ability to move their priorities forward.”

After COVID, the union saw even more interest in collective bargaining. It’s currently working with home care workers and expanding its reach into airport workers. Last month, it helped organize a walkout of dozens of Denver airport cargo workers seeking safer working conditions from their employer, Swissport International.

“It’s starting to come to light and workers in these industries are fed up with seeing record profits,” Felix-Sowy said. “Even through COVID, we saw airports getting millions and millions of dollars from the government and workers not seeing that, and then a few years later, seeing record profits again. It’s just like all of these pieces, specifically in Colorado, have really led to folks looking for an outlet. I think it’s the same way that we saw generations ago.”

➔ On the other hand … union membership has been in decline for years. During the early 1950s, about one-third of private sector workers belonged to unions. Now it’s 6%. The Associated Builders and Contractors said Friday that most construction workers employed by private companies aren’t in a union. Nationally, the industry reached an all-time high of 89.3% who are not part of a union. ABC is a trade group primarily for construction companies.

Housing: Rent or buy?

With mortgage rates still above 6%, buying a house hasn’t gotten any cheaper even as sales prices halted their spectacular rise in 2021 and 2022. Interest rates, according to the Colorado Association of Realtors, “defined the 2023 housing market.”

In 2023, potential sellers held on to their homes and “stopped the move-up market where a huge percentage of current homeowners have mortgages under 3.5% and don’t want to trade that in,” said Fort Collins Realtor Chris Hardy in a CAR update.

Last year, Colorado sellers listed 81,115 single-family homes for sale. Before the pandemic, there were 108,007, according to CAR data. Even just counting the past 12 months, the number of available houses for sale — or sold — fell by double digit rates from 2022. The median sales price in 2023? Up in some parts of the state, down in others.


But in December, prices inched up again, from a year ago, with the median price of single-family houses in Colorado at $549,950, up 3.8%. Median prices for the full year, though, were down 0.7%. The townhouse and condo market was up 3% in December to $424,995, and the annual median price was unchanged at $420,000.


Home prices are still high, though, so sellers are getting more than they paid for if they’ve owned it for more than a couple of years. But it’s become more difficult for renters to save up and qualify for a mortgage. However, interest rates are expected to fall this year, at least that’s what the body that makes that decision said it will consider.

Meanwhile, rent or buy? That’s a personal question. But even with a 20% down payment on December’s median-priced house in Denver ($593,500), the monthly mortgage is more expensive than a two-bedroom rental (at $1,914 a month), according to Realtor.com’s “Rent or buy calculator.”

Here’s how the rental numbers stack up:


“Despite all the craziness around increasing costs and increasing affordability challenges that we’ve been facing, the homeownership rate in Colorado actually continues to climb steadily since 2016. In 2022, we reached 67.4%, which is the highest level since 2010,” said Cooper Thayer, a Castle Rock Realtor at Thayer Group who presented the economic update at the Colorado Association of Realtors housing market update this week. “We’re seeing the cost of buying exceed the cost of renting right now so it’s really great to see, in Colorado specifically, our home ownership rate is still on the rise despite these challenges.”

Monday, January 22, 2024

Today's Dr Bob

  • Worker-centered policies
  • Strong anti-monopoly enforcement
  • Bolstering labor unions

Sunday, January 14, 2024

Better But Not Good Yet

The "conservative" attack on education over the last 40 years is having the desired effect. People don't care much about things like politics and government and economics because they're not being taught the importance of knowing something about that stuff to begin with, and once they get out into the real world, they're so tied up trying to make their lives work they get frustrated and start looking for somebody to blame, and that makes them vulnerable to the constant flow of propaganda flowing from "the right" (mostly).

And it'd be so gosh darned nice if the Press Poodles would remember to include corporate profits in the calculations of how shittily people are being treated, and how our attitudes are being cynically manipulated so we blame all the wrong people for all the wrong things.


Corporate America has blown past a brief wobble to its bottom line.

Driving the news:
The latest numbers from the U.S. Bureau of Economic Analysis, out Wednesday, showed that total corporate profits in the third quarter grew 3.3% to an annualized rate of $3.28 trillion.

That's just shy of the all-time peak of $3.3 trillion reached in Q3 2022.

Why it matters:
The rise in profits last quarter shows that U.S. companies have been able to adjust to the post-COVID operating environment, which includes higher wages and higher borrowing costs.



So of course corporate critters are doing just fine


But then we have to remember: "The news" is a corporate profit center, so the "coverage" might be just a tiny bit skewed.


‘Excess profits’ at big energy and consumer companies pushed up inflation, report claims

KEY POINTS
  • New research argues that the impact of companies maintaining margins by passing on higher prices to consumers should not be overlooked as a contributing factor to inflation.
  • Researchers say this has made inflation “peak higher and remain more persistent.”
  • They note that corporate profits are not the sole cause of inflation and did not cause shocks such as that to the energy market, but note that big international energy and food firms have an outsized influence on the wider economy.


The economy is improving under Biden. But many voters aren’t giving him credit

Despite the statistics, the kitchen-table experience of Biden’s first term has meant that many voters have experienced the last few years as a time of relative economic hardship

LAS VEGAS — Near the base of the Rainbow Mountains, Daniel Busby looks up longingly at his two-story “dream” townhouse, with the sliding glass door on its second floor, the balcony that wraps around the master bedroom, the five-minute walk from his kids’ elementary school.

“I just fell in love,” said Busby, 33, doing a chef’s kiss and smacking his lips together. “And then we started doing the math.”

The gregarious fry cook has enjoyed the windfalls of pandemic economic recovery overseen by President Biden. The president’s stimulus plan gave lower-wage workers more leverage to demand higher pay from their employers, with those in the service sector — like Busby — seeing particularly robust gains.

He went from being unemployed and working part-time at $15 an hour during the pandemic to a full-time job at the Paris Hotel, mostly at the Martha Stewart franchise, earning $19 an hour preparing a risotto dish and, his favorite, the whole chicken dinner. Busby and his wife now make a combined salary of just under six figures — a previously unimaginable sum.

But the gains have not kept up with rising costs, and that has become a major issue for voters like him. When Biden took the oath of office in January 2021, the average monthly mortgage payment in Las Vegas was about $1,200, according to calculations by Mark Zandi, chief economist at Moody’s Analytics. That number, for new mortgages, has soared to $2,350 today due to rising interest rates and robust housing prices — the outer edge of what Busby was willing to spend.

By many measures, the U.S. economy is a great success story — recession fears have fallen, along with gas prices and the unemployment rate, while manufacturing construction is up along with nominal wages and the stock market. The United States has grown faster since covid-19 than any peer country. Gas prices, once averaging over $5 a gallon, are now approaching $3. The Federal Reserve projects three interest rate cuts in 2024 that could help buyers like Busby.

But the kitchen-table experience of Biden’s first term — a roller coaster of covid adjustment and international shocks — has meant that many voters have experienced the last few years as a time of relative economic hardship. Despite rising wages, voters as a group lost spending power during 2021 and 2022 and have only recently climbed out of the hole. And even though wages are now outpacing inflation, prices are still continuing to rise: The latest government report showed inflation up 3.4 percent relative to the year before, fueling the anxiety even amid positive economic indicators.

A broad and diverse cross-section of American voters say they are experiencing the Biden economy as a challenging time of rising prices and high interest rates, according to interviews with more than 80 voters in four parts of the country — Las Vegas, Milwaukee, Phoenix and rural Georgia — that will play a major role in choosing the next president.

Adjusted for inflation, the per capita disposable income of U.S. residents rose nearly 1 percent from October 2021 to October 2023, a period that excludes the extraordinary one-time stimulus payments when Biden arrived, according to calculation by Robert Shapiro, a Democratic economist who advised Bill Clinton as president. By comparison, per capita disposable income, after inflation, grew about 7 percent under Donald Trump, during the first 34 months of his presidency.

The good news for Democrats is that the growth in spending power has been picking up over the last year at 3.7 percent through November, potentially setting the stage for a banner 2024, when wages will continue to grow even as the rate of inflation continues to fall.

“If incomes continue to rise rapidly over the next year, people will accept it by the election, especially since Biden’s record on jobs and growth is so much stronger,” Shapiro predicts. “Biden can overcome the fact that his income record — the growth of income — will not be strong over the whole term.”

But that is not the nation’s present-day reality. Biden’s polling on the economy has fallen with consumer confidence since he got into office, only recently stabilizing as confidence has begun to rebound. Wages are up, but the sting of higher grocery, coffee and restaurant bills remain. The president is still looking for credit from the budding manufacturing renaissance brought about by recent bipartisan legislation, though relatively few projects have been announced or begun production yet.

White House advisers are optimistic that the American public will soon internalize the good news and give the president credit before November. His political advisers note that other presidents who won reelection, like Ronald Reagan and Barack Obama, overcame challenging first-term economic conditions.

“We’re seeing real progress,” said Jared Bernstein, chair of the White House Council of Economic Advisers, in a statement. “We have more work to do as we execute President Biden’s agenda, a sharp contrast with congressional Republicans’ plans to cut taxes for the wealthy and big corporations while raising health care and prescription drug costs for hard-working American families.”

People like Busby, who voted twice for Obama before sitting out the 2016 and 2020 elections, are not sure they will vote for Biden in 2024 — indecision that could tip the scale in a narrowly divided country. He has chosen, for the moment, to stay with his wife and two daughters, ages 10 and 6, in their 1,100-square-foot Vegas apartment, where the rent recently jumped from $1,100 to $1,600 a month.

After touring more than 30 houses, relentlessly monitoring Zillow and Redfin, and investigating all the first-time home buyer programs they could find, they have put their dream on hold.

“We work full-time hours, but we still can’t afford things. You think, ‘I work full time. I should be able to afford a house,'” he said. “I don’t want to come home one day and then realize I have to pack up and leave. It’s that sense of stability we’re missing.”

Barbers cut hair at Gee’s Clippers on Nov. 26. (Alex Wroblewski for The Washington Post)
‘It’s really hard to keep up’
Milwaukee

‘It’s really hard to keep up’

Milwaukee WI:

Ceree Huley, 75, looked around Gee’s Clippers, the Black-owned Milwaukee barber shop where he works. “This place on a Thursday would be full of people,” he said of the those years before the pandemic.

“I don’t know what the reason they’re not here. … A lot of people are going to do it to themselves,” Huley said, referring to individual haircuts. “Or are they hiding from the costs of the prices that went up 10 dollars or 5 dollars? That could be a factor too.”

After 50 years as a barber, Huley has seen his own wages go up recently but is also paying more for rent after moving to a new place. Unlike some of his customers, he doesn’t blame Biden for his economic situation.

“I don’t know why it is, it seems like the economy gets worse,” said Zontayveon Mosley, a 21-year-old warehouse supervisor, who had come in for a cut. “For the average person who’s making $45,000 to $50,000 a year, it’s really hard to keep up.”

He said he would have backed Biden in 2020, but didn’t vote. He added that he will not vote for him this year and would consider supporting Trump, citing U.S. aid to other countries and the economy.

“Like giving billions of dollars to support others, when we have people that can’t eat, we have people that can’t pay bills, it’s just insane to me,” he said. “I feel like most Black people just lean towards Democrats. But I don’t know, entering the workforce and making money, I own a home. I’ve got to worry about interest rates and all of that. I feel like Trump is a better businessman.”

A stream of Black customers provided a nuanced take on the economy under Biden as they came in and out of the barber shop — decorated with basketball hoops, framed photos of athletes and the forest green Milwaukee Bucks logo sprawled across a gymnasium-style floor, razors buzzing in the background.

Posters decorate an employee breakroom at Gee’s Clippers, a basketball-themed barbershop owned by Ceree “Gee” Huley, in Milwaukee. (Alex Wroblewski for The Washington Post)

The economy here has largely tracked national trends, with weekly wages just below the national average and a nearly identical unemployment rate. William Robinson, a 47-year-old FedEx package handler, said he ends the month with less money than he starts, and it’s “kind of more survival than living” when he goes food shopping. He supported Obama both in 2008 and 2012, but said he will not vote for either Biden or Trump in 2024, describing them as “pretty much the same.”

“You can’t set prices. Inflation, you really don’t control none of that. Really it’s all the stuff that I can’t control that’s kind of making it difficult,” said Robinson, who added that he now needs to make adjustments between wants and needs. “Everybody got their little cheat foods, you know what I’m saying? Like the little cakes outside of the nutritious stuff. You just can’t enjoy it. And even with the stuff that’s nutritious, you got to prioritize, you know?”

Charles Franklin, director of the Marquette Law School poll, said that voter views of the president and the economy “moved in tandem with objective economic indicators tolerably well up until the early 2000s.” Since then, partisanship has become more powerful and the link has begun to break.

In a recent survey, twice as many respondents said they’d heard about inflation compared with the unemployment rate. As for voters’ current perceptions of the economy, Franklin sees a combination of partisan bias and the effect of inflation on real disposable income, especially “coming after this sugar high of transfer payments in the pandemic years.”

It’s a trend that cuts both ways. Ken McClendon, a 51-year-old in the health-care-manufacturing business, said his wages have gone up but his economic situation was better before covid, given that “everything is more expensive now.”

Biden’s handling of the economy was a “little shaky,” he said, before adding, “You have to realize what he walked into.” If the election comes down to a choice between Biden and Trump?

Biden “all the way,” he said.

‘Who gets credit for a dumb idea?’

Dalton, GA:

One of Biden’s legislative triumphs can be seen through the trees 80 miles north of Atlanta along Interstate 75, a gray, low-slung roof factory of Qcells North America.

The South Korean-owned plant expanded after the passage of the Inflation Reduction Act, adding 510 jobs to the growing solar industry. The panels its workers make in a 12-hour shift can produce as much solar power annually as the Hoover Dam’s peak output.

But few at the Oakwood Cafe in nearby Dalton have noticed in this conservative corner of the state, represented by Rep. Marjorie Taylor Greene (R). Dalton Mayor David Pennington (R) dismissed the government support of solar panels as the pet project of politicians, embraced both by Vice President Harris, who visited the plant in April, and Georgia Gov. Brian Kemp (R).

“Who gets credit for a dumb idea?” Pennington said, laughing. “When both sides are agreeing on something, it probably proves it is a stupid idea.”

When a guy deliberately misunderstands what's going on, and he shits on the simple fact that more of his constituents are getting fairly decent jobs, we see how intellectually corrupt way too many Republicans and Libertarians have become.

Pennington says residents most often ask him what he’s doing to help address the falling test scores of the city’s students. Families tell him that their grocery bills have gone up in the last three years. Pennington said that the night before, after a governmental meeting, he and his wife went to Krystal, a regional fast food joint, and ordered burgers, fries and drinks for $23, a meal he remembers costing $12 five years ago.

At a nearby table, Eric Azua, a local Realtor and registered Republican, made the same point: He has benefited himself from the Qcells expansion. He said he has sold homes to workers who are able to afford more given higher wages, offering Azua better commissions. But he credits local officials for the new jobs, rather than the Biden administration. Like many others in the area, Azua plans to vote for Trump.

“He needs to be replaced,” he said of Biden.

In 2018, Trump’s steep tariffs on solar panels from China prompted Qcells to build the facility in Dalton. Biden’s Inflation Reduction Act — including a provision by Sen. Jon Ossoff (D-Ga.) — provided tax credits for every stage of the solar manufacturing supply chain, incentivizing Qcells to expand.

Such expansions of U.S. manufacturing have been happening around the country in recent years, spurred by federal incentives supported by Biden. Monthly manufacturing construction spending rose from $77 million to $207 million between January 2021 and October 2023, a jump of 170 percent, according to census data. It’s progress that Biden has highlighted in his television ads this fall, talking about new manufacturing jobs, new green energy to lower power costs.

“For Joe Biden, it’s about restoring the sense of security working people deserve,” says one Biden spot that has run in Georgia.

The industrial park near the highway that cuts through Dalton has boomed since Qcells first opened there. Beside the first Qcells facility at the site, a second sleek, brightly lit warehouse has popped up, where workers are assembling commercial and residential solar panels with the help of automated machines.

“There are not other jobs similar in the area,” said Lisa Nash, general manager of the Qcells factory. “We can take high school students, people who have made other products, and if they have an aptitude, we can train them. And it’s upskilling.”

Other jobs have come downstream. Mary Sumner, who voted for Biden in 2020, recently started working for the local janitorial company that contracts with Qcells as an extra source of income aside from her job managing an apartment complex. She knows she is part of a minority in her family of 10 and hometown that would give any credit to Biden for anything positive, including the new source of money she receives.

“Four more years and there’s even better things to come,” Sumner said.

Jan Pourquoi, a Democrat and owner of a small Dalton carpet company, attended Harris’s visit to the site. When he looked around the room, he didn’t see anyone who lived in Dalton.

His neighbors and friends tell him they are worse off financially than they were under Trump and they believe Republicans are doing more to address immigration and drugs — or at least they seem to talk about it more. In the last local election, 9 percent of registered voters cast a ballot. In 2024, Pourquoi expects there won’t be any surge of voters supporting Biden, especially for the solar initiatives.

“There are more people aware of Qcells outside this area than in this area,” he said. “What it definitely will not do is change anything on the political dial.”

‘Everything has gone up in price’

Phoenix AZ:

Martha Isela Rodriguez remembers when she would go just once a week to buy her groceries at the Fry’s right around the corner from her house.

Now, she checks her mail daily to see the weekly ads with specials and coupons for grocery stores. El Rancho Market has deals on fruits and vegetables on Wednesdays and meat on Thursdays. On the weekend, Food City tends to have some good specials, too.

For Rodriguez, it has become the norm to visit three grocery stores a week — and even then, she’s still paying more than before.

Standing in the kitchen heating tortillas on a comal, a cast-iron skillet, Rodriguez recalled how she used to pay much less for groceries when Trump was president. Everything, from the chuletas de cerdo to the jalapeños she uses for her salsa, was cheaper. And that $380 electricity bill she just paid? It had never been so high, she remarked.

For her, all these higher costs spell trouble for Biden, who she voted for and knocked on doors to get elected in 2020. Her home county of Maricopa went for Trump in 2016 by under three percentage points and then backed Biden in 2020 by just over two percentage points. But she’s skeptical that Biden will win Arizona — or the 2024 election.

“Personally, I see it difficult for Biden to win. There’s already so many people who feel he hasn’t done anything, that the economy isn’t working,” Rodriguez, 48, said as she passed her 1-year-old granddaughter, Maria Daniela, an apple, mango and spinach baby food puree as a snack.

She was hearing it from her co-workers whom she had convinced to vote for Biden in 2020. Now, they either say they won’t vote this year or they’re considering backing Trump. They taunt her for pushing them to support Biden in 2020 — complaining to her about how bad inflation was under Biden and how he was letting in too many migrants and helping them when he wasn’t helping the undocumented immigrants already living here.

“They tell me things like, ‘Look at the gas. It hasn’t gone down at all since your Biden came into power.’ Your Biden, they tell me,” she said. “They say the same with a box of eggs or a gallon of milk. ‘Now that your Biden is around, the prices are up and the salaries don’t match it.’”

“And what can I say? Yes, it’s true,” she added. “Everything has gone up in price.”

Due to inflation, it cost an Arizona family over $2,700 a year more to purchase the same goods and services last August as it would have cost in August 2022, according to an analysis in September by the nonpartisan Common Sense Institute.

The sharpest increases came in distinct sectors, including gas prices, which rocketed higher in early 2022 after Russia invaded Ukraine, and have since fallen back to 2021 levels. The pain of those increases was felt especially in suburban and rural areas, where people like Rodriguez drive long distances on a daily basis.

Rodriguez said she knew it wasn’t necessarily Biden’s fault that inflation remained an issue in Phoenix, as she’d heard of it being a challenge globally. But she said she wished he would project more confidence and stability like Obama, the politician whom she said she became a U.S. citizen just to vote for. In her eyes, she said, Obama was handed a terrible economy after George W. Bush’s administration and was able to turn it around.

“Biden just doesn’t have that magic, that energy to get things done,” she said.

In a matchup between Biden and Trump, Rodriguez said she’ll vote for Biden again. It won’t be because he’s done a good job, she said, but because of just how strongly she dislikes Trump.

She added, however, that she doesn’t plan to repeat her election-year summer of knocking on doors in the Phoenix heat to get other Latinos out to vote for Biden this time.

Monday, November 13, 2023

Nancy MacLean

We pay attention to things so we're less likely to be fooled.
  • We pay attention to our health so pharmaceutical ads are less deceiving
  • We pay attention to economics so we're not as likely to be deceived by "Financial Reporters" telling us about indicators - leading or trailing or Market Basket or Durable Goods or interest rates or whatever
  • We pay attention to politics so we won't be fooled so often by demagogues and dog-assed Republicans




GOP megadonor pours millions into effort to hinder Ohio abortion amendment

New campaign finance records show Illinois Republican megadonor Richard Uihlein is funding the bulk of the campaign aimed at thwarting a constitutional amendment on abortion in Ohio.

Ohio is likely the only state this year to have a measure on the ballot to enshrine abortion access into the state constitution, setting up a test case for how the issue may drive voters ahead of the 2024 presidential election. A USA TODAY Network/Suffolk University poll released this week found 58% of Ohioans support a constitutional amendment.

That support may not be enough to pass. Currently, such amendments require support from a simple majority — 50% + 1 vote. But the GOP-led state legislature set up a special election for Aug. 8 to raise the threshold to 60%. That measure is known as Ohio Issue 1.

Uihlein, an Illinois shipping supplies magnate with a history of donations to anti-abortion groups, was the top funder of Protect our Constitution, the main group supporting Issue 1. Uihlein gave $4 million to the group, the bulk of the $4.85 million raised.

Last month, a CBS News investigation found Uihlein had an outsized role in getting Issue 1 on the ballot. In April, he gave $1.1 million to a political committee pressuring Republican lawmakers to approve the August special election. Financial disclosures show a foundation controlled by Uihlein has given nearly $18 million to a Florida-based organization pushing similar changes to the constitutional amendment process in states across the country.

Uihlein didn't immediately respond to a request for comment.

Ohio Republicans pushing to change the rules over constitutional amendments originally billed the effort as one that would prevent outside interests from influencing the state constitution. But supporters, including Secretary of State Frank LaRose, have since acknowledged the change would make it harder for a constitutional amendment on abortion to pass.

Last year, voters in Kansas and Michigan chose to preserve abortion access in their state constitutions with just under 60% approval.

Once the August special election was approved, money began to flow in on both sides. The central group opposed to raising the threshold for passing an amendment to 60%, One Person One Vote, raised a total of $14.4 million. The Sixteen Thirty Fund gave $2.5 million to the effort, campaign finance records show. The group, based in Washington D.C., has spent millions on left-leaning causes, including the campaign against the confirmation of then-Supreme Court nominee Brett Kavanaugh.

Monday, November 06, 2023

Change Gonna Come


I had planned to move from Virginia back to Colorado in 2018 or 2019, but some things went a little squirrelly, and I got put back about a year and a half, and then COVID fucked everything up, and then in 2022, the market for real estate (and for rentals) went totally fucking nuts, and it took me another year to sort thru it enough to get a place at a semi-reasonable price.

Anyway, what I don't know about economics could fill volumes, but I do know that when a market overheats, it tends to get tangled up in "irrational exuberance" (thank you, Mr Greenspan), and you have to expect a snap-back effect - aka: "market correction", which can be anything from a Dip-In-Market-Valuation to boing, as the whole thing craters in on itself.

It seems we are entering a period of correction. Keep your fingers crossed.


The pandemic years of overpaying for homes are over, according to a Denver realtor group’s analysis

Home sellers should also be ready to make more concessions to potential buyers.

As COVID-19 sent waves of uncertainty rippling through the housing market, sellers would list their homes and soon after have multiple offers from buyers — both individuals and investors — who had never even seen the place and would pledge well over the asking price.

Those days are long gone, and it’s time sellers admit it.

That’s according to the latest Denver Metro Association of Realtors Market Trends report that looks at October sales in Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties.

“Ultimately, sellers need to get the pandemic years out of their minds,” wrote Libby Levinson-Katz, head of DMAR’s Market Trends Committee, in a statement.

The low-interest rates of the COVID-emergency era are over, with mortgage rates now reaching around 8%.

As a result of that and more workers returning to work, demand has dropped.

“Sellers need to focus on value and put themselves in the buyer’s shoes,” Levinson-Katz said. “Buyers are no longer willing to overpay and, as such, pricing is the number one key in this market to sell a home.”

DMAR recommends sellers make concessions and even obtain pre-inspection reports on their homes and make any needed fixes ahead of putting a home on the market.

The rub for buyers is the rise in mortgage interest rates

High mortgage rates are putting many buyers off, even with market conditions seemingly in favor of people looking for a new home.

Some buyers have turned to hard-money loans and gifts from friends and family to make homeownership possible, according to DMAR.

“Many buyers tend to hibernate for the winter, but for those who continue to look through the holiday season, there is less competition and sellers are usually more motivated to sell before the end of the year,” DMAR noted.

The sharp rise in home costs the area saw over the past few years has evened out

At the end of October, the median sales price of a home was $585,000, the same as it was in September.

But month to month, the number of closed homes plummeted by more than 11%. Over the past year that drop is nearly 16%.


Properties are now listed for a median of 16 days, and there are currently two-and-a-half months of inventory on the market.

While interest rates are turning people off from buying at the moment, Levinson-Katz wants them to reconsider that: “The key is to get onto the escalator of homeownership and experience appreciation as it moves upwards over time.”

Would now be a good time to talk about collusion and price-fixing?


Colorado renters could be part of price-fixing lawsuit

DENVER (KDVR) — Tens of thousands of Coloradans live in apartment complexes whose management companies are accused of algorithmic price-fixing that inflated rental prices across the nation.

A group of apartment renters brought a class-action lawsuit against some of the nation’s largest landlords on Oct. 19, including:
  • Greystar Real Estate Partners
  • Lincoln Property Co.
  • FPI Management
  • Mid-America Apartment Communities
  • Avenue5 Residential, LLC
  • Equity Residential
  • Essex Property Trust
  • Thrive Communities Management
  • Security Properties
Companies accused of inflating rent prices

The lawsuit includes real estate analytics software firm RealPage as a defendant. A ProPublica investigation preceding the lawsuit found high concentrations of RealPage-using landlords in cities where rents have risen dramatically in the past few years.

Denver suburb rent rising even faster than city core

It alleges that each of the management companies illegally shared RealPage’s algorithm-born pricing with each other in order to inflate rental prices, rather than competing with each other on rent prices to attract renters.

Property managers vigorously disputed the charges in comments to ProPublica.

Apartment landlords in Colorado named in lawsuit

Six of the landlords named in the lawsuit have properties in Colorado:
  • Greystar Real Estate Partners
  • Lincoln Property Co.
  • FPI Management
  • Mid-America Apartment Communities
  • Avenue5 Residential and Equity Residential
The landlords managed at least 200 upscale apartment complexes in the Denver metro from Castle Rock to Boulder, with the majority in Adams, Arapahoe, Denver and Jefferson counties. Most have dozens or hundreds of units.

Colorado man convicted in ‘We Build the Wall’ fraud trial
About half are owned by Greystar. Equity Residential operates 32 and Avenue5 Residential 24.

Prices range widely across properties by location and apartment size. The average low end of the price is $1,609. The average highest price is $5,327.

The lawsuit hits home in an era where broader consumer inflation is colliding with unprecedented spikes in both home sales prices and rental prices, particularly in Colorado.


It's attracting some attention at the national level as well.


Tenants Are Suing Landlords for Allegedly Price-Fixing Rents with Software and the Feds Could Get Involved

The DOJ has requested to participate in a lawsuit by tenants alleging that landlords colluded using RealPage software to artificially inflate rents.

A pair of lawsuits from tenants across the U.S. allege that landlords use rent-setting software to illegally collude and boost their rents.

One lawsuit was filed in a district court in Tennessee and one in Washington. Both lawsuits were filed a year ago after a ProPublica investigation revealed that real estate software and analytics company RealPage’s rent-setting software, formerly called YieldStar, was artificially raising rents by sharing market data from competitors and setting prices for them, as well as sometimes encouraging landlords to leave units vacant.

Over 20 lawsuits from renters across the country alleging RealPage committed antitrust violations were consolidated in April in Tennesse’s Middle District, chosen for its central location. The United States Department of Justice filed a notice on October 17 asking for permission to participate in oral arguments on December 11. The court approved the government’s request, and the DOJ has until November 15 to submit a formal statement of intent if it wants to participate.

The RealPage class action complaint alleges that a “cartel” of landlords “artificially inflated prices in the multifamily real estate market in the United States” using RealPage's software. Now called RealPage Revenue Management Software, the program relies on market data it collects as well as rental data inputted by landlords. While landlords should theoretically be competitors, in practice they would “work with a community,” as one landlord is quoted as saying in the complaint. The complaint alleges that RealPage requires its users to accept at least 80 percent of its rent recommendations, and that users actually accept about 90 percent, giving RealPage market influence equal to its clients’ combined units.

But the most controversial practice alleged in the complaint—and laid out in the ProPublica report—is that YieldStar encouraged landlords to leave a certain amount of units vacant so that all the property managers using the service could artificially inflate rents. The goal was allegedly that “collectively in the market, there is never an oversupply of available units, artificially maintaining and inflating prices,” the complaint says. RealPage also coached its landlords that this practice would allow them to sacrifice “physical occupancy” for “economic occupancy.”

The main plaintiff in the lawsuit, Andrea Crook, rented from Mid-America Apartment Communities, Inc., a publicly traded real estate investment trust based in Memphis that is named as a defendant in the suit along with RealPage. Other large corporate landlords are named as defendants in the complaint, including Greystar and Cushman & Wakefield.

Are you a tenant at a property owned by one of the companies named in the RealPage or Yardi lawsuits? Has your rent increased? Motherboard wants to hear from you. Email roshan.abraham@vice.com or reach him on Signal at 646-657-8247.

When reached for comment, a RealPage spokesperson said that the company wouldn't comment on pending litigation and instead directed Motherboard to a "white paper" on revenue management written by a third-party consultant.

Another lawsuit in Washington makes similar allegations about a California-based company called Yardi Systems. The company was founded in 1984, when it provided property management software for the Apple II computer.

That class action alleges that from September 2019 to the present, Yardi and a group of multifamily apartment managers colluded to set prices through a centralized price-fixing software it launched in 2011 called “RENTMaximizer.” (The software has since been rebranded as RevenueIQ.) The lawsuit says the pricing was “supracompetitive,” or above what the market would have otherwise determined.

“In the absence of knowledge about competitors’ pricing strategies, property managers can only make their best educated guesses and set their prices at optimal positions, usually a bit lower than what offered by competitors—to attract renters in the market,” the lawsuit argues.

But the company “unlawfully solved this problem” with RENTMaximizer, the lawsuit argues, which “effectively outsources the management of rental pricing from a landlord to Yardi itself, which then implements higher prices collectively across a group of landlords.”

The lawsuit quotes Terri Dowen, Yardi’s VP of sales, as saying RENTMaximizer “simplifies the process by eliminating rent rate guesswork.” The complainants believe this proves that the software was “marketed as a means to eliminate the discounting that would occur in a competitive market.”

The complaint quotes Yardi marketing materials that say landlords who use the service “beat the market by a minimum of 2%” and “gain on average more than 6% net rental income.” Other marketing material for the product said users could “consistently beat the market.”

While the property managers who worked with Yardi are also accused of collusion in the complaint, this doesn’t always mean they directly communicated. (Although the complaint alleges they did that too.) Like RealPage's program, the software relies on data from landlords, who input rents in units they own, then get to see comparative rents in their area. Yardi then provides the landlord a recommendation for the units they own.

Landlords boasted about the higher rents they charged with the software in Yardi’s marketing. Brantley White, president of Ardmore Residential, was quoted in a 2016 Yardi press release saying, “RENTmaximizer has allowed us to push rents more aggressively and takes more human error out of the process.”

According to the complaint, other witnesses who worked at property management companies confidentially gave plaintiff attorneys testimony. A leasing consultant at Bridge Property Management is quoted as saying, “It was ridiculous. We were supposed to be helping these people who couldn’t afford a home. Instead, we were raising rents.”

The complaint says that many of the property managers being sued directly communicated with each other, as well, and a confidential witness said that one company would “call their competitors, often on a weekly basis, and specifically ask what prices those competitors were charging.”

Yardi did not respond to Motherboard's request for comment sent to available channels; the company appears to only have a media contact for its Matrix research service.

While there’s no data on how many households have rents set by Yardi’s software, an executive at the company claimed Yardi was used for 8 million residential units across the world. The attorneys also ran an analysis of 23,000 households using Yardi to see if rents were higher and found they were 6 percent higher among units where landlords used the software, in line with the company’s marketing claims.

Wednesday, October 25, 2023

A Red Flag (ish)

Peter Zeihan is a smart guy.
Peter Zeihan doesn't always get it right.
Peter Zeihan is worth a listen because he's not all that wrong all that often.


Thursday, September 07, 2023

Yay Elmo 🤨


Twixter has lost a shit load of value since Elmo bought it.

If you remember, he paid $44B for a company valued at about $20B, and since then, the valuation has dropped by as much as $15B according to some, while others are (IMO) a little over-anxious to boost the company, thinking (again, IMO) it might be ripe for a big comeback.


NOTE: Fidelity helped put Elmo's financing together so he could buy the thing last fall.
Gee, I wonder if that has anything to do with their decision to pimp it up a little.

But the main problem being reported is that ad revenues continue to lag badly - because companies want to avoid the potential for brand damage due to their names appearing next to some seriously slimy posts on a platform becoming quite well-known for slime, and dis-infobots, and racism, and Nazis, and hosts of other monsters of the id.

Case in point:




We can't continue with an overarching policy of Profit Over Principle, and expect a nice happy ending. It's never worked out like that. Ever.
  • People, then Policy
  • Labor, then Capital
  • Principle, then Profit
Call it a Business School version of Popper's Paradox: Allowing an anything-goes fully-laissez-faire management philosophy because "Profit Is King" can lead to the extinction of profit.

I think maybe Elmo is illustrating that for us now.

Thursday, August 10, 2023

Bidness Is Lookin' Up

Inflation ticked up a little in July, and new unemployment claims were higher than forecast last week, but the economy is strong and on track to get better.

Growth in factory construction for Q2 contributed more to GDP than at any time in the last 40 years.
  1. Unless you're in the business of fabricating outrage, don't expect the GOP to do one fuckin' thing for you.
  2. Democrats are proving - again - that they're the ones who know how a healthy economy works, and they're the ones who know how good government can keep it healthy.


3 signs the US economy is set to zoom past growth expectations
  • The US is on pace to grow beyond expectations, thanks to a strong labor market and new economic policies.
  • On Thursday, new GDP data will show just how much the US economy grew between April and June.
  • "Bidenomics" policies including the Infrastructure Investment and Jobs Act could heighten GDP more than expected.
The economy has been on a roll recently, and this trend may continue when GDP numbers come out on Thursday.

With the debate over a looming recession still going strong, all eyes will be on the gross domestic product numbers for the three months ending in June — and forecasts are sunny.

Last week, Morgan Stanley made a "sizable upward revision" in its GDP forecasts, projecting 1.9% growth, after crediting President Joe Biden's economic growth initiatives with driving a surge in manufacturing and infrastructure. Plus, consumer confidence is up and inflation is slowing, while a surge in new business creation remains strong.

Forecasts from the Federal Reserve Bank of Atlanta are also optimistic at 2.4% in the second quarter. However, panelists surveyed by the Federal Reserve Bank of Philadelphia predict second-quarter growth of 1.0%—which would signal a slowdown in growth from an annual rate of 2.0% in the first quarter. Congressional Budget Office estimates released Wednesday suggest GDP will rise at a 0.4% annual rate in the second half of 2023 and will steadily improve next year.

Some believe GDP won't rise too much since consumer spending has been modest, with many Americans becoming more cautious given high prices and rising credit card debt.

Thursday's data comes as President Biden continues to aggressively promote his economic growth initiatives, commonly deemed "Bidenomics," in an attempt to increase the country's industrial strength and bring back manufacturing jobs to the US.

"Together, we are transforming the country, not just through jobs, not just through manufacturing, but also by rebuilding our infrastructure," Biden said last week at a Philadelphia shipyard.

Investments in frastructure and manufacturing fuel growth

Ellen Zentner, chief U.S. economist for Morgan Stanley, said in a note that the Infrastructure Investment and Jobs Act is "driving a boom in large-scale infrastructure," adding that manufacturing construction has strengthened.

The US has also been experiencing a factory boom, with construction spending on US manufacturing nearly doubling from May 2022 to May 2023. Legislation such as the CHIPS Act, intended to boost semiconductor manufacturing, and the Inflation Reduction Act have provided tax incentives and funding to promote manufacturing construction. The boom has been led mainly by construction for computer, electronic, and electrical manufacturing.

Manufacturing employment recently hit its highest level since 2008, and since Biden took office, around 800,000 manufacturing jobs were added. However, manufacturing hiring still lags behind some other sectors due in part to the manufacturing skills gap, caused by the struggle to find workers with technical and manual expertise.

New business formation is still on the rise

The US has also seen a continued boom in new business creation, according to the Economic Innovation Group. In the first two quarters of this year, applications to start a business likely to hire employees grew 7% year-over-year. This puts the country on pace to nearly match 2021's highs, the highest level in US history.

So far this year, nearly 871,000 likely employer applications were filed, making this the second largest midyear total ever—and a 36% increase over the prepandemic half-year baseline. Individuals filed nearly 2.7 million applications to start a busy first half of this year, a 52% increase from the first two quarters of 2019.

Sectors leading likely employer business applications include accommodation and food services, construction, health care and social assistance, and retail trade. This data has been strongest in the South, with significant upticks in total business applications between Mississippi and North Carolina.

And existing businesses report favorable conditions as well. According to the National Association for Business Economics' July Business Conditions Survey, respondents on the whole saw improvement in sales and profit margins at their firms over the past three months.


"Results of the July 2023 NABE Business Conditions Survey reflect an economy of rising sales and profits, as materials costs decline and stabilizing wages prove less challenging," said NABE President Julia Coronado, founder and president, MacroPolicy Perspectives LLC in a statement.

Americans are feeling better about the economy — likely due to slowing inflation

After months of a so-called "vibecession," when many Americans felt poorly about the economy even though most metrics pointed away from a recession, consumer confidence has been rising.
On Tuesday, consumer confidence levels jumped to the highest level since July 2021, according to the Conference Board's monthly Consumer Confidence Index.

This uptick in consumer confidence comes as a recession seems less likely for 2023. According to the NABE survey, nearly 75% of forecasters believe there is a 50% or less chance the US would enter a recession in the next 12 months. This could signify a higher chance of a long-desired soft landing.

Additionally, many Americans have felt better about the economy due to slowing inflation. The Consumer Price Index rose by 3.0% year over year in June, down from 4.0% in May, a positive sign for Americans' wallets.

The CPI continues inching closer to the Federal Reserve's 2.0% inflation target, which it hopes to achieve partly through July's 25 basis point interest rate hike. More rate hikes are likely necessary to bring inflation numbers down further, though it's unclear how many additional hikes, if any, will occur this year.

To be sure, not every metric is pointing to blazing growth. Though still strong, the jobs market drastically slowed hiring in June, adding 209,000 nonfarm payroll jobs — almost 100,000 less than in May. Job openings also fell in June, suggesting the labor market still has a ways to go but is still growing at a sustainable rate.


Many economic indicators support strong GDP growth for the quarter and the rest of the year, which could be a good sign for big companies, new small business owners, and Americans at the grocery store.


Yes, we still have a problem with Deficit and Debt, and we can't expect to grow our way out of it. But if there's a better way to get a handle on our immediate national cash flow problem than to make the fat cats pull their weight, I'm listening.

Cutting taxes at the top of the earnings pyramid ends up a dead loser for the overall economy because it spurs self-indulgence on Wall Street, while actually taking money out of general circulation. Tax cuts always provide a nice boost for the top 0.01%, but they have a stifling effect on the economy for the overwhelming majority of the country.

Raising taxes on the top 1 or 2 percent (earnings north of $500K - $850K) will not slow things down, and will ensure solvency for Medicare and Social Security, as well as go a long way to fixing a host of problems the GOP has been deliberately causing in furtherance of their Plutocracy Project.

Returning to a progressive tax rate schedule would do wonders for everybody.