Archive for the ‘Economics’ category

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Poverty Level 2010

September 21st, 2011

The poverty level in 2010 went up during a supposed economic recovery. In total numbers of poor the United States had it’s biggest one-year increase since national records on people in poverty have been kept. It is also the highest level in many years, as reported on CNN.com;

“The nation’s poverty rate rose to 15.1% in 2010, its highest level since 1993. In 2009, 14.3% of people in America were living in poverty.

“The results are not surprising given the economy,” said Paul Osterman, author of “Good Jobs America,” and a labor economist at MIT. “You would expect with so many people unemployed, the poverty rate would go up. It’s just another sign of what a difficult time this is for so many people.”

About 46.2 million people are now » Read more: Poverty Level 2010

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Protest Against Wall Street

September 19th, 2011

There is a protest against Wall Street planned. In fact, it should be under way by the time you read this. What is it about? Well, that’s the problem. A report on CNN.com had this to say:

“Egyptians did it for democracy. So did people in Tunisia, Yemen, Bahrain and Syria. Now, activist groups are hoping Americans will launch their own uprising — in the form of thousands of protesters descending on Wall Street this weekend.

Occupy Wall Street is a “leaderless resistance movement” spearheaded by activist magazine Adbusters. Organizers want people to swarm into lower Manhattan on September 17 and set up camp for two months, then “incessantly repeat one simple demand.”

What’s that demand? They haven’t decided yet.”

I thought it was a joke when I first read that line. But no, they » Read more: Protest Against Wall Street

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Posted in Economics, Politics

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Bailing Out Europe’s Banks

September 17th, 2011

Is the U.S. taxpayer now bailing out Europe’s banks? It seems that way, according to  a report on CNN.com;

“The European Central Bank — along with the Fed, the Bank of England, the Bank of Japan and the Swiss National Bank — announced a coordinated plan to pump dollars into Europe’s financial system.

The aim: Provide U.S. dollars to European banks that need the currency to fund loans and repay debt.

European banks have seen outflows of U.S. dollars as U.S. financial institutions and money market accounts have scaled back exposure to European banks amid fears over the institutions’ exposure to a Greek debt default or another troubled EU member nation.”

Of course, this is not meant to be » Read more: Bailing Out Europe’s Banks

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Tax Hikes Destroy Jobs?

September 16th, 2011

An Opinion From Steve Gillman

Is it true that tax hikes destroy jobs? If it was true in a general sense and in all contexts, and our goal was to have as many jobs as possible, then we should logically have no taxes. But in reality, it is apparent that starting from nothing–which implies chaos and anarchy due to a lack of government–we actually improve our employment situation as we tax ourselves for the purpose of providing police and courts and necessary regulations that make civil society possible.

But as reported on CNN.com, John Boehner sticks with the extreme as the ideal;

“House Speaker John Boehner drew a line in the sand on taxes on Thursday, saying that a special debt committee tasked with cutting at least $1.2 trillion from federal deficits shouldn’t consider tax hikes.

“Tax increases, I think, are off the table,” Boehner said in a speech to » Read more: Tax Hikes Destroy Jobs?

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Bank Failures

September 13th, 2011

We might have passed the worst of troubles when it comes to banks, according to the numbers. But bank failures are still a regular event. Consider this Associated Press report from Yahoo News;

“The Federal Deposit Insurance Corp. seized First National Bank of Florida, based in Milton, Fla. The bank had $296.8 million in assets and $280.1 million in deposits. CharterBank, based in West Point, Ga., agreed to assume the assets and deposits of the failed bank.

In addition, the FDIC and CharterBank agreed to share losses on $216.3 million of First National Bank of Florida’s loans and other assets.

The failure o » Read more: Bank Failures

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U.S. Bonds Valuable?

September 12th, 2011

Are U.S. bonds becoming more valuable than ever? It would seem that way if you looked at the way they are selling.

Flickr photo by Sébastien Bertrand

Federal Reserve

When demand for bonds is higher the yield goes down, because investors pay more for the same interest payments. Yields as of Friday were the lowest they have been in a lifetime, as reported by CNN.com;

“The yield on the benchmark 10-year Treasury note dropped to a record low on Friday, as worries about European debt, a weak U.S. economy and anticipation of a new round of quantitative easing boosted the appeal of Treasuries.

As Treasury prices soared, the 10-year yield slipped as low as 1.89% on Friday, from 1.99% late Thursday.”

Part of the reason for the increased price (and therefore lower yield) is an expectation of Federal Reserve action:

“Because the Fed has already bought medium-term bonds, Bryant said expectations are that the next purchases will be » Read more: U.S. Bonds Valuable?

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Postal Service Jobs

September 7th, 2011

Should postal service jobs be cut to keep the U.S. Postal Service solvent? According to a recent CNN report;

Flickr photo by Rob Stinnett

Postal Service

“The U.S. Postal Service, teetering toward default, wants the power to cut 120,000 jobs by voiding labor protections for currently protected workers.”

One obvious problem is that to make the cuts they will have to essentially break promises of job security. On the other hand, if the entire operation is threatened, there may be no better choice. Some will say that these workers losing their jobs is better than risking all the employees’ futures.

But there is another element to this, and it has to do with jobs for minorities. As the CNN report says,

“The Postal Service is one of the largest employers of all minorities, led by » Read more: Postal Service Jobs

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A Shrinking Middle Class?

August 27th, 2011

Do we have a shrinking middle class? There is according to a recent article from the Economic C0llapse Blog, which cites; “34 pieces of evidence that prove that the middle class in America is rapidly shrinking…”

“#1 In 1980, 52 percent of all jobs in the United States were middle income jobs.  Today, only 42 percent of all jobs are middle income jobs…

#4 In 1969, 95 percent of all men between the ages of 25 and 54 had a job.  Last month, only 81.2 percent of men in that age group had a job…

#5 According to one recent survey, 64 percent of Americans would be forced to borrow money if they had an unexpected expense of $1000.

#6 The wealthiest 1% of all Americans now control » Read more: A Shrinking Middle Class?

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Mortgage Default Less Common Among Poor?

August 25th, 2011

Where is the bigger part of the mortgage default problem? It isn’t with the lower-middle class and less-affluent buyers of Clayton Homes.

Flickr photo by Mark Crawley

Mobile Home

In early 2011 Warren Buffet pointed out that those who bought from Clayton Homes, a company owned by his Berkshire Hathaway and which sells mobile homes, default at a dramatically lower rate than most conventional house buyers. This is despite the fact that mobile home buyers typically much lower incomes, less job stability and lower credit scores. The default rate on these homes is less than 2% to this point, compared with 10% to 25% for new home buyers, depending on the time frame looked at or the area of the country.

Buffet explains that although times are especially tough for those with lower income, those who buy homes from Clayton are truly motivated to keep their houses, in part because they have paid a decent down payment. He adds that “generally they borrowed sensible amounts in relation to their income.” It makes sense to find a way to make those payments when they are no more than the rent that will replace them if the home is lost. » Read more: Mortgage Default Less Common Among Poor?

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Posted in Economics, Real Estate

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What Is the Value of Labor

August 19th, 2011

By Steve Gillman

I sometimes write about the value of labor or about what constitutes fair pay, and I get negative feedback from labor activists and others. They start with the assumption that I am a heartless Republican. I am not nor have I ever been a member of the Republican Party–nor of the Democratic Party for that matter. Nor any other. But I also don’t think all Republicans or Democrats are heartless, and my wife does not think I am.

I do think that workers should be paid fairly, but I do not think it is so easy to determine what the value of labor is in a particular context. Many times it seems that activists make the assumption that everyone knows exactly what a man or woman should be paid (the amount they argue for, of course), and all who disagree are somehow against the rights of workers. It is also common to attribute » Read more: What Is the Value of Labor

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