Economics

Obama in China: Walking the Great Mall

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Ever since Richard Nixon visited China in winter 1972—an event timed to play into that year’s presidential elections—American presidents have made the pilgrimage to the modern version of the Forbidden City.

Landing in Shanghai on Sunday evening, President Obama has two days of meetings with the Chinese leadership, not to mention a town hall event with Chinese students (as if they were eligible to vote in a New Hampshire primary).

As a stage-set for photo opportunities, China is hard to beat. American presidents can walk the Great Wall, toast a nation in the Great Hall of the People, tower over diminutive Chinese leaders dressed in gray Mao suits, and make sweeping statements about new world orders.  read more »

Boomer Economy Stunting Growth in Northern California

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The road north across the Golden Gate leads to some of the prettiest counties in North America. Yet behind the lovely rolling hills, wineries, ranches and picturesque once-rural towns lies a demographic time bomb that neither political party is ready to address.

Paradise is having a problem with the evolving economy. A generational conflict is brewing, pitting the interests and predilections of well-heeled boomers against a growing, predominately Latino working class. And neither the emerging "progressive" politics nor laissez-faire conservatism is offering much in the way of a solution.  read more »

Honest Services From Bankers? Increasingly Not Likely

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Once you understand what financial services are, you’ll quickly come to realize that American consumers are not getting the honest services that they have come to expect from banks. A bank is a business. They offer financial services for profit. Their primary function is to keep money for individual people or companies and to make loans. Banks – and all the Wall Street firms are banks now – play an important role in the virtuous circle of savings and investment. When households have excess earnings – more money than they need for their expenses – they can make savings deposits at banks. Banks channel savings from households to entrepreneurs and businesses in the form of loans. Entrepreneurs can use the loans to create new businesses which will employee more labor, thus increasing the earnings that households have available to more savings deposits – which brings the process fully around the virtuous circle.  read more »

A Canadian Autobahn

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Canada is the largest high-income nation in the world without a comprehensive national freeway (autobahn, expressway or autoroute) system. Motorways are entirely grade separated roadways (no cross traffic), with four or more lanes (two or more in each direction) allowing travel that is unimpeded by traffic signals or stop signs.  read more »

Reducing Carbon Should Not Distort Regional Economies

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A pending bill in Congress to reduce carbon emissions via a “cap and trade” regime would have significant distorting effects on America's regional economies. This is because the cost of compliance varies widely from region to region and metro to metro. This is all the more important since such legislation may do very little to reduce overall carbon emission according to two of the EPA's own San Francisco lawyers.  read more »

Obama Still Can Save His Presidency

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A good friend of mine, a Democratic mayor here in California, describes the Obama administration as "Moveon.org run by the Chicago machine." This combination may have been good enough to beat John McCain in 2008, but it is proving a damned poor way to run a country or build a strong, effective political majority. And while the president's charismatic talent – and the lack of such among his opposition – may keep him in office, it will be largely as a kind of permanent lame duck unable to make any of the transformative changes he promised as a candidate.  read more »

A Slow Job Recovery in Silicon Valley

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Although job growth is gradually returning to Silicon Valley, don’t break out the champagne quite yet.

Lucia Mokres moved to the area five years ago. Last year, when she was working at a contract engineering and manufacturing firm, she saw several clients lose their jobs, as well as both large and small companies go under in the economic crunch. She remembers one conference vividly. While manning the event booth, instead of seeing people pitch work they had for her firm, they instead passed out resumes, asking her team for work.  read more »

Police Pensions and Voodoo Actuarials

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A key argument that public-safety officials use to justify their absurdly high pension benefits –- i.e., “3 percent at 50” retirements that allow them to retire with 90 percent or more of their final year’s pay as early as age 50 -- is this: We die soon after retirement because of all the stresses and difficulties of our jobs. This is such a common urban legend that virtually every officer who contacts me mentions this “fact.” They never provide back-up evidence.  read more »

Getting Real About “Green” Jobs

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Over the past year, Economic Modeling Specialists, Inc. (EMSI) has been fielding questions from local planners (workforce boards, community colleges, and economic developers) on how to look at green jobs, particularly at the regional level. Perhaps nothing has been more hyped, or misunderstood, than the potential impact of this sector on local economies.

In order to wade through the rhetoric and often overblown expectations, we’ve been doing our best to link labor market data to potential green sectors so people can gain an understanding of trends, earnings, education levels, and skills associated with “green occupation clusters”. So far, we have made three general observations:  read more »

Numbers Don't Support Migration Exodus to "Cool Cities"

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For the past decade a large coterie of pundits, prognosticators and their media camp followers have insisted that growth in America would be concentrated in places hip and cool, largely the bluish regions of the country.

Since the onset of the recession, which has hit many once-thriving Sun Belt hot spots, this chorus has grown bolder. The Wall Street Journal, for example, recently identified the "Next Youth-Magnet Cities" as drawn from the old "hip and cool" collection of yore: Seattle, Portland, Washington, New York and Austin, Texas.  read more »