Each generation has been affected differently by the deepening global recession. Baby boomers have witnessed their retirement savings evaporate into oblivion. Generation X families who finally saved enough for a down payment on their first house find themselves deep underwater without SCUBA gear. And earnest Millennials fresh out of college are wondering where all those high-paying jobs promised by duplicitous corporate recruiters went. read more »
By Richard Reep
During most business downturns, nimble private business owners search for countercyclical industries to which they adapt. During this business downturn, the construction industry finds itself frantically looking for anything countercyclical. Private construction, almost completely driven by the credit market, has stopped, and public construction, driven by tax revenue, has also stalled. Religious institutions, however, seem to be continuing incremental growth and building programs, giving evidence to some people’s answers to spiritual questions being asked today. read more »
The U.S. Treasury took enormous powers for itself last fall by telling Congress they would use it to “ensure the economic well-being of Americans.” Six months after passage of the Emergency Economic Stabilization Act of 2008 Americans are worse off. Since it was signed into law on October 3, 2008, here are the changes in a few measures of our economic well-being: read more »
From the very inception of the current downturn, sprawling places like southeast California's Inland Empire have been widely portrayed as the heart of darkness. Located on the vast flatlands east of Los Angeles, the region of roughly 3 million people has suffered one of the highest rates of foreclosures and surges in unemployment in the nation. read more »
Tom Brokaw named our parents The Greatest Generation. They came of age during The Great Depression and defeated Fascism, Nazism and Communism. They built the Interstate Highway System and landed a man on the moon. They built the great American middle class with safe communities and public schools that were the envy of the world. They deserve the title of The Greatest Generation. One of their few criticisms is that they spoiled us boomers, adhering to the teaching of Dr. Benjamin Spock. read more »
Race may be the thing that most obviously distinguishes President Barack Obama from his predecessors, but his biggest impact may be in transforming the nature of class relations — and economic life — in the United States.
In basic terms, the president is overseeing a profound shift from cowboy to what may be best described as collusive capitalism. This form of capitalism rejects the essential free-market theology embraced by the cowboys, supplanting it with a more managed, highly centralized form of cohabitation between the government apparat and the economic elite. read more »
There will be much talk in London about global financial regulation, particularly from the Europeans. But don’t count on it ever coming into existence.
At a House Financial Services Committee on March 26 Treasury Secretary Geithner testified that this particular subject “will be at the center of the agenda at the upcoming Leaders’ Summit of the G-20 in London on April 2.” read more »
Last week I wrote about the first part of my talk to the Bellevue Kiwanis Club on why our economy is in the position it is today. It is a story about good intentioned policies – like modifying credit scoring for Americans working in a cash-economy – that were bastardized in the execution – like some Americans using modified credit scoring to lie about their income. Just like there were superstar firms among the original “junk bond” companies, there were also firms like Enron and WorldCom.
In the first part of my story: banks wrote mortgages, their broker-arms sold them to the public in the form of bonds, they paid fees to Standard & Poor’s and Moody’s to get triple-A credit ratings, and they devised crazy default protection schemes which they also sold in the public capital markets. On top of all that, they screwed up the paper work so there was no relationship between houses and the ultimate financial paper that could be used to cover potential losses. read more »
I was thoroughly enjoying the broadcast of the March 23 final game of the recent World Baseball Classic at Dodger Stadium when I thought about steroids and sub-prime mortgages.
A seemingly odd leap, I’ll grant you – but hang in there on this one. read more »
By Richard Reep
The current economic crisis has many mixed impacts, including the shift of grocery customers to low-cost companies like Wal-mart. Yet at the same time we see a shift to local, community markets in an effort to cope with the new economy. While the global players deliver discounts due to their enormous volume, local community markets offer low-priced produce, goods, and services due to their microscopic volume. This common ground between individual efforts and enormous buying machines yields an interesting treasure trove of passion and hope. read more »