These are tough times for Michael Bloomberg's free-spending "luxury city." High-end condominium speculators – long considered impervious to the mortgage crisis – are shivering in the bitter cold this winter. Four billion dollars in building projects have been postponed or canceled outright, in large part because Wall Street's bonus babies are getting a tad less than they are accustomed to.
Despite this, I would suspect most of America thinks Wall Street, and New York's financial community, has not suffered enough. Industry bonuses are still expected to total well over $20 billion – small compared to last year's stupendous $33.2 billion, but not an insignificant New Year's present for the very people who have played a crucial role in wrecking the world economy. read more »
The current debate over whether to save our domestic auto industry has revealed some starkly different views about the future of manufacturing in America among economists, elected officials, and corporate executives. There are many disagreements about solutions to the Big Three’s current financial difficulties, but the more fundamental debate lies in whether the industry should be bent to the will of the government’s environmental priorities or if it should serve only the needs of the companies’ customers and their shareholders.
But there’s something more at stake: the long-term credibility of Detroit among the rising generation of Millennials. These young people, after all, are the future consumers for the auto industry and winning them – or at least a significant portion of them – over is critical to the industry’s long-term prospects in the marketplace and in the halls of Congress. read more »
San Francisco: A Chevron employee is forced to move his family of four into their Mitsubishi Gallant after being laid off…
Atlanta: Jeniece Richards moved from Michigan to Atlanta a year ago, but despite her best efforts, and two college degrees, remains homeless. She is living in temporary housing with her two children and younger brother…
Denver: As Carrie Hinkle’s hours dwindled, she was forced to choose between paying rent or buying food for her daughter. The two are now working with local agencies towards permanent housing, again…
These stories, plucked from the headlines of the past months are more than the typical holiday coverage. They show faces of the newly homeless, growing as the economy crumbles and opportunities fade. read more »
As store earnings plunged last week, the National Retail Federation proposed that the country create the mother of all sales by suspending taxes on all purchases. These tax holidays would occur in March, July and October and be national in scope.
The bill, they suggested, should be picked up by – who else? – the federal taxpayer, who would make up for the lost local revenues even for the five states without sales taxes. The rationale, suggests the Federation's chairman, J.C. Penney Chief Executive Myron Ullman III, in a letter to President-elect Barack Obama, would be "to help stimulate consumer spending as one of the first priorities of your new administration." read more »
By Susanne Trimbath and Juan Montoya
We just passed an era when the “American Dream” of home ownership was diminished as the growth of home prices outpaced income. From 2001 through 2006, home prices grew at an annual average of 6.85%, more than three times the growth rate for income.
This divergence between income and housing costs has turned out to be a disaster, particularly for buyers at the lower end of the spectrum. In contrast, affluent buyers – those making over $120,000 – the bubble may still have been a boom, even if not quite as large as many had hoped for. read more »
Shortly after my piece on Phantom Bonds, Blame Wall Street's Phantom Bonds For The Credit Crisis, posted here on NewGeography.com in November, a friend called from New York to ask if I’d seen the latest news. Bloomberg News reported on December 10 that “…The three-year note auction drew a yield of 1.245 percent, the lowest on record... The three-month bill rate [fell] to minus 0.01 percent yesterday.” The US Treasury is seeing interest rates on its notes that are “the lowest since it started auctioning them in 1929.”
My friend is an intelligent person, a lawyer who managed to accumulate more than $1 million working a 9-to-5 job in a not-for-profit firm and retire in her 50s. Some of her portfolio is in Treasury bonds, so she had a lot of questions. In the course of our conversation, it became clear that I wasn’t going to be able to explain all she needed to know on the phone, despite her background. I decided to write this short owner’s manual. read more »
Aspen is a great town. Its uniqueness extends beyond its spectacular geography to its amenities, people and community spirit. It’s a world-class, year-round Rocky Mountain resort offering great food, music, skiing, shopping – great everything – right in the middle of a real, functioning, small American community.
It’s no surprise people like it, want to keep it going. And not just the good, smart people who live in Aspen full-time and those who own second homes there (including some of the wealthiest people on Earth), but the thousands of good, smart people who visit every year to address big issues at the Aspen Institute and numerous other forums. These include elites of American arts, sciences, politics and economics with amazing amounts of brainpower and money at their disposal.
But geographic realities plus inexorable economic, demographic, and social trends are conspiring against the best of intentions. The future of Aspen – playground to the smart, rich and famous – may soon become untenable. read more »
You would think an economic development official in Michigan these days would be contemplating either early retirement or seppuku. Yet the feisty Ron Kitchens, who runs Southwest Michigan First out of Kalamazoo, sounds almost giddy with the future prospects for his region.
How can that be? Where most of America sees a dysfunctional state tied down by a dismal industry, Kitchens points to the growth of jobs in his region in a host of fields, from business services to engineering and medical manufacturing. Indeed, as most Michigan communities have lost jobs this decade, the Kalamazoo region, with roughly 300,000 residents, has posted modest but consistent gains. read more »
If many of the nation’s governors have their way, the next agenda item for the spendthrift federal government could be a bailout of state budgets. According to a report issued on December 10 by the Center on Budget and Policy Priorities, 37 states face mid-year 2009 budget deficits, totaling $31.7 billion. As would be expected from its size, California leads the pack at $8.4 billion. read more »
The continual Illinois corruption scandals have created not only ignominy to the Land of Lincoln, but have now placed a negative ranking from Standard and Poor on its credit. If Illinois vies with other states for the title of most corrupt, it has plenty of company when it comes to financial disaster.
Although building for years, the impending collapse of state and municipal finance has been hastened by the growing financial crisis. read more »