The Recession: Fuzzy Thinking Delays A Recovery

brainwaves; blue.iStock_000002003092XSmall.jpg

I keep hearing how the current recession will end in 2010 because the average United States recession from 1854 to 2001 has been 17 months. This is silly for a variety of reasons.

One reason is that there is no average recession. Post-World War II recessions have lasted from a minimum of six months to a maximum of only 16 months. If we were to apply the “average recession” logic to post World War II recessions, the current recession, which the NBER — the National Bureau of Economic Research — says started December 2007, would have ended 10 months later, last October.  read more »

Dubai, Mumbai, Shanghai : Destiny or Hype?

iStock_000007029967XSmall.jpg

The assonant phrase “Dubai, Mumbai, Shanghai or Goodbye” was credited to Andrew Ross Sorkin of the New York Times in late 2007 at the beginning of the financial crisis on Wall Street. For years, New York, London and Tokyo held sway as the world’s financial capitals. Then the tectonic plates of the financial world began to move and these new cities were going to be the prime beneficiaries.  read more »

Industry And The Urge To Cluster

grapeclustersiStock_000004916674XSmall.jpg

What drives industry to locate in one region and not in the next?

Economic geography – the distribution of economic activity over physical space – has always been central to economic development. Policy-makers trying to encourage economic activity to locate in under-developed regions want answers: Is it infrastructure? Fiscal incentives? Good business environment? Or could it be agglomeration – the compounding effect of industry clustering in a particular location?  read more »

A Tale of Two Blizzards

iStock_000005243438XSmall.jpg

January 1979 saw one of the worst blizzards in city history hit Chicago, dumping 20 inches of snow, closing O'Hare airport for 46 hours, and paralyzing traffic in the city for days. Despite the record snowfall, the city's ineffectual response was widely credited for the defeat of Mayor Michael Bilandic in his re-election bid, leading to Jane Bryne becoming the city's first female mayor.

In January 1978, a similar blizzard had struck the city of Indianapolis, also burying the city in a record 20 inches of snow. Mayor Bill Hudnut stayed awake nearly two days straight, coordinating the response and frequently updating the city on the snow fighting efforts through numerous media appearances.  read more »

Don't Politicize the Census Bureau

iStock_000006036685XSmall.jpg

The recent decision by the Obama Administation to place the Census under the control of the White House represents a danger – not only to the integrity of the process but to the underlying assumptions that drive policy in a representative democracy. It is something that smacks of the worst anti-scientific views of the far right, or the casual political manipulation of the facts one expects in places like Russia or Iran.  read more »

Fool Me Once, Geithner, Shame on You, Fool Me Twice...

geithner.jpg

Treasury Secretary Timothy Geithner revealed the new “Financial Stability Plan” on February 10, 2009. It’s thick with “why we need it” and thin on “exactly what it is.” He told Congress that he would open a website to disclose where all the bailout money was going. When asked if he would reveal where the first $350 billion went, he was a little vague on the details.  read more »

A Washington, D.C. Arts & Innovation District: "Sonya's Neighborhood"

Washington A&I site web.jpg

A recent widely-read piece in the Washington Post, “The Height of Power,” noted the great prospects of Washington's rise to the top, not only in politics but in publishing, media, business and the arts. In this way, it said, Washington's evolution will follow the pattern of other great capitals like London, New York, Paris or Tokyo.  read more »

Housing Price Bubble: Learning from California

iStock_000005973506XSmall.jpg

In a letter to The Wall Street Journal (February 6) defending California’s greenhouse gas (GHG) emissions policies, Governor Arnold Shwarzenegger’s Senior Economic Advisor David Crane noted that California’s high unemployment is the result of “a bust of the housing bubble fueled by easy money.” He is, at best, half right.

The “bust of the housing bubble” occurred not only because of “easy money,” but also because of the very policies California has implemented for decades and is extending in its battle against GHG emissions.  read more »

The Pleasure of Their Company

iStock_000000117689XSmall.jpg

Executives from banks including Goldman Sachs, JP Morgan Chase, and Bank of America (who bought Merrill Lynch) have been called to Capitol Hill to explain what they did with their shares of the $750 billion bailout. (You can watch it live or read transcripts here.)

Here’s a good question to put to those executives: how much did you spend on whores?  read more »

Stimulus Plan Caters to the Privileged Public Sector

iStock_000007674953XSmall.jpg

Call it the Paulson Principle, Part Deux.

Under the now thankfully-departed Treasury secretary, we got the first bailout for the undeserving – essentially, members of his own Wall Street class.

Now comes the Democratic codicil to the P. Principle. It's a massive bailout and expansion of the public-sector workforce as well as quasi-government workers in fields like health and education.  read more »