Last night I wrote about the Obama Administration’s housing bail out. But, I hate to say, there’s more to tell you – and it’s actually worse. In addition to the giveaways to mortgage holders, we also have to consider the federal government effectively offering to give a credit default swap (CDS, remember those?) to the banks. read more »
For decades, California has epitomized America's economic strengths: technological excellence, artistic creativity, agricultural fecundity and an intrepid entrepreneurial spirit. Yet lately California has projected a grimmer vision of a politically divided, economically stagnant state. Last week its legislature cut a deal to close its $42 billion budget deficit, but its larger problems remain. read more »
I was laying in bed this morning, listening to discussions of the Homeowner Affordability and Stability Plan, the 2009 version of a Homeowner Bailout. (The 2008 version was spent on the banks.) I listened closely because I had to decide if it was worth getting out of bed to earn the money to pay my mortgage or not. Like all those bankers that got a bailout, I was wondering if it might be worth more to me to default on my mortgage than to pay it. read more »
This month, a new report from The Center For An Urban Future, Reviving The City of Aspiration, examines the squeeze on middle class New Yorkers.
The struggle to afford life’s basics—and a few indulgences, too—is nothing new to urbanites of modest means. A 1907 New York Times piece headlined 'Very Soon New York Will Be A City Without Resident Citizens' reported, “Life in the big city is becoming impossible to the average householder, living on an average income.” ‘Average’ necessities were identified as rent, home-cooked meals, servants wages, ice, and coal. Occasional luxuries included theater and restaurant visits. read more »
The great housing turndown, which started as early as 2007, has entered a second and more difficult phase. We can trace this to Monday, September 15, 2008 just as October 29, 1929 – “Black Tuesday” – marked the start of the Great Depression. September 15 does not yet have a name and the name “Black Monday” has already been taken by the 1987 stock market crash. The 1987 crash looks in historical perspective like a slight downturn compared to what the world faces today.
On September 15 – let’s call it “Meltdown Monday” – the housing downturn ended its Phase I and burst into financial markets leading to the most serious global recession since the Great Depression. Indeed, International Monetary Fund head Dominique Strauss-Kahn now classifies it a depression. read more »
There is something about Oregon that ignites something close to poetic inspiration, even among the most level-headed types. When I asked Hank Hoell recently about the state, he waxed on about hiking the spectacular Cascades, the dreamy coastal towns and the rich farmlands of the green Willamette Valley.
"Oregon," enthused Hoell, president of LibertyBank, the state's largest privately owned bank, from his office in Eugene, "is America's best-kept secret. If quality of life matters at all, Oregon has it in spades. It is as good as it gets. It's just superb." read more »
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 »
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 »
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 »
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 »