Linking ≠ endorsement.
⇧ Fannie, Freddie and the Secrets of a Bailout With No Exit – The New York Times
… Fannie and Freddie have returned to the Treasury over $50 billion more than they received in the bailout. But the amount they owe to the government remains outstanding.
Well, they’re cash cows. Two reasons come to mind: 1) increase government revenue without raising taxes and 2) make privatizing them less attractive because of number one.
As credit flows into inefficient industries, its ability to drive growth diminishes. CLSA’s Cheung said China will need 4 yuan worth of new financing to generate every 1 yuan worth of gross domestic product growth in the future, compared with just 2 yuan of credit five years ago.
With China’s economic momentum continuing to slow, banks, borrowers and policymakers there must look for alternatives to credit to keep things moving.
⇧ Defaults Throw Wrench in China’s $3 Trillion Company Bond [Ponzi] Engine – Bloomberg
“Many Chinese companies are relying on new borrowings to repay their old debt,” said Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen. “If they can’t get the money they need, more will default.”
Hence, more will default.
⇧ 4 Steps to Ensure You’re NOT Getting Duped by a Turnkey Provider
… what kinds of things can you incorporate into your due diligence to ensure you are actually buying what is being advertised and you aren’t being taken?
4 Steps to Ensure You’re NOT Getting Duped by a Turnkey Provider
⇧ In Sweden, an Experiment Turns Shorter Workdays Into Bigger Gains – The New York Times
Sweden has long been a laboratory for initiatives to strike a better work-life balance, part of a collective ideal that treating workers well is good for the bottom line. Many Swedish offices use a system of flexible work hours, and parental leave and child care policies there are among the world’s most generous.
The experiment at Svartedalens goes further by mandating a 30-hour week.
What will those pesky social democrats think of next, ways of making people even healthier, happier, and more productive? Don’t they care about the poor laissez-faire elitists losing credibility, power, and control? How unfair! How selfish! It’s downright greedy! I love it.
⇧ Political Rifts Over Bill Clinton’s Welfare Law Resurface as Aid Shrinks – The New York Times
In her 2003 autobiography, “Living History,” Hillary Clinton said she agreed with her husband’s decision to sign the welfare bill, even though it “outraged some of our most loyal supporters.” The old program of Aid to Families With Dependent Children, created in the New Deal, “helped to create generations of welfare-dependent Americans,” she wrote.
… Senator Bernie Sanders of Vermont, fiercely opposed the law as a House member then and continues to press his case against it.
“I spoke out against so-called welfare reform because I thought it was scapegoating people who were helpless, people who were very, very vulnerable,” Mr. Sanders said at a campaign stop in February. …
“The program did not respond to economic need in the Great Recession,” said Hilary Hoynes, a professor of economics and public policy at the University of California, Berkeley.
… for many Democrats, swept up more by Mr. Sanders’s liberal populism than Bill Clinton’s centrism, the law is far less popular. Mr. Clinton, defending his wife, says she argued against more extreme welfare proposals that would have capped federal spending on Medicaid and food stamps. Her campaign notes that child poverty decreased more than 25 percent in the Clinton years and says that many families benefited from expansion of the earned-income tax credit under President Clinton.
“We’ve shredded our cash safety net,” said Ms. Edin, who examined those tactics in her book “$2.00 a Day: Living on Almost Nothing in America,” written with H. Luke Shaefer.
REIS analysts are reading the data to suggest that construction of new apartments is finally starting to have an impact on the market. REIS’s Scott Humphreys says: “It’s official: developers are finally building more apartments than there are renters to fill them.”
Similarly, at the blog Calculated Risk, Bill McBride reports on data from the National MultiFamily Housing Council (NMFC) which tracks vacancy rates for apartments around the country. Their data show that “market tightness” has been trending downwards for the past couple of years, and leads McBride to conclude that “it appears supply has caught up with demand—and I expect rent growth to slow.”
While national trends provide a helpful background, like politics, all housing is local. …
⇧ Long-Suffering Michigan is Finally Enjoying Below-Average Unemployment – Real Time Economics – WSJ
Michigan’s seasonally adjusted unemployment rate last month was 4.8%, the Labor Department said Friday, remaining at its lowest level in 15 years and below the national average of 5%. It was the third consecutive month that Michigan had lower joblessness than the U.S. as a whole, a streak not seen since 2000.
It’s not all good news. Michigan’s labor force shrank for years and remains smaller than it was a decade ago.
When I lived there, Detroit had the 5th-largest city population in the US and was the industrial capital of the world. It ended up becoming the “First city to ever drop back under 1 million….” ( https://en.wikipedia.org/wiki/Largest_cities_in_the_United_States_by_population_by_decade#2000 )
In early 2013, soon after becoming party chief and days before he became the President, Xi delivered a keynote internal speech at the party school saying the first three decades of the People’s Republic of China under Mao should not be used to “negate” its next three decades under Deng and vice versa.
Both Mao and Deng were wrong. China is still waiting for a leader who knows what he (or she) is doing. China is waiting for real democracy: to get out from under dictatorship.
⇧ Shell Companies Miami | FinCEN | SoFla Luxury Real Estate
Andres Fernandez, a Holland & Knight partner who moderated the panel, said he believes anti-money laundering reporting requirements will be extended to persons involved in real estate closings, whether it’s an attorney, a broker, or title insurance agent.
“If you fall into that category in the next three to five years, you will need to have anti-money laundering policies and procedures,” Fernandez said. “This targeting order is just the beginning.”
Vallejo Fire Department spokesman Kevin Brown said in a statement that the fire is considered suspicious and the cause is under investigation.
The vacancy rate in Ithaca is about 0.5 percent. In a healthy city, it’s more like three to five percent.
“We certainly know we have a housing shortage,” said JoAnn Cornish, Director of Planning and Economic Development in Ithaca. “The biggest area we’re seeing is in the affordable housing range.
⇧ Dueling nowcasts | Econbrowser
This is an educational post from James Hamilton.
⇧ New Evidence About the Dangers of Monsanto’s Roundup
Does your company or contractor/landscaping company use Roundup? If so, you should read this so you’re aware of the questions surrounding it and some of the information that has recently been revealed.
We should all stay on top of the developments concerning what research is being done, will be done, and should be done and what steps should be taken and when.
Naming the Toxins
Some European governments have already begun taking action against one of these co-formulants, a chemical known as polyethoxylated tallowamine, or POEA, which is used in Monsanto’s Roundup Classic and Roundup Original formulations, among other weed killers, to aid in penetrating the waxy surface of plants.
⇧ EU Survey: 64% of Europeans in Favour of Basic Income
In the questionnaire, basic income was defined as “an income unconditionally paid by the government to every individual regardless of whether they work and irrespective of any other sources of income. It replaces other social security payments and is high enough to cover all basic needs (food, housing, etc.).”
Only 24% of the respondents said they would vote against it, while 12% would not vote. More interestingly, though, the results show a correlation between the level of awareness about basic income and the level of support. In other words, the more people know about the idea, the more they tend to support it ….
I’m totally for it.
⇧ Wage Growth vs. Benefit Growth in the Post-Recession Economy | CEPR Blog | Blogs | Publications | The Center for Economic and Policy Research
While wage growth has accelerated modestly from its pace earlier in the recovery, the rate of growth in benefits, most importantly healthcare, has slowed. As a result, there has been almost no change in the rate of growth in total compensation.
⇧ Saving Clintonism? How About an Honest Discussion? | The Center for Economic and Policy Research
… Clinton left the White House as the stock bubble that had fueled the prosperity of his second term was in the process of collapsing. It led to a recession that began less than two months after he left office. From the perspective of working people this was the worst recession of the post-World War II era until the Great Recession. The economy did not get back the jobs lost until January of 2005.
Clinton also left a large and rapidly rising trade deficit. The United States has only been able to fill the demand lost as a result of this trade deficit with asset bubbles: first the stock bubble in the 1990s and then the housing bubble in the last decade.
… trade deals signed by President Clinton were not about “free trade.” They largely left in place the barriers that protect doctors, lawyers, and other highly educated professionals from foreign competition. As a result, the pay for these professions, most notably doctors, has continued to rise and led to higher health care costs and lower real wages for the rest of the workforce.
These deals also put in place longer and stronger patent and copyright protection. These protectionist barriers raise the price of a wide range of products, most importantly prescription drugs. This lowers living standards and is a drag on economic growth.
The trade deals also required little to no environmental, labor, safety, or health standards where US jobs were shipped.
⇧ Des Moines group targets blighted properties
“It’s not looking to make a profit. It wants to work as a tool for the best use in the neighborhood,” Jones said.
Jones said the model is based on successful land banks that Capital Crossroads studied in Atlanta, Minneapolis and Dallas.
“I’ve watched others do it in other cities,” he said. “We tackle challenges. That’s what we do.”
⇧ Three N.Y. real estate firms fined after apartment bias probe – NY Daily News
In one instance, an Empire employee told one of Schneiderman’s operatives that an apartment was available for rent and then backtracked after the operative asked to use a Section 8 voucher. The operative was then told there was a four-month waiting list for the unit.
Days later, another operative from the attorney general’s office called Empire about the same apartment and, without mentioning Section 8 vouchers, was told the unit was available immediately.
I always have difficulty where the parties to such governmental settlements don’t have to admit wrongdoing. It leaves more questions than should be left.
⇧ Here’s One Way to Fight Zombie Properties – DSNews
Hempstead Town, New York—population 800,000, making it the largest municipality designated as a town in the United States—is proposing a solution to the problem in order to combat the zombie property problem: Hold banks and servicers responsible. Town Supervisor Anthony Santino has proposed a law that would require the servicer of the mortgage provide a $25,000 “security fund” (either by cash, cash bond, or letter of credit) to maintain vacant and abandoned properties that are in the process of foreclosure in compliance with the Hempstead Town Code.
⇧ Commons – Wikipedia, the free encyclopedia
While the original work on the tragedy of the commons concept suggested that all commons were doomed to failure, they are still extremely important in the modern world. Work by later economists has found many examples of very successful commons and Elinor Ostrom won the Nobel prize for analysing situations where they operate successfully. For example, Ostrom found that grazing commons in the Swiss Alps have been run successfully for many hundreds of years by the farmers there.
Allied to this is the “comedy of the commons” concept, where very often users of the commons are able to develop mechanisms to police their use to maintain and even improve the state of the commons. This term was coined in an essay by legal scholar, Carol M. Rose, in 1986.
Other related concepts are the inverse commons, cornucupia of the commons, triumph of the commons. in the cornucupia of the commons, some types of commons, such as open source software, work better as in those cases “the grass grows taller when it is grazed on”.
⇧ United States Manufacturing PMI | 2012-2016 | Data | Chart | Calendar
The Markit Flash US Manufacturing PMI came in at 50.5 in May of 2016, lower than 50.8 in April and below market expectations of 51. Production declined for the first time since September of 2009 and new orders expanded at the slowest pace so far this year.
⇧ [“Bernie Bros” v. Hillary Hacks?] Remembrance of Booms Past – The New York Times
It’s sad, but it appears that Paul Krugman has turned into, or revealed himself to be, a false-propaganda hack.
Where’s the objectivity in this piece? I see none.
Bill Clinton continued the deregulation revved up by the Reagan-Bush-41 administrations. That deregulation, which Bush-43 didn’t roll back, caused the Great Recession. ( https://www.demos.org/blog/9/11/15/owning-consequences-clinton-and-repeal-glass-steagall )
Krugman says that facts have a center-left bias. Really? It seems clear that Paul ignores the facts that don’t suit his preconceived agenda, his ideology.
That’s why honest intellectuals aren’t enamored with Bill Clinton’s economic “achievements.” That’s just the tip of the iceberg too.
Paul Krugman continually brings up race, as in color, as in “white,” as if Bernie Sanders and his supporters are somehow in the racist camp. However, we know that Bernie Sanders was more on the front lines of the civil rights movement than Hillary and by an extensive extent. We also see Bernie Sanders and his supporters advocating a much less ethnic-based approached to the issue of Palestine. Why is it that Paul Krugman doesn’t mention Avigdor Lieberman in the context of Hillary Clinton and racism?
Avigdor Lieberman is Benjamin Netanyahu’s new defense minister. Avigdor Lieberman has made what to the uninitiated are considered shockingly supremacist comments. Meanwhile, Hillary Clinton has promised to invite Benjamin Netanyahu to the White House once she’s President. She’s not going to do that to read him the riot act. She also opposes the BDS Movement, but what is that Movement if not the Palestinian version of BDS against what we called Apartheid South Africa? Did she also oppose the BDS Movement against Apartheid South Africa? I didn’t. Did Paul Krugman? What’s the difference?
What about Hillary Clinton’s “Victory Fund” scandal? Does the “conscience of a liberal” just ignore that? ( https://www.politico.com/story/2016/04/clinton-fundraising-leaves-little-for-state-parties-222670 )
He says “disaffected white men” are Bernie supporters. There’s the “white” again, ad nauseam, as if there aren’t tons of people of color supporting Sanders with more joining everyday to this day.
Not all of this is in this one article of Krugman’s, but I just can’t bring myself to linking to all of his distorted blog posts. You’re free to search them and Google them, etc., to your heart’s content though. I’m not making anything up here.
Does Stephanie Kelton strike you as being a man? She doesn’t strike me that way. Is Krugman unable to even contemplate that many, many people support Sanders over Clinton and the Clintons out of conviction rather than because they are holding out for a position in a Sanders administration? Why couldn’t the same thing be said about Krugman vis-a-vis Hillary: he’s supporting her because he thinks he’ll have more say and possible get a high-profile economics position in her administration.
Paul is using bad pop psychology at best, not facts.
It’s ironic that so many calling themselves feminists have accused women supporting Sanders of doing so because the boys support Sanders, as if independent-minded young and other women cannot believe that Bernie Sanders’ positions are better, period, regardless of race, ethnicity, gender, etc.
I think Krugman is aloof. He hides behind the New York Times commenting system, where truly pointed comments showing Krugman’s hypocrisy are not allowed and where Krugman doesn’t have to respond.
Anyone can be rich, famous, popular, and not “disaffected” by echoing what the powers that be at the time want said. Some of the rest of us say what we truly believe and even if it means poverty or prison or both or worse.
For example, when Rania Khalek, associate editor at Electronic Intifada, argues that Walsh has “reduced [her] to a follower of a white man” for her support of Bernie Sanders, she is cast as a token of white leftist men. The foremost pa ragons of social justice simply ignore any deviation from the narrative as quickly as their block or mute buttons will allow, just so they may better perpetuate the lore.
Make no mistake about it. The mad rush to have Matt Bruenig fired from his position at Demos, and the new crusade explicitly tailored to deny him employment elsewhere, is meant to turn him into an example. It isn’t enough that they forced his employer into publicly removing him; they’re now after any other stream of income he, or his wife, may have. Indeed, they’ve decided that Elizabeth Bruenig, assistant editor for The Washington Post’s Outlook, should be punished, in essence, for being married to Matt.
In public conversations that rely heavily on the patriarchal notion that a woman, being owned by her husband, is at fault for his actions, countless gatekeepers of liberal feminism are calling for Bruenig to lose her job. Mind you, these same political performance artists spit venom at the very idea that Clinton should be forced to offer any form of penance for her own actions, let alone the actions of her husband during his term as President of the United States.
While the left may be fragmented and in desperate need of genuine solidarity, the liberal establishment class has shown its face.
The usurpation of social justice rhetoric for the sake of neoliberal ends, for the sake of maintaining existing conditions, is their modus operandi. Any flicker of criticism, no matter how tempered, will be described as too harsh, too divisive, and absolutely unnecessary.
No, that’s obviously not from Paul Krugman. It’s by Roqayah Chamseddine and may be found here: https://shadowproof.com/2016/05/23/bruenig-firing-civility-tool-control-political-dissent/
Why, oh why, include all of this on an insurance-agency blog? The reason is that neoliberal economics wreaks havoc. Neoliberal economics is extremely bad risk management. We can make much better progress without it.
⇧ EU and Poland in last minute talks on rule of law
This hasn’t been front-page news in the US, but it’s an important issue to the global economy and more because Poland is very important geopolitically.
In the interest of openness, I’m for a United States of Europe based upon as much direct democracy as can be managed from a practical standpoint, which is a great deal due to technological developments.
The way the EU was cobbled together as a technocracy was a huge error in my view that can only be corrected by full integration: real federalism.
The US certainly needs to vastly improve its democracy as well.
⇧ Public Banks as the Antithesis of Neoliberalism – Public Banking Institute
Matt Stannard has become quite the warrior for truth in domestic economics.
Public banks work. They fund public goods, they can be engineered to facilitate sustainable economies, they can be made 100% transparent and democratically accountable, and they have no institutional incentive to gamble on misfortune and misery. Utilizing them would shatter the illusion that there is some kind of fiscal scarcity that functions in the same way as the scarcity of natural resources. The very existence of public banks capable of democratizing the creation of money refutes false scarcity and clarifies what we don’t have enough of (and must therefore manage) and what we have an abundance of (and must therefore share).
… Although material resources are scarce, money is a social construct. That doesn’t mean we ought to create money carelessly, but it does mean we create money. So the only questions are who ought to control that process, and how to prioritize the applications of its power. The people should be in control, and private interests making money from money is socially destructive.
The Clinton administration didn’t understand this in the 1990s. The Bush administration that followed didn’t even understand that it didn’t understand it, and the Obama administration, in continuing a weak approach to Wall Street regulations, while pushing “managed” private health care and neoliberal trade agreements, and demanding energy transitions with only half-measures of economic security for energy workers, has been disappointing. Both parties have thoroughly bought into monetarism and neoliberalism, allowed Wall Street to steal hundreds of billions of dollars from municipalities, and maintained a narrative (albeit occasionally standing on distinct sides of it) that assumes people only deserve economic security through hard labor that adheres to a capitalist business model and that the transition to ecological sustainability, like the transition to universal health coverage, must be filtered through the demands of big capital.
⇧ Austerity is far more than just cuts. It’s about privatising everything we own | Aditya Chakrabortty | Opinion | The Guardian
Austerity is … a project irreversibly to transfer wealth from the poorest to the richest. It’s doing the job very nicely: while the typical British worker is still earning less after inflation than he or she was before the banking crash, the number of UK-based billionaires has nearly quadrupled since 2009. Even while he slashes benefits, Osborne is deep into a programme to hand over much of what is still owned by the British public to the wealthiest.
… accumulated effort and ingenuity will be handed over to a small group of investors — and for what? Better management? A recent study of the evidence by the University of Greenwich concludes there is “no significant difference in efficiency between public and privately owned companies in public services”. For more investment? Ministers selling off everything from railways to water have promised privatisation will bring greater investment. It comes — but it’s always the public that ends up paying for it.
Thatcher claimed that selling off BT, British Gas and the rest would turn Britain into a shareholder democracy. Official figures show that Britons now own less than half as much of the UK stock market as they did before Thatcher’s first privatisation.
Osborne’s privatisation, like the rest of his austerity programme, will enable him to transfer wealth from the public to a far smaller group of private investors. The employees can look forward to cuts in jobs, pay and conditions — as we have seen across the privatised utilities. The rest of us, the customers, will endure higher bills and paying for hidden subsidies. And the chancellor? He will have brought in enough cash to enable him to make some pre-election tax cuts — to literally buy himself votes.
Osborne calls this privatisation. I treat it as part and parcel of austerity. But there is another term you and I might use. Becau se this making off with our public property is nothing more than legalised larceny.
Do you know what this sort of thing by Osborne leads to? Revolution and greater nationalization than what was privatized in the first place is what. If it carries on long enough, if Osborne’s style prevails long enough, it can also lead to Robespierre. That would mean Osborne and his ilk losing their heads, literally.
⇧ Curious – Tim Duy’s Fed Watch
Ah, now this is the Tim Duy I like reading: slowed down enough to see what the Fed in general appears to be missing.
Part-time employment and long-term unemployment look to be moving sideways since the middle of last year, while progress in the U6 unemployment rate has decelerated markedly. And these shifts in momentum are occurring while at levels above those prior to the recession. Moreover, U3 unemployment is now moving sideways at a level above the Fed’s estimate of full employment.
I understand that this flattening is attributable to rising labor force participation. That fact, however, should not induce the Fed to tighten. Quite the opposite in fact, as it suggests that available slack is deeper than imagined and hence requires an even longer period of low rates.
That’s where I’ve been. Larry Summers is there too, though we don’t hear much from him lately versus the Fed.
I think Janet Yellen’s style is non-confrontational. She let’s the others speak their minds in public while she sits back analyzing the data and waiting and observing before speaking her own mind.
If unemployment and underemployment are still not foremost on her mind, I will be both surprised and disappointed. It appears Tim is in that same camp.
⇧ Disaster Fraud Rampant After Floods, Hurricanes
Many fraudsters get caught, and they all drive up premiums for everyone else.
⇧ Dry Winter Equals More Dust Storm Danger in the West
It’s that time of year in the Southwest — and as far as Alaska — when dust storms take shape, raising health and safety risks as plumes of dirt take to the sky.
I sure don’t miss them.
⇧ Fire Deaths Rising in Minnesota
State public safety officials say 57 people died in fires last year in Minnesota — the highest number of fatalities in 13 years.
⇧ West Virginia Town Issued ‘Do Not Drink’ Advisory Over Chemical Level in Water
… levels of the chemical C8 in the city’s water source are slightly above the new limit.
⇧ Bipartisan Senate coalition unveils bill to boost affordable housing | HousingWire
I’ve been writing for some time that the government needs to subsidize the development of affordable housing, soo …
As part of an effort to address what it calls America’s growing housing crisis, a bipartisan group in the Senate unveiled a bill this week that aims to boost affordable housing development by expanding the Low Income Housing Tax Credit.
Now, the article doesn’t really explain how it works, soo …
The LIHTC provides funding for the development costs of low-income housing by allowing an investor (usually the partners of a partnership that owns the housing) to take a federal tax credit equal to a percentage (up to 70% or 30% of PV depending on the credit type) of the cost incurred for development of the low-income units in a rental housing project. Development capital is raised by “syndicating” the credit to an investor or, more commonly, a group of investors. To take advantage of the LIHTC, a developer will typically propose a project to a state agency, seek and win a competitive allocation of tax credits, complete the project, certify its cost, and rent-up the project to low income tenants. Simultaneously, an investor will be found that will make a “capital contribution” to the partnership or limited liability company that owns the project in exchange for being “allocated” the entity’s LIHTCs over a ten-year period. The amount of the credit will be based on (i) the amount of credits awarded to the project in the competition, (ii) the actual cost of the project, (iii) the tax credit rate announced by the IRS, and (iv) the percentage of the project’s units that are rented to low-income tenants. Failure to comply with the applicable rules, or a sale of the project or an ownership interest before the end of at least a 15-year period, can lead to recapture of credits previously taken, as well as the inability to take f uture credits. These rules are described in greater detail below.
The program’s structure as part of the tax code ensures that private investors bear the financial burden if properties are not successful. This pay-for-performance accountability has driven private sector discipline to the LIHTC program, resulting in a foreclosure rate of less than 0.1%, far less than that of comparable market-rate properties. As a permanent part of the tax code, the LIHTC program necessitates public-private partnerships, and has leveraged more than $75 billion in private equity investment for the creation of affordable rental housing. (Source: https://en.wikipedia.org/wiki/Low-Income_Housing_Tax_Credit#How_it_works )
⇧ Dwindling of Arctic’s oldest ice since 1990 – YouTube
No signs of Anthropogenic Global Warming here, folks. It’s a hoax, don’t you know. Just move along. Move along.
Time lapse of the age of sea ice in the Arctic from week to week since 1990, updated through the March 2016 winter maximum. The oldest ice (9 or more years old) is white. Seasonal ice is darkest blue. Old ice drifts out of the Arctic through the Fram Strait (east of Greenland), but in recent years, it has also been melting as it drifts into the southernmost waters of the Beaufort Sea (north of western Canada and Alaska).
Video produced by the Climate.gov team, based on data ( https://nsidc.org/data/docs/daac/nsidc0611-sea-ice-age/ ) provided by Mark Tschudi, University of Colorado-Boulder. Data processing by Hunter Allen. Editing provided by Bruce Sales. Narration by Deke Arndt, NCEI. Unless specifically stated otherwise, Climate.gov video productions can be freely re-used.
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