October 2011 Posts

Morning Must Reads: Three Act Plays About Zombie Banksters, Smokestack Chasing and the Convoy

Paul Krugman describes our economic woes as a three-act play; now you Occupy Wall Street kids turn it into zombie banker street theater!

So, in case you’ve forgotten, it was a play in three acts. In the first act, bankers took advantage of deregulation to run wild (and pay themselves princely sums), inflating huge bubbles through reckless lending. In the second act, the bubbles burst — but bankers were bailed out by taxpayers, with remarkably few strings attached, even as ordinary workers continued to suffer the consequences of the bankers’ sins. And, in the third act, bankers showed their gratitude by turning on the people who had saved them, throwing their support — and the wealth they still possessed thanks to the bailouts — behind politicians who promised to keep their taxes low and dismantle the mild regulations erected in the aftermath of the crisis. Given this history, how can you not applaud the protesters for finally taking a stand?

A story in The Philadelphia Inquirer suggests Occupy Wall Street - Philadelphia is off to good start and includes more than just unshowered hippie kids. My twitter feed this morning even included a rumor that the Mayor was going to approve a brief moment of electricity so the protestors can watch the Phillies in Game 5 of the National League division series against the St. Louis Cardinals. As the saying goes, we want bread AND roses Phillies.

In the course of the morning, infrastructure — the kind meant to sustain the protest — started falling into place. After an organizer hopped up on a stone wall and called out that tables were needed for first aid and other stations, a rabbi from a nearby temple offered four tables, as did a community group called Fight for Philly. District 1199C of the National Union of Hospital and Health Care Employees donated office space for Occupy Philadelphia's legal team. Philadelphia Jobs with Justice, a coalition of labor unions and student, community, and religious groups, agreed to allow financial donations for the protest to be funneled through it, to ensure compliance with tax laws. The stagehands union said it would have a professional sound system in place for Friday, eliminating the need for the 'people's mike' — a system of echoing by the crowd, so all could hear.

Morning Must reads: As The Jobs Crisis Rolls On, Elected Officials Look To Hate To Win Votes

At 8:30 Friday morning, the Bureau of Labor Statistics will release data on September payrolls. Bill McBride provides a rundown of expectations that place the payroll count at 65,000 jobs, which would be an improvement from the total of ZERO jobs created in August. Talk about lowered expectations.

Also note that government payrolls have been shrinking by about 35,000 on average per month this year.

Pennsylvania Records First Quarter Revenue Growth

The September revenue collections are in, and as I told the Harrisburg Patriot-News this week, Pennsylvania is on track to meet revenue projections for the year, despite missing official estimates for the first quarter of 2011-12.

How's that? Well, first of all, revenue collections so far this fiscal year are running ahead of the same three-month time period last year, reflecting a stubbornly slow but continued economic recovery. Tax revenue grew by 3.7% during the quarter, which is slightly ahead of estimated growth of 3.3% for the fiscal year.

While actual tax collections are below official estimates, some of that underperformance may be attributed to a change in the way those revenue estimates were made. The 2011-12 estimates predict a larger share of annual revenue coming in during the first half of the fiscal year than revenue estimates of the past several years. If 2011-12 collection patterns follow a similar course as most recent years, this change may make budget “shortfalls” more common in the first half of the fiscal year, followed by surpluses in the second half.

I first wrote about this last week after looking at July and August revenues. Looking at the full first quarter revenue figures, the analysis holds up.

Morning Must Reads: Occupy Wall Street and the Banks in Pennsylvania

In just over a week, the Occupy Wall Street movement has gone from being lectured by writers at Mother Jones for not understanding messaging to comparisons to George Washington in a Central Pennsylvania newspaper!

George WashingtonThe protesters didn’t take their beef to the dysfunction that is Washington. Instead, they planted their flag of dissatisfaction in the heart of America’s financial district. It has spread to Philadelphia, San Francisco, Boston and Los Angeles, and is coming to Harrisburg on Wednesday ... The upstarts who got Occupy Wall Street off the ground might not become storied legends, but their idea looks like it has legs, and with any luck, there’s a next generation George Washington poised to step in, articulate a moderated message, and put American economic equality squarely in the political middle.

Morning Must Reads: Regulations and Jobs

Bruce Bartlett, former advisor to Ronald Reagan and George H.W. Bush, has a column in the Economix blog at The New York Times this morning with compelling fresh evidence (from the Bureau of Labor Statistics) that job creation is not hampered by regulation but, you guessed it, a lack of demand.

Also this morning, as if on cue, news stories appeared about the movement Monday of bills to weaken Pennsylvania's prevailing wage statute. The Pennsylvania House majority leader called the current prevailing wage statute a "job-crushing" law — without actually providing any evidence, naturally.

This week is off to a great start! Monday we demonize the unemployed and Tuesday it is all about regulation. I can't wait for Wednesday.

Governor's Drilling Fee Plan Sells Pennsylvanians Short

I put out the following media statement today on Governor Corbett's proposed impact fee on drilling in the Marcellus Shale:

"Governor Corbett has proposed a small, limited fee that fails to capture for Pennsylvanians the true worth of this vast natural resource, and fails to fully offset the short and long-term damage that will be done by the industry. The proposal sells Pennsylvanians short.

Morning Must Reads: Skill Mismatch Is Back And It Is Still Wrong

The view that people who lost a job due to the economy are lazy and shiftless dilettantes has spread from the editorial page of The Patriot-News to the newsroom with a particularly misleading story today.

The jobs are out there. Companies just can’t find the workers to fill them....Economists and business leaders point to a factor contributing to the pervasive disparity between available jobs and workers: attitude. Prospective work candidates simply want their cake — and on a silver platter. Some don’t want to commute, others want to work only the day shift, and others don’t want to take a job they feel is beneath them.