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I haven’t had the time to read any analysis yet, though I heard a little bit on NPR this morning.  Basically the Socialists regained power in France on an anti-austerity/pro-stimulus spending platform (as well as a “unity” platform against the anti-immigrant tide).  Apparently newly elected President Hollande is going to pick up the phone to argue with Chancelor Merkel immediately.  Anybody know when Germany is up for elections?  Does their system have a no-confidence vote?

Then in Greece even the Socialists who signed off on the Conservative Party’s austerity measures took a hit, and together the two main parties took under 35 percent of the vote with a slew of what NPR described as “extreme left and right parties” taking the rest.  One of the left parties actually slipped into second place with 17 percent of the vote.  Scary is the fact that the country’s neo-Nazi party went from one percent to seven percent, again over the austerity measures, but France’s more enlightened “unity” vote doesn’t seem to have rubbed off on Greece, which is suffering from 21 percent unemployement and a huge poverty rate.  There is no governing coalition at the moment.

Basically, the voters in both countries aren’t in the mood to tighten their belts to bail out the financial system.  I haven’t looked, but I imagine that stock prices have tumbled this morning as they get jittery whenever any news comes out of Europe about potential debt defaults.

If Europe had joined the US and China in an international stimulus program two years ago, we might not be here.  But for some reason conservatives in every country refuse to acknowledge that sudden and large cuts to spending when markets are in contraction actually exacerbate the debt problem, meaning that austerity measures are actually counterproducitve even if your concern is obsessed with debt to the exclusion of all the other economic concerns.

I would appreciate links to good articles you find on the subject.  Thank you.

The demise of American manufacturing is the major factor, but politics is another.  Probably the biggest kept secret of American political history – when supply-side economics failed and sent us into a double-dip recession in the early 1980s, Cap Weinberger proclaimed “Soviet Military Superiority” (since proven to be a sham) and Reagan spent his way into recovery – generating a deficit by the election of 1984 which had exceeded all prior deficits combined dating back to George Washington.  Hence this chart re government spending comparisons between Reagan and Obama.


Kos headline of the year in response to recent polling of Republicans: “Do Conservatives Really Belive Obama is Muslim, or are They just Dicks?”


Rick Santorum isn’t playing the game right.  Last week he admitted that the Republicans may lose the economy as an issue despite the story above.  This week he’s accusing Fox News of shilling for Romney.


And people keep putting a microphone in front of Sara Palin’s mouth with crazy results.

So the Fortuna Beacon is dead.  The Times Standard is shrinking.  Greystone Jewelers is closing, along with several other Old Town stores which have closed over the past year or two.

Now Hometown Buffet is closing – which has provided a meal at relatively low expense especially for seniors.  A couple of weeks ago I received a telephone call from someone who went to the Bay Shore Mall for a haircut.  He noticed that many of the spaces were empty, and the building was run down in places.  He took a few photographs before he was approached by a security person who instructed him to stop taking photographs.  He complied and put away his camera.  Several minutes later he was approached by another security employee, obviously someone with a little more authority.  The employee asked the individual for his name.  The individual declined to provide the name, and then the employee instructed him to leave the mall.  The individual said that he was waiting to get a haircut, but the employee was firm.  The individual had broken the rules.  Not that such a prohibition is posted or anything, but that was irrelevant.

As reported earlier, it appears that WalMart has found a back door into the community, and I suspect the ultimate goal is to take over the mall, maybe leaving a space or two for PetCo and such.

Unless something is done to bring in some employing investors, I suspect Humboldt County is in for a long period of decline towards a retirement community, with fewer and fewer families – even beyond this particular recession.  This is the only time I will comment on the subject as it could be seen as self-serving, but we really need to ask whether spending millions of dollars on lawsuits instead of conferring with potential employers to invest in local infrastructure accordingly.  And yes, environmentalist groups really do need to ease up a bit and let something happen every once in a while.  While the accusations against environmentalists with regard to economic impacts are overblown, there is an intransigence which does have an economic effect, and which will eventually generate a backlash which could undo crucial environmental regulations.

Not that the other side of the political equation is much better with their constant pushes for more housing and retail development without any kind of plan for an economic base to fuel it all.  Of course, the ideological thrust behind this side is that you don’t “plan” anything.  You just sort of let it all happen, because the economy isn’t a system, it’s organic, yada, yada, yada.

But we do need planning.  And we need community leadership, in office and out, which can venture outside its milieus of ideological comfort and take a holistic look at the situation – and generate a plan.  The plan can change, evolve, etc.  But right now we’re in trouble, and even the better aspects of the leadership are focused on the short term (which is admittedly daunting).  We need a comprehensive vision, anchored in short term reality, but also with a long term economic plan in mind.

I sincerely hope that discussion is the primary theme of the upcoming Supervisor races, because really, none of the smaller stuff is going to matter if we’re headed towards becoming another Trinity County where you see only a handful of people under 40 years old and hardly any kids.

“It’s not class warfare.  It’s math.” 

Cute line from President Obama as he released his deficit reduction plan.  I think in the end, something will be passed with no tax increases, or minimal if there are enough Republican moderates to break away from the Tea Party and buck the Norquist pledge.  It depends on how well Obama plays the politics, and it does looking like he’s going for broke.  At minimum, he’s learned that you have to start political negotiations with room to move – something he failed to do with health care reform and just about every other fight.  I think he’ll get the payroll tax cut extension, despite the Norquist-exempt opposition.  And the fact that Republicans are wigging out before they’ve even had time to read the thing suggests that they are concerned that they’re losing the narrative.

Of course, whatever passes isn’t going to have a huge impact.  It’ll probably stop the hemorrhaging and generate some moderate job growth.  But until we find something for high school educated men to do in a post-industrial US, I think we’re going to continue to slide in the long run.

Meanwhile, the Wall Street “Occupation” isn’t large, but it’s managing to gather some media attention.  I just wish they hadn’t reincarnated the “Days of Rage” meme from the Weathermen.  It pretty much marginalizes them.  They did get a boost from Roseanne Barr who is running for President.

Addendum:  Sen. Schumer is demanding that the tax proposal be put on the floor for debate and vote.  Democrats are sensing blood here.

Robert Reich divides the country into consumers and investors, which once prompted my father to ask, “what about the producers?”  This is pretty scary.  Calculated Risk is so far the only source I’ve seen covering the non-coverage of the holiday.

With the unemployment rate at 9.1% and almost 14 million Americans unemployed, with the alternate measure of unemployment (U-6) at 16.2%, with 6 million workers unemployed for more than 6 months, and with 6.9 million fewer payroll jobs than at the beginning of the 2007 recession, one might think every major publication would lead with a labor story on Labor Day. One would be wrong.

A quick glance shows zero labor stories on the front page on the NY Times – or on the Business page. Zero. Zip. Zilch. Nada.

LA Times? Same story – no stories.

The WSJ? One story, sort of.


Addendum:  TPM brings up another story not being covered by the media – the fact that private sector employment actually continued to expand in August, but that the hemorrhaging is in the public sector.  Obviously if the consumer base continues to deteriorate, the private sector can’t maintain its expansion.  The media also won’t even interview economists, who are almost universally calling for more stimulus spending from government despite the deficits.  But the message need not fall on deaf ears if it’s not even delivered.

Think Progress has some stats and graphs, including this one.  When the success is measured merely by the women “taken off the rolls,” I suppose it looks like a winner.

23 polls say yes, at least in preference to increased deficits and further cuts.

Addendum: It’s not getting much mainstream media coverage, but there is a bit of a counter tea party underway this year.

According to this article, solar power is currently generating more jobs in the US than any other power source industry.

Would that a significant amount of the stimulus money had been spent with this in mind.

Eric Cantor on the airlines pocketing the FAA tax the government can’t collect right now with the FAA shutdown.  In case you haven’t kept up, the FAA has not been renewed which means that thousands are out of work, including airport construction projects across the country, and over the month of August the US stands to lose one billion in revenues.  Basically, just before taking off for vacation, the House stuck the Senate with a bill which would weaken unions in the industry forcing the Senate to sign it or wait until September.  More “hostage taking” to come.

Apparently prices are not set by competition, and the extra money they will be making will thus not be transferred to consumers (nor invested for additional jobs), but will simply boost the airlines’ “bottom line” according to Cantor.  This is a test case for the conservative economist’s mantras about increased taxes increasing prices, and by all indications the premise is being proved false.  As local gas station owners once described their gouging of Humboldt County consumers when it did not appear that costs were impacting local prices, it’s all about “what the market will bear.”  As in, what consumers will pay.

But no, there’s no collusion.  That would be illegal, right?

Addendum:  Up next in national politics – Wisconsin.  Lots of money being poured in.

Meanwhile, here’s a nice cartoon on bipartisanship.

And CNN continues to cover the story about how badly “those people in Washington” are acting, as if there is equivalence between the parties in all this.

Bad news for the economy, and literacy.  But then we’ve been looking at the banner at the Bayshore Mall for weeks now.

More room at the mall for Wal-Mart?

Massive layoffs.   Recession imminent.

Thanks Tea Party!

The joys of a post-New Deal society.

You know, Obama does have one recourse since we are limited to surplus spending for the first time in history.  He can shut down three wars, and bring that spending back to this continent.  He doesn’t need Congressional approval for that.


July 2020