Zandar's Thought Of The Day

Louis Uchitelle, NY Times, has this report on the travails of unemployment.

After breakfast, his parents left for their jobs, and Scott Nicholson, alone in the house in this comfortable suburb west of Boston, went to his laptop in the living room. He had placed it on a small table that his mother had used for a vase of flowers until her unemployed son found himself reluctantly stuck at home.


The daily routine seldom varied. Mr. Nicholson, 24, a graduate of Colgate University, winner of a dean’s award for academic excellence, spent his mornings searching corporate Web sites for suitable job openings. When he found one, he mailed off a résumé and cover letter — four or five a week, week after week.

Over the last five months, only one job materialized. After several interviews, the Hanover Insurance Group in nearby Worcester offered to hire him as an associate claims adjuster, at $40,000 a year. But even before the formal offer, Mr. Nicholson had decided not to take the job.

Rather than waste early years in dead-end work, he reasoned, he would hold out for a corporate position that would draw on his college training and put him, as he sees it, on the bottom rungs of a career ladder.

“The conversation I’m going to have with my parents now that I’ve turned down this job is more of a concern to me than turning down the job,” he said. 

No really, travails.  It is so very, very hard being a gangsta pimp like Scott here.   I don't know why we need a 4-page expose' on people who are turning down $40k jobs because they're not good enough, but somebody needs to be delivering pizza in a ten-year old Canadian Subaru with no heater for a while to earn some perspective.

You know, if the pizza places were hiring.  Jesus.

World Cupdate

And the second Semifinal game got underway this evening as Germany took on Spain to see who would play Holland in the Finals.  Both teams went with 4-2-3-1 lineups, Zee Germans featuring Miroslav Klose (but missing Thomas Muller) and La Furia Roja with David Villa on point and Torres on the bench in favor of Pedro.  Both teams opened up very cautiously, not wanting to be on the downside of an early goal.  Spanish pride and German precision simply wouldn't allow it, but the Germans had to be thinking of Spain's 1-0 victory over this squad in the Euro 2008 finals where the Germans were unable to find any mistakes in the Spanish passing game and simply ran out the clock on themselves.  Germany were not a team that responded well to being down early, and the Reds were able to play their game in the opening stanza.  Zee Germans had to be even more worried about the fact that Paul the Psychic German World Cup Octopus picked La Furia Roja to win the match as well.  Spain continued to dominate possession in the first half but the German panzer pouncing on each Spanish less-than-perfect pass began to result in more German opportunities.  If anything, Spain seemed to be too frightened of a massive German counter-attack to really commit to anything less than the perfect goal.  In the second half it was more of the same.  Germany gambled on making some substitutions to finally adjust to Spain's passing game.  Both sides got some of their best chances yet to score as defenses begin to weaken in the late game, but it was Carlos Puyol with the running header dash at 72' to put Spain up 0-1.  Germany then completely panicked and Spain almost made it 0-2 in as many minutes.  Germany completely gave up the midfield in order to try to go on a full break stampede and crush the ball in, but the clock was their enemy and the Spaniards finally broke Zee Germans with it...and an octopus named Paul.

Your World Cup Finals will be Holland and Spain, the Eighty Years' War may have ended in 1648 but it begins again in 2010...

It's A Nuclear Melt-Up

And the Dow gains 274 points for no apparent reason.  None.  All the news was dismal today, and the markets gained nearly 3% just for the hell of it.  This is actually worse than the market falling 274 points, because at least that would have made sense. 

You know how if you're in a boat, and you keep pushing on one side, the boat will wobble but it won't capsize, right?  But if you rock the boat back and forth repeatedly, the thing's going to eventually flip?  Yeah, we're at the "rocking back and forth" part of the chaotic systemic variation right before the stock market goes BOOM, just like back in August 2008 when the market was all over the damn place.

The measure of that rocking back and forth, the VIX volatility index, has been floating around between 25 and 45 for the last two months.  This is bad, that much wobble in a system is going to eventually put cracks in the wheels.  When the volatility measure has that much volatility in it, that's...not good.  We're now getting into the point where chaos controls the market and not traders.

Buckle up, kids.  Second half 2010 is going to be a mite bumpy.

The GOP Plan Is Working Perfectly

And Obama is falling right into the trap.

Thirty-eight percent of independents approve of the job Barack Obama is doing as president, the first time independent approval of Obama has dropped below 40% in a Gallup Daily tracking weekly aggregate. Meanwhile, Obama maintains the support of 81% of Democrats, and his job approval among Republicans remains low, at 12%.

Over the past year, Obama has lost support among all party groups, though the decline has been steeper among independents than among Republicans or Democrats. Today's 38% approval rating among independents is 18 percentage points lower than the 56% found July 6-12, 2009. During the same period, his support has fallen nine points among Democrats (from 90% to 81%) and eight points among Republicans (from 20% to 12%).

Overall, 46% of Americans approve of the job Obama is doing as president in the June 28-July 4 aggregate, one point above his lowest weekly average. Obama's average weekly job approval rating has not been above 50% since Feb. 8-14, though it reached the 50% mark as recently as May 3-9.

Obama's lower ratings come amid a still-struggling economy, the ongoing difficulties presented by the oil spill in the Gulf of Mexico, and the recent change of command in the war in Afghanistan. Underscoring the challenge at hand, Obama's 44% approval rating in July 2-5 polling (Gallup did not interview July 4) ties his lowest three-day average to date.

The plan is as elegant as it is simple:  make sure nothing passes in the Senate and blame Obama when the country continues to fall apart, then make gains in November.  Repeat until you control Congress and the White House.  Now Obama's in a situation where by giving away everything to Republicans up front in order to secure their votes, they've simply stabbed him in the back and blocked everything anyway.  Only an amazing effort of will got health care reform through, and the President is unwilling (and now unable with only 59 Senate votes) to get anything else passed.  Now is when he needs Republican help the most, and now is when the Republicans he thought he could work with will oppose him straight down the line.

And he has no one to blame other than himself for believing for a second that the GOP wasn't out to destroy him or the country at the expense of winning in 2010 and 2012.  Been saying that for well over a year now.  All Republicans have to do is run out the clock until Labor Day, and they win.  It really is that simple, folks.  It's a damn shame Team Obama couldn't have figured this out, say, January 20, 2009.

Damn shame.

Really, Hawaii Dems?

OK, so Hawaii Gov. Linda Lingle is a Republican, and she vetoed the state's civil unions law (Via Balloon Juice.)  Not a gay marriage law, but a civil unions law.  That's pretty sad, even in 2010.

"There has not been a bill I have contemplated more or an issue I have thought more deeply about during my eight years as governor than House Bill 444 and the institution of marriage," Lingle said at a news conference.

"I have been open and consistent in my opposition to same-sex marriage, and find that House Bill 444 is essentially same-sex marriage by another name."

The bill would have granted gay and lesbian couples the same rights and benefits the state provides to married couples.

She said voters, not politicians, should decide the fate of civil unions.

"It would be a mistake to allow a decision of this magnitude to be made by one individual or a small group of elected officials," she said.

Sure, unless it's massive social program spending cuts, immigration laws or going to war.  In which case, only lawmakers know best.   But that's not what pisses me off.  Let's consider for a fact that Democrats in Hawaii have a 45-6 majority in the state House, and easily passed this bill in the first place...but will not override the Governor's veto because House Speaker Calvin Say already dismissed that option before Lingle's veto.

In a prepared statement, Say said he, along with members of the House leadership, decided that the governor’s veto list, released on June 21, did not warrant overrides because of the following:

• It does not appear to have the requisite two-thirds vote in both chambers necessary to override a veto;

• It does not rise to a sufficient level of statewide concern to warrant the extraordinary action of a legislative override;

• The governor’s preliminary objections to the bill have sufficient merit deserving of further evaluation; and

• Although the bill was intended to enhance state revenue to balance the budget when passed during the session, it is now no longer necessary because of the Council on Revenue’s improved revenue projection.

“It’s my personal belief that simply because we have the legislative super-majority to override is not justification for us to do so,” Say said in the statement. “Partisan politics should not be a consideration or basis for any policy decision. The House should be proud of the work accomplished during the regular session — including balancing the state’s budget without increasing the general excise tax, without increasing income taxes on low- and moderate-income families, and without scooping the counties’ hotel tax share.”

Right, but hey, why do anything about civil unions?  Nice work, Dems.  Nice work indeed on playing your cards.

Be Careful What You Wish For, Tea Party

You wanted smaller government?  You wanted state budget cuts?  You wanted to deal with "overpaid government drones"?  You got it.

Up to 400,000 workers could lose jobs in the next year as states, counties and cities grapple with lower revenue and less federal funding, says Mark Zandi, chief economist for Moody's Economy.com.

The development could slow an already lackluster recovery. Friday, the Labor Department said employers cut 125,000 jobs, mostly because 225,000 temporary U.S. Census workers completed their stints. The private sector added 83,000 jobs, fewer then expected, as the jobless rate fell to 9.5% from 9.7%.

Layoffs by state and local governments moderated in June, with 10,000 jobs trimmed. That was down from 85,000 job losses the first five months of the year and about 190,000 since June 2009.

But the pain is likely to worsen. States face a cumulative $140 billion budget gap in fiscal 2011, which began July 1 for most, says the Center on Budget and Policy Priorities.

While general-fund tax revenue is projected to rise 3.7% as the economy rebounds in the coming year, it still will be 8%, or $53 billion, below fiscal 2008 levels, according to the National Association of State Budget Officers.

Meanwhile, federal aid is shrinking. Money for states from the economic stimulus is expected to fall by $55 billion, says the National Governors Association. And the Senate last week failed to pass a measure to provide states $16 billion for extra Medicaid funding, an initiative that would have extended benefits from last year's stimulus. The House approved $25 billion in enhanced Medicaid funding.

Philippa Dunne, who surveys state financial officials for a newsletter, the Liscio Report, says most plan to intensify layoffs the coming year after relying largely on furloughs.

"The downturn has gone on so long, all the low-hanging fruit has been taken," says Scott Pattison, head of the state budget officers group.

So, another 400k jobs lost over the next year or so as FY 2011 turns into a bloodbath, and FY 2012 will be even worse come next July and onwards.

What's the plan to get these folks jobs, then?  The private sector should be eager to snap up qualified cops, firefighters, budget directors, city planners, and administrators, yes?  I mean since the private sector does everything better and more efficiently and all...

Because otherwise we've got 400,000 more Americans unemployed because Republicans refuse to fund these governments in trouble, and I'd like to know how that's going to help the economy.

Oh Look, It Gets Even Worse In The Gulf

So, apparently the AP's been checking around with all those other wells out in the Gulf of Mexico, and it turns out...well...nobody seems to know exactly what's going on with any of them.

More than 27,000 abandoned oil and gas wells lurk in the hard rock beneath the Gulf of Mexico, an environmental minefield that has been ignored for decades. No one — not industry, not government — is checking to see if they are leaking, an Associated Press investigation shows.

The oldest of these wells were abandoned in the late 1940s, raising the prospect that many deteriorating sealing jobs are already failing.

The AP investigation uncovered particular concern with 3,500 of the neglected wells — those characterized in federal government records as "temporarily abandoned."

Regulations for temporarily abandoned wells require oil companies to present plans to reuse or permanently plug such wells within a year, but the AP found that the rule is routinely circumvented, and that more than 1,000 wells have lingered in that unfinished condition for more than a decade. About three-quarters of temporarily abandoned wells have been left in that status for more than a year, and many since the 1950s and 1960s — eveb though sealing procedures for temporary abandonment are not as stringent as those for permanent closures.

As a forceful reminder of the potential harm, the well beneath BP's Deepwater Horizon rig was being sealed with cement for temporary abandonment when it blew April 20, leading to one of the worst environmental disasters in the nation's history. BP alone has abandoned about 600 wells in the Gulf, according to government data.

So, if I'm reading this right, there are hundreds, potentially thousands more Deepwater Horizon time bombs down there, and we have no clue what the status on them is.  None.  Zilch.  Bupkus.  And nobody's watching them to check.

And this has been going on for years, a graveyard of old, leaky cement plugged old wells.  Yes, these wells aren't filled with millions of gallons of oil anymore, but that doesn't mean they're safe, either.  The ones being slated for temporary abandonment that still DO contain oil...like Deepwater Horizon...are still out there and primed like land mines.

Great.  I needed some good news today.

He's Steele Kicking It

The TPM crew declares that having survived the holiday weekend, Michael Steele will remain chair of the RNC.

As he's often done during his tenure as chairman of the Republican National Committee, Michael Steele last week put the phone to his ear to save his embattled rear. On Friday, Steele arranged a raft of conference calls to explain his remarks that Afghanistan was a war of President Obama's "choosing," and tried to offer members now very used to his gaffe-prone tendencies context for the remarks.

"When the video broke Mike sent out a gargantuan amount of emails to members, to senators. He emailed by the pound," an RNC member told TPM in an interview. Steele even called conservative columnist Bill Kristol who began the drumbeat that the chairman should go in hopes of setting him straight. (Steele's friends complained that Kristol has not introduced himself to the chairman.)

Steele's message boiled down to two key points: it was a clumsy comment; and let's keep our eye on the prize. Steele allies backed that up with their own rounds of calls and emails to remind skeptical members the midterm elections are 120 days away and they must stay focused if they want to win back power in Washington.

"Of the two or three crises we've been through, this one has the least amount of steam to it," another RNC member said this afternoon. "That L.A. nightclub thing seemed to have more oomph on it. We told him that it 'was not your finest hour but we are only 120 days out.'"

I thought for sure he was done, but then again this brings up the Gonzo Rule:  no Republican ever gets fired for incompetence, they can only get bored of being a laughing stock and quit.  Steele hasn't reached that point yet (apparently his capacity for self-delusion is pretty substantial) and he still thinks he's the right man for the job, so he's survived yet again.

On the other hand, more and more Republicans are convinced that Steele is going to cost them some midterm victories.

Some Republican strategists say privately that Steele's troubles have weakened the party in an all-important election year. House Minority Leader John A. Boehner (Ohio) recently said he worries that fundraising problems at the RNC could hamper Republicans' efforts to take over the House in November, as major donors express reluctance to contribute to the organization under Steele. One House Republican, who spoke on the condition of anonymity to discuss the consequences of Steele's leadership candidly, said the party will do well in November because of the general political climate. But, he added, "we are going to be in a position to lose seats that we could win." 

So, if the Republicans fail to take the House in November, guess who's going to be among the unemployed?

Shame.  I think Michael Steele's great.

For the Democrats.

By The Time I Get To Arizona, Part 10

Eric Holder's crew are finally suing to block Arizona's immigration law over Constitutional grounds.

The Justice Department on Tuesday weighed in on one of the most explosive issues in American politics, filing a lawsuit to overturn a tough new Arizona immigration law that has sharply divided people along partisan, ideological and ethnic lines.

It also asked the federal courts to grant an injunction to stop enforcement of the measure before it takes effect late this month.

Arizona's law requires immigrants to carry their alien registration documents at all times and allows police to question the residency status of people in the course of enforcing another law. It also targets businesses that hire illegal immigrant laborers or knowingly transport them.

Justice Department lawyers argued that the state statute should be declared invalid because it has improperly preempted federal law.

"In our constitutional system, the power to regulate immigration is exclusively vested in the federal government," the brief said. "The immigration framework set forth by Congress and administered by federal agencies reflects a careful and considered balance of national law enforcement, foreign relations, and humanitarian concerns -- concerns that belong to the nation as a whole, not a single state."

In other words, the DoJ is suing over Article 1 Section 8 of the Constitution, which enumerates the powers of the Congress.  One of those powers is spelled out right there:

"To establish a uniform Rule of Naturalization" 

...which kind of completely kills the ability for states to have immigration laws that specifically conflict with federal immigration laws, and the fact that immigration is a federal matter.  Open and shut case, guys.  In which case the next argument is "OK, let's pass a national immigration reform law!"

Which, you know, keeps being blocked by Republicans.  So, why don't Republicans want national immigration laws?  They didn't when they were in power and they are blocking it again now.  Could it be if they get a law, they won't have much to complain about?

It's Over, They Lost, Go Home

Economist Brad DeLong argues that the Krugman/demand-sider view of the economy that we need more stimulus to jump start a deflationary economy has lost the political battle, and now we will pay the price.

The situation is grim. So why isn't everybody running around with their hair on fire?

Why aren't there irresistible political demands for more government action to steer us toward a better economic recovery --or at least to hedge against a double-dip in what seems likely to be called not a “recession” but a “depression” when historians get around to writing about it?

I have my theories:
    •       widening wealth inequality and an upgrading of the class position of reporters and pundits, who are no longer ink-stained wretches immersed in mainstream America;
    •       the collapse of union power, which ensures that nobody who sees real workers on a daily basis sits at the table when the deals are made;
    •       increasing job security for the powerful in Washington, aided by the growth of the lobbying apparatus that envelops the mixed-economy government;
    •       the collapse of professional integrity among the Washington press corps, which no longer dares to call balls and strikes as it sees them, preferring to say only that the Democrats say it was a strike and the Republicans say it was a ball, and that opinions on the shape of the earth differ.

I don't know which theories are right. But the situation does leave me feeling like one crying in the wilderness. (Say not "we are children of the market!”) I cry out to boost aggregate demand--by banking policy, by monetary policy, by fiscal policy, by spending increases, by tax cuts, by anything -- I don't care what!

More constructive, however, might be to go back to late 2008, when the incipient Obama Administration thought that it had put in place policies that would, by today, have reduced the unemployment rate safely below 7.5 percent. It’s time to review some of the ideas then being batted around about what to do if recovery reversed or stalled.

In other words, back when the smart guys were saying the stimulus was going to be too small in February 2009, we didn't have a plan B because Obama and the crew didn't think it would be needed...and the GOP wasn't going to allow any more than that anyway.  As it is, the stimulus barely passed the GOP wanting to assure the economy crumbled.

They did the next best thing:  allowing a relief package way too small to really fix the situation and then blame Obama for it.  I called the plan then, and lo and behold, here we are 15 months later going "hey, the stimulus was too small, Obama won't be able to ask for more because when he does the GOP will cover their ears and say TOLD YOU SO!".

I do hate being right about terrible things, but there you are.  Now we can't even get a jobs only bill away from the Forces Of Austerity.  Unemployment causes growth, you know.

StupidiNews!

• Hawaii's GOP Gov. Linda Lingle has vetoed the state's civil unions bill, saying the issue must go to a statewide referendum.
• A whistleblower claims BP is cutting relief payments to fishermen if they don't assist in cleaning up toxic oil.
• South Carolina Democratic Party chair Carol Fowler is stepping down after the party's bizarre Alvin Greene primary incident.
• Still no relief in sight as the Northeast US cooks under triple digit record highs.
• Swedish Pirate Party members are considering moving The Pirate Bay site into Parliament's servers, shielding it from prosecution.

Last Call

Been a while since I've talked about the commercial real estate market, but that's only because the residential one is so horrible still.  The commercial one however continues to collapse.

Office vacancies in the U.S. rose to the highest level since 1993 in the second quarter as the sluggish economic recovery damps demand from corporate tenants, Reis Inc. said in a report.

The vacancy rate climbed to 17.4 percent from 16 percent a year earlier and 17.3 percent in the first quarter, the New York-based research company said today in a statement. Effective rents, the amount tenants actually pay landlords, fell 5.7 percent from a year earlier and 0.9 percent from the previous three months, according to Reis.

That's staggering.  More than one in six office spaces in this country are vacant right now.  There is nothing that indicates that this will improve anytime soon and more than enough evidence to assume that this may jump to 19 or 20% soon.  Rents are down big time because of the oversupply...so why are these office spaces empty?

We built too many of them during the housing boom, simple.  Same goes for hotels...and even apartment vacancies are up now, people are trading down from condos to good apartments, from good apartments to decent ones, from decent apartments to lousy ones, and from lousy ones to the couch in Mom's basement...or worse.

The deflationary death spiral continues unabated.

Great Idea, They'll Hate It

Kevin Drum comes up with a very good solution to our stimulus impasse.

Actually, I think there's an easy solution to this quite aside from automatic stabilizers like extended unemployment insurance, which will automatically come down as the recession eases. And that solution is: a temporary payroll tax holiday paid out of the general fund. At this point, if we're going to pass a second stimulus I think it needs to be something that takes effect quickly, and a payroll tax holiday is about the fastest possible stimulus you could ask for. What's more, it's pretty effective, since the benefits primarily go to middle and working class families, who are more likely to spend it than rich families. And making it credibly temporary isn't hard either. Just set it on autopilot with a gradual phaseout: maybe a full holiday for two quarters, followed by a 75% holiday, a 50% holiday, and finally a 25% holiday. Or something like that. That would be easy to stick to and would avoid the problem of withdrawing all the stimulus at once just as the economy was starting to seriously pick up steam.

Would Republicans agree to this? Probably not. But some of them might, and public opinion would probably be pretty favorable even among the tea partiers, who prefer tax cuts to deficit reduction by a margin of 49%-42%.

Republicans would "probably not" agree to this, he says.  That is so terribly precious.

Hey K-Drum, bro?  What part of "Republicans will never, never, never agree to anything that will help the economy and allow President Obama to take credit for passing something usefully bipartisan before the midterm elections" do you not get?

Now January rolls around, I guarantee you a payroll tax holiday is the first damn idea you'll see out of the GOP, but if Obama and the Democrats suggest it, the Republicans will filibuster the hell out of it.

Hot Child In The City

That heat wave in the Northeast (and it's supposed to be worse tomorrow) brings up a question:  global warming aside, our infrastructure needs some help, and part of that is America's power grid.

"We are anticipating a potential record breaking day for electric usage," said John Miksad, senior vice president with Consolidated Edison Inc of New York. "It's not a record we're hoping to break and we are encouraging conservation among all of our customers."

Even though generation supplies were more than ample to meet forecast demand, heavy usage of some power plants and distribution lines could leave some stewing in the heat without power.

Con Ed, with more than 3.2 million customers, had about 1,500 homes and businesses without service earlier Tuesday as the temperature topped 100 degrees Fahrenheit (38 degrees C).

Miksad pointed out his company has about 93,000 miles of underground cable that can be vulnerable to damage caused by heat trapped underground.

The state-owned New York Power Authority (NYPA), meanwhile, activated its demand response program, which pays large business and government customers, like Citibank and New York City, to cut back on energy usage during heat waves. In that way, the power grid doesn't come under too much stress which can cause blackouts.

"(NYPA) has taken the steps necessary for ensuring that we're prepared to meet the challenges of the summer when the gap between demand for power and available generating supplies narrows the most, and generating and transmission facilities are most heavily utilized," NYPA President and CEO Richard Kessel said in a release.

But remember, we can't spend money on this because it might hurt the bond traders or something.  Meanwhile, record power consumption continues.  If only there was a large entity that could regulate power across all 50 states...

World Cupdate

And the Semifinals got underway this evening in Cape Town, South Africa, with Uruguay taking on the Netherlands.  Both teams were down key players from bookings and injuries, La Celeste missing Luis Suarez and Jorge Fucile, while the Oranje were down Gregory van der Wiel and Nigel de Jong.  uruguay took a 4-4-2 attack into the match with Edinson Cavani replacing Suarez and Diego Forlan expected to carry the load, while Holland fronted a 4-2-3-1 formation led by the ever-present Robin van Persie.  The Dutch, the orange-clad Denver Broncos of the FIFA world, were still looking for their first ever World Cup finals win, and were hoping van Persie would have his John Elway moment after having come so very close a number of times.  Uruguay meanwhile was hoping to continue their record of spoiler, the team that found a way to win even if it played an ugly game.  Both teams were content to squat early and counter-attack, but that meant neither squad was taking the forefront.  Holland finally dithered around in the corner enough so that Giovanni von Bronckhorst was able to set up a nuclear strike from the far turf, and it found its way into the back of the goal at 18' putting Holland up 0-1.  Suddenly Uruguay were in real trouble, but they didn't seem to want to up the attack too much...or maybe without Luis Suarez, they couldn't.  More trench warfare continued in the half, but Diego Forlan stepped up and ripped one in at 41' to equalize. 

Suddenly we had a game on our hands.  In the second half both squads went back to the trenches to try to tease another goal out, but it was a controversial goal at 70' by Holland's Wesley Sniejder that put Holland up, despite what looked like van Persie being offsides.  That controversy vanished a few minutes later however as Arjen Robben headed in a shot at 73'.  uruguay however was not done, and that offsides goal may go down as one of the great "What ifs?" in World Cup history as Maxi Periera banged one in at 90'+1 to make it a 2-3 game, but time expired and Holland will play for all the marbles on Sunday.  Will they face Spain or Germany?  We'll see tomorrow...