13 posts tagged “pinkslipnation”

So I'm sitting here on the final day of the California Democratic Party Convention waiting for the upcoming fight over whether the party will officially endorse propositions 1A-F.  California is essentially fubared--we're being told that we can either blow up the budget or sign our death warrant.  A coterie of elected officials have come out to shill for a decidedly unpopular slate of propositions at the caucuses and events, only to have activists and the brave few willing to stand against the deal the party brokered exhort everyone to vote no. 

What we're really looking at isn't just a political deal, but the financial future of the state.  We can vote for a short term fix (1A-F) that will get us through the current crunch, with no promise we won't be back at the table if things continue to get worse, and with a spending cap that will essentially ham string any future spending.  Colorado only recently repealed a spending cap that had starved the state of investment and threatened to strip funding for education and social services to an extreme extent that even many conservatives could not stomach.  Many grassroots activists view 1A with suspicion, a ticking time bomb California Republicans have placed in the mix to strip the state of its abiliy to fund programs thus far beyond their party's power to remove.

Or we can fight for the long term, and vote down the whole lot.  The risk of course, is that while Dems got Republicans to finally agree to a mix of cuts and fee/tax increases in the last go round, the Republicans might simply refuse to compromise.  The Republican primary system and the extent to which our districts have been gerrymandered mean the Republican party's main power lies in its ability to blackmail and strong arm the state.   They have only enough seats to prevent an easy 2/3rds majority for Demcorats, and tie up the budget process and their Governor is termed out.  It's likely their next candidate will be one of the extreme, right-wing Republicans who are increasingly marginalized in all but the reddest of districts.

Voters need to wake up to the fact that when it comes to their money, their dollars, and the state spending so many more depend on in these tough economic times--an extrememe minority party is essentially in chage until the 2/3rds rule can be overturned.  It seems crazy that the small band of legislators whom fewer and fewer voters send to Sacramento to represent them on the issues, gets to decide how to fund them.

But today the focus is on whether the delegates to the party are going to advise voters to hold their nose and pull the trigger, or simply say no.  The fact that this round of propositions has been greated with such silence by interest groups that nomally take a vocal stance in recommending how everyone should vote, is an indication of how conflicted activists and interest groups feel.  If activists vote not to endorse on 1A, which seems likely, they won't be the only ones.  Get used to the sound of silence, becuase it is hard for anyone to get excited about the options facing voters on May 19th.

Unhappy meal

Tough economic times can impact all levels of your life.  Not only are many stressing about keeping their job or struggling to pay the rent or mortgage, but even day to day concerns like the food we eat present a layered challenge.  While there are many for whom the challenge remains putting food on the table, the rest of us face the increasingly daunting task of eating healthy at a time when cost and time constraints, coupled with the stress of worry, make it that much harder.

From Newsweek-- The Economics of Eating:

Living off a dollar menu may save you money now, but you'll pay for it in the long run:

Lean times lead to bad diets. Bad diets lead to obesity. And obesity leads to diabetes, heart disease and other chronic illnesses—not now, but sometime later in life, when today's recession is a memory but Medicare, Medicaid and private insurers are still groaning under its weight. "People are eating cheaper, more fattening foods; care is more difficult to find; and as a result we're going to have more and more people presenting at a later stage of the disease process," says Roslin. "If you're concerned about paying your rent and making ends meet, it's very hard to think about the future implications of diabetes and other illnesses."

Of course, even in flush times we face a smorgasbord of bad choices that are cheap easy and plentiful.  But a bad economy can make that worse:

But one of the most insidious health effects of a downturn is in the area of diet. Eating healthily can be expensive and time-consuming—two qualities Americans currently have little appetite for. Hitting up the drive-through is cheap, no-hassle and easy to rationalize; those off-the-charts levels of fat, sodium and sugar feel like they can be dealt with in better days. Owing in part to psychology like this (lower fuel costs helped too), McDonald's Corp. this week announced that it has defied the worldwide economic downturn, posting a first-quarter profit of $980 million, up percent from last year. Burger King's most recent U.S. sales figures were also up 1.6 percent, according to the chain.

Of course it's not a "happy" meal if it will eventually kill you.  So add food and health to the list of major impacts this recession brings home.  But it also may provide an opportunity to finally do something about the public health issue that processed fast food presents.  If you're interested in the politics and policy behind food, check out Recipe for America.  Change can be slow, but as we reevaluate the role of government and the safety net so many depend on these day, it's worth looking at the root of the problem. 
 

In a nod to the angry populism bubbling up against the corporate jet-set, auto execs parked the company plane and headed off to Washington DC in their company cars.  No word yet on whether they chose to dine at Shoney's or  Denny's, or how many breakdowns occurred along the way. 

Auto Execs Carpool to Washington

So this week, Richard Wagoner of General Motors, Alan Mulally of Ford and Robert Nardelli of Chrysler drove from Detroit to Washington in cars their companies build for a second round of hearings. What those drives were like — it's nine hours from Detroit to Washington — was one topic of interest before the Senate Banking Committee.

Sen. Richard Shelby, R-Ala., the committee's top Republican, popped the big questions: "Did you drive or did you have a driver? Did you drive a little and ride a little? And secondly, I guess, are you going to drive back?"

Chairman Chris Dodd, D-Conn., tried to lighten the mood. "Where'd you stay?" he asked. "What did you eat?"

But this was serious business.

Yes, they were driving back. Mulally explained how he "carpooled" and "drove." "I'm driving back," he said.

Wagoner said he and a colleague split the driving 50-50.

For anyone doubting that John McCain is economically as out of touch as they come, here's the video to prove it: watch him dress down an audience of American workers that they just won't pick lettuce for $50/Hr. So how much does McCain think the person who made his lunch or stirred up his metamucil this morning earns per hour?  This guy is so out of touch, he prolly thought Spitzer's call girl was a downright cheap floozy c*nt.     

Uh oh.  Wall Street is not going to be happy about this--they thought their BFF in the fed would keep the free money flowing 4ever.  From Bloomberg:

Federal Reserve officials agreed at their meeting this month that their next move in interest rates will be to raise them, while reaching no conclusion on the timing of such a decision, records of the gathering show.

``Although members generally anticipated that the next policy move would likely be a tightening, the timing and extent of any change in policy stance would depend on evolving economic and financial developments,'' according to minutes of the Aug. 5 Federal Open Market Committee meeting released in Washington.

The minutes today show a debate over the magnitude of the inflation threat, with two groups of officials making different judgments on the impact of the recent slide in commodity prices. Policy makers also diverged on whether financial turmoil continues to pose the risk of a more severe credit crunch.

Really?  The experts are split on the impact of price declines in all those commodities they exclude when the bogus calculations are run for the core inflation rate? 

Kept Man John McCain  Material Girl  Eldon Smith may not remember how many houses he owns but this video does a great job showing the lifestyle to which John McCain has become accustomed.  Check out the ornate fireplace and the exquisite detailing with which the McCain dynasty  family left its mark.   Can you digg it?

Special hint*: did you catch the republican elephant motif in the designer kitchen?  And kids, can you find all of the three refrigerators?!!

Think just because you rent you're safe from all the foreclosure fallout going on around you?  Well, I won't tell you to wipe that smug smile off your face, but I would caution you to keep an eye out for some rental scams going around:

Once popular in the 1970s, tenants are conned into renting an apartment from a fraudlent landlord, only to discover later that the "landlord" doesn't even own the building.

The scam leaves renters homeless and broke as the con artist will get the first and last month's rent in cash, and is gone before the victims realize that their rental agreement was really phony.

Of course you are safe from having your house foreclosed on and all your stuff thrown in the street.  Unless of course, you rent from a landlord who is being foreclosed on.

In an effort to show how much he can relate to the everyday experiences of working Americans, McCain accompanied a mom and her child on a trip down the grocery aisle.  While dodging the present day perils of high prices and reduced volume sizes, they stop to pick up some applesauce in the most awkward grocery store experience I have ever seen.  Seriously, it was worse than if they had stopped to chat it up about Tampax. 

And then the apple sauce attacks him.  But his handlers were there to swoop in and protect the loafers, and remind everyone how completely out of place this man seems in a grocery store.

Imagine if this man is allowed to run the country.

McCant

Well, it may not be the mental recession McCain's camp foolishly touted the other week (and yes, I feel dirty linking to the Washington Times), but an advertising recession is emerging as companies slash marketing budgets to offset losses in sales.  Even the big guys, like Coca Cola and General Motors are making major changes to advertising budgets, which means that concerns over the economy continue to have a widespread effect. 

From the Financial Times:

Advertising weakness is spreading from newspaper and radio groups to the rest of the media and casting a shadow over a year that was supposed to benefit from the Beijing Olympics and a high-spending election season, analysts warn.

The biggest threat to the industry from big advertisers such as car dealers, banks, retailers and airlines, among others, as they tighten their belts.

Larry Haverty, portfolio manager at GAMCO Investors, said: “What we’ve got here is a recession in advertising. It started in local media – radio and newspapers – and is now spreading to TV.”

The latest red flags were reports that Coca-Cola and General Motors planned to target marketing budgets as part of cost-cutting efforts.

What does this mean for the average consumer?  Will we find ourselves suddenly less harassed or will companies make up their budget cuts with SPAM marketing campaigns looking to blanket the Internets?

Unfortunately, an advertising recession may have a larger impact than people might think.  Sure, it will hurt those of us whose paychecks depend, either directly or not, on advertising and media sales.  But it also signals that the economic troubles that started in the housing sector are continuing to trickle out into the larger economy. 

The idea that economic retrenchment in one industry will not affect another has been both naive and incredibly popular over the last two years.  First, residential real estate woes were dismissed in favor of a robust commercial real estate market, with no one seeming to make the connection that most of that increase in occupied office space stemmed from leases to, wait for it, residential real estate related services firms. Next we saw the financial markets rocked by all those securitized mortgage products and bank write downs and the fed having to come in to bail out and piece together deals to prevent large investment firms from tipping the market into a free fall.  Add to that today's announcement that banks are sharply reducing business loans, with the potential for an even wider impact across the economy.

I ran across this article earlier today at my Starbucks, but even with frantic internet searching it proved a bear to track down as no one seems to be talking about this today.  From the International Herald Tribune:

Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.

Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term "commercial paper" not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.

The drying up of capital for business deals, even for sound businesses, is particularly troubling given concerns over credit card defaults and write downs and actions of firms like American Express to make preemptive moves to cut off business borrowers in troubled industries, even if their businesses are doing well.  And we're not talking about an insignificant hit to the economy:

"The exact words were, 'We're saying no to almost everybody,' " Greenblatt recalled. "This is why God made banks, for this kind of transaction. This is going to slow down the American economy."

Earlier this year, credit extended by banks to companies and consumers was still growing at double-digit rates compared with three months earlier, according to an analysis of Federal Reserve data by Goldman Sachs. By mid-June, bank credit was declining at an annualized pace of more than 6 percent.

That is a drop of nearly $150 billion, an amount much larger than the value of the tax rebates the government has sent to households this year in an effort to spur economic activity.

In all of this, the term "tickle  trickle down economics" comes to mind, only the contagion of economic malaise seems to me a much more cogent model than the bogus economic policy of wealth redistribution it sold.  In fact, in the case of advertising we have seen the local level impact on media trickle up--much like the wealth creation of the past two decades that have been built on productivity gains and the depression of wages.    

Back to advertising, this marked shift in advertising budgets signals that even the big guys are settling in for the long haul.  It also means that the fallout of the reduced services those firms use, in areas such as graphic design,  video production, editing, marketing research, media buying, etc., will prompt further reductions as those companies in turn have to reduce their staffs and spending levels: pushing the economic fallout into more and more industries.  Compound it with the credit crunch coming to corporate America, and we're in for a rough ride.

Flipper Bowl Sink with Subway Tile!

So remember when it seemed you couldn't blink without someone you knew, somewhere, putting in granite counter tops and one of those crazy bowl-shaped sinks?  Well, like all trends, this one seemed to jump the shark when the housing market finally slammed into the cold hard granite of reality.  Now, an article from the NY Times about high levels of radiation being emitted from said granite counter-tops.  Yuppies everywhere are cursing the lemming-like choice of materials they had expensively installed in their showroom kitchens:

SHORTLY before Lynn Sugarman of Teaneck, N.J., bought her summer home in Lake George, N.Y., two years ago, a routine inspection revealed it had elevated levels of radon, a radioactive gas that can cause lung cancer. So she called a radon measurement and mitigation technician to find the source.

“He went from room to room,” said Dr. Sugarman, a pediatrician. But he stopped in his tracks in the kitchen, which had richly grained cream, brown and burgundy granite countertops. His Geiger counter indicated that the granite was emitting radiation at levels 10 times higher than those he had measured elsewhere in the house.

...The granite, it turned out, contained high levels of uranium, which is not only radioactive but releases radon gas as it decays. “The health risk to me and my family was probably small,” Dr. Sugarman said, “but I felt it was an unnecessary risk.”

Thankfully, as one subject of the article so aptly points out, most of these people aren't spending much time in the kitchens anyway.  But that doesn't mean they aren't furious that their conspicuous consumption is threatening to kill them.

And for all you fashionable renters, relax: you can breathe easy as you wipe down that tile and go back to browsing Apartment Therapy.