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March 25, 2010

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AZ's not all that bad. I just read that the legislature has legalized certain kinds of firecrackers to make up for taking away health care from poor kids.

The Census figures i see show a gain of 76k http://www.census.gov/popest/metro/CBSA-est2009-pop-chg.html

I enjoyed that Kunstler piece (radical as it is) though I wonder whether people will ever make out the connection between banksters, Kooks, the raging masses, and the current ongoing predicament: A lot of pitter patter about "Freedom! Freedom!" but only meaning freedom from responsibility. A cheap sense of entitlement. Idolatry of Darwin -- except when it comes to biology. A rejection of the very notion of a common interest and responsibility.

Yes, Florida HSR doesn't look good ( http://jacksonvilletransit.blogspot.com/ ). I suppose when it goes into service with the plans as is, it will be called the "Disney train". At the very least it should go into downtown Orlando.

As to Portland-Seattle, that would involve building a new line in a very difficult topography. Lots of tunneling & bridges etc. Probably won't happen. Maybe Kunstler is right and we should focus on getting back to 100 mph regular service.

The HSR progress so far in California is not really encouraging. The classic mistakes and traps experienced by other countries are on full display: NIMBYism, reverse-NIMBYism, lack of competent (political) project oversight & management, overengineering etc.

Conclusion: No one knows what they're doing regarding HSR in the US. Upgrade the Northeast corridor. Bring CaHSR to a less than horrible conclusion. Make regional rail a priority, that's where the big passenger numbers are.

A lot happened during the weeks Jon spent pounding the Smith Corona! He still has it in for Obama, but the guy put his political career on the line to get the healthcare bill passed, so (to me) he's much more than a cipher. For sure, he was inadequately prepared for the Presidency . . but who would have foretold the wreckage he'd inherit?

Mr. Talton wrote:

"The media keep looking for "green shoots" or at least a bottom in the housing market, especially in Phoenix, which doesn't have a Plan B. The old model of massive sprawl building financed by leverage isn't coming back. Questions?"

Today I read in the Arizona Republic that 20,000 net new jobs were created in February in Arizona. The article did mention that the unemployment rate has nonetheless jumped to 9.5 percent (presumably, it said, because some of those who had previously quit looking for jobs are now at it again -- though I think that is unlikely to explain the magnitude of the increase).

What the article didn't mention was that of those 20,000 jobs, 9,300 were in government, mostly in public education; the second largest increase was 5,700 in the category "leisure and hospitality". The problem, as I see it, with regarding the 20,000 figure too optimistically, is that the increase in teaching jobs is structural and not sustainable, and that the tourism jobs are the result of seasonal expectations now that Spring is here.

If Arizona wants to replace real estate construction and development (and the retail sector activity which rushes in to fill the vacuum in new developments) with tourism, it's going to have to have more than JUST sunshine and warm weather.

Arizona lost 327,000 jobs since December 2007. Even at a rate averaging 20,000 per month, it would take 16 months for the state merely to reach the previous starting point in terms of employment, GDP, and tax revenue from these sources (in real measures).

The question is, where will those jobs come from if the construction engine (and the retail sector dependent on it) isn't humming along?

The only way to get the housing industry restarted is to get rid of the housing glut. The necessary precondition for this is stabilizing and reversing high unemployment rates, but that merely prevents the glut from worsening. So, already, there is a chicken and egg problem, unless the Obama administration's proposed new mortgage rules (reducing or suspending payment of principal by the unemployed) are passed, have teeth, and affect a sufficiently large portion of those affected.

In Arizona, nearly 50 of homeowners are "underwater" (owing more than their homes are worth), and perhaps not coincidentally, about 50 percent of those who default are walk-aways (i.e., those who default voluntarily), according to CoreLogic, a real-estate data firm cited in a Business section article in a recent Arizona Republic article.

On top of this, additional population growth (and the jobs to support it) would be necessary to go beyond the mere whittling down of the housing glut and transform construction into an economic engine once again.

"I was surprised that Democrats finally had their Dr. Johnson moment. . .We should have had Medicare for all, etc. But this is a victory."

Provided it forms the basis for further, much needed reforms. There is every possibility of the camel getting into the tent once his nose is there. I'm quite favorably impressed with Obama's performance on this matter. Too bad he didn't do this a year ago instead of putzing around with his bi-partisan crap, but maybe that was a bit of political theater to demonstrate to the American public what needed to be done and why certain methods were justified (e.g., reconciliation to avoid a filibuster).

Note that even if Republicans manage gain a congressional majority in the next election, it is highly unlikely that they will have the two-thirds supermajority needed to overcome Obama's veto of their repeal legislation. It's a done deal, and the Republicans know it: all they can do is bleat their propaganda over and over in the hope of getting enough votes to give them a majority in one or the other houses; then they can be a success at what they do best: being the party of "NO".

"I read in the New York Times that Social Security is set to pay out more than it takes in. This will be taken even by the mainstream as a clarion call to screw over Baby Boomers who are already seeing the social compact enjoyed by the parents destroyed. How about raising taxes, especially on the rich..."

In fact, taking in more than it paid out (i.e., a cash-basis accounting surplus) was never the historical norm for Social Security: only since the early 1980s when Reagan (under the tutelage of Alan Greenspan) got Congress to "pre-fund" the program by means of a huge payroll-tax increase -- as if the program surplus would be banked instead of used to reduce the annual deficit (by then increasingly large -- another feature of the "Reagan revolution").

They could start by removing the cap on earnings (currently, income in excess of $106,800 is not subject to the Social Security payroll tax). Then, they could broaden the definition of "income" (for the purpose of applying the payroll tax) beyond the narrow definition of wage/salary earnings now used, to include -- but only for the wealthy -- income from rent, interest, capital gains, and other investment income.

I'd be interested to see figures on how far these two reforms would go toward meeting the increased strain on Social Security as the Baby Boom generation retires. It might well be that between the two reforms, the crisis would be met, or at the very least, postponed for decades.

"So is President Obama up to the job? I still don't know. Nancy Pelosi is the victor of health care, the LBJ. The president remains a cipher to me."

I may be misinformed, but I rather thought that it was the other way round: Obama proposed "his own bill" (with substantial advisory input and discussion) and his lieutenants in Congress (including Pelosi) imposed the party discipline necessary to get the votes -- though Obama himself did a great deal of traveling and lobbying of Democratic politicians in order to convince them that, among other things, any cache currently possessed by the Democrats among the electorate would be lost if his presidency could not bring home the bacon on the keystone issue of healthcare reform; so perhaps the lion's share of the credit should go to Obama in any case.

Sorry, that should have read "In Arizona, nearly 50 PERCENT of homeowners are underwater".

The 20,000 figure shows the lack of critical thinking in the media. The question is, how much does the 20,000 replace even the natural, organic growth of the labor force? Not much if at all.

Mr. Talton wrote:

"The question is, how much does the 20,000 replace even the natural, organic growth of the labor force? Not much if at all."

I assume you mean the growth in the Arizona labor force resulting from population growth within the state (i.e., births net of deaths) as opposed to an increase in population from immigration (either from other states or from south of the border).

Assuming that this is a proper construal, we should remember that aging also affects the size of the labor force, at least insofar as Baby Boomers increasingly reach retirement age and collect Social Security.

According to U of A economist Marshall Vest, Arizona's population growth from births net of deaths is about 55,000 annually.

http://www.azcentral.com/arizonarepublic/news/articles/2008/12/10/20081210population1210.html

Even assuming that this implies a need for that many net new jobs annually to keep up with organic growth -- not a realistic assumption since not every net birth means that somebody else reaches working age (it may be more or less) and since retirements will offset this in whole or in part -- wouldn't three months growth at 20,000 a month take care of that?

Anyway, before I decide about this I'd like to see some figures cited.

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