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June 16, 2009

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Then there's the pathos of having a lightweight right-wing governor trying to stave off the catastrophic damage right-wing zealots in the legislature can inflict. It's impossible to imagine this scenario in any other period of Arizona history. It's all come together: the Total Explanation message machine, a collapsed MSM, and a detached business community no longer concerned about the place where it does business. After all, a company headquarters is just a generic office park in a generic suburb.

It is unstoppable and irreparable. The momentum didn't slow with Napolitano but simply churned underground waiting to resurface. Now the zealots can put their theory to the test. What is too good to be true will likely be too True to be good.

And the inevitable failure of zealotry will not chasten the True Believers or cause them to reflect. They are, after all, not simply correct but convicted in their own hearts. It could be Jesus, or Ayn Rand, or Ronald Reagan who hears their prayers, but the answers are always the same: you are absolutely right.

The elderly on Social Security, the military pensioners, the Wal-mart assistant store managers all share the certitude of white bootstappers victimized by political correctness, Hollywood, and liberals. They never asked anyone for anything. They earned it entirely on their own. They never whined or complained, either. Now it's payback time.

Loved this from the previous comment: "It is unstoppable and irreparable. The momentum didn't slow with Napolitano but simply churned underground waiting to resurface." And now it has.

Yesterday I read that the governor has approved the new Centennial logo, at the same time she has proposed zeroing out the AZ Historical Society. In 2012, we may not have any institutions left to tell the story we are supposedly celebrating, but we'll have a logo. And parades, 100th birthday furniture sales, and lots of bunting.

Stegner hit the nail on the head: we like to think we're rugged individualists, Marlboro Men like Charlie Keating doing our own thing, but the truth is we depend on federal largesse as much as or more than any other region.

Excellent post, Mr. Talton. The first part should be taught in local school history classes. (Tom Horne would never permit it.)

We really are lucky to have such a talented writer as Mr. Talton to share his informed views here, free of charge.

Incidentally, Brookings released a new study from its Metropolitan Policy Program tracking "economic recovery" in the top 100 metro areas.

Phoenix is 98th of 100 in one-quarter unemployment increase. However, interestingly enough, it's Number 1 in average wage increases over the same period.

According to the Arizona Republic, "That may indicate that fewer lower-skilled workers have been moving to the state's two largest metro areas and that recent job losses have occurred disproportionately among lower-paying industries, said the Washington, D.C., public-policy group."

But that still doesn't tell us what is producing the increase in wages, or whose wages, or how, given the unemployment problems and a decline in gross metropolitan product, as well as declines in housing prices and a rate of real estate owned property that places Phoenix near the very bottom.

http://www.brookings.edu/metro/MetroMonitor/~/media/Files/Programs/Metro/metro_monitor/metro_profiles/phoenix_az_metro_profile.pdf

http://www.azcentral.com/arizonarepublic/business/articles/2009/06/17/20090617biz-brookings0617.html


Perhaps I should clarify why I'm skeptical of Brookings' explanation, which at first glance makes perfect sense.

Let's take a simple illustrative model in which there are just ten wage-earning workers, paid in generic units, whose wages are distributed like this: 2,2,2,2,2,3,4,5,6,7

Then, the (mean) average wage is the sum of these individual wages divided by the number of wage-earners: (2+2+2+2+2+3+4+5+6+7) / 10 = 3.5

Now, if those who earn only 2 units are laid-off, and assuming that laid-off workers are not counted as persons for purposes of calculating the average wage (since none of them draws a wage) the average wage becomes: (3+4+5+6+7) / 5 = 5

So, in fact, simply by laying off workers, without increasing the wages of those who remain employed, the "average wage" has increased 43 percent: but note that this comes from a decrease in employment of 50 percent.

Now, this is the maximum increase in the average wage you can get. If instead, for example, four of the lowest wage earners are fired, along with the guy making 5 units, the average wage is: (2+3+4+6+7) / 5 = 4.4

and this is an increase in the average wage of 26 percent from a decrease in employment of 50 percent.

What I don't see, then, is how you can get a 2.6 percent increase in the average wage from a nearly identical 2.9 percent decrease in employment over the same period, as shown by the Brookings figures, simply by firing low-income workers without some increase in the wages of some remaining workers.

Now, maybe there is a perfectly sensible explanation for this involving a different set and distribution of concrete numbers (both wage and employment figures), and I'm just not math-savvy enough to realize it. But that's why I'm skeptical of Brookings' proposed explanation as reported by the Arizona Republic.

P.S. Note that the smaller the percentage of the workforce laid-off, the larger the difference between that percentage and the percentage gain in average income thereby.

For example, if only one of the ten employees is laid off (one of those earning 2 units) then the average wage is: (2+2+2+2+3+4+5+6+7) / 9 = 3.7

In this case, the average wage increases less than 6 percent for an employment decrease of 10 percent.

The point being, that for an employment decrease of 2.9 percent, I would expect an average wage increase of much less than the 2.6 percent shown even if all of those laid off were low-wage workers, if the effect were to be attributed to this.

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