Cry Me A Hipster New York Times

The New York Times went with an article today on the woes of the hipster class in these trying times. In what seems like is becoming a series of articles, the Times continues to highlight the rich who cry poor in this recession. Unlike the poor elites who have trouble getting by on less than half a million a year, today's article focuses on the privileged youth that live in gentrified Williamsburg.

From The NY Times:

Luis Illades, an owner of the Urban Rustic Market and Cafe on North 12th Street, said he had seen a steady number of applicants, in their late 20s, who had never held paid jobs: They were interns at a modeling agency, for example, or worked at a college radio station. In some cases, applicants have stormed out of the market after hearing the job requirements.

“They say, ‘You want me to work eight hours?’ ” Mr. Illades said. “There is a bubble bursting.”

Famed for its concentration of heavily subsidized 20-something residents — also nicknamed trust-funders or trustafarians — Williamsburg is showing signs of trouble. Parents whose money helped fuel one of the city’s most radical gentrifications in recent years have stopped buying their children new luxury condos, subsidizing rents and providing cash to spend at Bedford Avenue’s boutiques and coffee houses.

While the Village Voice feels bad for the way the Times rips these carefree 20-somethings, I would rather the Times use ink in more industrious ways.

The article includes an in-depth exposé on trustafarians and their parents. Summing it up, the balance scale has tipped, meaning less money from the parental units and more time in finding a job that pays for Williamsburg apartment life. Now, it isn't as if I don't sympathize a little, but really, the Times should be focusing more on the real pain the recession is causing, like the foreclosures in Southeast Queens and the rise in crime there that the Bloomberg Administration would love to keep under wraps. Now to be fair, the Times does have a "Living With Less" section online, but many of those stories do not get the prominence in the paper that they deserve.

Unemployment Keeps Climbing

Wall Street may be hopeful because we only lost 539,000 jobs in April (though the number will probably be revised upward in a week or so) but for those people and the 5.7 million who are already out of a job due to this recession there is no reason to celebrate. We are now at our worst levels of unemployment since 1983 and there is no reason to doubt that we'll be surpassing the bad times of the early 1980s.

More And More Of The Middle Class Face Eviction In NYC

Unless you've been living in a cave for the last year or two, the fact that times are tough is inescapable. Foreclosures are up, the availability of jobs has plummeted and the economy is in the toilet. So I guess it should come as no surprise that here in New York, tenants are having more trouble keeping up with their rent. The evidence from the city's housing courts undeniably suggests that the middle class is starting to have a serious problem.

From the NYT Cityroom:

Lawyers, judges and tenant advocates say the staggering economy has sent an increasing number of middle-class renters across New York City to the brink of eviction, straining the legal and financial services of city agencies and charities. Suddenly, residents of middle-class havens like Rego Park in Queens and Riverdale in the Bronx are crowding into the city’s already burdened housing courts, long known as poor people’s court.

No one knows exactly how many of those kinds of tenants are facing eviction; the city’s five housing courts, and two smaller community courts that hear similar cases, do not keep data on the income level of litigants. Overall, court records show that the number of cases filed citywide for nonpayment of rent jumped about 19 percent in the first two months of 2009 from the same period last year, to 42,257 from 35,588.

These numbers are sad, but not surprising given how the economy has suffered in the last year. However, the blame cannot be put squarely at the feet of the laid off renter. Rental prices have been skyrocketing in this city for years and the fact is, rentals are too damn high for a large percentage of New Yorkers. True, prices are starting to come down but with so many people spending half their income on rent, when the income disappears the ability to stay in their apartment is quickly cut off.

What we need to do is pull together and pass rental reform in the city and across the state. Whether or not Paterson, Smith and Silver can, or will want to do that is up for debate.

One in Ten Americans On Food Stamps

The debate between this fiscal crisis being a recession and a depression has been increasing as do the length of the rolls displaying the recently unemployed. Nobody wants the economy to be in bad shape, but acknowledging the extent of the damage is the first step in dealing with it. For the unrealistic optimists still out there, take heed of this sobering fact, one in ten Americans are now on food stamps. Yes, one in ten.

From Yahoo News:

A record 32.2 million people -- one in every 10 Americans -- received food stamps at latest count, the government said on Thursday, a reflection of the recession now in its 16th month.

Food stamps are the major U.S. antihunger program and help poor people buy groceries. The average benefit was $112.82 per person in January.

The January figure marks the third time in five months that enrollment set a record.[...]

Food stamp enrollment rose in all but four of the 50 states during January, said Agriculture Department figures. Vermont, Alaska and South Dakota had increases of more than 5 percent. Texas had the largest enrollment, 2.984 million, down 65,000, followed by California at 2.545 million, up 43,000, and New York with 2.211 million, up 37,000.

Here in New York, a figure of 2.211 million means that even more than one in ten residents receives food stamps. Those numbers only reflect the people that actually go out and seek assistance. Thousands, if not millions more across the nation make much tougher decisions, such as going hungry because they have to pay rent or for overly-expensive prescriptions.

Imagine now if the GOP would have gone through with their attempt to eliminate the food stamp program. It is good to know Obama won't let that happen on his watch.

Congressman Hensarling (R-TX) Equates Recessions With Freedom

Um, wtf?



I think Congressman Hensarling is confusing freedom with unregulated markets. When markets are allowed to run amok, volitality will increase and lives are easier to destroy (at the behest of making a few at the top very wealthy). As for the alternative Jeb, there are more than just one. It isn't just your view of corporate welfare free markets vs. communism. There are actually many ways the government can influence the economy while allowing for the buyers and sellers in the marketplace to make decisions for themselves. Though I guess it might be hard to admit that when you have to keep up the image of the "Party of No."

How Bad Are These Economic Times For New York?

A few less Starbucks stores in the neighborhood, a few more "For Sale" signs and landlords offering a free first month upon signing are all indicators in Manhattan at least that times have gotten tough. Seriously though, unemployment has skyrocketed in the city and across the country and life in NYC has gotten harder. The boom times of Wall Street's excess had the poor barely getting by and the affluent loving every moment, but hardly anyone expected it could get this bad, this quickly. Well, economists that have been paying attention knew about it, and now that the recession is upon us their portend for the future does not look so bright.

From The NY Times:

John Tepper Marlin

Former Chief Economist

City Comptroller’s Office

Some people have compared this recession to the Great Depression. Mr. Marlin’s view? It could turn out to be worse.

He is troubled that this time, the crisis is more global in nature, given the interconnectedness of the world economy. That means it affects more people, and it also means there are more people to blame: the aggressive peddlers of subprime mortgages in California; the proponents of deregulation, led by two powerful former members of Congress from Texas, Dick Armey and Phil Gramm; and the people he sardonically calls the “geniuses” on Wall Street.

“We’ve had the verdict — Wall Street is guilty — but what’s playing out here is the sentencing, and it’s not just Wall Street that’s being sentenced; it’s the rest of the world,” Mr. Marlin said.

And that is just one person the Times talked to. Others did not have much better news. Nicole Gelinas at the conservative-leaning Manhattan Institute predicts that even though property taxes are helping the city stem the bleeding, reassessments will lead to even further reduced revenues. Ronnie Lowenstein of the Independent Budget Office in NYC says for us to forget about those boom years if Obama follows through with re-regulating Wall Street (a good thing from a macro perspective, that's for sure). Still others suggest things aren't as bad or will not get as bad as the Great Depression or even the recession of 1982. Precautions have been put in place so that the city won't go bankrupt like it has.

Of course as the article says in the title, we should expect change. That means we need to not rely on Wall Street like we have and in my view, diversify our economy. Long before Bloomberg's ramped up gentrification plan, the city had a booming cultural economy that has been stymied by the Mayor and others like him in the past. We need to stop begging and pleading the large banks to solve all our fiscal woes because more often than not, they dig our holes bigger than we started out with.

One In Nine Houses Are Empty In The U.S.

Thanks to an unregulated economy and a housing boom that kept the system going for the last decade, the effects of that irresponsible growth are being felt throughout the country. GDP is down, jobs are being lost, businesses are going under and the houses that were built by the tens of thousands are being left empty. In fact, out of all houses in the country, one in nine are now vacant.

From USAToday:

Census numbers show:

• More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.

• About 3% of owned homes are vacant. In normal times, "maybe 1% should be vacant," Myers says.

• More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.

• Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

The numbers show that like jobs reports, the economic situation is much more precarious than in prior recessions. The vacancies show that an incredible amount of people are losing their homes in this recession. The statistics on what happens after a home goes vacant is murky though because it is hard to tell how many people go homeless and what category of homelessness they fit into. The USA Today article seemed to be worried about the security situation squatters brings, but the question of if the squatters were the former owners was not brought up. What we need to be concerned with are the people who no longer have a place to live and not so much the value of the neighborhood.

Unemployment Numbers Released Today Minimize The Problem By Half

The headlines this morning, even on the Huffington Post screamed about unemployment jumping 0.4% to 7.6%. These numbers haven't been seen in thirty-five years, but it is far from the reality of the actual problem we face. Unemployment in this country is a serious problem that continues to get worse, but that single digit number so many people see on their newsreaders is far from accurate. It is only one data point among five others that the Bureau of Labor Statistics uses to gauge unemployment. Their most comprehensive number, the U6, is actually at 13.9% and not even that gets the clearest snapshot of what is going on.

From DailyKos:

But even the U6 figure undercounts, according to other observers, including John Williams, who runs the subscription-only electronic newsletter Shadowstats.com. Williams hasn't yet posted his January calculations, but last month he put the jobless rate at 16.5 percent -- more than double the official rate. His figures include unemployed workers who have been left out of the overall count since "discouraged workers" were dropped during the administration of Lyndon Johnson and other downward adjustments were made in 1994. Those changes mean the official rate can't be fairly compared with the official rate in the 1980s, much less the 1930s.

Last month, Williams told Reuters: "I expect that unemployment in the current downturn, which will be particularly deep and protracted, eventually will rival, if not top, the 25 percent seen in the Great Depression."

According to increases reported at the BLS, Williams' number could be at or above 17%. A much more ominous report than 7.6 percent. The traditional media is trying to coat the story with the thickest amount of sugar as they can. While the media networks must address the seriousness of the problem, no one wants to make comparisons to the Great Depression. However, the American people are feeling the effects of this downturn, no matter what official number is touted.

What it all means is that we need a real, solid stimulus bill to be signed by President Obama as soon as possible. What a shame that Republicans and some conservative Democrats are being allowed to dilute the bill, when what it really needs is to be strengthened.

NYC Retail Real Estate Plunging Fast

Despite many, many denials from the Bush Administration over the course of last year, the recession has been upon us for quite sometime. The jolt from the stock market starting in September was only a part of what has been going on. Americans had been feeling the pinch and the pain for a long time now and it showed in retail sales this past holiday season. Due to that drop in sales, many stores will be going out of business and even in Manhattan, the evidence will be all around us as we walk through the streets.

From The NY Times:

“The national retail scene is a mess, and it is going to impact us,” said Gene P. Spiegelman, an executive director in Cushman & Wakefield’s retail services group. He predicted that demand for space would soften throughout the city’s many shopping districts this year, and in fact, landlords in some of the trendiest areas have already begun lowering asking rents.

Industry experts say they also expect the pace of store closings to pick up in February and March, after retailers have tallied the cost of exchanging unwanted holiday gifts for cash.[...]

Suddenly, retail brokers say, this is shaping up to be one of the best tenants’ markets in years.

“Tenants definitely believe that the market has flipped in their favor,” said Michael J. Hofmann, a senior managing director at Colliers ABR, who represents both tenants and landlords. He said the tenants he was working with were negotiating more aggressively with landlords. Their offers, he said, “are at levels that we never would have proposed six months ago.”

Landlords have gradually begun lowering asking rents, even in some of the city’s most desirable shopping districts. For example, average asking rents fell by 3 percent last year on Madison Avenue, ending the year at $1,057 a square foot annually. And asking rents fell by 5 percent in SoHo, to $263 a square foot, according to Cushman & Wakefield.

Even in the upside of this news, there is still misery and sadness. Even with those lower rents, finding the credit for business to help move into new retail space is practically non-existent. It is definitely a buyers'/renters' market, but having the cash or capital to make the deals is tough considering the economic environment we are in at the moment.

Job Losses Are Accelerating As The Holidays Approach

The Grinch is certainly getting his way as literally millions of workers are losing their jobs in just the last few months. Times are terrible all over the country and despite what people try to do on their own, the overall economy is suffocating people.

Job Numbers Continue To Get Worse....And Worse

No one has to tell you that things are getting bad out there in our economy, but there is plenty of information to prove it. The Bush Administration and John McCain tried to tell us that the fundamentals of the economy were strong, but thankfully most of us saw beyond their obfuscation of the truth. Now that Wall Street has been erratically swinging (mostly down) for two or three months, we are beginning to see how it affects everyone outside of the Financial District.

From CNBC:

U.S. employers axed payrolls by a shocking 533,000 in November for the weakest performance in 34 years, government data on Friday showed, as the recession inflicted a mounting toll on the U.S. labor market.

The Labor Department said the unemployment rate rose to 6.7 percent last month in the highest reading since 1993, compared with 6.5 percent in October, after widespread losses across the country's major industry sectors.[...]

That meant 199,000 more jobs were lost in September and October than previously thought and the total reduction in U.S. nonfarm payrolls for last three months was 1.256 million, with almost 2 million shed in the year so far.

Service-providing businesses alone shed 370,000 jobs in November, following a loss of 153,000 jobs the month before.

Yeah you read that right, over 1.25 million jobs lost in three months. Republicans in power avoided these brewing problems for years (as did neo-liberal Democrats) and now it is time to begin to repair the damage. Barack Obama can't possibly take the helm soon enough. The time for change can barely wait for January 20th, if only he could have started on November 5th.

Did The Iraq War Cause Our Recession?

Our current economic downturn is being attributed to many different things. That includes the price of oil, the housing crisis, the sub-prime mortgage fiasco and the ridiculous amount of national and personal debt that we hold in the country. But what about Iraq. We waste billions upon billions over there, that has to account for something....something many Republicans do not want to even accept as a topic for debate. Joseph Stiglitz, a Nobel Prize winning economist, does want to make it an issue. And I am willing to go out on a ledge and say that he can debate any Republican politician willing to argue the other side and it would be a cakewalk for Stiglitz.

From The Australian News:

Professor Stiglitz told the Chatham House think tank in London that the Bush White House was currently estimating the cost of the war at about $US500 billion, but that figure massively understated things such as the medical and welfare costs of US military servicemen.

The war was now the second-most expensive in US history after World War II and the second-longest after Vietnam, he said.

The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit.

"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.

That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.

Professor Stiglitz, an academic at the Columbia Business School and a former economic adviser to president Bill Clinton, said a further $US500 billion was going to be spent on the fighting in the next two years and that could have been used more effectively to improve the security and quality of life of Americans and the rest of the world.

The money being spent on the war each week would be enough to wipe out illiteracy around the world, he said.

Just a few days' funding would be enough to provide health insurance for US children who were not covered, he said.

Well it doesn't take a Nobel Award winner to tell me that we could have paid to wipe out illiteracy or provide health insurance for underprivileged kids with that blood war money. Maybe he could get through to Bush on this....or perhaps Congress. Too bad the former doesn't care and the latter is too weak to act to help their constituents.

Deficit Projected To Be Higher This Year, But Truly How High

It is almost hard to imagine, but eight years ago the White House and Congress projected a $5.6 trillion dollar surplus during the decade. Thanks to a number of things (mostly Bush's terrible leadership) our national debt will nearly double instead, coming close to TEN trillion dollars. Bush promised us that if we cut taxes to the wealthy we'd see a huge within a few years. Well he turned Clinton's surpluses into deficits reaching over $400 billion dollars but for a while a strengthening economy (on the outside) reduced the deficit to a mere $163 billion for 2007.

Now the non-partisan Congressional Budget Office is predicting the U.S. to be $250 billion in the red for 2008. Now that number is far from accurate. For starters, only $30 billion is factored in for the war. Bush has requested far more than that and based on how the Democrats in Congress like to grab their ankles for the President, they'll most likely give him all of it.

Then there is the economy. The CBO is predicting growth this year at a slower rate than 2007 albeit, but their data is not as current as the market's and you know where many people think we're headed to....recessionland. With a recession, revenues are going to be down substantially. And to cap it off, Democrats again (blogger smacks head into table repeatedly) have agreed in principle to support $145 billion in deficit spending to "fix" our economic troubles by ingeniously giving more tax cuts where we do not need them. Eight hundred dollars in my pocket is great for buying crap that I do not need, but there are much better ways for the government to spend $145 billion. You know, like paying down the principle on our national debt, or a health care system that works, or fixing our infrastructure, or.....you get my point.

Basically, that $250 billion dollar shortfall predicted by the CBO is probably going to end up being Bush's worst year yet. Oh and you know how timely it is for him to hand it off to the next guy (or gal) to truly fix his gigantic mess.

Remember What Inflation Is?

Honestly, I wasn't alive in the 1970s, but studying American history and hearing from those that are older than me I got a good grasp on what inflation can do to a society. Of course the Weimar Republic was much, much worse, but that is a whole nother' story. President Bush has been talking up our terrible economy by spraying cheap perfume on it with the help of the Fed lowering interest rates these past few years. Now all the tweaking is coming to crash upon us. Unemployment is up, the housing bubble is slowly deflating and now, inflation is skyrocketing.

From RawStory:

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

The year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs at the time for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

Meanwhile, the Commerce Department reported that retail sales fell by 0.4 percent in December. It was a worse-than-expected decline and increased worries that the country could topple into a recession.

Just another reason to deem President Bush the worst in our nation's history. And of course the Fed is a large participant in the failure of the economy....along with the credit card industry....and the sub-prime lenders....and mass consumerism....you get the picture.