The New York Times has a good cautionary story today. It's about how people looking at low interest rates of conventional investments have been drawn to risky propositions to improve their retirement outlook. Dangerous business.
An Arkansas regulatory is quoted. Unsophisticated investors (and that's most of us) are being preyed on here, too.
...The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates.
Tens of thousands of them put money into speculative bets promoted by aggressive financial advisers. The investments include private loans to young companies like television production firms and shares in bundles of commercial real estate properties.
Those alternative investments have now had time to go sour in big numbers, state and federal securities regulators say, and are making up a majority of complaints and prosecutions.
...There are few good statistics on the extent of the problem nationally. But cases are mounting in the offices of regulators like A. Heath Abshure, the securities commissioner in Arkansas, where a majority of the 66 open securities cases involve complex investments sold to less sophisticated investors looking for a steady return.
This story, again, is an illustration of the folly of the beloved Ignorance Caucus notion that we should wreck Social Security and Medicaid and replace defined benefits with vouchers that give money over to Americans to invest for themselves and insure themselves as they choose.
Ten states began the New Year with increases in their minimum wage rates. According to this article, 19 states and the District of Columbia now have minimum wages above the $7.25 federal rate.
Arkansas, of course, is not one of the states outpacing the federal minimum wage rate. Far from it. It's one of a handful of states that either pay below the federal minimum or — worse in the case of some Dixie brethren — have no minimum wage at all.
Arkansas last raised the state minimum wage in 2006, to $6.25 an hour, now $1 below the federal rate. It covers employees not covered by the federal rate. (Not very well, obviously.) Some employees are even exempt from that lower rate. Arkansas's chamber of commerce lobby (which controls the legislature generally) caved to the last increase in the face of a constitutional amendment drive that would have indexed the state rate to inflation. In retrospect, the forces for a decent wage shouldn't have caved.
A tipster tells me a Democratic legislator plans to introduce legislation this year to make the state minimum $8.25 an hour. I haven't reached him yet to confirm. I'd like to predict that the new Republican majority would be open to legislation that helps low-wage workers, but ....
UPDATE: Rep. Butch Wilkins of Bono confirms he plans to introduce this legislaton. It's simple. He'd increase the minimum wage to $8.25 an hour effective July 1.
As you know there are a lot of people out there that are in need of help. These are people who are working for a living and not asking for a lot of help. The economy seems to be improving and now seems like the right time.
... You may recall in the 09 session I voted against a minimum wage bill sponsored by Rep. Nickels. At that time I thought we were headed into a deep recession and was worried about a loss of jobs that could accompany that bill. I feel much better about the economy at this time.
First-time jobless claims fell 12,000 to 350,000 in the latest week, the lowest level in more than four years, the U.S. government says.
The Arkansas unemployment rate dropped to 7 percent in November, from 7.2 percent the month before, but the size of the labor force still shrunk a bit.
With even the Pope now joining the twitterverse, I am apparently the last person remaining without an account. Need to get on it! U.S. Senator Mark Pryor announced today that he’ll be hosting his first-ever Twitter Town Hall this Thurdsay, December 6 at 1:30 p.m. Tweet your questions to him about the fiscal cliff and make sure to use the hashtag #AskPryor.
The Arkansas unemployment rate in October was 7.2 percent, up from 7.1 percent the month before. The workforce declined by 4,700 jobs.
Nocera also quotes bullyboy Republican Jack Welch as backing off from some of his overheated comments about supposedly corrupt numbers from an independent federal agency insulated from politics.
Here's what's important:
There is rough justice in the way things are playing out. Having spent the last year wrongly blaming the president for high unemployment, Republicans can only stand by helplessly as the unemployment rate goes down at the worst possible moment for them. Fox News scoured the data Friday, looking for signs that the economy wasn’t improving. They found some: high unemployment for African-Americans, for instance, and fewer manufacturing jobs.
But the data were largely overwhelmed by positive signals. In its revised figures for July and August, for instance, the bureau said that more jobs had been created than it originally estimated. People with only high school degrees were finding jobs. The number of people who had been out of work for six months or more was at its lowest point in three years.
Whether the Republicans like it or not, the economy is slowing getting better.
What kind of American would WANT bad economic results? Somebody who puts politics above country?
Now it's Slate with a cautionary tale about the rush by local governments to spend millions of taxpayer money to incubate technology parks, as Little Rock is doing under a plan hatched and controlled by the Little Rock Regional Chamber of Commerce.
The article mentions Louisville, hampered in its aim to do tech startups by a shortage of programmers. Uh, yeah, spec buildings don't count for much without somebody who can run the computers. Maybe, the article suggests, the focus on sci/tech is the wrong focus. Why not focus on creating incubation for, say, a national restaurant chain?
Check this excerpt, which is brilliant because it synthesizes precisely what I've been saying for years about the vision lacking in the continuing headlong rush by Little Rock and Arkansas to pass out corporate welfare dollars:
Having a pizzeria in your town is no great achievement, but having the corporate headquarters of a major international brand is. Given the realistic limits to how much high-tech growth your typical city can expect, the smartest move may be to look around at what great small businesses you already have and ask what they need to thrive and grow.
So what exactly do they need? Kauffmann’s analysis of the Inc. data found that such conventional measures as local venture capitalist activity, R&D spending by local universities, taxes, and patents per capita didn’t matter. The level of college graduates with degrees in technical subjects, by contrast, makes a difference, as does the overall ratio of new businesses to old ones. Having good local schools and being the kind of pleasant place to live that might attract skilled workers also turns out to be a generally sound growth strategy. The nonsignificance of taxes is itself an interesting finding, since all else being equal people prefer not to pay taxes. The flipside is that taxes finance public services, which may do more to attract firms and workers than taxes do to deter them.
The moral of the story, in other words, is that becoming a friendly place for successful startups is mostly about the fundamentals. Startups come in all kinds of sectors, and the biggest driver of startup success is a deep local pool of skilled labor. That means being a great place to launch a business and being a nice place to live are deeply related goals. Good schools, solid infrastructure, appealing cultural amenities, and a reasonable balance between taxes and public services mean more than a supercomputer.
Shazam! Good infrastructure. Good schools. A good place to live, with cultural attractions. These things grow communities. Double shazam! Taxes are not much of a factor for industrialists, except that a good tax base generally provides infrastructure, schools and cultural amenities. In Little Rock, though, the same-old, same-old prevails. Pour $28 million into an office building — and destroy a neighborhood while you're at it — and we all will be trickled upon.
WHILE WE'RE AT IT: States just can't quit passing out lucrative corporate welfare to movie makers, despite growing questions about the cost/benefits of the incentives.
Arkansas apparently tracks the national trend on rising home prices, though the number of home sales fell in July and August, the Arkansas Realtors reports.
The number of sales statewide dropped, year-to-year, by 1 percent in July and 5 percent in August. But average sales prices rose year-to-year by 13 percent in July and 10 percent in August.
The Arkansas unemployment rate held steady in August, at 7.3 percent, but the total workforce dropped slightly.
The Arkansas Arts Center has laid off three marketing employees in favor of outsourcing the work to Stone Ward. Leslie Peacock's Eye Candy blog has the details.
THE job numbers in recent months have been disappointing, encouraging Republicans who hope that the slow pace of recovery will cause voters to reject President Obama.
But buried in the numbers was one accomplishment that serves only to emphasize how poorly the American economy has performed since 2000. The pace of creation of jobs in the private sector during the current administration is now greater than the pace in either of President George W. Bush’s terms in office.
More inconvenient facts for those who live in the reality-based world. The faith-based liars of the Romney/Lyin' Ryan campaign will find them no obstacle. They'll have a re-spin quicker than you can run a three-hour marathon.
I fear the market may take back today what it gave yesterday. From CNN:
The U.S. economy added 96,000 jobs in August, down from 141,000 in July, the Labor Department said today.
The report is well below forecast and another sign of a fragile economic recovery. Economists polled by CNNMoney were expecting 120,000 jobs to be added.
Economists say at least 150,000 jobs must be created each month simply to keep pace with the growing population.
Meanwhile, the unemployment rate fell to 8.1% from 8.3%.
White House response:
The New York Times takes an in-depth look today at whether the story of luring foreign car manufacturers to the U.S. could hold a lesson for bringing tech manufacturing (think iPads and other consumer electronics) to the U.S.
For years, high-tech executives have argued that the United States cannot compete in making the most popular electronic devices. Companies like Apple, Dell and Hewlett-Packard, which rely on huge Asian factories, assert that many types of manufacturing would be too costly and inefficient in America. Only overseas, they have said, can they find an abundance of educated midlevel engineers, low-wage workers and at-the-ready suppliers.
But the migration of Japanese auto manufacturing to the United States over the last 30 years offers a case study in how the unlikeliest of transformations can unfold. Despite the decline of American car companies, the United States today remains one of the top auto manufacturers and employers in the world. Japanese and other foreign companies account for more than 40 percent of cars built in the United States, employing about 95,000 people directly and hundreds of thousands more among parts suppliers.
It's a complicated topic. Tariffs, trade practices, tax breaks, work ethic and lots more figure. But it's important as the U.S. gropes with ways to enhance the manufacturing sector.
The U.S. economy added 163,000 jobs in July, better than expected, but the unemployment rate still rose a tick, to 8.3 percent.
I'll play Krugman: Imagine how things would have been without the too-small, Republican-curtailed stimulus. Subtract a horde of auto workers, for starters.
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