- Last Updated on Wednesday, 11 March 2009 19:53
- Published on Wednesday, 11 March 2009 19:53
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When times are good almost no one pays attention to economic indicators. But when times are bad, it’s an entirely different story.
All at once, people who could have cared less about Gross Domestic Product, the Consumer Confidence Index, or such arcane statistics as new orders for durable goods, start hanging on every economic announcement. They’re looking for signs that things are improving, but more often than not in the current environment, are bracing for more bad news.
However, perhaps the most watched indicator, and the one that can spawn optimism or by itself bring even greater anxiety, is unemployment. This is the statistic that hits home and according to the Bureau of Labor Statistics, in February, reached 8.1%. Looking at it historically that’s not as bad as it sounds. In the early 1980’s unemployment was hovering around 9% and the economy managed a very rapid turnaround. But, if you’ve lost your job and can’t find another, that comment isn’t very helpful.
Many people would be surprised to know just how much trouble the government goes to in order to calculate the unemployment rate. While the unemployment statistic is derived by the Bureau of Labor Statistics, a part of the Department of Labor, the survey data itself is collected by the Census Bureau. They’re under the Department of Commerce. What can I say? It’s a surprisingly collaborative undertaking.
Each month the government surveys some 60,000 households to develop what’s called the “current population survey.” This data is collected by mail, by phone, and even in one-on-one interviews. The Census Bureau, and we know they’re a nosey bunch to begin with, ask a lot of questions in this survey and among them are questions about who has a job and who doesn’t.
There are also follow on questions about how recently a member of the household was laid off from work; was their decision to leave work voluntary; are they actively looking for work; are they receiving unemployment insurance; and on the less optimistic side, are they discouraged and not actively seeking employment.
This gives the Bureau of Labor Statistics a lot to work with in calculating their monthly summaries. The basic unemployment statistic we’re used to hearing is a simple calculation. It’s the number of unemployed, defined by what’s called the U3 statistic, which represents those who are unemployed but willing to work, divided by the total labor force. Easy enough, but nothing is ever quite that simple in economics. The details get a bit more complicated. For instance, out of the roughly 200 million who make up our prospective workforce, the number includes the military. It also includes people in prison. Before the 1980’s neither one of these groups was used in the calculation. It’s been said that the only reason these two groups are included is to make the unemployment rate seem lower.
However, the number that probably warrants more attention is simply in the definition of who is unemployed and who isn’t. The Bureau of Labor Statistics identifies several levels of unemployed. From those who are voluntarily out of work, to those actively looking for work, those who are part-timers, and those who have become discouraged and don’t bother anymore. However, only those actively looking for work are included in the monthly statistic.
It’s also been argued, and the data from this era isn’t as thorough as it is today, that the great depression’s 25% unemployment rate is well short of what it actually was. Some economists think that if itinerant workers (there were roughly 1 million Americans in this category during the depths of the depression), part-timers, and discouraged workers are factored in, the number reached almost a third of the workforce. For many people who lived through this era that doesn’t sound unreasonable, but it’s unlikely that anyone will ever have a firm grip on the data or the actual statistic.
The current calculation, while more precise than those available 80 years ago, still doesn’t represent a resolution of that debate. While this month’s number is 8.1% (high when you consider that it was 4.4% a year ago), when other types of unemployment data collected in the government’s survey are factored in, the number increases considerably. This data, given the ominous references of U4, U5, and U6 – the unemployment statistic we hear on the news is called U3 – includes part time workers, discouraged workers, and the rather sad sounding reference, marginally attached workers. When these numbers are included, the number gets closer to 13%.
However, data, and what it means, can be debated by economists for hours on end. In fact, this discussion on how to calculate the national unemployment rate has been raging for years. But what make the unemployment rate so unique is that unlike all the other economic indicators it’s=2 0personal.
Everyone, even those who have never been unemployed, feels a touch of anxiety every time they wait for the announcement of the monthly unemployment report. Hopefully though, it won’t be long, before the rate, instead of increasing, levels off, and begins what we all hope will be a steady decline.
- Last Updated on Wednesday, 04 March 2009 18:02
- Published on Wednesday, 04 March 2009 18:02
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Every Governor wants a legacy. But in Virginia, with only one term in which to leave their mark, it’s a tough thing to do.
Mills Godwin in his first term created the Community College system.
Linwood Holton presided over the enactment of a new state constitution that for the first time in a century had no reference to segregation or discrimination.
John Dalton focused on efficiency and a lean government.
Chuck Robb and Jerry Baliles put their emphasis on building the state’s education system and George Allen did away with parole and created the standards of learning.
More recently, Mark Warner succeeded in bringing both sides of an increasingly hostile legislature together to put Virginia’s financial house in order.
However, Tim Kaine, a decent man, well liked and generally thought to be a good governor, has had a tough time creating a legacy. Certainly not one that fits into the mold of his predecessors. As the last legislative term of his administration comes to a close, the Governor can’t point to any landmark legislation that be considered the Kaine legacy.
This isn’t necessarily his fault.
The Governor has tried hard to propose new ideas and new initiatives, but none managed to make it into law. Unfortunately, Kaine just wasn’t able to navigate the shoals of politics in Richmond. He faced a doggedly partisan and conservative House of Delegates. The State Senate was often an ally, but he was never able to do what Mark Warner did and find much common ground with the House.
His transportation bill was a good example. This was his signature issue in 2005, but the legislature, and in particular the House, never gave him an inch. He proposed a long term capital fund to support state transportation improvements. Under this notion, funding for transportation improvements would be separate from the operating budget and would have its own source of funds.
For the thousands of Virginians routinely stuck in traffic on I-81, I-66, I-64, and I-95, it made a lot of sense, but the legislature wouldn’t budge. They nixed the idea in 2006.
Later in 2007 the Governor, unfortunately, put his signature to an embarrassing bill, crafted by the House and Senate that raised transportation money from regional authorities and created a special abusers fee for driving infractions. The former was declared unconstitutional and the latter unleashed such a firestorm from drivers that it was quickly repealed.
Alas, that was just about it when it came to the Governor’s legacy on transportation.
Pre-kindergarten was another idea the governor put at the top of his list. It too was an excellent idea. Unfortunately, it didn’t get far. It needed funding and the legislature, once again, just wasn’t behind it. The Governor couldn’t craft a compromise with House Republicans and the idea continues to languish.
The one success, and this is to his credit, is the smoking ban. Thanks to the unlikely, but welcomed cooperation of Speaker Bill Howell, Virginia, the home of the tobacco industry has a ban on smoking in restaurants. Restaurant workers and non-smokers who have breathed in unwelcomed second hand smoke for years are grateful.
However, it’s important to note that Governor Kaine hasn’t been like most Virginia governors. Usually, even those with higher ambitions aren’t all that partisan. It’s sort of a Virginia thing.
But, Kaine never shied away from his Democratic Party identity. This might have been part of his problem in dealing with a GOP legislature, but it also had its returns. During his administration Virginia moved steadily towards the Democratic column. During his tenure, and thanks to his hard work, the State Senate is now dominated by the Democrats while the House of Delegates has added eleven new Democratic members.
At the same time, during his administration, the state elected two Democratic U.S. Senators and watched as a majority of its Congressional delegation went to the Democrats. Most substantially, for the first time in forty four years, Virginia voted for a Democrat for President. And Kaine, an early Obama, supporter was rewarded with the Chairmanship of the Democratic National Committee.
Kaine’s legacy, while not so remarkable when it comes to legislation is likely to be strong for other reasons. He will be the Governor who helped guide Virginia away from its long Republican tradition. He organized, planned, and worked tirelessly to shift the politics of the state and he succeeded. Thanks to Tim Kaine nothing from this point is going to be the same.
- Last Updated on Wednesday, 18 February 2009 05:00
- Published on Wednesday, 18 February 2009 05:00
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It wasn’t much of a news item. I guess it was a slow news day, because it got picked up by news services all over the country. But the White House, shortly after President Obama took office, announced that it had lost its e-mail service.
The outage didn’t last long, but the Obama White House, perhaps one of the most technology savvy administrations we’ve ever had, was at a loss as to how to handle the situation.
How do you live without e-mail?
Fortunately, some of the older staff, thinking back to their younger days, managed to keep things rolling. Instead of the constant clicking of keyboards and blackberries, the staff used the phone, and in several cases talked with their cohorts directly.
In many modern offices these are all but forgotten skills. The White House staff even found a stash of “while you out” phone message pads, no doubt left over from the Nixon Administration, so that bewildered White House staff could return phone calls.
Fortunately, before they reached the end of their patience, the e-mail servers, the gadgets which make modern office e-mail work, came back on line. Once again, the first President ever to have a Blackberry of his own, could, like the rest of us, go back to the constant e-mailing that defines modern work life.
I am, I have to admit it, as hooked on e-mailing and instant messaging as anyone can be. I have been through several blackberries, and yes, have had the infamous blackberry thumb.
For those of you not up on these terms, blackberry thumb is what you get when you hold your blackberry in one hand and use your thumb to send messages. It’s a form of muscle strain. The only cure is to stop trying to send messages using one hand, or even to stop using the blackberry to send messages altogether.
Though it’s estimated that 73% of Americans, and nearly 1.5 billion people worldwide, have some kind of access to e-mail, there is a move in some companies to have e-mail free days. This may or may not be a good idea, but the goal is to encourage more interpersonal contact. Rather than e-mailing customers, these companies want their sales agents, to talk to them directly.
The same is true for their fellow employees.
Instead of e-mailing the person in the next cubicle, which is more common than you think, they are encouraging face-to-face contact. It’s been noted that the social skills for some employees decline because they become so dependent on e-mail. The hope is that an e-mail free Friday might reverse this trend.
There also one thing many email users forget. E-mail, once it’s sent takes on a life of its own. An e-mail, admitting to some indiscretion, voicing a particular prejudice, or sent went you’re angry, can, depending on who you send it to, be forwarded to possibly hundreds, if not thousands of people.
In Virginia e-mail sent to or by public officials is bound by the requirements of the Federal Freedom of Information Act. In other words, if you send an e-mail to your county supervisor that you would prefer not be shared with the rest of world, be careful. There have been several instances, all relatively recent, where citizens and various groups have requested copies of the e-mail traffic for county supervisors or local school boards.
While not that exciting I doubt that the citizens writing their public officials realized that their messages, once they hit that send button, had become public property.
E-mail has another serious drawback.
It makes it a lot easier to send a message when you’re angry or when you don’t know all the facts. I know, because I have sent a couple like that. Perhaps one of the best teachers in this regard was Winston Churchill. Winston didn’t have e-mail, but he did write a lot of letters, and some of them, depending upon his mood could be caustic. So, Churchill, having learned his lesson over time directed his staff to hold his outgoing letters until the next day.
His files include dozens of letters that he wrote and never sent. You can do that with e-mail too, and a lot of people would be wise to learn that feature. I have.
The number of e-mails that get sent each day probably numbers in the billions. That means that e-mail free Fridays could just be a passing fad. But from time to time, it might be nice, if instead of an e-mail, we actually spoke to our office mates, or that fellow down the hall. You know, the one you’ve e-mailed, but never met. He might turn out to be a lot more interesting in person.
- Last Updated on Wednesday, 11 February 2009 20:15
- Published on Wednesday, 11 February 2009 20:15
- Hits: 565
Virginia, in the 21st century, has a diverse economy. There is manufacturing, mining, all sorts of agricultural products, a strong financial services industry, research and high tech engineering.
However, there was a time, not that long ago, when tobacco dominated our economy. Just 25 years ago the tobacco industry was responsible for 54,000 jobs in the Commonwealth. Today it’s substantially smaller. Until recently, save for some crusading anti-smokers who didn’t mind tilting at windmills, no one would ever think of uttering a word about regulating the industry or for that matter the consumption of its products.
Indeed, tobacco occupies an almost mystical part of Virginia’s history. If it hadn’t been for John Rolfe’s introduction of tobacco to the Virginia Colony back in 1612, it’s doubtful that the struggling settlement would have survived. The colonists had tried to make money in gold, silk, soap ash, and timber, but none of these were successful. It looked like the Colony in Virginia was headed for failure. But, tobacco changed all that.
Almost over night, the Virginia Colony turned into a financial success. Virginia tobacco, whose original breed was based on a plant grown in Trinidad, was in demand all over Europe. Fortunes were made and dynasties secured. Tobacco, as the lynchpin of the state’s economy was secure.
However, those days are past. Tobacco farming and cigarette production is still an important segment of our economy, but other concerns, about health and second hand smoke are finally being heard. Earlier in the year, the legislature considered an increase in the tobacco tax. It didn’t make it. But one change, that’s on the verge of becoming law, and frankly I never thought would see the light of day, is a restriction on the consumption of tobacco in restaurants.
There is strong statistical evidence that smoking isn’t just harmful to the smoker, it’s also bad for those around them. According to the Virginia Department of Health some 1,700 people die because of the effects of second hand smoke. Restaurant workers in particular are considered uniquely vulnerable since they have to put up with the smoke for their entire shift. The Governor has been a supporter of restricting tobacco use in restaurants for several years, but his proposals haven’t gotten very far in the past. However, this year it’s a different story. In a move that surprised both sides, Speaker of the House Bill Howell (R-Stafford) put aside partisan politics on this issue and has worked with Senate leaders and the Governor to craft a compromise bill. It’s one that is for the most part acceptable to all sides. It’s not an outright ban, but it represents the first statewide attempt to restrict smoking in a public place and it’s a major step forward in promoting public health.
Under the proposal smoking will be banned in restaurants. However, the owners, if they want to continue to allow their patrons to smoke, will be obliged to construct a separate and sealed smoking area. Some facilities are likely to do this while others might find it easier just to go along with the ban. Interestingly enough many restaurant owners don’t mind the idea of a ban, just as long as it applies equally to their competitors.
The hard core no-smoking advocates, and some of them aren’t happy with this deal, wanted a complete ban. No smoking in a restaurant, at all, no matter what. This has worked just fine in some states, but this is Virginia. Given the politics of the state, and its love affair with tobacco they should realize that this is a policy change of historical proportions and welcome it.
On the other side of the spectrum there are the folks who note, rightly, that tobacco is a legal product and further say that interfering with its consumption violates individual rights. They aren’t too interested in the second hand smoke argument. They consider the statistics dubious and want to smoke wherever they please.
At the moment, Phillip Morris, the state’s biggest tobacco producer, hasn’t taken a position on the ban, while the Virginia Hospitality and Travel Association is opposing it. However, with a majority of the State Senate, the strong and possibly firm handed support of Speaker Howell, Virginia, in an amazing step is likely going to regulate public the consumption of tobacco. From a public health standpoint this is a change that can’t come any too soon. It’s been said that the Virginia General Assembly, given its deep divisions and partisan hostility, has trouble agreeing on whether it’s day or night. Let alone passing needed legislation. However, if this bill passes, then all I can say is - nicely done.
- Last Updated on Wednesday, 04 February 2009 18:01
- Published on Wednesday, 04 February 2009 18:01
- Hits: 780
The only way to describe our current economic situation is as a modestly controlled panic. The numbers do most of the speaking. Unemployment in December was 7.2%, announcements by large companies of potential layoffs reached over 100 thousand last week alone, and many expect the number out of work to be substantially higher in February and March. It’s even possible, though I hope not, that the jobless rate could hit 10%. If so that would be the worst unemployment data since 1940. At the same time the Gross Domestic Product data isn’t good either. By the standard definition, namely two quarters, back to back that show a contraction, we’ve been in a recession for months now. However, the revised data for the fourth quarter of 2008 showed a drop of 3.8%. If you factor out the gains brought about by exports the number is closer to 5%.
But there is more going on than just a run of the mill recession. These recent numbers have all pushed the credit crisis, some would argue, the driving force behind this recession into the background. But, it’s still there. Banks are showing enormous losses, their asset values have dried up, and no one seems to have a grasp on just how much bad debt is out there. In trying to stem the bleeding the Department of the Treasury has already used up half of its bailout money. Originally Treasury’s plan was to buy bad assets and get them off the books. However, once they realized that this was just too hard, they turned to buying bank stock as a means to improve the capitalization for individual banks. It’s hard to tell whether it’s helped or not. The banks, in a sense, as the government owns more and more of their stock, are becoming nationalized, and the Treasury and the Administration want the other half of the bailout money to keep the process going.
All of this has created a crisis mentality. Washington and the new President want to do something. They sense, rightly, that the current economic crisis could be the first step in a much deeper contraction. That’s the argument behind the stimulus bill. The President, who began working on this before he was inaugurated, is pushing this $819 billion bill as a way to jump start the economy while at the same time making some needed investments in infrastructure, research, and education.
It’s appealing, but it’s also an incredibly huge amount of money. This is an expenditure that’s on top of a nearly $1 trillion deficit President Obama inherited from President Bush and the $700 billion financial bailout that the Congress approved last year. Added together this will put all other examples of deficit spending to shame. All told, the national debt, which just thirty years ago was below a trillion dollars, will likely reach or exceed $12 trillion.
The bill, no matter what the GOP says or does, is likely to pass. The President has the votes and the measure is popular with the country. Even a majority of GOP governors are supporting it.
But the question remains, will this bill do any good? That’s really hard to say. Is it an investment in job creating enterprises? Is it a broad investment in American infrastructure? Or, is it just a collection of favorite causes and projects? The answer is that it’s probably all three.
The current bill, passed by the House and headed for the Senate, is so big, with so many pieces, that it’s unusually hard to analyze. According to the House Appropriations Committee there is $275 billion for tax cuts. There is $90 billion for infrastructure, with roughly $30 billion of that for roads and bridges. There is $16 billion for expanding research facilities, $79 billion to help school districts that have been hard hit by the recession, $16 billion for the construction of education facilities, and $54 billion for renewable energy investments. Mixed in with this menu of new projects and programs is $130 billion to help the unemployed, $87 billion for Medicaid, $6 billion to build broadband networks, and a billion for veterans health care.
It’s a massive bill, and the numbers are staggering, but some of the thinking is that this massive infusion of funds could have an immediate impact on confidence, stemming the downward slide, while at the same time, promoting long term competitiveness and productivity.
To many, the Republicans included, it’s just a lot of spending and in the House, to a member, the GOP voted against it. Needless to say, some of their concerns might be justified. It’s a big bill, maybe too large and too diverse, with too much spending that doesn’t hit at the heart of the problem. However, at the same time, the current economic downturn isn’t like anything most of us have experienced. It feels like a meltdown, and President Obama isn’t anxious to follow in the shoes of Herbert Hoover and just watch while the situation deteriorates. This bill is a bit of a gamble. It may, or may not work. But right now, to borrow a phrase from Franklin Roosevelt, “one thing is for sure…we have to do something.”
- Last Updated on Thursday, 29 January 2009 03:03
- Published on Thursday, 29 January 2009 03:03
- Hits: 639
The Democrats in Virginia are riding high. Election 2008 was the culmination of one of the greatest comebacks in political history. Just a few years ago it looked like the Democratic Party of Virginia was headed for permanent minority status. However, beginning in 2001 things started to change. They captured, then held the governor’s mansion, took both U.S. Senate Seats, a majority of the State Senate, closed the gap in the House of Delegates, and last year, captured a majority of Virginia’s delegation to the U.S. House of Representatives. They also managed victories in dozens of local elections throughout Virginia.
The Democrats found a formula for victory and have managed to make it work in several successive elections. However, taking my Latin lessons from the movie Patton, they should remember the phrase “Sic transit gloria mundi.” It translates loosely into this bit of wisdom. “All glory is fleeting.” The advice is sound and applies just as well to politics as it did to ancient Roman generals. The tide in politics can change rapidly, and over confidence and even arrogance, something I sense in the party at the moment, can speed up the process considerably.
Election 2009 is supremely important to both parties. The Republicans want a comeback and the Democrats want to maintain their hold on state government. This is particularly important with redistricting coming up. The tide, for the most part should be towards the Democrats, but politics isn’t always that predictable and the Democratic Party is in a more vulnerable position than they seem to realize.
The big race this season will be for the Governor’s mansion. The Republicans, by virtue of winning the so-called down ticket races four years ago, have an advantage. They have a ready front bench of candidates who have already run statewide. What’s more, their only contested nomination is for Attorney General. Bob McDonnell, the current Attorney General is running for Governor, and Bill Bolling is running for reelection as Lieutenant Governor. It’s all pretty much decided.
The Democrats on the other hand are in the midst of a contentious primary. It looked like a simply fight between Delegate Brian Moran and Senator Creigh Deeds. Neither is a household name, but both are credible candidates. Moran understands Northern Virginia, and Deeds has a base in the southwest. But, then, and this is where the race took a turn for the weird, Terry McAuliffe, a Clinton intimate, and former chair of the Democratic National Committee decided he wanted to be Governor. He has no experience in Virginia politics and for that matter has only limited knowledge of the state itself. But he is in the race, he is energetic, and he can probably raise more money for the primary than both of his opponents combined.
However, he is, if the Democrats think about it, just about the worst potential choice they could make. Democrats in Virginia, as a rule, are moderate and when they run candidates who are moderate, they tend to win. This, by necessity, involves keeping a little distance between themselves and the national party. It can be argued that Virginia’s support for Obama in 2008 is a sign that things are changing. It probably is, but it’s doubtful that Virginia has changed its entire political culture overnight. When it comes to state politics, a moderate Democrat, running on a platform focused on statewide issues, the budget, schools, and transportation, is still the party’s best choice. Running a well known national liberal with no ties to the state just doesn’t seem like a good idea.
There is also the decision by the Governor to become Chairman of the Democratic National Committee. He says it is a part time job and it won’t affect his performance as Governor. Maybe it won’t, but the perception that he is taking time away from his duties as Governor, while the state is struggling sounds like good campaign fodder for the Republicans. Frankly, from a mildly partisan perspective, and if you haven’t figured this out yet, I lean towards the Democrats, I wish he hadn’t taken the job.
The Democrats still go into this election with a lot of advantages. Their coalition, anchored in the Northern Virginia inner and the outer suburbs, as well as support in the Hampton Roads area, has held. However, the Republicans running as outsiders in a tough period for the state and refocusing their message to be more sympathetic to Northern Virginia interests could prove to be powerful opponents. The Democrats need a strong candidate and a focused campaign. They can’t afford to take their success for granted or to assume that a winning streak can’t be broken. Because, in the lesson they gave to the Republicans, they proved it can be.