Economy

Finally parts of the U.S. might see some real internet speeds:

Google says it will run fiber-to-the-home trials at the astounding data speed of 1 gigabit per second. They'll sell this service at "a competitive price" to 50,000 people, possibly rising to 500,000 people.

It's at this point that I'd like to toss around some choice slang that is not acceptable when printed under the NPR banner. But I can't. So I'll just leave it at this: Holy cow!

I can't get past that speed number: One gigabit per second. Google says that's about 100 times faster than most home broadband connections. I'd say it's more than 100 times faster. My DSL connection is certainly not running at 10 Mbps. This is the kind of number that makes you sit back and wonder, if they can do that, why isn't someone else -- a dedicated ISP, for instance -- already doing it?

Internet speeds in the United States suck to the point that the birthplace of the internet is now ranked 28th in the world for internet speed. When it comes to broadband penetration, the U.S. is slightly better, ranking at 20th. So why hasn’t the existing ISPs been doing anything? Simple – they are greedy. Infrastructure is a big cost and they don’t want to invest in it.

What we need is a big government project to bring the U.S. back to the lead of the internet revolution, something akin to the interstate project. Think of the number of people that will put to work stringing fiber optic lines all across this nation. The government can also offset these costs by coming up with a “leasing” type agreement, where ISPs pay a certain fee back to the government for each user. Other local companies would get tax breaks by providing the repair and maintenance on the new, national network.

The United States hasn’t embraced the online world like it should. It is a key component in the 21st century economy, with more and more people telecommuting to work now. An investment like this won’t only help employment in the short term, but also in the long term. It will make the U.S. a strong competitor in the technological economy and provide decent internet to the millions of Americans who are still stuck on the early 90s connection speeds of dial-up.

So big kudos to Google for working to push the U.S. to this goal. I just wish I could enjoy it, but fiber optics here in Butler County, Ohio is a bad word thanks to Republican corruption and greed that put a halt to our attempts to bring fiber optics to all area.

I’m sure some will point to this as an indicator that we don’t need health care reform:

Spending on health care slowed in 2008, according to a government report released Tuesday. In fact, health spending grew more slowly than at any time in at least a half century.

[SNIP]

"National health spending growth slowed in 2008 to 4.4 percent, the slowest rate of growth in the National Health Expenditure Accounts."

In other words, the slowest growth since the government has kept records.

Of course the people who call this good news would be wrong:

There's still more bad news, says Rick Foster, the chief actuary at HHS. A major reason health spending slowed is that with the bad economy, many people simply couldn't afford medical care.

"In many cases they lost their employee-sponsored health benefits at the same time they lost their jobs. So that meant that the cost of care was much much higher because they had to pay it out of pocket. So some people presumably scaled back on their purchases."

People haven’t suddenly gotten healthier, nor has the health care industry done some major rate reductions. Instead more people can’t afford to seek health care when they are sick. The richest nation on earth and we have people who can’t afford to see a doctor when they fall ill. That alone is a crime and the fact that it happens here really shows that this is anything but a Christian nation.

With the recession, it’s no secret more and more people are flocking to the movie theaters for their entertainment. It looks like that trend could translate into a record year for Hollywood:

Movie studios began the year with January crossing the $1 billion mark for the first time ever, and box offices this month are counting on help from highly anticipated films such as "Avatar," "Sherlock Holmes" and "It's Complicated."

So far, moviegoers had snapped up $9.67 billion worth of tickets at domestic -- U.S. and Canadian -- box offices through Tuesday, said tracking firm Hollywood.com Box Office.

The firm said 2007's record was expected to be surpassed on Wednesday, as Hollywood reaps returns during a recession that, as in past downturns, has seen consumers showing up in theaters for relatively cheap entertainment.

I will be contributing my part in a few minutes when I head out to see Avatar.

The Black Friday results show what was to be expected – a rather blue Christmas for retailers:

As the closely-watched Black Friday weekend winds down, a National Retail Federation survey conducted over the weekend confirms the expected: more people spent less. According to NRF’s Black Friday shopping survey, conducted by BIGresearch, 195 million shoppers visited stores and websites over Black Friday weekend*, up from 172 million last year. However, the average spending over the weekend dropped to $343.31 per person from $372.57 a year ago. Total spending reached an estimated $41.2 billion.

The good side of this for the shopper is that retailers will probably be running bigger sales this holiday season in hopes to draw in larger crowds.

Image via Wikipedia

We knew that it was only a matter of time before the public shifted the blame of the economic mess from Republicans to Democrats and that time has come:

Nearly two years into the recession, opinion about which political party is responsible for the severe economic downturn is shifting, according to a new national poll.

A CNN/Opinion Research Corporation survey released Friday morning indicates that 38 percent of the public blames Republicans for the country's current economic problems. That's down 15 points from May, when 53 percent blamed the GOP. According to the poll 27 percent now blame the Democrats for the recession, up 6 points from May. Twenty-seven percent now say both parties are responsible for the economic mess.

The problem is that America isn’t seeing any improvement in the economy. Sure Congress and the White House can point to Wall Street, but that doesn’t mean a damn thing to the average citizen, who is out of work. It’s the common disconnect that occurs between Washington and Main Street USA.

What President Obama needs to do is hold one of his prime time pressers, which he seems to have abandoned, and tell the people who he plans on creating new jobs. Sure he is doing things like this “job summit”, but when you look at who’s attending you quickly realize that Obama isn’t looking for any new ideas. Some of the country’s greatest economic minds aren’t on the list, and that is not only a crime, but a waste of some great talent.

The White House needs to show America that they are serious about turning the economy around for Main Street and they need to do it now. If they wait until 2010 then they can watch their support in Congress really dwindle. As matter of fact it will be like 1994 all over again.

Statistics like this in the richest nation on the planet are totally unacceptable:

The number of Americans that have trouble putting food on the table shot up last year in an unprecedented spike to a record 17 million households, the government reported on Monday.

The Department of Agriculture report, which has been released annually since 1995, said the number of Americans that were hungry rose to 14.6%. In 2007, 13 million households or 11.1% of Americans had trouble getting enough food.

The one-year jump is all the more significant, given the number of hungry Americans had never been higher than 11.9% since these surveys began.

And what do we hear from our leaders on statistics like this? Nothing but crickets. I’m not going to single out one party or another here, as the issue of hunger is non-partisan. Instead the deafening silence from Congress and the White House as a whole should be considered a crime. All they seem to worry about is their buddies on Wall Street, while turning a blind eye to the American people. Again – that is a crime.

It always amazes me when the right goes on about how charities should take care of social needs. The problem is when people start losing money the first thing that gets cut is their charitable donations, which then results in things like this:

The holiday project is a group of nine nonprofit agencies that rely on sponsors to help provide food and toys to struggling families.

But because of the recession, a record number of families are expected to register for help at a time when many would-be sponsors are struggling. So far, the number of needy families seeking sponsors for food baskets and Christmas gifts is up 74 percent compared to the same time last year.

Tina Osso, director of Shared Harvest Foodbank in Fairfield and coordinator of the holiday project, fears the number of needy families may again outpace sponsors of the project .

“For the first time last year, we were not able to serve everybody that applied and that was just as the recession was beginning to hit hard for everybody,” Osso said.

Forget giving your children presents this year – you are concerned about giving them food to eat on Christmas Day. Take this part talking about Middletown, one of the nation’s 10 fastest dying cities:

Maurice Maxwell, executive director of Family Service of Middletown, said his agency has registered 300 families since Oct. 14.

You are talking about a town with a population of 51,000 and 21,000 households. That makes 300 families  a lot, especially in a town that has seen its poverty levels jump from 12% in 2000 to 22% in 2007.

With this grim economy ringing in the holiday season, we need to be braced for more bad news. I can only imagine how suicide rates are going to jump in the next couple of months, along with other crimes.

We do need another stimulus, but we need one that will take care of the middle and lower classes, the later which is increasing in size at record rates. Health care reform could have been a great part of that stimulus, but the greedy politicians we have been stuck with decided that the highly profitable insurance agencies needed the money more than the struggling and starving families. We are seeing class warfare continue in this country as it did under Bush. The sad part is that the people who need help the most don’t have that many people in power on their side.

That’s the best growth in 2 years and to many signals an end to the recession. Why couldn’t Obama turn the economy around?

There has been a lot of warnings lately that we are heading right towards another Lehman style collapse:

Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”

The Obama administration has released hundreds of pages of new legislation to stop this from happening, but it looks more and more like Rep Lobbyist and Sen. Lobbyist (both R-D Crookville) will curtail any such regulation. So will we see a repeat of 2008?

Yesterday the media was going on that we could hear the new unemployment numbers today and they very well could be above 10%, despite all the other signs of the contrary. Well take a look at this:

WASHINGTON (AP) Payrolls drop by just 247,000; jobless rate falls to 9.4 percent, sign recession ending.

The numbers are going in the opposite direction of what all the teevee talking heads were saying yesterday. It really seems like television economists are about the same as weathermen – they can always be wrong, yet they keep their jobs.

Some good news on the jobs front:

New applications for U.S. jobless benefits plunged to the lowest level in 14 weeks, a possible sign that the massive wave of layoffs has peaked. Still, the number of unemployed Americans getting benefits climbed to a new record.

The Labor Department reported Thursday that the number newly laid off workers applying for benefits dropped to 601,000 last week. That was far better than the rise to 635,000 claims that economists expected.

But the total number of people receiving jobless benefits climbed to 6.35 million, a 14th straight record.

That last sentence is what Drudge is focusing on though:

Funny how Drudge parses headlines like that. We get good news that is even better than economists expected, so Drudge finds the bad data in the article and promotes that, even though that really isn’t news. For the 14 weeks we have been able to use that same headline.

Here in the greater Cincinnati area we saw 16 tax levies on the ballot yesterday. Of those 16 only 5 passed. The local news reports showed people all saying the same thing; “we want to support it, but the economy is just too rough”.

Of course a lot of the levies were for schools and I can’t help but think its time for a restructuring of our schools, much like the auto industry. It seems like most districts go to the people every couple of years to get more tax dollars, and I can’t blame the people for being tired of it. My old school district was on the list of failures. When I went there 20 years ago they had a huge amount of administrators. That for a district that handles less than 10,000 students total, and it hasn’t really grown since then. Something isn’t right with that.

It looks like GM employees are going to get that perk that is usually limited to those in the teaching profession:

General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday. Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.

The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.

Of course its not really a perk, but rather a sign of our troubling economy. I am wondering though how the auto industry would look today if the credit markets flowed better. If people can’t get loans then they can’t buy cars.

Slate has a very cool interactive map showing where the job losses are occurring. I wonder if the Republicans still think the entire economic crisis is overblown?

(h/t Sullivan)

To prove this is a meme of the Republican Party just take a look at this blog post by Robert Stacy McCain (wingnut extraordinaire!):

Let me explain something to you, David Axelrod: Obama and the Democrats didn't "cut taxes" in a way that will stimulate economic growth. They didn't reduce or eliminate the capital gains tax. They didn't reduce or eliminate the corporate tax. Most of all, they didn't reduce the top marginal rate.

He is going after David Axelrod talking about the tax cut for 95% of Americans. See – the Republicans don’t care about 95% of the country. Instead they only worry about that top 5% and the big corporations. Screw everyone else.

Now I wonder how many of these wingnuts are gladly accepting the tax cuts under Obama? If they really believe what they say, then shouldn’t they give the money back, or better yet – donate it to a mega corporation of their choice? Prove you mean what you write. Yeah – I doubt that will happen.