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Pessimism Porn

April 14, 2009 / Klint Finley

Sloppy Unruh has a round-up of “pessimism porn”

I’ll add a couple things:

Sacramento tent city closed down (via Breaking Time)

Should we be more worried about Weimer-esque hyperflation than a new Great Depression? (via Richard Metzger)

In light of all of this, 250 new manufacturing jobs in Detroit doesn’t seem like much. But the article does paint an optimistic portrait of the future of energy related manufacturing in the US. (via WorldChanging)

I’m still gathering resources at the Recession Hacking Wiki.

In the recession, does advanced education really pay off?

April 12, 2009 / Klint Finley

As some of my e-mailers recognize, their dilemmas are those of the relatively fortunate. They are young. They have advanced degrees. As Sam wrote, “It should be noted that I’m a very lucky, healthy, happy 23-year-old male who, aside from having little money and having caught a bad break on his choice of careers, has nothing to complain about.” For a dose of perspective, I’ll include an e-mail from Dani, who is 28, lives in Chicago, and couldn’t go to college right out of high school. She works in a warehouse office and will finally graduate in May with a two-year associate degree for which she scrimped and borrowed and is “fighting tooth and nail for.” She can’t see how she can afford to go on in school, and she points out that “for those of us not privileged enough to have [a college degree] being seen as not as valuable as someone who is ‘smarter’ than us because they have a degree puts us behind in the job market even further. We are already worried about our futures, and the thought that this economy or even one bad thing happening [could] disrupt our paycheck-to-paycheck lives, is more than terrifying.” It is bad to have a degree that you fear is underwater. But it’s still worse to have no degree at all.

This article fails to adequately address the matter at hand because they only compare people with advanced degrees with those without any sort of degree or special training what so ever.

Here is another question: are people with advanced degrees better off than those who opted for vocational training of some sort, or even those who only got bachelor’s degrees? Comparing the plight of MBAs, Phds, and lawyers to plumbers, mechanics, dental assistants, etc. would be more relevant. It would also be worthwhile to compare people with advanced degrees with people who have bachelor’s degrees in certain fields such as biology, math, computer science, and engineering.

Slate: Help, My Degree Is Underwater

(via Cryptogon)

Ten principles for a Black Swan-proof world – Nassim Nicholas Taleb

April 8, 2009 / Klint Finley

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

Global Dashboard: Ten principles for a Black Swan-proof world

(Via Chris Arkenberg)

Tax dodgers multiply as underground economy cushions job cuts

April 3, 2009 / Klint Finley

Carlos Cruz has a strategy for surviving the worst global recession in 60 years: pay less in taxes and pass the savings along to customers.

“I’m declaring half as much as I used to,” said Cruz, 29, who runs a painting business in Madrid. “Prices have fallen by 30 percent and customers will choose you for a difference of as little as 50 euros ($67.70),” said Cruz, an Ecuadorian who has lived in Spain since 2001.

The production of goods and services that are lawful, though not declared, may grow the most as a proportion of total output since 2000, according to Friedrich Schneider, a professor at Austria’s Johannes Kepler University of Linz.

The shift, measured by tax analysts and economists using surveys, money-supply data and anecdotal evidence, is caused by businesses going off the books to cut costs and workers taking informal jobs to survive rising unemployment. It offers a buffer against the ravages of the crisis and may help explain why the slowdown hasn’t prompted more social unrest.

Full Story: Denver Post

(via Xtal)

Parts of Flint may go feral

March 31, 2009 / Klint Finley

Property abandonment is getting so bad in Flint that some in government are talking about an extreme measure that was once unthinkable — shutting down portions of the city, officially abandoning them and cutting off police and fire service.

Temporary Mayor Michael Brown made the off-the-cuff suggestion Friday in response to a question at a Rotary Club of Flint luncheon about the thousands of empty houses in Flint.

Brown said that as more people abandon homes, eating away at the city’s tax base and creating more blight, the city might need to examine “shutting down quadrants of the city where we (wouldn’t) provide services.” […]

City Council President Jim Ananich said the idea has been on his radar for years.

The city is getting smaller and should downsize its services accordingly by asking people to leave sparsely populated areas, he said.

Full Story: Mlive

(via Cryptogon)

Slate: How cities should deal with squatters

March 31, 2009 / Klint Finley

On the supply side, local governments should penalize owners who stockpile vacant housing, perhaps by imposing increased property tax rates on properties left vacant, and by moving aggressively to seize vacant properties when the owners fall behind on paying those taxes. On the demand side, governments should expand homesteading programs that permit and help low-income people to take over vacant housing—but only after it finds its way into city hands.

To be sure, these programs were only marginally successful in the 1970s, in part because of lack of funding, but also because of the difficulty of restoring abandoned urban properties to habitable condition. The housing that is becoming vacant during the current downturn, by contrast, is relatively new and should be easier for homesteaders to repair. The federal government should also move quickly to protect those in financial trouble from foreclosure and eviction by requiring foreclosing banks (many of which are themselves receiving taxpayer bailouts) to rent out foreclosed homes to their former owners at fair market value. In fact, as this letter to the editor in the New York Times Magazine on Sunday correctly observed, allowing owners to remain as renters in their foreclosed homes helps safeguard the value of the houses—which is good for the occupants, good for the banks, and good for the housing market as a whole.

The sudden increase in squatting shows that the housing market that is out of kilter. The solution is not to chase squatters off, but to bring the market back into balance by helping them find a place to call home.

Full Story: Slate

(via The Agitator)

Artists, Foreclosures and the Ruins of the Unsustainable

March 31, 2009 / Klint Finley

Although it is small consolation in the face of overwhelming economic strife in Detroit and elsewhere as the foreclosure crisis continues, this story gave me a real feeling of hope and renewal. To me, this example and other corresponding cases – like the artist-driven re-imaginings of shopping malls and big box stores seems symbolic of an even larger cultural shift. The arts community isn’t just moving into one downtrodden urban neighborhood; rather, they’re taking on the ruins of the unsustainable. They’re taking on big box stores, shopping malls, and grid-connected homes in the car capitol of North America. And they’re not just creating new art. They’re seizing the opportunity to turn old shells of buildings into independent, renewable energy-powered, 21st century-ready spaces.

What I’m most eager to hear next is that creative pioneers are conquering McMansions in the suburban hintersprawl. As Bryan Walsh wrote recently for Time Magazine, “The Metropolitan Institute at Virginia Tech predicts that by 2025 there will be a surplus of 22 million large-lot homes (on one-sixth of an acre [675 sq m] or more) in the U.S.”

Will subdivisions be turned into workshops and performance spaces? Or possibly into small-scale agricultural communities, or enclaves for artisan food-production? At the very least, will they become denser, transit-connected and less car-dependent … and what will drive that?

Full Story: WorldChanging

Sustainable Industry: Retraining America’s Workforce

March 30, 2009 / Klint Finley

In the energy sector, utilities are especially struggling to lure young people to an industry that’s plagued with a somewhat outdated stigma. Peter Darbee, CEO of San Francisco-based Pacific Gas and Electric (NYSE: PCG) in January 2008 told the San Francisco Chronicle that within five years more than 40 percent of the utility’s 20,000 employees will be eligible for retirement. Almost half the nation’s utility workforce will be nearing retirement age by 2016, according to the U.S. Labor Department.
Overall, job seekers with college or technical training will have the best shot at filling utility positions. Computer systems analysts and data analysts are expected to be among the most in-demand workers, in addition to employees with the training to help utilities expand their renewable energy portfolios, according to the Labor Department.

When it comes to training a workforce for a rapidly changing economy, the country’s nearly 1,200 community colleges are at the center of it all. PG&E has even partnered with community colleges to develop its PowerPathway program to train future employees.

With shorter programs and lower tuitions—about $2,360 on average nationwide—than four-year schools, community colleges present fewer barriers to entry for students than private technical colleges or even big, state universities. Plus, many technical and career programs are designed to train and certify workers for in-demand fields in less than a year compared to conventional four-year degree programs.

Full Story: Sustainable Industry Magazine

U.S. support for Detroit would buy 50 million Tata Nanos

March 28, 2009 / Klint Finley

G.M. and Chrysler are asking the politburo in Washington for more rubles (nytimes). Between the 25 percent tariff on imported light trucks (SUVs) and direct cash infusions, it seems likely that the U.S. taxpayer is being bled to the tune of $100 billion over a 2-3 year period. What does the taxpayer get in return for this money? The right to continue to purchase GM and Chrysler vehicles for $20,000-60,000 each.

What else might we do with $100 billion in this industry? Assuming that we could get a wholesale price of $2000 per car, that’s enough to buy 50 million four-passenger 54 mpg Tata Nanos. The fuel savings from driving Nanos to the 7-11 instead of monster SUVs would save taxpayers $100 billion every year (i.e., the initial investment in the Nanos would be paid back with one year of fuel savings). Current predictions are that the U.S. car/light truck market may shrink to 10 million vehicles per year. Thus with a $100 billion federal expenditure we could give everyone who had intended to buy a car or SUV a free Nano for the next five years. Fifty million American households that had expected to go into debt and make monthly car payments would now have $400 extra every month to buy other things ($240 billion per year). The total amount free for investment in the U.S. economy would be $340 billion per year.

Full Story: Philip Greenspun

(via Robot Wisdom)