Pre-Xmas Reads (Dec. 21, 2014)

I have arrived on vacation and may finally get around to writing some posts (assuming internet access stabilizes). To start off, here are some things I’ve read on the plane and intend to read over the break.

Year in Review. Grantland

A brief history of pregnancy workplace rights. JSTOR Daily

Governing through unhappiness. Potlatch [on austerity]

The War Nerd: more proof the US defense industry has nothing to do with defending America. Pando [there are also a couple of articles in the January edition of Harper’s that have terrific insights on the defense industry’s posture towards Russia and Ukraine]

Also: Could the US even launch a nuclear missile if it wanted to? Daily Mail. [Answer: probably not; serious longstanding morale problems in the USAF nuclear command]

Reporters fail to capture implications of pension provisions. Columbia Journalism Review [on the recent budget deal in Congress]

Adair Turner understands better than Paul Krugman. Angry Bear [understands “the economic situation”; follow video link]

Overselling America’s infrastructure crisis. New Geography

My reading of the FT on China’s “turning away from the dollar”. Michael Pettis at Credit Writedowns

Foucault’s responsibility. Jacobin

$100,000 says my portfolio will beat Tony Robbins’. Barry Ritholtz, The Big Picture

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Weekend long reads (Dec. 5, 2014)

Readers will notice that there hasn’t been much activity here since Thanksgiving. My absence is partly due to traveling I’ve had to do, being engrossed in my new book (The Power Broker by Robert Caro), and other academic obligations, which will continue next week. Nonetheless, I have provided some long reads here as they seem to one of the more popular types of posts. I hope to have the third part of the series on sectoral investment patterns up by the end of next week.

Fracking tantrums

Banking

Research and academics

Thanksgiving long reads (Nov. 27, 2014)

Happy Thanksgiving! Here are some articles I have lined up to read over the long weekend. Not all are recent; I’m trying to clear out the reading list.

1. The tech worker shortage doesn’t really exist. Bloomberg Businessweek

2. State unemployment map goes monochrome for October 2014. The Economic Populist. [Not actually monochrome, but close: no state observes an unemployment rate greater than 7.9% (US average is 5.9%), although underemployment is a separate problem. Also contains maps for employment-population ratio by state!]

3. Kuroda turns up the heat on Japan Inc.: turn profits into higher wages. WSJ

4. How the world’s most leveraged hedge fund got away with insider trading. Zerohedge

5. Oil at $75 means patches of Texas Shale turn unprofitable. Bloomberg [Good run-down of the economic-geography of fracking profitability]

6. Public relations and the obfuscation of management errors–Texas Health Resources dodges its Ebola questions. Health Care Renewal

7. Boomers, millennials and interest rates: a muni investor’s perspective. BlackRock blog

8. For middle-skill occupations, where have all the workers gone? Federal Reserve of Atlanta

9. Over at Project Syndicate: economic growth and the Information Age: Daily Focus. Washington Center for Equitable Growth

10. Jeff Henry, Verruckt, and the Men Who Built the Great American Water Park. Grantland.com [Schlitterbahn!]

On the book front, I’ve reading The Power Broker: Robert Moses and the Fall of New York by Robert Caro. I’ve been meaning to read it for a while and then found it at the bookstore, so here I go!

Link share: geography of a decade of job growth and decline

Check out this very well done interactive graphic from the blog of Austin-based consulting firm TIP Strategies!

I’ve filed this under “Terrible Cartography” (I have no category for the opposite), but rest assured this is the work of professionals.

Reading list (Nov. 19, 2014)

Here is another batch of items I am currently reading. Some of these are from last week or before, and that’s because I add things to my Pocket reading list and then leave them there.

1. Why are dystopian films on the rise again, JSTOR Daily

2. Why is anyone surprised that Abenomics failed? Naked Capitalism

3. Why do financial types hate Fed intervention? Pragmatic Capitalism

(Another option is that financial types pretend to hate intervention to mask the benefits that accrue to them from intervention; perhaps a recognition of the diversity of financial types could go some way to resolving this, ie. pension funds, hedges funds, too-big-to-fail banks, community banks, etc, as well as recognition that they don’t always love or hate it).

4. Potential output and recessions: are we fooling ourselves? Board of Governors of the Federal Reserve System

5. Credit to noncorporate businesses remains tight, St Louis Federal Reserve

6. Retirement planning: millennials vs boomers, Research Affiliates

On the book front, I have finished reading Robert Caro’s Master of the Senate (third in his LBJ series), which I recommend (specifically the chapters starting after pg 200). I am now reading the Kindle sample of Daniel Galvin’s Presidential Party Building: Dwight D. Eisenhower to George W. Bush and deciding whether or not to buy. I’m leaning towards buy.

Employment update: losses and gains since 2007 recession

In yesterday’s “2:00 pm Water Cooler” links at nakedcapitalism blog (http://bit.ly/1u1lJ9u), Lambert Strether of Corrente blog (http://correntewire.com/) included a Bloomberg map (from September of this year) of the recovery of employment by state since 2007 (http://bloom.bg/1zM4rC5). Specifically, Bloomberg writers purported to depict the ‘uneven recovery in states post-recession’ by showing the ‘percentage difference between a state’s maximum employment in 2014 and its recession high (reached between December 2007 and June 2009).” They sought to highlight only those states where employment remained below peak levels during the recession, coded using a couple shades of red.

As Strether pointed out, it is a rather confusing map, and I don’t think it conveyed the information in the best way. Why construct a choropleth map that only color-codes poorly performing areas? Why focus on individual peaks in employment during the recession? It would make more sense to depict cartographically the employment changes for all the states and to select a uniform starting date.

Being convalescent following my recent surgery means I have plenty of time to create some terrible cartography of my own. My topic here is total employment changes at the state level from 2007 to 2013. Descriptively, the question is: which states bore the brunt of the recession in terms of employment losses and which have experienced a recovery in employment. Before going right for the States, I start by presenting the ratio of employment in December 2013 to employment in December 2007 for the Census divisions (of which there are nine). [All data was drawn from the Bureau of Labor Statistics (http://data.bls.gov/cgi-bin/dsrv?sm)%5D.

census-div-ratio-emp-07-13

Recovery can be interpreted in a couple ways. First, it may refer to replacing lost activity, to the point that employment levels in 2013 equal those in 2007. Alternatively, recovery may refer to a kind of resilience. This term can indicate whether an area has returned to its pre-crisis trend, such that not only has that area recovered employment losses but it has added enough jobs that its employment levels are what would be expected had there not been any output losses. To calculate whether an area indeed was resilient and returned to a kind of equilibrium growth (or whether such a return is even possible!) is beyond my remit for the moment. However, the answer to whether an area is ‘resilient’ in this sense or not has much to do with whether there has been structural change in the economy (labor-saving technology, increases in productivity, further transition out of industry towards services). I highly recommend JK Galbraith’s new book The End of Normal for anyone interested in exploring this question.

As a point of reference, the ratio of 2013 employment to 2007 employment for the nation as a whole was exactly 1. The map (for the lower 48 states; Alaska and Hawaii are part of the Pacific division) shows that the West South Central states (Texas, Oklahoma, Arkansas, and Louisiana—major oil and gas states) performed best, with employment bases roughly six pct larger than they were in 2007. These can be deemed resilient. The West North Central (Great Plains states, where there is also quite a bit of fracking activity) and the Middle Atlantic (Pennsylvania, New Jersey, and New York) were second-best performing. The worst were the Mountain states and East South Central (Kentucky, Tennessee, Mississippi and Alabama), whose employment bases remained three pct below their levels at the end of 2007. These areas are clearly not resilient.

The next map depicts the above ratio of employment levels for all 50 states (maps not to scale). Clearly the Census divisions obscure some important differences within divisions, that is, between states. Census divisions do not always capture coherent economic-units, such as metropolitan areas or industrial districts, particularly in areas along and east of the Mississippi. A more apt unit of analysis for that would be the metropolitan statistical area, however these in turn do not necessarily have a single, coherent governing entity. As such, the US state, with different taxation regimes, varying receipts of federal moneys, bank regulation, local investment and labor force policies, etc, remains an important political-economic unit. The major takeaway, as I see it, is that resilient areas are either oil/gas producing (Alaska, North Dakota and Great Plains more generally, Gulf Coast) or are financial centers (New York and Massachusetts). Meanwhile, the diversified industrial and commercial economies of California, Washington, Virginia, Florida, Georgia, Pennsylvania, and New Jersey remain below their 2007 levels. That is just a hunch. From my academic research, other important factors include exposure to subprime mortgages and the foreclosure epidemic.

states-ratio-07-13

The next set of maps show change in employment for two-year increments beginning in 2007.I tried to apportion the states into quantiles, but there were quite a few shared values, and I also wanted to identify some of the outliers. The two-year increments correspond, more or less, with the most recent recession, then a nominal recovery period, and, perhaps finally, a stagnation period. These, incidentally, correspond to the stylized Minskiyan stages of the economic cycle (crisis/crash, recession, recovery, stagnation, economic boom, rinse, repeat). I won’t go into much depth here; I’ll leave readers to gander at these maps to their hearts’ content.

states-emp-chg-07-09

states-emp-chg-09-11

states-chg-emp-11-13

The maps, of course, rely on relative changes. I have also included below a table showing the ten states with greatest absolute employment losses from 2007 to 2009 and then the ten biggest gainers from 2009 to 2013.

Biggest Losers (from 2007 to 2009)
State Chg in employment (000s)
California -1,199
Florida -782
Illinois -409
Texas -403
Michigan -402
Ohio -401
North Carolina -329
Georgia -327
New York -288
Arizona -286
Biggest Gainers (from 2009 to 2013)
State Chg in employment (000s)
California 1,235
Texas 1,128
Florida 583
New York 546
Michigan 331
Ohio 291
Illinois 269
North Carolina 255
Georgia 250
Pennsylvania 230

Though the order in which these states appear varies somewhat, most of the states that lost the most employment also gained much of it back. The exception is Arizona, which lost over a quarter of a million employed workers but did not appear on the gains list. That state’s employment base grew by less than 170,000 from 2009 to 2013. In contrast, Pennsylvania lost close to a quarter of million jobs, but grew by 230, placing it at tenth in the gainer list.

In a previous post, I discussed the differences between employment and job growth. I emphasize here that I have looked at the stock of employed labor, not job growth. The quality of jobs is as important as the quantity, and job growth statistics provide great insights into employee turnover, job stability, and duration of employment. Additionally, I stress the importance of considering the sectoral component, which reveals comparative specialization and thus may indicate how an area is clued into larger financial networks and global supply chains. The utility of these maps is the clarity with which they can generate insights into the material distribution of burdens and benefits following the recession.

Reading lists (Nov. 11, 2014)

I thought I would add a few links to articles I am currently reading, about some of the stories that inspire me and keep me informed/interested.

1. An article on Market Basket, the New England grocery chain that recently saw its family-owners duke it out over the future of the company. It’s workers took to picketing (non-unionized) and with additional community pressure managed to reinstate their beloved CEO. Here, a number of scholars discuss lessons they learned from the case: http://bitly.com/11a1sVu

2. Obamacare architect admits need to conceal details of the reform from the public in order to pass it: http://bit.ly/1wQIwHm

3. A yet-to-read short paper on coops and other worker-owned organizations, and how they might provide a successful Lincolnian plank for the GOP: http://bit.ly/1tEexfW

The last one has given me an idea to compare credit unions in the States with commercial banks (location/clustering, profitability, how they affect cost of and access to credit, stability during times of macro-distress, etc). I’ll get around to that one day.

I am also in the middle of reading Master of the Senate by Robert Caro and The New Industrial State by Galbraith. Paper not electronic form, which is a nice vacation.