"On what basis do you say that we underdo the county commissioners and

township trustees, though?  "

 

The problem I see with having only 3 trustees (township or county) is that voters lose representation.  By that I mean that the trustees are all elected "at large".  In a place like Warren County, that means that a lot of people in Mason can basically elect their local person to be a county trustee since they have a large block of voters (most county residents seem to vote along geographic lines).

 

With only 3 trustees, a change of 1 person can completely change the direction of the area (from, say, preserving the semi-rural way of life to buldozzing everything). 

 

Also, with trustees elected "at large", people from a less populated area really don't ahve representation as the larger urban areas elect their own people.

 

I think that at both the county and township levels their needs to be more like 7 - 9 trustees, each from a geographic area (regardless of poulation density). I would eliminate the 'at large' elections immediately, if I could.

 

"Lots of states do just fine with no townships and county school systems"

 

I think it comes down to representation, and not allowing a segment of the population to get steam-rolled by the majority, especially when the majority is based elsewhere. With the Ohio county situation, you can have a large group of people living in a corner of the county basically dicatating what happens to the people and areas in the rest of the county.  When the people living elsewhere do not agree with the direction being taken by the county, they are pretty helpless to stop it.

 

It's not an issue of manpower, money, etc.  It's an issue of making sure people have a reasonable attempt to control their future.

 

And the township I live in is 15 miles across.  The people living on the other end of the township have no idea what roads exist in my area (and vice-versa). Geographic election of trustees would give better representation to the residents of the township.  (maybe only 5 township trustees needed).

"Look for a new taxpayer funded support program soon. If not, look for recessionary data by the holidays."

 

We've reached the point where diminishing returns are about to turn negative.  The latest efforts did not have the expected effects.  Congress and the President are in a budget-conscience mood. 

 

I do not expect any new initiatives to jump-start the housing market.  I think the government is out of ammo (or at least out of the desire to fire the ammo).  It looks like the old rules of supply-and-demand are about to be re-applied to the housing market.

 

I do look for recessionary numbers for the hollidays.

 

Cheers.

"Lots of states do just fine with no townships and county school systems"

 

I think it comes down to representation, and not allowing a segment of the population to get steam-rolled by the majority, especially when the majority is based elsewhere. With the Ohio county situation, you can have a large group of people living in a corner of the county basically dicatating what happens to the people and areas in the rest of the county. When the people living elsewhere do not agree with the direction being taken by the county, they are pretty helpless to stop it.

 

It's not an issue of manpower, money, etc. It's an issue of making sure people have a reasonable attempt to control their future.

 

And the township I live in is 15 miles across. The people living on the other end of the township have no idea what roads exist in my area (and vice-versa). Geographic election of trustees would give better representation to the residents of the township. (maybe only 5 township trustees needed).

 

If that's your position, though, we might as well get rid of counties altogether and just have townships, and then further divide every township into three, six, ten, etc. new townships to protect some areas of existing townships from more populated areas of the same township.

 

I say we already have that simply by having counties and townships; those break down the state into small enough regions as it is (in fact, I would say too small).

"If that's your position, though, we might as well get rid of counties altogether and just have townships"

 

The townships are not such a problem.  Maybe 3 trustees are sufficient. 

The problem I have is that where I live, the county government, run by 3 people, 2  of whom are very pro-growth and do not live in my area, are determined to bulldoze my area of the county in the name of bringing "jobs" to the county and therefore, tax dollars (note -these jobs are turning out to be minimum wage in too many cases).  However, the people living in the area do not want that to happen.  We've spoken up very loudly at county planning meetings and have been completely ignored.  Since the trustees are from elsewhere in the county, they are not affected personally by what they do in our area.  We do not have adequate representation to argue back. Notice they do not want to do the steam-rolling in their parts of the county, but want to preserve what is there.

 

In NY, county commissioners were elected geographically.  So if the county tried to do something in one area, the local commissioner could fight it.  And I could go to my commisioner and he was pretty sympathetic to what I had to say (he was up for election every 2 years).  More than one county effort to steamroll local residents there were thwarted due to local opposition while I lived there.  The resident opposition to county plans currntly present in my Ohio county is much greater than anything I witnessed while living in NY, but there is no local sympathetic commissioner to champion our cause.

 

This discussion probably belongs on another thread.  It's probably not much a problem in highly urban or highly rural areas. But for those areas that are mixed, or on the cusp of become mixed, it's a big deal.

My whole point on this thread was that state and local governments are having a hard time economically due in part to bloated state employment in certain parts of the country.  30 county commissioners is probably way too many from an economic perspective.  But from a representation perspective, 3 'at large' commissioners doesn't work well in a changing county.

I have to admit that I come at the issue from the other side, then; what you see as "preventing steamrolling," I see as paralysis, NIMBYism, and worse.  We already have more than enough layers of government (elected and appointed, as well as shadow governments like historic preservation boards in some areas with the power, formal or informal, to block development) standing in the path of development.  The last think I'm inclined to support doing is making developers' lives harder.

"Look for a new taxpayer funded support program soon. If not, look for recessionary data by the holidays."

 

We've reached the point where diminishing returns are about to turn negative. The latest efforts did not have the expected effects. Congress and the President are in a budget-conscience mood.

 

I do not expect any new initiatives to jump-start the housing market. I think the government is out of ammo (or at least out of the desire to fire the ammo). It looks like the old rules of supply-and-demand are about to be re-applied to the housing market.

 

I do look for recessionary numbers for the hollidays.

 

Cheers.

 

If you are right (I personally hope so - I don't think the government should continue to use taxpayer money to manipulate markets) then we will clearly have recessionary numbers by the holidays and a double dip will be a given.

After working for government in Ohio for several years I say, eliminate townships governments, increase Board of County Commissioners to 7 members and have them each elected by a geographical area. Next, make cities have the upper hand for annexation laws. This will streamline the government system, give more representation to geographical regions and focus our resources and economic development towards the cities and not the countryside. This will also make the region more competitive economically, focus financial resources towards current infrastructure and in the long run save the taxpayer money and preserve the environment.

 

Until then, the taxpayer continues to lose, the economy struggles, the return on investment is diluted and sprawl is the name of the game.

If that's your position, though, we might as well get rid of counties altogether and just have townships, and then further divide every township into three, six, ten, etc. new townships to protect some areas of existing townships from more populated areas of the same township.

 

I say we already have that simply by having counties and townships; those break down the state into small enough regions as it is (in fact, I would say too small).

 

What's interesting is that you already have that sort of system that you've just described- it's called incorporation (e.g. becoming a villlage or city) and if you look at the older, settled counties like Hamilton or Cuyahoga, you see its fragmented effects.

 

Correction- you see it in both its consolidated and fragmented forms.  Municipal government is a place where what is considered the conservative arsenal of ideas could really make a difference in the way we live our lives.  The state could take full control of a few things (like education, transportation [even if just in the form of matching funding, or funding bus systems, etc.] agriculture and environmental laws and corrections, for example) abolish townships and then let communities incorporate and tax themselves if they want other things.  This is basically the way it worked until after the Second World War.  Now the state should also apply some clearly defined and legitimate methods to allow for annexation, focused more on service delivery (police, fire, water, etc.) standards rather than simply maintaining existing political boundaries because certain folks don't want areas to change.

 

Regarding effective representation, it has always struck me as silly that we simply don't have more representatives and fewer legislative bodies.  Back in medieval days you'd have relatively unrepresentative city governments, but they'd have a lot more people on the 'council' than we do today.  Considering how large corporations are able to regularly handle thousands and thousands of proxy votes and other computerized voting systems, you'd easily be able to handle city or county governments numbering in the hundreds of representatives run in a Westminster style system.

I am more and more in the camp that the FEDs will try everything in their 'printing press power' to hyperinflate our way out of this mess. The next leg down is starting to show its ugly head.

 

RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve

 

"As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve."

 

"Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

 

The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7857595/RBS-tells-clients-to-prepare-for-monster-money-printing-by-the-Federal-Reserve.html

^Why exactly would the Federal Reserve do that when they can sell 10 year bonds at under 3 per cent rate of interest, and that price has been falling?

 

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

 

The U.S. government also has a technology, called modern credit markets, that will allow them to borrow presently at essentially no cost.

I am sure they will/are using all options. But, I think they must keep printing. I posted an article that showed that the total amount of US dollars in circulations continues to drop (I believe this has not happened since the great depression).

 

I think they must keep printing or deflation will set in, in a big way.

Calling all new stimulus programs, calling all new stimulus programs. Please report to Washington as quickly as possible. First new home sales plunged, now previously owned homes sales have plunged.

 

Pending Home Sales at Record Low as Tax Credit Ends

 

"Contracts for pending sales of previously owned homes plunged a record 30 percent in May, far more than expected, after a popular tax credit expired at the end of the prior month, a survey from the National Association of Realtors showed Thursday."

 

"The index is 15.9 percent lower than May 2009 and fell sharply in all regions of the country."

http://www.cnbc.com/id/38036138

LK:

 

What do you believe regarding how fast the deficit can be closed if, in the future, the interest rates on U.S. Treasuries change quickly?  With the amount of short-term debt we're issuing, we're going to come to a couple of milestones over the next 2-4 years in which we need to refinance/reissue a great deal of debt in a hurry.  Those are what I see as stress points, not the Treasury auctions of this month or this quarter.

LK:

What do you believe regarding how fast the deficit can be closed if, in the future, the interest rates on U.S. Treasuries change quickly?  With the amount of short-term debt we're issuing, we're going to come to a couple of milestones over the next 2-4 years in which we need to refinance/reissue a great deal of debt in a hurry.  Those are what I see as stress points, not the Treasury auctions of this month or this quarter.

 

I don't know how the Treasury refinances its debt, how many bonds it can buy back after issuing bonds today that are at record lows.

 

Are we issuing more short-term debt than usual, and when did we start issuing the short term debt that you are concerned about?  My understanding is that we've been able to sell bonds extremely cheaply relative to other investments since September 2008, so I suppose that debt that has been created since then for stimulus and shouldn't be a terrible concern.

 

What we want is to have the economy up and humming again so that government revenues increase.

 

But since the market is willing to pay next to nothing for a 10 year, 20 year or 30 year US treasury bond, the way I see it is that at present, the market doesn't see any risk of the U.S. coming close to default.

I think the term in the trade is "rollover."  When existing bonds mature, if the Treasury doesn't have the funds on hand to redeem them outright, the Treasury will instead issue new bonds and use the proceeds to pay off the old ones.  A couple of minutes of Googling found this (note that this isn't a site I've used before, but the graphic at least looked legit to me):

 

http://financialminorityreport.com/index.php/2010/04/debt-rollever-to-become-an-issue-for-the-treasury/

 

Right now, short-term interest rates are low, as you've noted.  Longer-term interest rates are much higher, but that's higher as compared with a very low short-term baseline, so in historical terms, long term rates are also fairly low for now.  That certainly looks good for us.  The problem is that because we've shifted so much of our borrowing into the short term, one thing that may be keeping the long-term rates down is that we're issuing proportionately less long-term debt ... and since our debt is sold at reverse auction, that means that the long-term rates reflect the beliefs of a more optimistic subset of Treasury buyers.  If we were to attempt to sell a great deal of long-term debt now, we probably wouldn't be able to keep rates that low, but we also have no idea how much they'd rise.

 

In fairness, at least one financial industry blogger has suggested that we do just that anyway, and it's a guy I normally respect (even if I disagree with him in part here):

 

http://seekingalpha.com/article/212066-3-reasons-why-the-treasury-should-borrow-now-to-restructure-and-rebuild

 

When I say I disagree with him in part here, I mean that I don't think that Congress would actually have the discipline to use the proceeds of the long-term debt issuance binge he advocates in order to get rid of the surfeit of short-term debt that we currently have, and I also don't think that they'd show particular enthusiasm for infrastructure projects, given how little of the ARRA funding actually went to infrastructure projects (as compared with payoffs to public employee unions at the federal, state, and local levels).  The general concept of issuing long-term debt at medium-low rates to get rid of short-term debt at low rates (thereby paying a little more now in order to get rid of long-term uncertainty and risk) is not objectionable on its face to me, of course; corporations do that kind of thing all the time (as well as the reverse).

 

The problem, though, is that we're going to have to refinance a lot of short term debt in addition to issuing new debt at the same time.  That's what has me, and a lot of other debt/deficit hawks, worried about the stresses to the system--and has got us raising red flags now notwithstanding the currently low Treasury rates, because the current picnic isn't going to last any more than the cheap money of the credit bubble lasted.

Thanks, that's some good information.

 

The problem, though, is that we're going to have to refinance a lot of short term debt in addition to issuing new debt at the same time. That's what has me, and a lot of other debt/deficit hawks, worried about the stresses to the system--and has got us raising red flags now notwithstanding the currently low Treasury rates, because the current picnic isn't going to last any more than the cheap money of the credit bubble lasted.

 

It's a legitimate concern.  I'm not sure what else you're supposed to do than try and refinance the sort term debt with long-term debt, try and squeeze some more long-term debt out of the system for infrastructure projects to stimulate demand, and then slowly increase revenues when the economy gets back to normal.  It's definitely been done before.  Also, Japan still seems to be able to borrow at extraordinarily low rates despite about a decade + of no growth and extremely large public debt.  It's going to be interesting.

 

I wouldn't characterize the support to state and local governments in ARRA as 'payoffs' to public employee unions so much as a pretty simple way to try and keep demand at pre-crash levels, but if one does legitimately think that, perhaps those unions will do the U.S. a solid and purchase our newly issued long-term debt for their pension funds.

 

I always find it funny how little faith people have in national politicians, when it seems clear to me that state and local politicians are far worse at keeping promises or governing responsibly.  State politicians generally seem to be the absolute worst, because they've got a lot more arrows in their quiver than most local pols do.  These state budgets are where most of the pain is going to be and going to stay, and neither party has tried to do anything about getting public sector employee benefits into line.

To me the real number to watch is how many people are employed and that number fell another 301,000 people in June.

 

Modest private sector hiring in June

Jobless rate falls to 9.5% but even that isn't good news

 

"Total nonfarm payroll employment fell by 125,000 in June as the number of temporary census workers dropped by 225,000, according to the Labor Department. This is the first decline in nonfarm payrolls this year."

 

This is the second straight sharp monthly decline in the labor force. While unemployment fell by 350,000 to 14.6 million for June, employment also fell a sharp 301,000 to 139.1 million.

http://www.marketwatch.com/story/modest-private-job-hiring-in-june-2010-07-02

I always find it funny how little faith people have in national politicians, when it seems clear to me that state and local politicians are far worse at keeping promises or governing responsibly. State politicians generally seem to be the absolute worst, because they've got a lot more arrows in their quiver than most local pols do. These state budgets are where most of the pain is going to be and going to stay, and neither party has tried to do anything about getting public sector employee benefits into line.

 

A fair point, but most states mandate balanced budgets for all but capital projects, which I think is a good system that would be worth replicating at the federal level, with an additional exception for formally declared war (obviously not an issue for the states).  The requirement of budget-balancing creates discipline.  That does mean that state and local politicians are worse at "keeping promises," but that's because a lot of their promises involve ridiculously unrealistic levels of spending, so those promises *should* be broken.

Y'all might recall those Ohio employment charts I used to post, based on BLS stats.  They counted Ohio private nonfarm employment by month. 

 

I did a quick look at the private sector numbers for the year so far, through May (June isn't available yet).  It looks like the monthly trends are mirroring employment pattens of 2005, 2006, and 2007.  In other words we are seeing growth in employment up from the winter lows in January and February.  And this growth is about the same number for those non-recession years, indicating the Ohio economy is generating jobs at about the same rate as it would have if the economy was in recovery.

 

Based on this trend I expect to see employment probably peak in June and then more or less plateau for the rest of the year.  If it doesn't and we see deterioration we are in for a double-dip recession.

 

Even if we have 2000's-type growth it won't be enough to dig us out of the employment hole we dropped into in 2008 and 2009.  The Ohio employment numbers would have to do better than the performance of the mid 2000's to make up the positions lost during this recession.

 

On a macro level, Paul Krugman opines that we are entering into a Panic of 1873  style recession..or depression.  Meaning weak or non-existent job growth and deflation.  I think we are seeing some deflation going on with real estate, huh?

 

The Panic of 1873 led to the "army of tramps", one of the early waves of homelessness and migrations episodes, excellently discussed in the indispensible Citizen Hobo.  Maybe,  we'll see a new wave of homelessness coming from these hard times?  Or maybe we have enough of a social safety net now.

 

This social safety net is, I'm guessing, why we are having the big deficit problem.  Federal and state budgets are being hit by a double whammy...decreased revenues due to weak economy, and a jump in entitlement spending for a longer period than the system is designed to handle.  This will become a really big deal if the increase in entitlement eligibility becomes a strutural feature, locked into the economy even during good times, rather than a temporary one due to short-term recessions.

 

Fun stuff, eh, this 'dismal science'?

 

 

 

I ran some numbers for the Dayton MSA based on a different data set than BLS...the Dept of Commerce "Regional Economic Accounts" database. 

 

They had numbers through 2008 for various economic sectors (manufacturing, trade, etc).  Doing a projection based on growth and decline of the various sectors for 2001-2008, the Dayton MSA will never recover from the recession lows, and will, in fact lose even more jobs, assuming 2001-2008 trends continue, and this is even with certains sectors, like health care, growing. 

 

Assuming a lower rate of decline for manufacturing, say a 1990s rate of decline, the Dayton MSA economy will start adding jobs starting first in 2015...it would take that long for the growing sectors to make up for the losses during the 2001-2008 time frame.

 

That's how bad it is locally...maybe (I am not an economist!).

This social safety net is, I'm guessing, why we are having the big deficit problem. Federal and state budgets are being hit by a double whammy...decreased revenues due to weak economy, and a jump in entitlement spending for a longer period than the system is designed to handle. This will become a really big deal if the increase in entitlement eligibility becomes a strutural feature, locked into the economy even during good times, rather than a temporary one due to short-term recessions.

 

Interesting that you wrote so much about job growth but think that the deficit problem is because of the social safety net.  The deficit problem exist from a lack of tax revenue, and tax revenue comes from economic activity.  We had a spike in the deficit from the collapse of economy activity.

^---  But doesn't unemployment hurt two ways? A man loses his job, and therefore pays less income tax. If he also starts collecting unemployment benefits, then the government loses the value of those benefits. The deficit goes up both by loss of tax revenue AND increased entitlement expenses.

 

  "The Dayton MSA will never recover from the recession lows..."

 

  There is a belief in this country that the economy always grows, population always grows, and things always get better. After all, this country has been growing steadily for the last 200 years, with a few setbacks during recessions.

 

    Watch any of the economic TV programs and you will hear things like "As soon as the economy recovers," "When the economy starts growing again," and things like that. It is a foregone conclusion that sometime in the future, the economic indicators will show an increase compared to today.

 

    Yet, there is no law of nature that says that the economy has to grow. It is not guaranteed. Just because no living person can remember the dark ages doesn't mean that we can't have a long term decline in economic activity.

 

    If the Dayton MSA will never recover from the recession lows, than that means that Dayton has peaked, permanently. This is a tough concept for a lot of folks.

 

    Yes, this "dismal science" is fun stuff.  :-(

But doesn't unemployment hurt two ways? A man loses his job, and therefore pays less income tax. If he also starts collecting unemployment benefits, then the government loses the value of those benefits. The deficit goes up both by loss of tax revenue AND increased entitlement expenses.

 

Yes, I think you get it. 

 

And, if the jobs that do come are so low-paying that this guy or gal qualifies for food stamps or the kids qualify for free school lunches, thats a long term increase in entitlements, a structural increase, not an interim one like unemployment insurance. 

 

 

^^No, you guys don't get it.

 

Taxes don't just go into Uncle Scrooge's money bin, they pay for real things that exist in the economy.  Future borrowing for the feds is very similar to the way everyday consumer borrow to pay for things that add value today with the expectation that future revenues will pay for it.  The only difference is that as the lender of last resort, the Federal Government has a few more tricks up their sleeve than the average borrower.

 

  ^---??? :?

 

  I thought that the deficit was the difference between expenses and revenues. If expenses increase and revenues decrease, then the deficit can only increase. What can I be missing?

Another thing that will cause a reduction in revenue if more people are moving to lower paying jobs is the earned income tax credit (EITC), which kicks in at various places depending on income and family size.  More people claiming the EITC= reduced tax in-take, contibuting to the deficit.

Another thing that will cause a reduction in revenue if more people are moving to lower paying jobs is the earned income tax credit (EITC), which kicks in at various places depending on income and family size. More people claiming the EITC= reduced tax in-take, contibuting to the deficit.

 

This will be a long term trend. Income options in the US are clearly showing signs of long term decline for more and more people.

If the Dayton MSA will never recover from the recession lows, than that means that Dayton has peaked, permanently. This is a tough concept for a lot of folks.

 

I think the employment drops of the last 10 years was probably a worst case scenario for manufacturing employment in this metro area.  It represents the shutdown of Delphi and GM (GM does have one plant left here), where a set of large plants downsized and closed over time.  This would also have some impact on suppliers, too (like the closure of that big Cooper Tire warehouse that was visible off I-75). 

 

However, humming along in the background was a diversified but low-viz industrial economy made up of smaller firms, akin to the German “mittelstand” firms.  Employment in this sector is being whittled away by globalization and automation and (in the case of the tool & die industry) lack of skilled workers.  So I expect manufacturing employment to continue to decline, albeit at a lower rate, and growth in other sectors (especially health and human services) to increase enough in the next ten years to make it a wash in terms of the MSA employment topline.

 

Taking a break from the Ohio employment numbers, here is a national look at the economy, from the Institute of Supply Management.  The ISM releases these status reports every month, and some of their indicators seem to be more predictive (like new orders) , so we can maybe see where the economy might be headed. 

 

The ISM looks at the economy by sector, apparently using the North American Industrial Classification Systems (NAICS) to categorized sectors, and releases two reports, one for the manufacturing economy and another for the non-manufacturing economy (presumably comparable to the goods producing and non-goods producing sector in the BLS data sets)

 

From their press release, for the non-manufacuring economy:

 

Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in June for the sixth consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Worldwide. "The NMI (Non-Manufacturing Index) registered 53.8 percent in June, 1.6 percentage points lower than the 55.4 percent registered in May, indicating continued growth in the non-manufacturing sector, but at a slightly slower rate. The Non-Manufacturing Business Activity Index decreased 3 percentage points to 58.1 percent, reflecting growth for the seventh consecutive month. The New Orders Index decreased 2.7 percentage points to 54.4 percent, and the Employment Index decreased 0.7 percentage point to 49.7 percent, reflecting contraction after one month of growth. The Prices Index decreased 6.8 percentage points to 53.8 percent in June, indicating that prices are still increasing but at a slower rate than in May. According to the NMI, 15 non-manufacturing industries reported growth in June.

 

Growing industries (in order of growth) are:

 

Real Estate, Rental & Leasing;

Arts, Entertainment & Recreation;

Agriculture, Forestry, Fishing & Hunting;

Information;

Mining;

Accommodation & Food Services;

Transportation & Warehousing;

Wholesale Trade;

Management of Companies & Support Services;

Public Administration;

Construction;

Utilities;

Health Care & Social Assistance;

Retail Trade

Professional, Scientific & Technical Services.

 

Also:  ”The two industries reporting contraction in June are: Other Services and Finance & Insurance.

 

For new orders:

 

“ISM's Non-Manufacturing New Orders Index grew in June for the 10th consecutive month. The index registered 54.4 percent, which is a decrease of 2.7 percentage points from the 57.1 percent reported in May. Comments from respondents include: "Increasing demand" and "Greater utilization of strategic sourcing opportunities."

 

For inventories:

 

ISM's Non-Manufacturing Inventories Index registered 58.5 percent in June, indicating that inventory levels grew in June for the third consecutive month. Of the total respondents in June, 33 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Using what we have and not replenishing stock" and "Cash flow shortage is preventing ordering."

 

….there’s also blurbs and detail for backlog of orders, prices, exports, etc.

 

 

Source: June 2010 Non-Manufacturing ISM Report On Business

 

 

Continuing the look at the ISM reports, here is the one for the manufacturing sector:

 

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded in June for the 11th consecutive month, and the overall economy grew for the 14th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The manufacturing sector continued to grow during June; however, the rate of growth as indicated by the PMI slowed when compared to May. The lower reading for the PMI came from a slowing in the New Orders and Production Indexes. We are now 11 months into the manufacturing recovery, and given the robust nature of recent growth, it is not surprising that we would see a slower rate of growth at this time. The sector appears to be solidly entrenched in the recovery. Comments from the respondents remain generally positive, but expectations have been that the second half of the year will not be as strong in terms of the rate of growth, and June appears to validate that forecast."

 

The growing industries, with the most growth first:

 

Plastics & Rubber Products;

Transportation Equipment;

Printing & Related Support Activities;

Computer & Electronic Products;

Electrical Equipment, Appliances & Components;

Paper Products;

Fabricated Metal Products;

Food, Beverage & Tobacco Products;

Furniture & Related Products;

Petroleum & Coal Products;

Nonmetallic Mineral Products;

Miscellaneous Manufacturing; and Chemical Products.

 

And…”The industries reporting contraction in June are: Apparel, Leather & Allied Products; Wood Products; and Machinery

 

New orders., which does show growth, but a big decrease since May:

 

ISM's New Orders Index registered 58.5 percent in June, which is a decrease of 7.2 percentage points when compared to the 65.7 percent reported in May. This is the 12th consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).

 

Again, much more detail at the link:

 

June 2010 Manufacturing ISM Report On Business

 

 

 

 

Even if no state officially declares bankruptcy, their fiscal decline will weigh on the economy for a significant time to come. If one or two do officially file bankruptcy of some form, (like Cali or Illinois) the financial shock to the system will be much, much greater than Greece, Spain, or Iceland every thought about being. Many state and local governments used the Federal stimulus program over the last year or two to keep things going. Without another big FED stimulus program states and local governments will have no choice but to cut deep and long for many years to come. Schools, Universities, transit, infrastructure, parks, and more are in for a very nasty ride.

 

To tie this to some previous discussions about government structures in Ohio. I think we may very well see the reduction in government agencies (such as Counties, Cities, Townships, school district, park districts, etc.) because the option to keep them all seperate will no longer be available, financially.

 

It’s “Chapter 66” as U.S. States Face De Facto Bankruptcy

 

“Forty-eight of 50 states face budget shortfalls this year,” they further report. “Many shortfalls amount to more than 20 percent of planned spending. The plunge in state tax revenue is the worst on record.”

 

Illinois

 

"It has reached the point where the state has, quite literally, stopped paying bills. This means that jobs are getting cut, paychecks are getting delayed, and businesses are being shut down. There is simply – and again, quite literally – no more money."

 

California

 

“People think we’re becoming a third world country,” says Arnella Sims, a Los Angeles County court reporter. “We are on the verge of system failure,” warns the executive director of the California Budget Project."

http://www.marketoracle.co.uk/Article21010.html

^

 

Just further reason to think the US Economy is NOT going to have a V-shapped recession.

 

The big question to me is... (how) will the state/local governernments and school districts default on future promised pension payments?

 

There is a ton of fat in those public pensions systems that could be cut back w/out getting to the bone. I imagine it will look a lot like how the automakers and steel corporations slowly and more quickly bled themselves of their retiree problems. I'd expect that minimal service years for retirement will go up as will expected contributions from public employees themselves (and likewise for health car et al).

I expect a sort of UAW-style cutback in the public sector as soon as the politics shift next year. New hires don't just waltz into the middle class. They get paid $14 an hour.

 

Given the fact that the Republicans controlled all branches of the Ohio Government from 1994-2006 and they did nothing to curb pensions, or shift future dollars for present spending to present spending, I seriously doubt it.

The economy was still growing if starting to lose its relative competitiveness through most the last GOP era. The big growth from the 70s and after in state gov't hadn't begun to completely overwhelm the states ability to pay for its retirees.

^I guess that's an excuse not to implement your political philosophy, if not a very good one.  I'm not sure it holds up to the fact that it's obvious these pensions have been a budgetary ticking time bomb for quite some time, particularly since that's been the lament in the private auto sector during the last GOP era and before.

 

Either way, It's certainly not the centerpiece of Kasich's campaign, which is to reduce revenue, not expenditure.

Either way, It's certainly not the centerpiece of Kasich's campaign, which is to reduce revenue, not expenditure.

 

Ohio has a balanced budget requirement, though, like most states, except for capital expenditures.  At some point, the numbers won't line up.  He'll have to find spending cuts, or else shift a prodigious amount over to capital expenditures and convince the voters to support a massive bond levy.

 

However, the pension, benefits, and salary scale disparities between public and private sector workers have mushroomed substantially in the past decade.  In addition, assumptions like 7-8% annual returns on investments are more transparently hollow now than they were during the tech boom and credit boom years.  There is nothing inherently inconsistent or duplicitous about acknowledging a problem for a long time but only moving it up on the priority list when it gets more serious.  Obviously, it's generally better to deal with problems earlier than later--but in both the public and private spheres, there are many reasons why that simply doesn't happen very often, whether with the sincerest of intentions or otherwise.

 

Almost everyone admits that rising prices for oil and other commodities are a substantial economic risk in the medium-term future, for example; that doesn't mean that there's an urgent need for any specific policy intended to deal with that risk.  Heck, lots of people even claim that the issues of the nuclearization of North Korea and Iran are problems for another day.  Without a certain degree of political momentum, which often can't be generated endogenously by public figures, even the best of ideas can lie fallow for a very long time.

Either way, It's certainly not the centerpiece of Kasich's campaign, which is to reduce revenue, not expenditure.

 

Ohio has a balanced budget requirement, though, like most states, except for capital expenditures.  At some point, the numbers won't line up.  He'll have to find spending cuts, or else shift a prodigious amount over to capital expenditures and convince the voters to support a massive bond levy.

 

Agreed.  All the more reason that someone whose centerpiece program to revive Ohio's economy is to cut revenue should actually have the stones to lay out what expenditure he wants to cut, particularly on the operating side.

 

However, the pension, benefits, and salary scale disparities between public and private sector workers have mushroomed substantially in the past decade.  In addition, assumptions like 7-8% annual returns on investments are more transparently hollow now than they were during the tech boom and credit boom years.  There is nothing inherently inconsistent or duplicitous about acknowledging a problem for a long time but only moving it up on the priority list when it gets more serious.  Obviously, it's generally better to deal with problems earlier than later--but in both the public and private spheres, there are many reasons why that simply doesn't happen very often, whether with the sincerest of intentions or otherwise.

 

Almost everyone admits that rising prices for oil and other commodities are a substantial economic risk in the medium-term future, for example; that doesn't mean that there's an urgent need for any specific policy intended to deal with that risk.  Heck, lots of people even claim that the issues of the nuclearization of North Korea and Iran are problems for another day.  Without a certain degree of political momentum, which often can't be generated endogenously by public figures, even the best of ideas can lie fallow for a very long time.

 

I'm more than willing to write off that period of Ohio's politics between 1994-2006 as squandered time as well.  Given the fact that the leading Republican candidate has offered no substantive policies except cutting revenue, and the record from that Party's previous tenure is one of infighting, lack of foresight and term limits, I don't think Ohio voters are being given any particular reason to vote for them.

Um, as opposed to the time before and/or since?

^I'm not exactly sure what that means.  I think that Kasich, who was originally a congressman, had the idea in mind that he was going to win this election on issues that mirrored what he and others considered to be the national mood, and I believe his policy prescriptions reflect that.  It doesn't seem like a winning strategy, let alone a coherent one that will actually improve the state.

You're saying that the period from 1994-2006 was "squandered time," apparently because the GOP had power, which by implication means you think that the Democrats did/have done better.  I want to know why you think that, or if you don't, then why you don't write off years before 1994 or since 2006 as squandered time as well.

^This is a good conversation- I'm not a mod, but you guys should continue it in the politics thread just so to avoid the off topic chilling effect: http://www.urbanohio.com/forum2/index.php/topic,19290.300.html

You're saying that the period from 1994-2006 was "squandered time," apparently because the GOP had power, which by implication means you think that the Democrats did/have done better.  I want to know why you think that, or if you don't, then why you don't write off years before 1994 or since 2006 as squandered time as well.

 

Deal.  Boundaries: I will only speak about the period from 1994-present, primarily because I was 14 in 1994 and don't really have any memory or knowledge of Ohio politics before that time except for the names Celeste, Celebrezze and Aronoff.  Additionally I would like to simply note that by responding to your question I am shifting from discussing Ohio politics and economy to things broader than simply in the context of the present election, which was what my previous posts on the subject clearly concerned.

 

"Squandered Time"- Given Kasich's stated goals that turning Ohio's economy around requires massive revenue cuts in the form of eliminating or reducing to a large extent the state income tax, and that Ohio requires a balanced budget, Ohio will have to eliminate some service related expenditure.  We can look at this in the context of previous GOP dominance in several ways 1) that the economic growth or growth in tax revenue that occured during that time was attributable to GOP rule and therefore the need for Kasich's proposed tax cuts to spur the economy is negated, since the present tax regime is the same if not identical to that of 2006; 2) that the loss of population and relative decline of Ohio's economy vis-a-vis other state's during that time period is what truly signals a dynamic state, and therefore any economic growth was the result of factors outside of the ability of the state government to control and should therefore be ignored, 3) revenue cuts in the form of tax cuts and breaks are always preferable and therefore the GOP in 1994-2006 should have been implementing Kasich's program.

 

Aside from the Third Frontier program I am unfamiliar with any particular policy accomplishment during the 1994-2006 period.  Certainly Ohio continued to lose population, which strikes me as being a decent measure of success or failure for a ten/fifteen/ or twenty year period of one party rule.

 

"Democrats have done better"-  Strickland has fought cuts to public education, frozen tuitions at public universities, and is pushing hard for the 3C rail investment.  The Republicans have opposed all of these things, if not unanimously than at least close to unanimously.  To me thse policies seem like obvious outgrowths or supports to Third Frontier, and I'm unsure why the Republicans want to oppose them.  In addition, these areas are some of the few where the state has a lot of room to act without the federal government, and those areas are the places where states will find the highest value add for government action.

 

But to expand, ultimately Kasich and the Republicans really fail at suggesting anyting outside of anything beyond tax cuts as the cure for Ohio's ills.  Their supposed concern for local government, freedom and efficiency is would offer them plenty of room to enact new policies that could really change the way the state operates.  Some that I've already mentioned are making the school system more efficient by abolishing the districts and instead operating them as a statewide system.  This could allow Ohio to fufill the Constitutional requirement (under their state constitution) while at the same time allow for parents to have some sort of authority on the level of the individual school.

 

They could reform the numerous laws that hamstring local governments from developing themselves and re-developing other areas, while slowly reducing the amount dloled out to support these often redundant government entities.

 

Ultimately though, I simply don't see how a tired old platform like "Eliminate the Income Tax" is either actionable or much of a call to arms for swing voters who didn't support you four years ago.

^This is a good conversation- I'm not a mod, but you guys should continue it in the politics thread just so to avoid the off topic chilling effect: http://www.urbanohio.com/forum2/index.php/topic,19290.300.html

 

Thanks for the assist, Straphanger.  And you're right.  Back on topic, folks!  Straphanger kindly linked to the thread for this discussion.

Oops. I guess Main Street isn't seeing all the green shoots!!!! This drop is huge, almost as big as after 9/11.

 

U.S. July consumer sentiment plummets

 

"WASHINGTON (MarketWatch) -- U.S. consumer sentiment plummeted in early July, hitting the lowest level since August, according to survey results released Friday by Reuters and the University of Michigan."

 

"The reading has only dropped this much or more seven times. The data goes back to 1978. The drop of 9.5 points in early July compares with a drop of 9.7 points following the terror attacks of Sept. 11, 2001."

http://www.marketwatch.com/story/us-july-consumer-sentiment-plummets-2010-07-16-103300

 

The US and UK are just playing games on a merry go round. Or, the US and the US is just playing games on a merry go round. Whoever it is, I think the goal is to just keep the ride going in circles and hoping it doesn't stop.

 

Chinese Treasury Dump Brings Its Total Holdings To One Year Low, As "UK" Continues Exponential Accumulation Of US Bonds

 

"We are a rather surprised that this morning's stunning Treasury International Capital report has not gotten far more prominent attention. The reason: in it we read that in May 2010, China dumped $33 billion in Treasuries, bringing its total to the lowest since June 2009. Furthermore, Japan also offloaded $8.8 billion in bonds, as did the Oil Exporters. Yet total foreign Treasury holdings increased from $3,957 billion to $3,964 billion almost exclusively as a result of ongoing exponential UK accumulation. It is time someone in the mainstream media asked just who is doing all this "UK-based" buying?"

http://www.zerohedge.com/article/chinese-treasury-dump-brings-its-total-holdings-one-year-low-uk-continues-exponential-accumu

 

 

I don't know what the ZeroHedge article's point was, since his conclusion was just an exhortation for someone else, somewhere else, to do something somehow to someone to conclude something.  However, his commenters are pretty open conspiracy theorists (the various Fed theories ... even the Rothschilds get a mention).

I don't know what the ZeroHedge article's point was, since his conclusion was just an exhortation for someone else, somewhere else, to do something somehow to someone to conclude something. However, his commenters are pretty open conspiracy theorists (the various Fed theories ... even the Rothschilds get a mention).

 

The point of my post was not the conspiracy theory stuff, its that China continue to par it US holdings. I think their is no doubt, that China can't just dump its US debt, but if they decide to no longer be a big player in our debt being purchased, that will clearly impact our debt dependent economy.

 

I do find it interesting to think that the UK (in its currently financial situation) is really buying US debt at that pace. But, I guess anything is possible.

"U.S. consumer sentiment plummeted in early July,"

 

So what?  Who cares about consumer sentiment.  Consumer sentiment is no longer corrolated with the economy.

 

Ok, maybe it's still important to some degree.  But imo, consumer setiment is only applicable to purchases from disposable income, and (imo) disposable income is a much smaller percent today of the economy than it has been in the past 40 years.  I have no proof of this, just my feeling.

 

So it doesn't matter how happy or how gloomy I am about the economy, my purchases are going to be pretty much the same.

 

Maybe consumer sentiment is relevant to "impulse consumers" which I am certainly not.  I usually plan my major purchases 1-2 years in advance, and don't buy a lot of the middle-level stuff.  And I sqeeze all of the utility out of an object I purchase.

 

I will be replacing a car later this year but I planned that purchase 2 years ago.  I just bought a 32" TV, but that was planned for 8 months ago and saved up for. Since i have kids I don't eat out at nice restaurants or spend much money on me.  Most of it goes to buying kids things.

 

Come to think of it, I spent a lot more unplanned money before I had kids.  Since fewer people today have children, that could affect discretionary spending some.