Explaining Southern California's economy

Blog Wars, Part I: Nick Denton doesn't like commenters

Nick Denton

Dave Winer/Flickr

Nick Denton is the man who founded Gawker Media. He doesn't much like commenters anymore.

Nick Denton is one of those Blog Lords whom, if you blog at all seriously, you have to pay attention to. But you also have to expect Denton to routinely exasperate. Such as when Gawker Media redesigned its blogs to be far more iPad friendly — and reader unfriendly. Or just today, when CNN reported on some comments that the Great Provocateur made at South by Southwest:

In the early days of the Internet, there was hope that the unprecedented tool for global communication would lead to thoughtful sharing and discussion on its most popular sites.

A decade and a half later, the very idea is laughable, says Gawker Media founder Nick Denton.

"It didn't happen," said Denton, whose properties include the blogs Gawker, Jezebel, Gizmodo, io9 and Lifehacker. "It's a promise that has so not happened that people don't even have that ambition anymore.

"The idea of capturing the intelligence of the readership -- that's a joke."

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DeBord Report on 'America Now with Andy Dean,' March 9 edition

It's Monday, and that means that I post the audio of my weekly joust with Andy Dean on his radio show — a show that's now seven months young! So congrats to Andy on that. He's trying to bring me out of the darkness and into the light, so on Friday we spent some discussing the sins of Paul Krugman, op-ed columnist for the New York Times and sworn foe of conservative viewpoints. Krugman hasn't given up on his position that we need more government spending rather than less right now. Andy is horrified by this prospect. I actually think that Krugman, in a recent blog post, actually did something unusual and glossed over a rather significant piece of spending under Reagan — defense spending.

I think we could use more of that right now, for two reasons: We need to refurbish aspects of our military, especially Navy ships, which guard the world's sea lanes; increased defense spending could also function as a kind of non-partisan stimulus is a political environment that far too divided to pass the kind of stimulus was saw early in the Obama administration.

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Three reasons why Greece should leave the euro

Life In Athens As Greece Is On The Brink Of Collapse

Vladimir Rys/Getty Images

An elderly man feeds pigeons on Syntagma Square on November 3, 2011 in Athens, Greece. Greece stands on the brink of economice collapse as political disagreements continue concerning the financial aid package proposed by the EU.

At this point, the Greek debt crisis probably seems like it's been going on forever. It hasn't, but it seems to defy resolution. Last Friday, the country finally defaulted, in a strictly technical sense, on part of its sovereign debt — an outstanding slice of private bondholder debt that was insured by the dreaded credit default swaps. The agency that determines whether those swaps — which amount to a bet that a country won't be able to keep up with its bond payments — should pay out said, "Yep, Greece has defaulted." Felix Salmon and John Carney provided a good explanation on Marketplace at the end of last week.

The main issue for Greece is just how long it's going to have to suffer. The austerity measures that are being forced upon it in exchange for more bailout money from the European financial authorities are setting it up for a decade of pain. On the plus side, Greece stays in the eurozone and has access to financing through the currency union; something can always be worked out...however...s-l-o-w-l-y. On the minus side...well, there's all that austerity and aforementioned pain.

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It was a meh week for the stock market

Price Of Oil Rises Amid Stock Market Volatility

Mario Tama/Getty Images

Traders work in the oil options pit on the floor of the New York Mercantile Exchange on August 11, 2011 in New York City.

First the Dow hit 13,000. And almost immediately, as if it we suffering a financial bout of triskaidekaphobia, the market retreated. And then it spend the week basically going nowhere, despite the launch of a new Apple iPad, a solid February jobs report, and a sense that the worst might be over for Greece and that whole neverending European debt crisis.

What's are the markets going to need to hit 13,000 again — and climb higher? Well, it's hard to say. Better GDP growth would help. But the real secret sauce will have to come from the Federal Reserve, which could do another round of "quantitative easing" or employ some new form of monetary policy — perhaps "sterilized" easing, with the focus on preventing inflation from creeping back into the economy.

Is Wall Street trying to force the Fed's hand? Maybe. But for the moment, it looks as if the Fed isn't quite ready to have its hand forced.

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The bad news in the good jobs news

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

Today's jobs report was pretty solid. Not supergood, but miles from superbad. I went on "AirTalk" with Larry Mantle this morning to hash it all out with Christ Thornberg of Beacon Economics.

There were indications in the BLS data that consumer spending is weakening a bit, due to fewer jobs being added in the retail sector. Robert Reich thinks it's worse that, even as the rough pace of 245,000 jobs on averge persists:

[W]hether even that good rate continues depends largely on whether consumer demand can be revived. Spending by American consumers is 70 percent of U.S. economic activity. But so far, spending is anemic.

American consumers have replaced worn-out cars and appliances, but little else. They haven't had the dough. Their wages are still falling, adjusted for inflation. The value of their homes - most consumers' single biggest asset -- continues to drop.

[...]

Corporate profits are up but the money isn't flowing to American workers. The ratio of profits to wages is the highest on record -- since the government began keeping track in 1947. Not only has the median wage continued to drop, adjusted for inflation, but a far smaller share of working-age Americans is now employed (58.6 percent) than was employed five years ago (63.3 percent). Today's employment-to-population ratio isn't much higher than it was at its lowest point last summer, when it dropped to 58.2 percent.

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