Explaining Southern California's economy

Good rich people v. bad rich people: Whom to hate

Dow Jones Industrial Average Closes Slightly Down

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At the Nation, Jamelle Bouie pretty well summarizes not just what the Occupy Movement stands for, but what lots of everyday Americans are feeling:

It’s hard to look at the wealth worshiping of American culture and conclude that Americans hate the rich. Rather, Americans hate people who become rich through rent-seeking, and then use their power and influence to pull up the ladder for everyone else. Financial elites crashed the economy, but rather than suffer any adverse consequences for their reckless behavior, they’ve prospered. Worse, they’ve yet to show any contrition for their actions, even as millions of Americans—who had no part in the sideshow—languish in a wounded economy.

This is the end result of what some have called the "financialization" of the U.S. economy, with the financial-services sector accounting for a historically disproportionate share of GDP. 

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Falling unemployment plus rising GDP growth equals a Happy New Year

A jobs sign hangs above the entrance to

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A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC. New claims for US unemployment insurance dropped last week to a level last seen more than three years ago, government data showed December 15, 2011 in a sign of stabilization in the troubled jobs market.

There's been a big debate in economics over the past few months about whether the U.S. will fall into another recession. One side points to continued high unemployment and sluggish growth, as well as the perception that the economy is in the dumps (and in an economy, perception is very important to consumer behavior, which accounts for 70 percent of economic activity in the U.S.). 

The other side says, basically, that we aren't seeing unemployment go up or GDP growth go down, and besides, most industries have declined so far that there's nowhere to go but up. Therefore, no double-dip recession.

The data favors the latter argument. This is from the LA Times:

Growth has picked up steam through the fall as dropping gas prices put more money in consumers' pockets and businesses rebuilt their inventories. Economists project the annualized growth rate from October through the end of the year could be as high as 4%.

Helping fuel that recovery is continued improvement in the job market.

New jobless claims declined again last week, falling to 364,000, the lowest level since April 2008, the Labor Department said Thursday. The four-week average of 380,250 is below the 400,000 figure that economists say is key to cutting into the unemployment rate.

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Remember Lehman Brothers? It's coming out of bankruptcy

Financial Crisis Inquiry Commission Holds Hearing In Washington

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WASHINGTON - SEPTEMBER 01: Lehman Brothers former Chairman and CEO Richard Fuld is sworn in before testifying to the Financial Crisis Inquiry Commission about the roots and causes of the 2008 financial and banking meltdown in U.S. and worldwide markets on Capitol Hill September 1, 2010 in Washington, DC. The commission begins two days of questioning about how two specific financial companies, Wacovia and Lehman Brothers, failed and why some institutions were considered "too big to fail" while others were allowed to fail. (Photo by Chip Somodevilla/Getty Images)

Not that that means anything. All that's left of the once-proud Wall Street investment bank, whose bankruptcy precipitated the financial crisis, is $65 billion. And every single penny of that is spoken for.

This is from Reuters, via the LA Times:

Unsecured creditors will receive about 21 cents to 28 cents on the dollar, depending on the type of security they held. Shareholders, whose stock in the company hit a high of $86.18 in February 2007, according to Reuters Data, will receive nothing.

The company had $639 billion in assets when it went bankrupt. Some of that money was returned to brokerage customers in a separate proceeding. There remains $65 billion to be returned to creditors who have $450 billion in claims, a group that includes debt investors and trading partners from before the bankruptcy, such as Goldman Sachs.

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The next time you use a computer, remember Jacob Goldman, RIP

Xerox Announces Revenue Restatement

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The House that Jacob Goldman built. The innovator died on Tuesday, at age 90.

How would we ever get anything done without the contributions of Jacob Goldman, founder of Xerox PARC, who died yesterday at age 90? This is from the New York Times' obituary:

Established in 1970 in an industrial park next to Stanford, PARC researchers designed a remarkable array of computer technologies, including the Alto personal computer, the Ethernet office network, laser printing and the graphical user interface.

The technologies would later be commercialized by both Apple Computer and Microsoft, among others, and Xerox would be criticized for not capitalizing enough on the technologies it had pioneered...

So Xerox didn't bring us the personal computing revolution. But at least the right people were around to capitalize on the research. If there's a lesson in Goldman's life, it's that research matters. And it really matters when it's funded by big companies, even if they don't wind up knowing what to do with the innovation that it enables.

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At long last, Steve Jobs gets a Grammy

Apple CEO Steve Jobs Delivers Opening Keynote At Macworld

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Steve Jobs will be awarded a special Grammy (posthumously) in February, 2012.

Maybe he should get ten. Or a special Giant Grammy that can only exist in low-earth orbit, or be used as statuary at Apple's Cupertino, Calif. campus.

This is from the New York Times' ArtsBeat blog:

Jobs, who died on Oct. 5, will be given a Trustees Award, which honors “outstanding contributions to the industry in a nonperforming capacity.” The academy’s national board of trustees decided to honor Jobs because he “helped create products and technology that transformed the way we consume music, TV, movies, and books,” the announcement said.

The National Academy of Recording Arts and Sciences certainly made the right call here, even if the Jobs Grammy will have to awarded posthumously. 

I'm far from the first person to argue that Steve Jobs saved the music business, making it possible for there to continue to be a National Academy of Recording Arts and Sciences to award posthumous Grammys. Here's Ed Nash, who runs a entertainment management firm in, yes, Nashville:

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