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A preview of world events in the coming week from CFR.org and Foreign Affairs.
An Israeli announcement of more housing construction in East Jerusalem became the focus of Vice President Biden’s Middle East trip, but CFR’s Jacob Walles thinks the “proximity talks” starting next week are a practical, low-risk way to restart negotiations.
Vice President Joseph R. Biden, in the Middle East to build support for revived Israeli-Palestinian peace talks, issued a strong denouncement of Israeli plans to build another sixteen hundred housing units in East Jerusalem, which Palestinians see as the capital of a Palestinian state. Commentators included those writing about the bad timing and substance of Israel’s announcement; others speculated about Israel’s stance on Iran and the readiness of both sides for real compromise.
New Jersey Governor Chris Christie is doing what he was elected to do, govern. And that means playing hardball with union termites who refuse to give an inch to help the state out of budget problems primarily caused by untenable union promises, union wages, and union pensions.
When unions refused to cooperate, Christie decided to take the next logical step, to privatize jobs. Please consider New Jersey plans to privatize state jobs
Gov. Chris Christie today will create a commission to privatize as many as 2,000 state jobs beginning next January, officials said Wednesday night.As he grapples with an $11 billion deficit in the budget he will present on Tuesday, Christie is also considering invoking the Disaster Control Act to suspend Civil Service rules to make it easier for him to lay off higher-paid workers, according to two administration officials.
The Republican governor today plans to sign an executive order creating the task force to cut the size and cost of the state payroll. Three officials familiar with his plans last night said the commission will identify which jobs or agencies would be operated by the private sector and how that would be accomplished. The officials declined to be named ahead of the announcement.
Privatizing jobs would require layoffs. By beginning them in January, Christie would not be subject to a deal between former Gov. Jon Corzine and state worker unions that would require the state to pay millions in raises to remaining workers if he orders layoffs before then.
Suspending civil service would allow Christie to order layoffs of higher-paid unionized state employees with many years of service, rather than the usual practice of layoffs that affect lower-paid new employees first, the officials said. Currently, workers with more seniority can “bump” less-experienced workers from their jobs.
The privatization effort deals a blow to state worker unions just 48 hours after Christie publicly acknowledged he is bound by the agreement struck by Corzine where state workers would get two 3.5 percent raises in the coming fiscal year Ð one in July and one in January. They deferred one raise and took 10 unpaid furlough days last year in exchange for the no-layoff pledge.
Two days ago when I read that the Union refused to give an inch on a ridiculous contract negotiated by former governor Corzine, I was delighted. The reason is I was pretty sure how Christie would respond. Today he hit a home run.
Moreover, his goal should be to privatize every government job he can. Why stop at 2,000?
Where’s The Leadership?
It’s too bad other governors refuse to follow Christie’s lead by cutting expenses. I talked about that previously in Missouri Budget Overstates Revenues By Up To $1 billion; Indiana Revenue Falls Short; Budget Battles In Washington; Budget Gaps In Kansas
Sadly, the governors in Missouri, Kansas, Washington, and Indiana fail to see the problem or are still looking for “tricks” to postpone dealing with those problems. There are no tricks left in the bag, yet states keep looking for tricks.
Add Virginia to the list of states playing trick-or-treat.
Federally Funded Ticketing Blitz In Virginia
Inquiring minds are reading Virginia State Police Help With Budget Crunch.
A federally funded ticketing blitz in the state of Virginia landed a total of 6996 traffic tickets this weekend. The blitz, dubbed “Operation Air, Land & Speed” coincided with frantic efforts by state officials to close a$2.2 billion budget deficit. Supervisors ordered state troopers to saturate Interstates 81 and 95 to issue as many tickets as humanly possible over the space of two days.Activists with the National Motorists Association pointed out that enforcement efforts may have concentrated on areas where speed limits are expected to rise to 70 MPH following Governor Bob McDonnell’s signature on legislation raising the state’s maximum speed limit (view law). This would mean a significant number of tickets were issued for conduct that will be perfectly legal in a matter of months. The group also indicated that state police tactics may run afoul of state law.
Under the federal grant application process, state officials explained that they would pay officers overtime — at least one-and-a-half times their normal salary — to participate. This special reward for ticketing operation participants appears to violate the spirit of state law.
Message To Virginia Governor
Hello, Bob McDonnell, you are not even in the ballpark with what needs to be done. How about showing some leadership rather that resorting to traffic blitzes to shore up the budget? All you are doing is postponing tackling the real problem, a bloated state budget.
If the state police have nothing better to do than harass drivers in areas where the speeding limit is set to go up anyway, then Virginia should get rid of some of that police force, reducing the budget at the same time.
Brass Balls In Las Vegas
Finally! The mayor of a major city is looking into doing what needs to be done. Please consider Las Vegas Mayor Says City Should Fire All Workers
If Las Vegas can’t get the desired wage concessions out of its employee unions, the city should simply fire everyone and offer to rehire them to work a shorter work week, Mayor Oscar Goodman said Wednesday.“I’m trying to save jobs. I really am,” Goodman said. “If it’s a strong-arm tactic, so be it. “If it’s legal, I’m going to propose it to the council. I think it’s the only way we’re going to save jobs.”
Goodman ordered the city attorney to study the possibility.
The idea didn’t go well with the unions. Several union presidents went so far as to call the mayor a bully. And Councilman Ricki Barlow also said he disagreed with the mayor.
The city faces a $70 million budget hole to fill and most likely a $40 million deficit in the next fiscal year, and the proposed solution to that hasn’t changed — all employees, Goodman said, should forgo their scheduled raises and accept 8 percent pay cuts in each of the next two years.
Or, under his fire-and-rehire plan, a new 37.5-hour workweek would trim costs 6.25 percent, and a 36-hour week would cut costs 10 percent, he said.
“I’ve never been as severely disappointed as this situation has caused me to be,” Goodman said about the unions being unwilling to open their contracts and accept needed changes.
Goodman also called for a study of whether the city should privatize its ambulance services, noting that his fire-them-all approach isn’t applicable to public safety employees.
Hello Mayor Goodman, you have the right idea, so just do it. And when you hire those workers back, privatize every one of the jobs, including police and fire. Don’t wimp out by privatizing just ambulance services. It’s time to show some brass balls.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Any economists blaming snow for recent weekly claims reports need to search for additional excuses. Once again, today’s numbers appear like reporting in the movie Groundhog Day.
Please consider the Unemployment Weekly Claims Report for March 11, 2010.
In the week ending March 6, the advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week’s revised average of 470,500.
Weekly Unemployment Claims
The weekly claims numbers are volatile so it’s best to focus on the trend in the 4-week moving average. That 4-week average has not show any improvement for quite some time.
4-Week Moving Average of Initial Claims
The 4-week moving average is still near the peak results of the last two recessions. It’s important to note those are raw number, not population adjusted. Nonetheless, the numbers do indicate broad weakness.
4-Week Moving Average of Initial Claims Since 2007
4-Week Moving Average of Initial Claims Detail
The 4-week moving average of claims for the last four weeks is about where it was on December 5, 2009. By this measure, the recovery has stalled. For more on jobs, please see Bragging About Census Hiring Starts Already; I’ll Take The Under.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Inquiring minds are reading Miami-Dade hospital system nears insolvency.
The major hospital network Miami relies on for trauma care is close to insolvency and could be cut off by suppliers. Executives for Jackson Health System surprised its governing board Tuesday by saying the nonprofit is near or already in a “death spiral” as it runs low on cash.Chief Operating Officer David Small says any day he could hear from a surgeon without enough supplies to operate. The hospital system is the only Level 1 trauma center set up to provide emergency care around the clock in Miami-Dade, which is Florida’s most populous county and the 8th largest in the nation.
The hospital system needs a $67 million advance from the county to avoid coming within a day and a half of operating cash by April 5.
County responsible for paying Jackson’s union workers
Here’s an interesting highlight. The Miami-Dade attorney says County responsible for paying Jackson’s union workers.
If the Jackson Health System runs out of cash, the county would be responsible for paying Jackson’s 10,500 union workers, but not necessarily the other 1,500 employees, according to a legal analysis by County Attorney R.A. Cuevas Jr.It’s unclear exactly how big a tab that might be, but it would be a huge chunk of the $86 million of salaries and benefits that the public hospital system spends each month. At present, Jackson is expected to run out of cash in May or June unless drastic cuts are made.
This revelation on the county’s responsibility comes just before a special meeting scheduled for Wednesday by the Miami-Dade County Commission “to really understand the issues . . . being faced by the community’s safety net hospital,” according to the memo from Chairman Dennis C. Moss, who ordered the meeting.
Cuevas’ memo explores many issues in the relationship between Jackson and the county and raises the possibility that Gov. Charlie Crist might set up an oversight panel to administer the financially troubled institution, much the same way that Gov. Lawton Chiles created a financial emergencies board in 1996 to get the city of Miami back on track.
Jackson Chief Executive Eneida Roldan is trying to find ways to get faster and lower costs, but last week she announced she was putting a 45-day moratorium on job cuts, meaning it would likely be May before any major cost-cutting takes place.
The county meanwhile is battling its own budget woes, needing to find another $48 million in cuts this fiscal year, making it extremely difficult to find more money for Jackson.
Cascading Bankruptcies
Read the last sentence in the above article above again. It highlights the problems of unions dumping on cities dumping on counties. The only solution is to get rid of unions, taxpayer supported defined benefit pension plans, and taxpayers supported salaries well above what the private sector makes.
As I said years ago, I fully expect several counties in Florida to go bankrupt. Moreover, I expect many cities in many states to do the same. The only way out is for unions to voluntarily agree to dramatic cuts in wages and benefits. However, as noted in Moorestown New Jersey Unions Highlight Union Arrogance, the odds of that happening in mass are slim.
Ironically, this depression is bound to unwind the devastatingly parasitic measures FDR used to combat the last depression.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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The Spanish property market has posted its first rise in house sales for three years, it has been announced.
Figures revealed by the Ministry of Housing show that sales in the country were up by 4.1 per cent year-on-year during the fourth quarter of 2009 and could represent a return in interest to the economically-troubled destination.
Speaking to Overseas Property Professional, many developers and agents reported that they had experienced a rise in the number of sales and enquiries they had dealt with surrounding the popular European destination.
Alfredo Milla, director of international investments at Mediterranean, told the property website that there was a feeling that the economic climate was improving.
"We believe that the confidence is returning to the international buyers as they can see the great offers that are now available in Spain.
"With a lot of European countries predicted to leave the recession this year there is not so much financial fear."
Meanwhile, the National Association of Estate Agents International has recommended that buyers invest early in the country to take advantage of bargain properties.
France could benefit from a massive influx of foreign property investment after its government decided to implement the country’s first ever trust law.
A report on Overseas Property Professional has explained that the new guidelines mean that foreign pension trustees will now be allowed to invest in leaseback property within the country.
Furthermore, wealthy investors can now avoid heavy taxation when using offshore funds for property transactions.
Investors from tax havens such as Jersey, Guernsey, the Isle of Man, the British Virgin Islands and the Cayman Islands will now be exempt from the three per cent penalty that has been applied in past years.
David Anderson, of law and tax firm Sykes Anderson, told OPP that this could represent one of the largest developments in overseas property of the last ten years.
"We’re seeing quite a run of high net worth individuals with offshore funds focusing on trophy properties and asset classes that can’t be bought in the UK, such as vineyards and ski lodges, as well as prime agricultural land."
A survey conducted by HomeAway and Savills recently claimed that France was set to become an investment hotspot during 2010.
After a turbulent few months for the Cypriot housing market, news that property sales are beginning to pick up is likely to be welcomed by investors.
The latest statistics, compiled by the island’s Lands and Surveys Department, demonstrate an increase in volumes of around 30 per cent in February compared with the same month last year.
Solomon Kourouklides, president of the Cyprus Real Estate Agents’ Association, explained that the growth was probably a result of more opportunities opening up for buyers in the marketplace.
Many new purchasers are buying up property from individuals who are struggling with loan payments.
Meanwhile, Mr Kourouklides made his predictions for the coming year: "If the economic parameters remain the same, we believe that the market will remain at the save level as in 2009."
This is the second month in a row that property sales posted an increase, as in January the Land and Surveys Department reported that there had been a 24 per cent increase in house sales compared with the same period in 2009.
Listen to experts breakdown the development of an international framework for geoengineering and the implications of these technologies for U.S. foreign policy.
Listen to experts breakdown the development of an international framework for geoengineering and the implications of these technologies for U.S. foreign policy.
Report
In a scene that I expect to play out in every city across the country, Unions won’t reopen talks in Moorestown New Jersey.
Township officials expressed frustration that several unions representing Moorestown government workers have not agreed to reopen contract negotiations.Last month, township council asked the unions to consider making wage and health benefit concessions this year even though they have contracts that continue through 2012 and guarantee annual pay raises of 3.75 percent.
At Monday night’s council meeting, Township Manager Christopher Schultz disclosed to the public the specifics of council proposals to the unions — a wage freeze and a payroll contribution to health care benefits to help cut costs to the township.
As of Monday night’s deadline to respond, township officials said none of the unions had agreed to reopen negotiations.
“It’s more than frustrating,” said Councilman Greg Gallo. “It’s irresponsible and it shows tremendous shortsightedness and, frankly, I think it shows a disrespect to the taxpayers and to council to not even enter into a conversation. We respect the fact that they have existing contracts, but the world has changed and we are living in extraordinary times.”
“The membership has decided not to open up the contract at this time, but we understand the township is facing economic pressure,” said CWA local President Adam Leibtag.
For the current contract reached in August 2008, he said the union made concessions that included an increase from $10 to $15 in doctor’s visit co-pays.
Blatant Union Arrogance
It is the height of arrogance and stupidity to brag about concessions like a $5 increase in copays made in 2008. Councilman Greg Gallo hits the nail on the head with “It’s irresponsible and it shows tremendous shortsightedness and, frankly, I think it shows a disrespect to the taxpayers and to council to not even enter into a conversation.”
I am thankful for that shortsightedness actually. Cities will be forced to realize what leaches unions are.
The correct solution, and the only solution is to get rid of union pestilence. That is easy to accomplish by privatizing every job, including the fire and police departments, the latter to the sheriffs association.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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In a headline trumpeting the wrong thing, Bloomberg is reporting Unemployment Decreased in Nine U.S. States in January.
The unemployment rate decreased in nine U.S. states in January and climbed in 30, signaling the thawing of the labor market is not broad-based.The jobless rate in Michigan showed the biggest drop, falling to 14.3 percent, still the highest in the nation, from 14.5 percent in December, according to figures issued today by the Labor Department in Washington. New York and New Jersey were among eight states where unemployment decreased by a tenth of a point.
A national unemployment projected to average 9.8 percent this year signals state budgets will be strained by decreases in tax revenue and rising jobless insurance payments. The loss of 8.4 million jobs since the recession began in December 2007 means the labor market in the world’s largest economy will take years to rebound.
“This is a recovery that’s really kind of concentrated,” said Steven Cochrane, director of regional economics at Moody’s Economy.com in West Chester, Pennsylvania. “It still portends weakness in income-tax revenue and sales-tax revenue into fiscal year 2011.”
Unemployment in the Detroit area, home to General Motors Co. and Ford Motor Co., dropped to 15.3 percent from 16 percent in December, contributing to the decrease in Michigan’s jobless rate.
States showing the most improvement in coming months will probably be those with a large manufacturing base, said Moody’s Economy.com’s Cochrane. The need to rebuild inventories and growing exports is propelling a factory rebound that will help some parts of the country over others, he said.
Unemployment in California, Florida, Georgia, North and South Carolina and the District of Columbia climbed to the highest levels since records began in 1976.
Regional and State Report
With that backdrop let’s take a look at the actual data from the BLS Regional and State Employment and Unemployment Report for January 2010.
Thirty states and the District of Columbia recorded over-the-month unemployment rate increases, 9 states registered rate decreases, and 11 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate fell from 10.0 percent in December to 9.7 percent in January, but was up from 7.7 percent a year earlier.In January, nonfarm payroll employment increased in 31 states and the District of Columbia, decreased in 18 states, and remained unchanged in 1 state. The largest over-the-month increase in employment occurred in California (+32,500), followed by Illinois (+26,000), New York (+25,500), Washington (+18,900), and Minnesota (+15,600).
State Unemployment (Seasonally Adjusted)
Michigan again recorded the highest unemployment rate among the states, 14.3 percent in January. The states with the next highest rates were Nevada, 13.0 percent; Rhode Island, 12.7 percent; South Carolina, 12.6 percent; and California, 12.5 percent. North Dakota continued to register the lowest jobless rate, 4.2 percent in January, followed by Nebraska and South Dakota, 4.6 and 4.8 percent, respectively. The rates in California and South Carolina set new series highs, as did the rates in three other states: Florida (11.9 percent), Georgia (10.4 percent), and North Carolina (11.1 percent). The rate in the District of Columbia (12.0 percent) also set a new series high.
Six states reported statistically significant over-the-month unemployment rate increases in January. New Mexico experienced the largest of these (+0.3 percentage point), followed by California, Florida, Idaho, and Utah (+0.2 point each) and Maryland (+0.1 point). The remaining 44 states and the District of Columbia registered jobless rates that were not appreciably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.
West Virginia and Nevada recorded the largest jobless rate increases from January 2009 (+3.5 and +3.4 percentage points, respectively). Six other states reported rate increases of 3.0 percentage points or more: Florida, Illinois, and Wyoming (+3.2 points each), Rhode Island (+3.1 points), and Alabama and Michigan (+3.0 points each). The District of Columbia also registered a large over-the-year unemployment rate increase (+3.6 percentage points). Thirty-five additional states had smaller, but also statistically significant, rate increases. The remaining seven states reported jobless rates that were not appreciably different from those of a year earlier.
Unemployment Rates By State
click on chart for sharper image
Percentage Change Year Over Year
click on chart for sharper image
Things are improving a bit in Michigan while climbing to new highs in California, Florida, Georgia, North and South Carolina and the District of Columbia.
Note that California was the state adding the most jobs. Employment just did not increase by enough relative to those seeking jobs.
These numbers show how shaky the “recovery” is, especially with huge budget concerns and layoffs coming in most states.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Instead of fighting jihad in Somalia by supporting the weak transitional government, the United States would have more success focusing on humanitarian aid and development, says democracy and governance expert Bronwyn Bruton.
Israeli Ministry of Defense adviser Uri Lubrani’s opinion that supporting Iranian opposition is a better policy than considering a nuclear strike has gained momentum in Israeli policy cirlces, the Wall Street Journal reports.
Please consider this one sentence video clip from House Speaker Nancy Pelosi.
http://www.youtube.com/watch?v=KoE1R-xH5To
“We have to pass the health care bill so that you can find out what is in it.” That unfortunately is the sad state of affairs, not just with healthcare, but with virtually any bill passed by Congress.
The only people who know what is in these bills are the lobbyists who write them.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
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