Death of a Paper

As financial ruin looms for the New York Times, we ponder a world without print.

The collapse of daily print journalism will mean many things. For those of us old enough to still care about going out on a Sunday morning for our doorstop edition of The Times, it will mean the end of a certain kind of civilized ritual that has defined most of our adult lives. It will also mean the end of a certain kind of quasi-bohemian urban existence for the thousands of smart middle-class writers, journalists, and public intellectuals who have, until now, lived semi-charmed kinds of lives of the mind. And it will seriously damage the press’s ability to serve as a bulwark of democracy. Internet purists may maintain that the Web will throw up a new pro-am class of citizen journalists to fill the void, but for now, at least, there’s no online substitute for institutions that can marshal years of well-developed sourcing and reporting experience—not to mention the resources to, say, send journalists leapfrogging between Mumbai and Islamabad to decode the complexities of the India-Pakistan conflict.

$7.7 Trillion

With the addition of Citi to the fray these bail out numbers are starting to get beyond comprehension. Here’s one perspective:

The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

Wow. More…

Bit of an update: (these are the numbers i was really looking for yesterday) If you adjust for inflation and add up the cost of the Marshall Plan (rebuilding Europe after WWII), Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA’s lifetime budget, you still fall short of the projected cost of this bail out.

WPA

Making the case for a new Works Project Administration.

During the Depression, President Roosevelt poured $11.4 billion (about $175 billion in 2008 dollars, by our estimate) into the Works Progress Administration. The agency spent nearly $4 billion on highway and road projects and more than $2 billion on public buildings and utilities. All told, the WPA put 8.5 million people to work between 1935 and 1943. Together those people built 651,087 miles of roadway, built or improved 124,031 bridges, erected 125,110 public buildings and laid 853 airport runways. Not bad at a time when the unemployment approached 25 percent.

Beyond providing jobs — analysts say every $1 billion spent on transportation projects creates 35,000 jobs — a modern-day WPA would produce lasting benefits. “China is spending 9 percent of its GDP on infrastructure, and we’re spending something like one or two percent,” says Allen D. Biehler, Pennsylvania’s transportation secretary. “A sustained investment would not only create jobs that have a strong multiplier effect on the larger economy, but would prevent us from falling behind other nations.”

more…

Funny Money

I’m guessing they blew the first $85 billion on hookers and blow? The presses at the Mint must be running overtime with all the fake monopoly dollars we needing to give away.

The New York Federal Reserve is lending up to $37.8 billion to American International Group to give the troubled insurer access to much-needed cash.

more…

Ageism

There was an interesting bit on NPR this morning about a 70-year-old retiree who wants to return to teaching high school because his home equity loan has tanked and the hemorrhaging stock market has nose-dived his income.

Ok fine. I’m not opposed to this – in fact I think we should be working towards 100% employment in this country – give everybody who wants to work education and a job. But what’s that means for the current working generation, in a tight job-market (the one who’s keeping his social security fund afloat no less)? This guy probably knows less than me about computer-related issues, but he’s got experience I can never catch up with. We’re potentially equally employable. If there’s to be a mass return of seniors to the workplace, a decent wage for those of us who’ve only been working for five to ten years could be harder to come by.

To top it off the government will nail an employers ass for perceived age discrimination – So if me and the 70-year-old retiree happen to look the same on paper, chances are he’s going to get the job.

What interesting and mildly horrifying times we live in.

WaMu

The largest bank failure. Ever.

Federal regulators had been trying to broker a deal for Washington Mutual because a takeover by the F.D.I.C. would have dealt a crushing blow to the federal government’s deposit insurance fund. The fund, which stood at $45.2 billion at the end of June, has been severely depleted after suffering a loss from the sudden collapse of IndyMac Bank. Analysts say that a failure of Washington Mutual would have cost the fund as much as $30 billion or more. – NYT

That sucking sound you hear? That’s your standard-of-living being sucked down into a bottomless pit of debt corruption and corporate greed. This is probably what the prison shower feels like the second you accidentally drop the soap.

Paycheck

Stocks before whore – everyone’s poor – Jon Stewart

Yeah, the fact that a meltdown in financial markets finally managed to kick the stories about a grown man paying for sex (wow, that really happens?) out of the headlines, is a little reassuring, although again, I’m still not certain why we’re not rioting in the streets, given the state of things.

Another bit that surprised me was the ommision of this little gem from the headlines – that the recently-departed CEO’s salary was about the same amount that JP Morgan just paid for the enitre instititution.

One person who does not have to worry is James Cayne, the recently departed chief executive of Bear Stearns. According to the New York Times, he walked with $232 million in compensation over the period from 1993 to 2006. This is just another example of how the global economy rewards extraordinary talent.

Yup, that totally makes sense to use tax payer money to bail them out.

Needing an FDR

The old, oil based, suburban sprawl economy based on forever rising house prices, on easy credit, on subdivision after subdivision–on running up credit cards and on leverage piled on leverage piled on arbitrage, is in the middle of cracking up, spectacularly. While there will be a short term reduction in the price of oil, in the long term oil is still going up and the America of the sprawl economy; the economic geography of America, looks entirely different at $4/gallon gasoline than it does at $2/gallon gasoline. Huge swathes of exurbia and suburbia become simply economically unviable. Zombie Burbs.

An interesting take on the current economic outlook. The pertinent question in my mind is where do we put all the refugees from the suburbs? Are we looking at reverse white-flight, where the affluent flock back to the urban cores, while the suburbs take a dive? Judging by the number of high-end condos going up in downtown Austin, this may already be happening.

Second Great Depression

Economists had laid out the sequence of causes and effects in a “hard landing,” and it worked just as they said it would. Once the run on the dollar started, everything seemed to happen at once. Two days after the Venezuelan oil shock the dollar was down by 25 percent against the yen and the yuan. Two weeks later it was down by 50 percent. By the time trading “stabilized,” one U.S. dollar bought only 2.5 Chinese yuan—not eight, as it had a year earlier.

Interesting piece from the Atlantic Monthly from the perspective of the 2016 presidential campaign. Kind of old but still pretty pertinent.

Bubbles

So is there a housing bubble ? From my perspective, prices seem pretty inflated but according to the mainstream media types, this is just a minor adjustment. However, for the past week-and-a-half the department of doom and gloom, (i.e the Internet) has been a rumble with various peices about the severity of the potential downturn. Here’s a few:

  • Apparently the Adjustable Rate Mortgage (ARM) is a bad idea. Shocker.
  • Kottke.org brought this horrifying line graph from the NYT to our attention. All those stories my dad tells about comic books costing a nickel vaguely apply to houses as well.
  • What’s with the media saying it’s all good?

    Newspapers earn money from advertising placed by Realtors®, so papers have a strong motive to publish the Realtors’® unrealistic forecasts. Worse, Realtors® have a near-monopoly on sale price information, and newspaper reporters never ask Realtors® hard questions like “how do we know you’re not lying about those prices?” The result is an endless stream of stories which minimize or just ignore the crash.

    From patrick.net, an intresting and well documented read on the SF Bay’s role in this.

  • Mainstream media outlet bashing aside, the Economist calls this the biggest bubble in history, rivaling the stock bubble of the 1920’s.
  • And finally to round out this bit of doom and gloom, this economist guy with a crap-ton of abbreviations after his name is predicting very very not fun times economically for next year due to the hypothetical bursting of the hypothetical bubble.

The hell with liquids on planes, Bush, Inc. should be looking at ways to spin this to scare people into voting for them.