Mish's Global Economic Trend Analysis

Heartaches by the Number: Just 14% Think Today’s Children Will Be Better Off Than Their Parents; Just 24% of Adults Think the Job Market is Better Than a Year Ago
Camden NJ, Population 77,344 Fires Entire Police Force, 270 Officers; Why Cities are Going Bankrupt
News Anchors Fired in Spain For Asking Frank Questions of Political Leaders; Move Guaranteed to Backfire
Complete Absurdity in Greece: ECB Prints Euros to Give to Greece to Make Interest Payments to ECB

Heartaches by the Number: Just 14% Think Today’s Children Will Be Better Off Than Their Parents; Just 24% of Adults Think the Job Market is Better Than a Year Ago

Posted: 09 Aug 2012 05:20 PM PDT

Here is a round of "Heartaches by the Number" polls, all courtesy of Rasmussen Reports.

July 29, 2012: New Low: Just 14% Think Today's Children Will Be Better Off Than Their Parents

Hope for the future generation has reached an all-time low. Just 14% of Americans expect today's children to be better off than their parents.

July 25, 2012: Long-Term Optimism About U.S. Economy Falls to New Low

Confidence that the U.S. economy will recover in the next five years has fallen to its lowest level since early 2009. Short-term confidence isn't much better.

Just 31% believe the U.S. economy will be stronger in one year. Thirty-five percent (35%) predict a weaker economy by next year, and 18% more say it will be about the same. Seventeen percent (17%) are not sure.

August 8, 2012: Right Direction or Wrong Track

Twenty-seven percent (27%) of Likely U.S. Voters now say the country is heading in the right direction. That's down two points from 29% the week before and the lowest finding since late June.

August 7, 2012: 44% Say Jobs Market Worse Than A Year Ago

Confidence in the U.S. job market has fallen again, with the highest number of Americans in 10 months describing the employment situation as worse than it was a year ago.

Just 24% of American Adults believe the job market is better than a year ago. Forty-four percent (44%) say that market is worse now, up 15 points from early June when only 29% felt that way. Thirty percent (30%) describe it as about the same.

Heartaches by the Number Summary

Just 14% expect today's children to be better off than their parents
Just 31% believe the U.S. economy will be stronger in one year
Just 27% think the country is heading in the right direction.
Just 24% of American Adults believe the job market is better than a year ago
44% think the job market is worse, up 15 points from June

Demographics Suggest Majority is Right

I happen to agree with the majority who think those now graduating from high school will not be better off than their parents.

There are too few jobs, too much student debt, and too few workers supporting too many retirees on Social Security.

For a graphical representation of that last point, please see Demographic Time Bomb in Pictures and Dollar Amounts; Ratio of Social Security Beneficiaries to Private Employment Now Exceeds 50%

Musical Tribute

I am not a big Country & Western fan (I like 50's and 60's rock and roll), but given the title of this post I feel somewhat obligated to do a musical tribute to Buck Owens.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Camden NJ, Population 77,344 Fires Entire Police Force, 270 Officers; Why Cities are Going Bankrupt

Posted: 09 Aug 2012 11:13 AM PDT

In an effort to rein in costs, the city of Camden NJ will fire its entire 270 member police force and instead will use Camden County officers.

Mayor Dana Redd and Police Chief Scott Thomson noted that for the same price, Camden can have 400 county officers on staff. That is nearly a 50% increase in the number of officers for the same price.

Of course the unions are howling.

In these cases, the county typically hires most or all of the officers at lower wage and benefit levels, but the article only notes a very vague "some current Camden officers will get jobs on the new force."

Why Cities are Going Bankrupt

Cities should strive to provide the most services at the least cost to taxpayers. However, public unions strive to provide the fewest benefits at the most cost.

Is it any wonder cities are going bankrupt?

Police and firefighter wages and benefits are crippling cities across the nation. Mayors are often in bed with unions rather than do what is best for the city.

I am a firm believer that every city under onerous police and firefighter contracts, most likely nearly every major city (if indeed not all of them), should do the same thing Camden did.

Camden Quick Facts

A quick check of City-Data shows Camden is economically poor with an unusual spike in home prices in 2007.

Population in 2010: 77,344.
Population change since 2000: -3.2%
Estimated median household income in 2009: $26,752
Estimated NJ median household income in 2009: $68,342

Racial Makeup of Camden

Home Sales and Home Prices in Camden

Median home price in Camden has been pretty steady at about $50,000 for 5 years. On above average volume, the median price rose to $400,000 in first quarter of 2008. What's that all about?

This was just something unusual that turned up while looking up the population of Camden.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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News Anchors Fired in Spain For Asking Frank Questions of Political Leaders; Move Guaranteed to Backfire

Posted: 09 Aug 2012 08:08 AM PDT

One way to control news reporting in these trying times is to get rid of news anchors the state does not like, replaced by news anchors willing to be media puppets of the government. Spain has done precisely that, forcing out popular news anchors for asking pointed questions.

The Financial Times reports Madrid accused of media interference.

Spain's government is facing mounting criticism for political interference in the country's main state broadcaster after a string of high-profile departures of journalists considered critical of the ruling Popular party in recent months.

Several of the broadcaster's most prominent news journalists have left on acrimonious terms, following a move by the government of Mariano Rajoy earlier this year reversing a law making key appointments at the state Radio y Televisión Española network subject to approval by a two-thirds majority in parliament.

Ana Pastor, presenter and interviewer of the RTVE's main breakfast news show, left the broadcaster over the weekend, prompting other journalists and commentators to criticise what they claimed was an attempt to purge voices critical of the Rajoy government as it enacts unpopular austerity measures.

RTVE said it had offered Ms Pastor – who had built a reputation for asking figures from across the political spectrum frank questions in difficult interviews – a different role before she left, but she denied this on her personal Twitter account.

"I know they are getting rid of me for having done journalism. And they did not offer me anything concrete," she said.

Several other news anchors have left RTVE in recent months.

In June, the broadcaster's head of news, Fran Llorente, was replaced by a journalist from the PP-controlled Madrid region's own television channel. Mr Llorente was first appointed to his role in April 2004, shortly after Socialist leader José Luis Rodríguez Zapatero came to power. In 2002, under the PP government of Jose Maria Aznar, RTVE had been found guilty by Spain's high court of unfairly reporting a general strike that year.

Move Guaranteed to Backfire

Attempts to control media reporting are guaranteed to backfire.

Given enough political pressure and firings, Spain may be able to control what the state-run media reports, but there is no way of forcing anyone to actually listen to it or watch it.

Moreover, biased reporting of the news by friendly state-sponsored news anchors is bound to make people suspicious of virtually everything the government says.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Complete Absurdity in Greece: ECB Prints Euros to Give to Greece to Make Interest Payments to ECB

Posted: 09 Aug 2012 12:01 AM PDT

No entity is willing to stand up and say the obvious, that Greece is insolvent and cannot and will not pay back its debts.

Moreover, in spite of an ECB mandate that prohibits direct financing of governments, the ECB is doing just that.

Simply put, the ECB is printing euros, to give to the Greece, so that Greece can make interest payments to the ECB on maturing bonds.

Der Spiegel notes the absurdity of this setup in The European Central Bank's Discreet Help for Greece.

"There is no time to lose," Jean-Claude Juncker warned just a few days ago. Leaders must use "all means at their disposal" to save the currency union, the head of the Euro Group said. But one thing is becoming clear: Politicians are increasingly pushing the dirty work on to the European Central Bank (ECB).

Take Greece, for example, where liquidity is becoming scarce. The government in Athens needs to repay a maturing bond worth €3 billion ($3.7 billion) to the ECB by Aug. 20. The solution to that problem seems paradoxical: The ECB itself is pumping money into Greece, so that the country can in turn repay the ECB.

It's a controversial plan, because the central bank is prohibited from financing governments directly. As a result, no one is talking openly about the absurd flows of money. The ECB has only hinted that it will extend a helping hand to Greece.

Now, information has leaked regarding how the ECB plans to keep Greece on its feet until the next tranche of European Union-International Monetary Fund aid is paid out. The ECB has chosen a detour via the Greek central bank. It will allow it to issue additional emergency loans to the country's banks. These in turn are supposed to use the money to buy up Greek bonds with short maturities. This will scrape together €4 billion, according to the plan.

The Greek central bank will accept the dodgy bonds as collateral, and will provide the country's equally troubled commercial banks with freshly printed euros -- which ultimately come from the ECB.

What is particularly absurd is the fact that, for the past two weeks, the ECB has no longer been accepting Greek government bonds as collateral for its refinancing operations. But the Greek central bank -- which in reality is little more than the Athens branch of the ECB -- is still allowed to accept them. The fact that the euro bankers are willing to go through such contortions shows just how precarious the situation is. At the moment, a Greek default is being fought off from week to week -- and politicians are trying to duck responsibility.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mish's Global Economic Trend Analysis

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