Putin’s Czarist Delusions

Answering Kennedy’s Call

Letter to New York Times

I cannot agree with Tatiana Stanovaya’s implicit conclusion in her article on Putin and the Kremlin’s delusionary behavior (July 19 Op-ed) —that we must fear a nuclear holocaust if we don’t placate in some way his Ukrainian ambitions.

Having been interviewed many times on the former Russia Today TV (six at last count) in its English language broadcasts when it was open to western news, I got to know its correspondents eager to hear from the west. She neglects to mention that Russians are more resourceful than she gives them credit for that they would remain under Putin’s propaganda thumb for long.

It has been obvious that his propaganda machine is all that keeps him and his cronies in power. He only believes in what Ms. Stanovaya describes as his 3-point plan to wear down the West, because that is the only way he can convince Russians that creating a new Russian empire is worth the cost of its retreat from the modern world.

How long can he maintain the media blackout that shields ordinary Russians from the reality that he has relegated Russia to a third-rate power with an economy smaller than that of Texas, so his cronies can continue to steal its wealth?

That time is on the side of the modern world will become ever clearer as the war drags on, because Russians have suffered from so many wars. They do know what a nuclear holocaust would do to their country.  

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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When Does Inflation Endanger Growth?

Financial FAQs

Tradingeconomics.com

Not all inflation endangers economic growth but the short answer is when inflation becomes so prolonged that consumers can no longer afford to consume. And that hasn’t happened yet, with consumer spending still at pandemic highs.

The annual inflation rate in the US accelerated to 9.1 percent in June of 2022, the highest since November of 1981, from 8.6 percent in May and above market forecasts of 8.8 percent.

It was mainly energy prices that rose 41.6 percent, the most since April 1980, boosted by gasoline (59.9 percent), fuel oil (98.5 percent), electricity (13.7 percent, the largest increase since April 2006), and natural gas (38.4 percent, the largest increase since October 2005).

FREDpce

Consumer spending may have peaked but has yet to decline substantially in May. It is still up 7.2 percent overall, 5.2 percent YoY without more volatile food and energy prices per the FRED graph, which is causing most of the current inflationary spike.

So, how long can this surge in prices last, given the Ukraine war, China’s COVID problems, and the ongoing pandemic restrictions?

President Joe Biden on Wednesday said in a statement that while a “headline inflation reading is unacceptably high, it is also out-of-date,” as he reacted to a report showing a year-over-year rise of 9.1% for the consumer price index in June. “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June,”

The fact that inflation may soften sometime in the future is a tough sell and hard for consumers to believe. What should we believe about the danger of longer-term inflation?

The analogy that I used last week that best describes current economic conditions (and inflation) is we are in a race to recover from COVID-19 while a European war is raging. The U.S. economy has slowed from a warp speed of 100 mph as it shot out of the pandemic to 60 mph, as it returns to a more normal growth mode.

Gas and oil prices are moderating because most of the oil-producing companies and countries have increased production for the simple reason that they are making record profits.

And consumers will slowly cut back on spending as prices continue to rise across the board. Friday’s retail sales figures for June will tell us how much consumers are cutting back. If spending is slowing, perhaps the Fed will also slow down their next boost to rates.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Labor Market Too Hot?

Popular Economics Weekly

MarketWatch

Total nonfarm payroll employment rose by 372,000 in June, and the unemployment rate remained at 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in professional and business services, leisure and hospitality, and health care.

I reported last week that weekly initial unemployment claims had been holding at the lowest level since 1970, which was a sign of an extremely tight labor market, and that has proved to be the case.

The unemployment rate held a 3.6 percent for the fourth month in a row. The labor force participation rate, at 62.2 percent, and the employment-population ratio, at 59.9 percent, were little changed over the month. Both measures remain below their February 2020 values (63.4 percent and 61.2 percent, respectively), which means not everyone has gone back to work (1.3 million, actually), and employment rolls still have room to grow.

All sectors showed growth and average hourly wages are still growing at 5.1 percent, a huge increase that will keep consumers spending and the economic growth continuing, despite inflation and rising interest rates.

The Federal Reserve will probably see this jobs number as too hot and continue to raise interest rates, so the debate will continue whether we can return to the Goldilocks era of an economy that is not too hot (inflationary), or too cold (deflationary).

MarketWatch

MarketWatch economist Rex Nutting is warning of one obstacle to continued jobs growth, a looming shortage of working-age adults. The baby boomer population bulge of the 1970s has reached retirement age, and the millennials cohort of the 1990s, their offspring, will be approaching retirement age as well, as is seen in his graph of population growth rates.

“But now the tide is going out,” said Nutting. “Next year, the working-age population is expected to grow by just 400,000. In 2024, it’s expected to grow by 300,000 and by just 200,000 in 2025. The pool of workers will begin to grow a bit faster later in the decade and throughout the 2030s, but current projections through 2060 don’t foresee the labor supply returning to the same growth rate we’ve gotten used to over the past 70 years.”

And that means slowing economic growth as well, unless we allow more working-age adults to immigrate and invest in more productive technologies, since more workers producing more goods and services powers economic growth.

How is this a sign of an impending recession? Companies are holding on to their workers for dear life, with one of the lowest unemployment rates in history. The rate was only lower in 1950, dipping to 2.5 percent during the record recovery from World War II.

So now we must worry about the Fed raising interest rates too high and choking off further growth.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Economic Growth Becoming More Sustainable?

Financial FAQs

The analogy that best describes current economic conditions is one where we are in a race to recover from COVID-19 while a European war is raging. The U.S. economy has slowed from a warp speed of 100 mph as it shot out of the pandemic to something like 60 mph, as it returns to a more normal growth mode.

The headlines are telling us growth could slow down even more, and the race come to a grinding halt, either later this year or sometime next year. Why? Because the Fed may continue to raise short term interest rates, and that may not be necessary since 60 mph is the speed we will need to maintain for more sustainable, longer-term growth.

The U.S. economy is cooling off, but the labor market is still red hot, hence the worries the Fed may be too aggressive in raising rates. Job openings in the latest JOLTS report fell slightly in May to a still extremely high 11.3 million (from 11.4 the past 2 months) and layoffs remained near a record low.

Job openings have slipped two months in a row after peaking in March at 11.9 million, but they have topped 11 million for six straight months. Layoffs are also extremely low, the Labor Department said Wednesday.

It’s most meaningful component, hires, and total separations, were little changed at 6.5 million and 6.0 million, respectively. This means there were 500,000 more new hirings than separations (those leaving a job). It is a sign that Friday’s June unemployment report will probably be strong and in line with past months.

Both business sectors, the manufacturing and service industries, are also returning to more normal growth levels. Their measure, surveys of Supply Managers, have shown incredible growth over the past two years.

Tradingeconomics.com

An Institute of Supply Management (ISM) barometer of business conditions at service-oriented companies (see above graph) such as restaurants, hotels and retailers dipped to a two-year low of 55.3 percent in June — yet any number over 50 percent indicates expanding activity.

The Trading Economics graph shows how it soared since July 2021 and reached a nose-bleeding altitude of 69 percent in November 2021.

A similar ISM survey of American manufacturers also showed business slowing to a two-year low to 53 percent in June. The ISM index dropped 3.1 points from 56.1 percent in May, yet that is still a good number.

BEA.gov

The decline in Q1 GDP was mainly due to a massive rise in imports overshadowing a slowdown in exports. But with the value of the U.S. Dollar at all-time highs the trend has reversed. Exports now exceed imports resulting in the lowest budget deficit this year. Import totals are subtracted from exports in the GDP tally.

Tomorrow’s unemployment report will give us another indication whether we can maintain that 60 mph speed, or will the Fed keep their foot on the brakes and slow growth further?

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Inflation Not the Real Problem

The Mortgage Corner

FREDcpi

Why do polls say we are going in the wrong direction and the economy isn’t doing well? Fifty-two percent of American adults say they are worse off financially than they were a year ago, according to a survey conducted for The New York Times this month by the online research platform Momentive.

A large part of the discontent is sky-high inflation, the highest in 40 years. Yet it was much higher 40 years ago, per the FRED graph on the Consumer Price Index. It was over 14 percent in 1981 due to the 1970’s era of stagflation that manifested slow growth and lower employment with higher inflation, as per the FRED graph.

It’s difficult to reconcile the pessimism shown in the latest consumer confidence surveys with actual economic data. The University of Michigan’s gauge of consumer sentiment, for instance, fell again to a final June reading of 50 from an initial reading of 50.2 earlier in the month and well below May’s level of 58.4.

Yet U.S. factory orders jumped 1.6 percent in May in a show of strength among manufacturers in a report out today, and the unemployment rate has remained at 3.6 percent for two months.

Maybe it’s a general fear of what’s to come—perhaps a hangover from two years of the pandemic, and now a war that has exacerbated inflation.

The increase in factory orders exceeded the 0.6 percent forecast of economists polled by The Wall Street Journal. The rise in new orders in April was also raised to 0.7 percent from 0.3 percent.

Yet a more recent poll of senior manufacturing executives signaled a slowdown in June. An index of manufacturers slipped to a two-year low in June as orders contracted for the first time since the start of the pandemic in spring 2020.

In fact, inflation is not the real danger to growth, but the fear of rising interest rates. Is that counter-intuitive? When the Fed or inflation hawks sound off on the dangers of inflation above the Fed’s 2 percent target rate, they really mean they don’t like the higher interest rates that tend to follow; which do slow economic growth.

Whereas higher inflation is usually a sign of robust growth; until it crimps consumers’ pocketbooks. For instance, the CPI inflation rate during the record 10-year Clinton era growth range of 2.5-3.5 percent. It only dipped below that during the recent pandemic years, a once-in-a-lifetime event.

Higher interest rates do most harm. That’s because most economic growth is powered by debt. We know the federal debt is upwards of $22Trillion, or 100 percent of GDP. Whereas consumer debt, either in the form of credit card or installment debt that includes mortgages, is up $38.1B or 10.1 percent annually, as consumers continue to spend with more borrowing.

Bloomberg

Inflation has mostly hovered around the 2 percent target rate historically, and should return to that range by next year, as the FRED graph makes clear, with spikes during extraordinary time, such as the 1970s era of stagflation, as I said.

But interest rates aren’t so flexible, and tend to become in installment loans with fixed monthly payments, in particular. So, we need to pay closer attention to interest rates, if we want to know what will happen next.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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The Great Clean Air Debate–Part II

Answering Kennedy’s Call

Chapter Six

Environmental Protection Could be Hazardous

At the time, I remember thinking environmental protection should not mean crawling down the partially opened rear stairs of a Boeing 727 passenger jet into a muddy field at San Francisco International Airport.

I had boarded a regularly scheduled Sunday afternoon flight to Los Angeles where I was producing a one-half hour public service television show for the USEPA on the dangers of toxic substances in anything we might eat or drink.

I sat next to a World War II pilot on that cloudy, rainy day in a United Airlines 727. Wisps of clouds raced by as we ascended. I hated the 727 with its three engines in the rear of the plane. It took off and landed like a wounded duck, as far as I was concerned, yet the airlines used it for the shorter flights. It always seemed to land with a deep thud that made me close my eyes on the approach, wondering if it had landed safely, and it seemed to lift off at the very last moment from the end of the runway.

As we climbed, I noticed a vapor streaming from the wing tips. I pointed it out to the former pilot I had just met. He said not to worry too much: they were probably jettisoning some excess fuel.

“But why?” I asked. “Why would they be jettisoning fuel after the takeoff?” It wasn’t long before we knew the answer. The pilot’s voice came over the intercom: “We don’t want you to be alarmed, but we have to return to the airport.”

I looked at my seat partner who seemed calm. He had been regaling me with stories of his fighter pilot days in World War II in the Pacific. “I don’t know what it could be,” he said. “Probably some malfunction in the navigation system, or some of the dials aren’t giving accurate signals.”

That was when the airline pilot told us what was actually happening. “We are returning because a warning light is telling us something is overheating in the cargo bay,” he said over the intercom. “It may be nothing, a light malfunctioning, but we would like you to grab your ankles as we approach landing, just in case.”

That was possible when flying in the 1970s. Seats were farther apart. In fact, airlines competed to offer more leg room rather than less in those days.

Though my heart beat a little faster, I didn’t think anything could really be wrong. But my partner and I grabbed our ankles as we approached, just in case. The plane had been circling while continuing to jettison fuel.

We heard the landing gear lock and the jet engines reverse thrust to slow down the plane as we landed, so I thought the flight was over. Suddenly there was a much louder THUNK, then the plane tilted crazily and began to slowly rotate. Those of us grabbing our ankles could see nothing, but I had the sickening feeling that I was going to die.

The THUNK was followed by a screeching of metal, but I had no idea how long that lasted before the silence. It was a silence that I honestly thought meant the end—I think we all felt that way—even though my mind was racing. Was it even possible this was what the afterlife must be? A limbo of sorts with nothing to see or hear? It was as if, at that moment, I had left my body, and whatever had become of me was hovering overhead.

But then I heard screaming, and a group of uniformed pilots suddenly appeared out of nowhere. It was only later that I realized they were off-duty pilots hitching rides home on the weekend. At this moment they happened to be in the right place at the right time. At least six of them rousted passengers out of their seats.

Most of us were in shock. They had to literally grab some of the passengers and throw them down the inflated chutes that had opened before it dawned on the rest of us that we needed to get the hell out of there.

Being near the tail of this 727, my partner and I had only one escape route. There was an exit staircase that opened under the tail, but it was only partially open. We crawled our way down those steps and found that the tail was sitting in the mud. When we stood up to look around in a slight drizzle, hands and knees covered in the mud, we saw we were in a wet field beside one of the runways. The nose of the plane was buried in a small, corrugated metal shack that must have stopped its slide.

My partner said immediately, “It has to be one of the landing gear.”

“What landing gear?” I asked. I looked up and down the runway we were beside and saw no landing gear. My partner had taken out a miniature Minolta camera and began clicking away in all directions as people continued to crawl or slide out of the plane. Some lay on the ground moaning, as sirens from approaching rescue vehicles screamed louder.

The pilots and crew members herded us away from the fuselage. I saw no smoke, and so thank God, maybe no fire. They were also shouting, “No pictures, please, no pictures, please,” which my partner, of course, ignored. When I looked down the runway that crossed ours, I saw a small object lying in the middle of it. It was our landing gear: four wheels still locked to the strut that anchored it to the wing.

The right-side wing was buried in the ground, and we now could see what had happened. Its landing gear, with all four wheels, had broken off the wing and was laying with its strut assembly barely visible in the distance. We must have skidded for more than a mile before coming to a stop in this muddy field.

The ex-fighter pilot told me that he had once crash landed on a beach and broken his back in the Philippines during World War II. It underscored how lucky we were this time. The United pilot must have landed too soon with too much fuel in the tanks. I had flown enough to know planes usually take off with more fuel than is safe to carry when landing, in case they were stuck in a holding pattern before descending to the tarmac. The extra weight may have caused the wounded duck to hit the runway harder than was safe. But the pilot’s skill probably saved us by keeping the plane’s nose up, said my seat mate, despite the impact that could have flipped us end-over-end.

So I cancelled the television show that weekend, even though United Airlines offered to put me on the next plane to Los Angeles—once the runways were cleared.

There was no map of what we should or could do in those early days. But making the public aware of what was happening to our air and water was a priority. Administrator DeFalco wanted the public to know why we were here and what needed to be done to protect the environment.

It was the dawning of an awareness of how human activity affected the environment, of the growing danger of toxic chemicals that Silent Spring author Rachel Carson had written about. We would educate and inform the public about our mission.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Inflation Cooling, Manufacturing Stays Hot

Financial FAQs

FREDpce

Inflation hawks that keep calling for more Fed rate hikes see a recession coming. But what if inflation is already beginning to decline?

The rate of inflation over the past year was unchanged at 6.3 percent in May. The yearly rate has backed off a little after touching a 40-year high a few months ago.

But the core rate of inflation that excludes the more volatile food and energy prices slowed to 4.7 percent in the 12 months ended in May from 4.9 percent in April and a 40-year high of 5.2 percent in March. What’s more, the inflation readings in the core PCE rate from February through May were the smallest since the end of 2020, reports the BEA.

This is huge folks, as households spent less and even the more volatile food and energy prices are subsiding. Consumers do know how to self-correct. They buy less and travel less with such high inflation, thus reducing the demand that elevates prices.

Meanwhile manufactures are upping their capital expenditures instead of cutting back for fear of a slowdown in economic growth.

Their so-called capital expenditures are up 13.9 percent in a year, a volume not seen since the 1980s, in a sign that supply bottlenecks are easing.

One reason is orders at U.S. factories for long-lasting goods such as new cars or heavy machinery rose 0.7 percent in May, a stronger than expected reading that showed manufacturers still had plenty of demand for their products even amid signs the economy was slowing. It was the seventh gain in the last eight months, the government said.

This contrasts with the third and last estimate of Q1 2022 GDP growth that was revised downward to minus -1.6 percent, when it had grown 6.9 percent in last year’s fourth quarter.

BEA.gov

The decline in Q1 GDP was mainly due to a massive rise in imports overshadowing a slowdown in exports. Import totals are subtracted from exports in the GDP tally. There was also some reduced consumer spending, as government COVID subsidies have subsided, as I said.

But manufacturers and other businesses are restocking their shelves, which will probably boost second quarter economic growth back into the positive column, though economists are uncertain as to how much.

The surging inflation that is causing so much pain at the gas pump and grocery stores is, after all, a sign of the red-hot growth of consumption outstripping supplies. Many American refineries had also shut down due to decreased consumption during the pandemic and gas prices that hit rock bottom.

Why such wild gyrations in growth? It seems uncertainty over what the Fed will ultimately do to tame inflation is causing the current instability. Will it raise interest rates too high too fast, and cause consumers to close their wallets?

Former Fed Chair Ben Bernanke believes that inflation will not become embedded longer-term, because the ‘70s stagflation was caused by 14 months of rising prices, whereas it has been rising for six months in the current cycle.

One reason for such business optimism is corporations have been reporting record profits, and able to pass most of their increased product costs onto consumers. They are using some of the record profits to hire more workers, because their markets are continuing to expand.

Let’s hope the Fed reads the inflation tea leaves correctly and doesn’t overreact.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Developing a Livable Community

Answering Kennedy’s Call

What are the requirements for a livable community? As recently as 2005, the Institute of American Architects said that

“. . . broadly speaking, a livable community recognizes its own unique identity and places a high value on the planning processes that help manage growth and change to maintain and enhance its community character.”

The Goleta Valley still had a rural feeling. It had been settled by immigrant farmers after the Civil War when the huge Spanish rancheros—made up of tens of thousands of acres—were broken up following an especially severe drought that killed the livestock that were the livelihood of the earliest settlers. Now it was a valley filled with lemon and avocado groves.

But a battle had erupted between developers building new subdivisions and environmentalists who wanted to keep the valley as rural and agricultural as possible. The developers had been winning until the environmentalists succeeded in passing a water moratorium that stopped new building projects that didn’t have existing water allotments.

I became involved with community events like the Lemon Festival and July 4th celebrations, where I met residents who wanted to live in a unique community. Many of them had already made several attempts to form their own city to control its development.

I thought the Goleta Valley, an area with more than 50,000 inhabitants, should become a city. Its revenues for needed improvements were spent elsewhere in the county rather than for the benefit of the valley. And Goleta continued to attract high tech businesses due to its closeness to the top-ranked physics and engineering schools of the University of California’s Santa Barbara campus.

The unplanned expansion had not been preserving the open spaces and pedestrian-friendly commercial centers that residents and sustainable development principles required. The third largest oil spill in U.S. history (behind the Gulf of Mexico and the Alaska oil spills) occurred in the Santa Barbara Channel in 1969. More than three million gallons of crude oil leaked from a deep water well and coated 35 miles of South Coast beaches for months, requiring massive cleanup.

The oil spill mobilized the whole South Coast community, searing the memories of those living there, helping to spawn the national environmental movement.

Goleta had a wonderful history, from its earliest Chumash Indian inhabitants to its discovery in the 1500s by Spanish explorer Juan Cabrillo, which led to the founding of California’s mission system. It then became known as “The Good Land”, an agricultural paradise named by a local historian for its abundant and fruitful soils and climate.

But as a bedroom community to Santa Barbara, the Goleta Valley had no real community organization of its own other than the Goleta Valley Chamber of Commerce. It needed an established entity to ask for what was needed to improve the valley’s aging and dilapidated infrastructure, and to reduce chaotic development. More public transportation, water resources, and just smart community planning were needed to mitigate the effects of a growing population.

There was much opposition to any organizing effort that would create more than a bedroom community in the Goleta

Valley. There were those who wanted to “belong” to the City of Santa Barbara so their property values would be the beneficiary of Santa Barbara property values. They wanted no part of a new, more rural city. Then there were the environmentalists that tended to cluster around UC Santa Barbara with its strong environmental studies program. They were afraid a new city would encourage more development.

But in fact, being unincorporated didn’t prevent development: property owners and developers had only to convince one County Supervisor that represented a larger area, rather than a city council responsible for the entire community.

Goletans couldn’t agree on what was unique about their own community. Was it a farming culture, bedroom community, or just funky adjunct to UC Santa Barbara? Many thought that, with prosperous Santa Barbara next door, what was the need for another city on the already crowded South Coast? Hence the impasse that had defeated earlier cityhood attempts.

The first step in building a livable community, in my view, had to be creating a town center that could focus planning efforts, and Old Town Goleta seemed just the place to do it. Old Town had been the historical center of the Goleta Valley with stores, a saloon, and a blacksmith for farmers in the early days.

There were marsh lands and the large Goleta slough to the south. Goleta Valley and Santa Barbara have the only southern facing coastlines in California due to a geological quirk. Early schooners could sail into what was then a bay at high tide, refill their water caskets at a natural spring where UC Santa Barbara is now located, and even dock near Old Town’s center.

Spanish explorers in the 1700s who were looking for mission sites originally thought it could be an ideal site for a mission, as a large island in the center of the slough had originally held five indigenous Chumash Indian villages and was surrounded by water making it easily defensible. But when the Spaniards returned several years later during a drought, there was very little water to protect it. So, they chose to build the mission in Santa Barbara, which had no natural harbor but a seasonal creek that could provide an adequate water supply.

Old Town, with its own past, could give Goleta Valley residents a sense of their own history and separate community identity. It even had a Community Center that hosted many community activities. An associate County Planner at that time, Dan Gira, also thought Goleta should become a city able to determine its future as part of the County’s General Development Plan update.

The update was required by the state of California to accommodate the changes necessitated by a growing population. I was one of many moving to this beautiful area of the South Coast with its unique climate sheltered by east-west mountains and south facing beaches. Santa Barbara and the South Coast has always been a beautiful and very desirable place to live, and the people kept coming.

The County would apply to the state of California for the formation of a Goleta Old Town Redevelopment District, which would allow some tax monies to be withheld for use in Old Town to upgrade its housing and infrastructure. While I loved the beautiful outdoors and the nature that surrounded us, more housing was needed in Old Town. Many Mexican agricultural workers—mostly undocumented—were living in Old Town because of its cheap rents, but landlords were taking advantage by housing ten to twenty of them in a single dilapidated housing unit.

I had to raise $50,000 in the community: 50 percent of the expense the County would incur to do the studies necessary to classify Goleta Old Town as a redevelopment district. The County would chip in its 50 percent in the form of time and labor, and whatever was needed for the feasibility study that would determine if Goleta Old Town fulfilled the state requirements for its redevelopment.

The study would include a report on degraded infrastructure, such as inadequate surface transportation, and the number of bars and other “nonproductive” businesses in Old Town. The point was to determine the extent of blight, or physical deterioration, of the Old Town community, and a cost estimate for fixing those problems.

There was plenty of blight. Goleta’s Old Town had become run down in the 1980s as competing malls were built elsewhere to accommodate the new auto-dependent subdivisions built to hold the growing population. Bars had proliferated as businesses left Old Town. A fire partially destroyed a ten-unit apartment building. A Santa Barbara News-Press reporter covering the fire reported that residents thought the popping noise from breaking Windows sounded like gunfire from gang warfare.

We raised the $50,000, the County Planning Department hired a consultant to write the feasibility study, and it was approved within a year. That gave us the means to begin planning for a new town center, and maybe a city.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Jobs Picture Reduces Inflation Worries

Popular Economics Weekly

Calculated Risk

Weekly initial unemployment claims are holding at the lowest level since 1970, which is a sign of an extremely tight labor market.

In the week ending June 18, the advance figure for seasonally adjusted initial claims was 229,000, a decrease of 2,000 from the previous week’s revised level, said the DOL.

It dipped below 200,000 claims once before in 1999 just before the COVID-19 pandemic, per Calculated Risk’s graph.

How is this a sign of an impending recession? Companies are holding on to their workers for dear life, with one of the lowest unemployment rates in history at 3.8 percent. The unemployment rate was only lower in 1950, dipping to 2.5 percent during the record recovery from World War II, per the FRED graph below.

FREDunemploymentrate

In fact, the latest JOLTS report showed there were still 11.4 million job vacancies over the past two months. Most headlines touted that the 11.4 million job openings in May as a “severe” drop from 11.9 million vacancies in April, But that wasn’t a sign of weakness. The 11.9 million April number was revised from the original estimate of 11.4 million, which really meant that April to May job vacancies were in essence unchanged showing openings and new hires (6.6 million) were still at record levels, as I said in an earlier post.

This is while consumers’ personal consumption expenditures have risen 6 percent in a year. Consumer spending that makes up some two-thirds of economic activity has skyrocketed since the pandemic; after just 2 percent average annual growth rates since the Great Recession.

The question pending is whether rising interest rates will slow consumers spending sufficiently to reduce inflation, averting reoccurrence of a 1970’s-style stagflation?

The Fed’s June Open Market Committee press release was optimistic about the prospects for continued growth.

“Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. (But) Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.”

We must now wait to see what the Fed’s push to raise interest rates will do to future growth.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Goleta’s Dam Dinner is Back!

Answering Kennedy’s Call

Noozhawk

What better way to show the love of your city than the announcement of a unique event that had been suspended for three years due to COVID-19? Goleta, a city just 20 years old, announced that their one-of-a-kind Dam Dinner is back.

“We are so excited for the return of the Annual Goleta Dam Dinner on Saturday, August 20th!” read its press release. “It’s been three long years since we were last able to hold this event, and we hope you will mark your calendars and join us at Lake Los Carneros Dam from 5:00 – 7:00 p.m. for this low-key, yet incredibly special Goleta gathering.”

Other cities have found ways to celebrate the love of their city, a movement that began in 2009 as a church-led movement to find ways to celebrate who they were by bringing people together. County fairs have done that traditionally, but it has been more difficult in urban, less agricultural settings.

The Loveourcities.org NGO was set up to facilitate these events touts on its website. At these community-wide volunteer days, people engage in a variety of projects, including appreciating public servants, visiting convalescent homes, donating blood, building a house with Habitat for Humanity, and working in city parks and schools, among other opportunities.

“We’ve done this every year since then and have helped more than 100 cities do the same, said the Loveourcities organization. “​Over 239,000 people have been involved … young, old, abled, disabled; people from a church or no church at all. Around 1 million volunteer hours have been donated – this is over $32 million dollars in service (independentsector.org) that we’ve given to our communities!”

This free community event offers live music in a beautiful outdoor setting while getting to enjoy dinner with friends and neighbors.

“It was really at the Love of Cities event that Peter Kageyama (guest speaker), a lecturer and consultant on forming such events, talked about placemaking,” said Valerie Cantella, onetime Goleta city press maven. “The City hosted the event at the Goleta Valley Community Center and we offered dinner. Peter spoke and then we did roundtable discussions of ideas that could make Goleta have more of an identity/place feeling. Peter shared pictures of the dinner on a bridge in some city (maybe elsewhere) and we got the idea to do dinner at the Dam.”

You can bring your own picnic dinner or purchase dinner from a local food truck. Wine, beer and lemonade will be for sale. Attendees can also purchase a Dam Dinner t-shirt along with the City’s 20-Year merchandise (t-shirts, hats, totes and mugs),” touted Goleta’s call to the upcoming Dam Dinner at Lake Carneros.

Harlan Green © 2022

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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