With a Wall Street meltdown, international credit crunch and real estate free fall still clearly visible in the rear view mirror, Florida can expect its housing market to stabilize, but commercial properties face a wave of foreclosures and the labor market will remain in a “funk,” said Snaith, director of UCF’s Institute for Economic Competitiveness at the College of Business Administration.

I tweeted this post last week but thought I’d comment a bit on the matter. The piece has Sean Snaith*, a leading economist with UCF delivering Orange County’s annual economic forecast. (You can read UCF’s full Florida/Metro economic forecast here.)

Of note, you’ll see he predicts Orange County to lead the state in job growth during the slow recovery period. And Orlando will lag only Lakeland and Ocala in population growth. Do you see an imbalance there? I do.

I guess my point to Lakeland and Polk is this: The message here should concern us. Our unemployment rate consistently tracks a full percentage point worse than our surrounding reigons, but we keep relying on the “good news”…population growth. We simply have to learn to work better with Orlando and Tampa to grow this super region if we ever expect to grow the right jobs. Seems we may be good at growing people, but have a long way to go in growing jobs.

More to come…

*Sean Snaith, Ph.D., is the Director of the Institute for Economic Competitiveness within the College of Business Administration at the University of Central Florida and is a widely recognized economist in the field of business and economic forecasting.

photo credit: Kel Patolog

I think this reform would be a perfect fit for Matthew Falconer, who is perhaps the most politically and ideologically interesting candidate running in the I-4 corridor right now. He was an invaluable ally in the battle against the CSX deal, railing against corporate socialism from the libertarian right, just like I did from what I guess passes for the ideological left in this state. He’s now running for Orange County mayor, which in that system, is essentially an elected county manager, on a fiercely anti-government platform. Check out his blog, where he bills himself as a “creative extremist,” a rather ingeniously meaningless term. For our Polk readers, think of him as more coherent version of Randy Wilkinson.

To his credit, Falconer’s brand of conservatarianism seems intellectually honest. Like Randy, he’s extremely critical of the cost and scope of the law enforcement/incarceration complex, a criticism for which I have much sympathy. Falconer also blasts the whole “economic development” talking point as a scam for funneling taxpayer money to big business. See CSX. Another position for which I have great sympathy. The Republican establishment does not like him any more than the Democratic establishment does.

He tends to write about government in language that conservatives would call class warfare if non-conservatives wrote it. An example:

I spoke today to a republican women’s club. Among the guests were some six figure government officials. When I told one I was going to be the next Orange County Mayor, his response was “yeah right.” I guess he does not like my idea that government benefits should not be better than the taxpayers who support them. I guess he did not like my plan to cut government salaries above $100,000 by 10%, including my own (and his).

Obviously, he and I differ on the nature and usefulness of government in the abstract. He seems to see it as a fixed, hopeless evil, where I see it as a thing that is useful or harmful, depending on how we the people form and oversee it. I feel certain Falconer would oppose any government-administered national health care plan, for instance.

Yet, local government provision of employee insurance is a place where our differing ideological interests could intersect and allow for some testing of abstract theories about governments and markets.

It’s important here to insert a fact that I don’t think everyone understands: If you get insurance from an employer, the premiums your employer takes out of your check cover only a small portion of the cost of your insurance. Your employer an your co-pays cover the rest, with the employer paying by far the largest chunk. That’s why COBRA is so much more expensive when you leave an employer – you have pick up the additional cost. The premium subsidies and overall costs of insuring employees are killing employers.

Accordingly, I believe the single greatest obstacle to long-term economic and social prosperity for the US is the employer-based health care system. It distorts everything – the cost of health care, the relationship between employer and employee, the quality of health care, and the entrepreneurial/innovative instinct. It’s one thing for a person to risk his or her own health care; it’s quite another to risk the whole family’s and strike out alone. As long as most of the US middle and upper class – 60 percent of all Americans – receives care from employers – albeit increasingly expensive and mediocre health care – we will never get to the kind of system that doesn’t weigh like an anvil in our national economic life. Forget taxes or housing, health care will eventually eat up the greatest portion of all our monthly incomes. It will also devour business profits. That’s a recipe for perpetual stagnation, not to mention crappy care.

I’d rather businesses realize this and stop providing health care to employees – and they will, eventually. But we could make that process quicker and easier if our local governments, which, including schools, tend to be the largest local employers, would prime the pump. From my point-of-view, I think it’s clear this would be horribly traumatic and cause very real hardship for many, many people. But that’s the point, I’m sorry to say. If local, state, and federal governments – including school systems — across the country stopped directly providing health insurance to employees, a huge chunk of the middle class and economic engine of this country would find itself in need of real health care reform. As a bonus, local governments would virtually solve their crippling financial problems overnight. Doctors and medical facilities would have radically revisit their pricing structures because millions of their best customers could no longer afford to see them. Magic of the market, indeed.

Come on, conservatives. You should love this.

Yes, people, including children, might die for lack of access in the period of transition. But what about the people who are dying now? Maybe it’s just that the children of government workers tend to be the children of people that we who write and read blogs know, not the faceless kids and adults we just hear as statistics. Many, many people in that 40 percent who don’t get insurance from employers don’t get insurance at all. 47 million – and counting – is the stat we hear. For a hideous sense of scale, that’s eight times as many people as Jews killed in the holocaust. Think about that for a second. We all just kind of shrug about those folks and write dumb letters decrying government intervention in Medicare.

I honestly think it would take only a couple of big local or state governments to drop employee health coverage to set off a chain reaction that would blow up the employer-system. The savings are too great, and governments and businesses are giant copycats. At that point, the political pressure for a national system would become overwhelming, and we could design a sustainable model that revolves around helping patients, not propping up insurance companies at ever greater cost.

The one big question mark I have is this: Would employees leave government en masse if we cut insurance coverage for them? I don’t think so. At least not now, because there’s nowhere for them to go. And I also think the mass shedding of employer insurance would happen so fast that there would be little benefit arbitrage out there to exploit. But I’m not certain of this. Would such a decision cause government to stop functioning? It’s a good question.

Now, if Falconer’s worldview is correct, that answer is clear cut. Absolutely not. He thinks you can cut salaries 10 percent, that government is a “country club”. As a good free market conservative, I’m sure he also thinks the market can easily adjust to provide for these middle class folks newly without insurance. So what about it, Matt? Forget the 10 percent salary cut. That’s a gimmick. Get creatively extreme. Orange County’s health care fund is expected to hit $35 million in two years, a dead recurring expense growing forever. (It may be much more than that because I’m not sure how the constitutional officers, including the sheriff, are dealt into the mix. It’s hard to tell from the budget book.) If all other Orange County governments followed suit – the schools, city of Orlando, etc. – you could save local taxpayers way more than $100 million every year. The aggregate long-term savings would be billions.

And you’d help me get this country a sustainable, patient-focused health care system. Talk about post-partisan.

Several Central Florida counties showed among the 27 that reported unemployment rates of ten percent or higher (January percentage in parenthesis):

Statewide, the highest unemployment rate was found in Flagler County, along the Palm Coast north of Daytona Beach, at 14.2 percent.  The lowest rate was reported in Liberty County, located in the Panhandle midway between Panama City and Tallahassee, with 5.5 percent.

Mr. Townsend. Thank you for your comments.

For the record, I am not Rush’s puppet. But, I am (1) an elderly man who lived through the Depression, (2) a WWII and Korean veteran (active duty with the USAF), and (3) blessed to be very well cared for by the excellent staff at The James A. Haley VA Hospital in Tampa.

Additionally, my B.A., M.A., and doctoral studies were, and remain today, the study of Economics, and Finance. History and writing are my passion, as is Truth, only the truth, and nothing but. I am not a parrot for anyone, and I “call it” as I analyze it, based upon what is always a continuing education.

You admit you‘re neither an economist, nor a historian. Your response to my post proved it.

I recommend reading, “The Politically Incorrect Notebook,” which can be purchased by calling 863-289-1191. At $14.95 it will provide a broader look at many subjects of national interest.

Following are some cogent thoughts about your positions. I did read your entire missile, my friend. (Maybe the only person on this planet to do so.)

First, I have never said “No!” to public works spending. Quite the contrary. We can most certainly use road repairs, bridges, and similar projects, particularly at times like today. What I did say was public projects are not classic examples of immediate and long lasting stimuli. Do them! Yes! But, don’t rely upon them to haul the economy from its present condition.

Perhaps you failed to recognize that my main point, re: WWII, wasn’t the war itself, but the economic conditions, which developed from 1930-1946. (If it’s war that’s required, I guess Iraq failed in your expectations.) Twenty-million people were added during that 16-year period, and when all able-bodied people were finally employed, and had little to buy, they saved! With the end of hostilities, they spent! And the economy blossomed.

It is truly a matter of supply and demand. Today, there is a glut of houses, cars, etc., which you have already recognized. You like to “read” graphs. Try to “read” a recent statistic: Savings. Since the initial “stimulus” payouts, and bank “bail-out,” U.S. savings rates have moved from 0% to over 3%. Why? How would you “read” this? Why didn’t consumers buy another house. Or car. Or, remodel the kitchen? What did you do with your $600?

Do my comments mean there shouldn’t be a stimulus bill? Good Grief, Charlie Brown! No! But, “spending” and “stimulus” are not synonyms! It’s all about HOW you spend the dollars. Dollars to Philippians? Dollars to Pelosi’s mouse project? Dollars to ACORN?

Is there “pork” in the present bill? Nobody really knows how much, because we were not allowed to read all 1,100 pages. Remember Obama’s “transparency pledge?” That we would have 5-days to analyze all bills? That didn’t happen. Why? Pelosi had a plane to catch. Italy was more important to her, than Obama’s pledge of transparency.

You also see interest rates as a better stimuli than tax reductions. You’re wrong. Where are interest rates now? Case closed.

What, and who will provide employment? And why would they? Over 75% of our economy is driven by “small business.” When their sales go down, they’re required to lay off employees. That’s bad. How to help? Improve unemployment benefits. That’s incorporated in the current bill, and that’s good. But, I ask again, what’s going to jump-start the small businessman? Interest rates mean nothing to him/her if no one is buying.

Now, let’s assume that there is a significant reduction in his/her taxes. Personal income taxes. Corporate taxes. Sales taxes. Surtaxes. License fees. An overabundance of bureaucratic paperwork, requiring time, lawyers, and accountants. Rising fuel costs. Al Gore’s carbon tax. Rising unemployment compensation taxes. Rising benefit obligations. The list is long, and burdensome. If lifted, a little, even temporarily, to the point where he/she can see the way to a profitable return to improving sales, HE HIRES!

Unless you promote that all unemployed become government employees, or true wards of the state, the U.S. must seek those “carrots” that encourage and promote the rehiring of those laid off. I hope, I truly hope you understand these simple economic lessons.

You also believe that “other countries” are eager and willing to buy our Treasury bonds. WOW! Uh…where have you been lately? Secretary of State Clinton just left China, the only major buyer of our debt paper, where she was officially told, and I quote, “We hate you! We don’t want your paper. We hate you, and can’t do anything about it!” This, from the country that already owns over $2 trillion of our paper! That’s a “T,” not a “B.”

Your early comment that it was a good achievement when 1933 unemployment rates of 25.2%, were reduced to 1940’s 13.9%, is like saying the Titanic only lost 1,503 lives.

But, sir, it was one of your closing comments that identifies everything about you. I’m not a profane man, but if anyone, or anything could prompt an outburst of sheer disgust, it is the following. And I quote:

“The Great Depression brought on Nazism, Fascism, Communism, nuclear weapons, and the (holocaust). What will be the (end result) of this looming Depression?”

Need proof? Let me count the ways. For fiscal 2006 our government doled out:

Foreign Aid – $16.7 billion
Farm Subsidies – $21.4 billion
Community Development (aka “Pork) – $5.8 billion
Regional Development (more Pork) – $2.6 billion
Education – $118.6 billion
Health (other than Medicare) – $252.8 billion
Medicare – $330.0 billion
Social Security – $548.6 billion
Food Assistance – $54.0 billion
Housing Assistance – $38.3 billion

I’ll save you the trouble. That adds up to $1.4 trillion (with a ‘T’). For fiscal 2006. I can hardly wait to see fiscal 2009’s numbers!

Now! For the bottom line. The federal government’s net receipts totaled $2.4 trillion, ergo, 60% of each dollar that reached Washington D.C., was applied to social programs. Sixty Percent! If that percentage figure doesn’t represent Socialism in full bloom, it’s close enough to warrant the label, sports fans.

Further, these programs, plus the incredibly inept spending bill the House is trying to foist on the Senate and our economy, will literally bankrupt the system! The United States is already obligated for unfunded liabilities of about $60 trillion! And the Socialists we know as Obama, Pelosi, Reid, Franks and Dodd are either economically illiterate, or are purposely leading the U.S into a situation which would require bankruptcy in order to reorganize!

Last February 6th, Obama, speaking to House and Senate Socialists, berated the Conservatives seeking changes in the current spending bell. It is not a “stimulus” bill. It is a spending bill. Obama thinks “spending” and “stimulus” are synonyms. They are not!

Money that is allocated to people in the Philippines, is not a stimulus to our economy. Money that is allocated for AIDS relief in Africa is not a stimulus to our economy. Money that is allocated to the ACORN’s of America is not a stimulus to our economy. The list of pork packages in the current spending bill is a disgrace, and represents the goals of the Wicked Witch of the West who Obama assigned the task of writing this obamanation…er…abomination.

Anyway, there’s the picture. Socialism is already here. The question is, can we return the United States to an economic system that encourages individual efforts? Can we return the judicial system to reflect obedience to the Constitution, a judicial system that continues to mandate unfunded obligations unto a taxpayer who has no appeal? I doubt it. Here’s the problem. The U.S voters are already Socialists – most of them, anyway – and their numbers will only increase. You know who they are. It’s out of our control, and I see no escape route.

Do you see any Hope for Change?

Me? I’m thinking New Zealand.

These two graphs show versions of the same thing, job losses as measured as a percentage of total workforce. They also take us further back than the original graph of doom I posted on Monday and reproduce below. The new graphs compare this recession with other previous recessions.

Bottom line: We’re in freefall, on a downward trajectory more vertical than any other post-war recession this long into the recession. But there is still time to prevent this recession breaking out into Great Depression territory. After five or six additonal months at this pace, that might not be the case. To me, these graphs argue even more strongly for stimulus spending becasue they show some hope.

Here’s the Star-Banner story, and the FDIC press release.

Not much else to add, except that my impression is that community banks, which I guess is how one would classify Ocala National, have generally faired better than big banks in this credit/mortgage meltdown.

Even a �mere� 12% annual return was enough to attract the well-endowed, and billions of dollars flowed into Madoff�s investment vehicle.

Where did Madoff go wrong? When and why did Madoff�s name become forever linked to Ponzi? As yet we don�t know the when or why, but certain truths can be introduced into the analysis. The beginning of the end occurred before Madoff announced the distribution of a $100-$200 million dollar bonus plan, a plan opposed by his two sons, both operating managers of the company�s trading firm. Faced with their strong opposition Madoff, realizing the �Time� had come, admitted to his boys that he was paying investors �returns� not earned, but were made possible by incoming cash flow. A Ponzi scheme.

In retrospect, the impact upon Madoff�s sons must have been catastrophic. Nevertheless, they both went immediately to Federal authorities, revealing the multi-billion dollar fraud.

But! Did that confrontation between father and sons actually occur? Can it be reasonably assumed, without question, that Madoff�s sons, operating managers of the firm, had no clue, no knowledge of the monies coming in, the actual trading returns being earned, and monies being disbursed? Did Madoff, alone, without accomplices, without accountants, without secretarial staff, have sole access to cash control? With $50 billion dollars, and thousands of investors involved, can it be reasonably assumed there was only one felon on the premises?

How about this scenario: father and sons acted in collusion, each with separate responsibilities. Madoff, the frontman, the friend of nobility, selling the company�s success to willing listeners. Number One son managing the cash inflow from a location separate from where Number Two son managed cash disbursements. With limited ability of personnel to communicate outside of their operating location any irregularities would be difficult to uncover. Within each operating section everything would appear normal and above board.

If such a scenario was, in fact, the operational situation at the time all three recognized the end of their Ponzi scheme – namely, current investors were withdrawing their funds as cash inflow was dropping as fast as the stock market � Bernard made the paternal sacrifice.

�Boys,� he might have said, �no need for the entire family to go under the bus. You two go to the Feds, tell them I duped even you, and your doing what is required for God, Country and Apple Pie. Anyway, I�m an old man, with limited time available. Go!�

And so it might have been.

Do you think the Feds look at the sons as persons of interest? What are your thoughts?

•

James MacMeekin served in the US Air Force during the Korean conflict, earned B.A. and M.A. degrees in economics and finance at Michigan State University, worked his way through Wall Street as stock analyst up to CEO of his own venture capital firm. Retired to Winter Haven, MacMeekin taught school in Polk County for eight years before turning his attention to writing. After a pair of biographies (Abraham Lincoln, Richard O’Kane), MacMeekin has turned his attention to the short essay form. Metro I4 News is happy to commence online publication of a variety of MacMeekin’s essays of interest to residents of the I4 corridor.