Well my wife and I have definitely contributed to the economy this month. We're in the process of re-finishing our poorly finished basement. We purchased a washer/dryer, new cabinetry, new plumbing fixtures for the powder room, new carpeting and I'm employing a plumber and an electrician to straighten out 80 years worth of accumulated piping and wiring mish-mash.
Of course all of this is happening because we are resigned to staying in our rather petite house since we can't afford to upgrade. But a lot of sweat equity on my part is keeping costs down so we're doing it without increasing our debt.
Posted by snark at February 28, 2006 08:15 AM4th quarter GDP was revised upward, from previous 1.1% to 1.6%.
The silver lining of the lower confidence numbers is that this is a more Fed-friendly number.
Everybody already knows the housing bubble is over. As long as folks have jobs and can make monthly payments, I don't see a collapse in prices. Prices have stopped going up and have reversed some, though.
Of course, the news out today is that 40% of the folks in the San Francisco area are considering leaving, citing high real estate costs as one of the factors. That's about 2.7 million folks. As you know, San Francisco pays higher wages, and this leads to the costs of everything being higher. Just another example of why raising the minimum wage doesn't do anything to help the poor, but just causes other wages to rise and the cost of living to increase.
Posted by muckdog at February 28, 2006 08:26 AMmuck, I'm told they are moving to Sacramento.
Posted by bbtb at February 28, 2006 09:05 AMSteve, I notice you didn't mention the foreclosure rate which increased every quarter in 2005.
And yes, muck, I read the paragraph that says:
Saccacio noted that the number of 2005 foreclosures needed to be kept in context. “Even with almost 850,000 properties entering some stage of foreclosure across the country over the course of the year, this represents less than 1 percent of all U.S. households. And the increase in U.S. foreclosures from Q3 to Q4 was just below 5 percent.”
Regardless, a 25% increase is a 25% increase. It'll be interesting to see what happens this year.
Posted by ann at February 28, 2006 09:08 AMSomehow, bu$hco has managed to make it seem like they are helping Veterans!
Posted by bbtb at February 28, 2006 09:51 AMbbtb I'm told they are moving to Sacramento.
Yeah, that's what some have done. But I also read an article talking about how middle and upper class folks are migrating out of CA. Lemme find the link...
Excerpts:
The latest Census Bureau data indicate that, in 2005, 239,416 more native-born Americans left the state than moved in. California is also on pace to lose domestic population (not counting immigrants) this year. The outmigration is such that the cost to rent a U-Haul trailer to move from Los Angeles to Boise, Idaho, is $2,090 -- or some eight times more than the cost of moving in the opposite direction.
But the worst growth killer may well be California's tax system. The business tax rate of 8.8% is the highest in the West, and its steeply "progressive" personal income tax has an effective top marginal rate of 10.3%, or second highest in the nation. CalTax, the state's taxpayer advocacy group, reports that the richest 10% of earners pay almost 75% of the entire income-tax revenue in the state, and most of these are small business owners, i.e., the people who create jobs.
And things may soon get worse, thanks to Rob Reiner, who played the liberal "Meathead" on the "All in the Family" sitcom in the 1970s and now plays the same part in real life. He and his rich Hollywood friends have put an initiative on the state's June ballot that would add a 1.7-percentage-point income-tax surcharge on "millionaires" with income over $400,000, with the proceeds earmarked for universal pre-school.
This isn't Mr. Reiner's first foray into confiscatory tax politics. Last year he sponsored a ballot initiative narrowly approved by voters that imposed a percentage-point income-tax surcharge (to the current 10.3%) to pay for government mental-health subsidies. And in the late 1990s he helped to pass an initiative to raise the state's tobacco tax by 50 cents a pack to pay for children's health care.
All of this has contributed to the trend of wealthy taxpayers disappearing from the state. State finance office data indicate that the number of Californians reporting million-dollar incomes fell to 25,000 in 2003 from 44,000 in 2000. That decline has cost the state $9 billion a year in uncollected tax revenues. The dot-com implosion of 2000 and 2001 no doubt wiped out many paper millionaires, but migration out of the state to escape its hefty tax premium has also played a role. Republican Assemblyman Ray Haynes notes that the average high-income individual can buy a newly built house in neighboring Nevada and pay for it just from the money saved in a year of not paying California taxes.
In the early 1990s under Republican Governor Pete Wilson, the state raised its top income-tax rate to 11%, triggering one of the worst fiscal crises in the state's history. Tax revenue fell as high-income people fled the state, while public debt exploded. That tax surcharge was removed in 1995, but now the state's politicians want to do it all over again.
If the Meathead tax passes in June, the reverse gold rush out of California will surely accelerate. And Hollywood's liberals will discover again that a state with fewer businesses creates fewer jobs and collects fewer taxes.
Posted by muckdog at February 28, 2006 10:34 AMmuck, A lot of them are coming to AZ. They sell their homes in SF and buy 5 houses here, bank a bunch and invest the rest.
Can't blame them. Get out while the getting was good. I got mine, screw the rest mentality.
Posted by bbtb at February 28, 2006 10:55 AMI know folks who have moved from the SF Bay Area to Nevada. Reno is booming. As is Las Vegas. They cashed out on their equity, and bought a house in Nevada and retired. No state taxes on their pensions, and just lower cost of living overall.
The "Meathead Economics" article I linked to above is a good one. Very true.
Posted by muckdog at February 28, 2006 11:26 AMHey, a question here for the CA lefties. Are you planning on leaving CA when you retire? List any reason, like cashing in on the home equity or lower taxes on pensions/IRAs. Just curious.
Posted by muckdog at February 28, 2006 11:32 AMJust another example of why raising the minimum wage doesn't do anything to help the poor, but just causes other wages to rise and the cost of living to increase.
Yeah, it's so much better to keep the wages low for the working poor while cutting taxes for the rich: it means the rich won't move to Arizona. But who cares, really? I mean, they're just raising prices with their high salaries. And then they don't pay taxes either, so it's not like they're contributing much except through consumption. We should just lower everyone's wages and then things would really be cheap.
Posted by ann at February 28, 2006 12:02 PMIt's just economics at work, Ann. File the cost of living issue in SF in the "law of unintended consequences" folder. Sounded great on paper to raise the minimum wage or have a living wage ordinance as SF passed in 2004 (I think) for certain workers. But the result was that everybody else got a raise, and all that money caused the prices for everything to increase.
Of course, the real benefit of that sort of thing goes to folks who are already established. If you previously own a home prior to a hike in minimum wages/living wages, and have a fixed rate mortgage, then when the new wage laws pushes everybody's wages up, your wage goes up, too. So you have more money to spend.
Again, no benefit goes to the poor. But it sure makes for a great Democrat soundbite during the election years, eh Ann?
Posted by muckdog at February 28, 2006 01:20 PMSo the more wretched the condition of the poor the better the economy; is that what youre saying muckdog? What sadistic, anal retentive, p.o.s you are. Its almost laughable that red state xtians have aligned themselves with this mentality.
Posted by jondee at February 28, 2006 01:25 PMAgain, no benefit goes to the poor. But it sure makes for a great Democrat soundbite during the election years, eh Ann?
Well, there would have been a benefit if only those making piss poor wages got increases as a result. Why increase the wages of someone who is already making a living wage?
But like everything that you bring up, I'm sure there's another side that gives more of the true picture. I'll run your theory by an economics friend who lives in the Bay Area.
Posted by ann at February 28, 2006 01:29 PMYup, as I thought muck is talking out of his ass again. This just in from an economist in the Bay Area:
It was not the living wage ordinance that created the inflation, it is the price of real estate and the starvation of property tax revenues that has impacted local services, raising the price of doing business in SF (thus prices) and the need for alternate taxes. Also, Reno and Vegas are among the last remaining opportunity for middle class people to get into the real estate investment market in the west, with the average price of a started house in Oakland (the ghetto) ringing in at 550,000, regular people can't afford to live here. It is only the wealthy that can afford to live here now, and they aren't moving. It's tempting to trade "up" or cash out real estate windfalls and resettle where they won't have a mortgage, and the threat that california might re-institute raising property taxes for people who can barely afford their mortgage adds to that temptation. Sell you house you bought 15 years ago for 75,000 for 650,000, buy one on Vegas for 350,000 and live off the rest in retirement. That's what a lot of people who have had houses here for 20 years did, because they lucked out with the market. But they aren't the wealthy, they are real estate rich, and their decision to move was more likely motivated by the fact that they were too poor to stay here later in life.
Living Wage ordinances affect taxes and to that extent they impact the local ecomony, but this is FAR FAR light years behind other cost drivers, and it is ambiguous. All studies show that minimum wage increases are an economic stimulus, because poor people put the money right back into the local economy, unlike other forms of investment that are redirected out of state or the country. Likewise, Living Wage ordinances are an answer to rather than a driver of inflation, and they help grow the local tax base, lessening the need for alternate taxes.
The dollar an hour raise for low-wage workers doesn not translate into a % raise for everyone on staff. That's only if you want top preserve the obscene ratio b/w lowest and higher paid members of staff, which has gotten way out of whack in recent years.
Posted by at February 28, 2006 01:58 PMjondee So the more wretched the condition of the poor the better the economy
I didn't say that. I just said that you can't artificially bump the lowest wage and expect that other wages won't bump up, too. In otherwords, if a Wal-Mart greeter gets an artificial living wage of $100K a year, then everyone making under $100K will want a raise that shows their value relative to the Wal-Mart greeter. Supply-demand.
In Ann's first comment, she shows that she doesn't understand this. According to Ann, if she's making $50K and a Wal-Mart greeter gets a raise from $10K to a $100K, she would be happy with her wage of $50K. Of course, her coworkers would all be upset that Wal-Mart greeters now make more than they do, and they'd demand a raise. But not Ann. She'd be happy for the Wal-Mart greeter. LOL.
Ann, your economist friend has a right to an opinion. It's not exactly correct, but lots of economists have lots of differing opinions. If they were right about stuff, they'd be making more money!
Inflation is caused by an increase in the money supply. That's why the Fed watches those jobs numbers and recently has sounded a bit edgey because of rising wages. When SF and surrounding community enacted living wage laws, they became a participant in feeding inflation in the Bay Area. Residents see this in higher prices for pretty much everthing. Happy Meals cost more in SF than in Sacramento. Fuel costs more. Everything costs more. Why? They make more money in SF, and the marketplace reflects that.
Your friend was right that some folks cash out on their homes and move to other areas. Your friend indicated that these folks aren't "wealthy" but real-estate rich. Is there a difference? What about Arnold? Is he "wealthy" or real-estate rich? And Bill Gates, is he "wealthy" or stock-market rich? Etc.
Posted by muckdog at February 28, 2006 04:15 PMSteve. Tsk tsk. You're normally the one to point out polling irregularities. Only when it suits your purpose, eh?
To be exact, the final numbers of individuals contacted were 409 Democrats to 272 Republicans. A quick mathematical exercise reveals that 40 percent of respondents were Dems, while only 27 percent count themselves among the GOP ranks
From KLo's blog.
Posted by muckdog at February 28, 2006 04:45 PMIn Ann's first comment, she shows that she doesn't understand this. According to Ann, if she's making $50K and a Wal-Mart greeter gets a raise from $10K to a $100K, she would be happy with her wage of $50K. Of course, her coworkers would all be upset that Wal-Mart greeters now make more than they do, and they'd demand a raise. But not Ann. She'd be happy for the Wal-Mart greeter. LOL.
You are completely and utterly full of shit. What an absurd analogy you've chosen. The living wage ordinance would impact all of the workers within a specific class, in your example, all of the greeters would get the same rate increase. As for the corporate execs, they already make way more than the minimum wage and there's no reason to raise their salaries. They aren't going to demand their wages be raised because the guy sweeping the bathrooms gets a dollar an hour more. And if they did, they should be laughed out of the company.
Ann, your economist friend has a right to an opinion. It's not exactly correct, but lots of economists have lots of differing opinions. If they were right about stuff, they'd be making more money!
You're predictable if nothing else. I might add that you have a right to an opinion, however incorrect that it is. From the brief bit of research I could do today on living wage ordinances, they are extremely popular, extremely effective and do not create inflation. So, look forward to the one that's coming to Sacramento! It's funny that you mention SF, because their living wage ordinance went into effect in 2004, I believe. SF was too expensive 16 years ago when I was considering relocating out there. The living wage ordinance didn't cause property values to soar, they were already out of control over a decade before!
Posted by ann at February 28, 2006 06:20 PMIn Ann's first comment, she shows that she doesn't understand this. According to Ann, if she's making $50K and a Wal-Mart greeter gets a raise from $10K to a $100K, she would be happy with her wage of $50K. Of course, her coworkers would all be upset that Wal-Mart greeters now make more than they do, and they'd demand a raise. But not Ann. She'd be happy for the Wal-Mart greeter. LOL.
And, btw, smugdog, where exactly did I say any of this? It's pathetic when you have to make things up to feel better about yourself, but I guess it's just a habit for you now.
Posted by ann at February 28, 2006 06:24 PMBasic needs do not cost drastically more in SF versus other areas of California. Gas, bread, and milk - sorry man, they are the same everywhere.
They have much lower wages in the Central Valley, does that make everything cheaper? no
Besides rent - to live in Fresno, San Francisco, or Santa Barbara is about the same. And is Fresno a better place because if its lower pay?
Inflation due to people earning more? I don't buy it. All that's happening is we are finally starting to some voodoo really kicking in - from oil speculators, higher energy prices, and a healthcare system tuned to profit. NOT higher wage pressures.
I am one with the opinion that VERY FEW are seeing pay increases worth anything. Higher wages are not keeping up with health care costs and energy. One reason we are seeing higher wages is the warmest January in 100 YEARS! More construction workers who make decent money and boom, a bump in the numbers.. The paltry increases these statisticians keep throwing at us are totally bogus and most people know it.
If lower paid people earned more money, they would be able to buy above and beyond basic need items - or heaven forbid, even save some or go to school. There's a fine line between making enough to survive and making enough to DO SOMETHING with your life. They don't call us "consumers" for nothing. It seems minimum wage has always ridden the razor's edge between survival money and a livable wage. California is way better off with a higher minimum wage. People that don't like I'm sure are all fightin to move to 'Bamma where chitlins are damn cheep.
Your Wall-Mart example is very flawed. If you paid a greeter 100k a year, there would not be an increase in every else's wage, but, there would be a massive increase in people applying for that position! Earnings are not that transparent. You also get what you pay for. If you run a business that has a higher pay scale, you would be able to select those with a higher skill set and there would be a lot less turn over.
There used to be an idea that through education, you increase the value of one's work, it's possible to get a decent and higher paying job, and society in general benefits through higher taxes, a more fulfilled workforce, and lower crime. I guess the Chinese idea of laboror is more to your liking?
Me for one - I'm a Californian born and raised and I love it here. I thought about going to North Carolina, Portland, or living in the Keys, and Costa Rica's been callin me lately.. but honestly, I can't cash in on a real estate windfall and I'm a working stiff for now - But the World is a beautiful place and when the bug bites and it's time to retire - maybe.... maybe..
Posted by dishwashing engineer at February 28, 2006 06:45 PMInflation due to people earning more?
Wouldn't that make tax cuts inflationary? I mean, theoretically speaking, of course, since most tax cuts go to the wealthy and they invest rather than spend on necessities.
Posted by ann at February 28, 2006 07:29 PMYes, Ann. Tax cuts are inflationary. That's why politicians cut taxes during a recession (when the economy is contracting). You got one thing right. The rest of your comments are absurd.
If a living wage comes to Sacramento, I welcome it because "I aready got mine." It'd push up wages for everyone, and thus the prices of goods and services.
After all, did the increase in the minimum wage and living wage in SF eliminate poverty there? Did it even help out? Can those at the living wage buy a house?
No. No. And, no. It was a non-event, except that the cost of living over in SF is higher than it was before the wage hikes.
Posted by muckdog at February 28, 2006 08:30 PMMuck - real estate wealth, minimum wage, and living wages are totally apples, oranges, and chimpanzees.
If you would just listen to the economic elevator music with just a smidgeon of doubt - you'd learn sooo much.
Has poverty been eliminated anywhere? Do you think having a higher minimum wage actually hurt anyone? "OH MY GOD" THESE POOR PEOPLE MAKE SO MUCH THEY ARE DRIVING UP THE PRICES OF EVERYTHING!!! We're going to have to move!
People in SF are progressive enough to not mind the MASSIVE WAGE HIKES and HYPERINFLATION they're experiencing because of these hYPES - I mean hikes...
There are people that make SICK money and then the rest of us. By siding with those making more than 400k a year, doesn't make you one of 'em...
I can't wait for the first real corporate epiphany when somebody asks, "I wonder if our CEO will quit if we decided to pay 12 million a year instead of 20."
I've always wondered if you offered the Virgin Mary grilled cheese sandwhich owner 2 thousand dollars instead of 28 thousand - would she have accepted? hmm
Is a one-hundred thousand dollar bonus for 2005 a bit much for a market broker who is supposedly trying to maximize their client's investment? When it was such a lackluster year... What about more than 10 million?
It was one of the best year's for wallstreet but not investors? Is that irony or churn? That's how THEY STEAL YOUR RETIREMENT. Commissions on the buy AND sell side.
These board members or making A LOT of money - telling everyone that everything is fine - keep spending - buy a house with a 40 year mortgage - outsourcing is a good thing because it lowers prices on the junk we buy - and whoohoo, the economy supposedly grew at 1.6% last quarter, not 1.1%.
If first quarter growth of 2006 is 4.5% like economists said today, I'll eat my shorts - and most of any increase isn't hurt by Bush's freakin defense spending. It's a farce.
And EVEN MORE GOOD NEWS!! A core price measure that strips out food and energy costs increased at a 2.1 percent rate, not the 2.2 percent pace reported a month ago. Wow, that's great, right there with many people's yearly pay increase... say it with me Muckster - STAG-NATe-ING WAGE-eS. That's without food and energy? The two areas that have totally SHOT UP and NECESSARY?! Jeeze - Greenspan F'ed everything up - there is one fool ASS punk that probably should have never made more then 14 bucks an hour...
Outsourcing, H1Bs, offshoring, whatever you want to call it, it's a bullshite economy...
The filthy rich get richer and the poor get the picture...
Nobody is FOR tax increases. Personally I would lower taxes on the MIDDLE CLASS where most people should reside, NOT cut every freakin social program within my reach, try to actually help people get educated, and not cut health benefits and retirement - and how would I accomplish this? By distributing funds FAIRLY.
And if this doesn't happen - I'm fine with that too - all that's happening is that the Bush voters are getting SCREWED and EACH and EVERY day, realizing it more and more. EACH DAY we hear of something else - another screw up - another "screw us" - screw the elderly - screw the poor - screw the left - screw the center - screw those that don't agree with MY WAR and don't agree with my administration's LIES. My only drive is to wait it out until this dumb ass has evaporated into ether of history and we can repair the damage.
Until then, I see a new venture on my horizon - I'm going to find out where these corporate boardmembers live and open a full service gas station that charges 23 dollars a gallon. These arseholes will probably pay it just to say they can!
Posted by Dishwashing Engineer at February 28, 2006 09:18 PMAfter all, did the increase in the minimum wage and living wage in SF eliminate poverty there? Did it even help out? Can those at the living wage buy a house?
Of course, it helped. Of course it didn't "end poverty" but who claimed that it would? The reality is though that with SF real estate prices out of control for almost 20 years, an increase in the minimum wage can't do much in less than two years. Heck, even the people in SF with really good salaries can't make it - I have a cousin who is married to one of the Prozac execs and they moved to Indiana because SF was too expensive for them - and that was six years ago.
Tell you what, though, when Sacramento gets the living wage, let us know how your salary increase request goes when you whine to your boss that it isn't fair that the guys cleaning toilets got raises.
Posted by ann at February 28, 2006 09:59 PMShorter muck:
I'm for inflation when it benefits me (tax cuts) but I'm against it when it helps anyone who actually works for a living (living wage ordinance.)
Posted by ann at February 28, 2006 10:19 PM