...The solution lies in residents increasing their job skills, he (Kelvin Jasek-Rysdahl, an economics professor at California State University, Stanislaus) said. -- Modesto Bee, Sept. 15, 2010
After the largest financial fraud in the history of the world comes down, the worst effects of all in the north San Joaquin Valley, and we had the Pomboza (representatives Richard Pombo and Dennis Cardoza) trying to gut the Endangered Species Act in the midst of it, and now we have this Turkey Tech economics professor blaming the victims for not having degrees in computer science or something else of a professional nature. If only it had just been forklift drivers that lied on their mortgage applications, while people with proper academic degrees told the truth, did not engage in wild real estate speculation and were wise enough to avoid financial disaster, the Learned Man's judgment might make some sense. But that's not how it happened.
It is a sad, sickening thing to see in the regional press, day after day, from the bloviations of UC Merced "scientists" to the CSU pundits on down, just how completely the academic elites sold out their own society -- aka us -- to stay "on the same page" of their corrupt disciplines.
The American people face this economic horror, which is only beginning, almost without any reliable intellectual guidance from the academic class, educated largely at public expense, Our cowardly professoriate, which has betrayed its society, says: Let them eat graduate school!
Yet, to say that they betray their own society is too harsh because it assumes the little darlings have a social conscience to betray, which is not the case. In general the social science disciplines in the US today are as sociopathic as the corporations that fund their "research."
Badlands Journal editorial board
The report comes on the same day as a forecast by UCLA economists that the statewide recovery will continue to be slow...Bassitt said the outlook remains uncertain, but surviving businesses are increasing their market share and taking advantage of reduced labor and rental costs...Despite the bleak outlook, UCLA senior economist Jerry Nickelsburg dismissed speculation that the economy is heading into a double-dip recession. "California's growing, but it's growing slowly," he said. "It doesn't follow that slow growth means you turn in a different direction."
Stanislaus County hits bottom of list...John Holland The Sacramento Bee contributed to this report.
The economy of the Northern San Joaquin Valley is in awful shape.
That comes as no surprise. The region has been among the worst in the nation in most economic categories for some time.
But just in case you don't believe those numbers or the experts who analyze them, or you've been living in cave, a Washington, D.C., think tank rolled out some new figures today confirming the region's plight.
Stanislaus County is dead last — 100th — in employment and real estate rankings, according to the Brookings Institution. The county's 17.2 percent jobless rate in June was the worst among the nation's 100 largest metropolitan areas.
The county also ranked 100th — again at the bottom of the list — with its 59.6 percent drop in home prices from the peak of the market nearly five years ago.
The job and housing numbers are closely related, Brookings economist Howard Wial said Tuesday, because the housing boom put many people to work.
"You're still experiencing the aftereffects of the housing bust," he said. "That ripples all the way through because housing was such a big part of the economy before the bust."
San Joaquin County ranked 99th for employment and housing prices. Merced and Tuolumne counties are too small to be in the report, but they have had a rough ride, too.
The report comes on the same day as a forecast by UCLA economists that the statewide recovery will continue to be slow.
Bill Bassitt, chief executive officer of the Stanislaus Economic Development & Workforce Alliance, said the county has been hit hard by layoffs, business closures and home-price declines.
"I think most of our businesses are fully cognizant of the fact that this area of the country is going to lag considerably behind the recovery the rest of the country experiences," he said.
The Brookings report, from the group's Metropolitan Policy Program, echoed other national studies finding that the Northern San Joaquin Valley has suffered mightily from recession, foreclosures and other woes.
"People lost a lot of wealth," said Kelvin Jasek-Rysdahl, an economics professor at California State University, Stanislaus. "Certainly, that affected their spending."
He said the north valley has long-term employment problems that are magnified by recessions. The solution lies in residents increasing their job skills, he said.
Still, the report showed a few bright spots. Stanislaus County had a 0.5 percent gain in gross metropolitan product — the value of all goods and services — in the second quarter of this year, compared with the first. This was just shy of the 0.6 percent national average.
The county's home prices have declined recently at a slower rate than the nation overall, Wial said.
"(The improvements) are very small and very fragile," he said. "It's hard to read much into one quarter."
Bassitt said the outlook remains uncertain, but surviving businesses are increasing their market share and taking advantage of reduced labor and rental costs.
Brookings found that the Omaha, Neb., area had the best employment picture, with a jobless rate of just 5.5 percent in June.
California's inland metro areas dominated the bottom of the employment list: Sacramento was 91st, Riverside 95th, Bakersfield 97th and Fresno 98th.
The quarterly UCLA Anderson Forecast said statewide unemployment won't fall to less than 10 percent until late 2012.
Despite the bleak outlook, UCLA senior economist Jerry Nickelsburg dismissed speculation that the economy is heading into a double-dip recession.
"California's growing, but it's growing slowly," he said. "It doesn't follow that slow growth means you turn in a different direction."
The Soft Bigotry of Low Expectations
By DEAN BAKER
In a country with almost 15 million people out of work, it is amazing that any economists still have jobs. This one is their fault first and foremost. Economists are supposed to know about the economy and provide advice on how to avoid disasters before they happen and help us recover from the bad things that happen in spite of good advice.
The economics profession has not done well on this simple scorecard. Remarkably, rather than improve their game, economists are now busy dampening down expectations so that the public will not hold them responsible for the state of the economy.
Towards this end, a group of Fed economists recently put out a new study claiming that it was impossible for economists to recognize the $8 trillion housing bubble before it wrecked the economy. In effect, they argued that economists should not be blamed for this failure because:
“The state-of-the-art tools of economic science were not capable of predicting with any degree of certainty the collapse of U.S. house prices that started in 2006."
This raises the obvious question: If economists can’t see an $8 trillion housing bubble, what can they see? This is a bit like the firehouse where everyone sits around calmly sipping their coffee as the school across the street burns down. Completely missing the largest financial bubble in the history of the world is pretty inexcusable, even if economists continue to make excuses.
Having failed to prevent disaster, economists are now anxious to tell us that there is nothing that they can do to remedy the situation. The story they are pushing is the unemployment is structural, not cyclical. This means that people are not unemployed because of a lack of demand in the economy, but rather they are unemployed because there is a mismatch between the available jobs and the skills and location of the available workers.
Before examining the argument here more closely, it is worth noting that arguments about rising structural unemployment come around during every recession. When the economy fails to produce jobs fast enough to bring down the unemployment rate economists quickly turn to blaming the workers. The problem is not that economists came up with bad policies; the problem is that workers don’t have the right skills or live in the right place. This happened after each of the last four recessions.
The story the economists tell is that we have jobs available but the workers who are unemployed don’t have the skills to fill these jobs. The “structural unemployment” gang got a big boost last week when the Bureau of Labor Statistics reported an increase of 180,000 in the number of unfilled job openings for July.
There are some logical implications of the structural unemployment story that are easy to test. For example, if there are sectors of the economy where they is a substantial unmet demand for labor then we should expect to see wages rising rapidly in these sectors. This is a simple supply and demand story. If demand exceeds supply then we should expect to see wages rising as firms compete for workers.
There is no major sector in which wages are keeping pace with the overall rate of productivity growth. Wages have been rising pretty much at the rate of inflation in most sectors for the last year and a half. In fact, taken as a whole the wages of production/non-supervisory workers have been rising slightly more rapidly than the wages of all workers over the last year and a half. Since all of the less-skilled jobs fall in the production/non-supervisory group, this suggests that the premium for skills has actually fallen somewhat in the last year and a half, the direct opposite of the structural unemployment story.
In the same vein, if employers can’t find enough skilled workers, then we would expect them to have their existing workforce put in more hours. So, there should be sectors of the economy where average weekly hours are increasing. The evidence refuses to cooperate here also. The biggest increase in average hours over the last year has been in mining and logging and manufacturing, industries that are not typically thought to be centers of new economy skills. On the whole, average weekly hours are far below their pre-recession level.
Oh yeah, and what about that big jump in job openings in July? With the July jump there are just over 3 million job openings being reported, which gives us a little more than one opening for every five unemployed workers. Furthermore, the current number of openings is down by roughly one-third from its level in 2007, before the recession began. And, no one was talking about structural unemployment three years ago.
In short, there really is no evidence for a problem of structural unemployment. The problem is that because of bad policy we don’t have enough demand in the economy. If there is a mismatch of jobs and skills it is between economist positions and the people who fill them.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.
This column was originally published by The Guardian.