The Massachusetts Miracle?

I'm not quite comfortable talking about what's going on in Massachusetts -- treading water -- as a "miracle," but it's a helluva lot closer to that than what Texas has done.

Austerity doesn't work

Krugman points out the obvious... and shows why the Irish are now even worse off than Iceland, because they bought into the stupidity of punishing the working poor and middle class instead of allowing the wealthy who tore apart the financial markets to fall on their own swords.

Instead of cutting Social Security, why not expand it?

I'm not the first person to suggest this, but it hasn't quite percolated through the Washington Bubble, quite yet. While it's not "conventional wisdom," it probably should be. All this deficit commission cat food commission talk of cutting Social Security should get nixed, immediately, and replaced with talk of expanding Social Security. Now is honestly the perfect time to do it. Why? Some of the people least likely to find new jobs in this economy are people in their 50s -- and guess which age group is one of the least likely to be unemployed?

Creating an early retirement age for Social Security, maybe with reduced benefits and perhaps an increased ability to offset those benefits by allowing them a slightly increased cap on what they can earn while on Social Security while still being able to maintain eligibility, would help solve the unemployment problem in two major ways. The first being that it would immediately help those people on the cusp of Social Security, who don't have a job, without having to worry about perpetually extending their unemployment benefits and redoing that political fight every 3 months. The second being the ability to lure some people into early retirement, thus opening up jobs for everyone else. There are lots of people who are 59, 60 and 61 who would think of retiring a bit early if they could have just a little help in the years between 59 and 62. Why not give them that push, when our job figure's so rotten.

Furthermore, while the cat food commission is obsessed with the zombie lie that Social Security is in trouble, it's pure myth. Social Security is set to take in more than it gives out until 2037, and even when that date comes, Social Security has a sizable trust fund to keep it afloat. The government may not be able to raid it anymore, but it will stay solvent. Surely, a modest bump in Social Security's payroll ceiling could fund this expansion option. I'd at least like to see the government to look at this as an option and run the numbers, especially when the economy's actually getting more bleak.

I'll never get Salem's Mayor Driscoll

I always hear how great she is by other party activists and I know people in Salem love her, but stuff like this baffles me.

The plan submitted to the Salem Planning Board would demolish the present Walmart and construct another building about 50 percent larger, with 611 parking spaces. The Lowe's facility would encompass 153,000 square feet, including a garden center. It would have 378 parking spaces.

Salem Mayor Kimberley Driscoll has been supportive of the project that the Everett-based Kennedy Development Group claims will create 105 new jobs and produce $225,000 in annual tax revenue. Aspects of the project were first proposed publicly over two years ago and informally for nearly two decades, at least where Salem's need for a new municipal water tower are concerned.

First off, the Kennedy Development Group is full of it. They can spout all the numbers they like, but until they talk about the costs, no one else should give them the time of day. The fact of the matter is the Big Box stores like Wal-Mart and Lowe's don't actually create new jobs or tax revenue, they just cannibalize what's already there in the economy, sucking it up from the small businesses and spitting it out to national and international investors and stock holders.

We know this now and we've known it for a pretty long time. That Mayor Driscoll never questions these kinds of things is a big mistake for Salem.

None of this is to say Mayor Driscoll doesn't have her strong points -- she's eminently approachable, kind and she gets out there. I can speak from experience on that. She's done lots to make the symbiotic relationship that exists between Salem and Salem State work best for both parties. Salem's been doing well over the past few years and I have no doubt she deserves a lot of the credit.

However, for whatever reason, she's unapologetic about her support for Big Boxes seemingly all over the place, many of which will compete with Salem's hugely important small business community. If she keeps at it, it's these sorts of things which could kill the uber-cool Downtown Salem. It seems like she's stuck somewhere between the '80s and '90s when it comes to this issue -- don't we know better by now? Shouldn't she?

The Real Cha-Ching

It is almost a travesty that there's a giant portion of our state without broadband or cable internet access. This is costing those regions jobs, keeping the kids in those schools in the digital stone age (dial-up). From Governor Patrick's daily briefing:

Governor's Briefing
November 5, 2009

Expanding Broadband

Wrapping up a two-day trip to Washington, DC, Governor Patrick meets with President Obama today after visiting with Massachusetts's congressional delegation to discuss jobs, the economy, and health-care reform. The Governor met with Commerce Secretary Gary Locke yesterday to secure stimulus funds that will help expand high-speed internet across the Commonwealth and spur economic development in every corner of the state. Learn more here.

• Increased broadband availability, an important part of Governor Patrick's plan to position the state for long-term recovery, will lead to new jobs, better health care, and better public education services across Massachusetts.

• Internet access is no longer a luxury--it is a necessity. The Governor expects that his move yesterday will help secure more grants to continue his plan to close the digital divide.

• Specific proposals developed carefully by Governor Patrick's administration for Boston and Cape Cod will improve internet reliability, develop more public computing centers, and provide free high-speed internet access in public housing.

• The largest plan for broadband expansion is for the Berkshires. The $107 million project is expected to create up to 3,000 new jobs and bring high-speed internet to 43 towns in Western Massachusetts that currently receive little or no broadband service.

• Governor Patrick's close relationship with the Obama administration has already secured millions of dollars in federal recovery funds for education and emerging sectors like clean energy and biotechnology. Today, Massachusetts is making the long-term investments that will create jobs and lay the foundation for enduring economic growth.

Governor Patrick's relationship with Barack Obama has certainly helped in the stimulus funds department and one can easily see the fruits of the investments these projects are making, both the stimulus money and the money the state had already invested through the bond bills passed a few years ago. As bad as the "Great Recession" has been, Massachusetts, as a state, has fared better than most -- I have to think Governor Patrick's steady hand is part of the reason why, sparing our cities and towns as much as possible, while looking for future growth potential under every rock and pebble, even as we have to make bone-deep cuts.

Economic Prosperity for All?

Today, Lynne and I had Ben Forman on our LeftAhead podcast. It was a great show. I think one of the things that becomes clear is that while Greater Boston, especially the 128 bubble, has seen a large amount of economic growth over the past few decades -- it hasn't been shared by all. That's lead to a large disparity. One of the key things that made Massachusetts great in the past was the fact that we had large parts of the state where there was economic opportunity to find a good job and join the middle class. Most of those jobs are gone. In some parts of the state, new sectors emerged and continued to offer people in some communities the same opportunity. In the 11 cities MassINC identifies as Gateways, they haven't recovered with new, emerging fields like we've seen inside 128.

That can, of course, be changed -- maybe not with the same kinds of jobs, led by giant factories, employing thousands, but by hundreds of small businesses, employing dozens -- the bulk of which, according to Ben, would be in the business and service sector. We need to start better servicing those living in these communities, as well as work on the PR side to help lure more people to these communities -- and retain them. Speaking from experience, New Bedford was a cool place to live. Lynne loves living in Lowell. These are awesome communities that people should think about when they're considering where to open their small business or buy/rent their home/condo. With so many affordable units in great locations, these are the perfect places to locate -- inexpensive, plenty of talented people eager for jobs, decent public transportation, affordable housing and often very artsy, diverse cultural cuisines and scenes. With more small businesses moving in these communities, they can and will drive our state to a level of success for the Commonwealth I haven't seen in my lifetime -- because we won't be leaving certain parts of the state behind.

Deval's Economic Development

Good news.

Governor Deval Patrick’s administration will spend hundreds of millions of dollars this summer building roads and highway ramps for at least five struggling private developments - from the former Naval air station in Weymouth to Somerville’s Assembly Square - in hopes of jump-starting construction and the local economy.

The money, a combination of federal stimulus money and state funds, will not go directly to the private developers, but rather for public works that Patrick aides said they expect will make it easier for companies to arrange financing in otherwise tight credit markets. That, in turn, would kick off construction of the planned office parks, shopping centers, housing, and hotels that will create new jobs.

The better news is just where these projects are proposed -- these are places ripe for job growth, many of which have a particular need for good jobs.

Although more projects may be chosen later, the ones already approved include not only SouthField in Weymouth and Assembly Square, but a new business park in Fall River that will recruit biotech companies, the Westwood Station project, and Waterfront Square at Revere Beach.

I'm particularly excited about the Fall River and Revere projects. Revere's project will be right across the street from Wonderland. There's a Blue Line station right there and plenty of further development opportunity, quite likely in Wonderland itself (it is closing, after all), which may be spurned on by these investments. Fall River is just an economically depressed city - the family median income is around $25k. It needs those jobs desperately. The thing about Fall River (and New Bedford) that makes it a great place for entrepreneurs is that the property there is dirt cheap - way cheaper than the rest of the Massachusetts, cheaper than the Tri City area in NC that's been siphoning off some biotech jobs. It's also close enough to the Boston area that it still has access to recruiting the top talent in the US for biotech or other high-tech jobs, not to mention a great university next door (UMASS Dartmouth), as well as plenty of Universities in Rhode Island, in and near Providence.

Here's hoping two years from now we can see tangible results from these major economic developments. It's just a start, but it's an illustration of the fact that Deval Patrick and his administration are serious about making sure the economic success that Boston's enjoyed over the years will finally be distributed throughout the state, in all our gateway and former mill cities that have been struggling for decades.

Techy Future for Gateway Cities?

From Governor Patrick:

HOLYOKE – Thursday, June 11, 2009 – Governor Deval Patrick, MIT President Dr. Susan Hockfield, UMASS President Dr. Jack M. Wilson, Boston University President Dr. Robert Brown, Joseph M. Tucci, Chairman, President & CEO of EMC, and John T. Chambers, Chairman & CEO of Cisco Systems today announced a collaboration that will lead to the development of a world-class, high-performance computing center in Holyoke, and a statewide collaborative research program. The center will be powered by a combination of green and cost-competitive energy, making it a cost-effective and environmentally sound facility....

The Patrick Administration, MIT, the University of Massachusetts, Boston University, EMC, and Cisco have signed an agreement committing to work collaboratively over the next 120 days to create an action plan with the ultimate goal of building and opening the new facility and forming the statewide research agenda. The plan will be assisted in part by the John Adams Innovation Institute and local collaboration of Holyoke Mayor Michael Sullivan and the Pioneer Valley Planning Commission, and will seek to identify the operational, capital, environmental, workforce, and academic elements of the project, along with a project timetable, which will be completed in several phases. Other major institutions and private companies are expected to join the collaborative effort.

“This is a cutting edge concept, and its impact on the city will be significant,” said Congressman John Olver. “The Computing Center will dovetail nicely with other big projects underway in Holyoke like the Multimodal Center and the Canalwalk. This is a very exciting time for the city.”

"This is an incredible opportunity for this Gateway City to re-invent itself and Holyoke cannot thank Governor Patrick and his economic development team enough for being our advocates,” said Mayor Sullivan. “I have long spoken to the issue of the ‘Holyoke advantage’, the difference is that Governor Patrick listened and understood how the City and the state could leverage their assets to create something powerful. It is a beautiful day in Holyoke.”

We, as a Commonwealth, need to figure out some way to bring our Gateway Cities the same prosperity that Greater Boston's enjoyed. Lynn tried to do something similar to Holyoke in the late 90s/early 2000s, capturing on the internet explosion. Several startups moved into Lynn and for a while it looked like it would fuel a reemergence of Lynn as being a great place to live and work.

Alas, the internet bubble burst. However, what Holyoke is building, because it's fueled by much more than startups - leveraging state, city, academic and private sector resources - has a much greater chance of finding success. What's more, these things tend to cluster. If this center, when built, is successful, it will fuel startups and expansions nearby. It could just mean hundreds of very good jobs for the area. Now we just need to figure out what to do with half a dozen other Gateway Cities in Massachusetts.

From the Ashes

I had a little debate with a friend a few weeks ago, who was horrified by all the car dealerships closing down. I wasn't as worried -- essentially making the point that while it was unfortunate for people who would lose jobs, new jobs and opportunity would soon emerge from the ashes. It looks like developers are already interested.

The only thing particularly troubling is that these car dealerships offered a lot of great, working class jobs. There aren't whole tons of those to go around anymore. However, we may be seeing a shift in the entire auto industry -- who knows if people will ever buy new like we did in the 90s and early 2000s anymore. If that's the case, perhaps the jobs will just shift from dealerships to more local auto shops.

Yet, in any case, there is resiliency in the economy: land will always hold value and all these soon-to-be vacant dealerships will certainly offer a lot of future opportunity, as well as jobs.

3 Long Term Obama Problems

The following three issues are the sort of bad, muted problems now that could cost him reelection four years from now, if and when it becomes a large enough problem that people find out:

1. Going all Bush on us when it comes to the power grab that Bush orchestrated and Obama is pursuing. This goes for the Obama admin's claims that it has the very same imperial powers that Bush claimed on matters of wiretapping or torture (even if Obama has stopped it in Guatanimo, they haven't said that the administration couldn't do it).

2. Following Geithner, Bush and Summers part 1: Obama's taking the plunge into the abyss by continuing this expensive and ineffective way of 'fixing' the banking industry, buying toxic assets at prices they aren't worth -- and now essentially guaranteeing through FDIC that if they aren't profitable to private investors, that the federal government will make it all better.

3. Part 2: here's what could really kill - the fact that Obama's going out of his way, through Geithner and Summers, to get banks involved by allowing them to avoid the limits on executive funds - creating middle men so the Government doesn't have to dole funds directly. If people find out that execs in Bank of America or Citi gave out bonuses or continue with lavish salaries despite new Congressional regulations for companies accepting federal assistance, Obama's now-fantastic approval rating could fall below Congress's.

I list these things not because they have to happen, but they will if Obama doesn't change course now. They won't hurt him today or tomorrow, but four years from now? It's just a matter of time. If he undoes these three policies, he very well could be the next FDR or JFK, but if he doesn't, he'll only earn the country's wrath. We can't continue to follow the old and ineffective ways of the past -- especially not when we elected a "change" President. Change. Now.

2 things on the aweful Obama plan

The shorter Obama plan on bank recovery: create middlemen government agencies to bypass congressional restrictions on executive pay for participating banks.

They're doing this for two reasons.

But officials at the Treasury and the Fed said they worry harsh pay limits will undermine critical bailout programs by discouraging financial firms from participating.

Good. If they don't want our money, it can be spent more wisely. I wish the Government was fighting so hard to give me money whilst I've been unemployed!

Second reason:

Although many of these companies could survive without government help, they might lack money to ramp up lending, which officials consider critical to turning the economy around.

If that's the real problem and threat to this country, I have an infinitely easier solution than handing out $700 billion to the banks with no real strings, courtesy of Summers, Geithner, et al.

Take the $700 billion (or more, if we have to) and offer it as loans straight to qualified American people and companies, competitive with private-market rates. We'll turn a profit, have no middlemen and not have to worry about companies that are not worthy of taxpayer investment. Let them go under if they're going to be dicks about getting *billions* of taxpayer dollars. There. Fixed.

Yay, Booksmith!

Gotta say, there's something special about this store. I love visiting my Brookline friends, grabbing a latte at Pete's or an ice cream at JP Licks, then meandering through Booksmith on a Friday night, maybe catching a movie later, across the street. There's a large selection for my friends and I can feel free to peruse through their used books with my vast blogger's budget =p

Obama's baffling me with this one

He wants Chrysler to merge with an Italian automaker because - get this - it's 'too small.' Obama's 1000 times better than Bush, but can't we get a President who realizes if companies are 'too big to fail,' they're also too big to exist? Over the next few years, we, as a country, need to force any company that's 'too big to fail' to break up into several, smaller pieces. We can't let our economy be at the mercy of companies like Citigroup and AIG ever again. One company's bad and selfish decisions shouldn't threaten the disintegration of our economic security.

The auto companies are already too big. GM and Ford are truly massive companies - and even Chrysler's Dodge unit was one of the three or four biggest selling car manufacturers just a few years ago, when trucks were still in style. In the end, Chrysler may be the car company that this country has to let go, because their reliability is way down from the other American (and foreign) companies), making it a tough sell to sell any of their vehicles. Plus, let's face it, their new ownership hasn't proven particularly effective. So if it must die, it must die. However, we shouldn't hold an ultimatum that if it doesn't grow, we won't support it. That's not only backwards policy, it's bad policy.

The Housing Market: Willing or Able?

The Globe says there are people who could buy homes... but just aren't. I look around local real estate and there's plenty of available homes for rock bottom prices. I saw one condo a stone's throw from the beach in Lynn (in the Diamond District) for 40k. It was small and a 1 bedroom, 1 bath, but still, that's 1 or 2 year's salary for a condo less than a 2 minute walk from the beach. The mortgage on that would be less than a lot of people's rent. That wasn't the only 1 bedroom condo in Lynn for 40k -- and some of them were much bigger (though, without the beach).

But is it really a bad decision for someone who may want a house and could hypothetically afford one to stay away from the market? Many people who aren't unemployed or underemployed (14% of the country) are afraid of losing their jobs. A lot of those people have good reason to be. None of those people should be burdening themselves with homes that could endanger them in the future.

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Slightly off topic, but I'm not sad to see the housing market crash at all. My parents bought the house I live in for ~25k in the 1970s -- less than what my Dad actually earned as his yearly salary (granted, he played in the NFL back then). I remember going to college and thinking I'd never be able to buy a house, short of being married.

Now, I look at the market and see hope. If I weren't one of the above 14%, I would be calling up the local real estate agent to see that Diamond District condo, looking forward to walking my dog on the beach on a daily basis. Alas.

Further Stimulus

While I wouldn't bet against a second stimulus bill over the next few years, I think it's more likely that we'll get health care, education and infrastructure bills. Basically, more stimulus, but packaged with a different name and sold as direct solutions to individual lives, not just more jobs. Furthermore, look for plenty of the projects that never made it into the actual stimulus bill to get into the regular budget, a bill that can't be filibustered in the Senate.

Super Train Stim Spending: Boston to Montreal?

Open Left lists the high-speed rail projects most likely to be funded with stimulus spending - and while Boston to Montreal (and Portland) were on the list, it wasn't very high up (not that we should be greedy: Boston-NYC-DC is #1 on the list).

That said, I still found the whole concept of the project interesting. Would I drive or fly to Montreal? Probably not. But I'd consider going there for a long weekend trip if there were a competitively-priced train. I bet a lot of Montreal residents would think of coming to Boston too.

I decided to check out the website for the plan, just finishing the detailed summary (pdf file) of the Phase 1 study. It predicted over 680,000 users annually starting out, more than 220,000 of which would go the full route. It's important to note I only read about the Boston-Montreal line, but the overarching plan would also link Boston to Portland. Furthermore, given the commute potential, a little publicity and future smart growth, it's easy to foresee a scenenario where many more than 680,000 people use the system. Linking Boston to places such as Lowell, Nashua, Manchester and Concord has a lot of potential.

I would love to see this take place, more to extend commuter options and public transit within Metro Boston than any other reason. I'm sure the people of NH and Vermont would feel similarly about their localities. Plus, it'd be nice to go visit Montreal using the train - my friends have raved about the city, so I'd probably go there if there were better travel options available.

Update: A few quick facts. The train would travel at an average speed of 110 mph. That's relatively slow compared to some other planned supertrains, but according to the report, it's the most feasible option. The safety requirements for trains that travel in excess of 150 mph are such that it would require significantly more investment to make this plan feasible.

Furthermore, to get passed the 150 mark, the added cost to the project would mean far more expensive fares for users - which was actually projected to reduce ridership. At 110mph, the costs for users would be around 20 cents/mile, which amounts to $66 each way. That seems low, but even if it's a hundred or a little more, that's much better than spending the $600+ for roundtrip airfare. Heck, it would even give Greyhound, charging $180 roundtrip ($92 if it's booked early) a run for its money, while saving users 2-3 hours each way on the 8 hour bus trip.

Why Palmer?

They may as well turn the UMASS Amherst Student Center and its hotel into a Mohegan Sun, it's so close to Palmer. Am I crazy to think that's why Mohegan wants it there? (The correct answer is no.)

The good news is that there's almost no chance this bill goes anywhere. No chance that the Governor pushes it after last year's fiasco and this year's economy. The bottom line is this is one area the unions are very, very wrong on - casinos are bad for people, bad for Massachusetts and bad for our state's economy.

No One Could Have Known!!

My favorite comment?

'after it realized that credit losses at Merrill Lynch & Co, which it bought on January 1, were much higher than expected, a person familiar with the matter said.'

I mean, they're only bankers - who expected them to be good at accounting?

We should have done it from the start, but it's really inevitable at this point. Nationalize the banks. If Bank of America is on the verge of a meltdown, what other alternative is there?

Go Kerry!

Senator Kerry's not going to just be a yes-man on Obama's bad ideas in the stimulus package. That's a good thing.

While it's a little said that it took National Democrats a Democrat in the White House to grow a spine, I'm glad they're starting to grow that spine regardless, so long as it leads to more progressive policy. We don't need to win this stimulus package by 80 votes in the Senate, as Obama wants, we just need the freaking thing to pass. Note, too, the fact that Republicans can't filibuster the economic stimulus, to the best of my knowledge, because it's a spending bill. Why make life harder and turn what's a necessary bill into a useless one?

Deval Wants to Tackle Obesity

Noble goal - with some sensible solutions - but, ah, no offense, don't we have more important things going on now? Posting calories and weighing kids at school are probably great ideas, don't get me wrong (and goodness knows I could do a little more calorie counting myself), but in the face of all that's going on now, isn't this just a little bit gimmicky? It's paving the ugly sidewalks when the bridge just collapsed.

Here's some collapsing bridges the government could be dealing with now, instead:

• Hundreds of millions may will be cut from local aid, without giving munis any options to deal with this new crisis upon their own budget crises... What about some pressing, sensible solutions... like allowing local option meals and hotel taxes?
• What about the tolls gas tax? Lots of momentum to do something about it, something major and potentially historic - at least if we had a certain governor pushing it with the bully pulpit.
• Heaven forbid we hear a little chatter about raising the income tax to help offset some of these crippling mid-year cuts...
• J o b s.

None of this is to say the state can't kill a few birds with one stone, but I've read one too many Big Plan come from the corner office over the past two years. None of them ever go anywhere. The timing's always all wrong. They're never coordinated with the relevant members of the House and Senate. It all comes across as amateurish and wishful thinking. These aren't exactly genius ideas - any fool can come up with most of them. We don't need any more laundry lists, we need clean sheets and new socks.