Category Archives: Economy

Cities Face Double Trouble

Source: Penelope Lemov, Governing, April 15, 2010

We’ve all heard the “good” news: The recession is over. Among the positive signs is consumer spending. U.S. retailers industry collectively reported a 9.1 percent sales increase at stores open at least a year, the strongest showing since 2000.

We’re all aware, too, of the bad news: States and localities are recovery-challenged. The problem for policymakers who would like to give states and localities a helpful push up the recovery ladder is that the troubles that bedevil those economies are not evenly distributed.

A New Paradigm for Economic Development

Source: David F. Shaffer and David J.Wright, Nelson A. Rockefeller Institute of Government, Higher Education, March 2010

From the press release:
Universities and higher education systems across the country are taking leading roles in their states’ economic development efforts — and a report released today by the Rockefeller Institute of Government says this trend seems likely to strengthen as the nation moves into the era of an “innovation economy.”

The study found that higher education’s increasingly important role builds on, but goes well beyond, the research strengths of universities — incorporating efforts as wide-ranging as job training, business consulting, housing rehabilitation and even securing seed money for new businesses.

Cliff Hanger: How America’s Public Schools Continue to Feel the Impact of the Economic Downturn

Source: Noelle M. Ellerson, American Association of School Administrators, April 2010

From the press release:
Students and school systems across the nation are facing serious challenges as a result of the economic downturn, according to a new survey of school administrators released today by the American Association of School Administrators. Compounding an already tough budget environment, schools are facing the harsh reality that stimulus funds will soon run out and the Obama Administration’s proposal to shift additional education dollars away from long-time formula grant programs to competitive grant programs. The new study, “Cliff Hanger: How America’s Public Schools Continue to Feel the Impact of the Economic Downturn,” is the seventh in a series of studies by AASA examining the impact of the economic downturn on schools.

Fiscal Distress and Governance Challenges: The Perfect Storm of the Fiscal Crisis

Source: Bruce J. Perlman, State and Local Government Review, Vol. 41 no. 3, 2009
(subscription required)

From the abstract:
Editor Bruce J. Perlman discusses the effect of the current fiscal crisis on state and local government and introduces the articles in the Governance Matters section that focus on this topic.

Other articles include:
Council-Manager Conflict and Cooperation in Times of Fiscal Distress
Joan E. Pynes and Steve Spina

Seeding the Clouds for the Perfect Storm: A Commentary on the Current Fiscal Crisis
Raymond W. Cox III

Who Broke America’s Jobs Machine?

Source: Barry C. Lynn and Phillip Longman, Washington Monthly, Vol. 42 nos. 3-4, March-April 2010

Why creeping consolidation is crushing American livelihoods.

If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009–nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.

Solutions that Work for Main Street: Progressive Guidelines for Closing Recessionary State Budget Gaps

Source: David Shreve, United for a Fair Economy, 2010

Virtually every state is groping for solutions to budget gaps of historic proportions. Unfortunately, most states are closing the shortfalls in counterproductive ways that deepen the recession, exacerbate hardships for residents, and stifle economic recovery.

Key points of the Guidelines include:

Closing Recessionary State Budge Gaps

* Make more money available to state governments
* Make tax increases and tax reform one and the same
* Encourage of federal-state revenue sharing

Defending a More Progressive and Economically Sound Approach

* Don’t equate frugality or efficiency with budget austerity
* Challenge anti-tax mythmakers

Working Scared: The American Worker in the 21st Century

Source: Carl Van Horn, Presentation at Workforce Challenges Conference at Rutgers, The State University of New Jersey, February 18, 2010

From the speech:
Today, I will:

• Describe the struggles of American businesses and workers as they confront
the harsh realities of today’s economy.

• Explain why the upheaval of the U.S. economy did not begin during the
Great Recession of 2008-2010 and why it will not disappear when the
economy recovers later this decade.

• Explain why millions of Americans have been working scared for more than
a decade and with good reason.

• Outline an agenda of common-sense actions to help employees, employers,
educators, and government policymakers respond to/manage current and
future labor markets.
See also:
The Labor Market, Then and Now: Changing Realities in the 21st Century

Safety Net Health Systems: An Essential Resource During the Economic Recession

Source: National Association of Public Hospitals and Health Systems, Policy Brief, February 2010

Since the beginning of the economic recession, safety net health systems have treated more patients overall, including 23 percent more uninsured patients. These health systems have also
provided 10 percent more uncompensated care to low-income populations.This research brief explores how safety net organizations remain critical to the nation’s health care system.

Business Investment and Employment Tax Incentives to Stimulate the Economy

Source: Thomas L. Hungerford and Jane G. Gravelle, Congressional Research Service, R41034, January 22, 2010

From the summary:
According to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the U.S. economy has been in recession since December 2007. Congress passed and the President signed an economic stimulus package, the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), in February 2009. The $787 billion package included $286 billion in tax cuts to help stimulate the economy. Among the tax reductions, many were tax incentives directed to business. The preliminary estimate of third quarter real gross domestic product (GDP) growth is 2.8%; the unemployment rate, a lagging indicator, averaged 9.6% in the third quarter and 10.0% in the fourth quarter of 2009. Federal Reserve Chairman Ben Bernanke expects the economy to continue growing at a modest pace, but predicts that bank lending will remain constrained and the job market will remain weak into at least 2010. To further assist unemployed workers, help business, and stimulate housing markets, Congress passed the Worker, Homeownership, and Business Assistance Act of 2009 (P.L. 111-92). The Obama Administration has advocated further business tax incentives to spur investment and employment, especially for small business.

The two most common measures to provide business tax incentives for new investment are investment tax credits and accelerated deductions for depreciation. The evidence, however, suggests that a business tax subsidy may not necessarily be the best choice for fiscal stimulus, largely because of the uncertainty of its success in stimulating aggregate demand. If such subsidies are used, however, the most effective short-run policy is probably a temporary investment subsidy. Permanent investment subsidies may distort the allocation of investment in the long run.

Workers’ Response to the Market Crash: Save More, Work More?

Source: Steven A. Sass, Courtney Monk, and Kelly Haverstick, Center for Retirement Research at Boston College, IB#10-3, February 2010

From the summary:
The stock market crash of 2008 significantly dimmed the retirement prospects of workers approaching retirement. These workers are heavily dependent on 401(k) plans, as opposed to traditional defined benefit pensions, as a source of retirement income. During the economic downturn, these plans lost about one-third of their value. Even before the crash, many older workers lacked the assets needed to enjoy a comfortable retirement.