Tag Archives: unemployment

Behind Government Budget Problems

Sutro Baths Steps by sirgious
Sutro Baths Steps, a photo by sirgious on Flickr.

This month’s post by Gail the Actuary explains our country’s (and the world’s) economic situation better than I ever could, so here it is.

This obviously speaks for Oakland as well, since we’re one of hundreds of US cities built upon a once lustrous but increasingly potholed and cracked foundation of cheap (and now all burnt up) oil and gasoline.

We’ll need to find other means of social lubrication, and in the meantime, don’t be poor!

The ramifications touch every part of our society, and thus I’ve tagged this with all categories. Put on your systems thinking cap and get reading!

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Is Grand Lake Theater on Crack?

Is this man on crack?

Is this man on crack?

Of all Oakland small biz owners, I recall one in particular, Allen Michaan, who rallied a rabid frenzy of gasoline-dependent “consumers” and fellow biz owners into an anti-city government parking fee increase froth.

Not that small businessees don’t have legitimate concerns of pure business survival during Great Depression 2.0, but the argument against parking  went too far. (I generally like his outdoor sign commentaries…)

Michaan, owner of the local movie theater by the lake claimed that his business was down 50% (?) due to the increased $0.50/hr parking fees? C’mon! Wake up and smell the non-fair-trade blue bottle coffee. Your theater has less patrons because their disposable incomes have shrunken like a cotton sweater left in the dryer on High too long. And you scared them off with parking ticket talk to the mainstream media. Heckuva job.

So now that Oakland City Council repealed its parking rate hike (and longer hours) this week, will we see a 50% rebound in said movie theater business? I highly doubt it. The Grand Lake shuck-and-jive to “roll” back higher parking rates will backfire into some other tax increase or service cut.

The real reason for Grand Lake businesses hurting is this:

Unemployment keeps increasing. Nationally the Sept unemployment rate is officially up to 10%.  That represents around 1 million fewer people working in Sept vs August.

To make house payments on your American Dream or to go out to movies every week requires a steady paycheck. A lot of people are losing that, which means they’re losing their disposable income.

Even if you keep your job, let’s say your credit card rate just got increased from 20% to 30% or your credit line got trimmed a cool thousand.  Now you have all the more reason to jump on Hulu.com or visit your local paid-for library’s DVD section… Plus, you might be inspired by all the bad news to actually save a few bucks for when you get laid off.

$3 gas now hurts more than $4 gas did in 2008.

Oakland business owners who have come to terms with all these facts of reality are battening the hatches for a few stark years  — and likely decades  — to come, Japan-style. People are only buying essentials these days. They’re going out less frequently.

Businesses which succeed will be the best of the best.

You can generally find these businesses at yelp.com’s “best of” sections.

They’ll also be located in great locations like Temescal, Uptown, maybe West Oakland, and perhaps even Rockridge. Areas close to public transit. Grand Lake can succeed too: at a smaller scale. Does any low-density neighborhood really need 5 beauty salons within three blocks?

Surviving businesses will thrive when their lesser competitors close. Survivors will have survived thanks to better service, unique ambiance you can’t enjoy anywhere else, maniacal focus, or being tight-knit with the local community. And most of all, offering something tangible which people really need. Food. Water. Air. Shelter. Clothing. You might have noticed that over in SF, the former Sony Metreon building now features an all-week farmers’ market indoors where sony hardware once sat. (Love the empenadas and day-old cupcakes!)

If they don’t offer the above, they are short-cutting or cheating somewhere. Think “bailout” or mafia.

Cheap and good is the order of the day.

Wishing small biz owners out there all the best! We’re in for a decade of penny-pinching. Now support your damn local economy by closing your national zombie bank account and switching to a local/regional bank or credit union!

I just closed my Chase account this week. If you can’t tell, I’m quite pleased with myself. 😉

A New All-American Olympics; Plus, Oakland Edition

Now we have another “We’re #1!” type event: the Unemployment Olympics in NYC! Woohoo!(As seen at NYDN and elsewhere.)

Time for Oakland’s Crime & Pimpin’ Olympics! We could have:

  • Find a Mayor Up to Some Good, Or Possibly Working
  • Put out a porta potty fire
  • Be a human shot spotter in the Eastmont Mall parking lot
  • Speed portrait painting of prostitutes by San Pablo McDonald’s
  • Timed scavenger/treasure hunt at all 100+ 2008 murder sites
  • Duck and cover from the chrome wheels
  • Find a Tree Without Graffitti
  • Measure the black tinting in my windshield
  • Count shell casings on my block at night with the lights off
  • Turn these empty cartridges into necklaces for sale in RR or Uptown
  • Convince your neighbors we have a crime problem taboo/charades
  • Fill the water coolers in City Hall with every Koolaid flavor
  • Drive your neighborhood drug dealer caught in the act to Montana to be processed at the nearest county jail and fill out his paperwork before falling asleep
  • Find a “safe” beat in Oakland not too far uphill or filled with hipsters
  • Run away from the muggers three-legged race
  • Catch the garden hose thief

Now who will help me “bake the bread”? Ho ho ho–a low blow, you say?

This reminds me of an epiphany I had today. We had a housing atm bubble, zero down for 60 months auto bubble, and bankster bubble… to go with that we also had a jobs bubble… which leads me to conclude that our peak oil bubble also produced a human population bubble. Charming thoughts.

Job bubble photo below, from Mish’s Global Economic Banalisys.

For the record, I don’t consider vice to be in the same category as violent crime or property crime.

My feedback on AP’s “Economic Woes, Police Problems in Oakland” article

It’s Friday and I’m going out on a limb. Here’s my deconstruction of yesterday’s mostly accurate AP socio-economic snapshot of our fair city. Let me know if I’m missing or misconstruing anything.

“In other problems, the city struggles with an unemployment rate that reached 14 percent in January. Because of the recession, Oakland is also looking at a projected budget deficit of nearly $114 million over the next two years.”

AP article, 3/19/09

Overall, the AP  article paints a fair picture of our city’s dire financial and political leadership situation. I want to praise the writers for getting at least this piece of truth:

“”This city needs some clear leadership, and it starts up top with the mayor,” said Dom Arotzarena, president of the Oakland Police Officers Association.”

A-men!

On the other hand, the writers take without a grain of salt the Mayor’s proposed solutions. They also make no note of his shortcomings  – such as his famously low work hours. They also make no mention of the continued allegations of nepotismo that Mayor Dellums seems to enable at City Hall, that I have read about time and again at A Better Oakland. I’ll discuss what the AP guys missed or got half-right, below.

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About Our Mayor

Some of Oakland’s Alleged City Hall Nepotisms: The Mayor spent $100k of our tax money to conduct a national manhunt for a new City Administrator after the Deborah Edgerly slow-firing bowel movement.

In the end he signed up his long-time FRIEND Dan Lindheim who has no relevant work experience (PDF!). Allegedly, the qualified candidate Robert Bobb, per opinions stated at ABO, RockridgeResidents and elsewhere, didn’t want to deal with INTERFERENCE from Dellum’s “shadow mayor” wife Cynthia.

Sorry about the All-Caps, but I’ve written to my councilmembers asking that they request the results of this $100k candidate search and gotten nothing. No published results. No answers. Who got the dough and what did it produce?

To be fair, Dellums campaigned on a platform in which said he didn’t really want the job in the first place, and wouldn’t be spending the same amount of time that other candidates would. So this is the fault of Oakland’s MEDIA for not calling this out at the time, and Oakland VOTERS’ fault for not making a better choice. (According to the general  sentiments of Oakland’s bloggerati, De La Fuente – for all his faults – seems to get things done.)

The AP writers also write without hesitation that

“The city has proposed about $3 billion in new projects, including creating thousands of green jobs, establishing community policing programs and improving streets.”

Nitpick – it was $2.6 billion. Excuse me for being quaint. I forget that Trillion is the new Billion.

“Thousands of green jobs” – Sorry. I just reviewed the Mayor’s stimulus funding request through US Conference of Mayors, and there aren’t “thousands” of green jobs. The total jobs created number is 3,400.

At most, there are 1,449 “green jobs” and some are double-counted. Streetscape improvement projects of various streets don’t require  a unique crew for each street – not to mention the one-time nature of these jobs. Construction jobs are very short-term, less than a year gigs. Cutting out the construction jobs, we are down to under 1,000 ongoing “green jobs.”

There are plenty of non-green jobs: dredging the Port’s harbor to be 50 feet deep, spending $2.5MM on a new helicopter (creates “30 jobs” how?), installing surveillance cameras at Eastmont PD and laying out cash for more gas-powered Crown Vics.

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Oakland’s Unemployment Rate

The  AP tagteam writes that Oakland’s unemployment rate is 14%. This is according to the State of California. I don’t know if they do their math better than the feds — I would hope so. If not, well then, read below for why our rate may be even higher. This may be a bit of a stretch.

If you know anything about federal statistics, you know that BLS in the 1990s changed the way it calculates unemployment such that a minimum of 7% of people  unemployed are no longer counted. Thank you, Former President Bill Clinton. Read a full explanation of how/why over at John Williams’ “Shadow Government Statistics” website.

Here’s what the current national unmployment rate is, according to SGS:

Current National Unemployment Rate: 19%

With this in mind, we should add 7-10% to Oakland’s unemployment rate for a true assessment. If accurate, this would mean that Oakland’s real unemployment rate is between 21% and 24% — nearly the First Great Depression amount of 25%. Time to start picking apples!

Dellums’ late 90s military base closings account for some of the long-term job losses; the rest can be equated with the long national march of offshored jobs in manufacturing (China now has the world’s largest “Middle Class”), the end of WWII shipbuilding (Kaiser shipyards), and general “white flight” to the Suburbs due to Oakland’s perceived and actual crime problems.

With white flight in reverse now, there are more entrepreneurial options for those with money and creative visions. New bars, resaturants, galleries and other entertainment venues are opening all over North Oak and Downtown. (Two more bars are opening in the Uptown District this spring – as if we needed more!)

I’ve seen one black family selling hot dogs out of a cart in front off the Uptown Night Club which they bring in on a pickup truck. Smart move, and reminds me of all the hotdog and khebab carts in NYC. There are also two new pedicab (bike taxi) services in DTO.

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Police & Local Economy

It will be interesting to see if Oakland’s crime problems recede with a new Police Chief, police management strategy, and any wrap-up of alleged corruption and collusion with criminals. Some of this relates to the Black Muslim Bakery-Chauncey Bailey case; the rest deals with “geographic policing” and the low morale of 12-hour days, chronic understaffing, and other problems outlined elsewhere.

Increased public safety would create a welcoming atmosphere for more Higher-Income Residents, Redevelopment, Tourism and New Businesses to flourish, thus adding more local jobs and reducing our unemployment rate. That is my theory anyway, and probably the theory of most Oaklanders and city politicians.

It doesn’t help our economy that many businesses are on hold, closing or have closed (Parkway, car dealers, restaurants, housing and commercial development projects) but in the long view, many of these were unsustainable anyway.

I’m not going to discuss the city budget here because V Smoothe does a better job of it. Soothe to say, like thousands of other US cities, Oakland will be cutting its staff and programs. It’s inevitable.

Cleveland did its round of firing and freezes in 2006 as soon as the housing bubble peaked, and is now sitting pretty. In a macro sense, I’m still amazed at the people who predicted that President Obama would be little more than an economic janitor. No wonder the Army’s ending its Stop-Loss program – they don’t need it anymore.

Time to get to work!