South By North Strategies, Ltd.

Manufacturing In the South Atlantic: August 2012

From the Federal Reserve Bank of Richmond’s latest survey of manufacturing activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Manufacturing activity in the central Atlantic region contracted at a less pronounced rate this month, after deteriorating in July, according to the Richmond Fed’s latest seasonally adjusted survey. Looking at the main components of activity, shipments edged higher, employment turned negative, and the weakness in new orders moderated somewhat. Evidence of diminished weakness was also reflected in most other indicators. District contacts reported that backlogs, capacity utilization, and delivery times remained negative but improved from July readings. Moreover, finished goods inventories grew at a slightly slower pace, while growth in raw materials was nearly unchanged.
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Looking forward, assessments of business prospects for the next six months were generally in line with last month’s readings. Contacts at more firms anticipated steady growth in shipments, new orders, and backlogs in the months ahead, while they expected capacity utilization to grow more quickly.

Around The Dial – August 28, 2012

Economic policy reports, blog postings, and media stories of interest:

• Naked Capitalism frets overs “our coming rentcropper society.”
• John Cassidy explains the problems with Medicare vouchers.
• Tapped lists “five things government does better than you.”
• Beat the Press graphs “the recession for college grads.”

A Breed Apart

Writing for Project Syndicate, economist Simon Johnson asks a good question; namely, “why do US fiscal conservatives care so little about government debt, relative to their counterparts in other countries?” From the article …

And Americans have shifted greatly toward political philosophies – on the right and on the left – that regard public debt merely as a distraction. Or, as former vice president Dick Cheney put it, “Reagan taught us that deficits do not matter” – meaning that Ronald Reagan cut taxes, ran bigger deficits, and did not suffer any adverse political consequences.
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[Rep. Paul] Ryan and members of the Tea Party wing of the Republican Party undoubtedly want to cut the size of the federal government, and they have articulated plans to do this over several decades. But, in the near term, what they promise is primarily tax cuts: their entire practical program is front-loaded in that direction. The calculation is that this will prove politically popular (probably true) while making it easier to implement spending cuts down the road (less obvious). The vulnerability caused by higher public debt over the next few decades is simply ignored.

Around The Dial – August 27, 2012

Economic policy reports, blog postings, and media stories of interest:

• Policy Shop points out that “half of young homeowners are underwater.”
• Paul Krugman shakes his head at “Galt, Gold, and God.”
• Off the Charts analyzes the latest federal budget update from the CBO.
• Simon Johnson asks, “Why does Wall Street always win?”
• The PBS NewsHour hosts an interactive political ideology quiz.

Back To School In North Carolina

From the North Carolina Budget and Tax Center’s “back to school” guide to school funding in the Tar Heel State …

As for the number of jobs in North Carolina’s schools, there are thousands fewer now than before the Great Recession, and the loss of school jobs continues as budget cuts deepen and persist. As of FY2011-12, there were 11,833 fewer school personnel in North Carolina than there were in the last school year before the Great Recession (FY2007-08). Claims made in this year’s legislative session that the FY2011-12 state budget added 2,000 teacher jobs didn’t hold up under scrutiny, and it appears likely that misunderstanding and misinformation about school employment and its direct relationship to budget decisions will continue to thrive through this election season and beyond.