Eric S. Raymond, author of “The Cathedral and the Bazaar“, has a thoughtful post on his blog this morning on how the current recession is impacting his circle of friends, two in particular. Here are the key paragraphs:

When I look at these guys, though, I can’t buy the explanation most people would jump for, which is that they simply fell behind in an increasingly skill-intensive job market. Thing is, they’re not uneducated; they’re not the stranded fruit-picker or construction worker that narrative would fit. Nor does offshoring explain what’s happened to these guys, because their jobs were the relatively hard-to-export kind.

No. What I think is: These are the people who go to the wall when the cost of employing someone gets too high. We’ve spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker — which meant the minimum revenue-per-employee threshold below which hiring doesn’t make sense has crept up and up and up, gradually. This effect was partly masked by credit and asset bubbles, but those have now popped. Increasingly it’s not just the classic hard-core unemployables (alcoholics, criminal deviants, crazies) that can’t pull enough weight to justify a paycheck; it’s the marginal ones, the mediocre, and the mildly dysfunctional.

In other words, established ‘liberal’ policies actually hurt those whom the liberals would most like to protect. Read the whole thing.

Wayne Holder, a high school friend and my boss at Oasis Systems/FTL Games nearly 30 years ago, talked once about how he was a radical liberal through college, then turned hard-core conservative once he started his own business and had to hire people. He complained about the increased costs and legal/regulatory consequences of each new person he hired — and this was back in the 1980s! I can only imagine what it’s like today.  ..bruce w..

Not so well, as it turns out (details over at Big Government). In the meantime, the Obama Administration continues to play games on “jobs created or saved”. ..bruce w..

How it looks in the planners' minds.

One fundamental economic problem with mass transit is that it rarely, if ever, is financially self-sufficient. This is usually explained away with something like, “Well, if we get enough people riding it, the benefit to the environment will be worth it.” Besides the fact that this generally isn’t true, there’s the additional problem that when (a) fuel prices go up and/or (b) economic times get tough, mass transit fares go up and services face cutbacks — right at the time when mass transit would might make more sense.

(Another fundamental problem is that mass transit, like most ‘alternative energy’ sources, lacks the density, carrying capacity, and convenience to make it worthwhile. But that’s another discussion.)

California, which never saw a green idea it didn’t like (and totally screw up), is facing this problem with mass transit right now (hat tip to Glenn Reynolds at Instapundit):

For three years, Veronique Selgado took BART from the East Bay to her job working for an airline at San Francisco International Airport. But she recently switched to driving because BART raised fares and upped its SFO round-trip surcharge from $3 to $8, boosting her daily trip cost to nearly $20.

“It’s outrageous,” Selgado said. “At what point do they stop raising the prices,  when it’s $50 a day to go round-trip to work? At what point does BART stand back and say, ‘People can’t pay that much to commute’?”

One of the comments to the article points to this Onion classic:

WASHINGTON, DC–A study released Monday by the American Public Transportation Association reveals that 98 percent of Americans support the use of mass transit by others.

“With traffic congestion, pollution, and oil shortages all getting worse, now is the time to shift to affordable, efficient public transportation,” APTA director Howard Collier said. “Fortunately, as this report shows, Americans have finally recognized the need for everyone else to do exactly that.”

Of the study’s 5,200 participants, 44 percent cited faster commutes as the primary reason to expand public transportation, followed closely by shorter lines at the gas station. Environmental and energy concerns ranked a distant third and fourth, respectively.

Note that I lived in and around Washington DC for eight years and was a great fan of the Metro system — but I still have to admit it’s poorly run, poorly maintained, and heavily subsidized.  ..bruce..

…they’d probably look something like the one above. Hat tip to Steven Hayward over at NRO. ..bruce w..

Companies are born, live, thrive, dwindle, and then often die or are absorbed by other firms. Being 56 years old, I’ve seen a lot of that first-hand and have worked for several firms that no longer exist. Over at 24/7 Wall Street, Jon Ogg and Douglas McIntyre have picked ten brands that they think will go away one way or another in 2010. Here’s their list:

• Newsweek
• Motorola
• Palm
• Borders
• Blockbuster
• Fannie Mae and Freddie Mac
• Ambac
• Eastman Kodak
• Sun Microsystems
• E*Trade

I worked (on a consulting/contract basis) at two of the companies above — Sun and Fannie Mae. I enjoyed my time at both locations, but I’m not surprised at the struggles that either firm is having. In fact, I’m not surprised at any  of the firms on the list, though some are doing worse than I thought. The whole article is worth reading.  ..bruce w..

(Hat tip to Blue Crab Boulevard.) I certainly remember Democrats and the mainstream media (the same thing, really) ranting about the millions of jobs lost under Bush, not to mention the climbing deficits. Funny how quiet they are now. I’m not sure we will see unemployment under Obama get back down to the highest point it reached under Bush (a little over 6%), nor will we ever see the deficit get back down to the highest point it reached under Bush, to wit (via the Heritage Foundation):

Things have gone so well since the Democrats took over Congress (starting in 2006, remember) and the White House. ..bruce w..

You know, the massive stimulus that was absolutely necessary to keep unemployment from rising above 8.0%? Kind of missed the target, didn’t it?

Anyone want to guess what unemployment will be in November 2010? November 2012? I’m willing to bet $1000 that it won’t be down to 7.0% and 5.5%, respectively, as the Obama economic team said it would be with the stimulus package. In fact, I strongly suspect it won’t even be down to the projected “without the recovery plan” levels of 9.0% and 6.0%.

The chart comes from Innocent Bystanders, via Ace of Spades.

UPDATE: Campaign Spot on NRO reminds us of what Pres. Obama said about the stimulus last February:

And the most — the biggest measure of success is whether we stop contracting and shedding jobs, and we start growing again. Now, you know, I don’t have a crystal ball, and as I said, this is an unprecedented crisis. But my hope is that after a difficult year — and this year is going to be a difficult year — that businesses start investing again, they start making decisions that, you know, in fact, there’s money to be made out there; customers — or consumers start feeling that their jobs are stable and safe, and they start making purchases again.

So, what are the things that the Obama Administration and the Democratic Congress are doing to encourage “businesses [to] start investing again” and to help “consumers start feeling that their jobs are stable and safe”? Massive deficits? Massive tax increases? Massive government bureaucracies? Increased regulation? Government expansion into the private sector? Yeah, that will encourage both businesses and consumers.  ..bruce w..

From USA Today:

The Obama administration’s $3 billion “cash for clunkers” program should be renamed “cash for gas-guzzling pickup trucks,” according to an Associated Press analysis of the data.

AP reports that for 8,200 deals — the most common — buyers traded in their old Ford 150 pickups for new Ford 150 pickups. Fuel economy for the new trucks is just 1 to 3 mpg better than the clunkers — less than 20 mpg.

Right on Ford’s bumper were big old Chevy and Dodge pickups that were traded in for big new Silverados and Rams.

Overall, more than 95,000 new vehicles — about one in seven — got less than 20 mpg. On top of that, taxpayers subsidized scores of deals — totaling $562,500 — for new cars and trucks that got worse mileage than the trade-ins.

Buyers received rebates of either $3,500 or $4,500. Their trade- ins were then junked.

Here’s the real problem with the “Cash for Clunkers” program: the Obama Administration and the Democratic Congress have so totally blown out the budget between bailouts and the “Stimulus” package that $3 billion sounds like chump change. But it’s good to see the mainstream media actually doing a bit of investigative reporting on this.  ..bruce w..

When Robert Samuelson starts asking that question, it’s time to worry:

The idea that the government of a major advanced country would default on its debt — that is, tell lenders that it won’t repay them all they’re owed — was, until recently, a preposterous proposition. Argentina and Russia have stiffed their creditors, but surely the likes of the United States, Japan or Britain wouldn’t. Well, it’s still a very, very long shot, but it’s no longer entirely unimaginable. Governments of rich countries are borrowing so much that it’s conceivable that one day the twin assumptions underlying their burgeoning debt (that lenders will continue to lend and that governments will continue to pay) might collapse. What happens then?

Read the whole thing.

Meanwhile, Ambrose Prichard-Jones says that it’s Japan we should be worried about, not America:

Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised “a real risk that Japan could end up in a major default”.

The IMF expects Japan’s gross public debt to reach 218pc of gross domestic product (GDP) this year, 227pc next year, and 246pc by 2014. This has been manageable so far only because Japanese savers have been willing – or coerced – into lending for almost nothing. The yield on 10-year government bonds has been around 1.30pc this year, though they jumped to 1.42pc last week.

Again, read the whole thing.  ..bruce w..

Much like Cash for Clunkers, but on a vaster scale, the Obama stimulus package is being revealed as a fraudulent failure. The Denver Post shows that the numbers here in Colorado just don’t add up:

The federal government reported Friday that Colorado created or saved 8,094 jobs through grants, loans and contracts funded by the American Recovery and Reinvestment Act.

Problem is, the figure is wrong, according to an analysis of recovery.gov data by The Denver Post.

Although a Colorado Springs Head Start program reported it had created or preserved 269 jobs, the real number was three, according to an interview with a program manager. And although the largest private contract in the state funded with stimulus dollars was estimated at $166 million, the number was off by tens of millions, apparently because of a data-entry error, contract information shows.

Despite the government’s bid to provide unprecedented details of spending, figures for stimulus awards in Colorado, as with an earlier data release, are inconsistent, inaccurate or incomplete so far.

This grand experiment by Congress and the Obama Administration is turning into one of the greatest fiscal disasters in US government history.  At least, until and unless Congress passes “health care reform”.  ..bruce w..