Future Forecast: Roundup of Scattered Probabilities

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[The Crystal Ball by John William Waterhouse, c. 1902]

While thinking about forecasting the future, I collected a few short-term predictions for the year ahead worth kicking around a bit. After gazing deeply into my crystal ball, I added a few predictions of my own.

The National Weather Service’s Climate Prediction Center at NOAA forecasts below-average precipitation in the Pacific Northwest along with higher than average temperatures in the Southwest through Summer 2013. Looks like rainfall across areas stricken by drought in 2012 might be normal, but this will not overcome the soil moisture deficit.

My prediction: Beef, pork, and milk prices will remain high or increase — and that’s before any weirdness in pricing due to changes in federal regulations after the so-called “fiscal cliff.” And the U.S. government, both White House and Congress, will continue to do even less than the public expects when it comes to climate change.

The European Commission predicted the UK will lead economic recovery in the EU with a meager 0.9% growth rate anticipated in 2013. The southern portion of the EU is expected to continue to struggle while the rest of the EU stagnates.

My prediction: More mumbling about breaking up the EU, with just enough growth to keep at bay any action to that effect. Silvio Berlusconi will continue to provide both embarrassment and comedic relief to Italy and the EU. (What are they putting in that old freak’s pasta? Or are they doping his hair color?)

In September, the Federal Reserve Bank forecast slowish growth in the U.S. through 2013. Did they take into account the lame duck status of an already lethargic and incompetent Congress in this prediction? Did the Fed Reserve base this forecast on a Romney or an Obama win? This forecast seems oddly optimistic before November’s election.

My prediction: All bets are off now, since the over-long backbiting and quibbling over the so-called fiscal cliff has eroded public sentiment. Given the likelihood of increased food prices due to the 2012 global drought, the public will feel more pain in their wallet no matter the outcome of fiscal cliff negotiations, negatively affecting consumer sentiment. The only saving grace has been stable to lower gasoline prices due to lower heating oil demand–the only positive outcome of a rather warm winter to date.

An analyst forecast Apple sales of iPads will equate nearly 60 percent of the total tablet market in 2013. As an owner of AAPL stock, I rather liked this. Unfortunately, that prediction was made in October, before the release of the iPad Mini. The stock market had something entirely different to say about the forecast–more like a bitchslap to the tune of nearly $200 decline per share between October and year-end. *Ouch!* Not all of that was based on the market’s rejection of the forecast on iPad Mini sales, though; much of that fall was related to the gross failure of Apple’s map application launched alongside the iPhone 5.

My prediction: I will continue to bemoan the failure to sell some AAPL stock in September 2012, while many of you will continue to buy Apple products. I thank you buyers in advance for trying so hard to boost my spirits and bolster my kids’ college fund in the coming year. Oh, and Google Maps will continue to eat at market share; it’s going to be a while before Apple recovers from its epic map failures. Conveniently, there’s GOOG stock in the kids’ college fund, too.

What about you? Are any of these predictions worth the pixels with which they’re presented?  What do you predict for the year ahead? Do tell.

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High Profile Republican Firm, Cerberus, to Sell Freedom

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It has come to this. Cerberus–the private equity firm full of well-connected Republicans like John Snow and Dan Quayle–has decided it can no longer continue to invest in Freedom Group, the maker of the Bushmaster assault rifle used in Friday’s massacre at Sandy Hook.

In its statement announcing the decision, it attempts to absolve itself of responsibility for killing 20 children.

In 2006 affiliates of Cerberus Capital Management, L.P. made a financial investment in Freedom Group.  Freedom Group does not sell weapons or ammunition directly to consumers, through gun shows or otherwise.  Sales are made only to federally licensed firearms dealers and distributors in accordance with applicable laws and regulations.  We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition.

It then couches its decision to sell Freedom in fiscal responsibility, not moral complicity.

It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level.  The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment.  As a Firm, we are investors, not statesmen or policy makers.  Our role is to make investments on behalf of our clients who are comprised of the pension plans of firemen, teachers, policemen and other municipal workers and unions, endowments, and other institutions and individuals.  It is not our role to take positions, or attempt to shape or influence the gun control policy debate.  That is the job of our federal and state legislators.

There are, however, actions that we as a firm can take.  Accordingly, we have determined to immediately engage in a formal process to sell our investment in Freedom Group. [my emphasis]

But that mention of its clients, including teachers pension plans, is the real tell. As CNN suggests, it was likely pressure from the California Teacher’s pension fund that prompted this decision.

Yesterday we reported that one of the largest investors in Cerberus private equity funds was the California State Teachers’ Retirement System, which subsequently said it would review its indirect investment in Freedom Group (it made no such pledge following the Aurora shooting, where a Bushmaster rifle also was used).

In any case, having made the decision to sell Freedom, things will now get interesting for Cerberus, as the sharp decline in gun stocks will force Cerberus to sell Freedom at a big loss.

Often when something like that happens–most spectacularly when Cerberus decided to sell Chrysler–it asks for a bailout. Will John Snow and Dan Quayle orchestrate a federal bailout for themselves again, as they did with the auto bailout?

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Bangladeshi Garment Fire: Downstream Effect of a WalMart Economy?

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One of the things hot on the nets yesterday was Peter Suderman’s pushback against the anti-WalMart action that has been progressing over the last week, culminating in organized protests at numerous stores across the country on Black Friday. Even Alan Grayson got in on the WalMart Thanksgiving protest mix.

But Suderman, loosing followup thoughts after an appearance regarding the subject on Up With Chris Hayes caused a storm. Here is a Storify with all 17 of Suderman’s Tweet thoughts. Suderman, who is a Libertarian and certainly no progressive, nevertheless makes some pretty cogent arguments, and the real gist can be summed up in just a few of the Tweets:

So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.
**********
Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.
**********
Paying Walmart’s workers more would mean the money has to come from somewhere. But where?
**********
Raise prices to pay for increased wages and you cut into the store’s huge low-price benefits for the poor. It’s regressive.

Suderman goes on to note that WalMart workers are effectively within the norm for their business sector as to pay and benefits.

My purpose here is not to get into a who is right and who is wrong, the protesters or Suderman, I actually think there is relative merit to both sides and will leave resolution of that discussion for others.

My point is that the discussion is bigger than than simply the plight of the WalMart retail workers in the US. WalMart is such a huge buyer and seller that it is the avatar of modern low cost retailing and what it does has reverberations not just in the US life and economy, but that of the world. Ezra Klein came close to going there in a reponse piece to Suderman’s take:

But Wal-Mart’s effect on its own employees pales in comparison to its effect on its supply chain’s workers, and its competitors’ workers. As Barry Lynn argued in his Harper’s essay “Breaking the Chain,” and as Charles Fishman demonstrated in his book “The Wal-Mart Effect,” the often unacknowledged consequence of Wal-Mart is that it has reshaped a huge swath of the American, and perhaps even the global, economy.

Not “perhaps” the global economy Ezra, definitively the global economy. WalMart sets the tone for high volume Read more →

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Let Mitt Romney Go Bankrupt

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Because he just lost this race.

Our country hates hates hates industrial policy. But industrial policy just re-elected a President.

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Foxes Are to Hen House Security as Bankers Are to Occupy Wall Street

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[photo: Daquella manera via Flickr]

Hey, it’s me, Angry Mom. Yeah, the one who spent the last nine years in political activism. I was utterly immersed in the effort, from baking cookies to persuade voters, to writing op-eds, licking envelopes, dragging my poor kids to conventions, to debating conservative candidates at local forums.

Along the way I learned a thing or two.

First, the overwhelming majority of Americans do not realize how very thin and brittle this democracy is–if we have one at all. I’ve done the math in my own state, and the numbers are probably very similar in yours based on conversations over the years with activists nationwide. A scant 4000 people who show up and do the work actually make democracy run for a state with a ballpark population of ten million.

4000/10,000,000 = roughly 0.0004 of the entire state is actively engaged.

Not even 1% of this state’s residents. Hell, the über-wealthy 1% are more numerous.

That’s it. Active members (not merely voters) of both major parties combined comprise less than 1% of the population. The other parties have so few people actively involved as to be statistically irrelevant. Go ahead, throw a tantrum about a beloved third party–the fact remains if a third party isn’t de-listed in this or other states, it may be close for lack of adequate numbers of voters.

Second, all kinds of arrogant boneheads think they know enough about politics and its process in America to tell others what what’s wrong with it. Virtually ALL of these opinionators are not a member of that less-than-1%-actively-involved, and probably never have been. I’ve seen them from my perspective as an activist, and I’ve seen them as an editor/journalist–they don’t know anything based on actual experience, but they’ll dump all kinds of opinion and call it fact.

Thirdly, based on what I’ve learned inside the trenches, it’s bloody hard to launch and sustain a movement in this country if you don’t have the right people with the right smarts. With so few Americans actually investing effort in the political process, political leaders are those who simply show up. That’s all it takes. Unfortunately, not everyone who shows up is a charismatic, well-trained genius who can coalesce an organization that can fight back successfully against corporate-funded behemoths. We have political leadership by default, not purely by merit.

These are three of the biggest truths I learned  from this school of hard knocks, tuition paid with sweat, shoe leather, long hours, lost opportunities to watch my kids’ soccer, and tepid spaghetti dinners. Keep these facts in mind and consider the loosely organized Occupy Wall Street movement, which is even smaller than any one political party in their respective state. Read more →

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Creeping Unemployment in the New Battlegrounds: PA and MI

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The big news of the campaign, once you get beyond Mitt’s kabuki storm assistance and auto bashing, is that PA and MI are battlegrounds again.

Maybe.

First, Restore Our Future PAC announced $2 million ad buys in both states.  The the Obama campaign announced they’d buy ads as well.

Today, the Detroit News has a poll showing Mitt within 2.7% of Obama (though polling ended on the 29th, when Mitt’s deceitful auto binge began). In fact, while Romney and Ryan were “not campaigning” yesterday, Ann Romney was, here in Grand Rapids.

Some commentators suggest this is just Mitt’s effort to open up new battlegrounds as it becomes clear he won’t win OH and might not win VA (or FL, but that would be game over for him). That is, Mitt has to look viable, and by moving into MI and PA, he can sustain narratives that he still has a shot.

That may be what’s going on.

But it pays to look at what has been going on with the unemployment rate in both MI and PA (I’ve included OH for comparison and MN because it often gets thrown into these discussions).

MI’s unemployment rate is up 1% off its recent low in April (the downtick this month, and some of last month’s uptick, is probably due to the way the auto companies handled model year layoffs). Part of the uptick is probably due to Rick Snyder’s austerity plans; part is probably due to Obama’s failure to provide real mortgage relief.

PA’s unemployment rate is up .8% from its recent low in May. Here, too, Republican governor Tom Corbett has pursued austerity measures. In addition, PA is exposed to the Euro-related decline that has hurt much of the Northeast.

The point, though, is that both these states have the makings of a battleground state–including a white working class population that can swing with economic tides–plus rising unemployment. Obama is still ahead in both. A few more ads about the auto bailout–indeed, Mitt’s deceitful attacks on GM and Chrysler generally–will probably move MI back towards Obama. And the Philadelphia area was spared the worst of Sandy, staving off the possibility that Pennsyltucky would have unimpeded voting while the Democratic Southeast would have floods. So it’s still most likely Obama will win both by comfortable margins.

But one thing makes movement towards Mitt more realistic here than in, say, MN. The economy is getting worse again. And in spite of all Mitt’s unforced errors in recent days, and in spite of the way that Snyder and Corbett’s state level policies–which mirror those Mitt would adopt at the federal level–have almost certainly exacerbated unemployment, voters may still turn to Mitt as an alternative to a stalled recovery.

Mitt’s play in MI and PA is probably a ploy to look viable. But there are a lot of unemployed workers in both states who will help him along.

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Will Paul Ryan’s Photo Op Hurt a Catholic Charity’s Efforts to Feed the Poor?

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The Nuns on the Bus have been saying for months that Paul Ryan’s miserly budgetary approach betrays his Catholic values. The Bishops agree. Joe Biden even called Ryan out for “taking issue” with the Church’s social teachings.

Just days after being called out by a fellow Catholic for being stingy with the poor, Ryan commandeered a soup kitchen so he could stage a photo op.

It turns out the soup kitchen is run by the Society of St. Vincent de Paul–a Catholic lay organization.

And the local president of the society suggests Ryan’s photo op might hurt their donations.

Brian J. Antag, president of the Mahoning County St. Vincent De Paul Society, said that he was not contacted by the Romney campaign ahead of the Saturday morning visit by Ryan, whostopped by the soup kitchen after a town hall at Youngstown State University.

“We’re a faith-based organization; we are apolitical because the majority of our funding is from private donations,” Antag said in a phone interview Monday afternoon. “It’s strictly in our bylaws not to do it. They showed up there and they did not have permission. They got one of the volunteers to open up the doors.”

[snip]

“I can’t afford to lose funding from these private individuals,” he said. “For us to even appear like we’re backing somebody, it’s suicide. … If this was the Democrats, I’d have the same exact problem. It doesn’t matter who it was.”

He added that the incident had caused him “all kind of grief” and that regardless of whether Ryan had intended to serve food to patrons or wash dishes, he would not have allowed the visit to take place.

Ryan has made a concerted effort to make it harder for the Federal government to help the poor.

And now, with his selfish big-footing, he may have made it harder for Catholics serving the poor to do so.

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Congressman Tim Ryan’s 4 Reasons Obama Is Winning Ohio

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The Alliance for American Manufacturing just had a press conference with Congressman Tim Ryan, who represents Youngstown and part of Akron, Ohio, to talk about the role that China is playing in this year’s President election.

Earlier in the day, in the wake of the release of a WaPo poll showing Obama with an 8 point lead in OH, Adam Serwer had suggested, “There’s a great piece of journalism to be done about how Obama nuked Romney in Ohio.” So I asked Ryan for the four top reasons why Obama is doing so well in OH.

He listed, in order:

  1. The auto bailout (Ryan’s district also includes GM’s Lordstown Chevy Cruze plant)
  2. Obama’s successful WTO trade complaint against China’s tire dumping (which affected Akron)
  3. The Administration’s investment in education and research
  4. Mitt’s campaigning against Proposal 2, which protected collective bargaining for OH’s public workers

As Ryan said of Mitt’s anti-union campaigning, “he was against [OH’s teachers, police, and firefighters] when they needed him.”

Obviously, Ryan’s not an unbiased observer. But he does represent a bunch of Ohioans who appear poised to swing the election to Obama.

Maybe Mitt shouldn’t have spent so much time demonizing workers?

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The Scab Grab Teaches Scott Walker the Value of Unions

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I confess, I went to sleep last night when Seattle QB Russell Wilson threw a pick with about 3 minutes left in the game [Update: actually, in retrospect it was a missed 4th down throw]. With the Squawks down 5, I figured there was no way they were coming back.

And there was no way they were coming back. Plus, by that point, the game had already descended into a series of plays the outcome of which were randomly determined by arbitrary calls from the refs. It just wasn’t a contest between athletes anymore; it was an art project by a bunch of inexperienced refs.

And so, when Wilson threw a Hail Mary in the last 8 seconds of the game and Packers DB M.D. Jennings caught it, the refs instead called it a Golden Tate TD. What I’m gonna call the Scab Grab. Win, Squawks.

Which has led to all sorts of people who for years have been advocating the replacement of union auto workers, cops, and teachers, to embrace union workers over greedy owners. Perhaps the most stunning of these is this guy:

(The replies to this tweet are definitely worth the laugh, btw.)

The entire country has discovered that unions do more than just inconvenience them. They ensure that experienced workers are not prevented by greedy profit-seekers from placing safe quality work over profit.

But consider: this is the same kind of fight on which the same union busters were on the other side, just weeks ago, on the Chicago Teachers strike. There, experienced teachers were–and still are–at risk of being replaced by inexperienced workers with no control over educational conditions captive to the profit-seeking motives of a bunch of capitalists. And yet on that fight, so many liberals (to say nothing of Scott Walker and Rahm Emanuel) cheered on busting the union with cheap replacements. Perhaps because we don’t get to see how inexperienced teachers struggle to manage a classroom–just as scab refs struggle to manage a game–the effects of the union-busting are applauded, not jeered.

It seems Americans are more willing to entrust their children to inexperienced union-busting replacement workers than they are their spectator sports.

Update: This great Sarah Jaffe post explains why this lockout–and the NHL lockout–matter for workers rights generally.

 

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Mitt’s DOES Have a View of Workers

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While I’m happy that Paul Krugman is observing the same thing I did here–that Republicans don’t care much about workers–I disagree with his observation that Mitt said nothing about workers in his RNC speech.

Lest you think that this was just a personal slip, consider Mr. Romney’s acceptance speech at the Republican National Convention. What did he have to say about American workers? Actually, nothing: the words “worker” or “workers” never passed his lips.

Sure, he didn’t actually utter the word “worker,” but I maintain that this passage was the most telling of his entire RNC speech.

But today, four years from the excitement of the last election, for the first time, the majority of Americans now doubt that our children will have a better future.

It is not what we were promised.

[snip]

It’s not just what we wanted. It’s not just what we expected.

It’s what Americans deserved.

You deserved it because during these years, you worked harder than ever before. You deserved it because when it cost more to fill up your car, you cut out movie nights and put in longer hours. Or when you lost that job that paid $22.50 an hour with benefits, you took two jobs at 9 bucks an hour and fewer benefits. You did it because your family depended on you. You did it because you’re an American and you don’t quit. You did it because it was what you had to do.

But driving home late from that second job, or standing there watching the gas pump hit 50 dollars and still going, when the realtor told you that to sell your house you’d have to take a big loss, in those moments you knew that this just wasn’t right.

But what could you do? Except work harder, do with less, try to stay optimistic. Hug your kids a little longer; maybe spend a little more time praying that tomorrow would be a better day. [my emphasis]

As I’ve noted, it’s telling because Mitt has bragged about creating those $9 jobs–the ones he admits you can’t live off of. And it’s telling because of the solution Mitt offers to people working dead-end jobs: pray, and trust that Mitt, as President, will make it better.

We now know that would involve trusting Mitt to do something for a bunch of people he believes don’t work hard, even while he admits they’re working two jobs to pay the bills.

A fundamental part of Mitt’s election message is that Obama is responsible for the real and perceived decline in the American lifestyle that has been in decline for decades. He claims he will fix that.

But when you put all the things he believes together, it’s clear he believes he will fix it by badgering people he admits are struggling under two jobs to work harder.

It doesn’t make sense: the real answer has more to do with Mitt’s own faults, with his own method of getting rich. But that’s why it’s important to note Mitt’s contradictory understanding of real workers.

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