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Economy

Where Have All the Shopppers Gone…?

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…long time passin’?

Looks like some of the young girls (young men, soldiers, whatever) have learned something. ’Cause wherever the shoppers are, they’re not in down-scale and middle-class stores today, four days before Christmas.

Had to wait until this morning to restock the much depleted larder, having run out of money on last month’s budget cycle. That budget cycle ended yesterday, and so today was the day to fly out the door and grab the stuff I’ve run out of.

Boy, did I dread it! Shopping right before Christmas: Vast mobs of people, beleaguered parents dragging their sick kids out there to cough in your face and scream in your ears, Mom and Dad as cranky as their sick little kids and taking it out on their fellow drivers, lines all the way back to the butcher counter…UGH!

I needed stuff that I couldn’t get anywhere else than Costco, a real zoo during the run-up to Christmas, and after that I had to make a Walgreen’s run, a Target run, and a Safeway run. Walgreen’s: maybe OK. Target: oh god. Safeway: bring a tent for camping in the butcher’s department.

But nay.

I’d planned to hit Costco the minute it opened at 10:00 a.m., but as usual ran so late I didn’t get there till after 11.

Dear readers: at 11:10 in the morning, NO ONE WAS THERE!

Well. Practically no one.

Gas was selling at a price unheard-of in years, $2.99 a gallon, but there was no line at the gas pumps! In the parking lot, I got a space within easy walking distance of the door, without even hogging one of the usually jammed crip spaces. Inside the store…whaaa? No mobs?

This time last year, the place was just packed—work day or no work day. In the ghetto, work days and nonworkdays are the same, since many of the residents live on one form or another of welfare or disability, while others struggle with “self-employment” or sporadic contract work. Even when jobs are to be had, unemployment rates are astronomical. So normally, neither day of week nor time of day has has any effect on the number of people inside the stores I was visiting.

But unlike last year, it was into that raggedy Costco and out without hassle.

Target: parked right next to the door. Found a bored checkout lady who had no one in front of me.

Across the metaphorical tracks and several miles to the north and east, the same story held true at the Safeway and the Walgreen’s. The Walgreen’s seemed to have more employees than customers.

Both stores were practically giving stuff away. At Walgreen’s I got an object (which shall remain nameless) for my son at about half the putative retail price. Safeway was almost throwing foodstuffs at the few customers wandering through the aisles. There I found one of my favorite wines for less than $8! It normally sells for around $14, plus tax plus tax plus tax. Scored three bottles to take to friends’ houses over the holidays.

So…uhm…where is everybody?

The other day I was over at Scottsdale Fashion Square, home of the rich and the feckless. You couldn’t find a place to park unless you had a crip-space sticker, and even then, your chances were slim. The place was jammed.

Can we hope that Americans all have jobs and so are preparing for the holidays at the most upscale joints in town?

Well. I suppose.

Kinda doubt it, though. The sort of people who shop at my Target and my Costco are not the sort who would shop at Scottsdale Fashion Square under the best of circumstances. My guess is, the (formerly working) poor and the (formerly) middle class simply can’t afford to buy anything just now, anywhere, even at Target or Costco. Meanwhile, them’s who’s got are gettin’.

Are you shopping for Christmas? Did you order it all online? Or  maybe you’re done and don’t even need to buy groceries?

Where have all the shoppers gone?

 Shoppers in Toronto. Originally posted to Flickr as Alone / Together. This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

Bye-bye, Mr. Postman

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Postal Carrier, Argentina

We’re told that the U.S. Postal Service is taking another step down the road to extinction: not only will they raise the price of a first-class stamp to 45 cents, they’ll no longer even try to deliver first-class mail in a timely way.

But never fear: all that junk mail they chuff into your mailbox for you to haul straight to the recycling bin will get to you on time!

{sigh} I’d like to say this is a real loss to America. And over time, the slow degradation of the USPS certainly has been a loss. I can remember when I used to wait with bated breath for the postman to show up. Now I just groan every afternoon at the prospect of having to retrieve and throw out another big wad of trash.

Does anybody other than junk mailers still do business with the USPS on purpose? I have only one client who persists in sending hard-copy checks. Not that I don’t appreciate the payment ( 🙂 ), but it’s a a bit of a nuisance, forcing me to waste time either scanning the check to e-deposit it or traipsing across the city to drop it off at the credit union.

Granted, I still get paper statements from the credit union, AMEX, and MasterCard. But none of those is necessary. I check my credit union statements online a lot more often than once a month, and if the credit-card issuers sent me statements by e-mail, I would bestir myself to hassle with their online sites to check charges. Truth to tell, there’s really no need to have that data printed out and mailed to me.

Now, I do love getting The Economist, Sunset, and The New York Review of Books in the mail. There are some circumstances in which little glowing letters on a screen just do not substitute for the real thing. But…as a practical matter, these days I get most of my news online. You’ll note that today’s news flash came from Bloomberg’s website, which I read three hours before the Times showed up with the same story on the front page of its business section.

The big, genuine regret here will be the loss of our postal carriers. Having these cheerful and friendly workers tooling through the neighborhood adds to the quality of our lives, at least in big cities…it’s one of the few pleasant traditions that have survived the gritty dystopianism we’ve seen over the past 50 years. Me, I haven’t been inside a post office in years—the service is so slow and the overworked staff are so unhappy, I’ll pay a little more to ship a package through UPS or FedEx. But when the day comes for the postal service to close down, I sure will miss the mail carriers.

Image: Rosarinagazo. The Postal Carrier, sculpture by Erminio Blotta y Pedro Cresta, Palacio de Correos, Rosario, Argentina. Creative Commons Attribution-Share Alike 3.0 Unported license.

Real Estate: That light at the end of the tunnel may not be a train

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Realtors are perennially optimistic, even in the worst of times. You pretty much have to be an optimist (even to the point of self-delusion) to sell things. Especially real estate, these days.

Over the past few months, friends who sell, finance, and renovate real estate have been saying the low-end market is extremely hot. At the weekly business group meeting, our former developer (reduced to handyman status by the depression) reported that he picked up a customer who bought six houses in Sun City—in cash!—to fix up and rent or flip. And the Realtor in our group echoed the same story the Realtor who sits near me in the alto section in choir tells: they can’t keep up with the business. They’re closing on so many houses they’re working six or seven days a week. Almost all these sales are short sales, but the level of foreclosures is dropping drastically. They say that the inventory of homes for sale has dropped below the historically “normal” three-month supply.

The mortgage broker remarked that it is simply not true the banks are, as the myth goes, sitting on a huge inventory of foreclosed houses. He says banks are not in the real estate business. They do not want to sell houses, and in fact, they can’t. He says there is no giant pool of foreclosures waiting to be dumped on the market.

Now comes a newsletter from the Realtors who work our neighborhood and who live here. Bill Goodheart built a fair section of the infill here, having been a builder of upscale homes before he retired and joined his wife in the real estate business. “The weather is finally turning in our favor,” he says. “Believe it or not, we actually are short of houses to sell below $400,000.” A chart from the greater Phoenix Arizona Residential Multiple Listing Service shows the inventory of all homes is well below the normal three- to six-month supply, and in the range below $200,000, the inventory is well under three months.

They report that for houses with sale prices between $25,000 and $200,000, we’re in a seller’s market. The market is “neutral” for homes between $200,000 and $600,000, and it’s still a buyer’s market in the $600,000+ range.

I give this pair a lot more credence than I do friends who report anecdotally that their business is getting better. Why?

The Goodhearts predicted the crash of the real estate market well before it happened. About ten months or a year before the crash, they published a newsletter that made one point and only one point: people who were in a position to to sell their homes should do so, and fast. They suggested that even if you were not considering a move, you should sell; then rent and plan on renting for several years. They urged people who even thought they might want to sell in the near future to do it quickly.

They saw the crash coming, so I figure they’re pretty savvy.

Says Goodheart: “If this trend continues, and I think it will, we should have stable prices for the next four to six months. Then, gradually, the prices will increase. . . . Repos are not a problem. . . . Current repo inventory is under a one-month supply.”

If they’re right again this time, it’s good news for M’hijito and me. Our Realtor thinks the house is worth about $150,000 (vs. the $235,000 we paid for it). In that case, it won’t have to go up much for us to be close enough to even when the 40/15 balloon comes up that we can either get out of the place or refinance the full amount. It’s too bad we can’t refinance now with the rates so low, but I’ll be happy if we can just get enough water bailed out that we won’t sink beneath the bounding main.

Now all we need is some decent jobs.

Image: Sötétkapu, or “Dark gate” in Esztergom, Hungary. Public domain.

What if we didn’t have to pay school taxes?

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We live, as it seems, in a country that’s seen its best days. The number of Americans dwelling in poverty has hit its highest rate in the 52 years since we began keeping track of it, employment continues to drop, and with incompetent leadership on both sides of the aisle there’s no end in sight to the economic slide into which we’ve fallen. Intellectually as well as economically, we’re being outstripped by what in our lifetimes were Third-World nations.

Voices among our present and would-be leadership want to respond to this state of affairs by cutting government and further cutting taxes (as we continue to wage expensive warfare in the Middle East on the pretext of fighting terror and spreading democracy, but really to keep a grip on the world’s supply of fossil fuels). Among the most obvious victims of this plan are our children, whose teachers are being canned left and right and whose schoolrooms are overcrowded and undersupplied. In my state a Proposition 13 will go on the ballot next year; given this year’s startling jump in property taxes, it’s a foregone conclusion voters will usher it right in, further gutting schools, libraries, and other public services.

This, of course, will shift the burden for educating future generations to parents. Those who are affluent will put their kids in increasingly pricey private schools. Those who can’t will be asked to buy supplies and books and eventually to pay for the maintenance and operation of the public schools out of their own pockets. Those who can’t afford it will take their kids out of school altogether. And those who think it can’t happen here delude themselves.

Consider what it costs for the individual users of a school system to support it. In China, whose children easily outstrip ours in math and science and where all schoolchildren are taught a foreign language, the cost of education consumes nearly a third of a family’s income. That’s if your kids are in kindergarten and you make a relatively decent living in a city. Rural residents, whose income is significantly lower than their citified cousins’, pay an even larger proportion of family income to keep the kids in the lower grades.

College there is simply out of reach for most people, especially for rural folks. Tuition is 5,000 yuan a year, well past the realm of reason on an income of 3,200 yuan.

America has managed to maintain its global position largely as the result of its universal free education. In our past we were lucky enough to have leaders who recognized that our children are our future. The way we’ve supported that engine of prosperity, once capable of graduating seniors who knew where Wisconsin is located and who understood what the word “urbanization” means, has been through taxation: everyone who benefits from the system, however indirectly, chips into it.

Imagine how many Americans at the poverty line—$22,350 a year for a family of four; $14,700 for a single mom with one child—would keep their kids in school if they had to pay the per-capita cost. In 1992 that was $7,764 a year. You can be sure it’s more than that today.

Could you afford to spend $8,000 a year to send your kids through grade school and high school? How much would you have left for the average public university tuition, books, and room and board: $16,153 a year?

Image: Matthew Trump, One-room Schoolhouse in Jefferson, Colorado. GNU Free Documentation License.

You Don’t Always Know When You’re Lucky

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The other day I was agonizing because the county raised the taxes on my paid-off (and hugely devalued) house by $300 a year and on the even more vastly devalued, upside-down house my son and I are copurchasing by $200.

As nothing.

This weekend during the kickoff for this fall’s choir season, one of the potluck dinner guests remarked that the taxes on their house had gone up $1260.

TWELVE HUNDRED DOLLARS! Holy mackerel!

If a tax bill like that had arrived in the mail, my house would have gone on the market the next day. That would make my annual tax bill—on this house alone—around $3,000, almost what I pay now for taxes, homeowner’s insurance, car insurance, and Medigap insurance combined!

Their house is very nice—a relatively new (10 or 12 years?) two-story place on a piece of infill next to a tiny, aging golf course), fenced off with a wall and an electrical gate—but it’s not that fancy. For heaven’s sake, there’s a trailer park across the street! And they’ve got the same slums on the other side of 19th Avenue that I’ve got.

Another person who lives down near M’hijito’s house said their taxes had also gone up, to a lesser extent—something like $600.

So, I guess I’m lucky that I can still afford to live here this year.

And I’d better face the fact that sooner or later the taxes will outstrip what I can afford to pay on a limited income. This house will have to go—when SDXB moved to Sun City, his insurance dropped by 50% and his tax bill was a third of what he was paying here, on a comparable house. (Comparable, except for its being in dreary Sun City…). Since property values were even more severely trashed out there than here in town, I should be able to sell my house here, pick up a place there that doesn’t require a lot of fix-up, and still have money in my pocket. Well, in the car salesman’s pocket: I’d have to buy a lower-mpg car so I could drive into town.

The only other possibility would be to invest the proceeds from this house and use it to rent an apartment. I don’t at all care for apartment living. Well, let’s put it more accurately: I loathe living in apartments. But if I want to keep going to choir and live near my son and my friends, that would be the only option. With a 6 percent drawdown from the most optimistic guess at what I’d clear on the sale of the house, I could afford about $950 a  month. At 4 percent, the affordable rental would be around $790. That won’t get you much around this place, especially with half the population displaced from their houses and trying to rent.

As for the downtown house…I don’t know what we’d do if they raised the taxes that high. Default, probably. We’re already at the limit of what we’re willing to pay on a worthless piece of property.

Well, it’s off and running. After an incredibly hectic week, a relatively normal one is coming up…but before it starts I have to manually vacuum the storm debris out of the pool, and it’s already 6:20 in the morning.

Cherry-picking the Looniness

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🙂  E. Murphy, one of my favorite commenters, engages the discussion that stemmed from a post of a couple of days ago. Says E.:

Okay, you can cherry pick some looniness within the Republican party. But you can also cherry pick some looniness within the Democrats also.

For godssakes women, the world is NOT black and white.

In the wee hours of this morning I was mulling over the issue: what are the roots of our present calamity? I do not see the basis of the irrecoverable disaster toward which we’re sliding on a skateboard as stemming from “looniness,” in the sense of isolated incidents of irrationality or stupidity. I see it as rooted in a deep, intransigent ideology that brooks no dissent from its dogma.

Here’s a little table showing the big missteps we’ve taken since the Reagan era. Let’s remember, too, that today Reagan would be considered “moderate” and Barry Goldwater, regarded as a right-wing loon in his day, would be trending to the left.

I submit that one does not “cherry-pick” right-wing lunacy. The crop of cherries is so thick and so ripe that all one has to do is stand under the tree, hold out a basket, and watch it fill.

Happy Labor Day, for those of you who still have a job. As for those who don’t and those who are marginally employed at a fraction of what you earned when you had a real job: go fish!