Pete Ware

Is the past prelude? Here’s a comparison of job losses in all the post-WW2 recessions. Note how bad the slope is for the current recession. Be careful though, these are absolute numbers and not relative to population.

And here is the change in consumer spending over the past 50 years smoothed to six months — meaning some bad months have gotten smoothed over with the surrounding better months. Is this really the only the second time it’s gone negative in five decades? And that first time was only barely negative.

It’s William Kristol’s last op-ed in the NY Times — ending one year of the worst written columns in NY Times history. Or as Political Animal “His columns combined the three worst qualities a columnist can have: Kristol’s work was wrong, predictable, and boring.”

From Will Obama Save Liberalism?:

This is William Kristol’s last column.

Here is Warren Buffett interview by Tom Brokaw on Dateline NBC. Buffett is very positive on Obama’s leadership. (7 min):

This is a great map from the Wall St Journal about the fighting in Gaza. Click on the image below to go to the interactive map. Once there, you can click on the calendar for day to day events.

From :

I read the news today oh boy Seems like a popular title for a news article these days. The song is a lot more depressing then I remember.

Anyway, I thought I’d add my own, personal piece of bad news:

More on bogus claim the auto workers making $70/hour.

From Economic Scene – Figure Skews Debate of a Bailout for Detroit – NYTimes.com

“We’ve heard this garbage about 73 bucks an hour”, Senator Bob Casey, a Pennsylvania Democrat, said last week. “It’s a total lie. I think some people have perpetrated that deliberately, in a calculated way, to mislead the American people about what we’re doing here.”

Here’s a nice graphic:

I still think it’s too risky a time to buy a house. The real estate market won’t shoot up that fast if you mis-time it by a year!

This article is trying to suggest it may be a good time (interest rates may drop to 4.5%!!!!) but don’t miss out on those little nuggets of reality:

From It May Be Time to Think About Buying a House

buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas.

Here is yet another diagram showing how the price/(yearly rent) ratio was historically stable around 15. Not the last few years. So either rents need to go up (not very likely) or house prices need to come down.

Moreover, the relationship between rent and home prices showed remarkable stability. In recent decades, the median home price has been roughly 15 times median annual rent

Here’s a link to the original report

In reading about the proposed bailout of the auto industry, I’d been bothered by the figure that union workers are making $70/hour. It left me feeling very unsympathetic to UAW and the auto workers but more sympathetic to GM, Ford, and Chrysler management. After all, how could anyone compete when your labor wages are so much higher?

Well, it turns out to be a dishonest calculation: Assembly Line

Let’s start with the fact that it’s not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research–who was my primary source for the figures you are about to read–average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007.

That $28 gets raised to $70 by taking benefits being payed out to retirees and dividing by the number of active workers. Which is $42/hour.

Of course, the cost of benefits for those retirees–you may have heard people refer to them as “legacy costs”–do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don’t have to pay the same costs. But don’t forget why those costs are so high. While the transplants don’t offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don’t have many retirees.

Of course, the contracts were renegotiated last year to reduce benefits, take the auto industry off the hook for retirement benefits, and reduce wages:

It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010–the final year of this existing contract–total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line–years the industry probably won’t have if it doesn’t get financial assistance from the government.

So maybe the unions aren’t as responsible for the auto industries woes as commonly presented.