The New Scrooge

Economist Joel Waldfogel doesn't want you to buy presents this holiday season.
His new book argues that holiday gift-giving is not only stressful but in fact economically unsound. That's because the money spent on presents (especially when they're bought in a caffeine-fueled frenzy on December 24th--wait, is that just me?) doesn't follow the same rational patterns that other spending does.

As Waldfogel explains it on Planet Money, we only buy ourselves things that are worth their price to us (a $50 sweater that will give $50 worth of pleasure, for instance.) But all sorts of other variables come into play when the item is bought for a third party. If that present is a dud, and ends up in the closet, it represents a complete (100%) waste of resources. And the chances that the present will be unwanted, or be worth far less than its monetary value to the recipient, are unacceptably high for a guy whose life's work is cost-benefit analysis.

Another argument for re-gifting?

Race and the Recession

“We’re already used to poverty; they’re really not.”

That's how one woman summed up the inclination of the black community in McDonough, Georgia, to help out their white neighbors who are struggling in the recession. In this town, part of historically segregated and racially tense Henry County, the effects of the recession have helped build a bridge across racial lines, according to this New York Times article.

If Henry County can be taken as a case study, it would seem the recession's good news for race relations. Even Eugene Edwards, the president of the Henry County branch of the National Association for the Advancement of Colored People acknowledged that, “there used to be a lot of racial tension here, but everybody knows that we need each other to survive this recession.”

But be taken as a case study it can't. Even the author of the times article acknowledges that Henry County has a very different profile from the rest of the nation. There, black people are more likely than whites to hold college degrees, and the income gap between white and black families is less than half what it is elsewhere. In McDonough, where lately, "women in Jaguars pull up to the local food pantry, and former millionaires hunker down in grand, unsellable homes" the recession has been widely accepted as a great "equalizer." In this construction town, a large percentage of both races are uneducated and so the historically fundamental privilege gap between the two races is diminished.

There's been much talk about the racially unequal nature of the recession. In a recent New York Times Op-ed, Dedrick Muhammad and Barbara Ehrenreich argued that, "racial asymmetry was stamped on this recession from the beginning." A, if not the, major catalyst of the recession was predatory sub-prime lending, and the victims of this practice were black families twice as often as they were whites. Even high income black families. Even when they qualified for prime mortgages. And they offered down payments.

Another reason that blacks have suffered more this recession is that, "thanks to a legacy of a discrimination in both hiring and lending, they’re less likely than whites to be cushioned against the blows by wealthy relatives or well-stocked savings accounts."

Recent reports, such as this one put out by the Acton Institute, this by the Applied Research Center also note the recession's racial divide. Even in Henry County, blacks made up a disproportionately high number of those seeking government assistance both before and after the slowdown. Since 2006, the number of blacks on Medicaid has more than tripled, outpacing the increase among whites.

So while black people rush to the aid of their privileged neighbors in McDonough, Georgia, the question remains: why does sympathy abound for those suffering from the recession when they are simply swelling the ranks of a demographic that has always existed, and in plenty large numbers?

And will this warm and fuzzy feeling of general equality and good will disappear when the circumstances aren't so dire for those in power? Or those who look like those in power?

Ms. Taylor said it best, in the New York Times article. Of her struggling white neighbors she said, “they’re a little weaker than we are at handling things like this, but I know they get more sympathy than we do.”

Gov Gaffe

Recovery.gov, the website set up by the Obama Administration to track the money spent on the stimulus, has been hailed as a great step forward in terms of transparency and a place to track every dollar spent on the stimulus.

But yesterday ABC News' Jonathan Karl revealed that many of the jobs reported as saved or created with the recovery money are in congressional districts that...uhm... don't exist.

Oops.

Ed Pound, Communications Director for the Board, attributes this misinformation to human error, saying, "we report what the recipients submit to us." Presumably, some submitters didn't know what district they lived in, and just took a wild guess when adding their stats to the website.

Working Women And Recession Wages

A recently released survey by the Bureau of Labor Statistics showed that women's wages have been increasing at a higher pace than men's wages during the recession - 3.2% over the past two year compared to 2% for men.
However, at the top of the income scale, the salary gap between equally qualified men and women is still vast, according to a report by Payscale. Payscale used information submitted by Joe and Jane Worker through the interwebs to try to help explain observed differences in what men and women earn - for example the figures from the Bureau of Labor Statistics that showed women earning a median weekly salary in 2008 that was 80 % of men's.

Read more about Payscale's methods and findings in this article from the Times Economix blog.

The Tale Of The $4 Million Road Sign

Once upon a time, the City of New York had a shitload of money, just burning a hole in its pocket. No one could figure out what to spend it on -- the city had no homeless or jobless citizens, and all the New Yorkers already had everything they could possibly need!

Along came a man named Eliot Spitzer. He was a modest guy who, at various points in his life, had spent his time upholding the American tradition of wealth-based social hierarchy, prosecuting others for crimes he committed himself, "steamrolling", taking the meaning of hypocrisy to a new level, and being every high-end hooker's worst nightmare. Mr. Spitzer was the governor of New York.

One day Mr. Spitzer had an idea for how to spend some of that ever-flowin money. New York City would rename the Triborough Bridge! Mr. Spitzer would get lots of publicity, make a bunch of rich and powerful people feel all warm and fuzzy inside, and, best of all, kiss the collective ass of one of the most powerful families in the country.

And so it was decided. For a substantial but entirely reasonable and worthwhile cost of $4 million dollars, the historic Triborough Bridge would become a completely new feature in New York City's landscape and history. Wellll, OK, technically it would be the same exact feature as it always was. But it would have a new name!

Some unpatriotic fools voiced opposition, making unreasonable points regarding the untimely nature of the change. Councilman Vallone of Astoria, for instance, said:

"Robert Kennedy was a great man, but this isn’t the time. While one agency that gets money from the state is raising fares and cutting service to the neighborhood at the foot of the bridge, another has somehow found a way to spend millions of dollars on changing the signage of it."

Oh come on, Vallone! As if anyone could think of anything better the city could be spending money on right now!!

Battle of the Bust!

Brooklyn's got fun independent businesses, community spirit, and more free events than a 20-something can handle. But Baltimore's got beautiful surroundings (nature=free), bookshares, and was sorta born ready for the collapse of the economy.

Check out and VOTE ON my guest post at the blog Baltimore vs. Brooklyn, where we debate which city is the best to weather the storm of the recession.

City Maintenance During the Recession

If this is it, we're in trouble.
via Thereifixedit.com