US Unemployment: Rate Unchanged in October but...

The US economy added a very surprising 151,000 new jobs in October, much higher than most economists expected.  The rate was unchanged at 9.6% but this is not surprising.  Let's suppose that we can sustain this kind of job growth, many people who have been waiting out the recession will be induced to rejoin the labor force to look for a job.  Thus both the supply of jobs and the demand for the jobs increases.  So, right now, the number you should focus on is the new jobs number.

In fact, the news in even better when you consider that the government sector shed 8,000 jobs so the private sector job growth was 159,000.  This is almost startlingly robust.  Still, there are plenty of bad things to point out: the U6 rate which includes underemployed and discouraged workers is still at 17% and the number of long-term unemployed (for a year or more) keeps increasing rapidly.

One interesting question is whether this suddenly makes QE2 unnecessary and dangerous.  After all the main argument against QE2 is sparking uncontrolled inflation and the core mechanism of stubborn inflation is wages.  But as David Leonhardt points out wages are not keeping pace with productivity gains at the moment, so it is hard to see were inflation is getting traction.

Trees and Crime: Correlation and Causation, Part 652

Once again I am moved to post on my favorite bugaboo: mistaking correlation with causation.  This time the subject is a study of the affect of neighborhood trees on crime in Portland that The Oregonian reports on in today's paper.  Part of my problem is with the study itself but part of my problem is fundamental mistakes in the way it has been reported on by The O.

Let's start with an excerpt of the abstract of the study (which was authored by two Forest Service employees):

In general, the authors find that trees in the public right of way are associated with lower crime rates. The relationship between crime and trees on a house’s lot is mixed. Smaller, view­obstructing trees are associ­ ated with increased crime, whereas larger trees are associated with reduced crime. The authors speculate that trees may reduce crime by signaling to potential criminals that a house is better cared for and, therefore, subject to more effective authority than a comparable house with fewer trees.

This is all fair enough, the study looks at the correlation between trees and crime controlling for a host of other observables. They find some statistically significant correlations and are careful in the abstract not to make a causal statement. Yes, there are reasons to expect that trees signal greater police and neighbor vigiliance (think the broken windows theory) and thus asct as a deterrent to crime. But there are a host of other reasons to think that areas with higher crime might be associated with lower income, shorter tenancies and thus lower investment in trees so the true causal realtionshiop is far from clear.  In simpler terms, in high crime areas, the crime might be a disincentive to invest in the planting and upkeep of trees, in which case the causality runs in the other direction.

Unfortunately the authors do nothing to try and uncover the true causal link, and so all they can do is talk about correlations and speculate as to the causal story as the abstract illustrates. To this extent they are honest. The title of the study is a big problem however: "The Effect of Trees on Crime in Portland, Oregon." This is simply inaccurate, this is not a paper about the effect of trees on crime (a causal statement), it is about the association of trees and crime.

Perhaps this is the root of the problem with the reporting then. Here are three snippets from the article in The O.

1) The title of The Oregonian article (this is the web version): Tall trees help protect houses from crime, says study conducted in Southeast Portland

Uh, no.

2) "Houses with tall trees had less crime because trees made the area look more desirable."

Uh, no (this doesn't even get their speculative story right - if an area is more desirable, why isn't it more desirable to criminals too?)

3) "Street trees, a bigger tree canopy and more trees were all associated with less crime." [Italics mine]

Ah, yes, yes, yes! Do you see the crucial difference in the third statement from the first two?

Now this association is interesting in its own right, so that is not a problem, but you have to be very careful about crossing over from correlation to causation.

Class dismissed.

Is the Social Security Trust Fund Real or Imagined?

Groan...why must The Oregonian publish such nonsense?  The other day in an Op-Ed, Lewis and Clark law professor Tung Yin (one wonders why a lawyer is considered an expert on these things) makes the tired claim that since the Social Security trust fund is invested in Treasury securities, it doesn't really exist, it is all just a shell game.

Except for the rather annoying fact that treasuries are legal contracts backed by the full faith and credit of the US government.  Whether the government of China, the Social Security trust fund or a US citizen like me holds it is irrelevant.  A default on its debt is a default no matter who holds the securities.  Defaulting on obligation is simply not an option for the US, unless it wants the entire economy to go kablooey, and so there is no reason at all to view this as some elaborate shell game.

The fact that the US government is in deficit is a separate issue and only confuses the discussion of Social Security.  In time, once the reality of the earnings power of the current working age adults is known and the trust fund is on the verge of running out there will be three options: raise the tax, means-test benefits, and/or raise the retirement age.  Probably some combination of all three will end up being the solution (or at least the last two), but it is not a terribly hard problem to solve.  Just look at France.

And, by the way, foreign governments own a bunch of US debt (a little over a quarter), but the vast majority of the US debt is owed to...ourselves.  So while US debt is an obligation of the government it also represents income to all who own it.

They Might be Giants

I have to admit, I was expecting defeat - the offensive juggernaut that was the Rangers leading into the series seemed to me unstoppable.  But then I made the mistake of comparing AL pitching with NL pitching.  Everyone knows real pitchers take a turn with the bat.  It was stunning to see how inept the Giants made the Rangers seem at the plate.

Suddenly the heartbreaks of 1989 and 2002 are gone (not to mention the Dodgers world series titles in '81 and '88) and I can revel in the notion that the Giants have finally won it all.  And I also have to admit to being very happy that Barry Bonds was not a part of this.  Had the 2002 Giants won their world series, the presence of an obvious juicer would have been deeply unsettling.  I loved him as a player early on, but he very obviously went on the juice hard and so that whole era of player - McGwire, Canseco (1989 series anyone?), Palmeiro, Giambi, Bonds - can just fade from memory in my view.  You can't rewrite the record books - I am sure many pitchers were juicers as well - but we can all just move on.

But what to tell my kids?  My dad had to wait 60 years for his Red Sox to win, I had to wait 42 for the Giants, my sons don't even have to wait until double digits?  Ah the innocence of youth. They'll learn the true despair of being a baseball fan in due course...

Causality: Economics and Politics Edition

Kevin Hassett, via The Oregonian, makes a fundamental error of the sort that you all know will set me off: mistaking correlation for causation.  This one seems so classically wrong that I offer it as a teaching moment on this election day.  Here is the thesis:

Chances are good that the power of the federal government, squarely in the hands of Democrats the past two years, is about to become divided between the two parties. Modern American history suggests that this is the best of all worlds. With due respect to Abraham Lincoln, a house divided against itself often prospers.

Since 1970, the levers of federal government -- the White House, Senate and House of Representatives -- have been in the hands of one party, whether Republican or Democrat, 30 percent of the time. By most any measure, the U.S. economy has been healthier the other 70 percent of the time.

His evidence to support this thesis:

From 1970, median GDP has grown 3.3 percent in years of divided government (1970-1976, 1981-1992, 1995-2002, 2007- 2008), compared with 3 percent when government was unified (1977-1980, 1993-1994, 2003-2006, 2009-2010).

The effect has been more pronounced in recent years. Since 1981, when Ronald Reagan took office, median GDP has grown 3.3 percent in years in which the government was divided and 2.8 percent when government was unified. Since 1993, when Bill Clinton took office, the economy has grown 3.6 percent per year when power is split and 2.8 percent in the other times.

How about unemployment? Divided government might be exactly what today's jobless should be wishing for.

Since 1970, median unemployment has been 6.1 percent under one-party rule, 5.7 percent when both parties have some control. The spread narrows (6 percent vs. 5.8 percent) since 1981 and widens (6 percent vs. 4.9 percent) since 1993.

Equity markets have practically jumped for joy at political division. Since 1970, the Standard & Poor's 500 Index has increased at a median rate of 13.5 percent per year in divided times and 9 percent per year under one-party rule. That spread grew (14.6 percent vs. 9 percent) since 1981 and even more so since 1993 (19.5 percent vs. 9 percent).

Open and shut. Uh, except for a few inconvenient facts. First, economic policy of the type made in the Capital Building in Washington, DC has very significant lags: the effects of a new piece of legislation are generally not felt for years. Second, divided governments are often the result of an unhappy electorate, and what makes electorates the most unhappy?  Poor economic performance.  Finally, the business cycle has always been a part of the economy (even when we thought we had achieved the 'great moderation') which means that poor performance is generally followed by good performance.

Thus it is just as, or even much more, likely that the causality works the other way: poor economic performance, especially around midterm elections cause divided governments and natural business cycles causes economic improvements after such elections.  So it is the economy that causes divided governments not divided governments that cause the economy.

This time will be no different: it is virtually certain the the economy will improve in the next two years (there is no where to go but up) and it is virtually certain that the Republican party will control at least the House.  Will the fact that the Republicans control the house have any real effect on the economy in the next two years?  Not really.  The roots of the current economic downturn run from the deregulation of Reagan to the financial reforms of Clinton to the loose monetary policy of Bush and has basically nothing to do with a specific party of what branches of government they control.

Hey, it is election day: VOTE!

Monday Morning Dump

Sick today, crawling back into bed, so here are some things to amuse yourselves:

1.  From Greg Mankiw: a picture from the Jon Stewart rally.

This is right up my alley, but I can't decide if it is a defense of the Obama administration or a criticism (too slow and deliberative)?

2. Eco-nomics 1: The Oregonian reports on what is, ostensibly, a very big bet by the city on one renewable energy company and one technology - windmills (sorry, wind turbines).   I am not saying it is a bad bet, but it is a big one and it represents many, many eggs in one basket.

This at a time when Vestas is reeling from high costs and competition.  The news that it is shedding jobs in Denmark I take as a sign that soon all the manufacturing will be done in East Asia.

3. Eco-nomics 2: A nice article on some massive solar energy projects in AZ and CA that may be the last of their kind for a while thanks to expiring incentives.  But if they show that these projects can be reliable and cost effective, the incentives may have done their jobs.

Things I Don't Understand

A little piece on an odd decision Adidas by Mike Rogoway:

Adidas America wants to sell its north Portland headquarters to raise money for operations, then lease back the property in a long-term deal.

This confuses me. Long-term interest rates are at historic lows, so how is it that this is a good way to raise capital? Either Adidas should be able to borrow directly or at the very least should be able to use the property to secure a very low interest loan against it.

But I am not a finance guy...still I wish someone would explain this to me.

Moles are not Rational

My experiment with the economics of moles has ended, predictably, badly.  By slightly raising the marginal cost of lining in my yard, I had hoped convince my subterranean friend by use of an annoying emitter of sound waves to seek out more pleasant pastures...like my neighbor's yard.  But alas, not only has my mole remained after three weeks of use, but he is quite happily continuing to dig within a few feet of the 'sonic spike' itself.  The picture above is not the best, but these are two new mole mounds with the solar panel of the 'sonic spike' visible at the edge of the grass.

Clearly my mole has not had an Econ 101 class and doesn't understand decisions at the margin.

But I have made a scientific breakthrough!  Moles are not rational creatures.

Addendum: When you post an entry, Blogger informs you of the having successfully posted on a separate page in which they embed a Google Ad clearly targeted by keywords from your post.  Ironically, the ad associated with this post was headlined" "SONIC MOLE CHASERS WORK" and clicking through takes you here.  You have been warned.

Election 2010: Measures 73 & 76

It may seem strange to write a single post about Measures 73 and 76 as they are so different, but they do have one common aspect that I dislike: they reduce the flexibility and responsiveness of government to deal with changing economic circumstances.

My wife is passionate about environmental and education issues and she considered a 'yes' vote on Measure 76 a no-brainer.  Who doesn't like funding for parks and beaches and wildlife?  So I posed a question: "at this moment, if there was one thing you had to cut for a couple of years until the economy improves, which of the two things, education and parks, do you think can best weather a temporary cut?"  My answer is clear: parks and wildlife.  There is convincing evidence that temporary disruptions like shorter school years, larger class sizes, etc. create long-term consequences for kids.  Thus if I have to make a difficult choice, I would protect schools above just about anything else.

I also don't like the idea of telling the criminal justice system how to do their jobs, having virtually no knowledge of the actual tradeoffs between spending more money on education, early childhood intervention and other things that will spur economic growth and thus provide non-criminal opportunities, versus spending more money on incarceration.  Measure 73 not only ties up money that might be better spent elsewhere, but it also reduces the ability of the justice system to deal on a case-by-case basis with recidivists.

Which is why I am weary of Measures like 73 and 76 which essentially tie-up state resources.  I believe that the state government needs more flexibility, not less, to deal with serious downturns like the one we are in.  I have faith that the good folks who make up our state legislature take their jobs seriously and try and do their best with the evidence they have (though I am always advocating for better evidence for them to work with).  In short, I believe in representative democracy.  Normally the trade-offs would not be so stark, but this recession is, and will continue to be, very severe and the cuts are going to have to be deep.
 
That said, there are arguments for both that essentially come from the same principle: there has been a failure of government (or the criminal justice system) to properly deal with to things that have substantial externalities.  Parks, beaches and wildlife have substantial positive externalities and as such are chronically underfunded.  Sex offenders and drunk drivers cause substantial negative externalities to society and as such there we have a system that allows too much of them.  I don't necessarily disagree with either statement.  But public education may have the biggest external benefit of all and to address the aforementioned two at the expense of education is the real trade-off.

In the end, things that look good in isolation start to become less clear when the trade-offs are explicit - which is a big point of economics in general.  Will schools benefit if these two do not pass?  I don't know, but given that K-12 is THE massive chunk of the state's general fund and a major part of the lottery fund account, it is hard to see how they won't.

Hard choices.

Picture of the Day: Venezuela

From N Greg Mankiw's blog:

This here is a market in Caracas selling oil.  They post the 'just price' and the (much higher) 'capitalist price' and let you know just how much you would have been screwed by the system were it not for the Chavez regime.

Giants

As someone who had a peripatetic childhood there are very few constants that I clung to and that remained with me until adulthood.  But perhaps the one true constant was, and is, the San Francisco Giants.  Born, and raised until I was 11, on the peninsula just south of San Francisco, I spent many a frozen evening at Candlestick Park watching the fog pour into the stadium through the breezeways in the upper deck while the likes of Willie McCovey, Jack Clark, Bill Madlock, Vida Blue and my personal favorite (for no real reason - I was a kid after all) Mike Ivey plied their trade below.

Later, I would develop a fondness for Milwaukee's County Stadium and the Brewers and Civic Stadium and the Beavers (I tried the Mariners but the Kingdome, even with a young Griffey, Jr., was just depressing), as my family split and went different directions. But I would continue to return to the nest thanks to return trips to visit relatives in SF and always carried the Giants as my birthright.  Recently, visits to my in-laws who live in Marin County are highlighted by ferryboat rides to McCovey cove to see the Giants play in the spectacular PacBell SBC AT&T Park, which (by any name) is by far the best in baseball.

I was in my apartment in Portland when I was in college for the 1989 World Series. My roommate was from the East Bay, but a Giants fan nonetheless, and when the earthquake hit we both ended up trying to contact our families to make sure all were okay and accounted for. Alas, the Giants did not put up much of a fight in that series, but frankly it didn't really matter.

I was alone in a hotel room in Williamstown, Massachusetts during game 6 of the 2002 world series - hiding out and blowing off a dinner banquet for the conference I was attending.  I was beside myself with excitement and anxiety until the bottom of the seventh inning of game 6 when Dusty Baker took out Russ Ortiz with a 5-0 lead.  I had a bad feeling and when it all unraveled I knew it was all over.  I couldn't hardly watch game 7.  

But it was hard to feel sorry for myself as my father, a Boston native, was still suffering each and every season with his beloved Red Sox.  He was an early adopter of satellite radio when he discovered that it meant he could listen to each and every Red Sox game in Portland.  He grew up across from a park in a nice neighborhood a short walk from the Fenway and used to tell me of Red Sox players who, while walking home from games and practices, would stop and play catch with the boys playing in the park - including the great Ted Williams.  The intimacy I have with the Giants can't compare to those more innocent times, but still, the Giants were an anchor to a kid without a geographic center.

But now the Red Sox have won twice since the 2002 World Series and I can start to feel like maybe it is my time - even though I am about 20 years ahead of my father when his dream was finally realized.  Still, I have a feeling of dread, the Texas Rangers seem like an offensive juggernaut and I think it could all end quickly and badly.  At least the National League finally won the All-Star Game.  So I protect myself with a healthy dose of pessimism (this too learned from my dad over my lifetime).

Anyway, tonight starts what might end up being a fortnight of tortuous suffering. But nevertheless I say: Go Giants!

Addendum. Despite my love for the Giants, this is a stupid statement:

"People on the East Coast think of the West Coast as this new place, but San Francisco is a really old American city," said Brian Murphy, the dulcet morning drive-time sports voice on KNBR radio. "This city has a thriving history that goes all the way back to 1860. … So whereas L.A., and Seattle, and Portland, and Phoenix are all sort of post-World War II towns, this town's history runs way deeper than most of America realizes."

Portland, a post-WWII city? Say what? Oregon City is the oldest city in the West. Portland was incorporated in 1851. Revel in the glory of the Giants, but don't be condescending or vainglorious.

And actually the modern history of the city goes all the way back to the Presidio and the San Francisco Mission in 1776 (see, I attended grade school in California!) so the 1860 date is pretty arbitrary.

Port of Portland Showing Healthy Gains in 2010

One thing I like to check on from time to time to get a sense of the direction of the Oregon economy is the Port of Portland marine statistics.  What a recent glance reveals is that 2010 is showing a very healthy improvement over 2009.  In fact in terms of total tonnage through the first nine months of 2010, the Port is 36% higher than last year and in just about every other metric the Port is experiencing strong gains.  Thanks, China.

A Note on Public Sector Worker Pay

I have no beef with Ted Sickinger's nice piece on compensation for public and private workers.  He does as good a job as one could ask for in trying to make sense of the issue, and I especially like how the article emphasizes the entire compensation package, not just salary.  For me, the generous benefits helped to make up for the fact that the pay I accepted was far below competing offers from places in California, Ohio and North Carolina.  [But they suck and Oregon is sweet!] I also really like the fact that he brought up education and job skills as they are very important considerations in any discussion of pay.

But if one were to really want to get to the bottom of the question of whether Oregon's public workers are overcompensated you would have to do more than compare averages across states and across private and public sectors.  You would need to be able to say something about productivity - are we getting as much bang for our buck as other states and the private sector.  As productivity is generally positively related to education, experience and job tenure, that would be a good place to start.  If you have data on individual workers you could control for these individual characteristics and then get a much clearer idea of where relative pay stands.  Even better, of course, would be an actual measure of productivity, but as we are talking about a vast array of jobs, doing so would be too difficult.

In the end, Sickinger's piece gives a nice bit of background information, but still leaves us essentially clueless about the question of whether public sector workers are overpaid or underpaid.  Though it may not matter that much given the amount of cutting the state is going to be forced to do.  Still, lawmakers should be aware of efficiency wages: you may cut so much that productivity per dollar actually drops.

My guess as an economist is based in the belief that the public sector has to compete for the same workers as the private sector and so, in equilibrium, productivity weighted compensation should end up roughly equal.  Pay too little and you will see that workers keep leaving for better paying jobs.  Pay too much and you will have a hard time showing how well you have managed your money as a boss.  In the end, I doubt there is much difference.

Oregon Tax Climate Ranking Unchanged

According to a report released today by the Tax Foundation, Oregon's tax climate ranking among all 50 states remained unchanged from 2010 to 2011 at 14th. Oregon's ranking did fall from 2009 to 2010, from 8th to 14th, after the passage of Measures 66 & 67, but it remains in the top third of all states.

State Business Tax Climate Index Fiscal Year 2011
	2011 Rank	2010 Rank	Change from 2010 to 2011	2009 Rank	2008 Rank	2007 Rank	2006 Rank
Alabama	28	19	– 9	20	23	22	16
Alaska	2	3	+ 1	4	3	4	3
Arizona	34	28	– 6	24	25	29	29
Arkansas	39	40	+ 1	35	37	36	35
California	49	48	– 1	49	49	48	42
Colorado	15	13	– 2	13	10	11	13
Connecticut	47	38	– 9	37	38	39	41
Delaware	8	8	0	10	9	8	9
Florida	5	5	0	5	5	5	5
Georgia	25	29	+ 4	27	28	21	20
Hawaii	22	24	+ 2	22	18	16	24
Idaho	18	18	0	29	21	26	30
Illinois	23	30	+ 7	23	24	31	26
Indiana	10	12	+ 2	14	13	12	12
Iowa	45	46	+ 1	44	46	45	44
Kansas	35	32	– 3	31	31	35	33
Kentucky	19	20	+ 1	34	27	28	38
Louisiana	36	35	– 1	33	34	33	32
Maine	31	34	+ 3	40	35	37	43
Maryland	44	45	+ 1	45	47	24	25
Massachusetts	32	36	+ 4	32	33	34	36
Michigan	17	17	0	21	17	23	28
Minnesota	43	43	0	41	42	43	39
Mississippi	21	21	0	19	22	19	19
Missouri	16	16	0	16	16	15	14
Montana	6	6	0	6	6	6	8
Nebraska	29	33	+ 4	42	40	41	45
Nevada	4	4	0	3	4	3	4
New Hampshire	7	7	0	7	7	7	6
New Jersey	48	50	+ 2	50	50	50	48
New Mexico	33	23	– 10	26	29	25	23
New York	50	49	– 1	47	45	46	49
North Carolina	41	39	– 2	39	41	42	40
North Dakota	20	25	+ 5	30	32	32	31
Ohio	46	47	+ 1	48	48	47	47
Oklahoma	30	31	+ 1	18	19	20	21
Oregon	14	14	0	8	8	9	10
Pennsylvania	26	27	+ 1	28	30	30	22
Rhode Island	42	44	+ 2	46	44	49	50
South Carolina	24	26	+ 2	25	26	27	27
South Dakota	1	1	0	2	2	2	2
Tennessee	27	22	– 5	17	20	17	18
Texas	13	11	– 2	9	11	10	7
Utah	9	10	+ 1	11	12	18	15
Vermont	38	41	+ 3	43	43	44	46
Virginia	12	15	+ 3	15	15	14	17
Washington	11	9	– 2	12	14	13	11
West Virginia	37	37	0	36	36	38	34
Wisconsin	40	42	+ 2	38	39	40	37
Wyoming	3	2	– 1	1	1	1	1

Where are the Wage Gains? Cities at the Heart of the Information Economy

Another gem by Ed Glaeser in the New York Times' Economix Blog:

Santa Clara County, which contains Silicon Valley, experienced 8.7 percent wage growth from 2009 to 2010. San Francisco County had 5.4 percent wage growth. These two counties were third and fifth on the list ranking areas by wage growth.

The success of these areas is particularly remarkable because they started off with higher wages. Typically area incomes revert to the mean, but in the recent recession, at least some places that started with higher earnings have gotten richer over time. This matches a post-1990 pattern in which the incomes of initially richer areas have risen more quickly.

***

The bad news is that more money has been earned by fewer people. The rise in the incomes of these coastal cities has not been accompanied by increases in the number of employed people. Employment in Manhattan dropped by 1.7 percent over the year and employment in San Francisco fell by 3.1 percent.

***

These wage gains are only the latest bit of evidence confirming that America’s economic future depends on its information-intensive cities. Our country is never going to be able to compete with Asia as a producer of ordinary manufactured goods. If the products are old, then they will be produced where costs are lowest. Our economic eminence depends on continually coming up with new ideas in software, biotechnology and finance.

One implication of this is that our future will never seem as certain as it did when America had enormous dominance across vast markets for manufactured goods. In those days, we could be pretty sure that incomes would continue to rise if we just kept doing what we were doing. Now we need to hope that the uncertain process of American innovation will continue forward on its jerky path.

A second implication is that America’s future depends on its schools. This recession has also emphasized the enormous handicaps facing less-skilled Americans. Only 39.5 percent of adult Americans without a high school degree currently have a job, according to the bureau, while 73.1 percent of adults with college degrees are employed. If we want the United States to be strong, we must make sure that we have more college graduates and fewer high-school dropouts.

The final implication is that cities remain vitally important to our economy. That importance reflects the fact that places like Wall Street and Silicon Valley create skills that are even more valuable than those taught in our schools. Globalization and new technologies have made knowledge ever more valuable, and we are a social species that acquires skills by hanging around other smart people.

This is the hope for Portland, that investments like those by Intel, Solar World and Vestas will lead to a regional economy based on technological innovation and high-tech manufacturing. By creating a critical mass of focused human capital, it is hoped that we will be able to crate and sustain a comparative advantage in such activity. It is a gamble for sure what with huge investments being made by China in specific human capital, but seems to me about as good a bet as one could make. What can government really do to engineer this? Not a lot, except make sure the fundamentals are right: education, R&D and infrastructure.

Read the entirety of Glaeser's article here.

Portland Home Values: The August Case-Shiller Update

Here are the numbers, nicely displayed thanks to the Wall Street Journal:

Home Prices, by Metro Area

Metro Area  ↓	August 2010	Change from July	Year-over-year change
Atlanta	109.09	-0.8%	-2.0%
Boston	158.35	-0.3%	1.5%
Charlotte	116.6	-0.4%	-3.4%
Chicago	126.7	0.4%	-2.9%
Cleveland	107	-0.3%	-0.4%
Dallas	119.41	-1.1%	-1.7%
Denver	128.57	-0.1%	-1.2%
Detroit	71.54	0.5%	-0.1%
Las Vegas	101.03	0.1%	-4.5%
Los Angeles	175.55	-0.4%	5.4%
Miami	147.47	-0.3%	-1.0%
Minneapolis	126.53	-0.3%	2.9%
New York	175.27	0.2%	0.1%
Phoenix	108.84	-1.3%	0.4%
Portland	147.02	-0.9%	-2.3%
San Diego	163.99	-0.6%	6.9%
San Francisco	142.83	-0.3%	7.8%
Seattle	145.93	-0.8%	-2.4%
Tampa	137.53	-0.5%	-4.1%
Washington	188.26	0.3%	4.8%

Source: Standard & Poor’s and FiservData

The news is bad: Portland is losing ground and in the top group for lost value. Not at all surprising given the unemployment situation.

Zooey: 1996 - 2010

We had to make the excruciatingly difficult decision to put our dog of almost 15 years down this weekend. If she had been stricken by an aggressive disease and was suffering visibly it would have been easier.  But she was mostly just old and was no longer able to get up on her own, was losing control of her bowels and had great difficulty walking.  How do you know when the time is right?  I have no answer.

What I know is that she was a great dog.  A Labrador through and through: she loved swimming and fetching (and the combination especially). A chance to swim would excite her more than anything else in the world.  The picture above is her about two or three years old in the Wildflower Preserve in Ithaca, New York at a popular dog swimming hole with rocks she could launch herself from.  I love this picture because I can't think of another one in which she looks as completely happy - dripping wet, big stick in mouth, tail wagging vigorously, ready to do it again...and again and again and again...

We got her as a puppy and had the choice of the litter.  How to make such a choice was answered (in typically social scientist fashion) by the puppy personality test from the wonderful book "The Art of Raising Your Puppy" by the Monks of New Skete. We wanted a moderate dog, not too dominant but self-confident, so we gave her and her sister the test (she had eight brothers, be we wanted a female) and she got mostly 3s.  Perfect.  And thus she was: wonderfully confident, a little willful but not too much - and, typical of Labs, the friendliest dog you could ever meet.

We got her the first summer we spent in Ithaca, between my first and second year in the economics PhD program at Cornell.  I had to study for the make-or-break exam in macroeconomics that summer and so little Zooey would sleep in her crate next to my desk and I would study and every hour or two we would take a break and go outside.  I passed the exam and the rest is history.  She was my constant companion ever since, was a gentle and proud caretaker of my sons and a constant reminder to get outside and enjoy nature.

I will miss her and I don't much feel like blogging...

O Rei is 70: Happy Birthday Pelé

QPR

Don't look now, but Queens Park Rangers are dominating the League Championship in England and are on course to be promoted to the Premiership next season.  Many matches ahead, but things are definitely looking good.  This would have made my Granddad, who was born and raised in Hammersmith and a QPR man, very happy.  If they end up promoted, games between his QPR and my Arsenal will leave me conflicted.

Friday Reads

It is Friday and a significant portion of the work I had planned to complete this week remains sitting on my desk, so I'll punt to something I rarely do: link to other posts.  This is THE sure way to drive traffic on your site, so they tell me, but I really don't care about how many people read my blog in general, I just care about who reads my blog.  And I am very, very happy with the interesting, thoughtful people who visit this space.  So, interesting, thoughtful people, here are some interesting reads - go and think:

Mark Thoma has a nice post on an article from the SF Fed.  Here is a nice (and scary) little graph on deflation risk - are we really different than Japan?  [Lost decade anyone?]

Justin Wolfers on Freakonomics has a ver nice lesson on detecting momentum in data and comments on Nate Silver's error of deduction when he suggests that there is no such thing in polling data.

The Oregon Office of Economic Analysis has a nice post on the output gap.

Ben Jacklet in Oregon Business Mag has a nice comment on the Intel News.  [Which by the way is a subject I have spoken about to three or four reporters and thus I decided not to post on it here.]

You can read my erudite analysis of the Intel investment in Mike Rogoway's article in The Oregonian.