G.Nelson

Blanchard, Dave. “Manufacturers’ Big Squeeze Puts Pressure on Supplierss.” Industry Week/IW 262.5 (2013): 40-41. Academic Search Complete. Web. 10 Oct. 2015

In light of the recession, Dave Blanchard explains in his article, “Manufacturers’ Big Squeeze Puts Pressure on Suppliers,” manufacturers are looking for ways to shore up cash flow. Large companies are looking to expand their payment arrangements to their suppliers for services and, or products rendered from 45 to 70 days. For the small to mid-sized suppliers of larger companies, this can greatly affect the smaller company’s cash flow and profits. Smaller companies may go to commercial lending companies, banks, and request a “factoring” service. Factoring is when a bank or lending institution looks at the accounts receivable and lends the company 70% to 90% of the value therein. The bank or lending institution will, then, usually charge 1.5% to 5.5% of the “total face value of the invoice.”

Blanchard illustrates how one company in the plastic industry utilized this banking technique of factoring to expand the growth of the company domestically and internationally. I find some issues with this technique of factoring, though. If any company is relying on credit markets and tools to grow or finance the company, the company is instantly losing 1.5% to 5.5% of potential profit to banking fees. Since the big companies are rearranging their finances due to the recession, is a small to mid-sized company trying to grow when the headwinds of a recession is attempting to push them back? A couple of questions that are not directly being answered in this article: since the big companies are expanding their payment arrangements to shore up cash flow, will this drive the big company to expand business? Will this expansion help the suppliers? Or is the factoring by small and mid-sized just a domino effect of the debt crisis of 2008-09?

Even though this article is short, the article illustrates the creativity that is within the financial markets, but also illustrates the potential risks of easy debt through creative financial mechanisms. Part of the issue that caused the 2008-09 crisis was debt, specifically derivatives. Even though factoring is --assuming-- to be limited to 45 to 70 days, commercial or investment banks my be able to bundle an amalgamation of factorings by multiple companies to sell to investors of debt, and if one company, or more, defaults on the factoring because a larger company defaults on their payment to suppliers, the underlying value of the amalgamated-bundle of factorings would default and result in a domino effect; thus, a 2008-09 crisis would once again rise up to smack the GDP down.

Does the Dodd-Frank Act account for this? My next article will be Dodd-Frank specific.

G.Nelson

Similar to what we see in Clark County WA, Boston, Massachusetts is faced with a housing problem where low income housing is scarce and rents are skyrocketing. A case control study of 49 homeless, female headed families and 81 house female-headed families in Boston attempted to reveal “Why Does Family Homelessness Occur?” Sample was collected from local shelters in Boston where homeless families stayed between April and July 1985. Housed families sample was collected via 1980 census. Both homeless and housed families had a choice of participating and were given monetary compensation for their time. Data was collected by personal interview of the mothers and children by a psychiatrist or psychologist. The comparison of homeless and housed mothers revealed important similarities and differences. In both groups, mothers were poor, currently single, had little work experience and relied on public assistance. Additionally both groups reported experiencing a major family disruption during childhood. Many of their children had serious developmental and emotional problems and showed poor performance in school. Additionally, children in homeless families were more likely to be abused or neglected. The homeless mothers had weaker support systems, which more likely consisted of men. They were also much frequently abused as children, and had been more frequently battered as adults. A greater proportion of homeless women had substance abuse or psychiatric problems than housed women did. The study states that family’s support network plays an important role and determines whether a family will need shelter or be able to find housing with friends or family. The fact that homeless mothers had experienced greater family violence as children could also explain, in part, their difficult to form and maintain supportive relationships as adults. Most importantly, this study notes that homeless mothers were less likely to have grown up on welfare than the housed mothers.<br> Although there are limitations that must be noted, the study makes valuable points as well. Data for housed women was collected during daylight, which could have limited the sample to non-working mothers only. The interview setting was different for homeless and housed mothers, and the psychiatrists conducting the interviews had knowledge of which individuals belong to which group. Again, I use the Social Construction and Typology Power as a discussion point for the study above. Homeless mothers more frequently experience abuse and family violence, their children have experienced neglect and show poor performance in school, and although Social Construction Theory suggests that they are “dependents” and deserving in terms of sympathy and pity, they still account for one third of the estimated homeless population of 2.5 million people nationwide. They are also the fastest growing subgroup according to the study. If it was the case that this specific group: homeless mothers with children, were in fact deserving, than we should be seeing a decrease in their numbers.

The recession that officially ended in June 2009 continues to impact how small businesses acquire financing and support, but some companies are stepping in to fill that void.

Banks previously held many small business loans, but increasingly those same businesses are turning toward their community and crowdsourcing, including community Sourced Capital (CSC), a Seattle company that aims to raise funds from community members who want to support businesses by providing money for interest-free loan. Projects typically range from $5,000-$50,000, which are the hardest to get bank funding for due to the amount of due diligence required. People who want to support the business can buy squares through the CSC website for $50 each, a zero-interest loan to the business. If the campaign is successfully funded, the business owners start paying back “Squareholders” soon afterward, and have up to three years to repay the full amount.

Lending was a role that used to be fulfilled by banks, in particular community banks for small businesses. In many areas, community banks have been swallowed up by larger banks, ending the relationship-driven lending model as small businesses have to compete with far-away banks who have many priorities and may not consider a small pasta shop in Seattle to be among them.

CSC’s Square Model was founded by four classmates getting MBAs at Pinchot University, a Seattle institute that emphasized social justice and sustainability. CSC joins the rapidly growing crowdfunding market, which globally raised $16.2 billion in 2014, according to Massolution, a crowdfunding and crowdsourcing research firm.

So far, CSC has loaned about $838,000 to 50 local businesses, most of them in the Seattle area — although its new partnership with the state Department of Commerce, Fund Local, aims to address the lack of access to capital for small businesses, particularly in rural and underserved areas. CSC and the Department of Commerce hope to support at least one company from each of Washington’s 39 counties.

Even if it doesn’t hit all 39, success in just half could be an economic boon for the state, said Maury Forman, the senior manager with the Department of Commerce who’s overseeing the program. If 20 counties participate and the average loan is $25,000, that’s half a million dollars in the state’s local economy, he said.

Alternative sources to bank funding for small business is important for our policy area (economic policy) in that we will examine the changing economy since the recession and financial crisis — much of it due to loan actions — and the small business economy is a vital part of that equation.

— Amelia Veneziano, 10/5/2015

G.Nelson

Rugy, Veronique de. "The Municipal Debt Bubble." Reason 42.8 (2011): 20-21. Academic Search Complete. Web. 5 Oct. 2015.

In Veronique Rugy’s article, “The Municipal Debt Bubble,” she posits that the municipal bond markets are heading for a “housing-like crisis,” and with federal-incentive policies and private investors looking for a safe heaven from current market turmoil, the municipal bond market will be turning into an unsustainable financial-bubble, like that of the 2006 housing bubble.

Since the 2008 financial crisis, she states, the demand for a safe haven has pushed investors into the municipal bond markets. Municipal bond markets are relatively safe and attractive in a time of financial uncertainty: “[T]he default rate for municipal bonds has average .o1 percent annually” (Rugy). This was the perceived notion on U.S. housing mortgages before the housing crisis of 2006. Rugy illustrates that if a state or local government wants to increase spending, they must issue bonds. Bonds have been utilized to fund projects ranging from stadiums, schools, bridges, to museums. Since 2009, however, they have increased by 800% and have recently been utilized to cover “basic operational expenses” (Rugy).

In 2009, the federal government created “The Build America Bonds program, part of the American Recovery and Reinvestment Act of 2009” (Rugy). Rugy illustrates that this program was utilized to subsidize local and state infrastructure programs. Through this act, the federal government directly paid part of the interest on the municipal bond, and with private investors seeking a safe heaven from corporate bonds, and tax incentives of investing in muni-bonds, the supply of municipal bonds where quickly bought up by private investors. Private investors, along with state and local officials, believe that if the banks were “too big to fail” then surely the municipal bonds would be “too big to fail.” Rugy illustrates that this assumption has lead to risky municipal bonds being issued to localities that are near bankruptcy, like Detroit and Los Angeles. This sort of risky loans operation is what fueled the housing crisis of 2006.

Like the 2006 housing crisis, investors have started to hedge, protect themselves, from a muni-bond crisis. Investors can purchase Credit Derivative Swaps (CDS) as an insurance against failing bonds. The price of CDS can be indicative of the underlying assumptions that investors have toward bonds, and recently, the prices have been increasing, just like what happened before and during the 2008 financial crisis on corporate bonds.

Rugy believes that there will be a muni-bond crisis in the near future. Since her article, Detroit has been in an annual bankruptcy process that has written off muni-bonds, costing taxpayers billions. Similarly, Puerto Rico has had muni-bond problems, which is tied in with US muni-bonds. If enough muni-bonds fail, a domino-like effect will overwhelm not just the U.S. economy, the global economy, as well, like that of the 2008 crisis. This time, however, the Fed is more limited in resources and jurisdiction to limit the financial fallout.

G.Nelson

Title: "Do housing bubbles generate fiscal bubbles? Evidence from California cities" Author(s): Razvan Vlaicu and Alexander Whalley Source: Public Choice, Vol. 149, No. 1/2, Public Choice in a Local Government Setting (October 2011), pp. 89-108 Stable URL: http://www.jstor.org/stable/41483725

“Do housing bubbles generate fiscal bubbles? Evidence from California cities” appeared in Public Choice in 2011 and was written by Vlaicu and Whalley. These authors sought analysis of how the housing market is connected to the local city budget. Vlaicu and Whalley hypothesized that government officials pay close attention to the housing market because property tax and sales tax are two major revenue streams for local government (2011). This article looks at city level data from California between 1993-2007 to analyze the effect of house prices on city government policy.

Property taxes are levied on the assessed property value rather than the fair market value of the property. Because of the constraints of assessing property values, there is usually a 2 year lag for assessed values to reflect market conditions (Vlaicu and Whalley, 2011). Additionally, some states, such as Florida and California, have legislative measures that restrict a city’s ability to change property taxes by increasing assessed values. Because of Proposition 13 in California, there is a hard cap that limits property value increases to only 2% a year (Vlaicu and Whalley, 2011). California did see an increase in property tax revenues, even with Proposition 13, because of the increase in home sales. As properties sold in California, the assessed amount was based on the new sales amount; property tax revenue increased because of the increase in property transactions. Between 1996 and 2006, the median housing price tripled in value (Valicu and Whalley, 2011).

However, their research shows that the connection between the housing bubble climax in 2008 and the budgetary stability of cities in California were not overly interconnected. Unlike the federal government, cities must operate on a balanced budget. The results from the multiple statistical test performed by Vlaicu and Whalley show that when governments have an increase in property tax collection, they cut back on other tax receivables. There cannot be a huge windfall of money in a balanced budget without increased spending that may not be sustainable. Additionally, because the housing market is closely correlated with other economic factors (i.e. employment rates, education level, etc), an indicator of city budgetary policy is more connected to the overall economy. Sales tax is a larger portion of a city’s budget and much more susceptible to a volatile economy. All of this data implies that the housing bust of 2008 itself had little impact on city spending in California. The overall economic recession has more of an effect on local and state tax revenue than housing market changes (Valicu and Whalley, 2011).

Housing First program, a nationwide effort to address chronic homelessness encourages the notion that providing housing to individuals, without putting limitations on them, will further enable their transition from homelessness and will decrease the use and cost of public services such as hospitals, shelters and jails. This study specifically focuses on chronically homeless individuals with severe alcohol problems and the effects of Housing First on their lifestyle. One large concerns of chronically homeless, is the high public system costs because chronically homeless use local crisis services at high levels. When considering alcoholism, substances abuse and mental illness these costs increase. According to the website, a study of “Quasi-experimental design comparing 95 housed participants (with drinking permitted) with 39 wait-list control participants enrolled between November 2005 and March 2007 in Seattle, Washington.” Participants with the highest total cost in 2004 were selected from a rank ordered list of chronically homeless with alcohol related hospital emergency stays to move into Eastlake, a Housing First apartment building in Seattle, the additional individuals were waitlisted as control group. According to the study, Participants received $5 for attending the study introduction and $20 for each interview. Participants were interviewed at baseline and at 3, 6, 9, and 12 months after enrollment. In addition, researchers collected data from variety of public agencies such as Department of Health and Human Services, Harborview Medical Center (HMC), King County Correctional Facility, Public Health–Seattle & King County, and Downtown Emergency Service Center. The results indicated that those who stayed at Eastlake showed decreases in cost over time. Prior to acceptance their cost was $4066 per person, per month. After six months of living in housing, it decreased to $1492 per person, and finally down to $958 after 12 months in a Housing First program. Although limitations in study are present, the study was able to conclude that the overall cost does in public burden goes down and that “[h]ousing First is associated with improvements in the life circumstances and drinking behaviors of this chronically homeless population while reducing their use of expensive health and criminal justice services.”

On a comparison level, this study encompasses very small portion of homeless population and housing issues. These specific individuals are not able to retain temporary or permanent housing unless they are going through a Housing First model, because both temporary and permanent housing requires abstinence from substances. We learn in the Social Construction Theory that homeless are least deserving and are considered deviants. The society views them as a burden, yet in order to cope with being homeless they resort to substance abuse or have severe mental illness problems and their behavior is constantly criminalized preventing them from ever finding permanent housing. In a sense this is a psychological approach to serving chronically homeless; by providing them a home, a place to stay, they will be able to put energy towards bettering their lives by meeting with case managers and going through treatment.

"Remains of the Progressive City? First Source Hiring in Portland and Chicago" by Greg Schrock. Urban Affairs Revew, 2015, Vol 51(5)649-675

This journal article looks at a progressive policy, First Source Hiring, in terms of urban development as an alternative to the growth-oriented model. The progressive model focuses on a more equitable development for all rather than just urban expansion and upward mobility for a few. In the 1970’s and 1980’s, First Source Hiring was an urban progressive policy that required private sector contractors or those receiving economic development subsidies to work with publically sponsored employment and job training programs to hire the unemployed residents of that city first. The goal was to directly benefit community need and local unemployment rates (Schrock, 2015, p. 649-650). The program was used by many cities but was phased out by a changing economic and political culture in the 1990’s (Schrock, 2015, p. 650). This article looks to explain the First Source Hiring experience for current community planners with whom a resurgence in progressive policies is occurring (Schrock, 2015, p. 651).

First Source Hiring was first implemented by Portland, OR in 1978. The policy emerged from a combination of local and federal initiatives. Under President Carter’s Targeted Job Demonstration Program in 1979, 10 cities around the country participated, including Portland. A key component of this federal program was for communities to implement targeted opportunity strategies that included incentives or mandates to influence how government contractors hired their labor force (Schrock, 2015, p. 652-654). Opponents of the program, which included some unions, claimed the hiring policies infringed on their members’ ability to make a living. The 1990’s brought a changing political atmosphere; cities saw an onslaught of growth oriented, entrepreneurial mayors that replaced the progressive mayors of the 1980’s. Racial quotas and affirmative action were also being attacked during the 1990’s; First Source Hiring was added to these policies as discriminatory (Schrock, 2015, p. 655).

Schrock uses archival sources and interviews to support his premise that institutionalization is the key factor in whether a policy can be resilient to changing circumstances and has the ability to influence future actions (2015, p. 655). Policies must imbed practices and goals that are adopted by stakeholders both inside and outside of government. The degree to which a policy can be institutionalized depends on the level of adversity and the supporter’s amount of resources. Chicago had a large number of NGOs with the resources necessary to carry on the progressive ideals, even though the Chicago First Hiring policy was officially ended in 1991. Because the policy had been institutionalized, aspects of the Chicago First policy are carried on to this day in other economic and development policies. First Source Hiring is still legally a policy in Portland, OR; however, due to the fact that it bounced from agency to agency, there has been no enforcement of the policy since the early 1990’s (Schrock, 2015, p. 662). Therefore, the key is not IF a policy gets adopted, but HOW it is adopted, that can predict its effectiveness and viability over time (Schrock, 2015, p. 670).

G.Nelson

[http://www.financialsense.com/contributors/matthew-kerkhoff/fed-s-dilemma]

Kerkhoff, Matthew. "The Fed's Dilemma." The Fed's Dilemma. Financial Sense, 11 Sept. 2015. Web. 28 Sept. 2015.

In Matthew Kerkhoff’s article, “The Fed’s Dilemma,” he examines what the Federal Reserve will do, in regards to interest rates (leave put or raise rates), when they release their FOMC Statement at the end of September 2015. Kerkhoff utilize market indicators, such as the GDP quarterly reports, jobless claims and job growth, corporate profits, tax revenue collected, personal income levels, consumer spending, consumer sentiment and confidence, yield curves, to illustrate to the reader that the U.S. economy is in a relatively strong position, and this should be a positive indicator for the Fed to start to raise rates.

Kerkhoff illustrates that the Fed has two components in which they primarily utilize as indicators to move rates or keep rates constant: “Maximum employment and price stability --defined as 2% inflation” (Kerkhoff). In regards to maximum employment, Kerkhoff utilizes the U-6 rate, “a broader measure of unemployment that includes discouraged and underemployed workers,” is relatively high (Kerkhoff). Moreover, wage growth, an individuals salary, is less than ideal, and is not showing significant growth. The Fed is, also, missing the second mandated component to raise rates: Inflation. Kerkoff depicts that domestic inflation is relatively stagnant, hasn’t moved much since 2012, and the deflationary pressures from around are working to keep domestic inflation down. Furthermore, the IMF and World Bank requested the Fed to withhold from raising rates, stating that it could have adverse affects to the many countries and markets that are currently struggling.

If the Fed were to raise rates, Kerkhoff hits on a key point about the ramifications that could ensue. A higher rate means a stronger U.S. dollar, which means the products manufactured within the U.S. are more expensive to foreign consumers. This, in turn, would lower future growth, and also, create stronger deflationary pressures, but this time from within the U.S. Kerkhoff only brushes slightly on the issue of currency wars, however, by stating that other countries are working to devalue their own currencies in order to drive growth” (Kerkoff). This move by other countries to devalue their dollars acts as a catalyst for other nations, investors, individuals, and groups to flood into the U.S. dollar to protect themselves from devaluation, thus, causing more deflationary pressure upon the U.S. economy.

At the end of September, Kerkoff sees that the Fed could go either way in how they deal with interest rates --leave put or raise rates. In the past, Kerkoff illustrates, the Fed has worked to raise rates to control a growing economy, but this time they are simply trying to maintain a “’normative’ interest rate policy” (Kerkoff). It is unusual to have rates near zero when the economy looks so “robust.” Kerkoff believes it’s best for the Fed to raise rates because of the strength of the U.S. economy, and the mandated components do not involve global growth.

G.Nelson

The growing number of homeless people has prompted new outlets to write more articles on the ways in which society can help house or service those who are homeless. The article cited below talks about the rise of homeless individuals in Portland and the inability to enforce a camping ban. The camping ban that Portland uses, among many other cities, makes it illegal to establish or maintain a temporary place to live. The Portland Police enforce the camping ban but only when there are complaints about garbage and human waste, which means those who clean up after themselves can continue to illegally camp.

The use of tent villages has been an oddity for Seattle and parts of Portland. These are basically just small communities of tents in a given area. As the article points out. some of these tent cities have grown to become a public eyesore and have rife cases of disease and health concerns. The city of Portland operates two versions of these tent cities, Dignity Village and the RIght 2 Dream Too rest area. The Right 2 Dream Too recently was given the ability to purchase land in the city of Portland by the Portland City Council, which means they have the right to buy land to create a tent city.

My groups topic area is broadly housing policy, but looking closely at Homeless housing policy. Looking at the camping bans that have been put in place is one way to look at housing policy directed at homeless individuals, though the city of Portland has gone farther in offering specific areas for homeless individuals to "make camp" in that they don't have to wait for non-profit or emergency housing.

Link: http://www.oregonlive.com/homeless/2015/06/post_1.html

“The Economic Impact of Stray Cats and Dogs at Tourist Destinations on the Tourism Industry,” written by Diana Webster with support from Cats and Dogs International (CANDi), draws a connection between animal policy and tourism, particularly for American and Canadian tourists. It asserts that countries with more humane and efficient animal control laws will have more robust and successful tourism industries.

Webster writes that tourist destinations have a lot to lose if animals appearing to be homeless, ill, or dangerous are highly visible at tourism destinations. Based on a survey CANDi conducted of more than 1,200 U.S. and Canadian tourists, about 41% of tourists were less likely to return to destinations where they had seen stray animals, and about a third said they would report the experience to hotel or resort management, the tourism booking company, their friends and family, and on social media.

Of those 1,200 respondents, 63% of U.S. travelers and 61% of Canadian travelers has encountered stray cats and dogs on their most recent trips outside of the U.S. and Canada. For many of them, the experience was mostly emotional, although concerns about issues like public health, zoonotic disease (diseases that can be transmitted from animals to people, like rabies), personal security, and biodiversity are also important when considering feral animal populations.

Webster claims that the impact of stray animals on tourism could be in the millions of dollars for countries like Mexico and other destinations for North American tourists who are accustomed to pets as family, and not seeing them starving and ill.

Webster writes that some international tourist organizations engage in mass killings of stray animals before tourist season in order to hide the problem, but it is not a viable solution; the best solution, she writes, is sterilization through spays and neuters.

To that end, she encourages companies who profit off tourism in these areas to partner with government and animal control efforts. Many of the countries are developing nations, and do not have the resources or the institutional capabilities to handle this complex problem alone. Webster cites several examples, including hotels working with veterinary organizations for spay-neuter clinics, “cat cafes” to give stray cats safe places with food and water, and airlines helping to transport vets and support staff to these areas for spaying, neutering, and medical care.

Creating and sustaining economic development is complex. Tourism is an important part of that cocktail, though certainly not the only part; however, tourism only works if people enjoy the experience, and heartache over ill or starving animals doesn’t lead to fun experiences.

It is important to consider a multitude of factors influencing tourism, from cost and experiences to personal security, before implementing it as a primary economic development engine. Although I felt that some empirical data was lacking, this article shines a light on an area many probably don’t think about: The impact of animal policy on tourism and economic development.

— Amelia Veneziano

Following up on previously posted annotation regarding camping ordinances in Vancouver, WA I learned that the Council will allow overnight camping in public places. As mentioned previously, all laws in regards to park closures, public behavior will still apply and can cause arrests. Vancouver city's legal council pushed for the ordinance in response to the recent case in Boise, ID and in response to Department of Justice opinion. In order to avoid legal repercussions, and because going against Department of Justice would not bring victory, the city approved the ordinance. There is a huge problem with homeless in the Clark County, the lack of shelter and influx of homeless is a problem that this ordinance is nowhere near to fix. According to Andy Silver, of 823 different people that calling seeking emergency shelter, 722 (88%) were told no because of lack of space. Silver states that "this is a step in the right direction," but not "the end of the road." Criminalizing homelessness does not prevent or solve the homeless issues. It further disables people from finding a home. As Katherine Garrett, director of Share House explained, "in th eyes of the landlords, people who have three camping violations on their record might as well have a felony." The Vancouver Police Department will not be doing "sweeps" of homeless camps but would continue to respond to neighbors complaints regarding illegal activity. Police Chief James McElvain said that the police won't "immediately cite" someone and that "their priority starts with crimes against persons and then crimes against property." There is a lot of hype around homelessness and issues revolving housing of people in Clark County. This camping ordinance is a very minor step that will ease some issues but will not come close to eliminating the serious lack of shelter and permanent housing. It's good to see progress so close to home, but social construction theory teaches us that homeless are considered deviants and deviants don't deserve nearly as much as resources. Perhaps, small improvements such as these can change the minds of communities and create homes for many.

G.Nelson

Swagel, Phillip. "Legal, Political, and Institutional Constraints on the Financial Crisis Policy Response †." Journal of Economic Perspectives 29.2 (2015): 107-22. Web.

Phillip Swagel, former Assistant Secretary for Economic Policy at the US Department of Treasury, discusses in his essay, “Legal, Political, and Institutional Constraints on the Financial Crisis Policy Response,” that the US policymakers response to the 2007 and 2008 financial crisis was shaped by the limited legal authority and tools available to the US Department of Treasury and the Federal Reserve at that time, and how new tools and authority –access to public money and greater jurisdiction-- were made available because of the financial crisis’ “’unusual and exigent’” stresses upon the broader US economy (Swagel 107). The new tools and authority of the Treasury Department and the Federal Reserve were not imminent, but required the crisis to unfold more seriously, so that the policymakers could realize the economic emergency as more of a pressing issue and pass legislation that would grant the Fed and Treasury Department more tools.

The Treasury Department and the Federal reserve had the following tools at the ready, pre 2007 and 2008 crisis: Discount window was available for banks in need, discount in the federal funds interest rate, FDIC backing, and encouragement for investors not to fire sale their assets and to avoid foreclosure on properties. However, a majority of tools were not available for the investment or insurance institutions that held a substantial amount of subprime loans and derivatives. Swagel illustrates that the Federal Reserve’s and Treasury Department’s tools were not just underwhelming in their initial attempt at remedying the crisis, but they, also, initially underestimated the seriousness and complexity of the crisis, as did the policymakers.

At the collapse of Bear Stearns, the Treasury Department and Federal Reserve realized that more investment firms would soon collapse if new tools and authorities were not granted. Swagel illustrates that the Fed turned to its only ace in the hole: “emergency authority…[to] lend to ‘any individual, partnership, or corporation’” if a loss is not expected (Swagel 110-1). Even with the Fed’s ability to loan a limited amount of assistance, this legal authority did not give the Fed or Treasury Department direct access to public money, however. After Bear Stearns’ negotiated bailout with the Fed, it took nearly 6 more months, October 2008, to enact the “Emergency Economic Stabilization Act that created the Troubled Asset Relief Program [(TARP)]” (Swagel 111). Beforehand, the Treasury Department understood that even attempting to approach congress without a real-time economic crisis of illiquid assets and credit market seizures, congress would “loath” the idea of providing public funds to investment banks for bailouts.

Under the same tools of restraint and provisions that granted the Fed the option to bailout Bear Stearns, Swagel illustrates that it was the decision of the Fed not to bail out Lehman Brothers that led to an even tighter constraint on market liquidity and seizures within the credit market. With limited options from the Fed and Treasury Department, the unforeseen consequences of letting Lehman Brothers collapse exasperated the crisis further and put a constraint on debt markets, which affected normal government operations of securing debt. Two days after refusing to bailout Lehman Brothers, however, the Fed provided loan assistance to AIG, American International Group, an insurance company, because the Fed believed AIG to be more financially sound and important to the US economy. The deal between AIG and the Fed was not clean or clear, however, and the two are currently in litigation, today, from the deal struck in 2008. The same week of the AIG and Fed deal, TARP was proposed --which passed a few weeks later in October 2008-- and two more banks failed, WAMU and Wachovia (Swagel 117). With TARP, the Treasury Department would be able to provide financial support to the markets of $700 billion. Swagel illustrates that if the Fed and Treasury Department had the tools earlier and the foresight, the crisis could have been more contained, but the policymakers would not have been able to justify the $700 billion cost of TARP without such a monumental crisis.

Swagel contends that if another financial crisis happens relatively soon, the Fed and Treasury Department will be limited in how they can intervene because of the 2010 Dodd-Frank financial reform bill and the expenditure of an already lowered interest rate by the Fed. Politicians stumped on the promise of not bailing out businesses that were “too big to fail,” so the likelihood of congress approving another direct infusion of funds, such as TARP, would be improbable, but with the Dodd-Frank act, governments may be able to seize businesses directly to control operations and direct the losses onto the bond holders and investors, which will limit the loss to the taxpayer because of new FDIC provisions. Swagel states that by studying what happened from the 2007 and 2008 collapse, a more effective response may be garnered in a future crisis.

G.Nelson

Adam S. Weinberg, a professor of sociology at Colgate University, partnered with Peter Cann, executive director of the Madison County (New York) Industrial Development Agency, on a project called “Hamlets of Madison County.” The project aimed to reinvigorate the rural hamlets of central New York, with populations of roughly 500-1,800.

Weinburg’s real-world work led to a theory of sustainable rural economic development, which he outlines in “Sustainable Economic,” Development,” published in the Annals of the American Academy of Political and Social Sciences in 2000.

Weinburg identifies “high road” firms as a critical component to rural economic success. High-road firms employ “the best workers and latest technology to yield products with a high value” (Harrison 1997; Thurow 1996, Kanter 1995). The work is carried out in smaller facilities, making components for larger products across geographic regions, which then supports a global network of production.

Essentially, companies in rural areas would make small items to contribute to larger projects — such as electric conduit for engineering work. They would do so without greatly increasing their environmental or social footprint in the community, but rather hiring local and regional talent and expanding upon current industry in high-paying jobs. The leaders of these companies also have existing ties to the community, which would keep them from relocating to a different area once established.

In attracting, or encouraging, high-road growth, there are three critical elements: Human capital (educated or highly trainable employees); physical infrastructure (communication and transportation, like high-speed data transmissions and access to airports); and adequate financing (including grants, bank financing and seed start money).

A community also needs to have an “Entrepreneurial Social Infrastructure,” or ESI, defined by Flora, Sharp and Flora as “a bundle of factors contributing to a locality’s ability to respond to challenges in a rapidly changing context.” That might mean industry and education teaming up to identify the most important areas to focus on for job growth. It certainly means differing factions joining together for the good of the community.

Weinburg says that local mobilization won’t happen without “social chance” — an idea expanded upon by the British sociologist Sibeon. Social chance is an event like two people meeting at the right place and right time, or a focusing event like a disaster. Social chance can be encouraged through local mobilization, or the opportunity to organize and synthesize competing ideas.

But even with these elements in place, a community first needs incentive, which can be either monetary (jobs, better schools, improved infrastructure) or less tangible — hope, he writes, is a good incentive.

Small communities are often resistant to change, Weinburg writes. They have seem economic growth efforts come and go, and suffered with consequences, such as effects from natural resource extraction, industrial waste and prisons. Small communities are also committed to their lifestyle and quality of life, so an influx of new employees and development is unappealing. There are also often competing and loud factions preventing different developments, out of fear of change or to promote their own projects.

High-road development solves at least some of that, Weinburg writes — it allows a town to stay small and capitalize on what already exists, thus contributing to their own economy and the global market.

As for Madison County, it’s a work in progress. The county has hired a consultant to assist with writing grants, but much of her time gets wrapped up in local politics. The businesses it has have grown, but only one is flirting with larger growth through contracting.

“A start has been made,” Weinburg writes. “… Sufficient organization and resources are available to suggest that production for the global market is not out of the question. One day, it might be possible to point to this county in central New York as an example of how a rural area can restructure itself to become an active agent of globalization.”

The fate of rural economic development is important to our policy report, as we will focus, at least in part, on the influence of economic development engines and organizations like the Small Business Association, which support entrepreneurialism and growth.

This is an article from June 11, 2015 edition of the Economist about the future of cities located in the Midwest of the United States that are suffering from post-industrial economic decline. The three cities that are analyzed are Gary, Indiana, South Bend, Indiana, and Galena, Illinois. All three of these cities have historical roots consisting of economic policy centered on industrial employment. However, as U.S. manufacturers have gone out of business or outsourced production to foreign countries, cities all over the nation, but particularly in the Midwest, have seen never before rates of vacant buildings, unemployment, high school drop-out rates, and crime. For survival, industrial cities must reinvent themselves by focusing on economic diversification anchored on fundamentals: geographical location to attract tourism and new business and to fiscally focus on institutions like universities and hospitals. Additionally, dependence on a single employer for a city has proven to be too risky as an economic plan; multiple businesses and new industries must be present in an increasingly volatile, non-heavy manufacturing market.

Galena, Illinois is an example of a post-industrial city that has reinvented itself as a National historic site that attracts more than one million visitors per year. Galena met its post-industrial decline much earlier than many other Midwestern cities; by the end of the 19th century, it had gone from a busy metropolis competing in size with Chicago, to a ghost town. However, due to some clever economic planning during the 1960’s, city planners invested in historical preservation and put Galena back on the map as a tourist destination.

South Bend, Indiana is another example of post-industrial survival. The Studebaker headquarters were located in South Bend until the company officially went out of business in 1963; it became a “company town without a company”(Economist, 2015). Fortunately, South Bend had 2 important economical anchors that have kept the city afloat: Notre Dame University and Memorial Hospital of South Bend. Although South Bend has seen huge increases in unemployment and poverty since the 1960s, these 2 key institutions have kept the city viable. Currently, the mayor is trying to lure technology companies to South Bend with tax incentives, inexpensive power, and the geographical location of a cool climate (ideal for manufacturing technological components).

By comparison, Gary, Indiana has not fared as well as Galena or South Bend; Gary is a smaller version of Detroit, Michigan. Gary has some 5,000 abandoned buildings (about ¼ of all buildings); this is an eyesore and attracts criminals. After a change in Indiana’s property tax rules one year ago, Gary lost more than half its annual budget; this meant the city faced shutting down half of the services it could offer. The current mayor of Gary, Ms. Freeman-Wilson pleaded with the White House for Gary to be a recipient of the “Strong Cities, Strong Communities” initiative, which gave Federal funds to the 7 most distressed cities in the nation. Presently, Gary has received $6 million in state funds for building demolition, and the mayor has applied for a $21 million federal transportation grant. Gary will focus its economic policy to invest in becoming a transportation hub, being located right on Lake Michigan and just 24 miles away from Chicago (America’s third largest city).

To read how semiconducting nanotubes can be used to potentially improve eyesight click here:

http://www.acs.org/content/acs/en/pressroom/presspacs/2014/acs-presspac-november-12-2014/artificial-retina-could-someday-help-restore-vision.html

To read general information on nanotechnology click on the following link:

http://www.nano.gov/nanotech-101/what/definition

The following article is an interestng example of using nanotechnology to create jewelery:

http://www.nytimes.com/2014/11/18/style/international/jewelry-nanotechnology.html

Possible Therapy? Find out what the author Dr. Yamauchi says in this regard.

http://www.futurity.org/flu-virus-capsid-789992/

surprise, surprise

WTF WHY DO WE HAVE QUOTAS FOR OUR PRISONS?!

Read more about this research in these two news articles: DNA Analysis Indicates Domesticated Dogs Originated In Europe

http://www.redorbit.com/news/science/1113004478/domestic-dogs-from-europe-dna-analysis-111513/#MkuDjF53wbrGoqcb.99http://www.redorbit.com/news/science/1113004478/domestic-dogs-from-europe-dna-analysis-111513/

DNA hint of European origin for dogs

http://www.bbc.com/news/science-environment-24946944

Check out a Science special issue on Dogs: http://www.sciencemag.org/site/extra/dogs/

Wolves were domesticated much earlier than thought. Researchers discovered that wolves were domesticated by European hunter-gatherers between 19,000 and 32,000 years ago. The analysis cannot, however, be used to determine the origin of the dog, argues a Danish DNA scientist.

http://sciencenordic.com/wolves-became-domesticated-dogs-much-earlier-thought

THIS

I hope that the focus on prohibition by the drug policy reform movement helps sidestep a similar effect happening with cannabis.

list of institutions with open access policies

The value of a unit depreciates with time (normalized for any trend in overall prices). That's a very different scenario than taxes.

The issue with this paragraph is that it assumes regulation is not to blame for the high cost of affordable housing. It may well be the case that it is.

But what is that potential, does it really exist?

Identify where/how this ground is established.

Policies and procedures are barriers, but there are many more barriers beyond that which get in the way first.