Wednesday, July 29, 2009

Two Ways of Counting Jobs

Economists measure employment in a very specific way. We look at the number of people employed as well as the number of people unemployed. In addition we use the establishment survey to get a count of the number of non-farm payroll jobs in the economy.

Politicians count things a little differently.

PORTLAND, Ore. (AP) - How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program's first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state's accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime...



Tuesday, July 28, 2009

Gasoline Pricing Game in Real Life

We played the gasoline pricing game in class today. I must note that the class did really well, one of the teams actually got promoted. Usually all four of the teams get fired. In real life it's a little more serious.

HT: Michael Giberson at Knowledge Problem


Sunday, July 19, 2009

Running the numbers on Hydrogen

Michael Giberson at Knowledge Problem has the details on Jetstream Wind's new plant in New Mexico.

From the comments:

Put another way, if this plant delivered 10 MW per hour every hour of the year, and was able to net $100/MW over ooperating costs, then it’s net free cash flow would be about $8.7 million per year. Consider that given current power prices and assuming some O&M cost, this thing will likely net $2-3 million per year.

So I ask, is a $2-$9 million per year return enough to justify a $219 million investment?

Actually that's being excessively generous. I doubt the plant will cover its operating costs, let alone pay back any of its capital costs.


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Competing with Tax Incentives

Although Arizona is a great place to produce energy from solar, it hasn't seen much manufacturing of the solar panels themselves. Part of the reason is that other states offer significant tax incentives which have been lacking in Arizona. State Senator Barbara Leff sponsored a solar manufacturing bill which was recently passed and signed into law by the governor. Apparently it is bearing fruit.

Chandler has made the "short lists" of two large German solar manufacturers looking to build new plants in the United States, said economic-development director Christine Mackay...

"For the first time, we were taken seriously," thanks to the incentives, she said of her whirlwind recruiting effort at the Inter Solar North America conference Tuesday and Wednesday...

Before she left for the conference, Mackay said that Chandler has lost prospective solar businesses to Oregon and New Mexico, which had been offering financial incentives Arizona did not.

"I was beyond thrilled" when the governor signed the incentive bill, she said, adding that within hours of the action, she set up the California trip and meetings with 30 key solar-industry officials.

I generally dislike tax incentives targeted at a specific industry. First, it seems unfair for the government to pick winners and losers (aside from the fact that throughout history they have been pretty bad at it.) I would prefer that we provide incentives for all businesses by lowering all of their tax burdens.

However, with the state budget crunch, we're not going to see that happen so we seem to be relegated to doing it piecemeal.

(Just so you know, Senator Leff is my state senator.)

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Competing with Foreclosures

One of the problems home builders have is competing with foreclosures. Apparently Fulton Homes has figured it out.

Since March, when it unveiled several lower-priced models designed for economy and energy efficiency, the company's sales have catapulted from about 12 homes a month to more than 80...

Despite continued stress in the Phoenix-area housing market and the national economy, conditions have shifted favorably for the bankrupt builder and its competitors, local experts say.

Chief among them is first-time home buyers' recognition that a vast pool of aggressive speculators now stands between them and their dreams of buying a foreclosed home for pennies on the dollar, Phoenix-based real-estate consultant Jim Belfiore said.

"We've heard this over and over again: Buyers (are) becoming frustrated with the process of purchasing foreclosed homes from lenders," said Belfiore, of Belfiore Real Estate Consulting, which collects and analyzes sales, customer feedback and other market data from home builders.

Not that this helps reduce the excess inventory of housing units...

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Saturday, July 04, 2009

July 4th Phoenix Tea Party

I went to the Phoenix Tea Party on the capital lawn this afternoon. It was scheduled to run from noon to 2:30. I got there 20 minutes early as people slowly gathered and could only stay for about an hour. Shortly after I got there I counted 50 people. There were a couple of hundred by the time I left.

This particular event was pretty impromptu. It was only set up last week and didn't have the promotion others in the area had.

Several families came including small children in strollers. There were a lot of retired folks. I also noticed a number of men, like myself, that came by themselves. (My wife is working today.)

I enjoyed the signs, especially those carried by the kids. Like the last time, the message seemed to be stop spending our future.

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