Robert Paterson's Weblog

Unemployment is permanent and structural - Need for a Reivention

Why am I making such a deal about unemployment? Because it is the main driver for people losing their homes now. There is no remediation if a person has no income.

There are are millions of Americans in the pipeline - who have lost their jobs or who will - who will inevitably lose their homes.

But what about the "Recovery" will they not get their jobs back? Have a look at this chart form the Department of Labor and think more about will the jobs come back in time?

The first thing we see is that the wait to find a new job is now very long indeed. It is in fact "off the chart".

Now look at this chart - what I think it shows is that over the last 60 years that has been a collapse in manufacturing jobs that is systemic and long term. What is happening today is the final curtain for the idea that a person with a high school education can support themselves - that is 75% of the population in America!

This chart tells us that we are back to end of the last depression before the  war made such a difference to manufacturing. It shows us that we have been in a long term systemic decline since 1980. It shows us that there is no quick or easy fix.

On a related note the Unemployment Benefit Trust Fund will run out of funds in the early part of 2010 - so those that are relying onunemployment to keep them in their house will lose that too - unless there is the politcal will to boost the fund in a major way.

So what does this mean?

I don't think that there is a simple rebound in the near future. Traditionally, the jobs come back - but we can see here that they cannot. Yes there may be Service Jobs but no one can own a house on that.

I don't see any way around having to Reinvent the Economy. Find out how to return to a high employment and local focus. Easier said than done right? But there are a lot of people who have a vested interest in finding out the answers. Many of them are already reinventing local food etc. My bet is that if we open our eyes - we see see the real "Green Shoots" and they will be where people who will not give up are trying things that are radically new.

Post Consumerism?

Being middle aged, chubby, bearded and male has had one big advantage. I have joined a club of similar types who have all found some success in the old world but who now profoundly reject it. But this group are more than misanthropes - most of them are very perceptive as well. Here is a gem that came in this morning:

Except for embellished versions of goods and services that were available up to the late 1980s there's nothing any longer to motivate the modest status aspirations of the masses -- which up until then were kept sweet and pacific. Unless they rotate their kitchen, bathroom and garden make-overs faster than ever which, maybe, a quarter of the population may still be able to do in the coming years, there's fat little else to acquire -- to be able to say "I've arrived!" -- "Here I am. I've joined the middle-classes now".

Consumerism as we've known it in the Western world has gone for good now.

It is going to take at least another generation or two before politicians realize this (if indeed they'll have a meaningful role at all in future times -- we'll probably be run by the civil servants, just like the Chinese). Meanwhile, where is status to be found if it's not in the goods we buy?

Well, I'll tell you. Status is to be found by means of much more ancient attributes than merely possessing gewgaws. It will be by skill, ability, integrity and reputation within the many specialized niches which are now so characteristic of this increasingly complex world.

It's going to require a totally new attitude to education. Instead of education being about "expanding one's mind" as those romantic pseudo-intellectuals have been telling us -- and has held sway -- for the past 50 years, it's going to have to be by educating children to levels of specific skills that enable them to get a job in this new complicated world.

Once they have a job and have some status in society then, by all means, it's highly desirable for them expand their minds if they want to. And the best way to do that is for the state to get out of education as fast as possible and let parents' aspirations decide what sorts of schools they want their children to go to.

This itself would take two or three generations before it works its way round to actually upgrading the formative culture within the majority of homes, but why should adults not be given the freedom to choose quality -- as it emerges sooner or later in everything else they buy? What makes education so different from choosing a dentist or hairdresser or buying a flat-screen TV?

KETC - Mortgage Crisis - Measuring Impact

Back in May, we started to think about how a TV Station could help its city cope with the then emerging mortgage crisis. Thanks to CPB, we at KETC got our chance to test our ideas that we could.

The test is over and the results are in. A major part of the project was measurement. We knew that emotion and anecdote - powerful as it is - would not be enough.

How do we measure media? In most cases on air we can get a sense of who is watching. On the web we know exactly who is watching. As we started the experiment to see if a Public TV station could help a community help itself we had to know more - we had to know if what we did - on air, on the web, in person and by measuring itself (Remember in Quantum the act of measurement affects the measured) had an impact.

Would what we did activate action?

Would what we did change perceptions?

Would what we did have a result in improving the health of our community?

Might acting as a social catalyst be the higher goal and role for public media?

Well dear readers, the research is in - yes to all of the above.

A huge thank you to Professor Dhavan Shah and his wonderful team at the University of Wisconsin (see follow on)

One of the points that we measured was the number of calls that the United Way got from people seeking help timed against our on air pieces. Here you can see a massive bump directly related to what we did.

There is more - we found that the act of measuring/surveying had also a huge impact

What do these numbers mean? Are they good, OK or mediocre?

I have shared with you just the highlights - we have a lot more information that tells us that not only were we able to shift beliefs, motivate reaching out and action but also increase support for the station.

It is going to be fascinating to see what happens as this work spreads more broadly in the public TV and Radio world.

It's one thing to bring good content and information to the public. It is another to be able to help activate the public to take back power and control into their lives.

I feel that we are on the edge of a breakthrough - the networked world is finding its place and its organization

Doing God's Work - KETC Channel 9 and the Mortgage Crisis

As a boy, I always wanted to be part of something noble. But as a young man, I ended up being part of the Matrix instead. It has taken me nearly 15 years since leaving the Matrix to become part of something noble. My work in Public Media has taken me to that place and Jack and Amy at KETC Channel 9 in St Louis have given me that opportunity.

This video will, I hope show you what I mean. This is the great work of our time. Helping to give people back their power.

Sub Prime - Now Prime

It's not over yet - get ready for the Prime Crisis (David Hirst - The Age)

Now, as subprime fades, the prime mortgages come into play and they will extinguish subprime's significance. From $US300,000 homes, we move into the $US1 million range, now worth perhaps half that and falling. That is the cause of Dimon's grief and warning.

A defection from prime to foreclosure has begun and JPMorgan's books show the trend. Dimon and others clearly fear that this will be the driving force behind balance sheets of financial institutions in the US and the world for years to come.

As last week's run on the now bankrupt IndyMac so graphically illustrated, Alt-A is the mortgage class to watch next. This, the class between subprime and top prime, triple A, is now showing all the hallmarks of a rerun of the subprime debacle. IndyMac distinguished itself as an Alt-A provider. By early next year, we will see subprime fading from the charts only to be replaced by Alt-A foreclosures.

As we begin act three, as nervous fingers reach to the hot stove to remove the pudding, we will find the proof. That is just part of the climax. If we concur — and I do — with Bridgewater Associates' statement that subprime will soon be behind us, we must now attempt the near- impossible task of determining what is in the remaining mix.

Dimon is almost desperately signalling that Alt-A is not the only cause of coming pain by saying even prime mortgages will see significant deterioration.

As observers digested his comments over the weekend, they began looking at other classes that have shown evidence of falsification and exuberance that were evident on the upswing.

The obvious classes are commercial real estate, as mentioned, construction loans, leveraged loans, credit card and car debt, high-yield corporate debt and emerging market sovereign debt.

All this to the backdrop of scarce political leadership, the twin problems of war and oil in the Middle East and a mood on Wall Street best summed up in an email I received at the weekend from a senior staffer at one of the majors who, of his office, quoted Stalin's line: "It takes great courage to be a coward in the Red Army."

But the daddy of all the problems is still housing.

Until we see that illusive bottom, all talk about recovery and catastrophe is but talk.

So the show just must go on. It could be a very long third act indeed.