Arizona’s jobs mess, in charts
Posted inPhoenix

Arizona’s jobs mess, in charts

The state has still not made up the jobs lost in the Great Recession…

AZjobs

Only Nevada and New Mexico among this sampling of other Western states have failed to recover (California has). Even hard-hit Oregon recently recovered all the jobs lost. Note that Washington is similar in population but has far more jobs…

AZothers

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Posted inPhoenix

The rule of holes

It's the sweet season in Phoenix, with the usual nice weather, resort amenities and economic forecasts. The panel at the annual lunch sponsored by JPMorgan Chase and ASU was its usual sunny self. According to the Arizona Republic, Philadelphia economist Joel Naroff said, "Better times are ahead. I truly believe this is a recovery, that this is an economic change that you can count on." ASU economist Lee McPheters told attendees, "2011 is going to be the best year for Arizona's economic growth in the past three years. So, I think there are bright skies ahead."

Another sense of the luncheon comes from the tweets by Channel 12 anchor, and former Republic business editor, Brahm Resnik: "Show of hands at Chase econ forecast luncheon indicates (fewer than) 6 people in room of 1200 believe recession is over." "1 year ago #PHX job losses were worst in US. Now, PHX No. 2 in US (sure doesn't feel that way)." " 'At threshold of recovery,' McPheters keeps saying." "Home prices have not hit bottom, Pollack says." "Apartment market only (commercial) market that looks good. The rest of you might consider suicide," Pollack tells crowd. "Pollack says 4-5 more years till commercial construction returns to normal (same as his forecast year ago)." Pollack being Elliott, the developer/economist who was once one of the biggest cheerleaders of the Real Estate Industrial Complex.

It's one sign of the trauma wrought by the Phoenix depression that Elliott Pollack is the realist in the room. Unfortunately, the overall tone sounds much like every year's brightside delusion, while the facts confronting Phoenix, Arizona and America keep sliding in the opposite direction.

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Posted inPhoenix

Phoenix recovery? Part II

The data and just driving around town make it clear that the Phoenix economy is not recovering. That the news snippets and economic forecasts desperately trying to spin things otherwise are almost exclusively focused on real estate is telling. Metro Phoenix so narrowed its economy that it was America's last big factory town, building houses. When this unsustainable game of risk crashed, the region was devastated. But like a dying rattler, it is still snapping its fangs, wildly hanging onto the hope that the Growth Machine can be started up again. It's always worked in the past! This is the forlorn cry of so many caught in past depressions and economic turning points. Buffalo… Youngstown…Detroit…

The old housing economy is not returning. The one based on large-scale output of tract houses built by national builders on a foundation of liar loans, high leverage and vast government subsidies for the suburban or exurban "American dream." Now that dream is a nightmare. The nation is much poorer after the Great Recession, yet the imbalances and high debt remain. Incomes and living standards for average people are in deep trouble. Millions of houses remain to be sold, with many more in the private "shadow inventory" as well as in the toxic "assets" taken off the hands of the banks by the Federal Reserve. Nowhere do these realities operate with more ruinous consequences than Phoenix. Any "new normal" will provide little relief for a regional economy whose business plans were based on an unsustainable profligacy of building and population increases. That little blip that might mean "the bottom" or "stabilization." So?

What's astonishing is the lack of realistic or imaginative thinking on the part of what passes for Arizona leaders faced with this harsh future. Or faced with the mounting evidence of how distorting, costly and damaging to the earnings of average people the real-estate monster had become. Metro Phoenix has never been so dependent on real estate, yet no one seriously wants to break the jones. To understand the future of discontinuity. Pinal County, a national ground zero of exurban crisis, sees only one way out: More sprawl. In fact, Pinal should be returning to agriculture as fast as it can; Arizona needs the exports to a growing Asia, as well as the capacity to feed itself in a high-cost energy future. But the self-destructive hits just keep coming:

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Posted inPhoenix

Phoenix recovery? Part I

So desperate is "the Valley" for good economic news that the Information Center published a story on the big circulation day of Sunday quoting the Coincident Economic Activity Index of the St. Louis Fed. It reminds me of the old contest we had when I was a young reporter in San Diego: How few words could you write to alienate a reader (the winner: Otay Water District). In any event, this measure allegedly "shows Arizona's economy probably hit bottom in December." Then it quotes U of A economist Marshall Vest, a very nice man who was utterly wrong about the state's economy in the run-up to the collapse, writing that the national recovery is "proceeding nicely." (!) The story adds, "But Arizona's recovery is lagging behind other parts of the country,
though conditions are looking better." OK, then.

The mandarins of economic knowledge in Arizona, prodded by their masters in the Real Estate Industrial Complex, have been predicting a bottom for more than two years. Now every little blip or sideways shudder is even more urgently flung out with incense and sparklers as a sign of "the bottom," or better yet, "recovery." Most of these yearnings are realized in extremely limited snapshots of real-estate activity, a problem in itself. Even the St. Louis index only looks at four metrics, concerning employment, hours worked, wages and salaries. And for every pebble of "good news" comes a landslide of less "positive" stories. In Forbes' list of "America's Recovery Capitals," even Vegas is given a sense of potential; Phoenix is nowhere. With Business Insider's slide show of "12 Cities Where Home Sellers Are Being Forced to Cut Prices Like Mad," both Mesa and Phoenix make the rogue's gallery.

Boosterism and denial aside, the reality is that Phoenix's economy is not recovering in any meaningful sense of the word. The idle rich did very well in this recession — a historic anomaly — so to the extent that north Scottsdale and Paradise Valley are a B-List destination for these critters part of the year, there's your "good news." Otherwise, the situation is harsh. I do not wish this on Phoenix. I wish it were not so. I wish I were 25 and had a squash player's body. But unless Phoenicians face up to their reality, whether they wish it that way or not, a real recovery will be even longer in coming, narrow in its benefits and short-lived.

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Posted inPhoenix Politics: Arizona/Phoenix

Arizona depression II

My favorite hotel, adjacent to the Willo Historic District, is full. Two large conventions are downtown. This was all booked before Arizona passed its Jim Crow anti-immigration law. Now every restaurant owner and person associated with the tourism industry I speak with is terrified about the growing backlash against the state. Many here are outraged about boycott calls. But it's fair game: Without the boycott, Gandhi, King and Chavez would not have had a key weapon against a grave moral injustice. I wish people would boycott by legislative district, while spending money and time in central Phoenix and Tucson, as well as with Hispanic- and progressive-owned local businesses. The rocks come with the farm, and the residents of the state allowed the Kookocracy to run wild, not only with SB 1070 but a host of madness.

Phoenix is in trouble anyway. Mayor Phil Gordon, a good man who loves the city and came into office seven years ago amid such hope, seems adrift. The composition of the city council has changed and for the first time since the reforming Charter Government movement took power six decades ago is becoming politicized. The ability to do the big things accomplished by Skip Rimsza and seen through by Gordon appears gone. Huge swaths of the city look like Dresden after the rubble had been carted away. The largest business, based on signage, remains "Available." Light rail (we built it, you bastards) is a big success; for example, I see many guests at the hotel taking it to restaurants, the convention center or to and from Sky Harbor. Yet the fiscal crisis is causing cuts in frequency, which will hurt ridership. The bus system has already been reduced to service levels seen in small cities.

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Posted inPhoenix

Reality bites

You know times are tough when even the JPMorgan Chase outlook luncheon, which for years was an orgy of boosterism and denial, sounds like a post from Rogue Columnist. ASU economist Lee McPheters said Arizona may not recover until 2014. McPheters is one of the genuinely intelligent ASU economists who usually pulled his punches because of past Kookocracy threats against honesty, especially the nuts' vendetta against the truth-telling Tom Rex. Elliott Pollack, the booster rubber-chicken-circuit fixture whom the Info Center consistently refuses to identify as the developer he is, even sounded clear-eyed about the dire situation. (You can read the entire report here).

Unfortunately, Phoenicians have two emotional speeds: irrational optimism and suicidal depression. While they should take this highly establishment verdict on the situation as a call to arms, I fear they will break out the cyanide capsules or just go to the booster sweat lodge chanting…all together now…Please, God, just give me one more real estate boom…

The reality is that things are even worse than the luncheon crowd heard. Phoenix is in a depression. I've created a searchable tag for it if you're on Twitter (#PhoenixDepression) to catalog all the news and data (my Twitter feed is jontalton). Yes, as my readers have heard for years, the region is too dependent on real estate and now has an inventory of houses and spec commercial space that will take years to work out. And, yes, contrary to the "Goldwater" Institute's sock puppet on the Info Center's editorial page, Arizona has been hit harder than any other state by job losses. Indeed, metro Phoenix led the nation in job cuts in October compared with the same month in 2008. Alas, the troubles run much, much deeper.

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Posted inPhoenix

Hey, y’all, watch this!

Since at least the 1980s, the Arizona Republic and its successor, The Information Center, have periodically rolled out campaigns to make the economy more than attracting freezing Midwesterners and building sprawl. I did my time in the trenches on several of these efforts earlier in the decade. The work continues with a Sunday story about attracting high-paid jobs and diversifying the economy. On the Viewpoints front, we find a piece explaining the stakes and solutions by Ioanna Morfessis, the first president of the Greater Phoenix Economic Council. Then there is the obligatory rebuttal by the Local Krackpot "Think" Tank: "Cut taxes and incentives to create jobs." Also: "Reducing government red tape would also create a job-friendlier climate."

And does anyone wonder why Phoenix and Arizona keep falling further behind? First, why does the "Goldwater" Institute have standing to weigh in on anything? It's an advocacy group funded by national "conservative" interests, repeating national talking points just like all the other right-wing "think tanks" that were seeded around the country out of the Mont Pelerin Society and other wealthy reactionary groups in the 1980s and 1990s. It is like PETA or the NRA. In no way is it an organization that does real research. And after years of the same old lines, what does it have to say that's new? What does its sock puppet on the editorial page have to say that's new? Nothing. Can't the Info Center find even one independent conservative voice to write something that's relevant and interesting?

More importantly: The ideology so relentlessly peddled by the "Goldwater" Institute has run Arizona for years if not decades. Its polemicists always strike the pose of victims standing up against the hordes of socialists that control everything — but it's a lie. They won. They're sore winners, out to quash any dissenting voices. Now they must continue to distract, keep the poor talk-radio zombies thinking that guv'munt is the problem. They must continue to carry water for the Real Estate Industrial Complex, which really controls the state (Please, God, give me one more boom…). All this because their ideology, implemented with ruthless, relentless effectiveness, has driven Arizona into the worst depression in its modern history. Their ideas have been tried and failed. And still they rule the day.

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Posted inPhoenix

Valley of denial

ASU's Morrison Institute has always labored under two Sisyphean tasks. First, its public-policy scholarship necessarily antagonized the state's ruling elites — hence, it was forced to pull its punches to avoid losing funding, and, even then, the elites wouldn't accept its work. Second, it was treated in the media as the "liberal" equivalent of the (Bob) Goldwater Institute. This, even though the "Goldwater" Institute is an arm of the national right-wing advocacy machine, not a genuine think tank that engages in open-minded, peer-reviewed research. With the loss a few years ago of my sometime collaborator Mary Jo Waits, author of Morrison's most prescient and important works (Five Shoes, Meds and Eds), the institute became even more marginalized. Now Morrison is trying once again to become part of the conversation under the leadership of Sue Clark-Johnson, retired Arizona Republic publisher and close friend of ASU President Michael Crow.

Good luck. Unfortunately, the first effort, Forum 411, seems destined for the dustbin of forgotten, well-intended reports at an even faster speed than its predecessors. It is brief, as to be expected from an entity now headed by a former Gannett executive, and strives to be inoffensive. Think of a pep talk. Anthony Robbins on economic development. It states two broad themes: the obvious (Arizona needs to diversify its economy) and the untrue (which I will deal with momentarily). Worst of all, it leaves critical information entirely out. The loss of Waits' intellectual heft is obvious. So, too, is the continued bowing before the Real Estate Industrial Complex (the report's sponsor is the suburban mall developer, Westcor).

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