Phoenix’s income crisis
Posted inPhoenix Politics: Arizona/Phoenix

Phoenix’s income crisis

Last week, the federal Bureau of Labor Statistics released per-capita personal income (PCPI) for metropolitan areas in 2013. For Phoenix-Mesa-Scottsdale, income grew 0.7 percent to $38.745.

This placed the sixth-most-populous city and 12th largest metro area at 285th in growth against other American metropolitan areas. It was not a good year for growth. The metro average was 2 percent. Booming Seattle ranked 223rd.

The truly troubling number is the actual income. The national average was $44,765.

Compare it to other similarly large metropolitan statistical areas: Boston (10th largest), $61,754; San Francisco-Oakland-Hayward (11),  $69,127; Detroit-Warren-Dearborn (14), $42,887; Seattle-Tacoma-Bellevue (15), $55,190; Minneapolis-St. Paul-Bloomington (16), $51,183.

Or compare metro Phoenix with smaller metros against which it competes for talent and capital: Austin, $44,760; Charlotte, $41,645; Denver, $51,946 and Portland, $46,461.

Metro Phoenix comes in lower than any other large metro with a big city in it. What's going on?

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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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Posted inPhoenix

How’d that boom work out for you?

The data are in and most Phoenicians have to show for the Great Real Estate Boom…not much. The federal Bureau of Economic Analysis this week released its comprehensive survey of per-capita personal income for metro areas and counties in 2007. It's the gold standard yardstick for measuring how the average person was actually doing after the Bush "boom" and as the nation prepared to slide into recession.

In metro Phoenix, per-capita personal income totaled $35,185, an increase of 1 percent from 2006 vs. the national average of 4.9 percent. From 1997 to 2007, income growth was 3.9 percent, vs. 4.3 percent nationally. More context: Phoenix's 2007 income was only 91 percent of the national average. Although Phoenix is the nation's 13th most populous metro area, it ranks 134th among metros in per-capita personal income. In 1997, it ranked 126th. This should be astonishing, if any one takes note.

Let's drill down deeper. Phoenix doesn't compete for talent and capital against the national average that includes Mississippi and Alabama. It competes against other big cities (here and abroad), whether it wants to or not. How did its competitors do?

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Posted inPolitics: National

Let’s look at the fundamentals of the American economy

Republican John Sidney McCain III is trying desperately to back away from his "fundamentals of the economy are strong" line, even going so far as to say he meant American workers. But not so fast. In fact, it is the fundamentals of the American economy that are in dangerous trouble. Let us count the ways. I’m going to have to give you some straight talk, my friends:

1. Debt. The nation is deeply in hock to creditors worldwide. We used this line of credit to finance the housing bubble, wars in Iraq and Afghanistan, tax cuts to the richest Americans, rebate checks that went into the ether and the privatization of hundreds of billions of dollars in government services. It’s paying for the bailout of Bear, Sterns and it stands to take a devastating shock from Freddie and Fannie. From government to business to consumers, Americans are debtors, and most of the debt has been pissed away on war, sprawl, speculation and corruption, as opposed to building something for the future.

As the economist Nouriel Roubini has pointed out, the current account deficit in the ’90s came back as investment in private innovation, but for the past eight years it has been used to finance deficit spending and debt. Moreover, now much of this debt is held by nations that do not necessarily wish us well, including China and the petro-states such as Saudi Arabia.

This situation dangerously limits our options in foreign policy. It makes it a near certainty that living standards will take a big hit as we have to pay it back. Remember, when the Soviet Union collapsed, the first people in the door were the bankers, wanting to be repaid for the debt the Bolsheviks defaulted on after the 1917 revolution.

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