Household Formation: Divorces, Births Correlated with Unemployment Across States

From the Simpsons episode where Milhouse’s parents get divorced:

Kirk van Houten: “Singles life is great, Homer; I can do whatever I want. Today I drank a beer in the bathroom.”
Homer Simpson: “The one down the hall.”
Kirk van Houten: “Yeah, and another great thing, you get your own bed. I sleep in a racing car, do you?”
Homer Simpson: “I sleep in a big bed with my wife.”

Kirk is not only employing someone who makes race car beds, he’s also taking up another unit of housing. Kirk van Houten is engaged in the messy business economists refer to as household formation, creating another unit of demand for housing (as well as boosting aggregate demand for things like race car beds in weak economic times). If you haven’t seen it already, there’s several arguments that a wave of household formations will start, taking pressure off the housing market and boosting overall aggregate demand. See Yglesias here, Krugman here and Karl Smith here. Read more....

Dissecting Romney’s Statement: What Are Problems the Middle-Class Has That the Poor Don’t?

I’m sure you’ve seen the latest by Mitt Romney. On CNN he said:

“I’m in this race because I care about Americans. I’m not concerned about the very poor, we have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich, they’re doing just fine. I’m concerned about the very heart of America, the 90-95% of Americans that are struggling.”

He clarified by saying:
“I’m sure there are places where people fall between the cracks,” Romney said. “And finding those places is one of the things that is the responsibility of government. We do have a very ample safety net in America, with Medicaid, housing vouchers, food stamps, earned income tax credit. We have a number of ways of helping the poor. And yet my focus and the area that I think is the greatest challenge that the country faces right now is not, is not to focus our effort on how we help the poor as much as to focus our effort on how to help the middle class in America, and get more people in the middle class and get people out of being poor and becoming middle income.” Read more....

U.S. futures edge up after jobless data

U.S. stock futures edged higher Thursday after weekly jobless claims fell more than anticipated, illustrating ongoing improvement in the labor market.

U.S. stock-index futures erased mild losses after the release of Labor Department figures that had applications for unemployment insurance payments declining by 12,000 to 367,000 last week.

Separately, the government reported a 0.7% rise in U.S. productivity in the fourth quarter, roughly in line with estimates.

Futures on the Dow Jones Industrial Average DJ2H -0.08% climbed 5 points to 12,658 and those on the Standard & Poor’s 500 stock index SP2H -0.02% added 0.8 point to 1,320.60.

Nasdaq 100 futures ND2H -0.03% rose 2.25 points to 2,489.75. Read more....

'I Stopped Denying People': Ex-Bank Of America CSR Tells All

Here's a testimonial from a former Bank of America customer assistance employee. She was fired on Monday for offering repayment plans to too many customers, even those who "deserved" the 29.99% APR for making late payments. After hearing her story, you might conclude that this job was never a good fit for her skills. The next time you run up against a dead-sounding CSR, though, remember that people like Jackie don't make for profitable collections department employees, which is why they don't stick around for long. Read more...

Newt Gingrich to Juan Williams: Americans Want Paychecks, Not Foodstamps

Newt Gingrich won the South Carolina primary over the weekend. This may all be a historical blip depending on what happens in Florida, but if Gingrich wins that state we could see a drawn out primary. Conservative and liberal writers are trying to make sense of what happened, and conservative writers and the conservative establishment are starting to panic. But Gingrich’s win is really the conservative establishment’s chickens coming home to roost, as their recent actions made Gingrich’s campaign a winner in three key ways.

Food Stamp President There’s been a bunch written about how Gingrich’s attack of food stamps brings up images of racism embedded in pre-welfare reform arguments. You can see the standing ovation for Gingrich’s arguments in the video linked above for what this looks like in practice. But beyond the specifics of a singular program, the imagery of food stamps links back to the Tea Party vision of the welfare state. Read more....

Bank of America Stole My House!

I dedicate this video to the millions of Americans affected by Bank of America's lack of due diligence. From selling bad mortgages to foreclosure fraud, this affects us all. It is real.

I won't let Bank Of America bully you in death, as they did in life. RIP Tim
I completely relate to being suicidal because of Bank of America's abuse because it happened to me. Bank of America made my life a living hell with lies, threats and fraud. I had a possible mini-stroke once on the phone with them. I was in such a confused state and also in such an economic hole that I refused to be taken to the hospital due to our high deductible. I became so overwhelmed with stress that I develped Fibromyalgia. Thanks BofA!!! Read more.....

Back on track

AT A polling station nestled among mansions and marinas in the wealthy Miami suburb of Coral Gables, a tanned couple in designer sunglasses pause on their way back to their Porsche to explain how they voted in Florida’s Republican presidential primary. The man says he voted for Mitt Romney due to his knowledge of business and finance, which should equip him to tackle America’s economic ills. Plus, adds his companion, Mr Romney has a better chance than the other candidates of beating Barack Obama come November.

It was not just the sleekly wealthy, however, who plumped for Mr Romney. A few miles away, underneath towering motorway viaducts on the fringes of Little Havana, a grizzled Cuban-American in a panama hat also believes that Mr Romney is the most electable. And in the opposite direction, in a recently developed neighbourhood where one in every 69 homes went into foreclosure in December, an elderly woman argues that Mr Romney has both the character and the policies needed in a president. There were voters who complained that Mr Romney is not a true conservative, that he is too slippery in his opinions—but even some of those said they voted for him, as the strongest candidate in the general election. That helps to explain Mr Romney’s lopsided victory in Florida: he took 46% of the vote, more than his two closest rivals, Newt Gingrich and Rick Santorum, put together. Read more...