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Sunday, January 29, 2012

Economic Stories of Relevance in Today's World -- January 29, 2012

(The Hound): You can follow the themes and see what is being addressed and what is dying on the vines. What was said three years ago still has relevance today and I believe that what was said three years ago and today will have relevance three years from now. We will keep moving forward.

The State of Hickory 2012
Wordle: The State of Hickory

The State of Hickory 2011
Wordle: The State of Hickory 2011

The State of Hickory 2010
Wordle: The State of Hickory 2010

The State of Hickory 2009
Wordle: The State of Hickory North Carolina 2009

U.S. Bridges, Roads Being Built by Chinese Firms
- ABC News - 9/23/2011 - Cities hire Chinese instead of American workers for building projects.

Mitt Romney's Bain Capital 'earned' $342 million by bankrupting a company and firing 850 Floridians - The Jed Report  - Jed Lewis - January 23, 2012 - Mitt Romney's Bain Capital 'earned' $342 million by bankrupting a company and firing 850 Floridians. In addition to the $242 million, Bain took $100 million in management fees for running the company. But despite their $342 million payday, Bain led Dade directly into bankruptcy.              
Bain ultimately relinquished its ownership claim, but it had already taken $342 million out of company, an 11-fold return on its $30 million investment in less than eight years. Fortunately, the bankruptcy didn't destroy the company, which emerged from bankruptcy and has prospered since Bain gave up its ownership stake. But even though Dade is now a successful company, its success comes despite Bain Capital—not because of it.                              Obviously, the story is timely because of the upcoming Florida primary and the fact that nearly one thousand Floridians lost their jobs as Bain bankrupted the firm, but if Romney gets the nomination, it won't simply fade away. Perhaps he can convince Republicans that questioning how he managed to "earn" $342 million while bankrupting a company is the same thing as assaulting free enterprise, but he won't be able to convince Americans of that. And given that Mitt Romney cites his private sector experience as the number one reason why he should be president, that's a big problem for Mitt Romney to have.

Drowning In Hypocrisy - Paul Craig Roberts - - January 24, 2012 -
The US government is so full of self-righteousness that it has become a caricature of hypocrisy. Leon Panetta, a former congressman who Obama appointed CIA director and now head of the Pentagon, just told the sailors on the USS Enterprise, an aircraft carrier, that the US is maintaining a fleet of 11 aircraft carriers in order to project sea power against Iran and to convince Iran that “it’s better for them to try to deal with us through diplomacy.” .....                      If it requires 11 aircraft carriers to deal with Iran, how many will Panetta need to project power against Russia and China? But to get on with the main point, Iran has been trying “to deal with us through diplomacy.” The response from Washington has been belligerent threats of military attack, unfounded and irresponsible accusations that Iran is making a nuclear weapon, sanctions and an oil embargo. Washington’s accusations echo Israel’s and are contradicted by Washington’s own intelligence agencies and the International Atomic Energy Agency. Why doesn’t Washington respond to Iran in a civilized manner with diplomacy? Really, which of the two countries is the greatest threat to peace? ........                                Washington sends the FBI to raid the homes of peace activists and puts a grand jury to work to create a case against them for aiding a nebulous enemy by protesting Washington’s wars. The Department of Homeland Security unleashes goon cop thugs to brutalize peaceful Occupy Wall Street demonstrators. Washington fabricates cases against Bradley Manning, Julian Assange, and Tarek Mehanna that negate the First Amendment by equating free speech with terrorism and spying. Chicago mayor and former Obama White House chief-of-staff, Rahm Israel Emanuel, pushes an ordinance that outlaws public protests in the City of Chicago. The list goes on. And in the midst of it all Secretary of State Hillary Clinton and other Washington hypocrites accuse Russia and China of stifling dissent.

Sales of U.S. New Homes Unexpectedly Decline in December
- Bloomberg - Alex Kowalski - January 26, 2012
- ... Purchases of single-family properties decreased 2.2 percent to a 307,000 annual pace, figures from the Commerce Department showed today in Washington. The median forecast in a Bloomberg News survey of economists called for a rate of 321,000 home sales. Last year marked the worst year for the industry in records going back to 1963.             “Builders continue to contend with a number of existing homes that are deeply discounted,” said Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We’re expecting a bit of a pickup in 2012, but we won’t see a meaningful increase as long as new homes are competing with those existing homes.”

Warren Pollock on This Week in Money

Thursday, January 26, 2012

The State Of Hickory 2012

Skin in the Game
This is the fourth year in which I will attempt to define where Hickory and its surrounding area presently stand here in the year 2012, where we have been over the past few years, and where trends show us to be headed. As always, I have tried to take into account opinions from across the socioeconomic strata and the demographics of this area. The Hound has become an entity that leads the local area in the discussion of the economic, social, and cultural issues that face us all. We drive the news! We have developed relationships with many of the structures of governance in our area and developed legitimacy and credibility through the relevance of what is discussed here. We have awoken the local media to the point where submissions from this blog become part of their thought process and we believe this is a very good development.

Though I talk about the Hound's relevance above, I would like to reiterate that this mission is not about any endeavor of personal ego or esteem. This mission is as stated about the vitality, growth, and future of this area we live in. We want to make every part of this city and metro area relevant. We truly believe that everyone has a role to play, unlike the actions of most of the leadership of this area has shown. In the past year, it has been unfortunate that we have not progressed much and much of this has been due to the misguided priorities and the impediments that certain power brokers and elected leaders have created.

Certainly there are significant achievements that we can be proud of. Over the last year, we have seen the unelected structure of governance continue to gain ground on positions that they have staked out in trying to resurrect the local economy back to steady growth, but the elected bodies have struggled to say the least. The Catawba County Chamber of Commerce has formulated several initiatives in conjunction with the educational bodies and the Economic Development Corporation that are bearing fruit. These associations have continued to carry out actions related to creating new economic realities. We can look to several positives created by CVCC, which include the on-campus practice hospital. We can look at tangible gains made by the Economic Development Corporation, which include the Turbo Coating Manufacturing facility. We can look to the steady progress made by the Appalachian State Partnership, Lenoir-Rhyne University, and the entities associated with the Champions of Education. What we have not seen is a game changer. When it comes to the creation of a game changing event and/or entity, it is the opinion of most that it is going to take the hands on guidance of community leadership, most importantly elected leadership, to make it happen. I don't want to include the Catawba County leaders or Conover in with this, because both of these entities have been very responsive to input by independent entities in the area.

The most exciting event that took place in 2011 was the Edison event sponsored by the Chamber of Commerce in conjunction with the Small Business and Technology Development Center. This is the reason why the Catawba County commission should not be thrown under the bus, because they have been very supportive of initiatives such as this and a couple of the members of the Commission were present for the final event and the Commission Chair Kitty Barnes even was a presenter for the award. People talk about optimism, yet don't seem to understand that they have to put skin in the game and everything isn't about politics. I don't understand why local politicos would be anything other than supportive of initiatives such as the Edison Project.

Conover put skin in the game with the Conover Station Project. While the City of Hickory has touted the Brownfield grants as a way to revitalize unused, blighted properties, Conover has already taken action with the revitalization of the Warlong building by retrofitting this old building towards modern realities and concerns. This building looks to be a new, modern center of economic activity in Conover. In my opinion this will end up being Conover's new Downtown with several new sites of Economic Commerce, like the Manufacturing Solutions Center, surrounding this building. Where the City of Hickory and its power brokers have demanded that Union Square must be Hickory's Downtown, Conover has decided to take a more realistic and open minded approach towards the realities of the future.

Stagnation through Economic Uncertainty
For most of the area, 2011 seemed to be a year of staleness. A year of going through the motions and plodding along. What most would define as being in a rut. There has to be a lot more happen than what I describe above in order to turn the local economy around. Risks are going to have to be taken in order to regain the ground that has been lost since the turn of the century. Certainly these need to be informed, educated, and calculated risks, but they most certainly will be endeavors that may create economic exposure due to the uncertainty in every aspect of modern economic realities. The deal is that we are exposed right now. We have been exposed for a decade. The problem is that many of the people in decision making positions in this community have not been pushed to make the necessary changes and seem to be waiting for something perfect to fall into their laps before a complete collapse takes place. What they can't seem to mentally grasp is that the hour has grown late and the chances of winning the lottery are slim. We have to create our future.

I have never understood why local officials want to attack national surveys that measure local economic conditions. It is like a kid that doesn't want to acknowledge their school report card. It is what it is. Man up! I especially can't understand it, because I am sure that most of these people made good grades when they were in school. These surveys are impartial statistical assessments that measure predefined categories of interest. They are created to help people, governments, and businesses understand where communities are succeeding and failing. They aren't contouring the survey to ensure our community fails. We need to face the fact that we are failing. They aren't going to change the methodology of the survey to curry favor with us. We are going to have to change our economic realities to climb the ladder of success. Communities have arisen from just as bad of circumstances as we find ourselves in today, but they had to take action to move forward.

If it were one or two surveys, then we might be able to legitimately ignore the data, but the problem is that we are at the bottom of just about every national economic survey and have been in the bottom 10% of these surveys for years. This past year we were listed as the 6th saddest metropolitan area in the United States in a Gallup-Healthway study... Forbes listed this metro as the 189th (out of 200) Best Places to do Business in the U.S.... And the Milken Group listed the Hickory Metro as the 189th (out of 200) Best performing Cities in the U.S.

Those that want to say that we are destined to plod back to economic growth can look at several cities in the Milken Survey that climbed several notches in the past year. You see 15 metro areas that have climbed at least 50 positions in 2011 and these cities aren't region specific. We all know that a lot of this is due to the problems with the manufacturing predicament we found ourselves in over the last decade, but we have failed to take action to evolve rapidly towards new economic paradigms and realities, when the writing was on the wall over a decade ago. We have faced the issues related to the uncertainty related to globalization of industry since 2001 and local officials didn't even acknowledge the problems were structural issues until 2008. We were constantly told that about the feeling that "this is gonna be our year." We needed a lot more than feelings then and we need more than feelings now. We need action.

Action speaks louder than words
I hear it constantly that we need to quit talking about issues and take action on the issues. That we need to quit talking about problems and start taking action towards solutions. I have listened to fellow participants during brainstorming meetings that I have attended say that we are just talking in circles. I understand the frustrations, but we must all understand the need for good communication in a Democracy. And what these people, who complain about the lack of action, need to realize is that in the end they are just talking also. They haven't committed to any action.

What is the desire of many of the people who create the impediments towards progress? Many of these same people who constantly complain about too much talk and too little action are the same people who are quick on the trigger telling us what we as a community cannot do. They think we can tweek around the edges and rearrange the the deck chairs on the Titanic and everything will be just fine. They like the way things used to be and think they can take us back to some mind warped nostalgic era that they have dreamed of from their youth. What they won't admit to when they talk about how great Hickory was in the 1940s, 1950s, and 1960s is that Hickory was segregated and we aren't going back there. We have to enable ourselves to prosper under the modern realities associated with inclusiveness.

I agree that we have to take action. That action requires capital procurement. The Hickory City leadership went to Chattanooga, Tennessee in December and the leadership of Chattanooga flat out told the Hickory City leaders that they turned the city around through private contributions from businesses in the area, major individual benefactors, and public-private partnerships. Where have we seen major investments by such entities in this area?

We need leadership to have a heart-to-heart with local businessmen and tell them that they are going to have to put a little extra skin in the game, if they want to stop the implosion of this community. I can hear the vast majority of those businessmen saying, "How dare you. I do enough. I pay taxes, hire people, and work hard." Folks, we are in a hole and we are going to have to do some extraordinary things to get out of that hole. We don't need local elected officials to act as enablers for a certain segment of the business population who only want leadership to support their narrow personal interests and fail to take responsibility to ensure the vitality of this community's ecosystem. In the long run, if this community fails so will the long term viability of their business within the community.

We have to start looking at the big picture. I look to initiatives like Hickory By Choice 2030. The problem is that while the document serves a purpose, it doesn't create a mechanism to help institute an agenda big enough or specific enough to have meaning. Look what China does. They create very specific plans that have forward visions of 50 to 100 years. That doesn't mean that they are going to achieve 100% of those particular objectives. It means that they are forcing themselves to have a vision of the future through an implemented structural process. It is easier to set goals and tweak them than to try and piecemeal a future together haphazardly. Look at the way Hickory is laid out. Look at its old manufacturing structures. Hickory has not been strategically designed. It is a mess the way that Hickory has been laid out and there are people who want to keep moving forward in such a fashion. That is unreasonable. As we heard at the entrepreneurial summit a few weeks ago, there has never been a normal. We have to create the future. If we do not create the future, it will be created for us by external forces. We have so much to gain by joining together in a process of structured goals and development. Sure, these plans should be able to be reassessed, but to not have plans is to set yourself up to have others determine your future!

We need leaders who know how to lead
One of the biggest issues that we face in this community is the loss of confidence. Where does that come from? I believe that it comes from the lack of leadership in this community and the lack of vision. Some think that it is the duty of citizens to ask local leadership what they can do to help. I think that local leadership ought to be able to convey a vision to citizens and tell them how they can help implement that vision. That would create confidence.

Think about being on a battlefield. You don't have the Sergeant telling the Corporals and Privates that it is their duty to figure out how to implement the plan of attack. The Sergeant is handed a battle plan and he informs the soldiers of what is expected of them. If anything goes wrong, then the highest ranking officer improvises tactics and communicates the plan to the soldiers. If the Sergeant cannot fulfill this important obligation, then he is removed and the next highest ranking officer makes the decisions.

As citizens of this community our input should be expected and appreciated, but in the end we must understand that elected leaders will be the decision makers. If they abdicate their responsibility, then it is incumbent upon the citizens to remove those who are not fulfilling their responsibility. Our elected leaders are paid a salary, benefits, and receive perks, privileges, and stature that regular citizens are not afforded. I have heard these benefits of office belittled many times as a stipend. These elected officials should realize that we have citizens in this community that are living on less than what this compensation affords. Many of our local citizens are doing without health insurance in these times. No, these elected officials are handsomely rewarded and if they don't think the job is worth their time, then they should step aside for someone who appreciates what is mentioned above.

Think about the issue of creating an economic entertainment dynamic within our community. As an example of the juxtaposition that those associated with the Hickory Hound find themselves in versus Hickory City Officials. We have talked about an amphitheater that would accommodate 3,000 people minimum with the possibility of 5,000. We believe this could bring value by bringing people from other communities into our area to attend concerts and spend money while visiting the area. Instead, the City decides to put up a tent on Union Square as a multi-purpose facility for the farmer's market and they say it can be used as an amphitheater. It is all about semantics. Mayor Wright says on the radio that he understands that some people in the community want a 5,000 seat amphitheater... well if he had his wish we would have a 17,500 seat arena for sports. You see the difference is that we aren't touting this idea, because we want a personal amusement. We are talking about an economic driver, while the Mayor is belittling our idea by personalizing it around himself.

If community leaders would get behind an effort such as Visionaire Jets and help them get Financing by whatever means and tie the economic incentives that we see being offered to other outside entities to job creation by Visionaire in our area, then you would see immediate excitement take root. I believe if we saw a Microlending function as an economic incentives package tied to paybacks and clawbacks, then we would see entrepreneurial development in our area.

Burke County, with an “entrepreneurial certified” effort, now has $378,000 of microlending in place with over 14 clients. This started several years ago with a very successful effort in Valdese led by their City Manager, Jeff Morse. The initial funding was from “One North Carolina”. This program was so effective that it was followed by a roll out to the entire county with additional funding from the "Gold Leaf Foundation" fund. The same mechanism and board that had learned in Valdese was left in place for the county wide effort.

We need to lose the egos. We need for local leaders to stop looking to themselves as politicians first. We don't need this "Bring it to me mentality," that breeds a sense of entitlement that everything has to be filtered through some absurd closed and arbitrary system. Leaders should not be waiting for ideas to be brought to them. They should be actively seeking ideas and fleshing them out. And decisions should not be manipulated to fit personal agendas. This is America, we don't need or deserve a King.

People are looking for signs of hope that the area is turning around and I think if we did have some local initiatives instituted by the people we elect and brought to fruition, then you would start seeing excitement build up and people in the community talking about how we are turning it around. If economic optimism were achievable through political platitudes and propaganda, then we would already have achieved it.

Its time to get Real
In hearing this week that we were the eighth worst metropolitan area to find a job, we found a local media that was trying to find a way to not be so negative about the circumstance. The message from the media is that we are going to take this bad news and turn it around. The unfortunate reality is that we have already been down this path umpteen times over the last several years. As I pointed out previously, we have bounced around the dregs of these surveys for the better part of a decade. Until 2008 no one admitted that we had structural issues, and since admitting that we do have structural issues it has been a constant drumbeat that we are going to turn it around. What makes you think that this is the time when we have bottomed out and are going to start addressing the issues that will start us towards turning the situation around?

When looking at that U.S. News and World Reports survey, the reporter states that the problems with the California cities that make up much of that bottom 10 list are related to the Real Estate bust and its lingering Depression. Our local officials and media have glommed onto this factoid and stated that our problem has nothing to do with the Real Estate Depression. I think they are missing something here also. Yes, our property values did not spike the way that they did in California, Florida, or Nevada; but haven't you seen the same issues they face with houses for sale and/or that have been foreclosed upon in this area. Have you seen the statistics related to people being underwater on their mortgages. This means that residential homes in our community are overvalued. This makes it easier for those who are deeply in the hole to walk away from their home. It also means that it is harder for those who don't want to take the hit on their credit to leave the community to seek employment elsewhere. And most all of us know people who are paying two mortgages. Eventually, if the economic momentum is not turned around, you will see housing prices and property values fall drastically in our area. What does that portend for those who have built significant equity in their property?

One problem that many of us see is that we have a local media that has been quick on the trigger to blame Washington and Raleigh, but refuse to make critical comments about what is happening here in this area. Many of us ascertain that this is because no one in Raleigh or Washington is listening to/reading what they have to say, but they will be getting a phone call or the cold shoulder if they ask questions deemed to be hostile towards community leaders. So what we have seen is that they basically hand the local leaders the microphone and let them have an open platform to direct their own interview or in the case of the print media submit whatever material they want unfettered.

Several Million dollars have been spent to compensate local leaders over the past decade. Criticism is naturally a part of accepting a public position. Think about a Professional Football team. You have a coach and a quarterback. If you have a terrible record, 4-12 or worse for several years, how long do they keep their positions? Does the media go around talking about how they are doing the best they can? Most of you have seen what happens. Do you keep doling out millions of dollars in compensation waiting for circumstances to change or do you aggressively demand accountability or seek to change circumstances. Who is in charge? The players or the owners?

In Conclusion
The things that are said on this blog are not presented lightly. I don't take joy in bluntly communicating this message to you. We are in a dead serious situation in dead serious times. The time is long past due for a put up or shut up agenda. It is time for accountability. The theme of 2012 is that we need to implement strategies that promote and exhibit decisive meaningful action... not padding your buddy's pocket... not moving forward your personal agenda... not making decisions based upon personal whims and fancies... Community First! We need to see actions this year that aren't related to low hanging fruit. We need some of that beautiful fruit that we have to climb the tree to obtain.

How long are we supposed to be patient? How long are we supposed to wait?

May God Bless this Community in the Upcoming Year!

Wednesday, January 25, 2012

The Corporate Media and the Control of Information - Silence DoGood

“What is to be done?” If you’ve read any amount of political or social science material, you’ve no doubt run across those words. Vladimir Lenin began a treatise with them long before the October Revolution in order to solidify the party core to foment revolution. Nah, I’m not advocating a revolution, I think it’s on its way without my words, pro or con. But that is for the individual him or herself to decide based on what they know, what they see, and in the end, what they believe.

Many have talked about the quality of information we receive today. How it is rife and loaded with political correctness, how it is slanted and skewed to portray and lead one to draw a particular conclusion, a desirable opinion, a favorable point of view, all for the favor or benefit of the one who is providing that information or favored by them. News and information is loaded with bias and it is very difficult today to find just the facts of any situation, regardless of your personal bias, as to what the truth is. But we are inundated with news carrying a particular message, from a specific perspective, that seeks to match our own view of the world. So habitually sourcing one source for information can lend itself to a rather obtuse, irrelevant, and narrow point of view of the world, regardless of what side of the fence you happen to reside on. Fox, MSNBC, CNN, and all of the main stream networks are slaves to advertising and the dollars that are invested in them. Each of those has their own particular view to push and want you, the viewer to embrace it as well. The print media is no different. Sure the press is free. They are free to tell us about or more importantly, not tell us about, what they see fit to edit in or out of their particular medium, be it print or broadcast. And if the editor or publisher, or the director or producer is a bit too zealous with providing that information, those advertising dollars dry up.

The control of information in order to dominate is contrary to our society and any freedom you may hope to salvage in the ensuing years. But that is exactly what is happening in the United States of today. Information and situations are controlled, spun, told in half-truth, double speak, and contra-indicated in order to confuse, befuddle, twist, and in the end, influence. But that is not their job, nor, in the sense of what the framers of the Constitution had in mind with the 1st amendment, their purpose. The empowerment of the media via the Constitution was meant to allow the media to be the watchdogs of government and to inform the people of what was going on. To keep the people informed of the facts of what government is doing, going to do, or has done. The purpose of that is so that the people can make informed decisions regarding their representatives and know how they are being represented. That isn’t happening today nor has it for quite some time. From the original intent to the current end product seems to have undergone its metamorphosis shortly after the beginnings of the industrial revolution in the late 1800’s. The publishers and owners saw the kind of empire to be made with railroads, coal, steel, and all the trappings of a modern industrial society and decided that they too could apply those principles to their particular vocation and thus grow and prosper much to the detriment of the truth, the facts, or what is truly going on at any one particular point in time.

Does that mean that anything and everything should be made public? Certainly not, at least not in such a timely fashion that it would aid an enemy or thwart a truly favorable outcome for the United States. But the truth of the Kennedy assassination, the Martin Luther King assassination, Area 51, and any other governmental action or investigation that has taken place and for which the statute of limitations has expired, should be made public and not redacted. The truth, the cold hard facts of the issue is what is at stake and what the people deserve. It is often said that the people are stupid, the person is smart. In that regard, we are informing persons, not people. And if you care to notice, all of the major politicians are quite quick to foment what it is the “American People” want, expect, demand, deserve, or are looking for. Notice how often they use that word ‘people’, now that you know the context within which it is being used, since I just provided you a common maxim among those in politics and political science. And reports should not be sensationalized for the sake of entertainment. The news is not nor should it be entertaining. If you want to be entertained, watch “Survivor” or any of those shows of the same mindless ilk. News is, after all, news. Right or wrong, good or bad, mundane or sensational, it should be reported without colorful prose, fanciful words, or what anyone associated with the broadcasting of the story thinks. We don’t need to be told what we just saw in that regard. We just saw it, let it sink in. No one needs to be nostalgic about a State of the Union address or Presidential candidate debate that just ended. In the same regard, keep your so-called experts and send them packing. Apparently media outlets think that lending the word ‘expert’ to any number of commentators appearing ex post facto of a story to, again, tell us what we just saw and interpret what you just saw is somehow, empowering. No it isn’t. They are trying to influence and tell you what it is you need to think about what you just saw.

On the local level, politicians should not be allowed to enter into closed session to discuss anything other than those things which are strictly limited to closed session. And legal counsel should offer that advice as a matter of course prior to the closed session as a means of due diligence and as a precautionary measure to their client bodies’ politic. Local politicians should not be allowed to continue a policy or practice that is known to be wrong or illegal, despite what the historical premise is behind it.

And yet, knowing with relative certainty that there are those that read this blog with regularity that can bring that sort of information to the fore, refuse to do so, opting instead to be a member of the status quo and the laissez faire attitudes that comprise the conditions under which the vast majority of us now reside. On the basis of profit and as a wage slave, those same people have elected to succumb rather than do what is right.

You, me, us need quality information and all of the information concerning any issue in order to make a valid decision. The quantifiability of the decision is to the individual but the information should not influence the decision rendered. It needs to be whole, complete, unabridged, and factual in its entirety. We should expect and demand no less of the press and of government. Everywhere we look it has gotten to the point that the trust of either is dismal. It’s time we held both to a higher standard for the sake of all.

Tuesday, January 24, 2012

Optimism? Pessimism? Realism? - Personal Reflection

Over the last few years with the economy in the dumps, many of us who have struggled have heard comments about how, as individuals, being more optimistic could help individuals move forward through their economic travails and get back on their feet sooner and headed towards the path to economic success. Some even surmise that our local community is suffering, because of a pervading pessimistic mood that has taken hold in the community like a contagion. I have been chastised time and time again for not being upbeat about this community. Maybe it is just my inherent personality, but I can't get a feel for what these people are saying.

I understand belief systems, I understand devotion, I understand perseverance and endurance... That is what keeps me going. That is what gives me hope that things will turn around. Yes, it is up to me as an individual to keep moving forward and keep challenging myself, but the anxiety and the depressed state of my emotions to me is understandable. I had no problem with making a modest income and not having all of the fancy trappings of life, but the last five years of my personal life have been a struggle; not in terms of making ends meet as much as not making personal economic progress -- closer to old age with nothing to show. I cannot do the physical work that I do when I get much older. And what does this treading water hold for my future?

I believe that intellectually through the necessity of the expansion of my cultural and social understanding that I have grown greatly. We have leaders on the local level all the way up to the top of the pyramid in this nation who think that if you have the opportunity, then you should work yourself to death. In my line of work, working on a line in a kitchen,  you will not live very long if you work 60 hours a week. I used to do it up until a few years ago and it tears your body up and is mentally very stressful -- to the point of physical and mental exhaustion. In the end what I am espousing is that I believe that it has been necessary for my priorities to change.

Maybe it has been a blessing that so many have had to take a step back from the rat race. I have read stories lately about how the labor dynamic in this country has been permanently altered. Productivity is up, because of robotic automation. Jobs have been offshored due to transfer costs related to labor costs versus the bottom line Corporate Profit picture. While this has gone on, since the year 2000, we see the economic realities of a cost of living that has increased by at least 30% (Consumer Price Index), a median household income that in real terms has fallen by 10%, and a United States population that has grown by 10%. None of that bodes well for the economic future of this nation unless their are dramatic shifts in its economic realities.

As I have stated to others, many of us rightfully feel anger and frustration towards the apathy, ambivalence, and status quo mentality of many of the people in this community; who seem to be saying that the economy is bad around here, because we have bad attitudes. I disagree with that assessment and believe that the anger and frustration comes from the bad economy, a lack of vision of many people in this community, impediments by many in decision making positions towards taking action, and a lack of empathy towards those who are less fortunate.

I can tell you that I don't seek pity. I certainly don't want someone patronizing me. All anyone wants is opportunity. Impediments block opportunity. A lack of acknowledgement of those impediments makes the problems we face even worse. 

I try to convey messages of relevance on this blog. I try to provide proper references and give detailed data and statistical summaries of what I proffer here. I also try to fully separate my opinion from the material presentations that are presented. Yes, I do display emotions, because I am a human being; but unlike the Dinosaur media, I don't try to pretend that I am impartial without a rooting interest, because I am an advocate, but I am an objective advocate.

One thing that I believe that we have spread here on this blog is that we must strive for excellence. That means that WE are going to have to take some risks and get out of our comfort zone  I do realize that there are people who are still doing well economically. I know people from every segment of the socio-economic strata. Many of these people are going about their lives business as usual. I am an observant person. I see the cars people drive and many are obviously still going out to dinner and spending lots of money. But I also see the melancholy that has pervaded much of our society. There is a sense that something is missing. Maybe, just maybe, it is that God and spirituality have taken a back seat to material acquisitions. I see people who wear their religiosity on their sleeves, while promoting their personal material badges. I don't believe that those ideals go hand in hand. Think Humility.

When I speak of striving for excellence, I am not talking about the personal attainment of luxuries. I am talking about the overall "Quality of Life" environment that surrounds us as individuals. I believe that the ecosystem in which we live is integral to the excellence of us as individuals. If the people around me are happier, then I am going to be happier. If you are in a room of 100 people and 10 are in a bad mood, then you can still say that "there is always one in every crowd" and the attitude of the room will remain positive. If you have 50 in that room that are upset, then soon another 40 are going to be upset and the tables are going to be completely reversed. When I talk about momentum, this is exactly what I am talking about. Right now we have negative economic momentum in this community and in this nation.

I look to the fashion that has become ingrained in our culture and in some ways I have been a participant in it. This sense of dressing down and not being judged for how one looks. I think a lot of us have done this , because our jobs don't necessitate us being in a uniform or needing to be presentable. In my personal industry, we are around food and chemicals and we are actively working, so anything we wear is going to get ruined fairly soon. But, in saying that, I do realize that this style has become a reality as part of my every day wardrobe and since the dynamics of my personal life have been downtrodden, I have dressed the part on a mostly permanent basis over the last few years.

In my personal life, I have felt the blahs related to this negative momentum that could definitely be described as pessimism. I have gotten tired of being tired and achy. Some of this has been related to the feeling of mortality due to my grandmother's passing, some has been due to the loss of people in my life, some is related to knowing that my life is closer to over than beginning, and a lot of it is related to this survival mode that I have been in that feels like it is never going to end. I have told people that I have learned to embrace my bitterness. Much of this discomfort had caused me to not go to Church over the last several months and that was only snowballing these feelings. So, I made a New Year's resolution to take a stand,  whether feeling like it or not, and get back to church and try to wear a suit when attending.

In the end, it is all about making an effort, even if one is just going through the motions in the beginning. I think for too long, many of us have found every way possible to follow the path of least resistance. I think the path of least resistance, and the false comfort that lies therein, is what has led this nation to where we are today. It is going to take a few of us, who are willing to take a stand, to turn the tide. We are going to have to create some resistance. Discomfort is coming whether we seek it or we wait on its arrival. Embrace the anxiety. It means you are alive.

Drumroll Please !!! - Hickory Metro is the 8th worst place in the United States to find a job. -

Sunday, January 22, 2012

Economic Stories of Relevance in Today's World -- January 22, 2012

Bob Chapman - The International Forecaster - January 21, 2012 - If the entire financial system does not come down upon our heads and if we do not have another war, global growth is going nowhere in the year’s ahead. We had a mini-recovery, but it cost $1.8 trillion. We had a second recovery and that cost $1.5 trillion. We are entering a third of what is becoming yearly recoveries that will probably cost $1.3 trillion. In other worlds without these massive injections of money and credit we would probably be in a deflationary depression.          As a result of overspending and poor financial choices state, county and local governments continue layoffs, increase taxes, cut services and attempt to pay back unemployment loans from the Federal government by creating more debt, by floating additional bond issues. The people who run these governments just do not get it. They expect the next bull market is just around the corner and it isn’t. In 2014-2015 we can expect a housing inventory at banks of 9.8 million homes, all for sale. That guarantees no housing recovery for years to come.                    The massive exodus of good paying jobs, one million a year, due to free trade, globalization, offshoring and outsourcing and the loss of 450,000 manufactures will soon end, as a number of countries debate trade barriers. Such protectionism will initially cut back on world demand and the expansion of world debt. Austerity is already a by ward and means restrained spending as well. Governments will become more onerous with additional regulation and taxes, because they have no intention of really cutting spending. We have been waiting for more than three years for debt reduction and saving and it has not as yet really materialized on an ongoing basis. We ask, are American consumers capable of reducing debt and savings? If they do will personal consumption of GDP fall from 70% to lower levels? The answer is of course it will...                   House prices will fall 20% over the next three years and foreclosed inventory could reach close to 10 million homes. Even though your rent is rising, stay where you are for a few more years. If that in fact is the bottom how many years will house prices bump along the bottom? Will it be 8 years or 30 years? We don’t know, but a home is not a good investment at this time...                  As consumers eliminate debt and cut back on credit card usage, retail sales will fall. This tact could be a long-term phenomenon, as spenders use cash and debt cards, because they cannot control their spending otherwise. Even the lay-a-way plan is making a comeback, something we haven’t seen since the 1960s.

HOW DID WELLS FARGO INCREASE EARNINGS 20% IF REVENUE FELL 4%? - The Burning Platform - January 17, 2012 - How many companies do you know that can increase profits by 20% when their revenue falls 4%? It must be amazing productivity. Right?              Nope. Wells Fargo created $600 million of income out of thin air with a journal entry saying their losses will be lower in the future. Sounds familiar.                If you remove this fake income, it seems Wells Fargo’s income went up 3%.

John Williams: No Way Out–Hyperinflation by 2014 - Financial Sense - January 20, 2012 - (Youtube) - -

The Global Elite Are Hiding 18 Trillion Dollars In Offshore Banks - - In recent days, the fact that Mitt Romney has millions of dollars parked down in the Cayman Islands has made headlines all over the world. But when it comes to offshore banking, what Mitt Romney is doing is small potatoes. The truth is that the global elite are hiding an almost unbelievable amount of money in offshore banks. According to shocking research done by the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks. And that figure does not even count any money being held in Switzerland. That is a staggering amount of money. Keep in mind that U.S. GDP in 2010 was only 14.58 trillion dollars. So why do the global elite go to such trouble to hide their money in offshore banks? Well, there are two main reasons. One is privacy and the other is low taxation. Privacy is a big issue for those that are involved in illegal enterprises such as drug running, but the biggest reason why people move money into offshore banks is in order to avoid taxes. Some set up bank accounts in foreign nations because they want to legally minimize their taxes and others set up bank accounts in foreign nations because they want to illegally avoid taxes. You would be absolutely amazed at what some large corporations and wealthy individuals do to get out of paying taxes. Unfortunately, the vast majority of the rest of us don't have the resources or the knowledge to play these games, so we get taxed into oblivion.

IRS data shows recession took heavy toll on sole proprietors
(In North Carolina) - The Business Journal by Chris Bagley, Triangle Business Journal - January 20, 2012 - Sole proprietors in North Carolina saw their incomes shrink more dramatically and much earlier during the Great Recession than most other taxpayers, according to data recently released by the IRS. Analysts say the data reflect a sharp decline in consumer spending and businesses’ general difficulties in adjusting their own spending, particularly on labor. While business income began to decline in 2007, most of the resulting layoffs and wage freezes didn’t follow until 2009, these analysts say.

Gaston Co. schools to decide on proposed closing of 3 schools - WSOC-TV - January 17, 2012 - GASTON COUNTY, N.C. -- On Tuesday, Gaston County school officials will decide whether to shut down three schools. Parents have been fighting to keep Rhyne Elementary, York Chester Middle and McAdenville Elementary schools open. The district said closing the schools will save $27 million over five years. The school board is set to vote on the closures Tuesday night.

Insight: Recovery at risk as Americans raid savings
- Reuters - By Jilian Mincer and Jonathan Spicer - January 17, 2012 - In an ominous sign for America's economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.           Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.            American households "have been spending recently in a way that did not seem in line with income growth. So somehow they've been doing that through perhaps additional credit card usage," Chicago Federal Reserve President Charles Evans said on Friday. "If they saw future income and employment increasing strongly then that would be reasonable. But I don't see that. So I've been puzzled by this," he said.          After a few years of relative frugality, the amount of money that Americans are saving has fallen back to its lowest level since December 2007 when the recession began. The personal saving rate dipped in November to 3.5 percent, down from 5.1 percent a year earlier, according to the U.S. Commerce Department. (The Hound: Why save money when the government is working hard to devalue the currency and the banks low-risk investments pay next to nothing. Why save for a child's education or retirement, when there is no assurance that the Investment Banks aren't going to steal it from you. That is the mindset!)

Treasury dips into pension funds to avoid debt - Reuters - Reporting By Rachelle Younglai; Editing by Chizu Nomiyama and James Dalgleish - January 17, 2012 - The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills. Geithner said Treasury started suspending reinvestments in a federal pension fund known as the G-Fund -- a tool Treasury has had to employ six times over the past 20 years in order to keep the country below the statutory debt limit. The Treasury Department has already tapped another seldom-used fund in order to allow the government to continue borrowing without running afoul of the country's laws.

Insight: Top Justice officials connected to mortgage banks - Reuters - Scot J. Paltrow - January 20, 2012 - U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.             The firm, Covington & Burling, is one of Washington's biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.               Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.             Reuters reported in December that under Holder and Breuer, the Justice Department hasn't brought any criminal cases against big banks or other companies involved in mortgage servicing, even though copious evidence has surfaced of apparent criminal violations in foreclosure cases.            The evidence, including records from federal and state courts and local clerks' offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.            In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners' lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven't responded publicly to any of the requests.

Warren Pollock on Max Keiser Regarding Bank Holidays

Wednesday, January 18, 2012

Newsletter about the City Council meeting of January 17, 2012

This newsletter is about the Hickory City Council meeting that I attended this past week. City council meetings are held on the first and third Tuesdays of each Month in the Council Chambers of the Julian Whitener building.

At right of this page under Main Information links is an Hickory's City Website link. If you click on that link, it takes you to our city’s website, at the left of the page you will see the Agenda's and Minutes link you need to click. This will give you a choice of PDF files to upcoming and previous meetings.

You will find historic Agenda and Minutes links. Agendas show what is on the docket for the meeting of that date. The Minutes is an actual summary of the proceedings of the meeting of that date.

Here is a summary of the agenda of the 1/17/2012 meeting. There were a couple of important items that were discussed at this meeting and the details are listed further below:

Please remember that pressing Ctrl and + will magnify the text and page and pressing Ctrl and - will make the text and page smaller. This will help the readability for those with smaller screens and/or eye difficulties.

Invocation by Pastor J. Whit Malone, First Presbyterian Church

Special Presentation:
A. Recognize Parks and Recreation Director Mack McLeod for Serving as NC Parks and Recreation Association President for 2011 - Mack has been a member of the association for 27 years. He received an award for serving as President of the NCPRA in 2011. He was commended for outstanding service and leadership as part of the association. He has served on the nominations and elections committee, the professional development committee, procedures committee, and annual conference committee.He was elected and served as the Region 8 Chair in 2006, Secretary in 2007, 2nd Vice President in 2008, Vice President in 2009, 1st Vice President in 2010, and President in 2011.He is serving as past President in 2012. He oversaw restructuring of the NCRPA Board of Directors and represented the NCRPA in legislative meeting with the NC General Assembly. The Mayor added that Mack was instrumental, a few years ago, in having the NC Parks and Recreation annual meeting here in Hickory.

B. Presentation Regarding Pink Heals Activities Held on September 22 – 24, 2011 and Recognition of Volunteers - Deputy Fire Chief George Byers addressed the Council. He talked about the volunteers  and Council who that helped make this event a success. Hickory was one of three cities in North Carolina to represent the tour. He talked about how the lives of so many people were touched by cancer. He thanked City management.

The initial application was submitted in November 2010. In December 2010, the Guardians of the Ribbon, Cares enough to Wear Pink organization announced Hickory as a host; establishing the dates of September 22 - 24, 2011. On February 9, 2011 Steering Committee formed. On February 14, 2011 the steering committee adopted a series of goals and objectives for programs, events, and to brainstorm ideas for the project, On March 1, 2011 Council approved the Pink Heals Tour 2011 program followed by a formal proclamation April 5, 2011. This event was transformed in 264 days. many area businesses volunteered at no expense. Many hundreds of thousands of people were touched about this event through media sources in our area and the Charlotte Metro Area. The group from Washington, DC spent 10 hours to drive to Hickory. The biggest success was the benefit dinner held at First Baptist Church. Over 60 individuals and businesses were involved in this endeavor.

The Steering Committee members were Darlene Huffman, Stephanie Drum, Terri Byers, Sylvia Martin, Claudia main, Mandy Pitts, Matt Hutchinson, Tom Alexander, Tom Adkins, Fred Hollar, Gerge Byers...

14 events were visited in 12 hours throughout the Unifour Area. Over 120 motorcycle riders helped escort the tour out of town. They will return sometime in 2013. This effort received an award from the United Way called "Giving from the Heart." A motorcycle was given away in a  raffle, as was a pink fire helmet. Alderman Hank Guess was the winner of the raffle for the helmet and in the picture below he is presenting the helmet to the Darlene Huffman of the Hickory Fire Department. $16,500 was raised through this project and the benefactor is a local organization "Through Healing Eyes," a non-profit organization (founded in 2003) headed by Katheryn Harlan.

The Hound can see the great heart of the Citizens of Hickory through the endeavor above. Hank Guess showed the overall good guy that he is in the presentation above. One could not help but see what a beneficial event this was from the beginning of this process to what was displayed tonight.

Consent Agenda:
A. Transfer of Cemetery Deed from City of Hickory to Jane Deitz in Oakwood Cemetery

B. Transfer of Cemetery Deed from City of Hickory to Betty Anthony in Southside Cemetery

C. Transfer of Cemetery Deed from City of Hickory to Robert Dixon in Southside Cemetery

D. Special Event Permit Application to Use Union Square for Hickory Downtown Art Crawls on Thursday, May 17, 2012 and Thursday, September 20, 2012 from 5:30 p.m. – 8:00 p.m.

E. Special Event Permit Application to Use Union Square for Swinging Under the Stars on Sunday, May 27, 2012 from 6:00 p.m. – 10:00 p.m.

F. Special Event Permit Application to Use Union Square for Hickory Oktoberfest on Friday, October 12, Saturday, October 13, and Sunday, October 14, 2012 from 5:00 p.m. on Friday to 5:00 p.m. on Sunday)

G. Special Event Permit Application to Use Union Square for A Hickory Holiday! On Thursday, December 13, 2012 from 5:30 p.m. – 7:30 p.m.

H. Offer to Purchase From Mildred A. Mauney to City of Hickory to Purchase City-Owned Vacant Lot Located on 2nd Street SW (PIN No. 370211573006) in the Amount of $2,000.00 - Mildred A. Mauney has presented an offer to purchase the city-owned vacant lot located on 2nd Street SW in the amount of $2,000.00. This .26-acre vacant lot is located beside Ms. Mauney’s home, and she has cared for and maintained the lot for the past 27 years. The property is zoned R-4, which allows single-family, multi-family residential or manufactured homes. The contract states that the buyer agrees to the inclusion of a restriction in the general warranty deed prohibiting the placement of mobile homes upon the property. Habitat For Humanity is not interested in the lot since they want to concentrate in Ridgeview or other neighborhoods like Green Park. Staff recommends acceptance of the offer to purchase from Ms. Mauney and authorization to advertise for upset bids. Once the property is advertised, other parties will have ten (10) days to submit upset bids.

I. Amendment to Traffic Ordinance By Changing All Parking on Union Square from Drive Entrance at 2nd Street NW Westward to Drive Entrance at 3rd Street NW from Two (2) Hours to Three (3) Hours - The Hickory Downtown Development Association (HDDA) has requested an extension of the time limitation for public parking on Union Square. They feel this would better accommodate the needs of customers and clients of the downtown business owners. This was agreed upon by the HDDA Downtown Parking Task Force on October 4, 2011, approved by the HDDA General Membership on December 7, 2011, and approved by the HDDA Board of Directors on December 20, 2011. The Traffic Division has analyzed this request and feels it would be fitting. Changing the signage along this parking area would be simple, and the signs/markings shop has already taken the appropriate steps to ensure an easy transition. Staff recommends approval.

J. Budget Ordinance Amendments
1. To budget $250 of library donations in the Library Books line item.
2. To budget $1,237 of Local Government Revenue in the Police Department Overtime line item. This revenue is payment from Catawba County Mental Health for a portion of an Officers time spent when accompanying involuntary commitment patients.
3. To budget $1,000 of Appropriated General Fund Balance and budget in the Library’s Audio and Visual Materials line item. This revenue represents a grant awarded to the Patrick Beaver Library from the Hickory International Council at the end of June, 2011 to purchase materials. The award came too late in FY11 to process, therefore an amendment is necessary.
4. To budget $6,500 of insurance claim checks from Trident Insurance Company in the Traffic Division Capital Vehicles line item for damages sustained to a Traffic Van. To transfer $13,500 of Traffic permanent salaries to the Capital Vehicles line item to provide the additional funds needed to replace the vehicle.
5. To budget a $10,349 insurance claim check from Farm Bureau Insurance Company in the Water and Sewer Maintenance and Repair of Vehicles line item. This insurance claim check is for damage sustained to Water and Sewer Division truck.
6. To budget funds for the first phase of the Zahra Baker All-Children's Playground Project. This is for the purchase of playground equipment for this project. Revenues include a $102,231 donation from the Hickory Kiwanis Foundation and a $20,000 grant from KaBoom! (to be paid directly to the vendor) This project will be constructed at Kiwanis Park.

Informational Items
A. Report of City Manager Mick Berry’s travel to attend the Redevelopment and Economic Development Meeting in Chattanooga, TN on December 13 – 14, 2011 (room – $198.15; per diem - $60.86; rental car - $200.51; other expenses (fuel) - $136.25)

B. Report of Mayor Rudy Wright’s travel to attend the Redevelopment and Economic Development Meeting in Chattanooga, TN on December 13 – 14, 2011 (room - $198.15; per diem - $60.86)

C. Report of Alderman Brad Lail’s travel to attend the Redevelopment and Economic Development Meeting in Chattanooga, TN on December 13 – 14, 2011 (room $198.15; per diem - $60.86)

D. Report of Alderman Hank Guess’s travel to attend the Redevelopment and Economic Development Meeting in Chattanooga, TN on December 13 – 14, 2011 (room $198.15; per diem - $60.86)

E. Report of Alderwoman Jill Patton’s travel to attend the Redevelopment and Economic Development Meeting in Chattanooga, TN on December 13 – 14, 2011 (room - $198.15; per diem - $60.86)

The Hound: The minutes of this meeting, held in Chattanooga, can be found on this link. They were posted earlier today. We weren't privy to the happenings from this meeting, but I do find the discussions to be very interesting in an odd way even though we have to read between the lines of the subject matter.

They are talking about creating a commission for entertainment and apparently, although she was not present, the thoughts of Alder Fox are to hold some kind of conference/event that centers around this. These minutes were not voluminous, but mention is made of the HDDA being involved in this process. Once again City officials are adamant that Hickory Economic Development center around Union Square.

City Manager Berry talks about the issue of Wayfinding and makes a point that Downtown Parking Deck funds can be used for the project. Isn't it time that the Parking Deck fund was used to build a parking deck? As I stated with the Tent on Union Square, which is also utilizing this fund. This is not going to mitigate the parking issues that people complain about as the number one problem with the Union Square experience. The City does deserve a Thank You for extending the parking hours from 2 to 3 hours, which was a recommendation made over 3 years ago. If you aren't going to utilize the Parking Deck fund for its legislated intended purpose, then let's see some honest government and end this fund and a fund instituted called the "Union Square Pet Projects Fund."

In this meeting, they flat out say that a Hickory Furniture Museum won't work and I think that is ludicrous. No rhyme or reason why it won't work, but I know it would step on some toes and we see a conflict of interest in this conversation -- put the puzzle together... 

The Mayor wants to focus on population growth 25 jobs at a time -- huh?!?!?!? Government jobs are recession proof -- well we will be finding out if that is true here pretty soon. He puts a number on the percentage of growth he would like to see in Manufacturing. How about we not put a number on it and create an environment where modern manufacturing can thrive. There are already efforts under way to do just that and we don't need to limit or constrain our capacity for growth with these numbers from nowhere. If Freightliner can add 1,100 jobs in Cleveland, NC and Solstace can create 500 in High Point, then we don't need to talk about landing such projects as though it is an impossibility.

Why is this blog called pessimistic and yet we point to things that can be done, while our leaders constantly tell us what can't be done and they are lauded for their optimism?

New Business - Departmental Reports:
1. Quarterly Financial Report - GENERAL FUND SUMMARY 50% OF THE YEAR COMPLETE . We have received 60.85% of our budgeted revenues. The 5 year average is 56.28%. Warren states that this is the first time we have been ahead of the game in a while. We have spent/encumbered 49.94% of our budgeted expenditures. The 5 year average is 49.50%. Revenues over (under) expenditures = $6,107,713. The 5 year average is $4,615,523. This is good news and is due to property tax revenues. Water/Sewer Fund - We have received 47.98% of our budgeted revenues. The 5 year average is 45.45%. We have spent/encumbered 52.02% of our budgeted expenditures. The 5 year average is 46.99%. Revenues over (under) expenditures = $189,529. The 5 year average is $173,608.This is a $20 million budget, so this is on target.

The above graph shows that Property Tax Revenues have met 71% of budgeted projections. That is a pleasant surprise, which is better than what has been seen in the last five years. They didn't see this happening, because of the bad building permit numbers. The problem with the lack of building permits is that it will eventually be a drag on revenue growth. Warren stated that the tax base estimate has remained stable (level), which is good news. He says, "so far, so good." This makes up 53% of revenue in the General Fund.

Sales Tax revenue makes up 15% of revenues. This represents 5 months. The City should meet the estimate for the year. There has been a $700,000 drop from peak sales tax revenues of 2008-2009. Investments have earned $36,000 this fiscal year. 90 day CDs are earning .1%. He believes that these earnings will increase in the second half of the year.

Wells Fargo Economic Outlook for 2012 - Expect 2% GDP growth during 2012. Threading the needle between low growth and recession. Continued slow job gains - 123,000 monthly. Modest improvement in income growth - 1%. Bottom Line: A repeat of 2011 assuming Europe and/or oil prices do not "blow up." This will give households another year to reduce their debt and increase savings (hopefully) resulting in increased confidence.

(National) Local Government Outlook - New Reality Slower Revenue Growth = Slower Spending Growth. Continued decline or stagnation of property values will negatively impact the tax base. This may continue to be an issue for years. Small improvement in consumer spending. Little need for new retail construction. Single family construction "dead in the water." Industrial fixed investment will be a bright spot.

What all of this means for us: We are beginning to see some stability and predictability in the numbers. We are not seeing net growth in revenue. Building permits are still at all time lows. Increased funding for fuel costs, health insurance costs, and capital replacement costs will be challenging. Cautious approach to undertaking initiatives that create annual recurring expenses. Will continue to recommend use of cash reserves for economic development related projects.

The Hound believes that Warren's report was an excellent summary rooted in current economic realities. I do believe that Europe is going to financially implode in the near future and the games being played in the Middle East do not bode well for oil price stability. The stability in local property values can be summarized as a dead cat bounce. We are lying on a plateau awaiting the next leg down. This was talked about at the Entrepreneurial Summit last week. We have local industrial property owners that are allowing aspiring entrepreneurs free rent just to keep buildings occupied for security purposes, because of crime such as copper theft of wiring that has been going on. 

I think Warren is dead on in what he has pointed to over the last several years with the building permit numbers. The way things stand now; we have at least another decade, as it stands, before we will see any real growth in property values. The entire country is overbuilt and without job growth and commerce, you are not going to see anything pushing us towards the demand side of the equation when it comes to housing, commercial, or industrial needs. The increase in sales tax revenue is purely a reflection on inflation and is actually negative. Sure some industry might come back from overseas, but until we change the trade paradigm, we aren't going to see a renaissance in the business sector that will sustain robust growth. But, the reality is that if we do find the guts to stand up against the raping and pillaging of our Industrial Base and the Middle Class, then we can see the renaissance that can rebuild this nation.

Sunday, January 15, 2012

Economic Stories of Relevance in Today's World -- January 15, 2012

The Hounds notes from the Regional Entrepreneur Summit (Part 1) - January 11. 2012
The Hounds notes from the Regional Entrepreneur Summit (Part 2) - January 11. 2012

The event above was a very good event that I feel went very well with some of the previous events that have been presented by the North Carolina Partnership in Innovation (NCPI) and the Catawba County Chamber of Commerce. The idea of holding these types of events was a big part of the discussions that have taken place during Future Economy Council meetings over the last three years. We have now seen two innovation events take place over the last 14 months and the first Edison Project Event. I truly believe these events have been fruitful and are developing a pattern which is moving the area forward and will bear fruit in the not to distant future.

The above event, which featured keynote speaker Ted Abernathy focused on collaboration, the event in November 2010 focused on creating networks that lead to innovation,  and the Edison Project event was an initiative that put the rubber to the road leading to specific action. We still have a long way to go, but we are definitely way past baby steps and far down the path on this journey.

The Edison Project - Good News and Great Ventures - September 19, 2011
Innovation 2010 - Andrew Hargadon - Creating a Network of Innovation - November 11, 2010

JPM Explains Why The US Economy Is About To Hit A Brick Wall - Zero Hedge - Tyler Durden January 13, 2012 - JPM's head economist Michael Feroli just joined the bandwagon of other Wall Streeters in cutting Q4 GDP, trimming his prior forecast of 3.5% to 3.0%. However, as this is backward looking, it is largely irrelevant if confirming what we already knew: that the economy was certainly not growing as fast as the market implied it was (yes, the manipulated market is not the economy, no matter how much the Fed would like that to be the case). A bigger question is what should one expect from the future. Yes - an in vitro future, isolated from the daily rumor mill of what may or may not happen to the French rating tomorrow or the day after. It is here that there is nothing good to expect: 'we think growth will downshift from 3.0% in 4Q11 to 2.0% in 1Q12. Looking beyond the first quarter, we expect a growing private domestic sector will contend with a fading drag from the external sector and a persistent drag from the public sector." Yet where JPM falls short, is its optimistic view on the private sector. As David Rosenberg showed yesterday, the ratio of negative to positive preannouncements just hit a multi-year high, with the primary culprit being the strong dollar. Unfortunately for Feroli's bullish angle, the private sector will not do all that well at all if the EURUSD remains in the mid 1.20s or falls further. In fact, corporate earnings will likely be trounced, which in combination with everything else that JPM lists out, correctly, could make the second half of 2012 a perfect storm for economic growth, an event which Obama's pre-electoral planners are all too aware of. What is the only possible recourse? Why more QE of course. The only unknown is "when."...

JPMorgan Profit Falls on Trading, Investment Bank Revenue - Bloomberg - Dawn Kopecki - January 13, 2012 - JPMorgan Chase & Co., the largest U.S. bank by assets, said fourth-quarter profit fell 23 percent as trading revenue and investment-banking fees declined.                    Net income dropped to $3.73 billion, or 90 cents a share, from $4.83 billion, or $1.12, in the same period a year earlier, the New York-based company said today in a statement. Earnings matched the average estimate of 28 analysts surveyed by Bloomberg....                 Investment banks are eliminating workers to compensate for falling trading revenue, disclosing plans to reduce staff by more than 200,000, according to data compiled by Bloomberg. Royal Bank of Scotland Group Plc, Britain’s biggest government- owned bank, said this week it would cut about 4,800 jobs.....                U.S. banks are in the middle of the industry’s worst two years of revenue growth since the Great Depression, according to Mike Mayo, an analyst with independent research firm CLSA in New York. Earnings across the industry were weak in the fourth quarter and won’t have much improvement this year, he said.....            

Presenting Mitt Romney's Top Campaign Contributors
- Tyler Durden on January 14, 2012 -

Corporate Welfare: State Taxpayers Pay to Train Workers for Large Corporations - AllGov - Noel Brinkerhoff - January 11, 2012 - Taxpayers are increasingly covering the cost of training for a corporation’s workforce, without getting any long-term benefit in return.                      For instance, North Carolina has spent a million dollars for 400 residents to learn skills for working in a Caterpillar factory, in addition to a $4.3 million on a community college program customized specifically to meet the company’s labor needs. While the investments are expected to help Caterpillar remain in the state, there are no assurances that will happen.                Previously, the state spent $2 million to train employees for a Dell factory. Five years later, the computer maker closed down its operation, costing North Carolina nearly 1,000 jobs.             Among the subsidies given to corporations, according to a report by Good Jobs First, are income tax credits, cash grants, low-cost or forgivable loans, reimbursement for worker training expenses and reductions in property taxes.

White-Collar Workers Join Crowd Straining Food Banks - Bloomberg - Patrick Cole - January 11, 2012 - After losing her job as a consultant for nonprofits, Martha Heassler and her husband, a graphic artist, no longer had money for their daughter’s college education, new clothing or groceries.               We’re waiting for my husband’s paycheck, and we probably have less than $200 to our name,” Heassler, 55, said by phone.                   She now makes weekly trips to the Open Door Food Pantry in Gloucester, Massachusetts, to pick up bags of food that include meat, eggs, yogurt and vegetables.              “Without the network of food pantries around us, I don’t know how we would have eaten,” said Heassler, who holds a bachelor’s degree in English literature from Gordon College, in Wenham, Massachusetts.                 As the sluggish economy idles more middle-class individuals and families, their donations to food banks and soup kitchens have evaporated, hitting the nonprofits from both ends..
Layoffs - PNC to lay off 600 in NC after RBC merger - - January 6, 2012 - Rocky Mount and Raleigh
Hiring - Freightliner truck plant will add 1,100 jobs in N.C. - AP - Emery P. Dalesio - January 13, 2012 - Cleveland, NC
Hiring - Solstas seeks incentives to add 500 jobs in High Point - The Business Journal - Matt Evans - January 6, 2012 - High Point

Gerald Celente makes talks about Trends for 2012

Saturday, January 14, 2012

The Hounds notes from the Regional Entrepreneur Summit (Part 2) - January 11. 2012

The following is Part 2 of a summary of the information provided at the conference on Building Entrepreneurial Communities held this morning Wednesday, January 11, 2012 sponsored by the Catawba County Chamber of Commerce and the North Carolina Partners in Innovation (NCPI). The conference was held at the Crowne Plaza in Hickory and featured speaker Ted Abernathy who is the Executive Director of the Southern Growth Policies Board who believes that "Complex problems need collaborative solutions. Collaboration is not natural, but by following some basic rules communities can use collaboration to create a competitive advantage. Entrepreneurial businesses and collaboration are both a natural fit and a marriage of necessity."

In Part 1 of the presentation
you will see local leaders provide ideas, information, and initiatives that can help to turn the Economic plight of our community around. Especially interesting was the information provided by Bill Parrish who is the Director of The Small Business and Technology Development Center and a fellow participant in the Future Economy Council. Much of the information provided within this presentation is relevant to the discussions that have been presented on the Hound.

Here in Part 2, I will write about the Presentation of Ted Abernathy, who in the past was the Director of the Research Triangle Park and wants to work in collaboration to help turn Hickory around. He worked in the past with Bill Parrish of the SBTDC. What you will see is that it isn't us against the World. There are many interested parties in this State that want to see this region turn it around and are willing to help us do just that.

Ted Abernathy - Entrepreneurial Development is Collaboration - Mr. Abernathy first began his presentation by exhibiting percentage of venture capital in the United States. He stated that we aren't going to solve (our problems) by thinking the way everyone else thinks. He added that he was brought in to speak about collaborative models and how we get people to work together to achieve something together. Economic Development has gone from being a game of checkers to becoming three dimensional chess. You have to anticipate and prepare.

 Photos copyright: ©2012 Pat Appleson Studios, Inc. All Rights Reserved, Used By Permission

John F. Kennedy - "Too often we enjoy the comfort of opinion without the discomfort of thought."

Collaboration is the act of working with one or more people to do something that you can't do yourself.
Collaboration = Value - People collaborate when it is in their interest to do so.
Depends on where you sit - The successful process designs itself so that everyone sees the value in the back end
Crisis & Complacency - Motivation comes when Crisis exceeds Complacency
Context matters - Like a Habitat for Humanity House. Agree to the goal and roles of participants.

5 things that make collaboration hard
1) What is the new normal? There has never been a normal. We have to create the future. If we do not create the future, it will be created for us by external forces. The Churn - there are always jobs being increased and lost in communities. Alvin Toffler - Future Shock - The pace of change is so fast it is making us ill (this was 40 years ago). We want and need to know about where we are headed in the future. Philip Tetlock - You can't know enough to predict.
2)Complexity Conundrum - Changing Trends. The complexity of the world causes most people to tune out. Global interdependence shows that the world is interconnected. Top percent GDP Growers in 2012 - They aren't all where you would think they would be. We are in a Matrix Paradox.
3) Cultural Fragmentation - News/Books/Music/Movies/Information. Lack of Familiarity. Today we get information from many more sources, so we aren't as familiar with where others are coming from.
4) We are in a bad mood - Lack of satisfaction in jobs. Most people say things are worse. 100 years ago the life expectancy was 47 years old.
5)The American Dream Crisis - Vision of America. Opportunity for all. It isn't how you were born; It is what you do with your talents. Mr. Abernathy asked what we thought America would be like in 2050. It is hard to be positive about the future when the media is so negative. Building competitive regional clusters is about enabling entrepreneurship through infrastructure, R&D, and training citizens. Global manufacturing - Top 10 drivers in competitiveness. America has to have a strong manufacturing base.

5 things that make for successful collaborations
1) Understanding motivations - "Their best interests." Regions are in this together. Motivations - The Sawyer effect - Create a message that resonates. Co-opts are created to help shops in an area, because vacancies drag down other businesses in an area. Likewise, regions are in this together. When motivating people to help you, you need to figure out how to motivate people to help you through what they want. All communities are competing for economic success. There will be winners and losers in this process. Specific language matters - Franks Luntz.
2)Build a team. Engage every partner. - Business Advantage Center. Evolution of Groups - they get familiar with each other, then build a common language based upon what they want to do, they create shared visions, then work together and eventually learn to trust one another. This builds Social Capital - or Hardwiring a Community. He addressed the people of Leadership Catawba and told them that if they weren't willing to lead, then they should quit the class. The experience is about networking and building trust.
3) Leadership is crucial and models are changing - Hierarchical or Grass Roots. Leadership is changing - Trust/Public/Private/Non-Profit. "Twilight of the Elite." Effective Regional Leadership. Martin Dempsey Quote. What do we want from leadership? Trust and Action. We want to believe that leaders have our interests at heart. There is a need for a catalyst. We get caught up on the fact we think that this is supposed to be hierarchy. Leadership depends on consensus. We need a shared regional narrative. How do we describe our area and talk about it. "A leader is a dealer in hope" - Napolean Bonaparte. “A society grows great when old men plant trees whose shade they know they shall never sit in.” - Greek Proverb. General Martin Dempsey recently said, "In the past, "we would have said we want men who are physically fit, educated, and disciplined. Now, what we way is that we want someone who wants to belong to a values-based group, who can communicate, who is inquisitive, and who has an instinct to collaborate."
4)Narrow whatever it is you are dealing with. The New Economy - how to prepare people and places to succeed in the New Economy. Define the geography. Let the function create the form. Collaborative Capacity -- if there is not a group to keep everything organized, then it will not work. If people don't think the objectives can succeed, then they will fail. You need to set realistic objectives. Collective Success depends on common agendas, shared measurements, mutually reinforcing activities, and support structures.
5) It takes capacity to hold groups together - How do you move people? Social influence - peer pressure. You model the behavior you expect. People get information in different ways, but they expect information. Collective Impact - Success is important.

People receive information in different ways. People are sure that society can't get along, but this isn't anything new. We knew this in the founding of the nation. James Madison - "The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society." Friction - checks and balances. Jacksonianism - Tea Party and other things have happened before and they reset America. Community Resilience was born out of Hurricane Katrina. How do you prepare people before critical times happen? Prepare today for negative events that may happen tomorrow. Communities have to be intentional in what they do in order to be successful. The more social capital, the better.

The Millennial Generation will be the most Entrepreneurial generation that we have ever had. They were born, technological, global, and expecting change to happen. They want to work for themselves.

Southern Growth Policies Board -