New England Economic Indicators
The Federal Reserve Bank of Boston just released its October 2007 issue of their New England Economic Indicators. After looking over the data, I noticed several disturbing trends in Maine’s economy.
First, bankruptcies are up 109.3 percent from Q2 2006 to Q2 2007–the largest percentage jump in New England. The current level stands at 678 filings in Q2 2007.
Second, the percent change in nonagricultural employment is the slowest in New England at 0.5 percent from August 2006 to August 2007.
Third, growth in total private employment has reversed itself since hitting its peak of 515,200 in June 2007. It has since fallen to 512,700 in July 2007 and again to 511,800 in August 2007.
Fourth, on the other hand, government employment is up since June 2007 growing from 104,500 in June, to 105,300 in July, to 106,600 in August (the highest level since August 2006).
Fifth, the “shadow government” education and health services industries also continue to grow from 114,200 in August 2006 to 116,600 in August 2007.
Sixth, Maine’s unemployment in the last two months have moved above the national average–4.8 percent versus 4.6 percent.
Seventh, correspondingly to point six, the number unemployed has increased 31,700 in June to 34,100 in August while the Civilian Labor Force shrinks from 712,300 in June to 707,100 in August. The higher number of unemployed indicates that it is getting harder to find a job and the lower number in the Civilian Labor Force means people are dropping out of the labor force altogether. A duel sign of a weakening economy.
Eighth, Total Merchandise Exports are down from the recent peak of $718 million in the third quarter of 2006 to $619 million in the second quarter of 2007.
Finally, the total economic activity index has stalled since June at 147.5.
With the national economy on the brink of recession due to the lackluster housing market, it appears Maine’s economy may already be heading down the recessionary path. When the legislature reconvenes in January, the first order of business should be to pass a sizable tax cut in order to stimulate Maine’s economy in the short term and to boost economic competitiveness in the long term. In a recent report MHPC has laid out a plan of action to cut and reform income taxes by over $218 million–this would be a good start.
Thomas Golebiewski
Posted on Oct 26, 2007
Sir, The recipe you suggest is a good one, but it fails to investigate the root economic problems we face in this nation. 1. Empire: current outlays total $1 trillion annually to maintain our 700+ military bases in 130+ countries. This is money that we do not have, and must borrow from China, Japan and others. Current CBO Director Dr. Orszag repeated to Congress just this past Wednesday that our nation is on an "unsustainable" path - referring to both the domestic welfare state as well as the foreign adventures and aid our government provides to others around the world. 2. The Federal Reserve scam: private bankers charge us interest for the privilege of using their currency, and the government has stripped away the use of gold and silver as legal tender. (You can't just trade Federal Reserve notes for gold or silver, you must also pay sales tax as you would on any other good. Do you pay a tax when you convert a dollar bill into 4 quarters?) The fact is that our economy is fatally flawed by design. There is simply not enough currency in circulation to pay all the debts that have been accumulated. We've seen "helicopter" Ben come to the rescue of Wall Street in recent months by lowering both the discount rate and the Fed funds rate, but this only more surely guaranteed further drops in the dollar - and indeed, we're seeing all sorts of record lows for the dollar. So, aside from concerning ourselves with micro-level issues like bankruptcies and so forth, we must also look at two critical issues of a much larger scope. We must curtail and abandon the empire, and we must abolish the Federal Reserve system and reinstitute sound monetary policies, beginning with reestablishing gold and silver as legal tender. And of course, massive tax cuts across the board at all levels and in all areas would be fantastic as well.