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This crisis is a moment, but is it a defining one?
Martin Wolf, Financial Times
Is the current crisis a watershed, with market-led globalisation, financial capitalism and western domination on the one side and protectionism, regulation and Asian predominance on the other? Or will historians judge it, instead, as an event caused by fools, signifying little? My own guess is that it will end up in between. It is neither a Great Depression, because the policy response has been so determined, nor capitalism’s 1989.
Let us examine what we know and do not know of its impact on the economy, finance, capitalism, the state, globalisation and geopolitics.
On the economy, we already know five important things. First, when the US catches pneumonia, everybody falls seriously ill. Second, this is the most severe economic crisis since the 1930s. Third, the crisis is global, with a particularly severe impact on countries that specialised in exports of manufactured goods or that relied on net imports of capital.
Fourth, policymakers have thrown the most aggressive fiscal and monetary stimuli and financial rescues ever seen at this crisis. Finally, this effort has brought some success: confidence is returning and the inventory cycle should bring relief.
… Unfortunately, there are at least three big things we cannot know. How far will exceptional levels of indebtedness and falling net worth generate a sustained increase in the desired household savings of erstwhile high-spending consumers? How long can current fiscal deficits continue before markets demand higher compensation for risk? Can central banks engineer a non-inflationary exit from unconventional policies?
… The willingness to trust the free play of market forces in finance has been damaged.
We can guess, therefore, that the age of a hegemonic model of the market economy is past.
… To paraphrase what people said on the death of kings: “Capitalism is dead; long live capitalism.”
(19 May 2009)
When Did Your County’s Jobs Disappear? An interactive map
Chris Wilson, Slate
An interactive map of vanishing employment across the country, updated with the latest figures.
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The economic crisis, which has claimed more than 5 million jobs since the recession began, did not strike the entire country at once. A map of employment gains or losses by county tells the story of how those job losses first struck in the most vulnerable regions and then spread rapidly to the rest of the country. As early as August 2007, for example—several months before the recession officially began—jobs were already on the decline in southwest Florida; Orange County, Calif.; much of New Jersey; and Detroit, while other areas of the country remained on the uptick.
Using the Labor Department’s local area unemployment statistics, Slate presents the recession as told by unemployment numbers for each county in America.
… Blue dots represent a net increase in jobs, while red dots indicate a decrease. The larger the dot, the greater the number of jobs gained or lost. Click the arrows or calendar at the bottom to see each month of data. Click the green play button to see an animation of the data.
(14 May 2009)
Striking animation — click the green button and watch the blue (job gains) turn to red (job losses. Recommended by William Tamblyn who writes, “Wow! Worth at least a thousand words I would say.”
Recession Turns Malls Into Ghost Towns
Kris Hudson and Vanessa O’Connell, Wall Street Journal
CHARLOTTE, N.C. — Malls, those ubiquitous shopping meccas that sprang up in the 1950s, are dwindling in number, with many struggling properties reduced to largely vacant shells.
On the low-income east side of Charlotte, N.C., the 1.1-million-square-foot Eastland Mall recently lost a slew of key tenants, including a Dillard’s and, next month, a Sears. Sales per square foot at the venue fell to $210 in 2008 from $288 in 2001.
As the recession alters American spending habits, traditional shopping malls like Eastland Mall are deteriorating at an accelerating pace.
The Metcalf South Shopping Center in Overland Park, Kan., is languishing after plans to redevelop it into an open-air shopping district fizzled. The stretch of shops that connects the two largest tenants — a Sears and a Macy’s — stands mostly vacant, patrolled by security guards.
With their maze of walkways and fast-food courts, malls have long been an iconic, if sometimes unsightly, presence in the American retail landscape. A few were made famous by their sheer size, others for the range of shopping and social diversions they provided.
But the long recession is helping to empty out the promenades. Some analysts estimate that the number of so-called “dead malls” — centers debilitated by anemic sales and high vacancy rates — will swell to more than 100 by the end of this year.
… During past economic cycles, dead malls were frequently redeveloped into mixed-use space that includes apartments, offices or parks. Repurposing mall space today will be more difficult. Lenders and investors are moving away from commercial real estate as property values decline and delinquencies rise on debt used to acquire or develop properties. Retail real estate has been hit especially hard, as declining retail sales and store closures hammer mall landlords.
(22 May 2009)
EB contributor Carl Etnier writes:
The article describes a downward spiral, where deteriorating mall economics lead anchor stores to pull out, which in turn deals a mortal blow to the mall. No mention of oil prices as a cause of mall’s distress, how forseeable and foreseen this decline was, or business strategies for a more localized economy. Just mourning for the past and attempts to keep it on life support.
