H&R Block’s Q4 Earnings Call is interesting, not just to someone who follows tax preparation, but what the changes at this company tell us about the nature of our larger economy.

Although many would agree with Woodrow Wilson that ‘what’s good for GM is good for the country, and vice versa,” it could also be said that whatever ills plague working people are sure to have an impact on H&R Block. Block is the nation’s largest tax preparer. They file one in every seven returns in the United States.

While they do have a broader range of services than some of the other chains, they still depend upon basic 1040A (more…)

Jamie Dimon earns more in one hour than one of his bank tellers earns in an entire year. Errol Louis at the NY Daily News hopes that a few non-profit groups pushing back against Chase will draw more followers.

Is it really possible to draft a “bucket list” for Raleigh? Can’t a city just be productive and affordable? Does it have to be fun, too? An ad on facebook suggests that such a list should be made.  I bet it says that for all the cities.  But, let’s try. Think about it this way: If a friend told you that he or she was going to stop over in your town for six hours, where would you tell them to go? Would you tell them to just stay in the airport? I hope not.  If your friend was in Raleigh, it would be a thought-provoking question. Maybe you could go to Umstead Park.  You could try to park on Jones Street.  You could have a funnel cake at the State Fair. Perhaps you could drive two hours to the beach. One of our local television announcers made his own top ten list. Only two of his ideas include North Carolina, and both involve listening to music. What about basketball?  No, in the Triangle, we’re affordable and productive. Go to the Big Easy if you want to take a few days off for a good time. Or, if you just want to take a few days off, go to Detroit.

I keep on seeing things that undermine any sense that I could have in a near-term recovery. The Federal Reserve Bank of San Francisco has a report out today that says that the economy is about to come back.  The number of borrowers that missed a mortgage payment has never been higher than it was in the first quarter. In fact, more than one in ten borrowers is now delinquent! Auctioneers in Mobile, Alabama are auctioning off assets of shipbuilders and manufacturers.  American manufacturing capacity actually decreased last year, the first time ever. Oh, yeah, and inflation is at a 44-year low.  Lenders are offering loans at less than 5 percent, and even then, mortgage applications are down.

FingerHut, where the poor avoid paying more up front by instead paying more over 12 easy payments, has a new credit partner. Remember that Fingerhut’s old provider, CIT, almost went insolvent. The new bank…drumroll, please: MetaBank.  In the catalog, prices are given for the product and then for the lowest monthly payment. The fine print on page 28 says that MetaBank extends credit at 24.9 percent. A special treat at Finger Hut: no payments during the “Deferral Period.” In that feature, a borrower can elect to make no monthly payments for an initial period after purchase.  During that time, interest accrues into additional principal.

The inability of retrained workers to make good on their student loans is a problem that should trouble anyone who has faith in the current wisdom surrounding how we tell people to get back on their feet.

It is boilerplate policy for any workforce development plan to funnel laid-off workers into job training classes.  The routine is a familiar one: the factory shuts down, the mill closes, or the branch plant moves on, but the worker remains.  All too often, the problem lies not with the worker but with a job function that is no longer viable in a global economy.  State policy often sees to it that these workers can get help paying for their new career training. Here are sum links to various iterations of the retraining idea in Washington state,  North Carolina, and Michigan.

All of this retraining requires a lot of classrooms.  It is hard to find space to build new classrooms on many of our existing state university campuses.  Maybe they are so full because they had to make room for more labs for technology transfer research, or for football game parking.  Whatever the reason, a great share of this retraining is taking place at community colleges and at private (“proprietary”) for-profit universities.

The largest universities in the United States are not Michigan, Minnesota, or Arizona State.  They are the University of Phoenix and DeVry University.  More than 100,000 students finished coursework at the University of Phoenix in 2007 alone.

These schools play an outsized role in educating our workforce. The private model works because it understands the needs of these laid-off workers.

DeVry and the University of Phoenix are both private, for-profit universities.  They have witnessed significant increases in demand for their courses as more workers are displaced by globalization. They have met that (more…)

The green shoots viewpoint on our economy holds that there will be new vitality within our businesses and households as our nation comes out of this recession.  The theory’s relevance depends, in part, upon how likely you believe it is that our country is bouncing back.  If you don’t put much faith in a higher Dow, and instead use unemployment as your metric, then you probably don’t have much reason to worry about the predictive value of green shoots.

Newspapers have traditionally been a cyclical industry whose rise and fall, driven by advertising revenue, corresponds to the health our larger economy. Newspaper ad pages grow when companies feel like consumers are ready to make buying decisions.  They shrink when businesses don’t see value, on the margins, of putting their brand before buyers.  If our economy is going to come back, green shooters might say that newspapers will be on the leading curve of that recovery.

That counters all of the evidence.  Ad pages are still down, and new revenue is going over to online vendors like Yahoo, or Google’s Doubleclick.

It is not just the Economy

This would be a sad story if newspapers were just victims of an external problem.  Ah, but that’s not the case.  (more…)

The Obama administration is finally getting around to reforming our financial system, right when the underlying anger about banking may be relenting.

The experts who judge our economy believe that we may be about to exit this recession.  Ben Bernanke said as much today during a talk at the Brookings Institution.  He believes that unemployment has reached its peak, that we can expect moderate growth, and that consumer confidence is coming back.  All of that would point to a rebound.  Granted, the evidence is still not visible on Main Street – unemployment tops 10 percent in much of the country. In North Carolina, unemployment is currently 11 percent.  In foreclosure-rich states like California and Florida, unemployment has increased approximately 60 percent from July 2008.

Today is significant for a few reasons – for one, it marks the one year anniversary of the collapse of Lehman Brothers.  (more…)