Continuing Challenges for Economic Development and Permitting

Reuters writers Elizabeth Dilts Marshall, Anirban Sen, and Imani Moise wrote a very interesting and impactful article about the finance sector and potential layoffs.  It is not entirely expected.  As to the impact to finance, you can read the article. 

What is more impactful to me is the last paragraph.  It is:

“Everyone has been surprised by how much more efficient you can be,” he said. “Later this year or early next year, (managers will) look around and say we just have many more people than we need.”

This tells me the initial layoffs noted in the article are only the beginning.  This type of restructuring could go on for several years.  Furthermore, if it is applied to other white collar industries, the negative impact could be exponential. 

For cities and counties, the effect is threefold:

·      Economic development:  how can we add value to the individuals laid off?  What existing partnerships can we enhance and new partnerships can we begin to offer a path to employment?

·      Finance:  how will cities and counties that rely on property tax deal with a likely decrease in value?

·      Permitting:  when new tenants are interested in leasing space previously rented by the finance sector or other white collar industries, how can permitting offices expedite the process?

This last one is of primary importance in that if you look across the country, we could be faced with a spike in vacant space.  Speed to market will be critical to any new tenant. So, how does permitting respond?

Link to article:  https://www.reuters.com/article/us-usa-banks-layoffs/banks-eye-layoffs-as-short-term-crisis-ends-long-term-costs-emerge-idUSKBN25O1KI#:~:text=2%20days%20ago-,Banks%20eye%20layoffs%20as%20short%2Dterm,ends%2C%20long%2Dterm%20costs%20emerge&text=NEW%20YORK%20(Reuters)%20%2D%20At,the%20wrong%20thing%20to%20do.

  

Good Economic Data - From the Federal Reserve II

Frankly, I am amazed by all the data that the Federal Reserve staff publishes. It covers so many disciplines.  I cannot begin to name them all, I suggest you take a look on the website.

However, one of my favorite publications is Industrial Production and Capacity Utilization.  If you love manufacturing data, this is the one for you.  I am not aware of any data that comes close to this piece. As an economic indicator, it is in a class by itself.  It is a monthly release, but not always on the same day.  The publications on the website go back to 1997. It runs 19 pages and consists of 15 tables.

This monthly publication looks at industrial production, plant capacity, and plant utilization for various manufacturing industries, mining, and utilities in the United States. This is the essence of manufacturing data. In fact, 89 industries are indexed. I know this is not necessarily the best explanation of the publication. In fact, the Federal Reserve does a far better job describing what each component is and I encourage you to read it.  I will simply add that if you enjoy all aspects of manufacturing, then this report is a must read to keep track of various industries and the health of these vital U.S. economic sectors. 

Link: https://www.federalreserve.gov/releases/g17/default.htm .  

Good Economic Analysis - From the Federal Reserve I

 I read alot of economic data.  It comes from magazines I subscribe to, the federal government, banks, etc.  The list goes on.  

Frankly, we have an abundance of economic data to read.  What is often lacking is analysis.  One of my favorite sources is the Federal Reserve. And one of my favorite publications is the Beige Book. That is the common reference.  The full name is Summary of Commentary on Current Economic Conditions by Federal Reserve District.  I prefer the Beige Book.

This publication comes out eight times a year. It is packed with anecdotes and analysis.  It starts with a brief national overview and summary of every region. Next, each region is discussed in great detail. Now do not ask me about the regions, I too question the methodology. (you might too after seeing the regions)

That should not detract from the value of the report. It is an easy read. Consider each one like this. You just listened to a detailed economic data presentation by an esteemed economist.  If you are like me, you might be scratching your head and asking what does it all mean. The Beige Book is the response. A quick read about economic conditions across the United States by region.  It is easily understood and you do not doubt the sources or the analysis.  A truly valuable and unique publication.

If you doubt my word, read the intro on the website.  

Link:  https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. 

Desert to you. Home to Me

In September of 2019 I posted this picture and the caption “Desert to you. Home to Me “on my Twitter and Instagram feeds.  

I have been home numerous times in my life.  We always stayed at my parents’ home until they sold it.  In fact, I have stayed in a hotel only twice in Midland, my father’s funeral and my 40^th class reunion. 

The reunion stay was truly different.  I had far more free time and drove around looking at old haunts and favored locations.  It was my first time downtown in decades.  And the first time every meal was at restaurant.

So I took my wife to restaurants she never went to before, like Wall Street and Luigi’s.  And yes, neither one changed.  It was like going to lunch with Dad or the family going to dinner in 1976.

We drove by my relatives old homes and went to the refurbished Dennis the Menace Park. 

We visited my old high school and took a tour.  It underwent substantial changes over the past 40 years.  But some of the older sections were preserved.

As I drove around my first day I thought it would be great to move back to Midland.  By the end of reunion, I was not so sure. This is by no means a cut or dig about Midland, but rather I think my interests and what Midland offers are not parallel.

Midland is a wonderful city for raising a family. It has a sense of risk and independence due to the wildcatters (oil men) and ranchers.  The schools were outstanding institutions and the teachers (most of them) outstanding individuals.  This is not a formal city, only the bankers, lawyers, and accountants wear suits.  Oilmen and other professionals did not.

It was the heyday of the company car. You could spot them a mile away, usually a Chevrolet Impala.

Midland was a city of professionals.  It was not an industrial town.  At one time Midland had a Rolls Royce dealership.  A key point people forget, back in the 70’s, the largest independent bank in the US was in the small city of Midland (less than 100, 000 people).

I realize that this sounds very nostalgic.  So let me end with these thoughts. 

I grew up in a wonderful city with so many positive attributes. I have a supportive and loving family.  I developed my writing in Midland.  I had incredible friends.  While I could tell you lots of negative aspects of Midland, they pale in comparison to my love of the city. 

However, I also know I cannot really go back.  The common saying is you cannot go home again, for you are a different individual. It is seldom added that the home also evolved.

You see a desert. I see home. And I always will.

Opportunity Zones - An Excellent Primer

 This is a very short post.  One of the most recent federal incentive programs is Opportunity Zones. It is also one of the most complicated.  I read numerous articles and stories about Opportunity Zones.  Most are helpful. However, I ran across this article in Econ Focus. It gives an excellent history, background, and general information about Opportunity Zones. It is a very good article for those seeking to understand it and those seeking to explain it.  

The article is by Jessie Romero. Link:  https://www.richmondfed.org/publications/research/econ_focus/2019/q1/feature1

A Bit of History

One publication I enjoy is Econ Focus, published by the Richmond Federal Reserve.  It is a quarterly magazine. 

Learning history gives us perspective on challenges we face today and tomorrow.  It also reminds us of the importance not taking any infrastructure improvement for granted.  

This most recent edition focuses on rural issues.  However, one of the most interesting articles is about the history of electrifying the rural parts of the U.S. In fact the title of the article is "Electrifying Rural America".

As you will see, electrifying the U.S. started in the 1870s and by the 1920s most cities ran on electricity.  In fact, by the 1930s nine out of 10 urban and nonfarm rural homes had electricity. It made daily living easier. 

However, the rural areas did not share in the infrastructure improvement. As you read the article, you may find arguments used by utility providers then sound familiar today. 

One fact I did not know, President Franklin Roosevelt created the Rural Electrification Administration by executive order.  More on that in the article.  And here you thought only recent presidents used executive orders excessively (Now do you see? That is why a sense of history is so important).  

Finally, one remaining observation.  In the early part of the 20th century or for that matter, any century, infrastructure is an absolutely critical component of a successful economic development program.  Enjoy the article. 

The article is by Tim Sablik.  Link to article:  https://bit.ly./rural-elec

C-SPAN - Showcasing a Very Successful Public/Private Partnership

Today on C-SPAN I watched an excellent example of a public/private partnership.  It was the return of SpaceX and the partnership with NASA.  I watched most of the coverage today and it was astounding.  

This is a very unique partnership.  While I could try to explain it, I think the following NASA blog post does a far better job.  What I find most interesting is NASA was created in 1958 and SpaceX was established 44 years later.  NASA has about 17,300 employees, SpaceX slightly less than half that. We forget that NASA always relied on partners, but this one is unique and historic.

https://blogs.nasa.gov/commercialcrew/2020/05/07/spacex-demo-2-will-showcase-public-private-partnership-benefits/

Watching the C-SPAN coverage today reminded me of the emotions I felt while watching NASA space flight take offs and landings in the 70s and Shuttle flights in the 80s.  Those decades (and future ones) allowed us to see amazing pictures, film, and hear commentary for the most advanced technology in the world.  Yes, we had setbacks, but we always reemerged, stronger and better.  Now we are taking a new and exciting direction to continue exploring space.  (Que: Space, the final frontier, these are the voyages of the starship Enterprise...). I know, you thought that too. 

Yesterday I watched the separation of the capsule from the International Space Station. And today I watched the landing and an impressive press conference - all courtesy of C-SPAN.  If you watched, you saw two groups, the NASA team and the SpaceX on a split screen. The following is the link to the C-SPAN video. It is over six hours, but well worth it. In an era of angst and uncertainty, this might remind you of the commitment to excellence and the benefits of public/private partnerships.

C-SPAN video:

https://www.c-span.org/video/?474396-1/nasa-tv-coverage-spacex-crew-dragon-return-earth

And just because it is my blog, from the introduction to every original Star Trek episode:  "Space, the final frontier. These are the voyages of the starship Enterprise.  Its five year mission: to explore strange new worlds; to seek out new life; and new civilizations. To boldly go where no man has gone before."