Updated: LV GDP Hits $40.1 Billion?

From LVEDC: The Lehigh Valley’s gross domestic product has reached a record-high $40.1 billion, with much of the economic growth driven by the region’s thriving manufacturing sector, according to newly-released federal data.

The $40.1 billion regional GDP for 2017 is about a 5 percent increase over the previous year, and growth in manufacturing was responsible for about 36 percent of that year-over-year growth, according to the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA).

“The Lehigh Valley is unique among major metropolitan areas in the United States in that manufacturing is driving such a large percentage of its growth,” said Don Cunningham, President & CEO of the Lehigh Valley Economic Development Corporation (LVEDC). “Manufacturing is clearly alive and well in the Lehigh Valley, and our regional GDP is the largest it’s ever been, far surpassing even the days of Bethlehem Steel.”

Manufacturing the fastest-growing sector

Manufacturing makes up $7.4 billion – or 18.4 percent – of the Lehigh Valley’s overall $40.1 billion GDP. That’s a much higher percentage than its share of the national economy. Manufacturing is 11.6 percent of the U.S. economy, according to the BEA.

Manufacturing was also the fastest-growing economic sector for 2017 in terms of economic output. Its $7.4 billion GDP was an increase of $700 million (10.4 percent) compared to 2016. No other sector had a larger year-over-year percentage increase.

That means manufacturing in the Lehigh Valley grew at a faster pace than transportation and warehousing, which saw the second-largest year-over-year jump. That sector, with a $2.1 billion GDP, grew at a rate of 8.8 percent compared to 2016.

“Contrary to the misnomer that big box warehousing and fulfillment centers are driving growth in the Lehigh Valley economy, manufacturing far surpasses it in economic output and growth,” Cunningham said. “That’s a testament to both the strength of manufacturing in the Lehigh Valley, and the balanced and diversified makeup of the overall economy.”

Manufacturing remains the Lehigh Valley’s second-largest sector. The largest is finance, insurance and real estate, which makes up $7.6 billion of the regional economy. Manufacturing fell only $200 million behind it in 2017, compared to a gap of $900 million the previous year.

Lehigh Valley ranks 64th in the U.S.

Gross domestic product is a measurement of a region’s economic output. The Lehigh Valley’s $40.1 billion figure accounts for private sector industry and does not include government spending. If that were included, the figure would rise to $43.8 billion.

The Lehigh Valley economy now ranks 64th out of the 382 largest metropolitan areas in the United States, which is one spot higher than last year. The BEA released the new data on Sept. 18, and 2017 is the most recent year for which measurable GDP data is available.

“The Lehigh Valley is the nation’s 69th largest major metropolitan area by population but the country’s 64th largest economy, so we continue to swing well above our weight class in economic output," Cunningham said.

The Lehigh Valley private sector GDP remains larger than that of Vermont ($27.4 billion) and Wyoming ($34 billion), as well as 112 other countries in the world. If the Lehigh Valley were a country, it would be the 88th largest economy in the world in terms of economic output.

Economic growth across many sectors

Nearly each of the economic sectors of the Lehigh Valley economy saw year-over-year GDP growth in 2017, with the exception of the information sector, which saw a slight drop from $2 billion to $1.9 billion. The sector-by-sector breakdown can be found below:

· Finance, Insurance and Real Estate ($7.6 billion, +4.26% year-over-year)

· Manufacturing ($7.4 billion, +10.4%)

· Education, Health Care and Social Assistance ($5.5 billion, +4.63%)

· Professional Services ($5.2 billion, +2.52%)

· Retail ($2.4 billion, +1.4%)

· Transportation and Warehousing ($2.1 billion, 8.8%)

· Information ($1.9 billion, -3.73%)

· Arts, Entertainment, Accommodation ($1.7 billion, +1.7 percent)

These GDP figures derive from the BEA and were analyzed and presented by George Lewis, LVEDC Director of Research and Analysis. GDP rankings of other countries come from the World Bank. The BEA adjusts its figures to account for new information and projections, so numbers that have been reported for previous years may have been changed or adjusted over time.

About LVEDC

The mission of LVEDC is to market the economic assets of the Lehigh Valley and to serve as a regional shared services and resource center to help businesses to come, grow, and start here. Our vision is of a Lehigh Valley with a diverse economic base in our cities and countries that enable businesses to come here, start here, and flourish here in order to create jobs and opportunities for all of our residents. Our priorities are marketing economic assets, coordinating a prepared workforce, focusing on city and urban development, serving as a shared services center, providing access to capital, and building our resources and engaging stakeholders.

Blogger's Analysis: I'm a little confused. According to this news release, the Lehigh Valley's GDP has jumped five percent over the previous year, and is now $40.1 billion. But when I add the sector-by-sector breakdown, I come up with only $33.8 billion GDP. So either someone's math is wrong, or one or more sectors are missing.

Also, despite the manufacturing boast, it only makes up 22% of the economy.

Retail has only risen 1.4%. That's hardly a sign that consumers have money in their pockets, or that Trump's temporary tax cuts has spurred spending.

The increase in transportation and warehousing is a bad sign for our failing infrastructure. The Lehigh Valley knows truck traffic is going to double, yet still has failed to take a regional approach to combat this problem.

Arts and entertainment is only up 1.7? Is this supposed to be a good thing, or a warning sign?

The drop in information is something you see every time you open up a newspaper. The problem is not fake news. the problem is no news at all, a very troubling sign in a democracy.

Updated 1:30 pm: LVEDC Responds!

We listed the eight largest sectors in our story, but there are a few other sectors that make up a smaller portion of the GDP (utilities, construction, wholesale trade) that we did not include.  However, if you’d like to see the specific breakdown, you can visit the BEA.govwebsite, go to the interactive data section, then search for GDP by metro, then pull up the 2017 numbers.

 

You can see in the screenshot below where the $40.1 billion (for private industry) comes from:

 

 

(You may also see some sectors are listed as “(D),” meaning “Did not report.” That means the BEA did not report specific amounts from them, either because of business confidentiality reasons, or because they deemed them too small to specifically report, or for some other reason. We have no control over that, obviously, but GDP from those sectors are still rolled into the $40.1 billion number.)

 

Manufacturing’s $7.4 billion GDP makes up 18% of the overall $40.1 billion GDP, which may not sound like much on the surface, but is actually quite high compared to most regions. For comparison purposes, manufacturing only makes up 11.6% of the overall U.S. economy.

 

Additionally, one of the unique factors of the Lehigh Valley economy is how unusually balanced and multifaceted it is. Many regions have one sector that makes up the vast majority of its economy, and then the other sectors are significantly smaller. By comparison, the Lehigh Valley’s top two sectors (finance and manufacturing) are very close to each other ($7.6B and $7.4B), as are its next two (education and professional services, at $5.5 billion and $5.2 billion, respectively). We view this as a strength for our economy, all our eggs are not in one basket; we are not overly dependent on one industry, and so if there is a decline in one sector, it will be partially offset by strength in the others.

Trump MAGAnomics

Authoritarian Donald Trump believes people overlook his petty and mean-spirited behavior because he's doing such a great job with the economy.  "It's the economy, stupid!," is a phrase he recently repeated on a friendly AM radio talk show. But is MAGAnomics really working?

On the surface, things look very good. The stock market is at an all-time high. The conservative CATO Institute proclaims, "The unemployment rate hovers around record-low levels, gross domestic product growth topped 4 percent in the second quarter, and consumer confidence is as high as it’s been since the late-1990s boom." This may explain why many Republicans stick with Trump despite his taunting tweets.

But how about long term? The CATO Institute concludes, "Trump’s economic agenda is little more than an impulsive dislike of trade and immigration, a hazy desire for less regulation, and a desire to lower taxes temporarily but not do the hard work to lower taxes permanently. In other words, MAGAnomics is more a marketing slogan than a serious plan to strengthen the nation’s economy."

With a federal debt of $21 trillion, which is higher than our GDP for an entire year, we are in trouble.

Trump 2020? How about Depression 2021?

Jennings on Wealth Disparity One Last Time

Earlier this week, I was fairly critical of a local task force on wealth disparity, which presented its findings at Northampton Community College. Its written report, is online and entitled Justice For All. It starts off with this accusation:

The United States has a problem with race. It is real. It is discreet and it is indiscreet. Depending on who you are you can feel it, see it, hear it, but you can’t deny it. In fact, denying that racism exists is the new racism: if we pretend it doesn’t exist we can ignore the pain it causes and the role nearly every one of us plays. Those in a position to ignore the pain get to keep the benefits. Those not continue to pay the price.

One of this group's recommendations is to add more diversity to the boards of local nonprofits. I have already stated how I feel, but want to give Jennings a final opportunity to tell me I'm full of shit. I'll give him the final word, and owe him that and more.

Help me to understand this: many of the most prominent organizations in the region do not have a single person of color on their decision-making bodies (all but one foundation ...). The task force that points this out is a rare group that is entirely made up of people of color and THAT's racist?

Don't you think it's important for people on the margins to get a voice once in a while? I cannot be the lone voice speaking up around here - I'm trying to give folks a chance to speak up. I'm not going to be able to do this as long as I had hoped, so I'm trying to pass the baton. Shouldn't our folks be at the same table as their white counterparts?

Dent Reacts To Anemic May Jobs Report

Dent in Hanover Tp on Armed Forces Day

In the wake of a disappointing jobs report released on Friday, in which the unemployment rate actually rose Lehigh Valley Congressman Charlie Dent has released this statement:

“After consecutive months of tepid economic improvement in the first quarter of the year, April and May’s terribly disappointing employment reports demonstrate the President’s brand of recovery is neither durable nor sustainable. To fully recover from the economic downturn and encourage job growth, Washington must promote fiscal responsibility by controlling and prioritizing federal spending, reduce the current regulatory burden on job creators, develop an all-of-the-above energy portfolio and enact comprehensive tax reform that encourages growth and investment. Unfortunately, the President has failed to embrace a single component of this strategy. Instead, he has consistently called for greater federal spending, talked about the need for regulatory relief without delivering any substantial reforms, attempted to pick winners and losers in the energy industry rather than letting the competitive market drive innovation, and proposed tax increases on American small businesses and hardworking families. The time has come for the President to abandon his election year posturing and support serious policies to revive this economy through the implementation of pro-growth measures.”

AT&T Blames FCC For T-Mobile's Call Center Closings

Barron von Footinmouth will no longer be able to prance outside T-Mobile's Call Center. It's closing. Six hundred jobs at the Hanover Township facility will be gone in June. Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs, interestingly blames the FCC:

“Yesterday, T-Mobile made the sad announcement that it would be closing seven call centers, laying off thousands of workers, and that more layoff announcements may follow. Normally, we’d not comment on something like this. But I feel this is an exception for one big reason– only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved. We also predicted that if the merger failed, T-Mobile would be forced into major layoffs.

“At that time, the current FCC not only rejected our pledges and predictions, they also questioned our credibility. The FCC argued that the merger would cost jobs, not preserve them, and that rejecting it would save jobs. In short, the FCC said they were right, we were wrong, and did so in an aggressive and adamant way.

“Rarely are a regulatory agency’s predictive judgments proven so wrong so fast. But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security. Only a few months later, the truth of who was right is sadly obvious.

“So what’s the lesson here? For one thing, it’s a reminder of why “regulatory humility” should be more than a slogan. The FCC may consider itself an expert agency on telecom, but it is not omniscient. And when it ventures far afield from technical issues, and into judgments about employment or predictions about business decisions, it has often been wildly wrong. The other lesson is even more important, and should be sobering. It is a reminder that in government, as in life, decisions have consequences. One must approach them not as an exercise of power but instead of responsibility, because, as I learned in my years of public service, the price of a bad decision is too often paid by someone else.”

Republican Pipe Dreams

In a news release late yesterday, LV Congressman Charlie Dent announces that he's voted for the Middle Class Tax Relief and Job Creation Act, which extends current payroll tax relief, extends and reforms the federal unemployment insurance program, ensures Medicare beneficiaries continue to receive the level of care they deserve and helps create and preserve domestic manufacturing jobs and promote American energy security.

Sounds like a good thing, right? Sounds like something that should have bi-partisan support, right?

Wrong.

Before the vote, President Obama had already claimed he'd veto it. Senate Majority Leader Harry Reid said it wouldn't get that far, vowing he'd kill the bill himself in the Senate. “The bill passed by House Republicans tonight is a pointless partisan exercise," roared Reid, from the well of the Senate floor. "The bill is dead on arrival in the Senate. It was dead before it got to the Senate.”

It passed in the House, 234 to 193, largely along party lines.

The Bill does extend a "temporary" payroll tax cit, giving most of us an extra $20 a week. It does block a reduction in Medicare doctor reimbursements for another two years. It extends unemployment benefits, although it requires drug testing and GED programs for unemployment beneficiaries who never graduated from high school. It even blocks a scheduled pay raise for ... gasp! ... Congress.

So what the hell happened? The Keystone XL pipeline. That's a plan to draw oil from Canada all the way to the Gulf Coast, and it was inserted into the Bill. Unions want it because it will create 20-25,000 jobs from the get go. It would also reduce dependence on the Middle East. But environmentalists hate it for a myriad of reasons. Obama is undecided, is waiting for environmental studies, and resents having it shoved down his throat.

“While our nation fights to overcome the prolonged economic downtown, this bill advances numerous policies that are critical to the American people and domestic job creators,” explains Dent. “By passing H.R. 3630, the House has taken the first step to prevent a tax increase on hard-working Americans by extending temporary payroll tax relief for an additional year. The bill also extends the federal unemployment insurance program while implementing common-sense reforms that will help more Americans get back to work, and ensures countless seniors maintain access to their current doctors by preventing a 27.4% cut to physicians’ Medicare reimbursement rates next year.”

“Furthermore, H.R 3630 addresses excessive federal regulations that stifle job growth in numerous sectors of our economy and extends 100 percent business expensing through 2012 to allow job creators to invest in their growth,” continues Dent. “Finally, H.R. 3630 establishes a process for the completion of the Keystone XL pipeline. Not only will the construction of this crucial infrastructure create thousands of jobs for American workers, it will also provide the energy resources needed to fuel our economic recovery.”

Dent's Summary of Middle Class Tax Relief and Job Creation Act

This summary comes courtesy of LV Congressman Charlie Dent.

Summary of H.R. 3630, the Middle Class Tax Relief and Job Creation Act:

Extends Current Payroll Tax Relief

The bill provides a one-year extension of the temporary payroll tax relief enacted in 2010. The measure ensures taxes will not increase on the nearly 170 million Americans who currently pay payroll taxes, saving the average American family $1,000 in 2012.

Extends the Unemployment Insurance Program & Implements Common-Sense Reforms

The bill extends unemployment insurance (UI) program benefits while implementing permanent reforms to strengthen UI. Recognizing that unemployment services should focus on helping Americans get back to work, the bill uses a two-step process to gradually reduce current maximum weeks of benefits from 99 to 59 weeks, a common-sense level that is in line with past recessions and economic downturns. H.R. 3630 also requires all state and federal UI recipients to, as a condition of eligibility, search for work, enroll in a GED program if they have not finished high school (with exceptions for older workers), and participate in reemployment services to help them get back to work. Additionally, the measure allows states, if they desire, to perform drug screening and testing as a condition of providing UI benefits in order to improve prospects for future employment.

Helps Create Jobs

The bill accelerates a final decision on the Keystone XL energy pipeline – requiring a permit be granted within 60 days unless the President determines the project is not in the national interest. Similar legislation passed the House with bipartisan support earlier this year. The measure extends 100% business expensing through 2012 to make it easier for employers of all sizes to invest in new machinery and equipment, grow their businesses, and create jobs. The bill stops the onerous new boiler MACT rule and requires the Obama administration to develop a more sensible alternative that balances the need to protect both jobs and the environment. Similar legislation passed the House in a bipartisan fashion earlier this fall.

Includes Two-Year “Doc Fix”

The bill ensures Medicare beneficiaries maintain their current level of care by implementing a two-year “doc fix” that protects Medicare physicians from large reimbursement cuts scheduled to take place next year.

Offsets Payroll and UI Extension through Spending Cuts, Not Tax Increases

The bill includes spending cuts in government programs – not tax increases on job creators – to fully pay for extending current payroll tax relief and UI benefits. This includes extending the current pay freeze for federal workers, including Members of Congress, eliminating government benefits for millionaires and billionaires, and reforming entitlement programs – many ideas for which President Obama has already expressed support. 

House REINS in Regs, But Partisan Divide Still Unbridled

It's called the REINS (Regulations from the Executive In Need of Scrutiny) Act. Sound pretty impressive, eh? LV Congressman Charlie Dent voted for it. In fact, so did every other Republican in Congress. All but four Democrats voted against it. It's dead on arrival in the Senate.

Dent explains that his vote in favor of REINS, which gives Congress more oversight, would both promote economic recovery and create more transparency. “President Obama has asserted over-regulation 'stifles innovation' and has a 'chilling effect on growth and jobs', yet federal agencies under his control continue to propose and advance major regulations that hinder our economic recovery,” said Dent. “Requiring Congressional approval of the most significant proposals will enhance the transparency of the entire federal rulemaking process and help strengthen the voice of the American people in the development of regulations that affect their daily lives.”

Congressional oversight would kick in for any major regulation, i.e. one estimated to have an annual economic impact of $100 million or more, or that results in a substantial increase in costs or prices for American consumers and producers, as well as federal, state and local government agencies. The bill establishes a 70 day window for Congress and the President to approve a rule through the passage of a joint resolution.

According to a Dent news release, there were 95 final major regulations in 2008, 84 in 2009, and 100 in 2010.

I can buy the transparency argument made by Dent. But I wonder whether these regulations are killing as many jobs as claimed. I understand the distrust of big government by fiscal conservatives. But New York Times columnist David Brooks, who is certainly no liberal, questions the validity of the GOP charge that Obama's is a "virulently antibusiness administration that spews out a steady flow of job- and economy-crushing regulations." He points out that only 13% of small businesses cite over-regulation as the reason why they lay off workers. Also, the most regulated of all industries - energy and health care - are the ones doing the most hiring.

So this Bill might lead to greater transparency, if it ever passed in the Senate, which it won't. But will it really help create more jobs? Especially when you know it's dead in the Senate? Is it all about talking points?

We have a serious problem. Both the GOP and the Democrats need to be working together, but they seem more divided than ever, and more interested in blaming each other than actually getting something done. Now I can see that some regulations might be stifling, but don't others also save lives?

Instead of reining in regulations, Democrats and Republicans in Congress need to rein in each other. Then we might start producing real jobs that will pass in both Houses.

Dent on November Jobs Report: Good, Not Great

I guess we should be happy that unemployment, at 8.6%, is at its lowest point in the past 2 1/2 years. On the other hand, part of the reason for this is that 315,000 people dropped out of the labor force, meaning the rate came down in part because fewer people were looking for work. So it's no surprise that LV Congressman Charlie Dent is ambivalent about the latest figures.

“News that the economy added 120,000 jobs in November, dropping the unemployment rate to 8.6%, is a welcome departure from months of insufficient job growth. However, there is cause for concern in this report, as the drop in unemployment was partially driven by over 300,000 Americans exiting the workforce. While the latest BLS report indicates our economy may be improving, Congress must maintain its focus on advancing policies that help more Americans get back to work.

“This year, the House has passed numerous bills that would help create an economic climate in which job creators have the certainty and confidence to grow, but Washington has failed to enact significant pro-growth policies largely because of an unacceptably idle Senate. The House will continue its work on promoting the development of American energy from all sources, averting tax increases that impede growth, enhancing the nation’s critical infrastructure and providing relief for small businesses and other job creators struggling with onerous federal regulations. But sustaining November’s nominal yet encouraging job growth will require the concentrated effort of both chambers and the White House.”

Scary Protest Against Rich People on Monday in Allentown

A group that apparently hates rich people - who doesn't? - will demonstrate at Allentown's  7th & Hamilton Street on Monday, between noon and 3 PM. According to organizer Adam Santo, "Occupy Allentown "is a leaderless resistance movement made up of the 99% of Americans that can no longer take the greed and corruption of the wealthy 1%. For those of us in the Lehigh Valley region that cannot be physically present in NYC to protest with our fellow 99%, the only way we can show support to is to stand in solidarity and get the message known in Allentown. Organizing to occupy downtown Allentown at the intersection of 7th st and Hamilton st at the monument. WE ARE THE 99%."

So far, only 13 people have committed to this event, which is less than 99.

People who look like this.












And this.












Hey, if nobody shows, they can always play Dungeons and Dragons.

"If the U.S. Government Were a Family ..."

“If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.” – Dave Ramsey

Is It a Double Dip Recession?

Although I'm a hundredaire and have a few bucks in my pocket for the weekend, I'm certainly no financial expert. So when a friend called me last night to complain about the nosedive in her stock portfolio as a result of the 500-point stock market crash yesterday, all I could do was tell her what I've learned from another friend who actually is an expert.

You might know him as Steve Thode, a member of Bethlehem's very busy Planning Commission. Last year, I cornered him at Pizza Joe's in Nazareth. He tried to get away, but I blocked the exit. Same thing happened a few weeks ago at Panera's Bread in Bethlehem, where my Center Street satellite office is located. He was in a booth, and I sat right next to him so he couldn't move. His kids got away that time, while I peppered the poor guy with question after question while he was trying vainly to finish his chicken lemon orzo soup.

Thode is known to Lehigh students as Dr. Stephen F. Thode, and is Director of the Murray H. Goodman Center for Real Estate Studies. He was interested in my Patch column about another nosedive in the Northampton County real estate market.

What Steve tells me, and he's a Doctor, is that the real estate market will improve when there are more jobs. But then he added that there's an old familiar enemy that should concern us all - the gas pump. According to Dr. Thode, a recession will follow a surge in oil prices as inevitably as night follows day.

Until yesterday, when oil dropped to $86, it had risen to $117 per barrel from $79 just a year before.

Are we headed to a double dip recession? Or worse, another Great Depression. I don't know. I'm no financial expert.

Debt Ceiling Crisis: A Pox on Both Their Houses

Jonathan Miller's Debt Ceiling for Dummies explains why it's imperative to resolve the debt ceiling crisis on or before August 2, the date we go into default. Failure means a shutdown in many government services, including Social Security and Medicare checks. It will degrade our credit rating internationally. It will even mean higher interest rates on individual credit cards and mortgages. Given these dire consequences, it's a stupid time for either Republicans or Democrats to engage in a game of brinkmanship. But we're Americans, and have proved time and again that we're pretty dumb.

Right now, there are two competing proposals, although details might change by the time you read this. House Speaker Boehner, on behalf of Republicans, would raise the debt limit about $1 trillion, and then would spend seven months on Tax Code reforms, as well as cuts to Medicare and Medicaid. After that, he would raise the debt limit again. Senate Majority Leader Harry Reid, on behalf of Democrats, would raise the debt ceiling by $2.5 trillion now, accompanied by cuts in that amount over the next ten years.

Both plans avoid a tax hike. Neither plan will succeed. President Obama has already vowed to veto Boehner's plan, while Democrats lack the muscle to push theirs through Congress.

Who's to blame? A pox on both their houses, I say.

This gridlock is precisely why we need more centrists like the Gang of Six, or Charlie Dent or Bob Casey. They are loyal to their parties, but eschew the extremes. Last night, Dent expressed concern about an "adverse reaction" in financial markets, and stated lawmakers must come to an agreement.

We need more bipartisanship and less flame-throwing.

Armstrong on Debt Ceiling: Time to Think the Unthinkable

As House Speaker Boehner walks, and President Obama balks, Allentown's Scott Armstrong speaks out:

Considering the dangers involved in a failure to reach a timely agreement on raising the nation’s debt ceiling one is forced to ponder whether a sinister political strategy is behind the brinkmanship in negotiations. The answer may become clear when one considers who presently has the stronger hand for next year’s national elections and plays out the potential winners and losers of a default. Despite the professed confidence of the Whitehouse and the DNC that President Obama and the Democrats are a shoo- in for electoral success in 2012 many experts doubt the claim. It is increasingly likely that year’s elections will be a referendum on the first term of the Obama Administration. If that is the case, we will see a repeat of the 2010 elections that brought voters to the polls en masse to put the Democrats out of power. Despite the brave face, Obama’s team understands big losses are ahead unless the current dynamic of the Democrats’ “owning” the bad economy and high unemployment numbers can be changed. As it is unlikely that any legislative tweaking will help improve the economic numbers, the only option left is to attempt to hand off the blame to the political opposition.


Allowing the country to go into a default is a risky strategy but the Obama team is desperate and by their thinking has little to lose by going for broke. For the first time in our history the nation would go into default and it would do so under Obama’s watch. However, the White House will count on the mainstream press to be an ally and attempt to lay/switch all of the blame unto the Republicans. So when seniors don’t get their social security checks it will be the Republicans’ fault; when interests rates rise and the markets crash, it will be the Republicans’ fault; when the dollar loses even more value and prices and unemployment rise even further, it will be the Republicans’ fault. In short all of the accumulated damage that has been done to the economy these past two and one half years plus all of the additional default harm will be cast by the White House/press as the consequence of the Republicans’ control of one third of the government for the last seven months.


Dare we imagine this could be their plan? If so,this cynical long shot strategy may pay off for the Democrats. However, enabling the default and following through with the consequences will serve to demonstrate the length the Democrats will go to maintain power and control. It should serve as a shocking display of total callousness towards the public good. Rest confident however, that’s not how the press will play it.

A Brief History of "Food Stamps"

From LV History: "[I]n 2009, there was a 40% increase in use of food stamps by the residents of Northampton County and a 23% increase in Lehigh County. In 2010 12% of the population in Lehigh County received food stamps and 9.2% in Northampton County. This is a direct result of more people suffering from unemployment. In Northampton County unemployment rose 63% affecting 9.0% of the residents and in Lehigh County it rose 57% leaving 9.2% out of work in 2010. Second Harvest formed a partnership with Bethlehem food banks such as New Bethany Ministries, Holy Bethlel Pentecostal, Concordia Lutheran, Trinity Episcopal, Moravian Food Bank and many others to feed thousands of our neighbors each day. The Animal Food Bank Services in Hellertown takes care of the pets during hard times for their owners."

LVEDC Stops Tweeting

What a difference a few days can make! Last week at this time, LVEDC was happily chirping away on Twitter. But on Friday, it sung off key. "We start summer hours today. That means most of the staff leave at noon, many to hit the links. Do you observe summer hours? What do you do?" This corporation is publicly funded to create and retain jobs. It was incredibly tone deaf to brag about hitting the links when many LV residents are on reduced wages or laid off.

LVEDC spent the rest of the day backtracking. Then LVEDC "Business Relations Manager" Steve Althouse predictably took it upon himself, in a mass email, to accuse me (without naming me) of "sensationalism" for accurately reporting what was said.

Today, the LVEDC tweets suddenly stopped.

Apparently, their tweeter has been silenced, and may even be fired. I sure hope that's not true. Yes, I am a bastard, but I'd hate to see someone lose his or her job for one ill-advised remark that was picked up by a disreputable blogger.

Besides, now that they have my attention, I think the problem is much deeper than their tweeter. I'm amazed by how much money is spent on key employees, or for travel to conventions in Arizona ... or Europe.

Yes, I said Europe. During a Recession.

I've sent Althouse a request for their travel information over the last three years, and COO Jean Mateff is getting the information ready.

That's nice of her.

Unfortunately, you won't find any of that information on the heavily sanitized financial statements posted on LVEDC's web page. But you can get a clue looking at the Form 990s filed with the IRS. In 2008, it looks like the travel budget was $75,314. In 2009, it shot up to $96,256. That's right. In the midst of a recession, they were whooping it up.

I've already told you that CEO Phil Mitman's salary went up 14% in 2009, from $117,788 to $134,366.

I can't tell you what Jean Mateff, the COO, was paid in 2008 because I can't find it. I've looked high and low, but just don't see it. But here's what Jean and some of her pals were paid in 2009.

Jean Mateff - $96,880
John Kingsley - $88,070
Peter Reinke - $81,450
Stephen Melnick - $81,363
Robert Wendt - $63,883
Robert Bilhemer - $56,307

It gets better. In 2008, $50,550 went to a "public affairs firm" to represent LVEDC interests throughout the Commonwealth. In 2009, $42,500 was spent for "direct contacts" with legislators. What the hell are these? Three-martini lunches? Tickets to the Phillies?

Needless to say, there's a lot going on at LVEDC, and it appears that it has very little to do with creating or retaining jobs.

I'll be back in touch when I hear from Mateff.

2008 Form 990

2009 Form 990

Dent: Obama Can't Be Pro-Jobs and Anti-Employer

Unemployment crept back up to 9.1% last week. In fact, you can thank Ronald McDonald for half of the new jobs created. These jobs are going to adults, incidentally. Teen unemployment is 24%.

LV Congressman Charlie Dent lashed out at President Obama:

“Certainly, I am disappointed the May employment figures reveal the economy is still struggling to recover. Sadly, I am not surprised by this news. Employers are naturally reluctant to hire new workers while the President continues to call for tax increases, stands in the way of domestic energy production and turns a blind eye to a growing list of onerous federal regulations.

“It is long past time to unleash the private sector, get serious about tax reform, open markets for American producers and stop bureaucrats from stifling job creation across the country. The anti-business agenda of this Administration must end. The President can no longer be both pro-jobs and anti-employer.”

Is Dent right? According to Politico, there may very well be "than $1 trillion in new compliance costs [tacked] onto a wide range of industries, from health care to the financial markets and energy." But early this year, Obama did sign an executive order asking federal agencies to throw out rules that just cost business. So far, there are preliminary plans for about a billion in savings.

Are We On Our Way to a Depression?

Democrats will find some way to blame Republicans. Republicans will find some way to blame Democrats. But it's increasingly obvious that the so-called economic recovery was little more than wishful thinking. In fact, Wall Street market strategist Peter Yastrow claims we are on the "verge of a great, great depression."

Former Clinton Sec'y of Labor Robert Reich reports that housing prices have dropped 33% below 2006 levels, which is actually a bigger decrease than during the Great Depression.

At a time when the private-sector payroll is supposed to be rebounding, there were just 38,000 new private jobs last month, well below the 175,000 predicted. Stocks dropped 2% in just one day.

In the meantime, Congress and the President are unable to reach agreement on raising the debt limit while reducing he deficit.

I never believed there was a recovery. Banks lent money against assets that are losing their value. Sure, they were bailed out, but those are still toxic assets, no matter how hard they try to pretend they aren't. And guess what, the real estate market is still in the tank, with no sign of improvement on the horizon.

Dent: Raise Debt Ceiling, But Reduce That Deficit

According to Treasury Secretary Timothy Geithner, refusing to raise the $14.3 trillion debt ceiling will push us into a "double dip recession." That's pretty amazing, especially since Geithner has already said the recession is over.

In a statement released today, LV Congressman Charlie Dent states he supports raising the debt ceiling, but only if that measure is accompanied by reforms reducing the deficit.

“Today, the United States reached the federal debt ceiling of $14.3 trillion – an outcome fueled by Washington’s history of excessive and unsustainable spending. The fragile condition of our economy, coupled with our nation’s severe budget problems, may compel Congress to raise the debt ceiling, but this significant step must be taken only if a concrete strategy to reduce the federal deficit is simultaneously set in motion.

“Proposals to raise the debt ceiling without enacting substantial reforms that control long-term government spending are unacceptable. Equally, allowing the government to potentially default on its debt is reckless and would have a dramatic impact on the American economy. I believe Congress must use this situation as an opportunity to build on recent achievements that promote sustainable spending and economic stability.”

Carmike Offering $5 Matinees

I watch no television. I consider it a monumental waste of time. But every weekend, I try to see at least one movie. It's an expensive habit. Tickets are $10, and even the smallest popcorn and soda is around $11. Some weekends, I just can't afford it.

Carmike, however, is trying to make things a little easier. Between 4 PM and 5:30 PM, you can see all the latest hits for just $5. I took advantage of that price break to see Thor today, and the place was packed with lots of happy young families who tell me they have not been to the movies in years.

We all were given a coupon for a Thor comic book and, best of all, a Pirates of the Caribbean tattoo.