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  • Davidson: Declining Mobility and What it Says About Workers Skills and Industry in America

    Adam Davidson 's latest NYT Magazine column is a must read, and it highlights one of the topics we love to keep an eye on at The Watch: mobility. Historically, a high level of economic mobility in the U.S. has often meant a lot of geographic mobility. But today? Not so much interstate migration, as this NYT graphic shows: Davidson points out that mobility requires industries that are successful and creating jobs to pull people from one state to another. And the industries that have that pull today are looking for workers with particular skills. Part of the problem is that the country’s largest industries are in decline. In the past, it was perfectly clear where young people should go for work (Chicago in the 1870s, Detroit in the 1910s, Houston in the 1970s) and, more or less, what they’d be doing when they got there (killing steer, building cars, selling oil). And these industries were large enough to offer jobs to each class of worker, from unskilled laborer to manager or engineer. Today, the few bright spots in our economy are relatively small (though some promise future growth) and decentralized. There are great jobs in Silicon Valley, in the biotech research capitals of Boston and Raleigh-Durham and in advanced manufacturing plants along the southern I-85 corridor. These companies recruit all over the country and the globe for workers with specific abilities. (You don’t need to be the next Mark Zuckerberg to get a job in one of the microhubs, by the way. But you will almost certainly need at least a B.A. in computer science or a year or two at a technical school.) This newer, select job market is national, and it offers members of the mobile class competitive salaries and higher bargaining power. Many members of the immobile class, on the other hand, live in the America of the grim headlines. If you have no specialized skills, there’s little reason to uproot to another state and be the last in line for a low-paying job at a new auto plant or a burgeoning green-energy cluster. The surprise in the census data, however, is that the immobile work force is not limited to unskilled workers. In fact, many have a college degree. This column has sparked an ongoing online conversation at the Planet Money blog. Read Davidson's column here . And then go to responses from Brookings demographer William Frey , here , and Northwestern economist Joseph Ferrie, here .

  • Adam Davidson: Shopping-Based Indicators and the State of Saving Among American Consumers

    In his most recent New York Times Magazine column, Adam Davidson writes about how he and his Planet Money colleagues surveyed the shopping indicator scene to see what Americans' shopping patterns might tell us about the state of the economy. From lipstick (once a strong indicator, now not so much) to Champagne sales ("consistently accurate"), there is no shortage of goods that are extolled as strong indicators. But in the end, the big takeaway is that consumers seem to remain consumers, and have yet to transition into savers. Davidson: Of all the indicators we looked at, one of the most consistently accurate was Champagne sales. The amount of French Champagne that Americans consume has predicted — with nearly 90 percent accuracy — the average American income one year later. Apparently, when we pop a Champagne cork, we know that good times are ahead (see chart). Champagne sales hurtled upward twice in recent history — at the peak of the Internet bubble in 1999 and during the heyday of the housing bubble in 2007. These were both followed by slowdowns as fewer people found reason to celebrate. There are so many indicators to choose from that you could glean just about anything regarding our economic future. In fact, the most telling indicator appears to be the sheer number of indicators themselves. Americans now have so many seductive things they can buy that there are ample consumer options no matter what we feel. Partly as a result, savings — known in economics as deferred consumption — have fallen steadily for more than 30 years, from a high of nearly 12 percent of income. It kissed zero before a tiny uptick in the past couple years. The decline of the savings rate is particularly troubling because it is consistent through busts and booms. During the fast growth of the late 1990s and mid-2000s, and the dark times that followed, people have been choosing to spend more and save less than ever before. Paradoxically, this happened just as pensions have been disappearing and life spans have been increasing. It suggests that Americans are so caught up in every short-term enthusiasm or agony that they haven't thought enough about long-term fiscal health. Read What Nail Polish Sales Tell Us About the Economy here .

  • Adam Davidson on America's 'Tough but manageable financial math problem'

    In his New York Times column, Adam Davidson says America's leaders need to sit down and do the math. The country's fiscal woes are complicated, but solvable. Corporations aren’t going to be able to pay that much. And as much as some people might want to punish them, or at least the C.E.O.’s that run them, it would wreck our economy if we did. It’s tempting to look to our millionaires and demand they pay more in taxes, but the same inconvenient truth applies. When you add up all the money made by all the people who earn more than $1 million a year, it amounts to around $700 billion. But since the millionaires already pay close to $200 billion in taxes, the government would have to increase rates to nearly 100 percent — which is about the worst idea ever — for it to have any real impact. It serves the interest of both parties to argue about taxes on corporations and the wealthy because neither wants to discuss the alternative, which is where things get touchy. To solve our debt problems, we have to go to where the money is — the middle class. People who earn between $30,000 and $200,000 a year make a total of around $5 trillion and pay less than 10 percent of that in taxes (owing mostly to tax incentives and the fact that most families make less than $68,000, where larger tax rates begin). Increasing the middle-class tax burden an additional 8 percent, however, would actually have a bigger impact than taxing millionaires at 100 percent. Still, many experts say we don’t need to raise the tax rate on the middle class; we just need to get rid of some of those despised loopholes (or beloved incentives). Most reform proposals suggest gradually eliminating the most popular tax deductions, like mortgage interest rates ($120 billion per year) and workplace health insurance ($200 billion per year). Regardless, most economists acknowledge, and most politicians privately concede, that the middle class will have to give up some benefits (Social Security, Medicare) or it will have to pay more in taxes. Actually, it will probably have to do both. The millionaires will be paying more, too. Leading Democrats are proposing a nearly 10 percent hike. Any wonder politicians don't want to sit down and do the hard math? Read It’s Not Just About the Millionaires here .

  • Planet Money Debate: To Profit or Not to Profit, on Microfinance Lending

    Vikram Akula believes that the path to spreading microfinance lending requires getting buy-in from profit seeking investors. He started SKS Microfinance, and soon will be taking the company public. Muhammad Yunus , on the other hand, thinks that having to please investors who expect a return on their profits undermines the purpose of microfinance. And he should know, right? Yunus, as you'll remember, won the Nobel Peace Prize in 2006 for introducing the world to the potential of microfinance. Adam Davidson spoke to Akula and Yunus at the Clinton Global Initiative annual meeting last week, and Planet Money edited the debate down into a podcast. Take a listen: The full panel discussion from last week is long, but compelling. The discussion begins 10 minutes in: Watch live streaming video from cgi_plenary at livestream.com

  • Planet Money: India's Booming Economy, and Persistent Poverty

    Adam Davidson , David Kestenbaum and their colleagues at NPR's Planet Money has been spending a lot of time this year looking into what makes poor countries poor. On Friday's Planet Money podcast, Davidson and Kestenbaum took on the case of India. India is a particularly curious case. While the economy of the world's largest democracy is growing at a rate of 8% (very impressive during this period of global recession and slow recovery), poverty seems inescapable for hundreds of millions there. Take a listen .

  • The Economic Benefits of Catchy Paint Jobs for Haitian Bus Owners

    Planet Money 's Adam Davidson has been traveling to Haiti since January's devastating earthquake and asking some key questions about what it will take to rebuild (or even build) that nation's economy. And in true Planet Money fashion, he has been marrying the micro and the macro, to give us vivid radio pieces. Now he is teaming up with Frontline on a series of reports. Here's one that benefits from video. It is about the standard mode of transportation for many Haitians: "tap-taps." Tap-taps are small, wildly decorated buses. These privately owned buses are essential in a place where just 3 percent of the population owns cars. Davidson was struck by the artistry he saw in the murals painted on the buses. And he found that the bold paint-jobs are simply good business: For more of Planet Money's coverage from Haiti, click here .

  • Planet Money: The Economics of Ticketmaster

    Have you attended a concert lately? Unless it was for a community orchestra, or your child's school concert, odds are fairly high you purchased your tickets through Ticketmaster . And you might have wondered why the ticket cost several dollars more than the listed price. All because of added costs like "convenience" charges. And you might have wondered why you are paying a convenience charge for tickets you bought online and printed out yourself, or even for tickets that are "paperless" and required no printing. David Kestenbaum and Adam Davidson tried to make sense of the Ticketmaster setup on Planet Money . Take a listen or download the podcast here .

  • Bad Banks, Visualized

    Last month we highlighted the This American Life program on "bad banks" . The folks at Redub have now put together a helpful visualization of the first example from that program--where Adam Davidson explains how a bank goes bad to his partner Alex Blumberg. Have a look, by clicking here .

  • Planet Money on Meet the Press

    Planet Money 's Alex Blumberg and Adam Davidson were guests on NBC's Meet the Press yesterday, where they talked about their aim of increasing financial literacy during the global economic crisis. They also talked to David Gregory about the banking system. Davidson told Gregory that the banks are "insolvent." And then the pair goes on to explain what that means for the government's efforts to rescue the banking system: Visit msnbc.com for Breaking News , World News , and News about the Economy Davidson, Blumberg go on to discuss their work at Planet Money and This American Life with Gregory in a special web-only interview. Gregory asks them to give the narrative for terms that have become familiar, even if most people have no idea what they mean: Visit msnbc.com for Breaking News , World News , and News about the Economy

  • Adam Davidson on Reporting the Crisis

    Adam Davidson started Planet Money for NPR as the global economic crisis hit 7 months ago, and the reporting unit/blog quickly became one of the most reliable providers of clear reporting on economic issues. He and Planet Money colleague Alex Blumberg are also the reporters who put together the Giant Pool of Money broadcasts for This American Life. In this interview for Harvard's Nieman Journalism Lab , Davidson discusses how he goes about reporting a story so complex as the subprime mortgage crisis: NPR's Adam Davidson on "The Giant Pool of Money" from Nieman Journalism Lab on Vimeo .

  • This American Debt

    The latest This American Life brings back the team of Alex Blumberg and Adam Davidson , the guys that put together the uniquely helpful Giant Pool of Money. This time, they give perhaps the clearest explanation of the problem with so-called "bad banks." They cover how banks go bad and the options in front of government--from letting the banks fail to taking them over in some form of nationalization. The whole program is a must listen, but the part of the program that focuses on consumer debt stands out. Columbia Business School David Beim says insolvent banks shouldn't lend, and he shows Alex Blumberg this chart: In the words of Pogo , "we have met the enemy, and he is us." The above charts household debt against GDP. And it has what Beim calls "twin peaks." It hits 100% twice: in 1929 and 2007. Blumber asks Beim if he the chart scares him. It does, and Beim says: That chart is the most striking piece of evidence that I have that what is happening to us is something that goes way beyond toxic assets and banks. It's something that has little to do with the mechanics of mortgage securitization, or ethics on Wall Street, or anything else. It says the problem is us. The problem is not the banks, greedy though they may be. Overpaid though they may be. The problem is us. We have been overborrowing. You can download the full Bad Bank episode from This American Life here .

  • Geithner on Stress Tests

    The nation's largest financial institutions are going under the microscope this week. The US Treasury Department began administering stress tests yesterday , with the aim of determining whether the banks have the necessary capital to make it through two years of adverse economic conditions. On yesterday evening's All Things Considered Treasury Secretary Timothy Geithner described the purpose of the stress tests to NPR international business and economics correspondent Adam Davidson . Geithner: What we want to do is to bring a more realistic, a more conservative, a more consistent, forward-looking assessment so that we are confident that these institutions are going to have the resources necessary to withstand a more challenging economic environment. And to do that we're gong to make sure they have support from the government — in terms of capital from the government — where that is necessary . We know Davidson, and we've highlighted his work before. He started Planet Money for NPR just as the global economic crisis struck last year. And his features for This American Life (Giant Pool of Money, parts 1 and 2 in particular), provide some of the clearest explanations of the root causes of the crisis. And this interview is consistent wth his previous work. As Davidson presses Geithner on how the Treasury will go about administering the stress tests, he put the Secretary through a little bit of his own stress test. You can catch the ATC interview here . But there's more that didn't make it onto the ATC edited version. The latest Planet Money podcast features the full interview with Geithner, and a description of the scene in Geithner's office. Download, or take a listen to the full interview here . UPDATE: The Baseline Scenario reacts to the Geithner interview .