Geography of a Recession

Excellent interactive graphic from The New York Times.

April 2009 Slides

Thanks to everyone who came to the Indicators Breakfast. My slides can be found below.

April 2009 Final

View more presentations from Taggert Brooks.

Foreclosures

Matt Kures, GIS specialist, from UW-Extension put together some maps with foreclosures for each county.

La Crosse

click on picture for full size.

Other Counties can be found here.

Hunger Task Force

The Slides from a recent presentation to the Hunger Task Force Conference.

Hunger Task Force 2009 Final

View more presentations from Taggert Brooks.

December 2008 Consumer Sentiment

In December of 2008 I conducted the semi-annual consumer sentiment survey for the 7 Rivers Region.  Approximately 1,100 current and past participants in 7 Rivers Region events were emailed a link to the survey. 238 responses were received.  The overall index for consumer sentiment in the 7 Rivers Region actually rose slightly in December 2008 to 70.9 from 69.9 in August 2008. Whereas the rest of the nation experienced a decline in overall sentiment from 61.2 to 60.1. According to Bloomberg:

“It’s a difficult environment for households right now,” Dean Maki, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in an interview with Bloomberg Television. “The job market is weighing on confidence. We are seeing activity just falling off.”

The confidence index was forecast to rise to 61.9, according to the median of 54 economists surveyed by Bloomberg News. Estimates ranged from 60 to 65. A preliminary report earlier this month showed a reading of 61.9.

A Commerce Department report earlier today showed the economy shrank at a 3.8 percent pace in the fourth quarter of 2008, the weakest growth pace since 1982. Consumer spending contracted at a 3.5 percent rate in the last three months of 2008.

 

Turning to the current conditions index, based on a subset of questions which ask respondents how they are doing now and how they have been doing over the last year. Again, we appear to have done a bit better than the rest of the nation. The 7 Rivers Region current conditions index rose from 76.5 in August of 2008 to 87.0 in December of 2008. The national index fell from 73.1 to 69.5 in August.

Turning to future expectations. The local expectations index appears to have taken the biggest hit, with the index of future expectations from 65.6 to 60.6. The national number rose from 53.5 to 57.8 over the same interval.

Regional Differences

Regional Differences can persist for a very long time. From Andrew Gelman

The Entrepreneurship Myth

The Entrepreneurship Myth an interview with Scott Shane about his book The Illusions of Entrepreneurship.

Some things that aren't surprising.

Describe the typical startup that you found.
The median startup is a business that's capitalized with about $25,000. The financing of that business comes from the entrepreneur's savings. The business is a retail or personal service business, a hair salon or a clothing store, that kind of thing. The founder doesn't have expectations of a very high growth business, in fact [the entrepreneur is] probably thinking a goal of $100,000 a year of revenue is a good goal.

And it's most likely to be organized as a sole proprietorship and to have no employees besides the owner—is that correct?

That's right. And in fact we're getting close to half, very close to the median would even be home-based.
Why do you think the myth of entrepreneurship, the image that you're debunking, is so popular?
Part of it is we have a belief that entrepreneurship is good because it's associated with things that we like to believe about Americans: being independent, doing your own thing, going your own way. The other part of it is that paradoxically, there is one really, really good thing about entrepreneurship that people don't talk about, which is dominant and we have lots of evidence to support: People who run their own businesses have greater job satisfaction than people who don't. I think part of it is that we're trying to make sense of this paradox—that we really like it, but financially it isn't so great. So we create a myth that says because we like it and it makes us happy, it must also make financial sense, because otherwise there's a kind of conflict we can't resolve.

Some things that are surprising are the conclusion the author makes. Rather inappropriately from my perspective. I think the government's track record of picking winners and losers is pretty poor. The best strategy is always one that lowers costs for everyone, rather than favoring one group over another.

You write that "encouraging startups is lousy public policy," based on the data you've examined. What would you propose as policy alternatives?
The part that's lousy public policy is the idea that entrepreneurs, regardless of what kind, are good, and if we just have more of them, it's better. But what's a good public policy is if we picked certain kinds of startups, and we emphasized the increase in those. But the way the policies are set up, they don't encourage the specific high-potential startups. Most of the policies are: More entrepreneurs—just let's get volume. It's a very volume-oriented strategy. That's bad public policy.
You collect a lot of data in your book and come to some counterintuitive conclusions about entrepreneurship. What would you say is the biggest illusion?
I think the biggest myth entrepreneurs have is that the growth and performance of their startups depends more on their entrepreneurial talent than on the businesses they choose. I hate to deflate egos, but on the other hand I want people to have a realistic understanding of things. The industry a person picks to start a business has a huge effect on the odds that it will grow. If you go back 20 years or so, about 4% of all the startups in the computer and office equipment industry made the Inc. 500, 0.005% of startups in the hotel and motel industries made that list, and 0.007% of startups in eating and drinking establishments. So that means the odds that you make the Inc. 500 are 840 times higher if you start a computer company than if you start a hotel or motel.