Robbing Paul to Pay Phil

Phil Gordon's famous for establishing the regressive food tax in Phoenix (it's regressive because the poor pay a higher percentage of their incomes into buying food):

http://sonoranalliance.com/2011/06/09/sal-diciccio-vs-phil-gordon-on-food-tax-money-used-for-employee-raises-bonuses/

Now we know what he wanted that money for: his new $1.4M 5-story condo w/ elevator.

http://www.bizjournals.com/phoenix/print-edition/2011/06/17/chateau-on-central-sells-first-unit-to.html?page=2

Dublin & Dubai Dubious Development Models for Phoenix

Brookings: Phoenix's recovery from recession will be slow | Phoenix Business Journal
The study ranks Phoenix 68th out of 150 major world economies for economic recovery. It has Dublin as the worst, which Arizona developers used as a model for the bioscience & technology sectors. Dubai, with which Phoenix Mayor Phil Gordon sought to establish a close trading partnership, is ranked second last.

Commodity-Triggered Double-Dip

In the short-term, I am skeptical of rosy retail numbers after hearing Bill Tatro say they include gasoline sales. But I also think this is one of many dark indicators for the long term. Just as we seem to be building a very tenuous recovery based on cost-cutting, M&A, & layoffs (not on increased sales), a commodity boom threatens to further squeeze costs for both companies & individual customers. One hidden indicator is inflation in the US, the official measure of which includes housing at a 40% weight -- this at a time when almost no one is buying, even though the inflation measure is supposed to be based on a "representative" set of goods (and don't get me started about the cheating built into "core inflation," which leaves out necessities like food & fuels).

Oil Back at $90 as Growth Gains Pace - WSJ.com The article illustrates that unlike recent short-term price spikes, the current one is more structural (long-term), at a time when both Iraq & Saudi Arabia have ramped up production to meet rising global demand.

Trader Holds $3 Billion of LME Copper - WSJ.com I mention this metal instead of gold because it's a more utilitarian commodity (used in construction, cars, & all sorts of appliances). The article also mentions single traders holding large positions in nickel, zinc, & aluminum.

The flip side of this coin is that this commodity boom must be benefiting miners, oil drillers, etc. However, if you have any significant holdings in such producers, I recommend getting out soon, because once these prices break the backs of buyers, the prices should dive off a cliff. (The pain in the rest of the global economies eventually has to spread to commodities producers.)

Prop 100 Gateway Drug to Higher State Taxes

Mr. Quinlan sure makes a compelling case. If only most Arizonans were well enough educated to understand graphs of demand & supply curves so I could demonstrate how raising taxes actually decreases tax revenues (and, even more importantly, if I could help them understand why the gov't intentionally does static forecasts of revenue changes from proposed tax increases and tell how the luxury tax on yachts in America only destroyed our domestic yacht industry & put many lower- & middle-income Americans out of work). But perhaps it just serves us right as fallen humans when we seek revenge on the rich through taxes.

Warped View of Budgeting

Note the paragraph near the top of the middle column that begins, "The price tag of the tax cuts ..." Some people have a very distorted view of government money management, as if the government earns it own money & then decides to donate money to businesses in the form of tax cuts. The truth is that tax cuts are less money being stolen from businesses by government.

Municipal Default

Cities & states during the housing bubble (wisely, of course) assumed housing prices & tax revenues would go up forever so they could keep spending like drunken sailors (following the federal example). Now the cities will have to be saved by the states, which are already in steep deficits, so the feds will have to come to their rescue. (But that's OK because the Treasury is just flush with excess cash, right?)

DiCiccio Reveals Phoenix's Wasteful Spending

http://www.azcentral.com/12news/news/articles/2010/04/11/20100411phxemployees0411-CP.html

The article demonstrates how, just as Mayor Gordon installed a city sales tax on food suggesting that cops would have to be fired otherwise, Councilman Sal DiCiccio is revealing just how highly paid city employees are, draining lifeblood out of an economy that's already on life support.