Saturday, August 31, 2013

Sid spells the name wrong!


Friday, August 30, 2013

countdown to Zoltan day


Thursday, August 29, 2013

How low is low?

Economists have been debating what 'full employment' means for a long time.  The only answer is that there is not a clear answer either quantitatively, or possibly even conceptually.

So I note my friend Mark's comment in one of the stories on the latest labor force data. PG: Pittsburgh Area unemployment rate declined slightly in July.  He is quoted in part: "With a healthy unemployment rate for the region being in the range of 4.5 percent." I am certain he said a lot more in context to explain that, but the blurb that made it to ink is worth thinking about.  What is a low unemployment rate for Pittsburgh.  Is 4.5% some standard?   Below is a histogram of the monthly unemployment rate for Pittsburgh every month since January 1970.  The regional unemployment rate has been below 4.5% for all of 33 out of 532 months over that period.  So 6.7% of the time.  Just saying.....  if that is the standard, when we reach it we will be in rarified times for Pittsburgh.  


Wednesday, August 28, 2013


Two memes out there just have to be connected.

First there is a palpable buzz over this story via Streetsblog: Did Progressive Parking Policies Propel Pittsburgh Past Detroit?

Makes you feel good. A big pat on the back for Pittsburgh. It was not all just luck that we did not wind up as Detroit of late. Deliberate planning to increase density and we didn't pave everything over for surface parking lots which wound up decimating Detroit's downtown. It is true that parking was a key element of Pittsburgh's postwar redevelopment efforts.  It all goes back to the beginning of the Pittsburgh Parking Authority, which was a deliberate part of Pittsburgh's renaisance.

Now juxtapose with the story yesterday: Commission seeks input on new street grid in Lower Hill District
In summary, we are soon about to spend a lot of public and private money to try and undo what was once touted as one of the gems of the Pittsburgh's renaissance.  A project that had some very dire consequences for a lot of families

Think about the two stories together.  If building vertically for parking was part of Pittsburgh's secret sauce, then why did we not follow that same pattern just yards beyond the edge of the 'Golden Triangle'?  Like say in the adjacent Lower Hill District. Personally I'd argue it was part of the same Downtown 'neighborhood' at the time. The bulk of the estimated 8,000 folks forced to move out of their homes (imagine trying to do that to a neighborhood today) were not displaced by the Civic Arena, but by the flat surface parking around the arena.  Maybe some would still have needed to be moved, but some vertical lots could have saved a lot of the neighborhood. Of course, there was no thought given to the integration of the arena into the Hill District as a neighborhood.  For a half century it looked mostly like an aspiring space port or space antenna aimed incorrectly.

The result is not that different from what Streetsblog is arguing happened in Detroit.  Big flat surface parking decimated whole neighborhoods of Detroit.  Where we did the same thing here, you get much the same result.  Not just for the homes that were demolished, but the contagion of living next to such big lots stretched well into the remaining sections of the Hill District.

But.....the history is clear, or at least the history as written.  The development of the Civic Arena was said to be about clearing the 'blight' out of the Lower Hill District. The very goal was getting rid of the housing.  I am partial to the argument that looking back in time, the failure is much clearer than it must have been at the time. Still you have to wonder why nobody thought about denser parking development in conjunction with the Civic Arena site.  Maybe we were 'progressive' in developing Downtown parking decades ago, but horizontal thinking where people actually lived should limit the kudos we get now looking back. Can't play pick and choose with history.

My older point is that  (via the last issue of Pulp magazine:) the Lower Hill District really represented Pittsburgh's Downtown residential housing stock that we have now spent hundreds of millions of public money to put back in place over the last decade.  Lots of the best Downtown neighborhoods elsewhere are gentrifications of past 'blight' in places that did not see housing stock demolished en masse. Once the Lower Hill District was taken out, Pittsburgh didn't have anything to gentrify and was left with a Downtown lacking population for the better part of a half century.  The consequences were part of Pittsburgh's population decline over subsequent decades. Then you really have to wonder about the impact on the folks who were forced to move, many of whom wound up in city housing developments that we have also demolished in recent decades.  So you produce serial, and multi-generational, displacement of the same families.


Tuesday, August 27, 2013

Big numbers and little numbers

The headlines will focus on the least important factoid to come out with the latest dump of labor force data for the Pittsburgh region.  The local unemployment rate is now 6.7%, dropping 1/10th of a percent between June and July. 

More interesting to me is that we are now 81 months below the national unemployment rate, but there are other numbers of note.  We focus mostly on seasonally adjusted labor force data for a reason, but the raw, or unadjusted, employment count for the Pittsburgh MSA is coming in at 1.202 million in July.  That would be the first time the employment count for the 7 county (current MSA definition) region has gone over 1.2 million.  Yes, ever.  As in ever including before steel jobs went into freefall.

Also of note is that seasonally adjusted employment in the MSA is up 18.6K year over year to 1.183mil in July, also a new all time peak. Basically every month will be a new all time peak as long as there is any positive trend upwards. I am more interested in the labor force trends. Pittsburgh MSA labor force is up a decent 12.9K year over year.  Not the biggest of increases, but when you realize a lot of regions are doing much better this year it is a good sign we are keeping on pace competitively. Earlier in the year my big question was whether convergence was going to catch up to Pittsburgh and we were going to end our streak of faring better than the nation by these metrics. Seems like it has opened up again in a good way, for now.

Anyways....  my relative unemployment graphic to date. 


Monday, August 26, 2013

Every Smell Has Its Map

NY's Gothamist had this funky post today: Map: Find Out What Manhattan's Sewers Smelled Like In 1910

Which has just motivated me in a stream of consciousness kind of way to put up selected pages from the classic: Odor Study and Engineering Evaluation of the LTV Steel Company Coke Plant in the Hazelwood Area of Pittsburgh.

From 1989, but ever more important today I would suggest. NY in 1910 documented locales of strong Banana Oil smell.  Eight decades later large swaths of the East End (see map in report) had documented and distinct instances of moth balls, burnt mothballs (who burns mothballs to know what they smell like?*), sulfer/mothballs and solvent/mothballs.  Who knew there were so many variants of mothball smells. 

The complete taxonomy of East End smells is a bit frightening. Not the stuff of sales brochures:


Sunday, August 25, 2013

Long past inflection

Folks really take issue with this when I point it out. Some just don't believe it, others don't want to. One view of the trend in mining jobs in Pennsylvania once you separate out what is happening in the Pittsburgh MSA. 

At the very least, not a sporadic trend for employment either on the upswing, or the downside.To be clear, none of this suggests the actual supply of natural gas across Pennsylvania is decreasing. Quite the opposite.  Just remember that for the bulk of Pennsylvania the employment impact comes mostly during the fracking phase.  Once a well is developed, the jobs move on even though the gas keeps flowing.  So it is quite consistent to note the recent news that natural gas production in the state is way up, but the employment across the state is dropping consistently over the last couple of years.

The next big battle is not really over fracking, but over all the pipelines needed to get access to current and future wells.  A very recent report says there are over 1,500 wells in Pennsylvania that are awaiting construction of a pipeline, a number that is itself increasing rapidly.

In the end, economics rears its inevitable head.  A lot of past Marcellus prognostication assumed some extreme form of ceteris paribus, that somehow price was going to remain stable in the face of vastly increasing supply. Yet all things are never held equal.  The vast new supply of natural gas has put a big damper on the price of natural gas. Another recent report says the price pressure is far from over: Gas Prices cower before Marcellus 'Monster.' Even the biggest booster of them all, Chesapeake Energy, is now saying it needs to (slide 9) "work off excessive excess well inventories." Slide 12 is a bit more telling where it shows only 12% of the firms capital expenditures are in the Marcellus region at all.  Remember, jobs are mostly going to come from spending.  As a result Bloomberg is pointing out the obvious that there is now Less appetite for shale lands.  Local news is that Pennsylvania's share of Marcellus Shale jobs dips.  I believe that is mostly the math that results from the expansion of shale development in Ohio and beyond and not necessarily a bad sign for Pennsylvania in itself.  Yet in Ohio the data is saying something a bit different than some think. From just the other day - shale gas still not creating promised jobs. What I want to know is why there is not a comparable Considine authored report for Ohio?  Why was it only for Pennsylvania?  Of course, there are now no longer any further reports on Pennsylvania either. In a bit of revisionism, the 2011 report is now labeled the "final in a series."  Personally I think an impact report is needed now far more than in 2011. Don't infer he is not busy.  Of late he is more interested in California is all.


Friday, August 23, 2013

Little Italy in a less than Italian Pittsburgh

Little Italy days are ongoing in Bloomfield.   Here are some graphics I put together in the past on the state of Italian Pittsburgh.  Interestingly, parts of Bloomfield are still showing to be the most Italian parts of the city, but the city as a whole is remarkably one of the least Italian parts of the county.  These maps would have looked very different just a few decades ago. Also these maps are reflecting data roughly 5 years old. Current data might look pretty different from these.

BTW, there is a big new rapid transit station being planned for Little Italy as well.  If only it was the same Little Italy. Yes, Cleveland is investing $$ in its rail transit as well as bus.


Thursday, August 22, 2013

One government down... only a thousand more to go

Sometimes it is the little news item that matters. So who actually read this in the Trib today: Elizabeth Township Authority Mothballed.  Maybe the better question is who cared? 

Who ever notices public authorities like the Elizabeth Township Authority in the first place, even when they are operating?  What trouble can they get into?  Just take a look at all the travails in Harrisburg (the city), which is going bankrupt because of the debt of the Harrisburg Authority (which isn't the city).   Or take the Dauphin County Authority which is in default on a hotel it owns at a local airport near Pittsburgh.  So the governments we pay the least attention to often matter a whole lot.

In the news today from just a few miles up the other end of Cleveburgh.  If ever there was an idea that needed to be replicated in Allegheny County, did you know that Cuyahoga County, Ohio has a Department of Regional Collaboration!!! Note, PLEASE, it is about regional COLLABORATION, not CONSOLIDATION.

Goes back to how much local government we have, and don't understand.  I put a graphic of it together some years ago in: Southwestern Pennsylvania- Meet Your Governments.  Before you look, take a guess for the number of governments exist across the 10 counties here. For more than just the descriptive, one of the first web pages I ever put up, and one I have not updated much in over a decade is my Primer on Local Government Fragmentation and Regionalism in the Pittsburgh Region.

Here in Pittsburgh, we can't even decide if public authorities are independent or not? Some we kind of forget altogether even if they have real financial responsibilities.  Quick, name the members of the city of Pittsburgh's Sinking Fund Commission, itself considered an independent local government.

For the US I once put together the pathological graphic of all local governments in the nation (file is about 40mb).  For Pennsylvania the graphic is below. We won't even get into the auxiliary pathology that most all of those governments have their own public pension systems. So many that it just is impossible for there to be any meaningful oversight of them all collectively.


Follow those stories

Isn't it about time for one of those follow up stories on what ever happened to all the property once owned by Bernardo K?  With a side note on how the music career is going?


Wednesday, August 21, 2013

Not all poverty is the created equal

The Census folks came out with a technical report of note for Pittsburgh: Examining the Effect of Off-Campus College Students on Poverty Rates

The title is mostly self explanatory.. well, sort of.  Many do not realize that college students are often treated as everyone else when it comes to measuring poverty.  So a college student living off campus with nominal income like most students will often be recorded as living in poverty if their income is below the poverty threshold.  Yes, it seems like a very different economic status than those living in long term poverty, but the poverty threshold is a simplistic metric. 

So this paper goes in and estimates how big a difference college students have on poverty rates. It also does specific calculations for larger municipalities and places across the nation.  What I am surprised nobody picked up on was the result for the city of Pittsburgh which has one of the bigger 'adjustments' in Pennsylvania. Using data from 2009-2011, the poverty rate for the city is calculated to be 23.1%.  With the exclusion of college students living off campus the city's poverty rate drops to 19.7%. The report does not look at smaller geographies, but the impact on certain neighborhoods must be significantly larger. Beyond poverty in itself, if you take out students from Shadyside the aggregate income metrics for the neighborhood.

These adjustments are notional and exist nowhere outside of this paper for the most part.  So any statistics you see on poverty remain as they have been calculated in the past.Just worth keeping in mind as you interpret local economic stats.


Tuesday, August 20, 2013

Housing bust and beyond

Speaking of real estate......   So it is a common refrain that Pittsburgh escaped much of the last recession because we never had the housing bust common most everywhere across the country.  That is likely true if more description than explanation of anything.  At the very least, the question of why we did not have the housing bust will be studied for a long time in the future.

But there is some new research that puts a little more analysis behind the stylized fact.  A neat bit of regional benchmarking is published recently by the Department of Labor in their Monthly Labor Review.  See: The relationship between the housing and labor market crises and doubling up: an MSA-level analysis, 2005–2011.

The authors look at all metro areas, but focused on 25 metros including Pittsburgh.   Indeed for most regions a regional housing bust precipitated a greater employment crisis.  Except for Pittsburgh and just a few other regions the housing crisis came after a regional employment decline.  In their analysis, Pittsburgh had a 3 month lag from the peak of the employment crisis until when the housing crisis finally set in, the longest lag other than Dallas in that direction. Basically, the financial crisis that the nation was going through so clogged up credit that the impact became unavoidable here in Pittsburgh.  Also in their data, Pittsburgh hung on longer than any region other than Houston before employment decline set in (3rd quarter of 2008 for Pittsburgh, tied with Washington, DC.) Houston's employment decline came in the 4th quarter of 2008.


Monday, August 19, 2013

Red hot apartment market Pittsburgh

I know I am gratuitously contributing some earned (social) media to this, and the analysis is a bit superficial, but it's such a serious video:

I swear he almost pronounced it "Picksburgh"

I also have to say this all must be about a rarefied subset of the entire rental market. The data is showing virtually no rental vacancy in all parts of Pittsburgh: north, central, west. Clearly there is housing in some of those markets, but probably not the higher quality rentals this is focusing on.


Hold... HOLD......

Yeah, yeah... wild card.


Sunday, August 18, 2013

What was Jeff Bezos doing the year after he graduated from college?

April 7, 1987 advertisement in The Daily Princetonian.  I'd love to know who those three hires were.


Saturday, August 17, 2013

Henry George lives in Altoona

So Pittsburgh ran away from the Land Value tax following Allegheny County's 2001 mass assessment. Long story there which we'll skip. But Altoona to our east has been working to put in a similar, if more extensive, land value tax. Not always easy to understand.  In the Altoona Mirror: Altoona property tax bills confuse property owners. h/t to David Levinson and Matt Yglesias and others for catching the news item.

To skip the lesson, but for more on the land value tax in the news there, see the relevant Wikipedia entry.

Henry George is much forgotten in Pittsburgh, which was the largest municipality to use a George-inspired 'tiered' tax from 1916 until the system was abolished in 2001.  No notice was there even of a major Henry George conference here just a couple weeks ago.

But now that the election is past, it is safe enough to throw this up here.Not only did Pittsburgh have a two tiered tax for 85 years, but in modern times it strengthened the system.  In 1979, former city councilman, and later US representative, Bill Coyne pushed the move from a 2-1 tax ratio for land vs. structures, to a roughly 5-1 ratio in the late 1970s.

Then a decade later it was former Mayor Sophie Masloff who fought to try and make the city more amenable to younger households by shifting the city's tax base from what was a higher income tax on residents to more revenue from the heavily weighted tiered real estate tax. Yes, it was all about trying to keep young people in the city... sound familiar? Whether you like the tax shift or not, everyone liked the lower income tax idea and it was supported broadly... if not by everyone.  As mayor Masloff was not trying to gut the city's revenue and the idea was a tax neutral shift.  No free lunch and a lower income tax meant a higher real estate tax.

In what has to constitute one of the greater acts of political courage in Pittsburgh history, Mayor Masloff went to bat fighting for the higher real estate tax part of the package deal.  In the end she partially won. The real estate tax was raised, but not by enough to really make the deal revenue neutral.  I personally think the resulting gap that was created lead to the structural deficit that lasted through the 1990s with an immense number of repercussions we live with today.  But the crescendo of the political fight came when it was time to raise the property tax. A remarkable piece of city of Pittsburgh political and economic history is embedded in a video captured and retained by Pittsburgh's Georgist in chief Dan Sullivan. (h/t to Jon Geeting for bringing this to our attention a few months ago)

I am not exaggerating. This really is the Rosetta Stone of the City of Pittsburgh's recent  history. It is the key to a lot of political history... to a lot of the city's economic history and for sure the city's recent financial history.  Worth watching the whole thing and you may recognize more than a few faces still around two decades later.

Again, watch a mayor argue against her core constituents for a tax hike that will hit them more than others.

pghtaxswap1990vimeo from Dan Sullivan on Vimeo.


Friday, August 16, 2013

Cheaper clothes

The BLS has released some new inflation data including data for metro regions. Below is the recent inflation picture for major expenditure categories in Pittsburgh. 

They must have been collecting data during some big clothes sale earlier in the year is all I can say. That and a $10 cocktail now costs a penny less on average. Pittsburgh data is reported for 6 month periods (1st half/2nd half of each year). This graph has the year over year change through the first half of this year (2013).


Thursday, August 15, 2013

Drip, drip, drip

An underappreciated headline locally is that: Charges Against 2 Traders Fault JPMorgan for Lack of Oversight. Hold that thought.

Seemingly unrelated it seems to the news coming at the beginning of next year.  With a change in administration Downtown there is going to be all sorts of public and political machinations filling local news headlines.  Some changes of great import, others not.  If you want to watch the inside game keep a close eye on all things that happen at the Pittsburgh Water and Sewer Authority (PWSA).  Why?  Simply put, because of longstanding consent decrees the PWSA entered into with the EPA, the authority along with ALCOSAN at the county level, are soon to begin one of the greatest public expenditure programs in the region's history. The spending coming soon is, quite rationally, making contractors salivate. As always, follow the money.  For more on the broader ALCOSAN consent decree checkout:

But back to JP Morgan.

I was trying to figure out what was my first post mentioning the PWSA's variable rate debt (or this post) came in July 2008. I apologize profusely for not standing on my head more over that at the time.  Eventually it became a news event that was so convoluted few understood at the time.  But the variable rate bond that somehow JP Morgan was able to convince the PWSA to issue soon became a ticking financial time bomb.  The details are in fact too much to get into here, but it was a pattern in Western Pennsylvania. Some school districts who were hit up the same way.  So bad were the deals JP Morgan got out of the municipal swaps business altogether soon thereafter. Many have sued JP Morgan over their advice and assistance during this period.  Many have received money back. The PWSA never attempted to recoup anything to the best of the public record. What befuddles me is that by 2008 the PWSA went ahead with variable rate debt even though it was known at the time similar variable rate debt was already blowing up for other public authorities.

How much are we talking about?  At the time the 2008 bond offerings were for $419 million dollars in total which should give you a clue into the scale of dollars we are talking about. The PSWA is going to have to finance a lot of this coming infrastructure replacement with new debt, even though it already has an incredibly high debt level for its size. A lot of that 2008 debt was the problematic variable rate debt that still is part of the equation.  Last I looked a tranche of it needs its letter of credit extended past this coming October. That may have happened, but the lack of news coverage compared to the past is of note. So it's unclear.

A side point, but the only reason the whole variable rate bond imbroglio has appeared to be stable (i.e. out of the news) in recent years is not that the problem has gone away, but the historic low interest rate world of late has eased the pressure on maintaining what is called a line of credit backing the deal.  If interest rates were any form of 'normal' the bad situation observed in 2008 would have long since passed a disastrous critical mass. The counterfactual is often out of sight and so, out of mind.

So what I would love is for some finance or accounting class to tackle for a semester long project is going back and looking at the 2008 Variable Rate bond deal the PWSA entered into and ascertain how much of the $$ raised ever went into the capital improvements it was intended for... vice what went into financial fees and interest along the way. It is a bill that keeps accumulating since the variable rate debt continues to need renegotiated letters of credit to back it up.  The swaps fees were big deal in other cases, and I am sure they add up here though I have never seen anyone look in depth at the numbers.  Then compare the results to what would have happened if they had done what happens I bet 95% of the time and issue some form of a fixed interest rate instrument. I am sure there is a journal article to be made of it as well.


Wednesday, August 14, 2013

When will we start calling it catsup?

So what to talk about?  Heinz layoffs?  USAirways merger being challenged?  Yarn-bombing? To me it is all just part of the same big story. 

Let's look at the news out of USAirways where the feds are challenging the proposed merger with American Airlines.  Anyone remember when USAir's merger with United was blocked?  All USAirways stories for us really go back to the great hub hope and all the effort spent on making air transportation the future economic engine of Pittsburgh.  It was once routine to talk about USAir, or an air transportation hub more generally, as the replacement for the steel industry in Pittsburgh. The numbers really never made sense to me even under the best of circumstances. Of course it didn't work out, but from the late 1980s through the early 1990s more economic development effort went into financing the new midfield terminal than most anything else in the region.

Why did we do that? There were not a lot of other great ideas for building jobs up in the region. For a while it seemed to work. Briefly USAir was the biggest private employer in the region. Then the bankruptcies of USAir ended it all. Like a lot of us, I used to blame USAir for abandoning their contract with the region. In retrospect I've come to realize USAir actually didn't want the midfield terminal, but was pushed into backing the concept more than anything else. We were desperate for ideas to bring growth to the region.

Heinz was not a part of the transformation story back then, because nobody really expected Heinz itself to ever leave Pittsburgh. When it was announced earlier in the year that Heinz was being sold, I was still getting into conversations with folks who did not realize that Heinz had long since moved its Ketchup production out of Pittsburgh.  In fact all Heinz manufacuting left the region years ago.  There is a reason why the big Heinz Ketchup sign is now mounted at the HISTORY center. This is not a new development. Some find this inconceivable, but Del Monte acquired the Northside plant we associate with Heinz back in 2002... so long ago that folks now call the area the North Shore... You have to go back further in time to find when Ketchup was last made there. That big Heinz office building?  People actually live there now. I'm serious. If you don't believe me, look it up.

Where Heinz, or the corporate Headquarters of Heinz, is currently located is nominally called the Heinz 57 center for the moment. Part of the announcement yesterday is they are moving to PPG place.  The Heinz 57 Center in itself has a big piece in local redevelopment history.  The building  is what many of us still call the Gimbels building. Heinz consolidated their corporate headquarters there only in 2000.  The redevelopment of the building was a big effort that took much of a decade. The region was traumatized by the closure of Gimbels and the empty building was a challenge to redevelop.  Enter one Richard Penzer, a young developer of condos in NYC who was able to buy the property for a song. With public support he was then able to redevelop the building into a mix of retail (remember Barnes and Noble downtown) and office space.  Penzer wound up parlaying that success into buying Warner Center, the Oliver Building and seemed to be on a path to own all of Downtown.

Penzer himself ran into some bizarre (civil to be clear) legal problems later on that are too complicated to get into here, but for a time he was the biggest thing in urban development here, long before any modern buzz over the state of downtown Pittsburgh.  Maybe someone else remembers the Pittsburgh Magazine cover with a full page photo of Penzer with currency raining down around around him.  So desperate we are for anyone to come and invest in Pittsburgh.  The hyperbole of it all was similar to the singular efforts on the midfield terminal; a sign of the post-collapse phase the region struggled through.

So, Yarn-bombing?  Connected to any of that? Not really, but just think about how few things like the Yarn-bombing of the Warhol Bridge were making news here back then.  If there was public art making news at the time it does relate to Penzer, or actually his sister.  The late Judith Penzer was the artist behind a mega mural of Pittsburgh sports heros that was on the side of 500 Wood Street, also owned by her brother at that point. That mural came down when the building was demolished to make way for an enterprise known as Lazarus that was supposed to yet again revitalize Downtown. Closer to home for me, Penzer also was the artist behind the "Bride Mural" on Penn Avenue in Garfield.  Long before any funk came to Garfield mind you.  Literally feet from Salt or the Glass Lofts, the Penzer mural still dramatically welcomes visitors to theneighborhood. Next to it a series of run down property remains undeveloped, even experiencing a catastrophic fire just last month.  J. Penzer, some recall, tragically lost her life in the crash of TWA Flight 800 in Long Island Sound in 1996.  But a few years earlier she proposed a 30 mural 'maze' of murals through Downtown Pittsburgh. There was some public opposition to such a funky idea.  How would the powers that be have reacted to Yarn-bombing back in the day I wonder?


Tuesday, August 13, 2013

Not all numbers are equal

Sinkhole in Florida: 100 feet

'Sinkhole' in Pittsburgh:  half a foot


Thursday, August 08, 2013

Immigration in Pittsburgh

A spat of news and commentary on immigration in Pittsburgh has been out in the last 24 hours.  Nothing really new, but there are some curious angles when you read together and not separately.

WSJ runs an op/ed by Pittsburgh carpet mogul Lou Weiss: Welcoming the Hard-Working Stranger. Subtitled: When I met Angel, he was in urgent need of an immigration lawyer. Now I'm hoping he votes GOP.

If you allow me my apophenia. Given the pattern of public comment there methinks Pittsburgh's East End has a mole in the WSJ editorial department. The explicit political statement in this piece is a bit peculiar given the reality of the political debates these days. The whole piece is a möbius of entendre. The protagionist in the oped is Mr. Weiss' hardworking landscaper. To understand his landscaping challenges it is helpful to read Mr. Weiss' earlier ink in the WSJ. For the WSJ oped he skips mentioning that he is striving to get his garden LEED certified. LEED certification is its own political football in some corners of the world.  I'd take note of the online comments building up there with the WSJ piece. No doubt it really is a remarkably forthright and heartfelt commentary. I must admit I would love to be a fly on the wall when Rep. M reads it.

At the other end of the spectrum Public Radio International (PRI) had this today:Rust Belt Cities, like Pittsburgh, Trying to Lure More Immigrants.With support from such a wide range of the political spectrum you would think immigration is one of the least contentious issues out there.  That and Pittsburgh would be doing so well at attracting and welcoming immigrants over the last decade.  Never would such logic fail you worse.

Let's skip the big national debate. Just talking about Pittsburgh.  The title of the PRI/World article reminds me of this in the New York Times: To Fill Gaps, Cities Seek Wave of Immigrants. The real immigration stories here are a bit more painful to tell.  Not Pittsburgh for sure, but not that far away was this in the New York Times not too long ago: Altoona, With No Immigrant Problem, Decides to Solve It. If you want some deeper introspection look at the long form look at immigration in Pittsburgh written by former WSJ journalist, now ASU Journalism professor, Gregg Zachary: Immigrants as urban saviors: When Immigrants Revive a City and When They Don’t - Lessons from the United States.

The discussion I have gotten into continuously over the last 15 or more years is that things are different now.  The 'now' being a bit existential.  But of course I note the obvious; a decade ago I don't think there was a denizen of the city of Pittsburgh hiring an entire extended family of Hondurans to do landscaping. Let alone someone writing about it in the Wall Street Journal. 


Wednesday, August 07, 2013

knowledge jobs vs manufacturing jobs

From the Federal Reserve of Cleveland is this little bit of analysis on the ratio of knowledge jobs to manufacturing jobs across metro regions. Pittsburgh appears to come in below a few regions, but just a bit below San Francisco/San Jose they included for some benchmarking context.  Not sure all that it means but see previous on the recent change in GDP calculations and what it might mean at a regional level. Note also the contrast with some of our closest neighbors.


Tuesday, August 06, 2013

Is Pittsburgh's economy actually doing better than we think it is?

I know very few folks will read another word once I point out this is all about a major change in economic accounting related to expanded capitalization of intellectual property products and a change to accrual accounting for defined benefit pension plans. Yet it really could be important for Pittsburgh.

Measuring the size of the economy is a big deal. Today the economic metric above all others is Gross Domestic product (GDP).   It also has not been as consistent over time as you might think.  Revisions big and small happen routinely. It has not always been the top measure either. 20 years ago old farts including this author will remember when the top dog of economic statistics was GNP, or gross national product.  GNP still exists as a metric, but a couple decades ago the star chamber of economists decreed that a slightly different metric called GDP,was a better way to measure the size of the economy. The simple story of the difference has to do with whether you are measuring value added by ownership or not. With the rise of multinational firms, it made less sense to look at the production of American owned firms as a basis for measuring growth in the economy. You had to look at where production was taking place. But enough on that, just perspective that not all numbers stay the same.

It turns out that GDP in itself does not quite have a static defintion.  What goes into the pot, so to speak, gets revised routinely.  Just last month a relatively bigger revision took place in GDP calculation.  The change of note for Pittsburgh is that a greater amount of expenditures for research and development are henceforth to be counted as investment spending. Who does a lot of research and development?  Just look around town.  For those who want to dig into the weeds even further here is the official description of one big change going forward:
Expenditures by business, government, and nonprofit institutions serving households (NPISH) for research and development (R&D) are recognized as fixed investment.  The new treatment improves BEA’s measures of fixed investment and allows users to better measure the effects of innovation and intangible assets on the economy. BEA July 31, 2013  emphasis added

The change in how R&D is capitalized added just under $400 billion to the calculated size of the US economy. Some have been written on this already, probably more clearly than I am doing. See Daily Beast: New Calculations of U.S. GDP Finally Take Research and Development Into Account. If I've lost you, read it from others. One writer at Forbes puts it in a more succinct perspective: Did 'Kramer, Hawkeye, And Fonzie' Goose GDP? (always resort to MASH analogies if desperate). Most of the esoteric punditry has had a national perspective. Unsurprisingly, the small bit of local/regional notice has come from some higher tech regions such as Seattle. Seattle Times: The story behind the new and improved GDP number. I'd argue this all has as much impact on measuring Pittsburgh's economy as it does Seattle's.

Why? This all could have some disproportionate implications for Pittsburgh.  The latest national GDP calculations released (2012 US GDP - $16.2 trillion) have implemented this change, but there have been no new metropolitan level GDP data released as yet.  Metro level GDP has only been released up to 2011 as yet. 2011 Pittsburgh MSA GDP  was $117 billion and its growth over 2010 was a pretty respectable +4.8%, before any of these changes were implemented. 

When we see MSA level data that account for R&D the same way, we may learn that the Pittsburgh economy is not only bigger than we think it is, and possibly that it has been growing faster than previously thought in recent years.  All the things we talk a lot about, to include research expenditures at local universities (see the emphasis on nonprofit institutions noted above), to a lot of the research expenditures at local tech firms (cough... Google... cough) are all going to contribute greater amount to Pittsburgh's metro region GDP than previously were being used in the calculations. The marginal $billion or two.. or three... that this accounting change might add to the size of Pittsburgh's economy would go a long way to explain some of the recent positive economic trends that still seem to befuddle many a nabob around town.

So we will have to wait and see for hard data. Lots of positive buzz about Pittsburgh of late. Folks looking at employment, earnings, labor force and real estate prices will all see generally positive trends compared to other regions, and certainly compared to any time in Pittsburgh's recent past.  Maybe the latest changes to GDP calculations are going to better explain what is really going on here?


Monday, August 05, 2013

A tale of two anthems

In the news out west is this: Since You Asked: They were singing about Yuba City in '85

The song was all about Yuba City's ranking in the 1985 Rand McNally Places Rated Almanac.  the one that surprisingly had Pittsburgh #1. Of course, they were not the only one's flummoxed by the rankings back then.  Some serious research even went into refuting Pittsburgh's top ranking. For more see this old post: Say it ain't Pittsburgh ever again..

We had our own anthems touting our first place ranking that year. See the WTAE version at bottom.  But here are the lyrics for Yuba City's defiant reply:

I’d rather live in Yuba City by 90 Proof Country (circa 1985)

We saw it on the news
Yuba City was the worst
And then they said that Pittsburgh somehow came in first
To wonder how it happened.
They didn’t come and ask us.
Seems like Rand McNally got their head up their Atlas

It Seems like Rand McNally got lost in all their facts
And they didn’t come to visit when they gave us the ax
They said they got statistics in making their defense
But when they wrote their book they should have some common sense

I’d rather live in Yuba City than in Pittsburgh, PA
I’d rather smell the peaches than the urban decay
I’d rather have the sunshine than a blizzard every day
I’d rather live in Yuba City than in Pittsburgh, PA

You can get rich with fiction, providing some tall tale
And some folks will do anything just to make a sell
But it takes the biggest moron on this planet earth..... say that we’re the worst place and then say that it’s research

Now Pittsburgh is an OK town, if you like industrial waste
And the humid hot summers just turns that smog to paste
And if you get mugged and beaten up while waiting for your bus,
just read your Rand McNally and don’t go blaming us.

I’d rather live in Yuba City than in Pittsburgh, PA
I’d rather smell the peaches than the urban decay
I’d rather have the sunshine than a blizzard every day
I’d rather live in Yuba City than in Pittsburgh, PA
I’d rather live in Yuba City than in Pittsburgh, PA

WTAE's contemporaneous version:


Lest we forget

PGer Bob Dvorchak on his father (MM3 Dvorchak) in WW2:


Friday, August 02, 2013

Where data does not flow

I have mentioned this before, but really am amazed at the amount of oil being shipped by rail through Pittsburgh. It is all a very new mode of crude oil shipment.  I am also amazed at how little data there is on crude by rail at a regional level.

What we know is that the total amount of crude oil being shipped by rail in the US has roughly doubled over the last couple of years per the following EIA graphic.  I am pretty sure the percentage increase in Pennsylvania is a much bigger jump than that and the % jump of oil moving through Pittsburgh even higher.

But there just isn't a lot of better data, which may explain why there is little other interest.  If you can't measure it, is it really happening. There must be folks asking the same questions as me as this is posted on the EIA web site. They just don't collect data on crude by rail.. likely because it was just not a big flow not long ago.

What it means?  I dunno, but worth noting.  But if you don't know what I am talking about, just keep an eye out for trains like this that just were not common here in the past:


Thursday, August 01, 2013

Do it for Sid!

No, not that Sid

But here is a graphic factoid.  Only this week are the Pirates faring better than they did in their last season in the playoffs. Probably more important, this week they have diverged from last year's trend.