By Sara Murray
A roundup of economic news from around the Web.
–Great Depression 2.0?: Simon Johnson writes the economy isn’t heading for a second Great Depression, but “it is increasingly likely that we will find ourselves in the midst of something nearly as traumatic, a long slump of the kind seen with some regularity in the nineteenth century…But experience at the end of the 19th century was also quite different from the 1930s – not as dramatic, yet very traumatic for many Americans. The heavily leveraged sector more than 100 years ago was not housing but rather agriculture – a different play on real estate. There were booming new technologies in that day, including the stories we know well around the rapid development of transportation, telephones, electricity, and steel. But falling agricultural prices kept getting in the way for many Americans. With large debt burdens, farmers were vulnerable to deflation (a lower price level in general or just for their products). And prior to the big migration into cities, farmers were a mainstay of consumption. According to the NBER, falling from peak to trough in each cycle took 11 months in 1945-2009 but twice that amount of time during 1854-1919. The longest decline on record, according to this methodology, was not during the 1930s but rather during October 1873 to March 1879 – more than 4 years of economic decline.”
–Perry Taxes: Howard Gleckman examines presidential hopeful Gov. Rick Perry’s record as a low-tax politician. His record, “suggests, in fact, a politician who has gradually toughened his anti-tax views over the years but remains willing to boost some levies…Perry’s biggest revenue challenge came in 2004-2006. Texas had been funding its schools through local property taxes, an arrangement courts found problematic. In 2004, Perry proposed replacing some school property levies with a basket of other taxes, including sales taxes, a higher cigarette tax, and an increased payroll tax. Perry’s plan died in the legislature in 2004 but in 2006, after the state Supreme Court determined the school funding system was unconstitutional, lawmakers did pass a major tax reform bill—a measure praised and signed by Perry. This version reduced local property taxes but created a new gross receipts tax on business (called a margins tax), raised the cigarette tax, and even taxed patrons of topless bars…Conservatives blasted the 2006 deal as ‘the largest tax increase in state history.’”
Households Without Cars: Adie Tomer examines the 7.5 million households in large metro areas that don’t have access to a private automobile. “While transit reaches the majority of these mobility-constrained households, it still leaves 700,000 without access to transit. These households without coverage are then forced to either borrow a car or carpool to reach jobs too far to reach by foot or bike. Beyond accessibility, the characteristics of zero-vehicle households are remarkably similar across selected demographic categories. Over 60 percent of zero-vehicle households live in cities, and a similar share qualify as low income. In particular, these low-income households may have difficulties purchasing and maintaining their own automobiles, making transportation alternatives that much more important.”