Unemployment rates for California, Illinois and New York. California in red enveloped the entire recession, start to end. New York, in blue, is New York city financials. When the market takes a small dive, California goes to a regime shift, paying public sector pensions from taxes, and that means major public sector layoffs, driving the economy down. Illinois, in green, is the North East traffic hub. Illinois is jagged because of weather volatility I suspect.
So, this recession started with high gas prices in California and ended with massive public sector lay offs. All the dominoes collapsed from there on. The California spiral is written into law and there is no Magic Walrus in DC that fixes the problem.
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