The Economy Today: Czar 21, Where Are You?

Headlines from California, Pennsylvania, and Maryland

Yet another indicator that the economy still hasn’t quite finished its downswing: USA Today reports that the national free and reduced lunch program has grown to cover almost twenty million American children. Administrators at the Food and Nutritional Service, which runs the program, believe that the increase may be attributed to the recession, with families applying for discounted lunches for the first time. While the federal government is backing the program, the free lunches present a challenge for local schools that must cover the gap between what the food costs and what the government subsidizes. This will be difficult for schools with already stretched budgets.

American retail sales are up 0.5 percent, as economists predicted, according to the Associated Press: “Much of that strength came from a 3.6 percent jump in sales at gasoline service stations, an increase which reflected in large part rising gasoline prices. The retail sales are not adjusted for inflation. Sales were also up at hardware stores, grocery stores and health stores.”

The White House’s fight over executive salary caps continues, says The Wall Street Journal. The original proposal to cap salaries at $500,000 was scrapped, and now the administration has appointed a pay czar to review compensation at the seven companies helped by the TARP funds. Kenneth Feinberg is the Obama administration’s twenty-first “czar.”

In local news, Californians are seeing hope in a new report that hints that the recession may be over for the state. In Pennsylvania, the gardening industry has survived the recession largely undamaged. And, in Maryland, an op-ed asks people to consider how charities and other organizations that provide services to the needy are fairing in the economic crisis.

Pennsylvania has spent $36 billion on gardening in 2008, and this year looks on pace to match or exceed that mark, according to the Philadelphia Inquirer. Families who plan to travel less this summer or want to save money by growing their own vegetables are keeping sales brisk at garden centers around the state. Inexpensive flowers as well as high-yield vegetables are strong sellers.

Meanwhile, Carlisle, Pennsylvania, will be the site of a groundbreaking for a bridge replacement, the AP reports. Vice President Biden will be on hand to celebrate the start of the $1.7 million project, which is funded by the stimulus funds.

Two economic reports in California are giving local residents reasons to believe that the recession may be over soon, even though the indicators are rife with ‘buts’. Or so says The San Francisco Chronicle. In reality, the reports say that two counties’ unemployment rates have dropped from 10.3 percent to 10.1 percent, which is still double the rates from a year ago. Home prices have grown by 2 to 3 percent in the last two months, but they still haven’t recovered from the double digit losses incurred over the last year. Steady traffic at San Fran’s airport was also cited as a positive indicator for the tourist industry.

Two of California’s regional transportation authorities will receive stimulus funds to expand service, says The San Jose Mercury News. Caltrain will receive $9 million for maintenance and construction projects in and near San Francisco. San Mateo County will receive $7 million to add more bus service. It’s not clear just how much this will actually help, though, because “both transit agencies are facing budget problems but stimulus funds are designed for capital improvement projects — not for balancing expense sheets.”

Also in California, The Sacramento Bee reports that California’s port industry is seeing a huge slump as the global economy remains weak. Exports from California were down 25.5 percent in April. Because cargo moves so slowly through ports, there might still be a lag even if the rest of the economy recovers in the next few months and ports may continue to suffer.

Human services agencies in Maryland are threatened by a perfect storm of adverse conditions, a guest op-ed in the Baltimore Sun argues. As donations decrease and federal and state contributions are cut, agencies that provide care for the poor and the infirm will not be able to meet their missions. The column takes a big picture view, calling out stark stats; for example, more than half of organizations surveyed by a charities database reported a decrease in contributions.

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Katia Bachko is on staff at The New Yorker.