The Economy Today: Hope Floats

Headlines from Texas, Idaho, North Carolina, Hawaii, and elsewhere

As the GM bankruptcy dominated headlines, President Obama asserted that the Chrysler bankruptcy offered a good blueprint for success. But today, The Washington Post reports that Chrysler is facing “an appeal from a group of lenders seeking to block the sale of Chrysler’s assets, a move that could delay the automaker’s exit from bankruptcy proceedings.” An Indiana pension fund is the group blocking the move.

Despite an infusion of money into construction projects, The Wall Street Journal reports that the country’s highway fund is “low on cash again.” The administration may seek $17 billion for road and bridge maintenance. The Journal predicts that Herbert M. Allison, who will oversee the $700 billion financial sector bailout, will face “headaches” and have to avoid the “political minefield associated with the unpopular rescue.” Some friends of the former TIAA-CREF and Merrill Lynch executive can’t figure out why he’d want the job.

The New York Times finds that homeowners aren’t finding ready help from programs or lenders that are designed to make mortgage payments more affordable. The problem is that the programs aren’t preventative in nature; that is, they still leave exposed some people who are vulnerable to defaulting on payments, but haven’t done so yet.

The regional economic picture is mixed this morning. In Idaho, the Forest Service will receive more money for roads, bridges, and rivers, but so far these funds have not yet arrived. California’s Coachella Valley won’t be able to expand or repair recreation facilities because of budget shortfalls; but in Texas, one high school reports a huge increase in the number of yearbooks sold. Perhaps the recession is making students nostalgic for the good old days?

Everybody loves “expert” testimony, and the folks at the Charlotte Observer are no exception? This morning, the paper quotes an economist from the University of North Carolina at Charlotte who says that the recession is over, but the recovery will be slow. Economist John Connaughton predicts that the “biggest declines this year will come in construction, durable goods manufacturing and nondurable goods manufacturing. The only sector expected to see any job growth is government.”

In Texas, the high-school yearbook industry is defying the recession. The Lubbock Avalanche-Journal reports that the number of yearbooks that will be sold at Estacado High School has almost quadrupled this year. Last year, the school sold fifteen yearbooks; this year there have been fifty-three orders among the 900 hundred students.

In California, The Desert Sun says that recreation facilities may suffer as a result of the recession. As the Coachella Valley struggles with budget shortfalls, some projects may not have the funds or the staff necessary to pursue expansion or maintenance. Among the affected projects are a soccer field in need of renovation, and a long promised-aquatic center in Palm Desert.

The San Francisco Chronicle offers a good reflection on how lender practices and chastened consumers will combine to create a new culture of credit card use on the other side of the recession. Finance experts say that the new legislation may place a greater burden on “good” card users, forcing those people to scale back their card use. Experts also predict that households will eventually carry less debt than has become commonplace in the last ten years. “By 2007, the average household had $1.33 in obligations for every $1 in personal disposable income.”

In another example of agencies and counties trying to hash out the stimulus funds, The Idaho Statesman reports that the state’s Forest Service will receive additional funds. Now, Idaho will get another $40 million for bridge, road, and river service, which is on top of the $60 million already assigned to projects in the state. According to the paper, most projects are located in “rural counties with high unemployment.”

In Hawaii, fans of Sabai Dee, a beloved Thai restaurant, are hoping that the eatery will make it through the recession. They urged The Star Bulletin’s food reporter to review it as soon as possible so that a surge of attention will help the restaurant stay in business. One reader wrote, “”At the expense of not getting a table and the perfect service I am urging you to review these guys before they go out of business.”

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Katia Bachko is on staff at The New Yorker.