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Santa Fe 'Recession-Resistant'?

May 5, 2009, 12:00 am
By Corey Pein
From MSNBC.com and Moody's Economy.com, a website by the same folks who helped bring you the bogus credit ratings behind the subprime mortgage crash, now comes the "adversity index," a nationwide data-mash of cities that are better off and worse off in the recession.

Readers will be pleased to learn that Santa Fe, according to this 20,000-mile analysis, is a "recession-resistant area."

Now, that has been the case in past recessions—and so far, in this one, this city has held out better than many others.

But.

There's a big but. And it has to do with the rationale for putting Santa Fe on that list in the first place. Here's what Moody's posits as our relative strengths and weaknesses.

Strengths
* Well-educated workforce.
* Above average household income.
* Long-term employment growth is relatively stable.

Weaknesses
* High house prices have deterred in-migration in recent years.
* Relatively high unit labor costs.
* Nearby research labs are susceptible to federal defense-related budget reductions in coming years.


Santa Fe benefits from a "well-educated workforce"? Where did they come up with that? Maybe they mean the transplant retirees with ranch homes who graduated Princeton back before it let women in.

As for that "above average household income"—well, it depends how you figure the average. And in what part of town you look.

As for Santa Fe's "weaknesses," Moody's doesn't like our "relatively high unit labor costs." That would be the "living wage," folks. According to these jackasses, it's bad that a motel cleaning lady with two kids can make nearly $10 an hour, instead of just over $7.

Apparently, Santa Fe makes the "recession-resistant" cut because it's a "military center," like many other cities on the list. Actually, there's a couple other cities that would count as New Mexico's military centers, but not Santa Fe. This town is all state and local government, and tourism. Tourism goes down, the government runs short of cash, the local infrastructure deteriorates and then nobody wants to live here.

This package looks like an example of what happens when journalists let numbers overwhelm the story—it comes off as somewhat detached from reality. For instance, Bend, Oregon is on the recession-resistant list. That town was just featured on NPR, in a story titled, "Bend's Highflying Economy Takes A Nose Dive." Unlike this MSNBC-Moody's package, the NPR story actually interviewed people in Bend.

"Want to live in a sunny town that's immune from recession?" the story begins. Then try a couple of southeastern military base hellholes, or a sprawling area in rural Washington "that will pay glowing dividends for thousands of years: nuclear waste from the Manhattan Project and the Cold War."

Oh. Great! Nuclear waste will save us from breadlines. Maybe Santa Fe should just move to Los Alamos.

Bill Dedman, whose byline tops this package, has a pretty top-notch reputation among investigative reporters. And he acknowledges—even in the story's headline—that nuclear waste and foreign wars are not wise pillars for economic sustainability. But he concludes that Rochester, Minnesota, home of the Mayo Clinic, has an economy to "envy"—as long as health care spending remains high.

That's like saying as long as we maintain the status quo in our wasteful, bloated and broken private health care system—a system that sucks a massive amount of money out of the economy while providing subpar service those lucky enough to have health insurance—then some people in one town in Minnesota will be OK.

Instead of slavishly following Moody's flawed measures of economic health, maybe we should take a tip from Bhutan. There's more to life than margins.

 

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