Fate of the States: The New Geography of American Prosperity

by Meredith Whitney

  3. Dennis Cauchon, “Why Home Values May Take Decades to Recover,” USA Today, December 15, 2008, http://usatoday30.usatoday.com/money/economy/housing/2008-12-12-homeprices_N.htm.

  4. U.S. Department of Commerce, U.S. Census Bureau, “Historical Census of Housing Tables,” 2011, http://www.census.gov/hhes/www/housing/census/historic/owner.html.; U.S. Department of Commerce, U.S. Census Bureau, U.S. Census Bureau News, January 29, 2013, http://www.census.gov/housing/hvs/files/qtr412/q412press.pdf.

  5. Paul Sullivan, “Despite Critics, Mortgage Deduction Resists Change,” New York Times, November 8, 2011, http://www.nytimes.com/2011/11/09/your-money/despite-critics-mortgage-interest-deduction-persists.html?pagewanted=all&_r=0.

  6. Dan Andrews and Aida Caldera Sanchez, OECD, “The Evolution of Homeownership Rates in Selected OECD Countries: Demographic and Public Policy Influences,” OECD Journal: Economic Studies, http://www.oecd.org/eco/growth/evolution%20of%20homeownership%20rates.pdf; Nation Master, People Statistics: Home Ownership by Country, http://www.nationmaster.com/graph/peo_hom_own-people-home-ownership.

  7. Mark J. Perry, “Due North: Canada’s Marvelous Mortgage and Banking System,” American, February 26, 2010, http://www.american.com/archive/2010/february/due-north-canadas-marvelous-mortgage-and-banking-system.

  8. Federal Housing Finance Agency, Office of the Inspector General, “History of the Government Sponsored Enterprises,” http://fhfaoig.gov/LearnMore/History.

  9. U.S. Department of Commerce, U.S. Census Bureau, “Housing Vacancies and Homeownership (CPS/HVS): 2012,” table 5: “Homeownership Rates for the United States: 1968 to 2012,” http://www.census.gov/housing/hvs/files/qtr312/tab5.xls.

  10. Federal Housing Finance Agency, Office of the Inspector General, “History of the Government Sponsored Enterprises,” http://fhfaoig.gov/Content/Files/History%20of%20the%20Government%20Sponsored%20Enterprises.pdf.

  11. Alan S. Blinder and Ricardo Reis, “Understanding the Greenspan Standard,” prepared for the Federal Reserve Bank of Kansas City symposium, The Greenspan Era: Lessons for the Future, August 4, 2005, http://www.kc.frb.org/publicat/sympos/2005/pdf/blinderreis.paper.0804.pdf.

  12. Alan Greenspan, “Understanding Household Debt Obligations,” remarks at the Credit Union National Association 2004 Governmental Affairs Conference, Washington, D.C., February 23, 2004, http://www.federalreserve.gov/boarddocs/speeches/2004/20040223/.

  13. Christopher Mayer, Karen Pence, and Shane M. Sherlund, “The Rise in Mortgage Defaults,” Journal of Economic Perspectives 23, no. 1 (Winter 2009): 27–50, http://dss.ucsd.edu/~grondina/pdfs/week2_mayer_risemortgagedefaults.pdf; Kelly Edmiston, “Foreclosures: A Closer Look at Nebraska and the Region” (paper presented at the Banker’s Roundtable on Community Development, University of Nebraska, Lincoln, NE, September 18, 2007), http://www.kansascityfed.org/speechbio/speeches/ForeclosuresNE.pdf.

  14. Sue Kirchhoff and Barbara Hagenbaugh, “Greenspan Says ARMs Might Be Better Deal,” USA Today, February 24, 2004, http://usatoday30.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm.

  15. Sheila Bair, interview by members of Fortune editorial staff, New York, January 17, 2008.

  16. Data from CoreLogic Loan Performance Database and Federal Housing Finance Board, “Monthly Interest Rate Survey”; Yuliya Demyanyk and Otto Van Hemert, “Understanding the Subprime Mortgage Crisis,” Federal Reserve Bank of St. Louis (Supervisory Policy Analysis Working Paper 2007-05, August 2008), http://www.stlouisfed.org/banking/pdf/SPA/SPA_2007_05.pdf.

  17. James R. Barth, Tong Li, Wenling Lu, Triphon Phumiwasana, and Glenn Yago, Milken Institute, “The Rise and Fall of the U.S. Mortgage and Credit Markets,” January 2009, http://www.milkeninstitute.org/pdf/Riseandfallexcerpt.pdf; “Top Residential Originators in Q2 07,” National Mortgage News, September 10, 2007, http://www.nationalmortgagenews.com/nmn_issues/31_49/-448295-1.html.

  18. Associated Press, “Wachovia Acquires Golden West Financial,” NBC News.com, May 8, 2006, http://www.nbcnews.com/id/12680868/#.UQ_5kR3Ac9U.

  19. Christopher Palmeri, “JPMorgan Chase to Buy Washington Mutual,” Bloomberg Businessweek, September 26, 2008, http://www.businessweek.com/stories/2008-09-26/jpmorgan-chase-to-buy-washington-mutualbusinessweek-business-news-stock-market-and-financial-advice.

  20. Eric Dash, “BB&T Takes Over Failing Colonial BancGroup,” New York Times, August 14, 2009, http://www.nytimes.com/2009/08/15/business/15bank.html.

  21. Dan Fitzpatrick, “BofA’s Blunder: $40 Billion-Plus,” Wall Street Journal, July 1, 2012, http://online.wsj.com/article/SB10001424052702303561504577495332947870736.html.

  22. U.S. Department of Housing and Urban Development, “The National Homeownership Strategy: Partners in the American Dream,” May 1995, http://www.globalurban.org/National_Homeownership_Strategy.pdf; Peter Coy, “Bill Clinton’s Drive to Increase Homeownership Went Way Too Far,” Bloomberg Businessweek, February 27, 2008, http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html.

  23. Dean Baker, “The Housing Bubble and What Greenspan Should Have Done,” Center for Economic and Policy Research, January 11, 2012, http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-housing-bubble-and-what-greenspan-should-have-done.

  24. Kathryn J. Byun, “The U.S. Housing Bubble and Bust: Impacts on Employment,” Monthly Labor Review, December 2010, http://www.bls.gov/opub/mlr/2010/12/art1full.pdf.

  25. U.S. Department of Commerce, U.S. Census Bureau, Housing Vacancies and Homeownership: Historical Tables, table 14: Homeownership Rates for the U.S. and Regions: 1965 to Present, http://www.census.gov/housing/hvs/data/histtabs.html, http://www.census.gov/housing/hvs/data/histtab14.xls.

  26. Federal Housing Finance Agency, House Price Indexes, State HPI Comparisons, http://www.fhfa.gov/Default.aspx?Page=215&Type=compare&Area1=CA&Area2=FL&Area3=; Federal Housing Finance Agency, Downloadable Data, Purchase Only Indexes: U.S. Summary through 2012Q4, http://www.fhfa.gov/Default.aspx?Page=87, http://www.fhfa.gov/webfiles/24974/4q12POSummary.xls.

  27. Homeownership rates data from U.S. Department of Commerce, U.S. Census Bureau, The 2012 Statistical Abstract, Construction and Housing: Homeownership and Housing Costs, http://www.census.gov/compendia/statab/2012/tables/12s0993.pdf; unemployment data from U.S. Department of Labor, Bureau of Labor Statistics, Archived News Releases|Regional and State Employment and Unemployment, year 1994 and 2006, http://www.bls.gov/schedule/archives/laus_nr.htm; GDP data from U.S. Department of Commerce, Bureau of Economic Analysis, Regional Data: GDP and Personal Income, Gross Domestic Product by State, http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1.

  28. Meredith Whitney Advisory Group; Federal Reserve Bank of New York, “Household Debt and Credit Report: Historical Reports,” http://www.newyorkfed.org/research/national_economy/householdcredit/county_report_by_year.xlsx.

  29. Rachel Baye, “MontCo Lawmakers Criticize Schools for Using Surplus on Pay, Not Classes,” Examiner, May 16, 2012, http://washingtonexaminer.com/montco-lawmakers-criticize-schools-for-using-surplus-on-pay-not-classes/article/619171#.UFiw96SXQxI.

  30. U.S. Department of Commerce, U.S. Census Bureau, State Government Finances, Historical Data: 2000, “Summary Table,” http://www.census.gov//govs/state/historical_data_2000.html; U.S. Department of Commerce, U.S. Census Bureau, State Government Finances, Historical Data: 2010, “Summary Table,” http://www.census.gov//govs/state/historical_data_2010.html.

  31. U.S. Department of Commerce, Bureau of Economic Analysis, “Regional Economic Accounts: GDP and Personal Income,” http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=1&isuri=1/; U.S. Department of Labor, Bureau of Labor Statistics, Archived News Releases|Regional and State Employment and Unemployment, http://www.bls.gov/schedule/archives/laus_nr.htm.

  32. Katalina M. Bianco, “The Subprime Lending Crisis: Causes and Effects of the Mortgage Meltdown,” CCH, 2008, http://www.business.cch.com/bankingfinance/focus/news/Subprime_WP_rev
.pdf.

  33. Federal Housing Finance Agency, news release, February 26, 2013, http://www.fhfa.gov/webfiles/25010/2012Q4HPI.pdf; Federal Housing Finance Agency, Historical HPI:Cities, http://www.fhfa.gov/webfiles/24979/4q12hpicbsapo.txt.

  34. Federal Housing Finance Agency, Downloadable Data, Purchase Only Indexes: U.S. Summary through 2012Q4, http://www.fhfa.gov/Default.aspx?Page=87, http://www.fhfa.gov/webfiles/24974/4q12POSummary.xls.

  35. Ben S. Bernanke, “Challenges in Housing and Mortgage Markets,” Operation HOPE Global Financial Dignity Summit, November 15, 2012, http://www.federalreserve.gov/newsevents/speech/bernanke20121115a.htm.

  36. Kevin Landrigan, “Recession Hit NH, NE Hardest in ’90s,” Nashua Telegraph, December 27, 2010, http://www.nhpolicy.org/news/recession_hit_nh_ne_hardest.pdf; Federal Housing Finance Agency, “House Price Index: State HPI Comparisons,” http://www.fhfa.gov/Default.aspx?Page=215&Type=compare&Area1=NH&Area2=&Area3=; U.S. Department of Labor, Bureau of Labor Statistics, Archived News Releases|Regional and State Employment and Unemployment, http://www.bls.gov/schedule/archives/laus_nr.htm.

  37. Christopher Chantrill, “Compare State and Local Spending,” USGovernmentSpending.com, http://www.usgovernmentspending.com/compare_state_spending_2012bF0a.

  38. Federal Deposit Insurance Corporation, Statistics on Banking, http://www2.fdic.gov/SDI/SOB/.

  Chapter 3: States Gone Wild

  1. Governmental Accounting Standards Board of the Financial Accounting Foundation, “GASB Reconciles Disclosure Requirements for Governmental Pension and OPEB Reporting,” June 2007, http://www.gasb.org/cs/BlobServer?blobkey=id&blobwhere=1175820457306&blobheader=application%2Fpdf&blobcol=urldata&blobtable=MungoBlobs.

  2. John Cornyn, “Sen. John Cornyn Says 49 States Have a Balanced Budget Amendment in Their State Constituitions,” December 1, 2010, http://www.politifact.com/texas/statements/2010/dec/25/john-cornyn/sen-john-cornyn-says-49-states-have-balanced-budge/; National Governors Association and National Association of State Budget Officers, “The Fiscal Survey of States,” Fall 2012, http://www.nasbo.org/sites/default/files/Fall%202012%20Fiscal%20Survey%20of%20States.pdf.

  3. Laura Myers, “Legislation Aims to Aid Mentally Ill in Nevada,” Las Vegas Review-Journal, January 27, 2013, http://www.lvrj.com/news/legislation-aims-to-aid-mentally-ill-in-nevada-188558511.html; Scott Waldman, “SUNY Fee Idea Off the Table,” Times Union, January 11, 2013, http://www.timesunion.com/local/article/SUNY-fee-idea-off-the-table-4187351.php; “Washington’s Per-Student Investment Continues to Decline Compared to Other States,” Lake Stevens Journal, January 14, 2013, http://www.lakestevensjournal.com/county-state/article.exm/2013-01-14_washington_s_per_student_investment_continues_to_decline_compared_to_other_states.

  4. Elizabeth McNichol, “Out of Balance: Cuts in Services Have Been States’ Primary Response to Budget Gaps, Harming the Nation’s Economy,” Center on Budget and Policy Priorities, April 18, 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=3747.

  5. U.S. Department of Commerce, U.S. Census Bureau, State and Local Government Finances, “State and Local Government Finance Summary Report,” http://www.census.gov/govs/estimate/.

  6. U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances: Historical Data: 2010,” http://www.census.gov/govs/state/historical_data_2010.html; U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances: Historical Data: 2000,” http://www.census.gov/govs/state/historical_data_2000.html.

  7. Laura Kinsler, “State Budget Provides $1 Million for Lacoochee Club,” Tampa Tribune, April 18, 2012, http://www2.tbo.com/news/politics/2012/apr/18/1/panewso1-state-funding-for-county-survives-ar-393605/.

  8. U.S. Department of Commerce, U.S. Census Bureau, “State Government Tax Collections: 2008 Annual Survey of State Government Tax Collections,” http://www.census.gov/govs/statetax/historical_data_2008.html.

  9. Dan Atkinson, “Dollars Don’t Measure New Newton North High School’s Full Cost,” Wicked Local Newton, June 2, 2010, http://www.wickedlocal.com/newton/news/x709124874/Dollars-dont-measure-new-Newton-North-High-Schools-true-cost?zc_p= 0#axzz2Kq0GCUpw.

  10. U.S. Department of Commerce, U.S. Census Bureau, “State Government Tax Collections: 2009 Annual Survey of State Government Tax Collections,” http://www.census.gov/govs/statetax/historical_data_2009.html; U.S. Department of Commerce, Bureau of Economic Analysis..

  11. Michael Cooper, “Recession Tightens Grip on State Tax Revenues,” New York Times, February 22, 2010, http://www.nytimes.com/2010/02/23/us/23states.html.

  12. Reuters, “State Budgets Spring New, Smaller Holes,” May 24, 2012; Phil Oliff, Chris Mai, and Vincent Palacios, “States Continue to Feel Recession’s Impact,” Center on Budget and Policy Priorities, June 27, 2012; U.S. Department of Education, “Condition of Education 2012.”

  13. Public School Forum’s Friday Report 14, no. 40 (April 5, 2012), http://www.ncforum.org/doclib/2012_0405.pdf.

  14. Allysia Finley, “California Prison Academy: Better Than a Harvard Degree,” Wall Street Journal, April 30, 2011, http://online.wsj.com/article/SB10001424052748704132204576285471510530398.html.

  15. “Income for Life,” CNNMoney, http://cgi.money.cnn.com/tools/annuities/.

  16. Steven Malanga, “How Stockton, California Went Broke in Plain Sight,” Wall Street Journal, March 30, 2012, http://online.wsj.com/article/SB10001424052702303404704577309231747497906.html.

  17. Mary Williams Walsh, “How Plan to Help City Pay Pensions Backfired,” New York Times, September 3, 2012, http://www.nytimes.com/2012/09/04/business/how-a-plan-to-help-stockton-calif-pay-pensions-backfired.html?pagewanted=all.

  18. California Constitution Article 13A [Tax Limitation], http://www.leginfo.ca.gov/.const/.article_13A.

  19. Associated Press, “N.J. Tax Amnesty Program Totals Record $725M,” Star-Ledger, July 8, 2009, http://www.nj.com/news/index.ssf/2009/07/nj_tax_amnesty_program_totals.html.

  20. U.S. Census Bureau, “State Government Finances: Historical Data: 2009,” http://www.census.gov/govs/state/historical_data_2009.html.

  21. U.S. Department of Commerce, Bureau of Economic Analysis, “Regional Accounts Archive for June 5, 2008,” http://www.bea.gov/histdata/RMyearAPFfiles.asp?docDir=/2007/GDP/state/advance_June-05-2008.

  22. Alan M. Wolf, “Biogen Will Build Bigger Space,” Newsobserver.com, April 26, 2011, http://www.newsobserver.com/2011/04/26/1154147/biogen-will-build-bigger-space.html; Joseph Vranich, “Calif. Business Departures Increasing—Now Five Times Higher Than in 2009,” Business Relocation Coach, Monday, June 20, 2011, http://www.thebusinessrelocationcoach.blogspot.com/2011/06/calif-business-departures-increasing.html.

  23. Meredith Whitney Advisory Group, “Tragedy of the Commons Third Edition: 2012 Update,” p. 22.

  24. U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances: Historical Data: 2010,” http://www.census.gov/govs/state/historical_data_2010.html; U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances: Historical Data: 2000,” http://www.census.gov/govs/state/historical_data_2000.html.

  25. Meredith Whitney Advisory Group, “3Q12 Municipal Analytics,” p. 13.

  26. Mary Williams Walsh, “JPMorgan Faces New Suit in Alabama County’s Woes,” New York Times, November 13, 2009, http://www.nytimes.com/2009/11/14/business/14muni.html; Romy Varghese, “Harrisburg Incinerator, Source of Fiscal Woes, May Save Its City,” Bloomberg, May 10, 2011, http://www.bloomberg.com/news/2011-05-11/harrisburg-incinerator-may-save-the-city.html.

  27. Jeffery Bell, “THE BIG LIE: Rich People Create Jobs,” Yahoo Finance, February 3, 2012, http://finance.yahoo.com/blogs/daily-ticker/meredith-whitney-along-jefferson-county-ala-files-largest-174407736.html.

  28. U.S. Department of Commerce, U.S. Census Bureau, State and Local Government Finances, “State and Local Government Finance Summary Report,” http://www.census.gov/govs/estimate/.

  29. Christina Romer, “The Impact of the American Recovery Reinvestment Act,” January 10, 2009, http://ww
w.ampo.org/assets/library/184_obama.pdf; Mark S. Ludwick and Benjamin A. Mandel, “Analyzing Federal Programs Using BEA Statistics,” U.S. Department of Commerce, Bureau of Economic Analysis, http://www.bea.gov/scb/pdf/2011/09%20September/0911_unemploy.pdf.

  30. Pennsylvania Budget and Policy Center, “Budget Points: Stimulus Transition Fund Reduces Future Deficits, Preserves Education and Health Care,” March 9, 2010, http://pennbpc.org/budget-points-stimulus-transition-fund.

  31. Mac Taylor, “Federal Economic Stimulus Package: Fiscal Effect on California,” Legislative Analyst’s Office, 2009–2010 Budget Analysis Series, March 10, 2009, http://www.lao.ca.gov/2009/bud/fed_stimulus/fed_stimulus_031009.pdf.

  32. Max Taves, “Private Fix for Public Parks,” Wall Street Journal, June 17, 2012, http://online.wsj.com/article/SB10001424052702303410404577464724255828622.html; Arizona Heritage Alliance, “Arizona State Parks Keeps 9 Parks Open; 13 Will Close,” January 17, 2010, http://azheritage.wordpress.com/2010/01/17/arizona-state-parks-keeps-9-parks-open-13-will-close/.

  33. National Association of State Budget Officers, “State Expenditure Report: Examining Fiscal 2010–2012 State Spending,” 2012, http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report_1.pdf; Meredith Whitney Advisory Group, “State Comprehensive Annual Financial Reports”; U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances Summary: 2010,” http://www.census.gov/prod/2011pubs/g10-asfin.pdf.

  34. The Bond Buyer, Market Data, Monthly, Primary Market Statistics: A Decade of Bond Finance, http://www.bondbuyer.com/marketstatistics/decade_1/?data-type=monthly#dataTable; Meredith Whitney Advisory Group, “The 50 Dirtiest Little Secrets: New Analysis on States’ Underfunded Pensions, Healthcare, and Other Off Balance Sheet Obligations,” p. 8, Exhibit 1; U.S. Department of Commerce, U.S. Census Bureau, “State Government Finances,” year 2000 and 2010, http://www.census.gov/govs/state/historical_data_2000.html, http://www.census.gov/govs/state/historical_data_2010.html.