The economy in Southwest Louisiana is booming due to the massive industrial construction projects. The vast majority of these projects are connected to plants built to export liquid natural gas (LNG). Investors in these facilities planned to do business with China, but President Donald Trump’s tariffs have put all of that in jeopardy. Sam Karlin of the Advocate reports on the impact China’s retaliatory tariffs will have on Louisiana.
The tariffs from China ratchets up pressure on developers trying to build multibillion-dollar liquefied natural gas export facilities, particularly in southwest Louisiana. More than $90 billion in potential investments are planned for Louisiana alone from about a dozen companies. Those firms are competing for long-term contracts from overseas buyers, including from China. “It’s going to continue to stall the development of LNG facilities in Louisiana until there’s more clarity on the issue,” said David Dismukes, head of LSU’s Center for Energy Studies. China is an important growing market for imported natural gas. In 2017, when LNG exports ramped up at Cheniere Energy’s Sabine Pass terminal, China was the third-largest destination, behind Mexico and South Korea, according to the U.S. Energy Information Administration.
Deep racial disparities in arrest rates
It’s no secret that Louisiana’s criminal justice system is fraught with racial inequities, and according to a new report by the Southern Poverty Law Center, there are alarming racial disparities in arrest rates in the state. The disproportionate rate of arrests of black adults for marijuana possession can’t be explained by differing rates of drug use alone, which raises the question of racial profiling in law enforcement. Emily Lane of Nola.com| Times Picayune has more:
The Center’s analysis also states that while blacks comprised about 31 percent of the state’s adult population in 2016, they accounted for 54 percent of adults who were arrested and 68 percent of adults in prison. The report concludes black adults in Louisiana were 4.3 times as likely as white adults to serve time for a felony prison sentence. The marijuana possession analysis, the report states, illustrates disparities in arrests that would be “difficult to explain by different rates of crime commission alone.” Outside of the unconstitutional nature of racial profiling, the report states, the practice undermines effective police work, “because it impairs trust between police and the communities they serve.” People who believe they are racially profiled in one situation might be less willing to report crimes, provide tips or “otherwise cooperate with investigators for fear that police will misuse the information or arrest people for low-level crimes.”
The next financial crisis
By most measures, the booming U.S. economy has fully recovered from the 2008 Great Recession. But what goes up will, eventually, come down. Student loans are weighing down consumers, corporations are borrowing more than ever and hackers pose a growing threat to the computer systems that fuel global commerce. Matt Phillips and Karl Russell of the New York Times survey the landscape:
Fast-growing pockets of debt, as in the last time around, look like potential sources of problems. They’re nowhere near as big as the mortgage bubble, and no blow-ups appear imminent. “But what we saw last time around is that things can creep up on you,” said Wesley Phoa, a bond-fund manager at the Capital Group. “You can turn around and in three years’ time you can go from not much of a problem to a pretty big problem.” The amount of American student debt — roughly $1.5 trillion — has more than doubled since the financial crisis. It is now the second-largest category of consumer debt outstanding, after mortgages.
Ruchir Sharma, also writing in The Times, notes that economists are notoriously bad at predicting when recessions will strike.
If a downturn follows (an interest-rate hike), it is more likely to be a normal recession than another 100-year storm, like 2008. Most economists put the probability of such a recession hitting before the end of 2020 at less than 20 percent. But economists are more often wrong than right. Professional forecasters have missed every recession since such records were first kept in 1968, and one of the many reasons for this is “recency bias”: using economic forecasting models that tend to give too much weight to recent events. They see, for example, that big banks are in much better shape than in 2008, and households are less encumbered by mortgage debt, and so play down the likelihood of another recession. But they are, in effect, preparing to fight the last war.
Blacks adults are less likely to have a degree
A college degree provides higher wages, job security and other social benefits. Louisiana has nearly 1.2 million adults who do not have any post-secondary education. Sadly, Louisiana ranks last when it comes to black adults who have any college degree. The Education Trust has more on black degree attainment in the country, and a state-by-state snapshot of racial equity among degree holders.
If we look at the top 10 states, New York — with a degree attainment rate of 34.1 percent and a Black adult population of 14.4 percent — is the only other state (besides Maryland) where the Black adult population exceeds 7 percent. Absent from the top 10 are any Southern states, which have the highest shares of Black adults. Virginia and Georgia at 12th and 13th, respectively, were the highest ranked Southern states. On the lower end of the attainment distribution for Black adults are Nevada, Mississippi, West Virginia, Wisconsin, Arkansas, and Louisiana. These states have degree attainment rates that are below 25 percent. Louisiana, at 20.7 percent, has the lowest degree attainment rates for Black adults. These states with low attainment rates for Black adults tend to have higher percentages of Black adults than the high(er) attainment states highlighted above. Over 30 percent of adults in Louisiana and Mississippi are Black, and nearly 16 percent of adults in Arkansas are Black. It is also noteworthy that 7 out of the 10 states with the lowest Black attainment rates are in the South, where Black adults make up larger shares of the state’s 25 to 64 year old population. The three non-Southern states are Nevada, Wisconsin, and Michigan. While Nevada and Michigan have relatively low or moderate levels of attainment for all adults, attainment in Wisconsin is relatively high.
Number of the Day
20.7 – Percentage of black adults in Louisiana that have an associate degree or higher. (Source: The Education Trust)