Tuesday, April 08, 2008

25% High School Graduation Rate in Detroit, Although State Dept of Education Says 67%

DETROIT--The Washington, D.C.-based America's Promise Alliance looked at the country's top 50 urban centers and found an average graduation rate of 51.8%. The Mesa, Ariz., school district had the best graduation rate, with 71.8%. Detroit Public Schools brought up the rear with a 24.9% graduation rate.

Detroit Public Schools spokesman Steve Wasko declined to comment on the study.

Graduation rates are controversial since they can be calculated in a variety of ways, but the study follows several others that have concluded Detroit has a serious dropout problem to address. A study released Feb. 25 by Michigan State University researchers found a 31.9% graduation rate for Detroit Public Schools students--just 25% for boys, and 39% for girls.

The Michigan Department of Education reported a 66.8% graduation rate for Detroit Public Schools for the Class of 2006.

More News on Retail Healthcare Clinics

BALTIMORE--MedStar Health is tapping into the retail health care trend. The Columbia health care company said Tuesday it is partnering with Rite Aid and a health clinic management firm to open four walk-in clinics providing treatment for flu, strep throat, injuries and other common ailments. The clinics -- two in Greater Baltimore and two in the Washington, D.C., area -- will be located inside Rite Aid stores sporting a MedStar PromptCare brand and will be staffed by physicians.

Small health clinics like these are cropping up at CVS, Walgreens, Target, Wal-Mart, Kroger and other retail stores throughout the country. At the end of 2006, there were about 250 retail store health clinics in the U.S., according to the Convenient Care Association. Now, more than 900 such clinics are operated by more than 20 companies in 30 states -- including 32 retail health clinics in Maryland.

Comment: While politicians in Washington and presidential candidates dream up the next grandiose government health care reform to address rising healthcare costs, the most effective, affordable and convenient healthcare solutions might be right around the corner at your local Rite-Aid, Target or Wal-Mart.

Venezuelan Healthcare Takes Turn for the Worse: "A System Only Michael Moore Could Love"

LA TIMES--Palacios, Venezuela's largest public maternity hospital and once the nation's beacon of neonatal care, has fallen on hard times. Half of the anesthesiologists and pediatricians on staff two years ago have quit. Basic equipment such as respirators, ultrasound monitors and incubators are either broken or scarce. Six of 12 birth rooms have been shut, and on one day last month, five newborns were crowded into one incubator.

There were six infant deaths at Palacios over a 24-hour period late last month, and since the beginning of February, six mothers have died in the hospital during or after childbirth.

Cases of malaria nearly doubled in Venezuela between 1998, the year before Chavez took office, and 2007. Incidents of dengue fever more than doubled over the same period. After the medical establishment blamed him for an outbreak of dengue fever last summer, Chavez halted weekly publication of an epidemiology report that for 50 years had tallied occurrences of infectious diseases nationwide.

As the Liberty Papers blog reports, this is a "healthcare system only Michael Moore could love."

(Via Taxing Tennessee)

Monster Employment Index Up +31% in Europe

The Monster Index Europe rose 5 points in March, leaving online job availability 31% higher than a year ago, indicating continued robust employer demand for labor across the European Union

"EU online recruitment activity picked up further pace in March, driven primarily by strong demand for technically skilled workers in areas such as architecture, engineering and manufacturing," said Hugo Sellert, Head of Economic Research, Monster Worldwide. "The underlying strengthening in demand has by and large been fuelled by Germany, Europe's largest economy, whose job market appears to have been gaining momentum in spite of concerns about slowing economic growth."

"Unemployment rates across the European Union have continued falling largely because employment is growing at a higher pace than the workforce," added Sellert. "The tightening labour market has resulted in ever more challenging recruitment conditions and the scarcity of qualified workers is likely adding to the availability of unfilled jobs."

Monday, April 07, 2008

Let's Review the Historical Record

From a comment by Publius on this CD post: "At a Joint Economic Committee hearing on Friday, Keith Hall, Commissioner of the Bureau of Labor Statistics suggested that median unemployment duration has declined simply because more people have lost their jobs recently, and therefore a large number have only been receiving unemployment payments for a few weeks, driving the average time of unemployment down."

That may or may not be true, but we do know for sure that in each of the last six recessions, median duration of unemployment went UP, not down (see chart above, click to enlarge).

101 Countries Have Lower Total Tax Rate than U.S.

From the World Bank and PricewaterhouseCoopers study "Paying Taxes 2008: The Global Picture:"

The Paying Taxes Study involves gathering information on the tax affairs of a standard case study company in 178 countries, by reviewing the financial statements and a list of transactions of a standard modest-sized firm. This information is used to generate three indicators related to the number of tax payments, the time taken to comply with its tax affairs, and the tax cost. These are equally weighted to produce an overall ranking for each country for the ease of paying taxes.

From the Executive Summary: The results show that tax reform is widespread. This year 31 countries improved their tax system and 65 have done so over the past three years.

Reducing corporate income tax was the most popular reform.

However, many countries have made changes to reduce the compliance burden by simplifying or eliminating other business taxes.

Total tax rates have been in a downward trend during the period in which Paying Taxes data has been collected.

Rankings for the United States:

Total Tax Payments: Rank #21/178 (10 different tax payments)

Total Tax Rate: #102/178 (46.2% total tax rate)

Time to Comply: #122/178 (325 hours)

Overall Ranking for the Ease of Paying Taxes: #76/178

Comment: Before American politicians consider imposing higher taxes on U.S. corporations, they should keep in mind that there are 101 countries that have a lower total tax rate than the U.S., 121 countries with a lower time to comply for corporate taxes, and 75 countries have a lower overall ranking for "ease of paying taxes."

Further, the global trend is towards LOWER total tax rates. In today's highly globalized economy, the mobility of capital, talent, investment and production is greater than ever, and they will move to where they receive the best tax treatment. As the NCPA points out "Despite the popular perception of America as a land of laissez-faire," this World Bank study tells a much different story of an economy with an uncompetitive, high corporate tax burden.

Obama Now Almost 7:1 Favorite Over Hillary

Based on actual futures trading on Intrade.com.

Weak Dollar Benefiting Michigan Exports

MICHIGAN--Manufacturers in Michigan and the rest of the country are benefiting from a weak dollar that is making their goods sold abroad cheaper, while imported goods are becoming more costly. In fact, a boom in Michigan exports is one of few bright spots in a mostly gloomy state economy. Exports from Michigan have risen 31% in the past five years, from $33.8 billion in 2002 to $44.4 billion last year, according to the U.S. Commerce Department (see chart above).

For an excellent database of state export data, click here.

5,000 Retail Clinics & The Threat to the MD Cartel

DETROIT--Retail health clinics have made their way into metro Detroit and are competing with doctors' offices for routine patient visits. Clinics contend that the quality of care is high and that when a patient requires urgent care or a visit to a physician's office, the process is seamless, said May Hang, manager of operations in Detroit for Minneapolis-based MinuteClinic, a subsidiary of CVS Pharmacy.

The latest numbers show that there are fewer than 1,000 U.S. retail clinics operating, but some expect the number of clinics to grow to 4,000 to 5,000 over the next five years.

Doctors and other groups, though, remain skeptical about how the clinics are operated and consider them a potential competitive threat.

Translation of the last paragraph: MDs are worried about competitive threats to their "medical cartel," and the potential erosion of their above-market, cartel wages.

Outsourcing to Ohio and Michigan.... Via India

MUMBAI, INDIA--India's leading software company Tata Consultancy Services (TCS) has signed a multi-year contract with US-based automobile manufacturer Chrysler to provide a comprehensive portfolio of IT services. According to the agreement, TCS will deliver IT application and maintenance support services to Chrysler by leveraging its Global Network Delivery Model from various locations around the world, including the recently announced TCS center outside Cincinnati, Ohio, and through a locally recruited team in the Detroit, Michigan, region.

Comment: What a wacky, interconnected, digital, Information Age, globalized, flat outsourced world - IT services outsourced from Chrysler in Michigan to Tata in India, back to Michigan and Ohio.

Don't Like Bush Tax Cuts? Pay at the Clinton Rates

WALL STREET JOURNAL--Senator Clinton's main tax proposal is to repeal the tax cuts of 2001 and 2003, raising rates to the levels of the Clinton Presidency. "We didn't ask for George Bush's tax cuts. We didn't want them, and we didn't need them," Mrs. Clinton explained.

But her higher tax rates wouldn't merely hit those who make $109 million; they'd soak middle-class families that make $100,000 or $200,000 a year and hardly feel "rich." If the former first lady feels so strongly that she should pay more taxes, we suggest she lay off the middle class and instead write a personal check to the U.S. Treasury for the difference between the Clinton and Bush tax rates (see 2000 tax rates above). She and her husband can afford it.

Comment: Here is the link to the Treasury's Gifts to the United States Government website for Citizens who wish to make a general donation to the U.S. government. This account was established in 1843 to accept gifts from individuals wishing to express their patriotism to the United States.

Hey, the Clintons could express their patriotism, and their disdain for the Bush tax cuts, at the same time by paying taxes this year at the 2000 rates. For Warren Buffet or anybody else who doesn't like the Bush tax cuts, you do NOT have to pay taxes at those lower rates, you can file taxes for 2007 at the higher Clinton tax rates, shown above!

Cartoon of the Day

Sunday, April 06, 2008

The World According to Newspapers

The UK's Online Journalism Blog features maps that show the world in 2007 through the eyes of editors-in-chief. The larger (smaller) the country on the maps, the more (less) media attention. See the world according to London's The Sun above.

Looking at the three British dailies, editors favour countries that are bigger and more populous, but also closer to home and better developed. They also give more room to the countries of origin of British immigrants, especially if they are white (look at the size of Australia and New-Zealand).

The Only Fair Choice: Support FREE Trade

Some of the conclusions from the article UNFAIR TRADE, by the Adam Smith Institute:

1. The
Fairtrade certification system and the Fair Trade movement from which it springs are fundamentally unfair. They offer a small improvement in prices to very few primary producers, while leaving most out in the cold and possibly even worse off than before. Of the farmers Fairtrade helps, many live in Mexico, a relatively wealthy and well-developed country. Fairtrade does little for the poorest of the poor in the agricultural sector, the landless laborers who are refused permanent employment under Fairtrade rules.

2. Fairtrade is not an answer to poverty. For those who promote it, Fairtrade is not even necessarily intended to aid economic development. Instead, Fairtrade operates to keep the poor in their place, sustaining uncompetitive farmers on their land and holding back the changes that could give their children a richer future by encouraging mechanization and diversification. Proponents of Fairtrade seek to present a consumer-friendly face, and have persuaded some commentators that it is an example of the free market in action. Yet the ultimate goals of the fair trade movement include the management of production and the rejection of free trade.

3. Economic growth in India and China is lifting more people out of poverty than ever before in human history. The insignificant scale of Fairtrade has no prospect of improving so many lives. Indeed, its economic vision, if implemented, would undoubtedly prevent such improvements from continuing.

4. Fair Trade is unfair: it seeks to reduce voluntary exchange to a government controlled privilege and to refuse agrarian societies the opportunity to become rich. By selling itself as the only option for the ethical consumer, Fairtrade directs the public away from new and exciting alternatives that may do much more good. Ultimately, for those who want to see the poor lift themselves out of their poverty, the only fair choice is to support free trade.

Comment: In a related
previous CD post I wrote: Whenever you hear politicians or Lou Dobbs talk about "fair trade" instead of "free trade," you'll pretty much be guaranteed that the discussion has left the realm of economic theory and the overwhelming empirical evidence of the benefits of free trade, and ventured off into a philosophical/political discussion justifying using the political process to bestow protectionist trade policy favoring a well-organized domestic, special-interest industry at the expense of consumers, in the philosophical interest of "fairness."

Likewise, any attempt by a private nonprofit organization to substitute controlled and managed "fair trade" for voluntary exchange and free trade, motivated by the goal to "seek greater equity in international trade," will necessarily result in inferior outcomes which are fundamentally unfair.

Stanford Launches On-Campus Venture Fund

TECH CRUNCH--Countless startups, such as Sun, Yahoo and Google (as well as newcomers like Meebo) were started at Stanford, or by Stanford graduates. Now Stanford wants to help its students by providing seed funding directly, and in the process will get a little equity in those new ideas, too.

Stanford Student Enterprises, a Stanford student association with several hundred employees and $13 million in assets, has launched an early stage venture fund called SSE Ventures to invest directly in student founded startups.

Death By Blogging?

In Web World of 24/7 Stress, Writers Blog Till They Drop

(HT: Ryan Stinson)

A Policy Unblemished By Success: Price Controls

Quotes of the Day:

1. With the command-and-control propensity of contemporary liberalism, Clinton predictably advocates a policy that has a record, running from Roman times to the present, that is unblemished by success. It is the policy of price controls: Her proposed five-year freeze on interest rates would be a control on the price of money.

2. The market, which bewilders and annoys liberals by correcting excesses without the supervision of liberals, is doing that as housing prices fall far enough to stimulate demand.

~From George Will's column today

'Need' now means wanting someone else's money. 'Greed' means wanting to keep your own. And 'Compassion' is when a politician arranges the transfer.

~Joseph Sobran via Mises.org, Adam Smith.org, Greg Mankiw, and Taxing Tennessee

Black (Real) Market to the Rescue in Zimbabwe

ZIMBABWE--With inflation estimated at 200,000% - easily the highest in the world - Zimbabwe's currency is barely worth the paper it's printed on (see chart above). (The largest Zimbabwean note, 10 million dollars, can't buy more than a couple of sodas.) Foreign currency runs this economy now, mainly the U.S. dollar and the South African rand, nearly all of it traded on the black market. (MP: Hey, somebody wants the USD!)

Remittances from Zimbabweans living overseas drive the economy, pumping as much as $1 billion in foreign currency into the country each year, nearly all of it coming through the black market. "There is absolutely no way that the economy could function without the inflows of money via the black market," said Tony Hawkins, a leading independent economist in Harare.

Comment: What would 200,000% inflation actually mean? It would translate to an hourly inflation rate of about 23%, and a daily rate of about 550%. An item that costs $10 today would cost $65 tomorrow. Prices would be doubling about every 4 hours. In other words, if you're planning a leisurely dinner at a restaurant, you might want to pay in advance, to avoid a possible doubling of menu prices by the time you're done!

There's also a lesson here about the power, adaptability and resiliency of the market. Regardless of how bad the official economy is in countries like Zimbabwe due to a "government disaster," and no matter how serious any natural disaster is (earthquake, hurricane, etc.), the market always survives and prospers and actually prevents the situation from being even worse! Without Zimbabwe's black market money dealers, and without "price gougers" after a hurricane, things would be a lot worse.

(HT: Ben Cunningham)

Saturday, April 05, 2008

Nectar Heaven: Russia Has 300 Vodka Distilleries

LA TIMES--Not long ago, Stolichnaya was the only Russian vodka Americans seemed to know about. But if you look around today, you can find up to 35 brands -- and the pace of new arrivals is picking up. This could keep going for a while, because there are about 300 vodka distilleries in Russia.

The collapse of the Soviet government and its monopoly on distilling is perhaps the ultimate reason for this surge. Add to that the recent American craze for premium vodkas from all sorts of places -- France (Grey Goose), Scandinavia (Finlandia), even Alameda, Calif. (Hangar One). Why not go to the source?

Comment: I'll be in Russia from April 18 to 27 and plan to do some research and taste tasting there on Russia's premium "nectar of the Gods." By the way, I'll be joined by best-selling author and Hoover research fellow Peter Schweizer as a guest blogger on CD during the time I'm traveling to Russia, since I might not have regular Internet access during my travels. Stay tuned for more information on CD's first-ever guest blogger!

(Vodka HT: Craig Newmark)

More On Wikipedia

Professors Should Embrace Wikipedia--If the Web is the greatest information delivery device ever, and Wikipedia is the largest coherent store of information and ideas, then we as teachers and scholars should have been on this train years ago for the benefit of our students, our professions, and that mystical pool of human knowledge.

Wikipedia as we know it will undoubtedly change in the coming years as all technologies do. By involving ourselves directly and in large numbers now, we can help direct that change into ever more useful ways for our students and the public. This is, after all, our sacred charge as teacher-scholars: to educate when and where we can to the greatest effect.

~Mark A. Wilson, professor of geology at the College of Wooster.

BBC NEWS--Wikipedia survives research test: The free online resource Wikipedia is about as accurate on science as the Encyclopedia Britannica, a study shows. The British journal Nature examined a range of scientific entries on both works of reference and found few differences in accuracy.

See related, previous CD post here.

Unintended Consequence: Shortages, Long Waits

NY TIMES: AMHERST, MASS.Once they discover that she is Dr. Kate, the supplicants line up to approach at dinner parties and ballet recitals. Surely, they suggest to Dr. Katherine J. Atkinson, a family physician here, she might find a way to move them up her lengthy waiting list for new patients.

Those fortunate enough to make it soon learn they face another long wait: Dr. Atkinson’s next opening for a physical is not until early May — of 2009.

In pockets of the United States, rural and urban, a confluence of market and medical forces has been widening the gap between the supply of primary care physicians and the demand for their services. Now in Massachusetts, in an unintended consequence of universal coverage, the imbalance is being exacerbated by the state’s new law requiring residents to have health insurance.

Comment: Wow, a one-year wait for a physical in Massachusetts, that sounds like Canada! This story reminded me of an old joke about the Soviet Union. A guy goes into a Soviet car dealer and orders a Lada (pictured above). The salesman says "Your car will be ready two years from today, you can pick it up then." The customer says "Will it be ready in the morning or the afternoon on that day?" The salesman asks "What difference does that make, it is two years from now." The customer replies "Well, the plumber is scheduled to come in the morning on that day."

Losing The Race for Skilled Workers: Scrap the Cap

America's political leaders are so fixated on illegal immigration they've barely noticed that the U.S. is losing the race for the best high-tech minds. This country won't keep its edge in the global economy until legislators stop behaving like border sentries and start acting like international recruiters – a switch virtually every industrialized country is making.

A good way to begin is for Congress to pass pending legislation to scrap the cap on skilled worker (H1-B) visas. This cap is currently so low (65,000) that in April last year it got used up within a day of these visas becoming available, leaving thousands of left over engineers to be scooped up by America's competitors. Immigration authorities started accepting 2009 applications last Tuesday – and expect a similar flood.

~Shikha Dalmia in today's Wall Street Journal

Jobless Rates by Education: Stay In School!

The chart above shows monthly unemployment rates, by educational attainment, from 2000 to March 2008, using data from the BLS, obtained via Economagic. The data show that almost all of the .50% increase in the overall unemployment rate over the last 9 months from 4.6% in June 2007 to 5.1% in March 2008 was mostly from increases in unemployment for workers with less than a high school degree and to a lesser degree from workers with a high school degree. Note that the unemployment rate for college-educated workers has been almost flat for the last three years, and the trend for workers with some college is almost flat as well.

It's also interesting to see that during the 2001 recession, the jobless rate increased by about a full percentage point for ALL education levels. Unfortunately, the data for jobless rates by educational attainment only go back to 1992, so it's not possible to extend this analysis back to recessions before 2001. But looking at unemployment rates by education in the the 2001 recession, we won't be in recession again until the unemployment rates for all education categories start to rise, and we haven't seen that yet.

Friday, April 04, 2008

Some Bright News in Today's Labor Report

One bright spot in today's BLS employment report is found in Table A-9 - the median duration of unemployment fell to a 15-month low of 8.1 weeks in March 2008, the lowest level since December 2006, and matches the third lowest level in more than six years (see graph above). That means that 50% of those unemployed are finding employment within about two months, one of the lowest levels since 2001!

If You Tax Something, You Get Less of It

CHICAGO SUN-TIMES--Are Chicagoans trekking to the suburbs to buy cases of bottled water -- and avoid a new nickel-a-container tax that adds $1.20 to the price of a 24-pack? Or are they making the switch to tap water to save money? One or the other is happening. Maybe both.

Revenues from Chicago's new bottled water tax are trickling in -- at a rate nearly 40% below projections -- exacerbating a budget crunch that has already prompted Mayor Daley to order $20 million in spending cuts. January collections were $554,000. That's far short of the $875,000-a-month needed to meet the city's $10.5 million-a-year projection.

Comment: Some remedial economics for Chicago's City Council?

1. People respond to incentives.
2. Demand is elastic, and there are substitutes for everything.
3. If you tax something, you get less of it.

Or to paraphrase Thomas Sowell, this story suggests that "The first lesson of economics is that people respond to incentives. The first lesson of politics is to ignore the first lesson of economics."

(HT: Market Power)

Thursday, April 03, 2008

An Occasional Crisis is the Cost of Innovation: The Case Against New Regulation of Financial Markets

THE ECONOMIST--Bold re-regulation could damage the very economies it is designed to protect. At times like this, the temptation is for tighter controls to rein in risk-takers, so that those regular, painful crashes could be avoided. It is an honourable aim, but a mistaken one.

A sophisticated and innovative financial system is susceptible to destructive booms; but a simple, tightly regulated one will condemn an economy to grow slowly.

The tempting answer is to try to wriggle free from the dilemma with a compromise that would permit innovation but exert just enough control to squeeze out financial failure. It is a nice idea; but it is a fantasy. The experience of the past year is an object lesson in the limited power of regulators.

The notion that the world can just regulate its way out of crises is thus an illusion. Rather, crisis is the price of innovation, so governments face a choice. They can embrace new financial ideas by keeping markets open. Regulation will be light, but there will be busts. The state will sometimes have to clear up and regulation must be about cure as well as prevention. Or governments can aim for safety and opt for dumbed-down financial systems that hobble their economies and deprive their people of the benefits of faster growth. And even then a crisis may strike.

Comment: As tempting as more regulation of the financial markets seems right now, we should not underestimate the market's resiliency and ability to self-correct. As economist Arnold Kling reminds us, "Markets fail, let's use markets."

Honey Badger: Most Fearless Animal on Earth

Amazing Video: Elephant Paints Self-Portrait

What Does $350k Buy in Today's Housing Market?

Check it out here, 10 homes/condos around the country for sale at $350,000.

Another Possible Healthcare Solution:The Dr. Nurse

WALL STREET JOURNAL--As the shortage of primary-care physicians mounts, the nursing profession is offering a possible solution: the "doctor nurse."

More than 200 nursing schools have established or plan to launch doctorate of nursing practice programs to equip graduates with skills the schools say are equivalent to primary-care physicians. The two-year programs, including a one-year residency, create a "hybrid practitioner" with more skills, knowledge and training than a nurse practitioner with a master's degree, says Mary Mundinger, dean of New York's Columbia University School of Nursing. She says DNPs are being trained to have more focus than doctors on coordinating care among many specialists and health-care settings.

(HT: Clover Aguayo)

BIG PORK: 11,610 Projects Worth $17.2 Billion

The Democrat-led Congress last year broke a promise to slash pork spending and doled out $17.2 billion for pet projects, a 30% increase over the previous year's $13.2 billion expenditure, according to the Citizens Against Government Waste's (CAGW) 2008 "Pig Book." Congress stuffed 11,610 projects into fiscal 2008 spending bills, the second-highest total ever and more than triple the number of projects in fiscal 2007.

The top three "porkers" identified in the "Pig Book" all were Republican members of the Senate Appropriations Committee: ranking member Thad Cochran of Mississippi with $892 million, Ted Stevens of Alaska with $469 million and Richard C. Shelby of Alabama with $465 million. CAGW ranked Mrs. Clinton of New York the 13th top pork spender in the Senate, far outpacing Democratic rival Sen. Barack Obama who ranked 28th and sent his home state of Illinois about $97 million in pork. The presumptive Republican presidential nominee, Sen. John McCain of Arizona, as usual secured no pork projects.

~Today's Washington Times

Senate List: By Dollar Amount or Alphabetical

House List: By Dollar Amount or Alphabetical

Complete Pork Database:
Search all 11,610 projects by keyword, member, state, party or appropriations bill.

Monster Employment Index Up 2 Points in March

The Monster Employment Index edged up two points in March, as overall U.S. online job availability rose moderately for the second consecutive month, but remained down 10% from a year ago. The Monster Employment Index is based on a real-time review of millions of employer job opportunities culled from a large, representative selection of corporate career sites and job boards, including Monster.

During March, a majority of industry and occupational categories tracked showed greater online job demand compared to the previous month, with 16 of 20 industries and 15 of 23 occupations registering gains.

Wednesday, April 02, 2008

Cost of Living

OSLO is the priciest city in the world to live in according to The Economist. In its latest twice-yearly index of over 130 cities, in which 160 items are assessed, Norway's capital has been the costliest since 2005, when it toppled Tokyo from the top spot. European cities dominate the list, reflecting the weakness of the dollar. New York is still the most expensive city outside of Europe or Asia, but it has slipped from 28th to 39th in a year. Relocating to Latin America or India would get you a lot more for your buck.

In Defense of Wikipedia: I Kinda Like It

Columbia Journalism Review--At the end of the day, Wikipedia looks less like the reputation-munching monster it’s being portrayed as, and more like the future of information in the Internet age.

Professor Mark Goodacre, Duke University--It is becoming fashionable among academics these days to have a go at Wikipedia. This is inevitable for a variety of reasons. Academics are often behind their students in the use of new technology, and this brings about a reaction of fear. We witnessed the same thing with the advent of the World Wide Web in the 1990s and now that fears about the academic value of Internet resources has diminished, a new, narrower target has been found. It is an easy target because its open source basis makes it often apparently "unreliable." Negative reactions to the use of Wikipedia in the classroom, however, are unnecessary and should be discouraged.

Professor Tyler Cowen--Critiques of Wikipedia miss its comparative advantage. Entries tend to be link-rich, and the ongoing debate and revisions refresh and improve the links. Think of Wikipedia as hiring someone to do search engine work for you, not just Google but the other brands as well. They then report back with the best links. Wikipedia brings you this service for free.

Washington Post Blog--Even the most celebrated sources of fact are frequently flawed. A study by the scientific journal Nature investigated the legitimacy of both Wikipedia and the Encyclopedia Britannica, a widely respected information outlet. Through a random sampling of articles, the study discovered 162 errors from Wikipedia and 123 from the Encyclopedia Britannica.

Ultimately, Wikipedia is more than merely a source of information; it is a global system that promotes a constant exchange of information. Its purpose is to encourage a dynamic flow of knowledge, an element that is critical to this era of globalization.

Duke Professor Cathy Davidson
--Wikipedia is not just an encyclopedia. It is a knowledge community, uniting anonymous readers all over the world who edit and correct grammar, style, interpretations, and facts. It is a community devoted to a common good — the life of the intellect. Isn't that what we educators want to model for our students?

As a cultural historian and historian of technology, I find that I often go to Wikipedia for a quick and easy reference before heading into more-scholarly depths. I'm often surprised at how sound and good a first source it is.

Comment: There are a lot of Wikipedia-skeptics out there, especially in academia, where it seems to be almost universally condemned, banned and ridiculed by professors.

Well, at the risk of being an academic heretic, I have a confession to make: I like Wikipedia, and often go there first when trying to find information on the Internet. For example, check out the Wikipedia listing for Gross Domestic Product. In addition to links for original sources of GDP data in many countries, there are many useful ranked lists at the end of the Wikipedia GDP entry, based on GDP using data from the IMF, World Bank and the CIA World Factbook with adjustments for inflation, PPP and per capita, etc. (I refer to these lists often):

List of countries by GDP (nominal), (per capita)
List of countries by GDP (PPP), (per capita), (per hour)
List of countries by GDP (real) growth rate, (per capita)
List of countries by GDP sector composition
List of countries by future GDP estimates (PPP), (per capita), (nominal)
List of countries by past GDP (PPP), (nominal)

Wikipedia is in its infancy, and will likely continue to improve significantly over time. Wikipedia-skeptics, give it some time. It'll likely be the "future of information in the Internet age."

Where's The Credit Crisis?

Annual Growth of Total Bank Credit Through March 19, 2008:
Annual Growth of Total Loans and Leases through March 19, 2008
Annual Growth of Commercial Loans Through March 19, 2008

Source: Federal Reserve via the St. Louis Fed.

Free Trade, Globalization & "The Great Moderation"

In recent decades, as foreign trade and investment have been rising as a share of the U.S. economy, recessions have actually become milder and less frequent (see chart above, click to enlarge). The softening of the business cycle has become so striking that economists now refer to it as "The Great Moderation."

For the U.S. economy as a whole, the era of globalization has brought healthy long-term growth and a moderation of the business cycle. Expansions are longer if less spectacular than in eras past, and downturns are mercifully shorter, shallower, and less frequent. Moderation of the business cycle in recent decades is something to be thankful for, and expanding trade and globalization deserve a share of the credit.

~From Cato's "Worried about a Recession? Don’t Blame Free Trade," by Dan Griswold

The Recession is a Media Myth

According to John Lott.

Tuesday, April 01, 2008

Market Share of Big Three at Record Low of 47%

According to March auto sales data released today by Motor Intelligence, the market share of the Big Three automakers fell to a new record low of 47% in March 2008, down from 53% last year (see chart above).

Carpe Diem Exclusive: Total Bank Is Growing At the Fastest Rate Since the 1970s: What Credit Crunch?

According to Federal Reserve banking data (via the St. Louis Fed) released yesterday, "weekly bank credit of all commercial banks" hit an all-time record high of $9.49 trillion on March 19, 2008. What's even more impressive though is the growth in total bank credit measured as the "percent change from a year ago" (see chart above). Compared to the same week a year ago, bank credit in the third week of March (the most recent week available) increased by 12.62%, the largest annual percent increase in bank credit in more than a quarter century!

You would never know from media reports on the "credit crisis" (1.81 million Google hits) and "credit crunch" (3.61 million Google hits) that total U.S. bank credit is higher in absolute terms than ever in U.S. history, and is growing at the fastest rate in percentage terms since 1979!

Update: Notice also that the growth in bank credit declined sharply during each of the last four recessions (shaded areas in graph). Although bank credit is not one of the official NBER recession-indicating variables, it seems highly unlikely that we could now be in recession when bank credit is growing at almost a record high rate.

Drew Carey Calls for Open Borders on Reason.tv

What do English-speaking soccer superstar David Beckham and working-class Mexican immigrants have in common? Drew Carey says they both make America a better place on Reason.tv.

“Americans, especially LA Galaxy fans were very excited and greeted David Beckham with open arms when he came here to play in Los Angeles, even though he took the roster spot away from some poor, hard-working American kid,” Carey says in the Reason.tv video. “So I guess we’re very welcoming when it comes to rich famous Brits. And we love our Beatles. But are we as welcoming when it comes to people from other countries?”

Food Stamp Hysteria: Whoops, They All Forgot to Control for Record U.S. Population of 306m in 2009

CBS Evening News: More Americans Turning To Food Stamps: Amid Economic Slowdown, Record 28 Million In U.S. Expected To Use Program In Coming Year

NY Times: As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record
The Independent: USA 2008, The Great Depression. Food stamps are the symbol of poverty in the US. Dismal projections by the CBO suggest that by fiscal year 2008, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance program was introduced in the 1960s - and a sure sign the world's richest country faces economic crisis.

Comment: There's one big, fundamental problem for these "food stamp hysteria" stories about record food stamp use of 28 million by 2009 (fiscal year 2008): The U.S. population will be at a record level of 306.272 million in 2009, and food stamp use by 28 million Americans will be about 9.14% of the population, just slightly higher than the 2005-2007 average of 8.78% (see chart above using data from USDA and the Census Bureau). And the 9.14% projected food stamp usage as a percent of population in 2008-2009, will be lower than food stamp usage in 1980, 1981, 1982, 1983; and 1992, 1993, 1994, 1995 and 1996.

Bottom Line: We're nowhere near a record for food stamp use, and we're nowhere close to the Great Depression!

(Inspired by this post on Captain Capitalism)

A Real Time-Saver: Alt-Tab Keyboard Shortcut

Alt-Tab is the name for a keyboard shortcut on Microsoft Windows used for switching between windows without using the mouse.

If you press ALT+TAB to switch between Windows-based applications, Windows displays a box that identifies the last application that you accessed. If you hold the ALT key down, pressing TAB cycles through all of the applications that are currently running. When you let go of the ALT key, the identified application becomes the active application.

Carpe Diem on Kudlow & Company

Thanks to my pal Larry Kudlow for a nice mention of this Carpe Diem post last night on CNBC's "Kudlow & Company," in the segment "The Case Against Case-Shiller" (starting at about 1:40).

Quote of the Day

There is no question that the people who run the Federal Reserve System today are a lot more knowledgeable about economics than those who ran it back in the days of the Great Depression. Indeed, the average student who has passed Economics 101 today is probably more knowledgeable than those who ran the Federal Reserve System back during the Great Depression.

Being a disinterested government official does not mean that you know what you are doing. That fact gets left out of the equation in a lot of proposals for new government programs.

~ From Thomas Sowell's latest column "Irony in Wall Street"

Monday, March 31, 2008

Cash for Keys in Vegas, Foreign Buyers in Detroit

A few interesting real estate stories:

1. Wall Street Journal--These days, bankers and mortgage companies often find that by the time they get the keys back from foreclosed homes, embittered homeowners have stripped out appliances, punched holes in walls, dumped paint on carpets and, as a parting gift, locked their pets inside to wreak further havoc. Real-estate agents estimate that about half of foreclosed properties to be sold by mortgage companies nationwide have "substantial" damage.

The most practical way to ensure the houses are returned in decent shape, lenders and their agents say, is to pay homeowners hundreds or even thousands of dollars to put their anger in escrow and leave quietly. In Las Vegas, agents hired by the banks to handle foreclosed properties say the "cash for keys" approach, as it's known in the industry, is a regular part of the job.

2. Detroit Free Press--Investors from as far away as Hong Kong and Hawaii are coming to Detroit to make their fortune buying foreclosed homes in bulk. Some buyers are looking to buy larger numbers of homes, perhaps 100 or more at a time.

In Detroit's distressed housing market, the majority of sales now are to investors, often in bulk deals. Sales were up dramatically in Detroit in February, rising 49% from a year before, and foreclosure properties played a key role in the increase.

Sunday, March 30, 2008

Forget Ethanol, What About Canada's Oil-Sands?

At a time when saying anything good about fossil fuels is like declaring war on the environment, it may seem like wishful thinking to press for an expansion of U.S. oil refining capacity. Yet it is precisely this sort of thinking that is necessary if we are to make use of a vast, secure and reliable supply of fuel from Canada's oil sands.

The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves. The U.S. currently obtains 1 million barrels a day from Canada's tar sands, but with planned investments the daily supply could exceed 3 million barrels by 2015.

Read more here in Investor's Business Daily

Piger's Recession Probability Index for Jan. = 0.04

The chart above shows University of Oregon economics professor Jeremy Piger's "Recession Probability Index" from 2000 to January 2008, based on the 4 monthly variables used by the NBER to determine U.S. recessions: non-farm payroll employment, the index of industrial production, real personal income excluding transfer payments, and real manufacturing and trade sales.

According to Professor Piger, "Historically, three consecutive months of recession probabilities exceeding 0.8 (see historical graph below) has been a good indicator that an expansion phase has ended and a new recession phase has begun, while three consecutive months of recession probabilities below 0.2 has been a good indicator that a recession phase has ended and a new expansion phase has begun."

Professor Piger's has a research paper on this topic, "A Comparison of the Real-Time Performance of Business Cycle Dating Methods," forthcoming in the Journal of Business and Economics Statistics.

Comment: According to this methodology, the U.S. economy has not entered a recession, at least not through January.

Dark Ages: Earth Hour Here, Earth Decade N. Korea

Dear Mr. Roberts, President of World Wildlife Fund:

You and members of your organization worry that industrialization and economic growth are harming the earth's environment. I worry that the intensifying hysteria about the state of the environment - and that the resulting hostility to economic growth - might harm humankind's prospects for comfortable, healthy, enjoyable, and long lives.

So I commend you on your "Earth Hour" effort. Persuading people across the globe to turn off lights for one hour supplies the perfect symbol for modern environmentalism: a collective effort to return humankind to the Dark Ages.


Donald J. Boudreaux, Chairman, Department of Economics, George Mason University

P.S. The WWF should award some special prize to the North Korean government, for that government keeps North Koreans not in any meager "Earth Hour," or even "Earth Day," but in what WWFers might call "Earth Decades." See picture above of a society keeping its carbon footprint tiny. Of course, in doing so it keeps itself also desperately poor, often even to the point of starvation.

Saturday, March 29, 2008

Forget Canadian Healthcare, Let's Go to Mexico

Mexico Builds Hospitals to Lure Medical Tourists From America

Grupo Empresarial Los Angeles, Mexico's largest private hospital chain, is spending $700 million to build 15 hospitals over the next three years. Oca Hospital, a family-owned company in Monterrey, is building a 200-bed facility there.

"In diverse cities that are attractive to Americans, we can offer hospitals that are very competitive and at a very good price,'' Ramirez said.

Grupo Angeles has a marketing campaign targeting Americans. The goal is for foreigners to make up 20% of patients within two years, up from 5% now. At the company's hospital in Tijuana, Americans accounted for 40% of the 100,000 patients the facility admitted in 2007.

Conventional Wisdom: Ethanol Is A Complete Scam

Time Magazine now joins the Christian Science Monitor, NYTimes, WSJ, IBD, Reason, and Rollingstone Magazine, in coming out against ethanol and biofuels in its most recent issue:

Several new studies show the biofuel boom is doing exactly the opposite of what its proponents intended: it's dramatically accelerating global warming, imperiling the planet in the name of saving it. Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous. Even cellulosic ethanol made from switchgrass, which has been promoted by eco-activists and eco-investors as well as by President Bush as the fuel of the future, looks less green than oil-derived gasoline.

Meanwhile, by diverting grain and oilseed crops from dinner plates to fuel tanks, biofuels are jacking up world food prices and endangering the hungry. The grain it takes to fill an SUV tank with ethanol could feed a person for a year. Harvests are being plucked to fuel our cars instead of ourselves. The U.N.'s World Food Program says it needs $500 million in additional funding and supplies, calling the rising costs for food nothing less than a global emergency. Soaring corn prices have sparked tortilla riots in Mexico City, and skyrocketing flour prices have destabilized Pakistan, which wasn't exactly tranquil when flour was affordable.

But the basic problem with most biofuels is amazingly simple, given that researchers have ignored it until now: using land to grow fuel leads to the destruction of forests, wetlands and grasslands that store enormous amounts of carbon.

Comment: As Reason Magazine points out "You know that something has achieved the status of "the conventional wisdom" when Time magazine finally latches onto it."

Medical Tourism: 92% Savings in India

NEW DELHI--The number of Americans heading abroad for medical procedures is surging as the country's 46 million people without health insurance look for treatment they can afford and cash-strapped U.S. companies struggle to find cheaper ways to provide high-quality medical care to their employees.

India is fast becoming the destination of choice for patients seeking complicated high-end procedures they can't afford or can't manage to schedule with a doctor they trust at home. These include things like heart surgery, organ transplants and orthopedic procedures like knee replacement or hip resurfacing (see price list above).

Several Fortune 500 companies and the West Virginia Legislature are among those considering bonuses — including first-class airfare and four-star hotel stays—for employees willing to undergo medical treatment abroad. And several major insurers already cover treatment programs in Mexico and Thailand.

(Via Taxing Tennessee)

Sticky Home Prices Finally Start to Get Less Sticky

Houses are almost perfectly engineered to trick owners into overvaluing them. For both economic and psychological reasons, there is no asset more conducive to hopeful overvaluation. That means real estate slumps tend to grind on for years, until sellers submit to reality and reduce their prices.

This week’s batch of economic reports suggest that the adjustment is finally starting to happen. The decline in house prices is accelerating, especially in some of the big metropolitan areas covered by the Case-Shiller index released Tuesday, while the number of home sales has recently risen a bit.

From "Be It Ever So Illogical: Homeowners Who Won’t Cut the Price" in the NY Times

Cell Phones for Cubans, But On $10-20 Per Month?

HAVANA--Raul Castro is revolutionizing his brother's island in small but significant ways — the latest in a decree Friday allowing ordinary Cubans to have cell phone service, a luxury previously reserved for the select few.

Many Cubans hope cell phones and new appliances are only the beginning for a post-Fidel Castro government that will improve their lives. Communist bureaucracy currently limits everything from Internet access to home ownership.

The new program could put phones in the hands of hundreds of thousands of Cubans, but they will remain out of reach for most on the island because minutes are billed in convertible pesos — which cost Cubans 24 times the regular pesos they are paid in.

"I'd love one!" said Juan Quiala, a retiree living on a $10 monthly pension. "But how am I going to pay for it?"

The government controls over 90% of the economy, and while the communist system ensures most Cubans have free housing, education and health care and receive ration cards that cover basic food needs, the average monthly state salary is only $20.

Friday, March 28, 2008

Recession Watch: Not In Texas, Jobless Rate Hits Record Low, Even Construction Sector is Booming

DALLAS--The Texas jobless rate dropped to 4.1% in February – a low not seen since the mid-1970s, the Texas Workforce Commission reported Thursday (see chart above).

"Texas has once again reached a prominent benchmark – a more than 30-year record low for unemployment," newly appointed Texas Workforce Commission Chairman Tom Pauken said. "Our falling unemployment, coupled with this month’s significant job gains, indicates the sustained health and vitality of the Texas economy."

Construction continued to add jobs, with 1,900 new positions in February for an annual job growth rate of 4.3%.

Thursday, March 27, 2008

It Won't Be Much of a Stimulus

According to the CNN poll above (click to enlarge), only 21% of the rebate will actually be spent, reducing the potential effectiveness of the fiscal stimulus by almost 80%.