2007 Current Account Balances
From the CIA, ranked by country, from #1 China with a $363.3 billion surplus, to #164 U.S. with a -$747.1 billion deficit.
Professor Mark J. Perry's Blog for Economics and Finance
From the CIA, ranked by country, from #1 China with a $363.3 billion surplus, to #164 U.S. with a -$747.1 billion deficit.
Watch this week for the debut of guest blogger Peter Schweizer, who will help out over the next few weeks with posts on CD during my travels to Russia, where my access to the Internet might be somewhat infrequent. Peter is a research fellow at the Hoover Institution, and author of many books including my favorite, "Do As I Say, Not As I Do: Essays in Liberal Hypocrisy."
RealtyTrac, the leading online marketplace for foreclosure properties, today released its March 2008 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 234,685 properties nationwide during the month, a 5% increase from the previous month and a 57% increase from March 2007.
Here's a cold reality that none of the presidential candidates want to tell you: a shrinking number of Americans are bearing an ever bigger share of the nation's income tax burden. In 2005 (the most recent year for which data is available), the bottom 40% of Americans by income had, in the aggregate, an effective tax rate that's negative: their households received more money through the income tax system, largely from the earned income tax credit, than they paid.
The real issues here are clear. One is having a shrinking minority of citizens pay most of Washington's bills. Social cohesion falls apart. The majority who pay nothing resent those with higher incomes; the minority who pay heavily resent those who don't pay.
According to a comment on this earlier CD post about Krugman and Don Boudreaux's response, Krugman was referring to the top chart above in the April 12 NY Times article by Floyd Norris "Many More Are Jobless Than Are Unemployed," which claims that "Men in the prime of their working lives are now less likely to have jobs than they were during all but one recession of the last 60 years. Most of them do not qualify as unemployed, but they are nonetheless without jobs."
Norris uses a "jobless rate," or "proportion of people without jobs," which can be calculated as: 1 - Male Employment Ages 25-54/Population. Using employment/population data for men, women and all workers aged 25-54 from the BLS (via Economagic), the "jobless rates" are calculated and displayed in the bottom chart above. The middle chart above shows this calculation for males aged 25-54, which matches the Norris graph at the top.
If Krugman did refer to that article as his source, there are a few problems:
1. Krugman says "the percentage of prime-working-age Americans without jobs is historically high," which is clearly not accurate. It would be more accurate to say that it is close to being historically low (see middle brown line above for "All Workers"). Krugman may have used Norris' data, but then mistakenly discussed the jobless rate for all workers aged 25-54 being high, when he should have been discussing men only aged 25-54.
2. When the data are displayed over a range from 0% to 70% (bottom graph) instead of a more narrow range from 2-16%, it's much clearer that the jobless rate for men aged 25-54 has been relatively stable at about 12% for the last 25 years. Further, the jobless rate for all workers aged 25-54 has been relatively stable at about 20% for the last 25 years, and jobless rate for women has been stable at about 28% for the last 20 years, and is close to an historical low.
Update: After exchanging emails with Norris, he calculated his "jobless rate" by first finding the number of men with jobs aged 25-54 in the household employment survey, and he then compared it to the civilian noninstitutional population for the same age group. Then he subtracted the employment/population ratio from 1 to calculate the "jobless rate." That calculation can be replicated by using the Employment/Population ratio from the BLS, and then subtracting that ratio from 1, see the middle chart above - it replicates Norris' top chart exactly.
Paul Krugman in today's NY Times: The official unemployment rate of 5.1%, though rising, is still fairly low by historical standards. Yet economic attitudes are worse now than they were in 1992, when the average unemployment rate was 7.5%. Why are we feeling so down?
WSJ--Study after study shows that most of today’s multi-millionaires made their wealth themselves, as opposed to inheriting it from their parents. PNC Wealth Management recently polled 1,500 Americans with $500,000 or more in investible assets and found that 69% of respondents made most of their fortune through work, business ownership or investments. Only 6% made their wealth by inheriting it, while 25% made it through a combination of inheritence and earnings (see chart above).
As the American film industry cuts costs, orchestras in Prague, Budapest and Sofia are picking up recording contracts for Hollywood scores, or those of French and Italian blockbusters.
PITTSBURGH--Last year was bad. This year, even worse -- a crush of applications, but a dearth of H-1B visas awarded to employers who say they need to import educated foreign workers to occupy high-tech positions that can't be filled by American workers.
A firm engaged in price discrimination faces two practical problems. The first is the problem of distinguishing customers who will buy the good at a high price from those who will not. One solution is said to be used by optometrists. When the customer asks how much a new pair of glasses will cost, the optometrist replies, "Forty dollars." If the customer does not flinch, the doctor adds "for the lenses." If the customer still does not flinch, he adds, "each."
During presidential elections, when candidates postulate this or that "crisis" for which each is the indispensable and sufficient cure, economic hypochondria is encouraged, so a sense of suffering is rampant.
The chart above was created using World GDP data from the IMF, U.S. GDP data from the BEA via FRED, and 2008 forecasts from the IMF for world GDP and U.S. GDP. The U.S. share of world GDP fell below 26% in 2007 for the first time since 1996, and is expected to fall below 25% in 2008 (24.76%) for the first time since 1980.
When a reform government was elected in New Zealand in 1984, it identified three problems: too much spending, too much taxing and too much government.
WALL STREET JOURNAL--The credit crunch has made it harder for Americans to indulge in their love affair with debt. So what are they doing? Borrowing more.
The rise in borrowing shows just how addicted the U.S. consumer has become to credit. Even as borrowers are cut off in one area, they promptly look for new sources.Comment: Consumer credit at U.S. banks is growing now by almost 6% on an annual basis, close to double the rate two years ago when growth was below 3.5% (see chart above). Whether or not the increase in consumer credit is a good thing is certainly subject to debate, but it seems clear that the media focus on a "credit crunch" is way overblown. As I've asked before: What credit crunch?
1. Indian consulates in the U.S. now outsource all visa applications to a private company - Travisa. Not so long ago, getting a visa from the Indian consulates across the country was a nightmare; now, applicants are all smiles thanks to the smooth functioning of the method of outsourcing such requests. MP: Invisible hand at work, can we do this with the Department of Motor Vehicles?
According to Entrepreneur.com (from September 2007):
(HT: Ben Cunningham)
According to U.S. antitrust laws:
TIMES ONLINE--Scientists at IBM say they have developed a new type of digital storage which would enable a device such as an MP3 player to store about half a million songs - or 3,500 films - and cost far less to produce. In a paper published in the current issue of Science, a team at the company's research centre in San Jose, California, said that devices which use the new technology would require much less power, would run on a single battery charge for "weeks at a time", and would last for decades.
It's a few years old, but here's an interesting article from July 2006 in the Chronicle of Higher Education by UC-Berkeley blogger/professor/economist J. Bradford Delong, as part of a Chronicle series on the topic "Can Blogging Derail Your Career?":
......According to First Trust Advisors (economists Brian Wesbury and Robert Stein)
Some positive aspects of today's trade report, despite CNBC news reports on "red ink" and "losing the trade deficit war."
The CD graph above was featured on CNBC's "Kudlow & Company" tonight, during the segment "Texas Economics" (starting about 0:45) featuring Texas Governor Rick Perry (no relation!) discussing the recession-proof Texas economy. Texas had the lowest unemployment rate in February (4.1%) since the 1970s (see chart below from this CD post), and cities like Dallas and Houston are booming!
Question from a CD reader:
Paul Krugman in the NY Times, "Grains Gone Wild"
According to Money Magazine, the 10 white-collar jobs above (click to enlarge) have the best combination of high pay and high security, and are among the best careers to have in a recession.
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.
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.
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.
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."
From the World Bank and PricewaterhouseCoopers study "Paying Taxes 2008: The Global Picture:"
Based on actual futures trading on Intrade.com.
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).
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.
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.
Some of the conclusions from the article UNFAIR TRADE, by the Adam Smith Institute: