Professor Mark J. Perry's Blog for Economics and Finance
Monday, May 19, 2008
Quote of the Day: Traditional Job A Career Failure?
The most compelling statistic of all? Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business owners consider themselves to be serial entrepreneurs, according to Inc. magazine. Tellingly, 18 to 24-year-olds are starting companies at a faster rate than 35 to 44-year-olds. And 70% of today's high schoolers intend to start their own companies, according to a Gallup poll.
An upcoming wave of new workers in our society will never work for an established company if they can help it. To them, having a traditional job is one of the biggest career failures they can imagine.
~From "The Next American Frontier" in today's WSJ
Texas Jobless Rate in April At Record Low of 4.1%
AUSTIN — The April statewide seasonally adjusted unemployment rate fell to 4.1%, down from 4.3% in March and 4.4% in April 2007, once again matching the record low set in February (see chart above, click to enlarge). The 4.1% April unemployment rate in Texas remains far below the U.S. unemployment rate of 5.0%. Seasonally adjusted nonagricultural employment in Texas grew by 15,400 jobs in April.
“Texas continues to outpace national trends with its record low unemployment rate,” said Texas Workforce Commission (TWC) Chairman Tom Pauken. “Texas employers now have added 262,000 jobs in the past 12 months.”
Note: Adding 262,000 jobs in Texas over the last 12 months is almost like adding an entire new state the size of Wyoming (total state employment of 283,000) to the Texas economy. Even the construction sector in Texas is booming - 3,000 jobs were added in April, for a gain of 23,200 jobs over the year.
Sunday, May 18, 2008
Clothing Deflation: One of Today's Best Bargains
Related to the post below on "The World's Cheapest Clothes," the chart above (click to enlarge) compares the "Consumer Price Index for All Items" to the "Consumer Price Index for Apparel," from 1992 to 2008 (with each index set to equal 100 in January of 1992, data are from the BLS). While consumer prices on average have risen by almost 55% in the last 16 years, the prices for clothing have FALLEN (deflated) by almost 10% over the same period. In fact, clothing for American consumers has never been cheaper, nor more affordable.
The World’s Cheapest Clothes, Cheaper Than Even Wal-Mart. How Does Steve & Barry Do It?
The most basic dresses at J. Crew start at $58. At American Apparel, they start at $26; at Old Navy, $19.50; and at Forever 21, some styles cost $15.80. The least expensive dress on the Wal-Mart Web site is $14.92.
Prices at Steve & Barry’s (a clothing chain where everything costs less than $10) are actually dropping — the $8.98 threshold for dresses (pictured above) was introduced as a holiday promotion last year, but remains with no set expiration. Meanwhile, the company’s sales at locations open at least a year, a crucial indicator of retail health, have increased more than 20% each month since January.
The question on everyone’s lips: How does Steve & Barry's make a decent dress or a jacket, with sleeves, or a pair of functioning shoes for $8.98?
Find the answer here in the NY Times.
HT: Division of Labour
Europe's Economy Rocks, Defies U.S. Slowdown
Surprising even the most optimistic forecasters, the German economy grew 1.535% in the first quarter of this year (about 6% on an annual basis), delivering its best performance in over a decade (see chart above, click to enlarge, data from OECD) despite the global financial crisis and recessionary fears enveloping the United States.
The euro zone, where Germany accounts for a third of economic output among 15 members, grew 0.7% during the period (2.8% annually), the statistics agency Eurostat reported Thursday. The region's numbers, which represent quarter-on-quarter growth, also got a surprising lift from France, where the economy grew 0.6% (2.4% annually) in the first quarter.
The figures, which were about double what most economists expected, suggested that the European economy was demonstrating a resilience that seemed unlikely as recently as last autumn.
Read news reports here, here and here.
Note: First-quarter GDP estimates show that the U.S. economy grew 0.2% (compared to the .60% growth on an annual basis reported in the U.S.) when the official figure is translated into a measure comparable with the estimates published in Europe. In the U.S., quarterly growth rates for GDP are annualized, while in Europe they are reported as quarterly rates without adjusting on an annual basis (see adjustments above in parentheses).
Economic Opportunity Is Close To An All-Time High
How much opportunity do Americans have today compared to 25 years ago (MP: about 60% more, according to the chart above)? How does opportunity compare across gender and racial groups? What will matter most in ensuring opportunity in America in the future?
The Economic Opportunity Index (EOI) is a tool for measuring the extent to which Americans have the opportunities available to them to achieve the American Dream, and identifying those factors which could contribute most to improved opportunity in the future. There are many measures of economic activity, such as unemployment, inflation, GDP1 growth, productivity, or income distribution. However, there is no credible, authoritative measure of economic opportunity – the potential for people to improve their economic well-being based on their individual efforts.
There is a profound and unmet need for a trustworthy set of measures that policymakers, media, or citizens can rely on to assess the degree to which America is indeed the “land of opportunity” for all its people – and whether the amount of opportunity is growing or shrinking over time. The Index will bring hard facts and solid, non-partisan analysis to what is now a confused and ideological debate that falls into the tired paradigm of “grow the pie” versus “redistribute the pie.” In our view, this misses the point because it is focused on the wrong “pie” altogether – we should aim to increase opportunity, and outcomes will follow.
Hope Street Group defines economic opportunity as “Expected lifetime real income, given effort.”
Saturday, May 17, 2008
Cartoon of the Day: How the Tax Rebate Works
Open Source "Intro to Microeconomics," Price = $0
Introduction to Economic Analysis, by R. Preston McAfee, California Institute of Technology
This is a "technical" principles book, assuming a working knowledge of calculus. It will cover most intermediate material as well and could easily be used for an intermediate course; the difference is that there are explanations of principles ideas in the text.
The focus of this book is on the conceptual tools and not on fluff. Most microeconomics texts are mostly fluff and the fluff market is exceedingly over-served by $100+ texts. In contrast, this book reflects the approach actually adopted by the majority of economists for understanding economic activity. There are lots of models and equations and no pictures of economists.
Download the entire book for free here.
Buy a printed copy for $11.10 plus shipping
McAfee's Class Website and powerpoints.
Hsueh-Ling Huynh's Ec 1011a at Harvard.
Simon Wilkie's Class Website.
Roy Radner's course syllabus at NYU.
Angelo Zago plans to use the text at Verona University.
Tom Andrews' course syllabus at West Chester U.
Nicolas Schmitt's course syllabus at Simon Fraser.
Michelle Goeree's course syllabus at Claremont McKenna.
Individual chapters in pdf format.
Friday, May 16, 2008
It's Not Just Gasoline That's Dirt-Cheap in the U.S.
American households can buy natural gas at prices that are among the lowest in the world, see chart above (date from EIA available here, p. 43). See related post below on electricity prices.
Electricity Prices in US Among Lowest in World, Less Than 50% of Most Countries in Europe
In 2007, the price that American households paid for electricity ($0.1002 per KWh) was among the most affordable in the world, and about half the price of electricty in many European countries like Denmark, Netherlands, Italy, Ireland, Germany, U.K., Portugal, and Austria (see chart above, click to enlarge). Data from the EIA available here (p. 43).
Univ. of Chicago Plans Milton Friedman Institute
(HT: Jeff Perry)
Gas Taxes By State
Are You Ready for This? Cars That Get 200-300 mpg
Wheat Prices Plunge By 41% in Three Months
On a recent CD post "As Share of Disposable Income, Food Is Still Cheap," Machiavelli999 left a comment about the falling price of wheat. The graph above confirms his observation - spot wheat prices have actually fallen by 41% in the last three months from $9.36 per bushel in February to $5.54 per bushel in February, and prices are now at their lowest level in almost a year (since June 2007 when wheat was $5.34).
Updated: Prices have fallen by 41%.
U.S. Gasoline is Still Dirt-Cheap
American gasoline is also dirt-cheap compared with gas in other countries. British motorists are currently paying about $8.38 per gallon for gasoline. In Norway, a major oil exporter, drivers are paying $8.73.
In 2007, out of the 32 industrialized countries surveyed by the International Energy Agency (see p. 42 of the report) only one (Mexico) had cheaper gasoline than the United States
(MP: And it't not just gasoline, consumer prices for electricity and natural gas in the U.S. are among the lowest of the 32 countries, about half the prices in the U.K. for example, see p. 43).
Last year, drivers in Turkey were paying three times as much for their gasoline as Americans were. The IEA data also show that in India—where the per capita GDP is about $2,700 (about 6 percent of the per capita GDP in the United States)—drivers have been paying more for their diesel fuel and gasoline than their American counterparts.
Gasoline is also cheap compared with other essential fuels. A Starbucks venti latte costs the equivalent of $23 per gallon while Budweiser beer runs $11 per gallon.
The simple truth is that Americans are going to have to get used to more expensive gasoline. And while they may continue grumbling at the pump, they need to accept the fact that even at $3.50 or $4 per gallon, the fuel they are buying is still a bargain.
From "Gasoline is Cheap" in Slate.com.
Thursday, May 15, 2008
Politics vs. Economics: Politics Wins All the Time
Chain stores have been disliked for decades, at both local and national levels. Taking advantage of economies of scale that lower their costs of doing business, chain stores are able to charge lower prices than smaller independent stores, and therefore attract customers away from their higher-cost competitors.
The economics of this is certainly not too "complex" to understand. However, politics is not economics, so politicians tend to respond to people's emotional reactions-- and if economic realities stand in the way, then so much the worse for economics.
People have every right to indulge their emotions at their own expense. Unfortunately, through politics, those emotions are expressed in laws and administrative decisions by people who pay no price at all for indulging either their own emotions or the emotions of the people who vote for them.
Anyone who doesn't like chain stores is free not to shop there. But that is wholly different from saying that they have a right to stop other people from exercising their own freedom of choice. That's not too "complex" to understand.
Wednesday, May 14, 2008
The "Cultural Rut of Pessimism" in the U.S.
What a difference a century makes:
1888: America excites an admiration which must be felt upon the spot to be understood. The hopefulness of her people communicates itself to one who moves among them, and makes him perceive that the graver faults of politics may be far less dangerous there than they would be in Europe. A hundred times in writing this book have I been disheartened by the facts I was stating; a hundred times has the recollection of the abounding strength and vitality of the nation chased away these tremors.
~"The American Commonwealth" by Britain's Lord Bryce
2008: There is something both startling and disturbing about the gloom that has settled over Wall Street and the country in general. In fact, looking back over the past century, it would be a stretch to rank the current problems as especially notable or dramatic. Something else is going on – namely a cultural rut of pessimism that is draining our collective energy, blinding us to possibilities, and eroding our position in the world.
~Who Stole the American Spirit? by Zachary Karabell, WSJ
As Share of Disposable Income, Food Is Still Cheap
Just like with gas prices, we hear a lot about food prices being at record levels, but we don't hear as much about disposable income also being at record high levels. How do food prices compare to disposable personal income?
According to data available from the USDA, expenditures on food as a share of disposable personal income have decreased from a high of 25.2% in 1933 to a low of 9.7% in 2004 (see chart above). In 2005 and 2006, there were insignificant increases to 9.8% and 9.9%, respectively.
Although data for 2007 and 2008 are not yet available, Eugene Volokh provides estimates of relatively insignificant increases for those years. For example, food prices increased by 3.9% in 2007 according to the BLS, and disposable personal income increased by 5.4% in 2007 according to BEA data (available here via FRED). Allowing for a 1.1% increase in population, the percentage of disposable income spent on food would remain unchanged at about 9.9% in 2007.
Through March 2008, the CPI for food increased annually by 3.9%, and disposable income increased by 4.1% from a year ago. Allowing for a 1% increase in population, the percentage of income spent on food has increased to 9.98%, a fairly small increase. Through April 2008, annual food inflation was slightly higher, about 5%, which could bring the percent of disposable income spent on food to about 10% in 2008. But even at 10% of disposable income, spending on food would still be below any year of the 1990s, and way below any previous year or decade, and about half of the spending on food during the early 1950s when spending on food was almost 21% of disposable income.
Even with the recent increases in some food prices, food is still relatively cheap and affordable, when spending on food is measured as a share of disposable income. And this analysis suggests that any comparisons between today's economic situation and the 1930s and the Great Depression are pure nonsense and nitwitery.
Welcome Finance Students in Romania!!
Is Concern for Inflation Inflated?
The chart above (click to enlarge) shows the growth rates (from a year ago) for the monetary base and M1 money supply since 2005. M1 has been flat with zero growth for more than 2 years, and the growth in the monetary base has been declining and is now approaching 0% growth. Given these monetary data, is the concern about inflation inflated?
Inflation Falls 4 Months in a Row, April Inflation of 3.9% is Lowest Rate in 6 Months, Since Oct. 2007
WASHINGTON -- U.S. consumer prices were under wraps last month, a government report showed, especially when food and energy prices were stripped out, further evidence that the economic slowdown is easing some of the inflationary effect of recent sharp gains in food and energy prices.
Consumer prices rose 3.9% on a year-over-year basis, down slightly from the prior month (see chart above). The core CPI grew a more modest 2.3% compared to April 2007. Over the past three months, core inflation rose at only a 1.2% annual rate.
MP: CPI inflation at an annual rate has fallen in each of the last four months, and is at the lowest rate in six months (since October 2007).
Harvesting Cash: Who Wants to Be a Millionaire?
WSJ--We can't wait to hear how Members of Congress explain their vote this week for the new $300 billion farm bill. At a time when Americans are squeezed at the grocery store, they will now see more of their taxes flow to the very farmers profiting from these high food prices.
Nearly every crop – corn, wheat, sugar – has won increases in subsidy payments even as farm commodity prices explode (see bottom chart above).
This year farm income is expected to reach an all-time high of $92.3 billion, an increase of 56% in two years (see chart above), making growers perhaps the most undeserving welfare recipients in American history. But that won't stop this bill from passing the House and Senate by wide margins.
Tuesday, May 13, 2008
Melodrama and Villains vs. Supply and Demand
With all the commotion in the media and in politics about the high price of gasoline, is there really some terribly complex explanation?
Is there anything complex about the fact that with two countries-- India and China-- having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world's oil supply?
The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains.
Where Are Home Prices Headed in 2009?
Money Magazine recently put out a city-by-city home price forecast, using data from Fiserv Lending Solutions, First American CoreLogic, city and county assessors, and realtors. The magazine determined that U.S. home prices will fall an average of 9.7%, see list above (click to enlarge).
Notice Detroit has the highest expected appreciation of 8.6% in 2009, up from $120,000 in 2008!
US HIPocrisy: 3,770 Calories/Day vs. 2,440 in India
NEW DELHI: Instead of blaming India and other developing nations for the rise in food prices, Americans should rethink their energy policy and go on a diet.
Americans eat an average of 3,770 calories per capita a day, the highest amount in the world, according to data from the UN Food and Agricultural Organization, compared to 2,440 calories in India (see chart above, click to enlarge). They are also the largest per capita consumers in any major economy of beef, the most energy-intensive common food source, according to the U.S. Department of Agriculture. The United States and Canada top the world in oil consumption per person, according to the U.S. Energy Information Administration.
Wal-Mart's Strong International Sales Boost Profits
WSJ--Wal-Mart Stores Inc. reported today a 6.9% rise in profit for its fiscal first quarter, helped by strong international sales and a tighter grip on inventories and markdowns.
International sales jumped 22%, pushing operating income up 16%. Wal-Mart's expansions into international markets such as Brazil and China are yielding fruit, analysts have said, and the company saw solid sales growth in the U.K.
What Recession? What Credit Crunch?
The chart above (click to enlarge) shows the annual percentage growth rate of the series "Commercial and Industrial Loans at All Commercial Banks," from the Fed, data available here at the St. Louis Fed. For the last 5 months through April 2008, the growth in business loans has been above 20%, the strongest period of growth in commercial loans since 1973.
Male Recession? The Gender Jobs Gap
As the top chart above shows, since late 2006 male employment in the U.S. has been stagnant, while female employment has continued to grow. From April of last year through April 2008, men have lost 131,000 jobs while women have gained 781,000 jobs (see bottom chart).
What's going on?
According to this BusinessWeek article, Men have the misfortune of being concentrated in the two sectors that are doing the worst: manufacturing (70% male) and construction (88% male). Women are concentrated in sectors that are still growing, such as education and health care (77% female).
The troubles for the American male worker, while exacerbated by the current slump, are hardly new. The manufacturing sector is in long-term decline, and construction goes through repeated booms and busts. Meanwhile women are graduating from college at higher rates than men. Some analysts even argue that men are less suited than women to the knowledge economy, which rewards supposedly female traits such as sensitivity, intuition, and a willingness to collaborate. "Men have tended to do better in the hierarchies, following orders and relying on positional power," says Andy Hines, a futurist at the Washington (D.C.) consulting firm Social Technologies, who previously worked for Kellogg and Dow Chemical.
Economists are debating whether the overall economy is in a recession. For men, the evidence is clear.
MP: Further, in 12 out of the last 16 months, the female unemployment rate has been below the male unemployment rate, and in each of the last 16 months, the female unemployment has been at OR below the male rate (see chart below).
Monday, May 12, 2008
WSJ India: Indian Billionaires
India has more billionaires than ever before. But are they robber barons or national heroes?
Find out here.
Foretelling the Future: Online Prediction Markets
ABC 20/20 Report (watch video here)--As a result of the collective intelligence of more than 77,000 bettors on Ireland's Intrade.com, the prices on the site may be a good way to predict the outcome of current events -- more accurate than some polls and pundits.
In 2004, the market odds on Intrade predicted the presidential vote of every state but Alaska. In 2006, the odds correctly indicated the outcome of every Senate race.
Note: Although most U.S. states sponsor legalized betting through state lotteries (with the worst possible odds), electronic prediction markets are illegal in the U.S.
Smoking: Greece is #1
Assorted Energy Links
1. "Wind ($23.37) v. Gas (25 Cents)," in today's WSJ: There is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective.
2. "Democrats Windfall Tax—On You," Investor's Business Daily: The last time the U.S. had a windfall profits tax on oil companies, the results were disappointing: 1) Domestic oil production decreased, as oil companies produced less oil, not more, b) The level of imported oil increased due to the huge tax advantage we gave foreign oil companies, and c) Revenues from the windfall tax were far less than expected, because domestic producers pumped less and nontaxed imports flooded our market.
3. "How to Use the Strategic Petroleum Reserve (SPR)," WSJ: Over the last 8 months, the government purchased more than 10 million barrels of oil for the SPR as the price rose $40 to above $120. This is not sensible. It puts upward pressure on oil prices at the worst possible time. It is a waste of taxpayer money. It gives aid and comfort to unfriendly nations. And it is an insurance policy that, for the most part, is no longer needed. In fact, we should be selling oil from the SPR at $120. Doing so could be a powerful tool for U.S. energy policy.
I don't often pass along inspirational stuff, as I do not want to offend or "preach," but this one got to me. We can all use a single image that speaks to us of love, harmony, peace, prosperity and joy. All I ask is that you take a moment to reflect upon it.
Click here to see image.
The Taxi Cartel and Their Government Enforcers
Sunday, May 11, 2008
I Had A Dream........ (IN CAPS)
DETROIT FREE PRESS--Congressional Democrats, including Michigan Sen. Carl Levin, increased their calls Thursday for an energy bill (FIRST CLASS MAIL BILL) aimed at lowering record oil and gasoline prices (STAMP PRICES) – and putting OPEC (UNITED STATES POST OFFICE) under U.S. antitrust laws.
Leven denounced OPEC’s (UNITED STATES POST OFFICE's) role in setting world (U.S. STAMP) prices. “OPEC (UNITED STATES POST OFFICE) is a monopoly. They have squeezed the American people and consumers,” Levin said. “Whenever they want to increase or reduce supply (INCREASE STAMP PRICES), they do it. If (SINCE) they were (ARE) an American outfit they’d be (SHOULD BE) in jail for monopolistic practices.”
And You Thought Gasoline Prices Were High? The U.S. Postal Monopoly Has Its Privileges
If stamp prices had increased over time at "only" the rate of gas prices, a first-class stamp would only cost only 27.6 cents today instead of 42 cents.
When gas prices rose last year, Rep. Bart Stupak (D.-MI) introduced "The Federal Price Gouging Prevention Act," which would make it a crime to "sell crude oil or gasoline at a price that is unconscionably excessive." Shouldn't we now investigate "unconscionably excessive stamp prices"? Monopoly has its privileges.
Saturday, May 10, 2008
Drivers Making Big Adjustments to High Gas Prices?
Proximity and Power: The Teachers' Union is #1
Of the 25 most influential interest groups, the teachers’ union is the closest to the capitol in 14 of the 50 states. By contrast, the AFL-CIO is the closest in seven states. The American Association of Retired Persons (AARP) and the National Federation of Independent Business are the closest in five states, each. The American Association for Justice (AAJ)—the leading organization of U.S. trial lawyers, formerly known as the Association of Trial Lawyers of America, or ATLA—is the closest in four states.
Why do the headquarters of state teachers’ unions tend to be so close to state capitol buildings?
The teachers’ unions don’t strive to be the closest because of the extra time it takes to walk or drive a few more blocks. They strive to be the closest because it is a visible display of their power and influence. It is a symbol of the connections and resources they can devote to something as trivial as having the closest office, just like the status obtained from having the best seats at a concert or a sporting event.
Read more here.
Gas Price Map of USA
January Traffic Volume Drops By -1.7%, The Largest Percentage Decline Since At Least 1992
Thanks to Bobble for data source in a comment on a CD post.
Friday, May 09, 2008
Greyhound Buses Get a Makeover
Greyhound’s image hasn’t changed much over the years – until now. In a bid to add a little snazz to its operation, Greyhound is biting back, unleashing its secret weapon – a new luxury service called the BoltBus that operates between New York and Washington, Boston and Philadelphia.
So, what’s so special about this BoltBus, you may ask. Well, apart from a paint job that makes it look like Ziggy Stardust’s tour bus, its two big draws are extra legroom and free on-board WiFi.
Continue reading here.
Looking for An Angel? Go to RaiseCapital.com
Example: utvchina.com is a Chinese youtube like website (see graphic above). It launched in spring 2007. We have enjoyed the rapid growth within one year. Current daily IP is around 350,000. Alexa ranking 3500. We are the only company with a commerical and entertainment site. Operating two versions English and Chinese drawing hits from more than 160 countries in over 40 languages. We are seeking a partner and funding to move to the next level.
55% of Oil Execs Says See $100 Oil By End of '08
HOUSTON (AP) — Even as oil prices ascended to new highs of more than $124 a barrel this week, many oil and gas industry executives say they expect the price to fall significantly by year's end, a new survey shows. Fifty-five percent of 372 petroleum industry executives surveyed by KPMG LLP said they think the price of a barrel of crude will drop below $100 by the end of the year. Twenty-one percent of respondents predicted a barrel of oil will end the year between $101 and $110, while 15 percent forecast the year-end price to be between $111 and $120 a barrel.
Thursday, May 08, 2008
Mexican Peso Rallies, Return of King Dollar?
Over the last 12 trading days since April 22, the US Dollar has increased by 1.67%, as measured by the Fed's Broad Trade-Weighted Dollar Index (data here and here), to 99.4439, the highest level since February 26, 2008 (see chart above). The 1.67% dollar appreciation is the largest 12-day gain in more than 3 years, since the 1.7% 12-day gain through April 4, 2005!
More evidence here: The USD is selling at a one-year forward premium against 23 out of 32 currencies, including a one-year 2.4% forward premium for the British pound ($1.9564/BP spot vs. $1.9099 one-year forward) and a one-year 1.7% forward premium for the Euro ($1.5421/EUR vs. $1.5161/EUR one-year forward).
Kudlow & Company!
The Ethanol Bubble: Is It Starting to Burst?
Judging by recent financial results, the big villains in the ethanol story—the American companies that are responding to government mandates by buying about 20% of the U.S. corn harvest and processing it into fuel—aren't exactly thriving. In fact, their bottom lines and stock prices are suffering pretty badly.
What gives? In theory, business should be gangbusters in the ethanol patch. Government policy has mandated consumption of the fuel, thus stimulating investment (and record high levels of production, see chart above).
But just because the government forces people to buy your product doesn't mean it's a surefire win. The combination of high oil prices, tariffs that protect domestically produced ethanol from imports, and tax credits for companies that blend ethanol into gasoline has stimulated something of an ethanol bubble. And as always happens during a bubble, excess capacity—and the vicious competition it creates—winds up eroding margins.
From Slate.com's Daniel Gross' article "Corn Dogs"
Canada's U.S. Baby Boom: Where's Michael Moore?
Globe and Mail (Canada's "Newspaper of record")--More than 100 Canadian women with high-risk pregnancies have been sent to United States hospitals over the past year – in what a doctors' group attributes to the lack of a national birthing plan.
The problem has peaked, with British Columbia and Ontario each sending a record number of women to U.S. neonatal intensive care units (NICUs). Specifically, 80 B.C. women have been sent to U.S. hospitals since April 1, 2007 (about 1 every 5 days); in Ontario, 28 have been sent since January of 2007, according to figures from the respective health ministries.
Canada, once able to boast about its high rank in the world for low infant-mortality rate – sixth place in 1990 – saw its rank plummet to 25th place in 2005, according to figures published this year by the Organization for Economic Co-operation and Development. Specifically, Canada's infant mortality rate of 5.4 deaths per 1,000 live births is tied with Estonia's and more than double Sweden's rate of 2.4.
Economists Blast US Corn Ethanol Program, The "Nicorette Gum of America's Oil Addiction"
VOANews--The U.S. program subsidizing the use of corn for the production of fuel ethanol came under sharp criticism at a Senate hearing Wednesday. Economists told the panel the program leads to higher food prices.
Twenty percent of the U.S. corn crop goes into ethanol production, and corn prices worldwide have increased by 50% over the past year (see chart above, corn prices have increased 3.5 times since 2005, from $1.61/bu. to $5.59/bu.). John Sununu, a Republican senator opposed to farm subsidies, says corn prices have risen in part because America is using increasing amounts of corn to produce fuel for automobiles.
Calling the U.S. ethanol program a disaster, Sununu said it is replete with taxpayer subsidies as both farmers and ethanol producers receive tax breaks from the government. In addition, he said, imports of cheaper sugar-based ethanol are blocked by high tariffs.
Related article from Forbes, "The Ethanol Industrial Complex"
Ethanol, once heralded as the homegrown Nicorette gum of America's oil addiction, is getting a second look from lawmakers suddenly concerned about the unintended consequences of merging the fuel and food markets.
MP: What a great sentence....
Wednesday, May 07, 2008
Is The U.S. Peso Making a Comeback?
Through today, May 7, the broad dollar index from the Fed (data available here and here) reached 96.32, the highest level in more than 10 weeks, since February 26. Over the last 11 trading days since April 22, the dollar index increased by 1.55%, the biggest 11-day gain in almost two years, since January 20, 2006 when the dollar gained 1.59% in 11 trading days.
Chinese Firms Outsourcing, Bargain Hunting in U.S.
Chinese businessman Liu Keil spent about $500,000 for seven acres in Spartanburg, S.C. -- less than one-fourth what it would cost to buy the same amount of land in Dongguan, a city in southeast China where he runs three printing-plate plants. U.S. electricity rates are about 75% lower, and in South Carolina, Liu doesn't have to put up with frequent blackouts. About the only major thing that's more expensive in Spartanburg is labor. Liu is looking to offer $12 to $13 an hour there, versus about $2 an hour in Dongguan, not including room and board. But Liu expects to offset some of the higher labor costs with a payroll tax credit of $1,500 per employee from South Carolina.
Liu is part of a growing wave of Chinese entrepreneurs expanding into the U.S. From Spartanburg to Los Angeles they are building factories, buying companies and investing in business and real estate.
Read more of the LA Times story here.
Gas Prices. It Could Be Worse. A LOT Worse.
About 2.5X worse to be exact, in the Netherlands. See retail gas prices above in selected European countries from late April 2008, data available here from the EIA.
Why Captain Capitalism Hates Blackberries
- To keep track of you when you're not at work.
- To give you more work when you're not at work.
- To give you something that tries to be both a phone and a mini-laptop but accomplishes neither.
- To piss you off when you have to type on those freaking little keypads.
- To give you something to make you look important when in actuality you're just telling the world, "Hey, my company just pissed away $500 on this thing that frankly doesn't do much that my laptop and cell phone can't."
Amen, Captain. Reminds me of the 1960s Amphicar (pictured above), which wasn't a very good car, and wasn't a very good boat.
Gas At $3.56 Per Gallon Is A Bargain, Adjusting for The 71% Increase in Fuel Efficiency Since 1973
From an anonymous comment on this CD post about gas prices as a percentage of income:
"You should further adjust the data for increased fuel efficiency per mile travelled and average mile driven per auto. 1000 gallons of use in 2008 moves an auto at least 50% further than in 1980."
In response, the chart above shows the average annual miles per gallon for passenger cars, from 1949 to 2005 (EIA data available here LINK NOW WORKS). From a low of 13.4 m.p.g. in 1973, fuel efficiency increased by 71% to 22.9 m.p.g in 2005 (most recent year available), and by 43% since 1980 (14 m.p.g.).
Bottom Line: Adjusting for both increased fuel efficiency and the significant increases in income since 1980, gas today is a bargain, even at $3.56 per gallon (price I paid today in Michigan).