Saturday, January 10, 2009

How Minimum Wage Caused 200 Jobs to Evaporate

ST. LOUIS POST-DISPATCH -- A young St. Louis mother who hand-painted barrettes to tame her daughter's unruly locks, turned the hair accessories into a $6 million dollar business (WeeOnes.com) that sold 2 million hairbows in 2007 and employed 250 workers in Missouri. It's a success story that could only happen in America, right?

MP: Yes, it's a perfect example of starting a business from nothing, and "living the American Dream," except that in October, the company told workers they were closing the plant in Missouri and contracting the work out to a factory in Mexico. One of the main reasons?

High and rising labor costs, primarily from the 37% increase in Missouri's minimum wage from $5.15 per hour in 2006 to $7.05 starting January 1, 2009 (see chart above), which contributed significantly to losses for the company over the last few years. The market for their products is so competitive that the company couldn't increase the price of the bows to offset the higher labor costs without losing sales, so the company was forced to move production to Mexico, and now more than 200 Missouri jobs have evaporated - largely thanks to the minimum wage.

Bottom Line: The workers of Missouri need jobs in today's tough economy more than they need the "compassion" of their state legislators. Unfortunately, for purely political reasons (not economic reasons), Missouri's elected officials have priced some of its unskilled workers right out of the labor market into the unemployment line, and helped ship jobs to Mexico, all because of their "compassionate" annual increases in the minimum wage (now mandated in Missouri).

Question: Which option is better for the Wee Ones workers: Continued employment at $5.15 per hour, or being now unemployed at $0.00 per hour? I bet if they had a choice, they'd take the first option. Unfortunately, that would be illegal.

HT: Kevin Murphy

Funniest Thing I Heard Today: Chicago Politics

Speaking as a Chicagoan, the notion that people in Illinois actually enjoy political corruption is a vicious stereotype. Illinois is the heartland. It is the most American of states.

When I was a boy, growing up in Chicago, we had a roadside stand in front of my beloved alma mater, Al Capone Jr. High School, named for an esteemed local philanthropist. We sold lemonade, chocolate chip cookies, zoning permits and seats on the Chicago City Council.

In Illinois, we don't dismiss governors selling favors, or public officials getting tailored for prison jump suits, with a single, tired, overworked cliché like corruption. In our little village of Chicago, we call it something else: Tradition.

Universal Healthcare And The Waistline Police

Imagine a country where the government regularly checks the waistlines of citizens over age 40. Anyone deemed too fat would be required to undergo diet counseling. Those who fail to lose sufficient weight could face further "reeducation" and their communities subject to stiff fines.

Is this some nightmarish dystopia? No, this is contemporary Japan. The Japanese government argues that it must regulate citizens' lifestyles because it is paying their health costs.

This highlights one of the greatly underappreciated dangers of "universal healthcare." Any government that attempts to guarantee healthcare must also control its costs. The inevitable next step will be to seek to control citizens' health and their behavior. Hence, Americans should beware that if we adopt universal healthcare, we also risk creating a "nanny state on steroids" antithetical to core American principles.

~Dr. Paul Hsieh writing in the Christian Science Monitor

Thanks to Ben Cunningham.

Market Competition Drives Down Drug Prices

BLOOMBERG -- American consumers and health insurers saved about $1 billion on generic drugs this year as “fierce” competition among drugmakers and pressure from insurers lowered prices. The surge in use was driven by a flood of new generic drugs that entered the market this year after patents expired on $16 billion worth of medicines. At the same time, insurers and retail pharmacies are pressuring generics makers to cut prices as they compete against each other. The trends are likely to accelerate through 2012 as half the current 20 top-selling pills get competition from generic copies, which can cost 70% less than their brand-name counterparts.

USA Today -- Spending on prescription drugs in 2007 showed the smallest increase in more than four decades, driven by rising use of low-cost generic drugs, and chain stores offering $4 prescriptions.

NY Times -- National health spending grew in 2007 at the lowest rate in nine years, mainly because prescription drug spending increased at the slowest pace since 1963, the government reported Monday. Prescription drug prices rose 1.4% in 2007, much less than the 3.5% growth recorded in 2006 (and also much less than the overall rates of inflation in both 2007 and 2008, see chart above). The slower growth results, in part, from generic drug discount programs offered by large retail chains like Walmart.

MP: Maybe if the rest of the health care industry was exposed to as much intense market competition as the prescription drug market, we'd also see price declines for physician services, etc.?


See a good timeline here at FMPolitics of the trend toward lower drug prices that began in 2006 when Wal-Mart started offering $4 prescriptions.

The Downsides of Widespread Homeownership; Have Americans Overinvested in Housing? Probably


From the Richmond Fed article "House Bias: The Economic Consequences of Subsidizing Homeownership":

The homeownership rate is about 68% now (see chart above). Perhaps the best policy question is no longer why the homeownership rate in the United States is so low. A question that economists might ponder instead is: Why should we want the homeownership rate to be so high?

The Downsides of Widespread Homeownership

1. The current policies produce an economy in which housing investment is generally higher than it would be if government didn’t favor it. Simply put, Americans may have overinvested in housing. And every dollar that is invested in housing stock is a dollar not invested in a more productive use elsewhere. That results in a net reduction in overall economic efficiency.

2. It's not clear that using a home purchase as a primary vehicle for a family’s investment is sound financial advice. Robert Shiller, an economist at Yale University and an expert on national housing markets, has estimated that “from 1890 through 1990, the return on residential real estate was just about zero after inflation.” Throw in the costs of maintenance of the property and it’s easy to see how renting could certainly be cheaper than owning, even if you include the tax advantages. Yet the opportunity cost of those home investments — the foregone investment opportunities elsewhere — go largely unseen.

3. The costs of owning a home go beyond the financial commitments too. Being tied down to a house tends to make people less likely to leave an area in which employment prospects are deteriorating. After all, terminating a lease is much less costly and time-consuming than foreclosing on a house or selling a home, even if the owner breaks even on the transaction. Economists predict this would lead to a decline in “labor mobility,” the ability for people to move to where the jobs are.

4. Homeownership also tends to contribute to adverse political incentives. Incumbent homeowners have an interest in keeping their property values high and have been shown statistically to have a bias in favor of land-use regulations. These restrictions limit the number of houses that can be built in any geographic area and, consequently, keep housing inventory low and property values artificially inflated.

Friday, January 09, 2009

Top 7 Phone Irritations

Are these phone behaviors as irritating to others as they are to me?

1. The Auctioneer Speedup. Somebody is leaving you a voicemail message, and no matter how fast they might be talking already, they do an "auctioneer speedup" when they leave their callback number, and you have to listen repeatedly to the message to get the whole phone number. How about speaking really, really slowly when leaving your phone number? Or at least repeat it.

2. The Generic Message. You're driving in your car, or are otherwise trying to multi-task without your reading glasses, and you dial somebody's number and then get a generic, machine-voice message that only mentions the number and not the person's name. Now you're not sure if you have reached the correct person, or have reached one of your other irritating friends with a generic message. What's so hard about taking 30 seconds to put a personalized message on your phone, so that others will know with 100% certainty that they have reached the correct number?

3. The Expected Callback from a Hangup. Somebody calls and hangs up without leaving a message. Then the next time you talk to them, they ask why you didn't call back. Calling and hanging up without leaving a message is called a "hangup," not a "phone call with a message." How are we supposed to know it wasn't a mistake?

4. The Callback Before Listening to the Message. You call somebody and leave a detailed message with all of the relevant information. They see that you called, and call you back before listening to the message. In many cases, a callback is not even required, because you have already left all of the relevant information in the message. At the very least, you now have to repeat the same information that was left on the message.

5. The Unexpected, Unwanted Handoff. You are talking to somebody on their cellphone, and they suddenly hand off the phone to somebody else, possibly somebody you are not that interested in talking to.

6. The Un-businesslike Answer. Somebody answers the phone with a greeting of "Hello," instead of identifying themselves by name, or identifying the company. Besides being un-businesslike, it now requires unnecessary conversation establishing that the caller has reached the correct person.

7. Reverse Order Talking. You answer the phone, and the caller is already talking before you have even had a chance to identify yourself or open with a greeting.

Comments welcome, I'm sure this list can be increased to 10.

Hyundai Offers New "Economic Return Policy"

Want to purchase a new car, but you're worried about losing your job? No problem, with Hyundai's new "economic return policy," which allows buyers to return a new car for free if they lose their job or lose their driver's license due to medical reasons.

Thanks to Sanil Kori.

The "Man-Cession" Continues to Worsen

According to today's BLS report (Table A-1, Household Data), the U.S. economy lost 2.956 million jobs in the last year (Dec. 2007 to Dec. 2008). Further analysis shows that 82% of the job losses (2.413 million) were jobs held by males, and 18% of the jobs losses (460,000) were jobs held by females (see top chart above). Of the 806,000 decline in December employment (household data), 91% of the job losses were male jobs (730,000), compared to a 76,000 job loss for females (9% of total).

Further, the December unemployment rate for men is 7.9% vs. only 6.4% for women, and the gap in jobless rates between men and women has been increasing for the last eight months (see bottom chart above).

See previous CD posts on this topic here and here.

Chart of the Day

I'm not sure what to say about this.

Thursday, January 08, 2009

Free: The Best Price Anybody Can Ask For

WASHINGTON POST -- Giant Food stores will give free generic antibiotics to customers with a prescription for the next three months in what retail experts called an aggressive move in supermarkets' heated battle for shoppers. The pharmacy business has become increasingly competitive since Wal-Mart began offering nearly 300 generic prescription drugs for just $4 in 2006. Its rivals were forced to follow suit, with Giant lowering 90-day supplies of popular drugs to $9.99 this summer.

Still, several experts said Giant's announcement yesterday was the first time they had heard of a retailer literally giving away prescription drugs.

"I think it's a gutsy move," said Ron Paul, president of food consulting firm Technomic. "Free is the best price anybody can ask for."


MP: I guess the only thing better would be a negative price, where you get the merchandise for free, along with some free cash.

If There's Life After Steel in Pittsburgh, There's Hope for Detroit

PITTSBURGH (NY TIMES)This is what life in one American city looks like after an industrial collapse: Unemployment is 5.5%, far below the national average (see chart above). While housing prices sank nearly everywhere in the last year, they rose here. Wages are also up. Foreclosures are comparatively uncommon.

A generation ago, the steel industry that built Pittsburgh and still dominated its economy entered its death throes. In the early 1980s, the city was being talked about the way Detroit is now. Its very survival was in question. Deindustrialization in Pittsburgh was a protracted and painful experience. Yet it set the stage for an economy that is the envy of many recession-plagued communities, particularly those where the automobile industry is struggling for its life.

“If people are looking for hope, it’s here,” said Sabina Deitrick, an urban studies expert at the University of Pittsburgh. “You can have a decent economy over a long period of restructuring.”

Yet the semisweet spot that Pittsburgh finds itself in was never inevitable. As recently as 2000, it had a higher unemployment rate than Detroit or Cleveland (see chart below). Just as Michigan has traditionally put all its chips on the auto industry, it took Pittsburgh a long time to come to terms with the end of the steel era.

MP: In the Big Three bailout discussions, there was a lot of hysteria about the significantly negative impact of a GM or Ford bankruptcy on the Michigan and national economies, almost as if Michigan could never fully recover from its long dependence on the auto industry. Pittsburgh's comeback from the decline of the domestic steel industry shows that Detroit and Michigan could survive even the unlikely demise of GM and Ford, and illustrates that there would be life in Michigan after the Big Three.

In a previous CD post, I documented the shift of Flint, Michigan (once the epicenter of both the UAW and GM) from a undiversified manufacturing-intensive, one-company town to a service sector economy. If a transition can happen in Pittsburgh and Flint, it could realistically happen anywhere.


New Blog

Observations, opinion, research and links from financial economists Eugene Fama and Kenneth French.

HT: Greg Mankiw

Quote of the Day: Socialized Medicine Can Kill You

New life-saving medications that go immediately into the market in the United States take a much longer time to become available to Canadian patients-- if they ever get approved by the bureaucrats.

No doubt that lowers the cost of medications-- if you count costs solely in money terms, rather than in terms of how many people literally pay with their lives when the bureaucrats are reluctant to buy new pharmaceutical drugs, while they can continue to approve obsolete and cheaper drugs for the same illnesses.


~Thomas Sowell

Welcome University of Michigan-Flint Students

To the finance students enrolled in BUS 466/MGT 566 International Finance for the winter term 2009:

WELCOME TO CARPE DIEM!

Professor Perry

Commercial Bank Share of Consumer Credit > 32%

According to consumer credit data from the Federal Reserve, commercial banks' share of consumer credit is above 32% for the first time since 2000, mainly as a result of the declining share of consumer credit held as "pools of securitized assets" since 2002 (see chart below).
Does this trend signal a return to the more "traditional" banking of the past?

Thanks to Larry Kudlow for the idea for this post.

A Lowly Municipal Clerk Has More Life-and-death Power Over You Than Bill Gates or Warren Buffet

Warren Buffett and Bill Gates, with about $60 billion in assets each, are America's richest men. With all that money, what can they force us to do? Can they take our house to make room so that another person can build an auto dealership or a casino parking lot? Can they force us to pay money into the government-run retirement Ponzi scheme called Social Security? Can Buffett and Gates force us to bus our children to schools out of our neighborhood in the name of diversity? Unless they are granted power by politicians, rich people have little power to force us to do anything.

A GS-9, or a lowly municipal clerk, has far more life-and-death power over us. It's they to whom we must turn to for permission to build a house, ply a trade, open a restaurant and a myriad of other activities. It's government people, not rich people, who have the power to coerce and make our lives miserable. Coercive power goes a long way toward explaining political corruption.


~Walter Williams column "Rich People vs. Politicians"

Debt-Financed Consumer Spending Spree?


From the Wall Street Journal article "Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes":

Rick and Noreen Capp recently reduced their credit-card debt, opened a savings account and stopped taking their two children to restaurants. Jessica and Alan Muir have started buying children's clothes at steep markdowns, splitting bulk-food purchases with other families and gathering their firewood instead of buying it for $200 a cord.

As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decadeslong buying spree, are finally saving more and spending less -- just as the economy needs their dollars the most.

MP: The "decadeslong buying spree" reported by the WSJ seems to be a commonly held belief; do a Google News Search of "consumer spending spree" and you get 600 results, and for "credit card nation" you get almost 400 results.

But the consumer debt data from the Federal Reserve suggest a slightly different story than the one reported by the media. The top chart above shows consumer credit outstanding as a percentage of GDP, which peaked in mid-2003 at 18.7%, and then declined a full percentage point by mid-2007 to 17.7% before increasing slightly to 17.9% by the third quarter of 2008. And 1% of GDP is a lot, about $140 billion.

The bottom chart above shows the growth rate in total consumer credit, which is at the lowest level since the early 1990s, and has been falling steadily since 2001.

What's going on here? It's possible that "consumer credit" reported by the Fed does not include mortgage debt, and homeowners started using home equity loans instead of bank loans around 2002?

Comments welcome.

Wednesday, January 07, 2009

Consumers Can Now Check Medical Prices

NASHVILLE, Tenn. -- Americans can't control the economy, but they can do a much better job of educating themselves about what they should pay for healthcare. Healthcarebluebook.com, the first national effort to provide free pricing data to consumers launches today, and is designed to give people the information they need to pay fair prices for healthcare.

Americans do price/value comparisons for their homes, cars, vacations and the majority of goods and services they buy. "Why not healthcare?" asks Dr. Jeff Rice, Healthcarebluebook.com founder.

HT: Ben Cunningham

Entrepreneurs Can Solve Health Care Problems

From Devon Herrick's (National Center for Policy Analysis) study "Health Care Entrepreneurs: The Changing Nature of Providers:"

The market for medical care does not work like other markets. Providers typically do not disclose prices prior to treatment because they do not compete for patients based on price. Payments are usually not made by patients themselves but by third parties — employers, insurance companies or government (only 12% of medical costs are paid directly by patients, see chart above). And the amounts paid are not really market-clearing prices; they are "reimbursement" rates negotiated with bureaucratic institutions and networks. Furthermore, when providers do not compete on price, they usually do not compete on quality either. In fact, in a very real sense, doctors and hospitals are not competing for patients at all — at least not in the way normal businesses compete in markets.

The lack of competition results in a highly artificial market plagued by problems of high costs, inconsistent quality and poor access, according to Devon Herrick at the National Center for Policy Analysis in his study "
Health Care Entrepreneurs: The Changing Nature of Providers."

But in health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. Examples include:

Cosmetic surgery: Since it is rarely covered by insurance, patients pay out of pocket and are thus sensitive to prices; they can typically compare prices prior to surgery and pay a price that has been falling over time in real terms (see chart below).


Laser eye surgery: Competition is holding prices in check and improving quality in vision correction surgery, including accurate correction, faster healing, fewer side effects and an
expanded range of conditions that can be treated.


Price competition for drugs: Wal-Mart became the first national retailer to aggressively compete for buyers of generic drugs by charging a low, uniform price ($10 for a 90-day supply). Other chain stores have responded with their own pricing strategies.

Walk-in clinics in shopping malls and drug stores compete by offering low money costs and low time costs, and electronic prescribing improves quality using error-reducing software.

Telephone-based practices: TelaDoc, provides telephone consultations to 2 million customers. It allows patients access to a doctor any time of day from any location and also
uses electronic prescribing to reduce errors.

Medical tourism provides cash-paying patients health care outside of the United States in high-quality facilities that rival domestic facilities. Patients can save 30 to 50 percent by going abroad.

Bottom Line: In health care markets where third-party payers do not pay the bills, the behavior of providers and patients is radically different. In these markets, entrepreneurs compete for patients’ business by offering greater convenience, lower prices and innovative services unavailable in traditional clinical settings. What lesson can we learn from these examples of entrepreneurship in health care? The most important is that entrepreneurs can solve many of the health care problems that critics condemn. Public policy should encourage, not discourage, these efforts.

Tuesday, January 06, 2009

Banks Don't Need To Be Forced to Lend

Banks are in the lending business: They do not need to be forced to lend. And contrary to popular and political opinion, banks have not stopped lending. Despite the recent financial market turmoil, a declining GDP, and an increase in loan-loss reserves, commercial bank lending actually grew $336 billion, or 4.9%, from August to Dec. 24, according to Federal Reserve data (see chart above). While lending dictates or other restrictions may be tempting, the Obama administration must discourage Congress from imposing them on recipients of TARP investments.

~Bert Ely in today's WSJ: "Banks Don't Need to Be Forced to Lend"

The Credit Crunch That Isn't

The media and the political interventionists have insisted that a huge credit crunch is going on that "proves" the failure of financial capitalism and the free market in general. What is a work is another political "fast one" to rationalize and justify the growth of the interventionist-welfare state.

The Federal Reserve's own data shows this to be another big government lie. Throughout 2008 bank loans have been increasing compared to a year earlier, both in absolute dollar terms and as a percentage increase over a year ago (see chart above, data here).

In addition, the Fed's survey of bank lending practices found that in October (the last month for which the data is available), only 25% of loan officers said they had "tightened considerably" on extending such loans, while 28% said their practices had not changed at all. About 47% said they had "tightened somewhat."


What is at work is the creation of a new version of the "myth of the failure of capitalism" to serve as the justification for why the straightjacket of even more government controls and regulations must be extended over what remains of the market economy.

~Richard Ebeling

MP: The chart above shows the volume of business loans, real estate loans and consumer loan volume, based on an index that is equal to 100 in January of 2004 for each series (data here).

Spending on "Infrastructure"

Washington Post: The package Congress is compiling is expected to include fresh investments in infrastructure.

Bloomberg: Obama is working on a package combining tax cuts and spending on infrastructure, such as roads, bridges and transit systems, to boost growth.

Thomas Sowell: Take the idea that much of this money will be spent on "infrastructure." This certainly sounds good-- until you stop and think about it. So do most political notions.
Does spending on infrastructure mean that the money is going to be spent filling potholes and repairing bridges? Or will it be spent creating new things?


One of the key reasons why infrastructure gets neglected in the first place, is that there is very little political pay-off to filling potholes and repairing bridges, compared to spending that same money creating community centers, bike paths and other things. These new things create opportunities for ribbon-cutting ceremonies that give politicians favorable free publicity in the media. But nobody holds ribbon-cutting ceremonies for filling in potholes or repairing bridges.

The whole process is biased toward doing new things, even if the repair and maintenance of existing infrastructure would serve the public interest better. But, even in the unlikely event that the public interest triumphs over special interests, there is another very important difference between repair and maintenance activities, on the one hand, versus building new things on the other.

New things require long delays before they can get started, especially when they have to be done by politicians. Someone once said that Congress would take 30 days to make instant coffee-- and Congress is just the beginning of the delays, as all sorts of competing interests jockey for position at the public trough. Just putting together an environmental impact report for something new to be built can be a long process, especially if its findings are challenged by environmental extremists, who pay very little price for challenging, even if the delays caused by their challenges cost others millions of dollars.

In short, it can be years before the money that is supposed to stimulate the economy actually gets into the economy. And nobody knows what the economy will be like when that money finally gets into circulation. A common problem with government economic policies in general is that it is very hard to predict how long it will be before the policy actually affects the economy. An economic stimulus policy created during a contraction in demand can take effect during an inflationary expansion of demand-- and fuel still more inflation.


Monday, January 05, 2009

Should Govt. Reduce Life-Expectancy Inequality?

In 2005, life expectancy at birth was 7% higher for American women (80.4 yrs.) than for American men (75.2 yrs.). Governments could certainly reduce this life-expectancy inequality by redistributing medical research funding on women's health to research on men's health, and general medical care funding from women to men. Consider that men are more likely to die from prostate cancer than women are from breast cancer. Yet in 2005 federal expenditures for prostate cancer research were $390 million compared to $698 million for breast cancer research (see chart above), and the American Cancer Society contributed almost three times as much for breast cancer research ($98 million) as for prostate cancer research ($36 million).

I find that people generally agree with, and rarely strongly oppose, forcible government transfers of income from the rich to the poor to reduce income inequality. But when I suggest that the government transfer medical expenditures from women to men to reduce life-expectancy inequality, I get a very different reaction. Often, the listener will simply give me a strange look and quickly depart. Those who do respond verbally, however, typically say that I couldn't possibly be serious because my idea is outrageously silly. I agree. It is silly. But I am completely serious in suggesting it.

When we seriously consider an attempt to use government power to reduce the gender inequality in life expectancy, the problems that we have always faced when government uses its power to reduce income inequality suddenly become crystal clear. Government transfers to reduce the gender gap in life expectancy would do little more than reduce improvements in both women's and men's life expectancies. For similar reasons, government transfers have done little more than reduce the income growth of both the rich and the poor. So government attempts to reduce life-expectancy inequality by transferring medical expenditures would be silly, but no sillier than its attempts to reduce income inequality by transferring money.

There are several reasons why redistributing medical expenditures to reduce gender inequality in life expectancies would not work. And there are parallel reasons for the failure of redistributing money to reduce income inequality.

Read more here of economist Dwight Lee's article "Should Government Reduce Inequality in Life Spans?"

Extinction Timeline

Timeline to 2050 of what will disappear from our lives, including video rental stores, fax machines, letter writing, physical newspapers, coins, keys, trade unions, ties, telephone directories, national currencies, desktop computers, and blogging (but not until 2025).

UAW-Ford Master Contracts: 2007 vs. 1941

Ever wondered what a modern UAW contract looks like? Pictured below is all 22 pounds of Ford’s 2,215 page 2007 master contract with the UAW.
What a difference sixty years makes. Pictured below is the 1941 Ford-UAW contract, which easily fits in the palm of your hand.

It measures about 3.5 inches by 5 inches, and is shown below with a 5-inch pen and 2-inch paper clip.

Here's a side shot to show its thickness - only 24 pages long.


Do You Speak 2009? Have You Read a Wovel Yet?

Check out the 2009 Buzzword Glossary including words and phrases like junior moment, BlackBerry prayer, staycation, upcycling, instapreneur and negawatts.

Thanks to Ben Cunningham.

Related: In 2009, we also have the "wovel," short for "web novel." There's an installment every Monday. At the end of every installment, there's a binary plot branch point with a vote button at the end.

99.65% of Commercial Banks Survived 2008

According to FDIC data, 25 commercial banks failed in 2008, out of 7,146 banks in the U.S. The failed banks represent about 1/3 of 1% of all banks, meaning that 99.65% of banks survived the 2008 recession. The chart above displays annual bank failures back to 1970 (data here), showing the S&L crisis (shaded) when almost 3,000 U.S. banks failed.

Before we make comparisons to the Great Depression, we might want to first compare today's financial troubles to the S&L crisis of the 1980s and 1990s, when almost 3,000 banks failed.

Sunday, January 04, 2009

Top 10 Reasons Life Is Getting Better All The Time

Be prepared to see a lot of doom and gloom this week. Those year-end video and photo montages, year-in-review summaries, and "a look back" reflections are inevitably gloomy even in boom times. That's likely to be especially true in 2008, a year that, admittedly, wasn't particularly filled with hope.

The last 12 months may prove not to be the most fondly recalled in recent American history, but things aren't all that bad. Most social indicators are still moving in the right direction. In general, our standard of living continues to improve. Advances in technology are helping us beat the diseases most likely to kill us; giving us more leisure time; making us more comfortable; giving us more convenience; and with the Internet, putting much of the world—quite literally—at our fingertips.

So here's the good news:

1. Crime rates are falling.

2. Sex crimes are down.

3. The divorce rate is at its lowest point in four decades.

4. Life expectancy is up.

5. Mortality rates for eight of the 10 leading causes of death in America are dropping. Deaths from the two biggest killers—cancer and heart disease—have been in decline for a decade. Deaths from the third leading cause of death, stroke, are also down.

6. For six years, both incidence of and deaths from cancer have been in decline.


7. Since 1991, fewer teens are having sex, fewer are having sex with multiple partners, and more are using condoms when they do engage in intercourse.

8. The abortion rate is also at its lowest point in 30 years.

9. Juvenile violent crime is still 40% lower than it was in 1994. The juvenile murder rate is a whopping 73% below its high in 1993.

10. We have more leisure time. Americans work on average eight fewer hours per week than we did in the 1960s.

Source: Randy Balko at Reason Magazine

Quote of the Day: As Likely As Anthrax on Cheerios

Beginning this week, US representatives and senators will be paid $174,000 a year. That represents an increase of $4,700 and the 10th time since 1998 that congressional pay has been given a boost.

As has become routine, this salary hike is taking place automatically - there were no hearings, no vote, no debate. No members of Congress stepped before the microphones to explain why their performance over the past year entitles them to a fatter paycheck. Or to make the case for helping themselves to more money at a time when so many Americans are out of work, the economy is in recession, and financial distress is spreading.

Hard as it may be to believe, there was a time when members of Congress didn't make it an annual priority to pad their pay envelopes. In 1932, during the Great Depression, the House and Senate even cut their pay by 10%, then cut it by another 5.5% in 1933. Today's lawmakers, save for a handful of honorable exceptions, are about as likely to follow that precedent as they are to sprinkle anthrax on their Cheerios.

~Jeff Jacoby


Google Custom Search Added to Carpe Diem

In response to several requests and inquiries about improving the search function of CD, I have added a "Google Custom Search" feature that allows comprehensive searches of Carpe Diem. You'll find it on the right hand side of the blog, scroll down and you'll see it right below the SiteMeter. I might try putting it up higher on the screen later, but for now it's available in its current location.

Nice Non-Work, If You Can Get It; Union Bosses Get +$100,000 Per Year for Beer, Bowling and Haircuts

WDIV-TV News 4 in Detroit did an expose of two union bosses who routinely rip off the UAW and Ford Motor Co. with fake time cards that allow them to get paid for not working, including unworked overtime hours (see Part 1 here and Part 2 here).

One of the bosses, Ron Seroka, a union job security officer, takes off half a day nearly everyday to go home to lounge around the house while he is on the clock. Seroka punches in at the plant at 6 a.m. every single day and is home by 11:30 a.m. for some nice leisure time at home. Yet he gets a steady 10 hours pay every single day despite the fact that he is rarely at work.

Seroka’s union boss is even worse. Union chairman Jim Modzelewski buys beer on a daily basis while on the clock and clocks himself in for overtime pay hours before he even wakes up to go into the plant. TV 4 found that after he punches in, he typically leaves for a beer run mere hours later. Again, all this is on a daily basis. He is also paid overtime pay on a daily basis as he sits home drinking his daily beer. With over 2,500 hours of overtime, Modzelewski made a six-figure salary last year. TV 4 also discovered that Modzelewski even played in a bowling tournament while on the clock — at overtime pay, too!

Together, just these two union chiefs clocked in over 3,500 hours of overtime pay for the year. Makes one wonder how many union bosses are abusing their positions this way, doesn’t it?

Link.

As Michelle Malkin asks: "At least the groveling Big Three CEOs gave up their corporate jets. Where's the public flogging for the greed-infested UAW fat cats reaching into our pockets to keep them afloat?"

First, By Golly, Sarah Palin; Now, You Know, Caroline Kennedy, You Know

Is it really possible to say "you know" 30 times in 2 minutes? Find out here: