The Top 4 Lessons Learned in Business School
#1 is "Always Consider Opportunity Costs." Read more here.
Professor Mark J. Perry's Blog for Economics and Finance
#1 is "Always Consider Opportunity Costs." Read more here.
August employment data was released yesterday, and the graph above of Initial Jobless Claims as a Percent of the Labor Force (1974-2009) has been updated to reflect the August labor force of 154,577,000 and the August average for initial unemployment claims (568,900 for the 4-week moving weekly average). This measure of initial jobless claims, adjusted for the size of the U.S. labor force, shows that jobless claims peaked during this recession above the levels of the last two recessions (1990-1991 and 2001), but were never anywhere close the levels of the previous three recessions in the mid-1970s and early 1980s (see chart above).
A German company is marketing a mobile toilet for women that fits into their handbags and can be used whenever they are caught short. The disposable portable lavatory consists of a plastic bag fitted with absorbent polymers that turn urine into a gel. The size of a chocolate bar when folded, it has a wide opening and can be used squatting, sitting or standing. The Ladybag is recommended for one-time use and comes in a bag of three for $16.00 including packaging.
Exhibit A: Portland home sales jumped in July, marking the first year-over-year increase in sales for any month since early 2006. A total of 3,375 new and resale houses and condos closed escrow last month in the Portland metro area. That was up 9.3% from June and up 5.8% from a year earlier. The number of homes sold in July was the highest for any month since August 2007, when 4,242 sold.
The two charts featured here further put the "mancession" into perspective, and demonstrate how men have been significantly and disproportionately adversely affected by the recession. The chart above shows that the August jobless rate for men of 10.9% is almost 5.5% above the post-WWII average of 5.43% for males, and is just 0.20% below the historical record high of 11.2% for men in 1982.
From the study "Income Mobility in the United States: New Evidence from Income Tax Data," by Gerald Auten & Geoffrey Gee (both of the Office of Tax Analysis, U.S. Treasury Department), which was released previously here.
Despite some recent signs that the recession probably ended this summer, the employment news for men sure hasn't gotten any better, and actually continued to worsen in August. The BLS employment report today shows that the Great Mancession deepened to an unprecedented level in August, as male unemployment jumped by almost a half percent to 10.9% (from 10.5% in July) compared to the .10% increase for women, from 8.1% in July to 8.2% in August.
ECON 101: The Speaker of the House wants everyone to pay the minimum wage except herself and other politicians. Watch Pelosi demonstrate her resistance to economic logic, and how she finally becomes so frustrated that she has to call the guard to prevent any more questions.
In the midst of all the talk about a top-down overhaul and reworking of the health-care industry, supposedly to fix the failures of the private sector, two new studies show that the private sector could do a better job of reform if government would just get out of the way. Time Magazine features two Rand Corporation reports on the rise of a new phenomenon, retail health clinics, and the impact that price awareness and competition have on the market. The studies focused on my state, Minnesota, which prides itself on health-care public policy – but private-sector care wins out.
CS Monitor -- Fans of Southwest Airlines’s folksy and egalitarian ways are in for a culture shock: From now on, customers who pay an extra $10 will get a head start on boarding.
Inside Higher Ed -- One of the hot battles in standardized testing these days is over the M.B.A. market. The Graduate Management Admission Test (GMAT) has long been dominant. In 2003, the Educational Testing Service lost its contract for the GMAT exam to ACT and a Pearson division, and a few years later, ETS was talking about encouraging business schools to consider the Graduate Record Examinations (GRE) as an alternative to the GMAT and a growing number of top business schools have agreed to accept either test (Wharton, Harvard, Stanford, MIT, NYU, and University of Virginia).
The Monster Employment Index rose in August, seeing its highest monthly rate of improvement in four years, as a majority of industries, occupations, and regions registered increased online job availability following the slow summer hiring activity. The Index’s annual rate of decline continued to moderate, indicating some signs of improvement in underlying demand for labor nationwide.
HOUSTON -- The British oil giant, BP, announced today the discovery of what it characterized as a “giant” oil field more than six miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.
NY TIMES -- About 860 cancer drugs are being tested in clinical trials, according to the pharmaceutical industry’s main trade group. That is more than twice the number of experimental drugs for heart disease and stroke combined, nearly twice as many as for AIDS and all other infectious diseases combined, and nearly twice as many as for Alzheimer’s and all other neurological diseases combined.
WSJ -- The IMF expects the global economy to expand at slightly less than 3% in 2010, said Jörg Decressin, a senior IMF economist, higher than the IMF's July estimate of 2.5%.
Update: In early March the odds for positive U.S. real GDP growth in the third quarter were only 25%, based on contracts trading at Intrade.com, the "Prediction Market." As the economy has improved and as economic indicators have grown increasingly positive over the last six months, the odds for positive third quarter growth have increased to 92.5% (see graph above, click to enlarge).
Like most faculty members, we began our academic careers with zero prior instruction on college teaching and quickly made almost every possible blunder. We’ve also been peer reviewers and mentors to colleagues, and that experience on top of our own early stumbling has given us a good sense of the most common mistakes college teachers make. In this column and one to follow we present our top ten list, in roughly increasing order of badness. Doing some of the things on the list may occasionally be justified, so we’re not telling you to avoid all of them at all costs. We are suggesting that you avoid making a habit of any of them.
Source: Real Clear Politics (9/1/2009)
(Tempe, Arizona) -- Economic activity in the manufacturing sector expanded in August, following 18 consecutive months of contraction, and the overall economy grew for the fourth consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
US News Health Day -- Walk-in retail clinics staffed by nurse practitioners provide high-quality care for routine illnesses, a new study has found.
Update from Time Magazine, "Drive-Thru Medical: Retail Health Clinics' Good Marks":
There are roughly 1,000 clinics now operating in the U.S., offering acute care for such routine problems as throat infections and earaches as well as providing diabetes and cholesterol screenings, routine checkups and vaccinations. The fees are low — and conspicuously posted; nearly all of the clinics treat both the insured and uninsured, and there is little or no waiting time. With 50 million Americans lacking health insurance and family budgets collapsing under the weight of medical costs, what's not to like about the clinics?
The table above (click to enlarge) is based on PSAT scores in 2008 for college-bound juniors for males and females taking the mathematics exam, showing the results for the five geographical regions of the U.S. For both males and females, the highest scores were in the Midwest states, similar to the findings for the SAT test results, reported yesterday on the NY Times Economix blog, "Why The Midwest Rules on the SAT."
At a 1978 lecture, Milton Friedman talks about government spending and explains one of the greatest economic fallacies of all time, essentially another version of Bastiat's "broken window fallacy."
HT: Drew Suder
PRINCETON, NJ -- Consistent with Gallup's Consumer Confidence measure and the continued strong performance of the equity market, the Gallup Index of Investor Optimism -- a broad measure of investor perceptions -- in August hit a new 2009 high of 9. This represents a 12-point increase from July and is the first time the Index has been positive since June 2008. The Index has improved by 73 points from February's -64 reading -- its lowest level since its inception in October 1996.
Peter Schweizer: Michael Moore is constantly trying to prove his and the Left's moral superiority, so he says things about himself that are patently not true. He's pathological about it. How else to explain that he's loudly proclaimed no less than three times that he doesn't invest in the stock market because it's morally wrong while quietly picking up shares in a whole host of companies. A portfolio that includes Halliburton, Boeing, and HMOs doesn't fit the bill so he lies about it. I think he assumed that no one would poke around and investigate. When it comes to the MSM he was correct in making that assumption. He never responded to my questions. I'm dying to know how he explains away this one.
Moore professes to hate capitalism ("the last evil empire" he's called it) but practices it in spades. Moore condemns people for their racism and claims to support and practice affirmative action, but has a lousy record of hiring minorities. He outsources post-production film work to Canada so he can pay non-union wages. I could go on and on. I would ask his fans: is this really a sincere person?
From the back cover of Peter Schweizer's book "Do As I Say (Not As I Do): Profiles in Liberal Hypocrisy":
DENVER - A city panel in charge of overseeing marijuana possession crimes in Denver recommended on Wednesday that the fine for possession be set at $1. If Denver's presiding judge accepts the recommendation from the Denver Marijuana Policy Review Panel, the fine would be the lowest in the entire nation for marijuana possession.
BLS -- The youth unemployment rate (the unemployment rate for 16 to 24 year olds) was 18.5% in July 2009, the highest July rate on record for the series, which began in 1948 (see chart above).
Additionally, the male (19.7%) - female (17.3%) jobless rate gap of 2.4% in July 2009 for youth was the highest male-female gap since 1954 (2.5%), and 1949 (2.8%), see chart below.
Bottom Line: Between the economic slowdown and the 24% increase in the minimum wage over the last years, the 16-24 year old group is having a rough summer. And it's especially bad for males in that age group, who are feeling the effects of the "mancession" along with males in other age groups.
The chart above is based on Social Security Administration data here for maximum taxable Social Security earnings, and here for the tax rates for Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare's Hospital Insurance (HI), and shows the maximum annual taxes payable from 1937 to 2009. The annual tax amounts have been adjusted for inflation using the CPI data available here, and are shown above in 2009 dollars for the total annual contributions that come from both employees (50% of the total) and employers (50% of total).
His name was Kennedy. He was the preeminent figure in the Democratic Party. And he was a resolute supply-side tax-cutter.
“It is a paradoxical truth,’’ he once told the Economic Club of New York, “that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.’’ What he had in mind, he said, was “an across-the-board, top-to-bottom cut in personal and corporate income taxes.’’
Those were not the words of Senator Edward Kennedy. The speaker - in December 1962 - was President John F. Kennedy (see video above), and his ringing call for tax cuts was no anomaly.
Four months earlier, JFK had called high tax rates a danger to “the very essence of the progress of a free society.’’ In his 1963 State of the Union message, his first priority was “the enactment this year of a substantial reduction and revision in federal income taxes.’’ In the speech he was scheduled to deliver on Nov. 22, 1963, Kennedy planned to report proudly: “We have proposed a massive tax reduction, with particular benefits for small business.’’
In recent days, Ted Kennedy has been justly acclaimed as a lion of the Democratic Party. But how different the party mourning Kennedy today is from the one that nominated him in 1962.
~Jeff Jacoby in today's Boston Globe
According to the latest figures from the U.S. Census Bureau, it takes an average U.S. citizen a shade under four years to earn $100,000. Alex Rodriguez does it in six pitches.
Coupons You Don’t Clip, They're Sent to Your Cellphone