Tuesday, February 02, 2010

Annual Cost Per Sugar Farm Job Saved = $826,000

A few days ago, I posted about tariffs doubling U.S. sugar prices (see chart above) and how those artificially high prices impose huge economic costs on the U.S. economy ($2.5 billion last year). Thanks to a comment from Ron H., I found a research paper "Employment Changes in U.S. Food Manufacturing: The Impact of Sugar Prices," that was published by the U.S. International Trade Commission in 2006. Here is a summary of the findings:

1. Employment in sugar containing products (SCPs) industries decreased by more than 10,000 jobs between 1997 and 2002 according to the BLS. Approximately 6,400 of these job losses can be attributed to confectionery plant closings and relocations abroad, where high U.S. sugar prices were cited as a significant contributing factor. During the same period, non-SCP food manufacturing employment grew by 31,326.

2. Approximately 987,810 people worked in sugar-using industries as of 2002. In contrast, there are 61,000 full-time equivalent jobs involved in the growing and harvesting of sugarcane and sugar beets. Studies suggest that the U.S. sugar program helps to maintain approximately 2,260 of these sugar industry jobs, many of which are growing and harvesting jobs,
at an annual cost per job saved of $826,000. Therefore, the total economic cost to the U.S. economy of those jobs saved is about $1.9 billion per year.

3. For each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly
three confectionery manufacturing jobs are lost.

4. For the confectionery industry in particular, evidence suggests that sugar costs are a major factor in relocation decisions because high U.S. sugar prices represent a larger share of total production costs than labor. In 2004, the price of U.S refined sugar was 23.5 cents per pound compared to the world price at 10.9 cents.

5. Many U.S. SCP manufacturers have closed or relocated to Canada where sugar prices are less than half of U.S. prices and to Mexico where sugar prices are about two-thirds of U.S. prices.

6. Plant closings and relocations have been accompanied by increasing SCP imports, which have tripled from $6.7 billion in 1990 to $18.7 billion in 2004.

Top 20 Business Blogs for January

1The Conscience of a Liberal
2The Business Insider
3The Big Picture
4Calculated Risk
5DealBook - New York Times blog
6Grasping Reality with Both Hands: Brad DeLong
7Techdirt
8The Baseline Scenario
9Naked Capitalism
10Seth Godin's Blog
11Greg Mankiw's Blog
12EconLog
13Economist's View
14Vox
15CARPE DIEM
16Econbrowser
17Mish's Global Economic Trend Analysis
18Tech Trader Daily
19Infectious Greed
20Robert Reich's Blog

Ranking by Wikio


How are these rankings compiled?

"The position of a blog in the Wikio ranking depends on the number and weight of the incoming links from other blogs. Our algorithm accords a greater value to links from blogs placed higher up in the ranking. A blog linking another blog is only counted once a month i.e. if blog A links to blog B 10 times in a given month, it is only counted as having linked to that blog once that month. The weight of any link decreases over time. Also, if a blog always links to the same blog, the weight of these links is decreased. Only links found in RSS feeds are counted. Blogrolls are not taken into account."


Canadian Politician Comes to U.S. for Heart Surgery

CANADA'S NATIONAL POST -- Newfoundland Premier Danny Williams will undergo heart surgery later this week in the United States. He is expected to be away from four to six weeks.
A decision to leave Canada for the surgery, especially if it is available here, raises questions about the Premier's confidence in Newfoundland's health care system.

MP: This raises the question: Where will U.S. politicians go for heart surgery if we ever adapt Canadian-style health care?


Thanks to Bob Wright.

Markets in Everything: Lord Ganesha U.S. Stamps

Usa-postage.com is proud to be the first company to offer customized postage with divine images that have specific appeal to the Indian community living in the United States. Commemorative sheets from Usa-postage.com are valid U.S. Postage produced by a technology called PC Postage.

HT: Sanil Kori

How To Make a Weak Economy Worse: Raise Taxes


From "How to Make a Weak Economy Worse" by Amity Shlaes in today's WSJ:

"Mr. Obama might want to stick to a moderate approach. FDR's war against business played to the crowd, but it hurt the economy. While monetary policies impeded recovery in the late 1930s, it was the administration's assault on companies and capital that ensured the Depression's duration. By 1935, FDR decided that firms, especially big firms, were impeding recovery. They must now redeem themselves and save the economy by sacrificing—or else.

The attacks started with taxes. In 1935, well before the "hatred" speech, FDR led Congress in passaging a law that replaced a flat rate on corporate income with a graduated rate—itself a penalty on larger firms. Personal income taxes went up, as did other rates (see charts above). In 1936 FDR signed into law the undistributed profits tax, which aimed to force reluctant firms to disgorge cash as dividends or by paying higher wages. This levy too was graduated, with a top rate of 27%.

The result of it all was the Depression within the Depression of 1937 and 1938, when industrial production plummeted (see chart below) and unemployment climbed back into the higher teens.

The 1930s story suggests not that any individual reform is wrong per se. It reminds us rather that frustrated presidents are inconsistent, that antibusiness policies are cumulative, and that hostility yields more damage than benefit. Presidents can choose between retribution and recovery. They cannot have both."

MP: In other words, the 1930s story suggests that if you want to have an unhappy ending, a "double-dip" recession, and stalled economic growth there's one sure way to do it: raise taxes during a fragile period of economic recovery. Like 2010.

Monday, February 01, 2010

It’s Not the 1930s Again; It's Not Even Close, Part II

The chart above (click to enlarge) shows the growth rate in Industrial Production, based on the percent change from the same month in previous year (data here).

Real Consumption Growth Rate: Highest Since 2007

The chart above shows the annual percent change from the same month in the previous year for real personal consumption expenditures (data here) from January 1970 through December 2009, as reported in today's Personal Income report from the BEA. December was the third consecutive month of a positive growth rate for real personal consumption, and the growth has been positive in four out of the last five months.

Further, the 1.77% growth rate in December was the largest monthly increase in real consumption since November 2007, the month before the recession officially started. Add this to the growing list of V-signs of economic recovery, and notice how it's similar to the V-patterns of recovery following recessions in 1975, 1980, 1982 and 1991.

See Scott Grannis for more analysis on why this growth in real consumption is a positive indicator, and one that suggests that job growth will follow.

Another Huge V-Sign of Economic Recovery: ISM Hits 5 1/2 Year High, Predicts GDP Growth = 5.5%

More from Brian Wesbury and Bob Stein:

"If this isn’t a V-shaped recovery, we don’t know what is. Today’s
ISM Manufacturing report blew away consensus expectations, surging to the highest level since 2004. The increase in
the ISM shows that the strong real GDP growth of late 2009 was not some kind of one-off inventory-related fluke, but is continuing into 2010. According to the Institute for Supply Management, which publishes the ISM report, an overall index reading of 58.4 is
consistent with real economic growth at a 5.5% annual rate."

It’s Not the 1930s Again --- It's Not Even Close

From Brian Wesbury and Robert Stein:

"Since the financial turmoil began, many analysts, investors and pundits have fretted about a repeat of the Great Depression. However, it’s important to put things in perspective. Real GDP fell for four consecutive years (and by a total of more than 25%) between 1929 and 1933. Unemployment reached 25% (see chart above). Nothing today even comes close. GDP is now rising and we expect unemployment has peaked.

The reason the Great Depression became so great was because government policies were outrageously bad. The Federal Reserve, which was less than two decades old at the time, made huge mistakes, and allowed the money supply to decline by a third between 1929 and 1933. At the same time, President Herbert Hoover increased the top marginal income tax rate from 25% to 63% in 1932 – a more than 50% reduction in the incentive to work and invest.

The odds of repeating anything like the Great Depression are low and shrinking by the day. It’s not the 1930s, it’s not even close."


MP: In terms of the monthly unemployment rate, we haven't even come close yet to the peak of 10.8% in November and December of 1982, and the average annual rate of 9.3% for 2009 is less than the 9.7% average in 1982 by almost a full half point, and a full point less than the 12-month average of the 10.3% unemployment rate between mid-1982 and mid-1983 (data here).

More on Cash-Only Medicine: Like Being Born Again

TRAVERSE CITY, MI -- Oct. 1, 2006, marks the fifth anniversary of the date on which Michael Harris, MD, opted out of Medicaid and Medicare and rid himself of all commercial insurers. He put his urology practice on a strict cash-for-services basis in 2001 and he has not looked back (see his website here for Northern Institute of Urology).

"This is how you practice medicine," Dr. Harris told Urology Times in a recent interview. "All the bureaucracy that is inflicted on a typical medical practice today contributes absolutely nothing to the care of the patient. All it does is hamper performance."


See related story "
Opting Out is Like Being Born Again, MDs Say."

See related CD post.

Personal Savings Reaches 11-Year High in 2009

According to today's BEA report on "Personal Income and Outlays," personal savings (percent of disposable personal income) was 4.8% in December, and the average savings rate for 2009 was 4.575%, the highest annual average rate since 5.26% in 1998.

Sunday, January 31, 2010

No Corkscrew or Bottle Opener? No Problem

Open a bottle of wine with a shoe, phonebook or a tree.

Open a beer bottle with a dollar bill, one hand, a CD, or a piece of paper.

Location, Location, Location

Here's a 5 bedroom, 5 bathroom, 3,000 square foot house in Flint, Michigan for $74,900. With a 20% down payment, and a 30-year mortgage at the current rate of 5.13%, the monthly payments would be $326.44 (principal and interest). It was built in 1928 and last sold in 2001 for $225,000.

HT: Flint Expatriates Blog

Market-Based Health Care Reform: Cash Only Family Practice, No Insurance, House Calls for $90

Dr. James Eelkema, a longtime ER doc, has set up a cash-only family practice in Burnsville, MN called Timewise Medical:

"If you are insured, under-insured, or uninsured, we can see you for any medical issue. Lack of insurance should not be a barrier to quality care. Our fees are reasonable and we ask for payment at the time of service with a valid credit or debit card (Visa, MasterCard or Discover). We do not work with insurance companies, since their cost structure, rules and mandates can sometimes get in the way of a caring physician-patient relationship. Our overhead costs are kept low by not filing and tracking insurance claims, and we pass those savings on to you. You will receive a copy of the day’s note and a receipt which you may send to your insurance company to apply the charges toward your deductible."

Here's the price list, with office visits starting at $36 for one problem and $54 for two problems, a complete physical for $110, and house calls starting at $90.

Read a profile here in today's StarTribune.

MP: This approach sounds a lot more promising than 2,000 pages of government healthcare "reform," doesn't it?

Price Tags Are Merely Suggestions: Haggling's Back

Washington Post article.

HT: Paul Kedrosky

What's Up With That?

We had 6 inches of snow in DC yesterday and I took this picture today in the Adams Morgan neighborhood. Yesterday I saw at least five cars like this in Adams Morgan during the snowstorm, and I think it's a trend in other parts of the country as well. Growing up in Minneapolis-St. Paul, which gets probably the coldest weather and most snow of any major city in the U.S. in most years, I don't ever remember seeing this, and Minnesota is the one place where dealing with cold weather is elevated to a sophisticated science. Because of the harsh winters, most Minnesotans develop a high level of expertise when it comes to dealing with cold-weather car starting (tank heaters, starting spray), driving in snow, getting cars un-stuck from deep snow, etc. If lifting wiper blades off the windshield was such a great idea, why weren't Minnesotans doing it decades ago?

Here is
some discussion on this topic, which mostly suggests that drivers are trying to prevent their wipers from getting stuck to the windshield, especially when getting out of a warm car. I don't think I ever experienced that being a big problem, and it somehow seems so unnatural and wrong to me, so I am currently unconvinced that this is a good idea. For those who do have troubles, maybe a better solution would be to simply install heavy-duty winter/snow wiper blades for $7. Comments?

Remedial Writing

Prof. Jack Miller writes about his experience teaching remedial writing at Normandale Community College (Bloomington, MN):

"Whatever their backgrounds, their writing problems fit into relatively few categories. Not surprisingly, they have little understanding of grammar and see it as a set of arbitrary “rules” concocted by sadistic pedants harboring grudges against the young. Punctuation is an equally baffling and dangerous area. There exists little understanding of it as a set of signals that facilitate the reader’s comprehension. Vocabulary is weak, perhaps stemming from the legions of teachers since elementary school who have feared above all that their students might suffer confusion or dismay.

Some are not sure what is done in the classroom—how to behave. They don’t know when or how to take notes. They perennially miss due dates, drift in late, drift out during the break not to return. They sabotage themselves and then seem to expect forgiveness and accommodation from their professors. Someone showing up one day after having been missing for five or six weeks, only vaguely recognized by the professor, will assume that a way can and will be found to bring him up to speed and on track with the rest of the class. Is all this the result of repeatedly being forgiven in the past? I think so.

Understanding the rudimentary conventions of research is minimal. Few are aware of what or how to quote from a source, or how and why to credit that source. Knowledge of plagiarism is far from certain, and finally there is the oft-noted paucity of a body of shared knowledge, thereby inhibiting what assumptions a writer can make about a reader. More than ever before, students live in an intellectual world of their own, a personal world where every individual’s baseline is likely to be different from that of most others and coincides with few. Coupled with extremely spotty historical knowledge, the factors outlined here make for a classroom of wide diversity, though not necessarily the “rich” diversity that college catalogues claim for their campuses."

HT:
Capital Capitalism


Update:
Could this be a factor? (Click to enlarge.)


Saturday, January 30, 2010

Michael Moore's Love Story: For Taxpayer Subsidies


Sugar Tariffs Cost Americans $2.5 Billion in 2009


The chart above displays refined sugar prices (cents per pound) using monthly data from the USDA (Tables 2 and 5) for: a) U.S. wholesale refined beet sugar price at Midwest markets and b) the world refined sugar price. Due to trade restrictions on imported sugar coming into the U.S. at the world price, the U.S. sugar beet producers have a sweet deal, assisted by their government enablers, who protect them from more efficient foreign sugar growers who can produce cane sugar in Central America, Africa and the Caribbean at half the cost of beet sugar in Minnesota and Michigan.

Of course, there's no free lunch, and this sweet trade protection comes at the expense of American consumers and U.S. sugar-using businesses, who have been forced to pay twice the world price of sugar on average since 1982 (27.2 cents for domestic sugar from beets vs. 13.8 cents for sugar from cane, see chart). How much does this trade protection cost Americans?

We can estimate the cost of sugar protection, using some additional data from the USDA (Table 1) about sugar:

1. Americans consume about 9.412 million metric tons (20.75 billion pounds) of sugar per year, and therefore every 1 cent increase in sugar prices costs Americans an additional $207 million per year in higher prices.

2. The U.S. produces about 6.9 million metric tons (15.4 billion pounds) of sugar annually, mostly from sugar beets.

3. Due to quotas, Americans are only allowed to import about 2.2 metric tons (4.85 billion pounds) of cane sugar every year, or about 23% of the total sugar consumed.

4. If sugar quotas were eliminated, and American consumers and business had been able to purchase 100% their sugar in 2009 at the world price in 2009 (average of 22.1 cents per pound) instead of the average U.S. price of 38.1 cents, they would have saved almost $2.5 billion. In other words, forcing Americans to pay 38.1 cents for inefficiently produced beet sugar instead of 22.1 cents for efficiently produced cane sugar, costs Americans an additional 16 cents per pound for the 15.4 billion pounds of American sugar produced annually, which translates to almost $2.5 billion. (Note: This is an estimate based on the assumptions that: a) the amount of sugar consumed in the U.S. and b) world prices, wouldn't change.)

Bottom Line: The cost of most trade protection is largely invisible and hard to calculate, but the cost of sugar protection is directly visible and measurable, since the USDA and the futures markets regularly report prices for both high-cost domestic sugar and low-cost world sugar. Like all protection, sugar tariffs exist to protect an inefficient domestic industry (sugar beet farmers) from more efficient foreign producers (cane sugar farmers), and come at the expense of the U.S. consumers and the American companies using sugar as an input, and make our country worse off, on net.

Friday, January 29, 2010

Dec. Restaurant Activity Index Highest Since Feb.

"Driven by improving sales and traffic levels, the National Restaurant Association's comprehensive index of restaurant activity rose sharply in December. The Association's Restaurant Performance Index (RPI) a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry stood at 98.7 in December, up 0.9% from November and its strongest level since February 2008 (see chart above). Despite the solid improvement, the RPI remained below 100 for the 26th consecutive month, which signifies contraction in the index of key industry indicators.

The Expectations Index, which measures restaurant operators' six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 100.0 in December the first time in eight months that the index reached the 100 level (see chart above).

Restaurant operators are increasingly optimistic about sales growth in the months ahead. Thirty-five percent of operators expect to have higher sales in six months (compared to the same period in the previous year), up from 31% who reported similarly last month and the highest level in more than two years. In comparison, 21% of operators expect their sales volume in six months to be lower than it was during the same period in the previous year, down from 24% last month.

Restaurant operators are also more optimistic about the direction of the economy in the months ahead. Thirty-four percent of restaurant operators said they expect economic conditions to improve in six months, while 18 percent expect economic conditions to worsen during the next six months. Last month, 27 percent of operators said they expected the economy to improve in six months, while 19 percent expected economic conditions to deteriorate."

V-Signs of Economic Recovery

Durable Goods (percent change from year ago).

Real GDP growth (percent change from year ago).
Here's one more from Scott Grannis (Chicago PMI).

Shortages Can Always Be Solved by Market Prices

American Enterprise Institute scholar Sally Satel’s article “Kidney Mitzvah: Israel’s Remarkable New Steps to Solve Its Organ Shortage” appeared this week in Slate. Here's a summary:
Israel is taking bold measures to address its severe organ shortage. With the introduction of two new laws, Israeli families that allow their deceased loved one’s organs to be donated can receive money for a funeral or other memorial, and anyone who agrees to be a posthumous donor gets priority in the event of needing an organ transplant himself. Other countries should follow Israel’s lead and implement initiatives that provide incentives for organ donation.
Other countries like...... maybe the United States? We face a huge organ shortage that continues to worsen every year under current policy, which makes it illegal to provide any financial compensation for organ donors.

The charts above clearly illustrate the worsening situation for those on the growing waiting list for kidneys in the United States. The top chart shows that at the end of 2009, there were more than 83,000 patients on the waiting list, setting a new record for the total number of candidates waiting for kidneys in any year. Also, the kidney waiting list increased by almost 5,000 in 2009, setting another record for the largest annual increase in history for the kidney waiting list.

Kidney transplant operations for 2009 are currently available only through October from the
United Network for Organ Sharing, but the projections based on year-to-date counts suggest that about 16,940 kidney transplant operations will take place in 2009. As the graph above shows, the annual number of transplant operations has remained relatively flat at between 16,000 to 17,000 since 2004, while the waiting list has grown by almost 23,000 in the last five years. What that means of course is that the chances for those on the growing waiting list to actually receive a kidney keep fading every year, and more and more people die waiting.

The bottom chart displays the ratio of the number of candidates on the kidney waiting list in a given year to the number of actual kidney transplant operations in that year, and shows the worsening situation for those waiting for a transplant. As recently as 1997, there were three candidates waiting for each kidney transplant operation, but that ratio has almost doubled, to six candidates waiting in 2009 (based on data through October) for every transplant operation. Stated differently, the chances of getting a kidney while on the waiting list have fallen almost in half over the last 12 years, from about a 33 percent chance in 1997 to only a 17 percent chance in 2009.

The historical trends clearly demonstrate that current U.S. policies are failing miserably to address the growing kidney shortage, and the situation is getting worse every year. Maybe we can learn something from Israel’s new policies that provide incentives, including “compensation-for-memorialization,” to increase organ donation in the United States.

Or how about just allowing direct cash payments? Economics 101 tells us that shortages are always caused by artificially low prices (zero in the case of organs), and can always be eliminated by market pricing ($36,000 is the price that has been proposed in Singapore).

Here's what we know for sure: Relying on altruism for organs and a price of $0 results in a huge shortage, with demand exceeding supply by a factor of almost 6:1. At some price, let's say $1 million, there would probably be a huge kidney surplus, with supply exceeding demand. At some market-determined, market-clearing price somewhere between $0 and $1 million per kidney, there would be no surpluses, no shortages, and market equilibrium (Qd = Qs). And that would be the best possible outcome, since it would eliminate the waiting list, and in the process eliminate the needless deaths that now occur at the rate of about 12 per day for kidney candidates.

Huge Gender Degree Gap at Age 22: National Crisis, Title IX, Government Funding? Probably Not

According to a report released yesterday by the BLS:

"At age 22, women were more likely than men to be enrolled in college and were more likely to have received a bachelor's degree. Twenty-nine percent of women were attending college during the October when they were age 22, compared with 25.2% of men. Moreover, 12.8% of women had earned a bachelor's degree, compared with 6.9% of men (bold added, see chart above).


MP: In other words, at age 22, there are 185.5 women holding a Bachelor's degree (or more) for every 100 men who have graduated from college. Now that's a huge gender disparity in college completion at age 22, but I predict:

1. This gender degree gap will receive almost no media attention, and certainly no attention from the gender activists.

2. There will be no calls for government studies, or increased government funding to address the problem, and nobody will refer to this gender degree gap as a "crisis."

3. President Obama will not address the issue by signing an Executive Order creating the "White House Council on Men and Boys," like he did for
women and girls.

4. Neither Obama nor Congress will address the gender degree gap by invoking the Title IX gender-equity law, like they have considered using for the gender gap in some college math and science programs.


5. Nobody will blame the gender degree gap on structural barriers from grades K-12 that discourage men from attending or graduating from college, like they do for explaining the gender gap for women in math and science.

In other words, the standard "disparity-proves-discrimination" dogma will not be applied in this case of a huge gender imbalance in college completion by age 22, because the disparity favors women, not men. But consider what happens when the disparity favors men, and this is just one example of many:

NY Times: "Women make up 46% of the American workforce but hold just 25% of the jobs in engineering, technology and science, according to the National Science Foundation. To Sally K. Ride, a former astronaut, that persistent gender gap is a national crisis that will prove to be deeply detrimental to America’s global competitiveness."

Thursday, January 28, 2010

First Time: Disapprove (48.8%) > Approve (48.1%)


Source: Pollster.com. Note that individual dots are individual polls, and the line is the consensus.

Michael Moore Seeks Subsidies from MI Taxpayers

"It is baffling to see the state of Michigan offer filmmaker Michael Moore a refundable tax credit for his documentary "Capitalism: A Love Story." This subsidy should be rejected by Moore on principle alone. Moore's acceptance of the Michigan film incentive subsidy is troubling because he has grown wealthy railing against corporations and capitalist institutions - such as Wall Street - for enriching themselves at the expense of the little guy and taxpayers.

In the trailer for "Capitalism: A Love Story," Moore shows up on Wall Street and says, "...we're here to get the money back for the American people..." This is in reference to the high-profile bailout of big banks (and other institutions) by the federal government. By accepting a state subsidy, Moore, who shows disdain for private, for-profit businesses raiding the pocketbooks of Americans, engages in this very practice himself.

Even more galling is that Moore is set to feed on Michigan's beleaguered taxpayers. The Great Lake State has had the highest unemployment rate in the nation for 46 months and currently stands at 14.6 percent. As measured by state Gross Domestic Product Michigan has experienced a lost decade of economic growth. Worse, our per-capita personal income rank among the states has plummeted from 23rd to 37th since 2003. Not since the Great Depression years have the incomes of Michigan residents been so comparatively low. We are becoming a poorer state with each passing year.

It is against this backdrop that Moore - with his every-man theatrics - asks the taxpayers of Michigan to subsidize his work and by extension his life. He should not. Doing so just smells like a conflict of interest and it makes this award-winning filmmaker appear hypocritical and insensitive to the plight of Michigan's taxpayers."

~
Michale LaFaive of the Mackinac Center for Public Policy

Quote of the Day: Diversity Creed

"It should be remembered that diversity creed holds that we are all equal and would be proportionately represented by race across all activities but for the fact of discrimination and oppression."

~
Walter E. Williams

Wednesday, January 27, 2010

Change You Can Believe In, As Long As You're Using Someone Else's Money, And Not Your Own

Watching Obama and Biden on TV and hearing Obama talk proudly about their "leadership," I can't help but remember how relatively uncharitable and uncaring they have been in the past when it comes to spending their own money. If we look at some of the years before the 2008 election, when nobody was really paying attention to their charitable giving:

1. Between 1998 and 2006, the Bidens' adjusted gross income (AGI) averaged $236,000 per year, and their average annual charitable contributions averaged just $283, or only $5.44 per week. That compares to an average annual charitable contribution of $1,916 for taxpayers with AGI between $15,000 and $30,000 (according to IRS data). In other words, taxpayers in one of the lowest income brackets ($15,000 to $30,000) were almost 7 times as generous as the Bidens with only about 10% of their income!

2. The Obamas were a little more generous than the Bidens, giving an average of $2,187 annually ($42.06 per week) between the years of 2000 and 2004, on average AGI per year of $243,000, which means the Obamas were just barely more charitable in their giving than those making less than only $30,000 per year.

Gone with the Wind Still #1 By Box Office, Tix Sales

Adjusted for inflation (in 2009 dollars), Gone with the Wind ranks as the #1 all-time movie for box office receipts at $1.5 billion (released in 1939 when the average ticket price was 23 cents), and Avatar currently ranks a distant #26 at $562 million (so far).

Measured by the number of tickets sold,
Gone with the Wind also ranks #1 with 202,044,600 tickets, compared to 75,373,800 tickets so far for Avatar.

Federal Subsidy Programs Now Exceed 2,000

"January 22, 2010 is a day that should live in infamy, at least among believers in limited government. On that day, the federal government added its 2,000th subsidy program for individuals, businesses, or state and local governments. Most people are aware that federal spending is soaring, but the federal government is also increasing the scope of its activities, intervening in many areas that used to be left to state governments, businesses, charities, and individuals.

To measure the widening scope, the chart above uses the program count from current and past editions of the Catalog of Federal Domestic Assistance, the official compilation of all federal aid programs, including grants, loans, insurance, scholarships, and other types of benefits. The chart shows that the number of federal subsidy programs has almost doubled since the mid-1980s after some modest cutbacks under President Ronald Reagan."

~From
Chris Edwards at The Cato Institute

HT: Juandos

Full, 100% Recovery for Canada Home Price Index


"Canadian home prices in November were up 2.6% from a year earlier, according to the Teranet-National Bank National Composite House Price Index. It was the second consecutive month of prices higher than 12 months earlier, after 10 consecutive months of 12-month deflation. The reason for the turnaround is that November was the seventh straight month in which the index for Canada as a whole was up from the month before, leaving it down only 0.1% from the peak of August 2008."

MP: The index for Canada home prices in November was 130.62, just slightly below the August 2008 peak of 130.79, and indicating that there has been a complete recovery for home prices in Canada.

Jobs and Jobless Rates: Private vs. Government

The graph above displays monthly employment levels for the private sector (blue line, left scale, data here) and the government sector (red line, right scale, data here) from January 2000 through December 2009, and shows a pretty bleak job picture for America’s private sector. Since private sector employment peaked at almost 116 million jobs in December 2007 at the onset of the recession, more than seven million private sector jobs have disappeared, while during the same time period government jobs increased by almost 100,000. That is, the entire burden of job losses during the recession has fallen on the private sector, while the public sector has actually expanded and added jobs during the economic downturn.

The disproportionate adverse effect of the recession on the private sector can also be seen in differences in jobless rates between the private and public sectors (see chart below). During the Great Recession, the jobless rate for government workers reached 3.6% in December 2009, or only about one percent above its historical average of 2.55%, compared to the increase in the jobless rate for private sector workers to 10.2% in December, or almost 4.5 percentage points above its historical average of 5.75%.


What about the $862 billion stimulus package that Obama claimed recently had already “created or saved 640,000 jobs," and would eventually save or create 3.5 million jobs in total? The employment data show that the $862 billion stimulus has yet to create a single new job in the private sector - there hasn’t been a monthly gain in private sector employment for the last 24 months.

To the extent that the stimulus has created or saved any jobs, they’ve been in the public sector, and have likely come at the expense of crowding out the growth that might otherwise have taken place in the private sector. After all, the only way the government can stimulate one person with a job or income is to first “unstimulate” somebody else with higher taxes, with no net gain in jobs or income. (Or as Nick Gillespie and Matt Welch remind us about the stimulus: "It can’t work, because government can only spend money by taking it from the current or future economy.")

In tonight's State of the Union address, look for President Obama to make more promises to create jobs for Americans. The fact that $862 billion in stimulus money hasn’t yet created a single private sector job and has added fewer than 100,000 public sector jobs should make us very skeptical about the government’s ability to create jobs. Despite all of the political rhetoric about “saving or creating” millions of jobs, the labor market statistics suggest a much different, and much more depressing story, especially about private sector jobs.


Update: Jeff Jacoby's column "Income Angst? Not for Public Employees"

Winter Olympics Preview: Vancouver Time Lapse



HT: Paul Kedrosky via Twitter

What You Won't Hear Tonight: About How Obama's Interventionism is Eroding U.S. Prosperity

"His grandiose legislative ambition has become the partially free economy's biggest debt problem (see chart below, data here)."

Neil Reynolds writing in today's Toronto Globe and Mail:

"When President Barack Obama delivers his State of the Union address tonight, he should - but won't - report the significant U.S. decline in economic freedom during his first year in the Oval Office.

Jointly published last week by the conservative Washington-based Heritage Foundation and The Wall Street Journal, the
2010 Index of Economic Freedom (a 480-page work) strips the United States of its traditional designation as a "free economy," listing it instead - and ranking it as No. 8 in the world - as "partially free." More embarrassing for Mr. Obama, it elevates Canada to the No. 7 spot that the United States surrendered, making Prime Minister Stephen Harper the leader of the economically freest country in the Western Hemisphere (see top ten below, click to enlarge)."



Tuesday, January 26, 2010

First Yearly Increase in Trucking Index Since 2008

"The American Trucking Association's advance seasonally adjusted (SA) Truck Tonnage Index climbed 2.1% in December, following a 2.6% increase in November. The latest gain boosted the SA index from 106.2 in November to 108.4 in December, its highest level since November 2008. Compared with December 2008, SA tonnage jumped 6.6%, which was the first year-over-year increase since September 2008. For all of 2009, the tonnage index was down 8.3%, which was the largest annual decrease since a 12.3% plunge in 1982.

ATA Chief Economist Bob Costello said that while tonnage jumped again on a month-to-month basis, the rate of increase may slow in the coming months. “The robust tonnage numbers in November and December were aided by better economic growth as well as a positive inventory effect,” Costello noted. “However, economic activity is expected to moderate in the current quarter, which will keep a lid on tonnage growth.”

He also addressed the year-over-year gain in tonnage, the first in over a year. “While the index was moving toward positive year-over-year readings in recent months, December’s gain was due, in part, to a 7.8% plunge a year earlier. There is no doubt that the industry is moving the right direction, but the level of freight will not be as strong as the year-over-year increases suggest because of how terrible it was in late 2008 and much of 2009.”

Twin Cities Housing Market Rebounds in 2009

Minneapolis Area Association of Realtors -- "2009 will go down in the history books as the year that the local housing market took large healing steps towards balance. In the Twin Cities 13-county metro area, total pending sales for 2009 ended at 52,167, up a strong 18.4% from 2008. That’s the highest number of units sold since 2005 and the strongest year-over-year increase in sales since 1998."

Highlights for 2009 include:

Pending Sales: +18.4% from 2008


Closed Sales: +16.7% from 2008

Sale Price as Percent of List Price: 93.4% in 2009 vs. 90.0% in 2008

Supply-Demand Ratio (Homes Per Buyer): 6.7 in 2009 vs. 8.43 in 2008

Months Supply of Inventory: 5 months in 2009 vs. 7.6 months in 2008

Florida Home Sales Increase 16th Straight Month

ORLANDO, Fla. (Jan. 25, 2010) – "Florida’s existing home sales rose in December, marking 16 months that sales activity has increased in the year-to-year comparison, according to the Florida Realtors. Existing home sales rose 33% last month with a total of 14,630 homes sold statewide compared to 11,013 homes sold in December 2008. Statewide existing home sales last month increased 4.3% over statewide sales activity in November.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in December. A majority of the state’s MSAs have reported increased sales for 18 consecutive months.

Florida’s median sales price for existing homes last month was $140,400; a year ago, it was $155,300 for a 10% decrease, and in November it was $139,000 for a 1% increase."

Case-Shiller Index Improves for 10th Month

"Data through November 2009, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the annual rates of decline of the 10-City and 20-City Composites continue to improve, in spite of price declines being measured across many markets during November. This marks 10 straight months of improved readings in the annual statistics, beginning in early 2009, and is the third consecutive month these statistics have registered single digit declines, after 20 consecutive months of double digit declines.

The chart above depicts the annual returns of the 10-City and 20-City Composite Home Price Indices, declining 4.5% and 5.3%, respectively, in November compared to the same month last year. All 20 metro areas and both Composites showed an improvement in the annual rates of decline with November’s readings compared to October."

Monday, January 25, 2010

Thoughts on Recycling

Beer bottle chandelier.
Beer bottle solar water heater.

Beer bottle furniture.
Beer bottle house.

More than three-quarters (77%) of American adults claim they "recycle" and slightly less than one-quarter (23%) of American adults "recycle nothing at all," according to a Harris Interactive poll in 2007.

GMU economist Don Boudreaux made an important point in his 2002 Freeman article "
I Recycle" that even though he and others might be part of the 23% who tell pollsters that they don't officially "recycle," they still do a lot of "unofficial recycling" every day, e.g. re-using many household items like towels, coffee mugs, dishes, utensils, clothes, shoes, appliances, CDs, furniture, and books.

Don concludes: "Reflecting on the impressive amount of recycling that actually takes place daily casts doubt on the prevailing misperception that people are naturally wasteful and mindlessly irresponsible. In fact, market prices compel us to recycle when recycling is appropriate—and to not recycle when recycling is inappropriate."

I've been thinking about recycling lately and Don's article, and have a few thoughts:

1. Even for the 77% of Americans who claim to regularly "recycle," they usually only recycle a very narrow and limited number of items like newspapers, bottles and cans. Don Boudreaux uses the example of paper plates, and suggests that it would be possible, but too costly, in terms of the time involved compared to the benefits, to re-use paper plates. Therefore, most people, even the most dedicated, religious "recyclers," do not bother to recycle their paper plates.

Likewise, there are many other items that even the most committed and devoted "recyclers" don't usually bother to re-use a second time: coffee filters, paper cups, dental floss, paper towels, paper napkins, Q-tips, toothpicks, plastic utensils, and Kleenex tissues.

2. Even when 77% of Americans say they recycle items like newspapers, bottles and cans, what they almost always mean is that they recycle using the "lazy approach," and they actually have somebody else do the actual work of recycling their discarded items (usually after a single use). The "lazy approach" means that instead of actually re-using those items themselves, they put their newspapers, bottles and cans in a special green bin instead of their regular garbage can, and send those items off for somebody else to do the actual, real work of re-using those items.

For example, there are lots of ways for "real recyclers" to actually recycle their own newspapers, instead of being "lazy recyclers" and having somebody else do their work. There are lots of websites (including
here and here) that provide great ideas on how to recycle newspaper including:

"Recycle newspaper into new paper by tearing it up, soaking it in warm water until it becomes pulp, then spread the pulp on an old window screen covered in a piece of fabric. When it dries, you have great recycled card stock for projects and gifts."

And there are some great ways to be a non-lazy "active recycler" of bottles, for example go
here and here to see pictures of the many items that can be made with bottles including light fixtures, Christmas trees, chandeliers, houses, entire temples, and solar water heaters (see photos above).

Bottom Line: 1) The 23% of American "non-recyclers" actually do a lot of recycling, especially when the benefits outweigh the costs (clothes, silverware, plates, towels, etc.).

2) The 77% of American "recyclers" are actually most often "lazy recyclers" and don't do their own recycling. Instead, they have somebody else do the recycling for them, and they don't for example use their bottles to make furniture or their newspaper to make paper.

3) The active "recyclers" limit their recycling very narrowly to select items like cans, bottles and newspapers, and even these religious recyclers don't recycle many potentially reusable items like toothpicks and coffee filters.


The Democrats' 5 Stages of Grief Over Health Care

"Therapists looking to study the five stages of grief—denial, anger, bargaining, depression, and acceptance, in that order—need look no further than Washington Democrats struggling to come to grips with the fact that the health care overhaul they spent nearly a year crafting is now dead. Every stage but the last is well represented. The only step left for Democrats is to accept that, after Republican Scott Brown's win in the Massachusetts special election, their signature reform effort is now lost."

~
Peter Suderman, Reason.com

Hayek vs. Keynes Rap: "Fear the Boom and Bust"


From Econstories.tv: Economist Russ Roberts and filmmaker John Papola's new release, "Fear the Boom and Bust," a rap video about the economic crisis.


L.A. Leads Nation in Charter Schools

LA Times -- "Over the last decade, a quiet revolution took root in the nation's second-largest school district. Enrollment is up at charter schools, and overall, standardized test scores outshine those at traditional campuses.

Today, Los Angeles is home to more than 160 charter schools, far more than any other U.S. city. Charter enrollment is up nearly 19% this year from last, while enrollment in traditional L.A. public schools is down. And a once-hostile school board has become increasingly charter-friendly, despite resistance from the teachers union. In September, the board agreed to let charters bid on potentially hundreds of existing campuses and on all 50 of its planned new schools.

Charters are taking students not just from traditional public schools but also from private schools. Particularly as the economy has soured, many parents see no reason to pay for school if they believe that a charter might offer a similar education without tuition."


HT: Art Little

Charter School Demand Surges, Outstrips Supply

Mackinac Center for Public Policy -- "For many parents, public charter schools are seen as an escape from underperforming or unsafe schools. Legislative limits on the growth of charters and subsequent waiting lists force parents to submit their children into a lottery to determine if they'll get to exercise their choice for a better educational option. For these parents, pure chance is their only ticket out of failing schools.

Below is a clip of a public charter school lottery in Boston for the
Match Charter School. Although it ignores the thousands of students who "lost" the lottery, the video shows what educational opportunity looks like for thousands of parents striving to obtain a better learning environment for their children."



A Sequel America Can't Afford



In this video, Cato's Dan Mitchell explains why we should be very concerned that a "Tax-and-Spend Interventionist" (Obama), following a "Borrow-and-Spend Interventionist" (Bush), could put America on the road to French-style economic stagnation.


Sunday, January 24, 2010

Traffic Volume: Largest 6-Month Increase in 5 Yrs.

The chart above shows the percent change in U.S. traffic volume through November (from the same month in the previous year), in a report released recently by the Federal Highway Administration (data and report here). After falling for 17 consecutive months starting in November 2007 and continuing through March 2009, traffic volume has increased in five out of the last six months (see chart above). The cumulative six-month June-November increase of 7.8% is the largest 6-month increase since the 11.6% increase through July 2004, more than five years ago.

The chart below displays traffic volume as a moving 12-month total, showing a similar pattern to the percentage monthly increase above. After falling for 16 straight months from December 2007 to March 2009, the moving 12-month total has increased six out of the last eight months, and the June-November increase marks the largest 6-month increase in traffic volume (12-month total) since the summer of 2007.
In a related report, "the American Trucking Associations’ Truck Tonnage Index (seasonally adjusted) increased 2.7% in November, following a 0.2% contraction in October. The latest gain boosted the index from 103.6 (2000=100) in October to 106.4, its highest level in a year (see chart below). Compared with November 2008, SA tonnage fell 3.5 percent, which was the best year-over-year showing in twelve months. In October, the index was down 5.2 percent from a year earlier."
MP: Two more positive signs that a V-shaped economic recovery is underway.

Update: Chart below shows that gas prices were generally increasing over the last six months, so the increased traffic volume happened in spite of rising fuel costs.


In Canada, Unequal Access to Cancer Drugs Creates A 'Postal-Code Lottery' to Get Treatment

GLOBE AND MAIL -- "In Canada, what some provinces consider standard treatment isn't offered to patients in other parts of the country.

Unequal access to cancer drugs – a long-standing issue for patients and oncologists –was to be remedied with the creation of the Joint Oncology Drug Review, to which all provinces but Quebec belong. Despite JODR's formation in March, 2007, the funding of some cancer drugs remains unequal across the country.

“Here in Canada, it's still a postal-code lottery for cancer drugs,” said Bill Hryniuk, past chairman of the Cancer Advocacy Coalition of Canada."

Top Industries Giving to Members of Congress, 2010

From OpenSecrets.Org, here's a list of the top industries contributing to members of the 111th Congress during the 2009-2010 election cycle (see top ten below).


Top Industries Giving to Members of Congress, 2008

OpenSecrets.Org: "Who's got the most juice on Capitol Hill? Here's a list of the top industries contributing to members of the 110th Congress during the 2007-2008 election cycle. The first list shows the overall 50 biggest industries (see top 10 below, click to enlarge)."

MP: It wasn't even close.

Heavy Hitters: Top 100 Rent Seekers 1989-2010

From OpenSecrets.org: "In boxing, big punchers seek knockouts. In government, the same principle applies: The wealthiest corporations and special interest groups usually pepper politicians with overwhelming amounts of money in hope of influencing the political process. Here you'll find total contributions for the 100 biggest givers in federal-level politics since 1989 -- information that exists nowhere else."

MP: Here are the top 18 below (click to enlarge), look at all of the donkeys!!

HT: Art Little