Saturday, May 15, 2010

US War on Drugs Has Cost $1 Trillion and Ten Times More Deaths Than 9-11 and Met None of Its Goals

MEXICO CITY — After 40 years, the United States' war on drugs has cost $1 trillion and hundreds of thousands of lives (MP: 28,400 in Mexico alone in just the last five years, more than ten times the number of casualties in 9-11, see chart above, data here), and for what? Drug use is rampant and violence even more brutal and widespread. Even U.S. drug czar Gil Kerlikowske concedes the strategy hasn't worked.

"In the grand scheme, it has not been successful," Kerlikowske told The Associated Press. "Forty years later, the concern about drugs and drug problems is, if anything, magnified, intensified."

Friday, May 14, 2010

Cellphones Now Used More for Data Than for Calls

NY Times -- "Although almost 90 percent of households in the United States now have a cellphone, the growth in voice minutes used by consumers has stagnated. This is true even though more households each year are disconnecting their landlines in favor of cellphones.

Instead of talking on their cellphones, people are making use of all the extras that iPhones, BlackBerrys and other smartphones were also designed to do — browse the Web, listen to music, watch television, play games and send e-mail and text messages. The number of text messages sent per user increased by nearly 50 percent nationwide last year, according to the CTIA, the wireless industry association.
And for the first time in the United States, the amount of data in text, e-mail messages, streaming video, music and other services on mobile devices in 2009 surpassed the amount of voice data in cellphone calls, industry executives and analysts say.

“Originally, talking was the only cellphone application,” said Dan Hesse, chief executive of Sprint Nextel. “But now it’s less than half of the traffic on mobile networks.”


MP: Isn't it interesting that historically the telephone replaced the telegraph, and talking on the phone replaced sending telegrams as the preferred method of communication. Now with the popularity of using phones for text messages and emails, it's almost like going back to sending telegrams by phone instead of talking on the phone.

Buying Spree: Discounted Land Prices, Long-term Real Estate Potential Are Attracting Developers

RISMEDIA, May 14, 2010 -- "Residential developers and homebuilders who survived the housing bust now are feasting on the remains of those who didn’t. They’ve been on a buying spree, using cash savings to acquire finished, but unbuilt lots and subdivisions that have been stalled or lost to foreclosure or bankruptcy. They’re paying up to 75 percent off peak land prices during the housing boom, and planning to succeed where others have struggled or failed.

All say discounted land prices attracted them, but it was the local housing market’s long-term potential that made them buy."

HT: John Jarrard

The Myth/Lie of "Government Job Creation"

From Ken Green's post on today's Enterprise Blog:

In the real world, jobs are not magically “created” when some central planner in the Politburo decides everyone needs new shoes, windmills, solar panels, tiny electric cars, fluorescent light bulbs, recycled paper underwear, or Rahm Emanuel action figures. Jobs are created when consumers decide they want to spend money to buy stuff. That means that: a) consumers have to have money to spend, b) they have to be confident enough in the future of the economy to be willing to spend their money, and c) they have to be able to afford the stuff for sale.

Instead of helping to create those conditions, the president and his allies in Congress are doing exactly the opposite. By layering massive regulatory burdens across the economy, they are increasing the costs of doing business; increasing barriers to entry; increasing the costs of goods and services; and destroying, not creating, jobs. By forcing windmills, solar cells, and biofuels into the energy supply, and by slapping “research delays” on everything having to do with fossil fuel production, they’re going to raise the costs of energy, and the costs of goods and services made with that energy (including food), suppressing consumer demand, and killing, not creating, jobs. And if they go ahead with the Kerry-Lieberman energy rationing plan deceptively named “The American Power Act,” they’ll make all of that significantly worse.

“Government job creation” is a myth bordering on a “Big Lie.”

Oil Boom in N. Dakota; March Output Sets Record

North Dakota crude oil production reached a new record high of 277,407 barrels of oil per day in March 2010 (see chart above, data here), with most of the increased oil production coming from the Bakken and Three Forks Sanish oil formations (source).

Oil production in North Dakota is growing exponentially and has now doubled over the last two years from fewer than 138,000 barrels per day in February 2008, and tripled over the last five years from 92,500 barrels per day in February 2005.

Associated Press -- "At the current pace, North Dakota is quickly gaining ground on California, the nation's third-biggest oil producer. (MP: North Dakota ranked ninth in 2006, and recently surpassed Louisiana to become the fourth largest oil-producing state.) Lynn Helms, director of the state Department of Mineral Resources, said North Dakota's 4,736 active oil wells pumped an average of 277,407 barrels a day in March, the latest figures available. The state was producing about 150,000 barrels a day in April 2008.

The record 8.6 million barrels produced in March was up from the previous high of 7.3 million barrels in February. Production could hit 300,000 barrels daily this summer, and 350,000 barrels next year."

Industrial Production Growth Highest in 10 Years

May 14 (Bloomberg) -- "Industrial production in the U.S. rose in April by the most in three months, indicating factories keep powering an economic recovery that’s becoming broad-based.
Output at factories, mines and utilities increased 0.8 percent last month after a 0.2 percent gain, figures from the
Federal Reserve showed today. Production at manufacturers rose 1 percent for a second month.

Spending by companies and consumers is spurring production at the same time factories are scrambling to replenish inventories. The combination of manufacturing growth and a pickup in Americans’ purchases is helping sustain the economy’s expansion."


MP: On an annual basis, industrial production increased by 5.2% in April, the highest growth rate in almost ten years, going all the way back to a 5.5% growth rate in June 2000 (see chart above). The manufacturing component of industrial production grew by 6% compared to April of last year.

Thursday, May 13, 2010

Glass Ceiling Has Been Shattered for CEO Pay

From Bloomberg:

Chief executive officers’ pay is shattering the glass ceiling. Boosted by a $47.2 million package for Carol Bartz of Yahoo! and $26.3 million for Irene Rosenfeld of Kraft Foods, compensation for woman CEOs at the biggest U.S. companies is booming.

Sixteen women heading companies in the Standard & Poor’s 500 Index averaged earnings of $14.2 million in their latest fiscal years, 43 percent more than the male average, according to data compiled by Bloomberg News from proxy filings. The women who were also CEOs in 2008 got a 19 percent raise in 2009 -- while the men took a 5 percent cut.

“When you see numbers like this, one can truly say that the glass ceiling in corporate America has been shattered,” said Frank Glassner, CEO of San Francisco-based Veritas Executive Compensation Consultants LLC. “I don’t remember seeing women ever getting paid more than men.”

HT: Morganovich


Continued Improvements in Global Shipping

Scott Grannis posted an update yesterday on the continuing improvement in various global shipping indexes, which provide more support that a global economic rebound in underway. A new report from the Port of Los Angeles provides additional support that both global shipping and the global economy are rebounding. On a three-month moving average basis, outbound export containers reached a 19-month high in April of 156,000 TEUs, the highest level since September 2008 (see chart above). Other highlights of yesterday's L.A. Port report for April:

1. Overall shipping volume is up 11.9% vs. April 2009.

2. Volumes are returning back to the Port following the economic downturn in 2008-09. While volumes are encouraging, it's important to note that total cargo volumes are still off significantly from 2007 highs.

3. Imports are climbing, leading to the need to replace and vacate empty containers from Los Angeles. Exports are up due to the value of the U.S. dollar.


4. New services and larger vessels are being added by the shipping lines.

Get Ready, The Recovery is Already Happening!

From today's NY Times, by Jack Stack, President of SRC Holdings:

"After spending the last six months on the road talking to hundreds of business owners around the country, I have come to a conclusion that might surprise you: the economic recovery is already well under way. And, if you don’t start putting a strategy in place to take advantage of it, you’re risking the future of your company.

I’ve been speaking eyeball-to-eyeball with entrepreneurs all across the country — in places like Pittsburgh, New York City, Richmond, Va., and Fresno, Calif. — and when I ask them how they did in the fourth quarter of 2009 or the first quarter of 2010, I keep getting responses like, “amazing,” “fantastic,” “record-breaking” and even “best we’ve done in years.”

The funny thing is that despite their recent success, most of these folks seem reluctant to acknowledge that things have gotten better. Why? Well, I have two theories about that: one, people feel so burned by the last few years that they still fear a double dip — and they’re still waiting for another shoe to drop. Two, I think some people are staying quiet because they don’t want to give anyone in Washington credit for the recovery. They feel that they have recovered due to their own innovation, creativity and hard work and not due to anything related to the stimulus.

But regardless of why no one is talking about it, the recovery is happening."


Thanks to Colin Grabow for the link.

U.S. Rail Traffic Sets New Record in April: All 19 Commodity Groups Increased vs. Last Year

From the Association of American Railroads (AAR) report released yesterday:

U.S. freight railroads saw a 15.8 percent rise in carloads during April 2010 compared with the same month last year (see charts above), and a decline of 11.5 percent compared with the same month in 2008.

According to AAR’s May 2010 Rail Time Indicators Report, all 19 major commodity categories saw higher carloads last month compared with the same month last year, marking a first since AAR’s data series began in 1989. U.S. rail intermodal traffic, which covers the movement of truck trailers and shipping containers by rail, was up 14.3 percent in April 2010 compared with the same month last year, but down 6.9 percent from the same month in 2008.

Commodities showing notable monthly carload gains in April 2010 included primary metal products, up 90.5 percent compared with April of 2009, and coal, up 7.1 percent compared with the same month last year. This is the first monthly gain in coal traffic since December of 2008.

"Last month’s favorable results come with a footnote that April 2009 was a particularly bad month for rail traffic,” said AAR Senior Vice President John Gray. "That said, rail traffic last month suggests the early phase of a broad based recovery is underway. Although the recovery may not be happening as quickly as we’d like, conditions are better today than they were even a few months ago."


Quote of the Day

"Higher tax rates don't produce prosperity or balanced budgets—as we can see in New Jersey and New York, or Greece and Portugal."

~
WSJ Editorial

ASA Staffing Index Reaches 76-Week High in April


The American Staffing Association (ASA) reported that its weekly index reached a 76-week high of 88 during the last week of April, the highest reading since the second week of November 2008, almost 18 months ago (see top chart above). In the first 13 weeks of the year, the Staffing Index has increased or remained flat every week except one. Compared to the same week in the previous year, the ASA index has registered double-digit percentage increases for the last 11 weeks (see bottom chart above).

Note: Temporary hiring is often the first step towards a permanent, full-time position, and it's becoming increasingly common for companies to hire new workers on a 90-day temporary basis, and then those temporary positions often get converted to full-time positions after the trial period.

For example: "Temporary employment is filling a key niche during the current spike in joblessness. But, perhaps its most important function is that it doesn't necessarily have to be temporary. More employers are starting to turn interim positions into full-time job opportunities."

Wednesday, May 12, 2010

Degree Gap Sets New Record of 571,000 This Year; Do We Really Need Hundreds of Women's Centers?

The chart above shows the Department of Education estimates for college degrees by gender for the Class of 2010 (data here). For associate's, bachelor's and master's degrees, women will receive 1.823 million college degrees, which will be 571,000 more degrees than men will earn (1.252 million) this year.

Just ten years ago, the overall degree gap was "only" 366,100 college degrees in favor of women, so the degree gap has increased by more than 200,000 in a decade (see chart below). The biggest gain for women has been the increase in the degree gap for master's degrees, which has almost doubled in the last ten years, from 73,472 in 2000 to 134,000 this year.

Question: Given the "degree gap" of 571,000 college degrees for the Class of 2010 in favor of women, can we really justify spending money (with some taxpayer funding in the case of public universities) to fund almost 200 women's centers on college campuses around the country (list here)? For example, the Women’s Center at the University of Minnesota advertises that it "serves as a catalyst for the University to achieve equity for women." At least in terms of college degrees, that happened 29 years ago back in 1981 (see chart below).


Cell Phone Only Use Hits New High of 24.5% in U.S.

"Preliminary results from the July–December 2009 National Health Interview Survey (NHIS) indicate that the number of American homes with only wireless telephones continues to grow. One of every four American homes (24.5%) had only wireless telephones (also known as cellular telephones, cell phones, or mobile phones) during the last half of 2009—an increase of 1.8 percentage points since the first half of 2009.

The percentage of adults living in wireless-only households has also been increasing steadily (see chart above). During the last 6 months of 2009, more than two of every nine adults lived in wireless-only households. One year before that (during the last 6 months of 2008), 2 of every 11 adults lived in wireless-only households. And 2 years before that (during the last 6 months of 2006), only 2 of every 17 adults lived in wireless-only households.


The percentage of children living in wireless-only households is also growing. In fact, for this population, the 4.6-percentage-point increase from the first 6 months of 2009 is the largest 6-month increase observed since 2003, when NHIS began collecting data on children living in wireless-only households."

Markets In Everything: Name Your Price for LASIK

At Price.Doc you can shop for the best cash price for: dental procedures (braces, bridges, crowns, fillings, etc.), medical procedures, vision (glasses, contacts, LASIK surgery, etc.), cosmetic procedures (facelift, breast implants, nose reshaping, etc.). You can also get coupons for many procedures, request a cash price from a listed provider, make a cash offer for a listed procedure, or name your price for a specific procedure (and Price.Doc will try to find a provider).

From its website: "Pricing transparency is fair and balanced and allows healthcare providers to focus on what they do best – taking care of patients. PriceDoc will help consumers make more informed buying decisions and will help keep pricing open and honest. PriceDoc doesn’t solve the healthcare crisis in America, but goes a long way to advancing the solution."


MP: Another market-based solution to rising health care costs.

Tuesday, May 11, 2010

Treasury Spread Model: NO Chance of Double-Dip


The New York Federal Reserve updated its "Probability of U.S. Recession Predicted by Treasury Spread" today with data through April 2010, and the Fed's recession probability forecast through April 2011 (see top chart above). The NY Fed's model uses the spread between 10-year (3.85% in April) and 3-month Treasury rates (0.16% in April) to calculate the probability of a recession in the U.S. twelve months ahead (see details here).

The Fed's model (
data here) shows that the recession probability peaked during the October 2007 to April 2008 period at around 35-40%, and has been declining since then in almost every month. For April 2010, the recession probability is only 0.37% (about 1/3 of 1%) and by a year from now in April 2011 the recession probability is only .041%, the lowest reading since September 1993.

According to the NY Fed Treasury Spread model, the recession ended sometime in middle of 2009, and the chances of a double-dip recession through early 2011 are essentially zero.

Huge College Degree Gap for Class of 2010

Click arrow to start video.
video
WILX-TV LANSING, MI -- For last year's graduating Class of 2009, women dominated at every level of higher education. Here's the national breakdown: for every 100 men, 142 women graduated with a bachelor's, 159 women completed a master's and 107 women got a doctoral degree. University of Michigan Economics Professor Dr. Mark Perry says similar numbers are in tow this year (see chart above for the Class of 2010).

"What's happening is historic and unprecedented and we're seeing this huge structural change in higher education," says Perry. "When it happens year by year, we just don't pay as close attention." But Perry says attention now must be paid. According to the U.S. Department of Education, in 1971, the percentage of men outnumbered women in degrees conferred 61 to 39, but by 2017, expect a complete reversal.

"It's really this complete domination now by women in higher education and the fact that men have fallen behind and have become the second sex in higher ed," Perry says.

Perry tells us this gender degree gap has translated into what's been coined as "The Great Mancession," which refers to the huge gap in unemployment rates between men and women.

"People with college degrees have the lowest level of unemployment, so as women get an increasing share of college degrees, that's also the most protected and less vulnerable in downturns of the economy," Perry explains.

Follow the Money: Human Mobility Networks



This video was created by two graduate students at the McCormick School of Engineering and Applied Science at Northwestern University and it won the 2009 Visualization Challenge sponsored by National Science Foundation and the American Association for the Advancement of Science.

Monday, May 10, 2010

Natural Gas: The Game-Changing Resource That Will Revolutionize the Industry and Change the World

"Over the past decade, a wave of drilling around the world has uncovered giant supplies of natural gas in shale rock. By some estimates, there's 1,000 trillion cubic feet recoverable in North America alone—enough to supply the nation's natural-gas needs for the next 45 years. Europe may have nearly 200 trillion cubic feet of its own.

We've always known the potential of shale; we just didn't have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag—and set the stage for shale gas to become what will be the game-changing resource of the decade.

I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy."

Read more here of the WSJ article "How Shale Gas Is Going to Rock the World."


OECD Leading Index Hits 30-Year High in March

The OECD released data today showing that its Composite Leading Indicator Index for 29 member countries came close to reaching a 31-year high in March (see chart above, data here). Having increased now for 13 consecutive months starting in March of last year, the OECD Composite Leading Indicators reached 103.9 in March of this year, the highest reading since April 1979, almost 31 years ago.

Although there were monthly declines reported for some non-OECD countries like China and Brazil, and small monthly declines in OECD members Greece, Mexico, New Zealand and South Korea, a flat index for France, with almost all other leading indexes showing continued improvements in March including the overall OECD total (see graph above), 24 of the 29 individual OECD countries including the U.S. and Canada, 18 of the 20 European countries, the Euro area as a group, the G7 countries, NAFTA members, and the non-OECD countries India, Russia, Indonesia and South Africa.

Overall, this is a very positive report, and further strengthens the evidence that the broad-based global V-shaped economic recovery currently underway will continue into the future.

Michigan Companies Can't Find Seasonal Help

Michigan had the highest unemployment rate in the nation at 14.1 percent in March, and the ranks of the state’s unemployed total more than 682,000. The last time the March jobless rate in Michigan was that high was 27 years ago in 1983, when it reached 16.1 percent.

So you would think it would be easy to hire seasonal workers in Michigan for industries like landscaping, right? Well, you would be wrong this year, because unemployed Michiganders are getting unemployment benefits for up to 99 weeks due to all of the federal jobless benefits extensions, and those benefits are creating disincentives for some of the unemployed to go back to work. Here’s the way the math works:

Landscape workers can earn about $12 per hour in Michigan and would make $480 per week before taxes working full-time, or about $350 per week after taxes. In addition, full-time landscape workers would face transportation costs and other work-related expenses. But collecting unemployment benefits and working zero hours per week, many of those unemployed workers can receive $255 per week tax-free for almost two years, which is only $95 less per week than if they worked full-time. For some workers who are getting the maximum of $387 per week in jobless benefits, they can receive even more from collecting benefits than they would get paid going back to work full-time.

So in the state with the highest jobless rate in the country, landscaping companies in Michigan are actually finding it difficult to hire seasonal workers this year, partly because of “the most generous safety net we’ve ever offered nationally,” according to Michigan economist David Littmann. Read more about it here in
today’s Detroit News.

Cross-posted at the
Enterprise Blog.

Scenes From The War on Drugs/War on Americans



Via Andrew Sullivan, Megan McArdle and Don Boudreaux, graphic scenes of a drug raid where a police SWAT team shot two family dogs, killing one and injuring the other, with a seven-year old child present. After searching the house, the police found a "small amount of marijuana."

Bottom Line: It's not really a war on "drugs," it's a war on Americans and sometimes even their family pets.


Rail and Trucking Freight Traffic Continue to Boom

1. The Association of American Railroads reported last week that the growth in rail freight traffic continued during the week ended May 1, as all 19 carload freight commodities and both intermodal categories were up from a year ago for the second consecutive week. U.S. railroads originated 295,718 carloads during the week ended May 1, up 16.3 percent from the comparable week in 2009.

Intermodal traffic was up 13.2 percent from last year but down 5.4 percent compared with 2008. Compared with the same week in 2009, container volume increased 15.2 percent while trailer volume gained 3.2 percent. Total volume was estimated at 32.9 billion ton-miles, up 16.7 percent from last year.

Combined North American rail volume for the first 17 weeks of 2010 on 13 reporting U.S., Canadian and Mexican railroads totaled 6,229,078 carloads, up 8.2 percent from last year, and 4,328,397 trailers and containers, up 10.2 percent from last year.

2. The American Trucking Associations’ seasonally adjusted (SA) Truck Tonnage Index increased 0.4% in March, following a revised 0.3% decrease in February. The latest improvement put the SA index at 109.2, the highest level since November 2008.

Compared with March 2009, tonnage jumped 7.5%, which was the 4th consecutive year-over-year gain and the largest increase since January 2005. For the first quarter of 2010, SA tonnage was up 4.9% compared with the same period last year.


Sunday, May 09, 2010

Other Highlights from Friday's Employment Report

Two of the hardest hit sectors during the recession are now starting to show employment gains:

1. Manufacturing employment increased by 44,000 in April, the largest single monthly increase in factory jobs since August of 1998.

2. Since the first of the year, manufacturing employment has increased by 101,000, the largest four-month increase in factory jobs since the four-month period ending February 1998.

3. Construction employment increased for two consecutive months for the first time since December 2006-January 2007.

4. The 40,000 increase in construction employment in March and April was the largest two-month increase in construction jobs in three years, since March-April 2007.

Data here.

Free Lunch: Competition from Google Docs Forces Microsoft to Offer Free Version of Office 2010

Seattle Times -- "Microsoft launches its latest version, Office 2010, on Wednesday in New York — and the stakes couldn't be higher. The lucrative franchise is threatened by a changing market spouting a four-letter word: free. The biggest threat comes from Google, specifically Google Docs, Web applications accessible from any computer. Because of Google, Microsoft has been forced to make a free ad-supported version called Office Web Apps."

MP: Another great example of how market competition is often more effective at regulating monopolies than the Department of Justice or the Federal Trade Commission, and how even long-standing monopolies and dominant firms are eventually challenged by innovation and competition.

World's Safest Table Saw: Finger Will Stop Blade



Conclusive proof that: a) things are getting better and better all the time, b) not all safety improvements are a result of OSHA regulations, and c) the invisible hand (aka "greed" or "enlightened self-interest") works.

HT: Mike Carlson


U.S. Mobile Culture Is Still in The Stone Age

NETWORK WORLD -- "The United States is surprisingly lagging other countries in the adoption of both cutting-edge and traditional mobile services, states a new survey by Sybase 365.

Sybase 365 commissioned a study of some 4,100 mobile phone users across 16 countries, including the United States, China, Germany, South Africa, India, Mexico and the United Kingdom, to learn about their mobile culture. The key finding: The United States finished dead last in the use of simple mobile technologies such as text messaging and instant messaging. Only one in three U.S. respondents take advantage of these services. In comparison, nine out of 10 respondents in China text on their mobile phones.


The United States fared only a little better with modern mobile services, such as mobile commerce and mobile customer relationship management solutions. Thirteen percent of U.S. respondents make use of modern services, edging out Canada. Whereas nearly half of respondents in China have adopted them.

How did other countries beat out the United States? Developing regions have more to gain with mobile commerce, Mallon says. In Africa, for instance, people can pay for goods with a simple text message and a payment card that acts as currency-that is, they don't need a bank account. In the United States, however, most people have access to banks and ATM machines. "Since we have more established and wider choices of payment infrastructure, there will be a slower rate of adoption for some new mobile payment services," Mallon says."

Amazing "Old World" Construction Techniques

Barefoot brick mover loading 22 bricks on his head (what would OSHA say?), throwing pails of cement up to a platform (notice the one-hand catch), and moving sand from the ground up to a roof with shovels in several stages (click on the arrows below to start the videos).

video video video

HT: Ed Joss

Reminds me of the story about Milton Friedman (from Steve Moore) traveling to Asia in the 1960s and visiting a worksite where a new canal was being built. Friedman was shocked to see that instead of modern tractors and earth-mover equipment the workers instead were using small shovels. Milton asked a government bureaucrat why there were so few machines, and the bureaucrat replied: 'You don't understand. This is a jobs program.' To which Milton Friedman replied: 'Oh, I thought you were trying to build a canal. If it's jobs you want, then you should give these workers spoons, not shovels.'"

Unbelievable Piano Player Slim Gaillard


Skip the introduction and go to about 1:15 and see an amazing piano player who can play piano with his fingers updside-down.