11 Comeback Cities for 2011
Downtown Flint, Michigan.
Professor Mark J. Perry's Blog for Economics and Finance
Today (April 12, 2011) is Equal Pay Day. According to the National Committee on Pay Equity:
For the 2011 season in Major League Baseball, the average salary for the top 25 highest-paid baseball players is $19,751,000, with Alex Rodriguez of the New York Yankees leading MLB at a salary of $32 million, according to the USA Today Salaries Database. In comparison, during the 1988 season the average salary for the top 25 highest-paid players was $1.955 million, or $3.657 million in today's dollars. The highest paid player that year was New York Mets catcher Gary Carter, who made $2.36 million that year, or $4.41 million in 2011 dollars.
Or, as the authors of the study put it: “While the share of income of the top 1 percent is higher than in prior years, it is not a fixed group of households receiving this larger share of income.”
- Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within ten years.
- About 55 percent of taxpayers moved to a different income quintile within ten years.
- Among those with the very highest incomes in 1996 — the top 1/100 of one percent — only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.
- The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
- Economic growth resulted in rising incomes for most taxpayers over the study period: Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation; real incomes of two-thirds of all taxpayers increased over this period; and median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.
From Bloomberg/BusinessWeek, a great story about the success of a new industry that has brought low-cost, dependable, convenient, market-based, Wi-Fi-enabled bus service to millions of Americans, despite rising gas and oil prices, and without any government subsidies, tax breaks or taxpayer funding:
This post has become an annual tradition at CD as the tax deadline approaches.
From a BLS report released in February on "America's Young Adults at Age 23":
The chart above shows quarterly federal government spending (current expenditures) as a share of GDP (data here), with actual data from 1976 to 2010 and projected estimates from 2011 to 2021 according to the Ryan Plan.
Federal regulators and the U.S. banking industry have blocked several attempts by Walmart to offer banking services at its 8,500 retail stores nationwide. But Walmart hasn't given up yet:
1. Basic economic theory tells us that one of the predictable consequences of resources becoming more expensive is that higher prices will stimulate discovery, exploration and greater production on the supply side. (Update: See "Peak Idiocy" here for a review of ECN 101 regarding energy prices.) And that's exactly what we're seeing now in Texas for oil and gas, according to today's WSJ article "Chevron Rekindles Old Texas Flame: High Oil Prices, New Technologies Once Again Make the Permian Basin a Popular Spot for Drilling," here's an excerpt:
Here's a really interesting interactive WSJ map/graphic of global central bank interest rates, on a monthly basis back to May 2004. If you watch the monthly time series, you'll see that the U.S. Fed started lowering interest rates in September 2007, about a year ahead of the interest rate cuts in Europe that started in October 2008. Now the ECB has moved ahead of the Fed by raising rates this month by a quarter point to 1.25%, thus the title of the front page story that the graphic accompanies: "Europe's Rate Rise Signals End of Cheap-Money Era."
Take the new Pew Research Center News IQ test here.
1. The American Association of Railroads reported today that U.S. railroads originated 305,905 carloads for the week ending April 2, which was an increase of 5.7% from the comparable week last year, and is the highest level for carload rail traffic since late 2008 (see chart above). Intermodal rail containers increased to 234,208 trailers and containers last week, which was 19.4% above the same week last year.
The Department of Labor reported today that initial jobless claims fell by 10,000 for the week ending April 2, bringing the four-week moving average down by 5,750 to 389,500 (see chart). For the first time since July 2008, the four-week average for jobless claims has remained below the benchmark 400,000 level for six consecutive weeks, and provides additional evidence that conditions in the labor market are gradually improving.
The chart above is from today's online version of The Economist, showing an international comparison of public opinion on the free market, with some interesting results:
Record-high gold prices have been in the news lately, here's an example of a new story today from Bloomberg titled "Gold Advances to Record for Second Day":
According to BlogPulse, there are more than 159 million blogs, and 68,825 new blogs have been created in just the last 24 hours.
From the Boston Globe:
1) The United States is the home of the entrepreneur.
The New York Federal Reserve updated its "Probability of U.S. Recession Predicted by Treasury Spread" yesterday with treasury yield data through March 2011, and the Fed's recession probability forecast through March 2012. The NY Fed's Treasury model uses the spread between the yields on 10-year Treasury notes (3.41% in March) and 3-month Treasury bills (0.10%) to calculate the probability of a U.S. recession up to twelve months ahead (see details here).
Paul Ryan (R-Wisconsin) presented his "Path to Prosperity" budget plan today at AEI, here's the full text of his talk, here's his WSJ editorial today, here's the link to the video, and here's the full 73-page plan.
1. "If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government (see chart above).
I'm not sure what's going on here, or if this means anything, but the monthly inflation measure from the MIT Billion Prices Project has been falling steadily since mid-February, see chart above. From the recent peak of 0.82% on February 18, the monthly BPP inflation rate has fallen almost in half, to 0.48% as of April 3, 2011.
1. Gloom and doom from Robert Reich: "The Truth About the Economy that Nobody In Washington Or On Wall Street Will Admit: We’re Heading Back Toward a Double Dip."