Saturday, September 24, 2011

Household Debt Ratios Are Lowest Since 1990s

The chart above is an update of previous CD posts (most recent one here), showing the ongoing de-leveraging of U.S. households based on new data released yesterday by the Federal Reserve.

In the second quarter of 2011, household debt service for required payments on outstanding mortgage and consumer debt as a share of disposable personal income fell to 11.09%, the lowest ratio since the fourth quarter of 1994; and the ratio for all household financial obligations (adds automobile lease payments, rental payments on tenant-occupied property, homeowners' insurance and property tax payments to the debt service ratio) fell to 16.09%, the lowest ratio since the fourth quarter of 1993. 

Let that be a lesson for Congress.....

Happy Birthday Ray Charles: September 23

Ray Charles (1930-2004) was born 80 years ago yesterday on September 23, 1930. In the video above, Ray performs "Drown in My Own Tears" with full orchestra and the Raylettes at the Newport Jazz Festival in 1960 when he was 29 years old. From the comments at YouTube:

"Nobody can sing the Blues slower than the Genius. He wipes you out emotionally."

"Around the 3:30 mark.... it occurred to me that this was the heaviest thing to ever go down in the history of mankind. ....mindblown."

"This is perhaps THE greatest blues recording of the fifties and sixties. Every other artist shrinks in comparison."

Intrade Odds: Almost a 20 Point Lead for Romney

Latest odds from Intrade for Republican nominee for president. 

Leading Economic Index Increases Again in August Upward Trajectory Not Consistent With Recession

The Conference Board reported on Thursday that its Leading Economic Index (LEI) increased in August for the fourth consecutive month to its highest-ever level of 116.4 (see chart).  Starting in April 2009, the LEI has increased every month except for April of this year, for a record of 28 increases over the last 29 months.  As the graph above shows, the last six recessions have been preceded by sharp declines in the LEI, and we're not seeing any declines in the LEI that would predict a pending recession.    

As Scott Grannis commented on the Calafia Beach Pundit Blog:

"The Index of Leading Indicators continues to rise, up 6.5% over the past year. Every recession for the past 50 years has been preceded by a significant decline in the growth rate of this index; that is not the case today. To be sure, this index is not always a good leading indicator, but it is not even close to signaling impending doom or even a modest recession."

Friday, September 23, 2011

Rising Rail Traffic Suggests No Double-Dip Recession

BLOOMBERG -- "Railroads shipments are the highest in almost three years, helping to defy concerns about a double- dip recession. Total rail volumes excluding grain and coal averaged 381,831 carloads in August, the most since October 2008, according to data from the Association of American Railroads. 

These shipments represent the bulk of materials for industrial production, so rising volumes show the economy is still growing, according to Art Hatfield, a transportation analyst in Memphis, Tennessee, at Morgan Keegan & Co. “We’re not seeing declines in rail volumes that are synonymous with a recession,” Hatfield said. “We remain in a slow growth environment.” 

The order rate for Kennametal Inc. (KMT), the No. 1 supplier of cutting tools used by manufacturers including Caterpillar Inc. (CAT) and Boeing Co. (BA), increased at a 20 percent annual pace in August, excluding acquisitions, divestitures and workdays, the company said in a Sept. 15 statement. Kennametal’s end markets “continued to reflect strong demand,” and its industrial business showed “ongoing strength,” the company said. 

The Latrobe, Pennsylvania-based company is a “good barometer” for industrial production, according to Sheila Kahyaoglu, a New York-based analyst at Credit Suisse Group AG. Kahyaoglu maintains an “outperform” rating on the stock because its order rate, while poised to slow, will continue to grow at a rate faster than consensus forecasts."

MP: The chart above of intermodal containers shows that the increases in rail activity through August reported by Bloomberg for monthly rail traffic have continued into September based on more recent weekly data.  For the week ending September 17, the volume of 242,250 intermodal trailers and containers reached the highest level of the year, and the highest level since 2008.  

Chart of the Day: 15-Yr. Fixed Rates at Record Low

The 15-year fixed mortgage rate fell to a new all-time low this week of 3.29%, according to Freddie Mac.

Romney Has 10-Point Lead vs. Perry on Intrade

In the last several weeks, Romney's odds on Intrade of being the Republican nominee for president have surged to an all-time high of 42.2% while Perry's odds have fallen to 32.4%, giving Romney almost a ten-point advantage.  That reverses a 8.4% gap in favor of Perry earlier in the month.  I guess that means Romney won the debate last night?  

Interesting Fact of the Day: Obese Outnumber Hungry, "Excess Nutrition" Kills More Than Hunger.

Yahoo News -- Obese people now outnumber the hungry globally, but hardship for the undernourished is increasing amid a growing food crisis, the International Federation of the Red Cross warned Thursday. The Geneva-based humanitarian group focused on nutrition in its annual World Disasters Report, released in New Delhi, seeking to highlight the disparity between rich and poor, as well as problems caused by a recent spike in prices.

In statistics used to underline the unequal access to food, the IFRC stressed there were 1.5 billion people suffering obesity worldwide last year, while 925 million were undernourished. "If the free interplay of market political? forces has produced an outcome where 15 percent of humanity are hungry while 20 percent are overweight, something has gone wrong somewhere," secretary general Bekele Geleta said in a statement. Asia-Pacific director Jagan Chapagain called it a "double-edged political? scandal" at a press conference in the Indian capital, adding that "excess nutrition now kills more than hunger."

Update: Here's one example of how political forces (farm subsidies) contribute to the problem of "excess nutrition" and obesity in America, from a report released this week by CALPIRG:

"America is facing an obesity epidemic – one that’s hitting children especially hard.  Childhood obesity rates have tripled over the last three decades, with one in five kids aged 6 to 11 now obese.  These increases in obesity rates will translate into kids who are at greater risk for heart disease and diabetes, undermining the health of our country and driving up medical costs by hundreds of billions of dollars.

The rise in childhood obesity has many causes, but one of the most important is the increased prevalence of high-fat, heavily sweetened junk food.  And shockingly, American taxpayers are spending billions to subsidize junk food ingredients, making the problem worse.

Between 1995 and 2010, American taxpayers spent over $260 billion in agricultural subsidies. Most subsidies went to the country’s largest farming operations, mainly to grow just a few commodity crops, including corn and soybeans.  While dairy and livestock production also receive some federal support, it is these commodity crops that get the lion’s share of the subsidies.

Between 1995 and 2010, $16.9 billion in tax dollars subsidized four common food additives - corn syrup, high fructose corn syrup, corn starch, and soy oils (which are frequently processed further into hydrogenated vegetable oils. Outside of commodity crops, other agricultural products receive very little in federal subsidies. Since 1995, taxpayers spent only $262 million subsidizing apples, which is the only significant federal subsidy of fresh fruits or vegetables.

If these agricultural subsidies went directly to consumers to allow them to purchase food, each of America’s 144 million taxpayers would be given $7.36 to spend on junk food and 11 cents with which to buy apples each year – enough to buy 19 Twinkies but less than a quarter of one Red Delicious apple apiece."

HT: Fred Dent

Thursday, September 22, 2011

Women Outnumber Men for Doctoral Degrees, 142 Women Enrolled in Grad School Per 100 Men, and Women Outnumber Men in 7 Out Of 11 Fields

The Council of Graduate Schools (CGS) released its annual report today, here are links to the press release and full report.  

For the second year in a row, women earned a majority of all doctoral degrees in 2010 (51.9%), an increase from the 50.4% female share in 2009, which was the first time in history that women outnumbered men earning doctoral degrees (see top chart above).  By field of study, women earning doctoral degrees outnumbered men in seven of the eleven graduate fields tracked by the CGS: Arts and Humanities (54.4%), Biology (54.8% - isn't that a STEM field?), Education (67.6%), Health Sciences 70.4% (STEM?), Public Administration (60.9%), Social/Behavioral Studies (59.4%) and Other fields (53.5%).  Men still outnumber women earning doctoral degrees in fields like Engineering (76.8%), Math and Computer Science (74.1%) and Physical Sciences (66.9%). 

The bottom chart above shows total graduate student enrollment in 2010 by gender and field for all graduate programs (Master's and Doctoral).  By this measure, it's not even close; women enrolled in graduate programs at all levels far outnumber men.  Women represent 58.7% of all graduate students in the U.S., meaning that there are now 142.1 women enrolled in graduate school for every 100 men.  In certain fields like Education (74.8% female), Health Sciences (79.8% female) and Public Administration (75.3%), women outnumber men by a factor of 3-4 times.  Overall, women enrolled in graduate school outnumber men in 7 out of the 11 graduate fields of study, all except for business (45.9% female), engineering (22.3% female), math and computer science (29.2% female) and physical sciences (37.5% female).    

Here's a prediction: The fact that men are underrepresented in graduate school enrollment overall (100 men for every 142 women), and underrepresented in 7 out of 11 graduate fields of study will get almost no media attention at all.  Additionally, there will be no calls for government studies, or increased government funding to address the problem, and nobody will refer to this gender graduate school enrollment gap as a "crisis."  But what will get media attention is the fact that women are underrepresented in four of the 11 fields of graduate study like engineering and computer science, which can likely be traced to some kind of overt or unexamined gender discrimination.    

Interesting Fact of the Day: N.D. Income +13.3%

The BEA released data today on State Personal Income for the second quarter of 2011.  Based on data in the report (but not reported by the BEA - it only reports quarterly growth rates), the annual growth in personal income from 2010:Q2 to 2011:Q2 for the booming oil-rich state of North Dakota was a phenomenal 13.31%, which was almost twice the growth rate for No. 2 Texas at 7.27% and No. 3 Iowa at 7.17%, and more than two times the national average of 5.47%.  

Updated: The next four states for the highest annual increases in personal income were Nebraska (7.16%), South Dakota (7.03%), Oklahoma (7.03%) and Kansas (6.84%).  What do the top seven states with the greatest annual percentage growth in personal income have in common?  They are all "right-to-work" states

Related: "The Economic Miracle of North Dakota, America’s Most Successful State" on the Enterprise Blog.

Markets in Everything: The Airport Sleepbox

Moscow-based Arch Group's first Sleepbox unit has been installed at the Sherematyevo Airport in Moscow.

Thoughts on Taxes: IRS Tax Rates are Not Binding and Buffett's Tax Situation is An Extreme Outlier

Here's a thought on taxes: Perhaps it receive greater attention that the statutory IRS tax rates at any given time are not legally-binding, maximum tax rates, it's more the case that the IRS rates are the legally-required minimum tax rates enforced by the IRS.  Advocates of higher tax rates like Warren Buffett seem to feel constrained by the current tax code, as if the current tax rates are legally-binding maximum rates, when that is not the case.  Maybe the IRS should clarify that it only enforces legally-required minimum tax rates, but these rates are not binding and can be adjusted upward by any taxpayer who voluntarily chooses to pay taxes a higher rate?

Update: Another thought... I think Warren Buffett distorted and misrepresented the tax issue by using himself as an example, implying that his case as a CEO paying a lower tax rate (17.4%) than his secretary was typical, when that is not the case.  Buffett’s case is an extreme outlier and not at all typical of a CEO because: a) Buffett takes only a $100,000 salary, and b) gets about $40 million of income annually from dividends and capital gains taxed at 15%.  

That’s how Buffett reports a 17.4% tax rate, but he never explained in his NY Times article (or elsewhere) that his case is NOT typical for salaried CEOs.  The typical CEO reporting ordinary income of $1 million or more would be paying taxes at a rate of something like 29%, including payroll taxes.  The typical secretary reporting $50,000 of income would be paying something like 11% for income tax, and something like 14% including payroll taxes. 

Wednesday, September 21, 2011

Markets in Everything: GPS-Embedded Shoes

The New Web -- "Today, in recognition of  World Alzheimer’s Day, GTX Corp, a company that focuses on customizable, miniaturized GPS solutions, announced the FCC certification of its GPS Shoe and the delivery of the first 3,000 units to shoe partner Aetrex Worldwide, Inc. (see video above)."

HT: Jacob Fink

Fact-Checking Buffett: His Math Doesn't Add Up

The Washington Poat did some fact-checking on the claim made by Buffett and Obama that rich CEOs are routinely taxed at lower rates than their secretaries and here's what they found:

"President Barack Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are. 

"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," Obama said as he announced his deficit-reduction plan this week. "It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million."

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes, according to the Congressional Budget Office.

This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.

Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.  Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent."

Read more here at my post today on The Enterprise Blog.

To Really Fix Social Security, Let's Privatize It

The debate about whether or not Social Security is a Ponzi scheme is probably less important of an issue than a discussion about the ultimate and real solution to the unsustainable "insecurity of Social Security": privatization.  Chile's successful transition to a privatized pension system in 1980 provides a model for the U.S. and the rest of the world.  Jose Pinera, the architect of Chile's privatization efforts explains in this article "Empowering Workers: The Privatization of Social Security in Chile":

"A specter is haunting the world. It is the specter of bankrupt state-run pension systems. The pay-as-you-go pension system that has reigned supreme through most of this century has a fundamental flaw, one rooted in a false conception of how human beings behave: it destroys, at the individual level, the essential link between effort and reward--in other words, between personal responsibilities and personal rights. Whenever that happens on a massive scale and for a long period of time, the result is disaster.

Two exogenous factors aggravate the results of that flaw: (1) the global demographic trend toward decreasing fertility rates; and, (2) medical advances that are lengthening life. As a result, fewer and fewer workers are supporting more and more retirees. Since the raising of both the retirement age and payroll taxes has an upper limit, sooner or later the system has to reduce the promised benefits, a telltale sign of a bankrupt system.

Whether this reduction of benefits is done through inflation, as in most developing countries, or through legislation, the final result for the retired worker is the same: anguish in old age created, paradoxically, by the inherent insecurity of the "social security'' system.

In 1980, the government of Chile decided to take the bull by the horns. A government-run pension system was replaced with a revolutionary innovation: a privately administered, national system of Pension Savings Accounts.  After 15 years of operation, the results speak for themselves. Pensions in the new private system already are 50 to 100 percent higher--depending on whether they are old-age, disability, or survivor pensions--than they were in the pay-as-you-go system. The resources administered by the private pension funds amount to $25 billion, or around 40 percent of GNP as of 1995. By improving the functioning of both the capital and the labor markets, pension privatization has been one of the key reforms that has pushed the growth rate of the economy upwards from the historical 3 percent a year to 6.5 percent on average during the last 12 years. It is also a fact that the Chilean savings rate has increased to 27 percent of GNP and the unemployment rate has decreased to 5.0 percent since the reform was undertaken.

More important, still, pensions have ceased to be a government issue, thus depoliticizing a huge sector of the economy and giving individuals more control over their own lives. The structural flaw has been eliminated and the future of pensions depends on individual behavior and market developments."

Interesting Fact of the Day

From the article "Got Cheap Milk?: Why Ditching Your Fancy, Organic, Locavore Lifestyle is Good for the World's Poor," in Foreign Policy (emphasis mine):

"What about [eating] "local"? Perhaps locally grown produce tastes better to some people. And perhaps it is psychologically better to have close contact with the people who grow your food. But that doesn't make it good for the environment.

For example, it is twice as energy efficient for people in Britain to eat dairy products from New Zealand than from domestic producers. It is four times more energy efficient for them to eat lamb shipped from the other side of the world than it is to eat British lamb.

That's because transporting the final product accounts for only a small part of the energy consumed in the production and delivery of food. It's far better to eat foods from places where production itself is more efficient. For example, New Zealand cattle eat clover from the fields while British livestock tend to rely on feed -- which itself is often imported."


Tuesday, September 20, 2011

Gain in Architecture Billings Index Highest in 4 Yrs.

Washington, D.C. – September 21, 2011 – "On the heels of a period of weakness in design activity, the Architecture Billings Index (ABI) took a sudden upturn in August. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the August ABI score was 51.4, following a very weak score of 45.1 in July (see chart above). This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 56.9, up sharply from a reading of 53.7 the previous month (see chart).

“Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle.” 

MP: The increase in the August architecture billing index was the largest monthly increase for the index in four years, and forecasts an increase in construction spending by next spring.

Exports from L.A. Port Surge in August

Loaded outbound export containers leaving Los Angeles for overseas destinations surged in August, registering an increase of 11.5% compared to July, and a gain of 24.8% compared to August of last year, according to shipping data recently released by the Port of Los Angeles (see chart above).  The 184,321 outbound containers set a new record for the month of August, and indicates that the global demand for U.S. manufactured products remains strong.  Strong August shipping from the L.A. Port should translate into solid August exports when the BEA releases international trade data next month, as well as contribute to gains in third quarter GDP when those data are released around November 1.     

In a related report, the Conference Board announced today that the Leading Economic Index for China increased by 0.60% in July, following increases of 0.90% in June and 0.40% in May.  The ongoing increases in China's Leading Economic Index signals that robust economic growth will continue in China through the rest of the year, although it's likely that growth in 2011 will slow slightly from 2010.  Continued economic expansion in countries like China will help to support demand for U.S. exports.  

Happy 5th Birthday Carpe Diem!

Carpe Diem started five years ago on September 20, 2006.  Here's a link to CD post #1 (this current post is #8,254), which features a quote in the WSJ from Warren Buffett - not about taxes, but about whether business degrees from Ivy League universities matter for success in the business world (answer: No).  

Thanks for your readership and support!  And special thanks go to: a) Professor Lee Coppock at the University of Virginia for his initial encouragement to start an economics blog, b) Mike "Eagle-Eye" Carlson for his voluntary copy-editing support, and c) Ben Cunningham for his ongoing research support! 

Cartoon of the Day: Getting The Terminology Right

IBD's Michael Ramirez.

HT: Mike Carlson

If Private, Social Security Would Be Illegal

"The fundamental problem of Social Security is that the irresponsible way its finances are set up, and the changing demographics of the country, mean that there is simply not going to be enough money in its trust fund to pay today's young people what they are legally entitled to, when time comes for them to retire.

Declining birth rates and greatly increasing lifespans have created havoc with Social Security's finances, which are based on having the first generation's pensions paid with money collected from the second generation -- and the second generation's pensions paid by the next generation, etc.

Any private financial scheme set up in a similar way would be illegal. That is why Charles Ponzi went to prison."

Omaha Hokum: The Entire Buffett Rule is False

"So here we are back at the same old political stand, though even Mr. Obama concedes that today those he routinely calls "millionaires and billionaires" pay at least some tax. The President's complaint, echoing billionaire Warren Buffett, is that too many billionaires pay a lower rate than regular salary earners. So even as he endorsed tax reform in general yesterday, Mr. Obama insisted that one of his reform "principles" is that people who make more than $1 million must pay a higher tax rate than middle-class earners.

There's one small problem: The entire Buffett Rule premise is false, as the table above shows. In 2008, the last year for which such data are available, the IRS reports that those who made more than $1 million in adjusted gross income paid an average income tax rate of 23.3%. 

That's slightly lower than the 24.1% rate paid by those making between $500,000 and $1 million, probably because the richest are like Mr. Buffett and earn more from capital gains and dividends. The rate for a relative handful of the rich—400 people—fell to 18%. But nearly all millionaires still paid a rate that is more than twice the 8.9% average rate paid by those earning between $50,000 and $100,000, and more than three times the 7.2% average rate paid by those earning less than $50,000. The larger point is that the claim that CEOs are routinely paying lower tax rates than their secretaries is Omaha hokum."

~Wall Street Journal editorial (emphasis added)

MP: Using IRS data for a different year (2009), I made the same point in a CD post yesterday. 

Monday, September 19, 2011

At USD, School of Nursing and Health Science is 96.5% Female But It Got $600,000 in Taxpayer Funding To Increase Female Professors in STEM?

Among administrators and deans at the University of San Diego, females are well-represented.  For example, the president, provost and VP for Student Affairs are female (top three above) and three of the university's six academic deans are female (bottom three above).  Among chairs and faculty in science, social science and math departments, females are also well-represented including:

1. Math and Computer Science Department: Female chair and 7  out of 15 faculty.    

2. Chemistry Department: Female chair and 5 out of 14 faculty.  

3. Sociology Department: Female chair and 6 out of 8 faculty.  

4. Biology Department: 7 out of 15 faculty.

5. Chemistry Department: 5 out of 14 faculty. 

6. Environmental Studies: 3 out of 6 faculty.

Given what appears to be a pretty female-friendly academic institution headed by a woman president and provost, with gender parity in most science and math departments, you wouldn't think the University of San Diego needs any taxpayer money to "boost the ranks of female science and technology professors," would you?  Well, think again.  

The University of San Diego was just awarded $600,000 of your tax dollars via the National Science Foundation to increase the ranks of female professors, particularly those of color, in science and technology.  From the university's press release:

“We’re excited about the opportunity to become a model for undergraduate institutions that want to increase their diversity and provide a supportive environment for female faculty,” said Mary Boyd, dean of USD’s College of Arts and Sciences.

The five-year grant for $600,000 will support the project, Advancement of Female Faculty: Institutional climate, Recruitment and Mentoring (AFFIRM) to boost efforts to recruit women, especially those of color, in science, technology, engineering and mathematics (STEM) as well as the social and behavioral sciences.

Research suggests that the disparity of women in higher education can be explained “by an academic culture that provides women fewer opportunities, limited support and inequity in leadership,” Boyd said. “Too often we still see talented young female professors leave the academy because of feelings of isolation, problems with balancing career and family life and other issues. The AFFIRM project can help change the culture and provide the support to attract, retain and advance more outstanding female professors in areas of science and technology that are vital to our nation’s future.”

MP: I don't think the under-representation of males in USD's School of Education (only 3 out of 13 faculty are male) or the School of Nursing and Health Science (all 11 administrative positions are held by women, and 44 out of 46 faculty positions are female, for an overall ratio of 27.5 females per one male, or 96.5% female), will qualify for any taxpayer funding to address the gender disparities in those academic fields (I guess Nursing and Health Science is not part of STEM)? For example, I don't think USD will be applying for a grant titled:

"Advancement of Male Faculty: Institutional climate, Recruitment and Mentoring (AFFIRM) to boost efforts to recruit men, especially those of color, in education and nursing."

HT: Mike Donahue

New FBI Numbers Reveal Failure of "War on Drugs": One Drug Arrest Every 19 Seconds in the U.S.

WASHINGTON, D.C. -- "A new FBI report released today shows that there is a drug arrest every 19 seconds in the U.S. A group of police and judges who have been campaigning to legalize and regulate drugs pointed to the figures showing more than 1.6 million drug arrests in 2010 as evidence that the "war on drugs" is a failure that can never be won.

"Since the declaration of the "War on Drugs" 40 years ago we've arrested tens of millions of people in an effort to reduce drug use. The fact that cops had to spend time arresting another 1.6 million of our fellow citizens last year shows that it simply hasn't worked. In the current economy we simply cannot afford to keep arresting three people every minute in the failed 'war on drugs,'" said Neill Franklin, a retired Baltimore narcotics cop who now heads the group Law Enforcement Against Prohibition (LEAP). "If we legalized and taxed drugs, we could not only create new revenue in addition to the money we'd save from ending the cruel policy of arresting users, but we'd make society safer by bankrupting the cartels and gangs who control the currently illegal marketplace."

Today's FBI report shows that 81.9 percent of all drug arrests in 2010 were for possession only, and 45.8 percent of all drug arrests were for possession of marijuana."

Petition to Redistribute College GPA Scores

Do some students really need a 4.0 GPA? Isn't that "excessive"?  Let's make it a 3.80 and redistribute those extra GPA points to another student who's struggling to graduate.

AT&T and the Economics of Monopoly; Dept. of Justice Has Dismal Record in Fast-Moving Industries

"The Justice Department has a dismal record in bringing antitrust cases in fast-moving industries. In the 1960s, IBM had to defend its "dominant" mainframe business, which the personal computer soon rendered obsolete. Then Microsoft was accused of having monopoly power it only wishes it ever had. Today Google is in the regulatory crosshairs just as it faces many new competitors. 

"In treating technology markets as if they were fixed in size and closed to new entrants," tech author Larry Downes wrote recently for Forbes, the case against AT&T "marks a new low in Washington's appreciation for how and why the Internet economy works."

In its focus on market concentration instead of on market power or any evidence of harm to consumers, the Obama administration is a throwback to the old style of antitrust. The last thing consumers need is the government protecting some wireless providers at the expense of others, especially if this prevents cheaper and more reliable wireless service. AT&T may not be the most sympathetic underdog, but the rationale for blocking this merger could make a target of any successful tech company.

Instead of trying to pick winners and losers, the White House and Congress should let the FCC finally hold its auctions for spectrum, then let the most innovative wireless companies compete to serve growing consumer demand."

2011 Pew Research Political Typology Quiz

Where do you fit politically? To find out, take the 2011 Pew Research Political Typology Quiz.

Sunday, September 18, 2011

Amazing Illusion: The McGurk Effect

Behold, The Circle of Government Life

Investor's Business Daily -- "Ex-employees of the failed solar panel company Solyndra have applied for aid under the federal government’s Trade Adjustment Assistance program, the Labor Department has confirmed. If approved, the employees of what was once touted as a leading exemplar of the White House’s green jobs program will be eligible for more federal funds to enable them to be retrained for other jobs.

It would be an ironic coda to the saga of Solyndra, which manufactured solar panels and received $527 million in loan guarantees from the Energy Department and praise from President Obama during visits to the firm’s California headquarters. Now those green workers will be seeking the government’s help to find work again and not necessarily in the conservation jobs sector."

Scott Lincicome summarizes this "Circle of Government Life":

"So to recap: massive government subsidies created 1,100 "green jobs" that never would've existed but for those massive government subsidies.  And when those fake jobs disappeared because the subsidized employer company couldn't compete in the market, the workers blamed China (instead of what's easily one of the worst business plans ever drafted) in order to receive... wait for it... more government subsidies.

Behold, the Circle of Government Life."

U.S. Dependence on Foreign Oil Lowest Since 1996

From Daniel Yergin's WSJ article "There Will Be Oil":

"In 2003, the Bakken formation in North Dakota was producing a mere 10,000 barrels a day. Today, it is over 400,000 barrels, and North Dakota has become the fourth-largest oil-producing state in the country. Such "tight" oil could add as much as two million barrels a day to U.S. oil production after 2020—something that would not have been in any forecast five years ago. 

Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47%."

MP: The chart above displays oil imports as a share of U.S. demand annually back to 1973 (data here), showing that dependence on foreign oil at 47% this year (average through July) is the lowest in 15 years, since the 46.4% share in 1996.