Saturday, June 30, 2012

Stand Your Ground Laws Increase Homicide Deaths By Firearms Of Whites But Not Blacks

From NBER Working Paper Series, "Stand Your Ground Laws And Homicides" by Chandler B Mcclellan, Department of Economics, Andrew Young School of Policy Studies, Georgia State University and Erdal Tekin, Department of Economics, Andrew Young School of Policy Studies, Georgia State University, Working Paper 18187, June 2012:
We find that the SYG [Stand Your Ground] laws increase firearm related homicides among whites, especially white males. Our results indicate that between 4.4 and 7.4 additional white males are killed each month as a result of these laws. We find no evidence to indicate that these laws cause an increase in homicides among blacks. Our results are robust to a number of specifications and unlikely to be driven entirely by the killings of assailants. These findings raise serious doubts about the claim that SYG laws make America safer
.

Friday, June 29, 2012

Mostly People With Income Below $60,000 Will Pay The Health Care Penalty

Keith Hennessey in his blog post, "Who will pay the ObamaCare uninsured tax?" finds, based on a previous CBO analysis, that only 1 out of 5 uninsured, 3.9 million of the estimated 21 million uninsured, will be required to pay the new health care law penalty (tax) for lacking health insurance due to exemptions written into the law. Seventy-five percent of those paying the health insurance penalty will have a yearly income under $59,000 per year.

Read Keith's complete post.

75 Percent Increase In Electricity Costs If Coal Power Plants Captured And Stored Carbon Dioxide Emissions: CBO

From CBO, "CBO Releases Report on Federal Efforts to Reduce the Cost of Capturing and Storing Carbon Dioxide" June 28, 2012:
carbon capture and storage (CCS), a much-discussed option for reducing the nation’s greenhouse gas emissions while preserving the ability to produce electricity at coal-fired power plants.

No CCS-equipped coal-fired power plants have been built on a commercial scale because any electricity generated by such plants would be much more expensive than electricity produced by conventional coal-burning plants: Engineers’ estimates indicate that electricity generated by the first CCS-equipped commercial-scale plants would initially be about 75 percent more costly than electricity generated by conventional coal-fired plants. Since 2005, lawmakers have provided the Department of Energy with about $6.9 billion to develop CCS technology, demonstrate its commercial feasibility, and reduce the cost of electricity generated by CCS-equipped plants.

In the absence of a significant technological breakthrough, it seems clear that a large amount of new CCS capacity—installed either at new plants or, through retrofitting, at existing plants—would be needed to reduce costs substantially. Such an investment seems unlikely in the foreseeable future and it might not occur even if the technology became more competitive economically. Unless the federal government adopts policies that encourage or require utilities to generate electricity with fewer greenhouse gas emissions, the projected high cost of using CCS technology means that the government’s current program for developing CCS is unlikely to do much to support widespread use of the technology. [Emphasis Added]
The full CBO report, "Federal Efforts to Reduce the Cost of Capturing and Storing Carbon Dioxide" is available.

Thursday, June 28, 2012

Full Text Of US Supreme Court Health Care Decision Upholding Individual Mandate

The complete US Supreme Court decision upholding the individual insurance mandate of the health care law, the Patient Protection and Affordable Care Act, is embedded below and available, as a 193-page PDF, from the US Supreme Court website and my Scribd website.

The Court upheld the individual insurance mandate's penalty as a valid exercise of the US Government's taxing power.

US Sup CT Health Care Decision

Wednesday, June 27, 2012

The Bottom 50 Percent By Wealth Are Disproportionately Younger Workers Starting Out, Seniors Who Used Up Their Wealth, The Unemployed And Nonwhite Or Hispanic Households

From Finance and Economics Discussion Series, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, DC, "The Other, Other Half: Changes in the Finances of the Least Wealthy 50 Percent, 2007-2009" by Arthur B. Kennickell, Assistant Director, Division of Research and Statistics, June 11, 2012:
This paper focuses on the wealth holdings of the least wealthy half of households
***
For example, although they [bottom 50 percent in wealth] hold little wealth on net, some of them do have sizeable assets which are largely offset by debts,
***
Although the group holds a disproportionate share of relatively young people who are early in the wealth accumulation phase of life and some older people who have decumulated wealth,
***
A number of striking patterns emerge in terms of the age distribution across and within the wealth groups. First, nearly half of the least wealthy 10 percent in 2007 were headed by a person aged less than 35 in 2007 and the next wealthiest group was almost as young
***
These results are consistent with the supposition that at least some of the observed distribution of wealth is driven by life-cycle events, which tend toward relatively less wealth and more borrowing at younger ages, and relatively greater wealth at older ages.
***
Unemployment appears to be a very important issue for the lower half of the wealth distribution, even aside from the overall economic disruption between 2007 and 2009. While less than 5 percent of household heads in the wealthiest half of households in 2007 reported that they had been unemployed and looking for work for a week or more in the preceding year, well over a quarter of the least wealthy 10 percent had such an employment spell; the rates were also relatively elevated for the other groups below the median.
***
In 2007, nonwhite or Hispanic households were much more heavily concentrated in the lower half of the wealth distribution than in the upper half. Almost 46 percent of the least wealthy 10 percent were in this group, as opposed to just under 19 percent of the wealthiest half.

Monday, June 25, 2012

US Government Debt Statistics Are Misleading And Do Not Include $200 Trillion Of Unfunded Future Entitlement Liabilities: Generally Accepted Accounting Principles Used In Business Should Apply To Government

From The Telegraph, "Reith Lecture: 'We’re mortgaging the future of the younger generation': Uncontrolled public debt threatens to rupture society as the older generation thrives at the expense of the young." by Niall Ferguson:
The heart of the matter is the way public debt allows the current generation of voters to live at the expense of those as yet too young to vote or as yet unborn. In this regard, the statistics commonly cited as government debt are themselves deeply misleading, for they encompass only the sums owed by governments in the form of bonds.
***
But the official debts in the form of bonds do not include the often far larger unfunded liabilities of welfare schemes like – to give the biggest American programmes – Medicare, Medicaid and Social Security.

The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues is $200 trillion, nearly 13 times the debt as stated by the US Treasury. Notice that these figures, too, are incomplete, since they omit the unfunded liabilities of state and local governments, which are estimated to be around $38 trillion.

These mind-boggling numbers represent nothing less than a vast claim by the generation currently retired or about to retire on their children and grandchildren, who are obligated by current law to find the money in the future, by submitting either to substantial increases in taxation or to drastic cuts in other forms of public expenditure.
***
The present system is, to put it bluntly, fraudulent. There are no regularly published and accurate official balance sheets. Huge liabilities are simply hidden from view. Not even the current income and expenditure statements can be relied upon. No legitimate business could possible carry on in this fashion.

Public sector balance sheets can and should be drawn up so that the liabilities of governments can be compared with their assets. That would help clarify the difference between deficits to finance investment and deficits to finance current consumption.

Governments should also follow the lead of business and adopt the Generally Accepted Accounting Principles. And, above all, generational accounts should be prepared on a regular basis to make absolutely clear the intergenerational implications of current policy.
[HT: Greg Mankiw]

85 Percent Intrade Odds Of Finding Higgs Boson Before End Of 2013

85 percent chance on Intrade that Higgs Boson particle will be observed before December 31, 2013.


Sunday, June 24, 2012

80 Percent Chance Health Care Law Mandate To Buy Insurance Is Unconstitutional Going Into Last Few Days of Current Supreme Court's Term

In the final week of the US Supreme Court term, there is an 80 percent chance on Intrade that the court will find the new health care law individual mandate unconstitutional before the end of the year.


Friday, June 22, 2012

Household Deleveraging Will End By Mid-Year 2013: McKinsey & Co.

From McKinsey Quarterly, "Working out of debt" by Karen Croxson, Susan Lund, and Charles Roxburgh:
The United States: Light at the end of the tunnel
Household debt outstanding has fallen by $584 billion (4 percent) from the end of 2008 through the second quarter of 2011 in the United States. Defaults account for about 70 and 80 percent of the decrease in mortgage debt and consumer credit, respectively. A majority of the defaults reflect financial distress: overextended homeowners who lost jobs during the recession or faced medical emergencies found that they could not afford to keep up with debt payments. It is estimated that up to 35 percent of the defaults resulted from strategic decisions by households to walk away from their homes, since they owed far more than their properties were worth.
***
Historical precedent suggests that US households could be up to halfway through the deleveraging process, with one to two years of further debt reduction ahead. We base this estimate partly on the long-term trend line for the ratio of household debt to disposable income. Americans have constantly increased their debt levels over the past 60 years, reflecting the development of mortgage markets, consumer credit, student loans, and other forms of credit. But after 2000, the ratio of household debt to income soared, exceeding the trend line by about 30 percentage points at the peak (Exhibit 1). As of the second quarter of 2011, this ratio had fallen by 11 percent from the peak; at the current rate of deleveraging, it would return to trend by mid-2013. Faster growth of disposable income would, of course, speed this process.
Source: McKinsey & Co.

Thursday, June 21, 2012

18.7 Percent Of US Households, 22 Million, Are Shared With Adult Family Members or Friends

From The Washington Post, "Census Bureau: Millions more Americans shared households in face of recession" by Michael A. Fletcher:
The number of adults sharing households with family members or other individuals jumped 11.4 percent between 2007 and 2010, the report said.

Overall, such living arrangements accounted for 22 million households in 2010 — or 18.7 percent of all U.S. households, compared with 17 percent in 2007.

Young adults were the most likely to double up, the report said, accounting for more than half of those who moved in with family members or friends. Between 2007 and 2010, the number of adult children who lived in their parents’ homes increased by 1.2 million to 15.8 million.
Given the the weak job market with its high job loss rate, high overall unemployment, the difficulty for college graduates to find well paying jobs, along with the collapse in the housing market with high foreclosure rates and underwater mortgages since 2007, I would have expected a much greater jump in the number of shared households than reported.

Wednesday, June 20, 2012

59 Percent Increase In Food Stamp Recipients Over Last 3 Years: 1 In 7 Americans Now Qualify Due To Expanded Eligibility

From The Wall Street Journal Opinion, "Food Stamp Fiasco: The Senate refuses to cut $20 billion out of $770 billion:"
But thanks to eligibility changes ... food stamps are becoming the latest middle-class entitlement.

A record 44.7 million people received food stamps in fiscal 2011, up from 28.2 million as recently as 2008. The cost has more than doubled in that same period, to $78 billion, and is on track to account for 78% of farm bill spending over the next decade. One in seven Americans now qualifies.
***
Some 39 states have no real asset test for food stamps, which means wealthy families without anyone in the job market are eligible

Monday, June 18, 2012

Diagnosis Of The Dysfunctions Of The Federal Student Loan Program

From Bloomberg, "End U.S. Student Loans, Don’t Make Them Cheaper" by Richard Vedder, director of the Center for College Affordability and Productivity and professor of economics at Ohio University.
The country is turning out far more college graduates than jobs exist in the areas traditionally reserved for them: the managerial, technical and professional occupations.

The Bureau of Labor Statistics tells us that we now have 115,000 janitors, 83,000 bartenders, 323,000 restaurant servers, and 80,000 heavy-duty truck drivers with bachelor’s degrees -- a number exceeding that of uniformed personnel in the U.S. Army.
***
we have millions of underqualified college students borrowing or getting Pell Grants to finance college.

More than 40 percent of them don’t even graduate within six years, and many who do have marginal academic records. Because the average college student spends fewer than 30 hours a week on all academic activities, for about 30 weeks a year, never have so many dollars gone to teach so many students for so little vocational gain.

Besides leading to more underemployed college students of increasingly dubious academic quality, the dysfunctional federal student financial assistance programs have other pathologies:

First, universities, unlike the taxpayers, suffer no financial consequences when the underqualified students they have lured into their academic programs ultimately default on their loans.

Second, students who study six years but ultimately drop out receive more financial aid than the diligent “A” student graduating in three years: We reward mediocrity and punish excellence.

Third, there is no adjustment of student-loan interest-rate terms to meet market conditions or differing risk factors relating to individual repayment prospects. That means too much money is lent, especially to high-risk individuals with little prospect for academic success.

Fourth, the Free Application for Federal Student Aid form, associated with these programs, aside from being unbearably complex, gives colleges private information about family finances that allows them to gouge students more.

Fifth, colleges’ tuition and fee policies drive the amount of loan volume, rather than the other way around, thus contributing to the college-cost explosion and the subsequent academic arms race.

Sixth, intended partly to promote greater opportunities for the poor, these federal-aid programs have been accompanied both by rising income inequality in the U.S., and a decline in the proportion of recent college graduates from poor families.

Our Core Health Care Problems Are Health Care Costs And Value: Not Health Insurance Costs And Universal Coverage: The Underlying Premise And Goals Of ObamaCare Are Wrong And Do Not Fix US Health Care

From The Wall Street Journal, "Why I No Longer Support the Health Insurance Mandate: Should ObamaCare be overturned by the Supreme Court, insurers have solutions ready to go." by Ron Williams, a former chairman and CEO of Aetna:
But no matter how the Supreme Court rules, we still need bipartisan solutions that work for all Americans. One benefit of the past two years has been the vigorous public policy discussion that we should have had prior to passing the legislation—and a recognition that the core problems are health-care cost and value. Simply put, we must create more value for consumers by improving the quality and long-term affordability of health care.

The private sector is hard at work creating new ways to deliver health care. Health plans are collaborating with hospital systems to develop innovative accountable care organizations that provide physicians with incentives to cooperate and enhance patient outcomes. Hospitals are encouraging physicians to improve the accuracy and quality of patient data, enhancing clinical decision-making to improve the quality of care.
ObamaCare is a complicated, uneconomic super-structure placed on top of the existing inefficient non-market based priced health care delivery system. The existing problems of our current health care system are not fixed by the new health care law and in many ways, such as by increasing demand for medical services through universal coverage without providing a method or an incentive to increase the supply of medical providers, has made the US health care problem worse.

Friday, June 15, 2012

Risk Is Necessary: Things Will Go Wrong: We Need Better Rescue Plans

From The New Yorker, "Failure and Rescue" by Atul Gawande:
This may in fact be the real story of human and societal improvement. We talk a lot about “risk management”—a nice hygienic phrase. But in the end, risk is necessary. Things can and will go wrong. Yet some have a better capacity to prepare for the possibility, to limit the damage, and to sometimes even retrieve success from failure.

When things go wrong, there seem to be three main pitfalls to avoid, three ways to fail to rescue. You could choose a wrong plan, an inadequate plan, or no plan at all. Say you’re cooking and you inadvertently set a grease pan on fire. Throwing gasoline on the fire would be a completely wrong plan. Trying to blow the fire out would be inadequate. And ignoring it—“Fire? What fire?”—would be no plan at all.
***
All policies court failure—our war in Iraq, for instance, or the effort to stimulate our struggling economy. But when you refuse to even acknowledge that things aren’t going as expected, failure can become a humanitarian disaster. The sooner you’re able to see clearly that your best hopes and intentions have gone awry, the better. You have more room to pivot and adjust. You have more of a chance to rescue.

But recognizing that your expectations are proving wrong—accepting that you need a new plan—is commonly the hardest thing to do. We have this problem called confidence.

Tuesday, June 12, 2012

Elinor Ostrom Has Died: First And Only Woman Awarded Economics Nobel Prize

Elinor Ostrom, awarded the 2009 Nobel Prize in Economics, died, June 12, 2012.

From "IU community mourns passing of Distinguished Professor and Nobel Laureate Elinor Ostrom:"
Ostrom, 78, died of cancer at 6:40 a.m. today [June 12, 2012] at IU [Indiana University] Health Bloomington Hospital surrounded by friends. She was senior research director of the Vincent and Elinor Ostrom Workshop in Political Theory and Policy Analysis, Distinguished Professor and Arthur F. Bentley Professor of Political Science in the College of Arts and Sciences, and professor in the School of Public and Environmental Affairs.
***
Ostrom shared the 2009 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, also known as the Nobel Prize in Economic Sciences, with University of California economist Oliver Williamson. She was the first woman and remains the only woman to be awarded the prize.
***
The Royal Swedish Academy of Sciences awarded the 2009 Nobel Prize in Economic Sciences to Ostrom "for her analysis of economic governance, especially the commons." Through a multidisciplinary approach that combined theory, field studies and laboratory experiments, she showed that ordinary people are capable of creating rules and institutions that allow for the sustainable and equitable management of shared resources. Her work countered the conventional wisdom that only private ownership or top-down regulation could prevent a "tragedy of the commons," in which users would inevitably destroy the resources that they held in common.
***
Elinor Ostrom's best known book, "Governing the Commons: the Evolution of Institutions for Collective Action,"examines effective governance systems for common-pool resources, drawing on studies of water management districts, irrigation systems, grazing resources, fisheries, forests and other examples. [Emphasis added.]





Friday, June 8, 2012

Farmers In India Are Benefiting From US Shale Production

The wonderful power of open international trade and capitalism. Farmers in India make money off of oil and gas drillers in the US.

From Reuters, "Shale energy triggers bean rush in India" by Meenakshi Sharma and Selam Gebrekidan:
U.S. companies drilling for oil and gas in shale formations have developed a voracious appetite for the powder-like gum made from the seeds of guar, or cluster bean, and the boom in their business has created a bonanza for thousands of small-scale farmers in India who produce 80 percent of the world's beans.

"Guar has changed my life," said Shivlal, a guar farmer who made 300,000 rupees ($5,400) - five times more than his average seasonal income - from selling the beans he planted on five acres (two hectares) of sandy soil in Rajasthan state.

"Now, I have a concrete house and a color TV. Next season I will even try to grow guar on the roof."

Guar gum, which is also used to make sauces and ice cream, is a main ingredient of the hydraulic fracturing, or fracking, process used to extract oil and gas from oil shale.

Savings From Wisconsin Governor Walker's Union Reforms Enabled Schools To Reduce Class Size And Add Programs

From The Wall Street Journal, "Scott Walker's Education Victory: Union reforms have freed more money for classrooms in Wisconsin. And not only in Wisconsin." by Kimberley A Strassel:
The [Wisconsin Governor Scott] Walker breakthrough was to integrate education into the broader fiscal and structural dispute. His argument: Wisconsin is broke. We can continue to pour money into the public-union monopoly, forcing us to cut further from priorities (namely, education). Or we can enact broad structural changes, the savings from which we can use to better our state (notably, schools).
***
Unions and liberals have argued that education "reform" is really about starving public schools of money and resources. Mr. Walker's budget victory has shown that structural government reform is the surest way to put more dollars into kids.

It's resonating because taxpayers see it working. In addition to limiting collective bargaining, the Walker reforms let schools competitively bid on health insurance, asked employees to contribute to health and pension plans, and introduced merit pay. The Legislative Fiscal Bureau estimates the pension provision alone will save schools $600 million over two years, while competitive health bidding is already saving $220 per student per year.

Places like the New Berlin school district, with its 4,700 students, have already reduced health-care costs by $2.3 million, retirement costs by $1.25 million, and other liabilities by $15 million. The district hired new staff, reduced class sizes, and added programs. The Shorewood district saved $537,000 simply by bidding out its health contract (previously run by a union outfit), and also reduced insurance premiums for its teachers.

Parents are also seeing the alternative via liberal school districts that rushed to lock in contracts prior to the reforms. Among them were the Milwaukee, Kenosha and Janesville districts, which this year reported the largest number of teacher layoffs in the state. Those districts accounted for 40% of the state's teacher firings, though they educate only 12.8% of Wisconsin kids. [Emphasis Added.]

Wednesday, June 6, 2012

Job Applicants Cannot Find Jobs Because Employers Are Unwilling To Train: It Is The Age Of The "Plug And Play" New Hire

A seven and a half minute informative video interview with Peter Capelli, George W. Taylor Professor of Management at The Wharton School and Director of Wharton's Center for Human Resources, by Francesca Donner of The Wall Street Journal.

The gist is companies believe they can save money by not hiring; companies are unwilling to train qualified applicants for the specific job opening; companies are overwhelmed by the number of applicants and companies are unrealistically seeking employees with multi-function skills.

While upper level management will say that applicants lack necessary job skills, that is rarely if ever heard from line management.

Companies are seeking "plug and play" new hires who have job experience working at a similar company doing a similar job and do not need any job training.

From The Wall Street Journal Real Time Economics, "Video: Why Job Seekers Don’t Land Jobs:"

Tuesday, June 5, 2012

Tepid Economic Growth Is The Cause Of Our Political Divisiveness

From The Weekly Standard, "The Beltway Establishment Still Doesn't Get It" by Jay Cost:
The American political process is starting to break down because of major changes to the political economy of this country. For half a century after World War II, the economy grew at such an incredible pace that we could have low taxes, high social welfare benefits, and a low deficit. This was one of the major reasons why there could be bipartisanship. Economic growth bankrolled these “great” compromises. It had very little to do with the foresight, courage, or moderation of the pols in Washington. They were just riding the wave generated by the private sector.

But all that seems to be over now. For more than a decade (not just the Great Recession but going back to 2000), economic growth has been far below its postwar average, and too low to keep the old regime afloat. You can’t have low taxes, high spending, and low deficits when the economy can’t break 3 percent growth.

This is something the D.C. establishment still does not seem to get. For years, their “farsighted,” bipartisan compromises were possible because the guys with the green eyeshades told them that the economy would grow to fill the gaps that they couldn’t fill. But now the economy can’t do that – so we have a mind-bogglingly large deficit and increased polarization in the political sphere.

2011 Inflation Adjusted (Real) GDP Growth By State And Region

From The US Department Of Commerce Bureau of Economic Analysis, "Widespread Economic Growth Across States In 2011: Advance 2011 and Revised 1997—2010 GDP–by–State Statistics:"
Real gross domestic product (GDP) increased in 43 states and the District of Columbia in 2011, according to new statistics released today by the U.S. Bureau of Economic Analysis (BEA) that breakdown GDP by state. Durable–goods manufacturing, professional, scientific, and technical services, and information services were the leading contributors to real U.S. economic growth. U.S. real GDP by state grew 1.5 percent in 2011 after a 3.1 percent increase in 2010. [Footnotes omitted.]


Real GDP increased in all eight BEA regions in 2011, although growth slowed in most regions. The Far West (2.1 percent) was the only region where growth accelerated. The Southwest region grew the fastest (2.7 percent), led by Texas with a 3.3 percent increase.









US Economy Is 10 Percent Below Where It Should Be And Falling Further Behind

From The Wall Street Journal, "Why This Slow Recovery Is Like No Recovery: The U.S. economy lost about 10% relative to trendline growth. To make up the shortfall, we need to average more than 3% growth a year for several years." by Robert J Barro:
The average annual growth rate of U.S. GDP since 1948 has been 3.1%. In the recession starting in the third quarter of 2007 and ending in the second quarter of 2009, GDP fell by nearly 5%. But this decline is 10% when gauged relative to trend—that is, after factoring in normal growth. To make up for this shortfall, the subsequent recovery has to attain growth rates averaging above 3% for several years.

This is not an unreasonable expectation. For instance, the GDP growth rate averaged 4.3% per year from 1982 to 1989 following the deep recession of the early 1980s. Yet in the current "recovery," beginning in the second quarter of 2009, growth has averaged only 2.4% per year, and just 1.8% for the first quarter of 2012. This low growth means that the U.S. economy has actually been falling further and further behind the normal trend. Therefore, it is not a recovery at all.

Monday, June 4, 2012

By Age 14, 78 Percent Of US Kids Have A Facebook Account

Source: The WSJ "Facebook Explores Giving Kids Access"

From The Wall Street Journal blog Digits, "Kids Find a Way to Facebook" by Shayndi Raice:
Facebook currently won’t let users under the age of 13 set up accounts. Last June, however, Consumer Reports released a study that found that of the 20 million children signed up for Facebook, a whopping 7.5 million were under the age of 13. Of those illegitimately using the site, five million children were under the age of 10.

Then in the fall, researcher Danah Boyd released a study sponsored by Microsoft Research that found 36% of parents were aware that their children joined Facebook before age 13 and that a substantial percentage of those parents helped their kids lie about their age in order to sign up.

Excerpts From The Moral Case For Capitalism

From the Manhattan Institute for Policy Research, Issue No.12, May 2102, "An Audacious Promise: The Moral Case for Capitalism" by James R. Otteson, joint professor of philosophy and economics, and chair of the Philosophy Department, at Yeshiva University in New York:
Milton Friedman once said that every time capitalism has been tried, it has succeeded; whereas every time socialism has been tried, it has failed. Yet President Obama has oddly claimed that we’ve tried free-market capitalism, and it “has never worked.” This is rather remarkable. Since 1800, the world’s population has increased sixfold; yet despite this enormous increase, real income per person has increased approximately 16-fold. That is a truly amazing achievement. In America, the increase is even more dramatic: in 1800, the total population in America was 5.3 million, life expectancy was 39, and the real gross domestic product per capita was $1,343 (in 2010 dollars); in 2011, our population was 308 million, our life expectancy was 78, and our GDP per capita was $48,800. Thus even while the population increased 58-fold, our life expectancy doubled, and our GDP per capita increased almost 36-fold. Such growth is unprecedented in the history of humankind.
***
Capitalism gives us incentives to trade and associate with people outside our local community, even complete strangers, not on the basis of our love or care for them but out of our own—and their—self-interest. So capitalism enables people to escape the strictures of their local communities. But is that bad? Capitalism creates opportunities for people to trade, exchange, partner, associate, collaborate, cooperate, and share with—as well as learn from—people not only from next door but from around the world—even people who speak different languages, wear different clothing, eat different foods, and worship different gods. The social characteristics that in other times and under different institutions would lead to conflict—even violent, bloody conflict—become, under capitalism, irrelevant—and thus no longer cause for discord.
***
Even if we do not all get rich at the same rate, we all still get richer. To see the importance of this point, ask yourself: If you could solve only one social ill—either inequality or poverty—which would it be? Or suppose that the only way to address poverty would be to allow inequality: Would you allow it? This seems a no-brainer: poverty is a far larger factor in human misery than is inequality. If we could have steadily fewer people suffering from grinding poverty, is that not something to wish for, even if it comes with inequality?
Read the complete article.

[HT: Craig Newmark]

Sunday, June 3, 2012

Less Than A Third of Public College Students And About Half Of Private College Students Graduate In Four Years

From The Washington Post, "Public universities pushing ‘super-seniors’ to the graduation stage" by Daniel de Vise:
Fewer than half of students graduate in four years at 33 of the 50 state flagship schools. The overall four-year graduation rate is 31 percent for public colleges and 52 percent for private ones, the federal government reported this year.

Saturday, June 2, 2012

Majority Of Unemployed Have Some College

From The Wall Street Journal Real Time Economics Blog, "Number of the Week: Most Unemployed Have College Experience" by Phil Izzo:
52%: Percent of the unemployed who have spent at least some time in college.

In a significant shift in the labor market, the majority of people who are unemployed have some college education, reversing the situation that prevailed for decades. In 1992, only 37% of the unemployed had some college experience.
***
In May 4.8 million of the 9.2 million people older than 25 looking for work had spent at least some time in college, while 48% of the unemployed had only completed high school.