...the paradox that even as American businesses today are generally efficient and highly profitable, they aren’t reinvesting in new plants, equipment and technology or hiring more workers at the pace they normally would. Business investment was up last quarter—a hopeful sign—but over the recovery the trend has been sluggish.
***What does investment have to do with stagnant wages? Everything. As Paul Samuelson, the premiere Keynesian economist who sold more economics textbooks than anyone in history, once explained: “What happens to the wage rate when each person works with more capital goods? Because each worker has more capital to work with, his or her marginal product [or productivity] rises. Therefore, the competitive real wage rises as workers become worth more to capitalists and meet with spirited bidding up of their market wage rates.”
History bears this out. Workers did very well in jobs and rising incomes in the 1960s, 1980s and late 1990s when capital gains and dividend taxes fell.
Tuesday, October 28, 2014
From The Wall Street Journal, "Obama Soaks the Rich, Drowns the Middle Class: The ripple effect of the president’s tax hikes is swamping take-home pay." in Opinion:
Posted 10/28/2014 09:10:00 PM
Friday, October 24, 2014
From Sageworks, Data Releases, "The best performing industries in the U.S. this year:"
Source: Sageworks, a financial information company (www.sageworks.com)
Based on an analysis of private company financial statements, Sageworks, a financial information company, identified the ten industries with the strongest financial performance in the current economy, according to sales growth and profitability.
***Best performing industries – 12 months ended September 30, 2014
Industry Sales Growth Net Profit Margin Total Current Liabilities (as % of Total Assets) Support Activities for Mining 21.6% 10.5% 33.4% Oil & Gas Extraction 18.6% 16.3% 26.0% Computer Systems Design Firms 15.7% 7.4% 50.0% Services to Buildings and Dwellings 14.2% 8.0% 41.4% Architectural Firms 12.9% 8.6% 42.7% Consumer Goods Rental 12.4% 7.5% 51.48% Management, Scientific, and Technical Consulting 12.0% 10.4% 49.8% Accounting Firms 10.0% 18.9% 38.4% Advertising & Public Relations Firms 9.8% 7.5% 59.6% Outpatient Care Centers 9.8% 11.8% 31.0% Private Company Average 8.6% 6.8% 36.2%
Posted 10/24/2014 01:54:00 PM
Monday, October 20, 2014
From The Wall Street Journal, "How a Brewing Hobby Became a Business: Scott Smith Talks About Growing His Beer Sales—but Not Too Much" by James R Hagerty:
|Source: The Wall Street Journal|
Posted 10/20/2014 01:50:00 PM
Friday, October 17, 2014
From "NASA Study Finds 1934 Had Worst Drought of Last Thousand Years" in ScienceBlog:
A new study using a reconstruction of North American drought history over the last 1,000 years found that the drought of 1934 was the driest and most widespread of the last millennium.
Using a tree-ring-based drought record from the years 1000 to 2005 and modern records, scientists from NASA and Lamont-Doherty Earth Observatory found the 1934 drought was 30 percent more severe than the runner-up drought (in 1580) and extended across 71.6 percent of western North America. For comparison, the average extent of the 2012 drought was 59.7 percent.
"It was the worst by a large margin, falling pretty far outside the normal range of variability that we see in the record," said climate scientist Ben Cook at NASA’s Goddard Institute for Space Studies in New York. Cook is lead author of the study, which will publish in the Oct. 17 edition of Geophysical Research Letters.
Posted 10/17/2014 12:01:00 PM
Thursday, October 16, 2014
States That Enacted Medical Malpractice Reform Did Not Reduce Rates Of Hospital Admissions Or Imaging Tests
From National Institute of Health, MedlinePlus, "Limiting Malpractice Claims May Not Curb Costly Medical Tests: ER charges haven't declined in 3 states with legislative reforms, study says:"
Emergency room physicians in three states that enacted malpractice reform continued to order imaging tests and admit patients for treatment at the same rate, even though the law had been changed to make it more difficult for patients to sue them, according to researchers at RAND Corporation, a nonprofit research organization.
***"If you're looking at ways to decrease our national spending on health care or reduce waste, then you're going down a blind alley if you're spending your time thinking about malpractice reform," concluded lead author Dr. Daniel Waxman, an adjunct natural scientist at RAND and a visiting associate professor of emergency medicine at the University of California, Los Angeles. ***Researchers reviewed over 3.8 million Medicare patient records from 1,166 hospital emergency rooms between 1997 and 2011. They compared care in the three reform states to care in neighboring states that did not pass malpractice reform. ***The findings are published in the Oct. 16 edition of the New England Journal of Medicine.
Posted 10/16/2014 01:27:00 PM
Wednesday, October 8, 2014
From Congressional Budget Office, "Monthly Budget Review for September 2014" by David Rafferty, Joshua Shakin, and Adam Wilson:
The federal government ran a budget deficit of $486 billion in fiscal year 2014, the Congressional Budget Office (CBO) estimates—$195 billion less than the shortfall recorded in fiscal year 2013, and the smallest deficit recorded since 2008. Relative to the size of the economy, that deficit—at an estimated 2.8 percent of gross domestic product (GDP)—was slightly below the average experienced over the past 40 years, and 2014 was the fifth consecutive year in which the deficit declined as a percentage of GDP since peaking at 9.8 percent in 2009. [Emphasis added.]
Posted 10/08/2014 01:07:00 PM
Monday, October 6, 2014
US Workers Least Likely To Seek Work Abroad: Majority Of 21 To 30 Year Old Americans Willing To Relocate To Outside US
From The Wall Street Journal, Real Time Economics, "Americans Don’t Fancy Jobs Abroad. Oh, Except Millennials." by Jonathan House:
American workers are among the world’s least likely to seek employment abroad, although attitudes are changing among younger generations, a new study on worker mobility shows.
The Boston Consulting Group and The Network, an alliance of global recruiting websites, surveyed 200,000 workers in 189 countries and found that just 35% of U.S. respondents were willing to relocate to another country. That was the lowest percentage among the 31 largest countries surveyed.
However, 59% of American respondents between the ages of 21 and 30 said they would be willing to go abroad.
Posted 10/06/2014 01:59:00 PM
Friday, October 3, 2014
From Tax Foundation, "Losing the Future: The Decline of U.S. Saving and Investment" by Alan Cole:
As saving has declined in the U.S., though, so has investment.
Source: Tax Foundation
Figure 2 (above) includes all saving and investment in the U.S. as a percentage of GDP, including both the private and public sectors. Over the last four decades, saving and investment have continued on a downward trend, falling from over 10 percent of GDP to less than 4 percent today.
Saving and investment move in similar patterns overall. In general, saving is necessary to enable investment. But saving and investment are not exactly the same thing; in the U.S., investment outpaces saving. This discrepancy exists because the United States has an open economy. Foreign savers can purchase investments in our nation, and vice versa. Much of the investment in America is financed from abroad. Foreign savers, in other words, are stepping in with their savings to fund the investments that American savers cannot afford.[Footnotes omitted.]
Posted 10/03/2014 11:24:00 AM
Thursday, October 2, 2014
From The Wall Street Journal, "The President of Inequality: Policies promoting equality over growth have damaged both:"
As the nearby chart shows, incomes fell after 1999 through 2004 but then rose again for three straight years and nearly reached the 1999 level in 2007 at $56,436. The bottom fell out with the 2008 financial panic and recession, as you would expect. But the amazing fact of the Obama years is that incomes did not rebound with the recovery as they have in every other expansion. Only in 2013 did incomes begin to pick up modestly, five long years into recovery.
Even then real median income did not increase in 2013 in 36 states. Instead, the gains were concentrated in metro areas like Washington-Arlington-Alexandria (median: $90,149), San Francisco-Oakland-Hayward ($79,624) and Boston-Cambridge-Newton ($72,907). Wyoming amid the fracking revolution was another standout, with the median rising 5.7%.
|Source: The Wall Street Journal|
Posted 10/02/2014 09:17:00 PM