Wednesday, April 30, 2014

Municipal Governments' Non-Debt Debt Account For Two-Thirds Of All Borrowing

From City Journal, "Detroit’s Message to Investors: There will be blood." by Steven Malanga:
Though most states have laws or constitutional restrictions on borrowing, governments (and their financial advisors) have found ways to sidestep them. At least two-thirds of all municipal borrowing in the $3.5 trillion market now takes place outside the scope of debt limits, according to an estimate by Columbia University law professor Richard Briffault. He calls these transactions “non-debt debt.” In 2009, in one example, Arizona closed a budget gap by borrowing $1 billion, even though its constitution prohibits such debt. The state simply claimed that the transaction wasn’t borrowing but instead a sale of government-owned office buildings. Yet no real sale took place: the state retained control of the properties and instead sold certificates of participation for them. Arizona is repaying the certificate holders out of tax revenues but calling the payments “rent” (see “State Budget Bunk,” Winter 2011). The Goldwater Institute, a Phoenix-based think tank, estimated that Arizona will spend $1.6 billion to pay off the $1 billion sham sale.

Monday, April 28, 2014

Cholesterol Lowering Statin Users Increase Their Fatty Food Intake: No One Should Be Surprised: Its Human Nature

From MedlinePlus, "Statin Users Eating More Bad Food Than a Decade Ago, Study Shows: Doctors need to re-emphasize importance of healthy diet to patients, researcher says" by Robert Preidt:
Many Americans who take cholesterol-lowering statin drugs seem to believe they can eat plenty of unhealthy foods without suffering any consequences, a new study suggests.

Researchers found that people who took statins in 2009-2010 consumed more fat and calories than those who took the drugs 10 years earlier. There was no similar increase in fat and calorie intake among people who didn't take statins, the University of California, Los Angeles (UCLA) researchers said.

Their analysis of U.S. National Health and Nutrition Examination Survey data showed that statin users in 2009-2010 consumed 9.6 percent more calories and 14.4 percent more fat than statin users in 1999-2000.
No one should really be surprised. Whenever risk to harm from an activity is reduced, people will increase the activity to offset all or some of the risk reduction. For example, anti-lock braking will prevent skidding on wet roads during rain. With the introduction of cars with anti-lock braking, drivers drive faster than before during rain and offset the risk reduction from the anti-lock feature. There is no reason to expect the response from cholesterol reducing drugs, which reduce the risk of heart disease, will be any different.

Today's Economic Predicament Is A Sustained, Subsidized Lethargy

From The Wall Street Journal, Opinion, "Demand-Side Policy Gave Us the Big Economic Fizzle: The unstimulating stimulus ignored basic principles of economic incentives." by Alan Reynolds:
The fact that employment has gradually risen from 140 million to 145.7 million since the recession ended is unremarkable. What is truly remarkable is that at the same time that job opportunities improved, the number of Americans who were neither working nor seeking work soared from 80.9 million to 91.4 million.
Demand-side economists focus on incentives to borrow and spend. Supply-side economists focus on incentives to work, save, invest and launch new businesses. Demand-side economists focus on the uses of income and debt (consumption). Supply-side economists focus on sources of income and wealth.
The time for demand-side gimmicks has long passed. The remarkably aggressive fiscal and monetary effort to stimulate demand did not stimulate demand. Even if it had worked, we can't pretend to be "fighting recession" forever. Today's economic predicament is not a cyclical crisis but a sustained, subsidized lethargy. Different tasks require different tools. When the number of job seekers falls twice as fast as the increased number of jobs, that is a supply-side problem.

Tuesday, April 22, 2014

Are Salaries At The Federal Banking Regulators Too High?

From The Wall Street Journal, "Guess Who Makes More Than Bankers: Their Regulators: In 2012 at the Federal Deposit Insurance Corp. the average pay was $190,000. At the Federal Reserve? It won't say." by Paul Kupiec:
Most banks in this country are small businesses and pay employees modest salaries. The Bureau of Labor Statistics reports that the average annual salary of a bank employee was $49,540 in 2012, not much higher than the average annual across all occupations, $45,790.

Yet one group in banking stands out as highly paid—federal bank regulators. Before the Dodd-Frank Act, the average employee of a federal bank regulatory agency received 2.3 times the average compensation of a private banker. By 2013 this ratio increased to more than 2.7—and in some cases considerably more.
You might think high-paying jobs at these agencies require special skills. Not so. At the OCC, secretaries make on average $79,182 per annum. Motor vehicle operators (the agency's limo drivers) at the FDIC earn $82,130. Human resources management trainees at the CFPB make $110,759 a year.

Monday, April 21, 2014

First Time More Hispanics Than Whites Admitted To University Of California

From The Wall Street Journal, "Hispanics Gain at California Colleges: University System Admits More Latinos Than Whites for First Time" by Miriam Jordan:
The University of California has admitted more Hispanics than whites for the first time, reflecting demographic shifts in the country's largest state. The state university system also admitted more students from other states and abroad, who pay higher tuition, a national trend at state universities.

Latinos account for 28.8% of the 61,120 Californians admitted for this fall's freshman class at the UC system's nine undergraduate campuses, up from 27.6% last year and topping the 26.8% share of whites, preliminary data show.

Both trail the 36.2% share for Asians, the largest freshman group for the past few years. Blacks represented 4.2% of those admitted, the same as in 2013.

Hispanics represent California's largest ethnic group. According to the California Department of Finance, among 15- to 19-year-olds in California, 49.4% are Hispanic, 29.2% are white, 10.9% are Asian and 6% are black.

CBO Infographics Of 2013 US Budget, Revenues And Spending

From CBO, "The Federal Budget in 2013: An Infographic:"

The Federal Budget in 2013: An Infographic
Source: CBO

From CBO, "Revenues in 2013: An Infographic:"

US Revenues in 2013: An Infographic
Source: CBO

From CBO, "Mandatory Spending in 2013: An Infographic:"

US Mandatory Spending in 2013: An Infographic
Source: CBO

From CBO, "Discretionary Spending in 2013: An Infographic:"

US Discretionary Spending in 2013: An Infographic
Source: CBO

Friday, April 18, 2014

Long-Term Unemployed Face Repeated Periods Of Joblessness

From The Washington Post, "Long-term unemployed struggle to find — and keep — jobs" by Ylan Q Mui:
New research tracking people who have been out of work for six months or longer found that 23 percent of them landed a job within a few months of the study. But a year later, more than a third of that group was unemployed again or out of the labor force altogether.
Several factors are blamed for perpetuating the vicious cycle. Some economists argue that workers' skills deteriorate during long spells of joblessness, making them less employable. Others counter that desperate workers are accepting jobs that are unstable or a poor match for their abilities, often for less money than they were making before.

In a paper for the Brookings Institution, former White House chief economist Alan Krueger looked at data on the long-term unemployed from 2008 to 2013 and documented the incidence of repeat joblessness. In a given month, about 36 percent of those workers were in a job 15 months later, according to his analysis. A closer look at the data revealed something even more disheartening: Only 11 percent were in steady, full-time jobs.
Other economists have demonstrated just how difficult it can be for the long-term unemployed to land a job in the first place. In research for the Federal Reserve Bank of Boston, Northeastern University economist Rand Ghayad sent nearly 5,000 mock applications in response to job postings. He found that résumés showing unemployment lasting more than six months were uniformly rejected — even when those applications listed significant work experience. In other words, Ghayad said, companies were more willing to hire people with little experience who were recently unemployed than they were to hire long-jobless candidates with relevant experience.

Another Government Mandate Program Causes More Harm Than Good: Ban On School Lunch Chocolate Milk Decreases Calcium And Protein Intake, Milk Consumption And School Lunch Participation

From MedlinePlus, "School Bans on Chocolate Milk May Backfire: Kids ended up drinking less fat-free white milk, too, Oregon study finds" by Robert Preidt:
Bans on chocolate milk in 11 Oregon elementary schools were linked to a big drop in the amount of healthy, fat-free white milk students drank, a team of Cornell University researchers reports.
In the study, researchers analyzed data from 11 Oregon elementary schools that outlawed chocolate milk and replaced it with skim milk. While the bans meant children could no longer get the added sugar found in chocolate milk, there were unexpected consequences.

Total milk sales at the schools fell by 10 percent, the study showed, and students ended up wasting 29 percent more milk than before. And while the students consumed less sugar and fewer calories, their intake of calcium and protein also fell.

After the chocolate milk bans took effect, there was a also 7 percent decrease in the number of students taking part in the Eugene School District's lunch program, according to the researchers at Cornell University's Center for Behavioral Economics in Child Nutrition Programs.

Thursday, April 17, 2014

Nearly 5 Million Census Blocks (44 Percent) Have Zero Population

From mapsbynik, "Nobody lives here: The nearly 5 million Census Blocks with zero population:"
Nobody lives here: The nearly 5 million Census Blocks with zero population

Zero Population Census Blocks
Source:  mapsbynik

A Block is the smallest area unit used by the U.S. Census Bureau for tabulating statistics. As of the 2010 census, the United States consists of 11,078,300 Census Blocks. Of them, 4,871,270 blocks totaling 4.61 million square kilometers were reported to have no population living inside them. Despite having a population of more than 310 million people, 47 percent of the USA remains unoccupied.

Friday, April 11, 2014

FERC Circles The Wagons And Kills The Messenger of Grid Vulnerability Instead Of Fixing The Problem

From The Wall Street Journal, "Federal Energy Regulator to Take Steps to Protect Grid: After Criticism, Commission to Clamp Down on Public Disclosure of Sensitive Material" by Amy Harder:
The federal agency that regulates the U.S. electricity grid is clamping down on public disclosure of potentially sensitive material after criticism of how it handled an analysis of the grid's vulnerability to physical attack, the agency's acting head told Congress on Thursday.

Cheryl LaFleur, acting chairman of the Federal Energy Regulatory Commission, testified at a hearing that she has "ordered a full internal review of the chain of custody of all documents," in the wake of a preliminary report issued by Energy Department Inspector General Gregory Friedman.
In March, The Wall Street Journal reported that a FERC analysis found that the U.S. could suffer a coast-to-coast blackout if saboteurs knocked out nine of the most critical electric-transmission substations in different areas of the country.
A closed system, as FERC is becoming or has already, that is unresponsive to the demands of outside forces, cannot adapt and evolve to exist in a constantly changing world. Censoring information never fixes a problem. Without public transparency, market forces and accountability, problems in our electrical grid will not go away.

Saturday, April 5, 2014

Unusually Low Percentage Of Mid-Career Workers of Prime Working Age In Labor Force

From The Wall Street Journal, Opinion, "The Decline of Work: The employment ratio is stagnant even for Americans of prime working age:"
Workers Age 25-54 Employment Rate
Source: The Wall Street Journal

Many attribute the decline of work in America to the wave of Baby Boomers heading into retirement and the fact that the population at large is getting older. Studies show this is part of the story, though that is also a problem if those workers are retiring earlier because they lost a job and can't find a comparable one.

Yet the decline in work is also affecting those between the prime working ages of 25 and 54. The employment rate for those workers rose steadily in the postwar period, dipping during recessions but always returning to an upward climb. The nearby chart tracks the trend from 1980. The rate reached an all-time high in 1999 of 81.6% amid the dot-com boom, dipped in the early George W. Bush years, and was recovering until the recessionary collapse.

At 76.7% today, this measure of work has only recently returned to 2009 levels. That's roughly where it last hovered in 1984 and 1985 before climbing amid the Reagan growth surge. So after several years of 2% economic growth since 2009, the share of mid-career workers in their best earning years who are on the job is still historically and unusually low.

Wednesday, April 2, 2014

Popularity Increases Student's Chance Of Getting Bullied

From MedlinePlus, "Popular Kids May Be Targets for Bullying: Study: Competition for social status could play a role, researchers say" by Robert Preidt:
It's well known that socially vulnerable teens -- such as those with delayed physical development, body-image issues or a lack of friends -- are at greater risk for being bullied. But these new findings suggest that many bullying victims don't fit the stereotype, said authors of the study, which appears in the April issue of the American Sociological Review.

"Most people probably would not think having a higher social status would increase the risk of being targeted, but with few exceptions, that's what we find," lead author Robert Faris, an associate professor of sociology at the University of California, Davis, said in a journal news release.
Students who climbed in popularity from the middle range to the 95th percentile had a more than 25 percent increased risk of being bullied.