Tuesday, June 30, 2015

Price Matters Even When Booking A Clinton To Speak

From The Washington Post, "A college balks at Hillary Clinton’s fee, so books Chelsea for $65,000 instead" by Philip Rucker and Rosalind S. Helderman:
When the University of Missouri at Kansas City was looking for a celebrity speaker to headline its gala luncheon marking the opening of a women’s hall of fame, one name came to mind: Hillary Rodham Clinton.

But when the former secretary of state’s representatives quoted a fee of $275,000, officials at the public university balked. “Yikes!” one e-mailed another.

So the school turned to the next best option: her daughter, Chelsea.

The university paid $65,000 for Chelsea Clinton’s brief appearance Feb. 24, 2014, ....

Friday, June 26, 2015

Taxes On Wine By State

From Tax Foundation, "How High are Wine Taxes in Your State?" by Samantha Jordan and Scott Drenkard:
The treatment of wine differs extensively across the states, and at higher rates than beer because of greater alcohol content. Check out today’s map below to see where your state lies on the wine tax spectrum.
Wine Taxes By State
Source: Tax Foundation
Kentucky has the highest wine excise tax rate at $3.18 per gallon, followed by Alaska ($2.50), Florida ($2.25), Iowa ($1.75), and New Mexico ($1.70). The five states with the lowest wine excise rates are Louisiana ($0.11), California ($0.20), Texas ($0.20), Wisconsin ($0.25), and Kansas and New York (tied at $0.30). Notably, these rankings do not include states that control all sales.

Thursday, June 25, 2015

US State Map Of Workforce Decline And Growth From 2015 To 2030

From BloombergBusiness, "These 22 States Will See Their Workforce Shrink Over the Next 15 Years: New England is poised to see big declines" by Michelle Jamrisko:
Vermont was the biggest loser in the bunch, where the working-age population between this year and 2030 is projected to drop by 11.5 percent — 2 percentage points more than the next-closest state. That's even as the working-age population is projected to grow 5.2 percent nationally over the same period. There's a big gap between winners and losers across the country, as shown in the map below.
Workforce Change Map From 2015 To 2030
Source: BloombergBusiness

Saturday, June 20, 2015

Comment On Obama's Mandate For An Increase In Heavy Truck Fuel Economy

My posted comment to The Wall Street Journal Opinion, "Delivering a Greener Fleet of Trucks: The Obama administration’s new proposal will reduce fuel use, cut pollution and spur transportation innovation." by Indra K Nooyi and Fred Krupp:
Fuel efficiency requirements create manufacturer selling price distortion in the marketplace without actually changing total fuel usage. The more weight carried the more fuel used over a distance. Fuel efficiency is per vehicle, but not by vehicle equivalent cargo load.

Most material, engine and design changes that can increase fuel economy have already been achieved by normal marketplace profit maximizing forces. By mandating higher fuel efficiency, trucks and cars will get lighter by decreasing their overall size, carrying weight and engine power. More trips will be made to carry the original size load the same distance.

A truck carrying 10 tons of goods will be replaced by a fuel efficient truck carrying 5 tons. Two trips will be needed now to carry the same cargo as one trip before. Vehicle fuel efficiency increases but total fuel use does not go down.

Truck makers will increase prices so buyers buy fewer high cargo capacity trucks to satisfy mandate for higher mpg truck sales.

Thursday, June 18, 2015

Good Intentions Do Not Guarantee Success: Michelle Obama's Well-Intentioned Healthy School Lunch Mandate Increased School Day Hunger And Unhealthy Eating

From The Wall Street Journal, "The School Lunch Program With an Unappetizing Report Card: The first lady’s project is plagued by complaints of inedible meals, wasted food and misspent funds." by Julie Kelly and Jeff Stier:
Nearly five years after passage of the Healthy, Hunger-Free Kids Act of 2010, mounting evidence suggests that the law may not be achieving either end. The well-intentioned signature policy of first lady Michelle Obama is an attempt to stem childhood obesity and hunger by providing healthier school meals. But as Congress prepares to reauthorize the program, which expires in September, lawmakers are sharpening their knives to address complaints of inedible meals, food waste and misspent funds.
Even though lunches are “free,” they are so unappetizing thanks to new nutrition standards that much food is thrown away. “It is horrible,” one inner-city principal, responsible for 1,200 students and 10,000 meals a week, told us. “It is just heartbreaking how much food is thrown away.”

So the students go hungry most of the day, until after school when enterprising vendors sell items like pork rinds, hot chips, or fresh corn mixed with cheese and mayonnaise from food carts outside of the school. Students don’t eat the free, healthy meals at school, remain hungry during the day, then flock to purchase the unhealthy foods the school lunches aim to replace. [Emphasis added.]

Majority Of Borrowers Using Payday Lenders Are Very Satisfied With Service: Federal Regulations Will Shut Off Needed Credit Access To Payday Borrowers

From Washington Times, "Obama-Elizabeth Warren payday lender rules slammed by Florida Democrats" by Kelly Riddell:
"I’m under no illusion that payday lenders are saints or the best industry in the world. I would advise consumers against taking out payday loans if they can avoid them," said Joe Colangelo, the executive director of Consumers’ Research, an independent think tank. "There’s this well-intentioned desire to fix something that’s not fair, but by making it more difficult to access credit, you’re not fixing the problem, you’re just preventing people access to another avenue of credit. You’re pushing them toward the guys on the streets who will break their knees if they aren’t going to pay."
Last year, a survey from the Federal Reserve found two-thirds of Americans making less than $40,000 annually would have to sell something or borrow money to pay for a $400 emergency expense, making payday lending an attractive option.

Moreover, a study by George Washington University found 54 percent of payday borrowers were "very satisfied" with the service, as compared to 5.7 percent who were "very dissatisfied." [Emphasis added.]

CBO Presentation On How It Will Implement Dynamic Scoring

From CBO, Presentation, June 17, 2015, "How CBO Will Implement Dynamic Scoring:"

Tuesday, June 16, 2015

Long-Term Outlook For The Federal Budget Has Worsened Dramatically Over The Past Several Years: Publicly Held US Federal Debt Nearly Doubled And Now Higher Percent Of GDP Than Any Point In US History Except WWII: Will Grow To Over 100 Percent Of GDP By 2040: CBO

From CBO, June 16, 2015, Report, "The 2015 Long-Term Budget Outlook:"
The long-term outlook for the federal budget has worsened dramatically over the past several years, in the wake of the 2007–2009 recession and slow recovery. Between 2008 and 2012, financial turmoil and a severe drop in economic activity, combined with various policies implemented in response to those conditions, sharply reduced federal revenues and increased spending. As a result, budget deficits rose: They totaled $5.6 trillion in those five years, and in four of the five years, they were larger relative to the size of the economy than they had been in any year since 1946. Because of the large deficits, federal debt held by the public soared, nearly doubling during the period. It is now equivalent to about 74 percent of the economy’s annual output, or gross domestic product (GDP)—a higher percentage than at any point in U.S. history except a seven-year period around World War II.

If current law remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits—caused mainly by the aging of the population and rising health care costs—would push debt back to, and then above, its current high level. The deficit would grow from less than 3 percent of GDP this year to more than 6 percent in 2040. At that point, 25 years from now, federal debt held by the public would exceed 100 percent of GDP.

From CBO, June 16, 2015, Report, "The 2015 Long-Term Budget Outlook in 25 Slides:"

Percentage Of Car Sales Going To Rental Companies

From The Wall Street Journal, "Why Your Next Rental Car Will Be a Camry or Cruze: GM, Toyota and others sold 21% of midsize sedans to rental agencies" by Christina Rogers:

Percentage Of Car Sales Going To Rental Companies
Source: The Wall Street Journal
Among the most reliant on sales to rental fleets in the first quarter: General Motors Co., Fiat Chrysler Automobiles NV, Volkswagen AG, Nissan Motor Co. and Hyundai Motor Co. The Chevy Cruze had the highest volume of cars going to rental car fleets during the quarter, amounting to about 45% of the compact’s total sales, followed by the Nissan Altima, Toyota Camry and Chrysler 200.

About one-quarter of sales for the popular Camry, the best-selling passenger car in the U.S., were to rentals in the first quarter, up from 14% a year ago. Roughly 39% of Chrysler 200 sedan sales went to rental fleets. For the Nissan Altima, the rental-car mix was 27%.

Thursday, June 11, 2015

Google Cars Show That Driving Legally Increases Accident Rates

From The Wall Street Journal, "When Robo-Cars crash, It’s Your Fault: Google’s self-driving car never causes an accident but still has more than most." by Holman W. Jenkins, Jr:
[F]rom a Google spokesperson: "We just got rear-ended again yesterday while stopped at a stoplight in Mountain View. That’s two incidents just in the last week where a driver rear-ended us while we were completely stopped at a light! So that brings the tally to 13 minor fender-benders in more than 1.8 million miles of autonomous and manual driving—and still, not once was the self-driving car the cause of the accident."
At 13 accidents per 1.8 million miles driven, Google’s accident rate is about twice the accident rate of the safest cohort of drivers, ages 40-64. At 7.2 per million miles, Google’s rate most closely matches the accident rate of drivers 70-74—perhaps shedding light on a widely read blog post by a driver in Google’s neighborhood who reported "Google cars drive like your grandma."
If Google’s claims are accurate, then we face a paradox: Google cars have more accidents than other drivers, and it’s the other driver’s fault.
On your daily high-speed commute, you and other practiced commuters zoom along efficiently at 20 mph above the speed limit—until a Google car appears in your lane rigidly adhering to the law. In New York City, a Google car would be a metaphysical impossibility. A Google car would never be able to make a left turn, never be able to pull away from the curb and into traffic, because aggressive taxi drivers would quickly learn to exploit its algorithms.

Wednesday, June 10, 2015

Real GDP Growth By State, 2013-2014

From BloombergBusiness, "This Map Shows How Fast Each State Grew Last Year: From Texas and Wyoming to Oregon, growth is heating up west of the Mississippi" by Jeanna Smialek:
Gross domestic product increased by 4.3 percent in the Southwest last year as mining helped Texas boost its output by 5.2 percent, giving it the second-fastest growth rate of any state. The Rocky Mountain region saw a 3.9 percent expansion as the Far West, which includes California, Oregon, Washington and Nevada, grew 2.7 percent.

Real GDP Growth By State, 2013-2014
From BloombergBusiness

In addition to mining, professional, scientific and technical services helped Western states pull ahead from the rest of the nation last year. The latter made the biggest contribution to U.S. output growth by state in 2014.

North Dakota was the fastest-expanding state last year, growing 6.3 percent, following a 0.9 percent advance in 2013 that was revised down sharply from a previously reported 9.7 percent rate.

Tuesday, June 2, 2015

Burton Malkiel On Janet Yellen's Stock Picking Expertise

From The Wall Street Journal, "Janet Yellen Is No Stock Market Sage: If you sold your biotech stock based on the Fed chair’s assessment of the market in July, you’d be sorry now." by Burton G Malkiel:
If Ms. Yellen and other Fed officials had some insight into stock valuations, their pronouncements might be stabilizing. But neither the Fed nor professional investors have any special expertise in second guessing the collective wisdom of market participants. Market professionals have had an abysmal record in judging whether the market as a whole is “overvalued.”

Nor has the Fed distinguished itself when opining on market valuations. In December 1996, then-Chairman Alan Greenspan famously questioned whether stock prices exhibited “irrational exuberance.” The market rallied sharply into early 2000, and anyone buying equities after Mr. Greenspan’s speech would have received generous long-run returns even after the market declines after the bursting of the dot-com bubble of 2000 and the housing bubble of 2007. An investor who put $10,000 into an S&P 500 stock index fund immediately after the “irrational exuberance” remark and held on while reinvesting dividends would have almost $40,000 today.

Since July, when Ms. Yellen suggested that biotech stocks had “stretched” valuations, the iShares Nasdaq Biotechnology exchange-traded fund has rallied about 40%. It wasn’t simply speculators who caused the price increase. Sophisticated companies purchased biotech companies at extremely generous premiums over their market prices.
The entire article is worth a read.

Monday, June 1, 2015

Constraints And Not "Outside The Box" Thinking Are Critical Sources Of Value-Creating Innovation: McKinsey & Co

From McKinsey & Company, Insights & Publications, May 2015, "The simple rules of disciplined innovation: Constraints aren’t the enemy of creativity—they make it more effective." by Donald Sull:
When it comes to innovation, the single most common piece of advice may be to “think outside the box.” Constraints, according to this view, are the enemy of creativity because they sap intrinsic motivation and limit possibilities.

Sophisticated innovators, however, have long recognized that constraints spur and guide innovation.
Simple rules add just enough structure to help organizations avoid the stifling bureaucracy of too many rules and the chaos of none at all. By imposing constraints on themselves, individuals, teams, and organizations can spark creativity and channel it along the desired trajectory. Instead of trying to think outside the wrong box, you can use simple rules to draw the right box and innovate within it.
Simple rules are most commonly applied to the sustaining kind of innovation, often viewed as less important than major breakthroughs. The current fascination with disruption obscures an important reality. For many established companies, incremental product improvements, advances in existing business models, and moves into adjacent markets remain critical sources of value-creating innovation.