Wednesday, September 4, 2019

An Expectation View Of The 2008 Housing Crisis

Back in October 2008, I published a list on this blog [below] of some possible future sociological and economic scenarios that would affect the then current prices of homes through a change in expectation. In looking at that list today, it surprises me that so many occurred.
Tuesday, October 21, 2008, "Home Values Were Not In A Bubble" Posted By Milton Recht:
***
In a rational expectations, efficient market world which is the world economic research finds we live in, house price changes are due to changes in the expectations of the economic fundamentals related to the need, demand and value of houses. Thus, current house prices reflect their true economic value and homes are not undervalued whether due to the unavailability of credit or for other reasons. Arms-length housing market transactions, of which there are still many, occur at the true current price of housing.
***
Some of the possible future scenarios which would decrease the current value of a home are:
  1. a significant and long-term decline in household formation.
  2. a significant and long-term decline in population growth in the US due to changes in birthrate or immigration policies.
  3. an increase in adult children living in their parents home (including after marriage or cohabitation).
  4. an expectation of an increase in mortality or a shortening of life expectancy due to war, disease or natural or man made disasters. [Add opioids and suicide.]
  5. a change in our preferences so as to prefer multi-family or apartment type dwellings as opposed to single family homes decreasing the need for single family homes.
  6. a significant increase in the costs of owning and maintaining a home which lowers its economic value to a purchaser because of the expected increase cash outflow during ownership.
  7. a decline in both household income or the expected growth rate of household income.
  8. an alternative technology for building homes which will dramatically reduce the costs of building new houses.
  9. a change in home related taxation such as a denial of mortgage interest or real estate taxes deductions.
  10. a substantial expected increase in real estate taxes.
  11. other possibilities that affect the economic value of a home that I have not mentioned.
Some ideas mentioned above are testable. For example, I was going to mention global warming but a recent paper about house price declines in California observed that the decline is greater in central California than along the coast which is contrary to what would happen to house prices along the coast due to rising sea levels due to global warming. See the paper by OFHEO, "Recent Trends in House Price", pages 4 and 5 and note 6 at http://www.ofheo.gov/media/research/pricesandfinancing.pdf. [The Office of Federal Housing Enterprise Oversight (OFHEO) no longer exist and I am unaware of an updated weblink to the paper.]

The point of this post is that to most economists who believe in economic value, efficient markets and rational expectations, the current decline in home prices is a rational response to a change in expectations about the value of homes. If there were not this belief that current homes are fairly valued, then buyers would be buying up and warehousing the depressed priced homes, the foreclosed homes and abandoned homes. The fact that buyers are not rushing in shows that the current prices of homes are fair and homes are not undervalued.

Friday, July 26, 2019

US Regional GDP Change: Chart Of Past 4 Quarters

From The Wall Street Journal, "Real Time Economics: The Outlook is Getting ‘Worse and Worse’ " by Jeffrey Sparshott, and Likhitha Butchireddygari, Jul 26, 2019:
For the first time in two years, all 50 states and Washington, D.C., saw an increase in real GDP in the first quarter of 2019. But the Northeast and mid-Atlantic regions have underperformed for the past four quarters, while the Southwest and Rocky Mountain regions have outpaced the country.
***
Source: The Wall St Journal, Real Time Economics

Thursday, July 25, 2019

Gross Domestic Product by State, First Quarter 2019: Map

From US Bureau of Economic Analysis, "Gross Domestic Product by State, First Quarter 2019: West Virginia Had the Fastest Growth in the First Quarter":
Real gross domestic product (GDP) increased in all 50 states and the District of Columbia in the first quarter of 2019, according to statistics released today by the U.S. Bureau of Economic Analysis. The percent change in real GDP in the first quarter ranged from 5.2 percent in West Virginia to 1.2 percent in Hawaii.
Source: US Bureau of Economic Analysis

Friday, July 12, 2019

Over 70 Percent Of Very High (Top 400) Income Earners Are In That Top Tier For Only One Year

The US has a high turnover of people in the very high income brackets. A higher tax on people earning very high incomes affects many more people than elected officials lead us to believe. Over a 22- 23 12-13 year period, 4500 people entered the class of the top 400 earners for at least one year. Fifty percent of income earners are in the top 10 percent for at least one year during their lifetimes. 11 percent will be in the top 1 percent. Any higher tax on the rich will hit many more taxpayers than politicians tell us.

From Tax Foundation, "How Much Turnover Is There Among the Richest Americans?" by Robert Bellafiore and Aida Vazquez-Soto:
As scholars and everyday taxpayers continue to debate this issue and the question of increasing taxes on the richest Americans, one observation to keep in mind is the high degree of turnover among the highest-income Americans.

The following chart, using data from the Internal Revenue Service (IRS), shows the frequency of those filing who make the top 400 individual income tax returns with the highest adjusted gross income from 1992 to 2014. Of the 4,584 people who made it into the top 400 at some point over that period, 3,262 qualified for only one year. In other words, 71.2 percent of those who were in the top 400 made it once and not again.
***
Source: Tax Foundation

As The Cato Institute noted, "High Turnover Among America’s Rich" by Chelsea Follett, January 8, 2016:
Your odds of “making it to the top” might be better than you think, although it’s tough to stay on top once you get there.

According to research from Cornell University, over 50 percent of Americans find themselves among the top 10 percent of income-earners for at least one year during their working lives. Over 11 percent of Americans will be counted among the top 1 percent of income-earners (i.e., people making at minimum $332,000 per annum) for at least one year.

How is this possible? Simple: the rate of turnover in these groups is extremely high.

Just how high? Some 94 percent of Americans who reach “top 1 percent” income status will enjoy it for only a single year. Approximately 99 percent will lose their “top 1 percent” status within a decade.

Wednesday, July 10, 2019

Average Household Income Of The Top 1 Percent Was $1.8 Million Before Taxes And Transfers And $1.6 Million After: CBO Report

From CBO, "The Distribution of Household Income, 2016" July, 9, 2019, report:

Source: CBO
What Was the Distribution of Income in 2016 Before Taxes and Transfer Payments?
First, CBO analyzed household income excluding the effects of federal taxes and means-tested transfers (which include benefits from Medicaid, the Supplemental Nutrition Assistance Program, and Supplemental Security Income). According to the agency’s estimates, in that year:
  • Average income among households in the lowest quintile (or fifth) of the income distribution was about $21,000;
  • Average income among households in the highest quintile—that is, the top 20 percent—was about $291,000; and
  • Average income among households in the top 1 percent was about $1.8 million.
Those amounts include social insurance benefits (such as benefits from Social Security and Medicare).

How Did Means-Tested Transfers and Federal Taxes Affect the Distribution of Income in 2016?
Means-tested transfers and federal taxes are both progressive. That is, low-income households receive a larger share of their income as means-tested transfers than do high-income households, and high-income households pay a larger share of their income in federal taxes than do low-income households. Because of the progressive structure of those systems, the distribution of income after transfers and taxes is more even than the distribution of income before transfers and taxes. In 2016, according to CBO’s estimates, those transfers and taxes:
  • Increased income among households in the lowest quintile by $14,000 (or more than 65 percent), on average, to $35,000,
  • Decreased income among households in the highest quintile by $76,000 (or more than 25 percent), on average, to $215,000, and
  • Decreased income among households in the top 1 percent by $600,000 (or more than 33 percent), on average, to $1.2 million.
Not all households receive means-tested transfers. In fact, those transfers went overwhelmingly to low-income households in 2016. Over 50 percent of means-tested transfers went to households in the lowest income quintile, which amounted to 72 percent of income before transfers and taxes for those households. Less than 4 percent of means-tested transfers went to households in the highest quintile, which amounted to less than one-half of one percent of income for those households. Households in all quintiles have some form of federal tax burden, but high-income households paid the majority of federal taxes in 2016. Households in the highest income quintile, which received about 54 percent of all income, paid about 69 percent of federal taxes. The average federal tax rate for those households was about 27 percent. Households in the lowest quintile, which received about 4 percent of all income, paid less than one-half of one percent of federal taxes. The average federal tax rate for those households was less than 2 percent. Households in the top 1 percent of the distribution received 16 percent of income and paid 25 percent of federal taxes; their average federal tax rate was about 33 percent.

What Are the Trends in Household Income and Income Inequality?
According to CBO’s estimates, average household income before transfers and taxes was almost 60 percent higher in 2016 than it was in 1979 in real (inflation-adjusted) terms—reflecting an average growth rate of 1.3 percent per year. That growth, however, was not the same across the income distribution. For the lowest quintile and the middle three quintiles, it was 33 percent (or 0.8 percent per year), but for the highest quintile, it was 99 percent (or 1.9 percent per year). For the top 1 percent of the income distribution, it was 218 percent (or 3.2 percent per year). Because of those differences in growth rates, income inequality was greater in 2016 than it was in 1979 [omitted interactive graphic]. For the lowest quintile, cumulative growth in income after transfers and taxes (85 percent, or 1.7 percent a year) was significantly greater over the period than was growth in income before transfers and taxes (33 percent). That change was due to an expansion of means-tested transfers (especially Medicaid benefits) and a reduction in federal taxes (largely from an expansion of refundable tax credits). By contrast, for the highest quintile, cumulative growth in income after and before transfers and taxes was similar, at 101 percent and 99 percent, respectively. The same was true for the top 1 percent of the income distribution: 226 percent versus 218 percent. Because of the redistributive nature of means-tested transfers and federal taxes, the degree of income inequality was less after transfers and taxes than it was before. Over the 1979–2016 period, the extent to which those policies reduced income inequality increased.

Tuesday, July 9, 2019

Distribution of Household Income, 2016: CBO

From The Congressional Budget Office, July 9, 2019, Report, "The Distribution of Household Income, 2016":
In 2016, average household income before accounting for means-tested transfers and federal taxes was $21,000 for the lowest quintile and $291,000 for the highest quintile. After transfers and taxes, those averages were $35,000 and $214,000.
Source: CBO


Thursday, May 16, 2019

Fix K-12 Schools And Diversity College Admission Preferences Will Not Be Needed

My comment to The Wall Street Journal article, "SAT to Give Students ‘Adversity Score’ to Capture Social and Economic Background: New score comes as college admissions decisions are under scrutiny" by Douglas Belkin | Graphics by Elbert Wang:
The focus on college admissions hides the true problem of the failure to teach in inner city, union run, government public schools. Without skills in basic reading comprehension, basic mathematics and logical reasoning (what SAT measures), students admitted through diversity will either fail to graduate college or gravitate to the easiest majors. While it is easy to blame environment and parents, standards to become a teacher have declined over the years. NYS teacher test has a score range of 15-75. The passing absolute score for certification for grades 1-6 is 46 (equivalent to 61 percent on a 100 based scaled); English and Math grades 5-9 and grades 7-12 passing absolute scores are 38 (equivalent to 51 percent). When our teachers are barely understanding the subjects they are teaching, how can our inner city, low income, disadvantaged kids be expected to learn to read and do basic math? Fix k-12. De-unionize to allow firing of teachers. Allow school choice. College admission solved.
Source for NYS Teacher certification passing scores.

Saturday, May 11, 2019

Job Opening Excess Does Not Mean The US Needs Additional Labor

My published comment to The Wall Street Journal, Opinion, "Help Wanted in the U.S.A.: More guest workers would ease the growing labor shortage." by The Editorial Board:
The existence of [excess] job openings does not equate to a need for additional labor. There will always be marginal businesses that do not have the funds to invest in equipment, that are profitable and exist only if labor is very cheap. Keeping labor costs low by importing more labor leads to a misallocation of resources into unsustainable businesses that are unneeded, inefficient and have artificially low product prices. When the WWII Bracero guest migrant agricultural worker program, which existed from 1942 to 1964, ended in 1964, farming equipment replaced the lost workers without a loss of output. Additionally, as workers gain experience, they move into higher productivity jobs at higher wages at the same or different firms. An unfillable opening at the lower wage previous job is a signal to the employer that its products and processes are inefficient and lack needed added consumer value to allow the payment of a competitive wage. Importing cheap labor distorts capital investment.

Tuesday, May 7, 2019

Every Banana Republic Has A Bill Of Rights: Every American Generation Has A Vocal Minority That Considers Itself Doomed To Live In An Age Of Constitutional Degeneracy.

From The Wall Street Journal, "The Culture That Sustains America’s Constitution: Without it, checks and balances are barricades of foam and counterweights of butterfly’s breath." By Joseph Tartakovsky, July 2, 2018:
"Every banana republic has a Bill of Rights," Justice Antonin Scalia told a Senate committee in 2011 [See embedded video below]. Written guarantees are meaningless without a culture to sustain them. Russia’s Constitution purports to secure the freedoms of speech and press, but Muscovites shrugged in 2001 when Vladimir Putin seized the last independent television network. Imagine if the White House swallowed up Fox News, CNN and MSNBC, one after another. Americans may bicker over “fake news,” but an attempt at censorship like that would unite us in virtuous rage.

Every American generation has a vocal minority that considers itself doomed to live in an age of constitutional degeneracy. The supposed fall from purity began about 600 days into the Constitution’s life, when the Virginia Legislature, in November 1790, denounced George Washington’s financial policies as constitutionally blasphemous. But Americans chose to cannonade each other with pamphlets, not artillery. And so the orderly transitions of power went on, one after another, like a never-ending football game in which the parties eternally gain and lose yardage.

Constitutionalism is not a mere institutional form but a culture—a set of sentiments, habits and assumptions, a permeating spirit that animates an otherwise lifeless paper scheme. Without this instinctive loyalty, the Constitution’s checks and balances are barricades of foam and counterweights of butterfly’s breath. It is not in having a constitution that our strength lies, but in cherishing it. So long as we keep the faith, our Constitution will be displaced no sooner than an ant tips over the Statue of Liberty.
Video of the late Justice Antonin Scalia, "Opening Statement on American Exceptionalism to a Senate Judiciary Committee" delivered October 5, 2011, Washington, DC:



Full transcript follows of above video from American Rhetoric Online Speech Bank:
Thank you, Mr. Chairman, Members of the Committee:

I'm happy to be back in front of the Judiciary Committee, where I started this pilgrimage.

I am going to get even more fundamental than my good friend and colleague. Like him, I speak to students, especially law students but also college students and even high school students, quite frequently about the Constitution because I feel that we're not teaching it very well.

I speak to law students from the best law schools -- people, presumably, especially interested in the law and I ask them, "How many of you have read the Federalist Papers?" And a lot of hands will go up. [And I say], "No, not just Number 48 and the big ones. How many of you have read the Federalist Papers cover to cover?" Never more than about 5%.

And that is very sad, especially if you're interested in the Constitution. Here's a document that says what the Framers of it thought they were doing. It's such a profound exposition of political science that it is studied in political science courses in Europe. And yet, we have raised a generation of Americans who are not familiar with it.

So, when I speak to these groups the first point I make -- and I think it's even a little more fundamental then the one that Stephen [Breyer] has just put forward. I ask them, "What do you think is the reason that America is such a free country?" "What is it in our Constitution that makes us what we are?"

And I guarantee you that the response I will get -- and you will get this from almost any American, including the woman that he [Justice Breyer] was talking to at the supermarket. The answer would be: freedom of speech, freedom of the press, no unreasonable searches and seizures, no quartering of troops in homes -- those marvelous provisions of the Bill of Rights.

But then I tell them, if you think that a bill of rights is what sets us apart, you're crazy. Every banana republic in the world has a bill of rights. Every President for life has a bill of rights. The bill of rights of the former "Evil Empire," the Union of Soviet Socialist Republics, was much better than ours. I mean it, literally. It was much better. We guarantee freedom of speech and of the press -- big deal. They guaranteed freedom of speech, of the press, of street demonstrations and protests; and anyone who is caught trying to suppress criticism of the government will be called to account. Whoa, that is wonderful stuff!

Of course -- just words on paper, what our Framers would have called a parchment guarantee. And the reason is, that the real Constitution of the Soviet Union -- you think of the word "constitution," it doesn't mean a "bill"; it means "structure"; [when] you say a person has a sound "constitution," [he] has a sound "structure." The real Constitution of the Soviet Union, which is what our Framers debated that whole summer in Philadelphia in 1787 -- they didn't talk about the Bill of Rights; that was an afterthought, wasn't it? -- that Constitution of the Soviet Union did not prevent the centralization of power, in one person or in one party. And when that happens the game is over; the Bill of Rights is just what our Framers would call a parchment guarantee.

So, the real key to the distinctiveness of America is the structure of our government.

One part of it, of course, is the independence of the judiciary; but there's a lot more. There are very few countries in the world, for example, that have a bicameral legislature. Oh, England has a House of Lords, for the time being, but the House of Lords has no substantial power; they can just make the [House of] Commons pass a bill a second time. France has a senate -- it's honorific. Italy has a senate -- it's honorific. Very few countries have two separate bodies in the legislature equally powerful. That's a lot of trouble, as you gentlemen doubtless know, to get the same language through two different bodies elected in a different fashion.

Very few countries in the world have a separately elected chief executive. Sometimes I go to Europe to talk about separation of powers, and when I get there I find that all I'm talking about is independence of the judiciary, because the Europeans don't even try to divide the two political powers, the two political branches -- the legislature and the chief executive. In all of the parliamentary countries the chief executive is the creature of the legislature. There's never any disagreement between them and the prime minister, as there is sometimes between you and the President. When there's a disagreement, they just kick them out. They have a no confidence vote, a new election, and they get a prime minister who agrees with the legislature.

And the Europeans look at this system and they say, well, it passes one house [and] it doesn't pass the other house; sometimes the other house is in the control of a different party; it passes both, and then this President, who has a veto power, vetoes it. And they look at this and they say, "Ah, it is gridlock." [in faux foreign accent of indistinct origin]

And I hear Americans saying this nowadays, and there's a lot of it going around. They talk about a "dysfunctional government" because there's disagreement. And the Framers would have said, yes, that's exactly the way we set it up. We wanted this to be power contradicting power -- because the main ill that beset us -- as Hamilton said in The Federalist when he talked about a separate Senate -- He said, yes, it seems inconvenient, but inasmuch as the main ill that besets us is an excess of legislation, it won't be so bad. This is 1787 -- he didn't know what an excess of legislation was.

So, unless Americans can appreciate that and learn to love the separation of powers, which means learning to love the gridlock, which the Framers believed would be the main protection of minorities -- the main protection. If a bill is about to pass that really comes down hard on some minority [and] they think it's terribly unfair, it doesn't take much to throw a monkey wrench into this complex system.

So, Americans should appreciate that and they should learn to love the gridlock. It's there for a reason -- so that the legislation that gets out will be good legislation.

And thus conclude my opening remarks.

Thursday, April 25, 2019

For A Job, Go Midwest High School Graduate

From Bloomberg Business, "No College Degree? NYC, D.C. Seen as Worst Areas for Job Seekers" by Shelly Hagan:
Opportunities for workers with little to no post-high school education vary across the country, with the Midwest having some of the best options and New York City among the worst. Toledo, Ohio; St. Louis, Missouri and Lansing, Michigan are a few of the metro areas with the highest share of jobs that pay wages above the national average and don’t require a college degree, according to a new study by researchers from the Federal Reserve Banks of Cleveland and Philadelphia.

The study ranked 121 U.S. metro areas by share of “opportunity employment,” which is defined as employment accessible to workers without a bachelor’s degree and typically paying above the national median wage, adjusted for regional inflation.
Source: Bloomberg Business

Monday, April 22, 2019

My Comment To "Jamie Dimon’s Timely Warning: A CEO finally speaks up to tell the truth about the shared misery of socialism" In A WSJ Opinion by Andy Kessler

My published comment to The Wall Street Journal Opinion, "Jamie Dimon’s Timely Warning: A CEO finally speaks up to tell the truth about the shared misery of socialism." by Andy Kessler:
Just tell potential socialists that under socialism there wouldn't be any almond, oat, coconut, soy, antibiotic free, non-GMO or organic milk for their coffees. lattes and cappuccinos. Don't even mention gluten-free. Without a profit motive and competition, there isn't any market demand feedback. Without a capitalistic market mechanism, there isn't any need for new products since the old products, such as cow's milk or wheat pasta, work. Why change and bring out new products when the old product is good enough and OK. Plus, under socialism, government decides production amounts, such as how much wheat is used for bread and how much for pasta. Get used to your turkey sandwich between two layers of linguine when there is not enough bread produced.

Wednesday, March 27, 2019

Medicare For All Is Not Really Healthcare For All

A common, widespread misconception among politicians, the media and the public is that the path to cheaper and more available healthcare requires changes to medical insurance, such as Medicare for All or Obamacare.

Broadening healthcare insurance through subsidies or a government takeover increases demand for medical services without increasing the supply of those services. Excess demand leads to higher prices, limited affordability, and limited availability of health services. Using government subsidies (tax dollars) to lower the visible, consumer payment part of healthcare does not lower the underlying actual cost of medical services and results in continually higher amounts of needed subsidies and higher government budgets (and taxes) to meet the existing and increasing demand for medical care, in part due to a growing and aging population. In the end, the reality will be less medical care availability and not more as originally intended, as government budgets will become insufficient to pay for the needed medical care of the general public.

Medical Insurance Industry

The insurance industry does not provide healthcare and it is not an employer of doctors, nurses, etc. It does not compete in the medical care industry. Medical insurance is a reimbursement mechanism to consumers for their medical costs. It is like collision auto insurance that reimburses a car owner for the repair of damage to a car body, or home fire insurance to pay for repairing fire damage to a house.

No rational person would think that government involvement in collision insurance or fire insurance would lower the purchase price of a car or a home. Yet, with medicine, politicians expect that government involvement in health insurance will lower the cost of seeing a doctor or staying in a hospital. The reality is that the more government is involved in healthcare and healthcare insurance, the more expensive and unavailable it becomes. The private sector, in a profit motive, competitive marketplace, is much better than government in quickly delivering quality goods and services to almost all consumers, while driving costs and prices lower than laws, regulations and government providers can. Government is good at hiding the true cost of consumer services and consumer goods through tax benefits and subsidies, but government is not as good as the competitive marketplace at providing cheaper services through efficiency, productivity and innovation.

For the health insurance industry to continue to exist, the total yearly revenue from health insurance premiums must exceed the total yearly payout to consumers for medical claims. If total insurance premium payments were below total insurance claim payouts, insurance companies would go bankrupt and leave unpaid claims. The way to lower insurance premiums is to lower the total real cost of provided healthcare through healthcare industry competition, efficiency, productivity and innovation.

Healthcare Costs
The problem with healthcare costs is that the medical care industry, not the health insurance industry, is non-competitive and is not striving to increase productivity through innovation and efficiency. The healthcare industry is on the low end of industry productivity improvements in the US, along with education and construction. As long as healthcare productivity is below average and less than the other sectors of the economy, it costs will increase faster than inflation and faster than average growth in income and wealth. The numerous government barriers, medical industry restrictions and anti-competitive behavior to the entry of new doctors, medical providers, trained immigrant doctors, new hospitals and out-patient surgery facilities, limit the number of competitive medical providers and keeps healthcare services prices artificially high.

In the case of government run medical services, when the yearly budget is exceeded or the money runs out, the services and subsidies stop. For Medicare for All to be able to pay the annual medical costs for all eligible individuals, its total annual budget cannot be lower than the total actual yearly medical usage costs of all those covered under Medicare for All. Doctors and hospitals that currently accept the existing Medicare do so because they are cross-subsidized by the higher payments by the individuals (mostly under 65) covered by private insurance and not Medicare. Once Medicare for All goes into effect, those that are paying higher amounts than Medicare will cease to exist and the current existing fee structure of Medicare will have to be higher under Medicare for All.

To control costs and avoid going over its yearly budget, government will have to limit the availability and usage of healthcare services through limiting the availability of technology, doctor appointments and surgeries. Wait times will increase to see doctors, to have medical tests and surgery performed. Purchase and use of newer and existing technologies will be delayed or not purchased in sufficient numbers to meet demand without excessive delays.

Medicare for All will give you insurance coverage, but it will very quickly result in delays in receiving care, delays in replacing outdated technologies and under-funding in medical infrastructure. The inability to obtain needed quality medical care in a timely manner, is in reality equivalent to having no medical coverage, or at best inferior medical care. Medicare for All will quickly evolve and give you health insurance without access to timely, needed healthcare and without access to the best technology and treatments.

Added March 31, 2019:
Also see my April 24, 2018, blog post, "Expensive Medicine: MY Posted Comment To WSJ Opinion, 'English Literature Isn’t Brain Surgery: Why is American medicine so expensive?' And An Addendum"







Thursday, March 14, 2019

Inactive Ingredients In Many Oral Medications Can Trigger Allergic Reactions

From ScienceNews, "Hidden compounds in many medications can trigger allergies: An analysis of 42,000 pill recipes shows 93 percent have potentially problematic ingredients" by Maria Temming:
Every pill contains a pharmaceutical drug with some therapeutic effect on the body, as well as a mixture of inactive compounds added to boost the medication’s effectiveness or simply to make the pill more palatable. Inactive ingredients are generally considered harmless. But many pills contain chemicals that can cause allergic reactions or digestive problems in some patients, according to an analysis of the chemical ingredient lists for thousands of pills.

Researchers searched a database that contained about 42,000 recipes for oral medications marketed in the United States. Of those, 92.8 percent contained at least one of 38 inactive ingredients that have triggered allergic reactions in patients, the researchers report online March 13 in Science Translational Medicine. And 55 percent of pills contained at least one of a class of sugars called FODMAPs, which can cause digestive problems in people with irritable bowel syndrome.

Monday, March 4, 2019

NYS Population Over 65 Years Old Increased 26 Percent Over Last Decade, While Overall Population Grew 3 Percent

From Center for Urban Future, Report - February 2019, "New York’s Older Adult Population Is Booming Statewide" by Christian Gonz├ílez-Rivera, Jonathan Bowles, and Eli Dvorkin:
There are now more residents aged 65 and older in New York State—3.2 million—than the entire population of 21 states. Today, nearly one in six New Yorkers is 65 and above (16 percent), a larger share of the state’s population than ever before.

This data analysis provides a new level of detail about the aging of the population in cities and counties across New York State. Our analysis finds that older adults are the fastest-growing segment of the population statewide. Over the past decade, the number of New Yorkers ages 65 and over increased by 647,000, or 26 percent. During the same period, the state’s overall population grew by just 3 percent. There are now more New Yorkers ages 65 and older statewide than there are children under the age of 13.
***
Indeed, the growth of the older adult population is outpacing overall population growth in all of the state’s 20 largest cities and counties, including Rochester, Syracuse, Yonkers, Albany, and New York City. Today, New Yorkers ages 65 and above account for a whopping 19 percent of the population in Ulster and Sullivan Counties and 18 percent of the population in Erie, Nassau, Niagara, and Saratoga counties.
***
Source: Center for an Urban Future

Thursday, February 28, 2019

New York City Metro Area Has The Largest Outmigration Of 25–34 Year Olds

From City Journal, "Where Millennials Really Go for Jobs: Contrary to media hype, tech firms and young workers aren’t flocking to “superstar” cities." by Joel Kotkin and Wendell Cox, February 27, 2019:
[A]s a new Brookings study shows, millennials are not moving en masse to metros with dense big cities, but away from them. According to demographer Bill Frey, the 2013–2017 American Community Survey shows that New York now suffers the largest net annual outmigration of post-college millennials (ages 25–34) of any metro area—some 38,000 annually—followed by Los Angeles, Chicago, and San Diego. New York’s losses are 75 percent higher than during the previous five-year period.

By contrast, the biggest winner is Houston, a metro area that many planners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials net last year, while other big gainers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively. Last year, according to a Texas realtors report, a net 22,000 Californians moved to the Lone Star State.

The other top metros for millennials were Charlotte, Phoenix, and Nashville, as well as four relatively expensive areas: Seattle, Denver, Portland, and Riverside–San Bernardino. The top 20 magnets include Midwest locales such as Minneapolis–St. Paul, Columbus, and Kansas City, all areas where average house prices, adjusted for incomes, are half or less than those in California, and at least one-third less than in New York.

Perhaps even more significant has been the geographic shift within metro areas. The media frequently has exaggerated millennial growth in the urban cores. In reality, nearly 80 percent of millennial population growth since 2010 has been in the suburbs.
From Brookings Report, "How migration of millennials and seniors has shifted since the Great Recession" by William H. Frey, January 31, 2019:

Sunday, February 17, 2019

US Debt Level Thoughts: My Posted WSJ Comment To "Worry About Debt? Not So Fast, Some Economists Say"

My posted comment to The Wall Street Journal, "Worry About Debt? Not So Fast, Some Economists Say U.S. deficits may not matter so much after all—and it might not hurt to expand them for the right reasons" by David Harrison and Kate Davidson:
Interest expense on US debt is a manageable amount of the budget. In 2018, interest expense was 7.4% of the federal budget. In 2019, it is expected to be 8.5% percent of the budget and to grow to 12.5% around 2025. Unlike households or corporations, the US does not set aside or amortize principal. It waits until maturity of the debt. Its expense is almost exclusively interest payment. The average maturity of US public debt has been slowly increasing and is around 6 years now. When debt matures, the Treasury typically refinances the principal due with new debt. If 10 year US Treasury bond payments included amortizing principal payments, like residential household mortgages, it yearly debt payments would be about 4.5 times as much. With private debt, the inability to refinance or pay off the principal amount at maturity is an important component of default risk and the interest rate demanded. With US bonds, maturity and interest payment risk is a small risk factor. Low risk, low rate.

Friday, February 15, 2019

Developing Countries Create Most Global CO2 Emissions

From The Wall Street Journal, Real Time Economics, Commentary, "The Green New Deal’s Global Blind Spot: U.S. policy could do the most good by targeting innovation other countries can exploit" by Greg Ip:
The [Green New] deal targets U.S. emissions, yet the harm from global warming—extreme weather, heat, rising sea levels—comes from global emissions. This year, the U.S. will contribute 15% of the world’s carbon-dioxide emissions, according to the International Energy Agency. China will contribute 30% and India, 7%. By 2040, the U.S. share will drop to 12%, China’s to 27%, and India’s will rise to 14%.

Thus, even if the Green New Deal introduced by some Democrats last week succeeds in reducing U.S. emissions to zero, this will benefit Americans little unless other countries, in particular China and India, do the same.
Global CO2
Source: Wall Street Journal, Real Time Economics

Monday, January 14, 2019

Video Explanation Of Harold Demsetz, "Toward A Theory Of Property Rights"

In honor of Harold Demsetz, born: May 31, 1930 – died: January 4, 2019.

From Learn Liberty, "Property Rights as a Response to a Problem:"

Seventy Percent Of Americans Say US Healthcare Has Major Problems Or In A State Of Crisis: Gallup

From Gallup, "Seven in 10 Maintain Negative View of U.S. Healthcare System" by Justin McCarthy:
Seventy percent of Americans describe the current U.S. healthcare system as being "in a state of crisis" or having "major problems." This is consistent with the 65% to 73% range for this figure in all but one poll since Gallup first asked the question in 1994.
Source: Gallup 
In that one poll -- conducted right after the 9/11 attacks in 2001 -- just 49% of Americans said the U.S. healthcare system had major problems or was in crisis. This was because of Americans' heightened concerns about terrorism after the attacks, which temporarily altered their views and behaviors on a variety of issues.

Saturday, January 5, 2019

Religious Composition Of The 2019 Congress

From Pew Research Center, FactTank, "5 facts about the religious makeup of the 116th Congress" by Aleksandra Sandstrom:
The religious composition of the new [2019] Congress is very different from that of the U.S. adult population. While the number of self-identified Christians in Congress has ticked down slightly, Christians as a whole – and especially Protestants and Catholics – are still overrepresented in proportion to their share in the general public. But by far, the largest difference between the U.S. public and Congress is in the share of people who are unaffiliated with a religious group. In the general public, 23% say they are atheist, agnostic or “nothing in particular.” In Congress, just one person says she is religiously unaffiliated... .
Source: Pew Research Center