NY Has Longest Home Foreclosure Process: Three Years To Foreclose On Defaulting Homeowner: Five Times As Long As Arizona: NY Home Prices Show Yearly Decline While US Shows Gains

Posted by Milton Recht:

From Bloomberg, "New York Protecting Defaulters Stalls Rebound: Mortgages" by Prashant Gopal:

The New York area was one of only two in the country to post year-over-year home price declines in the latest Case- Shiller 20-city index. Homebuyers also could lose, with the Federal Housing Finance Agency considering a fee increase to compensate Fannie Mae (FNMA) and Freddie Mac for doing business in New York and four other states with slow, costly foreclosures.

"New York suffers from what appears to be altruism, in that it postpones foreclosures as long as possible -- the problem is that altruism can be expensive," said Anthony B. Sanders, an economics professor at George Mason University in Fairfax, Virginia. “It slows down the housing market and it results in lenders being almost unwilling to lend. New buyers will pay the price for this.”***In New York it took 1,089 days on average to foreclose in the fourth quarter, the longest of any state and more than five times the pace in hard-hit Arizona, a non-judicial state that has worked through much of its backlog, according to data from RealtyTrac.

Prosecutorial Discretion Is A Huge Unregulated Threat To Civil Liberties: The Lesson Of Aaron Swartz And David Gregory

Posted by Milton Recht:

From the academic paper, "Ham Sandwich Nation: Due Process When Everything Is A Crime" by Glenn Harlan Reynolds, Beauchamp Brogan Distinguished Professor of Law, University of Tennessee. J.D. Yale Law School:

Attorney General (and later Supreme Court Justice) Robert Jackson once commented: "If the prosecutor is obliged to choose his cases, it follows he can choose his defendants." The result is "The most dangerous power of the prosecutor: that he will pick people he thinks he should get, rather than pick cases that need to be prosecuted." Prosecutors could easily fall prey to the temptation of "picking the man, and then searching the law books . . . to pin some offense on him." In short, prosecutors’ discretion to charge – or not to charge – individuals with crimes is a tremendous power, amplified by the huge number of laws on the books.

Two recent events have brought more attention to this problem. One involves the decision not to charge NBC anchor David Gregory with weapons--‐ law violations bearing a potential year--‐long sentence for brandishing a 30--‐ round magazine (illegal in D.C.), despite the prosecutor's statement that the on--‐air violation was clear; the other involves prosecutors' rather enthusiastic efforts to prosecute Reddit founder Aaron Swartz for downloading academic journal articles from a closed database, prosecutorial efforts so enthusiastic that Swartz committed suicide in the face of a potential 50--‐year sentence.

Both cases have aroused criticism, and in Swartz's case even legislation designed to ensure that violating websites’ terms cannot be prosecuted as a crime. But the problem is much broader. Given the vast web of legislation and regulation that exists today, virtually any American is at risk of prosecution should a prosecutor decide that they are, in Jackson’s words, a person "he should get."***With so many more federal laws and regulations than were present in Jackson's day, the task for prosecutors of first choosing the man – or woman – and then pinning the crime on him or her has become much easier. This problem has been discussed at length in Gene Healy's Go Directly To Jail: The Criminalization of Almost Everything, and Harvey Silverglate's Three Felonies A Day. The upshot of both is that the proliferation of federal criminal statutes and regulations has reached the point that virtually every citizen, knowingly or not (usually not) is potentially at risk for prosecution. That is undoubtedly true, and the consequences are drastic and troubling. [Emphasis added, Footnotes omitted.]

Hispanics Show Biggest Increase In US High School Graduation Rates

Posted by Milton Recht:

Frpm Bloomberg, "U.S. High School Graduation Rate at Highest Since 1970s" by John Hechinger:

U.S. students graduated from public high schools at the highest rate since the 1970s, with the largest leap for Hispanic students, government data show.

In 2009-2010, 78.2 percent of students earned a diploma after four years, compared with 75.5 percent the year before, according to a U.S. Education Department report released today.***In 1969-1970, the rate was 78.7 percent. It fell as low as 71 percent in the 1990s, before inching higher in the current decade.

Ethnic Groups

In the most recent round, Asian-American students had the best performance, at 93.5 percent, trailed by whites at 83 percent. The Hispanic graduation rate of 71.4 percent rose from 65.9 percent, the largest increase of any ethnic group. For blacks, the percentage rose to 66.1 percent from 63.5 percent.

US Plans To Sell Remaining GM Shares Within 12 To 15 Months

Posted by Milton Recht:

From US Treasury Press Release, "Treasury Commences Plan to Sell General Motors Common Stock" 1/18/2013:

Today, the U.S. Department of the Treasury announced that it took the next step in its plan to sell its approximately 300.1 million remaining shares of General Motors (GM) common stock with the initiation of a pre-arranged written trading plan.

Under the plan, Treasury will proceed with its December 2012 announcement that it intends to sell its shares into the market in an orderly fashion and fully exit its remaining GM investment within the next 12-15 months, subject to market conditions. That previous announcement was made in connection with GM’s repurchase of 200 million shares of GM common stock from Treasury, which was also completed in December 2012.

Geographical Differences In Health Spending Due To Socio-Economic Differences And Not Due To Medical Practice Style Differences

Posted by Milton Recht:

From The Federal Reserve Board, Finance and Economics Discussion Series, "Why the Geographic Variation in Health Care Spending Can't Tell Us Much about the Efficiency or Quality of our Health Care System" by Louise Sheiner:

This paper examines the geographic variation in Medicare and non-Medicare health spending and finds little support for the view that most of the variation is attributable to differences in practice styles. Instead, I find that socioeconomic factors that affect the need for medical care, as well as interactions between the Medicare system, Medicaid, and private health spending, can account for most of the variation in Medicare spending. Furthermore, I find that the health spending of the non-Medicare population is not well correlated with Medicare spending, suggesting that Medicare spending is not a good proxy for average health spending by state.***More broadly, the paper shows that the geographic variation in health spending does not provide a useful measure of the inefficiencies of our health system. States where Medicare spending is high are very different in multiple dimensions from states where Medicare spending is low, and thus it is difficult to isolate the effects of differences in health spending intensity from the effects of the differences in the underlying state characteristics. I show, for example, that the relationships between health spending, physician composition and quality are likely the result of omitted factors rather than the result of causal relationships. [Emphasis added.]

Full 56-page research paper for those interested.

Wind Power Is 6 Percent Of US Electrical Generating Capacity

Posted by Milton Recht:

From Bloomberg, "U.S. Wind Power Accounted for 6% of Generation Capacity in 2012" by Louise Downing:

U.S. wind power accounted for 6 percent of the nation’s total electricity generation capacity after developers rushed to finish projects before expiration of a subsidy, Bloomberg New Energy Finance said.

The threat that the U.S. Production Tax Credit would lapse on Dec. 31 prompted developers to complete as many projects as they could last month, the London-based research group said. A record 13.2 gigawatts of turbines were installed last year including 5.5 gigawatts in December, the most ever for a single month. Total wind capacity is about 60 gigawatts.

Head Start Does Not Benefit Low Income Students On Any Measure: US Department of Health and Human Services Report

Posted by Milton Recht:

From Brookings, "Can We Be Hard-Headed About Preschool? A Look at Head Start" by Grover J. "Russ" Whitehurst:

The findings [Third Grade Follow-up to the Head Start Impact Study Final Report, December 18, 2012, US Department of Health and Human Services], in brief, are that there were effects favoring Head Start children on some outcome variables at the end of the Head Start year. However, these impacts did not persist. Both in the kindergarten and first grade follow-up data, released just short of three years ago[6], and the third grade follow-up data, released in December of 2012, there were no reliable differences in outcomes for children who won the lottery to attend Head Start vs. those who lost that lottery and served as the control group. In the words of the authors of the report, "by the end of 3rd grade there were very few impacts … in any of the four domains of cognitive, social-emotional, health and parenting practices. The few impacts that were found did not show a clear pattern of favorable or unfavorable impacts for children."[page xvii] [Emphasis added.]

If this conclusion by the authors isn’t clear enough, I’ll put it in less academic language:

There is no measurable advantage to children in elementary school of having participated in Head Start. Further, children attending Head Start remain far behind academically once they are in elementary school. Head Start does not improve the school readiness of children from low-income families.

$3 Trillion In Non-Residential Capital Investment Needed To Close Employment Gap

Posted by Milton Recht:

From Real Clear Markets, "Economic Growth Must Be Washington's Plan A" by Rich Lowrie:

In what I call the "Woodhill Equation," put forth by economic growth guru and fellow Cain economic advisor Louis Woodhill, GDP always equals 46% times non-residential produced assets (equipment, machines, structures, computers, etc.), plus 7% times residential produced assets. Accordingly, every additional dollar of capital investment in plant and equipment increases the stock of non-residential produced assets by a dollar, and this, in turn, generates 46 cents more GDP...every year! There is no better game in town.

Since the average job is supported by roughly $210,000 of non-residential produced assets, to create 15 million average jobs, a little more than $3 trillion (roughly the amount Congress and Obama have squandered) of private sector capital investment is needed. Putting people back to work is a great way to reduce federal outlays and increase federal revenues.

Standing in the way of growth is a wall that separates people with ideas from people with capital. It makes no sense to wall off those with ideas. That's where we get innovation, new business formation, job creation and wealth generation. This wall consists of a tax code that retards new capital formation and double taxes any capital that does form. It is reinforced by an unstable monetary system that diverts precious capital from its most productive uses because of the need to guard against the chaos caused by a floating dollar. As if that's not enough, the wall is guarded by regulators who treat the marriage of capital and ideas as an anti-social act.

CBO's Forecasts Tend To Slightly Overestimate Inflation, Interest Rates And Wages, But CBO's Economic Forecast Are As Accurate As Private Forecasts

Posted by Milton Recht:

From Congressional Budget Office report, January 17, 2013, "CBO's Economic Forecasting Record: 2013 Update:"

Do CBO’s Forecasts Exhibit Notable Bias?
A simple and widely used indicator of statistical bias is the mean error—the average tendency of a forecast to be low or high over an entire period. In general, CBO’s forecasts and those by the Administration and the Blue Chip consensus have had similar mean errors. Specifically, CBO’s evaluation finds this:

• For CBO’s forecasts that look two years ahead, the mean errors have generally been very small. The agency’s forecasts have shown slight tendencies to overestimate future interest rates and wages and salaries.
• For CBO’s forecasts that look five years ahead, the mean errors imply a slightly stronger tendency to overestimate inflation compared with that of the agency’s two-year forecasts—which largely accounts for higher mean errors for growth in nominal output and in wages and salaries. In other respects, the mean errors generally resemble those for forecasts that look two years ahead.

How Accurate Are CBO’s Forecasts?
Accuracy is the degree to which forecast values are dispersed around actual outcomes. One widely used measure of accuracy is the root mean square error. By that measure, the forecasts by CBO, the Administration, and the Blue Chip consensus have been about equally accurate over two-year periods as well as over five-year periods.

Ineffectiveness Of American Schools, Dumbing Down Of Text Books And Progressive Education Theories, Responsible For The Increase In Income Equality Since The 1970s [Updated Weblinks]

Posted by Milton Recht:

From City Journal, "A Wealth of Words: The key to increasing upward mobility is expanding vocabulary" by E D Hirsch, JR:

Early in the twentieth century, a well-meant but inadequate conception of education became dominant in the United States. It included optimism about children’s natural development, a belief in the unimportance of factual knowledge and book learning, and a corresponding belief in the importance of training the mind through hands-on practical experience. In the 1920s and 1930s, these ideas began spreading to teacher-training institutions. It took two or three decades for the new teachers and administrators to take over from the old and for the new ideas to revolutionize schoolbooks and classroom practices. The first students to undergo this new schooling therefore began kindergarten in the 1950s and arrived in 12th grade in the 1960s.

Their test scores showed the impact of the new ideas. From 1945 to 1967, 12th-graders’ verbal scores on the SAT and other tests had risen. But then those scores plummeted. Cornell economist John Bishop wrote in the 1980s of “the historically unprecedented nature of the test score decline that began around 1967. Prior to that year test scores had been rising steadily for 50 years.” The scores reached their nadir around 1980 and have remained low ever since.

Some scholars thought that the precipitous fall of verbal SAT scores simply reflected the admirable increase in the percentage of low-income students taking the SAT. But Bishop observed that the same downhill pattern had occurred in verbal scores on the Iowa Test of Educational Development—a test given to all Iowa high school students, who were 98 percent white and mostly middle-class in attitude. He argued that the declining effectiveness of American schools was a leading indicator for the shrinking income of the American middle class. The evidence today suggests that he was right. The decline in the educational productivity of our schools tracks our decline in income equality. For 30 years after 1945, Stiglitz observes, economic equality advanced in the United States; after about 1975, it declined.

Later, another Cornell scholar, the sociologist Donald Hayes, showed that the decline of the verbal SAT scores was indeed correlated with a dumbing-down of American schoolbooks. Following the lead of the great literacy scholar Jeanne Chall, Hayes found that publishers, under the influence of progressive educational theories, had begun to use simplified language and smaller vocabularies. Hayes demonstrated that the dilution of knowledge and vocabulary, rather than poverty, explained most of the test-score drop.

The entire article is worth reading.

Chart Of Owners Of US Debt

Posted by Milton Recht:

From "Who Really Owns the U.S. National Debt? [Preliminary FY2012 Edition]" on Political Calculations Blog:

Source:  Political Calculations

The information presented in our chart above is preliminary, as the U.S. Treasury typically revises its foreign entity debt ownership data in March of each year.

Getting Closer To An Alzheimer Vaccine

Posted by Milton Recht:

From "Major Step Toward An Alzheimer Vaccine" on ScienceBlog:

One of the main characteristics of Alzheimer’s disease is the production in the brain of a toxic molecule known as amyloid beta. Microglial cells, the nervous system’s defenders, are unable to eliminate this substance, which forms deposits called senile plaques.

The team led by Dr. Serge Rivest, professor at Université Laval’s Faculty of Medicine and researcher at the CHU de Québec research center, identified a molecule that stimulates the activity of the brain’s immune cells. The molecule, known as MPL (monophosphoryl lipid A), has been used extensively as a vaccine adjuvant by GSK for many years, and its safety is well established.

In mice with Alzheimer’s symptoms, weekly injections of MPL over a twelve-week period eliminated up to 80% of senile plaques. In addition, tests measuring the mice’s ability to learn new tasks showed significant improvement in cognitive function over the same period.

Defense Versus Entitlement Spending: Chart

Posted by Milton Recht:

From AEIdeas, "Charts: Is the big US budget problem entitlement spending or defense spending?" by James Pethokoukis:

Source: AEIdeas

Source: AEIdeas

Tax Foundation 2013 Map Of State Gasoline Tax Rates

Posted by Milton Recht:

From the Tax Foundation, map of state gasoline tax rates:

Source: Tax Foundation

Social Security (OASDI) Holds Enough Assets To Pay Benefits For 4 Years Without A Debt Ceiling Increase

Posted by Milton Recht:

At the end of December 2012, the Social Security Trust Fund held $2.7 trillion in investments. The fund also receives $100 billion per year in interest payments on these investments.

According to the 2012 Social Security Trust Fund report, Table III.A5, Social Security paid out $725 billion in Old Age, Survivor and Disability Insurance (OASDI) benefits in 2011.

By selling the US bonds it holds as investments, Social Security can continue to pay OASDI benefits for 4 years without a debt ceiling increase.

With payroll taxes, interest on investments and tax receipts from taxable portion of Social Security benefits, the Trust Fund will see a net addition to the fund for the next few years, according to the OASDI Trustees actuarial report, Table IV.A3. In which case, the fund can continue to pay OASDI benefits for many years without a debt ceiling increase.

Sorry Democrats and Mr. President, Social Security beneficiaries do not need an immediate debt ceiling increase to continue to receive their benefits.

"Fix The Machine, Not The Person" Excerpt: In Memory Of Aaron Swartz

Posted by Milton Recht:

From Aaron Swartz's Raw Thought, "Fix the machine, not the person" by Aaron Swartz, September 25, 2012:

Three months after they got back to the US and reopened the [GM Fremont] plant, everything had changed. Grievances and absenteeism fell away and workers started saying they actually enjoyed coming to work. The [GM] Fremont factory, once one of the worst in the US, had skyrocketed to become the best. The cars they made got near-perfect quality ratings. And the cost to make them had plummeted. It wasn’t the workers who were the problem; it was the system.

An organization is not just a pile of people, it’s also a set of structures. It’s almost like a machine made of men and women. Think of an assembly line. If you just took a bunch of people and threw them in a warehouse with a bunch of car parts and a manual, it’d probably be a disaster. Instead, a careful structure has been built: car parts roll down on a conveyor belt, each worker does one step of the process, everything is carefully designed and routinized. Order out of chaos.

And when the system isn’t working, it doesn’t make sense to just yell at the people in it — any more than you’d try to fix a machine by yelling at the gears. True, sometimes you have the wrong gears and need to replace them, but more often you’re just using them in the wrong way. When there’s a problem, you shouldn’t get angry with the gears — you should fix the machine.

If you have goals in life, you’re probably going to need some sort of organization. Even if it’s an organization of just you, it’s still helpful to think of it as a kind of machine. You don’t need to do every part of the process yourself — you just need to set up the machine so that the right outcomes happen.

For example, let’s say you want to build a treehouse in the backyard. You’re great at sawing and hammering, but architecture is not your forte. You build and build, but the treehouses keep falling down. Sure, you can try to get better at architecture, develop a better design, but you can also step back, look at the machine as a whole, and decide to fire yourself as the architect. Instead, you find a friend who loves that sort of thing to design the treehouse for you and you stick to actually building it. After all, your goal was to build a treehouse whose design you like — does it really matter whether you’re the one who actually designed it?***When you’re upset with someone, all you want to do is change the way they’re acting. But you can’t control what’s inside a person’s head. Yelling at them isn’t going to make them come around, it’s just going to make them more defiant, like the GM workers who keyed the cars they made.

No, you can’t force other people to change. You can, however, change just about everything else. And usually, that’s enough.

See also, "Who Writes Wikipedia?" by Aaron Swartz.

Why Doesn't Amazon Provide Free Digital Cloud-Based Copies Of Hard Books As It Does For Physical CDs? Probably Coming Soon

Posted by Milton Recht:

I own a Kindle Fire and use it for reading, email, video, games and other things. Over the years, I purchased many books from Amazon. It would be a nice Kindle feature to have digital access to books I purchased as hard copies. When I purchase a new book, it also would be pleasant to have it available to me as both a hard copy and a digital copy. There are occasions when I enjoy reading a physical book and there are occasions when a digital copy is more convenient and enjoyable. Shouldn't my purchase of a book allow me to read it in both formats for the same price?

From "Amazon to Provide CD Buyers With Cloud-Based MP3s For Free (Update: It’s Just Launched!)" by Jamie Condliffe:

CNET is reporting that Amazon is planning to launch a reward scheme for CD buyers. When they purchase music in its physical form, they'll also receive a digital copy, which they'll be able to listen to via Amazon's cloud music service.

Update: The service is now live! See below for more details

Codenamed "Auto Rip", the service will automatically deposit the audio tracks into the customer's Amazon cloud account upon purchase.

Government Not Needed To Provide Medical Care To The Uninsured: Of Course, Affected Competitors Want Them Out

Posted by Milton Recht:

From The New York Times, "As ‘Bodega Clinicas’ Fill Void, Officials Are Torn on Embracing Them" by Sarah Varney:

The "bodega clinicas" that line the bustling commercial streets of immigrant neighborhoods around Los Angeles are wedged between money order kiosks and pawnshops. These storefront offices, staffed with Spanish-speaking medical providers, treat ailments for cash: a doctor’s visit is $20 to $40; a cardiology exam is $120; and at one bustling clinic, a colonoscopy is advertised on an erasable board for $700.

County health officials describe the clinics as a parallel health care system, serving a vast number of uninsured Latino residents.***"Someone has to figure out if there’s a basic level of competence," said Dr. Patrick Dowling, the chairman of the family medicine department at the David Geffen School of Medicine at the University of California, Los Angeles.***many of these clinics are actually private doctor’s offices, not licensed clinics, which are required to report regularly to federal and state oversight bodies.

It is a distinction that deeply concerns Kimberly Wyard, the chief executive of the Northeast Valley Health Corporation, a nonprofit group that runs 13 accredited health clinics for low-income Southern Californians. "They are off the radar screen," said Ms. Wyard of the bodega clinicas, "and it’s unclear what they’re doing."

Background Article About Josh Angrist: One Of The Most Cited Economists In The World

Posted by Milton Recht:

From MIT Technology Review, "The Natural Experimenter: MIT economist Josh Angrist’s meticulous ­methods have influenced scholars for two decades. Now he’s zeroing in on what makes some schools better than others." by By Peter Dizikes:

Over two decades, [Josh] Angrist’s natural experiments have made him a prominent figure within economics. As of August, he was one of the 100 most-cited economists in the world, according to the Federal Reserve Bank of St. Louis, which keeps data on more than 33,000 authors. Among his best-known papers are studies on the relationship between length of schooling and income; the effect military service has on earnings; and the link between class size and student achievement.***"He’s had tremendous influence," says Whitney Newey, PhD ’83, chair of MIT’s Department of Economics, who was one of Angrist’s graduate-school advisors.

Angrist’s citation ranking within economics probably understates that influence. Biostatisticians, who study cause and effect in medicine and biological research, regularly cite his methods, and political scientists and sociologists have adopted natural experiments as a basic research tool as well.

Household Wealth Is Mostly Human Capital: Value Depends On Industry, Occupation And Education: Differences In Industry Human Capital Values Affect Sector Expected Stock Returns

Posted by Milton Recht:

From The Journal Of Finance, "Industry-Specific Human Capital, Idiosyncratic Risk, and the Cross-Section of Expected Stock Returns" by Esther Eiling:

a significant fraction of wealth for virtually all investors is human capital. Heaton and Lucas (2000) report that about 48% of household wealth is due to human capital, while only 6.8% is invested in financial assets. Lustig, van Nieuwerburgh, and Verdelhan (2010) even estimate human capital to be 90% of total wealth, while the share of equities is only 2%. This suggests that, in theory, human capital should matter for portfolio choice and asset pricing.***The nature of human capital is investor-specific and depends on, for example, age, education, occupation, or the industry or firm in which the investor works.***This paper shows that human capital heterogeneity [differences] affects the cross-section of expected stock returns. I focus on industry-specific human capital. In the labor economics literature, several papers document the existence of significant inter-industry wage differentials (e.g., Katz and Summers (1989), Neal (1995), and Weinberg (2001)), suggesting that labor income and human capital are determined in part by industry affiliation.

Possibility Of US Government Debt Default Due To Debt Ceiling Is A Myth

Posted by Milton Recht:

From The Wall Street Journal, "Rivkin and Casey: The Myth of Government Default: The Constitution commands that public debts be repaid. There is no such obligation to fund entitlement programs." by David B Rivkin Jr and Lee A Casey:

Contrary to White House claims, Congress's refusal to permit new borrowing by raising the debt ceiling limit will not trigger a default on America's outstanding public debt, with calamitous consequences for our credit rating and the world's financial system. Section 4 of the 14th Amendment provides that "the validity of the public debt of the United States, authorized by law . . . shall not be questioned"; this prevents Congress from repudiating the federal government's lawfully incurred debts.***This means that a failure to raise the debt ceiling—to prevent new borrowing—does not and cannot put America's current creditors at risk. So long as this government exists, and barring a further constitutional amendment, those creditors must be paid.

Nor are they at risk in practice, since the federal government's roughly $200 billion in tax revenue per month is more than sufficient to service existing debts. If the executive chose to act irresponsibly and unconstitutionally and failed to make any debt payments when they come due, debt-holders would be able to go to the Court of Federal Claims and promptly obtain a money judgment.***Second, despite White House claims that Congress must raise the debt ceiling to pay the bills it has incurred, the obligations protected as "debts" by the 14th Amendment do not include entitlement programs such as Medicare and Social Security. These programs are not part of the "public debt," which consist of loans that are made to the federal government through bonds and similar financial instruments. Entitlement programs are instead political measures that are fully subject to the general rule that one Congress cannot, by simple legislation, prevent a future Congress from making cuts.***The distinction was recognized by the Supreme Court in Flemming v. Nestor (1960), which involved the power of Congress to modify Social Security benefits. The court noted that entitlements and "contractual arrangements, including those to which a sovereign itself is a party, remain subject to subsequent legislation by the sovereign."

Congress can reduce a wide range of payments to various beneficiaries at any time by amending the statutes that authorize them or simply by failing to appropriate sufficient funds to pay for them. Nor does Congress have any legal or constitutional obligation to borrow money to pay for entitlements.

42 Percent Of December's New Jobs Were In Healthcare And Education: 25 Percent Of New Jobs For All Of 2012 Were in Health and Education

Posted by Milton Recht:

From The Federal Reserve Bank Of Cleveland, Economic Trends, "Employment in Education and Healthcare Services" by Tim Dunne and Kyle Fee:

About one-quarter of the jobs added in 2012 have been in the education and health services sector, and in December alone the sector accounted for 42 percent of the new jobs.

Source: Federal Reserve Bank Of Cleveland

Source: Federal Reserve Bank Of Cleveland

IBM Again Receives Most US Patents: 20th Year In A Row

Posted by Milton Recht:

From NETWORKWORLD, "IBM cements 20 years of patent dominance: IBM earned more U.S. patents in 2012 than any other company, topping the list of patent winners for the 20th year in a row" by Ann Bednarz:

IBM earned 6,478 utility patents last year, topping the list of patent winners for the 20th year in a row, according to data from IFI CLAIMS Patent Services. With its record haul, Big Blue bested its 2011 patent tally by 5%.

Samsung was the second most prolific patent winner, with 5,081 patents received in 2012, according to IFI, which tracks and analyzes patent data from the U.S. Patent and Trademark Office. Canon placed third with 3,174 patents, followed by Sony (3,032), Panasonic (2,769), Microsoft (2,613), Toshiba (2,447), Hon Hai Precision Industry (2,013), GE (1,652), and LG Electronics (1,624).

13 Percent Reduction In Current Trade Between US States Due To Civil War Aftereffects, North South Cultural Differences And Regional Trust

Posted by Milton Recht:

From Economic Inquiry, "Within U.S. Trade And The Long Shadow Of The American Secession" by Gabriel Felbermayr and Jasmin Gröschl:

Using data from U.S. commodity flow survey, we show that the historical Union–Confederacy border lowers contemporaneous trade between U.S. states by about 13%. The finding is robust over econometric models, survey waves, or aggregation levels. Including contemporaneous controls, such as network or institutional variables, lowers the estimate only slightly. Historical variables, such as slavery, do not explain the effect. Adding U.S. states unaffected by the Civil War, we argue that the friction is not merely reflecting unmeasured North–South differences. Finally, the border effect is larger for differentiated than for homogeneous goods, stressing the potential role for cultural factors and trust.

Ungated earlier working paper version available on EconPapers.

Correction And Reposting: Yield Curve Slope Predicts 0.6 (Not 0.7) Percent Real GDP Growth In 2013: Federal Reserve Bank Of Cleveland

Posted by Milton Recht:

CORRECTION: Due to an editorial error, a previous version of the Cleveland Federal Reserve GDP yield curve prediction was used in the original version of this post on January 4, 2013. The corrected GDP growth prediction is 0.6 percent growth and not 0.7 as originally posted.

Federal Reserve Bank Of Cleveland, "Yield Curve and Predicted GDP Growth, December 2012" by Joseph G. Haubrich, VP, and Patricia Waiwood:

Projecting forward using past values of the spread [difference between long and short interest rates] and GDP growth suggests that real GDP will grow at about a 0.6 percent rate over the next year, even with both October and November. The strong influence of the recent recession is still leading towards relatively low growth rates. Although the time horizons do not match exactly, the forecast comes in on the more pessimistic side of other predictions but like them, it does show moderate growth for the year.

Are We Nearing The End Of The Current Economic Recovery?

Posted by Milton Recht:

From The Economist Free Exchange Economics, "Business cycles: Running out of time" by RA:

Source: The Economist

 The chart at right shows the duration of expansions since the Second World War. On average, the economy has grown about 58 months at a time during this period, an age the current American expansion will reach in April of next year. Since the Volcker recession, good times have gone on for longer—95 months on average—though the expansion of the 2000s was just 73 months long, a milestone the current recovery will reach in July of 2015.

1990 To 2012 Federal Debt Chart

Posted by Milton Recht:

From The Wall Street Journal, "Vital Signs Chart: Growing National Debt" by Josh Mitchell:

The federal debt is now equivalent to 101.6% of the nation’s gross domestic product, up from 53.5% in early 1990. Not all the federal debt is subject to the nation’s borrowing limit of $16.394 trillion.

Source: The Wall Street Journal

Correction: Yield Curve Slope Predicts 0.6 (Not 0.7) Percent Real GDP Growth In 2013: Federal Reserve Bank Of Cleveland

Posted by Milton Recht:

CORRECTION: Due to an editorial error, a previous version of the Cleveland Federal Reserve GDP yield curve prediction was used in the original version of this post. The corrected GDP growth prediction is 0.6 percent growth and not 0.7 as originally posted.

Federal Reserve Bank Of Cleveland, "Yield Curve and Predicted GDP Growth, December 2012" by Joseph G. Haubrich, VP, and Patricia Waiwood:

Projecting forward using past values of the spread [difference between long and short interest rates] and GDP growth suggests that real GDP will grow at about a 0.6 percent rate over the next year, even with both October and November. The strong influence of the recent recession is still leading towards relatively low growth rates. Although the time horizons do not match exactly, the forecast comes in on the more pessimistic side of other predictions but like them, it does show moderate growth for the year.

Earliest Flu Season In A Decade

Posted by Milton Recht:

From The Washington Times, "Starting in the South, flu season off to a fast and miserable start" by Meredith Somers:

This year’s start to the flu season is the earliest in a decade, according to the Centers for Disease Control and Prevention, setting off a wave of doctor visits in mostly Southern states from Louisiana to Virginia that have been hard hit. Although the early onset doesn’t necessarily portend an epidemic, medical professionals say this year’s strain is particularly severe.

Government Bureaucracies' Attempts To Minimize Banking Risks Leads to 78 Calculus Equations And 509 Pages of Rules

Posted by Milton Recht:

From Bloomberg, "Basel Becomes Babel as Conflicting Rules Undermine Safety" by Yalman Onaran:

The first Basel agreement on global banking regulation, adopted in 1988, was 30 pages long and relied on simple arithmetic. The latest update, known as Basel III, runs to 509 pages and includes 78 calculus equations.

The complexity is emblematic of what happened over the past four years as governments that injected $600 billion to rescue failing banks during the worst financial crisis since the Great Depression devised ways to make the global banking system safer. Those efforts have been stymied by conflicting laws, divergent accounting standards and clashing rules adopted by nations to protect their interests, all of which have created new risks.

Patti Page Has Died

Posted by Milton Recht:

Extra Body Weight Not As Unhealthy As Thought

Posted by Milton Recht:
From The New York Times, "Study Suggests Lower Mortality Risk for People Deemed to Be Overweight" by Pam Belluck:

The report on nearly three million people found that those whose B.M.I. ranked them as overweight had less risk of dying than people of normal weight. And while obese people had a greater mortality risk over all, those at the lowest obesity level (B.M.I. of 30 to 34.9) were not more likely to die than normal-weight people.

Taxpayers To Lose 61 Percent, $15 Billion, On GM Bailout, At Current Prices

Posted by Milton Recht:

From "GM Bailout Will Cost Taxpayers Billions" by Investor's Business Daily:

...GM on Wednesday said it will buy back the 200 million share government stake for $5.5 billion, or $27.50 a share.

The break-even point on the government's total holdings was $53 a share. But now, with $20.9 billion in taxpayer funds left to pay off from 300 million shares, the break-even point has risen to $69.72 a share.

In other words, at current prices, taxpayers are sitting with a loss of 61%, or nearly $15 billion, on their investment.

Banning Insurance Companies And Employers From Considering Health Status Leads To Unhealthier Lifestyles: Lowers Incentives To Lead Healthier Lives

Posted by Milton Recht:

From "Analyzing the Effects of Insuring Health Risks: On the Trade-Off between Short Run Insurance Benefits vs. Long Run Incentive Costs" by Harold L. Cole, University of Pennsylvania, Soojin Kim, University of Pennsylvania and Dirk Krueger, University of Pennsylvania, November 2012, NBER Working Paper No. w18572:

This paper constructs a dynamic model of health insurance to evaluate the short- and long run effects of policies that prevent firms from conditioning wages on health conditions of their workers, and that prevent health insurance companies from charging individuals with adverse health conditions higher insurance premia. Our study is motivated by recent US legislation that has tightened regulations on wage discrimination against workers with poorer health status (Americans with Disability Act of 2009, ADA, and ADA Amendments Act of 2008, ADAAA) and that will prohibit health insurance companies from charging different premiums for workers of different health status starting in 2014 (Patient Protection and Affordable Care Act, PPACA). ...it is suboptimal to introduce both policies jointly since such policy innovation induces a more rapid deterioration of the cohort health distribution over time. This is due to the fact that combination of both laws severely undermines the incentives to lead healthier lives. The resulting negative effects on health outcomes in society more than offset the static gains from better consumption insurance so that expected discounted lifetime utility is lower under both policies, relative to only implementing wage nondiscrimination legislation.

Connecticut Ranked As Having 4th Toughest State Gun Laws: Summary Of Connecticut Gun Laws

Posted by Milton Recht:

From The Law Center To Prevent Gun Violence, "Connecticut State Law Summary:"

[T]he Law Center [To Prevent Gun Violence] ranked each state based on a review of state laws in 29 different firearms-related policy areas. Connecticut ranked 4th out of 50 – having enacted some of the strongest gun violence prevention laws. Among other things, Connecticut:

• Requires a background check prior to the transfer of a handgun between individuals other than licensed firearms dealers;
  
• Requires a background check for all firearm transfers at gun shows (but not for private transfers of long guns elsewhere);
• Requires handgun dealers to obtain a license, and handgun purchasers to first obtain an eligibility certificate;
  
• Prohibits the transfer or possession of assault weapons and certain 50 caliber rifles, but not large capacity ammunition magazines;
  
• Imposes a two-week waiting period on long gun transfers from licensed dealers;
• Acts as a “point of contact” state, conducting its own background checks, rather than relying on the FBI;
  
• Requires the reporting of all individuals prohibited from possessing firearms to the database used for firearm purchaser background checks;
  
• Requires firearm owners to report the loss or theft of their firearms;
  
• Allows local governments to regulate firearms and ammunition; and
  
• Allows local governments discretion to deny a concealed weapons permit.

Connecticut does not, however,

• Limit the number of firearms that may be purchased at one time;
  
• Impose design safety standards or microstamping requirements on handguns; or
• Regulate ammunition sales.

Source: Law Center To Prevent Gun Violence

Source: Law Center To Prevent Gun Violence

Raising Federal Income Tax Rates Without Limiting Tax Deductions Benefits Liberal Democrats More Than Republicans

Posted by Milton Recht:

Liberal Democrats tend to live in the higher tax states and they take bigger federal income tax deductions for state and local taxes. Raising federal tax rates makes the deduction for state and local taxes more valuable. The higher federal tax rates lowers the burden of high state taxes to high income earners, while raising the federal tax burden of low state tax residents.

The increase loss of federal income tax revenues from the deductions under higher income tax rates is borne by residents in low tax states, mostly Republicans, who take smaller deductions for state and local taxes. The net effect is that low tax state residents will pay a bigger part of the high tax state government employee salaries, benefits and pensions.

By not limiting deductions, while raising federal tax rates, Obama will unfairly increase the federal tax burden of low tax state residents for the higher spending of high tax states.

Raising the tax rates on the rich is not fair unless income tax deductions for state and local taxes are also limited.

From The Wall Street Journal, "Of Liberals and Loopholes: The current tax code favors high-tax states:"

Source: The Wall Street Journal

Since the affluent tend to itemize their deductions more than do average taxpayers, and since the affluent pay higher marginal tax rates, they tend to benefit more from deductions. Ergo, limit deductions and you raise the effective tax rate (not the marginal rate) of the affluent. (The effective tax rate is the share of total income paid in taxes, while the marginal rate is the tax on the next dollar earned.) Such a reform would help tax efficiency and equity, and the economy would benefit from fewer investment distortions.

But suddenly liberals are having second thoughts, and our guess is that this is because residents of high-tax Democratic-run states are about twice as likely to take advantage of tax loopholes as taxpayers in low-tax states. For example, 44% of Connecticut filers itemize their deductions, but only some 21% of North and South Dakota residents do.

Need To Install Wind Turbines Covering An Area The Size Of North Carolina Every Year Just To Keep Up With The Annual Growth In Electricity Demand: Need More If Want To Replace Existing Fossil Fuel Electricity With Wind

Posted by Milton Recht:

From The Wall Street Journal, "Harvard Needs Remedial Energy Math: Wind and solar power cannot possibly meet the world's growing need for more electricity." by Robert Bryce:

The International Energy Agency expects global electricity use to continue growing by about 450 terawatt-hours per year through 2035.

Here's where the math becomes college-freshman obvious: In 2011, the world had 240,000 megawatts of wind-generation capacity. That fleet of turbines produced 437 terawatt-hours of electricity. Therefore, just keeping up with the growth in global electricity demand—while not displacing any of the existing need for coal, oil and natural gas—would require the countries of the world to install about as much wind-generation capacity as now exists, and they'd have to do so every year.

Put another way, just to keep pace with demand growth, the wind industry will need to cover a land area of some 48,000 square miles with wind turbines per year, an area about the size of North Carolina.

States Without An Income Tax Have Better Private Sector Economic Growth

Posted by Milton Recht:

From The Wall Street Journal, "States that Spend Less, Tax Less—and Grow More: States with an income tax spent 42% more per resident in 2011 than the nine states without an income tax." by Dave Trabert and Todd Davidson:

States that allow taxpayers and employers to keep more of their earnings are reaping the benefits. States without an income tax have significantly better growth in private sector GDP (59% versus 42%) over the last 10 years. They increased the number of jobs by 4.9% while jobs in the rest of the states declined by 2.6%. States without an income tax gained population (+5.5%) from domestic migration (U.S. residents moving in and out of states) while all other states as a whole lost 1.3% of population between 2000 and 2009.

Millions More Taxpayers Affected By An Increase In Top Marginal Income Tax Rates Now Than 1950s Rate Of 91 Percent: Increase In Top Rates Will Have Greater Negative Economic Impact Today Than In The Past

Posted by Milton Recht:

From Tax Foundation, "CRS, at odds with Academic Studies, Continues to Claim No Harm in Raising Top Earners Tax Rates" by William McBride:

The top rate in the late 1950s was 91 percent, but it only applied to income of $3 million or more, in inflation adjusted terms. As Peter Schiff at the Wall Street Journal points out, the top rate applied to no more than a couple hundred taxpayers (in 1958, 236 of 45.6 million taxpayers paid at a rate of 81 percent or more). Today, the top rates are much more broadly applicable. Raising the top two rates of 33 and 35 percent, as the President proposes, would affect 3.9 million taxpayers, out of about 140 million.

Spending, Spending, Spending And Not Revenue!

Posted by Milton Recht:

From AEIdeas, "What do we make of this chart?" by James Pethokoukis:

Source: AEIdeas

Bottom Two-Thirds Of Federal Income Taxpayers' Share Of Taxes Paid Fell From 29 Percent To 6.7 Percent, A 77 Percent Decrease, From 1958 To 2010

Posted by Milton Recht:
From The Wall Street Journal, "Peter Schiff: The Fantasy of a 91% Top Income Tax Rate: A liberal article of faith that confiscatory taxes fed the postwar boom turns out to be an Edsel of an economic idea." by Peter Schiff:

In 1958, approximately two million filers (4.4% of all taxpayers) earned the $12,000 or more for married couples needed to face marginal rates as high as 30%. These Americans paid about 35% of all income taxes. And now? In 2010, 3.9 million taxpayers (2.75% of all taxpayers) were subjected to rates that were 33% or higher. These Americans—many of whom would hardly call themselves wealthy—reported an adjusted gross income of $209,000 or higher, and they paid 49.7% of all income taxes.

In contrast, the share of taxes paid by the bottom two-thirds of taxpayers has fallen dramatically over the same period. In 1958, these Americans accounted for 41.3% of adjusted gross income and paid 29% of all federal taxes. By 2010, their share of adjusted gross income had fallen to 22.5%. But their share of taxes paid fell far more dramatically—to 6.7%. The 77% decline represents the single biggest difference in the way the tax burden is shared in this country since the late 1950s.

College Grads Most Likely To Moonlight And Hold Two Or More Jobs: Unchanged Over Last Ten Years

Posted by Milton Recht:
From Federal Reserve Bank Of Cleveland, Economic Trends, "Moonlighting" by Jonathan James:

For some workers, one job isn’t enough. In any week, more than 5 percent of workers hold more than one job (about 7.2 million people in October 2012). While most multiple jobholders work only two jobs, a significant share, about 10 percent, work three or four jobs.
*** Perhaps less well known is that the rate of multiple job holding varies significantly by education level. Those with some college or a college degree are almost twice as likely to hold multiple jobs as those with just a high school degree.

Source: Federal Reserve Bank of Cleveland

*** Finally, unlike many other features of the labor market, for example unemployment and hours worked, the rate of multiple job holding has changed very little over the last 10 years. While the unemployment rate has close to doubled during the recent economic downturn, the overall incidence of moonlighting has changed only about 15 percent from a pre-recession high of 5.78 percent in 2004 to its current low in 2012 of five percent.

Source: Federal Reserve Bank of Cleveland

$168 Per Day Is The Cash Equivalent Of Benefits To Poverty Households

Posted by Milton Recht:

From The Weekly Standard Blog, "Welfare Spending Equates to $168 Per Day for Every Household in Poverty" by Daniel Halper:

The amount of money spent on welfare programs equals, when converted to cash payments, about "$168 per day for every household in poverty," the minority side of the Senate Budget Committee finds. Here's a chart detailing the committee's findings:

Source: The Weekly Standard Blog

According to the Republican side of the Senate Budget Committee, welfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.

From 2003 To 2011, Employer Health Insurance Premiums Rose 62 Percent, Employee Premiums Rose 74 Percent And Deductibles Rose 117 Percent

Posted by Milton Recht:

From "Employer health insurance premiums rose 62% from 2003-11" in ScienceBlog:

Average premiums for employer-sponsored family health insurance plans rose 62 percent between 2003 and 2011, from $9,249 to $15,022 per year, according to a new Commonwealth Fund report.

The report, which tracks state trends in employer health insurance coverage, finds that health insurance costs rose far faster than incomes in all states. Workers are also paying more out-of-pocket as employee payments for their share of health insurance premiums rose by 74 percent on average and deductibles more than doubled, up 117 percent between 2003 and 2011.

Poorly Performing Hedge Funds Do Not Report Results To Commercial Databases Leading To An Appearance Of Higher Average Investment Returns By Hedge Funds

Posted by Milton Recht:

From The Review Of Financial Studies, "Out of the Dark: Hedge Fund Reporting Biases and Commercial Databases" by Adam L. Aiken, Quinnipiac University, Christopher P. Clifford, University of Kentucky and Jesse Ellis, University of Alabama:

Abstract

We examine the potential for selection bias in voluntarily reported hedge fund performance data. We construct a set of hedge fund returns that have never been reported to a commercial hedge fund database. These returns allow a direct comparison of performance between funds that choose to report to commercial databases and funds that do not. We find that funds that report their performance to commercial databases significantly outperform nonreporting funds. Our results suggest that the voluntarily reported performance in commercial databases suffers from a selection bias that may exaggerate the average skill of the universe of hedge fund managers.

By 2060, Hispanics US Population Share Will Double To 1 Out Of 3

Posted by Milton Recht:
From The Wall Street Journal, "Hispanics to Nearly Double Share of U.S. by 2060" by Laura Meckler:

By 2060, Hispanics will account for one in three people living in the United States, nearly double the Hispanic share of the population today, the Census Bureau reported Wednesday, a shift with significant political and cultural implications.

The bureau estimates that by 2043, U.S. whites will lose their majority race status for the first time, with no one race representing more than half of the country. The white population is projected to peak in 2024 at nearly 200 million and then begin to fall, as older whites die at a faster pace than new white babies are born.

By 2060, non-Hispanic white people will represent 43% of the country, down from 63% today.

AARP's Appearance Of A Conflict Of Interest: It's Lobbying Efforts For Seniors Also Protect Its Royalty Revenues: In Whose Best Interests Is It Speaking?

From The Washington Post, "AARP lobbies against Medicare changes that could hurt its bottom line" by Jerry Markon:

AARP, the highly influential lobby for older Americans, is fiercely opposing any Medicare or Social Security cuts and emphasizes that it is fighting for the good of its members. But the proposals for changing Medicare also could affect AARP’s bottom line.

AARP has long played a dual role. It advocates for the interests of seniors, and it makes money allowing its name to be used in selling them private insurance, including coverage known as ­Medigap, which supplements government-provided Medicare. The group gets a 4.95 percent royalty each time someone buys Medigap insurance with the AARP brand. The Medigap insurance policies bring in hundreds of millions of dollars a year and are among an array of AARP-endorsed products that generate slightly more than half of the group’s $1.4 billion in revenue, according to tax records and people familiar with the group’s operations.***By making them pay for more of their health care, policymakers seek to curb unnecessary medical visits and tests. These changes would probably reduce Medigap premiums, similar to how premiums for auto insurance tend to be lower if customers pay higher deductibles.

The smaller Medigap premiums could reduce AARP’s revenue by shrinking its royalties. A report released in September by Sen. Jim DeMint (R-S.C.) estimated that the group could lose $1.8 billion over 10 years. AARP officials said they do not understand how that number was calculated and declined to comment further.

AARP says it opposes the proposed change to Medigap because it would harm older Americans, even though they may pay lower premiums.***More recently, GOP lawmakers have called for raising the eligibility age as part of a deal to avert the fiscal cliff. AARP objects to the idea.

Health-care experts and former AARP executives said raising the eligibility age for Medicare would hit the group’s revenue because Medigap is available only to individuals who qualify for Medicare. Under the proposal, 65- and 66-year-olds would no longer be able to buy Medigap coverage, and AARP’s royalties could fall.

Commercial 3-D Printing Is Mainstream

From Forbes "Inside The World's Biggest Consumer 3D Printing Factory (Video)" by Andy Greenberg:

In October, 3D-printing startup Shapeways opened its New York production facility in Long Island City, Queens, the biggest consumer-focused 3D printing factory in the world. When I visited the site last week–at the height of its holiday frenzy–the startup had already installed nine industrial-sized 3D printers turning digital blueprints into solid physical objects at its fastest rate ever: In 2012 it printed more than a million items, well over its total for all prior years combined since the company launched in 2008. And by the holiday season of 2013 it hopes to have more than 50 printers filling its 25,000 feet of floor space.

High Tax Rates Reduce Worked Hours And GDP Per Capita

From the Wall Street Journal, "Prescott and Ohanian: Taxes Are Much Higher Than You Think" by Edward Prescott and Lee Ohanian:

High tax rates—on both labor income and consumption—reduce the incentive to work by making consumption more expensive relative to leisure, for example. The incentive to produce goods for the market is particularly depressed when tax revenue is returned to households either as government transfers or transfers-in-kind—such as public schooling, police and fire protection, food stamps, and health care—that substitute for private consumption.

In the 1950s, when European tax rates were low, many Western Europeans, including the French and the Germans, worked more hours per capita than did Americans. Over time, tax rates that affect earnings and consumption rose substantially in much of Western Europe. Over the decades, these have accounted for much of the nearly 30% decline in work hours in several European countries—to 1,000 hours per adult per year today from around 1,400 in the 1950s.

Changes in tax rates are also important in accounting for the increase in the number of hours worked in the Netherlands in the late 1980s, following the enactment of lower marginal income-tax rates.

In Japan, the tax rate on earnings and consumption is about the same as it is in the U.S., and the average Japanese worker in 2007 (the last nonrecession year) worked 1,363 hours—or about the same as the 1,336 worked by the average American.

14.5 Percent Decline In EU Private Investment

From McKinsey Global Institute, "Investing in growth: Europe's next challenge" by Charles Roxburgh, Eric Labaye, Fraser Thompson, Tilman Tacke and Duncan Kauffman:

Although the decline in Europe’s level of private investment from 2007 to 2011 is rarely highlighted as a feature of the region’s financial crisis, it was unprecedented. In fact, during that period, private investment in the European Union’s 27 member states (the EU-27) plunged by a combined total of €354 billion....

Source: McKinsey

Private investment is necessary for long term economic growth, employment growth, productivity and wage growth. The lack of private investment in the US is also responsible for the current slow economic growth in the US.

High tax rates along with legal uncertainties for investors, such as created by the Chrysler and GM bankruptcies, deter private investment.

The Labor Force Continues To Decline

From The Wall Street Journal, "The Case of the Missing Workers" in Opinion:

Yet even as payrolls are rising, albeit slowly, the overall labor participation rate has continued to fall. In November, the share of the available labor force that is working fell to 63.6%, which is down from 65.7% when the recession ended in June 2009.

Mull that one over: Three years into an economic expansion, the labor participation rate has fallen two full percentage points and three times this year (including November) it has reached the lowest level since 1981. This means that about three million more workers were working or looking for work in 2009 than in November. In the last year alone, the number of working age nonworkers grew to 89.2 million from 86.8 million.

Possible causes are early retirement of baby boomers and/or increased government benefits for not working, such as extended unemployment insurance and higher income eligibility levels for food stamps.

US Would Have 15 Million More Jobs If It Had Recovered To Historical Job Trends

From AEIdeas, "The Jobs Gap | Missing: 15 million jobs from the private sector" by James Pethokoukis:

Source: AEIdeas

Not only do we need another 4 million private sector jobs to get back to the pre-Great Recession level, but we need a lot more to get private sector jobs back to the pre-Great Recession trend (as the above chart reflects).

A whole lot more. If the US economy had been generating jobs at its usual pace since 2007 until the present, the US would have roughly 15 million more private sector jobs right now. (Other folks calculate it a bit differently, but basically the range is between 13 million and 16 million.)

Share Of Income Taxes Paid By Top 10 Percent And Bottom 50 Percent: 2001-2010 Chart

From The American, "The Left’s Flip-Flop on the Bush Tax Cuts" by Steve Conover:

Figure 1.

Source: The American Enterprise Institute

Presumably we want the rich to shoulder more of the tax burden. The Clinton-era top rate of 39.6 percent applied to income taxes; the Bush policy lowered this rate to 35 percent. But Figure 1 shows that, even though the top income tax rate went down, the top 10 percent of taxpayers ended up paying a higher share of income taxes after the Bush "tax cuts."
***First: is it wise to assume that a feel-good increase in the top tax rate will really extract a higher share of the total taxes from the top earners? If so, by all means, let’s proceed — but we should at least understand that recent history doesn’t necessarily support our case. Second: just what is a “fair share”? The top 10 percent of income tax payers paid 64 percent of the burden when Clinton left office, and they are paying significantly more of the burden today — so if they’re not paying their "fair share" yet, they were even further away from paying their "fair share" under Clinton.

Rich Reinvest More: Taxing The Rich Lowers The Amount Of Funds Available For Economic Growth: A Small Decrease In Economic Growth Has a Big Difference On Future US Standard of Living: Our Children And Grandchildren Will Feel The Brunt Of Today's Higher Taxes On The Rich

The rich save and invest a very large portion (40 percent or more) of their income. The middle income and poor spend all or almost all of their income and save very little, if any, of their income.

Economic growth comes from:

1. investing in new businesses,
2. funding expansions of profitable and growing businesses, and
3. investing in new equipment, technology and other processes to increase productivity, reduce the cost of production, and lower the selling price.

A higher capital gains tax, dividend tax and a higher tax rate on the rich, the major investors in US businesses and the US economy, will decrease future private investments, decrease productivity growth, decrease GDP growth, decrease new business start-ups, decrease innovation and new technology, slow the growth in the US standard of living and slow employment growth.

Additionally, higher capital gains and dividend taxes creates a "lock-in effect." Investors delay selling investments with poor growth prospects that have historical gains to avoid paying the capital gains tax. The natural tendency to defer paying capital gains taxes, delays the freeing of funds that could be used to finance new business opportunities. Slowing the pace of new investments will slow the growth of the US economy.

Higher taxes will not eliminate all private investment, but over time, a slight difference in private investment and per capita GDP growth rates will have a big difference on the average US family's standard of living.

If per capita GDP grows by 1 percent, after 70 years, a lifetime, the average family's standard of living, their per capita GDP, will be twice as high as now. If per capita GDP grows by 2 percent instead of 1 percent, after 70 years, the average family's standard of living will be four times as high as now. Three percent would lead to a eight times as high standard of living as now. Of course, if there is no economic growth, as is possible with higher taxes in our current slow growth economy, there will be no improvement in the standard of living.

Taxing the rich today, slows the improvement in the standard of living of our children and grandchildren. Inequality matters. It is necessity for a growing economy. Inequality is a necessity for a country that wants to help its underprivileged because the rich reinvest more and enable the standard of living of everyone in the US to improve.

From Bloomberg, "Warren Buffett Is Wrong About Taxes" by Edward Conard:

Federal Reserve surveys show the top 5 percent of households save and invest 40 percent of their income. Median- income households save very little, whereas the Buffett household probably invests 99 percent of its income.

If we tax, redistribute and consume income that otherwise would have been invested, the investable pool of savings declines.

Government Employees Work Fewer Hours Than Private Sector Employees

From The Wall Street Journal, "Biggs and Richwine: The Underworked Public Employee: The cliché is true: Government workers do tend to take it easier than their private counterparts." by Andrew G Biggs and Jason Richwine:

[O]verstaffing is a serious problem in government, and the best evidence is a simple empirical fact: Government employees don't work as much as private employees. If public-sector employees just worked as many hours as their private counterparts, governments at all levels could save more than $100 billion in annual labor costs***What we found was that during a typical workweek, private-sector employees work about 41.4 hours. Federal workers, by contrast, put in 38.7 hours, and state and local government employees work 38.1 hours. In a calendar year, private-sector employees work the equivalent of 3.8 more 40-hour workweeks than federal employees and 4.7 more weeks than state and local government workers. Put another way, private employees spend around an extra month working each year compared with public employees. If the public sector worked that additional month, governments could theoretically save around $130 billion in annual labor costs without reducing services.***But could public-private differences in work time be due to other occupational differences between the sectors? Large differences in work hours actually persist even when comparing workers with similar jobs and similar skills in each sector.

Number Of Millionaire Tax Returns And Tax Revenue: Chart 2001 - 2010

From Tax Foundation, "Beware of Revenue Estimates Stated with Such Certainty" by Scott A. Hodge:

Source: Tax Foundation

Source: Tax Foundation

CBO’s Long-Term Projections for Medicare and Medicaid Spending: Federal Spending Will Double, As Percent Of GDP, Over Next 25 Years

Major conclusion of CBO presentation on Medicare and Medicaid future spending, slide 4 of presentation:

Source: CBO

Full CBO presentation embedded below:

CBO’s Long-Term Projections for Medicare and Medicaid Spending in the United States from Congressional Budget Office

California Has Highest Poverty Rate: US Census

From LAWEEKLY Blogs, "California Is America's Poorest State?" By Dennis Romero:

California has a whopping poverty rate of 23.5 percent, meaning that nearly one in every four of us is straight up poor.

The Golden State ranks number one in poverty, then, beating out all comers (Washington, D.C. came close with a 23.2 percent rate); Florida ranked second among states.***Census officials explain, they're taking into account geographic differences, including cost of living. You see, it's a lot more expensive to live in California than just about anywhere else, so even a fulltime job can put you in the poorhouse here.

The Charitable Tax Deduction Is A Disincentive To Community And Social Responsibility

Comment I posted on askblog, "The Tax Deduction for Charitable Contributions" by Arnold Kling:

A problem with charitable deductions is that it is focused on organizational structure and not actions. If I invite and feed a poor person in my house on Thanksgiving, the tax deduction is not available. If I donate food or money to a food bank or church that feeds the same person on Thanksgiving, I get a deduction.

I get a deduction for giving money to the Red Cross, but do not get a deduction for donating blood to the Red Cross.

If I grocery shop or cook a meal for a needy, ill senior in my neighborhood, no deduction, If I donate to a community organization that has volunteers who do the same thing, I get a deduction.

Charitable deductions are a disincentive to community and social responsibility.

When there is suffering, such as the Haiti earthquake, do we need a tax deduction to motivate us to send money, food, and other items? Of course not.

Let's eliminate the charitable deduction. If the government takes too much money from us so that we cannot donate as much as we would like to charities, let's fight for lower taxes and not more deductions.

EPA Required Dispersant For BP Oil Spill Clean-Up Increased Toxicity 52 Fold: The EPA Cure Is Worse Than The Spill And Worse Than Letting Nature Clean-Up The Oil

From "Worse Than the Problem: Clean-up Makes 2010 Spill 52x More Toxic" on ScienceBlog:

The study [from the Georgia Institute of Technology and Universidad Autonoma de Aguascalientes (UAA), Mexico] found that mixing the dispersant with oil increased toxicity of the mixture up to 52-fold over the oil alone. In toxicity tests in the lab, the mixture’s effects increased mortality of rotifers, a microscopic grazing animal at the base of the Gulf’s food web. The findings are published online by the journal Environmental Pollution and will appear in the February 2013 print edition.

Using oil from the Deep Water Horizon spill and Corexit, the dispersant required by the Environmental Protection Agency for clean up, the researchers tested toxicity of oil, dispersant and mixtures on five strains of rotifers. Rotifers have long been used by ecotoxicologists to assess toxicity in marine waters because of their fast response time, ease of use in tests and sensitivity to toxicants. In addition to causing mortality in adult rotifers, as little as 2.6 percent of the oil-dispersant mixture inhibited rotifer egg hatching by 50 percent. Inhibition of rotifer egg hatching from the sediments is important because these eggs hatch into rotifers each spring, reproduce in the water column, and provide food for baby fish, shrimp and crabs in estuaries. [Emphasis added.]

Terry Snell, chair of the Georgia Institute of Technology School of Biology said, "Perhaps we should allow the oil to naturally disperse. It might take longer, but it would have less toxic impact on marine ecosystems."

Majority Against Government Guaranteed Healthcare For All

From Gallup Politics, "In US, Majority Now Against Gov't Healthcare Guarantee: Views of healthcare system overall more positive in some respects" by Jeffrey M. Jones:

For the first time in Gallup trends since 2000, a majority of Americans say it is not the federal government's responsibility to make sure all Americans have healthcare coverage. Prior to 2009, a majority always felt the government should ensure healthcare coverage for all, though Americans' views have become more divided in recent years.

Source: Gallup