Slowing Labor Force And Productivity Growth From Retiring Baby Boomers Will Lower GDP Growth By 1.2 Percent

From BloombergMarkets, "Here's a Reason Baby Boomers Will Curb U.S. Growth this Decade: Output per capita will take a hit as workers older than 60 make up more of the labor force" by Jeanna Smialek:

The retirement of baby-boomers in the decade between 2010 and 2020 will lower GDP growth per capita by 1.2 percentage point a year from what would have been the case if the nation's demographics had held steady, according to a National Bureau of Economic Research study out this week. The bright side is that the dent is only half as deep between 2020 and 2030 as the pace of aging slows.

The study is based on a simple idea: population aging is already long underway and has been playing out with varying degrees of intensity across different regions of the country. By looking at variations in state population aging, authors Nicole Maestas at Harvard Medical School, and Kathleen Mullen and David Powell at policy research group RAND Corporation, are able to estimate how a graying workforce affects output, participation rates and productivity.

Source: BloombergMarkets

The Social Science Research Network link and abstract of the research study paper follows:

"The Effect of Population Aging on Economic Growth, the Labor Force and Productivity" by Nicole Maestas, Harvard Medical School - Department of Health Care Policy, Kathleen Mullen, RAND Corporation and David Powell, RAND Corporation, July 2016, NBER Working Paper No. w22452:

Abstract:
Population aging is widely assumed to have detrimental effects on economic growth yet there is little empirical evidence about the magnitude of its effects. This paper starts from the observation that many U.S. states have already experienced substantial growth in the size of their older population and much of this growth was predetermined by historical trends in fertility. We use predicted variation in the rate of population aging across U.S. states over the period 1980-2010 to estimate the economic impact of aging on state output per capita. We find that a 10% increase in the fraction of the population ages 60+ decreases the growth rate of GDP per capita by 5.5%. Two-thirds of the reduction is due to slower growth in the labor productivity of workers across the age distribution, while one-third arises from slower labor force growth. Our results imply annual GDP growth will slow by 1.2 percentage points this decade and 0.6 percentage points next decade due to population aging.

20-Year Annualized Average Public Pension Returns At Lowest Level: Funding Shortfall Expected

From The Wall Street Journal, "Pension Returns Slump, Squeezing States and Cities: Long-term returns for U.S. public pensions are expected to drop to the lowest levels ever recorded" by Timothy W Martin:

Long-term returns for U.S. public pensions are expected to drop to the lowest levels ever recorded, portending deeper pain for states and cities as a $1 trillion funding gap widens.

Twenty-year annualized returns for public pensions in the U.S. are poised to decline to 7.47% once fiscal 2016 results are released in coming weeks, according to an estimate from Wilshire Trust Universe Comparison Service, which tracks pension investment returns.
***

Source: The Wall Street Journal

***Funding shortcomings often mean taxpayers or workers are asked to chip in more to account for rising liabilities. Every one-percentage-point drop in investment returns represents an increase of 12% in liabilities, according to the Center for Retirement Research at Boston College.

US Consumer Financial Bureau Restrictions On Payday Lending Will Increase Borrowers' Bankruptcies And Borrowing Costs

From The New York Times, DealB%k, "Payday Loan Limits May Cut Abuse but Leave Some Borrowers Looking" by Stacy Cowley:

"We’re very concerned that if this [Consumer Financial Protection Bureau (CFPB) rule ending payday debt] goes through ...," said Pat Crowley, a spokesman for the Ohio Consumer Lenders Association. "There will be less credit available, and those who find a resource will pay more."

Many economists fear that he is correct — and that low-income consumers will be the ones who are hurt.

In 2004, Georgia made most short-term, high-interest loans illegal. In the wake of that law, Georgia residents paid more bounced-check overdraft fees and became more likely to file for bankruptcy, according to a report by the Federal Reserve Bank of New York.

A sweeping study of bans on payday lending, scheduled to be published soon in The Journal of Law and Economics, found similar patterns in other states.

52 Percent Of Workers With Access Participate In Employer Health Plans: Private Industry Workers Pay 21 Percent Of Single Coverage Medical Premiums On Average, While Government Workers Pay 13 Percent On Average

From The Bureau of Labor Statistics, Economic News Release, Friday, July 22, 2016, USDL-16-1493, "Employee Benefits in the United States:"

The participation rate for employer-sponsored medical care benefits for civilian workers was 52 percent in March 2016, the U.S. Bureau of Labor Statistics reported today. The participation rate was 49 percent for private industry workers and 73 percent for state and local government workers. (See tables A and 2, and chart 1.)

The participation rate for employer-sponsored retirement benefits, which include defined benefit and defined contribution plans, was 54 percent for civilian workers. The participation rate was 49 percent for private industry workers and 81 percent for state and local government workers. Differences in retirement plan participation are influenced by the type of plan offered. (See tables A and 1, chart 1, and the technical note.)***The share of single coverage medical care premiums paid by employees averaged 19 percent for civilian workers, 21 percent for private industry workers, and 13 percent for state and local government workers. (See table 3 and chart 2.) [Emphasis added.]

Employee Benefits in the United States – March 2016 on Scribd

My Comment To WSJ "Markets Run Into Skepticism—and Regulators"

My comment to The Wall Street Journal, "Markets Run Into Skepticism—and Regulators: Faith in economic freedom used to be a given in the West. Now a misguided trust in government control is growing." by Daniel Yergin:

Markets never cease working.

Government involvement, laws, regulations, subsidies and price control increase the costs of goods and transactions unevenly, which causes markets to cease pricing accurately and to cease allocating capital based on return and risk. If government becomes too heavy handed, illegal markets develop.

Government frequently attempts to do away with buyer's or investor's risk, such as FDIC deposit insurance, Too Big To Fail, Ginnie Mae, Fannie Mae and Freddie Mac's direct or implicit backstop government guarantees.

When government hides risk there is too much investment in too risky assets that can lead to severe negative macroeconomic events, such as the housing bubble, its collapse and the recent recession.

Markets need only a rule of law that protects property rights and enforces contracts. More government involvement creates price and risk distortions, which eventually lead to bad investments, bubbles, recessions and slow growth.

CBO Infographic Of US Long-Term Budget Outlook

From the Congressional Budget Office, July 15, 2016, "The 2016 Long-Term Budget Outlook: An Infographic:"

This infographic provides an overview of CBO's report, The 2016 Long-Term Budget Outlook. Gain quick insight into why CBO projects a substantial imbalance in the federal budget beyond the next 10 years.

Women's Lower Math Confidence, Not Lower Math Ability, Causing Women To Switch Out Of STEM Degrees At Higher Rate Than Men

From "Calculus factors women out of STEM degrees, researchers find" on ScienceBlog.

Both men and women experience a loss of confidence in their math skills at a similar rate in Calc I, says co-author Jess Ellis, an assistant professor of mathematics in the College of Natural Sciences. The problem, says co-author Bailey Fosdick, an assistant professor of statistics, is that women arrive with lower math confidence to begin with. “When women are leaving, it is because they don’t think they can do it” – not because they can’t do it – she says.***Students across the country were asked about their interest in and intention to pursue a STEM degree, their test scores, preparation, learning experience, plans and backgrounds – before taking Calculus I and after. A student was considered to “persist” in the STEM track if they went on to take Calculus II.***Of the students who switched out after Calculus I, when asked why they decided against taking Calculus II, most of the possible explanations fell fairly equally across the genders (too many classes, not needed for major, etc.) – except for one: "I do not believe I understand the ideas of Calculus I well enough to take Calculus II." Of those who had been planning to major in a STEM area, 14 percent of men who switched out listed this as a reason; 35 percent of women did. But fewer than one in five of the departing students of either gender reported that their Calc I grade was actually too low to continue.

Twinkies Hostess Brands Streamlines And Automates: 1,170 Employees And 3 Bakeries Replaced 22,000 Employees And 40 Bakeries

From The Washington Post, "What it took to save the Twinkie" by Drew Harwell:

Where the [Hostess Brands, LLC] company just five years ago had 8,000 employees — 75 percent of whom were represented by unions — the company now says in filings that it has a “streamlined employee base” of roughly 1,170 workers. That workforce is the shadow of a once-vast empire, which shortly before its troubles totaled 22,000 workers across more than 40 bakeries.

The company has invested $130 million to upgrade production lines and industrial ovens in its three core bakeries in Indianapolis; Emporia, Kan.; and Columbus, Ga. Its other bakeries have disappeared: The company in 2014 announced it would shutter its long-running bakery in the Chicago suburb of Schiller Park, where the Twinkie was first baked. About 400 jobs were affected.

Based in Kansas City, Mo., the company has closed all 600 or so of its Hostess outlet thrift stores and now delivers directly to warehouses, helping avoid the inefficiencies of regional bakeries, small distribution lines and direct-to-store delivery.

Over 40 Percent Of US Luxury Home International Buyers Are Chinese

From Dow Jones, Mansion Global, "More than 40% of All Foreign Buyers of Luxury Homes in the U.S. Are Chinese: One out of four Chinese buyers in the U.S. purchased $1 million-plus homes" by Fang Block:

Chinese buyers purchased more homes in the U.S. — and at higher prices —than any other international buyers.

In fact, 42% of foreign buyers who purchased homes worth $1 million or more in the U.S. between April 2015 and March 2016 were Chinese, the National Association of Realtors (NAR) reported.

Out of all buyers from mainland China, Taiwan and Hong Kong, about 27% bought homes valued at $1 million and higher, according to an NAR analysis completed for Mansion Global.

By contrast, only 4% of all Canadians — the second-largest group of foreign buyers in the U.S. — bought homes for $1 million or over.

***

Top Four Luxury Markets for Foreign Buyers
State	Percentage of $1 million-plus homes sold to foreign buyers
California	39%
Florida	14%
New York	14%
Washington	6%
Source: National Association of Realtors

FBI Director James B. Comey's Press Statement on the Investigation of Secretary Hillary Clinton’s Use of a Personal E-Mail System

Statement by FBI Director James B. Comey on the Investigation of Secretary Hillary Clinton’s Use of a Personal E-Mail System
Washington, D.C.
July 05, 2016

FBI National Press Office
(202) 324-3691
Remarks prepared for delivery at press briefing.

Good morning. I’m here to give you an update on the FBI’s investigation of Secretary Clinton’s use of a personal e-mail system during her time as Secretary of State.

After a tremendous amount of work over the last year, the FBI is completing its investigation and referring the case to the Department of Justice for a prosecutive decision. What I would like to do today is tell you three things: what we did; what we found; and what we are recommending to the Department of Justice.

This will be an unusual statement in at least a couple ways. First, I am going to include more detail about our process than I ordinarily would, because I think the American people deserve those details in a case of intense public interest. Second, I have not coordinated or reviewed this statement in any way with the Department of Justice or any other part of the government. They do not know what I am about to say.

I want to start by thanking the FBI employees who did remarkable work in this case. Once you have a better sense of how much we have done, you will understand why I am so grateful and proud of their efforts.

So, first, what we have done:

The investigation began as a referral from the Intelligence Community Inspector General in connection with Secretary Clinton’s use of a personal e-mail server during her time as Secretary of State. The referral focused on whether classified information was transmitted on that personal system.

Our investigation looked at whether there is evidence classified information was improperly stored or transmitted on that personal system, in violation of a federal statute making it a felony to mishandle classified information either intentionally or in a grossly negligent way, or a second statute making it a misdemeanor to knowingly remove classified information from appropriate systems or storage facilities.

Consistent with our counterintelligence responsibilities, we have also investigated to determine whether there is evidence of computer intrusion in connection with the personal e-mail server by any foreign power, or other hostile actors.

I have so far used the singular term, “e-mail server,” in describing the referral that began our investigation. It turns out to have been more complicated than that. Secretary Clinton used several different servers and administrators of those servers during her four years at the State Department, and used numerous mobile devices to view and send e-mail on that personal domain. As new servers and equipment were employed, older servers were taken out of service, stored, and decommissioned in various ways. Piecing all of that back together—to gain as full an understanding as possible of the ways in which personal e-mail was used for government work—has been a painstaking undertaking, requiring thousands of hours of effort.

For example, when one of Secretary Clinton’s original personal servers was decommissioned in 2013, the e-mail software was removed. Doing that didn’t remove the e-mail content, but it was like removing the frame from a huge finished jigsaw puzzle and dumping the pieces on the floor. The effect was that millions of e-mail fragments end up unsorted in the server’s unused—or “slack”—space. We searched through all of it to see what was there, and what parts of the puzzle could be put back together.

FBI investigators have also read all of the approximately 30,000 e-mails provided by Secretary Clinton to the State Department in December 2014. Where an e-mail was assessed as possibly containing classified information, the FBI referred the e-mail to any U.S. government agency that was a likely “owner” of information in the e-mail, so that agency could make a determination as to whether the e-mail contained classified information at the time it was sent or received, or whether there was reason to classify the e-mail now, even if its content was not classified at the time it was sent (that is the process sometimes referred to as “up-classifying”).

From the group of 30,000 e-mails returned to the State Department, 110 e-mails in 52 e-mail chains have been determined by the owning agency to contain classified information at the time they were sent or received. Eight of those chains contained information that was Top Secret at the time they were sent; 36 chains contained Secret information at the time; and eight contained Confidential information, which is the lowest level of classification. Separate from those, about 2,000 additional e-mails were “up-classified” to make them Confidential; the information in those had not been classified at the time the e-mails were sent.

The FBI also discovered several thousand work-related e-mails that were not in the group of 30,000 that were returned by Secretary Clinton to State in 2014. We found those additional e-mails in a variety of ways. Some had been deleted over the years and we found traces of them on devices that supported or were connected to the private e-mail domain. Others we found by reviewing the archived government e-mail accounts of people who had been government employees at the same time as Secretary Clinton, including high-ranking officials at other agencies, people with whom a Secretary of State might naturally correspond.

This helped us recover work-related e-mails that were not among the 30,000 produced to State. Still others we recovered from the laborious review of the millions of e-mail fragments dumped into the slack space of the server decommissioned in 2013.

With respect to the thousands of e-mails we found that were not among those produced to State, agencies have concluded that three of those were classified at the time they were sent or received, one at the Secret level and two at the Confidential level. There were no additional Top Secret e-mails found. Finally, none of those we found have since been “up-classified.”

I should add here that we found no evidence that any of the additional work-related e-mails were intentionally deleted in an effort to conceal them. Our assessment is that, like many e-mail users, Secretary Clinton periodically deleted e-mails or e-mails were purged from the system when devices were changed. Because she was not using a government account—or even a commercial account like Gmail—there was no archiving at all of her e-mails, so it is not surprising that we discovered e-mails that were not on Secretary Clinton’s system in 2014, when she produced the 30,000 e-mails to the State Department.

It could also be that some of the additional work-related e-mails we recovered were among those deleted as “personal” by Secretary Clinton’s lawyers when they reviewed and sorted her e-mails for production in 2014.

The lawyers doing the sorting for Secretary Clinton in 2014 did not individually read the content of all of her e-mails, as we did for those available to us; instead, they relied on header information and used search terms to try to find all work-related e-mails among the reportedly more than 60,000 total e-mails remaining on Secretary Clinton’s personal system in 2014. It is highly likely their search terms missed some work-related e-mails, and that we later found them, for example, in the mailboxes of other officials or in the slack space of a server.

It is also likely that there are other work-related e-mails that they did not produce to State and that we did not find elsewhere, and that are now gone because they deleted all e-mails they did not return to State, and the lawyers cleaned their devices in such a way as to preclude complete forensic recovery.

We have conducted interviews and done technical examination to attempt to understand how that sorting was done by her attorneys. Although we do not have complete visibility because we are not able to fully reconstruct the electronic record of that sorting, we believe our investigation has been sufficient to give us reasonable confidence there was no intentional misconduct in connection with that sorting effort.

And, of course, in addition to our technical work, we interviewed many people, from those involved in setting up and maintaining the various iterations of Secretary Clinton’s personal server, to staff members with whom she corresponded on e-mail, to those involved in the e-mail production to State, and finally, Secretary Clinton herself.

Last, we have done extensive work to understand what indications there might be of compromise by hostile actors in connection with the personal e-mail operation.

That’s what we have done. Now let me tell you what we found:

Although we did not find clear evidence that Secretary Clinton or her colleagues intended to violate laws governing the handling of classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information.

For example, seven e-mail chains concern matters that were classified at the Top Secret/Special Access Program level when they were sent and received. These chains involved Secretary Clinton both sending e-mails about those matters and receiving e-mails from others about the same matters. There is evidence to support a conclusion that any reasonable person in Secretary Clinton’s position, or in the position of those government employees with whom she was corresponding about these matters, should have known that an unclassified system was no place for that conversation. In addition to this highly sensitive information, we also found information that was properly classified as Secret by the U.S. Intelligence Community at the time it was discussed on e-mail (that is, excluding the later “up-classified” e-mails).

None of these e-mails should have been on any kind of unclassified system, but their presence is especially concerning because all of these e-mails were housed on unclassified personal servers not even supported by full-time security staff, like those found at Departments and Agencies of the U.S. Government—or even with a commercial service like Gmail.

Separately, it is important to say something about the marking of classified information. Only a very small number of the e-mails containing classified information bore markings indicating the presence of classified information. But even if information is not marked “classified” in an e-mail, participants who know or should know that the subject matter is classified are still obligated to protect it.

While not the focus of our investigation, we also developed evidence that the security culture of the State Department in general, and with respect to use of unclassified e-mail systems in particular, was generally lacking in the kind of care for classified information found elsewhere in the government.

With respect to potential computer intrusion by hostile actors, we did not find direct evidence that Secretary Clinton’s personal e-mail domain, in its various configurations since 2009, was successfully hacked. But, given the nature of the system and of the actors potentially involved, we assess that we would be unlikely to see such direct evidence. We do assess that hostile actors gained access to the private commercial e-mail accounts of people with whom Secretary Clinton was in regular contact from her personal account. We also assess that Secretary Clinton’s use of a personal e-mail domain was both known by a large number of people and readily apparent. She also used her personal e-mail extensively while outside the United States, including sending and receiving work-related e-mails in the territory of sophisticated adversaries. Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal e-mail account.

So that’s what we found. Finally, with respect to our recommendation to the Department of Justice:

In our system, the prosecutors make the decisions about whether charges are appropriate based on evidence the FBI has helped collect. Although we don’t normally make public our recommendations to the prosecutors, we frequently make recommendations and engage in productive conversations with prosecutors about what resolution may be appropriate, given the evidence. In this case, given the importance of the matter, I think unusual transparency is in order.

Although there is evidence of potential violations of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case. Prosecutors necessarily weigh a number of factors before bringing charges. There are obvious considerations, like the strength of the evidence, especially regarding intent. Responsible decisions also consider the context of a person’s actions, and how similar situations have been handled in the past.

In looking back at our investigations into mishandling or removal of classified information, we cannot find a case that would support bringing criminal charges on these facts. All the cases prosecuted involved some combination of: clearly intentional and willful mishandling of classified information; or vast quantities of materials exposed in such a way as to support an inference of intentional misconduct; or indications of disloyalty to the United States; or efforts to obstruct justice. We do not see those things here.

To be clear, this is not to suggest that in similar circumstances, a person who engaged in this activity would face no consequences. To the contrary, those individuals are often subject to security or administrative sanctions. But that is not what we are deciding now.

As a result, although the Department of Justice makes final decisions on matters like this, we are expressing to Justice our view that no charges are appropriate in this case.

I know there will be intense public debate in the wake of this recommendation, as there was throughout this investigation. What I can assure the American people is that this investigation was done competently, honestly, and independently. No outside influence of any kind was brought to bear.

I know there were many opinions expressed by people who were not part of the investigation—including people in government—but none of that mattered to us. Opinions are irrelevant, and they were all uninformed by insight into our investigation, because we did the investigation the right way. Only facts matter, and the FBI found them here in an entirely apolitical and professional way. I couldn’t be prouder to be part of this organization.

Asians Are Highest US Hourly Earners By Sex, Race, And Ethnicity: More Asians Have Bachelor And Advanced Degrees Than Whites, Blacks Or Hispanics

From Bloomberg, "Asian Men Win the Hourly Earnings Race in America: White and Asian women are getting paid more, too." by Zara Kessler:

The Pew Research Center's review of Current Population Survey data found that, when looking at full- or part-time workers age 16 and up, median hourly earnings for Asian [Asians include Native Hawaiian and Pacific Islanders and include only non-Hispanic Asians] males were $24 last year, compared with $21 for white men. Median hourly earnings for Asian women were $18, compared with $17 for white women. And in a slight twist on the whole notion of the gender wage gap, white and Asian women outpaced black and Hispanic men, whose median hourly earnings in 2015 were $15 and $14, respectively.

Source: Bloomberg

Educational attainment, of course, plays a role: Those with a four-year college degree earn more than those without, and Asians are comparatively very well educated. Fifty-three percent of Asian adults 25 and older had at least a bachelor’s degree in 2015, vs. 36 percent of whites, 23 percent of blacks, and 15 percent of Hispanics. [This includes all those 25 and older in the U.S. civilian non-institutionalized population, not just workers with positive earnings.] Meanwhile, 21 percent of Asians age 25 and older had an advanced degree, compared with 14 percent of whites.

Differences in educational attainment is the primary cause of income differences in the US among racial and ethnic groups.

Governments Are Instituted Among Men, Deriving Their Just Powers From The Consent Of The Governed: The Declaration of Independence

From the National Archives, the text of "The Declaration of Independence" and a photo of the actual parchment copy:

The Declaration of Independence: A Transcription

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

The 56 signatures on the Declaration appear in the positions indicated:

Column 1
Georgia:
Button Gwinnett
Lyman Hall
George Walton

Column 2
North Carolina:
William Hooper
Joseph Hewes
John Penn
South Carolina:
Edward Rutledge
Thomas Heyward, Jr.
Thomas Lynch, Jr.
Arthur Middleton

Column 3
Massachusetts:
John Hancock
Maryland:
Samuel Chase
William Paca
Thomas Stone
Charles Carroll of Carrollton
Virginia:
George Wythe
Richard Henry Lee
Thomas Jefferson
Benjamin Harrison
Thomas Nelson, Jr.
Francis Lightfoot Lee
Carter Braxton

Column 4
Pennsylvania:
Robert Morris
Benjamin Rush
Benjamin Franklin
John Morton
George Clymer
James Smith
George Taylor
James Wilson
George Ross
Delaware:
Caesar Rodney
George Read
Thomas McKean

Column 5
New York:
William Floyd
Philip Livingston
Francis Lewis
Lewis Morris
New Jersey:
Richard Stockton
John Witherspoon
Francis Hopkinson
John Hart
Abraham Clark

Column 6
New Hampshire:
Josiah Bartlett
William Whipple
Massachusetts:
Samuel Adams
John Adams
Robert Treat Paine
Elbridge Gerry
Rhode Island:
Stephen Hopkins
William Ellery
Connecticut:
Roger Sherman
Samuel Huntington
William Williams
Oliver Wolcott
New Hampshire:
Matthew Thornton

US Bottled Water Sales Growth: 2000 - 2016

From Bloomberg, "Nestlé Discovers Water in the Arizona Desert, and Bottles It: Despite a 17-year drought, Phoenix has welcomed the sale of its water as a consumer product—but for how long?" by Eric Roston:

In America, single-serving bottles of water recorded 40 straight quarters of 20 percent growth or more starting in 1995, a decade long run during which the product went from novelty to mainstay, visible in almost every conceivable setting. Though its overall growth has dropped since then, Michael Bellas of Beverage Marketing Corp. said this year may mark a more telling milestone: Water sales are expected to surpass soda sales for the first time.

Source: Bloomberg

Pharmaceutical Industry Practice Of Cheap Free Meals to Doctors Increases Prescriptions For Higher Priced Branded Drugs Over Generics

From Bloomberg, "Doctors Getting Free Meals Pick Branded Drugs More, Study Finds" by Jared S Hopkins:

Doctors who accept free meals from the pharmaceutical industry are more likely to prescribe certain branded drugs to Medicare patients than generics, according to a study published Monday.

The article in JAMA Internal Medicine documents a group of almost 280,000 doctors who received industry-sponsored meals, typically costing less than $20, in 2013. The study found that the doctors more frequently prescribed the four most common brand-name drugs that were available in the Medicare Part D program. In the case of Bystolic, a beta blocker for high blood pressure, physicians who received at least four meals chose the brand 5.4 times as often as generics.

"What was most surprising to me was that such small payments were associated with big differences in physician prescriptions," said Colette Dejong, one of the study’s authors and a research fellow at the Center for Healthcare Value at the University of California at San Francisco. "It was previously thought it takes a certain amount of money to influence a doctor, and the current guidelines are written that way."

What a surprise. Doctors are human after all and behave just like everyone else. Their decisions are not always objective or the best and can be manipulated.

The US Upper Middle Class Is Larger: Expanding From 12% In 1979 To Nearly 30% In 2014

From The Wall Street Journal, Real Time Economics, "Not Just the 1%: The Upper Middle Class Is Larger and Richer Than Ever: Research shows the number of upper middle class households has more than doubled since 1979" by Josh Zumbrun:

A range of data after the recession and the housing bust supported the idea that only a tiny elite of U.S. society, generally seen as the top 1%, had rebounded and was doing well.

But a growing body of evidence suggests the economic expansion since the 2007-2009 financial crisis has enriched a much larger swath of the upper middle class, and that a deeper income divide is developing between that top quarter or so of the population and everyone else.

The latest piece of evidence comes from economist Stephen Rose of the Urban Institute, who finds in new research that the upper middle class in the U.S. is larger and richer than it’s ever been. He finds the upper middle class has expanded from about 12% of the population in 1979 to a new record of nearly 30% as of 2014.

From the abstract to the "The Growing Size and Incomes of the Upper Middle Class" by Stephen Rose:

This report uses absolute income thresholds adjusted for inflation and family size to show that the size of the upper middle class grew from 12.9 percent of the population in 1979 to 29.4 percent in 2014. In terms of shares of total income, the middle class controlled a bit more than 46 percent of all incomes in 1979, while the upper middle class and rich controlled 30 percent. By 2014, the rich and upper middle class controlled 63 percent of all incomes, while the middle class share had shrunk to 26 percent.

The Key To Growth: My Comment To The Wall Street Journal Opinion, "The Fed Surrenders"

My posted comment to the The Wall Street Journal Opinion, "The Fed Surrenders: The central bank underscores the slow-growth reality:"

Low interest rates expand the economy primarily through housing. Fed data shows that from the end of 2013 to the end of 2016Q1, total mortgages dollars, by all holders, for 1-4 family residences increased less than 1.3 percent over the entire period, or about 0.6 percent per year.

Net private domestic business investment, in nominal dollars and not inflation adjusted, has been declining for the previous year, from $557 billion to $439 billion at 2016Q1. The post recession peak of $559 billion in 2015Q2 was below 2000Q2 peak of $565 billion. $565 billion in 2000 is equivalent to $785 billion in 2016 on an inflation adjusted basis.

Bursting of the housing bubble might explain the lack of interest in homes. It does not explain the lack of business investment. Without business investment, there has been and will be many fewer new business formations and little or no wage and employment growth.

The key to growth is increasing domestic private business investment. The Fed is powerless here.

California Is The World's Sixth Largest Economy, Overtaking France

From BloombergPolitics, "California Overtakes France to Become Sixth-Largest Economy" by Alison Vekshin:

California has overtaken France as the world’s sixth-largest economy, fueled by strong growth and the U.S. dollar’s gains against foreign currencies, state data released Tuesday show.
***

Source: BloombergPolitics

California grew by 4.1 percent in 2015, compared with a 2.4 percent increase for the U.S. and 1.1 percent for France, Asmundson said.

Last year, California created the most jobs of any state, more than the second- and third-most-populous states Florida and Texas combined.

Decision Of The US Court of Appeals Upholding FCC Net Neutrality Regulations

United States Telecom Association v FCC

Link to the decision on the US Court of Appeals website, https://www.cadc.uscourts.gov/internet/opinions.nsf/3F95E49183E6F8AF85257FD200505A3A/$file/15-1063-1619173.pdf.

55 Percent Of US Workers Left 658 Million Unused Vacation Days In 2015: Third Of Unused Vacation Days Could Not Be Rolled Over Or Paid Out

From The Wall Street Journal, Real Time Economics, "More Than Half of U.S. Workers Are Leaving Some Vacation Days Unused: New study says many workers feel too integral to get away, or may worry about returning to piles of work" by Melanie Trottman:

More than half of U.S. workers left some vacation time unused in 2015, ... according to a new study.***The study found that workers used 16.2 vacation days on average last year, compared with the long-term average of 20.3 days from 1976 to 2000. More than half of workers surveyed as part of the research — 55% — left days unused last year, up from prior years, Ms. Denis said, though figures aren’t exactly comparable because the methodology changed.***In total, Americans left 658 million vacation days unused last year. Of those, 222 million were forfeited because they couldn’t be rolled over or paid out in any way. That means an average of two full days were forfeited per worker.

"Americans are effectively volunteering hundreds of millions of days of free work," forfeiting $61.4 billion in benefits, the study said.

Incredibly, 99 Percent Of Federal Employees Get Excellent Or Better Performance Reviews And Less Than 1 Percent Get A Not Good at Their Job Review

From The Washington Post, "The federal workforce, where everyone’s performance gets rave reviews" by Lisa Rein:

Source: The Washington Post

In the ranks of the federal government, 99 percent are really good at their jobs — and almost two-thirds exceed expectations or do outstanding work.

That’s the conclusion of a new report by the Government Accountability Office, which also found that 78 percent of high-level civil servants — those in GS grades 13 through 15 — were given top performance scores of outstanding or fully successful.
***At the other end of the spectrum, it is “equally not credible” that just 1 percent of employees are not doing a good job, he said.

Source: The Washington Post

Income Inequality Is Higher Among Black Households Than Asian Or White Households

Income inequality is higher among Blacks than Asians or Whites. See the chart below from The St. Louis Federal Reserve FRED Economic Data Series, "Income Gini Ratio For Households By Race Of Householder:"

Source: FRED Economic Data

Does the higher income inequality among Blacks mean we need to redistribute the income from richer Black households to poorer Black households? Of course not. The median income of Blacks is lower than the median income of Asians or Whites, as the following chart from Business Insider, "American Median Incomes By Race Since 1967 [CHART]" by Steven Perlberg shows:

The higher income inequality among Blacks is a good sign.

Income has a lower value of $0 and does not include the value of many government benefits available to lower income households, such as SNAP (formerly Food Stamps), subsidized government housing, housing vouchers, Medicaid, Earned Income Tax Credit, etc.

The inequality in income among Black households is an indication that there are households that are earning income in amounts that can tip the inequality measure upward. It is a sign of economic progress among some, but not enough, Black households. As more Black households make economic progress and see an increase in their household income compared to receiving government benefits, inequality measures will continue to increase until the point that economic progress and income increases reach the lowest income Black households. As Black households move away from government benefits not included in income measures to more earned income, income inequality among Blacks will eventually reach a maximum and then begin to show a decrease.

Among Black households, the high income inequality measure is an indication of poverty and reliance on government benefits. It is not an indication of too much income earned by too few at the top.

80 Percent Of US Residents Have More Pleasant Weather Now Due To Climate Change: Models Predict Worse Weather By Next Century

From ScienceNews, "U.S. weather has gotten more pleasant, but will soon worsen: Researchers hope shift will spur action on climate change" by Thomas Sumner:

Americans have climate change to thank for a decades-long spate of milder winters. Around 80 percent of U.S. residents live in counties where the weather has become more pleasant over the last four decades (see map). That trend won’t last, however: Researchers predict in the April 21 Nature that 88 percent of Americans will experience noticeably worse weather by 2100 than they do today. [Emphasis added.]
***Fair weather

Redder-shaded counties in the contiguous United States had relatively nicer weather (milder winters and cooler summers) between 1974 and 2013; green-shaded counties had worse weather. White-colored counties had insufficient data to gauge the area’s changing weather.

80 percent

Source: ScienceNews

Portion of Americans living in counties that experience better weather today than in 1974

88 percent
Portion of today’s Americans who live in counties that will have worse weather by 2100

Source: P.J. Egan and M. Mullin/Nature 2016

Affordable Care Act Is Pushing Too Many Low Productivity Resources Into Healthcare: Hurting Job Growth And Economic Growth

From NCPA Health Policy Blog, "Eight Thousand Non-Health Jobs Lost in May" by John R. Graham:

The true scope of this [June 3, 2016] morning’s miserable jobs report is disguised by the headline figure of 38,000 jobs gained. In fact, health services added 46,000 jobs while civilian non-health, non-farm employment dropped eight thousand (Table I). The warping of our economy towards the government-controlled health sector ....***

Source: NCPA Health Policy Blog

Milton Friedman On Illegal Immigration: Video

From YouTube, "Milton Friedman - Illegal Immigration only helps when its Illegal:"

Is The New Orleans School System The Template For Fixing Other Inner City Schools?

From The Wall Street Journal, Opinion, "A Fresh Turn in the New Orleans Charter School Miracle: Oversight will revert to the city from the state, but with safeguards to ensure that gains remain intact." by John White:

Undeniable progress has been made: Although New Orleans public schools serve one-third fewer students than they did before Katrina, they send twice as many to college. But further progress, in a city rife with poverty and social stratification, has also required transforming the district’s central office from a disorganized instrument of political interests to a focused regulator protecting the rights of disadvantaged children***Each [nonprofit organization that operates a charter] school signs a contract with its regulator—either the state or the local board—that includes performance objectives and requirements for responsible operation. Nonprofit groups that miss academic targets or prove unable to capably serve students with disabilities, for example, have lost their license to operate and been replaced.

This approach has evolved beyond assuring compliance toward aggressively protecting individual students’ civil rights. In 2011, school leaders and regulators created a citywide enrollment process whereby all families complete one application for admission to New Orleans’s charter schools. Parents can apply to any school in any neighborhood, and schools must accept all assigned students.

For Most College Loan Borrowers, The Increase In Earnings Easily Offsets Monthly Student Loan Payments

From Federal Reserve Bank Of Cleveland, "Is There a Student Loan Crisis? Not in Payments" by Joel Elvery:

In the second quarter of 2015, the average student loan payment for those in the 20- to 30-year-old range was $351, according to the Federal Reserve Bank of New York’s Consumer Credit Panel data. This amount is just more than 50 percent higher than it was in 2005 ($227 when adjusted for inflation).***Fifty percent of the borrowers had payments of $203 or lower, and another 25 percent had payments between $203 and $400. This means that 75 percent of student loan borrowers in this age range would be, in the simplest sense, better off with a student loan if going to college increased their monthly take home earnings by $401 or more. In 2014, labor force participants aged 20 to 30 who had at least some college on average earned $2,353 per month, $750 more than people the same age with just a high school degree. This is more than double the average monthly student loan payment, suggesting that the increase in earnings from going to college more than offsets the cost of student loan payments for most borrowers.

Link to PDF of article.

Household Debt Reaching Pre-Recession Peak, But Lower Debt Payments From Low Interest Rates

From The Wall Street Journal, "Trillions in Debt—but for Now, No Reason to Worry: U.S. household borrowing nears precrisis peaks; global debt has already topped 2008 levels" by Ken Brown:

Global debt has already topped 2008 levels and keeps rising. That’s pretty astonishing so soon after debt-driven crises in the U.S. and Europe and endless worries about too much borrowing in Japan, China and emerging markets.

But for all the hand-wringing, a near-term debt crisis is unlikely. Lower interest rates mean debt payments are far lower than they were before the crisis. In the U.S., household debt compared with the overall economy is way down. And overseas, loans can easily be rolled over.
***U.S. households owed $12.25 trillion at the end of the first quarter, up 1.1% from the end of 2015, according to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, released Tuesday. If the first quarter repeats itself through the end of the year, U.S. household debt will approach its peak of $12.68 trillion, which it hit in the third quarter of 2008.
***

Source: The Wall Street Journal

Slowdown In Temporary Worker Hiring Generating Fears Of Another Recession

From The Wall Street Journal, "Temp-Worker Freeze Bodes Ill for Economy: Flat staffing suggests broader job-market slowdown may be ahead" by Eric Morath:

One of the labor market’s early-warning signs may be flashing trouble.

Hiring by staffing agencies has ground to a halt so far in 2016, a worrisome sign because the category fell off before a broader job-market slowdown ahead of the past two recessions. Many economists look at the sector as a leading indicator because cautious firms tend to first hire temps when an expansion begins and dismiss those nonpermanent workers when they sense the economy is faltering.
***"It’s the first sector that really begins to lose jobs," said Donald Grimes, a labor economist at the University of Michigan. "If you start seeing those numbers go negative, you’ve got a real problem."

Source: The Wall St Journal

In Memoriam Of Sarah Breedlove (Madam C. J. Walker), Died May 25, 1919: Successful Entrepreneur, Philanthropist, Activist Who Rose From Washerwoman To One Of The Wealthiest African American Women In Early 1900s

From Wikipedia, "Madam C. J. Walker:"

Source: Wikipedia

Sarah Breedlove (December 23, 1867 – May 25, 1919), known as Madam C. J. Walker, was an African American entrepreneur, philanthropist, and a political and social activist. Eulogized as the first female self-made millionaire in America, she became one of the wealthiest African American women in the country. Walker made her fortune by developing and marketing a line of beauty and hair products for black women through Madame C.J. Walker Manufacturing Company, the successful business she founded. Walker was also known for her philanthropy and activism. She made financial donations to numerous organizations and became a patron of the arts. Villa Lewaro, Walker’s lavish estate in Irvington-on-Hudson, New York, served as a social gathering place for the African American community. The Madame Walker Theatre Center opened in Indianapolis in 1927 to continue her legacy. Both of these properties are listed on the National Register of Historic Places. [Footnotes omitted.]

Continue reading at "Madam C. J. Walker" on Wikipedia.

Capitalism Is Not About Greed

From The Wall Street Journal, "Dear Grads, You Need a P&L: Even if you don’t like capitalism, you’d better draw up a personal profit-and-loss statement if you want to change the world." by Andy Kessler:

When I buy something from you (assuming you’re not a rent-seeking crony capitalist), your profit is how much I am willing to pay over what it costs to produce the item. In a truly competitive world, your profit is the value of my delight in your invention, or I’d simply make the thing myself. To put it in Facebook speak: Your profit is the social value of the transaction. Profits create wealth not only for you but for the collective “me” of society. ***Hollywood movies notwithstanding, capitalism is not about greed. It is a system that weeds out dumb ideas from smart ones. The former generate disdain and losses; the latter generate delight and profits.

New CEOs Use Same Strategies To Improve Results At Well-Performing, Poorly Performing, And Stable Companies: McKinsey & Co

From McKinsey & Company, Mckinsey Quarterly, May 2016, "How new CEOs can boost their odds of success" by Michael Birshan, Thomas Meakin, and Kurt Strovink:

We expected that CEOs taking the helm at poorly performing companies, feeling compelled to do something to improve results, would have a greater propensity to make strategic moves than those who joined well-performing organizations. To learn whether this idea was true, we looked at how each company had been performing relative to its industry counterparts prior to the new CEO’s arrival and then subdivided the results into three categories: well-performing, poorly performing, and stable companies. When we reviewed the moves by companies in each of these categories, we found that new CEOs act in similar ways, with a similar frequency, whether they had joined well- or poorly performing organizations. CEOs in different contexts made bold moves—such as M&A, changing the management team, and launching new businesses and products—at roughly the same rate (Exhibit 1). [Emphasis added].

Exhibit 1

Source: McKinsey & Co

Forget That Job Promotion Under The New Overtime Rules

In civil service, job promotions are based on test scores. In union jobs, seniority is the basis for job promotions. In the private sector, where over 93 percent of jobs are non-union, a manager selects who gets promoted.

The new overtime rules will make it more difficult for employees to show the qualities that make them a valuable worker and worthy of a promotion.

Private sector managers promote employees who are hardworking, trustworthy and loyal. Managers form their opinions to promote employees through observations and interactions with workers.

In a salaried job without extra overtime pay, an employer can gather more information about a worker's potential as a higher level employee. Obama, by increasing the size of the overtime group of workers from 7 percent of the salaried workforce to 35 percent, has remove the ability of many workers to signal to their employers that they are loyal, committed, trustworthy and deserving of a promotion.

Imagine two employees at a job with overtime pay where approval is needed for overtime, as is usual for most employers, otherwise workers would have strong financial incentives to extend the time to complete tasks to earn overtime. With required overtime pay, independent of the amount of work that needs to be done, both workers will show up at the start of the scheduled workday, not earlier, and leave at the end of the workday, not later, to avoid unapproved overtime.

Imagine two employees at a salaried job without overtime pay. A hardworking, loyal, trustworthy employee realizing there is extra work to be done, might come in a little earlier or stay a little later, to complete the unfinished work. A worker who sees the job just as a job and is not committed to the employer will not care about the unfinished work and will come in and leave at the scheduled time.

The government’s expansion of the class of overtime eligible workers five-fold, from 7 percent to 35 percent of the salaried workforce, deprives managers of valuable employee information to decide who to promote. With less information about a worker, companies will be more at risk of making a mistake, will be more careful and slower to promote, and will promote fewer employees to avoid the risk of a mistake.

Before the new overtime rules, employees had an option to work harder to show their employers they wanted a promotion. Under the new rules, employees lost that valuable option.

As an aside, the financial loss to employees of the new overtime rules can be computed. The expanded numbers of overtime employees were buying a call option on a promotion with extra salary, using the unpaid extra work as payment to buy that call option. The expanded class of overtime employees lost a call option whose value can be computed if one knew the estimated average number of extra hours these employees worked and the expected rate and extra salary of a promotion. If salaried employees had not valued the call option positively, they would not have put in the extra unpaid hours.

Wind Energy Allowed To Kill 4200 Bald Eagles Per Year By US Fish And Wildlife Proposal: Wind Industry Reporting Of Bird Kills Not Required

From The Wall Street Journal, "An Ill Wind: Open Season on Bald Eagles: Sacrificing 4,200 of the birds a year for green energy sounds fine to regulators." by Robert Bryce:

Two weeks ago the [U.S. Fish and Wildlife Service] agency opened public comment on “proposed improvements” to its eagle conservation program. It wants to extend the length of permits for accidental eagle kills from the current five years to 30 years. The changes would allow wind-energy producers to kill or injure as many as 4,200 bald eagles every year. That’s a lot. The agency estimates there are now about 72,434 bald eagles in the continental U.S.
***A 2013 study in the Wildlife Society Bulletin estimated that wind turbines killed about 888,000 bats and 573,000 birds (including 83,000 raptors) in 2012 alone. But wind capacity has since increased by about 24%, and it could triple by 2030 under the White House’s Clean Power Plan. “We don’t really know how many birds are being killed now by wind turbines because the wind industry doesn’t have to report the data,” says Michael Hutchins of the American Bird Conservancy. "It’s considered a trade secret."***The double standard is stunning. In 2011 the Fish and Wildlife Service convinced the Justice Department to file criminal indictments against three oil companies working in North Dakota’s Bakken field for inadvertently killing six ducks and one phoebe.

My WSJ Posted Comment To Google's Ad Ban For Payday Lenders

My posted comment to The Wall Street Journal article, "Google Bans Ads for Payday Lenders: Alphabet’s subsidiary says such loans ‘can result in unaffordable payment and high default rates’" by Yuka Hayashi:

Google’s ad ban for payday lending is a sad day for the working poor. A private business trying to meet the needs of the cash-strapped lower income worker living paycheck to paycheck must be bad if it is not part of the lobbying, ex-regulator hiring system called Banking.

Payday lenders for a few dollars meet the needs of the unbanked who have jobs but have bad or no credit histories and probably no bank accounts. Unfortunately, mathematically converting the cost of a business fee into an annual interest expense makes the fee seem astronomical.

I guess Google thinks a $35 overdrawn bank fee every week or two plus interest on an overdraft loan at a bank is preferable because the US says so. Why aren’t bank overdraft fees treated like Payday loans and banned?

If banks were a competitive alternative to payday lenders, payday lenders would not exist. Without payday lenders to meet short-term cash needs, what else is legally available to the workers who are living paycheck to paycheck?

After Washington State Legalized Marijuana, Number Of Fatal Car Crashes Involving Marijuana Doubled

From the National Library of Medicine, the National Institutes of Health, MedlinePlus, "Pot-Linked Fatal Car Crashes Doubled in One State After Legalization :Experts say Washington state's experience could be a lesson for rest of country" by Mary Elizabeth Dallas:

The number of fatal car crashes involving marijuana more than doubled after Washington state legalized the sale of the drug, a new study finds.

Marijuana became legal in Washington in December 2012, researchers said. Between 2013 and 2014, the percentage of drivers in Washington involved in fatal car accidents after using marijuana rose from 8 percent to 17 percent, according to the study from the AAA Foundation for Traffic Safety.

In 2014 alone, one in six drivers involved in a deadly crash had recently used the drug, researchers found.

For The First Time Since 2009, The Federal Budget Deficit Will Increase, In Relation To The Size Of The Economy

From Congressional Budget Office, "The 2016 Budget Outlook Presentation" by Keith Hall, CBO Director, at the Peter G. Peterson Foundation’s 2016 Fiscal Summit:

In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009, according to CBO’s estimates. If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years, CBO projects. Debt held by the public would also grow significantly from its already high level.

To analyze the state of the budget in the long term, CBO has extrapolated its 10-year baseline projections an additional two decades. If current laws governing taxes and spending remain in place, the outlook for the budget would steadily worsen over the long term, with revenues falling well short of spending. CBO is in the process of completing a detailed update of its long-term projections; but in January the agency did a simplified update. On that basis, budget deficits are projected to rise steadily and federal debt held by the public is projected to exceed 130 percent of GDP by 2040.

The 2016 Budget Outlook from Congressional Budget Office

Law Enforcement Can Legally Compel A Suspect To Use A Finger To Unlock A Smartphone: Cannot Compel A Suspect To Provide The Password To Unlock A Smartphone

From Bloomberg, "The Fingerprint Lock on Your Phone Isn’t Cop-Proof: Law enforcement has an end run around smartphone encryption. For now." by Kartikay Mehrotra:

For the 250 million phones sold around the world with fingerprint authentication since 2013, law enforcement may be able to compel suspects to press their fingers to the devices and unlock them.

With minimal litigation on the books in the U.S., police and prosecutors require only a judge’s blessing on a warrant for a suspect’s fingerprints. So far they’ve used the power sparingly. But as the number of fingerprint scanners in hip pockets grows, district attorneys across the country say the technology is poised to become a major engine of evidence-gathering. "It is likely to be just a matter of time till this does become a primary gateway to accessing phones," says Micheal O’Connor, an Alameda County assistant district attorney in Oakland, Calif.***Los Angeles and Oakland are among the cities that have already granted or received warrants for the use of a finger to unlock a phone. The next step may be a lawsuit that determines whether a fingerprint is off-limits.

Legal scholars say law enforcement is likely to win that fight.

Current US Birth Rate Below Pre-Recession Levels: Expected To Stay At Lower Level

From The Wall Street Journal, "Baby Lull Promises Growing Pains for Economy: Slow rebound in post-recession birth rates challenges businesses, poses long-term test for government programs" by Janet Adamy:

The U.S. is experiencing a baby lull that looks set to last for years, a shift demographers say will likely ripple through the U.S. economy and have an impact on everything from maternity wards to federal social programs.
***...the U.S. may not soon return to its pre-recession average of about two babies for every adult woman. Some demographers have pared their forecasts for future births because an expected post-recession baby boom has been smaller than anticipated.

The leveling-off in births is weighing on sales at children’s stores, prompting hospitals to rework their birth wards and putting pressure on builders of single-family homes, executives and economists say.***

Source: The Wall Street Journal

Substantial Decline In Minimum Wage And Involuntary Part Time Jobs Since 2010: Most Of The Increase In Minimum Wage And Involuntary Part Time Jobs Occurred During The Recession in 2008 And 2009

From The Wall Street Journal, Real Time Economics, "Just How Good (or Bad) Are All the Jobs Added to the Economy Since the Recession? We take a closer look at employment and wage data to see the makeup of newly created jobs" by Lam Thuy Vo and Josh Zumbrun:

Overall, the data also show that more people work minimum wage or involuntarily part time than prior to the recession. But most of this increase occurred during the recession in 2008 and 2009.

The number of minimum wage and part time workers has declined over the past five years. There are currently about 2.6 million workers earning the minimum wage. That’s up from 1.7 million in 2007, but down substantially from 4.4 million in 2010. There are currently about six million people who work part time but want full-time hours. That’s up from about four million in 2007, but down substantially from nine million in 2009 and 2010.

Share Of Young Men Jobless Or Incarcerated By Education Level: CBO

From Congressional Budget Office, May 9, 2016, "Trends in the Joblessness and Incarceration of Young Men:"

In 2014, 16 percent of men in the United States between the ages of 18 and 34 were jobless or incarcerated, up from 11 percent in 1980. Those numbers and related longer-term trends have significant economic and budgetary implications.

View CBO Document

In 2014, there were 38 million men in the United States between the ages of 18 and 34; about 5 million of those young men were jobless, and 1 million were incarcerated. Those numbers and some related longer-term trends have significant economic and budgetary implications. Young men who are jobless or incarcerated can be expected to have lower lifetime earnings and less stable family lives, on average, than their counterparts who are employed or in school. In the short term, their lower earnings will reduce tax revenues and increase spending on income support programs, and the incarceration of those in federal prison imposes costs on the federal government. Farther in the future, they will probably earn less than they would have if they had gained more work experience or education when young, resulting in a smaller economy and lower tax revenues.

The share of young men who are jobless or incarcerated has been rising. In 1980, 11 percent of young men were jobless or incarcerated; in 2014, 16 percent were (see figure below). Specifically, 10 percent of young men were jobless in 1980, and 1 percent were incarcerated; those shares rose to 13 percent and 3 percent in 2014.

Layoffs Have Negative Effects On Rehired Workers: Lower Future Earnings And Lower Home Ownership

From The Wall Street Journal, "The Recession’s Economic Trauma Has Left Enduring Scars: Effects of losing a job linger, from lower wages and home ownership rates to psychological problems" by Ben Leubsdorf:

Even for the millions of Americans back at work, the effects of losing a job will linger, the research suggests. They will earn less for years to come. They will be less likely to own a home. Many will struggle with psychological problems. Their children will perform worse in school and may earn less in their own jobs.[Emphasis added.]
***Labor Department data show 40 million layoffs and other involuntary discharges during the recession that began in December 2007 and ended in June 2009. The official unemployment rate peaked at 10%. Princeton University economist Henry Farber calculated that the rate of job loss from 2007 through 2009 was 16%.

Wage scarring
As in previous recessions, millions of Americans faced a phenomenon economists sometimes call wage scarring. People who lose a job, even during economic expansions, usually earn less money when they re-enter the workplace. They are out of work for a time and often take a pay cut as the price of returning to work at a new employer or even in a new career.
***

Source: The Wall Street Journal

Quarter Of Home Energy Use Is From Devices Turned Off

From The New York Times, "Just How Much Power Do Your Electronics Use When They Are ‘Off’?" by Tatiana Schlossberg:

Once upon a time, there was a difference between on and off. Now, it’s more complicated: Roughly 50 devices and appliances in the typical American household are always drawing power, even when they appear to be off, estimates Alan Meier, a senior scientist at the Department of Energy’s Berkeley Lab.

It adds up. About a quarter of all residential energy consumption is used on devices in idle power mode, according to a study of Northern California by the Natural Resources Defense Council.

67 Percent Of US Natural Gas Supply From Fracked Wells

From Bloomberg, "Two-Thirds of U.S. Gas Supply Now Comes From Fracking" by Christine Buurma:

Source: Bloomberg

***Fracking now accounts for 67 percent of marketed gas output, up from less than 7 percent in 2000, according to the U.S. Energy Information Administration.

Medical Errors Are Third Leading Cause Of Death, Behind Heart Disease And Cancer Deaths

From Bloomberg, "Medical Errors Are Leading Killer After Heart Disease and Cancer, Study Finds: Mistakes cost a quarter of a million lives a year in the U.S., Johns Hopkins reports, up from famous estimate of 100,000 in 1999." by John Tozzi:

After heart disease and cancer, medical errors kill more Americans than anything else, claiming a quarter of a million lives a year, according to a study by researchers at Johns Hopkins University.

If bungles and safety lapses in the hospital were accounted for as deaths from disease and injury are, they would be the third most common cause of death in the U.S., leading to more fatalities than respiratory disease, the report in the British Medical Journal argues.

Source: Bloomberg