More info on "The Scam" that is Daylight Savings Time....Hate losing that hour!!

From the Washington Post...

Daylight saving time — still mostly a scam

1) Daylight saving time doesn’t save energy — quite the opposite. Back in World War I, when Germany, Russia, and England first adopted daylight saving, the idea was to conserve coal for the war effort. (The United States eventually followed suit in 1918.) If these countries could just stretch out the daylight during the summer, leaders reasoned, then people would use less electricity for lighting. Sounds sensible, right? The problem is that daylight saving no longer seems to be effective on this score.


Here’s a raft of studies on the subject. Most of them find that while households do use less lighting during daylight saving, thanks to the longer, brighter afternoons, they also end up cranking up the air conditioning more, which makes it either a wash or a net loser for energy use. A 2008 paper (pdf) by economists Matthew Kotchen and Laura Grant examined what happened in Indiana when, thanks to a change in state law, all counties suddenly had to shift to daylight saving. They concluded that daylight saving probably costs Indiana about $10.7 million to $14.5 million per year in higher electricity bills and increased coal pollution.

Meanwhile, daylight saving doesn’t seem to impact gasoline use and driving habits one way or the other. Back in 2005, Congress decided to extend daylight saving by four weeks, claiming it would reduce oil use by 1 percent. A subsequent review (pdf) in 2008 by the Department of Energy found that the legislation didn’t appear to have any effect on gasoline consumption at all.

2) Daylight saving time might increase traffic fatalities. There’s also some dispute about whether daylight saving time increases or decreases traffic accidents. On the one hand, the extra hour of sunshine in the afternoon means that more people are driving while it’s still light out. That makes the roads safer, according to a 1995 study (pdf) in the American Journal of Public Health. On the other hand, the sleep disruptions that occur when clocks are moved forward can increase the risk of traffic fatalities during the spring. Back in 1996, researcher Stanley Coren found that traffic accidents flare up in the spring, when we set our clocks forward and everybody’s tired, and drop again in the fall, when we set our clocks back and get an extra hour of sleep.

3) Daylight saving can be bad for your health. Again, some mixed results here. The extra sunlight is good for vitamin D synthesis. But the disruption in sleep patterns caused by setting your clock forward can actually kill people. Here’s the finding reported in a brand new study out of the University of Alabama in Birmingham: “The Monday and Tuesday after moving the clocks ahead one hour in March is associated with a 10 percent increase in the risk of having a heart attack,” says researcher Martin Young. And a 2009 study (pdf) in the Journal of Applied Psychology found that tired workers are at greater risk of workplace accidents.

4) Daylight saving has mixed effects on the economy. Retailers love the extra sunlight — it means that there are more customers around who are willing to go out and shop. The all-powerful golfing industry is also a big fan, apparently. On the other hand, daylight saving can cut into sales for movie theaters and reduce the audience for prime-time television — people go out and enjoy the evening air instead of staring at screens inside.

So there you have it. Daylight saving: It kills people, it seems to be an energy-loser, and it leads to a slight uptick in road accidents in early March. On the other hand . . . who doesn’t enjoy a little more Vitamin D?

Why is a hospital room so expensive? Nice graph showing the decline in number of hospital beds since 1975...What has happened to the population since then? This ain't Rocket science...

The number of hospital beds in the US declined by 35% since 1975. 

The US population was 216,000 in 1975 and 305,000 in 2008. That is an INCREASE of 41% in population.

How do you ration out a declining number of beds to a rising number of customers/patients?  Price....An additional reason for rising healthcare costs?

Why the demand curve slopes downward AND do we REALLY throw away this much clothing? Maybe Will Johnson is RIGHT!!

This quote comes from an article on cotton production and how our demand for clothes made from cotton has, at the margin, "crowded out" the production of food commodities.  I liked the article  because it nicely illustrates the downward sloping nature of a Market Demand Curve, specifically the inverse relationship between Price and Quantity Demanded:

""...Since 1994, the consumer price of apparel, in real terms, has fallen by 39 percent..... In the mid-1990s, the average American bought 28 items of clothing a year. Today, we buy 59 items.


I was also intrigued by this:

"...We also throw away an average of 83 pounds of textiles per person, mostly discarded apparel, each year. That’s four times as much as we did in 1980, according to an EPA analysis of municipal waste streams [PDF]...."

This since they quoted the statistic on a per person basis, I wondered how much the population has changed since 1980.   Here is the graph:

Using an Index of 100 to represent the base year 1980, we can see the population has increased approximately 38% since 1980. Population increased 38% and we throw away 400% more.  I ain't no mathemetician, but that seems out of balance!  Reduce, Reuse, (Recycle??)...MAYBE Will Johnson has a point!!  :)

A couple of nice graphs showing a link between Capital Stock and Economic Growth---Hey, STOP yawning and find out why this is important!!!

Here are a couple of graphs that help illustrate an important concept in AP Macroeconomics---the relationship between "Capital Stock"(or Stock of Capital) and economic growth.  Capital Stock, simply, is "the stuff you use to make other stuff"--Tools/Equipment that produce goods/services but also help workers be more productive.  The assumption is as more Captial Stock is employed, in terms of quanitity and quality, the higher future economic growth will be (Actual and/or Potential Economic Growth).  

Source: Conversable Economist

The graphs from this study compare the use of capital in IT (Information Technology) by multinational corporations in the US and Europe (the top graph--Capital Employed-Per Labor Hour Worked) and the potential effect on overall productivity (the bottom graph--Output Per Labor Hour Worked) between the two geographical areas.

I inserted the Red Line at the year 2000 just to get a before and after perspective.  I did not post these to prove anything on a large scale. There are/could be many other variables affecting productivy between the continents.  However, I believe some of the difference in productivity gains can be attributed to a  higher level of Capital Stock employment and the effective use of that Capital in producing goods and/or services.

"Puzzling Indeed"

Source: Carpe Diem

Short article on the role of "scarcity" in business (and government). If you are a business, finance or econ student this will be helpful to you...

Here is a link to a short article on the value of "scarcity" in business (and you can extend this to govt as well, in my opinion) and why we should embrace it.  As is learned  Day 1 in a basic economics course, scarcity is the over-arching theme in the study of economics---how we (individual, businesses, govts) go about allocating limited resources to satisfy unlimited wants. 

Below is an excerpt. I encourage you to read the whole thing...

The Silver Lining to Scarcity: It Drives Innovation

..."How does innovation manage to flourish under such time and budget constraints? For one thing, as these examples demonstrate, scarcity forces focus. Instead of exploring every avenue, consulting every possible collaborator, and blindly pursuing established "innovation processes" because they once worked for someone else, we make tough decisions about where to apply our efforts. This means leaving things out and taking risks—two actions we avoid in times of abundance. In times of scarcity, innovation is less risky than stagnation, especially when it's pursued with focus, clear expectations, and a creative problem-solving approach.

Scarcity also gives us an excuse to get on with it. With limitless time and resources, it's always easy to ask for more tests and get more data. "We'd like to get going on this concept," we find ourselves saying, "but maybe we should run it by one more review committee." Everyone has an opinion, and in times of plenty, everyone wants to be involved. But this is exactly where our tendency to design by committee takes over. Scarcity gives us the freedom to say "It'd be nice to go over it again, but we simply don't have the time/money."

Most important, scarcity forces us to be genuinely creative. The branded environment project described above didn't have the resources to do a "proper" sales office, so the team had to start from scratch. Given enough time and money, any competent organization can emulate something that succeeded in the past. But when limited resources take the tried-and-true off the table, the only option is to come up with something new....""

"It's a Gas, It's a Gas, It's a Gas Gas Gas (Taxes)!"---Gas taxes and consumption from around the world...

Gas prices vary across countries and continents. Much of the difference is in the level of taxation.  The chart below (From The Conversable Economist) shows, in US dollars, the amount levied on a gallon of gas in various developed countries.

There are many reasons why you might want to put high taxes on gasoline.  Economic theory suggests if you tax something you get less of it or at least less consumption of it.  The chart below shows the relationship between the gallons consumed per person (vertical axis) and the retail price of gasoline, taxes included (horizontal axis).   The labels are flipped relative to the conventional Demand Curve. There seems to be a pretty tight relationship between price and quantity demanded!

Abbott and Costello explain how we calculate the unemployment rate...

The following is from the blog of Greg Mankiw. The humor that is calculating the unemployment rate in the US.

Abbott and Costello explain unemployment

Thanks to U Chicago's Allen Sanderson for sending this along:

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good "subject". Terrible "times". It's about 9%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's 16%.

COSTELLO: You just said 9%.

ABBOTT: 9% Unemployed.

COSTELLO: Right 9% out of work.

ABBOTT: No, that's 16%.

COSTELLO: Okay, so it's 16% unemployed.

ABBOTT: No, that's 9%...

COSTELLO: WAIT A MINUTE. Is it 9% or 16%?

ABBOTT: 9% are unemployed. 16% are out of work.

COSTELLO: If you are out of work you are unemployed.

ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

COSTELLO: But ... they are out of work!

ABBOTT: No, you miss my point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To who?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work...Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment roles, that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it would be 16%. You don't want to read about 16% unemployment do ya?

COSTELLO: That would be frightening.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means they're two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.

ABBOTT: Now you're thinking like an economist.

COSTELLO: I don't even know what the hell I just said!

A couple of sobering charts showing the change in world oil consumption since 1980. Not a "barrel" of laughs...

A couple of sobering charts showing the change in world oil consumption since 1980. 

The rise of Asia accounts for much of the overall net increase in consumption.  The total consumption (demand) of oil worldwide has increased approx 37% (85 minus 62 divided by 62) in 30 years.

Source: EIA

Source: EIA

Nice graph showing gas prices from 1918 (yes, that's right) in nominal terms and adjusted for inflation. Quite interesting!!

Here are 2 measures of gasoline prices dating from 1918. The black line is in nominal prices--just the price of a gallon of gas in a given years price (not adjusted for inflation).

The red line is adjusted for inflation over time.  It is measured in 2011 prices. The year 1981 is noted on the graph. The nominal price in that year was $1.35/gal. In 2011 dollars that would be equivalent to $3.31/gal.  In other words, what cost you $1.35 in 1981 would have cost you $3.31 in 2011. 

Source: Inflationdata

How Electric cars get their power---From the Kingdom of TINSTAAFL, of course...

Source: Carpe Diem

Law just passed by Congress taxes at 100% Unemployment Benefits collected by people with incomes over $750,000 ($1.5M for a couple). Read that again. Yes, millionaires collecting unemployment benefits IS a problem! See the data here...

The following two graphics (source HERE) show the amount of Unemployment compensation collected by millionaires from 2005 to 2009.  Really? I mean REALLY?  I would love to know who those 18 with OVER $10 million in income for ONE YEAR are.  Gee Whiz...

Source: Senator Tom Coburn

Nice graph showing on a historical basis where tax dollars from all levels of government tend to flow. Guess first, then look at the graph...

This graph from the NYTIMES shows, on a per person basis, where tax dollars at all levels of government have flowed since 1960.  Government is pretty much in the Public Transfer Payment business today.   Everything else is just commentary.   

Source: NYTIMES

Nice chart showing the effective tax rates of the Top 400 Taxpayers and a very brief explanation of how this came to be...

From this chart, you can see the 400 taxpayers in the US (data from 2008) earn most of their income in what are called "Capital Gains" (56.8% --center chart) and a bulk of them pay an effective tax rate of between 10% and 20% (left chart).  Below the chart I give a brief (albeit not comprehensive)  explanation on how this works.

Source: NYTIMES

A Capital Gain (or loss--I am going to focus on Gain) is the difference between the buying price of a qualified investment (i.e. a stock) and the selling price. Really as simple as that.  Here is the important point: The time span between the buying and selling is going to determine how much tax you pay on that gain.

If you buy it and sell it within the same year (365 days) you have to included it as regular income and the gain is taxed at the marginal tax rate (assume you are one of 400 above) of 35%.

If you sell it anytime after one year (365 days) the Capital Gain in not considered regular income and is taxed at 15%. What a difference a day makes!

Over time, as the richest 400 (and ones above that threshold) moved from being income earners to financial and physical asset holders their overall effective tax rate decreased as well. Look at the list of them HERE. You can see that many/most of them were prime earners/entrepreneurs in the 80's and 90's and built very valuable physical and financial assets. Mostly financial assets, though, in terms of the value of the stock in the companies they created.
Not saying I agree or disagree---it is just the way it has panned out...What do you think???