Tuesday, July 24, 2012
This is what I thought about on my commute last week on public transit to downtown Chicago ...
Last week I rode the train from the Northwest Suburbs of Chicago to downtown Chicago to attend the AP US Govt and Politics College Board Summer Institute (AP Econ is next week). It takes about 45-60 minutes. After arriving at the train station I walked 2.25 miles to Northwestern U.
Along the way I see lots of large, abandoned manufacturing facilities and other buildings that were built sometime at the beginning-to-middle of the last century.
I have read lately that this represents under-utilized infrastructure/capital and is indicative of the decline in the US manufacturing base. "They say" if we could just revive the manufacturing sector we could put these idle resources back to work.
I don't see it. I see these buildings as "spent" capital/infrastructure. They served the old way of production---lots of labor relative to capital and technology. The capital/machines used were large and bulky and required large spaces. Most of those factories produced many of the inputs that went into a final good. Today, firms specialize and "out-source" the production of inputs. Capital/machines are much smaller and more productive. These buildings will never serve current or future manufacturing of any kind.
It is not under-utilized infrastructure--it is dead infrastructure.
When something dies, it should be buried or otherwise disposed of properly.
Why not spend "stimulus" funds to eliminate this dead infrastructure to make way for new uses for the land---whether it is for new construction or green areas. It would improve property values and have many other positives consequences for the blighted areas.
I think this is a relatively rare case where you can have addition though subtraction.
Any thoughts?
Note: I am a devotee of Basitiat. I don't think I am violating the principles of "The Broken Window"--the buildings are not "bringing enjoyment" to anyone, as far as I can tell. Could be wrong.
Also, I do acknowledge the "opportunity costs" of using resources for this purpose as opposed to something else. From a policy making position, I think it can legitimately be on the "to do" list.
Along the way I see lots of large, abandoned manufacturing facilities and other buildings that were built sometime at the beginning-to-middle of the last century.
I have read lately that this represents under-utilized infrastructure/capital and is indicative of the decline in the US manufacturing base. "They say" if we could just revive the manufacturing sector we could put these idle resources back to work.
I don't see it. I see these buildings as "spent" capital/infrastructure. They served the old way of production---lots of labor relative to capital and technology. The capital/machines used were large and bulky and required large spaces. Most of those factories produced many of the inputs that went into a final good. Today, firms specialize and "out-source" the production of inputs. Capital/machines are much smaller and more productive. These buildings will never serve current or future manufacturing of any kind.
It is not under-utilized infrastructure--it is dead infrastructure.
When something dies, it should be buried or otherwise disposed of properly.
Why not spend "stimulus" funds to eliminate this dead infrastructure to make way for new uses for the land---whether it is for new construction or green areas. It would improve property values and have many other positives consequences for the blighted areas.
I think this is a relatively rare case where you can have addition though subtraction.
Any thoughts?
Note: I am a devotee of Basitiat. I don't think I am violating the principles of "The Broken Window"--the buildings are not "bringing enjoyment" to anyone, as far as I can tell. Could be wrong.
Also, I do acknowledge the "opportunity costs" of using resources for this purpose as opposed to something else. From a policy making position, I think it can legitimately be on the "to do" list.
Nice graphic showing drought conditions each year in the US since 1899. Is there a pattern??
Go HERE for a larger image of the graphic and article at NYTIMES.
Each line of maps represents a decade of drought conditions in the US. Can you see a pattern of worsening conditions over time? Or is it inconsistent enough to not be able to draw any conclusions?
Each line of maps represents a decade of drought conditions in the US. Can you see a pattern of worsening conditions over time? Or is it inconsistent enough to not be able to draw any conclusions?
Sunday, July 22, 2012
Find out how your city/region would fare in terms of GDP if it was its own country.
Here is a world GDP (Gross Domestic Product) ranking by country AND with the added twist of including the dollar value of production of goods/services in US cities/metropolitan areas.
To look at this properly, DO NOT include the US GDP number. This is because the overall US GDP number INCLUDES the city/metropolitan area number. It is there for reference and scale. In your mind, bump up every country/city on the list one spot.
If you look down the list, you see "New York/Northern New Jersey-Long Island, NY-NJ-PA". This represents a regional geographic area that produces $1.287 TRILLION dollars in final goods and services.
If this geographic area were its own country, it would be the 13th (remember, you have to bump up one spot) largest economy in the world in terms of the dollar value of goods and services it produces.
Go down the list and find your city/metropolitan area and see how it ranks relative to the rest of the world. The US is STILL a production machine. We often forget that.
Note: The screen shots I took here are not the entire list. Go HERE at the Wall Street Journal to find the rest, if you don't see your area here.
To look at this properly, DO NOT include the US GDP number. This is because the overall US GDP number INCLUDES the city/metropolitan area number. It is there for reference and scale. In your mind, bump up every country/city on the list one spot.
If you look down the list, you see "New York/Northern New Jersey-Long Island, NY-NJ-PA". This represents a regional geographic area that produces $1.287 TRILLION dollars in final goods and services.
If this geographic area were its own country, it would be the 13th (remember, you have to bump up one spot) largest economy in the world in terms of the dollar value of goods and services it produces.
Go down the list and find your city/metropolitan area and see how it ranks relative to the rest of the world. The US is STILL a production machine. We often forget that.
Note: The screen shots I took here are not the entire list. Go HERE at the Wall Street Journal to find the rest, if you don't see your area here.
Nice graphic showing the decline over time in the number of teenagers getting drivers licenses. WHY is this the trend?
Why don't young people want to drive anymore? Is this a good or bad thing?
As you move from left to right on this graphic, focus on the difference in the BLUE line (1983) and the GREEN line (2010). The bars represent the percentage of that age group in those particular years that have drivers licenses given that year. In other words, the number with licenses in that age group divided by the number of people in that age group in that particular year (1983, 2008, 2010).
Example: In 1983 approx 70% of 17 year olds had licenses. Fast forward to 2010 and approx 47% did. That is around a 33% decrease. Certainly not insignificant.
The article this graphic comes from points out the statistically significant decline between 2008 (the RED bar) and 2010 (the GREEN bar) and asks what is driving this decline in the desire to get a license.
On the negative side I can see this affecting used cars sales, a big business for car dealers.
On the positive side I see fewer accidents, hence injuries and deaths. Use of less gasoline. Parents don't have to pay high car insurance premiums.
I can come up with more positives than negatives. Extra credit for good responses at to how this trend may negatively impact the economy as a whole today and in the future.
As you move from left to right on this graphic, focus on the difference in the BLUE line (1983) and the GREEN line (2010). The bars represent the percentage of that age group in those particular years that have drivers licenses given that year. In other words, the number with licenses in that age group divided by the number of people in that age group in that particular year (1983, 2008, 2010).
Example: In 1983 approx 70% of 17 year olds had licenses. Fast forward to 2010 and approx 47% did. That is around a 33% decrease. Certainly not insignificant.
 |
| Source: The Atlantic |
On the negative side I can see this affecting used cars sales, a big business for car dealers.
On the positive side I see fewer accidents, hence injuries and deaths. Use of less gasoline. Parents don't have to pay high car insurance premiums.
I can come up with more positives than negatives. Extra credit for good responses at to how this trend may negatively impact the economy as a whole today and in the future.
Wednesday, July 18, 2012
Was Romney right in saying we need fewer Fire Fighters? See the graphs/data here before yelling at me...
Here are a couple of graphs showing some interesting information regarding firemen (and women).
The first one shows the decrease in the number of fires since 1980 (the RED line and look at the left hand scale) of about 40% and the increase in the number of firefighters (BLUE line and look at the right hand scale) of about 40%. We have many more firemen fighting fewer fires.
The second graph is pretty self-explanatory. The left scale shows the number of calls to the fire department for medical calls (BLUE line), actual fire calls (Solid RED line) and false alarms (dotted RED line).
In most cities we have firehouses that support BOTH ambulance service and firefighting equipment/trucks. The trend in the graphs seem to show we need fewer, expensive full service firehouses and more ambulance based houses with less capital requirements (trucks, etc) that would be less expensive.
Having said this, I LOVE MY FIRE DEPARTMENT!! :)
The first one shows the decrease in the number of fires since 1980 (the RED line and look at the left hand scale) of about 40% and the increase in the number of firefighters (BLUE line and look at the right hand scale) of about 40%. We have many more firemen fighting fewer fires.
 |
| Source: Marginal Revolution |
The second graph is pretty self-explanatory. The left scale shows the number of calls to the fire department for medical calls (BLUE line), actual fire calls (Solid RED line) and false alarms (dotted RED line).
 |
| Source: Marginal Revolution |
Having said this, I LOVE MY FIRE DEPARTMENT!! :)
Batman vs Spiderman--nice income inequality info-graphic.
Equal opportunity does not guarantee equal outcomes. :)
Click image to see a larger versionSuperhero Economics: Bruce Wayne vs. Peter Parker via H&R Block
Friday, July 6, 2012
UN calls for a billionaires tax to help the world's poor. Thought I would re-write the headline so it actually solves the problem...
Saw this headline on Yahoo!News:
UN calls for 'billionaires tax' to help world's poor.I thought this is what the headline should really be to actually produce some positive results:
"UN calls forJust sayin'...'billionaires tax'government reforms in under-developed countries to help world's poor become billionaires (or millionaires, thousand-aires, or whatever they would like to be)"
Quick Snapshot of todays Employment Report---Not good...
The significant gainers for the month are in BLACK and the losers are in RED. Numbers are in thousands, so add 3 zeroes behind the number. Be careful to not include the headline category number when you look at these. Look at the sub headings for the job number.
Temporary help, Leisure and Hospitality, and Healthcare jobs are NOT going to lead a robust recovery.
Temporary help, Leisure and Hospitality, and Healthcare jobs are NOT going to lead a robust recovery.
Thursday, July 5, 2012
"You should drive a car "Made in America"! Well, I do in fact drive the car with the MOST US sourced parts and labor--- Toyota Camry. See more here...
Cars.com comes out with this list every year. It is a ranking of cars made in the USA, regardless of ownership of the automaker, based on the source of parts and final assembly. Turns out that some of the most popular cars produced by the Japanese are more "Made in America" than some of the US manufacturers of cars.
5 of 10 models of cars with high (more than 75%) US sourced parts and labor are either Toyota or Honda models...(HT: Carpe Diem---as always)
5 of 10 models of cars with high (more than 75%) US sourced parts and labor are either Toyota or Honda models...(HT: Carpe Diem---as always)
A little data on the number of doctors we have in the US---Domestic and Foreign. Do we have too many doctors with not enough to do or do we have a shortage? Maybe both...
Data is from the Census HERE
From 1980 to 2009, the average yearly NET change in the US (new entrants plus current MD's minus leavers) in MD's with US medical school degrees is 12,068---These are additional, domestically "produced" doctors EACH YEAR.
The average net change in MD's from foreign medical school degrees is 5,310. There are additional, foreign "produced" doctors EACH YEAR.
Average total change in the number of doctors in the US, per year over 29 years, is 17,378 medical doctors--domestic plus "foreign".
The graph below shows, in RED, the number of US Medical School graduates over time, and the projected number of doctors, in BLUE, that we would need to maintain the same doctor-per-person ratio.
Notice the number of Medical School graduates (RED) stays relatively constant since the 1980-1985 period.
Keep in mind, not all of these graduates will eventually become doctors. If fact, it looks like in any given years roughly 4,000 per year do not become full-fledged doctors, hence the need to "import" doctors from abroad (or at least from "Non-US Medical Schools").
The graph shows, based on population trends, we are not keeping a consistent doctor-per-person ratio. It suggests we are about 1,200 doctors short.
With the increase in demand for healthcare anticipated from the Affordable Healthcare Act, we will have to either increase the number of students graduating from US medical schools and/or increase the importation of doctors.
My question is: why has it not been policy to do either, given the population trend? Do we have excess capacity in MD'S---too many with not enough to do? Or is it an artificial shortage encouraged by government policy/lobbying by interested parties?
I dunno....
From 1980 to 2009, the average yearly NET change in the US (new entrants plus current MD's minus leavers) in MD's with US medical school degrees is 12,068---These are additional, domestically "produced" doctors EACH YEAR.
The average net change in MD's from foreign medical school degrees is 5,310. There are additional, foreign "produced" doctors EACH YEAR.
Average total change in the number of doctors in the US, per year over 29 years, is 17,378 medical doctors--domestic plus "foreign".
The graph below shows, in RED, the number of US Medical School graduates over time, and the projected number of doctors, in BLUE, that we would need to maintain the same doctor-per-person ratio.
 |
| Source: Carpe Diem |
Notice the number of Medical School graduates (RED) stays relatively constant since the 1980-1985 period.
Keep in mind, not all of these graduates will eventually become doctors. If fact, it looks like in any given years roughly 4,000 per year do not become full-fledged doctors, hence the need to "import" doctors from abroad (or at least from "Non-US Medical Schools").
The graph shows, based on population trends, we are not keeping a consistent doctor-per-person ratio. It suggests we are about 1,200 doctors short.
With the increase in demand for healthcare anticipated from the Affordable Healthcare Act, we will have to either increase the number of students graduating from US medical schools and/or increase the importation of doctors.
My question is: why has it not been policy to do either, given the population trend? Do we have excess capacity in MD'S---too many with not enough to do? Or is it an artificial shortage encouraged by government policy/lobbying by interested parties?
I dunno....
Tuesday, July 3, 2012
My contribution to the 4th of July mixed with a political message..Cannot resist.
""The Founding Fathers left their generation with a signed document that empowered people to resist the Tyranny of a King, and they did so at a large cost to
themselves. Today, we ask politicians to sign a document to resist the Tyranny of King Dollar (Campaign Contributions) and they do NOT do so because the cost is too large to themselves---See the difference?""---Me while running errands.
Sunday, July 1, 2012
"Keynes vs Hayek" mini-rap video. If you are a fan you will want to see this one. Oh, and buy a t-shirt too.
If you follow the "Keynes vs Hayek" economics rap videos, this "mini-episode" will amuse you. Wish they could turn this into a TV series, a la "The Big Bang Theory". :)
Here is my quick analysis of how a small business makes a hiring decision in terms of Stimulus vs real economic growth. Need your help in telling me where I am going wrong...
If I were a small businessman looking at the economic landscape and how it is being addressed by our political class (and reported on by the media), I would wonder if they had any idea of what my day is like and how I make hiring decisions. Keep in mind, I am just a "regular Joe/Josephine" trying to do the best I can.
Senario 1: Assume I hear of a local business getting stimulus funds to do some road work in my area and I know there will be 100 additional workers with, say, $20 additional discretionary dollars to spend at my business during any given day (not all at once, spread out during the day). Remember, I am not the only business in town, so my fellow shopkeepers are in the same position I am in.
I know this will money is temporary and will last about 6 months and we will go back to status quo.
With this information, do I ask my existing workers to (1) work harder, (2) give my part-timers more hours, (3) offer overtime to existing full-time employees or (4) hire an additional full-time and/or part-time worker?
Given what I know, I am pretty sure 1-3 are viable options, with preference to (1) and (2), but I am pretty sure I don't do #4.
Scenario 2: A new company (or an existing one expanding operations) renovates and moves into a building down the street from me. I know there will be an addtional 100 workers with, say, $20 additional discretionary dollars to spend at my business during any given day on a permanent basis.
I know this money will not be temporary, will last well into the forseeable future and we will NOT go back to the status quo. In other words there is a sustained higher level of spending in my business.
Using numbers 1-4 above, how might my hiring decision(s) be affected now? Does it change, "at the margin"? When I look at my current situation, I believe I have to go with (2) at the minimum and/or most likely (4) , right?
Conclusion: As a small businessman, I am happy with Scenario #1 because it allowed me to potentially "save" a job in my business that I otherwise might have had to eliminate---it did create stability for me. Although some of my fellow shopkeepers may have been able to "create" a new, sustained job from the temporary stimulus, I think a majority of them faced the same dilemma I did in making hiring decisions.
What small business people are looking for are signs of Senario #2 emerging beyond what has been offered in Scenario #1. Only when that "Leap" is made from one to the other, will they hire and we will have a robust expansion and recovery.
The question is, how do we move from one scenario to the other? Are policy makers and politicians focused enough on that or are we still just short term thinkers?
Senario 1: Assume I hear of a local business getting stimulus funds to do some road work in my area and I know there will be 100 additional workers with, say, $20 additional discretionary dollars to spend at my business during any given day (not all at once, spread out during the day). Remember, I am not the only business in town, so my fellow shopkeepers are in the same position I am in.
I know this will money is temporary and will last about 6 months and we will go back to status quo.
With this information, do I ask my existing workers to (1) work harder, (2) give my part-timers more hours, (3) offer overtime to existing full-time employees or (4) hire an additional full-time and/or part-time worker?
Given what I know, I am pretty sure 1-3 are viable options, with preference to (1) and (2), but I am pretty sure I don't do #4.
Scenario 2: A new company (or an existing one expanding operations) renovates and moves into a building down the street from me. I know there will be an addtional 100 workers with, say, $20 additional discretionary dollars to spend at my business during any given day on a permanent basis.
I know this money will not be temporary, will last well into the forseeable future and we will NOT go back to the status quo. In other words there is a sustained higher level of spending in my business.
Using numbers 1-4 above, how might my hiring decision(s) be affected now? Does it change, "at the margin"? When I look at my current situation, I believe I have to go with (2) at the minimum and/or most likely (4) , right?
Conclusion: As a small businessman, I am happy with Scenario #1 because it allowed me to potentially "save" a job in my business that I otherwise might have had to eliminate---it did create stability for me. Although some of my fellow shopkeepers may have been able to "create" a new, sustained job from the temporary stimulus, I think a majority of them faced the same dilemma I did in making hiring decisions.
What small business people are looking for are signs of Senario #2 emerging beyond what has been offered in Scenario #1. Only when that "Leap" is made from one to the other, will they hire and we will have a robust expansion and recovery.
The question is, how do we move from one scenario to the other? Are policy makers and politicians focused enough on that or are we still just short term thinkers?
Saturday, June 30, 2012
"Obamacare" is now the law. See this map I put together that shows who will win the Presidency in November...
This map shows all the States and general level of the population without health insurance. I put a yellow star on the States that are considered Electoral College Toss Up States.
Look at the States that are Dark Green AND have a star on it---High Uninsured and a Toss-Up electorally---Alaska, Nevada, North Carolina and Florida. Florida is the Big One with 29 Electoral College votes up for grabs---Advantage and Re-Election(?) for Pres Obama. We elect Presidents through the Electoral College, not popular vote. This matters!
Look at the States that are Dark Green AND have a star on it---High Uninsured and a Toss-Up electorally---Alaska, Nevada, North Carolina and Florida. Florida is the Big One with 29 Electoral College votes up for grabs---Advantage and Re-Election(?) for Pres Obama. We elect Presidents through the Electoral College, not popular vote. This matters!
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