Nice Infographic showing the Income and Wealth of the Characters in "Twilight". Very Walmart family-like...

I am not a fan of this movie series.  Don't hate me for it.

This is a nice example and illustration of people who are "income poor" but asset rich and are considered "wealthy".  We tax income at much higher rates but don't tax physical or financial assets until they are sold (for the most part, anyway, at the FEDERAL level). 

I guess you could say the characters from this movie are kinda like the children of Sam Walton of Wal-Mart fame.  Asset rich, income "poor".   Ok, no jokes about them being retail Vampires.  :)

Source: Business Insider

Taking stock of my own ignorance---a 24/7 task...

"I always try to take stock of my own ignorance in certain subjects before I label someone else as such. That seems only fair and I usually find, upon genuine reflection, I don't really know as much as I thought I did..."

Not an original thought. I have seen variations of it from a variety of philosophers. It is prompted by various postings I see in the blogosphere and on my Facebook newsfeed.

I try to post things (here and on my FB page) that either informs; points out something different to; or makes laugh, anyone who wants to read it.  For me it is fun, stimulating, educational, professional development, a hobby, blah, blah, blah...All good stuff!

Many others post things that mock, demean or other wise plays on the "ignorance" of others, and the comments flow in agreement and then some. Congratulatons: you win the game of intellectual superiorty!  I hope you feel better in your cozy blanket of smugness.  I say you are lazy and ask if you were really as smart as you think (know) you are, why not just forgo the "low-hanging fruit" of judgement and let it pass by? 

I guess (ok, er, I know) I have a thin skin. That stuff bothers me, especially when it comes from people I know and respect OR from people  I don't know but I read and respect.

I will just let John Coffey speak for me.  He says it best and definitively. 

Teachers/Students---Here is a link to a TERRIFIC explanation of the the Pros and Cons of a Carbon Tax OR a Cap and Trade system to reduce Carbon Emissions.

There are two primary ways under consideration for reducing carbon emissions that contribute to climate change---A straight carbon tax on individual consumption of fossil fuels (i.e. gasoline) at the point of sale OR a "cap and trade" system  that affects producers of goods and their use of carbon based fuels/energy/inputs.  Both are designed to make emitting carbon more expensive, either directly for the consumer or the producer. Ultimately, the consumer bears the brunt of either policy in higher prices.

Here (Economics in Plain English) is a terrific and pretty definitive lesson/explanation (complete with graphs!) on the pros and cons of implementing a carbon tax.  It contains MANY, MANY Microeconomics topics and concepts that are covered in class and on the AP Microeconomics test.  If you are interested in the topic, this is a must see!

Economics in Plain English also has a most excellent explanation of the Cap and Trade system HERE.

Read both, ponder them, then decide which would be more effective.

I post this graph just to get under your skin---Graph of EXPORTS of Gasoline to "Fer-in-ners" It may be a domestically produced good but it is priced and sold in international markets.

Exports of Gasoline to international destinations in an annual graph and a monthly graph (for perspective). Record levels of exports.  Good thing, bad thing, or just a thing?



Source: US Energy Information Agency

 

 

Here is a twist---The President lost most of the States that had the HIGHEST new job creation in the last 3 years and won States that had the least. Must see set of graphs/maps that tell an interesting story in politics

President Obama ran a successful re-election campaign on the basis of an improving economy and the creation of 2.6 to 3 million new jobs.  If you look at WHERE most of the those jobs were created you will find politics makes strange bedfellows.

A large majority of those jobs were created in States that the President LOST in the Electoral College and a minority of the jobs created were in States that he won.  See the explanation and graphs below.  It is an interesting lesson in politics and interest groups. 

Unions are a big supporter of the President and vice versa.  However, ironically, the ability to boast about so many new jobs created came in States that are not Union NOR electorally friendly to the President.

The first graph below shows two things.

1. The two bars on the left show the percent of the population that lives in Right to Work States ("R-T-W") and the percent that live in "Forced Union" States. (22 States are classified as R-T-W States and 28 as Forced Union).  61.2% of the US population live in those 28 Forced Union States and 38.8% of the population live in R-T-W States.

2. The two bars on the right show the percent of the overall "jobs created" (appox 2.6 million) from 2009-2012 in the R-T-W States vs the Forced Union States.

So, in the R-T-W States that have just 39% of the US population, 72% of the 2.6 million jobs created in the last 3 years came from those States.  28% of those 2.6 million jobs came from Union States.

Source: Carpe Diem

This next graph shows on a map the R-T-W States (in Red) and the Forced Union States (in Blue)

This last map shows the latest 2012 Electoral College map.  States in blue are states that President Obama won and the ones in red are the ones that went for Gov Romney. 

See any  resemblence?  Yeah, me too...

Nice graph showing US energy consumption by fuel source projected through 2040. We have to figure out a way to "drill, baby, drill" for alternatives...

A reminder to "get real" on energy policy. We must develop alternatives but we have so far to go to get off the "dirty stuff" it is not even funny.

This is a projection out to 2040.  Maybe a major breakthrough will occur in alternatives, but it seems a balanced plan is in order. 

I am pretty sure this "Cavity Search" is not covered under Obamacare...

Good Lord! 33% or respondents are willing to accept a "Cavity Search" in order to fly.

Maybe they think they are actually getting some kind of Dental exam under Obamacare...

Poll: Nearly One Third Of Americans Would Accept ‘TSA Body Cavity Search’ in Order to Fly

A new survey commissioned by Infowars and conducted by Harris Interactive has found that almost one third of American adults would accept a “TSA body cavity search” in order to fly, with a majority of Americans also feeling a law that would make disobeying a TSA agent in any public place illegal is reasonable.

Meanwhile, back in the Economy----Two Graphs that show why the economy may be in an unemployment funk for an extended period of time. Not sure the political system can fix what you see here...

This graph from Carpe Diem shows 2 things. Real GDP (Blue Line and use the scale on the Left Axis) and Employment, those WITH jobs, (Red Lind and use scale on the Right Axis).

At the tail-end, the Real GDP line shows that Real GDP is now 2.2% HIGHER than it was before the recession. So, while we have not made up for lost time, we are back to a little more than even.

Notice the two lines before the recession (gray area). Real GDP and employment track each other pretty closely.  In AP Macroeconomics one of stock phrases we teach is the direct relationship between the production of goods and services and employment----produce more stuff and you need more people to produce it---businesses hire people.

However, look at what happened post-recession.  Real GDP recovers but at a much quicker rate than employment. The two lines separate rather dramatically. 

Bottomline: Businesses are producing MORE goods and services BUT with approx 3.8 million FEWER workers compared to just before the recession.  This succinctly illustrates what a "jobless recovery" looks like. 

Commentary from Carpe Diem (highlights are mine)--

1. Measured by real output (GDP), the U.S. economy has made a complete recovery from the 2007-2009 recession now that real output in Q3 of this year at $13.6 trillion (2005 dollars) was 2.2% (and $290 billion) higher than the $13.32 trillion of real GDP in Q4 2007 when the recession started (blue line in chart).

2. While real output has completely recovered to 2.2% above its pre-recession levels, the current U.S. employment level of 142.4 million jobs in Q3 is still 3.84 million jobs (and 2.62%) below the 2007 peak of 146.27 million jobs (red line in chart), and that translates into the current “jobless recovery.”

3. The recovery of real output to an historically high level that is 2.2% above pre-recession levels with 2.6% fewer employees has also translated into record-level after-tax corporate profits, which are now 30% above pre-recession levels.

4. The recovery of both output and profits to above 2007 levels with 3.84 million fewer workers could explain the sluggish job growth that will probably continue for several more years. If companies can produce more output now than in 2007 with fewer workers and earn record profits, where’s the incentive to hire more workers?

The Great Recession stimulated huge productivity and efficiency gains as companies shed marginal workers and learned how to do “more with less (fewer workers).” The surge in productivity since the recession started has been significant (see chart below of real GDP per worker) and may have long-lasting effects, e.g. an extended period of time with a jobless rate above 7%. With real GDP, real GDP per worker, and corporate profits at all-time highs, we can expect sluggish job growth to continue, but it’s unlikely that we’re on the front edge of a recession right now.

Excellent Infographic that breaksdown what a Home Mortgage is. This the biggest purchase you will make in your lifetime---PLEASE know the in's and out's to save you MONEY and ANGST.

Going to buy a home soon? A very nice infographic for students and teachers alike that breaksdown what a "mortgage" is. It is the BIGGEST purchase you will make in your lifetime so the more information you have the better. I KNOW THAT from experience.

Brought to you by: HomeInsurance.org

ObamaCare casualties as a result, ironically, of Healthcare reform. Low wage workers will see their hours cut and limited full-time work possibilities in the future. This can't be what the law intended, right?

 

Yup.  Wrote about this last week (HERE)  in regards to an IRS ruling outling businesses responsibility in recording hours worked by employess to comply with the provisions of "Obama-Care".

Beware of unintended (not to be confused with unforseen) consequences of major legislation passed in a relative rush with much discussion. 

The devil is ALWAYS in the detail of big legislation and this one is going to harm low wage/entry level workers and they are not even going to know why. There are always costs to "greater good" policies. It is just necessary to acknowledge them.

From The Wall Street Journal

Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.
Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

Sweden--To be Socialist, or not to be Socialist, It is a question of cultural mores and attitude/trust towards govt. Could we use a little (a lot?) of it ourselves???

Here is an interesting (and easy to read) paper on the reasons Sweden, thought by most to be a "Socialist" country, is actually (perhaps) more market-orientated than some countries thought to be "Free Market" (not going to mention any names).

My take away from this: Cultural mores in regards to the use/abuse of social programs and trust towards government. Both of which we lack in the un-named country suggested above.
(HT: Newmarks Door)

The whole thing is worth a read, but here is some of the conclusion I excerpted:

Scandinavian societies have developed a unique culture with a strong work ethic and strong ethical

attitudes regarding the claiming of welfare benefits. There are also high levels of trust and social

cohesion. This social capital, which was built up before the advent of the modern welfare state, has

played an important role in the success of Scandinavian countries.

For many decades, this pre-existing culture, allowed countries such as Sweden to have extensive

welfare systems without the social difficulties, rise in worklessness and other effects that many

would have predicted. Scandinavian countries have also reaped the rewards of relatively free market

policies in some areas of economic life to reach impressive levels of wealth creation.

To characterise the Swedish model either as a social democratic utopia or a failed socialist

experiment is a mistake. Sweden is a successful country in terms of having a low poverty rate

and long life expectancy. However, these factors have much to do with non-government facets of

Swedish society that pre-existed the welfare state.

 

"Price Gouging" myth. Just had to get this off my chest.

Politician with courage: "I will let the price of gasoline rise so that most people will be able to purchase some gasoline. Not as much as they want/need, but they will have some. I will hear cries that I am allowing price gouging and I will be despised for this. But I know many more people will have gasoline than they otherwise would have in this emergency. I dont think I will be re-elected".

Politician without courage: "I will tell gas station owners they cannot raise the price of gas. When the stations run out of gas (because so many more people are wanting more gasoline than usual) I will blame the greedy station owners, suppliers or someone else. Most people will not have ANY gasoline (except for the lucky few in the front of the line with all their extra gas containers) but they will love me for standing up to the price gougers. I am pretty sure I will be re-elected. Gee, how did I just get away with that?"

Quick Snapshot of the JUST RELEASED jobs report for November. This is positive news.

A quick snapshot of the jobs report for October just released.  Numbers are in "thousands" so add 3 zeros to the end of each number you see.

Gainers were the usual suspects--Healthcare, Professional Services, Leisure and Hospitality.  Manufacturing showed an increase after a couple of months of decline.

Government was down after gaining for a couple of months. See more analysis below the graphic directly from the report.

 

Bureau of Labor Statistics

 



Establishment Survey Data

Total nonfarm payroll employment increased by 171,000 in October. Employment growth
has averaged 157,000 per month thus far in 2012, about the same as the average monthly
gain of 153,000 in 2011. In October, employment rose in professional and business
services, health care, and retail trade. (See table B-1.)

Professional and business services added 51,000 jobs in October, with gains in
services to buildings and dwellings (+13,000) and in computer systems design (+7,000).
Temporary help employment changed little in October and has shown little net change
over the past 3 months. Employment in professional and business services has grown by
1.6 million since its most recent low point in September 2009.

Health care added 31,000 jobs in October. Job gains continued in ambulatory health
care services (+25,000) and hospitals (+6,000). Over the past year, employment in
health care has risen by 296,000.

Retail trade added 36,000 jobs in October, with gains in motor vehicles and parts dealers
(+7,000), and in furniture and home furnishings stores (+4,000). Retail trade has added
82,000 jobs over the past 3 months, with most of the gain occurring in motor vehicles
and parts dealers, clothing and accessories stores, and miscellaneous store retailers.

Employment in leisure and hospitality continued to trend up (+28,000) over the month.
This industry has added 811,000 jobs since a recent low point in January 2010, with
most of the gain occurring in food services.

Employment in construction edged up in October. The gain was concentrated in specialty
trade contractors (+17,000).

Manufacturing employment changed little in October. On net, manufacturing employment
has shown little change since April.

Mining lost 9,000 jobs in October, with most of the decline occurring in support
activities for mining. Since May of this year, employment in mining has decreased
by 17,000.

Employment in other major industries, including wholesale trade, transportation and
warehousing, information, financial activities, and government, showed little change
over the month.

In October, the average workweek for all employees on private nonfarm payrolls was
34.4 hours for the fourth consecutive month. The manufacturing workweek edged down by
0.1 hour to 40.5 hours, and factory overtime was unchanged at 3.2 hours. The average
workweek for production and nonsupervisory employees on private nonfarm payrolls edged
down by 0.1 hour to 33.6 hours. (See tables B-2 and B-7.)

In October, average hourly earnings for all employees on private nonfarm payrolls edged
down by 1 cent to $23.58. Over the past 12 months, average hourly earnings have risen
by 1.6 percent. In October, average hourly earnings of private-sector production and
nonsupervisory employees edged down by 1 cent to $19.79. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for August was revised from +142,000 to
+192,000, and the change for September was revised from +114,000 to +148,000.

Un-intended consequence of "Obamacare"---If you work over 30 hours per week but less than 40 on average, look out for cutbacks to get you below 30 hours. Reality Bites....

One of the consequences of passing a large piece of legislation, that may be scant on implementation details, is the agency in charge of carrying out the provision(s) has to interpret the legislation and issue rules and guidelines.

The IRS has issued such rules on how businesses with over 50 employees must comply with "ObamaCare".   Beware of un-intended consequences!!

The IRS has clarified what determines a Full-Time Employee and a Part-time employee.

 The IRS has established 30 hours per week as the mark to distinguish part-time from full-time work.  Work over 30 hours per week and the business must treat you as a full-time worker eligible for full-time benefits.

This is important because if you work an average of over 30 hours per week the business must provide you insurance coverage under the provisions of the Affordable Care Act.  An average estimate is this will cost a business roughly $5,000 (maybe less, maybe more) per employee OVER the 30 hour mark.  If the business does not provide this benefit they will be subjected to a fine.  Either way, an employee will become more costly to the business.

The un-intended consequence of the rule/regulation is that many businesses may decide to pull down the average hours worked per employee to get below the 30 hour requirement.  This potentially can effect those workers incomes.

If you are one of those "marginal" workers whose hours are perilously close to that cut-off,  look out for cutbacks in your hours in the coming months. Now you know why. 

Also, if you are looking for an example of how government rules and regulations are costly to a business, go to the ACTUAL IRS ruling on this.  Imagine you are a Human Resources person and you have to figure out how to apply this to EVERY worker employed by the business.  Multiply this by 1,000's from various government agencies and you begin to see the scope of the problem.

 
HT: Washington Post for the idea behind this posting.

 

"There is no profit in destruction"---This storm is beginning to affect economic reasoning as well...

An example of Frederic Bastiats "Broken Window Fallacy".  The BWF decries the "bad economist" and his view that there is a positive side to destruction. 

There are visible benefits to rebuilding, or fixing a broken window, but seldom is considered the unseen costs of what might have been purchased had the window not been broken.  What you add you must subtract as well.  This

This is one of the criticisms of calculating GDP----it only counts the stuff purchased to fix things. It does not subtract the value of things already in place and productive that were destroyed.

Yes, broken windows happen and need to be fixed, but it should not be considered a net positive for the economy by politicians and pundits.  It is neutral, at best.

From Forbes

Is Hurricane Sandy To Provide A Stimulus For The US Economy? 

The sharp divergence between macroeconomic and microeconomic data can certainly be attributed to hurricane Sandy that is about to hit Eastern US—a highly populated region—prompting consumers to stack-up to all kinds of things, from batteries and candles, to bottled water, to snacks, and all-sorts of dry food. Is this rush of consumers to spend a very-much needed stimulus of the US economy?

Definitely not, as Sandy is one time event, and as the boost in demand for certain items this week will turn into bust for the same items in the weeks to follow. A boost in the demand for water bottles this week, for instance, will turn into bust next week, as consumers over-stack the product. But, what about the impact of cleaning and reconstruction that is expected to follow the hurricane? Wouldn’t it give a boost to the economy? 

It depends on the extent of the damages and magnitude of the reconstruction to be done. Some experts talk of damages in the order of $10, $20, even $100 billion—seeing a “Sandy stimulus package.” But even if we go with the highest estimate, $100 billion, it is a too small number given the size of the US economy. Besides, whatever stimulus comes from cleaning and reconstruction will be mitigated by other factors like declines in the tourist sector, and losses in economic activity, due to disruptions in transportation and communication. And don’t expect any significant boost from policy makers.

The bottom line: We do hope and pray that the damages from Sandy will be minimal. A stimulus from a storm is something we don’t need.