Hardball politics in Wisconsin. How would YOU like to receive this in your mailbox?

I don't live in Wisconsin, but I think I would really be bothered to get a mailer like this, REGARDLESS of which side of the issue I was on. 

It lists your name, address and whether you voted or not in the last two elections.  It shows what your  neighbors did as well.  It also leaves a blank for the next election on Tuesday .  The red circle is mine for emphasis.  The tone of this line bothers me.

Info like this should be public knowledge but it makes me queasy in the way it is used in this case.  What do you think?

Source: Milwaukee Sentinel Journal

"Paving" our way into the future. Is this the answer to our unemployment problem? Only "concrete" answers, please.

Robert Frank of the NYTIMES offers this commentary on the benefits of "infrastructure refurbishment".  Fancy way of saying if we are not going to embark of full-fledged new public works projects then perhaps a little maintenance around the edges will do. 

Whether you agree or disagree with his message/policy prescription, he DOES mention "Capital Stock", which is key vocabulary in AP Economics.  Might help put some context to the concept for students.

Source: NY TIMES:

DEMOCRATS and Republicans share less common ground than at any point in living memory, and they are especially divided about our still-ailing economy. When Democrats propose additional economic stimulus, Republicans call for more cuts in government spending and regulation. And even though the effects of the Great Recession are still with us, political gridlock seems set to continue.

Yet recent public statements by both President Obama and his probable Republican challenger, Mitt Romney, suggest a way forward. The president has long advocated infrastructure investment as a way to put Americans back to work. For his part, Mr. Romney recently warned that government spending cuts would “slow down the economy,” so he, too, has acknowledged the clear link between spending and employment.       

Both men should thus be willing to take the one politically feasible step that could help mend the economy quickly: an accelerated program of infrastructure repairs. People in both parties already agree that these improvements are needed — even apart from their impact on employment.       

In its 2009 assessment of the nation’s roads, bridges and other infrastructure, the American Society of Civil Engineers identified more than $2 trillion in long-overdue repairs. Of course, when maintenance is postponed, its cost rises rapidly. If Interstate highway repairs are delayed even briefly, damage from heavy trucks and winter weather can cause costs to rise several fold. According to the American Association of State Highway and Transportation Officials, substandard roads also cause $335 in annual damage per vehicle on the road. Still more troubling, those roads cause many easily preventable deaths and injuries. What could possibly justify further delay?       

Quick-look data from the JUST RELEASED jobs report for May. Not good---only 69,000 net job change. See where the strenghts and weakness were HERE

For the current month measured (May) look at the data to the far right.  Read the numbers in "thousands".  The first number shows 69,000 job gain. The losses are denoted with the negative sign in front of the number.  Be careful reading the chart. Notice the indentations on some of the sub categories.  This is to drill down a bit to show job sectors within jobs sectors and how they are performing.  GO HERE  for the complete report and summary.

Source: BLS

NY City is proposing a ban on sugary drinks sold in containers over 16 oz. Take one last Big Gulp of your Slurpee, City dwellers. It might be your last. (Nice graphic showing what is and is not acceptable HERE)

The powers that be in New York City are proposing a ban on certain  types of sugary drinks in quantities over 16 oz's.  This is in response to health concerns, especially for children. 

Here is a chart that illustrates what is and is not a qualified drink and the allowable quantity is can be sold in.  Good idea? Bad idea? How do you think interest group politics will affect this proposal? Will it pass and become local law?

Source: NYTIMES

Interesting survey on EU countries attitudes regarding each other. Without looking, guess which country is in the most denial about its work ethic?

 Greeks think they are the Greek God Ponos but are perceived as the Goddess  Aergia.  This survey of European attitudes about their fellow EU members is interesting and pretty telling.  Greeks self-assess themselves as being the hardest workers but they "get real" when assessing their own corruption.  Germany is obviously widely respected by their peers on the continent. 

Source: The Economix

Link to a study on Household Production and how much it would add to GDP if it was counted.

When we cover the basics of Gross Domestic Product (GDP) in Economics we learn that "Household Production" is not included in the official measure of GDP. Household production is classified as work (labor performed) you do yourself that does have a market value but since you perform it yourself the value is not counted in GDP. 

Examples:  I can clean my own house (value of labor not counted) or I can hire someone to do it for me (value of labor counted). I change my own oil in my car (value of labor not counted) or I can hire someone to do it for me (value of labor counted).  I can tutor my own child in Math (value of labor not counted) or I can hire someone to do it for me (value of labor counted). I can fix a leaky faucet or hire a plumber to fix it.  So on and so forth.

Here is a recent study from the Bureau of Economic Analysis (BEA) that attempts to determine how much GDP would be if household production was included in the official measure.  Below I copied and pasted only the basic conclusions from the paper. 

Summary of Findings

This paper develops a satellite account that adjusts gross domestic product (GDP) for household production between 1965 and 2010. The primary findings are as follows:

• Incorporating the value of non-market household production raises the level of nominal GDP 39 percent in 1965 and 26 percent in 2010. The decline reflects the steadily decreasing number of hours households spent on home production.
• In 1965, men and women spent an average of 27 hours in home production, and by 2010, they spent 22 hours. This overall decline reflects a drop in women’s home production from 40 hours to 26 hours, which more than offset an increase in men’s hours from 14 hours to 17 hours.
• The downward trend in the hours spent on non-market household production appears to be unaffected by the 2007–2009 recession, despite the increasing number of unemployed household members.
• Including the value of household production lowers measured GDP growth by accounting for the losses in home production associated with increases in women’s labor force participation and in market wages between 1965 and 2010. Over this period, adjusting nominal GDP for home production lowers growth from 6.9 percent to 6.7 percent.
• Home production reduces measured income inequality. Although households engage in a similar number of hours in home production regardless of income, adding a relatively constant value of home production to all households proportionately raises the income of low-income households more than that of high-income households.

Applications of this can be significant. One in particular comes to mind.  In poor, developing countries people, in general, do a lot more things for themselves. Most notably in the production of food and securing the everyday necessities of life. LOTS of production they do themselves that is not compensated for monetarily. 

Thus, on national level the official GDP statistic would UNDERESTIMATE the value of production in that country.  This can lead to a misunderstanding/misrepresentation of the actual standard of living in the developing nation. 

I lived HERE for two years. I have seen the disconnect up close and personal.

Note: Additional analysis of this study can be found at The Economix. I just noticed this morning they did a post on this study as well. 

Of these 3 people with fake tans which one has been the MOST fiscally responsible and created the MOST private sector jobs for other people? Yes, we ARE in trouble.

Couple of graphs showing college grade distribution over time. Grade inflation or are we getting smarter? You be the judge...

No real commentary from me.  Just thought it was interesting the change over time.

Both of these are from Carpe Diem---go there to read the commentary/conslusions.

The first graph shows the general distribution of grades given at the college level.  It is combined private and public universities/colleges.  "A's" have been on an upswing for a long time, "B's" relatively constant and "C's" are almost a mirror image to "A's". 

The second graph shows the break out between private and public universties/colleges. 

Facebook stock is a victim of "Short Selling". What the heck is Short Selling? I give a VERY brief example here using FB stock. This is a strange concept...

Another reason people hate Wall Street is this business of "Short Selling" a stock.  Never have done this and only know about it from what I read.  Here is my barely literate take on how it works... 

You buy 1,000 shares of Facebook stock at the opening price of $38 per share. Your investment in FB stock is $38,000.  However, you don't really possess these shares, your brokerage firm actually "holds" them for you.  

I am a BIG customer of the brokerage firm you used as well.  I believe FB stock is overpriced and the price is going to go down.  I am going to enter an agreement with "our" brokerage firm to borrow your shares of stock (for a fee). Here is what I am going to do:

1.  Borrow your 1,000 shares AND immediately sell those shares (assume the price is still $38 per share).  $38,000 is put INTO my account at the brokerage firm. Your account stays the same and YOU have NO idea of what just transpired between me and our brokerage firm.

2.  As I predicted, the market price for FB stock decreased. Perhaps helped by my borrowing and selling YOUR stock! Assume it drops to $35 per share. 

3. Now you see this on the news, freak out, and want to sell your stock.  This is the fun part.  I am now required, per my agreement with the brokerage firm, to buy those 1,000 shares back at a price of $35 so those shares can be returned to you to sell at $35.  So I have to dip into my account and spend $35,000 to buy the stock.  Remember, as a result of the initial transaction I had $38,000 in the account.  After the subtraction of $35,000 I have $3,000 left in my account.  You originally invested $38,000 and now you have $35,000 as a result of selling at the lower price---$3,000 LESS!!

4. This is the best scenario for me but I do take a risk.  If instead the price of the stock increased, to say $41 per share and you wanted to sell to take your profits, then the situation described above would be reversed---I would have to put  $3,000 into my account to cover the purchase of the stock and you would make $3,000 on your sale of the stock. 

4. The question in your mind has to be: Is this legal? Yes, it is.

Short sellers are betting that price of the stock will go down.  The benefit of allowing short selling is that it tends to keep the price from getting artificially high---or form a "bubble". It serves as a counter-weight to "irrational exuberance" investors might have toward a specific stock.

Bottom line for me:  I see the purpose and value (I think, I do anyway) of short selling, but bothers me that my stock can be traded like this without my explicit knowledge.

If you half-way understood the above, then you are more equipped to read and understand THIS article on the Short-Selling of FB stock in the first couple of trading days.  Pretty interesting read

Explore the "Better Life Index" and see how US Men and Women compare to other major developed countries. How does the US rate??

A very nice interactive made available by the Organisation for Economic Co-operation and Development(OECD), a European agency that has an excellent reputation for producing economic and social data.

It is called the "Better Life Index".  It is an altenative way to mearsure national well-being.  You can select the key variable(s) you want to compare across borders with other countries and at the same time the differences between men and women within that country.  Below is one where I isolated Income and Education.  The US is on the far right.  The RED bubble is for Woment and the BLACK one for men.  I encourage you to check it out and fiddle with the variables. Is the US THAT bad a place?

Source: OECD

Donald Trump bashes China, again. If he wants to kill the beast perhaps he should stop feeding it. See photo evidence here...

Donald Trumps own words:

"China is succeeding. They are rebuilding their country off our money. I mean, they're -- we are making so many products in China, paying China so much money for those products, that you go to these Chinese cities, they are rebuilding cities and they're building new cities that are bigger than any of our cities....

...You have such a huge deficit with -- trade deficit with China. Their currency is artificially low. And, see, we have fallen into the Chinese trap. We are now destroying the dollar in order to try and compete with them. We shouldn't be doing that. We should be keeping the dollar strong and stable and we should tax Chinese products.

And the people that talk about free trade, we don't have free -- I am a big free trade believer, by the way -- but we don't have free trade with China.

China is, literally, going to destroy this company -- this country. If we don't get smart quickly, China will destroy our country...."

Pictures of Trump Products:  If you want to starve the beast you have to stop feeding it...

New Electoral College Map correlated with Swing States expected return to pre-recession levels of employment---this one IS important...

I put a yellow star on the State that according to Real Clear Politics is considered a "swing State" by Real Clear Politics.  The colors are coded by when it is expected the State will return to Pre-Recession employment levels in that State.  Of particular interest are the States with a star AND are either green, yellow or red.  All those (except Colorado and Virgina) are passed the Presidential election this November. Pundits suggest people will vote on the economic issues when the election nears and all the other issues will dissipate.  If this is the case, then the President has more of a challenge at this point.

Remember, ignore national popular polls between Romney and Obama. What counts is the Electoral College map.  

Source of Map Carpe Diem. Source for Swing States Real Clear Politics

Nice Infographic regarding the "Youth Vote" and how it tends to play out in National Elections.

Lots of data regarding the "Youth Vote" and how they, as a group, tend to sway.  Interesting stuff.

Add caption

Via: Best Online Colleges

You Have $75 Billion To Save The World---How would you spend it? See here how top economist would spend it.

Asked how they would spend $75 Billion dollars (by the Copenhagen  Consensus Center) to help people in the developing world, five of the worlds top developement economists responded by listing, in order of priority, what they would do. The list is below. Go HERE for a short analysis of this list.  Do you agree with these prescriptions?  Would you add something (or subtract)?

You Have $75 Billion To Save the World:  How would you spend it?

1     1.  Bundled interventions to reduce under-nutrition in preschoolers (to fight hunger and improve education)

2   2.  Expanding the subsidy for malaria combination treatment

3   3.  Expanded childhood immunization coverage

4   4.  Deworming of schoolchildren, to improve educational and health outcomes

         5.  Expanding tuberculosis treatment

6     6.  R&D to increase yield enhancements, to decrease hunger, fight biodiversity destruction, and lessen the effects of climate change

7   7.  Investing in effective early warning systems to protect populations against natural disaster

8    8.  Strengthening surgical capacity

      9.    Hepatitis B immunization

1   10.  Using low‐cost drugs in the case of acute heart attacks in poorer nations (these are already available in developed countries)

1   11.  Salt reduction campaign to reduce chronic disease

1    12.  Geo-engineering R&D into the feasibility of solar radiation management

1   13.  Conditional Cash Transfers for School Attendance

1   14.   Accelerated HIV Vaccine R&D

E  15.  Extended field trial of information campaigns on the benefits of schooling

1   15.  Borehole and public hand-pump intervention

 

1

Nice interactive---Where would YOU cut Defense spending to reduce government spending? See what I did HERE...

Think YOU can cut the military budget in order to reduce deficit spending?  Go to the interactive HERE and try for yourself.  Below this first picture of the interactive is the box on the left and the "cuts" I made--at total of $173 billion over 10 years.  Low hanging fruit and, for me, relatively easy cuts to make.  How did you do?? (HT: to website Chart for the link)