Tuesday, March 26, 2013

Sage Advice About Customer Service

Posted by Milton Recht:

Deleted Earlier Post About Paid Sex By Males

Posted by Milton Recht:

I deleted the earlier published post about males paying for sex at the request of an author of the study. Despite basing my post on a reliable news report and quotes, the author claimed there were misleading inaccuracies in the post.

Monday, March 25, 2013

Major Environmental Groups, NRDC, Sierra Club, Etc, Lack Hiring Diversity: Fail To Employ Representative Minority Staff And Professionals: Problem Exist For 30 Years: Why Aren't Anti-Discrimination Employment Laws Being Enforced?

Posted by Milton Recht:

From The Washington Post, Health and Science, "Within mainstream environmentalist groups, diversity is lacking" by Darryl Fears:
the level of diversity, both in leadership and staff, of groups such as the Natural Resources Defense Council (NRDC), the Sierra Club and the Chesapeake Bay Foundation is more like that of the Republican Party they so often criticize for its positions on the environment than that of the multiethnic Democratic Party they have thrown their support behind.

Some of the groups say they are working toward greater diversity. "I think that the concerns are absolutely well founded," said Adrianna Quintero, a lawyer for the NRDC. "It’s taken too long for environmental groups to work closely enough with minority communities."

Kim Coble, vice president of environmental protection and restoration for the Chesapeake Bay Foundation, said the organization strives for inclusion, even though the percentage of minorities on its full-time staff is only 4.5 percent in a region where they represent nearly half the population.

"The environmental movement has a bit of a reputation as being a wealthy white community, and the Chesapeake Bay Foundation works hard to counteract that," Coble said.

The reputation is deserved, said Norris McDonald, president of the African American Environmentalist Association.

"This goes back a long way," McDonald said. "It’s why I founded the [association] in 1985. . . . White groups weren’t hiring black professionals, and when they did, it was a hostile atmosphere. There were a handful of black professionals in the environmental groups then, and there are a handful now."
"We essentially have a racially segregated environmental movement," said Van Jones, co-founder of the nonprofit Rebuild the Dream and a former adviser on green jobs to the Obama administration. "We’re too polite to say that. Instead, we say we have an environmental justice movement and a mainstream movement."
In 1990, the director of the Southwest Organizing Project, Richard Moore, issued a letter signed by some 100 community and cultural leaders saying that the big green groups lacked diversity, failed to protect minorities from pollution impacts and had histories full of "racist and exclusionary practices."
But, he [Fred Tutman, the only African American riverkeeper] said, "I do think we’re invisible. The movement is inauthentic if it remains all white . . . if we can’t get a seat at the table unless we emulate their values.
Why aren't the federal and states Offices of Civil Rights, the Departments of Labor and the Attorneys General bringing anti-discrimination employment lawsuits against these organizations? Who is behind the funding of these mostly white organizations?

Sunday, March 24, 2013

About A Third Of Employers' Costs Of Employees Is For Benefits

Posted by Milton Recht:

From The Wall Street Journal, Real Time Economics, "Number of the Week: Employers’ Benefits Costs" by Phil Izzo:
31%: The percent of employer costs that goes to paying for benefits.

Nearly a third of employers’ costs per worker goes to benefits on top of regular wages and salaries, and the share is even greater in some industries.

In December 2012, the most recent month for which detailed data are available, the average employer costs for each worker per hour was $30.84, according to the Labor Department. Of that total, $21.35 or 69% was for wages and salaries, the remainder went to benefits. The lion’s share of benefits’ costs is for health insurance, which on average makes up 8.5% of the total. That’s followed by legally-required benefits, at 7.8% of the total, which include Social Security, Medicare, workers’ comp and unemployment insurance. Paid leave takes up another 7% of the costs, with the remainder made up of retirement contributions and supplemental costs, such as overtime.

But that’s just the average; the contributions vary greatly across different industries. A greater share of state and local government’s costs per employee goes to benefits — 35% — compared with 31% for full-time private-sector workers. The costs to the government are greater per worker at $41.94 with $27.24 going toward salaries, while private employers on average pay $33.63 overall per worker and $23.22 on wages.

Friday, March 22, 2013

Unemployment By Gender, Age, Race

Posted by Milton Recht:

From Federal Reserve Bank of Cleveland, Economic Trends, "Educational Attainment and Demographic Differences in Employment" by Dionissi Aliprantis and Nelson Oliver:
It is well-known that employment outcomes such as unemployment rates and employment-to-population ratios vary markedly across demographic groups. Differences in unemployment rates are especially pronounced across age and racial groups. For example, in January 2013 the unemployment rate for African Americans was approximately double that of whites.

Unemployment Rate in January 2013 (percent, seasonally adjusted)









African American














Source: Bureau of Labor Statistics.

US Applies AML Laws To Online Currencies Like Bitcoin

Posted by Milton Recht:

From The Wall Street Journal, "Web Money Gets Laundering Rule" by Jeffrey Sparshott:
The U.S. is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the Internet are being used to fund illicit activities.

The move means that firms that issue or exchange the increasingly popular online cash will now be regulated in a similar manner as traditional money-order providers such as Western Union Co. They would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000.

Thursday, March 21, 2013

One Third Of Demand For Low Skilled, Non-College Educated Workers Is Due To Increased Demand And Wages For Skilled College Educated Workers: Lowering Income Taxes On The Rich Would Increase Demand And Wages For Low Skilled Workers

Posted by Milton Recht:

If the skilled, college educated workers had more disposable funds, such as through lower taxes, there would be more demand for low skilled, non-college educated workers. Greater demand for low skilled workers would increase their employment and wages and reduce income inequality.

From MIT Press, Review of Economics and Statistics, March 2013, Vol. 95, No. 1, Pages 74-86, "Spillovers from High-Skill Consumption to Low-Skill Labor Markets" by Francesca Mazzolari, Centro Studi Confindustria, Rome, and Giuseppe Ragusa, Luiss University, Rome:
The least-skilled workforce in the United States is disproportionally employed in the provision of time-intensive services that can be thought of as market substitutes for home production activities. At the same time, skilled workers, with their high opportunity cost of time, spend a larger fraction of their budget in these services. Given the skill asymmetry between consumers and providers in this market, product demand shifts—such as those arising when relative skilled wages increase—should boost relative labor demand for the least-skilled workforce. We estimate that this channel may explain one-third of the growth of employment of noncollege workers in low-skill services in the 1990s.

Another Negative Unintended Consequence Of The New Credit Card Rules; An Elizabeth Warren Contribution To A Weaker Economy

Posted by Milton Recht:

From Bloomberg, "Plastic-Shy Young in U.S. Spur Move to New Credit Data" by Jeanna Smialek
[There is] a growing reluctance among young adults to use plastic for everyday purchases. Thirty-nine percent of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010, a Sallie Mae and Ipsos Public Affairs survey found. And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under- 35 households, according to Federal Reserve data.

The trend, rooted in stricter lending rules and weaker job outlooks for young Americans since the 2008-2009 recession, has implications for the strength of the economy. As people in Frohne’s age group eschew plastic, fewer are building the credit histories that would help them to gain financing for purchases of homes and cars that are critical to economic growth. [Emphasis added.]

CBO's Legislation Scoring Process Allows Congressional Gaming Of The Process To Hide True Program Costs And Future Deficits: Time For CBO To Switch To Present Value Model Of Legislative Scoring Or At Least To Provide Rolling 10-Year Costs Estimates In The Initial Projections: CBO's Scoring Understates Future Spending And Budgetary Deficits of Proposed Legislation

Posted by Milton Recht:

Recently, CBO looked at the change in the projected net costs of the Affordable Care Act's coverage provisions. Despite, little change in the future yearly projected costs of the ACA since its passage, CBO says the total net costs has risen 69 Percent from $788 billion to $1329 billion. The reason is simple. CBO only counts the costs of the first 10 years of any legislation, starting in the current year. Many of the costs of the Obama healthcare legislation were back-ended beyond the 10 year window and were not counted as part of the costs by CBO at the time of discussion of the pros and cons of the legislation, although CBO did have projections of the amounts beyond the 10 year cost analysis window. CBO's costs projections of the healthcare law have now risen because the higher unchanged back-ended costs are now, 4 years later, included in the analysis.

The CBO 10 year window of analysis process allowed the Congress and the President to game the analysis and the legislative discussion by putting many costs of the program outside of CBO's analytical time frame, its reports and the media's news stories.

A much more financially sound method of analysis would have been to include the costs beyond the 10 year window and for comparative program purposes use present value of the costs, or at a minimum provide a chart of the rolling 10 year total of the costs beyond the initial year.

From "How Has CBO’s Estimate of the Net Budgetary Impact of the Affordable Care Act’s Health Insurance Coverage Provisions Changed Over Time?" by Jessica Banthin & Sarah Masi:
Changes in the Estimated Budgetary Impact of the ACA’s Coverage Provisions Since March 2010
When the ACA and other proposals that led up to that legislation were being considered by the Congress in 2009 and 2010, CBO and JCT prepared estimates of those proposals’ budgetary effects over the 2010–2019 period. In the estimate prepared in March 2010, CBO and JCT projected that the provisions of the ACA related to health insurance coverage would cost the federal government $788 billion between 2010 and 2019. The latest projections extend the original ones by four years, corresponding to the shift in the regular 10-year projection period since 2009, and the estimated cost of the ACA’s insurance coverage provisions between 2013 and 2023 is $1,329 billion. However, the projections for each given year have changed little, on net, since March 2010....

Tuesday, March 19, 2013

Fewer Women Than Men Choose Science Careers Because More Women Have Better Verbal Skills Leading To More Career Choices

Posted by Milton Recht:

From Association for Psychological Science Press release, "More Career Options May Explain Why Fewer Women Pursue Jobs in Science and Math:"
Women may be less likely to pursue careers in science and math because they have more career choices, not because they have less ability, according to a new study published in Psychological Science, a journal of the Association for Psychological Science.

Although the gender gap in mathematics has narrowed in recent decades, with more females enrolling and performing well in math classes, females are still less likely to pursue careers in science, technology, engineering, and mathematics (STEM) than their male peers.

Researchers tend to agree that differences in math ability can’t account for the underrepresentation of women in STEM fields. So what does?
Looking at students who showed high math abilities, [University of Pittsburgh developmental psychologist Ming-Te] Wang and colleagues found that those students who also had high verbal abilities — a group that contained more women than men — were less likely to have chosen a STEM occupation than those who had moderate verbal abilities.

Further analyses suggest that gender differences in career choice could be explained, at least in part, by differences in students’ combinations of abilities.

According to Wang, this study identifies a critical link in the debate about the dearth of women in STEM fields.

"Our study shows that it’s not lack of ability or differences in ability that orients females to pursue non-STEM careers, it’s the greater likelihood that females with high math ability also have high verbal ability,” notes Wang. “Because they’re good at both, they can consider a wide range of occupations." [Emphasis added.]

Monday, March 18, 2013

New Deal Banking Reforms Shifted Risk Management Burden From Bankers To State And Federal Regulators: Result Is Bankers Took On More Risk And Leverage After New Deal

Posted by Milton Recht:

From "Does 'Skin in the Game' Reduce Risk Taking? Leverage, Liability and the Long-Run Consequences of New Deal Banking Reforms" by Kris James Mitchener and Gary Richardson, NBER Working Paper No. 18895, Issued in March 2013:
This essay examines how the Banking Acts of the 1933 and 1935 and related New Deal legislation influenced risk taking in the financial sector of the U.S. economy. The analysis focuses on contingent liability of bank owners for losses incurred by their firms and how the elimination of this liability influenced leverage and lending by commercial banks. Using a new panel data set, we find contingent liability reduced risk taking. In states with contingent liability, banks used less leverage and converted each dollar of capital into fewer loans, and thus could survive larger loan losses (as a fraction of their portfolio) than banks in limited liability states. In states with limited liability, banks took on more leverage and risk, particularly in states that required banks with limited liability to join the Federal Deposit Insurance Corporation. In the long run, the New Deal replaced a regime of contingent liability with deposit insurance, stricter balance sheet regulation, and increased capital requirements, shifting the onus of risk management from bankers to state and federal regulators.

Scientists Have Not Quantitatively Studied Link Between Global Warming And Storms: Suggested Connection Between Global Warming And Stormier Weather Is Speculation And Not Based On Analysis Or Data

Posted by Milton Recht:

From "Has the weather become stormier as the climate warms?" on ScienceBlog:
There’s little doubt — among scientists at any rate — that the climate has warmed since people began to release massive amounts greenhouse gases to the atmosphere during the Industrial Revolution.

But ask a scientist if the weather is getting stormier as the climate warms and you’re likely to get a careful response that won’t make for a good quote.

There’s a reason for that.

"Although many people have speculated that the weather will get stormier as the climate warms, nobody has done the quantitative analysis needed to show this is indeed happening," says Jonathan Katz, PhD, professor of physics at Washington University in St. Louis.

Friday, March 15, 2013

95 Percent Of New Mortgages Are Federally Guaranteed, Almost Double The Rate Prior To 2008

Posted by Milton Recht:

From CBO, "Snapshot of Guarantees of New Residential Mortgages:"
Before the recent financial crisis, federal agencies and the government-sponsored enterprises Fannie Mae and Freddie Mac guaranteed (meaning, assumed the financial risk for) about half of the total volume of residential mortgages originated each year. In 2008, as the financial crisis worsened and the government took control of Fannie Mae and Freddie Mac, the situation changed dramatically: By 2012, more than 95 percent of new mortgages were federally guaranteed.

Greening The Planet With Fossil Fuels: Matt Ridley

Posted by Milton Recht:

Leaked Radioactivity From Fukushima, The Earthquake And Tsunami Damaged Japanese Nuclear Power Facility, Produced No Negative Health Effects

Posted by Milton Recht:

From Bloomberg, "Fukushima Radiation Proves Less Deadly Than Feared" by Robert Peter Gale & Eric Lax:
And what of the lasting threat from radiation? Remarkably, outside the immediate area of Fukushima, this is hardly a problem at all. Although the crippled nuclear reactors themselves still pose a danger, no one, including personnel who worked in the buildings, died from radiation exposure. Most experts agree that future health risks from the released radiation, notably radioactive iodine-131 and cesiums-134 and - 137, are extremely small and likely to be undetectable.

Even considering the upper boundary of estimated effects, there is unlikely to be any detectable increase in cancers in Japan, Asia or the world except close to the facility, according to a World Health Organization report. There will almost certainly be no increase in birth defects or genetic abnormalities from radiation.

Even in the most contaminated areas, any increase in cancer risk will be small. For example, a male exposed at age 1 has his lifetime cancer risk increase from 43 percent to 44 percent. Those exposed at 10 or 20 face even smaller increases in risk -- similar to what comes from having a whole-body computer tomography scan or living for 12 to 25 years in Denver amid background radiation in the Rocky Mountains. (There is no discernible difference in the cancer rates between people who live in Denver and those in Los Angeles or New York.)

Rather than stand as a warning of the radiation danger posed by nuclear power, in other words, Fukushima has become a reminder that uninformed fears aren’t the same as actual risks.

Thursday, March 14, 2013

Social Security Disability Insurance Will Run Out Of Funds And Cease Payments By 2016: 20 Years Before Social Security Old Age And Survivors Benefits Expected To Run Out Of Money

Posted by Milton Recht:

From CBO summary, "Testimony on the Social Security Disability Insurance Program" before the Subcommittee on Social Security, Committee on Ways and Means, US House of Representatives, March 14, 2013:
The Number of Disabled Worker Beneficiaries Has Increased Nearly Sixfold Since 1970
The DI program pays cash benefits from the DI trust fund to nonelderly adults (those younger than age 66) who are judged to be unable to perform “substantial” work because of a disability but who have worked in the past; the program also pays benefits to some of those adults’ dependents. In the past four decades, the number of workers with disabilities who receive benefits from the DI program has increased nearly sixfold, rising from 1.5 million in 1970 to 8.8 million in January 2013. Including the dependent spouses and children of those workers, 10.9 million people received support from the program in January 2013.

The growth in the program can be attributed to changes in multiple factors, including demographics, the labor force, federal policy, opportunities for work, and compensation (earnings and benefits) during employment.

DI Program Outlays Are Outpacing Dedicated Revenues
Between fiscal years 1970 and 2012, DI expenditures on benefits (adjusted for inflation) rose more than ninefold. The DI program’s rapid expansion and the projected gap between its spending and dedicated revenues in the future raise questions about the financial sustainability of the program.

Since 2009, the program has paid out more each year in benefits than it received in dedicated revenues (which come primarily from the Social Security payroll tax). In 2012, total DI expenditures were $135 billion, or 0.87 percent of gross domestic product (GDP), while the program’s dedicated tax revenues totaled $102 billion, or 0.65 percent of GDP. In 2023, CBO projects, the program’s spending will be 0.82 percent of GDP, and dedicated tax revenues will be 0.66 percent of GDP.

CBO projects that the DI trust fund will be exhausted in 2016, nearly 20 years before the projected exhaustion of Social Security’s Old-Age and Survivors Insurance (OASI) trust fund for the Social Security retirement program. If a trust fund’s balance falls to zero and current revenues are insufficient to cover the benefits that are specified in law and administrative expenses, the Social Security Administration has no legal authority to pay full benefits when they are due.

Wednesday, March 13, 2013

US Becoming Much Less Religious

Posted by Milton Recht:

From "Americans and religion increasingly parting ways, new survey shows" on ScienceBlog:
Religious affiliation in the United States is at its lowest point since it began to be tracked in the 1930s, according to analysis of newly released survey data by researchers from the University of California, Berkeley, and Duke University. Last year, one in five Americans claimed they had no religious preference, more than double the number reported in 1990.
On American attitudes toward religion, UC Berkeley researchers found that 20 percent of a nationally representative group reported no religious preference. That’s a jump from 1990 when all but 8 percent of Americans polled identified with an organized faith.

Under Obama, Oil And Gas Production On Federal Lands Fell, 23 And 33 Percent, While Production On Private And State Lands Increased 22 And 40 Percent

Posted by Milton Recht:

From The Wall Street Journal, "Drill, Barack, Drill: A new study shows the U.S. oil boom is all on private and state land:"
President Obama does a neat John D. Rockefeller imitation these days, taking credit for soaring domestic oil and gas production as if he planned it that way. Not quite. As a new Congressional Research Service (CRS) reports shows, "All of the increased [oil] production from 2007 to 2012 took place on non-federal lands."

The research outfit reports that thanks to the innovation of hydraulic fracturing and horizontal drilling on private and state lands, the U.S. in fiscal 2012 produced 6.2 million barrels of oil daily, up from 5.1 million barrels as recently as fiscal 2007. Private industry's technological advances, operating under state regulation, increased U.S. production last year at the fastest rate in the history of the domestic industry, which drilled its first commercial well in 1859.

The story on federal lands is the opposite. The CRS study finds that federal oil production fell more than 23% from fiscal 2010 to fiscal 2012 and is today below what it was in 2007. The federal share of total U.S. oil production has slid under Mr. Obama to 26% in fiscal 2012 from 31% in fiscal 2008.

The story is the same in natural gas, with overall production climbing 20% since fiscal 2007 even as "production on federal lands has remained static or declined each year over the same period." Production on non-federal lands grew 40% since 2007, while production on federal lands fell by a hard-to-believe 33%. The federal share of total natural gas production in 2007 was 27.8%. Today it's 15.5%.

Tuesday, March 12, 2013

After The Shale Oil Gas Revolution, Offshore Frozen Methane Extraction

Posted by Milton Recht:

From BBC News, "Japan extracts gas from methane hydrate in world first:"
Japan says it has successfully extracted natural gas from frozen methane hydrate off its central coast, in a world first.

Methane hydrates, or clathrates, are a type of frozen "cage" of molecules of methane and water.
Other countries including Canada, the US and China have been looking into ways of exploiting methane hydrate deposits as well.
Offshore deposits present a potentially enormous source of methane but also some environmental concern....

Paul Ryan's 2014 Responsible Balanced Budget Resolution: Full Text

Posted by Milton Recht:

From the Introduction by House Budget Committee Chairman Paul Ryan to the Fiscal Year 2014 House Budget Resolution, "The Path To Prosperity: A Responsible, Balanced Budget:"
This budget seeks to revive our communities with an emphasis on six areas. It expands opportunity by growing our economy. It strengthens the safety net by retooling federal aid. It secures seniors’ retirement by reforming entitlements. It restores fair play to the marketplace by ending cronyism. It keeps our country safe by rebuilding our military. And it ends Washington’s culture of reckless spending.

Responsible Balance Budget 2014 Resolution Paul Ryan uploaded by Milton Recht

My Comment On Carbon Based Taxes Posted On RealClearMarkets

Posted by Milton Recht:

My comment to RealClearMarkets, "The Tax Favored By Most Economists" By William Gale:
In a world of politics and not academic economics, it is difficult to have "a well-designed tax." A carbon tax will raise the cost of energy used by households and the cost of production of goods and services. Unless the tax equals the value of the harm created by carbon emissions, not just in amount but also in timing and specificity as to the households who will bear the greatest burden, a carbon tax left to the legislative and regulatory process will likely quickly be seen as a revenue generating source as opposed to a carbon reduction tax. Even if it remains a carbon reduction tax, much of the welfare gain from carbon taxes comes from the use of the new revenue to replace distortionary taxes, which will allow for higher rates of capital investment and employment of labor. In a real world scenario, the distortionary taxes on the economy will not remain absent or low for long, and a carbon tax on top of distortionary taxes will easily create a reduction in general welfare instead of an increase.

Additionally, to the extent that a carbon tax is linked to productive assets, it is a capital tax and economic literature supports a zero capital tax.

Economic studies show that in open economies, such as the US, it will be labor and not investors that bear most, if not all, the burden of the carbon tax through lower wages.

While theory supports a carbon tax, the effective implementation requires much trust in the taxing authorities and a belief in government's restraint under a carbon tax not to reinstate taxes on other sources to increase revenue.

Externalities, prices that do not fully reflect the harm created by the production of the output, are offset in part, whole, or more by the loss in general economic welfare of the public from the increase in the price of energy and goods and services. While no doubt, a carbon tax, if it raises the prices of energy, goods and services, will lower the amount of carbon produced. Before actual implementation, there is uncertainty and a possibility that a carbon tax will reduce general welfare (in some or all households), reduce economic growth, lower GDP and lower employment. If the amount of the tax is set by a legislative and regulatory process, the tax likely will be set at a level that will do harm to the economy, especially overtime as politicians seek more revenue and reinstate taxes or raise the rate of the carbon tax, and as regulators seek to increase the tax to further reduce carbon output.

Monday, March 11, 2013

Fewer Than 2 Percent Of Existing Health Plans Meet Health Insurance Coverage Standards of Obama's Healthcare Law

Posted by Milton Recht:

From HealthPocket, "Almost No Existing Health Plans Meet New ACA Essential Health Benefit Standards: Maternity & Pediatric Care Especially Lacking from Existing Plans"
Our research took the Affordable Care Act’s Essential Health Benefits as our starting point. The Essential Health Benefits are the minimum categories of health insurance coverage that every qualified health plan must have starting January 1, 2014. HealthPocket then examined 11,100 individual health plans across the United States to see how many plans had coverage in each of the Essential Health Benefit categories.

The data shows that there will be a near complete transformation of the individual and family health insurance market starting in 2014. Less than 2% of the existing health plans in the individual market today provide all the Essential Health Benefits required under the Affordable Care Act (ACA).

Essential Health Benefits Coverage in Existing Health Insurance Plans

Source: HealthPocket

Heart Disease Risk Is Independent Of Diet: Heart Disease Existed Thousands Of Years Ago In Many Cultures

Posted by Milton Recht:

From The Wall Street Journal, "Telltale Finding on Heart Disease" by Ron Winslow:
Researchers who examined 137 mummies from four cultures spanning 4,000 years said Sunday they found robust evidence of atherosclerosis, or hardening of the arteries, challenging widely held assumptions that cardiovascular disease is largely a malady of current times.
The same researchers reported similar findings in 2009 from Egyptian mummies. Because those specimens were believed to have been from the upper echelons of society, the researchers surmised their calcified arteries could have developed from high-fat diets. But by expanding the research to other cultures, including Puebloans of what is now the U.S. Southwest, the researchers believe all levels of society were at risk, regardless of diet.
Gregory Thomas, medical director at MemorialCare Heart & Vascular Institute, Long Beach, Calif., and another researcher on the effort, said the findings don't challenge the need for a healthy diet. But they do suggest that "regardless of diet and culture, we're all at risk for atherosclerosis."

Over A 90,000 Mile Lifecycle, An Electric Car Prevents At Best $48 Total Climate Damage: A Very Poor Taxpayer Deal For The Huge Government Subsidies Per Car

Posted by Milton Recht:

From The Wall Street Journal, "Bjorn Lomborg: Green Cars Have a Dirty Little Secret: Producing and charging electric cars means heavy carbon-dioxide emissions." by Bjorn Lomborg:
A 2012 comprehensive life-cycle analysis in Journal of Industrial Ecology shows that almost half the lifetime carbon-dioxide emissions from an electric car come from the energy used to produce the car, especially the battery. The mining of lithium, for instance, is a less than green activity. By contrast, the manufacture of a gas-powered car accounts for 17% of its lifetime carbon-dioxide emissions. When an electric car rolls off the production line, it has already been responsible for 30,000 pounds of carbon-dioxide emission. The amount for making a conventional car: 14,000 pounds.

While electric-car owners may cruise around feeling virtuous, they still recharge using electricity overwhelmingly produced with fossil fuels. Thus, the life-cycle analysis shows that for every mile driven, the average electric car indirectly emits about six ounces of carbon-dioxide. This is still a lot better than a similar-size conventional car, which emits about 12 ounces per mile. But remember, the production of the electric car has already resulted in sizeable emissions—the equivalent of 80,000 miles of travel in the vehicle.

So unless the electric car is driven a lot, it will never get ahead environmentally. And that turns out to be a challenge.
Even if the electric car is driven for 90,000 miles and the owner stays away from coal-powered electricity, the car will cause just 24% less carbon-dioxide emission than its gas-powered cousin. This is a far cry from "zero emissions." Over its entire lifetime, the electric car will be responsible for 8.7 tons of carbon dioxide less than the average conventional car.

Those 8.7 tons may sound like a considerable amount, but it's not. The current best estimate of the global warming damage of an extra ton of carbon-dioxide is about $5. This means an optimistic assessment of the avoided carbon-dioxide associated with an electric car will allow the owner to spare the world about $44 in climate damage. On the European emissions market, credit for 8.7 tons of carbon-dioxide costs $48.

Friday, March 8, 2013

Inherited Wealth Squandered By Third Generation

Posted by Milton Recht:

From The Wall Street Journal, "Lost Inheritance" by Missy Sullivan:
But if the past is any prelude, inheritors, especially those who are new to the family-windfall phenomenon, face an unpleasant reality: They're likely to blow it. Although it's not widely discussed, financial advisers say that new riches prove particularly hard to hold onto—and even harder to patiently nurture and grow. Indeed, research shows that family money rarely survives the transfer for long, with 70 percent evaporated by the end of the second generation. By the end of the third? Ninety percent. Hence the old saw, "Shirtsleeves to shirtsleeves in three generations."
Source: The Wall Street Journal

Almost 90 Percent Of Middle And High School Teachers Use Wikipedia For Preparation Despite Warning Thier Students It Cannot Be Trusted

Posted by Milton Recht:

From Forbes, "Study Finds Most Teachers Use Wikipedia, Are Hypocrites" by Jeff Bercovici:
The Pew Research Center’s Internet and American Life Project surveyed 2,462 middle and high school teachers to find out how they use digital technology in their classrooms and assignments.

When it came to Wikipedia, Pew’s researchers made two key findings: First, teachers overwhelmingly admonish their students not to use the Web-based open-access encyclopedia as a source, warning them that its accuracy can’t be trusted. Second, teachers overwhelmingly use it themselves for research and preparation.

In fact, they use it “at much higher rates than U.S. adult internet users as a whole (87% vs. 53%), according to Pew’s report.

Thursday, March 7, 2013

Raising The Minimum Wage Slows Long-Term Employment Growth

Posted by Milton Recht:

From Council on Foreign Relations, Geo-Graphics, "Obama's Minimum Wage Hike Will Hit Employment" by Benn Steil and Dinah Walker:
Source: Council on Foreign Relations

President Obama has proposed increasing the federal hourly minimum wage from $7.25 to $9.00,
An important question which follows is what impact this would have on employment. A recent paper by Texas A&M economists Jonathan Meer and Jeremy West found that whereas the immediate impact on unemployment of raising the minimum wage by 10% is very small, its impact on long-term job growth is more substantial: 0.35 percentage points. The logic is that raising the minimum wage is a greater deterrent to hiring than it is a motivator for firing.

...the effective minimum wage proposed by President Obama would decrease long-run job growth by 0.7 percentage points. Put in perspective, this is significant. Over the past twelve months, average year-over-year job growth has been 1.8%. Knocking off 0.7 percentage points would reduce it to 1.1%, which is barely more than the 0.9% average year-over-year growth in the labor force over the past twelve months.

Working From Home More Common, Almost 1 In 10 Workers

Posted by Milton Recht:

From The Wall Street Journal, Real Time Economics, "Nearly One in 10 Employees Works From Home" by Neil Shah:
The U.S. Census Bureau said in a report Tuesday that some 13 million people, or 9.4% of the working population in 2010, worked at least one day at home per week, compared with just 9.2 million people in 1997, when 7% worked at least partly from home. People working either entirely or partly from home were more likely to be in management and business. Those in computer, engineering and science jobs saw among the biggest shifts home-ward: “Home-based” work in these fields jumped around 70% from 252,000 workers in 2000 to 432,000 workers in 2010. (Home-based workers work exclusively or part of the time from home.) According to Census figures, 5.8 million people or 4.3% of the U.S. workforce worked from home most of the week in 2010 — an increase of about 1.6 million since 2000.

Federal Grants Fund A Quarter Of State And Local Government Spending

Posted by Milton Recht:

From CBO, "Federal Grants to State and Local Governments" March 2013:
In fiscal year 2011, the federal government provided $607 billion in grants to state and local governments. Those funds accounted for 17 percent of federal outlays, 4 percent of gross domestic product (GDP), and a quarter of spending by state and local governments that year.

CBO Federal Grants to State and Local Governments by

Wednesday, March 6, 2013

Dow Jones About 10 Percent Below The Inflation Adjusted High of October 2007: S&P500 About 12 Percent Below Its Inflation Adjusted Closing High

Posted by Milton Recht:

Yesterday, March 5, 2013, the Dow Jones Industrial Average closed at a new all time nominal closing high of 14253.77. The previous high close was in October 2007. On an inflation adjusted basis the Dow Average needs to rise by another 9.8 percent to equal its October 2007 closing high.

On October 9, 2007, the Dow Jones Industrial Average closed at 14,164.53. On October 11, 2007, the Dow Jones Industrial Average had an intraday and previous all time high of 14,198.10. On an inflation adjusted basis, the previous Dow Jones Industrial Average closing high is equivalent to 15,644.16 in today's dollars and the previous intraday high is equal to 15,681.40.

S&P 500 Index

The S&P 500 Index needs to gain about 12.3 percent to reach a new high on an inflation adjusted basis.

On October 9, 2007, the S&P 500 Index closed at 1565.15. In inflation adjusted dollars, the closing high is equal to 1728.65. On October 11, 2007, the S&P 500 Index had an intraday high of 1576.09. In today's dollars, the closing high equivalent is 1740.73.

The monthly CPI index from the Bureau of Labor Statistics was 208.5 at the beginning of October 2007 (September 2007 index value). The latest CPI index value is 230.28, reflecting the value through January 2013. The inflation factor to convert October 2007 values to the most currently available inflation values is 1.1045. It is computed by dividing the CPI current index value, 230.28, by the beginning of October value, 208.5.

Sunday, March 3, 2013

David Henderson Post On The Supply Of Doctors, My Comment

Posted by Milton Recht:

My comment to "Garett Jones on the Supply of Doctors" by David Henderson:
The current structure of schooling, training and laws creates significant barriers to entry to those who would like to be doctors, limits the availability of medical services, increases costs and unnecessarily forces individuals to use doctors.

Look at actual usage of medical services, and see where doctor involvement can be eliminated or significantly lessened. For example, eliminate the need for prescriptions for commonly used non-addictive medicines. Why does a woman need a prescription for birth control? Or a man for ED medicine? Why can't someone with a bad sore throat get an antibiotic for strep without seeing a doctor? or antibiotic drops for an eye infection such as pink eyes?

Expand the role of nurses, nurse practitioners, surgical assistants, and pharmacists and without the need that they be under doctor supervision or part of a physician practice.

Reduce immigration restrictions on foreign trained doctors and reduce requirements that they do US residencies. Instead require posting of medical schooling and residency and let the public choose.

Just like we have different levels of college education, Associate, BA, Masters, PhD, let's do the same for medicine. Can also do the same for medical training as we currently have, e.g., Board Certification. For example, EMTs are not doctors but are adequately medically trained to handle emergencies.

The US can easily eliminate unneeded demand for doctors and increase the availability of competent medical providers through legal and licensing changes. It would allow those that want to medically help people do so at many levels of training and it would eliminate unnecessary demand for expensive overly trained medical personnel.

These and other changes would go a long way to eliminate barriers to entry and the supply demand imbalance between medical services providers and medical services users. The changes would also reduce costs and eliminate the guild effect of the medical profession