Statistically speaking, what is employment?

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There’s been a lot of good economic news lately, the second year in a row that July uncharacteristically surged ahead. The “ISM Index” poll of manufacturers looked more positive than it has since 2008, even with a strong US Dollar. Initial claims for unemployment fell to 326k last week, another low since 2008. US GDP grew at 1.7% in 2Q13, not exactly great news but far better than expected (and accompanied upward revisions to previous quarters). The ADP employment report showed a net gain of 200k jobs, the rosiest figure of them all. Only 82k of those came from small businesses, with large companies gaining a new high of 60k jobs added – meaning that for the first time since 2008 big companies are in a hiring mood. Continue Reading

Coffee, tea and empires

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Picture yourself in England at the start of Queen Victoria’s reign. If you have some skills as a part of the growing middle class, things look better every day. That life comes in part from unskilled workers driven into the growing (and filthy) cities who are more productive than ever before. The great symbol of the improving standard of living greets you in the morning as a cup of this once luxury beverage, tea. It comes from China, traded under the barrel of the guns of the Royal Navy through the new colony of Hong Kong. The latest in technology, the Clipper Ship, brings it to you with great speed and makes it possible to run this enterprise at a distance. The sun never sets on the British Empire, and tea is both its greatest commodity and emblem of success. Continue Reading

What’s the deal with credit unions?

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Fed up with banks? You’re hardly alone. Credit unions have grown dramatically in the last 20 years, fueled largely by high fees charged by commercial banks. Low rates for ordinary loans are also a big draw. But for all the growth, not much has been written about credit unions other than the occasional puffy story about how much a consumer can save by ditching their bank. That’s not to say that the growth has gone unnoticed at all – or indeed that it isn’t creating its own problems that need to be addressed. Continue Reading

Reasonable expectation of privacy?

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The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. Continue Reading

What if Obamacare works?

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If you listen carefully in Washington, you can hear the tiny whooshing sound that dice make when they are up in the air. The difference is that when politicians throw them you hear a lot more bluster and babbling. Continue Reading

Fixing income inequality

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There’s no doubt that income inequality is finally getting the attention it deserves. President Barack Obama assailed it in his second inaugural address saying we can’t succeed “When a shrinking few do very well and a growing many barely make it.” Ben Bernanke decried inequality for “creating two societies.” Pope Francis famously tweeted his opinion. Even Goldman Sachs CEO Lloyd Blankfein called for “some redistribution” to create a stable and just society. But for all the talk, not much is happening. Why is that? Continue Reading

Cheers for the underground economy!

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“Since we decided to adopt the leaf as legal tender, we have all of course become immensely rich. But we have run into a small inflation problem owing to high leaf availability. That means the current rate is something like three major deciduous forests buy one ship’s peanut. In order to obviate this problem and revalue the leaf, we’ve decided on an extensive campaign of defoliation and burn down all the forests. I think that’s a sensible move, don’t you?”
– The Management Consultant to Fintlewoodlewix (later called Earth) – “Hitchiker’s Guide to the Galaxy” Continue Reading

Inequality versus sustainable growth

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Is wealth and income inequality holding the economy back? A recent study by the Pew Foundation shows that from 2009-2011 the wealthiest 7% of the US saw their net worth climb 24% – to an average of nearly $3.2M – while the other 93% of the population saw their wealth plummet 7%. More than being unfair, it may also be holding back economic growth overall. The rich may be happy with their take, but it may stop coming. Continue Reading

Crunching the numbers on debt

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At what point does public debt become a problem? If you ask many Republicans when the debt hits 90% of GDP we’re in trouble. Given that the Federal Debt is above this level you can see why there is a push for budget control if not outright austerity. But where did that magic figure come from? Continue Reading