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Notes From the Fieldby Martin Weil

Archive for the ‘Economy’ Category

June 3, 2015

Marriner Who?

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Interesting historical quote via @StephanieKelton

 

 

 

 

 

 

 

And who is Marriner Eccles some might ask?

The building at left is named after him. Home of the Federal Reserve.

May 18, 2015

Healthcare Costs Are Coming Under Control

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Annual percentage change in US healthcare costs.

Whether you love or hate Obamacare, it does seem to be a factor in the decline in national healthcare, costs which have been long recognized as the major threat to US solvency.

With slowly growing prices, even rising demand for healthcare has led to less-than-projected spending, in just about every category. (To be clear: This doesn’t mean healthcare is getting cheaper; it means healthcare is getting more expensive slower than we anticipated.) The government is casually saving hundreds of billions of dollars in Medicare thanks to both direct cuts and other reforms. Insurance companies, despite a rough year due to the arrival of some expensive new drugs, have been spending less than the actuaries projected in 2010. Even with growth in high-deductible plans, out-of-pocket spending is actually coming in below projections from five years ago.

Forecasts of medical spending have undergone round after round of major surgery. Six years ago, the Urban Institute projected that the country would spend $23 trillion between 2014 and 2019. After Obamacare became law, it raised its forecast by half-a-trillion dollars. But the latest projections, published this month, are lighter by $2 trillion and $2.5 trillion, respectively.

From The Atlantic

May 17, 2015

Don’t Be So Sure the Economy Will Return to Normal

…there is a much more disturbing possibility that could turn out to be more accurate: namely, that the recession was a learning experience that we haven’t fully absorbed. From this perspective, the radical and sudden changes of the financial crisis were early indicators of deep fragility and dysfunctionality.

Slowly but surely, we may be responding to these difficult revelations by scaling back our ambitions for the economy — reinforcing negative trends that were already underway. In this troubling view, we have finally begun to discover some unpleasant truths. Borrowing a phrase from the University of Toronto economist Richard Florida, it’s possible that we are experiencing a “Great Reset.”

Tyler Cowen in the NYT

March 20, 2015

Oil. She Said, He Said

“You know that the President just vetoed the Keystone pipeline,” said the woman.

“Honey, no politics. People from the coast feel differently,” said her husband.

The short exchange took place on the edge of the Yasuni National Park in the Ecuadorean rainforest, where the forces of oil exploration and environmental protection are squarely facing off. I suppose this is what prompted the remarks. The man and woman were from Oklahoma; we are from California.

I was struck by how much was communicated in these two sentences. So much so that I have tried for two weeks to write a longer piece about the underlying issues, from the fundamental importance of oil to our way of life to its environmental impacts. In the end, nothing worth publishing.

But I still think those two sentences speak volumes.

March 20, 2015

The Yield Curve, Visualized

And explained as well. The NY Times (registration required) does a bang up job on this 3D visualiztion. Just great.

March 3, 2015

Millennials – Largest Generation Ever

Goldman Sachs has this excellent short presentation on millennial demographics and how their behaviors are reshaping the economy. Did I hear someone say “social media?”

The Millennial generation is the largest in US history and as they reach their prime working and spending years, their impact on the economy is going to be huge. …

They’re also the first generation of digital natives, and their affinity for technology helps shape how they shop. They are used to instant access to price comparisons, product information and peer reviews.

Pointer The Big Picture

January 15, 2015

I Absolutely Love This Idea

Crowd-sourcing (think Yelp, TripAdvisor etc.) comes to economic forecasting!  The Good Judgment Project is a bold attempt to harness the “wisdom of crowds” as a more reliable predictor of future economic and geo-political events than expert forecasters.  I am really excited by this development.  University of Pennsylvania’s Philip Tetlock who brilliantly took on the failings of “expert” political judgement with his book of the same name, is behind the project.

July 29, 2014

So Warren Buffett Walks Into a Bar…

Ten working class guys are in a bar when Warren walks in, goes the tale. As soon as Buffett crosses the bar’s threshold, the average person’s wealth in the room skyrockets.

This is a classic example of how statistics can be used to make utterly misleading statements. It is preamble to this more than a little shocking bit of data from Marginal Revolution

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower.

The median is the statistical measure that provides real insight here regarding how the typical American household’s wealth has fared. Average wealth and income in the US has certainly risen since 2003. But this information is of no value if we are trying to explain how the typical household is doing. Average in this case is not “average.”

Much like Warren walking into the bar, this rise in average income is a consequence not of rising wealth across the board, but of extreme wealth increases at the very highest end of the spectrum. This rising tide has not raised all boats this time around and most people affected “get” this fact. The typical household, as shown by this study, has not benefited from an increase in wealth at all, but has instead suffered a substantial decline.

It is data points such as these that betray for me the factors underlying the ongoing discontent with the current economy in the US.

inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. – See more at: http://marginalrevolution.com/marginalrevolution/2014/07/were-not-as-wealthy-as-we-thought-we-were.html#sthash.xK1atyzm.dpuf

July 19, 2014

Global Income Inequality is Falling

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. …

Policies on immigration and free trade, for example, sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole….

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth….

Yes, we might consider some useful revisions to current debates on inequality. But globally minded egalitarians should be more optimistic about recent history, realizing that capitalism and economic growth are continuing their historical roles as the greatest and most effective equalizers the world has ever known.

Tyler Cowen in the NY Times

 

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough…

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth…

– See more at: http://marginalrevolution.com/#sthash.tVnFynL5.dpuf

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough…

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth…

– See more at: http://marginalrevolution.com/#sthash.tVnFynL5.dpuf

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough…

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth…

– See more at: http://marginalrevolution.com/#sthash.tVnFynL5.dpuf

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough…

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth…

– See more at: http://marginalrevolution.com/#sthash.tVnFynL5.dpuf

July 8, 2014

Really Unexpected Magazine Cover

http://www.ritholtz.com/blog/wp-content/uploads/2014/07/Br8ZRliIYAAksS_.jpg

Bigtime companies are moving their “headquarters” overseas to dodge billions in taxes … that means the rest of us pay their share.

This is is not Mother Jones, the Nation or Rolling Stone, but Fortune magazine decrying Corporate America on their cover as “Un-American.”  The optics of these practices aside, overhauling our tax code is way overdue.

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