Realitybase Journal

Most read Realitybase posts in April

Skeptic — Wed, 02 May 2012 16:59:05 +0000

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

The history of US per-capita petroleum consumption will surprise you. A graph and other data show US per-capita consumption of petroleum is down substantially from the 1970s, has been very stable since 1983 because of CAFE standards, and has fluctuated only slightly with retail price changes.

"The American Dream died in February 1973 With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Dysfunction and Corruption of Our Healthcare System, Its Damage to the National Economy and other Basic Healthcare Matters (Guest Post) Describing a system that is destroying American business global competitiveness, that violates fundamental insurance risk principles, and that has inherent conflicts of interest preventing quality national health care delivery and cost efficiency, and proposing a solution.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian trade theory rarely if ever align with real-world conditions.

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US or the US CEO pay market is broken.

One chart refutes three myths about US foreign trade. About Smoot-Hawley, the post-WWII export "boom," and "self-balancing" trade.

US job creation has been declining since April 2000 and is now in freefall. Discussion around a dramatic graph showing the US employment-to-population ratio strongly increasing until 2000 followed by a devastating loss in 10 years of all the gains made in the previous 20 years.

What's the market alternative to this big government program? On a per-vehicle-mile-traveled basis, conventional command-and-control regulations have reduced deaths by 85%, tailpipe pollutants by 89%, and fuel consumption by 40%.

The Prius fallacy fallacy Data refute the claim that when people have more fuel efficient vehicles they tend to drive substantially more miles.

The Prius fallacy fallacy

Skeptic — Tue, 03 Apr 2012 23:37:26 +0000

In the never-ending attack on vehicle fuel efficiency regulations, "the Prius fallacy" has become shorthand for the argument that when one replaces his gas guzzler with a fuel efficient vehicle his gasoline consumption does not go down, or goes down only a little bit, because he will decide to use the lower cost per mile to drive many more miles. (Some economists refer to this more generally as the "rebound effect.") Although it's plausible to think this could happen, it turns out it doesn't. Afsah and Salcito at CO2 Scorecard, using data compiled by Yale professor Ken Gillingham for his doctoral research at Stanford, show that the distribution of vehicle miles traveled ("VMT") by Prius drivers is essentially the same as the average of all other vehicle owners in California.

After driving a series of Audi A4s for 11 years, last year I bought a Prius. Now, instead of 23 MPG, I get 46 MPG actual road mileage. So, do I drive more miles now? No. In fact, I drive fewer long distance miles because the Prius is a less comfortable road car. In our first trip of about 250 miles with three people in the car, we learned that the back seat has inadequate head room. On a 1,100 mile trip with two people, we learned that the seats are way less comfortable than the Audi seats. Also, the Prius has fewer features and a generally lower level of luxury and comfort, and is not, compared to the Audi, at all peppy, responsive, or "fun to drive." Since we still have an Audi in the family, we use it for long trips and trips with three or more adults. Bottom line: The differences that make the Prius more fuel efficient also make me drive it less—the Prius fallacy is a fallacy.

There's another factor countering the Prius fallacy—economy cars do not raise ones social status. The most conspicuous form of discretionary driving is "cruising," and it's really hard to imagine hundreds of Prius owners driving Woodward Avenue in Detroit or Whittier Boulevard in East LA to show off their rides. I don't think that could even happen on Wilshire Boulevard in the Peoples Republic of Santa Monica. Auto industry journalist, Jamie Lincoln Kitman, responds to the Prius fallacy proponents this way:

Although their math is often specious, these critics lose sight of the fact that for more than a century, the automobile industry has been based on selling people dreams to go with their mobility. We're used to drivers who want an S.U.V. or a sports car so they'll look virile, sporty or capable.

The Kitman link is to a forum where others espouse the Prius fallacy. The argument seems to arise out of an unexamined conviction that the only proper—and effective—way to influence social outcomes is by manipulating prices. The truth is sometimes that works, and sometimes it doesn't. As a result of government command-and-control regulations, tailpipe emissions of HC, NOx, and CO from new cars are down 89% since the early 1950s, fuel consumption per VMT is down 40% from 1975, and each VMT is 85% less likely to result in a fatality than it was in 1949. Take the challenge: What's the market alternative to this big government program?

Most read Realitybase posts in March

Skeptic — Sun, 01 Apr 2012 04:50:43 +0000

"The American Dream died in February 1973 With graphs showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

Two hypotheses for why US CEO pay is so high Charts show that US CEO pay is about double that in other advanced countries, meaning there is either a shortage of talent in the US, or that the US CEO pay market is broken.

Comparative Advantage—The Unicorn of Free Trade Collection of sources and analyses demonstrating that the assumptions of classic Ricardian theory rarely if ever align with real-world conditions.

All the way to Tampa? "Enhanced" pictures of the GOP Presidential candidates.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might accidentally get into a war with Iran.

The Recession is Coming! The Recession is Coming! December 2007 post with charts showing America's middle class had been in recession for 7 years and asking if we really care.

Still a big shortage of jobs for college grads

Skeptic — Mon, 26 Mar 2012 00:19:48 +0000

The Great Recession officially ended as the college class of 2009 was graduating. Exactly two years later, real GDP was back to its pre-recession high, and the stock market indexes were above their pre-September 2008 crash levels. In stark contrast The New York Times Magazine interviewed 73% of those who graduated from Drexel University (a mid-tier liberal arts school) in June 2011 and reports that nearly half are not appropriately employed or in graduate school. The breakdown:

In graduate school 22%

Working full time 39% (includes jobs not requiring college)

Working part time 22% (includes jobs not requiring college)

Unemployed 17%

The article also reports that only 5 of the 20 jobs projected by BLS to grow the fastest in the next decade require bachelor's degrees. Policy makers, you are failing. The necessary jobs aren't creating themselves. Fix it or get out of the way.

Still time for another not-Romney to enter the race?

Skeptic — Thu, 22 Mar 2012 00:15:49 +0000

[If you don't see the embedded video in the RSS or email feed, click here.]

Ironically, Romney couldn't object to this. H/t Christine and Kenneth Quinnell at Crooks and Liars.

All the way to Tampa?

Skeptic — Mon, 19 Mar 2012 17:16:05 +0000

The Trees and the Forest of Unemployment

Skeptic — Fri, 09 Mar 2012 22:59:22 +0000

The BLS February employment report is out today, and the headline unemployment rate (U-3) is steady at 8.3%. By September, it could be 7.9% or less, which might be low enough to get Obama reelected.

However, we are a long, long, LONG way from full employment. The employment population ratio remains below where it was two years ago—and below where it was 34 years ago when women were just starting to enter the work force in large numbers:

Where are the 13 million jobs we need to get back to 64%, and how long will it take? US employment back to normal in 2016, 2027, or never?

Most read Realitybase posts in February

Skeptic — Fri, 02 Mar 2012 01:50:24 +0000

The Citigroup Plutonomy Memos With key quotations from documents that are being disappeared. This post has been the #1 response to a Google search for "plutonomy memo."

"The American Dream died in February 1973 With graphs from multiple sources showing stagnation of inflation-adjusted middle class incomes since the 1970s after strong and steady post-WWII growth

Comparative Advantage—The Unicorn of Free Trade A collection of sources and analyses demonstrating that the assumptions of classic Ricardian theory rarely if ever align with real-world conditions.

Why We Can't Bring Manufacturing and Innovation Back to America A comprehensive piece on how changes since the 20^th Century have been so profound that innovation is rapidly following manufacturing from the US to China, and on why that trend will continue without US government intervention—even in the unlikely event that China were to comply with international law on trade and currency.

U.S. aircraft carrier and 15 other Navy ships sunk in the Strait of Hormuz in 5-10 minutes Reporting on the results of US war games when attacked by large numbers of speed boats and missiles such as Iran has in the hands of Revolutionary Guards reputed to be "cowboys," and suggesting still other ways we might get into an all out war with Iran by accident.

US healthcare efficiency did not go off the rails until about 30 years ago. US life expectancy increased in lockstep with 19 other rich countries as healthcare expenses increased, but in 1982 the US life expectancy increases shifted onto a dramatically slower rate of increase than the other 19 countries even though US healthcare spending started rising even faster. The adverse change was most striking for females. It all seems very counterintuitive, but several data sets are compelling.

What happens when you get all your information about employment and job creation from employers? Cluelessness. In a live video chat with citizens Obama seemed stunned that it may not be true that employers have to bring in foreign high-tech workers at low wages under H-1b and L-1 visas because "there is a shortage of qualified Americans."

Adam Smith on self love and greed

Skeptic — Tue, 28 Feb 2012 19:05:05 +0000

Adam Smith is regarded by many as the patron saint of capitalism and the chief proponent of the prevalent notion that thoughtless greed is economically beneficial to society at large. Gavin Kennedy, who runs the Adam Smith’s Lost Legacy blog, posted these two paragraphs from Smith’s Theory of Moral Sentiments as revised by Smith in 1789 a few months before his death.

“When the happiness or misery of others depends in any respect upon our conduct, we dare not, as self–love might suggest to us, prefer the interest of one to that of many. The man within immediately calls to us, that we value ourselves too much and other people too little, and that, by doing so, we render ourselves the proper object of the contempt and indignation of our brethren.l Neither is this sentiment confined to men of extraordinary magnanimity and virtue. It is deeply impressed upon every tolerably good soldier, who feels that he would become the scorn of his companions, if he could be supposed capable of shrinking from danger, or of hesitating, either to expose or to throw away his life, when the good of the service required it.

One individual must never prefer himself so much even to any other individual, as to hurt or injure that other, in order to benefit himself, though the benefit to the one should be much greater than the hurt or injury to the other. The poor man must neither defraud nor steal from the rich, though the acquisition might be much more beneficial to the one than the loss could be hurtful to the other. The man within immediately calls to him, in this case too, that he is no better than his neighbour, and that by this unjust preference he renders himself the proper object of the contempt and indignation of mankind; as well as of the punishment which that contempt and indignation must naturally dispose them to inflict, for having thus violated one of those sacred rules, upon the tolerable observation of which depend the whole security and peace of human society. There is no commonly honest man who does not more dread the inward disgrace of such an action, the indelible stain which it would for ever stamp upon his own mind, than the greatest external calamity which, without any fault of his own, could possibly befal him; and who does not inwardly feel the truth of that great stoical maxim, that for one man to deprive another unjustly of any thing, or unjustly to promote his own advantage by the loss or disadvantage of another, is more contrary to nature, than death, than poverty, than pain, than all the misfortunes which can affect him, either in his body, or in his external circumstances” (TMS, Part 3, Chapter 3, paragraphs 5 and 6: 137-8).

Are you paying attention, John Galt and Gordon Gekko?

Cal Trillin on super PACs

Skeptic — Sun, 26 Feb 2012 19:11:03 +0000

There might be a serious message somewhere in Cal Trillin's piece in today's NYT, but the only reason I'm linking to it is that it made me laugh. Really.

INTERVIEWER Your “super PAC,” America the Super, has now spent just over $3 million on negative television ads attacking Art Schwartz, the most serious opponent of Jeff Gold in the race for the Senate, and — with all due respect, ma’am — that has raised questions about how closely America the Super is connected to the Gold campaign.

SUPER PAC CHIEF EXECUTIVE By law, a candidate’s campaign cannot coordinate or communicate with a super PAC. America the Super is for America being super. If that leads to an investigation into whether Mr. Schwartz did any inappropriate touching when he was a scoutmaster in 1978 — because a lot of those scoutmasters did, you know — so be it.

INTERVIEWER Well, you do understand the assumption some have that there might be more contact than the spirit of the law intends there to be, given your closeness with Mr. Gold.

SUPER PAC C.E.O. My closeness? What do you mean by my closeness?

INTERVIEWER Because you’re, well, his ...

SUPER PAC C.E.O. Because I’m his mother?

. . . .

Read the rest here.