Applied Rationality

Birth-control "abhorrent" to Catholics?

2012-02-02T08:56:00.002-05:00

President Obama has come under withering criticism from a segment of the Catholic community for his decision not to exempt religious-affiliated non-profits, such as the University of Notre Dame, from new health insurance rules that require health plans to cover the cost of contraception. For example the Catholic Action League has denounced the policy, calling it "an expression of unmitigated contempt for the rights, consciences, and sensibilities of Catholics” and complaining that the institutions "will be forced to pay for procedures, devices, and chemicals abhorrent to the consciences of Catholics."

Let's put aside the fact that the exemption to religious institutions and to organizations that primarily serve or employ people from a particular religious group stands.

Those procedures, devices, and chemicals aren't abhorrent to most Catholics, at least on revealed preference grounds.

Catholics contracept at approximately the same rates as other groups. In April 2011, the Alan Guttmacher Institute released a analysis of 2006-8 data from the National Survey of Family Growth. Among sexually-active women of reproductive age who were neither pregnant, post-partum or trying to get pregnant, 89 percent of Catholics were using some form of birth control, which is identical to all women in that group. The types of contraception were also nearly identical. Rates of pill use were 31 percent for Catholics and for women generally; rates of IUD use were 5 percent for Catholics and women generally; rates of sterilization (of either the woman or her partner) were 32 percent for Catholics and 33 percent for women generally, and rates of condom usage were 15 percent for Catholics and 14 percent for women generally.

Thus, it appears that the "sensibilities" of the vast majority of Catholics include not just the tolerance but the regular use of contraceptives. The rights of these Catholics and the many non-Catholics who are employed at these tax-advantaged (and often taxpayer-supported) institutions also need to be considered.

Hey Gov. Romney, the poor are Americans too!

2012-02-01T13:20:00.000-05:00

Looking to erase the stigma of Romney-care, former Gov. Mitt ("Honey Badger") Romney unveiled a new social agenda--Romney-don't-care.

Gov. Romney: I'm in this race because I care about Americans.

With you so far Governor. It would be better to care with all of humanity, but voters will understand that you can only do so much and that someone whose heart is already two-sizes too small has to start somewhere.

Romney: I'm not concerned about the very poor. We have a safety net there. If that needs repair I'll fix it. I'm not concerned about the very rich. They're doing just fine. I'm concerned about the very heart of America. The 90-95 percent of Americans who right now are struggling, and I'll continue to take that message across the nation.

Whoa, whoa, whoa.

The poor aren't Americans? They're not included in "the very heart of America?" Governor Romney, who has previously criticized liberals, the Occupy movement, and his Republican rivals for sowing class warfare, has effectively disinherited the poor from America.

With respect to the Governor's 90-95 percent figure, he might be surprised (if he cared) to discover that 46.2 million Americans, 15.1 percent of our population, were officially poor in 2010. One third of Americans--more than 100 million people--lived in households with incomes below 200 percent of the poverty line and were considered poor or near poor. 6.7 percent of American were in deep poverty, meaning that they were living in households with incomes that were less than half of the poverty threshold. Those are sizable groups that Governor Romney is tagging as un-American and unworthy of his concern.

Also, the very poor would take issue with whether we have anything near a safety net. All of the poverty figures account for cash transfers, like welfare and social security. So, that's a 15.1 percent poverty rate after those safety net checks have gone out. An alternative poverty measure that accounts for in-kind transfers, like food, medical, housing, and energy assistance, but that also accounts more accurately for households' needs, indicates that 16 percent of Americans are poor. A safety net that lets nearly one out of every six people fall through seems moth-eaten and in serious need of repair.

But, at least it's not Americans who are falling through those holes.

Romney directed company that defrauded the U.S. of $25 million

2012-01-28T10:31:00.002-05:00

Mitt Romney is getting clobbered with a new set of ads in Florida that describe how the Damon Corp., a company that Mitt Romney's company purchased and that Romney directed, defrauded the Medicare program of $25 million, was caught, and eventually paid $119 million in fines.

Politifact reports

The story begins in 1989, when Romney was the head of Bain Capital, a private equity firm that specialized in buying troubled companies, turning them around, and then selling them for a profit. That year, Bain bought Damon Corp., a medical testing company based in Needham, Mass.

Bain took the company public in 1991, and Romney served on the company’s board of directors. In 1993, Bain orchestrated a sale of the company to Corning Inc., getting a handsome return on its investment and earning Romney himself $473,000, according to The Real Romney. After the sale, Corning closed the main facility in Needham, laying off 115 people.

In October 1996, federal prosecutors announced that Damon was agreeing to pay $119 million in both civil and criminal fines after pleading guilty to defrauding Medicare. The company was providing doctors with forms that didn’t make clear what tests included, so doctors were checking off additional tests that weren’t necessary, according to the Globe’s summary of the government’s case.

The overbilling went from 1988 through 1993, prosecutors said. "This is a case, pure and simple, of corporate greed run amok," U.S. Attorney Donald Stern said when the settlement was announced.

The story is all too typical of the "heads I win, tails you lose" approach of modern big business.

Under the most charitable explanation, Romney failed in his ethical and fiduciary responsibilities. Despite these failures, he was handsomely rewarded and was able to walk away from this mess he was involved in.

In this week's debate, Romney said,

...I think it's important for people to make sure that we don't castigate individuals who have been successful and try and, by innuendo, suggest there's something wrong with being successful and having investments and having a return on those investments.

Speaker, you've indicated that somehow I don't earn that money. I have earned the money that I have.

There is "something wrong" with running or overlooking a multi-million dollar criminal enterprise. There is "something wrong" with pocketing money that activity. And there is "something wrong" with foisting that illicit enterprise off on some other unwitting investors.

The same types of unethical and irresponsible behavior--create a mess, take your cut, and sell it to the next person--were at the heart of the financial crisis that led to the Great Recession. Romney was just a few years ahead of his time.

The next big GOP worry after voter fraud

2012-01-26T08:42:00.000-05:00

Why do Republicans hate business regulations?

Maybe because the ones they come up with themselves are so ridiculous.

An Oklahoma Republican is pushing a bill to outlaw the use of human fetuses in food, because, as he says, “there is a potential that there are companies that are using aborted human babies in their research and development of basically enhancing flavor for artificial flavors.”

This level of stupidity should be disqualifying; instead, some folks wear it like a badge of honor.

Jobs for Greensboro?

2012-01-25T17:02:00.000-05:00

The company that is proposing a new commercial development at the corner of W. Friendly Avenue and Hobbs Road, has released plans to the News & Record.

The developers of a proposed shopping center at West Friendly Avenue and Hobbs Road met with News & Record reporters and editorial writers today. Here is some of what the developers said:

• The center will have four buildings that encompass about 53,000 square feet on 6.7 acres. The two buildings on the north side of the property will be leased to small shops. On the south side along Friendly Avenue, there will be a grocery store and a drugstore...

• The project will create 135 construction jobs and 160 permanent full- and part-time jobs. It will add roughly $200,000 to the city's property-tax base.

Just in case anyone has forgotten, Greensboro is hungry for jobs, especially construction jobs. In November, the unemployment rate in the Greensboro-High Point metropolitan area was 9.9 percent. Nearly 36,000 people are unemployed in the area.

People in the neighborhood are gathering the torches and pitchforks to drive the developer off (though judging by the many Bill Knight signs that were seen a few months ago in the neighborhood, some of them weren't so opposed to a trashier development in backyards a bit further east). That development, however, is somebody else's future livelihood.

The development is sensibly placed. It would front a busy road and be sandwiched between a large commercial center and a church. In Greensboro's long-range plan, this area was slated for moderate-density residential redevelopment. However, a parcel just down the block at the corner of Hobbs Road and Northline Avenue, which was originally slated for commercial development may be developed as condominiums. Essentially, the long-range zoning of commercial and residential plots within a block of each other would be swapped. In the last few years, another plot a few blocks away at the corner of Friendly and Green Valley was effectively turned into a park. Other parks--the Bicentennial Garden and Bog Garden--are within a few blocks.

Put me down as one neighbor who would like the jobs and tax revenues this infill development would bring. A Trader Joe's wouldn't be so bad either.

North Carolina did not add teachers

2012-01-25T15:55:00.001-05:00

The Civitas Institute (and others) are pushing selective numbers to try to show that the draconian K-12 budget cuts by the Republican legislature actually increased the number of teachers being funded by the state in 2011-12.

Civitas is taking its numbers from the North Carolina Department of Public Instruction Statistical Profile and focusing on the 2010-11 and 2011-12 school years. Below I show the figures for teachers from the 2008-09 through 2011-12 school years.

Full-time teachers in public schools
School year	State-funded	Federally-funded	Locally-funded	Total
2008-09	86,447	5,699	6,952	99,098
2009-10	81,746	9,245	4,386	95,377
2010-11	78,963	11,443	4,473	94,879
2011-12	81,020	8,791	4,153	93,964
Data from the NC DPI Statistical Profile.

Civitas is touting the fact that from 2010-11 to 2011-12, the number of teachers that were paid for through state revenues increased by 2,057 from 78,963 to 81,020. The figure that's relevant to children, however, is the total number of full-time teachers in North Carolina's public schools, which decreased by 915 this from 94,879 to 93,964 and which has decreased by more than 4,000 since 2008-9.

The claim that this is anything other than a loss is ridiculous. If I took $3,000 from your savings account and only put $2,000 of it back in your checking account, you wouldn't be thanking me for my "generosity."

Civitas tries to explain this discrepancy away by saying that the losses were really caused by the federal government, which started scaling back its stimulus funding resulting in a loss of 2,652 teaching positions. Decreases in funding by local governments also contributed to the decrease, causing a loss of 320 teaching jobs.

What Civitas overlooks is that the federally-funded teachers were originally state-funded teachers who were put on the put on federal revenues temporarily. In 2009-10 and 2010-11 with the availability of stimulus funding, North Carolina shifted nearly 6,000 teachers from state revenues to federal revenues. In 2010-11, shifts of teachers to federal and local revenues mostly offset shifts out of state revenues. In 2011-12, a third of these "temporarily-shifted" full-time teachers were shifted back to state funds.

Civitas also overlooks decreases in the other funding that the state has sent to local school districts. In 2011-12, these cuts were more than $300 million, on top of the $459 million reduction in other state spending.

When all full-time personnel are included, full-time employment in North Carolina's public schools dropped by 4,840 positions in 2011-12.

Full-time personnel in public schools
School year	State-funded	Federally-funded	Locally-funded	Total
2008-09	144,789	12,573	33,764	191,126
2009-10	128,540	24,715	29,684	182,939
2010-11	125,981	26,070	28,419	180,470
2011-12	130,594	18,650	26,386	175,630
Data from the NC DPI Statistical Profile.

Once again, personnel on state revenues increased but were more than offset by decreases in personnel on local and federal revenues.

Civitas goes on to claim that the 4,840 decrease in employment shows how mild the cuts were. As if.

First of all, the cuts compound cuts of nearly 11,000 full-time people in the preceding two years. Taking a pint of blood on one day leaves you woozy; taking pints on three consecutive days represents a serious health risk.

Second, the figures that Civitas uses (and that are shown above) are limited to full-time personnel and do not include part-time jobs. They also exclude pre-K positions. The schools estimate that when all of these positions are included that the employment loss was 6,400 jobs this year and 17,300 since 2008-9.

Third, the reports do not account for reductions in work days and work hours that occurred in about two-thirds of school districts.

More fundamentally, Civitas overlooks how unnecessary these cuts were. The legislature eliminated a tax surcharge on higher-income households, eliminated a temporary sales tax surcharge, and cut corporate taxes. These cuts led to the losses in positions in pre-K, K-12 and higher education.

The job picture in NC ain't pretty

2012-01-24T19:16:00.000-05:00

Some blog posts should come with child warnings.

The monthly labor report from the U.S. Bureau of Labor Statistics shows that jobs continue to pass the Tar Heel state by. While the number non-farm jobs nationally grew by about 200,000 on a seasonally-adjusted basis in December, the number of non-farm jobs in North Carolina actually fell slightly, dropping by 4,400.

The first graph below shows North Carolina's employment each month since January 2007.

Seasonally-adjusted non-farm employment (in 000s) in North Carolina from the BLS Current Employment Statistics

The next graph shows the corresponding national figures.

National seasonally-adjusted non-farm employment (in 000s) from the BLS Current Employment Statistics

Employment in North Carolina bottomed out in early 2010 -- the same time as the rest of the country (though the percentage drop in employment was greater in North Carolina). Employment temporarily surged in the state and nationally with the Census in the spring of 2010. Since then, employment in North Carolina has oscillated around a relatively flat trend. Employment grew early this year (the state and national unemployment rates were actually equal in the spring) but fell as the state ended the last fiscal year. The state still hasn't regained the levels of employment from this spring. In contrast, national employment has increased fairly steadily.

One thing that the figures don't show is population growth. Population increased both nationally and in North Carolina, but the growth has been faster in North Carolina. This means that the state's anemic job performance is even more immiserating than these graphs suggest.

2011 clearly ended badly. Let's hope that 2012 is brighter. North Carolina has a lot of catching up to do.

Pope's misinformation for UNC alumni

2012-01-22T12:16:00.002-05:00

The John W. Pope Center for Higher Education Policy can be faulted for a host of sins, but a lack of ambition is not among them. Not content to mislead and misinform state lawmakers to cut public funding for North Carolina's public university system, the Pope Center also operates a misleading web-tool to also discourage private donations from some alumni.

Did you attend a North Carolina college or university?

If so, you undoubtedly receive frequent pleas from your school for financial support. Does your school deserve your donations?

Find out using this Alumni Guide to North Carolina colleges. Select your college or university from the list below to answer a short survey to determine whether your giving priorities line up with your alma mater’s current activities and performance.

I went to the Alumni Guide for my institution, UNCG, to see what dastardly things my colleagues and I were doing. Below I post some of the Pope Center's statements, along with English translations.

Pope: UNC Greensboro has a free speech rating of "Red"

Translation: A free-speech group objects to UNCG's policy on discriminatory conduct--specifically to the statements

UNCG will not tolerate any harassment of, discrimination against, or disrespect for persons. UNCG is committed to equal opportunity in education and employment for all persons regardless of race, color, creed, religion, gender, age, national origin, disability, military veteran status, political affiliation or sexual orientation.

The same group rates 65 percent of the colleges and universities that it surveyed as also "severely restricting free speech and open debate." Only four percent of colleges and universities meet with the group's approval.

Pope: UNC Greensboro has a grade of "B" in ACTA's "What Will They Learn" assessment.

Translation: Another group has marked UNCG down for allowing students with SAT or ACT writing scores in the top decile to opt out of its first-year English 101 composition class. Students would still have to take an additional "Reasoning and Discourse" class and also complete two additional "writing-intensive" classes. The group also objects to UNCG allowing students to take courses like Western Civilization, Introduction to Greek Civilization, and Europe 1400-1789 in place of a course on either U.S. History or U.S. Government. In addition, the group objects because UNCG doesn't require students to take Economics (okay, they've got a point there).

Describing this as a "what will they learn" index is odd. At one end of the distribution (tied for worst in the state), our sister school, UNC Chapel Hill, gets a "D" from the group. UNC Chapel Hill students seem to learn a lot (just ask one of them). At the other end of the spectrum, getting "A's" are the University of Texas -- San Antonio, which graduates a whopping 27% of its students, the University of Science and Arts of Oklahoma, which graduates 32% of its students, and Kennesaw State University, which graduates 41% of its students. The distinction between putting an extra requirement in the undergraduate bulletin and actually learning something seems lost on the Pope Center.

Pope: UNC Greensboro received a rating of "Unbalanced: Democratic" for faculty political balance.

Translation: Pope explains

This category measures the number of professors in the economics and political science departments who are registered Democrats versus the number who are registered Republicans. Ratios of greater than 5:1 are considered "Very Unbalanced." Ratios between 5:1 and 1.5:1 are considered "Unbalanced." A ratio of 1.5:1 or less is considered “Balanced.” Data were gathered from the North Carolina State Board of Elections.

So, in one breath, Pope criticizes UNCG for not forcing students to take government and economics classes. In the next, it decries those faculty as being unsuitably democratic. It's really hard to win with these folks.

Pope: UNC Greensboro has a 6-year Graduation Rate of 52 percent. The national average for 4-year schools is 63.2 percent.

Translation: The 52% statistic listed for UNCG is the percentage of students who started their careers at UNCG in 2003 and who completed their degrees at UNCG by 2009. The 63.2% statistic is not comparable and appears to be the proportion of students who start at a four-year institution seeking a bachelor's degree and ever attain one at any institution. At UNCG, just over a fifth of students transfer. UNCG (and other colleges) don't track graduation rates for their former students. The 63.2% statistic appears to come from a completely different data series based on a government survey (the kind of government spending other folks in the Pope Empire routinely object to). The comparable statistic for students completing a bachelor's degree at the same four-year institution they started at is 55.5%; for public institutions, the comparable statistic is 53.5%.

Incorrect and misleading statistics? Just another day at the office for the folks at the Pope Center.

Disenfranchising voters right and left

2012-01-19T08:27:00.000-05:00

Republicans in state houses throughout the country, who have busied themselves gerrymandering voting districts and disenfranchising the poor, disabled and elderly through voter-ID requirements, have found yet more ways to disenfranchise voters.

In Iowa, it appears that we will never know who won the Republican caucuses. In part because, Iowa Republicans have lost the results from eight precincts. The Des Moines Register reports

There are too many holes in the certified totals from the Iowa caucuses to know for certain who won, but Rick Santorum wound up with a 34-vote advantage.

Results from eight precincts are missing — any of which could hold an advantage for Mitt Romney — and will never be recovered and certified, Republican Party of Iowa officials told The Des Moines Register on Wednesday.

Rather than count further, Iowa Republicans are simply declaring that the results are "close enough."

Closer to home, approximately 43,000 residents of Guilford County are slated to go unrepresented in their own county government because of a mistake in a redistricting law that state Republicans rushed through the NC General Assembly.

Last year, the General Assembly rushed through a redistricting plan that redefined Guilford County voting lines and reduced the county board from 11 members to nine.

The new district map was heavily criticized. Beyond claims about racial bias in the map, it created logistical problems:

• Some districts are left without any direct representation by commissioners.

• Other newly created districts are represented by more than one commissioner.

• No provision is made for electing at-large representatives until 2014, which would mean no at-large representation on the board for two years.

Republicans tout their strict adherence to Constitutional principles, but it seems they have a blind spot to the Constitutional right to vote.

Either that or they are grossly incompetent.

Come to think of it, they could be both.

Pope Center says there are too many UNC students; the data say there are too few

2012-01-16T11:34:00.003-05:00

Earlier this year, the John W. Pope Center for Higher Education Policy recommended a host of budget cuts for the UNC system, based in good part on false and misleading statements about enrollment growth.

In recent years, expansionist policies have pushed the UNC system far beyond its natural limits.

...The recent rate of growth in the university population is unsustainable. The population of North Carolina grew approximately 16 percent between 2000 and 2009; over that period, UNC enrollment grew 38 percent. This growth places an increasing burden on taxpayers to subsidize additional students...

Enrollments at the schools in the UNC system did grow substantially from 2000 to 2009, though by slightly less than the figures that the Pope Center reported (from 162,761 students in Fall 2000 to 222,322 students in Fall 2009, an increase of 36.6 percent). The Pope Center, however, chose not to report that enrollments in Fall 2010 fell to 221,727 students. Since their report was posted, enrollments fell further to 220,305.

Are these enrollments unnatural or unsustainable? Let's stick with the Pope Center's high-watermark enrollment figures from Fall 2009, as these are the most favorable to its case.

Nationally, enrollment in 4-year institutions grew 37.8 percent from 9.36 million students in Fall 2000 to 12.91 million students in Fall 2009, so UNC's enrollment lagged the general growth in demand for post-secondary education and skills (of course, reporting that college enrollments in the U.S. grew 37.8 percent and UNC's almost did too makes for a very different headline).

Another indicator is the growth in enrollments in two-year institutions. From 2000 to 2009, enrollment in North Carolina's public two-year institutions grew 48.3 percent from 38,369 to 56,896.

We can also consider UNC enrollments relative to the size of the potential student population. There's no perfect measure for this because enrollments include graduate students, non-traditional students, and returning students, but the number of 18-24 year-olds is a general benchmark. The Census Bureau estimated that there were 930,000 18-24-year-olds living in North Carolina in July 2009. So, in Fall 2009 there were 0.239 UNC students per 18-24 year-old living in the state. Nationally, there were 0.253 four-year public-institution students per 18-24 year-old. Far from over-serving its population, the UNC system enrolls fewer students relative to the numbers of youths and young adults.

We can also use the Pope Center's comparison of students relative to the general population. In North Carolina, there were 0.0235 UNC students for every state resident in Fall 2009; nationally, the figure was 0.0251 public-four-year students. Put another way, in Fall 2009, there were 42.5 North Carolina residents potentially supporting each UNC student. Nationally, there were only 39.8 people supporting each public university student.

Jobs in North Carolina and elsewhere demand increasing amounts of skills. North Carolina's youths will have to compete with workers from other states and other countries whose skills are increasing. The state's lower--and now falling--enrollment rates put them and the state at a competitive disadvantage.

The problem in North Carolina isn't too many public university students, it's too few.

Are some first amendment tax breaks better than others?

2012-01-12T16:52:00.000-05:00

David Taintor, who has blogged critically at TPMMuckraker about tax breaks for a religious-themed amusement park in Kentucky, today turns his attention to an Oklahoma lawmaker who wants to repeal that state's sales tax loophole for newspapers and magazines.

An Oklahoma lawmaker wants to repeal a sales tax exemption on his state’s newspapers and magazines. Because apparently people are still reading too many newspapers these days.

We tax other media, including books. Is that because lawmakers want to discourage reading?

We tax children's coats. Is that because lawmakers want children shivering?

I like newspapers; I don't like unemployment, and I don't like taxes. But why should for-profit newspapers get special tax treatment that is not available to other businesses? The goods and services that those businesses sell are also important, and the people that they employ (or could employ) are worth our consideration.

North Carolina his its own newspaper sales-tax loophole. It and other sales-tax loopholes could (and should) be closed, which would broaden the tax base and allow the nominal sales tax rate for everyone to fall.

Gun deaths up in 2010

2012-01-12T08:44:00.000-05:00

On a chilly January morning, a dismal scientist's thoughts naturally turn to death.

The CDC reports that 31,513 people in the U.S. died in 2010 from guns, up from 31,347 the year before. Homicides involving guns were down (11,105 in 2010 from 11,493 the year before), as were homicides generally. Gun deaths from accidents and suicides accounted for the overall increase. A gun is still nearly twice as likely to be used in a successful suicide than in a homicide.

The cheerier news is that overall death rates decreased nationally, though the cheer will have to be reserved for other states--North Carolina's death rate actually increased.

Millions stolen from NC workers

2012-01-10T08:42:00.004-05:00

The North Carolina Justice Center last week issued a research brief on wage theft--the non-payment or under-payment of owed wages by employers. The brief tallies statistics from the North Carolina Wage and Hour Bureau on workers' complaints about being stiffed on promised wages by their employers. The total value of confirmed, investigated wage theft by employers rose from $3.8 million in FY 2010 to $4.7 million in FY 2011; however, the amount recovered fell from $1.9 million in FY 2010 to $1.8 million in FY 2011.

Figures from the U.S. Bureau of Economic Analysis indicate that about $230 billion was earned by NC in wages and salaries in 2010. So the $4.7 million figure represents a tiny fraction of total payments, but the $4.7 million also likely undercounts the total extent of wage theft because it omits small cases (the Wage and Hour Bureau won't even consider a case under $50), other cases that were not reported, and cases that were pending investigation.

The extent of investigated and confirmed wage theft is up sharply from previous years. From FY 2007-2009, the amounts of documented theft ranged from $1.3 million to $2.0 million. The proportion recovered is down substantially--88 percent of the wages due were recovered in FY 2007, but only 38 percent of wages due were recovered in FY 2011.

When a worker takes money from an employer, it is theft or embezzlement, and the worker can be hauled off to jail. When an employer takes money from workers, it is an administrative or civil matter, and when the employer closes its doors, it's a tough sh*t, just bidness matter.

If only we could "solve" the debt crisis

2012-01-09T08:27:00.001-05:00

The News & Observer ominously warns

The failure of Congress to slash the national deficit threatens to cascade from Washington straight into North Carolina's schools, stores and doctor's offices.

Automatic spending cuts - triggered by the lack of agreement in Congress over ways to reduce the more than $1.2 trillion deficit - will begin in 2013 and could mean:

An estimated 9 percent cut in the $417 million that Duke University gets from the National Institute of Health to research cures for diseases such as cancer and Alzheimer's, alternative energy and national security.

The loss of federal funds for public schools with large populations of low-income students. In Cabarrus County, for example, that means the school system could lose money that pays for a series of federal programs, including $210,000 in Title 1 funding, which helps low-income schools hire teachers and assistants to reduce class sizes, improve computer labs, purchase supplies, and increase teacher training.

And the death of mom-and-pop shops in military towns like Fayetteville that could lose $351 million in defense contracts and tens of millions in civilian payroll.

The article, correctly, points to the economic harms associated with automatic spending cuts that will be triggered by Congress' debt deal last summer and by Congress' failure to agree on an alternative debt reduction plan. We've seen this kind of government retrenchment at the state level, and it retards and can even reverse economic growth.

However, the article fails to mention the harms that would be associated with a debt deal.

There are only two ways to rein in the deficit: cut spending and increase taxes. The article lists cuts that would hurt university research, school spending, and military base businesses, but other cuts would fall on somebody else.

Cuts to poor people's medical care or food assistance, college students' education assistance, extended unemployment, or the elderly's medical care would also hurt specific people and take money out of the economy. Similarly, increases in taxes, perhaps in the form of closing "loopholes" (a.k.a. somebody else's tax break), letting the payroll tax cut expire, or straightforwardly raising rates, would take money out of wallets and pocket books and slow the economy.

Those are the unpalatable choices on the table. The News & Observer complains about one serving of brussel sprouts but doesn't tell you that the other serving bowls are filled with lima beans and that dinner will be followed by a big spoonful of castor oil.

A remarkably solid jobs report

2012-01-06T09:32:00.000-05:00

The monthly national jobs report from the U.S. Department of Labor for December showed moderately strong growth as the U.S. added 200,000 jobs on a seasonally-adjusted basis and as the unemployment rate dipped to 8.5 percent.

The 200,000 job gain is important because it is solidly above the growth in the working-age population, which means that the country is actually making progress in its jobs recovery. The job gains of around 100,000 in previous months were much closer to population growth, meaning that we were only treading water. Indeed, the 58.5 percent of people who are working in December 2011 is the same rate as October 2009, when the unemployment rate crested at 10 percent.

Also notable was how widespread the employment gains were. Nearly every major industrial sector added jobs. The only declining major sectors were temporary help agencies, which is something of a good sign, and the public sector, which was weighed down by local government job losses. Among those who were working, there were also big shifts from part-time work (338,000 fewer workers) to full-time work (553,000 more workers).

As with last month's report, the number of people who were "in the labor force" (people either working or looking for work) dipped slightly. The fall, however, was mostly attributable to decreases in labor force participation among teenagers. Nevertheless, expanded definitions of the jobless rate that include discouraged, marginally attached, and involuntary part-time workers all dropped.

Overall, the figures, although slightly better than expected, suggest only gradual improvement in the employment situation. It will take job gains closer to 400,000 a month to begin making noticeable improvements.

Could it be Magic? The NC Republicans' Midnight Special

2012-01-05T09:25:00.000-05:00

In the wee, dark hours of this morning, North Carolina Republicans in the General Assembly put on a Midnight Special and showed us all a little bit of magic.

No, not this kind of magic.

Instead, Republicans performed some much cheesier magic (who knew that anything could be cheesier than Barry Manilow).

Republicans waited until six Democratic representatives had disappeared. They then gaveled a quickie legislative session in with just a few minutes of notice and made a previously vetoed bill to weaken state teachers labor representation magically re-appear.

Just after 1 a.m. today, in a secreted session critics called unconstitutional, Republican legislative leaders passed a bill aimed at weakening the state's largest teachers association.

Republicans over-rode the governor's veto and then promptly adjourned.

When blindsided Democrats and teachers complained, Republican House Speaker Thom Tillis, aka "the Amazing Tillini," accused them of not having enough magical thinking.

Speaking to reporters after the session, House Speaker Thom Tillis maintained the legislature was transparent and lawmakers and the public should have known this bill could come before the House, even though it was not noticed.

If there's any good news from this sorry performance, it's that we might all be spared Republican moralizing about how they will be different from their predecessors.

"I am fearful of what Benjamin is capable of"

2012-01-02T10:39:00.000-05:00

"I am fearful of what Benjamin is capable of with the small arsenal he has in his home and his recent threats of suicide."

So wrote the mother of Benjamin Colton Barnes' infant daughter in papers supporting her request for a restraining order this July.

Yesterday, Barnes validated those fears by using parts of his arsenal to gun down a park ranger (and mother of two).

A man who was being sought in the shooting of four people at a New Year's party in South King County early Sunday is suspected in the fatal shooting of a park ranger in Mount Rainier National Park later in the morning.

Park Ranger Margaret Anderson, a mother of two who was married to another ranger at the park, was shot about 10:30 a.m. after setting up a roadblock to stop a car that was fleeing another officer.

She was shot when the driver apparently stepped out of the vehicle with a shotgun and opened fire. It took authorities nearly 90 minutes to get to her because the assailant continued to fire an assault rifle at Pierce County SWAT team officers as they tried to assist the injured ranger, officials said.

Despite reportedly threatening himself and others and despite earlier run-ins with the law, Barnes was able to keep his arsenal.

At last report, he still appears to be loose in the woods with an assault rifle.

2012 is picking up where 2011 left off.

Police deaths jump in 2011; guns are the leading cause

2011-12-28T21:21:00.000-05:00

Preliminary estimates from the National Law Enforcement Officers Memorial Fund (NLEOMF) tragically indicate that the number of police officers killed so far in 2011 exceeds the total for the same period last year by 13 percent and that the number of police officers killed by gunfire was the leading cause of death.

According to preliminary data from the National Law Enforcement Officers Memorial Fund, 173 officers have been killed during 2011 — up 13 percent from 153 line-of-duty deaths in 2010.

For the first time in 14 years, more officers died from firearms-related incidents than traffic-related incidents. Sixty-eight officers were shot and killed in 2011, up 15 percent from 2010 when 59 officers died from gunfire. The number of officers killed by firearms has now risen during each of the past three years.

The number of gun-related fatalities in 2011 substantially exceeds the average from the 2000s and is slightly higher than the average for the 1990s. Gun-related fatalities among law-enforcement officers are down though from the very high levels recorded in the 1980s and 1970s.

The statistics are a grim reminder that a society awash in guns poses deadly risks even to those who are armed, well-trained, and often wearing protective vests.

Armed and dangerous

2011-12-27T10:06:00.000-05:00

Advocates of gun anarchy like to proclaim that stricter gun laws only serve to keep guns out of the hands of law-abiding citizens. However, a New York Times investigation of North Carolina concealed weapons permit holders shows that those armed "law-abiding" citizens can become very, very dangerous.

...The New York Times examined the permit program in North Carolina, one of a dwindling number of states where the identities of permit holders remain public. The review, encompassing the last five years, offers a rare, detailed look at how a liberalized concealed weapons law has played out in one state. And while it does not provide answers, it does raise questions.

More than 2,400 permit holders were convicted of felonies or misdemeanors, excluding traffic-related crimes, over the five-year period, The Times found when it compared databases of recent criminal court cases and licensees. While the figure represents a small percentage of those with permits, more than 200 were convicted of felonies, including at least 10 who committed murder or manslaughter. All but two of the killers used a gun.

The story relates a number of cases where permitted hot heads flip out and then use the close proximity of a weapon to assault or kill, going from "law-abiding citizen" to dangerous felon in the blink of an eye.

The Times also reports that felons often get to keep their concealed guns and their ability to purchase more.

The review also raises concerns about how well government officials police the permit process. In about half of the felony convictions, the authorities failed to revoke or suspend the holder’s permit, including for cases of murder, rape and kidnapping. The apparent oversights are especially worrisome in North Carolina, one of about 20 states where anyone with a valid concealed handgun permit can buy firearms without the federally mandated criminal background check. (Under federal law, felons lose the right to own guns.)

Ricky Wills, 59, kept his permit after recently spending several months behind bars for terrorizing his estranged wife and their daughter with a pair of guns and then shooting at their house while they, along with a sheriff’s deputy who had responded to a 911 call, were inside. “That’s crazy, absolutely crazy,” his wife, Debra Wills, said in an interview when told that her husband could most likely still buy a gun at any store in the state.

A sensible proposal would be be for anyone accused of a violent crime in North Carolina to immediately have their gun rights (including any special gun permits) suspended and weapons impounded until their criminal case is adjudicated. Courts would revoke all gun rights and dispose of the weapons upon conviction but allow people to petition for reinstatement of their rights some period after completing sentences.

If North Carolina can suspend driving privileges for some accusations of traffic offenses and impound vehicles for some accusations of crimes, it can surely do the same for guns.

After 20 years, EPA finally issues mercury rules

2011-12-21T18:18:00.001-05:00

Um, no not that Mercury.

After 20 years of delays, the EPA has finally announced rules to curb mercury and other toxic materials from large (25 megawatt and larger) coal- and oil-powered electrical plants. The rules were mandated by the 1990 Clean Air Act Amendments. An initial, weaker set of mercury rules was issued in 2005 by the Bush administration, but those rules were vacated by a federal court because they specifically exempted electric utilities. The new rules fulfill the court's instructions.

When fully implemented, the EPA estimates that the long-delayed Mercury and Air Toxics Standards will prevent each year

4,200 to 11,000 premature deaths,
2,800 cases of chronic bronchitis,
4,700 heart attacks,
130,000 asthma attacks,
5,700 hospital and emergency room visits, and
540,000 missed work days.

To put the numbers in perspective, the numbers of deaths and illnesses that would be saved each year would likely exceed the deaths (4,484) and casualties (32,200) that the U.S. suffered over the eight and a half year course of the Iraq war.

The EPA estimates that the annual health benefits are worth $37 billion to $90 billion, while the cost to implement the changes is just under $10 billion. Much of that $10 billion will go toward construction and equipment operations jobs.

Hmm, a set of cost-effective, life-saving, and health-inducing rules. Cue the predictable screams from the Radical Right, including notable coal-apologist Rep. Ed Whitfield.

What me hungry?

2011-12-21T09:15:00.000-05:00

After a wait of far too many years (maybe a topic for another post), a study that Craig Gundersen and I conducted on "Food Insecurity and Insufficiency at Low Levels of Food Expenditures" has been published in the Review of Income and Wealth.

In the fall of each year, the U.S. Department of Agriculture releases a report on food insecurity in the U.S. that describes the prevalence of food problems. News outlets take this report and publish stories on the extent of hunger. For example, this year MSNBC reported

The percentage of U.S. households where adults sometimes go hungry or are unable to put enough food on the table declined last year, United States Department of Agriculture figures released on Wednesday showed.

The food insecurity measures are also used by advocacy groups and the government to describe the needs of households and the effectiveness of assistance programs.

The primary food insecurity measure is constructed from responses to 10 to 18 survey questions that people are asked (10 questions if no children live in the household, and 18 questions otherwise). The questions ask about problems of increasing severity from

We worried whether our food would run out before we got money to buy more.” Was that often, sometimes, or never true for you in the last 12 months?

the least severe condition to

In the last 12 months did any of the children ever not eat for a whole day because there wasn’t enough money for food? (Yes/No)

the most severe condition. People who answer three or more of the questions affirmatively ("sometimes" or "often" to the frequency questions and "yes" to the yes/no questions) are classified as food insecure, "meaning that they had access at all times to enough food for an active, healthy life for all household members."

Craig and I were interested in how well the measures actually captured food problems. In particular, several of the questions leave room for subjective judgements (for example, how often is "often"). Respondents may also be embarrassed to report problems to interviewers. In addition, respondents may simply forget about problems that they experienced several months ago.

The survey that USDA uses to measure food insecurity also asks people about other, more objective, and more recent food outcomes, including the amounts that they spent on food in the previous week and in a usual week. Craig and I figured that the amounts that people spent on food should be correlated with their reports of food insecurity and that people with very, very low levels of food spending should report high (actually nearly ubiquitous levels) of food insecurity.

What we found was surprising.

Food insecurity and food expenditures are negatively related, as you would expect. However, the correlation is astonishingly weak. Among people in low-income households, the absolute value of the correlation between food insecurity and weekly food expenditures scaled by household size or food needs is less than 10 percent.

More surprising still, when we focus on households with low incomes and very low levels of food expenditures (e.g., expenditures below half of what the USDA says is the minimum recommended healthy amount for a household), less than 40 percent report being food insecure. In fact, at no point along an objectively-scaled food expenditure distribution do people report food insecurity rates much above 50 percent.

We run some follow-up analyses that indicate that the food expenditure and food needs measures are reliable. We also re-examine the relationships for groups where we can rule out other types of reporting problems. The analyses lead us to the conclusion that the weakness lies in the food insecurity measure itself.

The particular problem is the food insecurity is much likely higher among some especially disadvantaged groups than the reported statistics indicate. As we state at the end of the article,

Our findings that food hardships are under-reported at the low end of the expenditure distribution should be disquieting to researchers and policymakers. The data may be masking genuine distress among the disadvantaged households, and the modest relationship with food expenditures may mean that the food insecurity and insufficiency measures will have difficulty registering increases in well-being from policy innovations and economic improvements.

Hopefully, this will give USDA something to chew on.

Big fat nothing-burger in state job growth

2011-12-20T14:54:00.000-05:00

Another month, another state employment report, another month of waiting for significant job growth in the Tar Heel state.

The U.S. Department of Labor reported today that the number of non-farm jobs in North Carolina grew last month on a seasonally-adjusted basis by only 3,800. Despite modest increases last month and the month before, the total number of non-farm jobs in November remains below the numbers recorded in February through May.

The Republican plan of cutting taxes and getting the government out of the way was supposed to lead to a jobs renaissance. Instead, state employment is struggling to get to recover to the point where it was when Republicans took over the legislature.

Party of No run amok

2011-12-20T08:04:00.000-05:00

Just when you thought the machinations over the payroll tax and emergency unemployment insurance extensions couldn't get any more ridiculous, House Republicans gave the whole dysfunctional saga a new twist, by using a procedural maneuver to block a vote on the Senate's compromise package.

Republicans on the House rules committee have voted to prevent a direct vote Tuesday on a Senate plan favored by Democrats and Senate Republicans to extend the payroll tax cut for two months.

By an 8-4 vote Monday night, the GOP-led panel rejected a Democratic amendment that would have held a vote on whether to approve the Senate plan, which is opposed by House Republican leaders.

This marks the second time that Republicans have stopped votes on Republican-supported versions of the tax cut and UI extension.

Recall that last week, Republicans in the Senate used a procedural maneuver to block a direct vote on legislation that had been passed in the Republican House (showing that they are equal-opportunity obstructionists, Senate Republicans also blocked votes on legislation submitted by Democrats).

Now it seems that House Republicans are returning the favor, while at the same time showing that the Party of No is incapable of negotiating in good faith.

Dearly departed

2011-12-19T09:10:00.001-05:00

One of the world's most prolific mass-murderers has left the stage. North Korea's "Dear Leader," Kim Jung Il died this weekend. Few, other than the kleptocrats who continue to control North Korea, will mourn his loss.

Kim Jung Il's loathsome legacy includes mass murder at home and abroad. At home, he presided over political killings and government-abetted famines that may have taken two million lives and possibly a great many more. The death toll places him with Stalin, Hitler, Pol Pot, and Mao Zedong among history's most notorious mass murderers. Abroad, he is accused of bombings that killed South Korean officials in 1983 and that brought down a South Korean civilian airliner in 1987. This last March, his regime torpedoed a South Korean corvette, consigning another 46 people to death.

Murder was only one of Kim Jung Il's crimes. Human Rights Watch described his system.

There is no organized political opposition, free media, functioning civil society, or religious freedom. Arbitrary arrest, detention,lack of due process, and torture and ill-treatment of detainees remain serious and endemic problems. North Korea also practices collective punishment for various anti-state offenses, for which it enslaves hundreds of thousands of citizens in prison camps, including children. The government periodically publicly executes citizens for stealing state property, hoarding food, and other "anti-socialist" crimes.

Human Rights Watch estimates that up to 200,000 North Koreans continue to waste away in the country's concentration camps. North Korea's economy remains in ruins, and its people continue to starve and suffer.

The world's fondest hope should be that Kim Jong Il's death extinguishes Stalinism on the Korean peninsula. Sadly, the gears of the regime's succession appear to be grinding forward.

Onward Christmas Soldiers!

2011-12-17T16:01:00.001-05:00

The holiday display on the courthouse lawn near (one of the places) where I grew up has become much more diverse than I remember.

For the better part of 50 years, a creche and a Christmas tree were the only holiday displays on the Loudoun County Courthouse grounds.

Then came the mannequin Luke Skywalker and signs celebrating the winter solstice. This month, a skeleton Santa Claus was mounted on a cross, intended by its creator to portray society’s obsession with consumerism. A pine stands adorned with tinsel — and atheist testimonials. (“I can be moral without religion,” one declares.)

Members of the Church of the Flying Spaghetti Monster are scheduled to put up their contribution this weekend. It’s a banner portraying a Nativity-style scene, but Jesus is nowhere to be found. Instead, the Virgin Mary cradles a stalk-eyed noodle-and-meatball creature, and the manger is surrounded by pirates, a solemn gnome and barnyard animals. The message proclaims: “Touched by an Angelhair.”

It's heatwarming to see some new holiday traditions, although some older ones, like a Festivus pole, would have been nice too.

The War on Christmas (continued)

2011-12-15T09:10:00.002-05:00

Maybe it's the unusually warm weather this December, but the "war on Christmas" letters to the local paper were late in arriving this year. One more thing to pin on global warming I suppose.

Finally, though this morning, they arrived, and Greensboro is bathed in the fresh scent of holly, mistletoe and intolerance.

One, lamenting that the Jaycees' parade held on December 5 was called a "Holiday Parade," asks "Why don’t we have a Christmas parade? ...What has happened to this country? The majority should rule."

I'm not quite sure how Christmas describes much of anything occurring on December 5. Calling it a Faunalia or St. Nicholas Eve parade would have more apt.

The other, writing about Greensboro's Community Tree Lighting, asks

It is really a shame that in order to be politically correct the word “Christmas” has been absent from most advertising promoting the event. What would be wrong with Community Christmas Tree Lighting?

A nice Christmas tree, just like Joseph set up in the manger?

The author might consider that the Community Tree putter-upper-namer-givers were actually being sensitive to more Biblically-minded Christians who remember that Jeremiah 10:2-4 instructs

This is what the LORD says: “Do not learn the ways of the nations or be terrified by signs in the heavens, though the nations are terrified by them.

For the practices of the peoples are worthless; they cut a tree out of the forest, and a craftsman shapes it with his chisel.

They adorn it with silver and gold; they fasten it with hammer and nails so it will not totter.

Happy Holidays!

Just kidding

2011-12-14T18:26:00.000-05:00

It turns out that the Republican plan to privatize Medicare wasn't so serious after all. The Washington Post reports

House Budget Committee Chairman Paul Ryan, who has been castigated by Democrats and hailed by Republicans for his plan to privatize Medicare, will on Thursday unveil a new approach that would preserve the 46-year-old federal health program.

Sort of reminds me of when Johnny turned out the runway lights in Airplane.

Boundaries for sustainability

2011-12-14T13:35:00.000-05:00

Bloomberg has a fascinating slide show on nine so-called "planetary boundaries." These are biophysical thresholds, such as the amounts of greenhouse or ozone-depleting gases in the atmosphere or the acidity of the oceans, beyond which scientists believe we risk catastrophic environmental change.

A 2009 article by Rockström and colleagues from Nature explains the concept more and argues that the planet has already passed the safe thresholds for greenhouse gases, species extinction rates, and nitrogen loading.

The thresholds are speculative. Scientists can't say for sure where (or in some cases even whether) there are points at which environmental systems tip from one set of dynamic relationships to another. The authors of the Nature article admit to being overly cautious in setting boundaries a safe distance within the catastrophic thresholds (sort of the way that the empty warning light on your dashboard indicates that you at risk of running out of gas but still have some time to get some).

The concept of boundaries fits well with economists' standard methodological approaches of constrained optimization and suggests a formal, practical approach for accommodating sustainability into growth modeling.

Little dynamism in employment

2011-12-14T09:54:00.003-05:00

Earlier this week, the Bureau of Labor Statistics released its monthly Job Openings and Labor Turnover report. Consistent with the recent modest growth in employment, the report showed that hiring rates slightly exceeded separation rates and that the job opening and hiring rates were substantially better than they were in the depths of the recession.

Rates of job openings are close to where they were near the end of the last "employment recession," which suggests that employment might be ready to pick up.

However, rates of hiring and separations remain far, far below their pre-recession values. In the mid-2000s, there were generally 5.0 to 5.5 million hires per month and slightly fewer separations. Over the last year, hiring has come in at around 4.0 million per month (again, with separations slightly lower). There has been only a slight trend upward in hiring rates since the bottom of the recession.

Much of the difference in job dynamics appears attributable to a fall-off in voluntary separations. In the mid-2000s, about 3 million people quit their jobs in an average month; currently, fewer than 2 million are quitting their jobs.

The changes indicate that the job market is much less dynamic than it used to be. Fear plays a role; in a weak economy, people are less likely to quit jobs unless they have something already lined up. The housing collapse may also be contributing; people who are underwater in their mortgages may not be able to move to places where there are better opportunities. The fall-off in wealth from the housing collapse and a weak stock market may be leading older workers to put off retirement.

Gov. Romney shamed by "Bob the Veteran"

2011-12-13T08:10:00.005-05:00

Campaigning in New Hampshire, former Mass. Gov. Mitt Romney had an uncomfortable encounter with his own support of bigotry.

It started out as a seemingly safe situation. Mitt Romney, working a friendly room at a the Chez Vachon diner here, approached an older man wearing a Vietnam Veteran cap and sidled up next to him.

After some friendly banter about their ages, Bob Garon asked the former Massachusetts governor whether he supports repealing New Hampshire’s same sex marriage law.

...With that, it started to become clear that a routine campaign conversation could become hostile. Though Romney had no reason to know it, Garon – a 63-year-old from Epsom, N.H. -- was sitting at the table with his husband.

Visit msnbc.com for breaking news, world news, and news about the economy

Ben Smith reports further

Romney aides, meanwhile, reminded reporters that the former governor is running in a Republican (italics original) primary.

"We'll take that pistol-whipping," an aide said.

Someone might remind the former governor that although he is running in a Republican primary, he is seeking to be President of the entire United States.

You would think that someone who came from a faith tradition that suffered as much government-supported persecution as Mr. Romney's would be more understanding of this issue. So long as Mr. Romney is running in a Republican primary, you'd be wrong.

One issue at a time?

2011-12-12T09:33:00.003-05:00

In it's Pledge to America, the incoming Tea-Party Republicans pledged that they would

end the practice of packaging unpopular bills with “must-pass” legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time.

The extension of the payroll tax cut would seem to qualify as "major legislation," but the House Republican's bill definitely does not qualify as "one issue at a time." The bill's description "to provide incentives for the creation of jobs, and for other purposes" says it all.

The bill has six major sections (Titles), only the first purports to deal with job creation, and the second actually contains the extension of the payroll tax break. So what's in the bill?

Title I -- requires that the Obama administration act on the Keystone XL pipeline application, suspends several regulations from the Environmental Protection Agency, and gives depreciation tax breaks to businesses.
Title II -- extends the payroll tax break and emergency Unemployment Insurance (UI) payments through 2012 but also makes other changes to the UI program, applies the "doc fix" and other changes to Medicare, requires offsets for the costs of the "doc fix," and extends and modifies the Temporary Assistance for Needy Families (TANF or cash welfare) program.
Title III -- covers the Flood Insurance Program.
Title IV -- covers auctioning of the broadband spectrum and public safety communications.
Title V -- lists funding offsets, including increasing the fees that Fannie Mae and Freddie Mac charge borrowers, changing federal retirements, freezing the pay of federal workers, and and increasing Medicare premiums for high-income people.
Title IV -- contains "miscellaneous provisions.

That's a lot of issues at one time. That's also a broken pledge.

Charity begins someplace else

2011-12-12T08:25:00.003-05:00

Apparently, beggars have had it too easy in Johnston County, but the Johnston County commissioners have an app for that.

Panhandlers could soon have to undergo a criminal background check and pay $20 a month if they want to continually ask people for money in Johnston County.

County commissioners voted 6-1 last week to set limits on people who beg for money in Johnston. Wade Stewart cast the lone vote against a new ordinance. A second vote is set to take place next month.

Under the proposed rules, panhandlers would be required to get a permit every 30 days through the sheriff's office. The first month's permit would be free, but panhandlers would pay $20 for each subsequent permit.

Lest you think the dissenting vote represented some soft-hearted squishiness on the part of the commissioners, that vote came because a commissioner feared the licenses would create an entitlement to beg.

Conservatives have long maintained that charity is undermined by government assistance. However, as the Johnson County commissioners show, charity is actually undermined by the lack of charity.

Joe Guarino goin' Hollywood

2011-12-09T15:54:00.005-05:00

Some readers may be old enough to remember way back in the Fall of 2000, when many of Hollywood's dimmer luminaries were threatening to leave the country if George Bush were elected.

Others may remember Alexander threatening to move to Australia after his terrible, horrible, no good, very bad day.

Well, similarly childish Hollywood sentiments are now afflicting local conservative blogger Joe Gaurino.

Following the terrible, horrible, no good, very bad election day that conservative city council candidates had last month, Joe is telling folks to get out of Greensboro while the gettin' is good.

People are able to vote with their feet. And as far as I am concerned, they should be encouraged to do so-- to consider getting out.

Greensboro is a slowly sinking ship; and it might be best to find a life boat.

And earlier

...Greensboro residents concerned about the taxes they will be paying should justifiably look at alternatives-- especially in view of the lopsided tax/bond/spend majority the city's voters just elected. At some point, good people must decide whether they will allow themselves to continue to be exploited; or whether they will do what they need to do to protect their own property and income.

It's pleasant to imagine how much nicer Greensboro would be if Joe and his C4GC friends did up and leave. Heck, I'd offer to help them pack.

My prediction, however, is that when their pity party is done, Joe and his conservative cabal will show themselves to be like Alec Baldwin, Susan Sarandon, and the fictional Alexander in one additional way--they'll suck it up and stay.

Some heartfelt economic news...

2011-12-08T09:16:00.003-05:00

Yes, I'll fess up that after a couple-month hiatus, I did pay a "few" visits to McDonalds last month, but I didn't think I ate that much

Sales rose 6.5 percent at McDonald’s stores in the U.S. and also 6.5 percent in Europe. Analysts were expecting growth of 5 percent in the U.S. and 4.3 percent in Europe.

Thank goodness that Donut World doesn't have to report its sales figures.

Amnesty good for me but not for thee

2011-12-07T08:47:00.007-05:00

Want to make a Republican apoplectic and to receive a stern lecture on incentives? Suggest a compromise that somehow involves a path to citizenship or permanent residency for some of the 11 million or so unauthorized immigrants aliens in this country.

Someone mentioned Newt Gingrich's musings about a pathway to citizenship for some long-term immigrants to Republican Representation Brian Bilbray, causing him to spew

They don’t understand that talking about amnesty to reduce illegal immigration is about as logical as somebody saying, ‘Let’s drill a hole in the bottom of a boat to let the water out.’ You’re going to cause a whole new wave of illegal immigration.

Rep. Bilbray even criticized the mere discussion of these proposals.

It’s sending a signal to the world that a candidate for president, or worse, the president himself, has announced that if you break the law and come to this country illegally — if you risk your life or be one of those who die along the border and try to come to the country illegally, we will reward you if you come in here ... Everyone who is given a job and any elected official who is announcing to the world that Washington and the federal government is going to reward illegal immigration are part and parcel to the problem of sending a clear and defining message. Even Newt Gingrich would say that our problem is that we’ve sent mixed messages in the past and that’s enticed people to come here and be here illegally.

Once you get past the spittle and snarling, Rep. Bilbray and other Republicans seem to be making the point that amnesties, even partial ones, create some awful incentives. While the policy addresses some immediate concerns, it also creates future problems if the next set of people considering whether to enter and stay in the country without authorization come to expect periodic amnesties.

So if amnesties encourage such bad behavior, why are Republicans (regrettably abetted by some "centrist" Democrats) advocating a one-year, no-strings-attached, "olly olly oxen free," tax amnesty for multinational corporations who have hidden their revenues in other countries?

Specifically, corporations are allowed to defer taxes on profits that are held abroad. The tax amount, which would generally equal the different between the applicable U.S. tax rate and what the corporation pays in the country where the profits are initially parked, is only due when the company brings the money back into the country. Instead of this eventual amount, Republicans are proposing a special low-low rate of as little as 5.25 percent if corporations rebate the money now. Rep. Bilbray (the same don't-you-idiots-understand-incentives guy) has even submitted a bill that would temporarily reduce the tax rate to zero.

Republicans main argument about the tax amnesty is which hostage to take to pass one--the payroll tax break that is due to expire this year or the broader set of Bush-era tax cuts that are due to expire next year.

Absent from those arguments, however, is any discussion of the bad incentives that tax amnesties create. One reason why corporations delay repatriating money to the U.S. is the possibility of a lower tax rates, including special amnesty deals, in the future. There's precedent for this thinking because a similar "one time" amnesty was granted in 2004. And consistent with the incentives argument, multinational corporations greatly increased the amounts of profits that they stashed overseas following the 2004 amnesty. If a similar policy were enacted today, the professional staff of the Joint Committee on Taxation predict that the bad incentives would lead to a net cost of $79 billion over 10 years.

When human beings are concerned, these policies are nasty "amnesties." When corporations are concerned, they're "holidays." Go figure.

Diminishing returns along the border

2011-12-06T08:14:00.006-05:00

Arrests of people crossing the border with Mexico have fallen to historic lows. The Washington Post reported on Saturday

The Border Patrol apprehended 327,577 illegal crossers along the U.S.-Mexico border in fiscal year 2011, which ended Sept. 30, numbers not seen since Richard Nixon was president, and a precipitous drop from the peak in 2000, when 1.6 million unauthorized migrants were caught. More than 90 percent of the migrants apprehended on the southwest border are Mexican.

...“We have reached the point where the balance between Mexicans moving to the United States and those returning to Mexico is essentially zero,” said Jeffrey Passel, a senior demographer at the Pew Hispanic Center, whose conclusion was shared by many migration experts.

Yet the Obama administration continues to deploy 1,200 National Guard troops along the border, mostly for show.

President Obama’s decision last year to send 1,200 National Guard troops to the U.S.-Mexico border may have been smart politics, but a growing number of skeptics say the deployment is an expensive and inefficient mission that has made little difference in homeland security

The rules of engagement, rightly, limit the role of the National Guard to observation. The net effect, however, is that the troops increase the cost of securing the border by about $110 million per year but have little impact on security itself. The Post story continues

In an August report on the costs and benefits of an increased role for the Defense Department along the U.S.-Mexico border, the Government Accountability Office told Congress that it takes three people to do the job of one: two Guard soldiers to spot an illegal crosser and one federal agent to catch him.

Since 9/11, the United States has greatly strengthened its fence along the border. It has also doubled the number of Border Patrol agents, with predictable effects on border crossings and apprehensions.

At a time when the military is already strained and where the government is looking to save every penny that it can, an ineffective $110 million National Guard "troop surge" along the border seems especially wasteful and a bad return on investment. President Obama should end the deployment at the end of this year and allow the troops to return to their home states and bases.

Profiles in cravenness

2011-12-05T08:24:00.003-05:00

Juan Williams writes in The Hill about Mitt Romney and Newt Gingrich being for health insurance mandates before they were against them.

What do Newt Gingrich and Mitt Romney, the leading contenders for the Republican presidential nomination, have in common?

Long before President Obama, both supported an idea they now pretend to spurn — the idea of requiring people to buy health insurance.

As recently as 2009, Romney publicly supported, the “individual mandate” for buying health insurance. And as recently as last month one of Gingrich’s websites still endorsed the “mandate” for all Americans earning more than $50,000 annually.

...At the CNN debate this October in Las Vegas, Gingrich took a swipe at Romney over the former Massachusetts governor’s healthcare plan that requires citizens in the Bay State to buy health insurance. Romney shot back: “Newt, we got the idea of individual mandate from you.”

Gingrich responded: “You did not get that from me. You got that from the Heritage Foundation.”

They are both correct on this revealing point. The Heritage Foundation, the influential conservative think tank, first developed the idea of an individual mandate for healthcare in the late 1980s. That is how deeply this idea is tied to conservative thinkers.

Romney used the Heritage policy in developing his Massachusetts healthcare law. That reform contained the dreaded individual mandate.

And Gingrich supported the federal mandate as an alternative to Hillary Clinton’s healthcare reform package when he was Speaker in the 1990s.

There seem to be few former policy "stands" these two won't gainsay to appease the Tea Party crowd.

Solving thorny problems, like health care reform, requires the courage to lead and to stand up for potentially upsetting positions. The late Sen. Paul Tsongas' name for politicians like Gingrich and Romney seems apt--pander bears.

Some perspective on Food Stamp fraud

2011-12-04T11:23:00.004-05:00

Households that receive benefits from the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) usually fly under the radar, but recently they've received a lot of unflattering (and misleading) attention.

For example, an article in the Washington Examiner was breathlessly headlined "Maryland, Virginia at top of nation for food stamp fraud."

Maryland ranks second and Virginia fifth in the amount of taxpayer dollars wasted on food stamp fraud.

For every $100 in benefits, Maryland gave out $6.11 to people who weren't eligible -- amounting to about $60 million, according to fiscal 2010 data from the U.S. Department of Agriculture. Virginia gave out $5.04 to ineligible recipients, or about $70 million, and the District ranked 21st, doling out $3.76 in overpayments. The national average was $3.05.

But local investigators are examining a shrinking percentage of recipients for fraud -- and very few offenders are prosecuted -- even as government spending on the welfare program, which helps needy families pay for groceries, soars to record highs.

Analysts say fraud is increasingly going undetected, as most states have fewer resources to devote to the oversight of food stamps for more than 45 million Americans.

Earlier this week, Republican presidential candidate Newt Gringrich reportedly said

...more Americans today get food stamps than before. And we now give it away as cash -- you don't get food stamps. You get a credit card, and the credit card can be used for anything. We have people who take their food stamp money and use it to go to Hawaii. They give food stamps now to millionaires because, after all, don't you want to be compassionate?

The stories by the Washington Examiner and Mr. Gingrich suggest that there is rampant fraud in the SNAP program. It might surprise both of them to learn that administrative errors and fraud in the SNAP have decreased substantially over time and now appear to be at record lows. In 2010 the GAO reported

The national payment error rate reported for SNAP, which combines states’ overpayments and underpayments to program participants, has declined by 56 percent from 1999 to 2009, from 9.86 percent to a record low of 4.36 percent.

The administrative error rate for FY 2010 in the SNAP was lower still at 3.81 percent. The error rate is a problem, but it is much lower than other organizations. For example, improper payment errors in the Medicare fee-for-service program in 2011 were 8.6 percent, and errors in the Medicare Advantage program were 11 percent. And even these error rates are far lower than rates for major private health insurers, which the American Medical Association estimated were 19.3 percent in 2011.

In contrast to the implication by the Washington Examiner article, the fraud rate is different from and much likely lower than the error rate. Administrative errors occur for many reasons, including case-worker errors. In FY 2009, 843,000 suspected SNAP fraud cases were investigated by state authorities. Only about a quarter of these were determined to actually involve fraud, and the amount of fraud identified came to just over $100 million (compared to total overpayments of $1.8 billion).

Trafficking in SNAP benefits also has decreased; the 2010 GAO report indicated that

FNS estimates indicate that the national rate of food stamp trafficking declined from about 3.8 cents per dollar of benefits redeemed in 1993 to about 1.0 cent per dollar during the years 2002 to 2005.

Over this same period, the SNAP became much more efficient. In FY 2003, $5.0 billion, or 19 cents out of every dollar spent on SNAP, went to administrative overhead. By FY 2009 (the last year for which full figures are available), the overhead rate had fallen to just under 12 cents per dollar. The available evidence* indicates that the overhead expense rate is now closer to 10 cents. Again, some perspective is worthwhile. Private health insurers have complained that overhead caps of 15 to 20 percent (Medical Loss Ratio minimums of 80-85 percent) under the Affordable Care Act are too onerous.

The improvements in program performance have come at a time when the SNAP has expanded significantly. In the year before the expansions under the Republican-signed 2002 farm bill, the SNAP (then Food Stamp Program) served 19.1 million people. In FY 2010, it served 40.3 million.

It's questionable whether additional administrative expenses in the SNAP would be worthwhile. In FY 2009, the states and federal government spent $6.6 billion administering the SNAP, while the total estimated overpayments were $1.8 billion and the total estimated underpayments were about $0.4 billion. At this point, each additional dollar of administrative expenses seems to reduce the value of administrative errors by less than a dollar.

A program that serves 40 million people is going to turn up some problems, including some egregious ones. Indeed, errors and abuses in the SNAP cost taxpayers and potential recipients billions. Nevertheless, the available evidence indicates that the SNAP run with less proportional administrative cost, with fewer proportional errors, and lower rates of fraud than other private and public programs.

While we can't say for certain how many people are taking unfair advantage of the SNAP, we can identify two: the Washington Examiner and Newt Gingrich.

* States and the federal government share the expenses of administering the SNAP approximately 50-50. For FY 2010, we have the federal expenses but not the state expenses. The federal overhead rate was approximately 5 cents per dollar.

Santa came early with November's job report

2011-12-02T08:53:00.003-05:00

For the first time in a while, the monthly job report was solidly positive. The estimated, seasonally-adjusted unemployment rate from the household survey fell to 8.6 percent, the lowest that figure has been since March of 2009. The proportion of the civilian, non-institutionalized population that was working rose to 58.5 percent, the best that figure has been in 8 months.

The improvement in the unemployment rate is a positive development. However, while many more people reported working last month, a portion of the drop in unemployment was due to an unexpected drop in the number of people in the labor force. The proportion of people in the labor force (people working or actively looking for work) fell to 64 percent, which keeps the number near 30-year lows).

The preliminary figures from the establishment survey indicate that 120,000 non-farm jobs were added on a seasonally-adjusted basis in November, while revisions to the figures for September and October added another 72,000 jobs. Altogether, the number of jobs in the current report was nearly 200,000 higher than the number reported in the previous report.

More working Americans is good news heading into the holiday season. Hopefully, many more people will be working before long.

Job-killing regulations

2011-11-23T14:21:00.003-05:00

Want a great example of a job-killing regulation? Take a look at the new immigration law that Alabama Republicans enacted. Last week, the law's provision requiring police to detain undocumented foreigners netted an executive from Mercedes-Benz. CNN reports

Fierce critics of Alabama's controversial new immigration law -- and one of its staunchest supporters -- are pointing to the arrest of a German Mercedes-Benz executive last week to make their case.

Police in Tuscaloosa, Alabama, pulled the man over because of a problem with the tag on the rental car he was driving, and then detained him when he didn't have proper identification on hand, according to Alabama's homeland security director.

What could be more business friendly?

You better believe that foreign and multinational businesses are going to think twice before setting up shop in Alabama and other states with similar provisions.

North Carolina's job recession continues

2011-11-22T14:17:00.004-05:00

Yet another month has passed, and we're left to ask "where are the jobs that Republicans promised with their tax-cutting austerity budget?"

This morning, the Department of Labor released its monthly report on state employment and unemployment. Compared to the rest of the country, North Carolina continues to under-perform.

The state's seasonally-adjusted unemployment rate edged down from 10.5 percent in September to 10.4 percent in October. In June, the month before the Republican budget went into effect, the unemployment rate was 9.9 percent. Also, a substantial part of October's decline was due to 3,500 North Carolinians leaving the labor market and thus no longer being counted as part of the unemployed.

On a seasonally-adjusted basis, the state added a measly 5,500 jobs in October. On net, private sector jobs were unchanged--the slight gain in jobs came from the partial recovery of state and local government jobs. The number of jobs continues to be substantially lower than this spring and to largely reflect net changes in public employment.

After overriding the Governor's veto of their budget in June, the Republicans bragged

In November 2010, the people of North Carolina used the ballot box to send a message to North Carolina lawmakers: State government must reduce costs and regulation on the people, so that they can create jobs and prosperity. Years of overspending by Democrats had given North Carolina the highest tax rates in the Southeast and a budget shortfall of at least $3 billion. High taxes were killing jobs.

...Our budget contains the largest tax rate cut in the history of North Carolina. It makes our state more competitive with our neighbors again. It puts almost $1.5 billion back in to the hands of hard working North Carolinians.

Funny thing about those job-killing high taxes, they were associated with thousands more jobs than the low-tax, competitive Nirvana that Republicans created.

Businesses and wealthy North Carolina households now enjoy lower taxes than they did last year, and they are using that bonanza to create...well, not much of anything at all.

$12.4 million grant sits unused while state Republicans dither

2011-11-11T08:46:00.006-05:00

North Carolina recently received a $12.4 million federal grant to help set up its health insurance exchange, but the grant is going unused because Republicans refuse to meet to provide the go ahead.

Millions in federal money has gone unspent for weeks because legislators have put off talking to the state Department of Insurance about how a national health insurance grant will be used.

Lawmakers dropped discussion of the $12.4 million grant from the Oct. 27 agenda of a high-powered group called the Joint Legislative Committee on Governmental Operations. Agencies must consult with the committee, which House Speaker Thom Tillis and Senate leader Phil Berger run, before spending grant money in certain circumstances.

The money is for the state to do prep work for a health benefit exchange that the federal health insurance law would require of all states by 2014. With no grant money to support it, most of the work at the state Department of Insurance and the N.C. Institute of Medicine on the exchange has stopped.

Health insurance exchanges were a feature of both the Republican and Democratic proposals on health care reform and rightly so because the exchanges will increase the availability, transparency, and efficiency of health insurance. There is no good reason not to begin planning for how to set up the state's exchange.

The approach is also counter-productive to Republican goals because it increases the chances that North Carolina will have to operate under a possible federal exchange program rather than a North-Carolina-run and tailored program.

In addition, the delay hurts North Carolina economically. The $12.4 million would provide an economic boost to a state that sorely needs it. Over the last year, North Carolina has effectively had no job growth, and last month, the state had the dubious distinction of leading the nation in job losses. Given that sorry record, you would think that the Republicans would feel some urgency to get the money into the economy.

Instead, much like they did with the federal unemployment money, Republicans are engaged in a senseless, self-defeating, job-killing delay.

Insider trading by Congress?

2011-11-10T11:10:00.005-05:00

An article earlier this year by a Georgia State University researcher and colleagues in the electronic journal, Business and Politics, uncovered evidence that suggests that Congressional representatives may have been financially benefiting from insider information.

We measure abnormal returns for more than 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Consistent with the study of Senatorial trading activity, we find stocks purchased by Representatives also earn significant positive abnormal returns (albeit considerably smaller returns). A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually).

As the blurb indicates, the study produced results that were consistent with an earlier analysis of Senators' stock returns, and some of you may recall an earlier insider financial transaction by a panicked Sen. Burr.

The evidence from the latest study is suggestive but far from convincing. First, the evidence is indirect; the authors don't examine insider trading directly but instead try to infer it from stock returns.

Second, the study includes evidence that counters the insider trading argument. For example, the authors found that stock returns were high for junior members of Congress but not for senior members. To the extent that insider knowledge and influence increase with seniority, we might expect the opposite relationship to hold.

Diminishes us all

2011-11-03T10:31:00.003-04:00

The New York Times reports on the disreputable and fraudulent actions of a Dutch researcher.

A well-known psychologist in the Netherlands whose work has been published widely in professional journals falsified data and made up entire experiments, an investigating committee has found. Experts say the case exposes deep flaws in the way science is done in a field, psychology, that has only recently earned a fragile respectability.

The identified offenses may have occurred in another discipline and another country, but they damage the scientific enterprise everywhere.

In principle, all of the studies that scientists conduct and publish should be replicable. In practice though, replication rarely occurs, is often impossible, and seldom gets attention or credit if it is conducted. Because of this, the modest amounts of credibility and respect that scientific conclusions muster owe greatly to scientists' reputations for reporting research accurately. Put another way, much (possibly too much) of science relies on trust.

Sadly, researchers like this particular Dutch psychologist treat science as a confidence game. Equally sadly, the psychologist has a lot of company in the scientific community.

We're number one! (in killing jobs)

2011-10-28T20:34:00.006-04:00

The austerity budget of North Carolina's Republican-led General Assembly continues to kill jobs. The Bureau of Labor Statistics reported today that on a seasonally-adjusted basis North Carolina's unemployment rate rose in September to 10.5 percent and its nonfarm payroll employment fell by 22,200 jobs. North Carolina had the dubious distinction of leading the nation in job losses.

In March of this year, unemployment was at 9.7 percent, and there were 3.890 million jobs in the state. Through September, three months into the Republicans' fiscal-year 2012 budget, unemployment has now climbed to 10.5 percent, while nonfarm payroll employment has dropped to 3.863 million jobs.

North Carolina continues to underperform relative to the rest of the county. In September, the national unemployment rate was 9.1 percent, and the country added just over 100,000 jobs. Since March, the country has added nearly 600,000 jobs. National job growth hasn't been spectacular, but there has been steady job growth for more than a year. In contrast, North Carolina's job situation has deteriorated.

One way a local crisis pregnancy center misrepresents medical risks

2011-10-26T16:50:00.005-04:00

The NARAL Pro-Choice North Carolina Foundation has recently conducted an audit study of crisis pregnancy centers in North Carolina. The study found that that the centers tend to give inaccurate and incomplete information, that few had medically-trained staff (though that didn't stop staff from dressing up like medical professionals), and that some encouraged women who might still be considering terminating their pregnancies to wait to see if a natural miscarriage occurred. The report has sparked a lively conversation at Ed Cone's blog.

To get some perspective on how these centers are presenting themselves, I thought that it would be worthwhile to look at the web-site that is run by the local Greensboro Pregnancy Care Center (GPCC). The web-site encourages women to "consider their choices" and says specifically to women considering abortion that "it is good you are taking the time to do some research before you make your final decision because there are risks, just as there are with any other medical procedure, and you are wise to weigh them."

Below is the information that the GPCC offers about the abortion pill, Mifepristone, and about drug-induced abortions.

This drug is only approved for women up to the 49th day after the start of their last menstrual period. Some doctors may prescribe this drug up to 63 days after the last menstrual period, but this is not an FDA approved method of use. The procedure usually requires three office visits. On the first visit, the woman is given pills to cause the death of the embryo. Two days later, if the abortion has not occurred, she is given a second drug which causes cramps to expel the embryo. The last visit is to determine if the procedure has been completed. The abortion pill will not work in the case of an ectopic pregnancy.

An ectopic pregnancy is a potentially life-threatening condition in which the embryo lodges outside of the uterus, usually in the fallopian tube. If not diagnosed early, the tube may burst, causing internal bleeding and in some cases, the death of the woman.

Women are being instructed to use the abortion pills in a manner not approved by the FDA. This includes using it beyond 49 days of pregnancy and using it vaginally. A number of women who have used the abortion pill have died due to sepsis (full body infection).

The information, while scary and intimidating, is factually accurate and is similar in a lot of respects to the more detailed cautions on the Food and Drug Administration's (FDA's) web-site.

The GPCC, however, omits one crucial bit of context--the risks are exceedingly rare. How rare? According to the FDA, the risk of any complications whatsoever is about 0.15% (about 150 in 100,000), and the risk of dying is about 0.001% (slightly less than 1 in 100,000). Put another way, about one woman per year dies shortly after taking Mifepristone.

Numbers like this can be hard to interpret, so let's compare them to some other risks.

For instance, what are the risks associated with popping an aspirin or another NSAID pain reliever? A 1998 study in the American Journal of Medicine reported

Conservative calculations estimate that approximately 107,000 patients are hospitalized annually for nonsteroidal anti-inflammatory drug (NSAID)-related gastrointestinal (GI) complications and at least 16,500 NSAID-related deaths occur each year among arthritis patients alone.

Without information on the number of people who take aspirin, it's hard to re-express this number as a rate. But even if we use the entire U.S. population as a base, the risk of death from taking aspirin is at least 5 times higher than taking Mifepristone.

A more relevant comparison is the risk of death from child birth, that is, maternal mortality. The independent and nonprofit health care accreditation and certification organization, the Joint Commission, reports

According to the National Center for Health Statistics of the Centers for Disease Control and Prevention, in 2006, the national maternal mortality rate was 13.3 deaths per 100,000 live births.

...“Maternal deaths are the tip of the iceberg for they are a signal that there are likely bigger problems beneath – some of which are preventable,” says Dr. Callaghan. “It is important to consider the women who get very, very sick and do not die, because for every woman who dies, there are 50 who are very ill, suffering significant complications of pregnancy, labor and delivery.” For 1991 through 2003, the severe morbidity rate in the U.S. for severe complications and conditions associated with pregnancy was 50 times more common than maternal death. Understanding these experiences could affect how care is delivered as well as health policy.

Women who continue their pregnancies to term are 13 times more likely to die than women who take Mifepristone.

What does the GPCC say about pregnancy?

During pregnancy, your body goes through many changes. Some common symptoms of early pregnancy include a missed period, nausea, breast tenderness, frequent urination, tiredness and mood swings.

Other than listing some questions women might have, the GPCC mentions no other medical complications or risks with pregnancy. Medically, it all sounds like a refreshing walk through the park.

Readers can decide with the GPCC's highly selective reporting, which lists but does not quantify the mortality risks of Mifepristone but which omits the risks of pregnancy, is misleading.

If the GPCC really wants women to "weigh" the risk, why does it only put information on one side of the scale?

Will BofA lose money over its $5 debit card fee?

2011-10-19T08:17:00.005-04:00

In introductory economics, we teach that when the price of a product goes up, the demand for that specific product goes down. When Bank of America (BofA) announced its new $5 debit card fee for certain types of accounts and effectively raised the price on those accounts, those well-known economic laws kicked in, though possibly to BofA's advantage.

This morning's Charlotte Observer reports on the predictable and intuitive result--customers are leaving BofA for credit unions.

Charlotte-area credit unions have seen an increase in phone calls and new members in the last two weeks as people upset about new fees at big banks look for new places to park their money.

Several credit unions have launched advertising campaigns promoting their fee-free offerings, hoping to capitalize on the wave of consumer discontent since Bank of America announced its $5 monthly debit card fee late last month.

"It's been wonderful," said Nicol Morris, chief operating officer of the Charlotte Metro Federal Credit Union, which has about 33,000 members.

She said the credit union saw a 350 percent increase in online account creation, along with a 90 percent increase in calls.

"They are extremely fed up with the continued talk about fees, whether it's in regard to checking or the debit card fee," she said.

The loss of customers is undoubtedly bad news for BofA and surely must have been anticipated by its management.

Nevertheless, the new fee might still improve BofA's bottom line and leave BofA laughing all the way to, well, um, itself.

Some of the other things that we teach in introductory economics is that the sizes of the responses matter and that you have to consider all of the responses.

To the first point, the loss of customers might not be that large--that is, the demand response might be inelastic. Some simple, completely made-up numbers can help to illustrate. Suppose that the new fee adds 20 percent to BofA's revenues from the average basic checking account but that the new fee also causes 10 percent of the accounts to close. In this (made-up) example, BofA's total revenues on basic accounts go up by 8 percent (it gets 20 percent more revenue on the 90 percent of accounts that stay with the bank but loses 10 percent of its initial revenue from the accounts that close).

With respect to the sum of responses, BofA appears to be steering its existing basic-service customers toward other more-profitable services. From another article in the Charlotte Observer

Bank of America CEO Brian Moynihan said Tuesday that a recently announced $5 monthly debit-card fee is a way to encourage people to bring more of their "banking relationships" to the Charlotte-based bank.

The comments were among Moynihan's first responses to the debit-card fee, which has drawn a significant outcry from consumers and politicians since it was announced late last month.

"When we look at the profile of customers who have their entire banking relationship with us and those that don't, a lot of people can qualify, will qualify and do qualify not to pay the fees...," Moynihan said on a conference call with analysts to discuss the bank's quarterly earnings report.

"The issue is when people split their relationship and use our convenience and our access and our 18,000 ATMs ... and our online banking products and all that and yet have their relationship elsewhere," he said.

"That is tough for us to afford to provide and... be competitive. And so the fees are to get people to bring more of their relationships, and we're comfortable that we'll end up in a good dynamic there."

Debit-card users will not have to pay a fee if they have at least $5,000 in a linked savings account, a mortgage or a substantial investment account with Bank of America.

The new fee will cause some people to substitute away from basic services toward other BofA services. Also, BofA's creepy "relationship" language is telling.

The "relationships" themselves not only represent additional streams of revenues but also represent ways of reducing future demand responses. It turns out that breaking up is hard to do, especially when those "relationships" are with your bank.

Each "relationship" that BofA establishes with its customers, is one additional "relationship" that would have to be terminated in order to leave for another bank or credit union. If a customer has set up automatic deposits and automatic bill-paying, he or she would need to go through the hassle of changing each of these "relationships" before leaving for good. Instead of one change in service, there would now be multiple changes. People aren't formally locked into an account. However, it becomes much harder to leave, especially given people's predisposition toward behavioral inertia.

In the end, the sizes of these responses--the loss of customers versus the gain of per-customer revenues and the tie-in effects--will determine whether BofA comes out ahead. At this point, it would be premature to count BofA out, and you better believe that other banks (and geeky economists) are watching carefully.

Farmer Stanley

2011-10-17T07:38:00.005-04:00

If you you thought that Wall Street's pre-crash gambling binge couldn't get any kookier, you should read Bloomberg's story on Morgan Stanley's investments in Ukrainian farm land.

Iowa native Justin Bruch marveled at the opportunity when Morgan Stanley (MS) called in late 2007 to recruit him for an unusual assignment.

The New York bank, flush with $7.5 billion in fiscal 2006 profit -- the biggest in its history -- was going to be farming 11 parcels on the steppes of Ukraine. The commodities team wanted Bruch, a redhead with meaty hands who’d been farming all his life, to manage one of them.

...Morgan Stanley gave up on farming in Ukraine in July 2009, abandoning the initiative in the middle of a harvest. It bought out its local partner, Aleksandr Mamontenko, then sold Enselco to an investment firm based in Jersey in the Channel Islands, at what people familiar with the situation say was a loss. All told, Morgan Stanley put about $30 million into Enselco through loans, according to Igor Bobrov, who was hired in 2008 to be Enselco’s chief financial officer and later became its CEO. Hugh Fraser, a London-based Morgan Stanley spokesman, says bank officials declined to comment for this story.

Morgan Stanley’s failed gamble in Ukraine shows how Wall Street firms, in the last gasp of a debt-fueled bull market, strayed further from their traditional business of advising companies and underwriting stock sales to embrace diverse projects with unfamiliar risks.

The story is a great example of how Wall Street, enabled by its own creative debt instruments, pursued ever more speculative returns towards the end of the financial bubble. While conservatives continue to blame the Community Reinvestment Act, Fannie Mae and Freddie Mac for these types of shenanigans, Morgan Stanley's foray into Ukrainian farming shows that none of these were necessary. An under-regulated and over-leveraged Wall Street was quite capable of causing a financial disaster on its own, thank you.

Thom Tillis, class warrior

2011-10-13T19:01:00.005-04:00

North Carolina's Republican House Speaker Thom Tillis' recently had this to say to a Madison County audience about poor families on public assistance.

By gosh, we come back in 2013 ... I don't know if we'll go as far as Florida, but if you're receiving government assistance and every once in a while we want to do random drug tests, done on a fair basis, I think we should do it.

When you go in and you see a woman in a wheel chair, she's from here, she's from Asheville who's on the brink of losing her benefits and you know that Health and Human Services are sending checks to a woman who has chosen to have three or four kids out of wedlock, then at some point you need to say "first kid, we'll give you a pass; second, third, fourth kid, you're on your own."

And start, say what we have to do is find a way to divide and conquer the people who are on assistance. We have to show respect for that woman who has cerebral palsy and had no choice in her condition, that needs help, and we should help. And we need to get those folks to look down at these people who choose to get into a condition that makes them dependent on the government, and say, at some point, you’re on your own.

Rep. Tillis now claims that he made a "poor choice of words," but the entire statement was of a piece. Moreover, the statements that we need to drug test, "divide and conquer," and "look down at" poor people" were just some of the appalling comments that Rep. Tillis offered.

In the same talk, Rep. Tillis made these observations and policy prescriptions for the unemployed and work-disabled.

Folks, I don't know if any of you are out of work or have ever been out of work. Nobody spends 50 hours a week looking for a job. Now they may spend 50 hours a week thinking about looking for a job, and then they may go and apply, and then they may go and do an interview. My guess is that every single person who is out of work over a seven-day period has 10-15 hours they can give back to the community. And if they're an out-of-work teacher, that's a mentor in a school. If they're out-of-work healthcare provider, it is volunteering and having their time recorded in a health care clinic where they're certified and they can provide services. And if you're going to get government assistance, we know you have that time, and we think you ought to do it.

...I feel very strongly that, there, that, the, that people need to have that responsibility and that sense of obligation for if you're getting... We give people 99 weeks of unemployment benefits in this state, 99 weeks. And quite honestly if you're on workers comp, you may not be able to do the job that was physically demanding but you may be able to sit somewhere and be a mentor to somebody or something else. It's just giving people some sense of being more productive. That's how, that's how we become more competitive and more productive as a country.

Those lazy teachers and public health care providers that Rep. Tillis and his colleagues just fired, they're not really looking for work ("nobody spends 50 hours looking for a job"), and they need to pay us back for all the free time that they've been given. That lady from Asheville in the wheelchair, well, she can just "sit somewhere and be a mentor." "Every single person who is out of work has 10-15 hours (a week) they can give back to the community" and effectively pay back the rest of us who are lucky enough to still have jobs.

In Rep. Tillis' eyes, many of the poor--single mothers, the unemployed, the injured--are f***ing moochers who not only deserve every bit of misfortune that have received but also owe the rest of us for the meager crumbs that we, through the government, have thrown their way.

And Rep. Tillis has promised that when he and his reactionaries "come back in 2013," they'll be after those last few crumbs.

Texas consumers and taxpayers suffer after malpractice "reform"

2011-10-12T19:25:00.007-04:00

Conservatives tout caps on malpractice awards as a good medicine for the health care system and for bringing down health costs. However, a new report by the consumer organization, Public Citizen, shows that many health care outcomes in Texas got worse after 2003 when that state capped non-economic damages in malpractice cases.

From the report

Medicare spending in Texas has risen far faster than the national average. Per-enrollee spending for Medicare’s two main programs ranked second-highest in Texas among the 50 states in 2009. In 2003, Texas ranked seventh. In light of the steep reduction in litigation that has occurred in Texas since 2003, these figures contradict the theory that medical malpractice litigation is driving health care costs.
Medicare spending specifically for outpatient services in Texas has risen even more steeply compared to national averages.
Premiums for private health insurance in Texas have risen faster than the national average.
The percentage of Texans who lack health insurance has risen, solidifying the state’s dubious distinction of having the highest uninsured rate in the country.

The report gives evidence that doctors and insurance companies benefited, but those benefits didn't get passed on to consumers or to taxpayers generally.

Greensboro's latest goodwill ambassador

2011-10-10T09:26:00.003-04:00

Greensboro residents are spreading their good cheer far and wide. The city's latest goodwill ambassador received the following praise from the Hickory Daily Record.

Blind rage caused a Greensboro man to put three lives at risk while driving down a Hickory street.

Raymond Morris Patterson, 32, was arrested after he admitted to crashing his girlfriend’s car – on purpose – while she was driving. His 7-year-old son was in the back seat at the time. He was strapped into a child safety seat.

Way to pay it forward Greensboro!

A very solid jobs report

2011-10-07T08:36:00.003-04:00

The headlines from today's monthly national jobs report are likely to focus on the unemployment rate stagnating at a still-too-high 9.1 percent, but a closer read of the report shows some signs for optimism.

The unemployment rate is defined as the ratio of (a) people who are not working but looking for work (the government's definition of unemployed) to (b) the sum of people who are working and people who are unemployed (the government's definition of being in the "labor force"). The rate changes as more people become employed. Over the last two months, the number of people who report being employed has increased by 364,500 a month. But the rate also changes as people decide to look for work. Over the last two months, the number of people in the labor force has grown by just under 400,000 people per month, which is twice as fast as population growth.

As a result of these changes, the percentage of the adult population that is now in the labor force has edged up over the last two months to 64.2 percent, and the percent of the adult population that is employed has edged up to 58.3 percent. However, when the numbers of adults who are employed and adults who are actively looking for work both grow, the unemployment rate can stagnate.

The modest growth in the percentages of the adults working and looking for work is a hopeful sign, while the fact that these percentages remain lower than a year ago is a discouraging one.

The other optimistic components of the monthly jobs report are the growth of just over 100,000 establishment-reported payrolls in September and upward revisions of job growth in July and August. Last month's job report estimated that jobs grew by 85,000 in July and were unchanged in August; this month's report estimates that July's increase was 127,000 and August's was 57,000. The growth in the number of jobs would have been even larger had it not been for the elimination of 65,000 public sector jobs over the last three months. The government reports that more than half a million local government jobs have been eliminated since September 2008, a significant drag on overall employment and on economic growth.

Overall, the job growth numbers, while far from outstanding, provide some hope that the country may dodge a double-dip recession. The country remains in a very deep hole, but for this month, at least, it doesn't seem to be digging any deeper.

Corporate entitlement

2011-10-06T14:49:00.005-04:00

Entitlement seems to start at the top.

Bank of America's CEO defended his bank's new $5 fee on debit cards on Wednesday, saying that customers and shareholders understand the bank has a "right to make a profit."

...Moynihan (BofA's CEO) said that the bank will talk to its customers, teammates and shareholders and "they'll understand what we're doing -- understand we have a right to make a profit."

I'm sure that BofA's CEO and some of its shareholders sincerely believe that their company has this right, but they should not expect any such understanding from their customers or "teammates" (especially the 30,000 "teammates" who are about to be kicked to the curb).

BofA has a limited right to pursue success and to pursue profits; it can't, for instance, pursue profits through restraints of trade or collusion. But even these rights are different from any rights "to make a profit."

BofA's entitlement attitude in this $5 debit card fee debacle has been clear from the beginning. The new regulations that cap debit card interchange fees leave plenty of room for reasonable profits from BofA and other large banks, while protecting merchants from the excessive fees that these banks had been able to charge because of their size and market power. Indeed, banks in other countries have remained profitable despite facing much lower caps on interchange fees.

These reasonable profits weren't enough, and BofA is now trying to reach into its poorer customers' pockets (the richer customers are, of course, "entitled" to free debit-card use) for an extra $5 a month.

BofA has every right to ask this sum from its customers. It also has a right to bad-mouth the government and to deflect attention.

Customers, however, have the right to change their behavior to avoid the fee. Given BofA's behavior, the safest route would seem to choose a less-entitled financial institution. Just avoiding debit-card purchases with your BofA card (paying cash) is another.

Changes in customer behavior might not be enough to cure BofA of its entitlement mentality (the entitlement force is strong with this one). Changes in customer behavior would though send an appropriate signal.

Yes, but how about the international ranking of education researchers

2011-10-05T08:31:00.003-04:00

Civitas Review touts a recent study that allegedly "exposes the myth of suburban schools." But it seems that the study actually exposes the myth of competent George W. Bush Presidential Center education researchers.

The study in question, the Global Report Card sponsored by the George W. Bush Presidential Center, compares the test score distributions of individual schools and school districts to international distributions. However, because states don't all use the same tests, the study uses a normalizing procedure. The study's web-site describes its procedure

The calculations begin by evaluating the distributions of student achievement at the state, national, and international level. To allow for direct comparisons across state and national borders, and thus testing instruments, we map all testing data to the standard normal curve using the appropriate student level mean and standard deviation. We then calculate at the lowest level of aggregation by estimating average district quality within each state. Each state's average quality is evaluated then using national testing data. And finally, the average national quality is determined using international testing data. Essentially, this re-centers our distribution of district quality based upon the relative performance of the individual state when compared to the nation as a whole as well as the relative performance of the nation when compared to our economic competitors.

For example, the average student in Scarsdale School District in Westchester County, New York scored nearly one standard deviation above the mean for New York on the state's math exam. The average student in New York scored six hundredths of a standard deviation above the national average of the NAEP exam given in the same year, and the average student in the United States scored about as far in the negative direction (-.055) from the international average on PISA. Our final index score for Scarsdale in 2007 is equal to the sum of the district, state, and national estimates (1+.06+ -.055 = 1.055). Since the final index score is expired in standard deviation units, it can easily be converted to a percentile for easy interpretation. In our example, Scarsdale would rank at the seventy seventh percentile internationally in math.

This may be an example of the "new math," but it looks like the index number should be 1.005, not 1.055.

There are other problems with the methodology. A big one is that it normalizes standard deviations in the distribution of test scores across countries and states. Consider a hypothetical state that was successful in improving test scores and in "closing the achievement gap," that is, the state improved test scores among all students but improved them more for students in the bottom of the test score distribution than for students in the top. The standard deviation (measure of dispersion) for its test scores would fall. The Global Report Card, however, uses standard deviations as its unit of measure. The effect would be that school districts within this state would be evaluated on a different standard than school districts in other states.

Another problem is that the methodology does not account for the characteristics of students, such as numbers of students who enter with limited native-language proficiency.

So, beyond the obvious goof on the web-site, there's a lot about this report (and Civitas reporting) that doesn't add up.

Funding a Republican near you

2011-10-03T08:54:00.003-04:00

In a development that would make Ronald Reagan proud, it turns out that some of the wealth that has bankrolled the Tea Party and other conservative causes comes from sales of petrochemical capital to Iran. Bloomberg reports

A Bloomberg Markets investigation has found that Koch Industries -- in addition to being involved in improper payments to win business in Africa, India and the Middle East -- has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism.

Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada.

From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn’t pay for from federal land by mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.

The Bloomberg article goes on to describe how Koch industries has stolen, lied, polluted, bribed and killed. One of Koch's employees called it, "the Koch method."

KochPAC has been a major contributor to Rick Perry, Michelle Bachmann, and other Republicans. Don't hold your breath, however, waiting for any of them to give any of that money back.

Proposed electric monopoly wants customers to pay the costs of firing workers

2011-09-21T07:22:00.003-04:00

There are stories that Chinese communists would execute prisoners with a gun shot to the back of the head and then charge the prisoners' families for the bullet.

Executives from the likely-to-be-merged Duke Energy and Progress Energy companies must have taken these stories to heart.

In a hearing yesterday by the North Carolina Utilities Commission, which is considering whether to approve the companies' merger, executives made this jaw-dropping admission.

The chief executives of Duke Energy and Progress Energy said Tuesday that their companies will have to raise electricity rates to cover the cost of severance payments that will be paid to employees who lose their jobs as a result of the utilities' merger.

Who pays for severance costs remains the single biggest unresolved issue related to the Duke-Progress merger, which was announced in January and is expected to close before the end of the year.

The merger, which would reduce the already meager amount of competition in power generation, is expected to cost 2,000 workers their jobs. Many of those jobs would be in North Carolina.

It's bad enough that this unnecessary merger will weaken a struggling economy. Now energy executives and the companies' shareholders want local customers to foot the bill for the companies' destruction of jobs.

Somewhere a Chinese communist is smiling.

Austerity killed the radio star

2011-09-01T23:04:00.002-04:00

The Washington Post reports

After more than a year of aggressive budget cutting by European governments, an economic slowdown on the continent is confronting policymakers from Madrid to Frankfurt with an uncomfortable question: Have they been addressing the wrong problem?

The campaign to reduce government deficits has come in response to a European debt crisis that could endanger the global banking system. And the budget cutting has been coupled with a reluctance by the the European Central Bank to stimulate economic growth like the Federal Reserve has in the United States; the ECB has instead raised interest rates twice this year to contain inflation.

Those steps have sucked hundreds of billions of dollars out of a European economy that may be edging towards recession.

American politicians sneer at everything "European," yet they swoon for this current European affectation like tween-age girls swooning for Justin Bieber.

Children's lives aren't priceless

2011-08-26T11:18:00.007-04:00

The Washington Post has a great story that illustrates the quandary that regulatory agencies face when they consider new safety measures and that illustrates the use of cost-benefit analysis.

For years, safety advocates have been pressuring the federal government to require seat belts in school buses. The rationale behind this request is as sensible as it is compassionate--seat belts would save lives and reduce injuries among bus passengers.

The National Highway Traffic Administration (NHTSA) has considered the request and rejected it, mostly on cost considerations.

NHTSA found that "that an average of 19 school-age children die in school bus-related traffic crashes each year: 5 are occupants of school buses and 14 are pedestrians near the loading/unloading zone of the school bus." (p. 20). Thus, school buses are already incredibly safe (several times safer than traveling in an automobile), though fatalities still occur.

NHTSA also agreed that seat belts would increase safety and reduce the number of fatalities among passengers. In particular, the agency "estimated that lap/shoulder seat belts would save about 2 lives per year and prevent about 1,900 crash injuries, of which 97 percent are of minor/moderate severity (mainly cuts and bruises), assuming every child wore them correctly on every trip."

So why not require seat belts?

Saving those 2 lives and preventing those 1,900 crash injuries would require enormous costs. NHTSA estimates that seat belts would add $5,500-$7,300 to the cost of each new school bus. Adding up the costs for all new school buses, NHTSA estimates that "the benefits would be achieved at a cost of between $23 and $36 million per equivalent life saved."

Worse, those very high costs could lead to some perverse effects. In particular, the costs would likely lead to school districts using fewer buses and spending less on student and driver training. NHTSA calculates that the likely changes in school district behavior might actually lead to a net loss of 10 to 19 additional lives. Thus, school buses themselves would be safer. However, they would available to fewer children and would be operated in a less safe manner, leading to a greater loss of lives.

NHTSA's analysis not only shows the costs associated with the regulation but how those costs will affect behavior. Regrettably, those high costs will continue to cost some children their lives.

Look who Republicans want to tax

2011-08-23T10:22:00.004-04:00

In recent weeks, Republican dogma against raising taxes has evolved. Republicans had previously been opposed to raising any taxes under any circumstances. Now, however, Republicans are complaining that 47 percent of American households pay no federal income taxes and are arguing that new taxes should be imposed on them. For instance, David Weigel of Slate writes

On Sunday, in an interview with the Wall Street Journal, Huntsman found himself in a virtual love-in with Rick Perry and Michele Bachmann over, of all things, taxes. The paper asked Huntsman if "the half of American households no longer paying income tax—mainly working poor families and seniors—should be brought onto the income tax rolls."

He agreed, crediting the GOP's current front-runner for vice president, Sen. Marco Rubio, with the insight that "we don't have enough people paying taxes in this country."

The Journal called this position the "new GOP orthodoxy," which it is. When he announced his presidential bid two weeks ago, Perry told a room of conservative activists and bloggers that "we're dismayed at the injustice that nearly half of all Americans don't even pay any income tax." He was following on Bachmann, who'd just told the South Carolina Christian Chamber of Commerce the very same thing.

"Part of the problem is today, only 53 percent pay any federal income tax at all; 47 percent pay nothing," said Bachmann. "We need to broaden the base so that everybody pays something, even if it's a dollar. Everyone should pay something, because we all benefit."

So who are these households that Republicans want to tax? The Tax Policy Center of the Urban Institute and Brookings Institution has recently conducted an analysis of "Why Some Tax Units Pay No Income Tax."

The Tax Policy Center found that of the households in the U.S. that pay no income taxes, about half do so because their incomes are so low that they fall below the standard exemption and deduction amounts. In 2010, the exemption and standard deduction for a single, non-elderly adult totaled $9,350; the exemptions and standard deduction for a non-elderly married couple filing a joint return totaled $18,700. The exemptions and standard deduction for elderly or blind filers or for households with children were somewhat higher. These income cut-offs are near or in some cases below the poverty threshold. For example, the poverty threshold for a single, non-elderly adult is $11,344; the threshold for a non-elderly married couple is $14,602.

Note that these exemptions and deductions can be claimed by nearly all taxpayers. Thus, most single, non-elderly taxpayers pay no federal income taxes on the first $9,350 of income, and most married, non-elderly taxpayers pay no federal income taxes on the first $18,700.

The other half of households that currently pay no income taxes do so because of special provisions and breaks in the tax code, which are sometimes referred to as "tax expenditures" or loopholes. One of the biggest tax breaks in the tax code is that a portion of Social Security benefits is excluded from taxable income. The Tax Policy Center calculates that special provisions for the elderly (the Social Security exclusion and the slightly larger standard deduction) account four out of nine households that owe no taxes because of tax expenditures.

There are also special provisions for households with children (e.g., the child tax credit) and the working poor (e.g., the Earned Income Tax Credit). These provisions account just under another third of the households that owe no taxes because of tax expenditures. Some means-tested cash transfers, such as Supplemental Security Income and Temporary Assistance for Needy Families, is not treated as taxable. These exclusions account for another six percent of households.

If we put these figures together, at least 90% of the households that are not paying federal income taxes are either have very low incomes or have somewhat higher incomes but are elderly or have children. Indeed, the Tax Policy Center calculates that 80% of the households that escape federal income taxation have incomes below $30,000.

Of the other households that escape federal income taxation, most do so because of policies that Republicans favor, including the mortgage interest deduction and the special treatment of capital gains and dividend income.

Taxes for some of these "no tax" households are scheduled to increase in coming years. In particular, the tax package that was approved last December extended some credits for working and poor families. Under the current law and under the Obama administration's budget proposals, the proportion of people paying some taxes would rise. So a tax increase is on the way.

Self-inflicted economic wounds in the Tar Heel State

2011-08-21T12:42:00.003-04:00

North Carolina's (former) workers are reaping the bitter fruit of the Republican legislature's slashing of government spending. Non-farm employment in North Carolina, which was starting to recover when the Republicans took control of the legislature, has now declined from 3,890,000 jobs in March to 3,868,100 jobs in July, a loss of 21,900 jobs.

In March, there were 435,200 unemployed workers in North Carolina, and the unemployment rate was 9.7 percent. In July, the number of unemployed workers was 455,000, and the unemployment rate was 10.1 percent.

The state has performed worse than the rest of the country. While the national job picture has been far from than stellar, the national economy has still managed to add 433,000 jobs since March. Over the same period, employment in North Carolina has fallen.

The state's net job losses were as unnecessary as they were painful because they all came from the elimination of jobs in the public sector. From March to July, North Carolina shed 25,000 state and local government jobs.

The Republicans' policies are inflicting lots of pain in the form of displaced government workers, reduced public services, and more crowded classrooms but are producing no discernible benefits for the general economy. Worse still, the cuts have largely come from the education sector, which will likely lead to North Carolina's children and young adults being less productive and earning lower wages in the future.

How about some change we can believe in

2011-08-08T19:36:00.005-04:00

On the first market day following S&P's downgrade of U.S. debt, the world looked to Washington for leadership and confidence. Instead, the world got a few minutes of dispiriting remarks from a President that is clearly in over his head.

On Friday, we learned that the United States received a downgrade by one of the credit rating agencies -- not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act. The markets, on the other hand, continue to believe our credit status is AAA. In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.” I, and most of the world’s investors, agree.

Investors didn't agree. The Dow Jones Industrial Average, which was already down about 400 points when the President went on the air, dropped another 200 points in the final two hours of trading.

Investors and the rest of the world were surely looking for concrete steps to stem the crisis. Instead, the President used the White House stage to chide Congress for its intransigence and to make a vague call for change. At the same time, the President revealed that he had nothing to offer beyond some empty words.

Given the crisis that we are facing, Congress should immediately call itself back into session. The President and Congress should then take the following steps to improve the economy and restore confidence:

Ratify the outstanding free trade agreements with South Korea, Panama, and Columbia that Republicans want and the extension of Trade Adjustment Assistance that Democrats want. The President and Congress appear to have an agreement for these four pieces of legislation to begin moving forward in September, but why not remove all uncertainty and pass the package now?
Negotiate an agreement for and pass the fiscal year 2012 federal budget. The budget should include a continuation of the 99-week unemployment benefits.
Complete and pass the two-year bipartisan transportation reauthorization that has been negotiated by Senators Barbara Boxer and James Inhofe.
Negotiate and pass the long-term reauthorizations of the FAA, No Child Left Behind, and a host of other bills stalled by partisan infighting.
Drop all single-senator holds on the President's nominees and hold votes on the nominees' confirmations.

None of these actions would be a magic bullet. However, action on each is needed, could make modest improvements to the country's economic functioning, and is achievable in short order. Despite their "small ball" nature, completion of each would be a vast improvement over lurching from one self-inflicted crisis to the next.

The debt-ceiling debacle has already cost us $1.7 billion

2011-08-01T17:32:00.001-04:00

CNN/Money reports

The debt ceiling debacle has just cost U.S. taxpayers more than $1.7 billion.

That's the amount of additional interest the government had to pay investors Monday to sell Treasury bills that finance its operations.

To be precise, the extra cost is $1,721,250,000 more in interest payments than the government would have needed to pay investors just two weeks ago, when they were willing to accept far lower rates before the debt ceiling became a crisis.

And here I thought that the Republicans were concerned about the deficit.

Sen. McConnell's Theater of the Absurd

2011-07-12T16:46:00.005-04:00

Senate Republican minority leader, Mitch McConnell, started the day criticizing President Obama's "smoke and mirrors" deficit reduction plans. Recall that Republicans have been holding a vote to raise the debt ceiling hostage to a larger deficit reduction plan.

A few hours later, Sen. McConnell came out with this doozy of a proposal.

Senate Republican Leader Mitch McConnell proposed a “last choice option” to avoid a default on U.S. debt obligations that effectively would grant President Barack Obama power to unilaterally raise the debt limit in installments.

McConnell’s plan would let the president raise the limit in three stages unless Congress disapproves by a two-thirds majority, while Obama would also be required to propose offsetting spending cuts. The spending reductions would be advisory, and the debt-ceiling increase would occur regardless of whether lawmakers enact the cuts, McConnell said.

In other words, the Republicans are willing to cede their precondition that meaningful action be taken about the deficit in return for three meaningless, "smoke and mirror" no votes against the debt limit that they would effectively be agreeing to raise.

Talk about the "Party of No." Republicans are willing to give up all responsibility for this issue and let $4 trillion in proposed deficit reduction slip through their fingers just so they vote no three times (after voting yes).

Sen. McConnell and other Republicans are hoping that the Tea Partiers won't notice that they've just been sold out. However, that "smoke and mirrors" with the Republicans' base seems to be easier than actually governing.

If the Tea Partiers have any rationality at all, they'll recognize that Sen. McConnell is not only selling them out but also insulting their intelligence.

Update (5:30 p.m., 7/12): It didn't take long for some in the Tea Party to see through this. Freedom Works tweets

Sen. McConnell thinks cutting spending is too hard. Help him find his spine! Call him at 202-224-2541

Get well soon ... or else

2011-06-16T08:36:00.004-04:00

Got a cold? If you live in North Carolina, you might just receive a "get well soon ... or else" card from the State Bureau of Investigation (SBI).

The North Carolina General Assembly is poised to pass HB 12, a bill that would require drug stores to

before completing a sale of a product containing a pseudoephedrine product, electronically submit the required information to the National Precursor Log Exchange (NPLEx) administered by the National Association of Drug Diversion Investigators (NADDI)... The seller shall not complete the sale if the system generates a stop alert.

The bill further requires that the information retailers provide to the NADDI on North Carolina residents be forwarded on a weekly basis to the SBI.

All that state cold sufferers need to do to make it into the NADDI and SBI databases and be treated as criminal suspects is purchase medicine with pseudoephedrine (e.g., Sudfed).

So much for the NC GOP wanting to reduce regulations for businesses and get "big government" off our backs. Democrats can share the blame as well.

Senate votes to continue throwing $6 billion a year down the ethanol rabbit hole

2011-06-14T20:19:00.005-04:00

There are precious few occasions where I find myself in agreement with both Tom Coburn and Richard Burr, but today's Senate vote on ending ethanol subsidies was one of those occasions. Sadly, their amendment went down in flames due mostly to overwhelming support by Democrats, including Kay Hagan.

Shame on Kay for supporting this wasteful, budget-busting measure.

Kudos to Coburn, Burr and 33 other GOP senators who showed courage by not only rejecting this tax break but also by breaking with the Americans for Tax Reform and not requiring an offsetting tax break.

I hope that we can agree again under more successful circumstances.

Republicans agree that some state workers are underpaid--their own staff!

2011-06-11T10:38:00.002-04:00

Most state workers in North Carolina have gone three years without a raise, have been hit with higher contributions, deductibles and co-payments on their health insurance, and have even had a short furlough. However, the News & Observer reports that some state workers have done much, much better.

House Speaker Thom Tillis in the last few months handed out raises as high as 27 percent to half his staff after vowing in January to set an example for others in state government by cutting his office payroll.

Tillis' general counsel Jason Kay got a 27 percent raise, from $110,000 a year to $140,000.

Chief of staff Charles Thomas got a 25 percent, $30,000-a-year increase, from $120,000 to $150,000.

Policy advisers Christopher Hayes and Amy Hobbs received $12,000 raises, both going from salaries of $70,000 to $82,000 a year. Kay, Hayes and Hobbs are all new hires who joined the state payroll for the first time in January. Thomas is a former state House member from Asheville.

In all, Tillis gave raises to seven members of the 14-person staff he had before April. He hired an additional employee in May, paying him $70,000 annually.

Far from cutting his own office payroll, the News & Observer found that Rep. Tillis' was at least 10 percent higher than his Democratic predecessor.

So much for shared sacrifice.

Bitterness & division

2011-06-07T11:49:00.004-04:00

A story linked from CNN's main page asks "After 50 years of racial strife: Why is Greensboro still so tense?"

The story plumbs the depths of nearly every bit of nastiness over the years, from the KKK shootings 32 years ago to the current controversies over reopening the White Street landfill and moving city council boundaries. Only the Wray fray seems to be left out.

The story misleadingly depicts a mostly seamless pattern of tension. Milestones such as the election of a black mayor and appointment of ~~a black police chief are ignored~~ other black city leaders are mentioned but not examined closely.

Sadly, the central premise of the story is spot on. The question is what to do about it?

Correction (June 8, 2011): The second paragraph of the CNN states that "African Americans have won unprecedented positions of political power in Greensboro in the past four years, including mayor and city manager." (Thanks to Jeff Sykes for alerting me to my poor reading skills.)

Real job-killing government policies

2011-06-06T09:16:00.003-04:00

Add sharp cuts in state and local employment to the list of economic headwinds. CNNMoney reports

Don't look to state and local governments to prop up the job market.

To the contrary, this cash-strapped sector is set to go on a record-breaking layoff binge when the new fiscal year starts on July 1.

State and local governments are forecast to shed up to 110,000 jobs in the third quarter, the first time the blood-letting has risen into the triple digits, according to IHS Global Insight.

Nationally, the number of state employees peaked at 5.2 million in August 2008, and the number of local government employees peaked at 14.6 million in September 2008. Since then, state governments have shed 100,000 jobs, while local governments have shed 450,000.

Parents and students will feel the cuts in terms of more-crowded classrooms, fewer class choices, and reduced school services (who needs those pesky nurses, librarians or guidance counselors). Other taxpayers will notice the cuts in terms of longer lines at the DMV and longer waits for tax refunds.

Less noticeable but as important will be the overall drag on local economies.

Slashing jobs doesn't make much sense in a weak employment market.

Less dynamism in the U.S. job market

2011-06-04T12:48:00.005-04:00

Last week the Washington Post's Steve Pearlstein had an interesting column on the decline in dynamism in the U.S. job market. The column describes the research of John Haltiwanger from the University of Maryland and his colleagues on job flows. By coincidence, I had an opportunity to see one of Haltiwanger's co-authors, Javier Miranda from the U.S. Census Bureau, present some of their research while I was in Denmark.

"Job flows" are technique for breaking net employment growth down into four components:

Jobs added by brand new employers (establishment births),
Jobs added by existing employers (establishment expansions),
Jobs lost because of employers shutting down (establishment deaths), and
Jobs lost because of employers contracting (establishment contractions).

By simple arithmetic, if you add the jobs created by new and expanding employers and subtract the jobs by "dying" and contracting employers, you get the net change in the number of jobs. While much attention is paid to the net employment change (e.g., the paltry 54,000 jobs added last month), we actually learn quite a bit by examining changes in the separate components. The latest figures from the U.S. Bureau of Labor Statistics, which extend through the third quarter of 2010, are shown below.

The figures show that there is tremendous dynamism in the labor market. While the overall number of jobs might change by a few hundred thousand in a given quarter, there are actually several million jobs being created and lost. Also, though we tend to think about jobs changing from businesses opening or shutting down, far and away the lion's share of job changes occur among continuing employers.

The decrease in dynamism that Pearlstein and Haltiwanger refer to is the overall downward trend in all four job flow components. The downward trend is even more pronounced when you consider that the U.S. population has grown and when the flows are expressed in per capita terms.

Employer "births" and "deaths" have trended steadily downward. However, employer expansions and contractions have also trended downward.

Some of this is a new phenomenon. Prior to the Great Recession, expansions were not viewed as being especially cyclically sensitive. However, during the Great Recession, employment growth associated with expansions fell by more than one million and has yet to recover. The credit crisis offers one explanation for the plunge and the incomplete recovery. Many firms have had a difficult time borrowing and issuing commercial paper, and firms that have had funds have either built up cash reserves or used their funds to buy back stock and to buy out competitors.

More interesting, though, is that the downward trend in dynamism pre-dated the recession. During the 2000s, taxes were cut, and the government followed an unabashed pro-business policy. These advantages for businesses and entrepreneurs, however, did not translate into increased job creation.

Haltiwanger offers a novel "too big to grow" explanation. His research shows that "young" firms contribute disproportionately to job growth. As older behemoths, like Walmart, come to dominate local markets, they take the air out of other newer but potentially faster-growing firms. More generally, the abandonment of anti-trust policy may be keeping new entrepreneurs from entering markets and may be robbing the economy of a prime source of job creators.

If Haltiwanger's hypothesis is correct, you can add "too big to grow" to a host of other problems associated with businesses being "too big," including moral hazard ("too big to fail"), undue political influence ("too big to play nice in elections"), and undue influence in markets ("too big to pay fair wages or prices").

Did something other than sight-see in Denmark

2011-05-23T17:51:00.003-04:00

I was lucky to spend today attending a workshop on “Health, Work and the Workplace” at the Aarhus School of Business (academic economists use an odd definition of "lucky").

Besides the opportunity to interact with lots of researchers with similar interests, there was an opportunity to hear about some fantastic data that are available to Danish researchers. In particular, social scientists are Aarhus University have access to survey data sets with personal identifiers that can be linked to social registry data on jobs, social insurance, and even health care utilization.

The conference featured several studies that linked survey data on perceptions of work conditions, such as exposure to physical and health hazards, workplace policies, work schedules, job satisfaction, supervisor practices, and the like, with more objective information on earnings and job turnover as well as long-term information on these outcomes. Several papers showed how bad work conditions and practices were associated with worse health outcomes for employees. Another paper showed how some of those policies hurt companies by increasing turnover. Although the emphasis was on how health worked through and was affected by these workplace conditions, it’s easy to imagine lots of additional research that could be done.

All of the research focused on outcomes in developed economies in Europe and the U.S. These countries all feature relatively strong protections for workers’ health. In the case of the European countries, workers also had fairly uniform access to quality health care. Despite these protections and supports, there was still consistent evidence throughout many of the papers that certain types of working conditions, such as holding a job with high physical demands, being exposed to job insecurity, and even having to work for a “toxic” boss, takes its toll on people’s physical and psychological health.

At this point, the research seems best poised to help us refine our understanding of how health and work outcomes are determined, borrowing insights from two related fields. It is also likely to help us understand the possible consequences of work intensification at jobs as employers downsize, “rightsize,” and shift more risks to workers. These policies may have immediate benefits for employers’ bottom lines, but the research at the conference suggests that they may be costly in the long run. Worse, these costs may be external to firms and may appear years after firms take certain actions, giving the firms few incentives to mitigate them.

We already know that economic outcomes for many workers have deteriorated over the last decade and especially through the Great Recession. Regrettably, the results from the workshop suggest an additional mechanism by which workers may have been made worse off by employer restructuring.

Dave's descent into Danish darkness

2011-05-22T04:07:00.006-04:00

Fate (and an invitation to talk about some research on the health of workers in different occupations) has brought me to Denmark, a verdant land of wind turbines, excellent rail service, universal health care, tradable carbon permits, labor protections, restricted store hours, and one of the highest tax burdens on the planet -- in other words the nightmare vision of the Republicans/Tea Party.

According to their fevered prognostications, this country should be a hollowed-out, post-apocalyptic wasteland. Then again, according to some other fevered prognostications, yesterday was the day to cash in those Groupons for the Rapture.

A job-killing, death-panel-induced, government-hands-all-over-my-Medicare, theft-posing-as-taxation calamity may yet befall the Danish economy. For now, however, there's little that's rotten here. Despite the recent global recession, the country remains prosperous with an unemployment rate of 5.9 percent and a per-capita gross national income that is only slightly less than that of the US on a PPI-adjusted basis (and 25% higher than that of the US on an exchange-rate basis).

Aside from a couple of cranky infants in a coffee shop, the Danes that I have encountered have been happy and smiling. Maybe they're just getting the last laugh.

My two cents on NC Republicans' efforts to curtail early voting

2011-05-13T12:34:00.004-04:00

Given the enormous shortfall in North Carolina's state and local government budgets, some very tough decisions need to be made. Republicans in the General Assembly are arguing that one of these decisions may involve the availability of early voting.

The Charlotte Observer reports about a contentious vote in the General Assembly to reduce early voting.

On a largely party line vote Thursday, the N.C. House tentatively passed a bill that would cut North Carolina's early voting period almost in half.

Republican supporters said cutting the 2 1/2-week period by a week would save money for local governments and for candidates.

Critics said it would reduce turnout, particularly among African-Americans.

"Whether intentional or not, the effect of this measure will be disenfranchisement," state Rep. Kelly Alexander, a Charlotte Democrat, said during the debate. "It will suppress the vote."

Calling this disenfranchisement is far too strong. However, the shorter voting period will almost certainly reduce turnout and have the largest effect on poor, and especially working poor, households.

The expected reduction in voting follows from a simple economic model of the "demand" for voting. In the economic model, people value voting but also value all the other goods that they can possibly consume. People face trade-offs between voting and the consumption of other goods, as the time and effort required to vote reduces the resources available for other things. Thus, voting has a cost, or price. The predictions from the model are the same as those from a standard demand equation. Increases in the price of the good (voting) and decreases in people's resources cause the demand for the good (voting) to fall.

A shorter early voting period makes voting less convenient, effectively raising the price of this good. Lower incomes mean that poor people would already be close to the margin of not voting, so the change in availability/price would be expected to affect them more. Inflexible work schedules and limited transportation options might also mean that the poor would also face higher initial costs voting, again putting them closer to the margin of not voting.

Republicans argue that the effects won't be large. Polls would still be open on election day; mail-in ballots could still be cast, and 11 days of early voting would still be available. Thus, it's an open question as to how much voting would be reduced--that is, how much benefit there is from early voting.

We do know, however, that the costs of offering early voting are extraordinarily low.

In 2010, North Carolina's 100 counties operated 297 one-stop early voting sites, with every county operating at least one site but with many operating multiple sites. Not every site operated through the entire early voting period. Counties tended to operate more sites closer to the election.

A review of the schedules shows that counties offered a total of 1,104 "site days" during the first week of voting in 2010. The NCGA Fiscal Research Division (FRD) estimates that each site cost $389 per day to operate. Using this figure, the average county spent just $4,295 (or $429,500 across the entire state) to accommodate the first week of early voting. Divided among the state's 9.6 million residents, the cost of operating the sites was less than a nickel per person--literally pennies.

It should be further noted that the counties themselves didn't bear all of this cost. Local boards of election can obtain reimbursement from the federal government for the costs of operating these sites. The FRD reports that 59 counties had their costs reimbursed.

Voting is a fundamental right. While it's hard to place an exact value on how much early voting contributes toward extending this right, it seems that it would be worth at least a nickel.

Callous gamesmanship from NC Republicans continues

2011-05-10T14:40:00.008-04:00

North Carolinians old enough to remember the National Lampoon and its iconic 1973 "if you don't buy this magazine; we'll kill this dog" cover are getting a chance to watch a real-life replay, involving Republicans holding long-term jobless benefits hostage to unrelated budget demands.

The News & Record reports,

No end appears in sight for a stalemate that's held hostage extended unemployment benefits for North Carolina's long-term jobless for nearly a month, state legislative leaders said today.

Senate leader Phil Berger, an Eden Republican, said the General Assembly's Republican leaders are waiting for Democratic Gov. Beverly Perdue to propose a compromise.

Perdue vetoed the GOP proposal to extend the benefits only if the governor accepts double-digit cuts before budget negotiations begin in earnest. Perdue called the linkage "extortion." Republican leaders said they wanted to ease questions about continued state funding in case a budget deal isn't reached by the time the next fiscal year starts in July.

..."What I am telling people is the Senate and the House have passed a bill that extends those benefits. We think the question is: what has the governor done other than say, 'Do it my way. That's the only way that I'll accept.'" Berger said. "I would hope that either the governor would modify her position or tell us what it would take to modify her position."

In other words, "Governor, if the budget isn't an acceptable ransom for jobless benefits, what is?"

The appropriate response is "nothing."

The extension of unemployment benefits has nothing whatsoever to do with North Carolina's budget situation. Extended benefits require a minor legislative fix so that federal dollars--approximately $11 million per week--can be spent to help 37,000 long-term unemployed.

The National Lampoon magazine cover was ridiculous but ultimately harmless satire. The Republican gamesmanship is equally ridiculous but ultimately harmful and cruel.

NC Republicans callous inaction on jobless benefits

2011-05-07T10:33:00.006-04:00

Republicans in the NC General Assembly still have not gotten around to passing legislation necessary for 37,000 long-term out-of-work North Carolinians to collect an extra 20 weeks of federally-funded unemployment benefits.

Last month, the Republicans tried to use the extension to extort Governor Perdue into committing to double-digit percentage budget cuts for the coming fiscal year. The governor, rightly, vetoed the legislation and asked for a clean bill. The extension has subsequently languished.

Regrettably, Republicans' general callousness towards the poor isn't new or surprising. However, once upon a time, Republicans did at least try to show support for workers who lost their jobs, a group they included among "deserving poor." No more.

As the Republican Senate Leader, Phil Berger said, "We need to remember that we're talking about the extension for folks who have already received benefits" for a year and a half.

Moral and humanitarian concerns notwithstanding, Republicans should be able to grasp the practical, economic benefits of hundreds of thousands of federal dollars flowing into a state that still suffers from 9.7 percent unemployment. But again, no.

Since benefits ran out, Republicans have found the time to adopt resolutions recognizing the 100th anniversary of North Carolina Family and Consumer Sciences, a former representative, and Cinco de Mayo.

These are priorities, but legislation that would help the long-term jobless and bolster our economy, all without costing our state budget a dime is not.

Shhh, don't say 'gay'

2011-04-26T21:28:00.004-04:00

Teaching about Oscar Wilde, discussing civil rights, and reprimanding children for anti-gay taunting could all get a lot tougher in Tennessee where a state Senate committee approved a bill that would prohibit elementary and secondary schools from providing "any instruction or material that discusses sexual orientation other than heterosexuality."

If we don't talk about it, it doesn't exist, right?

A follow-on bill will prohibit Will and Grace re-runs and Ted Haggard sermons from being shown on Tennessee televisions before 10 p.m.

Boehner supports Obamacare for the elderly

2011-04-26T16:47:00.004-04:00

What a long strange trip it's been.

During the floor debate on the Affordable Care Act (which Republicans affectionately refer to as "Obamacare") in March 2010, then Republican minority leader, Rep. John Boehner, described the Democrats' reforms thusly

...today we’re standing here looking at a health care bill that no one in this body believes is satisfactory.

...Can you go home and tell your senior citizens that these cuts in Medicare will not limit their access to doctors or further weaken the program instead of strengthening it? No, you cannot.

...Shame on us. Shame on this body. Shame on each and every one of you who substitutes your will and your desires above those of your fellow countrymen.

In January of this year, Republicans made the repeal of the ACA their first substantive (though ultimately unsuccessful) piece of legislation.

Yesterday, however, Speaker Boehner was singing a different tune. When asked about the Republicans' plans to cut and privatize Medicare, Speaker Boehner said

It transforms Medicare into a plan that's very similar to the President's own healthcare bill.

He went on to praise the proposed program's efficiency and to state several times that he supported it.

So a short time ago, the President's proposals were shameful and unsatisfactory, but now, changes that are "very similar to the President's own healthcare bill" are laudable.

Throw Grandma from the nursing home

2011-04-25T13:52:00.002-04:00

In yet another fine display of their "what's good for bidness, is good for the commonwealth" philosophy, North Carolina Republicans are now proposing that nursing homes should be allowed foist hard-to-care-for charges onto the county governments.

When a North Carolina assisted-living facility accepts a resident, the home has the legal responsibility to look after the person or to find a safe alternative placement.

But a bill making its way through the state House would shift that responsibility to county social services departments, which don't want the responsibility of dealing with early-morning phone calls demanding the care of a person with a disability such as dementia.

The bill also would allow facilities to escape state sanctions after making an unsuccessful attempt to find a new place for a resident.

Some advocates for older people say the bill could result in some of the most dependent residents being released to homelessness.

It's hard to come up with a more cruel and mean-spirited policy (though we shouldn't put this bunch to the challenge). The proposed change would put the most vulnerable patients at risk while also increasing responsibilities for county health agencies that the Republicans' are already targeting for cuts.

We didn't cover this in labor class

2011-04-20T14:53:00.003-04:00

This semester's labor economics class is winding down. Somehow, I neglected to cover this novel workforce development strategy.

It's a bird! It's a plane! No, it's just an unemployed guy in a red cape.

A Florida unemployment agency is under investigation for spending $14,000 in public funds on red superhero capes as part or broader campaign that frames joblessness as a battle between good and evil. The agency, Workforce Central Florida, even created a fictional villain, Dr. Evil Unemployment, whose superpower is apparently handing out pink slips in a bid to somehow take over the world.

The campaign has now been withdrawn, but you have to wonder what they were thinking.

About the only positive thing that you can say about this is that it beats the agency's careereoki campaign from two years ago.

Floridians must be so glad that they contract these services out to private agencies instead of letting the government handle social services.

Houston, we have some whiners

2011-04-19T20:49:00.008-04:00

Is there anything that Republicans won't whine about? The latest is Texas Republicans moaning and groaning over Houston not getting a space shuttle. Reps. Ted Poe and Pete Olson write

Now that the space shuttle program is ending, no other place in the world deserves a retired shuttle more than Houston, Texas. Put simply, this decision should be a no-brainer.

But Houston has been overlooked. Shuttles are going to Los Angeles, Florida, and Washington. The prototype Enterprise is headed to New York City. "We were tremendously surprised," said Susan Marenoff-Zausner, president of the Intrepid Sea, Air and Space Museum in New York after NASA made the announcement. No kidding.

Sadly, it seems partisan politics permeates this announcement. And we are demanding answers.

...Here's our justification for Houston: Houston is the fourth largest city in the United States, visited by nearly 7 million international visitors every year. More than 750,000 people a year visit the Johnson Space Center in Houston to glimpse the history of space exploration. Houston doesn't seek an orbiter because it wants to add a relic to a museum to highlight a marvel of modern engineering. It is more profound than that. To Houston and the men and women of Mission Control, who dedicated their careers to human space flight; it represents a life's work.

We can find no logical explanation for this mind-boggling decision.

No logical explanation?

New York, our largest city, has averaged more than 45 million visitors per year since 2006. Los Angeles, our second largest city, welcomed about 24 million per year over the same period. Washington, DC, our Nation's capital, welcomed more than 15 million per year and hosts an extraordinary Air & Space Museum. And central Florida has not only been home to the shuttle program but is a major tourist destination. Orlando welcomes more than 45 million visitors per year, and the Kennedy Space Center alone draws 1.5 million visitors per year (twice as many as the Johnson Space Center).

Under other circumstances (i.e., when it doesn't benefit them), Reps. Poe and Olson are foes of government entitlements. Consider Rep. Poe in February

We are long overdue to stop subsidizing the government’s special projects for its special people with money that doesn’t exist.

and Rep. Olson in March

We can all find a way to do more with less.

What changed in the meantime? The availability of a big fat government goody.

And when they didn't that goody, what did they do? Cast unfounded aspersions and cry politics. Talk about an entitlement mentality.

Sadly, the only "partisan politics" on display here are from these two hypocritical whiners.

Compound errors

2011-04-18T15:51:00.004-04:00

The local conservative weekly, the Rhinoceros Times, has an article about runaway public spending in Guilford County.

Now that the 2011-2012 Guilford County budget process is in full swing, with the county manager's proposed budget on the table and the budget ball in the county commissioners' court, it's interesting, and even kind of fun and nostalgic, to look back 10 years and see how things compare.

One look at Guilford County's budget for fiscal 2000-2001 and it quickly becomes evident that, while 10 years wasn't that long ago in some respects, when it comes to county budgets it was light years ago and a galaxy far, far away.

One way the 2000-2001 budget seems very distant from today is in the number of dollars shelled out. Just a decade ago, Guilford County was being run on a much smaller budget: The 2000-2001 budget totaled $397.5 million. That compares with a proposed county budget of $582.3 for 2011-2012 – a 46 percent increase in the county's budget in just 10 years.

The population of the county only went up 16 percent from 2000 to 2010, from 421,048 to 488,406.

Joe Guarino piles on

Spending increases in these areas outpaced population growth and inflation combined.

When county commissioners wring their hands and represent that they cannot conceive of ways to achieve spending cuts sufficient to avoid a tax increase, they are not being honest with us.

The fact is that we have had solid liberal Democratic leadership of the county for a long time, with all the fiscal profligacy that entails.

The figures that the Rhino and Joe put forward look like a big increase, but they aren't when you also account general price growth.

Over the last 10 years (from March 2001 to March 2011), overall price inflation as measured by the Consumer Price Index went up by 26.9 percent.

The combination more than accounts for the growth in spending.

In 2000-1, the county was spending $944 per resident. In 2011-12, it is proposing to spend the equivalent of $939 per resident, based on 2000-1 dollars.

Far from letting spending run away, the county has kept its spending slightly below the combined rates of population and price growth.

Guilford County is facing a tough budget situation. However, the crunch has been caused by falling revenues, not exploding costs. Property values have fallen, depleting the county's largest source of revenue. The state and federal governments will also be transferring less money to the county next year.

In inflation- and population-adjusted terms, Guilford County has kept its expenditures frozen.

Republican's budget rhetoric and reality

2011-04-14T15:44:00.003-04:00

People with a memory for such things might recall that in their "Pledge to America," Republicans promised (underline added)

With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to prestimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to begin paying down the debt, balancing the budget, and ending the spending spree in Washington that threatens our children’s future.

To this end, Republicans passed pointless, go-nowhere legislation. They then fulminated and threatened to shut the government down if they didn't get their way. With a shut down looming, their leader, Rep. John Boehner bargained tenaciously for spending cuts.

Today, those negotiated "spending cuts" were approved by a large majority of House Republicans (and with substantial support--81 votes--from Democrats).

The effect on this year's budget?

Total spending this year will be $3.3 billion higher than last year.

The Washington Post reports

The Congressional Budget Office estimate shows that compared with current spending rates the spending bill due for a House vote Thursday would cut federal outlays from non-war accounts by just $352 million through Sept. 30. About $8 billion in immediate cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.

When war funding is factored in the legislation would actually increase total federal outlays by $3.3 billion relative to current levels.

So, far from reducing this year's budget, the Republican House just approved a $3.3 billion spending increase for FY 2011.

To quote Sarah Palin's question to the National Tea Party Convention, "how's that hopey changey thing working out for ya?"

NCBCBS asks not to be blamed for misdirecting premium dollars

2011-04-13T10:58:00.003-04:00

Blue Cross and Blue Shield of North Carolina (NCBCBS) is starting a new marketing campaign to spark a discussion on reining in health care costs. The News & Observer reports

Blue Cross and Blue Shield of North Carolina is tired of playing the scapegoat.

The state's largest health insurer will announce this morning that it's beginning a major marketing campaign to emphasize that many parties share the blame for rising health costs. The message is that those groups, including insurers, doctors, hospitals, drug companies, lawyers and consumers, must work together to reduce medical costs.

The effort will include TV commercials and other advertising with goats portraying the various groups. The Chapel Hill company also is starting a website, www.letstalkcost.com to spur more discussion about how to control medical costs.

At the risk of scapegoating the state's largest insurance oligopoly, let me suggest that NCBCBS first consider the cost implications of misdirecting its ~~hostages'~~ customers' premium dollars toward self-serving marketing and lobbying campaigns.

Congressional taunting

2011-04-07T11:52:00.003-04:00

A new study of the communication patterns of Congress members finds that 27 percent of Congress' time is spent taunting.

On Wednesday morning, the Senate had been in session only a few minutes before the first exchange of barbed words.

“Democrats are more concerned about the politics of the debate than keeping the government running,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a floor speech. “They can’t blame anyone but themselves if a shutdown does occur.”

A while later, Sen. Bernard Sanders (I-Vt.) came out to speak. He had a few choice things to say about Republicans’ plans for cuts to the federal budget.

“The more the American people take a hard look at where [Republicans] want this country to go, the more outraged will be millions and millions of citizens,” Sanders said.

To which, McConnell later presumably replied, "The good gentleman's mother was a hamster and his father smelled of elderberries!"

Because Greensboro doesn't have enough nightclub shootings

2011-03-30T21:20:00.003-04:00

Defying the two-thirds of North Carolinians who apparently oppose the measure, the radical Republican right has lurched forward its BYOG restaurant bill. From the local News & Record

The state House has agreed to allow people with concealed weapons permits in North Carolina to take their pistols into restaurants that serve alcohol and public parks.

Doncha feel safer already?

BTW, what's with restaurants that serve public parks?

There's an obvious pun about concessions to gun owners, but let's not go there.

Bad jobs worse than no jobs?

2011-03-30T09:06:00.003-04:00

Gallup reports some intriguing findings about people's work and well-being:

American workers who are emotionally disconnected from their work and workplace -- known as "actively disengaged" workers -- rate their lives more poorly than do those who are unemployed. Forty-two percent of actively disengaged workers are thriving in their lives, compared with 48% of the unemployed. At the other end of the spectrum are "engaged" employees -- American workers who are involved in and enthusiastic about their work -- 71% of whom are thriving.

The results suggest that a bad job, at least bad in the sense that it doesn't engage or motivate you, is associated with lower well-being than no job at all.

If interpreted causally, the results further suggest that losing a bad job is actually good for you, which would be really good news in the current economy. However, that interpretation is a stretch.

Gallup's engagement measure is constructed from a series of questions that ask about expectations, feedback, relationships, and opportunities at work. Some of these questions ask about conditions that are (arguably) external to the worker, such as whether the worker gets "recognition or praise for doing good work" or receives performance reviews. I add the parenthetical term, arguably, because all of the reports come from the workers who may be viewing their employers' objective actions through a subjective lens.

However, many of the questions appear to be related to a person's general perceptions regarding his or her locus of control, that is, a person's belief that the person's own behavior can affect outcomes in his or her life. Thus, the answers to the questions may reveal as much about the respondent and about the power of positive thinking as they do about the respondent's job.

It's also hard to imagine that a negative external event like being fired would improve someone's perceived locus of control.

The question comes down to whether the engagement index reflects a bad job, a bad worker, or some combination of the two.

Gallup does caution that it's results "cannot definitively determine the direction of the causal relationship between engagement and wellbeing." However, it pushes the causal interpretation by describing disengaged workers as being in "bad jobs" and describing how employers can affect engagement.

Incentives matter for job growth

2011-03-28T07:40:00.002-04:00

Some predictable things happen when you subsidize companies to buy one type of input but not another. Bloomberg reports

Even though employment tends to lag behind investment early in recoveries, BofA’s Dutta said the current gap is “unprecedented” in the postwar era: Capital expenditures are expanding at an almost 14 percent pace, while job growth stays below zero, according to calculations he based on a six-quarter annualized change from the ends of the recessions.

In addition, the “unintended consequences” of policy changes indicate the government may “undercut its own principal aim of job creation,” he said.

While the tax bill President Barack Obama signed Dec. 17 allows businesses to write off 100 percent of some purchases in 2011, there’s no similar incentive to speed up hiring. The Fed’s commitment to keep its benchmark interest rate near zero for an extended period also facilitates lower-cost financing for machines.

The administration’s goal to double overseas sales of American-made goods is another plus for investment over hiring, Dutta said, since the U.S. export sector is capital intensive rather than labor intensive.

Civitas misleads on rail

2011-03-23T18:06:00.003-04:00

Surprise, surprise. Brian Balfour at the conservative Civitas Institute has posted a misleading and mistake-filled column, supporting North Carolina House Bill 222, which would potentially turn back the federal rail improvement funds that are coming to the state.

Some of the misleading statements

The column begins by explaining that the proposed legislation "would prohibit North Carolina’s Department of Transportation from accepting any federal funds earmarked for high-speed rail without first getting the General Assembly’s approval."
Earmarked? No, the North Carolina rail grant was awarded through a competitive process; no earmarks were involved.
The column goes on,
Refusing federal funds for light-rail boondoggle projects would follow in the footsteps of Governors in Wisconsin, Florida and New Jersey who have refused federal funds for high-speed rail.
Light-rail boondoggle? The grant funds improvements to the primary passenger and freight rail corridor through North Carolina.
Next,
North Carolina doesn’t appear to be a very appropriate location for high speed rail lines. According to this analysis, Charlotte is the only NC city among the top 40 in the nation for populations within 10 to 25 miles of downtown – an indication that this area lacks population density in its urban areas sufficient to justify rail projects. The analysis further concludes that passenger rail for intercity travel would only be viable with additional regional investments (more state and local taxpayer dollars).
Balfour has taken some selective statements and fundamentally misrepresented the actual report, which not only rates the Charlotte-to-Raleigh rail link as one of the more promising in the country but also recommends exactly the types of incremental improvements that are being proposed. The rail links in and around Greensboro actually show up in the report as scoring in the top 10 percent of most of the review criteria for high speed improvements.

Next,
But many will still insist that NC would be foolish to pass up 'free' federal dollars to build high-speed rail lines because it would 'create jobs.' I pointed out previously, however, that such federal funds are not 'free,' and in fact hinder a state’s economic growth prospects. A Harvard study examined the impact of federal earmark spending in states and found that federal 'fiscal spending shocks appear to significantly dampen corporate sector investment activity.'
Again, Balfour compares the North Carolina rail project to earmark spending--it isn't.
Finally,
HB 422 is a good idea because accepting these federal funds would put NC taxpayers at risk for paying for the very likely cost overruns and the politically-motivated rail projects will divert scarce resources away from entrepreneurs and make the state’s economy worse off.
Balfour continues to describe the project in earmark terms (politically-motivated rail projects). He also describes a risk of over-runs but no evidence that these characterize this project.

On the bright side, if there is any leftover funding from the rail project, it might be used to straighten out Civitas' twisted statements.

Safer, faster, more reliable train service coming PLUS 4,800 jobs

2011-03-22T08:49:00.004-04:00

While several states have recently canceled federally-funded rail improvement projects, North Carolina is finally ready to move forward with its project to make rail service safer, faster and more reliable.

The News-Observer reports

After months of wrangling with a reluctant freight railroad, the N.C. Department of Transportation says it has won the agreement it needed to secure $461 million in federal grants that will put faster, more frequent and more reliable passenger trains on the tracks between Charlotte and Raleigh.

Gene Conti, the state transportation secretary, said DOT will start seeking bids over the next two weeks for contracts to lay tracks, build bridges and buy trains.

The construction is expected to create 4,800 jobs over the next two years and cut the train time from Raleigh to Charlotte below three hours, including seven stops on the way.

The project will improve in several ways, including laying double track and passing sidings, straightening curves, replacing crossings with bridges, and purchasing additional rail cars.

The funds come from the American Recovery and Reinvestment Act of 2009, the original stimulus legislation.

While conservatives point to business anxiety over policy "uncertainty" as a reason for slow jobs growth, the 4,800 jobs for the North Carolina project have actually been held up by a business, Norfolk Southern Railroad, which leases the tracks from North Carolina.

UPDATE (3/22/11): In an effort to prove that the government can indeed inject some uncertainty into its infrastructure improvement and job creation efforts, Republicans in the North Carolina General Assembly have introduced the "No High-Speed Rail Money from Federal Gov't" Act (H422, a.k.a., the "Run 4,800 Jobs Out on a Rail" Act) which would prohibit the state's Department of Transportation from accepting or spending any of the railway grant money that it was awarded.

O'Keefe not so keen on being videotaped

2011-03-18T17:49:00.003-04:00

What's sauce for the goose, apparently isn't sauce for the gander. The TPMMuckraker reports

James O'Keefe, the conservative activist who made his name with a string of undercover video sting operations, doesn't like it so much when the camera is turned on him.

Speaking to around 100 members of the Bayshore Tea Party in New Jersey Thursday night, O'Keefe reportedly had members of the group ask a photographer from the Asbury Park Press to leave the event.

Could it be that people actually have a right not to be videotaped?

Deception overload

2011-03-18T07:58:00.006-04:00

One piece of advice that I used to give my students at GW when considering whether an action or statement was right or wrong was to think about whether they would be comfortable with it being reported in the Washington Post. This would have been great advice for Richard Schiller, the former fundraising director for NPR, Wisconsin Gov. Scott Walker, and others who have recently been ambushed by impostors.

Michael Gerson has a column today on the morality of these ruses. The ruses are ethically dicey because they start with lies. The perpetrators' hope is that one wrong will cause another which will make the whole scheme right. Gerson concludes that these types of deceptions are rarely justified. He also points out that that the deceptive editing of the NPR "gotcha" video is unethical (the initial lie of the scheme is compounded by other lies in the presentation of the evidence) and that there was no good in the underlying objective (to cause embarrassment).

However, in a column that's thoughtful and balanced in most respects, Gerson slips in these digs against Schiller and NPR.

The interviewers posed as representatives of a Muslim organization that wanted to donate $5 million to NPR. The stingers bought access to NPR executives with fake money.

...There is no ethical imperative to provide a prostitute to a weak man and then videotape the scandal, or to provide drugs to a recovering addict and then report the result — or to promise $5 million to a radio executive to get him nodding to leading questions.

The implication is that meeting with the impostors itself was immoral and wrong and a sign of succumbing to temptation.

Although he is aware of it and mentions it earlier in the column, Gerson's later statements conveniently ignore that the executive in question was NPR's director of fundraising--the person responsible for developing relationships with potential donors. Thus, the only "access" that was "bought" was contact with the employees responsible for donor contacts (the director of fundraising and his assistant for institutional giving). Moreover, Schiller had an obligation and responsibility to meet with and encourage possible donors.

The deception put Schiller in a damned if you do, damned if you don't situation. If he meets with the imposters, he gets accused of providing "access" to a Muslim organization. However, if Schiller doesn't meet with the impostors, he's open to an accusation of discrimination against Muslims and more generally of not doing his job.

To be clear, none of this justifies or excuses Schiller's comments regarding the Tea Party, which were dumb, thoughtless and biased. He was wrong to have said them and embarrassed himself and NPR. Several other comments that he made were also embarrassing and ill-advised.

However, Schiller was obligated to follow up on the contact with the impostors. The deception didn't trade on Schiller's weakness but rather on his responsible and obligated behavior, which makes the deception even more under-handed.

Tsunami warnings part of Republicans' "discretionary spending" cuts

2011-03-12T16:16:00.004-05:00

As devastating as the massive, record-setting earthquake was (and continues to be) in Japan, it's outcome would have been far worse without the substantial investments that Japan made in earthquake and tsunami protection.

The U.S. is far less prepared, and Republicans in Congress want to reduce those preparations even more as part of their effort to cut "discretionary" government spending. The Washington Post reports

A spending plan being pushed by Republicans would slash funding for the agency that warned the West Coast about the devastating tsunami in Japan.

The plan, approved by the GOP-controlled House last month, would trigger an estimated $126 million in cuts for the National Weather Service, the agency that houses the Pacific Tsunami Warning Center in Hawaii. The center issued widespread warnings minutes after Friday's earthquake and issued guidance and updates throughout the day.

A union representing workers at the tsunami center said the proposed cuts - part of $454 million in cuts for the National Oceanic and Atmospheric Administration - could result in furloughs and rolling closures of weather service offices. If so, that could affect the center's ability to issue warnings similar to those issued Friday, said Barry Hirshorn, Pacific region chairman of the National Weather Service Employees Organization.

Tsunami warnings and, more generally, weather warnings save lives in the U.S. and throughout the world. The cuts that the Republicans have voted to enact are irresponsible, short-sighted, and ultimately deadly.

Who are the job killers?

2011-02-24T14:10:00.004-05:00

So much for Republican claims of promoting job growth.

In a report to investors, Goldman Sachs is cautioning about slower growth next year due to Republican-led efforts to trim spending.

The modest spending cuts we assume in our own budget forecast would lead to renewed fiscal drag. Since spending cuts could be enacted no earlier than next month, when the current fiscal year will be nearly half over, $25bn in cuts would require spending in the second half of FY2011 to be reduced by $50bn at an annual rate. Since the cut would be phased in abruptly, it could result in a drag on growth in Q2 by as much as one percentage point (pp), but would quickly fade over the next two quarters as spending stabilizes at a lower level, with little effect versus current policy on the rate of real GDP growth by year end.

The spending cut package that passed the House of Representatives would have a deeper effect. Under the House passed spending bill, the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.

In the current weak recovery, a percentage point of economic growth is the difference between job gains and job losses. The Republican plan could retard growth by more and over a longer period.

Rep. Boehner has already said that if federal jobs are lost, "so be it." Apparently, the same attitude applies to the country's job growth.

Sliming federal workers

2011-02-23T19:02:00.003-05:00

Senators Claire McClaskill and Tom Coburn have decided to call out federal workers about their delinquent taxes.

While millions of Americans continue to send back portions of their hard earned wages to Washington, many federal employees are failing to contribute their share.

...In 2009, the Internal Revenue Service (IRS) found nearly 100,000 civilian federal employees were delinquent on their federal income taxes, owing over $1 billion in unpaid federal income taxes.

Gosh.

In response to this overwhelming problem, the senators have introduced legislation that would fire any federal employee who doesn't pay his or her taxes.

How bad exactly is this problem? There were 2.8 million federal employees at the end of 2009. If 100,000 were behind or short on their taxes, that would imply a delinquency rate of 3.5 percent (the figure is actually lower because the Senators have rounded their number of federal tax delinquents up).

How does this compare to the rest of the population? At the end of 2009, there were 236.9 million noninstitutionalized civilians aged 16 or older. Let's use this as the tax-owing population (this adds lots of teenagers and people with very low incomes who don't pay taxes but also omits the military and some institutionalized people who might owe taxes). The IRS reports that there were 13.2 million delinquent tax returns in 2009. Subtracting out the federal workers and their delinquent taxes, this translates to a non-federal delinquency rate of 5.6 percent.

So, federal employees were 37 percent less likely to be delinquent on their taxes than other Americans. For this, they have the privilege of being slimed by Senators McClaskill and Coburn.

We can do better with parental leave

2011-02-23T07:58:00.004-05:00

Human Rights Watch, which usually focuses on human rights issues in other countries, has weighed in on family work supports in the U.S.

Around the world, countries have responded to the massive growth of women in the workforce over the past century by crafting public policies to help reconcile work and family obligations. These supports, which workers and employers in most countries have come to accept as standard and necessary for working families, include paid leave for new parents, flexible scheduling, breastfeeding and pumping accommodations, paid sick days that can be used for family care, and prohibitions on workplace discrimination based on family responsibilities. One of the most common work-family supports, paid maternity leave, is practically universal: academic research covering 190 countries shows that as of 2011, 178 countries guarantee paid maternity leave under national law. In nine of the 190 countries, the status of paid leave for new mothers was unclear. Just three countries definitively offer no legal guarantee of paid maternity leave: Papua New Guinea, Swaziland—and the United States.

This lack of paid leave under law in America is at odds with a workforce revolution in which female participation in paid labor skyrocketed over the past century, especially among those with young children. In the US more than 19 million families with children now have a mother as the primary or co-breadwinner, and 70 percent of children live in households in which all adults are in the labor force. Married women with children under age six were almost four times more likely to be in the paid workforce in 2008 as they were in 1950.

Yet US law provides only the most meager supports to enable workers to fulfill their work and family obligations, leaving the availability of such provisions largely up to employers’ generosity. The idealized notion is that private markets will foster such supports as employers compete for good workers. In reality, however, huge swaths of the workforce have no such supports, and there are enormous disparities in access.

Parental leave policies have not evolved much in the U.S. since the passage of the 1993 Family and Medical Leave Act (FMLA). The FMLA gave workers the right to 12 weeks of unpaid leave following the birth or adoption of a child or to care for a sick family member. The FMLA was recently updated to add care for service members and to apply to domestic partners.

The FMLA is limited in several ways. Besides only providing unpaid leave, the law also only applies to companies that have at least 50 employees and workers who have worked at least 12 months and for at least 1,250 hours for the company. About 30 percent of U.S. private sector jobs are in firms with fewer than 50 employees, meaning that a substantial fraction of workers are not covered by the meager benefits of the FMLA.

Even with those limitations, the FMLA is burdensome to companies who have to come up with strategies for temporarily replacing the services of a worker. Leave policies might be even more burdensome to small businesses. Paid leave would make these policies even more costly.

Somehow 178 other countries make this work. We hear a lot from conservatives about American Exceptionalism; however, here America only seems exceptional in its inability to support working families.

In the current political climate, universal paid leave doesn't seem to be in the cards. However, policymakers could take two modest steps forward.

The first step would be to make the right to unpaid leave universal by extending the FMLA to all employers, regardless of size. The costs to such an extension seem modest, especially in the present slack labor market where so many people are available to pick up temporary assignments. At the same time, the extension would level the playing field between firms, especially those small firms that already responsibly offer leave benefits.

An even more modest second step would be to create tax-deferred savings accounts for families to save and eventually pay for their own leave, if their employers don't offer this benefit. The accounts would work much the same way that IRAs or HSAs work with payments not being taxed until they are withdrawn from the accounts. The accounts would be portable, meaning that employees wouldn't be locked into a particular employer. At retirement, proceeds from the accounts could be transferred to IRAs or HSAs, so workers wouldn't face "use or lose" incentives.

A family that regularly put aside five percent of one of its earners' salaries would accumulate enough to cover a 12-week "paid" leave within five years. With the tax break, the up-front cost to the family might be much lower.

The policy would effectively create defined-contribution family leave benefits.

While the second step would be much more modest, look for howls of protest from businesses who would face the prospect of more workers actually being able to take the leaves they're entitled to. Look also to derisive cries of the "nanny state" from the Tea-party cranks. For any intellectually consistent conservative, however, support for HSAs or more generally personal responsibility should imply support for family leave accounts.

Helping families to finance their own family and medical leaves seems like a sound middle-of-the-road policy. Is America really so exceptional that it even rejects win-win solutions?

Wisconsin public workers already under-compensated

2011-02-21T13:37:00.002-05:00

A new report from the Economic Policy Institute concludes that Wisconsin public employees are under-compensated.

Comparisons controlling for education, experience, organizational size, gender, race, ethnicity, citizenship, and disability reveal that employees of both state and local governments in Wisconsin earn less than comparable private sector employees. On an annual basis, full-time state and local government employees in Wisconsin are undercompensated by 8.2% compared with otherwise similar private sector workers. This compensation disadvantage is smaller but still significant when hours worked are factored in.

Conservatives love to point out that the average compensation for public workers typically exceeds that of private workers. This is no different in Wisconsin where the report indicates that full-time public workers cost their employers just over $63,000 per year on average compared to just under $62,000 for full-time private workers.

However, public workers tend to have significantly more education (the proportion of public workers with college degrees is double the proportion of private sector workers with degrees). Within education groups, the report finds that public sector employees in Wisconsin receive less compensation than private employees, except for those with less than a high school education.

The report also uses regression methods to adjust for other measurable differences between employees, including education, experience, gender, race, citizenship, and employer size. Once those controls are included, average annual compensation for public workers is 8.2 percent less than for comparable private workers. Average hourly compensation is 4.8 percent less.

Like many other states, Wisconsin faces serious and real budget problems. Difficult and painful choices are required. One problem, however, that Wisconsin does not face is over-compensated public employees. Describing them as such is misleading, and treating them as such will ultimately be self-defeating.

NC Republicans gaming the public

2011-02-14T09:05:00.006-05:00

It hasn't taken long for NC's new Republican legislature to start wallowing in the sleaze. Last week, Republicans from the General Assembly used a state building to hold a closed-door meeting with video gambling lobbyists.

House Republicans, who for years have complained about government secrecy, took in a three-hour briefing Thursday from special interests and lobbyists advocating both sides of the video gambling issue.

But they shut the media out, saying the gathering in the Legislative Office Building was only for Republicans and their invited guests.

Okay, bad enough.

But guess who set up the closed door meeting, er, we should say "policy-committee caucus?" The News & Observer reports

The state lawmaker who led a closed-door committee meeting last week for House Republicans to hear from lobbyists and special interests on video gambling is, himself, in the gambling business.

Rep. Mike C. Stone, a Sanford Republican, owns a small grocery where customers can play a variety of sweepstakes games on four desktop computer terminals. The games mimic the spinning wheels of a slot machine. Until this weekend, customers could also take their chances on four video-poker-style stand-up machines that lined a wall near the canned vegetables.

Stone said he removed the video-poker-style machines Friday night after repeated phone calls from an N&O reporter.

State law currently prohibits "electronic machines and devices used for sweepstakes purposes" across North Carolina, the result of a high-profile ban passed last year that was the third attempt by lawmakers in the past decade to wipe out all forms of video gambling. A first offense is a misdemeanor, but repeated violations are felonies.

The News & Observer goes on to report that two of the pro-gaming speakers that Rep. Stone invited to the closed-door session had made personal donations to his last campaign.

To be clear, there are bipartisan advocates for relaxing restrictions on gaming. Gov. Perdue is studying the idea as a way to close the budget gap. More locally, Democratic Rep. Earl Jones (who has also taken gaming lobbyists' money) has submitted legislation to legalize video sweepstakes machines. And you don't have to go too far back in the legislative history to find other Democrats, like former Speaker Jim Black, who were out-and-out corrupted by the video gaming industry.

It's too bad that Republicans now want to bring us back to that era.

Half-million dollar mistake

2011-02-01T07:08:00.002-05:00

Paperwork problems in North Carolina's Medicaid program from 2004 and 2007 will cost the state $541,000 in lower federal reimbursements in the coming years. The News & Observer reports

The state owes the federal government more than $541,000 for improperly reporting how much it paid for birth control drugs under the Medicaid program.

According to a federal audit of the Medicaid family planning program, the state underreported how much it had received in drug company rebates. The federal government pays most of the state's Medicaid costs, and because the rebates were reported inaccurately, the federal government paid too much.

The state Department of Health and Human Services acknowledged that it made mistakes. In a December letter, DHHS secretary Lanier Cansler agreed to the repayment and said the problem uncovered in the audit would be fixed.

While half a million might appear to be small change in a $20 billion state budget, the amount works out to as many as 12 entry-level teachers.

Regrettably, these problems are all too common in state and local governments where individual employees have few if any incentives to actually collect money that is owed to them.

Beef -- it's what may not be for dinner

2011-01-28T08:23:00.003-05:00

Cowabunga! Even beef production is suffering in this economy. Bloomberg reports

The U.S. cattle herd probably shrunk to the smallest size since 1958, and the drop in beef supplies may boost prices to a record, analysts said.

Ranchers held 92.211 million head of cattle as of Jan. 1, down 1.6 percent from a year ago, according to the average estimate of seven analysts surveyed by Bloomberg News. That would be the smallest herd in 53 years, said Ron Plain, a livestock economist at the University of Missouri in Columbia.

Look for prices for your favorite hamburger or steak to rise and profit margins at many restaurants to fall in the coming year.

One culprit for the declining herd and higher prices may be the government's push to promote corn-based ethanol as a fuel. The Bloomberg story cites "surging prices for corn," up 82 percent this year as a key factor in declining profit margins for beef producers.

One other thing to look for is an oversupply of beef in about two years, as producers follow the well-worn cobweb cycle (and no, it's not the "some pig" variety of cobwebs).

Journal of Universal Rejection

2011-01-23T14:35:00.004-05:00

A colleague with a great sense of humor forwarded this description of the Journal of Universal Rejection.

The founding principle of the Journal of Universal Rejection (JofUR) is rejection. Universal rejection. That is to say, all submissions, regardless of quality, will be rejected. Despite that apparent drawback, here are a number of reasons you may choose to submit to the JofUR:
You can send your manuscript here without suffering waves of anxiety regarding the eventual fate of your submission. You know with 100% certainty that it will not be accepted for publication.
There are no page-fees.
You may claim to have submitted to the most prestigious journal (judged by acceptance rate).
The JofUR is one-of-a-kind. Merely submitting work to it may be considered a badge of honor.
You retain complete rights to your work, and are free to resubmit to other journals even before our review process is complete.
Decisions are often (though not always) rendered within hours of submission.

I don't think that the colleague was describing my editorial behavior at the Southern Economic Journal, even though my handling of manuscripts seems to be eerily similar to the JofUR.

Really?

2011-01-22T15:42:00.003-05:00

Okay, we all get it, a presidential election is just short of two years away, and there are a number of interesting GOP wannabees trying to elbow each other out of the way.

But with nearly 15 million Americans officially unemployed, the nation's old-age security programs sliding into insolvency, 100,000 troops at risk in a faltering campaign in Afghanistan, a chasming federal debt, and an unaddressed climate catastrophe, is a GOP horse-race article really the best use of WaPo newsprint?