Friday, June 29, 2012

If it makes you happy...

What had Rep. Jean Schmidt (R-OH) screaming like a Banshee yesterday?

Oh right, the false initial report that some 30 million or so of her fellow citizens, including millions with pre-existing medical conditions, would continue to go without health insurance coverage.

(Rumor has it that Rep. Schmidt later gave Meg Ryan a good run for her money with her reaction to the House's contemptible contempt vote against Attorney General Holder).

Imagine what could be accomplished if Rep. Schmidt and her colleagues put half as much enthusiasm into finding common-ground solutions to problems like health care, the budget, entitlement reform, and the economy instead of gainsaying everything that Democrats propose and manufacturing crises.

Thursday, June 28, 2012


It wasn't long ago that former Massachusetts Governor Mitt Romney praised individual health insurance mandates.

But his position has, well, evolved.

Former Gov. Romney has also praised Supreme Court Justice John Roberts.
As president, Mitt will nominate judges in the mold of Chief Justice Roberts...
I wonder if that position will evolve too.

Wednesday, June 27, 2012

Getting Subsidized Food All Over Your Family

The U.S. federal government funds several large food assistance programs, including the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), the National School Lunch Program (NSLP), the School Breakfast Program (SBP), and the Supplemental (WIC). In FY 2011, the federal costs for these programs were $75.3 billion, $11.3 billion, $3.0 billion, and $7.2 billion, respectively. The programs all share a common goal of helping disadvantaged people get access to more nutritious food than they could otherwise afford, but the programs differ in how they try to achieve that goal. The SNAP increases food resources for entire families, while the other programs only benefit specific members. In particular, the NSLP and SBP are targeted at school children, and WIC is targeted at infants, very young children, and pregnant, postpartum, and breastfeeding women.

A natural question regarding the targeted programs (natural to an economist anyway) is "do they benefit other members of a household?" Consider the WIC program. WIC provides its beneficiaries with vouchers that can be used for specific foods--for example, juice, milk, regular cereal, eggs and legumes for beneficiaries who are young children or mothers. In a household that also includes older children, it's possible (and maybe even reasonable to expect) that those children might consume some of the food that was intended for their mother or younger siblings.

The SBP and NSLP programs are different in that they serve meals outside the home and directly to their beneficiaries, so other household members can't literally take the food out of the school children's mouths. However, families can redirect resources. If participating families would have otherwise spent money on school-day breakfasts or lunches for their children, they could redirect that money to other members' food consumption.

A UNCG Ph.D. student, Jonathan Woodward, and I received a small grant from the U.S. Department of Agriculture to look at these issues, using 2002-3 survey data from the Child Development Supplement (CDS) of the Panel Study of Income Dynamics (PSID). The CDS is really helpful in this regard because it asked 1,744 children aged 10 or older about the foods they usually ate for breakfast and the foods that they had eaten in all meals during the previous week. The CDS and the PSID also asked about households' participation in each of the food assistance programs described above and about other economic and demographic characteristics of the households.

Results from Jonathan's and my research were just published in the open-access journal, Food and Nutrition Sciences. We found evidence that was consistent with targeted food assistance being shared. Specifically, school children who had mothers or younger siblings who received WIC reported drinking more milk and eating more cereal (foods that are in the WIC basket) for breakfast than other school children but also reported eating less toast (a food that isn't in the WIC basket). School children also benefited from the programs that were supposed to help them, generally eating more if they got school meals or if their families received SNAP.

An implication from this research is that it is really hard to target benefits for specific family members. In the case of WIC, we might consider whether it's really worth operating a separate program to do this or whether we should just fold the program into the larger SNAP. Merging the programs would allow for administrative efficiencies for the government and for households. Part of the cost savings could be used to expand benefits and participation among the intended recipients of WIC (WIC isn't able to help all eligible mothers and children now). Part of the savings could also go to deficit reduction. Families would also probably appreciate this because it would give them more flexibility in purchasing food.

Monday, June 25, 2012

Party of None of the Above

People have discussed a lot of motives behind Republicans' obstructionism.

A simpler motive, however, is that Republicans just want to put their collective heads in the sand.

Slate reports on people's responses about ways to cut the deficit.


When Republican legislators vote "no" on everything, they're just following the childish, fairy-tale wishes of their party members.

Sea-level rise along East Coast faster than thought

The News-Observer reports
From Cape Hatteras, N.C., to just north of Boston, sea levels are rising much faster than they are around the globe, putting one of the world's most costly coasts in danger of flooding, government researchers report.

U.S. Geological Survey scientists call the 600-mile swath a "hot spot" for climbing sea levels caused by global warming. Along the region, the Atlantic Ocean is rising at an annual rate three times to four times faster than the global average since 1990, according to the study published Sunday in the journal Nature Climate Change.
The story continues
Those estimates became an issue in North Carolina recently when the Legislature proposed using historic figures to calculate future sea levels, rejecting higher rates from a state panel of experts. The USGS study suggests an even higher level than the panel's estimate for 2100.
Meanwhile, the radical North Carolina legislature continues to push legislation that would constrain the Coastal Resources Commission from considering the full range of evidence and modeling in projecting sea-level rise for regulatory purposes.

Monday, June 18, 2012

Will the NC legislature regulate land subsidence too?

The Washington Post reported yesterday on the special sea-level challenges faced by our northern neighbor, Norfolk, VA. Besides facing a rising sea, Norfolk is subsiding, meaning that its relative sea-level rise is faster than other areas.
In Norfolk, Virginia’s second-largest city, with 250,000 residents, Faella’s concerns aren’t the isolated fears of one woman living on the river’s edge. The entire city is worried. Miles of waterways that add to Norfolk’s charm are also a major threat in the era of increased global warming and relative rising sea levels, as well as its odd and unique sinking ground.

The National Oceanic and Atmospheric Administration warns that Hampton Roads, anchored by Norfolk, is at the greatest risk from sea-level rise for a metro area its size, save for New Orleans.
Problems with subsidence, however, are not unique to Norfolk. Sections of North Carolina also have a history of sinking. The NC Department of Environmental and Natural Resources commissioned a study in 1993 that showed that Kinston and New Bern subsided at a rate of just over .15 inches per year from 1935-1978/9.

NC land subsidence is actually a feature in the larger global debate on sea-level rise. Global-warming skeptics cite NC's history of subsidence as one reason why measured sea-level rise may be less than it appears.

As Norfolk's soggy experience shows, the academic debate over whether sinking land or rising seas contributes more to relative sea-level changes doesn't matter much in coastal communities.

Friday, June 15, 2012

Deterioration in NC employment situation accelerates

North Carolina's employment situation, which had stalled in recent months, has now taken a decided step downward. The Bureau of Labor Statistics reported today that the state lost 16,500 jobs between April and May on a seasonally-adjusted basis. The big loss follows smaller losses in the preceding two months. The losses were widespread across industries with construction losing 4,800 jobs, professional and business services losing 7,000 jobs, private education and health services losing 2,600 jobs, and leisure and hospitality losing 3,600 jobs.

The state's unemployment rate remained at 9.4 percent on a seasonally-adjusted basis. The seemingly neutral figure, however, masks some worsening numbers. First, North Carolina's unemployment rate is now the third highest in the nation, trailing only California and Nevada. Second, while the number of unemployed people (people who aren't working but are looking for work) fell by 3,700, the number of people who reported looking for work fell by 9,500.

The situation for the state's unemployed is grimmer still with the expiration of extended unemployment insurance benefits. The loss of those benefits may account for some of the decrease in the number of unemployed--some people may have been looking for work just to continue receiving the benefits.

Meanwhile, our state legislature, which is taking a break today, has found time this week to regulate cold medicine, substitute its radical view for expert scientific judgment, and maintain a $3,500 tax break ($141 million total cost) for wealthy business owners.

Jobs first? Not with this bunch.

Tuesday, June 12, 2012

And the taxi driver?

Steven Kopits at has written a thought-provoking article about how autonomous driving technology (the ability of cars to drive themselves without human input) will facilitate a shift from buying cars to buying car services.
For the last several years, Google has been testing self-driving cars, primarily in California and Nevada. Its vehicles use lasers, radars, and other sensors to establish their position and identify objects around them. This data is interpreted by artificial intelligence software that enables the vehicle to drive itself. Google's vehicles have now proved themselves in hundreds of thousands of miles on the road. And Google's not the only game in town. Bosch is also developing the technology, and Cadillac has promised to have a car capable of driving autonomously on the highway by 2015. Self-driving technology is gradually moving to commercialization, and when it does, it will liberate the car from its driver, enabling a vehicle to serve more users.

According to the Transportation Department, the average U.S. vehicle is used less than one hour per day -- a utilization rate of about 5 percent. Many Americans only drive their cars to work, park, and leave them until they drive home at night, making them essentially unavailable for use by others for most of the day. But if the car could drive itself, it could return home to take the children to school, members of the family shopping, and seniors to visit friends or keep appointments. If the vehicle served even one additional passenger, its utilization rate would double, and its capital cost per user would fall by half.
Kopits writes about this in the context of making electric cars affordable. The car-as-service model would allow for the (presently) necessary recharging of batteries. The high utilization rates would also help to cover the high capital costs of the cars.

As interesting is was what Kopits doesn't write about--the effect on labor. Car services would cut into, if not eliminate, traditional taxi and limo services. Essentially, you get the service without the driver. Indeed, it's the lack of a driver--or more specifically, the lack of having to pay a driver--that would make the service cost-effective.

The Bureau of Labor Statistics (BLS) reports that nearly a quarter of a million people in the U.S. were employed as taxi drivers or chauffeurs in 2010 and that the number of jobs is expected to increase by 20 percent over the next decade (faster than other occupations). The work does not require any special experience or education; the BLS lists the entry-level education as less than high school. Also, the job requires minimal training. The pay, at approximately $22,440 per year or $10.79 per hour, is sub-par, but there is pay.

There would certainly be a lot of benefits with self-driving cars, but to borrow from Cheryl Crow, taxi jobs might "real gone" sooner than you think.

BTW, don't even get me started about Pixar taking all those great acting jobs away.

Monday, June 11, 2012

Households' net wealth dropped 39% from 2007 to 2010

The Washington Post reports on newly released figures from the Federal Reserve that show that median household net worth dropped by 39 percent from 2007 to 2010.
The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.

Sadly, there's little reason to think that the wealth figures have improved much since 2010. Although the stock market has recovered, housing prices continue to drift down. Suppressed wealth will continue to be a drag on the economy.

Thursday, June 7, 2012

Science-suppression legislation to be debated today in NC Senate

If you thought that this Kevin Costner bomb was over the top; prepare yourself for something even sillier.

Legislation to suppress the forecasts of the NC Coastal Resources Commission's Science Panel on Coastal Hazards will be debated in the NC Senate today. Under the Dome reports
Bloggers and TV comics have ridiculed it, and now state legislators will get their first chance Thursday to debate unusual legislation that would put tight restrictions on how state and local agencies cope with rising sea levels.

The Senate Agriculture, Environment and Natural Resources Committee will air the proposal, which was drafted by Republicans in response to controversy over a state-appointed science panel’s warning that a rise of one meter (39 inches) is likely by the end of this century.
If the legislation goes through, new roads, bridges, utilities, and other public infrastructure could be put at risk by being placed in areas of rising waters. Subsidized development might also be encouraged in areas that may become a flood risk.

It would be one thing if private developers using entirely private money wanted to develop these areas. However, the developers inevitably reach into the public purse for infrastructure. Also, when disasters happen, the victims will expect (and will almost certainly receive) help. Don't look for the developers to be offering to help those victims then.

Public decision-making in this case entails two types of risks. Over-preparing (relying on a forecast that is too pessimistic) would be wasteful because it would involve either building too many protections or not building at all. However, under-preparing is likely worse because the entire initial investment could be lost. Under-preparing could also put lives at risk.

The science panel provided a range of forecasts; the one-meter projection was near the middle of this range. The forecasts were also in line with those of other state coastal agencies. The panel further recommended  refining the forecasts every five years.

The forecast that would be mandated under the legislation would actually be substantially below the lowest forecast that the panel made. Relying on this wish, rather than the panel's judgment, would be a short-term boon for developers, but would likely bring high costs to other taxpayers.

North Carolina shouldn't substitute developers' wishes for sound, scientific judgment.

Tuesday, June 5, 2012

NC: Economic growth but little job growth

The Bureau of Economic Analysis (BEA) released figures this morning showing that total inflation-adjusted output in North Carolina grew 1.8 percent in 2011, after growing 2.5 percent in 2010. The state's growth in 2011 was higher than the national rate of 1.5 percent and the southeastern state average of 0.9 percent.

Growth in NC was led by an increase in manufacturing, which contributed 0.8 percent, and finance and insurance, which contributed another 0.45 percent.

For the second year in a row, economic growth in the state outpaced population growth. On a per capita basis, economic growth increased 0.8 percent in 2011, putting North Carolina 17th among the 50 states and DC.

Despite this growth in output, North Carolina added fewer than 34,000 non-farm jobs in 2011, a growth rate of only 0.9 percent. Nationally, the job growth was much closer to output growth at 1.4 percent.

The Chamber of Commerce and the Republican legislature claim that a poor business climate is holding back job growth. North Carolina businesses, however, appear to be performing better than the national average--they also got a nice break in their tax rates. Maybe it's time for businesses to show a little of that love to the state's workforce.

The horrors of carbon cap-and-trade

Horrible things are happening in 10 states north of North Carolina, where irresponsible do-gooders have implemented a carbon cap-and-trade system...that just might be working.

The Regional Greenhouse Gas Initiative, Inc. (RGGI) reported yesterday that CO2 emissions in the 10 states that participate in the cap and trade program were 23 percent lower in 2009-2011 than in the preceding three years, even though electricity use only declined 2.4 percent.

The changes in climate policy did not appear to hurt the states' economic growth. Inflation-adjusted gross state products in the 10 RGGI states increased by 1.4 percent from 2008 to 2011 compared to 0.5 percent in non-RGGI states. From 2006-2008 the change in inflation-adjusted gross state products in RGGI and non-RGGI states was identical.