Tab Clearing 2

A really interesting look at state budget deficits.

History of deficits and surpluses in the USA.




A look at, among other things, the difference between the headline unemployment numbers and the true, revised, numbers quietly released later.




 The general thought by professionals is that the recent jobs reports have been a little screwy.
Here's the head economist for Gallup explaining why.
Essentially, the labor force continues to shrink.  Explains apparently falling unemployment numbers, not even close to good news.
And here's Jack Welch explaining how stratospherically rapidly the economy would have to grow for the numbers to actually be real and be good news.

The economy is not in a free-fall. Oil and gas are strong, automotive is doing well and we seem to be seeing the beginning of a housing comeback. But I doubt many of us know any businessperson who believes the economy is growing at breakneck speed, as it would have to be for unemployment to drop to 7.8% from 8.3% over the course of two months.
The reality is the economy is experiencing a weak recovery. Everything points to that, particularly the overall employment level, which is 143 million people today, compared with 146 million people in 2007.

And finally, it turns out that America expects its rich to pay a larger share of taxes than ANY OTHER industrialized nation.  

"The United States is actually more dependent on rich people to pay taxes than even many of the more socialized economies of Europe. According to the Tax Foundation, the United States gets 45 percent of its total taxes from the top 10 percent of tax filers, whereas the international average in industrialized nations is 32 percent. America’s rich carry a larger share of the tax burden than do the rich in Belgium (25 percent), Germany (31 percent), France (28 percent), and even Sweden (27 percent)."

Energy Expenditures

Lower-income households spend a much greater percentage of their income on energy than to higher-income households.  Therefore, an increase in energy prices will disproportionately hurt low-income families.  Over the past couple of years energy (and food) prices have been steadily increasing.  Where are the administration's actions to demonstrate that they actually, as they say, care for the poor and middle-income Americans?  They should be taking every options to reduce energy prices, not doing everything in their considerable power to increase energy prices. 

Chart from HERE:

Change in Incomes by Quintile

Look at this chart.   It's from here, investors.com.  Now, you cannot pin the cause on any one factor, but the reality displayed in the chart above certainly does put the lie to the idea that the middle class in this country saw any kind of a recovery in 2011. 

What does it mean? Briefly, in 2011 the 20% of households with the highest annual income were the only group of households to see their average income increase.  

The Insulation of DC

Once again, the DC area has several of the nation's wealthiest counties.  This year greater DC has 7 of the 10 counties with the highest annual income.  This is up from previous years.

To me, this is a very obvious symbol of just how very out-of-touch the DC area is from the rest of the country.  Government jobs and government-funded jobs (gov/defense contractor) are simply insulated from the harsh economic realities facing most of the nation right now.  

You can find the information here, in the 2011 American Community Survey conducted by the Census Bureau. 

Corporate Cronyism

I've written about crony capitalism before.  Essentially it is businesses attempting to use the coercive power of government for their own ends, either to regulate their competition or to seize money from taxpayers for the business. 

Charles Koch has written a nice column in the WSJ address this topic.  

Selected quote:

Trouble begins whenever businesses take their eyes off the needs and wants of consumers—and instead cast longing glances on government and the favors it can bestow. When currying favor with Washington is seen as a much easier way to make money, businesses inevitably begin to compete with rivals in securing government largess, rather than in winning customers.
We have a term for this kind of collusion between business and government. It used to be known as rent-seeking. Now we call it cronyism. Rampant cronyism threatens the economic foundations that have made this the most prosperous country in the world.
We are on dangerous terrain when government picks winners and losers in the economy by subsidizing favored products and industries. There are now businesses and entire industries that exist solely as a result of federal patronage. Profiting from government instead of earning profits in the economy, such businesses can continue to succeed even if they are squandering resources and making products that people wouldn't ordinarily buy.

Spend Like a Rich Man

This article has a very interesting discussion of how the very-rich (net worth in excess of $25Million) spend their money each year.  Essentially they spend money on their cars, houses, and trips.  Oh, and something not mentioned by the article, they GIVE.  LOTS.  See the very interesting chart below.  I find the giving very interesting b/c Americans are constantly told that the rich don't care about anybody else, that they got rich by basically being terrible.  You know, maybe not.

There is this theory called "crowding out" and it is the idea that as government takes more responsibility than private citizens take less - due to two reasons.  First, they simply have less money as government takes taxes to pay for the "charity".  Second, private citizens see reduced need.  Right or wrong, something about human nature likes to be needed.  To me, the great amount of giving by the wealthy is a very positive sign.