January 11, 2007

Econ and Other Notes (011107)

Filed under: Business Moves,Economy,Marvels — Tom @ 3:42 pm

Oil went below $53 a barrel earlier in the day (Update: It closed below $52). The lowest Cincy-area gas prices have slipped below $2. Pain Dealer reports that Cleveland prices are as low as $1.96.
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Feeling Cranky? “Cranky” is the name of a new search engine targeted to “people 50 and over (who) are confused about searching on the Web.” No word as to whether feeling like you’re 50 counts.

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This is clever — A hand gel that provides a nicotine fix.

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Good luck, but I doubt this will do anything — “Investors Try to Block Nardelli Payouts”

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Howard “Nardelli” Stern? Stern gets an $83 million stock bonus from Sirius for subscriber acquisition. Meanwhile the stock is still about 40% lower than when he began broadcasting for the company, and down about 3% just before Thursday’s close.

Moving at the Speed of Government in New London, CT

Filed under: Economy,Taxes & Government — Tom @ 12:42 pm

From the New London Day of Jan. 8 (link requires registration after 72 hours, and paid subscription after roughly a week):

New London Officials Have High Hopes For Reviving Development
Fort Trumbull plan at issue in talks set to start Wednesday

New London — It’s time to move forward at Fort Trumbull, according to city councilors.

After spending most of last year securing settlements with six former Fort Trumbull homeowners, the city and the New London Development Corp. now want to proceed with their effort to revive the city’s waterfront — and tax base — with development that would include rental housing, a hotel, office space and a museum.

To ensure progress on the development of the Fort Trumbull peninsula, City Councilor Beth A. Sabilia will hold the first of a series of Economic Development Committee meetings at 4:30 p.m. on Wednesday at City Hall.

The meetings are designed to coordinate city efforts with those of the New London Development Corp. The meetings will give councilors their first opportunity in some time to discuss the status of the Fort Trumbull municipal development plan with NLDC leaders.

The town’s settlement with the original Kelo ruling holdouts was six months ago. I see the last sentence of the excerpt as an admission that literally nothing has been done, or even discussed, since then. How are the NLDC people earning their salaries?

Nobody Makes Lemonade into Lemons Better Than AP’s Business Reporters

An unbylined report on unemployment claims by the Associated Press is a classic of the genre (bold is mine):

The Labor Department reported Thursday that applications for jobless claims dropped by 26,000 to 299,000 last week on a seasonally adjusted basis. It marked the first time jobless claims have fallen below 300,000 since the week of July 22.

The improvement was much better than the decline of 9,000 that analysts had been expecting and provided further evidence that the slowing U.S. economy has not begun to seriously affect the labor market outside of specific industries such as housing and auto manufacturing.

SLOWING? Did AP ever consider that maybe claims are dropping because the economy may NOT be slowing?

It’s not like there is a lack of evidence of continued and probably accelerating growth:

  • The manufacturing sector (14% of the economy) returned to expansion mode in December after one month of minimal contraction in November.
  • The services sector (86% of the economy) maintained its strong expansion posture in December.
  • 167,000 new jobs were added last month (cited in the article), and 29,000 more were added during the two previous months than originally estimated, according to the Labor Department’s Establishment Survey (the official measurement of employment growth),
  • The unemployment rate remained at 4.5%.
  • The Household Survey (officially used for calculating the unemployment rate only) has shown an explosive growth in the number of people working — almost 1.6 million in the last five months (you read that right).
  • December retail sales, framed as “disappointing,” still came in with an increase of 4.5% — well above inflation. That 4.5% figure does not pick up the 26% increase in Nov. 1 – Dec. 20 online sales.

AP and others will probably stay in their “slowing economy” meme until the 4th quarter GDP report is released in late January. This Reuters article from yesterday that should have been known to AP cites a current consensus that the fourth-quarter result will come in at 2.3% (fifth paragraph). Anything above the third quarter’s final number of 2.0% will prove that the formerly Mainstream Media’s meme has been wrong all along — but don’t expect acknowledgment of that.

Cross-posted at NewsBusters.org.

Column of the Day: Alan Reynolds Nails the New York ‘Class Envy’ Times, So I Don’t Have To

That’s a relief, and he did a great job of it in his Thursday Townhall column, including a great wrap that looks at who pays ALL federal taxes (link to NYT added by me; link probably requires free registration; bolds are mine):

To have any chance of having his story appear in The New York Times, (reporter Edmund) Andrews had no choice but to dissemble.

….. Measured in constant 2004 dollars, average income of the top 1 percent was $1,413,000 in 2000, but only $1,259,700 in 2004 — a drop of 7.9 percent. Tax cuts did not help a bit. After-tax income of the top 1 percent fell from $946,300 to $887,800 — an even larger 8.3 percent decline.Andrews says, “Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels.” You don’t need to be an economist to discern that “the biggest dollar value” of any equiproportionate tax cut must go to those with the “biggest dollar value” of taxes paid. Yet the top 1 percent did not get anything remotely close to a proportionate share of the tax cuts after 2000.

….. The CBO calculates the effective tax rate for all federal taxes — including Social Security and Medicare taxes, income taxes and excise taxes. For the bottom 80 percent as a group, that total federal tax fell from 14.1 percent in 2000 to 11.4 percent in 2004 — a 19.1 percent tax cut. The tax cut was deepest among the poorest fifth (29.7 percent), largely because of the Bush administration’s refundable tax credit for children. For the middle fifth, the total tax rate fell from 16.6 percent to 13.9 percent — a 16.3 percent cut. As for the top 1 percent, their overall tax rate was merely trimmed from 33 percent to 31.1 percent — a 5.8 percent cut.

A truly courageous (willing to be fired) ombudsman of The New York Times would insist on the following correction to Andrews’ upside-down article:

“Households earning more than $266,800 a year saw their federal tax rates drop less sharply than any other group in the country as a result of President Bush’s tax cuts, according to a new Congressional Budget Office study.”

Repeating in bullet list form, plus a helpful note:

  • The top 1% got a 5.8% tax cut, and a 1.9% cut in the effective rate they paid.
  • The middle quintile got a 16.3% tax cut, and a 2.7% cut in the effective rate they paid.
  • The bottom 80% got a 19.1% tax cut, and a 2.7% cut in the effective rate they paid.
  • Memo to Edmund Andrews and his layers of fact-checking editors — 19.1% and 16.3% are both more than 5.8%; 2.7% is more than 1.9% (with Times business reporting, you take nothing for granted).

As to the last two paras of the excerpt above, rumor has it that Times ombudsman Bryan Calame is going to be fired anyway for truth-telling like that referred to here last week. So, Bryan, why not go out in a blaze of glory?

Carnival Barking (011107)

Filed under: News from Other Sites — Tom @ 7:35 am

Newshound’s 56th on Ohio politics is here.

Boring Made Dull’s 28th on Econ and Social Policy is here.

John Cox Lays Down the Benchmarks

Consider this a 2008 checklist for sensible issue positions (HT to the anon e-mailer who sent the link). I’m with John Cox on 98% of what he says, and the 2% where we might differ doesn’t matter.

I don’t know John Cox, but if he checks out (anyone who knows him or of him is welcome to comment or e-mail), and if no one comes forth who is very close to where he is on the issues, he should be the conservative/common sense (but I’m being redundant) standard-bearer.

How About This Deal on Iran?

Filed under: Economy,Environment,Taxes & Government — Tom @ 6:14 am

The right wants to do something about that country’s nuke development program.

The left seems OK with it, and with leaving Tehran alone, but should change its mind lickety-split once it learns about the smog problem in Iran’s capital (/sarcasm):

Iran smog ‘kills 3,600 in month’

Air pollution is estimated to have killed nearly 10,000 people in Tehran over a one-year period, including 3,600 in a month, Iranian officials say.

Most of the deaths were caused by heart attacks and respiratory illnesses brought on by smog, they said.

The scale of the problem led one senior official to say living in the Iranian capital was like “collective suicide”.

Cheap fuel encourages car use in Iran, correspondents say, and many vehicles do not meet global emissions standards.

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UPDATE: Doug Ross has a quick roundup of other stories about Iran that you might see in the BBC (as per above), but that “somehow” don’t make it into American newspapers — and why.

A Big Step (Iraq Oil Trust to Be Set Up)

Filed under: Economy,Taxes & Government — Tom @ 6:09 am

From President Bush’s Wednesday televised address:

To establish its authority, the Iraqi government plans to take responsibility for security in all of Iraq’s provinces by November. To give every Iraqi citizen a stake in the country’s economy, Iraq will pass legislation to share oil revenues among all Iraqis.

This has been recommended by many, including Sens. Hillary Clinton and John Ensign, and Steve Forbes. It is long, long overdue. Failure to do this shortly after the government was set up was a big mistake.

Supply-Side Chirac?

Filed under: Economy,Taxes & Government — Tom @ 6:04 am

From Expatica:

Chirac calls for vigorous tax, reforms

PARIS, Jan 4, 2007 (AFP) – French President Jacques Chirac on Thursday called for vigorous new tax and economic measures in both France and the European Union in the face of rising global competition.

Chirac, in New Year greetings to labor and management groups, proposed a reduction in the French corporate tax rate to 20 percent from 33 percent over five years in a bid to make France a more attractive place to do business.

He called on the European Union to set an exchange rate policy and to adopt a more muscular approach toward the promotion of EU commercial interests.

The president in addition predicted that France’s stubbornly high unemployment rate — which came to 8.7 percent in November — would fall to its lowest level in 25 years by the end of 2007.

To have a meaningful impact, the French tax cuts should be front-loaded. I would suggest dropping the top rate to 25% in the first year, and maybe a point or two in each subsequent year.

Positivity: US Heroes Catch Falling Toddler

Filed under: Positivity — Tom @ 5:59 am

From New York City:

Published: 2007/01/05 20:59:53 GMT

Two New York men are being hailed as heroes after catching a toddler as he fell four storeys from a fire escape.

Julio Gonzalez and Pedro Nevarez saw three-year-old Timothy Addo dangling from a railing and rushed to position themselves underneath him.

As the boy lost his grip, he hit a tree branch, bounced off the chest of one of the men and landed in the other’s arms.

Two days earlier, a New Yorker jumped onto a subway track to save a man who had fallen there after a seizure.

“This is a week of heroes here in New York,” Police Commissioner Ray Kelly said.

‘Hero of Harlem’

Police said Timothy crawled out of a fifth-floor window in the Bronx while his babysitter was briefly distracted. He then fell through a gap to the fire escape below, 40ft (12.2m) above the street.

“He was hanging on for dear life. We ran over and stood underneath so we could catch him,” Julio Gonzalez, 43, told the New York Post.

The toddler hit Mr Nevarez in the chest so hard he knocked him over. But after the incident, the 40-year-old insisted the pair had just done the obvious thing.

“I’m not a hero. I just did what any other father would do. When you’re a father, you would do this whether it’s your child or not,” Mr Nevarez said.

Police said they had spoken to the babysitter and that an investigation was under way.