Archive for March 2012
Pucker Up!
The Friday File: When it comes to makeup, spending cycles back and forth between lips and eyes. A fall in colored lipstick sales from ’07 through ’09 was offset by a rise in “smokey eye” which then morphed into volumizing eyelashes. Since then eye product sales have fallen but lip color sales jumped 13% between…
Read MoreBigger Than You Think!
How big is the US welfare state? Bigger than you think! In Europe, governments subsidize industry, and provide healthcare and day-care, through high taxes. Here we do the same thing, but with special (charitable, medical) deductions, (childcare) tax credits and exemptions. Adding back these items (totaling $600 billion) increases government spending by 20%! This puts…
Read MorePsychology of Terrorism
A recent paper by three economists shows that Palestinian terrorist attacks that killed Jewish Israelis (civilian and military, in Israel the West Bank and Gaza) between ’02 and ‘04 had no effect, immediate or delayed, on the happiness of Jewish Israelis. The authors carefully controlled for gender, age, marital status, number of kids, education, health,…
Read MoreOil is OK
West Texas Intermediate crude sells for $106/barrel while North Sea Brent sells for $125. Normally, they are similarly priced. The current gap exists because of a lack of pipeline capacity out of Cushing, OK. (where physical delivery of oil occurs). But, a new pipeline (part of the Keystone XL project) is now being built which…
Read MoreHelping Can Hurt
The share of the unemployed out of work six months or longer has been stuck above 40% for two years. Therefore, some states are considering legislation making it illegal for firms to discriminate against the unemployed. This well-intended approach will have unintended consequences, because the longer someone is out of work the more likely skills…
Read MoreBad Seeds
The Friday File: Opium production in Afghanistan jumped 61% in ’11 to 5,800 metric tons. The farm value is $1.4 billion, 9% of GDP! The street value, which includes profits for the Taliban, refiners, warlords, politicians and cartels, is much higher. Worse, area under cultivation (324K acres) is double what it was in ’02 despite…
Read MoreUnemployment is not the Story!
The unemployment rate is falling fast, but for the wrong reasons. In 1/12 the labor force participation rate was 63.7%, the lowest level since ’82 and way below the 66% when the recession began. Had the LFPR rate not fallen, the unemployment rate would now be 10.4%, not 8.3%. And, because the Boomers are fast…
Read MoreRomney Gets Republican Nod
Romney will win the Republican nomination. So far, 582 delegates (25% of the 2,286 total) have been awarded. Romney has won 331, or 57%, while Santorum has picked up 139, or 24%. With 1,704 delegates left to award, Santorum must win 59% of the remaining delegates, more than 2.5 times his current success rate. By…
Read MoreOlympic Stupidity
The ’12 London Summer Olympics will bring little if any net benefits. Sure, 40K athletes and coaches will come, but regular tourists will stay away, bookings are already down, and 20% of locals plan to be out of town to avoid crowds and traffic. While there will be new sports facilities, it just means less…
Read MoreInject Some Sanity
Vaccine shortages; This industry has very high fixed costs to develop a vaccine (labs are costly), high fixed costs to produce a batch (it takes about a year), trivial marginal costs to make an extra dose within a batch (increasing the batch size is cheap) and very limited ability to store serum. Given this cost…
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