Archive for November 2015

The Friday File: Since 1972, no candidate finishing lower than second in the New Hampshire presidential primary has won his party’s presidential nomination. By contrast, because the Iowa caucus is heavily dominated by activists who are not representative of primary voters elsewhere, finishing further back is okay. Bill Clinton was fourth in 1992, George H.W.…

While the labor force participation rate is 62.4% down from 65.7% when the recession ended, those workers won’t return. They’ve retired, are students, are disabled or care for a family member. Slack is the sum of discouraged, marginally attached and those working part-time because they can’t find full-time work. That number, corrected for growth, is…

In 1918 during WWI, US GDP was $75.8 billion and the budget deficit was 12% of GDP. In 1919, GDP was $78.3 billion; the deficit, 17% of GDP. By 1942, GDP was $148 billion and the wartime deficit was 14% of GDP. By 1943, GDP was $185 billion while the deficit peaked at a staggering…

China’s economy continues to slowly weaken. Y-o-Y inflation is just 1.3% and declining, producer prices fell 5.9% and have been falling for 44 consecutive months. Imports fell 18.8% primarily due to slowing demand from for raw materials from heavy industry, and exports dropped 6.9%. While the Party will do its best to boost growth and…

Friday’s employment report rocked! The unemployment rate fell from 5.1% to 5.0%, net job growth was a strong 271,000, and in what may be the start of something big, average hourly earnings rose 2.5% Y-o-Y, its best showing since 7/09. Additionally, the broadest measure of unemployment declined to 9.8%; best level since 5/08. Lastly, the…

The Friday File: In some sports the difference between success and failure is tiny. In the 100-yard sprint, hundredths of seconds make all the difference, same is true in downhill skiing. Add NHL goaltending to the list. Today, superstar goalies save better than 91.5% of the shots they face, good goalies save between 91% and…

When Turing Pharmaceuticals acquired Daraprim, they raised the price from $13.50/dose to $750/dose because they had a monopoly on it. In 2010 China tried to corner the market in rare-earths by reducing exports; prices quickly rose 1000%. Then economics kicked in. Recently Imprimus Pharmaceuticals offered up an alternative to Daraprim at 99 cents/tablet. US rare-earths…

The tragedy of China’s draconian population control policies is they were promoted to solve economic problems. The problem was the dreadful economic policies implemented by China’s elites! The one-child policy has led to massive infanticide, sex-selective abortions and much worse. Moreover, China is aging staggeringly fast. Its working-age population is shrinking, yet China remains poor;…

Uber/Lyft solved a market failure deliberately created by municipalities who, acting as monopolists, prevent free entry and exit into taxi markets. To protect against unwanted market entry, licenses were required that were difficult to obtain. Taxis were made artificially rare and prices were raised. By breaking the monopoly, Uber/Lyft enhances welfare. If Lyft/Uber reduces vehicle…

Despite last week’s array of disappointing data, including quarterly GDP growth of 1.5%, weak housing and business fixed investment spending, weak consumer spending and wage and inflation data, the economy’s OK. Q3 GDP growth was temporarily depressed primarily due to earlier inventory overbuilding. Separately, real private sales to domestic purchasers (which excludes inventory changes, trade…