Assorted Links (6/29/2012)

Here’s a list of articles that I have been reading, videos that I have been viewing, and podcasts that I have been listening to lately:

Uncommon Knowledge: John Stossel

www.hoover.org

I listened to Peter Robinson’s 45 minute interview with John Stossel this morning on my daily walk around ATX. Stossel is a rarity – a libertarian member of the news media. The interview centered around a discussion of Stossel’s new book entitled “No, They Can’t: Why Government Fails—but Individuals Succeed.” (cf. http://amzn.to/MGGkZo). The interview and the book are organized around a series of initial statements which are framed as “What intuition tempts us to believe: ____”, followed by responses which are framed as “What reality taught me: ____”. For example,

WHAT INTUITION TEMPTS US TO BELIEVE: When there’s a problem, government should act.
WHAT REALITY TAUGHT ME: Individuals should act, not government.

WHAT INTUITION TEMPTS US TO BELIEVE: Someone needs to plan, and the central planners know best.
WHAT REALITY TAUGHT ME: No one knows enough to plan a society (Stossel gives a shout-out to Hayek on this one).

WHAT INTUITION TEMPTS US TO BELIEVE: The important thing is to have heroic leaders.
WHAT REALITY TAUGHT ME: Real heroes don’t control other people’s lives.

WHAT INTUITION TEMPTS US TO BELIEVE: Big business runs the media, so the media support business. WHAT REALITY TAUGHT ME: The media hate business.

and so forth…

The Wrong Remedy for Health Care

professional.wsj.com

This article provides a coherent explanation of what a market-oriented reform alternative to the so-called “Affordable Care Act” (AKA “Obamacare”) would look like…

The Tax Duck

professional.wsj.com

“If it looks like a duck, swims like a duck and quacks like a duck, it probably is a duck… A sampling of Democratic denials—from President Obama on down—that the individual mandate is a tax, as the Supreme Court ruled it is.”

The ObamaCare Election

professional.wsj.com

Quoting from this article, “The Roberts majority didn’t just legitimize ObamaCare—it provided Democrats a road map, and the tools, for the party’s ambitions to turn us into a European-style entitlement state.”

Noonan: Obama Has a Good Day

professional.wsj.com

“But liberty has a bad one, Peggy Noonan writes.”

A Triumph and Tragedy for the Law

professional.wsj.com

“In The Wall Street Journal, David B. Rivkin and Lee A. Casey write that in order to uphold the individual mandate as an exercise of the taxing power, the majority overlooked the natural meaning of the statutory text.”

Priceless: Curing the Healthcare Crisis

www.amazon.com

I just added this book to my ever-expanding reading list; here’s a synopsis of the book provided by the “Zon” (AKA Amazon.com):

“In the groundbreaking book Priceless, renowned healthcare economist John Goodman reveals how patients, healthcare providers, employers, and employees are all trapped in a dysfunctional, bureaucratic, healthcare system fraught with perverse incentives that raise costs, reduce quality, and make care less accessible. Unless changed, these incentives will only worsen the problems in the coming months and years. He demonstrates how market forces have been driven out from the American healthcare system, making it nearly impossible to solve problems as effectively or efficiently as in virtually every other type of consumer marketplace. Goodman cuts through the politics to think “outside the box” and propose dozens of bold and crucial innovations that, if adopted, would enable caregivers, entrepreneurs, and patients to use their knowledge and creativity to create access to low-cost, high-quality healthcare.”

Health care ruling: A strange constitutional win

washingtonexaminer.com

Georgetown University law professor Randy Barnett makes an intriguing case that the SCOTUS decision was a victory of a sort…

The Revolution: A Manifesto

amazon.com

In his book entitled “The Revolution: A Manifesto”, Ron Paul describes the health care system which existed in the America of my youth and early adulthood. How times have changed!:

“It is easy to forget that for decades the United States HAD a health care system that was the envy of the world. We had the finest doctors and hospitals, patients received high-quality, affordable medical care, and thousands of privately funded charities provided health services for the poor. I worked in an emergency room where nobody was turned away for lack of funds. People had insurance policies for serious health problems but paid cash for routine doctor visits.”  

Obama won ugly and only temporarily

www.washingtonpost.com

Interesting political take on yesterday’s SCOTUS decision: “There was never a debate about whether Americans wanted new taxes to support government-required health insurance. The court answered a question that wasn’t asked. Now President Obama must celebrate his new tax and defend it between now and the election in November. The ruling will instantly be challenged in Congress, and it puts vulnerable Democrats in the position of having to defend an Obama tax increase, not generous health-care benefits.”

Why Roberts did it

www.washingtonpost.com

“The chief justice had to choose between two imperatives.”  Excellent essay by Washington Post columnist Charles Krauthammer…

The New Swing Justice

professional.wsj.com

Quoting from this article, “The tax theory had been disclaimed by President Obama, as well as House Democratic Leader and Nancy Pelosi and Senate Majority Leader Harry Reid. In their dissent, the Justices note that while Congress might have framed the mandate as a tax, it didn’t do so. “We cannot rewrite the statute to be what it is not,” they wrote. “In this case, there is simply no way, “without doing violence to the fair meaning of the words used,” . . . to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.””

And Now, Health Care Reform?

professional.wsj.com

Quoting from this article, “Forget SCOTUS. Amazingly, John Kerry laid out its real epitaph in 2004 in a major campaign address. Mr. Kerry delivered the unwelcome message that extending coverage to the uninsured would only lead to a renewed explosion of health-care spending as the uninsured now participated in the same incentives to overspend as the rest of us. Bingo.”

The ObamaCare Tax

professional.wsj.com

“The Wall Street Journal’s Stephen Moore says Mr. Obama’s team is surely uncorking the champagne bottles, but taxpayers may not be so happy.”

Supreme Court Upholds Mandate as Tax

online.wsj.com

“The court upheld the mandate as a tax, in an opinion by Chief Justice John Roberts. The justices also found fault with part of the health-care law’s expansion of Medicaid.”

The President That Time Forgot

professional.wsj.com

“In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that ObamaCare was a legislative monolith, out of sync with an iPad world.”

Research On Religion | Robert Woodberry on Missionaries and Democracy

researchonreligion.org

I highly recommend listening to Tony Gill’s interview of Bob Woodberry concerning his recently published paper entitled “The Missionary Roots of Liberal Democracy” (available at http://bit.ly/KQHwvw). Dr. Woodberry empirically finds that “the historic prevalence of Protestant missionaries explains about half the variation in democracy in Africa, Asia, Latin America and Oceania and removes the impact of most variables that dominate current statistical research about democracy.”

Assorted Links (6/27/2012)

Here’s a list of articles that I have been reading and videos that I have been viewing lately:

Why the Apple Demographic Is So Important to Orbitz and Retailers

blogs.wsj.com

Here’s a followup article to another article entitled “On Orbitz, Mac Users See Pricier Hotels” (@ http://on.wsj.com/MXDei0) which makes the following claim: “Studies suggest that adult owners of Mac computers are not only wealthier, but they also skew younger than PC users.”

The Never-Ending War Over CEO Pay

professional.wsj.com

“Columnist Holman Jenkins writes that when asked, shareholders seem happy to richly reward disciplined risk-taking.”

Let’s Ban the Word ‘Trillion’

professional.wsj.com

“Andrew Tisch writes that U.S. national debt is $15,800,000,000,000. Our lingo shouldn’t obscure how dangerous that is.”

Down and Out in Stockton

professional.wsj.com

“The Wall Street Journal reports on the latest city to confront bankruptcy and how it got there.” Quoting further from this article, “The average firefighter costs the city about $157,000 a year in pay and benefits and can retire at age 50 with a pension equal to 90% of his highest year’s salary plus nearly free lifetime health benefits.”

The iPhone Turns Five

online.wsj.com

“In The Wall Street Journal, Thomas Hazlett writes that we should forget the shouting about ‘open’ or ‘closed’ systems, because the magic is in the dynamics of platform competition.”

Federal Student Aid and the Law of Unintended Consequences

hillsdale.edu

Subsidies make college educations less, not more affordable; this article explains how…

How many houses should you look at before you buy?

mindyourdecisions.com

“A lot of my friends have recently bought homes, and I thought this was a fun aspect of their buying process. What amazed me the most is that there was a big variance in the number of houses people looked at before buying.”  This article provides an interesting mathematical proof concerning how to maximize your chances of finding the “best” house; apparently the math generalizes to other important problems; e.g., what dating strategy can help you find the best spouse. Thankfully, I found the best spouse early in life without the benefit of the mathematics! 🙂

Capitalism Is Responsible

valuesandcapitalism.com

“Once we accept the fact that genuine moral good requires more than intentions, it becomes immediately apparent that capitalism has a leg up on every other economic system when it comes to the noble goals of poverty alleviation, peace and health.”

Uncommon Knowledge: Dennis Prager

hoover.org

Yet another book to read – Dennis Prager’s “Still the Best Hope: Why the World Needs American Values to Triumph” (cf. http://amzn.to/MUpOmZ). The link listed below will take you to a 45 minute video interview of Dennis Prager by Peter Robinson, who is the host of the “Uncommon Knowledge” program (cf. https://www.facebook.com/UncKnowledge)… I listened to this interview and was totally blown away..

How Big Is the World Black Market?

freakonomics.com

“Economists Ceyhun Elgin and Oguz Oztunali are researching the size of shadow economies, or black markets, around the world. Using a dataset with 7,395 observations for 161 countries from 1950 to 2009, they’re looking into how the size of black markets differs in rich and poor countries.”

Uncontrolled Self-Promotion

www.nationalreview.com

I highly recommend Manzi’s book entitled “Uncontrolled” (cf. http://amzn.to/KyodDn), as well as 1) Peter Robinson’s (less than 40 minute) interview with Jim Manzi @ http://www.hoover.org/multimedia/uncommon-knowledge/119871, and Russ Roberts’ 60 minute podcast featuring Jim Manzi @ http://www.econtalk.org/archives/2012/06/manzi_on_knowle.html.  My friend Jonathan Warren brought Manzi’s book to my attention by way of David Brooks’ review @ http://nyti.ms/Kfbg09.

Should Tenure for College Professors Be Abolished?

professional.wsj.com

“Yes, says author Naomi Schaefer Riley in a Wall Street Journal debate, because it rewards research over teaching. No, says Cary Nelson, president of the American Association of University Professors, because it is the ultimate quality check.”

Law Grads Face a Brutal Job Market

professional.wsj.com

“Members of the law-school class of 2011 had little better than a 50-50 shot of landing a job as a lawyer within nine months of receiving a degree, new data show.”

Why Charter Schools Work

professional.wsj.com

“In The Wall Street Journal, Deborah Kenny of Harlem Village Academies writes that accountability for results and freedom from union rules attract the best teachers into the profession.”

Why the Euro Crisis Will Go On and On

professional.wsj.com

“In The Wall Street Journal, Business World columnist Holman Jenkins writes that European voters are not going to accept the economic reforms that will allow the euro to be viable.”

Crop Insurance Set to Expand Despite Growing Fraud Worries

cnbc.com

“None of the proposals to expand crop insurance would add anything to combat fraud, which costs taxpayers as much as hundreds of millions of dollars a year.”

The Grumpy Economist: Taylor’s “First Principles”

johnhcochrane.blogspot.com

“The Grumpy Economist,” the University of Chicago’s John Cochrane, reviews John Taylor’s book First Principles: Five Keys To Restoring America’s Prosperity (cf. http://amzn.to/KzkT0F). Quoting from Professor Cochrane’s review, “This book is fundamentally about rules vs. discretion, commitment vs. shooting from the hip, and more deeply about whether our economy and our society should be governed by rules, laws and institutions vs. trusting in the wisdom of men and women, given great power to run affairs as they see fit.”

Silly Season, 2012

washingtonpost.com

Charles Krauthammer characterizes the election in the following manner: “What remains is a solid, stolid, gaffe-prone challenger for whom conservatism is a second language vs. an incumbent with a record he cannot run on and signature policies — Obamacare, the stimulus, cap-and-trade — he hardly dare mention.”

What Republicans Think

nytimes.com

“This election is about whether we try to work within the existing governing model or render it obsolete to build something fresh.”

A Simple Tax Code Is a Fair Tax Code

professional.wsj.com

“Harvey Golub writes that the top 1% pays more in federal income taxes than the bottom 90%—but the system is biased toward the powerful in other ways.”

How the Euro Will End

professional.wsj.com

“In The Wall Street Journal, Gerald O’Driscoll writes that Greece will simply run out of cash, then Spain’s real-estate bubble will ruin an economy that really matters.”

Whose Fault Is Today’s Bad Economy?

online.wsj.com

“Stanford economist Ed Lazear writes that what we’re experiencing is a new wave of slowdowns, not a continuation of past problems.”

Obama’s United Auto Workers Bailout

online.wsj.com

“If the administration treated the UAW in the manner required by bankruptcy law, it could have saved U.S. taxpayers $26.5 billion.”  So much for the rule of law… Viva crony capitalism!

Is Capitalism Immoral? An Interview with Father Robert Sirico

patheos.com

“Countless detractors over the years have argued that capitalism is intrinsically immoral. Is it true?”

Worst. Bailout. Ever.

blog.american.com

Here is the American Enterprise Institute’s take on the EU’s $125 billion bailout of Spain’s banks. They characterize it as the “Worst. Bailout. Ever.” I have to agree. Furthermore, the human toll in Spain is tragic; the overall unemployment rate in that country currently stands at roughly 25 percent (and more than twice that rate for young people). Another alarming statistic is that apparently nearly half of all Spanish adults under thirty-five still live with their parents. After many years of deficit spending, failing welfare states all across Europe (i.e., not only Spain, but also Greece, Ireland, and Portugal) have become unsustainable.

Jonah Lehrer on Creativity and Imagine

econtalk.org

Jonah Lehrer and the host of EconTalk, Russ Roberts, have an engaging conversation concerning Mr. Lehrer’s fascinating new book entitled “Imagine: How Creativity Works” (cf. http://amzn.to/LQXjYC) which explores the neuroscience behind creativity and innovation.

The Moral Diet

www.nytimes.com

“We all commit little indiscretions, just enough to keep from feeling too bad about it. Should we be active in curtailing this inevitability, and if so, how?”

Obama’s Real Spending Record

online.wsj.com

Quoting from this article, “The right point of focus is not at what pace spending has grown under President Obama but instead how much more he needs to cut spending from its bloated levels to bring the economy back to health. The huge increase in spending as a percentage of GDP under Presidents Bush and Obama is the reason we are experiencing the slowest recovery since the Great Depression. As Milton Friedman understood, an economy cannot spend or tax itself into prosperity.”

Assorted Links (6/11/2012)

Here’s a list of articles that I have been reading and videos that I have been viewing lately:

Obama vs. Romney on Public School Jobs

www.cato-at-liberty.org

“The president wants to hire more public school teachers. Governor Romney thinks we have too many already. Rather than theorize about who’s right, let’s look at the numbers…”  Quoting further from this article, “… (public school) enrollment is only up 8.5% since 1970, whereas (public school) employment is up 96.2%. In other words, the public school workforce has grown 11 times faster than enrollment over the past 40 years.”

Eugenics, Past and Future

www.nytimes.com

“Will yesterday’s pseudoscience become tomorrow’s temptation?”

Europe’s Latest Bailout

professional.wsj.com

Let’s see – the Spanish government was having difficulty selling bonds in the financial markets so it turned to the Spanish banks and had them sell bonds to fund loans to the Spanish government. However, since the Spanish banks have now loaned too much money to the Spanish government, they have enlisted the “help” of the Spanish government which has now turned to the EU for a bailout which the Spanish government will use in order to recapitalize Spanish banks which are capital impaired because they have loaned too much money to the Spanish government.

High finance can sure be confusing at times! Obviously this is one huge Ponzi scheme – barring an imminent and dramatic recovery in the Spanish real estate market in particular and the Eurozone economy in general, kicking the can further down the road in this fashion is only going to make the final resolution of the sovereign debt crisis much more painful for all parties involved… As this WSJ article notes, “Far better to clean up the mess once and for all, including the discipline of letting failing banks fail, erasing shareholder capital, and firing the managers.”

No More Welfare for Banks

professional.wsj.com

“In The Wall Street Journal, FDIC Director Thomas M. Hoenig writes that the FDIC and the taxpayer are the underwriters of too much private risk taking.”

Castro Endorses Obama

professional.wsj.com

“Wall Street Journal columnist Mary Anatasia O’Grady writes that the Cuban dictator’s daughter gets a visa to make speeches here while the Castro regime continues to hold an American hostage.”

Citizens United and the Wisconsin Vote

professional.wsj.com

“Stanford professor Michael W. McConnell notes that Scott Walker’s opponent in the recall election, Tom Barrett, got millions in support from unions, whose contributions were legitimized by the Supreme Court.”

Notable & Quotable

professional.wsj.com

“Ron Haskins of the Brookings Institution testifying before the Senate Finance Committee, June 5, on the relationship between individual initiative and poverty.” Dr. Haskins’ recommendations for poverty are 1) complete at least a high school education, 2) work full time, and 3) wait until age 21 and get married before having a baby. Quoting further from this article, “Based on an analysis of Census data, people who followed all three of these rules had only a 2% chance of being in poverty and a 72% chance of joining the middle class (defined as above $55,000 in 2010). These numbers were almost precisely reversed for people who violated all three rules, elevating their chance of being poor to 77% and reducing their chance of making the middle class to 4%.”

Obama’s Green Jobs: What’s In A Name?

www.youtube.com

“What is a “green” job?” See related Forbes article at http://onforb.es/NO1tST.

The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman

amazon.com

I love this quote from Richard Feynman’s book entitled “Pleasure of Finding Things Out” (cf. http://amzn.to/LIgQZq): “Science is a way of trying not to fool yourself. The first principle is that you must not fool yourself, and you are the easiest person to fool.”

Actually, I don’t think science is unique in this regard – I think it is a problem that we all need to be aware of whenever we take in and process new information, concepts, and ideas. Confirmation bias – i.e., the tendency to favor information which confirms our own pre-conceived beliefs or hypotheses – is dangerously lurking everywhere we go…

Four Words That Moved the World: ‘Tear Down This Wall’

professional.wsj.com

“In The Wall Street Journal, Peter Robinson writes: This may sound odd coming from a Reagan speechwriter, but for 25 years I have wondered—did that Berlin address really matter?” I am looking forward to the upcoming (June 13) luncheon at Austin’s Steven F. Austin Intercontinental Hotel featuring Peter Robinson who was the writer of Ronald Reagan’s famous, “Mr. Gorbachev, tear down this wall” speech which was delivered by Ronald Regan at the Brandenburg Gate in Berlin on June 12, 1987. See http://bit.ly/17LRBD for an edited excerpt of this historic speech at youtube.com…

For Greater Glory

www.forgreaterglory.com

“What price would you pay for freedom? An impassioned group of men and women each make the decision to risk it all for family, faith and the very future of their country.” This is a fantastic movie; I was not aware of the history behind it prior to seeing it (i.e., the so-called Cristero War of 1926-1929); see the Wikipedia article located at http://bit.ly/LvpEqX for context…

Hitler finds out that Scott Walker won the Wisconsin recall election

www.youtube.com

Hilarious Hitler Parody about last Tuesday’s Wisconsin recall election…

Obama, Drones and Thomas Aquinas

professional.wsj.com

“In The Wall Street Journal, former Justice Department official John Yoo writes that Obama has avoided vexing detention issues simply by depriving terrorists of all of their rights—by killing them.”

What’s Changed After Wisconsin

professional.wsj.com

“The Obama administration suddenly looks like a house of cards.”

Why delay austerity decisions?

keithhennessey.com

“We meet Lefty and Righty, who are discussing stimulus and austerity.” Interesting thought experiment by Stanford professor Keith Hennessey…

What Wisconsin means

www.washingtonpost.com

Here’s the latest missive from Charles Krauthammer. Quoting from this article, “The unions’ defeat marks a historical inflection point. They set out to make an example of Walker. He succeeded in making an example of them as a classic case of reactionary liberalism.”

‘Eliminate Dengue’ Team Has A Deep (Lab) Bench

www.npr.org

“Australian researcher Scott O’Neill is leading a charge to rid the world of dengue fever. And it’s a real team sport, he says: “We don’t work in isolation in any projects in science these days. The days of having someone beavering away by themselves in the backroom have long gone.””

11 Public Universities with the Worst Graduation Rates

www.thefiscaltimes.com

“With just 56 percent of college students completing four-year degrees within six years, here are 11 public universities with the worst graduation rates.” Southern University at New Orleans has the worst record of this group of 11 public universities, clocking in only 4 percent of its students completing four-year degrees within six years…

Crony Capitalism and the Crisis of the West

professional.wsj.com

“In The Wall Street Journal, Luigi Zingales writes that in Italy and Greece, the most talented don’t get ahead—and that’s also increasingly true in the United States.” Excellent essay about crony capitalism in the USA by Luigi Zingales, who in addition to his day job as University of Chicago finance professor is also the author of “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity” (cf. http://amzn.to/LEecWF)…

‘Stick It to Mitt’ Won’t Work

professional.wsj.com

“In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that Bain Capital and Mitt in Massachusetts are not what’s on voters’ minds in 2012.”

On US Indebtedness…

Earlier today, I had an exchange with a friend of mine about the ongoing European sovereign debt crisis. I opined that an important reason why the European sovereign debt crisis has been going on for such a long period of time (several years now) is due to the political class’s preference (was well as incentives) for applying triage by implementing half-measures; such triage enables policymakers to kick the can far enough down the road so that the European sovereign debt crisis becomes someone else’s problem.

After thinking about a bit further about this, we Americans obviously similar governance problems as the Europeans which, quite tragically, have similarly put the US on an unsound and completely unsustainable fiscal footing. Debt owed by the US federal government now stands at more than $15.7 trillion. Putting this number into perspective, US federal government debt stood at $5.7 trillion on the day that George W. Bush was first inaugurated (January 20, 2001), and grew by $4.9 trillion (to $10.6 trillion) by the time of Barack Obama’s inauguration on January 20, 2009. In just three years and five months, US federal government debt has grown by an additional $5.1 trillion, to $15.7 trillion (you can verify these numbers by using the “Debt to the Penny” app located on the treasury.gov website (see http://www.treasurydirect.gov/NP/BPDLogin?application=np). So Bush 43 accounts for 31.2%, Obama accounts for 32.5%, and the previous 42 presidents cumulatively account for 36.3% of total US federal government debt.

As bad the US federal government debt problem is, we have a far worse entitlement problem which no one (other than perhaps Paul Ryan (R, Wisconsin) and Ron Wyden (D, Oregon)) are even talking about these days. According to an authoritative (but dated) source located at http://www.pgpf.org/Special-Topics/Download-the-Citizens-Guide.aspx (see Figure 10 on page 30 of that document), in January 2009 the present value of Social Security and Medicare promises stood at $45.8 trillion; $7.7 trillion of this total was due to Social Security, and the remaining $38.1 trillion was attributable to Medicare. According to the recently published (April 2012) Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, the present value of unfunded Social Security obligations now stands at $8.6 trillion, which represents an 11.7% increase over the January 2009 amount. Since I haven’t been able to locate a current estimate of the present value of unfunded Medicare promises, I’ll assume for the time being that the present value of unfunded Medicare promises has also grown 11.7% since January 2009. Thus, the January 2012 present value of Social Security and Medicare promises probably now stand at or around $45.8 trillion x 1.117 = $51.2 trillion. (If anyone knows of an authoritative, up-to-date source for the present value of Medicare promises, please let me know! :-)).

This means that as a country, our total indebtedness now stands at roughly $15.7 trillion plus $51.2 trillion, or $66.9 trillion. Since there are (according to the US Census Bureau) 117,538,000 households in America, if you do the arithmetic this works out a per household debt of (gulp) $569,178.

Assorted Links (6/11/2012)

Here’s a list of articles that I have been reading and videos that I have been viewing lately:

Obama vs. Romney on Public School Jobs

www.cato-at-liberty.org

The president wants to hire more public school teachers. Governor Romney thinks we have too many already. Rather than theorize about who’s right, let’s look at the numbers…

 

Quoting from this article, “… (public school) enrollment is only up 8.5% since 1970, whereas (public school) employment is up 96.2%. In other words, the public school workforce has grown 11 times faster than enrollment over the past 40 years.”


Debt to the Penny (Daily History Search Application)

www.treasurydirect.gov

To find the total public debt outstanding on a specific day or days, simply select a single date or date range and click on the ‘Find History’ button.

 

Earlier today, I had an exchange with my friend Jonathan Warren about the ongoing European sovereign debt crisis. I opined that an important reason why the European sovereign debt crisis has been going on for such a long period of time (several years now) is due to the political class’s preference (was well as incentives) for applying triage by implementing half-measures; such triage enables policymakers to kick the can far enough down the road so that the European sovereign debt crisis becomes someone else’s problem.

After thinking about a bit further about this, we Americans obviously similar governance problems as the Europeans which, quite tragically, have similarly put the US on an unsound and completely unsustainable fiscal footing. Debt owed by the US federal government now stands at more than $15.7 trillion. Putting this number into perspective, US federal government debt stood at $5.7 trillion on the day that George W. Bush was first inaugurated (January 20, 2001), and grew by $4.9 trillion (to $10.6 trillion) by the time of Barack Obama’s inauguration on January 20, 2009. In just three years and five months, US federal government debt has grown by an additional $5.1 trillion, to $15.7 trillion (you can verify these numbers by using the “Debt to the Penny” app located on the treasury.gov website (see http://www.treasurydirect.gov/NP/BPDLogin?application=np). So Bush 43 accounts for 31.2%, Obama accounts for 32.5%, and the previous 42 presidents cumulatively account for 36.3% of total US federal government debt.

As bad the US federal government debt problem is, we have a far worse entitlement problem which no one (other than perhaps Paul Ryan (R, Wisconsin) and Ron Wyden (D, Oregon)) are even talking about these days. According to an authoritative (but dated) source located at http://www.pgpf.org/Special-Topics/Download-the-Citizens-Guide.aspx (see Figure 10 on page 30 of that document), in January 2009 the present value of Social Security and Medicare promises stood at $45.8 trillion; $7.7 trillion of this total was due to Social Security, and the remaining $38.1 trillion was attributable to Medicare. According to the recently published (April 2012) Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, the present value of unfunded Social Security obligations now stands at $8.6 trillion, which represents an 11.7% increase over the January 2009 amount. Since I haven’t been able to locate a current estimate of the present value of unfunded Medicare promises, I’ll assume for the time being that the present value of unfunded Medicare promises has also grown 11.7% since January 2009. Thus, the January 2012 present value of Social Security and Medicare promises probably now stand at or around $45.8 trillion x 1.117 = $51.2 trillion. (If anyone knows of an authoritative, up-to-date source for the present value of Medicare promises, please let me know! :-)).

This means that as a country, our total indebtedness now stands at roughly $15.7 trillion plus $51.2 trillion, or $66.9 trillion. Since there are (according to the US Census Bureau) 117,538,000 households in America, if you do the arithmetic this works out a per household debt of (gulp) $569,178.


Eugenics, Past and Future

www.nytimes.com

Will yesterday’s pseudoscience become tomorrow’s temptation?

 


Europe’s Latest Bailout

professional.wsj.com

“The Wall Street Journal Europe writes about Greece, Ireland, Portugal and now Spanish banks.” Let’s see – the Spanish government was having difficulty selling bonds in the financial markets so it turned to the Spanish banks and had them sell bonds to fund loans to the Spanish government. However, since the Spanish banks have now loaned too much money to the Spanish government, they have enlisted the “help” of the Spanish government which has now turned to the EU for a bailout which the Spanish government will use in order to recapitalize Spanish banks which are capital impaired because they have loaned too much money to the Spanish government.

High finance can sure be confusing at times! Obviously this is one huge Ponzi scheme – barring an imminent and dramatic recovery in the Spanish real estate market in particular and the Eurozone economy in general, kicking the can further down the road in this fashion is only going to make the final resolution of the sovereign debt crisis much more painful for all parties involved… As this WSJ article notes, “Far better to clean up the mess once and for all, including the discipline of letting failing banks fail, erasing shareholder capital, and firing the managers.”

 

 


Thomas Hoenig: No More Welfare for Banks

professional.wsj.com

In The Wall Street Journal, FDIC Director Thomas M. Hoenig writes that the FDIC and the taxpayer are the underwriters of too much private risk taking.

 


O’Grady: Castro Endorses Obama – WSJ.com

professional.wsj.com

Wall Street Journal columnist Mary Anatasia O’Grady writes that the Cuban dictator’s daughter gets a visa to make speeches here while the Castro regime continues to hold an American hostage.

 


Michael McConnell: Citizens United and the Wisconsin Vote

professional.wsj.com

Stanford professor Michael W. McConnell notes that Scott Walker’s opponent in the recall election, Tom Barrett, got millions in support from unions, whose contributions were legitimized by the Supreme Court.

 


Notable & Quotable

professional.wsj.com

“Ron Haskins of the Brookings Institution testifying before the Senate Finance Committee, June 5, on the relationship between individual initiative and poverty.” Dr. Haskins’ recommendations for poverty are 1) complete at least a high school education, 2) work full time, and 3) wait until age 21 and get married before having a baby. Quoting further from this article, “Based on an analysis of Census data, people who followed all three of these rules had only a 2% chance of being in poverty and a 72% chance of joining the middle class (defined as above $55,000 in 2010). These numbers were almost precisely reversed for people who violated all three rules, elevating their chance of being poor to 77% and reducing their chance of making the middle class to 4%.”

 

 

 

Obama’s Green Jobs: What’s In A Name?

www.youtube.com

“What is a “green” job?” See related Forbes article at http://onforb.es/NO1tST.

 

 


The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman (Helix Books)

amzn.to

I love this quote from Richard Feynman’s book entitled “Pleasure of Finding Things Out” (cf. http://amzn.to/LIgQZq): “Science is a way of trying not to fool yourself. The first principle is that you must not fool yourself, and you are the easiest person to fool.”

Actually, I don’t think science is unique in this regard – I think it is a problem that we all need to be aware of whenever we take in and process new information, concepts, and ideas. Confirmation bias – i.e., the tendency to favor information which confirms our own pre-conceived beliefs or hypotheses – is dangerously lurking everywhere we go…

 

Peter Robinson: Four Words That Moved the World: ‘Tear Down This Wall’

professional.wsj.com

“In The Wall Street Journal, Peter Robinson writes: This may sound odd coming from a Reagan speechwriter, but for 25 years I have wondered—did that Berlin address really matter?” I am looking forward to the upcoming (June 13) luncheon at Austin’s Steven F. Austin Intercontinental Hotel featuring Peter Robinson who was the writer of Ronald Reagan’s famous, “Mr. Gorbachev, tear down this wall” speech which was delivered by Ronald Regan at the Brandenburg Gate in Berlin on June 12, 1987. See http://bit.ly/17LRBD for an edited excerpt of this historic speech at youtube.com…

 

 

For Greater Glory

www.forgreaterglory.com

“What price would you pay for freedom? An impassioned group of men and women each make the decision to risk it all for family, faith and the very future of their country.” This is a fantastic movie; I was not aware of the history behind it prior to seeing it (i.e., the so-called Cristero War of 1926-1929); see the Wikipedia article located at http://bit.ly/LvpEqX for context…

 

 


Hitler finds out that Scott Walker won the Wisconsin recall election

www.youtube.com

Hilarious Hitler Parody about last Tuesday’s Wisconsin recall election…



Obama, Drones and Thomas Aquinas

professional.wsj.com

In The Wall Street Journal, former Justice Department official John Yoo writes that Obama has avoided vexing detention issues simply by depriving terrorists of all of their rights—by killing them.

 


Noonan: What’s Changed After Wisconsin

professional.wsj.com

The Obama administration suddenly looks like a house of cards.

 


Why delay austerity decisions? | Keith Hennessey

keithhennessey.com

“We meet Lefty and Righty, who are discussing stimulus and austerity.” Interesting thought experiment by Stanford professor Keith Hennessey…

 

 

What Wisconsin means

www.washingtonpost.com

Here’s the latest missive from Charles Krauthammer. Quoting from this article, “The unions’ defeat marks a historical inflection point. They set out to make an example of Walker. He succeeded in making an example of them as a classic case of reactionary liberalism.”


 

‘Eliminate Dengue’ Team Has A Deep (Lab) Bench : NPR

www.npr.org

“Australian researcher Scott O’Neill is leading a charge to rid the world of dengue fever. And it’s a real team sport, he says: “We don’t work in isolation in any projects in science these days. The days of having someone beavering away by themselves in the backroom have long gone.””

 


 

11 Public Universities with the Worst Graduation Rates

www.thefiscaltimes.com

“With just 56 percent of college students completing four-year degrees within six years, here are 11 public universities with the worst graduation rates.” Southern University at New Orleans has the worst record of this group of 11 public universities, clocking in only 4 percent of its students completing four-year degrees within six years…

 

 

Luigi Zingales:Crony Capitalism and the Crisis of the West

professional.wsj.com

“In The Wall Street Journal, Luigi Zingales writes that in Italy and Greece, the most talented don’t get ahead—and that’s also increasingly true in the United States.” Excellent essay about crony capitalism in the USA by Luigi Zingales, who in addition to his day job as University of Chicago finance professor is also the author of “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity” (cf. http://amzn.to/LEecWF)…


 

Henninger: ‘Stick It to Mitt’ Won’t Work – WSJ.com

professional.wsj.com

In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that Bain Capital and Mitt in Massachusetts are not what’s on voters’ minds in 2012.

 


Crop Insurance Proposal Could Cost U.S. Billions

www.nytimes.com

“A possible expansion of a federal insurance program comes as high crop prices are prompting farmers to expand into millions of acres of land once considered unsuitable for farming.” One of the “unintended consequences” of overly generous crop insurance premium subsidies (where taxpayers pay 2/3 of the cost of the insurance) is that this policy, in conjunction with high crop prices, is motivating overinvestment in (marginal) farmland and also fueling a speculative bubble in prices.


 

Assorted Links (6/6/2012)

Here’s a list of articles that I have been reading and videos that I have been viewing lately:

Hollande’s First Step Backward

professional.wsj.com

“Lowering the retirement age (from age 62 to age 60) puts France closer to another downgrade, The Wall Street Journal writes in an editorial.”

Offering a Helping Hand on Retirement Saving

professional.wsj.com

“A new website called FutureAdvisor provides investment novices free portfolio recommendations and lets you put questions directly to the CEO.”  This looks like a very useful resource for folks who are interested in figuring out how in the world to allocate assets in a tax deferred account such as a 401-K . This article notes that “FutureAdvisor says it uses a mathematical optimization algorithm to apply modern portfolio theory principles to each person’s portfolio.”

Top 400 Taxpayers Paid Almost As Much in Federal Income Taxes in 2009 as the Entire Bottom 50%

mjperry.blogspot.com

“We hear all the time that the “rich don’t pay their fair share of taxes” (123,000 Google search results for that phrase). Here’s an analysis using recent IRS data that suggests otherwise.”

Google Opts to Honor Meaningless Anniversary over D-Day Sacrifices

www.ijreview.com

When I awoke this morning, one of the first things that came to mind was that 68 years ago today, the Normandy landings which initiated the Allied effort to liberate mainland Europe from Nazi occupation during World War II took place. I didn’t realize, until Google reminded me, that today ALSO apparently marks the 79th anniversary of the first opening of a drive-in theater. Why the latter is worth commemorating whereas the former apparently isn’t, baffles me…

Imagining a Romney Recovery

www.nytimes.com

I look forward to reading the two books referenced in this article by New York Times columnist Ross Douthat: 1) “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong” (see http://amzn.to/Mf9ctn) and 2) “A Capitalism for the People: Recapturing the Lost Genius of American Prosperity” (see http://amzn.to/La9e2Z)…

Richard Epstein on the Constitution

www.futureofcapitalism.com

“NYU law professor Richard Epstein defends the Constitution against a University of Texas law professor who called it “imbecilic.””

Why is ‘x’ the unknown?

www.ted.com

“Why is ‘x’ the symbol for an unknown? In this short and funny talk, Terry Moore gives the surprising answer.”  I was fascinated to learn today from this short TED talk that ‘x’ is the unknown because you apparently can’t say “sh” in Spanish!

Big Banks Are Not the Future

professional.wsj.com

“As leading financial firms face market and regulatory challenges, the likelihood of their managers responding deftly seems slim at best.”

Europe’s Green Energy Suicide

professional.wsj.com

“If it’s cheap and plentiful—even low in carbon-dioxide emissions—much of the continent wants no part of it.”

A Victory for Self-Government

professional.wsj.com

“The Wall Street Journal says that Wisconsin voters defeated a campaign of union revenge to recall Governor Scott Walker.”

California’s Labor Pains

professional.wsj.com

“The Wall Street Journal’s Allysia Finley on ballot initiatives in San Jose and San Diego.”  Quoting from this article, “More than two-thirds of voters in San Jose and San Diego supported ballot measures scaling back pensions for government workers.”

Why Obama Strikes Out in Court

online.wsj.com

Reagan Normandy Speech: Ceremony Commemorating the 40th Anniversary of the Normandy Invasion, D-Day 6/6/84

www.youtube.com

“President Reagan’s Address at the Ceremony Commemorating the 40th Anniversary of the Normandy Invasion, D-day at Point-du-Hoc – 6/6/84.”

General Eisenhower’s Message – D-Day – June 6, 1944

www.army.mil

“The U.S. Army remembers June 6, 1944: The World War II D-Day invasion of Normandy, France.”

Obama’s Debt Boom

online.wsj.com

“The Wall Street Journal on the most predictable crisis in history.”  Quoting from this article, “If we wait for the bond vigilantes to strike, as in Europe today, the recourse will be painful spending cuts and destructive tax increases virtually overnight. The longer we extend Mr. Obama’s legacy of slow growth and more debt, the greater the economic price to fix it.”

Clarke and Dawe – European Debt Crisis

www.youtube.com

Classic British comedy sketch about the European debt crisis featuring Clarke and Dawe. This video originally aired on 2 years ago, and the main difference between now and then is that the severity of the European debt crisis has gotten much worse, so whenever Roger the Financial Consultant cites a number, it’s probably safe to multiply said number by a factor greater than 1…

Tracking the trackers

www.ted.com

“As you surf the Web, information is being collected about you. Web tracking is not 100% evil — personal data can make your browsing more efficient; cookies can help your favorite websites stay in business. But, says Gary Kovacs, it’s your right to know what data is being collected…”

Keeping the Spirit of Steve Jobs Alive

professional.wsj.com

Longtime technology analyst Mary Meeker apparently noted at last week’s “All Things D” conference that technology advances could be undermined by the underperformance of what she calls “USA, Inc.” Quoting from this article, “The country has the biggest peacetime gap between revenues and expenses, with entitlement spending swamping everything else. “What gives me pause is that when we were born, 85% of households paid federal income taxes. Now only 49% do,” she pointed out. “Soon more people will receive government aid than pay taxes. That scares me a lot.”” Me too!…

California’s Casino Budgeting

professional.wsj.com

Here’s the latest from Stanford economists Bosking and Cogan on the fiscal circumstances of the one state in the U.S. which most closely resembles Greece…

Equal Opportunity vs. Equal Outcome

valuesandcapitalism.com

Quoting from this article, “In the latest at the blog, Kurt Jaros explores the fifth chapter of “Free to Choose” by Milton Friedman: “Friedman has three categories for human equality: equality before God, equality of opportunity and equality of outcome. He thinks the first is the Founders’ use, the second is compatible with liberty, and the third is socialism.””

Jostens misspells ‘education’ on diplomas — for two years straight

www.bizjournals.com

It’s graduation time, when students… get their prized diplomas, proof of their hard work and “eduation”.

Lone Star Discussion with Arthur Brooks

Arthur Brooks, President of the American Enterprise Institute, discusses America’s tradition of free enterprise, the moral justifications for a free society and today’s threats to liberty with the Texas Public Policy Foundation’s VP of Communications, Josh Trevino (recorded in Austin, TX on May 31). In this 63 minute video, Dr. Brooks provides an overview and synopsis of his new book entitled “The Road to Freedom”. For more information about Art Brooks and his book “The Road to Freedom”, see http://arthurbrooks.aei.org. For more information about the Texas Public Policy Foundation, see http://www.texaspolicy.com.

Assorted Links (6/3/2012)

Here’s a list of articles and videos that I have been viewing lately:

On Poverty

www.liberalorder.com

“Federal, state and local governments have spent about $15 trillion… fighting “the war on poverty” since 1964.” Here’s the breakdown, “…federal welfare spending alone totals more than $14,848 for every poor man, woman, and child in this country. For a typical poor family of three, that amounts to more than $44,500. Combined with state and local spending, government spends $20,610 for every poor person in America, or $61,830 per poor family of three.”

Are we sending too many students to college?

www.liberalorder.com

“Fewer than half of students graduate in four years at 33 of the 50 state flagship schools. The overall four-year graduation rate is 31 percent for public colleges and 52 percent for private ones.”  Here are some more stats: “In 1960 about 45% of those who graduated from high school went on to college, today that figure is about 70%. Out of 100 randomly chosen high school students today, 25 will not graduate, 24 will gradate but not go on to college, 23 will attend college but never earn a degree, 28 will earn a college degree.”

Euro Crisis from Long Perspective

thinkmarkets.wordpress.com

“The European crisis, in progress for years and still showing no sign of resolution, is largely the result of elite hubris.”  This is some of the best writing that I have seen on the ongoing saga known as the Eurozone crisis (from ThinkMarkets, which is a blog of the NYU Colloquium on Market Institutions and Economic Processes). Quoting from this article, “Creating the euro was a different level of ambition from building a common European market. The latter had historical roots. There had been free flow of goods, capital and people across parts of Europe in the 19th century and earlier… Hence by removing the barriers to the movement of goods, money and people, the European Union was not imposing a novel blueprint. Had it stopped with free markets, tremendous economic and political benefits would have been achieved with little downside. I have to admit that I never understood the aggressive drive to impose a common currency.”

The Morality of Capitalism

www.valuesandcapitalism.com

The Values and Capitalism blog features an 8-part series on the morality of capitalism. This series demonstrates “…how capitalism not only “passes the minimum test by failing to violate basic moral standards,” but that it’s also a system that works to actively promote morality.” To date, the following 3 essays have been posted:

1. The Morality of Capitalism: Introduction (http://valuesandcapitalism.com/dialogue/economics/morality-capitalism-introduction)

2. Capitalism is Honest (http://valuesandcapitalism.com/dialogue/economics/capitalism-honest)

3. Capitalism Is Peaceful (http://valuesandcapitalism.com/dialogue/economics/capitalism-peaceful)

Rich and Poor

blog.tifwe.org

I would like to recommend the following series of thought-provoking articles published by the Institute for Faith, Work, and Economics:

Part 1: Rich and Poor (http://blog.tifwe.org/part-1-2/)
Part 2: Rich and Poor 2 (http://blog.tifwe.org/rich-and-poor-2/
Part 3: Poverty and Government (http://blog.tifwe.org/poverty-and-government/)

The Obama spending binge

keithhennessey.com

Quoting from this article by Stanford University professor and Hoover Institution fellow Keith Hennessey, “Federal spending has averaged 20% of GDP for decades. President Obama is presiding over a much bigger government, at 24% of GDP. If his latest budget were enacted in full and he were elected to a second term, the average over his tenure would be 23.4% of GDP. This means that, relative to the economy, federal government spending would be 20 percent larger than the historic average during a one-term Obama presidency and 17 percent larger than average during a two-term Obama presidency. That is a spending binge.”

Obama Honors Socialist Leader

www.futureofcapitalism.com

“One of the leaders honored by President Obama yesterday with the Presidential Medal of Freedom is Dolores Huerta, an honorary chair of Democratic Socialists of America (see http://dsausa.org).”

An Economy Built to Stall

online.wsj.com

“The Wall Street Journal argues that with a third slowdown in three years, maybe the problem is the policies.”

Miserable May jobs report suggests U.S. in recession red zone

blog.american.com

As the American Enterprise Institute’s James Pethokoukis notes, the Obama transition team forecasted in January 2009 that by May 2012, the unemployment rate would be 5.7% if only Congress would “do something” by passing the $831 billion American Recovery and Reinvestment Act (ARRA) of 2009 (AKA the “stimulus bill) in February 2009. Congress complied, and President Obama signed ARRA into law on Feb. 17, 2009. Tragically, three years and three months later, our nation’s unemployment rate now stands at 8.2%.  Putting this into perspective (hat tip to my friend Louis Kokernak for supplying the following quote), “According to the BLS, the seasonally adjusted non-farm employment in the US in January 2009 was 133,561,000. In May of 2012, that total had fallen to 133,009,000. That’s right – we’ve LOST over 500,000 jobs while imposing drastic costs to the nation’s fiscal health. If the stimulus bill was an laboratory experiment in public policy, we’d had have to dismiss it as a failure.”

The 5th Avenue to Serfdom

professional.wsj.com

“In The Wall Street Journal, Business World columnist Holman Jenkins writes that nobody thought about taking away your sugary Big Gulp until the government began to pay for everyone’s health care.”

Robin Hoods Don’t Smash Shop Windows

professional.wsj.com

“Shouldn’t supposedly selfish conservatives—not idealistic liberals—be producing nasty mobs?”  This WSJ article provides a conservative assessment of the meaning of “social justice”. Quoting from the article, “Perhaps it’s the more centrist and even conservative side, with its constant call for individual liberty, for self-reliance, for individual responsibility and hard work, that results in stronger virtue and greater neighborliness—and the left, with its constant striving for equal results, greater redistribution and more entitlements, that results in a weakened moral sense and an erosion of moral character. Perhaps the more we tell people that their problems are always someone else’s fault, that “others” are robbing them of all they are “entitled” to, the more we corrode peoples’ character.”

California Cuts Threaten the Status of Universities

www.nytimes.com

“If a proposed tax increase is not approved, officials say they would be forced to consider eliminating entire schools or programs, hurting the university system’s elite reputation.”

Obama: Drone Warrior

www.washingtonpost.com

“The peacemaker becomes the avenger.”  The Washington Post’s Charles Krauthammer writes, “A very strange story, that 6,000-word front-page New York Times piece (@ http://nyti.ms/KBTirD) on how, every Tuesday, Barack Obama shuffles “baseball cards” with the pictures and bios of suspected terrorists from around the world and chooses who shall die by drone strike.”

Applying Economics to our Call to Help the Poor

blog.tifwe.org

“Loving our neighbor requires that we give help that protects dignity, that offers opportunity and that allows the unique gifts of the beneficiary to be unleashed.”

2012: Carrying the flame

www.boston.com

“Earlier this month in Greece the Olympic flame began it’s ceremonial relay to the site of the summer games in London. The flame is being carried by some 8,000 torchbearers to spread the message of peace, unity and friendship over 70 days until it arrives at the opening ceremonies on July 27.”  Wonderful photoessay by our friends at the Boston Globe’s “Big Picture” website…

ObamaCare in Reverse

professional.wsj.com

“The Wall Street Journal reports that Maine deregulates the insurance market. Premiums fall.”

John Chubb and Terry Moe: Higher Education’s Online Revolution

professional.wsj.com

“In The Wall Street Journal, John Chubb and Terry Moe write that the substitution of cyber technology (which is cheap) for labor (which is expensive) can vastly increase access to an elite-caliber education.”

How to Put a Waitress Out of Work

professional.wsj.com

“In The Wall Street Journal, Michael Saltsman writes that when the government forces restaurants to pay servers more, the number of jobs and tip income go down.”  This is an interesting and compelling case study of the law of unintended consequences, where public policy ends up hurting the very people that said policy is supposed to help…

Rules for America’s Road to Recovery

professional.wsj.com

“In The Wall Street Journal, John B. Taylor writes that as the economist and philosopher Friedrich A. Hayek taught us, predictable policies will help restore economic prosperity and preserve freedom.” The latest missive on how to heal the American economy from my favorite macroeconomist, Stanford University’s John Taylor.

The Hunt for the Good Sermon

professional.wsj.com

“In The Wall Street Journal’s Houses of Worship column, John Wilson asks: Are American churches really suffering a crisis of bad preaching?”

‘Facebook’ for Dead People?

www.cnbc.com

“You think Facebook’s stock has flopped over dead? A new web service lets you post on Facebook even after YOU flop over.” No, this is not an Onion article…

Today's unemployment report…

Earlier today, the Department of Labor’s Bureau of Labor Statistics (BLS) released its May 2012 unemployment report (AKA its “Employment Situation Summary”, available at http://www.bls.gov/news.release/empsit.nr0.htm). The news (net job creation of only 69,000 jobs) was very disappointing and came in far below economists’ expectations. According to the BLS, the January-April monthly average rate of net job creation was 188,500 jobs per month, so the May report represents a more than 60 percent drop in the rate of job creation. Putting this into a broader perspective, it takes 130,000 new jobs per month just to keep the unemployment rate at its current (historically high) 8.2% rate, assuming that the labor force participation rate remains constant and that the US population prospectively continues to grow 1% per year (see http://bit.ly/LPEVOM).
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