Relevant and even prescient commentary on news, politics and the economy.

Health news

I’m not sure if there are studies looking at the long term effects of such advice on one’s health especially in this economy, but I can see where in the words of Arlo Guthrie, it could create a movement.


Health Experts Recommend Standing up at Desk, Leaving Office and Never Coming Back

ROCHESTER, MN—In an effort to help working individuals improve their fitness and well-being, experts at the Mayo Clinic issued a new set of health guidelines Thursday recommending that Americans stand up at their desk, leave their office, and never return. “Many Americans spend a minimum of eight hours per day sitting in an office, but we observed significant physical and mental health benefits in subjects after just one instance of standing up, walking out the door, and never coming back to their place of work again,” said researcher Claudine Sparks, who explained that those who implemented the practice in their lives reported an improvement in mood and reduced stress that lasted for the remainder of the day, and which appeared to persist even into subsequent weeks. “We encourage Americans to experiment with stretching their legs by strolling across their office and leaving all their responsibilities behind forever just one time to see how much better they feel. People tend to become more productive, motivated, and happy almost immediately. We found that you can also really get the blood flowing by pairing this activity with hurling your staff ID across the parking lot.” Sparks added that Americans could maximize positive effects by using their lunch break to walk until nothing looks familiar anymore and your old life is a distant memory.

The Onion February 6, 2015

Maybe the labor unions could follow-up on this advice and determine what the long term benefits might be?

There is also this report today:

New Study Finds Therapy, Antidepressants Equally Effective At Monetizing Depression

NORMAN, OK—Noting that similar outcomes were achieved under both approaches, a landmark decade-long study of mental health treatment options published Tuesday has found that talk therapy and antidepressant medications are equally effective at monetizing clinical depression. “Our data indicate that regular counseling sessions and prescription drugs have similarly high success rates in generating large sums of money from the clinically depressed,” said Katherine Hutton of the University of Oklahoma, the study’s lead author, noting that both methods demonstrated consistent positive earnings across chronic, episodic, and seasonal depression cases. “While some people make tremendous profits with drugs, others see substantial revenues from therapy. Together, these are two very powerful tools for improving the health care industry’s bottom line.” The study concluded that when both approaches are combined, financial results are likely to be reached far more quickly than with one method alone.

The Onion, February 17, 2015


I think this raises some ethical questions for the medical profession and possibly concerns for congress as to the incentives within the ACA.

Certainly, the expert advice combined with the study would create some discussion within congress regarding the policy related to just about anything…






Social Security Report Tables & Figures: a Project Sample – Table V.B2

Table V.B2: Additional Economic Assumptions
Well I am back and working on a new project in anticipation of the release of the 2015 Report this late Spring. The project involves extracting the Tables and Figures from the Social Security Trustees Report, in this case the 2014, and having them individually web accessible as spreadsheeets or images or both. This first attempt is to present the Table that has projections for Unemployment going forward both over the short run and in ultimate terms. Since this is mostly a test of concept I will just let people see if they can actually access the data. I would point out however that under the Intermediate Cost Alternative (i.e. standard and supposedly median projection) Unemployment for 2014 was projected at 6.9% and then staying above 6% until 2017 after which it would settle quickly to 5.6% in 2020 and ultimate 5.5% by 2025. When we turn to the more optimistic Low Cost Alternative (which in toto would have Social Security self-fund under current formulae) we see that even there 2014 UI was set to be 6.7% in 2014 and 6.1% in 2015 before settling fairly quickly to ultimate 4.5%.

Now what does it mean that actual UE in 2014 came in under both Intermediate and Low Cost and projects to do the same in 2015? Well hard to say, in order to make some judgement you would have to look at all the economic and demographic variables in Tables V.A1-A4 and V.B1-B2 over the ten year window while keeping an eye on ultimate numbers and then examine the various Sensitivity tables for each of those variables. And what would help with that is someone compiling all those Tables and Figures into individual files as opposed to just linking to a ginormous HTML or PDF of the whole Report. Of which this is a sample. Comments on either the project or the unemployment numbers welcome in Comments.

Irish Austerity Exodus Continues

The Eurozone experiment in austerity continues to fail as the peripheral countries endure ongoing cuts. Following up on my post of August 15, it’s time to look at the most recent Irish immigration data to update it through April 2013 (Ireland records population data from May 1 to April 30) and see how it affects the reported unemployment rate. The picture remains ugly, with emigration climbing once again, from 87,100 in 2011-2012 to 89,000 in 2012-13. Immigration increased by 3200, so net emigration fell by 1300, with net out-migration over the year declining by about 3% to 33,100. Here are the details:


  Year ending
April 2012 April 2013
Immigration 52,700 55,900
Emigration 87,100 89,000
Net migration -34,400 -33,100
of which Irish nationals -25,900 -35,200

Source: Central Statistics Office Ireland

Take a good look at the last line: Net emigration by the Irish themselves increased by 35.9% and accounts for all net out-migration; there was net in-migration by non-Irish citizens of 2100 in 2012-13. Indeed, the Irish comprised 57.2% of all emigrants in the most recent report.

Explaining Class Warfare

Last month one hundred and fourteen thousand unemployed moochers…suddenly yank the government teat out of their mouths, get off the couch for forty hours a week? Why?
I say follow the money; cause I found out, that right around the time those people got those jobs…they started getting paid!
And just where does that money come from? Right out of the pockets of the job creators. How’s that for your socialist redistribution of wealth? Folks, it’s called class warfare.
Mr Colbert has created a new party that will issue a certificate to sooth the hurt of the job creators. The Certificate of Richness issued by:
Protecting Industry Titans and Yachtsman party. The P.I.T.Y. party.
And right on cue:
If President Obama is re-elected and raises taxes, Westgate Resort’s David Siegel says he will have to lay off workers and downsize his company — or even shut it down.

Unemployment Rates Across the Euro Area – Tough Times in Key Markets

by Rebecca Wilder

Unemployment Rates Across the Euro Area – Tough Times in Key Markets

Today Eurostat released its unemployment rate figures for the month of August. The Euro area unemployment rate held firm at 11.4% for the third consecutive month. Spain still has the highest unemployment rate in the euro area, 25.1%, and Greece is catching up quickly, 24.4% (in June, which is the latest data point).
The chart below illustrates the level of the unemployment rate and its month-month change for the euro area 12 countries.

The periphery are under performing the average, with Spain, Greece, Portugal, and Ireland leading the way. Internal devaluation, or driving up the unemployment rate to reduce relative prices with demand, is really taking its toll. Respectively, the unemployment rates in Spain, Greece, Portugal, and Ireland are 178.9 ppt, 234.2 ppt, 93.9 ppt, and 212.5 ppt above their pre-crisis minimums (loosely defined since January 2008) – a simple average of 179.9 ppt above the joint minimum for these four countries. The average euro area 17 unemployment rate is just 56.2 ppt above its 7.3% pre-crisis minimum. Hard days in the periphery, to be sure. Against this backdrop, weekend protests in Paris, Madrid, Lisbon, and Rome are not a surprise.
I further point out the troubling trend in the French labor market, as the new government presents its fresh austerity budget for 2013.

This budget is highly dependent on tax revenue and positive growth momentum, which is likely to disappoint amid such deterioration in domestic demand. See Ambrose Evans-Pritchard on the expected budget impact.

cross posted with The Wilder View…Economonitors

US wages trail 10 OECD countries, but with higher unemployment than 9 of them

by Kenneth Thomas

US wages trail 10 OECD countries, but with higher unemployment than 9 of them

Contra Eric Cantor, Labor Day celebrates the importance of labor and the labor movement in American history. But the bluster of Cantor, where he celebrates the so-called job creators, does illustrate that organized labor has been in decline in this country for quite some time.

One result of having a weak labor movement is that average wages in the United States have fallen behind those of 10 other industrialized democracies that are members of the Organization for Economic Cooperation and Development (OECD). What is most confounding, for Republicans at least, is that nine of these countries also have lower unemployment, which contradicts their view that high wages (and high minimum wages) harm employment.

The table below below is constructed from data at OECD StatExtracts, showing the average earnings of all wage and salary workers in each country, as well as its most recent unemployment rate (usually July 2012).
Source: OECD StatExtracts.

For average wages, select data by theme, then labour, then earnings, then average annual wages, and use “2011 USD exchange rates and 2011 constant prices” for each country. For unemployment, select data by theme, then labour, then labour force statistics, then short-term statistics, then short-term labour market statistics, then harmonized unemployment rates.
This table does not make use of purchasing power parity (PPP) conversions to wages (and the U.S. in fact has the highest wages when adjusted for PPP), for a very important reason. Essentially, the PPP calculation adjusts actual exchange rates for differences in the cost of living between countries. In practice, this means downward adjustments for expensive countries like Norway (where I had a personal pan pizza for $25 on my honeymoon six years ago; the New York Times recently published more examples) and upward adjustments for developing countries and even Eastern European countries. As I note in Investment Incentives and the Global Competition for Capital, gross national income per capita for the Czech Republic in 2006 was $12,680 at actual exchange rates, but $21,470 at PPP (page 99).
The reason we should ignore PPP when dealing with wages and jobs is that a company deciding to invest in one place rather than another has to pay the wages using the actual exchange rate and is not affected by PPP. Thus, if there is an effect of wages on employment, that will be a response to what an employer actually has to pay to hire someone, not a hypothetical measure of how well off the worker is in terms of PPP-adjusted dollars. The data here does not show any negative effect of wages on unemployment.
Moreover, I would argue that living in a high-wage, high-cost location has distinct advantages over living in a low-wage, low cost location, even if after adjusting for cost of living (via PPP or within a single country) the lower wage location has “higher” pay. One important reason is that having extra cash gives you extra options. You will have a higher retirement benefit and will keep it if you move to a lower-cost area, whereas the reverse is not possible. You will have better quality services on average, particularly health care. It is far easier for you to vacation in a low-cost location than it will be for someone in a low-cost location to vacation to a high-cost location ($25 personal pan pizzas!).

Your high salary will be the benchmark if you take a job in a lower-cost location. If you economize from the standard basket of goods used to measure cost of living, your benefit will be higher in the high-cost area. Of course, a full treatment of this issue requires another post, but the big point is that high wages do not necessarily create unemployment and reducing wages is not the route to middle class prosperity.

cross posted with  Middle Class Political Economist

Does the US Corporate Saving Rate Portend a Lower Unemployment Rate?

by Rebecca Wilder

Does the US Corporate Saving Rate Portend a Lower Unemployment Rate? An interesting thing happened in Q4 2011: the corporate saving rate declined following two quarters of gains. Nominal net saving by the domestic business sector fell 3%, while nominal gross fixed investment and inventories surged 6% – the two pushed the saving rate down nearly 40 bps to 2.94% of GDP. The corporate saving rate (gross saving less gross investment) has been on a downward trend since the end of 2009, a welcomed trend by the labor market.

There’s a very strong correlation between the corporate saving rate and the unemployment rate, 80% according to a simple bivariate OLS regression. I’ve argued in the past that there is some causation to this relationship – but that’s not the point of this post. The point here is that the trend in corporate saving has fallen sufficiently to portend some material declines in the unemployment rate in coming quarters….ALL ELSE EQUAL. For example, a simple bivariate regression would forecast a 7.5% unemployment rate if the corporate saving rate falls another 30 bps to 2.6%.

The all else equal is important. The primary driver of this quarter’s decline in the corporate saving rate was the 6% increase in nominal investment spending, the largest quarterly gain since 2010 Q2. Amid relatively weak manufacturing orders and the expiration of the depreciation allowance, I expect that this momentum is unlikely to be matched in coming quarters. Will firms start drawing down nominal saving to finance new hires?

Better put: will the unemployment rate drop to meet the saving rate? Or will the saving rate rise to meet the unemployment rate?

Rebecca Wilder

originally published at The Wilder View..Economonitors

Which Economy Is Pursuing Procyclical Fiscal Policy?

by  Rebecca Wilder

Which Economy Is Pursuing Procyclical Fiscal Policy?

Today the BLS reported that the US unemployment rate dropped to 8.3% in January 2012. This is the lowest measured rate since February 2009 – a local trough. Also this week, Eurostat reported that the Euro area (EA) unemployment rate stabilized in December at 10.4%. This is the highest level since inception of the euro – a global peak (so far).

It’s pretty easy to see through relative labor performance which economy is pursuing procyclical fiscal policy, namely deficits rise when the economy is booming and fall when the economy is contracting: the EA.

originally published at The Wilder View…Economonitors

Jobs, jobs, jobs

Hale Stewart of BondDad blog discusses jobs…and jobs…

1. V shaped real retail sales and industrial production recoveries vs. jobs:

…Comparing those with private jobs (red) and total payrolls (green), we can see that the percentage losses in sales and production were steeper, and have made up nearly or more than all of their ground compared with jobs. Meanwhile, private jobs have regained only slightly over 30% of their losses. When government employment is added for the total jobs picture, fewer than 25% of the losses have been regained.

2. Comparing improvements in aggregate hours and jobs:

…Another point I have frequently made is that aggregate hours worked are recovering faster than new jobs. Since more hours were lost than jobs during the recession, if past was prologue then we would have to wait for aggregate hours to regain their lost comparative ground before job growth would match the growth in hours….

3. Comparing real retail sales with jobs:

…This is yet another indication of just how significant government job losses have been to the relatively poor jobs recovery. At the same time, because real retail sales are a leading indicator for jobs, this reinforces that we should expect to continue to see positive job growth in the economy, with private jobs at least being added at something like a 2% YoY rate.

4. Comparing initial jobless claims with jobs added:

…In 2010 I thoroughly debunked the idea that we needed 400,000 or less in initial jobless claims to be consistent with job growth. It simply makes a lot of difference how deep the recession is, and also the pattern declining into a recession is quite different from the pattern during a recovery. I pointed out half a year ago that if we were to descend into a “double dip,” I would expect to see a break in trend in the scatter graph comparing these two series, with a new trend line to the left of the recovery trend line developing.

5. Okun’s Law

Okun’s law is actually a rule of thumb that holds that for every 2% YoY increase in GDP, there should be a 1% decline in the unemployment rate. Generally speaking, 2% YoY GDP growth equals no change in unemployment. A 4% GDP increase gives you a 1% decrease in unemployment. Contrarily a 0% YoY change in GDP gives you a 1% increase in unemployment.

I make use of a corollary, which is the YoY% growth in GDP minus 2% approximately equals the YoY% change in job growth 3 to 6 months later. Here is the graph of this relationship going back 65 years, and it has ominous implications:

As I said, this contradicts virtually all of the previous indicators we have discussed. A possible explanation comes via Jeff Miller of A Dash of Insight, who informed us yesterday that the BLS’s Dynamic Business Report of actual job data collected from the states showed that in the first quarter of this year only 250,000 jobs were created, rather than the 500,000 previously reported.