Kruse Kronicle

GDP Growing Fastest in Poor Countries

The poorest regions of the world have been growing the fastest for at least twenty years. The Economist forecasts world GDP to be 2.9%, while Asia and Australasia (less Australia) is at 5.7%, and Sub-Saharan Africa is at 4.5%. These rates actually indicate a considerable slowing of growth from recent years. The US forecast is 3.2%. This is more evidence of the that global inequality is shrinking, even though inequality within many nations is increasing. As the bottom of the economic ladder rises higher so does the distance between the bottom and the top. A recent article forecast that their would be no poor nations by 2050. I think that is likely. See: Gauging growth in 2015

The Story of Globalization in 1 Graph

Atlantic: The Story of Globalization in 1 Graph

... Globalization has winners and losers. The winners—particularly the upwardly mobile middle classes of China, India, Indonesia,Brazil, and Egypt—occupy the long hump of this elephant-like line. They have seen their inflation-adjusted incomes grow by 70 percent or more. The world's "1%" (which works out to the top 12 percent of the U.S., or households making more than $130,000) is also racing away with income, particularly at the tippy-top.

But the story for world's poorest percentiles has been the same as for the developed world's lower-middle class: No growth or worse. ...

 

Nordic welfare state being cut down to size

Yahoo! News: Nordic welfare state being cut down to size

Copenhagen (AFP) - The Nordic model, known for high taxes and its cradle-to-grave welfare system, is getting a radical makeover as nations find themselves cash-strapped.

During the post-war period, the Scandinavian economies became famous for a "softer" version of capitalism that placed more importance on social equality than other western nations, such as Britain and the United States, did.

But globalisation, economic necessity and an ideological shift to the right has led to a scaling back of the public sector.

In Sweden, visitors are sometimes surprised to learn about year-long waiting times for cancer patients, rioting in low-income suburbs and train derailments amid lagging infrastructure investment.

"The generosity of the system has declined," said Jonas Hinnfors, a professor of political science at the University of Gothenburg.

"Much of this already started changing in the 1980s and especially in the 1990s," he added. ...

Why the US economy doesn’t weigh as much as we thought it did

AEI Ideas: Why the US economy doesn’t weigh as much as we thought it did

... One way of analyzing the changing nature of the US economy is by looking at how much GDP physically weighs. Former Federal Reserve Chairman Alan Greenspan once remarked that the value of US GDP is five times as great as it was 50 years ago. Yet “the physical weight of our gross domestic product is evidently only modestly higher today than it was 50 or 100 years ago.” Very little of the nation’s economic growth ”represents growth in the tonnage of physical materials — oil, coal, ores, wood, raw chemicals. The remainder represents new insights into how to rearrange those physical materials to better serve human needs.”

In other words, to paraphrase economist Paul Romer, more and more we create value by coming up with different “recipes” to rearrange the physical world. Ideas and innovation are what truly drive growth. So even though America becomes more productive and the size of the economy bigger, it doesn’t gain any weight — just wealth.

Interesting way of illustrating the how advanced economies are changing.

Debt, Spending and Taxes: All Time Highs? (3 Charts)

Business Insider has these three interesting graphs from the Bureau of Economic Analysis.

Personal taxes are a little below the forty year average but federal spending including transfers is near all time highs, mostly due to an explosion in transfer payments. There is some good news from the New York Times: The Incredible Shrinking Budget Deficit

... The number crunchers at Goldman Sachs have lowered their estimates of the deficit both this year and next, on the back of higher-than-expected revenues and lower-than-projected spending. Analysts started the year projecting that the deficit in the current fiscal year would be about $900 billion. Earlier this year, they lowered the estimate to $850 billion. Now they have lowered it again, to $775 billion, or about 4.8 percent of economic output.

“Spending in the fiscal year to date is lower than a year ago and the nominal growth rate is lower than it has been in decades,” the Goldman economists wrote in a note to clients. “Revenues have also exceeded expectations, with a 12 percent gain fiscal year to date. What is more notable is that the strength in revenues preceded the payroll tax hike at the start of the year, and the spending decline does not seem to reflect sequestration, which has just started to take effect.” To translate: the deficit could come in even smaller than currently anticipated because of spending cuts and higher tax rates. ...

Not everyone is as postive about the growth projections. See the NYT piece for more details

Do Foreigners Really Own America?

Source: Business Insider

When it comes to world GDP, BRICS are carrying the load

Economist

Union membership falls to lowest percentage in 76 years

Reuters: Union membership falls to lowest percentage in 76 years

(Reuters) - The percentage of workers belonging to unions tumbled to 11.3 percent in 2012, the lowest percentage in 76 years, led by dramatic declines in states where lawmakers have put organized labor in the political crosshairs, government figures showed on Wednesday.

The total number of union members fell by nearly 400,000, from 11.8 percent of the workforce in 2011, the Labor Department report on union membership said. The rate of 11.3 percent of the workforce was the lowest since 1936, when Franklin Roosevelt was president. ...

...  Some analysts blame unions for the drop. Membership has been falling since 2008, when it was 16.1 million, or 12.4 percent of the workforce, federal data shows. It peaked in 1954, when 28.3 percent of workers were represented by organized labor.

"They must now admit that they are not investing enough staff and funds in organizing and not embarking on an imaginative journey to rediscover the relevancy of unions," said Gary Chaison, professor of industrial relations at Clark University. "Essentially, workers are feeling tremendous job insecurity ... Yet as today's figures suggest, workers are not turning to unions to act as their voice." ...

World GDP Trend

Economist

Saturday Links

1. Too often Westerners perceive African economy as a monolithic basket case. There are actually many regions of that are very hopeful. Ozwald Boateng explains Why entrepreneurs are back in Africa

2. Want a higher paying occupation? Here Are The Jobs With The Biggest Wage Growth Right Now

3. Lots of recent talk about whether or not e-books will ever actually totally supplant hard copy books. This week Mashable explores Why Are People Still Buying CDs? (And people are still buying them.)

4. Speaking of transitions to digital media, Business Insider shows that Old Media Is Alive And Rocking

5. This fascinating chart shows Inflation Since 1775 And How It Took Off In 1933

6. Want to live to a ripe old age? US News reports on What People Who Live to 100 Have in Common.

7. I almost didn't link this article because I could swear I've linked it before. Why Does Deja Vu Happen?

8. Several months ago I saw a speech expert interviewed has offered voice training to a number of famous figures. One was Margaret Thatcher. They showed her speaking in the 1970s and then in the 1980s, after receiving voice training. A big piece of the change was lessening the modulation in tone and pitch, which tends to vary more widely with female voices. The changes were intended to make her sound more authoritative, which both men and women, unjustified as it may be, more often associate with male vocal traits. But apparently, the thing that really triggers gender detection in our language is the way we use S's. Change Your Perceived Gender by Pronouncing S's Differently

9. This has to be a new low technological achievement: a sensor-filled smartfork that tells you when you're eating to much. Medieval Tines: A Brief History of the Fork

10. And this has to be the Holy Grail of technology cool! Star Trek-Inspired 'CommBadge' Gives You Handsfree Access to iPhone, Android

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Saturday Links

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I hope you had a great Christmas and are enjoying the holidays.

1. The Huffington Post offers their top religion stories of 2012: 2012 Religion Stories: The Top 10

2. David Gushee reflects on Glen Stassen's A Thicker Jesus: Incarnational Discipleship in a Secular Age: The illnesses of American Christianity

"... The first kind of Christianity avoids reactionary authoritarianism but is often a therapeutic or vanilla mush that fails to ask anything of anybody out of fear of giving offense. The second kind of Christianity offers stern, clear moral directives that attract people seeking the “specific instruction, even confrontation that calls us to grow in discipleship” (p. 6), but disastrously embraces right-wing ideology and baptizes that as the content of Christianity.

Both of these versions of Christianity are so deeply flawed, says Stassen, that both are contributing to the alarming spread of secularism in the U.S. The first version of Christianity is so thin as to lack any particular reason why one would want to get out of bed on Sunday and go to church; the second is so reactionary as to drive thoughtful people into an anti-religious posture if they conclude that religion equals right-wing authoritarianism.

I believe this is a stark but actually quite accurate depiction of the primary problems afflicting the Protestantisms of the left and of the right in the current U.S. setting. ..."

3. When New England Progressives Won't Tolerate Evangelicals. "Once a center of 19th-century evangelism, Northfield, Mass., is unsettled by the prospect of a school with religious aims."

4. Peter Enns with yet another provocative post: What do Turkey, Bethlehem, and Tennessee Have in Common? They Don’t Bode Well for the Conservative Christian Subculture

5. Peter Liethart offers a book review of Peter Brown's new book, Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 Ad, at Christianity Today: How the Early Church Made Peace with Prosperity. (And, no, I don't know why everyone seems to be Peter this week ... Enns, Liethart, and Brown.)

6. Why Latin Americans top the happiness rankings

"While not exclusive to Latin America, the culture of family, support, and living a life to spend time with your family, I think, is an important part of Latin American culture that keeps people positive. Being with those close to you and finding other friends and partners that value that way of life is a key part of Latin American culture. That might be the main reason why people remain positive: they are never truly alone. Interestingly, many discussions and documentaries about immigrant groups in the United States show an internal conflict among many who move to the US and who do not wish to lose their support systems in a new culture rooted in individualism. While being motivated and entrepreneurial is valued, a life being with your family, where you are never truly alone, is the basis for many cultures in many parts of the world. Many new Americans frown on the thought that children can detach themselves from their family at 18 years of age. They believe people can only truly thrive as a family."

7. In contrast to Latin American happiness based in family connection is this survey of British children that revealed that A 'dad' is tenth most popular Christmas list request for children.

8. Christian Science Monitor reports on Parental leave global comparison: US still among least generous

9. And in yet another story on familial collections China orders children to visit their elderly parents.

10. Scientific American reports some positive news: Early Childhood Obesity Rates Might Be Slowing Nation-Wide

11. Men may want to think twice before taking up yoga. It seems men are more prone to serious injury from yoga. Wounded Warrior Pose

12. What are the ten most popular books of all time? The 10 Most Read Books In The World

13. Traditional Books On Decline, Survey Says

"A Pew Internet Research Center survey released Thursday found that the percentage of Americans aged 16 and older who read an e-book grew from 16 percent in 2011 to 23 percent this year. Readers of traditional books dropped from 72 percent to 67 percent. Overall, those reading books of any kind dropped from 78 percent to 75 percent, a shift Pew called statistically insignificant."

14. Here are nine interesting findings about state by state data from the Census Bureau: Here Are The States Where People Are Leaving, Moving To, And Having Lots Of Babies

• Puerto Rico, Vermont, and Rhode Island are the only states (and territory) that saw a net decrease in population over the year.
• The fastest growing region was the South (1.06% population growth) followed by the West (1.03% population growth).
• North Dakota and the District of Columbia had the highest population growth, with 2.5% and 2.3% population growth, respectively. Texas, Wyoming, and Utah also saw major growth.
• West Virginia and Maine are the only two states where people are dying faster than they are being born, with 0.93 and 0.99 births for each death.
• Utah (3.44) and Alaska (3.33) had the highest birth to death ratio in 2012. That means 3.44 babies were born for each death in Utah.
• Domestic migration determines the rate that people leave and enter states to and from other states. Per capita, more natives left New York, Illinois, New Jersey, Connecticut and Rhode Island to move somewhere else than any other states.
• On the other hand, people flocked to North Dakota, D.C., Wyoming and South Carolina.
• The states that had the highest rates of international migration — that is, the rate of immigrants coming in — were Hawaii, New Jersey, Florida, New York and D.C.
• Puerto Rico is seeing a massive exodus — 1% of their population left last year.

15. When we think of transportation in the United States, few of us think about river and costal water transportation. Yet a great many goods and commodities are shipped on our rivers. The Midwest drought is having an impact on a major artery of that transportation network. The Mississippi River's Water Levels Are Dropping, And Could Shut Down Trade Next Week

16. Facebook?! Twitter?! Instagram?! We Did That 40 Years Ago. "Three decades before Yelp and Craigslist, there was the Community Memory Terminal. ..."

 

 17. America's Stuff Is Getting Really Old, And That's Bullish

"In other words, Americans are increasingly likely to have to purchase and replace these goods some time soon as they get more and more worn out.  That's bullish for spending, jobs, and the economy as a whole."

18.From right here in my hometown, just a mile or two from where I live: In a Kansas City Neighborhood, Deep Investments and an Uncertain Future. The Atlantic Cities reports on Kansas City's experiments with Green Impact Zones.

19. Why are men, in aggregate, better navigators than women? National Geographic: Of Men, Navigation, and Zits

"... Yet a few differences between the sexes do seem to hold up to scrutiny. One is spatial abilities. If men look at an object, for example, they are slightly faster at guessing what it would look like if it were rotated 180 degrees. There are plenty of women who do better than individual men. But overall there’s a stasticially significant difference in their average performance. This kind of difference carries over from one culture to another. It’s even detectable in babies. ...

... Whenever we reflect on human evolution, it pays to compare our species to other animals. And in the case of spatial abilities, the comparison is fascinating. Almost a century ago, the psychologist Helen Hubbet found that male rats could get through a maze faster than females. The difference can also be found in a number of other species. ...

... Clint and his colleagues propose a different explanation: male spatial ability is not an adaptation so much as a side effect. Males produce testosterone as they develop, and the hormone has a clear benefit in terms of reproduction, increasing male fertility. But testosterone also happens to produce a lot of side effects, including male pattern baldness and an increased chance of developing acne. It would be absurd to say acne was an adaptation favored by natural selection. The same goes for the male edge in spatial ability, Clint and his colleagues argue. They note that when male rats are castrated, they do worse at navigating a maze; when they are given shots of testosterone, they regain their skill. ..."

Saturday Links

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1. Pray for Egypt Today!

More than 50 million Egyptians are voting today on a constitution that would be a giant step backward for Egypt and much of the Middle East, marginalizing women and religious minorities. A nation that has historically been a voice of moderation, the largest Muslim nation in the region, will likely move toward becoming an Islamist state. Remember to pray for Egypt. (See the Economist's The Founding Brothers)

2. Our prayers are with families of the victims at the Sandy Hook elementary school. Grace and peace to the entire community.

In the wake of the horrific shooting, more debate about gun control is certain to surface. The Atlantic has some useful charts showing the nuanced take Americans have on gun rights and gun control. Do Americans Want More or Less Gun Control? Both, Actually The Christian Science Monitor also has this piece: What gun control laws might US voters support?

3. Traffic deaths in 2011 fewest in six decades

Traffic deaths in the USA continued their historic decline last year, falling to the lowest level since 1949, the government announced Monday.

A total of 32,367 motorists, bicyclists and pedestrians died in 2011, a 1.9% decrease from 2010. Last year’s toll represents a 26% decline from 2005, the National Highway Traffic Safety Administration (NHTSA) said. ...

4. Obesity in Young Is Seen as Falling in Several Cities

... The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011....

5. In Girl’s Last Hope, Altered Immune Cells Beat Leukemia

....The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells. ...

... The research is still in its early stages, and many questions remain. The researchers are not entirely sure why the treatment works, or why it sometimes fails. One patient had a remission after being treated only twice, and even then the reaction was so delayed that it took the researchers by surprise. For the patients who had no response whatsoever, the team suspects a flawed batch of T-cells. The child who had a temporary remission apparently relapsed because not all of her leukemic cells had the marker that was targeted by the altered T-cells. ...

6. The CDC says Chlamydia, gonorrhea cases increasing

....In 2011, 1.4 million chlamydia infections were reported to the CDC. The rate of cases per 100,000 people increased 8%, to 457.6 in 2011 from 423.6 in 2010.

The CDC reported 321,849 gonorrhea infections. The rate increased 4% to 104.2 cases per 100,000 in 2011 from 100.2 in 2010. Like chlamydia, gonorrhea can lead to pelvic inflammatory disease, a major cause of infertility in women.

Last year, 13,970 primary and secondary syphilis cases were reported. The rate of 4.5 cases per 100,000 was unchanged from 2010. ...

7. You may be bilingual but can you write in two languages, one with each hand, at the same time?!

8. Washington State Senate: Republicans Claim Majority After Democrats Defect. That makes two states were Democrats have won majorities in the state Senate and then a small number of Democrats decide to caucus with Republicans, giving Republicans the majority. The same thing happened in the New York Senate last week.

9. One-party dominance grows in states

10. Kevin Drum of Mother Jones speculates on why liberals have more exaggerated perceptions of political differences. We Are More Alike Than We Think

11. A surprising "right to work" bill was signed into law in Michigan, of all places. That has spurred a lot of debate about unions and the right to work. Michael Kinsley wrote a thoughtful piece opposing RTW, The Liberal Case Against Right-to-Work Laws. David Henderson has piece in support of RTW, The Economics of "Right to Work".

12. Slate has a piece about The Great Schism in the Environmental Movement. Keith Kloor opines on the division between mondernist environmentalists (or eco-pragmatists) and conservation traditionalists.

... Modernist greens don't dispute the ecological tumult associated with the Anthropocene. But this is the world as it is, they say, so we might as well reconcile the needs of people with the needs of nature. To this end, Kareiva advises conservationists to craft "a new vision of a planet in which nature—forests, wetlands, diverse species, and other ancient ecosystems—exists amid a wide variety of modern, human landscapes."

This shift in thinking is already under way. For example, ecologists increasingly appreciate (and study) the diversity of species and importance of ecosystem services in cities, giving rise to the discipline of urban ecology. That was unthinkable at the dawn of the modern environmental movement 50 years ago, when greens loathed cities as the antithesis of wilderness. ...

13. One of the creepiest Twilight Zone episodes I remember from my childhood was when this woman ends up trapped in a department store at night. The mannequins begin calling to her. She discovers she is actually a mannequin who has over stayed her time out in the world and it is time for the next mannequin to spend some time outside the store. This story confirms my worst nightmares: In Some Stores, the Mannequins Are Watching You

14. Carpe Diem: World manufacturing output, 2011

15. One of the biggest concerns about fracking technology is the enormous amount of water it uses. A company has figured out how to recycle water so that far less water is used in the fracking process. Solving fracking's biggest problem

16. Scientific American has a interesting article on the potential impact of 3-D Priting: Why 3-D Printing Matters for "Made in U.S.A."

... 3D printing represents the latest version of what industry experts call "additive manufacturing" — a way to turn practically any computer designs into real objects by building them up layer-by-layer using plastics, metals or other materials. The technology could end up affecting every major industry — aerospace, defense, medicine, transportation, food, fashion — and have an even bigger impact on U.S. manufacturing than the robot revolution. ...

17. Popular Mechanics is celebrating its 110th anniversary. In celebration, they are publishing 110 Predictions For the Next 110 Years.

18. Scot McKnight has a great post reflecting on the (false, IMO) equation of progressive with prophetic: The Prophetic is the Progressive

19. Dirk Kurbjuweit offers some interesting insights into Why Germany Can't Shed Its Troubling Past.

20. Michael Cheshire has a great piece in Leadership Journal on "What I learned about grace and redemption through my friendship with a Christian pariah." Going To Hell with Ted Haggard

".... A while back I was having a business lunch at a sports bar in the Denver area with a close atheist friend. He's a great guy and a very deep thinker. During lunch, he pointed at the large TV screen on the wall. It was set to a channel recapping Ted's fall. He pointed his finger at the HD and said, "That is the reason I will not become a Christian. Many of the things you say make sense, Mike, but that's what keeps me away."

It was well after the story had died down, so I had to study the screen to see what my friend was talking about. I assumed he was referring to Ted's hypocrisy. "Hey man, not all of us do things like that," I responded. He laughed and said, "Michael, you just proved my point. See, that guy said sorry a long time ago. Even his wife and kids stayed and forgave him, but all you Christians still seem to hate him. You guys can't forgive him and let him back into your good graces. Every time you talk to me about God, you explain that he will take me as I am. You say he forgives all my failures and will restore my hope, and as long as I stay outside the church, you say God wants to forgive me. But that guy failed while he was one of you, and most of you are still vicious to him." Then he uttered words that left me reeling: "You Christians eat your own. Always have. Always will."

He was running late for a meeting and had to take off. I, however, could barely move. I studied the TV and read the caption as a well-known religious leader kept shoveling dirt on a man who had admitted he was unclean. And at that moment, my heart started to change. I began to distance myself from my previously harsh statements and tried to understand what Ted and his family must have been through. When I brought up the topic to other men and women I love and respect, the very mention of Haggard's name made our conversations toxic. Their reactions were visceral."

21. Leonardo Bonucci got a yellow card for faking collision during a soccer game. It should have been a red card. No one deserves to be a professional soccer player with acting skills this bad!

 

Saturday Links

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Here are this week's Saturday links.

1. To celebrate the Christmas season, Deck the Halls with Macro Follies

2. The Explosion of 15th Century Printing: A Data Visualization

"... Drawing on data from the [Harvard] university's library collections, the animation below maps the number and location of printed works by year. Watch it full screen in HD to see cities light up as the years scroll by in the lower left corner. ..."

3. Drive-through fast-food not convenient enough for you? Burger King delivery: A new front in the fast-food wars?

4. There is a U-shaped happiness curve, consistent across cultures, that shows happiness declines from childhood until about our mid-forties and then begins to improve as me grow old. It appears it may hold true in primates as well. Our ability to discount bad news, even when we shouldn't, follows the same U-shaped curve. Our brains and experience are optimal for discerning bad news in middle-age. Turns out that ignorance (or maybe denial) truly is bliss. Viewpoint: How happiness changes with age. On a related note, it appears that Elderly Brains Have Trouble Recognizing Untrustworthy Faces.

5. The holiday season is in full swing and many people falsely believe this a time of elevated suicide rates. Actually, spring and summer have the highest rates and Nov - Jan have the lowest. In 2010, July was highest and December was lowest. Holiday suicide myth persists, research says

6. French sperm count 'falls by a third' but still within normal range. Researchers don't seem to know why.

7. The Atlantic has interesting article on Why Don't Parents Name Their Daughters Mary Anymore? It includes this graph.

"Michael" was in the top 3 names for boys from 1953-2010. It dropped to sixth last year. Want to know how your name ranks for each year since 1880? Go to the Social Security Online's Popular Baby Names. The Baby Name Wizard is also pretty cool.

8. More Dads Buy the Toys, So Barbie, and Stores, Get Makeovers.

"For the first time in Barbie’s more than 50-year history, Mattel is introducing a Barbie construction set that underscores a huge shift in the marketplace. Fathers are doing more of the family shopping just as girls are being encouraged more than ever by hypervigilant parents to play with toys (as boys already do) that develop math and science skills early on.

It’s a combination that not only has Barbie building luxury mansions — they are pink, of course — but Lego promoting a line of pastel construction toys called Friends that is an early Christmas season hit. The Mega Bloks Barbie Build ’n Style line, available next week, has both girls — and their fathers — in mind.

“Once it’s in the home, dads would very much be able to join in this play that otherwise they might feel is not their territory,” said Dr. Maureen O’Brien, a psychologist who consulted on the new Barbie set...."

And this reminds me of last year, or the year before, when cooking sets were becoming big with boys. They've been watching Emeril Lagasse on the Food Network. "Bam!" New merchandising angle.

9. Instead of indiscriminately sending kids off to college and saddling them with huge debt, maybe a New push for two-year degrees could be smart move for US, report says.

10. Business Insider lists The 12 Most Corrupt Countries In The World.

11. Love them or hate them, the Koch brothers are intriguing. Many political junkies know of them but few others seem to know about them. Forbes has an interesting feature article in the most recent issue on the Koch empire and its influence: Inside The Koch Empire: How The Brothers Plan To Reshape America

12. Is the two party system fracturing? Coalition Is to Control State Senate as Dissident Democrats Join With Republicans

13. How is this economic recovery different from others? The Scariest Jobs Chart Ever

14. "Data-driven healthcare won't replace physicians entirely, but it will help those receptive to technology perform their jobs better." Technology will replace 80% of what doctors do

15. Another bright idea. New plastic lighting saves energy. Goodbye, fluorescent lights?

"Scientists have designed an energy-efficient light of plastic packed with nanomaterials that glow. The shatterproof FIPEL technology can be molded into almost any shape, but still needs to prove it's commercially viable."

16. Yet another good story about the rise of vertical farming. Salad in the sky: The rise of the vertical farm?

17. The Conservation Law Center has an interesting piece about the potential changes nanotechnology will bring to use of resources and the economy. Nanotechnology: The Potential to Make Every Industry Sustainable

"... Last month, at the first ever conference of the Sustainable Nanotechnology Organization in Washington DC, Michail Roco of the National Science Foundation, and architect of the U.S. National Nanotechnology Initiative provided a response. He said, “every industrial sector is unsustainable…and nanotechnology holds the promise of making every one of them sustainable.”

It’s my belief that that is true: nanotechnology, or the ability to manipulate matter at a scale of one billionth of a meter, has far-reaching implications for the improvement of sustainable technology, industry and society.

Already, it is being used widely to enable more sustainable practices. Safer manufacturing, less waste generation, reusable materials, more efficient energy technologies, better water purification, lower toxicity and environmental impacts from chemotherapy agents to marine paints are all current applications of nanotechnology. There is no reason for this technology to develop in an unsustainable manner.

In the past, a lack of foresight has resulted in costs to society – people, businesses, and governments, and— that could have been avoided by proactive efforts to manage risks. Today, the tools to develop safer technologies and less harmful products exist. Let us not miss this opportunity. ..."

18. The American Enterprise Institute has an interesting summary of a Nielson report about social media usage. 8 fun facts about the incredible rise of social media

19. Death On Facebook Now Common As 'Dead Profiles' Create Vast Virtual Cemetery

"It used be that news of death spread through phone calls, and before that, letters and house calls. The departed were publicly remembered via memorials on street corners, newspaper obituaries and flowers at grave sites. To some degree, this is still the case. But increasingly, the announcements and subsequent mourning occur on social media. Facebook, with 1 billion detailed, self-submitted user profiles, was created to connect the living. But it has become the world's largest site of memorials for the dead."

20. From the "That's just not right!" file. Harvard Economics Department does their version of "Call me maybe."

The Long Story of U.S. Debt, From 1790 to 2011, in 1 Little Chart

Atlantic: The Long Story of U.S. Debt, From 1790 to 2011, in 1 Little Chart

Be sure to check out the article. The author breaks down the chart by eras and offers some analysis.

Higher costs forcing firms to relocate (from China)

China Daily: Higher costs forcing firms to relocate

Jobs going to other countries in China's 'great industry transfer'

Rising wages and shrinking export demand are forcing manufacturers to relocate to neighboring Southeast Asian nations and many that remain are seriously considering moving, a foreign trade official from the Ministry of Commerce said.

The official, who declined to be named, said that "nearly one-third of Chinese manufacturers of textiles, garments, shoes and hats" are now working "under growing pressure" and have moved all, or part, of their production outside China in what he called the great industry transfer.

Favored destinations are usually members of the Association of Southeast Asian Nations, especially Vietnam, Indonesia and Malaysia.

And in all likelihood, "the trend will continue" with more traditional labor-intensive manufacturers transferring production, he told China Daily. ...

... China's labor costs have surged recently by 15 to 20 percent annually, squeezing margins and driving some companies to bankruptcy.

According to the Ministry of Human Resources and Social Security, from January to June the minimum wage was raised, on average, by 20 percent in 16 provinces.

The minimum wage in Shenzhen now stands at 1,500 yuan ($238) per month, setting the highest standard for the whole Chinese mainland.

Many developing countries in Southeast Asia have lower labor costs.

The monthly wage for manufacturing jobs in Vietnam was, on average, 600 yuan in 2011, equivalent to the level of 10 years ago in Dongguan, an industrial town in South China's Pearl River Delta....

...But lower costs in other countries could soon change, some said.

"The advantage (of labor and production costs) in Southeast Asian countries will only last for a few years," said Chen Jian, a general manager of a garment company headquartered in Foshan, on the Pearl River Delta.

"The trend is just like what happened some 10 years ago when many manufacturing industries in Hong Kong and Taiwan moved to the Pearl River Delta to chase cheap labor. But now you can see how much our labor costs have gone up."

The Severe Jobs and Skills Mismatch in Manufacturing

Bloomberg: Caterpillar’s Worker Hunt Means Welders Top Banking Pay

... Companies such as Caterpillar Inc. (CAT) are looking for workers like Brennan. Even with trades offering competitive pay, skilled factory vacancies may soar fivefold to 3 million by 2015 amid a U.S. industry rebound and baby boomer retirements, according to the Society of Manufacturing Engineers. That shortfall threatens to jeopardize both the U.S. recovery and corporate growth plans.

The manufacturing mismatch is part of a broader skills gap in an economy that has more than 3 million jobs open, even with an unemployment rate that ran at 8 percent or more for 43 straight months until the decline in September to 7.8 percent.

Economics and history are combining to drive the skilled-worker shortage. High-school graduates are opting in increasing numbers for four-year schools that can lead to jobs with higher pay and more prestige, and shying away from manufacturing after it shed jobs for more than a decade....

... Schools that provide training for trades and fields such as nursing aren’t producing students in great-enough numbers. Enrollment in two-year colleges that award degrees totaled 7.68 million in 2010, 18 percent more than in 2005. In the same period, four-year university enrollment climbed 21 percent to 13.3 million, according to the U.S. Education Department. ...

... The average annual salary in the field [welding] is $47,900, more than a bank teller supervisor, according to jobs website CareerBuilder. Welders with their own equipment can make $70 an hour, Roy said. Billing 40 weekly hours at that rate and working 50 weeks a year would produce gross pay of $140,000. ...

... Government figures understate the factory shortage, according to a September 2011 report by Deloitte LLP for the National Association of Manufacturers trade group. The report, based on a survey of 1,123 executives, estimated that there were 600,000 unfilled U.S. jobs in manufacturing.

The Society of Manufacturing Engineers used that data as the basis for its projection of 3 million manufacturing vacancies in three years. ...

... “We’re at the edge of a significant problem turning into a critical problem,” Giffi said. “The only reason it’s staying out of critical is because growth is stalled.”

Industrial companies in search of skilled workers cite a common refrain: reluctance by parents and teachers to steer young people to factory jobs. ...

... The Irving, Texas-based company [Fluor Corp] is visiting high schools and recruiting military veterans to hire about 8,000 skilled workers, he said. ...

And I can't help but wonder how many twentysomethings there are out there with a mountain load of debt for a college education they will not use, who would have been better served with a trade education.

Global Grain Production at Record High Despite Extreme Climatic Events

World Watch: Global Grain Production at Record High Despite Extreme Climatic Events

Global grain production is expected to reach a record high of 2.4 billion tons in 2012, an increase of 1 percent from 2011 levels, according to new research conducted by the Nourishing the Planet project for our Vital Signs Online service. According to the United Nations Food and Agriculture Organization (FAO), the production of grain for animal feed is growing the fastest—a 2.1 percent increase from 2011. Grain for direct human consumption grew 1.1 percent from 2011. ...

... Further highlights from the report:

•  
  • The FAO expects global maize production to increase 4.1 percent from 2011, reaching an estimated 916 million tons in 2012.
  • Global rice production achieved an all-time high of 480 million tons in 2011, a 2.6 percent increase from 2010.
  • World wheat production is projected to drop to 675.1 million tons in 2012, down 3.6 percent from 2011, with the largest declines in feed and biofuel utilization.
  • Since 1961, grain production has increased 269 percent and grain yield has increased 157 percent, while the grain harvest area has increased only 25 percent. This is due largely to the Green Revolution and the introduction of high-yielding grain varieties.

To purchase your own copy of State of the World 2011: Innovations that Nourish the Planet, please click HERE.

Current Recession vs Double Dip Recession in the Early 1980s

Conversable Economist: The Potential GDP Perspective on Business Cycles

A few themes jump out from looking at the data in this way:

1) If the Great Recession is measured according to  how far the economy had fallen below potential GDP, it is actually quite similar to the effects of the double-dip recession in the early 1980s.

2) If the Great Recession is measured by the size of the drop, relative to potential GDP, it is about 9 percentage points of GDP (from an actual GDP 1 percent above potential GDP to an actual GDP that is 8 percent below potential GDP). The total size of this drop isn't all that different--although the timing is different--from the years around the double-dip recession of the 1980s, the years around the recession of 1973-75, and the recession of 1969-1970.

3) The recovery from the early 1980s recessions was V-shaped, while the recovery from the Great Recession is more gradual. But this change isn't new. The recoveries from all the recessions before the early 1980s were reasonably V-shapes, and the recoveries after the 1990-91 and 2001 recessions were more U-shaped, as well.

Here is the Graph he references:

Russia reveals shiny state secret: It's awash in diamonds

Christian Science Monitor: Russia reveals shiny state secret: It's awash in diamonds

Russia has just declassified news that will shake world gem markets to their core: the discovery of a vast new diamond field containing "trillions of carats," enough to supply global markets for another 3,000 years.

The Soviets discovered the bonanza back in the 1970s beneath a 35-million-year-old, 62-mile diameter asteroid crater in eastern Siberia known as Popigai Astroblem.

They decided to keep it secret, and not to exploit it, apparently because the USSR's huge diamond operations at Mirny, in Yakutia, were already producing immense profits in what was then a tightly controlled world market.

The Soviets were also producing a range of artificial diamonds for industry, into which they had invested heavily.

The veil of secrecy was finally lifted over the weekend, and Moscow permitted scientists from the nearby Novosibirsk Institute of Geology and Mineralogy to talk about it with Russian journalists.

According to the official news agency, ITAR-Tass, the diamonds at Popigai are "twice as hard" as the usual gemstones, making them ideal for industrial and scientific uses.

The institute's director, Nikolai Pokhilenko, told the agency that news of what's in the new field could be enough to "overturn" global diamond markets. ...

US incomes fall to 1989 levels. How did that happen?

Christian Science Monitor: US incomes fall to 1989 levels. How did that happen?

A Census report signals that for much of America, the economic downturn has produced not one lost decade but two.But the data also show that federal safety-net programs helped keep people out of poverty. ...

... Economists haven't reached a consensus about what forces have caused the middle-class stagnation, but they have pointed to some that may be involved to varying degrees:

Globalization: The rest of the world is playing catchup to the nation that came to dominate in technology and sheer productive muscle during the 20th century. In theory, the US can still prosper as emerging nations from China to Brazil rise, but recent years have seen fierce global competition. America needs to boost its skills faster to stay in the game.

Technology: As with globalization, in theory this isn't a job-destroying force, just one that causes the nature of jobs to change. But some argue that rapid technological advances are having an especially hard impact on many middle-wage jobs that can be largely automated.

Inequality: A wage premium for the educated, the decline of labor unions, and the failure of the minimum wage to keep up with inflation have been among the factors widening the income gap between the rich and the middle class or poor. Some economists say that gap makes for a less vibrant nation. "Lack of opportunity means that its most valuable asset -- its people -- is not being fully used," Joseph Stiglitz of Columbia University has argued. When the rich are able to win big tax cuts it "leads to underinvestment in infrastructure, education and technology, impeding the engines of growth."

Debt and government: Another line of reasoning, taken by some conservative economists, is that economic growth is slowing as America becomes more of a European-style welfare state, with more people receiving public services and government spending accounting for a larger share of the economy. Some say the rising level of public debt, in particular, is emerging as an obstacle to be reckoned with. Others cite high levels of regulation and "crony capitalism," in which government policies favor some industries or companies at the expense of others.

Two other factors, mentioned by Census officials as affecting the recent data, are demographic aging of the population (income typically goes down as people hit retirement age) and a skewing of new jobs in 2011 toward the lower end of the wage spectrum.

The prescriptions for the road ahead depend on the diagnoses of causes, but many economists agree on the need for stronger education, better matching of skills with job opportunities, and an effort to overhaul the nation's fiscal policy, including taxes.

Some economists also argue for policies targeted to boost the level of innovation and entrepreneurship. ...

Recession: Why We're So Gloomy

Time (via Carpe Diem): Recession: Why We're So Gloomy

Well, why are Americans so gloomy, fearful and even panicked about the current economic slump? U.S. consumers seem suddenly disillusioned with the American Dream of rising prosperity. Hard times are forcing some people to turn their back on the American Dream. 

"Whining" hardly captures the extent of the gloom Americans feel as the current downturn. The slump is the longest, if not the deepest, since the Great Depression. Traumatized by layoffs that have cost million of jobs during the slump, U.S. consumers have fallen into their deepest funk in years. 

While some economists have described the current slump as a near depression, that phrase overstates the case if it is taken as a comparison with the period 1929-33, when the U.S. economy contracted by nearly a third. The D word becomes more valid, especially with a small d, when it is used to compare the growth rate of the 1930s, which averaged 0.5% a year, with the expected sluggishness of the next decade, which some economists predict will see an average growth rate of 2%. 

"I'm worried if my kids can earn a decent living and buy a house," says Tony Lentini, vice president of Mitchell Energy in Houston. "I wonder if this will be the first generation that didn't do better than their parents. There's a genuine feeling that the country has gotten way off track, and neither political party has any answers. Americans don't see any solutions." 

The deeper tremors emanate from the kind of change that occurs only once every few decades. America is going through a historic transition from a heedless borrow-and-spend society to one that stresses savings and investment. When this recession is over, America will not simply go back to business as usual. 

The underlying change in the way American consumers and business leaders think about saving and spending will make the recovery one of the slowest in history and the next decade one of lowered expectations. Many economists agree that the U.S. will face at least several years of very modest growth as consumers and companies work off the vast debt they assumed in the last decade.  ...

By the way, the date of this article? January 13, 1992! ;-)

The Surprising Spending Habits of India's Rural Population

Atlantic Cities: The Surprising Spending Habits of India's Rural Population

... The Times of India reports that rural spending growth is outpacing urban spending for the first time since economic reforms took place two decades ago. Between 2009 and 2012, spending by the 69 percent of the Indian population living in rural areas increased by about $67 billion. For the 31 percent who are urban dwellers, spending increased by only about $54 billion.

Overall, the rural majority has been spending more than its urban counterparts for years. From 2004 to 2005, rural dwellers spent $52.2 trillion, about 57 percent of the $91.5 trillion spent nationally. Rural spending has been the majority every year since. But now, rural spending growth has outpaced urban growth as well. ...

... While we might associate rural areas with poor farmers and dusty fields, the rural economy in India is also shifting. Non-farm work is on the rise, especially in the form of construction jobs. Between 2005 and 2010, there was an 88 percent increase in rural construction jobs, many through government sponsored employment generation schemes. At the same time, farm jobs fell from 249 million to 229 million.

The other reason is that all those people who've moved to cities to make more money are actually sending a lot of that money back to the rural areas from which they've migrated. Rural family members back home suddenly find themselves with much greater discretionary incomes than ever before, and they're very happy to spend it. ...

Graphing Changes in Income

The Monkey Cage: Choices in graphing parallel time series

Earlier this week I posted the following chart:

Economist Andrew Gelman took at look at this and explored alternative presentations of the data here is what he came up with:

Then I thought of plotting the incomes over time (all these income values are inflation-adjusted, of course):

I like this one a lot. In particular, it shows that the drop from 2000-2010 is really a drop since 2007. (Although I suppose Cowen would argue that the drop was really happening earlier and it was just that the economy was doing a Wiley E. Coyote, standing in midair and not actually going into freefall until people realized they had gone off the edge of the cliff).

Still, even the time-trends graph is not quite a replacement for the original bar plot which shows so much drama. I think my recommended solution is to give the bar plot for the initial impression and then follow up immediately with the time-trends graph, which shows the big picture much more clearly.

60 Years of American Economic History, Told in 1 Graph

Atlantic: 60 Years of American Economic History, Told in 1 Graph

China Confronts Mounting Piles of Unsold Goods

New York Times: China Confronts Mounting Piles of Unsold Goods

GUANGZHOU, China — After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.

The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors. ...

... China is the world’s second-largest economy and has been the largest engine of economic growth since the global financial crisis began in 2008. Economic weakness means that China is likely to buy fewer goods and services from abroad when the sovereign debt crisis in Europe is already hurting demand, raising the prospect of a global glut of goods and falling prices and weak production around the world.

Corporate hiring has slowed, and jobs are becoming less plentiful. Chinese exports, a mainstay of the economy for the last three decades, have almost stopped growing. Imports have also stalled, particularly for raw materials like iron ore for steel making, as industrialists have lost confidence that they will be able to sell if they keep factories running. Real estate prices have slid, although there have been hints that they might have bottomed out in July, and money has been leaving the country through legal and illegal channels. ...

The Future of Manufacturing Is in America, Not China

Foreign Policy: The Future of Manufacturing Is in America, Not China

How new technology is driving a U.S. industrial comeback.

... But Ralph Lauren berets aside, the larger trends show that the tide has turned, and it is China's turn to worry. Many CEOs, including Dow Chemicals' Andrew Liveris, have declared their intentions to bring manufacturing back to the United States. What is going to accelerate the trend isn't, as people believe, the rising cost of Chinese labor or a rising yuan. The real threat to China comes from technology. Technical advances will soon lead to the same hollowing out of China's manufacturing industry that they have to U.S industry over the past two decades.

Several technologies advancing and converging will cause this.

First, robotics. The robots of today aren't the androids or Cylons that we are used to seeing in science fiction movies, but specialized electromechanical devices run by software and remote control. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. Several companies, such Willow Garage, iRobot, and 9th Sense, sell robot-development kits for which university students and open-source communities are developing ever more sophisticated applications.

The factory assembly that China is currently performing is child's play compared to the next generation of robots -- which will soon become cheaper than human labor. ...

... A type of manufacturing called "additive manufacturing" is now making it possible to cost-effectively "print" products. In conventional manufacturing, parts are produced by humans using power-driven machine tools, such as saws, lathes, milling machines, and drill presses, to physically remove material until you're left with the shape desired. This is a cumbersome process that becomes more difficult and time-consuming with increasing complexity. In other words, the more complex the product you want to create, the more labor is required and the greater the effort.

In additive manufacturing, parts are produced by melting successive layers of materials based on three-dimensional models -- adding materials rather than subtracting them. The "3D printers" that produce these parts use powered metal, droplets of plastic, and other materials -- much like the toner cartridges that go into laser printers. This allows the creation of objects without any sort of tools or fixtures. The process doesn't produce any waste material, and there is no additional cost for complexity. Just as, thanks to laser printers, a page filled with graphics doesn't cost much more than one with text (other than the cost of toner), with 3D printers we can print a sophisticated 3D structure for what it would cost to print something simple.

Three-D printers can already create physical mechanical devices, medical implants, jewelry, and even clothing. The cheapest 3D printers, which print rudimentary objects, currently sell for between $500 and $1,000. Soon, we will have printers for this price that can print toys and household goods. By the end of this decade, we will see 3D printers doing the small-scale production of previously labor-intensive crafts and goods. It is entirely conceivable that, in the next decade, manufacturing will again become a local industry and it will be possible to 3D print electronics and use giant 3D printing scaffolds to print entire buildings. Why would we ship raw materials all the way to China and then ship completed products back to the United States when they can be manufactured more cheaply locally, on demand? ...

Keep in mind that the above does not mean there will be more manufacturing jobs in the U.S. We are still going to see a decline in manufacturing jobs. Manufacturing as a percentage of GDP has remained very constant since World War II but technological innovation has elminated the need for much human labor. About 32% of the labor force was in manufacturing in 1947 but it is about 12% (and declining) today. The loss of manufacturing jobs has much less to do with China and a lot more to do with onging technological innovation.

Source

The Employment "Recovery"

From the St Louis Fed via Greg Mankiw:

From the St Louis Fed:

Were Americans Richer In 1983? We Just Don't Know

Businessweek: Were Americans Richer In 1983? We Just Don't Know by Peter Coy

There’s a chart flying around the blogosphere that seems to show that American families were wealthier in 1983 than in 2010, and the figures in it are attributed to me. I never made that claim, because I have no idea whether or not it’s accurate. What I can say is that American families were wealthier in 1989 than in 2010. There is no solid information for years before that, at least from the Federal Reserve.

The story of the chart that took on a life of its own gives some insight into how memes are created and circulated on the Internet. It started life at Reuters with a sensible disclaimer, but as it circulated those disclaimers have been sandpapered off. It has popped up on the Washington Post website, the PBS NewsHour’s Rundown blog, Brad DeLong’s tumblr feed, and probably some other places I haven’t seen yet.

Let me explain what happened. ...

More Than Half of US Spending in 2012 Will be on Entitlements

Heritage

CEO-to-Worker Compensation Ratio - 1965-2011

HT: Greg Mankiw

Decline in Labor Force Participation Reflects Demographics, May Not Be as Bad as Reported

Carpe Diem: Decline in Labor Force Participation Reflects Demographics, May Not Be as Bad as Reported

... 1. An important point of clarification: The civilian labor force participation rate (LFPR) is calculated by the BLS as the Civilian Labor Force (employed + unemployed) divided by the Civilian Noninstitutional Population (16 years and over), and not by the working age population as both the WSJ and IBD report.  This can be verified by the current BLS employment report, which calculates the April Labor Force Participation Rate of 63.6% as 154,365 (labor force) DIVIDED BY 242,784,000 (TOTAL POPULATION, not divided by working-age population). ...

... Bottom Line: The overall LFPR was in decline after peaking in 2000 reflecting long-term demographic trends even during the expansion of 2002-2007, and probably would have continued to decline even without the Great Recession.  Although it's certainly likely that the Great Recession accelerated the decline since 2007, it's important to realize with increased life expectancy, we can expect continued increases over time in those counted as "not in the labor force" and a continuation of the decline in the LFPR that started in 2000.

Phenomenal Gains in Manufacturing Productivity

Carpe Diem: Phenomenal Gains in Manufacturing Productivity

... In other words, the average American factory worker today produces more output in an hour than his or her counterpart produced working almost a ten hour day in 1947 - and that's why we're producing record levels of output with fewer workers. ...

The Great Reversal: Playing the U.S. Manufacturing Boom

Wall Street Journal: The Great Reversal: Playing the U.S. Manufacturing Boom

Investors who have favored emerging markets like China in recent years should pay attention to another growing manufacturing center. It boasts plenty of skilled workers; cheap and abundant energy; stable institutions; and a large middle class that likes to shop.

It is the U.S., where a long industrial decline might be in reverse.

In March, manufacturing expanded for the 32nd straight month, and contributed 37,000 of the 120,000 U.S. jobs added, the government reported. That's partly because of the ongoing recovery from the Great Recession. But the economy is also changing.

Manufacturing's share of gross domestic product plunged to 11% in 2009 from 26% in 1947, according to the Commerce Department. In 2010, it rose to 11.7%—the biggest yearly gain in more than 50 years. The 2011 numbers will be released on April 26, and the anecdotal evidence is promising; companies like Caterpillar, CAT -2.17% Ford Motor F -2.00% and NCR say they are moving some operations back to the U.S.

Three trends suggest America's "manufacturing renaissance" is just getting started, says Neil Dutta, U.S. economist at Bank of America Merrill Lynch. First, the cost advantages of outsourcing factory work are narrowing. Emerging market wages, while still much lower than U.S. wages, are rising, and high oil prices have made shipping more expensive. That is expanding the range of goods U.S. factories can produce at competitive prices (think sophisticated machines, not toys).

Second, a weakening dollar makes U.S. goods more attractive to foreign buyers. The dollar has fallen by nearly one-third over the past decade against a basket of currencies including the euro, British pound and yen.

Third, energy production is booming in the U.S., and domestic natural-gas prices have recently plunged. That gives an edge to U.S. producers of fabricated steel, transportation equipment, machinery and chemicals, which use natural gas extensively, according to a recent report from Citigroup C -2.36% . ...

The Most Energy Efficient US Economy Ever

Carpe Diem: 2011: Most Energy-Efficient Economy in History

Data Source: Energy Information Administration

Manufacturing’s Declining Share of GDP is Inevitable, Global, and Something to Celebrate

Carpe Diem: Manufacturing’s Declining Share of GDP is Inevitable, Global, and Something to Celebrate

... Actually, that's not really accurate. The chart above shows the manufacturing shares of GDP for the U.S., the entire world economy and four of the countries cited in the study (Japan, Germany, Finland and the Netherlands) as having a "stable or growing" shares of GDP using United Nations data here for the years 1970 to 2010. For all five countries and for the world economy, the manufacturing shares of GDP fell to historic all-time lows in 2009, before increasing slightly in all cases in 2010. Like the U.S., manufacturing's share of GDP has fallen in Germany, Japan, Finland and the Netherlands.

It’s also interesting to note that the decline in manufacturing’s share of U.S. GDP over the last forty years (from 24% to 13%) is nearly identical to the decline in world manufacturing as a share of world GDP, which fell from 27% in 1970 to 16% in 2010. Therefore, we can conclude that the declining share of manufacturing’s contribution to GDP is not unique to America, but reflects a global trend as the world moves from a traditional manufacturing-intensive Machine Age economy to more a services-intensive Information Age economy. ...

... Manufacturing’s declining share of output isn’t a sign of economic weakness - it’s just the opposite. It’s a sign that advances in manufacturing productivity and efficiency translate into lower prices for consumers when they purchase goods like cars, food, clothing, appliances, furniture, and electronic goods. In the U.S., the price of goods relative to services fell by 52 percent between 1970 and 2010, so it’s not surprising that manufacturing’s importance in the economy has fallen significantly.

As spending on manufactured goods as a share of household income declines, it raises our standard of living, and for that “decline in manufacturing” we should celebrate, not complain.

A longer version of this post appears today at the National Chamber Foundation blog.

What's Making Americans Less Hungry For Gasoline?

NPR: What's Making Americans Less Hungry For Gasoline?

... He says gasoline demand peaked in 2007 and has fallen each year since, even though the economy has begun to recover.

"The U.S. has already reached what we can call 'peak demand.' Because of increased efficiency, because of biofuels, we're not going to see growth in our oil consumption," Yergin says.

That view is shared by the government's official source of energy data, the Energy Information Administration. Its long-term projection is that gasoline consumption will steadily decline by around 7 percent over the next 25 years.

Howard Gruenspecht, the EIA's acting administrator, says the projection does not take into account the latest proposal on automotive fuel efficiency, likely to be approved later this year. It requires fleet averages of 54.5 miles per gallon.

"If you put those into the mix, we would expect a somewhat steeper decline in overall liquid fuels demand, and gasoline demand in particular," Gruenspecht says. ...

New Math Will Drive a U.S. Manufacturing Comeback

Harvard Business Review: New Math Will Drive a U.S. Manufacturing Comeback

Making the United States an even more attractive location for factories and investments is critical for the health of our nation. More domestic factories would help create more balanced trade flows and a more stable global economy. But company decisions on what and where to place production facilities, while influenced by many factors, ultimately depend on the math.

Thankfully, the math these days is starting to work in America's favor again.

Our research last year suggested to us that changing conditions in China would bring home some of the manufacturing work that migrated overseas during the past decade. We originally saw this "insourcing" phenomenon, as the White House now refers to it, starting around 2015.

We were deliberately conservative in our estimates and made clear that the coming manufacturing renaissance would benefit some industries more than others, with seven sectors benefitting the most: vehicles and auto parts, appliances and electrical equipment, furniture, plastic and rubber products, machinery, fabricated metal products, and computers and electronics. These seven sectors currently account for nearly two-thirds of the more than $325 billion the U.S. imports from China.

We noted that several factors had combined to push these sectors toward a tipping point, when U.S. manufacturing becomes an attractive alternative to China. These factors include China's rapidly rising labor costs, which we discussed in an earlier HBR blog; the increased value of the yuan; the challenge of managing long-distance supply chains; the quality control concerns that continue to haunt many manufacturers that have offshored production; and the significantly higher productivity of U.S. workers. ...

Are Wives Making More Than Their Husbands?

Yahoo! News: Are Wives Making More Than Their Husbands?

What percentage of American wives outearn their husbands? The number just might astonish you.

If you've been hanging around the United States over the past 20 years or so, you've bumped up against the notion, in the media and maybe in real life, that wives are increasingly earning more than their husbands-and what a fiasco it is! Men feel emasculated and resent their wives' incessant harangues about helping more around the house; women seethe as they continue to take on more than their fair share of the domestic duties and find themselves losing sexual desire for the unambitious lummoxes in their midst. Certainly you can think of a few couples in which this is not the case, in which he and she seem to have reached some graceful accommodation or are even, by all appearances, thriving: The guy is happily pushing the kids on the swings, while the gal is digging her high-powered job (and/or paycheck). But regardless of all the cultural noise, the overall proportion of wives whose salaries eclipse their husband's is, while not insignificant, nothing like the norm-right?

Wrong. Reading Washington Post reporter Liza Mundy's book, The Richer Sex: How the New Majority of Female Breadwinners Is Transforming Sex, Love and Family, out this March, was a genuine shock. Based on 2009 Bureau of Labor Statistics figures hot off the press (a government economist slipped Mundy the stats before they were published, in fact), "almost 40 percent of U.S. working wives now out-earn their husbands." While that's not the majority-grandiose subtitles definitely are the norm-it's darn close to it. (For the record, my guess was 25 percent, the figure in the early '90s.) ...

In 2005-2008, Poverty has fallen in all regions of the world

The Economist: Now for the good news

Poverty has fallen in all regions of the world

THE past four years have seen an economic crisis coincide with a food-price spike. That must surely have boosted the number of the world’s poor (especially since food inflation hits the poor hardest)—right? Wrong. New estimates of the numbers of the world’s poor by the World Bank’s Development Research Group show that for the first time ever, poverty—defined as the number and share of people living below $1.25 a day (at 2005 prices)—fell in every region of the world in 2005-08. Half the long-term decline is attributable to China, which has taken 660m people out of poverty since the early 1980s. But the main contribution to the recent turnaround is Africa. Its poverty headcount rose at every three-year interval between 1981 and 2005, the only continent where this happened. But in 2008, it fell by 12m, or five percentage points to 47%—the first time less than half of Africans have been below the poverty line. The bank also has partial estimates for 2010. These show global poverty that year was half its 1990 level, implying the long-term rate of poverty reduction—slightly over one percentage point a year—continued unabated in 2008-10, despite the dual crisis.

 

Reshoring: Manufacturing is Coming Back to U.S.

Carpe Diem: Reshoring: Manufacturing is Coming Back to U.S.

Three examples:

1. "Globalization has come full circle at Otis Elevator. The U.S. manufacturer, whose elevators zip up and down structures as diverse as the Empire State Building and the Eiffel Tower, is moving production from Nogales, Mexico, to a new plant in South Carolina. More startling: Otis says the move will save it money."

2. "After having their products manufactured in China the past seven years, The Outdoor GreatRoom Company is bringing production back home to Minnesota."

3. "Not long ago, overseas plants produced half of Idaho-based Buck Knives’ output. Today they produce 25 percent. Buck Knives wants to keep moving production from China to Post Falls, Idaho over the next few years, company chairman Chuck Buck said. “I want to get out of China as quickly as I can,” he said. ...

Changes in US Consumer Spending

The Economist: Hard Times

Can America's Jobless Fill American Jobs?

PBS Newshour: Can America's Jobless Fill American Jobs?

An interesting piece that suggests there is now a structural mismatch between what employers need and what employees are qualified to do.

Watch the full episode. See more PBS NewsHour.

The World of Seven Billion

National Geographic has a fascinating interactive map at their website that gives some valuable socio-economic perspective. The World of Seven Billion

 

Upside: Surprising GOOD NEWS About the State of Our World - Book Review

Hunger and poverty is increasing, people are working longer hours, crime is getting worse, and violence around the world is on the rise. In short, the world is going to hell in a hand basket. So goes the common wisdom. But the common wisdom is wrong. Long-time readers of the Kruse Kronicle who have read my series on American Social Indicators and World Social Indicators know that most social indicators show an improving world … in some facets, the improvements are nothing short of astonishing.

Now comes an excellent book by sociologist Brad Wright, Upside: Surprising GOOD NEWS About the State of Our World. Wright covers most of the issues I’ve raised at my blog plus many more. It is full of wonderful stats and charts but the narrative is in Wright’s characteristically engaging witty style.

Wright is not saying that everything in the world is getting better (think things like obesity and environmental challenges) but it is hardly a planet on the verge disaster. In fact, there are reasons for considerable optimism. Following Matt Ridley’s lead, he sees the coming to fruition of specialization and exchange as a key to the recent rise in human welfare. One area where I would like to have heard more, is why pessimism is so pervasive. He offers some insights. For one, our modern society is highly adaptive due to the rise of specialization and exchange. But it is incomprehensibly complex. Because of our inability to grasp complexity, we are prone to simply extrapolate present trends … particularly negative ones … indefinitely into the future. There is a radical underestimation of our adaptive ability. Furthermore, we seem programmed not to see incremental improvements in life. Once an improvement arrives it quickly becomes the new normal. But we easily fixate on negative news and trends that we experience as threats. And, of course, news sources are aware of the fixation and they highlight such news to attract readers. That is how we create a society where are large majority think there life is good or getting better but also think other people’s lives are going downhill.

The book is a gem. His data is documented in endnotes, most of it available through websites or readily available sources. I will be keeping this book on my reference shelf and you will know doubt see it referenced in future Kronicle posts. Pick up a copy today.

U.S. revises amount of Marcellus gas higher, much higher (42 times higher)

Philly.com: U.S. revises amount of Marcellus gas higher, much higher

The U.S. Geological Survey on Tuesday dramatically increased its estimate of the natural gas contained in the Marcellus Shale, the deep deposit that has triggered a drilling frenzy in Pennsylvania.

The USGS now estimates that the shale contains about 84 trillion cubic feet of undiscovered, technically recoverable natural gas and 3.4 billion barrels of undiscovered, technically recoverable natural gas liquids.

The agency's latest numbers are 42 times greater than its 2002 assessment, which said the shale contained about two trillion cubic feet of gas. The Marcellus lies under Pennsylvania and seven other Appalachian states. ...

GDP recovery since the recession

Economist: GDP recovery since the recession

Which economies have fared best and worst during the global financial crisis?

The U.S. Content of “Made in China”

Federal Reserve Bank of San Francisco: The U.S. Content of “Made in China”

Abstract

Goods and services from China accounted for only 2.7% of U.S. personal consumption expenditures in 2010, of which less than half reflected the actual costs of Chinese imports. The rest went to U.S. businesses and workers transporting, selling, and marketing goods carrying the "Made in China" label. Although the fraction is higher when the imported content of goods made in the United States is considered, Chinese imports still make up only a small share of total U.S. consumer spending. This suggests that Chinese inflation will have little direct effect on U.S. consumer prices.

Article

The United States is running a record trade deficit with China. This is no surprise, given the wide array of items in stores labeled “Made in China.” This Economic Letter examines what fraction of U.S. consumer spending goes for Chinese goods and what part of that fraction reflects the actual cost of imports from China. We perform a similar exercise to determine the foreign and domestic content of all U.S. imports.

In our analysis, we combine data from several sources: Census Bureau 2011 U.S. International Trade Data; the Bureau of Labor Statistics 2010 input-output matrix; and personal consumption expenditures (PCE) by category from the U.S. national accounts of the Commerce Department’s Bureau of Economic Analysis. We use the combined data to answer three questions:

•  What fraction of U.S. consumer spending goes for goods labeled “Made in China” and what fraction is spent on goods “Made in the USA”?

•  What part of the cost of goods “Made in China” is actually due to the cost of these imports and what part reflects the value added by U.S. transportation, wholesale, and retail activities? That is, what is the U.S. content of “Made in China”?

•  What part of U.S. consumer spending can be traced to the cost of goods imported from China, taking into account not only goods sold directly to consumers, but also goods used as inputs in intermediate stages of production in the United States?

Answers?

Although globalization is widely recognized these days, the U.S. economy actually remains relatively closed. The vast majority of goods and services sold in the United States is produced here. In 2010, imports were about 16% of U.S. GDP. Imports from China amounted to 2.5% of GDP. ...

... Obviously, if a pair of sneakers made in China costs $70 in the United States, not all of that retail price goes to the Chinese manufacturer. In fact, the bulk of the retail price pays for transportation of the sneakers in the United States, rent for the store where they are sold, profits for shareholders of the U.S. retailer, and the cost of marketing the sneakers. These costs include the salaries, wages, and benefits paid to the U.S. workers and managers who staff these operations. ...

... This U.S. fraction is much higher for imports from China. Whereas goods labeled “Made in China” make up 2.7% of U.S. consumer spending, only 1.2% actually reflects the cost of the imported goods. Thus, on average, of every dollar spent on an item labeled “Made in China,” 55 cents go for services produced in the United States. In other words, the U.S. content of “Made in China” is about 55%. The fact that the U.S. content of Chinese goods is much higher than for imports as a whole is mainly due to higher retail and wholesale margins on consumer electronics and clothing than on most other goods and services. ...

Conclusion

Figure 2 shows the share of U.S. PCE [personal consumption expenditures] based on where goods were produced, taking into account intermediate goods production, and the domestic and foreign content of imports. Of the 2.7% of U.S. consumer purchases going to goods labeled “Made in China,” only 1.2% actually represents China-produced content. If we take into account imported intermediate goods, about 13.9% of U.S. consumer spending is attributable to imports, including 1.9% imported from China.

Since the share of PCE attributable to imports from China is less than 2% and some of this can be traced to production in other countries, it is unlikely that recent increases in labor costs and inflation in China will generate broad-based inflationary pressures in the United States.

Average Home Size Shrinks

Source: Carpe Diem

 

Why companies won't hire - David Frum

CNN: Why companies won't hire

... In fact, on our current trajectory, the U.S. will catch up to 2007 levels of economic output sometime in the next couple of months. Yet at the current job creation rate of a little north of 100,000 jobs per month, the U.S. economy will not recover its 2008-2009 job losses until the middle of the decade. And because so many distressed workers have quit the labor force altogether, the pace of job creation would have to double for the U.S. to see total employment rates return to pre-crisis levels before 2015.

What's the problem? Consider just these factors:

1. This past recession delivered its hardest blow to some especially labor-intensive industries: construction and retailing. Even as economic activity recovers, we're not going to see lots of new home building. Nor will we see people using their cash-out refinancings to go shopping at Best Buy. Americans are saving again. Those who have jobs are paying down debt.

2. Recessions lead to consolidations. Weak firms go broke, strong firms gain market share. The strong firms hire, the weak firms fire. But because the strong firms are more productive (that's why they are strong!), they do not hire nearly as many people as the weak firms have laid off.

3. A catastrophic experience like the 2008-2009 recession changes an employer's expectations about the future. Caution and self-protection become the guiding rules of business management. Companies decide it's safer to have one worker too few than one too many. They may not recover their exuberance and optimism for years.

4. Last and most important: The economy, although growing, is not growing very fast. The rule of thumb is to reduce unemployment by 1 point, the economy must grow 2 points over trend. Right now, the U.S. economy is still growing below trend. The engine is just not revving fast enough to move the car.

Then there's public policy. Employers must fear that the future probably holds heavier taxes, more regulation and higher employee health care costs. The outlook might be worse under a President Obama than a President Romney, but it looks sufficiently ugly either way.

As I said: That's the optimistic scenario, the 1936 scenario.

Don't get me started on the other.

Who Holds the Federal Debt?

CQ.com: Who Holds the Federal Debt

As of the end of March, the federal government owed $14.27 trillion to a wide variety of holders of U.S. Treasury securities. This graphic depicts who those creditors are and the amount they have bought in treasuries. Click on the arrows next to a category to expand its subcategories.

Check out the graph at the link above.