January 23, 2013

Posted by orrinj at 8:20 PM


The Myth of a Stagnant Middle Class : Household spending on food, housing, utilities, etc. has fallen from 53% of disposable income in 1950 to 32% today. (DONALD J. BOUDREAUX AND MARK J. PERRY, 1/23/13, WSJ)

Third and most important, the average hourly wage is held down by the great increase of women and immigrants into the workforce over the past three decades. Precisely because the U.S. economy was flexible and strong, it created millions of jobs for the influx of many often lesser-skilled workers who sought employment during these years.

Since almost all lesser-skilled workers entering the workforce in any given year are paid wages lower than the average, the measured statistic, "average hourly wage," remained stagnant over the years--even while the real wages of actual flesh-and-blood workers employed in any given year rose over time as they gained more experience and skills.

These three factors tell us that flat average wages over time don't necessarily support a narrative of middle-class stagnation. Still, pessimists reject these arguments. Rather than debate esoteric matters such as how to properly adjust for inflation, however, let's examine some other measures of middle-class living standards.

No single measure of well-being is more informative or important than life expectancy. Happily, an American born today can expect to live approximately 79 years--a full five years longer than in 1980 and more than a decade longer than in 1950. These longer life spans aren't just enjoyed by "privileged" Americans. As the New York Times reported this past June 7, "The gap in life expectancy between whites and blacks in America has narrowed, reaching the lowest point ever recorded." This necessarily means that life expectancy for blacks has risen even more impressively than it has for whites.

Americans are also much better able to enjoy their longer lives. According to the Bureau of Economic Analysis, spending by households on many of modern life's "basics"--food at home, automobiles, clothing and footwear, household furnishings and equipment, and housing and utilities--fell from 53% of disposable income in 1950 to 44% in 1970 to 32% today.

One underappreciated result of the dramatic fall in the cost (and rise in the quality) of modern "basics" is that, while income inequality might be rising when measured in dollars, it is falling when reckoned in what's most important--our ability to consume. Before airlines were deregulated, for example, commercial jet travel was a luxury that ordinary Americans seldom enjoyed. Today, air travel for many Americans is as routine as bus travel was during the disco era, thanks to a 50% decline in the real price of airfares since 1980.

Shhhh...the white middle class doesn't like to be bothered with facts when they're whingeing.

Posted by orrinj at 8:15 PM


Major league heart (Rick Reilly, 1/22/13, ESPN.com)

"I read where the soldiers over there get lonely and bored," says Albitz, who spent time with the Memphis Redbirds (Triple-A) last season. "I feel that way sometimes, you know? New town, new team all the time. And I'm just playing baseball. These guys are putting their lives on the line for us. I just thought somebody ought to thank them for it."

Albitz read an article somewhere in which a soldier was asked what he'd most like to have sent to him. "Two gloves and a baseball," the soldier replied. And something clicked in Albitz's brain.
He's sent nearly 300 this offseason so far, all by himself.

"It helps not to have a girlfriend," Albitz says.

He does it out of his parents' house in Torrance, Calif. His dad oils the gloves and fixes the strings and Vance fills the boxes, adds a note and ships them off. Getting the gloves donated isn't easy, but getting the money to ship them (about $25 per box) is even harder.

His goal is to send 1,000 by the time he reports to Cardinals spring training on Feb. 23. "Then I've really got to stop."

Posted by orrinj at 5:29 AM


Why All U.S. States Should Eliminate The Income Tax (Francis DeLuca, 1/23/13, Forbes)

Louisiana Governor Bobby Jindal, Nebraska Governor Dave Heineman, and Kansas Governor Sam Brownback have all called for their states to eliminate their income tax and replace it with a sales tax over the past week. They were joined yesterday morning by North Carolina, where the Senate President Pro Tempore, Phil Berger, confirmed the legislature and the Governor, Pat McCrory, would pursue serious tax reform this session. Indeed, a senate proposal being crafted into legislation includes a repeal of North Carolina's personal and corporate income taxes along with an expanded sales tax. [...]

The Civitas report evaluates the economic benefits from eliminating the personal income tax, the corporate income tax, and the franchise tax, all of which penalize businesses and hinder job creation. In place of the old taxes, the reform calls for a new consumption-based tax system, largely via expanding and slightly increasing the state sales tax.

The findings of this study show the proposal is a recipe for economic growth and more jobs. The Civitas study shows that such consumption-based tax reform can increase North Carolina's average annual rate of personal income growth by 0.38 percent to 0.66 percent. It also shows that states without a personal income tax have average annual growth rates 0.5 percent higher than other states, while states without corporate income taxes average a full percentage point higher each year.

But what do those figures really mean? If a consumption-based tax reform like this had been passed in 2000, North Carolina would be an entirely different place. In dollar terms, total personal income would have been between $14.4 billion and $25.0 billion higher, a 4 to 7 percent increase over the state's actual 2011 total personal income. This is an additional $1,500 to $2,600 in income per worker.

Posted by orrinj at 5:23 AM


David Cameron calls for UK exemption from EU's 'ever-closer' union (Nicholas Watt, 1/23/13, guardian.co.uk)

David Cameron has outlined the scale of his ambition to transform the terms of Britain's membership of the EU by calling for the UK to be exempted from its founding principle: the creation of an ever-closer union.

In his long-awaited speech on the EU, the prime minister cast himself as a modern-day heretic as he pledged to challenge established thinking.

Speaking at the London headquarters of Bloomberg, Cameron confirmed plans to hold an in-out referendum after the next election but warned: "The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy. In its long history Europe has experience of heretics who turned out to have a point."