Religion: Is Your Religion Your Financial Destiny?

The economic differences among the country's various religions are strikingly large, much larger than the differences among states and even larger than those among racial groups.

The most affluent of the major religions — including secularism — is Reform Judaism. Sixty-seven percent of Reform Jewish households made more than $75,000 a year at the time the Pew Forum on Religion and Public Life collected the data, compared with only 31% of the population as a whole.

Many factors are behind the discrepancies among religions, but one stands out. The relationship between education and income is so strong that you can almost draw a line through the points on this graph.

For more, see Is Your Religion Your Financial Destiny? by David Leonhardt, May 11, 2011 at NYTimes.com.

Education: Buying Influence at Universities

The St. Petersburg Times reported on Tuesday that Charles G. Koch, one of the billionaire brothers at Koch Industries, has pledged $1.5 million to Florida State University to be used for hiring in the economics department. In exchange, his representatives get to screen and sign off on the hires.

Another philanthropist is using donations to shape classroom curricula. Bloomberg reported that John Allison, the former chairman of the banking company BB&T, is working through the company's foundation to give schools grants up to $2 million. The condition is that they must agree to create a course on capitalism that has Atlas Shrugged on the reading list.

The article reports that 60 schools, including at least four campus of the University of North Carolina, have begun teaching the book as a result of accepting the foundation money.

For more, see Buying Influence at Universities by Catherine Rampell, May 12, 2011 at Economix.

Mind: Nice Guys Finish First

The story of evolution, we have been told, is the story of the survival of the fittest. The strong eat the weak. The creatures that adapt to the environment pass on their selfish genes. Those that do not become extinct.

Yet every day, it seems, a book crosses my desk, emphasizing a different side of the story. These are books about sympathy, empathy, cooperation and collaboration, written by scientists, evolutionary psychologists, neuroscientists and others.

Michael Tomasello, the author of Why We Cooperate, devised a series of tests that he could give to chimps and toddlers in nearly identical form. He found that at an astonishingly early age kids begin to help others, and to share information, in ways that adult chimps hardly ever do.

An infant of 12 months will inform others about something by pointing. Chimpanzees and other apes do not helpfully inform each other about things. Infants share food readily with strangers. Chimpanzees rarely even offer food to their own offspring. If a 14-month-old child sees an adult having difficulty — like being unable to open a door because her hands are full — the child will try to help.

Tomasello's point is that the human mind veered away from that of the other primates. We are born ready to cooperate, and then we build cultures to magnify this trait.

For more, see Nice Guys Finish First by David Brooks, May 16, 2011 at NYTimes.com.

Economics: $2 Trillion Needed for U.S. Infrastructure

The report [by the Urban Land Institute] envisions a time when, like Detroit, U.S. cities may opt to abandon services in some districts and when lightly used blacktopped rural roads would be allowed to return to nature. Eventually, the report says, the federal gas tax will be increased; local governments will be allowed to toll interstate highways; water bills will rise to pay for pipe and sewer replacement; property and sales taxes will increase; and private, profit-seeking companies will play a much larger role in funding and maintaining public projects.

Congress has failed to approve the two major bills that allow for long-term funding and planning for aviation and transportation. The Federal Aviation Administration has been operating under a funding bill that expired in 2007 and has been extended 18 times. The surface transportation act, which provides the balance of federal transportation funding, expired in 2009 and has been extended seven times.

As Congress debates how much should be spent and where to find the money, China has a plan to spend $1 trillion on high-speed rail, highways and other infrastructure in five years. India is nearing the end of a $500 billion investment phase that has seen major highway improvements, and plans to double that amount by 2017. Brazil plans to spend $900 billion on energy and transportation projects by 2014.

The United States, the institute report concludes, needs to invest $2 trillion to rebuild roads, bridges, water lines, sewage systems and dams that are reaching the end of their planned life cycles.

For more, see Study: $2 Trillion Needed for U.S. Infrastructure by Ashley Halsey III, May 16, 2011 at The Washington Post.

Diversion: Tourists Can Now Dangle Precariously from CN Tower

The CN Tower, which stretches 116 stories above the Toronto skyline, its "main pod" hovering there like some sort of malevolent spacecraft, will now invite tourists to stroll around its perimeter. There will be no fences, no ledges, no plexiglass walls. NOTHING, in fact, standing between you and a 1,200-foot plunge — save for the janky, sure-to-malfunction cable that binds your harness to an overhead railing.

From Tourists Can Now Dangle Precariously from CN Tower by Seth Abramovitch, May 11, 2011 at Gawker.

Politics: The Unwisdom of Elites

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe's single currency is coming apart at the seams. How did it all go so wrong?

Well, what I've been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it's mostly the public's fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate's foolishness.

So this seems like a good time to point out that this blame-the-public view isn't just self-serving, it's dead wrong.

The fact is that what we're experiencing right now is a top-down disaster. The policies that got us into this mess weren't responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

Let me focus mainly on what happened in the United States, then say a few words about Europe.

...

For his the rationale, see The Unwisdom of Elites by Paul Krugman, May 8, 2011 at NYTimes.com.

Economics: The Missing Fifth

As my colleague David Leonhardt pointed out recently, in 1954, about 96% of American men between the ages of 25 and 54 worked. Today that number is around 80%. One-fifth of all men in their prime working ages are not getting up and going to work.

According to figures from the Organization for Economic Cooperation and Development, the United States has a smaller share of prime age men in the work force than any other G-7 nation. The number of Americans on the permanent disability rolls, meanwhile, has steadily increased. Ten years ago, 5 million Americans collected a federal disability benefit. Now 8.2 million do. That costs taxpayers $115 billion a year, or about $1,500 per household. Government actuaries predict that the trust fund that pays for these benefits will run out of money within seven years.

Part of the problem has to do with human capital. More American men lack the emotional and professional skills they would need to contribute. According to data from the Bureau of Labor Statistics, 35% of those without a high school diploma are out of the labor force, compared with less than 10% of those with a college degree.

This is a big problem. It can't be addressed through the sort of short-term Keynesian stimulus some on the left are still fantasizing about. It can't be solved by simply reducing the size of government, as some on the right imagine.

It will probably require a broad menu of policies attacking the problem all at once: expanding community colleges and online learning; changing the corporate tax code and labor market rules to stimulate investment; adopting German-style labor market practices like apprenticeship programs, wage subsidies and programs that extend benefits to the unemployed for six months as they start small businesses.

Reinvigorating the missing fifth — bringing them back into the labor market and using their capabilities — will certainly require money. If this were a smart country, we'd be having a debate about how to shift money from programs that provide comfort and toward programs that spark reinvigoration.

For more, see The Missing Fifth by David Brooks, May 9, 2011 at NYTimes.com.

Diversion: Pearls Before Swine Versus Bloggers

From Pearls Before Swine Versus Bloggers by Stephan Pastis, April 11, 2011 at Comics.com.

Media: Prognosticators to Listen to and Those to Ignore

Op-ed columnists and TV's talking heads build followings by making bold, confident predictions about politics and the economy. But rarely are their predictions analyzed for accuracy.

Now, a class at Hamilton College led by public policy professor P. Gary Wyckoff has analyzed the predictions of 26 prognosticators between September 2007 and December 2008. Their findings? Anyone can make as accurate a prediction as most of them if just by flipping a coin.

The students found that only nine of the prognosticators they studied could predict more accurately than a coin flip. Two were significantly less accurate, and the remaining 14 were not statistically any better or worse than a coin flip.

After [Paul] Krugman, the most accurate pundits were Maureen Dowd of The New York Times, former Pennsylvania Governor Ed Rendell, U.S. Senator Chuck Schumer (D-NY), and former House Speaker Nancy Pelosi — all Democrats and/or liberals. Also landing in the “Good” category, however, were conservative columnists Kathleen Parker and David Brooks, along with Bush Administration Treasury Secretary Hank Paulson. Left-leaning columnist Eugene Robinson of The Washington Post rounded out the “good” list.

Those scoring lowest — “The Ugly” — with negative tallies were conservative columnist Cal Thomas; U.S. Senator Lindsey Graham (R-SC); U.S. Senator Carl Levin (D-MI); U.S. Senator Joe Lieberman, a McCain supporter and Democrat-turned-Independent from Connecticut; Sam Donaldson of ABC; and conservative columnist George Will.

Landing between the two extremes — “The Bad” — were Howard Wolfson, communications director for Hillary Clinton's 2008 campaign; former Arkansas Governor Mike Huckabee, a hopeful in the 2008 Republican primary; former House Speaker Newt Gingrich, a Republican; Sen. John Kerry of Massachusetts, the Democratic nominee for president in 2004; liberal columnist Bob Herbert of The New York Times; Andrea Mitchell of NBC; New York Times columnist Tom Friedman; the late David Broder, former columnist for The Washington Post; Chicago Tribune columnist Clarence Page; New York Times columnist Nicholas Kristof; and Hillary Clinton.

[Emphasis added].

For more, see Claim: Krugman Is Top Prognosticator; Cal Thomas Is the Worst by Jim Romenesko, May 2, 2011 at Poynter.

Politics: Liberal & Conservative Leanings Over Time

A system called DW-Nominate, developed by a group of six political scientists, rates each member of Congress on a scale from negative 1 (very liberal on economic issues) to positive 1 (very conservative) based on their roll-call votes. The system also creates a score for each president based on cases in which the outcome he desired from a vote in Congress was clearly articulated.

Whereas Democratic presidents usually have scores fairly close (but just slightly to the left of) the median Democratic member of Congress, Republican presidents — with the very clear exception of Eisenhower — articulate legislative positions that are equivalent to those held by one of the most conservative members of their party.

We need to be careful in interpreting these results. The positions that presidents advocate on Congressional roll calls can be subject to a number of tactical considerations, and may not be entirely representative of their ideology.

For more, see How Liberal Is President Obama? by Nate Silver, April 29, 2011 at FiveThirtyEight at the New York Times.

Health: With Liposuction, the Belly Finds What the Thighs Lose

... researchers randomly assigned nonobese women to have liposuction on their protuberant thighs and lower abdomen or to refrain from having the procedure, serving as controls. As compensation, the women who were control subjects were told that when the study was over, after they learned the results, they could get liposuction if they still wanted it. For them, the price would also be reduced from the going rate.

The result, published in the latest issue of Obesity, was that fat came back after it was suctioned out. It took a year, but it all returned. But it did not reappear in the women's thighs. Instead, Dr. Eckel said, it was redistributed upstairs, mostly in the upper abdomen, but also around the shoulders and triceps of the arms.

As for the women in the control group, when the study ended and they knew the results, more than half still chose to have liposuction.

For more, see With Liposuction, the Belly Finds What the Thighs Lose by Gina Kolata, April 30, 2011 at NYTimes.com.

Economics: How the U.S., on the Road to Surplus, Detoured to Massive Debt

Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation's budget problems. But routine increases in defense and domestic spending account for only about 15% of the financial deterioration, according to a new analysis of CBO data.

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That's nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.

Big-ticket spending initiated by the Bush administration accounts for 12% of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.

Obama's 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6% of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.

For more, see Running in the Red: How the U.S., on the Road to Surplus, Detoured to Massive Debt by Lori Montgomery, April 30, 2011 at The Washington Post.

Economics: European Regulators Investigate Banks for Credit Swaps

There are $600 trillion of derivatives in the world (compared to the $14 trillion Federal debt).

European regulators in Brussels announced two sweeping antitrust investigations into the world's largest banks on Friday, opening a second front in the battle to rein in a $600 trillion business that until now has operated mostly in the shadows. The regulators are focusing on whether the banks have shut out competitors in recent years in a bid to keep profit margins high.

For more, see European Regulators Investigate Banks for Credit Swaps by Louise Story and James Kanter, April 29, 2011 at NYTimes.com.

Happiness: Some Happy States Have High Suicide Rates

Researchers who study how people's sense of well-being varies from place to place decided to compare their findings with suicide rates.

The surprising result: The happiest places sometimes also have the highest suicide rates.

"Discontented people in a happy place may feel particularly harshly treated by life," suggested Andrew Oswald of the University of Warwick in England.

The new study, which has been accepted for publication in the Journal of Economic Behavior & Organization, looked at the 50 states and the District of Columbia.

It lists the top 10 states for well-being as Utah, Louisiana, Colorado, Minnesota, Wyoming, Hawaii, Arizona, Delaware, Florida and Nevada.

Four of those states also are in the top 10 for suicide rates, with Nevada ranked 3rd, Wyoming, 5th; Colorado, 6th; and Utah, 9th.

Among the others, Arizona was 11th and Florida, 15th.

The 10 states with the lowest well-being ratings are: Kentucky, West Virginia, Pennsylvania, Indiana, Missouri, Ohio, New York, Massachusetts, Michigan and Rhode Island.

Just one of those states, West Virginia, is among the top 10 for suicides, ranking No. 8. The only other state in the top 20 was Kentucky at 16th.

For more, see Study: Some Happy States Have High Suicide Rates by Associated Press, April 25, 2011 at Fox News.

Healthcare: Comparing Ryan's Medicare Plan to What Congress Gets

In an Op-Ed piece in The Wall Street Journal, Mr. Ryan wrote, Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy.

He repeated that assertion on NBC's Meet the Press on April 10, when he said, For future generations, what we are proposing is a personalized Medicare, a Medicare system that works exactly like the health care I have as a member of Congress and federal employees have.

Exactly? I beg to differ.

There is a huge difference in one important aspect between the Medicare program in the Ryan budget plan and the Federal Employee Health Benefit Plan, or F.E.H.B.P., for federal employees and for members of Congress.

Basically, the F.E.H.B.P. is best described as a typical employer-sponsored health insurance plan. The federal government's — that is, taxpayers' — annual contribution to the premiums paid to competing private insurers by employees and members of Congress would rise in step with the average premiums charged by the private insurers (see Page 1).

These premiums have been rising over time more or less in step with the overall increase in per-capita health spending in this country.

By contrast, under the Ryan plan, the federal contribution toward the purchase of private health insurance by future Medicare beneficiaries would be indexed only to the Consumer Price Index (see Page 2 of the C.B.O. analysis).

For more, see Comparing Ryan's Medicare Plan to What Congress Gets by UWE E. Reinhardt, April 18, 2011 at Economix.

Economics: Us Debt Clock.org

W. Scott Burns contributed Us Debt Clock.org which contains a very concise display of many financial statistics. Note the state and world buttons at the top left, the time machine at the top right, and the tabs at bottom. I haven't found out who or what runs it.

It's hard to find the exact meaning of some of the numbers, but you can see a short description of them by placing your mouse pointer over the number. Statistics like revenues seem to be year-to-date.

I thought the comparison of $675,688 total debt per family versus $6,766 savings per family (at the time I checked) was extremely scarey until I figured out that the debt figure includes debts of all organizations including businesses and levels of governments and excludes other assets of families such as houses.

Economics: The Big Mac Index

Martha contributed ...

The [Big Mac] index is based on the idea of purchasing-power parity, which says that a currency's price should reflect the amount of goods and services it can buy. Since 14.5 yuan can buy as much burger as $3.71, a yuan should be worth $0.26 on the foreign-exchange market. In fact, it costs just $0.15, suggesting that it is undervalued by about 40%.

From An Indigestible Problem, October 14, 2010 at The Economist.

Religion: Why Do Americans Still Dislike Atheists?

A growing body of social science research reveals that atheists, and non-religious people in general, are far from the unsavory beings many assume them to be. On basic questions of morality and human decency — issues such as governmental use of torture, the death penalty, punitive hitting of children, racism, sexism, homophobia, anti-Semitism, environmental degradation or human rights — the irreligious tend to be more ethical than their religious peers, particularly compared with those who describe themselves as very religious.

Consider that at the societal level, murder rates are far lower in secularized nations such as Japan or Sweden than they are in the much more religious United States, which also has a much greater portion of its population in prison. Even within this country, those states with the highest levels of church attendance, such as Louisiana and Mississippi, have significantly higher murder rates than far less religious states such as Vermont and Oregon.

As individuals, atheists tend to score high on measures of intelligence, especially verbal ability and scientific literacy. They tend to raise their children to solve problems rationally, to make up their own minds when it comes to existential questions and to obey the golden rule. They are more likely to practice safe sex than the strongly religious are, and are less likely to be nationalistic or ethnocentric. They value freedom of thought.

For more, see Why Do Americans Still Dislike Atheists? by Gregory Paul and Phil Zuckerman, April 29, 2011 at The Washington Post.

Healthcare: What Health Insurance Does Cover, and Doesn't

Does your plan cover enough?

For more, see What Health Insurance Does Cover, and Doesn't by Catherine Rampell, April 20, 2011 at Economix.

Lib/Con: The Mental Roots of Racial Prejudice

Strange ...

Presented with a series of facts about members of two groups, Conservatives developed more negative impressions towards the minority group, which were reinforced by consistent memory biases, they report in the Journal of Experimental Social Psychology.

Strikingly, the researchers found this effect without making reference to race, religion or sexual orientation. All it needs to be activated, it seems, is the presence of a larger group and a smaller one.

In their first experiment, 234 students read a series of 39 sentences, each of which described an action of some sort. The person engaging in this behavior was identified as either a member of Group A or Group B.

Twenty-seven of the sentences described positive behavior (Jim gives up his seat on the bus to an elderly woman), while 12 described negative behavior (James often tells many lies).

Twenty-six of the sentences referred to someone from Group A, while only 13 referred to a member of Group B. The ratio between positive and negative behavior was the same for each group: 18 positive and 8 negative for Group A, 9 positive and 4 negative for Group B.

After reading the sentences, participants evaluated the two groups, rating the applicability of such adjectives as intelligent, sociable and lazy. They were then provided with all the sentences and asked to estimate how many of the described actions were performed by members of each group, and how many of each group's actions were negative.

Finally, the students' level of social conservativism was measured by having them give their views on five hot-button topics, including immigration and gay marriage.

The researchers found an illusory association between Group B and negative behaviors. Specifically, the perceived proportion of negative behaviors was significantly higher for Group B, although in fact the two groups were identical in this regard.

Increased levels of social conservativism were associated with more negative evaluations of Group B as compared to Group A, the researchers add. The illusory correlation between Group B and negativity was accentuated among conservatives.

[Emphasis added].

For more, see The Mental Roots of Racial Prejudice by Tom Jacobs, April 11, 2011 at Miller-McCune.