Saturday, October 26, 2013

Who owns the Federal Reserve Bank of the United States? Good question that is sort of answered here...

Here is a nice primer from an independent source as to who (or what) "owns" the Federal Reserve Bank of the US ("The Fed" for short).  It is considered a "quasi-governmental" institution---a hybrid privately owned bank with heavy government oversight.  However, the lines are not really all that clear as to where one stops and the other starts.

"...But the Fed is a weird entity when it comes to “ownership”.  It exists due to an act of Congress.  But it is also considered an independent entity because it is not part of the Executive or Legislative branches of government.   The Fed exists because Congress created it, but it doesn’t enact policy measures with any Congressional or Presidential approval.  Politically, this makes it a very independent entity..."
An excellent supplement to the AP Macroeconomics unit on Monetary Policy.

Go HERE to read the whole thing...

Nice graphic on the rise of bottled water and the demise of soft drinks. However, one question remains unanswered...

"...But bottled water is washing away the palate trained to drain a bubbly soda. By the end of this decade, if not sooner, sales of bottled water are expected to surpass those of carbonated soft drinks, according to Michael C. Bellas, chief executive of the Beverage Marketing Corporation.
“I’ve never seen anything like it,” said Mr. Bellas, who has watched water’s rise in the industry since the 1980s..."
It is a useful example to teach supply and demand, specifically two determinants of demand---a change in consumer preferences and the availability of substitutes.  At a given price the quantity demanded for bottled water is more than is was before and for soft drinks it is less than what it was before. The demand curve for bottled water shifts to the right and to the left for soft drinks as consumers change their preferences for a drink with less sugar, and water is a viable substitute to quench a thirst.

Here is a graphic that accompanied the article showing the movement in the market for the two categories of drink.

I think it is interesting to note that while the consumption of bottled water has leveled off since 2007-08, the consumption of soft drinks has continued to decline, even post-recession.  What are people drinking? The population has increased over this time period.  Are people wising up and just drinking what comes out of the facet for pennies on the dollar? What do you think?

Wednesday, October 23, 2013

Wanna know the problem with our Federal Budget? Here is it as plain as I can make it plus my take on the solutions. Your welcome...

The Christian Science Monitor has a terrific set of Budget and Debt graphs on its site today.

Below is one I copied and modified to show you the predicament our National Budget is in and why fixing it is going to be difficult.

Total Federal Revenues (Fiscal Year 2012) are on the LEFT along with the sources of those revenues.

Total Federal Spending (Fiscal Year 2012) are in the RIGHT along with the major budget categories that spending occurs.

The YELLOW arrows on the RIGHT show the budget spending that is considered "Mandatory" or "Non-Discretionary  Spending".  The major entitlement programs (Social Security, Medicare, Medicaid, Unemployment Compensation (with some other programs as well), and Interest owed on the National Debt).

The YELLOW arrow on the LEFT shows how much of the revenues it takes to pay for the Mandatory budget items....YIKES! Mandatory spending takes up virtually ALL of the revenues.  See the little GREEN arrow on the LEFT? That is what is left over to spend on everything else with a green arrow on the right.

But is really gets WORSE.  Much, or all depending on your point of view,  of what is termed "Discretionary Defense" is really mandatory.  If you take that whole block of spending and over to the revenue side, well, you can see that we are in a financial hole already and that is not taking into account of ANYTHING else the Federal govt spends money on.

1. Cut/Slow spending on Entitlement programs--also known as "reform". Whatever THAT means. Political death.
2. Raise taxes.  Not political death, but life support required.  Dr Kevorkian on stand-by.
3. Do a little of 1 and 2.  Politically possible. This is called COMPROMISE!  Oh, wait, never mind.
4. Grow the dickens out of the economy so tax revenues will increase, au naturel, without having to raise taxes. Most desirable!  But alas, does not seem on the horizon anytime soon.

If you have any other ideas let me know. I am fresh out.  :)

Tuesday, October 22, 2013

Are Multiple Job Holders "Crowding Out" new entrants or re-entrants into the job market? See the data for yourself and you tell me...

The Bureau of Labor Statistics (BLS) keeps track of all kinds of employment data from the surveys they do to determine employment/unemployment.  With the release of today's employment report I went looking for some off the beaten track data to see if I could come up with my own take or observation in the report. Found this.

Data on Multiple Job Holders. I clipped the relevant historical data on the different categories of Multiple Job Holders and calculate the change from August to September 2013 (Highlighted in Yellow below)

1. Multiple Job Holders who had a Primary Full Time Job AND a Secondary Part Time Job increased by 69,000 (3,774,000-3,705,000).

2. Multiple Job Holders whose Primary AND Secondary Jobs were Part Time increased by 118,000 (1,889,000-1,871,000).

3. Multiple Job Holders whose Primary AND Secondary Jobs were BOTH Full Time (Yikes!) increased by 25,000 (214,000-189,000).

 Between August and September the number of Multiple Job Holders increased by 212,000.

Were are creating jobs but it appears we are creating them for people who ALREADY have jobs, for the most part.

Are multiple job holders "crowding out" new entrants or re-entrants into the job market?

Not sure of the answer myself. What do you think???

Update to the map comparing US Gross State Product (GSP) to Gross Domestic Product's (GDP) for select countries. Nice reference tool!!

Here is an update to an interesting way to look at the Gross Domestic Product (GDP)  for the US.  (HT: student Gabe Salmon)

It takes each of the States "Gross State Product"--GSP (dollar value of goods and services produced in that State) and compares it to the GDP of an entire country. Click on the image to make it larger OR go HERE for a much larger version.

For instance, the Gross State Product of California is roughly equal to the Gross Domestic Product of Russia.  For further analysis, they provide a population figure for the State and Country.  So, California has a per person ("per capita") GSP of $54,677 and Russia $14,306.  BIG difference on a per person basis.

For a full comparison of world GDP go HERE.

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