GDP IS DOWN -- OR UP -- Consumers are spending more, but government is spending less and firms reduced their inventory investments, according to the latest estimate from the federal Bureau of Economic Analysis. As a result, U.S. Gross Domestic Product (GDP) growth rate slowed to 2.6 percent in the fourth quarter of 2013, down from 4.1 percent in the third quarter. An earlier survey put the fourth quarter growth rate at 2.4 percent.
MORE MONEY? -- Personal income in February increased 0.3 percent, the government reported. So if consumers have more money, will they continue their spending trend that showed in fourth quarter GDP? And does this mean that recovery is well established, so the Federal Reserve can ease back more on its stimulus? Meanwhile, conservatives will use this data to support their demand that government spending be cut even further. The danger is that monetary and fiscal support will be pulled too soon, sending the country back into recession. It's happened before, most notably in 1937, just as the U.S. was recovering from the Great Depression.
ILLINOIS BLUES -- The Federal Trade Commission said it's okay for the state legislature to repeal a law that bans auto sales and leases on Sunday. Illinois State Sen. James Oberweis asked for the opinion. Who knows how many old Sunday blue laws are still on the books scattered around the country.
TWO-SPEED ECONOMICS -- Europe has been trying to cope with wide variations in economic health among its various member nations, but that phenomenon showed up in America long ago. Compare the industrial Northeast with the agricultural South and Midwest in the 19th Century. More efficient energy technology and lower labor costs enabled many manufacturers to move from New England to the South in the early 20th Century. Later, the invention of air-conditioning brought many office buildings to the South. Combine all these factors and the two-speed variation closed somewhat.
Over time, something similar could happen within the European Union, but that will depend largely on whether economic nationalism can yield to proposals for the greater good.
ENERGY BOOM -- Oil and gas findings in the American Great Plains are fueling a population boom in that region, according to the U.S. Census Bureau. Six of the ten fastest-growing metro areas were within or near the Great Plains, the bureau said. These were Odessa, Midland and Austin, in Texas, as well as Fargo and Bismarck in North Dakota, and Casper, Wyoming. For the twelve months ended July 1, 2013, seven areas in or near the Great Plains, with populations of between 10,000 and 50,000 grew by 10 percent or more, the Census Bureau said. By comparison, larger metropolitan statistical areas, with populations of 1 million or more, grew by just 1 percent.
Friday, March 28, 2014
Wednesday, March 26, 2014
Currency Conundrum
What would happen if half the states in the U.S. issued their own money? And a dollar issued by one state had to be exchanged for the currency of another state while traveling or making interstate purchases?
It can't happen, of course, since the federal government is the only entity able to issue money. But in the early years of the republic, it did happen, until the federal government took full control of the money supply, over-ruling the ability of states and local banks to issue currency.
The concept is relevant today because about half the nations in the European Union subscribe to a single monetary unit -- the euro -- to be used by all in the group. Of the 28 countries in the EU, just 16 -- a bit more than half -- have converted to the euro as a universal currency, usable and accepted in each country.
Some nations -- Denmark, for example -- tied its currency to par with the euro even as the Scandinavian countries have had a longstanding agreement to link their currencies for ease of trade. Historically, Ireland too set its pound to be equal to the British pound when it achieved independence, but that ended when Ireland joined the EU and adopted the euro. Britain, however, has not yet adopted the euro.
Moreover, the issue is complicated by the lack of a central bank with enough authority to bail out or shut down troubled smaller banks. There is, of course, the European Central Bank, but for now it can only act on major banks, although there's a move afoot to strengthen ECB controls.
Meanwhile, the ECB can and does regulate the number of euros in circulation, telling each member country in the euro zone how many euros it can produce. The problem, however, is that nations in economic trouble can't inflate their currencies to gain an advantage in international trade. In addition, tariffs and import quotas are also banned among EU members. (More fun? Each nation has some discretion as to what to print. In Ireland, for example, the highest denomination printed is the 50 euro note, while Germany prints more 500-euro notes than all the other member nations combined.)
This monetary control issue was confronted as early as 1990, when a common currency unit was being discussed.
"Without a central institution, the system would therefore incorporate a strong incentive for countries to 'free ride' at the expense of their neighbors, i.e. to expand money supply ... excessively at home without bearing the full associated inflation costs." (One Market, One Money, in "European Economy," No. 44, October 1990, from the EU. http://ec.europa.eu/economy_finance/publications/publication7454_en.pdf)
So there must be central control of the money supply. However, when one region falls into dire economic straits, there is responsibility for others in the union to help. And because of centuries-old rivalries, that's not as available in Europe as it could be. For that matter, it could be better within the U.S. as well.
In North America, a Free Trade Act (NAFTA) reduces barriers to international commerce between the U.S., Canada and Mexico, but each country retains its own monetary unit and government. Within the U.S., each state has its own government, but interstate commerce is regulated by the federal government, which also controls the money supply.
The U.S. is one nation, while the EU, with an economy of similar size (about $16 trillion) remains a collection of 28 separate and independent nation-states.
After independence from Britain, the U.S. tried a confederation form, but that didn't work out very well, so a new Constitution was prepared that set up a stronger central government, even as individual states retained a level of independence.
However, the concept of states' rights -- what the Declaration of Independence in 1776 referred to as "free and independent states" -- remains strong in some regions in America, more than 200 years after the Constitution was adopted. And while a war in the 1860s established the supremacy of the federal government, there are still many who do not accept that.
So to a large extent, the European Union faces a similar issue. The EU has tumbled many trade, commerce and employment, as well as travel barriers throughout Europe just as the U.S. did more than 200 years ago. There are still, however, many cultural as well as language issues that stand in the way of full European political unity.
One thing is clear: Forced unity through war and domination of one group over all the others is not the answer. It has been tried before, and only led to death and destruction. That way madness lies.
Monetary and commercial unity is possible, through immense cooperation, but political unity is less likely. As well try to unify the U.S. and Canada. The offer of statehood was made more than 200 years ago, but Canada rejected it.
So to achieve a more perfect trade union, regions -- cultural, linguistic and monetary -- must give up some political independence. Even among the 13 American colonies that joined themselves together for a new nation, there were many differences despite having shared a common language and a common currency as subordinates of the British crown.
Political, cultural, linguistic and economic differences and suspicions may yet forestall closer ties in Europe, even to the extent of collapsing the European Union.
Perhaps it's possible that the U.S. and Canada will form "one nation, indivisible," even as the many nations of Europe collaborate for closer monetary and political ties.
But it's not likely.
It can't happen, of course, since the federal government is the only entity able to issue money. But in the early years of the republic, it did happen, until the federal government took full control of the money supply, over-ruling the ability of states and local banks to issue currency.
The concept is relevant today because about half the nations in the European Union subscribe to a single monetary unit -- the euro -- to be used by all in the group. Of the 28 countries in the EU, just 16 -- a bit more than half -- have converted to the euro as a universal currency, usable and accepted in each country.
Some nations -- Denmark, for example -- tied its currency to par with the euro even as the Scandinavian countries have had a longstanding agreement to link their currencies for ease of trade. Historically, Ireland too set its pound to be equal to the British pound when it achieved independence, but that ended when Ireland joined the EU and adopted the euro. Britain, however, has not yet adopted the euro.
Moreover, the issue is complicated by the lack of a central bank with enough authority to bail out or shut down troubled smaller banks. There is, of course, the European Central Bank, but for now it can only act on major banks, although there's a move afoot to strengthen ECB controls.
Meanwhile, the ECB can and does regulate the number of euros in circulation, telling each member country in the euro zone how many euros it can produce. The problem, however, is that nations in economic trouble can't inflate their currencies to gain an advantage in international trade. In addition, tariffs and import quotas are also banned among EU members. (More fun? Each nation has some discretion as to what to print. In Ireland, for example, the highest denomination printed is the 50 euro note, while Germany prints more 500-euro notes than all the other member nations combined.)
This monetary control issue was confronted as early as 1990, when a common currency unit was being discussed.
"Without a central institution, the system would therefore incorporate a strong incentive for countries to 'free ride' at the expense of their neighbors, i.e. to expand money supply ... excessively at home without bearing the full associated inflation costs." (One Market, One Money, in "European Economy," No. 44, October 1990, from the EU. http://ec.europa.eu/economy_finance/publications/publication7454_en.pdf)
So there must be central control of the money supply. However, when one region falls into dire economic straits, there is responsibility for others in the union to help. And because of centuries-old rivalries, that's not as available in Europe as it could be. For that matter, it could be better within the U.S. as well.
In North America, a Free Trade Act (NAFTA) reduces barriers to international commerce between the U.S., Canada and Mexico, but each country retains its own monetary unit and government. Within the U.S., each state has its own government, but interstate commerce is regulated by the federal government, which also controls the money supply.
The U.S. is one nation, while the EU, with an economy of similar size (about $16 trillion) remains a collection of 28 separate and independent nation-states.
After independence from Britain, the U.S. tried a confederation form, but that didn't work out very well, so a new Constitution was prepared that set up a stronger central government, even as individual states retained a level of independence.
However, the concept of states' rights -- what the Declaration of Independence in 1776 referred to as "free and independent states" -- remains strong in some regions in America, more than 200 years after the Constitution was adopted. And while a war in the 1860s established the supremacy of the federal government, there are still many who do not accept that.
So to a large extent, the European Union faces a similar issue. The EU has tumbled many trade, commerce and employment, as well as travel barriers throughout Europe just as the U.S. did more than 200 years ago. There are still, however, many cultural as well as language issues that stand in the way of full European political unity.
One thing is clear: Forced unity through war and domination of one group over all the others is not the answer. It has been tried before, and only led to death and destruction. That way madness lies.
Monetary and commercial unity is possible, through immense cooperation, but political unity is less likely. As well try to unify the U.S. and Canada. The offer of statehood was made more than 200 years ago, but Canada rejected it.
So to achieve a more perfect trade union, regions -- cultural, linguistic and monetary -- must give up some political independence. Even among the 13 American colonies that joined themselves together for a new nation, there were many differences despite having shared a common language and a common currency as subordinates of the British crown.
Political, cultural, linguistic and economic differences and suspicions may yet forestall closer ties in Europe, even to the extent of collapsing the European Union.
Perhaps it's possible that the U.S. and Canada will form "one nation, indivisible," even as the many nations of Europe collaborate for closer monetary and political ties.
But it's not likely.
Tuesday, March 25, 2014
Scammer Grammar
One clue that can identify an internet scam is poor grammar or spelling. Many of the schemes are hatched and spread from regions where English is a second language, and learned poorly, at that. So when you get an email message offering a freebie if you clink on a link and answer a few questions, take a look at the spelling and grammar, keeping in mind the adage, "If it sounds too good to be true, it probably is."
Example: A pitch just came in the email saying you can "recieve" a free gift certificate to "JC Penny," just for replying to the pitch.
Beware: That pitch violates two rules ingrained in students' heads in elementary school.
Rule No. 1: "i before e, except after c, or when e sounds like a, as in neighbor and weigh."
Rule No. 2: Spelling counts, so get the name right. The American retail chain is JC Penney, spelled with two e's.
Moreover, the first warning was the opening, which said, "Thank you for your patronage at JCPenny." There are no stores by that name within many miles of this residence, and it has been several decades since anyone in the family lived anywhere near such a store.
Conclusion: No matter how enticing the freebie might seem, delete the message without reading further.
Example: A pitch just came in the email saying you can "recieve" a free gift certificate to "JC Penny," just for replying to the pitch.
Beware: That pitch violates two rules ingrained in students' heads in elementary school.
Rule No. 1: "i before e, except after c, or when e sounds like a, as in neighbor and weigh."
Rule No. 2: Spelling counts, so get the name right. The American retail chain is JC Penney, spelled with two e's.
Moreover, the first warning was the opening, which said, "Thank you for your patronage at JCPenny." There are no stores by that name within many miles of this residence, and it has been several decades since anyone in the family lived anywhere near such a store.
Conclusion: No matter how enticing the freebie might seem, delete the message without reading further.
Monday, March 24, 2014
Hyphen Nation
A failed bank system is not the same as a failed-bank system.
How many adjectives can modify a noun? In English, there is no limit. After four, however, the phrase becomes clumsy, so it behooves the careful writer to break it up. Meanwhile, there are occasions when a hyphen must be used to avoid confusion, as in the above example. This clarifies that the first deals with a failed system, and the second deals with failed banks.
The important thing to remember, however, is to use a hyphen only when necessary to clarify. Otherwise, the phrase looks clumsy. And when there are multiple modifiers, such as in "big red round ripe juicy apple," not only are multiple hyphens unnecessary, but their use only paints a foolish phrase.
Moreover, when there is little or no likelihood of confusion, avoid inserting a hyphen. Example: "Small business owner." If, in fact, the business owner's height is relevant, say so in another sentence.
Don't get hyphen-happy. Over-punctuation is worse than none at all.
On a related issue, -ly adverbs, such as newly elected, partly completed, recently enacted, never take hyphens. Why? Because they are adverbs, not adjectives. Adverbs are used mostly to modify verbs, and since there is no confusion as to what they modify, especially when only two words are involved, there is no need to hyphenate.
Don't believe me? Check any style book, going all the back to Strunk & White's "Elements of Style," first published about a hundred years ago and still one of the best. That manual states flatly that -ly adverbs "never take a hyphen."
How many adjectives can modify a noun? In English, there is no limit. After four, however, the phrase becomes clumsy, so it behooves the careful writer to break it up. Meanwhile, there are occasions when a hyphen must be used to avoid confusion, as in the above example. This clarifies that the first deals with a failed system, and the second deals with failed banks.
The important thing to remember, however, is to use a hyphen only when necessary to clarify. Otherwise, the phrase looks clumsy. And when there are multiple modifiers, such as in "big red round ripe juicy apple," not only are multiple hyphens unnecessary, but their use only paints a foolish phrase.
Moreover, when there is little or no likelihood of confusion, avoid inserting a hyphen. Example: "Small business owner." If, in fact, the business owner's height is relevant, say so in another sentence.
Don't get hyphen-happy. Over-punctuation is worse than none at all.
On a related issue, -ly adverbs, such as newly elected, partly completed, recently enacted, never take hyphens. Why? Because they are adverbs, not adjectives. Adverbs are used mostly to modify verbs, and since there is no confusion as to what they modify, especially when only two words are involved, there is no need to hyphenate.
Don't believe me? Check any style book, going all the back to Strunk & White's "Elements of Style," first published about a hundred years ago and still one of the best. That manual states flatly that -ly adverbs "never take a hyphen."
Sunday, March 23, 2014
Spock's Dillemma
Language is not logical. Logic uses language to express its concepts, but language itself is not logical.
Many folks insist on following the fallacy that a double negative makes a positive. However, while that phenomenon happens among speakers of English more often than it should, the truth is that only in mathematics does a double negative result in a positive. In speech, it serves only for emphasis. Moreover, in some languages -- French and Spanish, for example -- double negatives are required. "Ne ... pas" in French, or "No hay nada" (There is nothing) in Spanish. The English equivalent, "There ain't nothing," is frowned on not because of its mathematical contradiction, but because it's considered a "lower class" expression.
Otherwise, some may use the expression, "I am not unhappy," but that doesn't necessarily mean the speaker is in fact happy. Nor does it connote sadness. It could at best be construed as neutral, or accepting of a situation.
Many folks insist on following the fallacy that a double negative makes a positive. However, while that phenomenon happens among speakers of English more often than it should, the truth is that only in mathematics does a double negative result in a positive. In speech, it serves only for emphasis. Moreover, in some languages -- French and Spanish, for example -- double negatives are required. "Ne ... pas" in French, or "No hay nada" (There is nothing) in Spanish. The English equivalent, "There ain't nothing," is frowned on not because of its mathematical contradiction, but because it's considered a "lower class" expression.
Otherwise, some may use the expression, "I am not unhappy," but that doesn't necessarily mean the speaker is in fact happy. Nor does it connote sadness. It could at best be construed as neutral, or accepting of a situation.
Demographic Destiny
The labor force is changing, and no longer reflects economic needs in the way it used to. But as economic needs change, so does the makeup of the labor force. Moreover, this is especially true of the long-term unemployed.
For example, the demographic composition of the work force is different. The Baby Boom generation is nearing retirement, and many are already in the ranks of the long-term unemployed. As they age, their chances of re-entering the work force and getting a job are declining. Result: that cohort of the work force is thinning, even as the work force as a whole is increasing.
"Even in good times, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high withdrawal rates," said three Princeton University economists in a new study. Moreover, those in this group "exert little pressure on wage growth or inflation," the study said. It was written by Alan B. Krueger, Judd Cramer and David Cho of Princeton, and was published by the Brookings Institution.
Separately, the U.S. Labor Department said the labor force -- the number of people working or looking for work -- "has gone through substantial changes in size and demographic composition over the last half of the 20th Century." But after the wave of women and those in the Baby Boom generation began to recede, through retirement and other factors, growth in the labor force is declining. It's still growing, however, and is expected to total 163.5 million by 2022, the government report said, for an annual rate of 0.5 percent.
Moreover, the labor force is becoming increasingly diverse even as it grows. Reason: Immigration and increased participation by minority groups.
A century ago, agriculture took up much of the labor force in America, and then manufacturing took the lead. More recently, the service industry hired more workers than other fields. Now, technology leads the way, demanding higher skills and more education than was needed in agriculture or manufacturing.
However, even technology geeks need food, clothing and shelter. And the next time your car engine conks out, try asking a computer whiz or a surgeon to fix it.
Moral: The more complex the economy, the more support it will need from farmers, mechanics, plumbers, electricians and carpenters. Technology enables more efficient production, but this calls for more knowledgeable workers at all levels.
And the longer a person is unemployed, the less likely that person is to find a good job. Therefore, Krueger, Cramer and Cho conclude, "the long-term unemployed are an unlucky subset of the short-term unemployed."
This is not to say they are unimportant. It does mean, however, that short-term unemployment is a better predictor of inflation and wage growth than the overall unemployment rate, the authors said.
For example, the demographic composition of the work force is different. The Baby Boom generation is nearing retirement, and many are already in the ranks of the long-term unemployed. As they age, their chances of re-entering the work force and getting a job are declining. Result: that cohort of the work force is thinning, even as the work force as a whole is increasing.
"Even in good times, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high withdrawal rates," said three Princeton University economists in a new study. Moreover, those in this group "exert little pressure on wage growth or inflation," the study said. It was written by Alan B. Krueger, Judd Cramer and David Cho of Princeton, and was published by the Brookings Institution.
Separately, the U.S. Labor Department said the labor force -- the number of people working or looking for work -- "has gone through substantial changes in size and demographic composition over the last half of the 20th Century." But after the wave of women and those in the Baby Boom generation began to recede, through retirement and other factors, growth in the labor force is declining. It's still growing, however, and is expected to total 163.5 million by 2022, the government report said, for an annual rate of 0.5 percent.
Moreover, the labor force is becoming increasingly diverse even as it grows. Reason: Immigration and increased participation by minority groups.
A century ago, agriculture took up much of the labor force in America, and then manufacturing took the lead. More recently, the service industry hired more workers than other fields. Now, technology leads the way, demanding higher skills and more education than was needed in agriculture or manufacturing.
However, even technology geeks need food, clothing and shelter. And the next time your car engine conks out, try asking a computer whiz or a surgeon to fix it.
Moral: The more complex the economy, the more support it will need from farmers, mechanics, plumbers, electricians and carpenters. Technology enables more efficient production, but this calls for more knowledgeable workers at all levels.
And the longer a person is unemployed, the less likely that person is to find a good job. Therefore, Krueger, Cramer and Cho conclude, "the long-term unemployed are an unlucky subset of the short-term unemployed."
This is not to say they are unimportant. It does mean, however, that short-term unemployment is a better predictor of inflation and wage growth than the overall unemployment rate, the authors said.
Thursday, March 20, 2014
Security vs Freedom
You can have tight government-run security or you can have the Bill of Rights. You can't have both.
Keep all things in balance. -- Druid proverb
Those who defend government surveillance in the name of security should remember that in doing so we all lose some freedom of expression.
Free speech means you can say whatever you like, as long as you agree with me. -- Prof. Hans Offerduff.
"I love it when they're stupid." -- Detective Lenny Briscoe of TV's 'Law & Order.'
A member of the new Ukraine Parliament committee on free speech reportedly joined a gang of men to beat up a TV news chief in Kiev because the station broadcast what the MP called "Russian propaganda." The TV station maintains it was simply reporting events.
The gang videoed the thrashing and posted it online.
INDEPENDENCE VOTING -- The latest claim from Russia is that if the Crimea referendum on leaving Ukraine is illegal under international law, then so also are upcoming votes on Scotland leaving the UK and Catalonia leaving Spain.
Keep all things in balance. -- Druid proverb
Those who defend government surveillance in the name of security should remember that in doing so we all lose some freedom of expression.
Free speech means you can say whatever you like, as long as you agree with me. -- Prof. Hans Offerduff.
"I love it when they're stupid." -- Detective Lenny Briscoe of TV's 'Law & Order.'
A member of the new Ukraine Parliament committee on free speech reportedly joined a gang of men to beat up a TV news chief in Kiev because the station broadcast what the MP called "Russian propaganda." The TV station maintains it was simply reporting events.
The gang videoed the thrashing and posted it online.
INDEPENDENCE VOTING -- The latest claim from Russia is that if the Crimea referendum on leaving Ukraine is illegal under international law, then so also are upcoming votes on Scotland leaving the UK and Catalonia leaving Spain.
Working Numbers
The labor force participation rate is a better measure of employment health than the number that purports to show the percentage of workers unemployed. The unemployment rate gets more ink and airtime time in news reports, largely because it's a smaller number and carries a negative tone, which makes it easier to grasp, but it can be misleading. The problem is that it's based on two separate sets of numbers -- one firm and the other less so.
Consider: The labor force comprises all those aged 16 or over who are not in jail, in a hospital, in the military or in school. That's an easy, solid number to gather. The number of people actually working is also an easy number to gather, simply by collecting company payroll data.
Those out of work, however, are harder to find. The best method so is a telephone survey of households, which yields an approximation. Surveyors ask how many are in the household, how many are working, and how many are not. However, those who are not working must also stipulate that they are in fact available and actively looking for work. That survey number is then calculated as a percentage of the more firm number of the total work force. Two numbers, gathered from separate sources and by separate methods.
And there are seasonal variations. For example, the work force always rises in summer as school lets out and students look for work, and it declines again in September as students go back to school and drop out of those available and actively seeking work. Likewise, women may stop looking for work as they decide to become stay-at-home moms.
Nonetheless, they are useful numbers as long as those several variables are kept in mind. Granted, unemployment is a problem, but there are also many who are temporarily sick, are between jobs, or are college graduates looking for their first career job. With that in mind, the question then becomes, what is an "acceptable" unemployment rate?
Zero is not possible in the real world. There will always be some folks out of work for a wide number of good reasons. Meanwhile, the total number of people in the work force is a variable number, as folks enter or drop out, also for any of several rational reasons.
But for those who lose their jobs through no fault of their own, either because they were let go or because of economic downturn or technological change, being out of work is a drain on their own financial, emotional and physical resources. These are the ones who need help.
Currently, the U.S. labor force is estimated at some 155 million, and the unemployment rate is 6.7 percent, with an additional 175,000 jobs added in February. The labor force participation rate in February, according to the Bureau of Labor Statistics in the U.S. Department of Labor, was 63.0 percent in February, identical to January. It was in the same range all year, from 63.6 percent as 2013 opened, down to 62.8 percent in October. The rate was at a ten-year high of 66.4 percent in January 2007, according to BLS data, and has since declined to its low point of 62.8 percent in October 2013.
Clearly, a range of just four percentage points over ten years does not have the sizzle factor that news editor like. Instead, they can focus on the more emotionally charged negativity associated with the unemployment rate. When that number goes to double digits, it can bring back memories of severe economic recession, and when it drops to below 5 percent, headlines can tout the "Happy Days Are Here Again" song.
In addition, the BLS estimates that the growth of the labor force in America has been slowing, to an annual growth rate of 0.5 percent, and will bring an additional 8.5 million into the labor force by 2022. This is down from a growth rate of 0.7 percent in the previous ten-year period, from 2002 to 2012, when the total number of workers rose by 10.1 million.
Moreover, the increase will be entirely from population growth, the BLS said, even though the participation rate will drop to 61.6 percent by 2022.
The times --- and the people -- they are a-changing.
Consider: The labor force comprises all those aged 16 or over who are not in jail, in a hospital, in the military or in school. That's an easy, solid number to gather. The number of people actually working is also an easy number to gather, simply by collecting company payroll data.
Those out of work, however, are harder to find. The best method so is a telephone survey of households, which yields an approximation. Surveyors ask how many are in the household, how many are working, and how many are not. However, those who are not working must also stipulate that they are in fact available and actively looking for work. That survey number is then calculated as a percentage of the more firm number of the total work force. Two numbers, gathered from separate sources and by separate methods.
And there are seasonal variations. For example, the work force always rises in summer as school lets out and students look for work, and it declines again in September as students go back to school and drop out of those available and actively seeking work. Likewise, women may stop looking for work as they decide to become stay-at-home moms.
Nonetheless, they are useful numbers as long as those several variables are kept in mind. Granted, unemployment is a problem, but there are also many who are temporarily sick, are between jobs, or are college graduates looking for their first career job. With that in mind, the question then becomes, what is an "acceptable" unemployment rate?
Zero is not possible in the real world. There will always be some folks out of work for a wide number of good reasons. Meanwhile, the total number of people in the work force is a variable number, as folks enter or drop out, also for any of several rational reasons.
But for those who lose their jobs through no fault of their own, either because they were let go or because of economic downturn or technological change, being out of work is a drain on their own financial, emotional and physical resources. These are the ones who need help.
Currently, the U.S. labor force is estimated at some 155 million, and the unemployment rate is 6.7 percent, with an additional 175,000 jobs added in February. The labor force participation rate in February, according to the Bureau of Labor Statistics in the U.S. Department of Labor, was 63.0 percent in February, identical to January. It was in the same range all year, from 63.6 percent as 2013 opened, down to 62.8 percent in October. The rate was at a ten-year high of 66.4 percent in January 2007, according to BLS data, and has since declined to its low point of 62.8 percent in October 2013.
Clearly, a range of just four percentage points over ten years does not have the sizzle factor that news editor like. Instead, they can focus on the more emotionally charged negativity associated with the unemployment rate. When that number goes to double digits, it can bring back memories of severe economic recession, and when it drops to below 5 percent, headlines can tout the "Happy Days Are Here Again" song.
In addition, the BLS estimates that the growth of the labor force in America has been slowing, to an annual growth rate of 0.5 percent, and will bring an additional 8.5 million into the labor force by 2022. This is down from a growth rate of 0.7 percent in the previous ten-year period, from 2002 to 2012, when the total number of workers rose by 10.1 million.
Moreover, the increase will be entirely from population growth, the BLS said, even though the participation rate will drop to 61.6 percent by 2022.
The times --- and the people -- they are a-changing.
Wednesday, March 19, 2014
In or Out
From our Dublin correspondent:
I have been watching the debates about the United Kingdom leaving the European Union. British Prime Minister David Cameron has promised a referendum on a simple question: Should the UK stay in the EU or leave it?
Cameron has been saying that he wants to renegotiate the terms of membership for the UK. Terms of membership are part of the process of joining and every member is expected to follow the rules. The terms really have to do with the length of time a new member has to adjust to all the new rules and give those new members time to get specific EU rules into their national laws.
The rules at the time a country joins will apply, although new things that come up in the future are sometimes optional. All the other members must agree to the new terms. This will apply to the UK, and I don't think that will happen. Angela Merkel, the chancellor of Germany, has said that would create a two-speed EU.
Cameron wrote an article for the Sunday Telegraph a few days ago spelling out his new terms. His article said, amongst other things, that he wants the EU to continue to grow and get new members.
* He does not want the UK to have to use the euro as its currency. In fact, that is not a requirement for long time members, although new members must agree to become euro zone members in the future.
* He does not want free emigration which allows citizens of any member state to live and work in any other member state. That is actually a clause of the European free trade agreement, of which all EU states are members.
* He does not want the UK to have to join the Schengen Agreement, which allows for passport-free movement between those member states that have signed up to it. New EU member states must become part of the Schengen travel area.
Many countries are in it although Ireland and the UK are not, because they have had a common travel area since 1922. If Ireland joined Schengen and the UK did not, passports would then be needed to go from one area to another, for example Fermanagh in Northern Ireland to neighboring Monaghan in the Irish Republic. Once again, because Ireland and the UK were members of the EU before Schengen came into force, there is no obligation to join.
(Schengen is a small city in Luxembourg which hosted a meeting of leaders of the EU countries. The outcome of the agreement, signed in 1985, was that when someone arrives in a country that is party to the agreement, that country must validate the passport controls for that traveller. The traveller may then move from country to country without any cross- border controls. At airports in countries that are in the Schengen travel area there is a special "fast lane" for those who arrived from another Schengen country. That still does not mean, however, that your luggage will get off the conveyor any faster.)
* Cameron does not want an ever-closer union and he wants to stop the EU headquarters in Brussels from getting more power. Transfer of power to the EU is done by agreement between the member states of the EU and that was always the case. If the UK ceded certain authority to the EU in the past then it was done along with all the other EU member states.
* He and some of the UK members of Parliament want to decide which EU legislation is suitable for the UK and only bring in the things they want.
* He wants to ensure the UK justice system is unencumbered by decisions of the ECHR (European Court of Human Rights).
* He does not want a European Army. That is something no one has proposed, although there is an agreement that most members have signed up to, which is have a "rapid reaction force" to step in if and when necessary. It has already been on peace keeping duties in parts of Africa.
The second debate has to do with an independent Scotland.
The Scottish First Minister would like to see a sterling area created. That would mean that Scotland would continue to use sterling. He does not say how he would see that happening. The English Finance Ministry has said that won't happen. I suppose what they mean is that they will make decisions about sterling based on UK requirements, and not necessarily on those of Scotland, although there is nothing to stop Scotland from using a Scottish pound, with parity to the English pound sterling. Ireland did that -- parity with the British pound -- from 1922 to 1979.
An independent Scotland likely would not want nuclear weapons in Scotland. That will be a problem for the U.S., as it has a submarine base in Scotland. Other military installations will also have to be dealt with.
There is an impression that the oil reserves in the North Sea will continue to fuel the Scottish economy. The reserves are running out and the oil companies that have agreements with the UK will have to renegotiate these leases. There is a possibility the oil companies will not renew a lease on a nearly depleted reserve.
The UK Finance Minister has warned Scotland that the major banks in Scotland may relocate to London. There is a precedent for this as when Quebec was toying with independence at least one major bank relocated to Toronto from Montreal.
If Scotland does become independent, there is a view that it will then join the EU. As a new member of the EU, Scotland could then become a member of the euro zone. However, the Scots dislike the euro as much as the English. They will also be expected to join the Schengen travel area, and if that happens passports will be required to travel from Scotland to the UK or Ireland.
I have been watching the debates about the United Kingdom leaving the European Union. British Prime Minister David Cameron has promised a referendum on a simple question: Should the UK stay in the EU or leave it?
Cameron has been saying that he wants to renegotiate the terms of membership for the UK. Terms of membership are part of the process of joining and every member is expected to follow the rules. The terms really have to do with the length of time a new member has to adjust to all the new rules and give those new members time to get specific EU rules into their national laws.
The rules at the time a country joins will apply, although new things that come up in the future are sometimes optional. All the other members must agree to the new terms. This will apply to the UK, and I don't think that will happen. Angela Merkel, the chancellor of Germany, has said that would create a two-speed EU.
Cameron wrote an article for the Sunday Telegraph a few days ago spelling out his new terms. His article said, amongst other things, that he wants the EU to continue to grow and get new members.
* He does not want the UK to have to use the euro as its currency. In fact, that is not a requirement for long time members, although new members must agree to become euro zone members in the future.
* He does not want free emigration which allows citizens of any member state to live and work in any other member state. That is actually a clause of the European free trade agreement, of which all EU states are members.
* He does not want the UK to have to join the Schengen Agreement, which allows for passport-free movement between those member states that have signed up to it. New EU member states must become part of the Schengen travel area.
Many countries are in it although Ireland and the UK are not, because they have had a common travel area since 1922. If Ireland joined Schengen and the UK did not, passports would then be needed to go from one area to another, for example Fermanagh in Northern Ireland to neighboring Monaghan in the Irish Republic. Once again, because Ireland and the UK were members of the EU before Schengen came into force, there is no obligation to join.
(Schengen is a small city in Luxembourg which hosted a meeting of leaders of the EU countries. The outcome of the agreement, signed in 1985, was that when someone arrives in a country that is party to the agreement, that country must validate the passport controls for that traveller. The traveller may then move from country to country without any cross- border controls. At airports in countries that are in the Schengen travel area there is a special "fast lane" for those who arrived from another Schengen country. That still does not mean, however, that your luggage will get off the conveyor any faster.)
* Cameron does not want an ever-closer union and he wants to stop the EU headquarters in Brussels from getting more power. Transfer of power to the EU is done by agreement between the member states of the EU and that was always the case. If the UK ceded certain authority to the EU in the past then it was done along with all the other EU member states.
* He and some of the UK members of Parliament want to decide which EU legislation is suitable for the UK and only bring in the things they want.
* He wants to ensure the UK justice system is unencumbered by decisions of the ECHR (European Court of Human Rights).
* He does not want a European Army. That is something no one has proposed, although there is an agreement that most members have signed up to, which is have a "rapid reaction force" to step in if and when necessary. It has already been on peace keeping duties in parts of Africa.
The second debate has to do with an independent Scotland.
The Scottish First Minister would like to see a sterling area created. That would mean that Scotland would continue to use sterling. He does not say how he would see that happening. The English Finance Ministry has said that won't happen. I suppose what they mean is that they will make decisions about sterling based on UK requirements, and not necessarily on those of Scotland, although there is nothing to stop Scotland from using a Scottish pound, with parity to the English pound sterling. Ireland did that -- parity with the British pound -- from 1922 to 1979.
An independent Scotland likely would not want nuclear weapons in Scotland. That will be a problem for the U.S., as it has a submarine base in Scotland. Other military installations will also have to be dealt with.
There is an impression that the oil reserves in the North Sea will continue to fuel the Scottish economy. The reserves are running out and the oil companies that have agreements with the UK will have to renegotiate these leases. There is a possibility the oil companies will not renew a lease on a nearly depleted reserve.
The UK Finance Minister has warned Scotland that the major banks in Scotland may relocate to London. There is a precedent for this as when Quebec was toying with independence at least one major bank relocated to Toronto from Montreal.
If Scotland does become independent, there is a view that it will then join the EU. As a new member of the EU, Scotland could then become a member of the euro zone. However, the Scots dislike the euro as much as the English. They will also be expected to join the Schengen travel area, and if that happens passports will be required to travel from Scotland to the UK or Ireland.
Friday, March 14, 2014
Marginal Utility of War
The more you have of something, the less use you get from each additional unit. In formal terms, economists call that concept diminishing marginal utility. It applies to every human endeavor, including war, because the more control a nation acquires over another, the more resistance is built up against the domineering power. So while the dominant nation may nominally own more assets, the return on those assets diminishes. And while the dominant few may build wealth through force, the cost in terms of lost life and destroyed property rises. Put another way, the return on investment falls.
Marginal Utility
When a person is hungry, one potato chip helps to dull the sharp edge of hunger, and each additional morsel eases the pangs a bit more. Eventually noshing slows as the marginal utility -- satisfaction -- of each extra chip diminishes. When the hunger is sated, the person stops eating -- marginal utility has reached zero, since no more satisfaction is gained from more food. In fact, the effect can be negative.
Eat enough, and you are satisfied; you have conquered hunger.
Eat too much, and you get sick.
Buy one car, and you enhance your ability to get to work or travel for leisure. Buy a second car and you expand the mobility of others in the family. Soon, when every one in the family has a car, buying another would serve no purpose -- it would have zero marginal utility.
As a person acquires wealth, more money provides more enjoyment. However, there comes a time when that person has more money than he or she can spend. In fact, when most wealth of a nation is held by a few, the many have less, and must depend on the few for either employment or charity.
And if the many do not feel charitable, the many suffer. So it was in the so-called Golden Age of the late 19th Century.
In time, the many became resentful of the few, and a new balance was sought. Not only could the few fail to gain more satisfaction or use from additional wealth, but the disparity or imbalance became too wide and too costly to maintain. As it was then, so it may be again today.
So also on an international power scale. When one nation acquires so much wealth and the rulers become so removed from the ruled, the imbalance causes the dominant nation to topple of its own weight. To maintain control, it must invest more and more of its resources on controlling what it perceives to be its possessions. The cost -- in terms of military expenses and loss of life and property -- becomes too high, The marginal utility of war -- spending more to expand or maintain control, declines to zero. The cost of a military operation is not justified by the benefits in acquiring more territory or assets.
The principle applies equally to those nations that have no imperialist or colonial ambitions. There comes a time when major nations that have assumed the mantle of peacekeeper decide that the benefits of being the world's referee do not balance with the costs.
Marginal Utility
When a person is hungry, one potato chip helps to dull the sharp edge of hunger, and each additional morsel eases the pangs a bit more. Eventually noshing slows as the marginal utility -- satisfaction -- of each extra chip diminishes. When the hunger is sated, the person stops eating -- marginal utility has reached zero, since no more satisfaction is gained from more food. In fact, the effect can be negative.
Eat enough, and you are satisfied; you have conquered hunger.
Eat too much, and you get sick.
Buy one car, and you enhance your ability to get to work or travel for leisure. Buy a second car and you expand the mobility of others in the family. Soon, when every one in the family has a car, buying another would serve no purpose -- it would have zero marginal utility.
As a person acquires wealth, more money provides more enjoyment. However, there comes a time when that person has more money than he or she can spend. In fact, when most wealth of a nation is held by a few, the many have less, and must depend on the few for either employment or charity.
And if the many do not feel charitable, the many suffer. So it was in the so-called Golden Age of the late 19th Century.
In time, the many became resentful of the few, and a new balance was sought. Not only could the few fail to gain more satisfaction or use from additional wealth, but the disparity or imbalance became too wide and too costly to maintain. As it was then, so it may be again today.
So also on an international power scale. When one nation acquires so much wealth and the rulers become so removed from the ruled, the imbalance causes the dominant nation to topple of its own weight. To maintain control, it must invest more and more of its resources on controlling what it perceives to be its possessions. The cost -- in terms of military expenses and loss of life and property -- becomes too high, The marginal utility of war -- spending more to expand or maintain control, declines to zero. The cost of a military operation is not justified by the benefits in acquiring more territory or assets.
The principle applies equally to those nations that have no imperialist or colonial ambitions. There comes a time when major nations that have assumed the mantle of peacekeeper decide that the benefits of being the world's referee do not balance with the costs.
Wednesday, March 12, 2014
Drivel
"My worst nightmare is seeing apostrophes where they don't belong." -- New Yorker cartoon, 5 Dec. 2013.
Strict adherence to grammatical correctness is no vaccine against drivel.
Even so, it's helpful to follow the rules. J.S. Bach wrote the book on rules of musical composition, then broke every one of them.
Rules are made to be broken, it has often been said, but first you need to know them. Case in point: Grammar rules. They are not laws, but descriptions of what good writers and speakers do and how they communicate.
There is no jail time or monetary fine for those who break rules of grammar or composition. Their only punishment is a failure to communicate.
And longer isn't necessarily better; it's just longer.
Strict adherence to grammatical correctness is no vaccine against drivel.
Even so, it's helpful to follow the rules. J.S. Bach wrote the book on rules of musical composition, then broke every one of them.
Rules are made to be broken, it has often been said, but first you need to know them. Case in point: Grammar rules. They are not laws, but descriptions of what good writers and speakers do and how they communicate.
There is no jail time or monetary fine for those who break rules of grammar or composition. Their only punishment is a failure to communicate.
And longer isn't necessarily better; it's just longer.
Foiled Again
"You interrupt a lot, don't y ..."
"No I don't!"
Many TV interview programs have degenerated into competitive talking bouts, as the hosts -- despite the pretext of offering a platform for guest views -- show no regard for the guest but treat them as mere foils to extend their own opinions.
Moreover, the rapid-fire delivery coupled with frequent breaks for commercial advertising diminishes the value of the program as a whole. Or should that be "hole"?
Some decades ago, network television was described as a "vast wasteland" containing little of thought value drowned by a flood of shallow entertainment.
Entertainment has value in itself, of course, and serious thought shows can be entertaining.
Serious issues are not in themselves boring; the presentation often is.
In any case, interruptions are rude, and show no respect for the person whose views are sought for a TV interview.
How can this problem be resolved? Change the channel. You don't even have to get off the couch to do so.
Meanwhile, in society at large, interruptions have become endemic, where competitive talking has become a symptom of rudeness.
"No I don't!"
Many TV interview programs have degenerated into competitive talking bouts, as the hosts -- despite the pretext of offering a platform for guest views -- show no regard for the guest but treat them as mere foils to extend their own opinions.
Moreover, the rapid-fire delivery coupled with frequent breaks for commercial advertising diminishes the value of the program as a whole. Or should that be "hole"?
Some decades ago, network television was described as a "vast wasteland" containing little of thought value drowned by a flood of shallow entertainment.
Entertainment has value in itself, of course, and serious thought shows can be entertaining.
Serious issues are not in themselves boring; the presentation often is.
In any case, interruptions are rude, and show no respect for the person whose views are sought for a TV interview.
How can this problem be resolved? Change the channel. You don't even have to get off the couch to do so.
Meanwhile, in society at large, interruptions have become endemic, where competitive talking has become a symptom of rudeness.
Tuesday, March 11, 2014
Tumbling Deficits
Government revenues rose by 9 percent and spending dropped by 4 percent in the first five months of the fiscal year, according to a Congressional Budget Office analysis.
Receipts from October 2013 through February 2014 totaled $1.1 trillion, up from $1.0 trillion a year ago, the CBO said. Outlays for the most recent period were an estimated $1.48 trillion, down from $1.50 trillion a year ago.
For the month of February, the CBO reported the federal deficit was an estimated $195 billion, some $9 billion below the $204 billion deficit incurred in February 2013. And receipts for last month were 17 percent higher -- $144 billion, an increase of $21 billion.
Increased revenues come from more taxes, which result from increased economic activity. Lower spending means reduced government activity.
So why the griping from the Radical Righteous of the Right Wing?
Receipts from October 2013 through February 2014 totaled $1.1 trillion, up from $1.0 trillion a year ago, the CBO said. Outlays for the most recent period were an estimated $1.48 trillion, down from $1.50 trillion a year ago.
For the month of February, the CBO reported the federal deficit was an estimated $195 billion, some $9 billion below the $204 billion deficit incurred in February 2013. And receipts for last month were 17 percent higher -- $144 billion, an increase of $21 billion.
Increased revenues come from more taxes, which result from increased economic activity. Lower spending means reduced government activity.
So why the griping from the Radical Righteous of the Right Wing?
Hypocrisy
Hypocrisy, thy name is politics.
Time was, a conservative Republican President would issue "signing statements" indicating which parts of a new law he would decline to enforce. Now, conservative Republicans in the House are demanding that a liberal Democratic President enforce federal laws regardless. H.R. 4138 would authorize each legislative chamber to file suit in a federal court calling on the Executive branch to "faithfully observe and respect congressional enactments." Moreover, appeals of a district court decision would go directly to the Supreme Court.
The Congressional Budget Office says such a program would have "no significant impact" on the federal budget, since funds would come out of existing pockets.
A companion bill, H.R. 3973, would require the Justice Department to report to Congress whenever any federal agency, for any reason, refrains from enforcing any law or regulation. Current law calls for such a report only if DOJ believes a law or regulation is unconstitutional.
How odd it is that it seems OK for a Republican President to ignore Congress, but when a Democrat does it, it's tantamount to destroying the nation.
Time was, a conservative Republican President would issue "signing statements" indicating which parts of a new law he would decline to enforce. Now, conservative Republicans in the House are demanding that a liberal Democratic President enforce federal laws regardless. H.R. 4138 would authorize each legislative chamber to file suit in a federal court calling on the Executive branch to "faithfully observe and respect congressional enactments." Moreover, appeals of a district court decision would go directly to the Supreme Court.
The Congressional Budget Office says such a program would have "no significant impact" on the federal budget, since funds would come out of existing pockets.
A companion bill, H.R. 3973, would require the Justice Department to report to Congress whenever any federal agency, for any reason, refrains from enforcing any law or regulation. Current law calls for such a report only if DOJ believes a law or regulation is unconstitutional.
How odd it is that it seems OK for a Republican President to ignore Congress, but when a Democrat does it, it's tantamount to destroying the nation.
Sunday, March 9, 2014
The Why Factor
In a previous posting, I wrote that reporters use the Famous Five W's to describe an event, trend, or situation -- the Who, What, Where, When and Why. Unfortunately, many fail to pursue the Why, often the most important to the quintet. This failure may be due to lack of time, lack of expertise, lack of interest, or even lack of competence.
In a breaking story, there may not be time to probe every aspect of an event, and the audience or readers may care more about the emotions involved -- love of one country and/or fear of another, for example.
Consider Ukraine. Media coverage has dealt very little with the historic and economic background of the Kiev demonstrations or of the Russian movement into Crimea. Doing so would mean probing the Why Factor, the most important of the Five W's. It's also the most important and the most difficult.
So why the rush to coverage, at the expense of omitting that most important aspect of the story? One reason is the perceived importance of being first, which means emphasizing the flashiest elements of the story. A second reason extends the first, picking up on the sizzle and ignoring the steak. In turn, this attracts more readers and viewers.
In the Ukraine example, there is a strong base of emotional support for protesters (Americans typically root for the underdog), plus a residual fear of Russia, going back to the Cold War era and the widespread fear of Communism
Result: Western news media stressed the emotional aspects of the story while ignoring the economic and historical background that led to the protests in Kiev, the downfall of the Ukraine government and the intrusion of Russian forces into the predominantly Russian-speaking Crimean peninsula.
Interconnected with all this is the emotional preference of viewers and readers for a hometown win. To that extent, war and the potential for war are treated much like sports stories. The difference, of course, is that in sports competition, the athletes don't die and spectators are not killed. Nevertheless, similar metaphors are used in reporting victory or defeat.
Reporters may or may not be ready, will and able to describe the background issues that led to the crisis in Ukraine, but that presents a challenge: Make it interesting, to get past the apathy of history. However, it remains a media responsibility to present the Why Factor in ways that readers and viewers grasp the details and implications quickly and easily.
It can be done. Journalists are not bound by the strictures that often make academic writing boring. People may think they care only about a home team victory. But journalists have a duty not only to satisfy that craving, but also to explain both sides, even when -- or especially when -- viewers may not want to hear it.
It's a difficult job, and the easy path would be to cater to the tastes and preferences of the audience. But just as marketers persuade consumers to try something new, journalists can persuade their news consumers to consider alternative viewpoints. Otherwise, they are broadcasting propaganda for one side.
This is not to say, Change their minds. That would indeed be propaganda, which has a negative reputation, even as marketing does not. Yet. Mostly.
Either way, news is a commodity, a product that is marketed to viewers and readers. And, like any commodity, there is a variety of tastes and preferences for the product.
In a breaking story, there may not be time to probe every aspect of an event, and the audience or readers may care more about the emotions involved -- love of one country and/or fear of another, for example.
Consider Ukraine. Media coverage has dealt very little with the historic and economic background of the Kiev demonstrations or of the Russian movement into Crimea. Doing so would mean probing the Why Factor, the most important of the Five W's. It's also the most important and the most difficult.
So why the rush to coverage, at the expense of omitting that most important aspect of the story? One reason is the perceived importance of being first, which means emphasizing the flashiest elements of the story. A second reason extends the first, picking up on the sizzle and ignoring the steak. In turn, this attracts more readers and viewers.
In the Ukraine example, there is a strong base of emotional support for protesters (Americans typically root for the underdog), plus a residual fear of Russia, going back to the Cold War era and the widespread fear of Communism
Result: Western news media stressed the emotional aspects of the story while ignoring the economic and historical background that led to the protests in Kiev, the downfall of the Ukraine government and the intrusion of Russian forces into the predominantly Russian-speaking Crimean peninsula.
Interconnected with all this is the emotional preference of viewers and readers for a hometown win. To that extent, war and the potential for war are treated much like sports stories. The difference, of course, is that in sports competition, the athletes don't die and spectators are not killed. Nevertheless, similar metaphors are used in reporting victory or defeat.
Reporters may or may not be ready, will and able to describe the background issues that led to the crisis in Ukraine, but that presents a challenge: Make it interesting, to get past the apathy of history. However, it remains a media responsibility to present the Why Factor in ways that readers and viewers grasp the details and implications quickly and easily.
It can be done. Journalists are not bound by the strictures that often make academic writing boring. People may think they care only about a home team victory. But journalists have a duty not only to satisfy that craving, but also to explain both sides, even when -- or especially when -- viewers may not want to hear it.
It's a difficult job, and the easy path would be to cater to the tastes and preferences of the audience. But just as marketers persuade consumers to try something new, journalists can persuade their news consumers to consider alternative viewpoints. Otherwise, they are broadcasting propaganda for one side.
This is not to say, Change their minds. That would indeed be propaganda, which has a negative reputation, even as marketing does not. Yet. Mostly.
Either way, news is a commodity, a product that is marketed to viewers and readers. And, like any commodity, there is a variety of tastes and preferences for the product.
Commodity Sports News
There's no business like show business, and that includes the NFL, the NBA, Major League Baseball, the World Cup and the Olympics.
Time was, radio and television stations ran news programs "to serve the public interest and necessity," to quote Federal Communications Commission rules, and the fate of their licenses depended on broadcasters meeting that obligation.
More recently, however, news divisions became profit centers, and their product -- information -- became something to be marketed and sold, much like any other commodity. Sports news, too, is a commodity. But unlike general news and information, athletic events have long been more in the realm of entertainment. After all, promoters sell tickets to their events, and sell broadcast rights to radio and TV stations, who in turn sell advertising to other businesses anxious to reach an attentive audience.
Orchestras sell tickets to concerts; drama and comedy attract audiences and depend on reviewers to help promote their performers, just as sports teams sell tickets and broadcast rights.
Even print reporters in the stadium press box are there at the pleasure of the team owner. Credentials can be denied or withdrawn at any time. The same is true, by the way, for the White House press corps. Those who are not accredited cannot gain entry to the briefing room, and must cover the news as best they can from a street corner.
Time was, radio and television stations ran news programs "to serve the public interest and necessity," to quote Federal Communications Commission rules, and the fate of their licenses depended on broadcasters meeting that obligation.
More recently, however, news divisions became profit centers, and their product -- information -- became something to be marketed and sold, much like any other commodity. Sports news, too, is a commodity. But unlike general news and information, athletic events have long been more in the realm of entertainment. After all, promoters sell tickets to their events, and sell broadcast rights to radio and TV stations, who in turn sell advertising to other businesses anxious to reach an attentive audience.
Orchestras sell tickets to concerts; drama and comedy attract audiences and depend on reviewers to help promote their performers, just as sports teams sell tickets and broadcast rights.
Even print reporters in the stadium press box are there at the pleasure of the team owner. Credentials can be denied or withdrawn at any time. The same is true, by the way, for the White House press corps. Those who are not accredited cannot gain entry to the briefing room, and must cover the news as best they can from a street corner.
Friday, March 7, 2014
Writing Lives
"Whether" is not one of the Journalistic Five W's
The best stories write themselves. That is, they take on a life of their own, and writers are just mediums who transcribe the stories from the mental ether to print.
The term media is well chosen to represent what journalism does. It transcribes and reports what others say and do, as intermediaries between government and citizens.
Politicians have resumed their attack on news media, alleging that journalists have agendas and "define" what the politicians say and do. To the contrary, journalists only report what politicians say and do. By their actions and sayings, politicians define themselves.
Granted, there are some who use the mantle of journalism to cover their agenda. However, those who do so are commentators, not reporters. There is a place in journalism for comments and opinions, and the tradition of a free press -- going all the way back to John Milton and his "Areopagitica" speech to Parliament -- guarantees that right, cemented in America by the First Amendment to the Constitution.
However, readers and viewers have a responsibility to recognize the difference between reporters and commentators.
Writers and researchers use the Fabled Five W's -- Who, What, Where, When and Why, plus How -- to describe an issue, trend or situation. Whether to accept that situation, trend or issue is a social and political decision, not economic. Politics may dictate economic policy for a brief time, but in the long run, economics controls politics.
By the way, the second word in the title of this posting can be read as either a noun or a verb.
The best stories write themselves. That is, they take on a life of their own, and writers are just mediums who transcribe the stories from the mental ether to print.
The term media is well chosen to represent what journalism does. It transcribes and reports what others say and do, as intermediaries between government and citizens.
Politicians have resumed their attack on news media, alleging that journalists have agendas and "define" what the politicians say and do. To the contrary, journalists only report what politicians say and do. By their actions and sayings, politicians define themselves.
Granted, there are some who use the mantle of journalism to cover their agenda. However, those who do so are commentators, not reporters. There is a place in journalism for comments and opinions, and the tradition of a free press -- going all the way back to John Milton and his "Areopagitica" speech to Parliament -- guarantees that right, cemented in America by the First Amendment to the Constitution.
However, readers and viewers have a responsibility to recognize the difference between reporters and commentators.
Writers and researchers use the Fabled Five W's -- Who, What, Where, When and Why, plus How -- to describe an issue, trend or situation. Whether to accept that situation, trend or issue is a social and political decision, not economic. Politics may dictate economic policy for a brief time, but in the long run, economics controls politics.
By the way, the second word in the title of this posting can be read as either a noun or a verb.
Wednesday, March 5, 2014
Lowflation
Prices rise to absorb the amount of money available.
Prices fall to match the amount consumers are willing to pay.
Too much inflation is a bad thing, experts say, leading to runaway prices and the inability of workers to keep up. Now comes a warning that too little inflation isn't so good, either.
Central banks try to keep the money supply from increasing at more than 2 percent, figuring that's a reasonable level to encourage economic growth without the problems of accelerating too fast. In general, central banks pump up the money supply to hold interest rates down, which encourages borrowing for expansion, thus leading to economic growth. But this has not been working.
Now a study by the International Monetary Fund says that "even low inflation -- let's call it 'lowflation' -- can be problematic," and called on European Central Bank to reduce interest rates and make more cash available throughout the European economy.
Pumping more money into the economy is what the Federal Reserve -- America's central bank -- has been doing, but has been talking about easing off as the nation's economy shows signs of recovery.
In Europe, there have also been signs of recovery, but while very low inflation benefits some, the IMF report said that "in the current context of widespread indebtedness," it's detrimental to recovery in the euro area, especially in "fragile countries" where it thwarts efforts to "reduce debt, regain competitiveness and tackle unemployment."
So there's a risk to a long period of low inflation, according to IMF chief Christine Lagarde, and central banks should be ready to prevent a stumbling recovery from falling.
Falling prices, or deflation, may sound like a good thing, but the reality is that such a phenomenon can set off a renewed recession -- or worse. And at its least, stable prices can intimidate growth.
The current problem is partially this: Firms borrow at low interest rates but use the funds to pay down older, higher rate debt and don't use the money for investment in new capacity. Result: Production is stagnant because consumer demand is holding steady. There's no reason to boost supply if demand isn't there.
Meanwhile, demand may fall further as consumers see a possible trend of still lower prices. Moreover, those out of work have little choice but to trim spending.
Put all those factors together, and you get a downward spiral. And that's what has economists worried.
You wouldn't know it from the Beige Book, though. The latest summary of economic conditions in the U.S. said the economy "continued to expand" from January to early February. Eight of the twelve Federal Reserve districts reported "improved levels of activity," the report said, "but in most cases the increases were characterized as modest to moderate."
And while that's not bad news, it's not time to toss a party, either. The most recent report on GDP (Gross Domestic Product) in the U.S. showed a slowdown in the growth rate. And in Europe, high debt levels continue to hold back momentum, according to IMF chief Christine Lagarde. In a speech earlier this week in Spain, she noted that the risk of low inflation -- substantially below the price stability goal of 2 percent -- "is also looming and could derail the recovery."
That 2 percent inflation rate guideline is the same one used by the Federal Reserve in the U.S. But inflation in the U.S. was pegged at 1.6 percent in January, according to government figures, despite Fed's "quantitative easing" campaign to bring it to 2 percent.
Separately, Reuters reported that the Bank of Canada is still worried about weak inflation, as the nation posted an inflation reading of 1.5 percent in January. Moreover, the bank said it expects inflation to be "well below target for some time," at least through the rest of this year.
Prices fall to match the amount consumers are willing to pay.
Too much inflation is a bad thing, experts say, leading to runaway prices and the inability of workers to keep up. Now comes a warning that too little inflation isn't so good, either.
Central banks try to keep the money supply from increasing at more than 2 percent, figuring that's a reasonable level to encourage economic growth without the problems of accelerating too fast. In general, central banks pump up the money supply to hold interest rates down, which encourages borrowing for expansion, thus leading to economic growth. But this has not been working.
Now a study by the International Monetary Fund says that "even low inflation -- let's call it 'lowflation' -- can be problematic," and called on European Central Bank to reduce interest rates and make more cash available throughout the European economy.
Pumping more money into the economy is what the Federal Reserve -- America's central bank -- has been doing, but has been talking about easing off as the nation's economy shows signs of recovery.
In Europe, there have also been signs of recovery, but while very low inflation benefits some, the IMF report said that "in the current context of widespread indebtedness," it's detrimental to recovery in the euro area, especially in "fragile countries" where it thwarts efforts to "reduce debt, regain competitiveness and tackle unemployment."
So there's a risk to a long period of low inflation, according to IMF chief Christine Lagarde, and central banks should be ready to prevent a stumbling recovery from falling.
Falling prices, or deflation, may sound like a good thing, but the reality is that such a phenomenon can set off a renewed recession -- or worse. And at its least, stable prices can intimidate growth.
The current problem is partially this: Firms borrow at low interest rates but use the funds to pay down older, higher rate debt and don't use the money for investment in new capacity. Result: Production is stagnant because consumer demand is holding steady. There's no reason to boost supply if demand isn't there.
Meanwhile, demand may fall further as consumers see a possible trend of still lower prices. Moreover, those out of work have little choice but to trim spending.
Put all those factors together, and you get a downward spiral. And that's what has economists worried.
You wouldn't know it from the Beige Book, though. The latest summary of economic conditions in the U.S. said the economy "continued to expand" from January to early February. Eight of the twelve Federal Reserve districts reported "improved levels of activity," the report said, "but in most cases the increases were characterized as modest to moderate."
And while that's not bad news, it's not time to toss a party, either. The most recent report on GDP (Gross Domestic Product) in the U.S. showed a slowdown in the growth rate. And in Europe, high debt levels continue to hold back momentum, according to IMF chief Christine Lagarde. In a speech earlier this week in Spain, she noted that the risk of low inflation -- substantially below the price stability goal of 2 percent -- "is also looming and could derail the recovery."
That 2 percent inflation rate guideline is the same one used by the Federal Reserve in the U.S. But inflation in the U.S. was pegged at 1.6 percent in January, according to government figures, despite Fed's "quantitative easing" campaign to bring it to 2 percent.
Separately, Reuters reported that the Bank of Canada is still worried about weak inflation, as the nation posted an inflation reading of 1.5 percent in January. Moreover, the bank said it expects inflation to be "well below target for some time," at least through the rest of this year.
Tuesday, March 4, 2014
Hatching Ideas
Ideas are like eggs. They sit in the back of your mental henhouse surrounded by cackling until they're ready to crack out of their shells and move to the real world.
Put another way, the seed of an idea lies buried in the back of your mind until it germinates, then pushes its way up into your consciousness so you can let it bloom into full flower.
So it is with writing. You never know, really, what ideas have been planted, much less when or whether they will sprout. Sometimes you think you know, and credit someone else with having "put an idea into your head," or when you combine two elements, or link one concept to another -- connect a few dots, so to speak, to search for a pattern.
You use a guideline, something like this: Once is an accident, twice is a coincidence, but three times is a pattern. Then the question becomes, is it really a pattern? It may be just a series of disparate events, with little or no other connection than happening at the same time or consecutively.
Good writers, however, keep in mind a saying popular among detectives and criminal investigators: "I don't believe in coincidences."
Even if it is "just a coincidence," a writer's job is to describe the happenings and search for relationships.
Correlation may not be causation, but either way, you have a story.
Put another way, the seed of an idea lies buried in the back of your mind until it germinates, then pushes its way up into your consciousness so you can let it bloom into full flower.
So it is with writing. You never know, really, what ideas have been planted, much less when or whether they will sprout. Sometimes you think you know, and credit someone else with having "put an idea into your head," or when you combine two elements, or link one concept to another -- connect a few dots, so to speak, to search for a pattern.
You use a guideline, something like this: Once is an accident, twice is a coincidence, but three times is a pattern. Then the question becomes, is it really a pattern? It may be just a series of disparate events, with little or no other connection than happening at the same time or consecutively.
Good writers, however, keep in mind a saying popular among detectives and criminal investigators: "I don't believe in coincidences."
Even if it is "just a coincidence," a writer's job is to describe the happenings and search for relationships.
Correlation may not be causation, but either way, you have a story.
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