College Majors Versus Earning Potential

The Democrats' chant of Free College just keeps getting louder. Bernie Sanders claims that free college would be the "driver of a new era of American Prosperity". But let's look at how well that's working today. An analysis by Georgetown University demonstrates that that there is no correlation at all between what a career pays and how many people choose to pursue it in college study. Few are opting for majors like engineering and pharmacy and finance that pay the most. More are opting for psychology and "fine arts" that pay the least. It's not clear how Free College churning out more "fine arts" majors is going to create prosperity. Maybe an economics course or two might help?

Also, a short quiz for Mr. Sanders and Mrs. Clinton. If you succeed in greatly increasing the number of college graduates with your Free Tuition scheme, what do you think will happen to the salaries for those with the degrees? Here, again, a course on basic economics might be helpful.

Bernie Sanders is Right. Our Economy IS Designed By the Wealthy

Bernie Sanders is running around the country braying that our economy is “designed by the wealthiest people in this country to benefit the wealthiest people in this country at the expense of everybody else.” If he'd left off the last six words, he's be absolutely right. Our economy is designed to reward those who are extraordinary economic producers. That's pretty much how you become really wealthy. Doing things that others find quite valuable -- whether designing great smartphones or hitting .325. The last six words are where he goes (intentionally, I'm sure) wrong. If the economy is "designed" by the successful to reward only the successful, they sure screwed it up. Darn,

Middle Class Incomes Declining?

The constant drum beat from the left: The Middle Class is disappearing. The number of people with middle class incomes is declining. Well, yes. The percentage of households earning less than $100,000 is, in fact, declining because more and more of those households are now earning greater than $100,000. How could that possibly be a bad thing? Unless you're a demagogue running for President.

Uber Expands The Ride Market

Bloomberg Business shows the effect that Uber and other ride services have had on the car-for-hire market. The Portland city government initially did what many incumbent-controlled city governments have done -- fight the innovation and the competition it brings to established markets. Finally in late April of 2015, they agreed to a 120 day "trial", which has since been extended. Not surprisingly, Uber and Lyft took market share from established taxi services. What they also did was expand the market in total. Portlanders took 100,000 more rides in August than they did in May. By introducing competition and making it easier for riders to hail a ride, Uber and Lyft have grown the total market. Just like the airlines grew the travel market while simultaneously taking share away form the railroads.

Pope Francis Should Look at What More Capitalism Might Have Done For Argentina

Pope Francis has been rather critical of capitalism. Perhaps he needs to review what has happened to the economic well-being of his fellow Argentinians relative to people in the United States.  I wonder if maybe Argentinians might wish they had experienced a little more capitalism in the last century?

The Prosperity Link to Fossil Fuels

So what should we make of the chart below? Obviously that the world's standard of living and life expectancy is highly correlated with the exploitation of cheap energy from fossil fuels.



Should this not at the very least give pause to those hell-bent on reducing the further development of fossil fuels in the pursuit of global warming? The ability of mankind to control the earth's constantly changing climate by building windmills is, at best, debatable. Is it worth jeopardizing the continued improvement in the lives of billions of people around the globe? More practically, what do you think the odds are that the governments of nations like China, India and Indonesia are going to say to their people, "We're going to dampen the growth in living standards you've been experiencing because some wealthy liberals in the US and Europe think that they can control the climate"?

The Obama Recovery in Nine Charts

President Obama insists that he's responsible for the economic recovery of the last seven years. I think he can take pretty clear responsibility for a lot of these. [Thanks to Zero Hedge for charts].

Where There's Smoke. . . There's Money Being Burned

According to the Washington Post, the number of  annual fires occurring in the country has fallen in half of the last 30 years while the number of career firefighters employed has risen by more than half.

                           Number of  Fires Annually       Number of Career Firefighters    Fires per Firefighter

1985                                 2.4MM                                      225,000                                    10.6

2015                                 1.2MM                                      360,000                                      3.3

% Change                          -47%                                          +57%                                     -69%


Are the firefighters we are hiring today just wimps?  Can't handle the task anymore?

Two words: Government Unions. The International Association of Firefighters brags that it is "one of the most active lobbying organizations in the country". And local governments cave in because, after all, who wants to be against firefighters? Or puppies? Doesn't this sound pretty similar to the NEA's constant whine to reduce class sizes for teachers?

The next time you see firefighters responding to something, notice how many of them show up. Usually two or three times as many as are needed.  Because they have nothing else to do. And the statistics above show you why.

Money Walks

On the site How Money Walks you can see how wealth migrates from high tax locations to lower tax locations. For example the two snapshots below show that Washington State is gaining wealth from high tax states and losing wealth to lower tax states.  This phenomenon is readily observable within the state as well, as wealth is migratiing from high tax counties like King to lower tax counties outside of Seattle.

And then, of course there's the well documented example of how California is driving wealth to other lower tax states.

And yet legislatures in these states keep drinking the poison of raising taxes. And Congress can't seem to understand how high US income taxes drive companies to send more business and jobs abroad.

The LA CIty Council's Minimum Wage Hike Is Also Working As Predicted

In September, 2014, Los Angeles City Council raised the minimum wage for hotel workers to $15.37. The wage went into effect in July, 2015, for hotels with 300 or more rooms, and will go into effect July, 2016 for 150-plus-room hotels.

Minimum Wage Hike Has The Immediate Effect the City Council Promised

The Seattle City Council said that its minimum wage law would have an intermediate effect on workers. They were right.

Capitalism is the Scourge of the Poor?

If you listen to those on the left -- Democrats, the media -- you would think that capitalism was the scourge of the poor. And then there are the facts . . . .

Private Versus Public Debt

Since the onset of the last recession the private sector has behaved prudently and reduced its borrowing. The public sector has been decidedly imprudent and continued to run up huge amounts of debt -- that the more prudent private sector will eventually have to pay. This is precisely how Greece got into the fix they are in.

Elefantes Blancos del Gobierno

It never ceases to amaze me that, despite all of the contrary evidence, people tend to think that government is wiser than they about how to spend their money, and that it acts in the best interests of the people rather than the government.

Exhibit A: Cuidad Real International Airport



Now, if you don't know where this is, you have a lot in common with the people of Spain (it;s about 100 miles form Madrid). You see, it's the brainchild of all those brilliant people who work in government. It's a €1 billion airport project, which the Spanish government recently sold to a Chinese consortium for -- ready? -- 10,000 Euros. And it's in pristine condition because it's never been used.

There are, of course, a few people who are quite happy about this. Like the friends of Spanish politicians who run the construction companies that were paid to create this white elephant. But the people of Spain? They're just next in line to slide into the same morass that the Greek government created for its people. For the same reasons.

Capitalism Makes Food Less Expensive.

"It's just sinful how those unfettered capitalists keep making food cheaper." -- Pope Francis?

People Think Obamacare is Bad -- Participation Rates Prove It

HHS released data around the participation rates among people who are eligible for Obamacare. Interestingly, but not surprisingly, as income levels rise and government subsidies decrease, participation levels fall off dramatically. What this says is that people do not find Obamacare to be a good value. The more of their own money they have to put up, the more they reject it.

Wouldn't it be nice if the government created plans that people actually wanted to buy instead of ones with richly mandated benefits that few need or want, restricted physician networks and a shell game where young people are asked to pay more so that older people can pay less?


Subsidy Level
% Above "Poverty Line"                % of Eligibles Participating

110-150%                                                     76%
151-200%                                                     41%
201-250%                                                     30%
251-300%                                                     20%
301-400%                                                     16%

Source: Health and Human Services (HHS)

Questions for Pope Francis

Pope Francis recently decried the effects of "unfettered capitalism" calling it the "dung of the devil".

Two questions for His Holiness:

1. What economic process does he think produced the results shown in the chart below?
2. Could he please name a place  -- any place -- where capitalism is unfettered today?




Don't you think the poor of Venezuela might prefer a big helping of "capitalist dung" to the dung they've had to eat under the "social justice" legacy of Hugo Chavez?

Economics Deniers

The Obama administration has been busy making it more expensive for companies to hire workers. For the first quarter of 2015 compensation increased 2.8%, while benefits increased 2.6%.The Obama administration recently increased employment costs by having the Department of Labor mandate time-and-a-half overtime pay for workers who had previously been classified as managerial. And now the 10-15% price increases for Obamacare medical policies are starting to be posted.  This will only raise labor costs and depress productivity further. 



The Obama administration wails constantly about "deniers" of global warming. But it appears that they themselves are "deniers" of economics -- somehow believing that imposing higher labor costs on employers will encourage them to hire more workers.

The Student Debt "Crisis"

$28,000   Average amount of debt owed by undergraduates who incur tuition debt

$17,000   Average annual salary difference between high school and college graduates

So the "crisis" is that I have to borrow money that I recoup in two years of working? Sounds like a good ROI to me. If that's a crisis, please bring me some more. 

Wages and Benefits Per Worker -- Perspective

Just something to keep in mind as you listen to all the rhetoric from Democrats running for President in the next year.