Well Said...

"If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties."

~ Sir Francis Bacon

Sir Francis Bacon (1561-1626)

The Man Wearing Red Shoes

The man wearing red shoes -- I photographed this dapper gentleman on the streets of Brussels earlier today.

The Man Wearing Red Shoes (Brussels, Belgium, 2011)

The Shops of Brussels

I flew into Brussels a couple of days ago on business and spotted the shop owner below looking into the street from his establishment -- I could not resist snapping his photo -- incidentally, the streets of Brussels are filled with business people, tourists, shoppers, couples, and vitality -- a thriving metropolis of our time...

A European Shop Owner Looking into the Street (Brussels, Belgium, 2011)

Is Austerity Worse than Default?

The following comments under the pseudonym, “Capitalistic,” appeared in The Atlantic in response to an article entitled, Is Austerity Worse than Default? (2011):

1. Default is better than austerity. Governments don't function like businesses.
2. Governments can default because they do not like the terms of their loans.
3. Austerity favors debt holders, not governments.
4. When a country's economy contracts, austerity is the worst thing a government can implement. It leads to stagnation.
5. A country can default, wipe out their debt, and raise new capital with higher interest rates.
6. There's no proof that austerity works.

The commentary above is succinct and instructive for those still considering the implications of austerity for a society. We the people should be quite careful what we wish for...

Source: Indiviglio, D (2011, June 21), Is Austerity Worse than Default? Atlantic.

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Well Said...

"Read, every day, something no one else is reading. Think, every day, something no one else is thinking. Do, every day, something no one else would be silly enough to do. It is bad for the mind to continually be part of unanimity."

~ Christopher Morley

Christopher Morley (1890-1957)

Breakaway Wealth

According to Peter Whoriskey of the Washington Post (2011):

The evolution of executive grandeur — from very comfortable to jet-setting — reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.

For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent. But economists had little idea who these people were. How many were Wall street financiers? Sports stars? Entrepreneurs? Economists could only speculate, and debates over what is fair stalled.

Now a mounting body of economic research indicates that the rise in pay for company executives is a critical feature in the widening income gap.

The largest single chunk of the highest-income earners, it turns out, are executives and other managers in firms, according to a landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T Heim. These are not just executives from Wall Street, either, but from companies in even relatively mundane fields such as the milk business.

The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.

Other recent research, moreover, indicates that executive compensation at the nation’s largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of America has stalled.

Source: Whoriskey, P (2011, June 18), With Executive Pay, Rich Pull Away from Rest of America, Washington Post.

Identifying Critical Thinkers

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The View of the World

When that great Kings return to clay,
Or Emperors in their pride,
Grief of a day shall fill a day,
Because its creature died.
But we—we reckon not with those
Whom the mere Fates ordain,
This Power that wrought on us and goes
Back to the Power again.

Dreamer devout, by vision led
Beyond our guess or reach,
The travail of his spirit bred
Cities in place of speech.
So huge the all-mastering thought that drove—
So brief the term allowed—
Nations, not words, he linked to prove
His faith before the crowd.

It is his will that he look forth
Across the world he won—
The granite of the ancient North—
Great spaces washed with sun.
There shall he patient take his seat
(As when the Death he dared),
And there await a people’s feet
In the paths that he prepared.

There, till the vision he foresaw
Splendid and whole arise,
And unimagined Empires draw
To council ’neath his skies,
The immense and brooding Spirit still
Shall quicken and control.
Living he was the land, and dead,
His soul shall be her soul!

~ Rudyard Kipling

Rudyard Kipling (1865-1936)

Why US Needs Inflation

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Greek 2-Year Yields at 28.2%

Greek 2-year bond yields are at 28.2%.

Anyone still believe that austerity measures are working in Greece...?

Source: Bloomberg

Full Moons...

Tonight, a full moon beams solitude, perfectly...

Global Economic Terror

Pentagon Loses $6.6 Billion in Cash

The following is excerted from a recent report that appeared in The Atlantic:

The Pentagon has no idea where $6.6 billion in Iraq reconstruction money went, according to a report in the Los Angeles Times. At the height of the reconstruction effort, C-130 Hercules cargo planes were carrying $2.4 billion each in shrink-wrapped bricks of $100 bills. "They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that US officials believe to be the biggest international cash airlift of all time," reports Paul Richter. "This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins. But despite years of audits and investigations, US Defense officials still cannot say what happened to $6.6 billion in cash."

Clearly, the US government has too much money at its disposal...

Source: Hudson, J (2011, June 14), US Lost the Equivalent of Zimbabwe's GDP, in Cash, in Iraq, Atlantic.

Well Said...

"Setting an example is not the main means of influencing another, it is the only means."

~ Albert Einstein

Dr Albert Einstein (1879-1955)

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Personalized Learning Paths are the Future

Follow the link below to learn more about MindTap and the future of learning.

MindTap

Reforming the Military-Industrial-Congressional Complex

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What is Financial Repression?

Reinhart and Sbrancia (2011) argue that the following measures are indicative of ensuing financial repression:

1. Explicit or indirect capping or control over interest rates on government debt and deposit rates.
2. Government ownership or control of domestic financial institutions coupled with barriers to market entry by other institutions.
3. Creation of captive domestic markets for government debt via reserve requirements and other monetary controls.
4. Government restrictions on the transfer of assets abroad through the imposition of capital flight laws and regulations.

Source: Reinhart, C M & Sbrancia, M B (2011), The Liquidation of Government Debt, Cambridge, MA: National Bureau of Economic Research.

US Employment to Population Ratio Depressing Economy

The latest employment data from the Bureau of Labor Statistics (BLS) shows that the US employment to population ratio* stood at 58.5% for May 2011, up from 58.4% the previous month, but down from 58.7% a year ago. The US employment to population ratio has been trending downwards since 2000.

Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of "unemployed" in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000.

*The BLS defines employment and population (civilian noninstitutional) as follows:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

Source: Bureau of Labor Statistics

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The Economic Value of College Majors

The economic value of higher education has been well-documented over the years. However, the value of a college education by major has been less studied. To fill this gap in the literature, the Georgetown Center on Education and the Workforce (Carnevale, Strohl, & Melton, 2011) has released a detailed study that specifically addresses the economic value of college degrees by major field of study.

According to the authors:

We’ve always been able to say how much a Bachelor’s degree is worth in general. Now, we show what each Bachelor’s degree major is worth.... The report finds that different undergraduate majors result in very different earnings. At the low end, median earnings for Counseling Psychology majors are $29,000, while Petroleum Engineering majors see median earnings of $120,000.

Follow the link below to download copies of the full report.

What's It Worth? The Economic Value of College Majors

Source: Carnevale, A P; Strohl, J & Melton, M (2011), What's It Worth: The Economic Value of College Majors, Georgetown Center on Education and the Workforce, Washington, DC.

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Well Said...

"Gold and silver are money. Everything else is credit."

~ J P Morgan

John Pierpont Morgan (1837-1913)