July 24, 2014

My Quarterly Project: Studying Counter-Evidence in Economics and Sociology

Dow 36,000

During my free time for the next few months, I'm practicing "counter evidence" a la the John Stuart Mill school of thought.  This means reading some texts far outside of the mainstream on a wide range of topics, including a few of the most illogical, discredited, and frankly, unhinged, books, essays, and speeches you'll ever encounter. The purpose is three-fold.  First, it allows me to sift through the mess and find one or two good ideas, which are almost inevitably buried in there somewhere. … [Read more...]

Wedding Rings Are the New Indicator of Social and Economic Class

Wedding Rings New Class Status Symbol

You need to read this magnificent article in The New York Times that breaks down the economic phenomenon we went over several years ago when we looked at the work of Harvard Professor Charles Murray, who demonstrated that a significant driver of income inequality in the United States was caused by a radical shift in the family structure of the lower and middle classes. The wedding ring, along with a college degree, has become the primary social and economic class status indicator.  Namely, th … [Read more...]

Tiger Stone Illustrates the Pressure Labor Faces as a Commodity in the Knowledge Economy

Tiger Stone

We've talked so much about how no one, other than economists, want to discuss what is really driving a significant portion of income inequality - technological advancement - but I came across another perfect illustration of how radical the shift to a knowledge economy away from an industrial one has been for the labor force. Think about the human effort required to lay stones and make paths or side streets.  Up until fairly recently, it took a lot of people, skilled in their line of work, who … [Read more...]

The S&P 500 and U.S. Household Wealth Have Reached Record Highs

United States Net Worth Economy

We've done it again.  Despite our own stupidity, and constant attempts to trip ourselves up with in-fighting, at this exact moment, by nearly every conceivable economic metric, the United States has the largest group of individual people enjoying a higher standard of living, more total wealth, longer median lifespans, and more free time than any other civilization that has ever existed, at any point in recorded human history.  There has never been a point when life is better than it right now.  Y … [Read more...]

The Debt Ceiling 101 – An Explanation for the Average Person

United States Treasury Department Debt Ceiling

It's time we talk about the debt ceiling and what a debt ceiling default would mean for the United States.  I've avoided this conversation because I was hopeful we would never end up here, again, after the last round of stupidity.  I've also avoided discussing the on-going shutdown of the Federal Government, despite some strong implorations from those of you who have written through the contact form asking me to share my thoughts on it.  The shutdown will have to be put off for another day be … [Read more...]

Income Inequality Is Partially Caused By Women Joining the Work Force

Median Lifetime Earnings by Degree and Education Georgetown University

We've talked about income inequality a couple of years ago; specifically touching on the role of marriage patterns and assortative mating in household income levels.  We've also discussed the economics of assortative mating more directly - the deeply ingrained tendency of people to marry other people like themselves with similar educational backgrounds, cultural values, personalities, and career orientations. One interesting result of this is that the women's liberation movement in the 1960's an … [Read more...]

I Found the Rarest Treasure of All Today: An Intelligent Yahoo Comment

Yahoo Comment

I was reading an article on Yahoo about the recently released jobs report.  Normally, the comments make me think that we've already crossed the Rubicon but the one of the top responses from a reader named Cavedweller was this: I don't even know what to do with that.  It's a perfect, spot-on analysis.  We talked about it extensively here.  I've touched on it in the five-part post about how to solve the trade deficit.  We looked at how the problem is being reinforced and exacerbated by assor … [Read more...]

The Honey Bee Dance and Why You Should Know It

Honey Bee Dance and Waggle Dance

The honey bee dance, also known as the honey bee waggle dance, is one of the most amazing things found in nature.  To understand why it is so important, you need to appreciate how much we depend on the honey bee, how complex its hive behavior is, the specialization of tasks, and the ways in which a honey bee is really part of a superorganism that is greater than any individual member.  Without the parent hive, death is certain. We'll get to the waggle dance in a moment.  First, some ba … [Read more...]

There Is a Great Depression Happening In Several European Countries

Image by Dimitri Destugues and Available under Creative Commons Attribution-Share Alike 3.0 Unported from Wikipedia

Across the Atlantic Ocean, several members of the European Union are experiencing an economic catastrophe that is, for them, on scale with what the United States went through during the Great Depression.  To illustrate the depth of the pain using two examples, the unemployment rate in both Spain and Greece now stands at 27.2%. Following the aftermath of the 2008-2009 economic crash, things would have gone back to normal.  Business cycles happen.  That's life.  But they didn't for a handful of co … [Read more...]

You Wouldn’t Realize How Amazing Life Is in the United States By the Media Coverage

Life in the United States

I've been thinking about life in the United States.  We are a massive nation that generates $15 trillion in wealth every year.  We have consolidated assets (personal, corporate, and government) of more than $200 trillion.  Our natural resources are abundant.  Our military power immense.   Going further, take a moment to consider the following: The S&P 500 and Dow Jones Industrial Average closed at a record high last week.   America's millionaire population is at an all time high.   Pe … [Read more...]