Category: Statistics

Prop 13, That’s Why

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Big Media Matt wonders why construction in Texas has outstripped that of California:

Houston is the fastest-growing city in America, but what’s really remarkable about Houston is that it’s not just Houston. The Dallas, San Antonio, and Austin metro areas are all also growing super-fast and so are several of Texas’ smaller metro areas. There are many factors inspiring this population growth, but as you can see above one striking thing is simply that Texas is handing out building permits at a rapid clip (data here).

It used to be that California led the nation in building permits. That makes sense. Even though California’s not as geographically expansive as Texas it is extremely large. And a whole bunch of factors would lead you to assume that California would add people more rapidly than Texas. They share proximity to Mexico, but California is home to our Pacific Ocean ports and certainly trade with Asia has exploded. What’s more, California has better weather than Texas and substantially higher wages. But in the nineties California downshifted its permitting and ran neck-in-neck with Texas for a while. Then starting in the mid-aughts Texas has just gobbled up a bigger and bigger share of America’s permitting. The precise legal and economic underpinnings of this are complicated, but the key difference to me is simply a different mentality. Texas politicians of both parties by and large want to see growth. They brag about it. California politicians fear it, as if we’re one new building away from dystopia.

He is ignoring the elephant in the room, Proposition 13.

Proposition 13 limits the amount that property taxes can go up by 2% a year, so if you bought a 4BR house in 1980 for $60,000, you would be paying property taxes for a value of $120K.

If you downsize to a bungalow, and it costs $300K, you would be paying 2½ times as much in taxes, because when you buy a new house, the level starts at the sale price.

It really does not make sense to downsize if your property tax bill triples, so you stay in your old home, which restricts the supply, and makes housing more expensive, and reduces demand.

Any analysis of California which does not take into account the suicide pact that is their culture of initiative petitions.

If you bought a house in 1980 for $80,000.00

It’s Jobless Thursday

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And initial jobless claim have fallen for the first time in over a month, by 12K to a still crappy 377K, but the 4-week moving average rose, as did continuing claims, though extended claims fell.  (It should be noted that extended claims are being impacted by people running out their strings, so the drop is not necessarily good news).

I would note that we also have a slightly wonkish bit data point, where the yield curve has inverted, indicating that the markets think that the markets are expecting a deflationary environment:

One could argue that this is a positive development for the US consumer because it could mean price stability. However this move in TIPS certainly raises the risk of near-term deflation, driven by weak demand growth. And deflation is notoriously difficult to get under control. This feels (though only in the near term) a bit like Japan, a nation quite familiar with zero to negative inflation expectations.

Normally, the longer a bond, the higher the rate, because there is a cost to having your money locked up for long periods, but under certain conditions,  like investors desperate for a safe haven, the rates drop as the term lengthens (up to a point).

In a not entirely not unrelated note, the Chinese central bank has unexpectedly cut its benchmark rate in response to their economy slows.

Not a good economic news day.

Though I’m Sure that New Yorkers are Glad to be Rid of Rush…

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It appears that the numbers don’t lie, but right wing economists do:

Proponents of the migration myth are at it again, trying to sell the idea that if states with lower taxes gain more population than states with higher taxes, taxes must be the reason.

To prove that people migrate from state to state in search of lower taxes, the latest edition of the American Legislative Exchange Council’s (ALEC) “Rich States, Poor States” report notes that, over the past two decades, Hawaii (which has an income tax with a relatively high top rate) has lost twice as many residents to other states as Alaska (which has no income tax).

Wait, you might ask. What about differences in the job market? Oil prices? Housing costs? Shouldn’t we take these and other potential factors into account?

………

For example, ALEC attributes Florida’s 46 percent population gain between 1990 and 2010 to its lack of an income tax, ignoring the fact that neighboring Georgia — which has an income tax — grew by 50 percent over that period.

As for Alaska and Hawaii – the states that ALEC uses to illustrate the tax-flight myth — IRS data show that, in fact, slightly more households are moving from no-income-tax Alaska to high-income-tax Hawaii than the other way around. In 2010, the last year for which data are available, 300 households moved from Alaska to Hawaii; 287 moved the other way.

As our report stated:

It would not be credible to argue that no one ever moves to a new state because of the desire to live someplace where taxes are lower. But neither is it credible to say that taxes are a primary motivation, nor that migration has a large impact on the revenue impact of tax measures.

As for Rush, he probably decided to move to Florida because it’s easier to get a direct flight to the Dominican Republic from the sunshine state.

After all Rush has to be able to indulge his “tourist proclivities.”

H/t Mark Thoma.

Good Point, Yves

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Yves Smith discovers an interesting data point on just how badly our healthcare system fails as a market.

The issue has always been two thing, information asymmetry, and the need for immediate services, because when you have a pneumothorax, you are not going to compare prices.

Well her data point is the fact that a study has shown that the happier you are with with your doctor, the more likely you are to die:

There is an important study in the Archives for Internal Medicine last month, which escalates an ongoing row as to whether patient satisfaction is in any way correlated with positive medical outcomes. The answer is yes, and the correlation is negative.

This finding is of critical importance, not just in understanding why American medicine is a hopeless, costly mess, but also as a window into how easy it is for buyers of complex services to be hoodwinked by their servicer provider, whether via the provider being incorrectly confident about his ability to do a good job or having nefarious intent.

Let’s deal with health care case first. The study in question was large scale, of 52,000 patients from 2000 to 2007. This summary comes from the Emergency Physicians blog (hat tip Julie W):

Results of the study showed that patients who had the highest satisfaction ratings spent 9% more on health care and prescription medications than did patients who had the lowest satisfaction ratings. In addition, the most satisfied patients had a 26% greater risk of death compared to least satisfied patients. When patients in poor health were excluded, the risk of death for these highly-satisfied “healthy” patients increased to 44% more than their least-satisfied counterparts.

In commentary accompanying the article, Dr. Brenda Sirovich suggested that discretionary testing is likely the cause of both the increased costs and the increased mortality in highly satisfied patients. Patient perceptions, even if medically inappropriate, drive testing and treatment. Antibiotics are harmful in patients with viral infections, yet a substantial subset of patients are not satisfied without an antibiotic prescription for their colds. Large studies show no link between PSA screening and either overall survival or prostate cancer survival. However, any patient whose life has been “saved” by a PSA screen is often quite satisfied. In both scenarios, there is no perceived negative effect from treatment. Patients will recover from their colds with or without antibiotics. Patients likely would not have died from their prostate cancer even if it was left untreated.

Here’s hoping that Scalia, Thomas, Alito, and Roberts just love their doctor.

10½ Years?

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Duncan Black teases out this rather alarming factoid:

Bernanke Money Policy Seen Achieving Goal as Savers Become Consumers Again

………

The average age of cars and light trucks on the road today has risen to 10.6 years, Jenny Lin, senior U.S. economist at Dearborn, Michigan-based Ford Motor Co., said on a Dec. 1 conference call. That’s above the seven-to-7.5 years Ballew says is the long-term average.

The number has been trending up for years, notwithstanding what Ms. Lin said, but a 1.2 year increase since 2008 is a big jump for just 3 years.

Here’s something to think about: That number is never going back, because people are used to keeping their cars longer now, and the technological advances over the past couple of decades allow them to.

Cars are a lot better than they were 20 years ago, and they last a lot longer.

Holy Sh%$!!!

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Click for full size

This is scary

It’s rained so hard world wide that ocean levels fell in 2010:

Guest Blogger on Oct 2, 2011 at 12:40 pm
by Barry Saxifrage, via the Vancouver Observer

“The year 2010 was one the worst years in world history for high-impact floods. But just three weeks into the new year, 2011 has already had an entire year’s worth of mega-floods. “ – Meteorologist Jeff Masters

I spend hours a day researching what New York Times columnist Thomas Friedman calls “global weirding”: the destabilization of our weather system fueled by the three million tonnes of fossil fuel pollution we inject into it each hour. So it is a rare day when something shocks me as much as a recent U.S. National Aeronautics and Space Administration (NASA) report on last year’s extreme rainfall.

As most locals know from soggy personal experience, our corner of planet Earth since last spring has been a bit wetter and greyer than normal. And next door, our Washington neighbours donned their gum boots and slogged through their fourth wettest year since 1895.

Still, we got off lucky. Very lucky it turns out.

According to this jaw-dropping NASA report, worldwide rainfall and snowfall were so extreme, in so many places last year, that sea levels fell dramatically.

Great googly moogly.

Holy Sh%$ (Economics Edition)

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Remember the recession? Well it turns out it was much worse than we were led to believe at the time:

Two days after that, Americans received grim news about the economy: in the fourth quarter of 2008, GDP contracted at a 3.8% annual pace—the worst quarterly performance since the deep recession of 1982. More bad news hit on February 6th, when the BLS released new labour market figures. It reported an employment decline of 598,000 in January, following on revised drops in employment of 577,000 in December and 597,000 in November—a three-month drop of 1.8m jobs. On February 10th, the Senate passed its version of the stimulus, worth $838 billion. In conference committee, the bill shrank to $787. On February 17th, Mr Obama signed the bill into law.

In the months and years that followed, Washington provided additional support to the economy, perhaps ultimately contributing approximately $1 trillion in total stimulus. But that first bill was the big bite at the apple. The White House looked at the economic situation, sized up Congress, and took its shot. Unfortunately, the situation was far more dire than anyone in the administration or in Congress supposed.

Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

OMFG!

That’s depression level of contraction.

So, not only was the this recession the worst since the Great Depression, but it was even worse than first reported.

And so the stimulus in 2009 was even more inadequate than was previously reported.

This is why moderation in such situations is so disastrous.

Don’t Let the Door Hit Your Ass on the Way Out, Joey

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Joe Lieberman makes his retirement official:

Referring to Mr. Lieberman’s plan to forgo re-election, Bill Curry, a prominent Democrat who served with Mr. Lieberman in the State Senate, said, “It’s the first thing he’s done in 10 years to make Connecticut Democrats completely happy.”

I don’t really have much to add to this, except for the fact that Ezra Klein has clearly been assimilated by the Beltway Borg™, and has become yet another thought free spewer of conventional DC wisdom, since he is wondering if Joe Lieberman is some sort of Democratic Hero:

That [Obama’s disgraceful lobbying on behalf of Lieberman to keep his seat and seniority] kept Lieberman in the fold, and after Arlen Specter switched parties and Al Franken won his election, gave Democrats the 60 votes they needed to break a Republican filibuster against health-care reform. Lieberman’s behavior during the debate was often erratic and seemingly unprincipled. Among other things, he skipped the meetings where Democrats were trying to work out a compromise on the public option, and then he killed the Medicare buy-in proposal they’d developed — despite endorsing that exact proposal months before. In doing so, he doomed a great piece of policy, and by doing it at the last minute, endangered the rest of the bill, too. But the reality is that the legislation simply wouldn’t have passed without his vote. And after extracting his pound of flesh, he voted “aye.”

This ignores the fact that the Democrats really had 60 votes for only a few weeks, because Ted Kennedy was busy dying, and the displays of narcissism, petulance, self importance, and wounded pride that made Lieberman determined to inflict as much damage as possible while keeping his committee chairmanship.

If Lieberman could have found a way to vote “No”, and keep his position, he would have, because he was all about petty vengeance.

OK, I Don’t Have Much to Add on the Assassination and Shooting Spree

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These are on the days preceding the shooting

But Brad Delong finds a rather alarming data point.

Here are two members of Congress, both Democrats, from the same state, but in the 4 days before the shooting, Gifford’s hits on her wiki page skyrocketed.

There are a number of caveats here:

  • Even with the delta, the number is pretty small, under 400 hits peak over a 4 day period.
  • This could have been triggered by something as innocent as a mass email to constituents.
  • It could be one person, obsessively visiting the page.

It could also be:

  • The result of some obscure right wing media figure calling her out.
  • The result of a small group of people involved in a conspiracy. (Unlikely, this seems to be the archetypal Lone Gunman).

Anyone aware of any event that might support some the more prosaic explanations?

I Knew This in 1968

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It has been announced a new study has shown that male circumcision reduces cervical cancer risks for their partners:

Circumcising men can reduce cervical cancer risk in women, a new study shows.

The study involved more than 1,200 HIV-negative, heterosexual couples living in Uganda, where circumcision of male adults is increasingly encouraged as a means of slowing the spread of HIV/AIDS.

Half the men received the surgical procedure at enrollment and the other half were scheduled for circumcision after their participation in the trial ended.

Two years later, the female partners of the men who remained uncircumcised were more likely than the partners of the circumcised men to be infected with human papilloma virus (HPV) types most often associated with cervical cancer.

When I was about 6 years old, I remember discussing the correlation between uncircumcised partners and cervical cancer, though that was prior to the understanding of the correlation between HPV and cervical cancer.

This has been known for something like 100 years.

Here’s a Shocker…

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It turns out that all those studies showing Americans to be the most church going and religious people in the industrialized world, don’t show this.

They just show that Americans are the most likely to lie to pollsters about their religiosity:

Two in five Americans say they regularly attend religious services. Upward of 90 percent of all Americans believe in God, pollsters report, and more than 70 percent have absolutely no doubt that God exists. The patron saint of Christmas, Americans insist, is the emaciated hero on the Cross, not the obese fellow in the overstuffed costume.

There is only one conclusion to draw from these numbers: Americans are significantly more religious than the citizens of other industrialized nations.

Except they are not.

Beyond the polls, social scientists have conducted more rigorous analyses of religious behavior. Rather than ask people how often they attend church, the better studies measure what people actually do. The results are surprising. Americans are hardly more religious than people living in other industrialized countries. Yet they consistently—and more or less uniquely—want others to believe they are more religious than they really are.

If this is true, then the only surprise is that I am apparently more religiously observant than the average America, which buggers the mind.

We are Unbelievably Screwed

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“March of 2000, of course, was the peak of the internet bubble.”

Small investors are holding less cash than at any time since March 2000.

This means that small investors are pulling money out of bank accounts, where returns are low, but the accounts are guaranteed, and putting the money in the stock market seeking greater returns.

Time for another crash in the market, because as a group, small investors are the idiots who enter the market just before they run out of idiots.

Person writing this, Joe Weisenthal, clearly thinks so too, or he would not have referenced the dotbomb bust in the last line of the article (reproduced as a caption to the chart pr0n).

Economics Update

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Catching up on the economic number dump, first we have the Federal Reserve’s so-called Beige Book, which shows that growth has continued, but it is very sluggish.

This is reinforced by the fact that consumer confidence fell in October, factory production and capacity utilization fell in September, for the first time in a year, though home builder confidence rose (to a truly pathetic 16 where 50 is neutral), and housing starts rose.

We also have some importing news out of China, with their central bank making a surprise increase in its benchmark rate, and Chinese government published new statistics showing that its growth slowed and inflation edged up.

Certainly, it looks like the Central bank is concerned about inflation, and the statistics, even considering the general unreliability of official government statistics, indicate a problem.

One interesting effect of the rate hike is that it should place additional upward pressure on the Yuan.

Economics Update

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It’s jobless Thursday, and the initial claims numbers are out, with initial claims falling to 450,000, the 4 week moving average falling to 464,750 last week’s 478,250, continuing claims falling 84,000 to 4.49 million, and emergency claims fell by over 500,000, which is all a good thing, though the story also mentions that the Federal Reserve Bank of Philadelphia’s general economic index missed expectations, remaining in the contractionary range, while the New York Fed’s Empire State Index fell but remained in positive territory.

In terms of other general measures, we have conflicting data, with inventories rising strongly, retail sales rising in more sedately, and the NFIB’s small business confidence rising modestly to an anemic 88, while on the other side we see industrial growth slowing in August.

Real estate, on the other hand is pretty grim in the post-tax credit days, with home repossession spiking, and CoreLogic’s home price index showing no year over year gain for the first time in five months, and home mortgage applications fell this week.

On the inflation front, the Producer Price Index came out, and while there is still little inflation in the core rate, but food and energy costs are rising more sharply, though still well below a 6% annual rate.

Not Gonna Happen……

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The latest polling on the Texas governor’s race has the Republican Rick Perry leading Bill White by 42% to 41%, which, given that undecideds generally swing against the incumbent (Perry) means that White could actually win this election, and might therefore be able to have a significant influence on redistricting.

The same goes for this poll, which has Perry up by 39% to 33% shows that the race is pretty close.

Obviously, the specifics of the polls make a difference, but this should be interesting in November, particularly given the ability of Governor Goodhair to put his foot in his mouth.

In any case, the phrase, “Margin of Error” figures prominently, as will the dynamics of early voting.

No Big Surprise

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The Annual Report of the Board Of Trustees of the Federal Old-Age and Survivors Insurance And Federal Disability Insurance Trust Funds is out and Social Security is just fine, and healthcare reform has improved Medicare’s financial picture.

This is not a surprise. If you follow this at all, and possess the math skills required to engage in basic counting, and are not demagoguing this for political advantage, then you already know this.

Of course, the conditions that I have stated rule out 95% of the reporters, 99% of the pundits, and 101% of the Republicans out there, (someone must be hitting the button twice) so we still get the “youngsters will never see social security” bullsh%$.