Gini Index demonstrates Saez-Piketty Inequality

The Gini index demonstrates Saez-Piketty trends. These two very different markers show that inequality is increasing.

The trend line for the Gini index (Gini)  is well correlated with the trend line from Saez-Piketty Inequality (SPI) studies, although these two ways to estimating inequality are unrelated – different techniques employed by different economists using different resource bases.

We present this result as a graph through time, discuss what Gini and SPI indicators mean, and examine why the Gini marker, part of the standard U.S. Census Bureau (USCB) report, is intrinsically hard to use.          Click any image for full resolution.

Gini Index of Inequality

The  Gini index is a value devised by the Italian Corrado Gini and meant to indicate the “level” of a country’s inequality. Gini uses data about a country’s economy to calculate a single value G that ranges from 0 to 1. The bigger the G number, the more unequal the society. Continue reading

Posted in Economics | Tagged , , , , , , | Leave a comment

Business Startups and Inequality

FiveThirtyEight posted on the decline of startups.  Who would have thought of Saez-Piketty inequality?

New information shows that startup businesses in the U.S. have been following a declining trend since 1977.   This was posted by Ben Casselman, chief economics writer at Nate Silver’s well known FiveThirtyEight.com blog.

Casselman presents several graphs – The charts show that the startup fraction of all existing enterprises has been decreasing for decades. Established businesses had little to fear from disruptive new techniques traditionally brought to maturity by newly started business wanta-bes  –  at least in America.

Casselman_img

Fig 1   Ben Casselman

He points out  “Entrepreneurship is a critical source of jobs in the economy.  Perhaps even more importantly, it is a major driver of productivity growth.”  This growth is fueled by new ideas and Continue reading

Posted in Economics | Tagged , , , , , , , , , , , | 2 Comments

Are Tuition Costs Exaggerated?

Claims that college tuition rate rises cause problems are wrong. Or are they?

Do rising college costs exclude some and force others into crippling loans that weaken their future?  Maybe that’s nonsense!  Maybe the exact opposite is true – aren’t trends showing lowering in actual payments, making higher education easier for all?  Maybe this means graduates have a better future than ever before.  LastTechAge uses tuition values from the colleges and accepts the first view.  Some folks argue for the Maybes.

David Leonhardt, New York Times

Fig 1  David Leonhardt, New York Times

David Leonhardt in his New York Times Upshot column (Tuesday 29 July 2014) gives a strong pushback. Mr. Leonhardt is one of the NYT’s outstanding reporters and is managing editor of the Upshot website.  Leonhardt’s comments are probing and edgy, perhaps a bit more sympathetic toward the monied Right.

LastTechAge posted Government data showing that, for the decade prior to 1980s, college tuition followed inflation, then abruptly started rising, following the Saez-Piketty inequality curve.  This is a clear and visible data trend, but, if wrong, we should acknowledge it.

As always, click any figure to get a full resolution image.

The data

Here are Leonhardt’s two basic charts.. Continue reading

Posted in Education | Tagged , , , , , , , | 1 Comment

Should oil trains get limited liability?

Exploding oil cars do not deserve a waiver from the costs they generate.

Warren Buffett has requested that oil train companies get a liability limitation – just like nuclear power plants, so reports Heather Smith  in her 2014 Aug 6 column in Grist.

Casselton oil train explosion

2013 Dec – tanker collision with another train.  Casselton, North Dakota.

The immediate reason is the recent destruction in Lac Megantic (Quebec, 2013 Jul) when a tank train hauling extra thin and flammable shale oil exploded.  1.6 Million gallons of oil took 47 lives and 30 buildings.  See Grist link for Quebec image.

The rail company, Montreal Maine and Atlantic, had $25M in insurance, but 10 times more was needed to merely clean up their mess.

MM&A declared immediate bankruptcy, the owners walked away, and Canadian taxes (including from the survivors and local owners of lost businesses) is being used to clean up and rebuild.

Buffett_img

Warren Buffett

Buffett (who owns Irving Oil which transports lots of oil) wants a guarantee of limits to liability and cites the Price-Anderson act which limits liability in the nuclear reactor industry.

He wants something similar so that future misadventures are covered by taxes, not personal wealth.

Though Buffet is one of the ‘good’ 0.01 percent, it is not too Continue reading

Posted in Natural Resources | Tagged , , , , , , , | Leave a comment

The Tuition Addition

Education debt soars with rising college tuition and correlated Piketty inequality, causing loss of opportunity in America

Want a good job? Though experts say get an advanced degree, tuition costs continuously rise while salaries continuously drop.  If you agree to excessive debt at market rates, you must  accept the grinding consequences.  Data show clear and shocking correlation to Piketty’s “income inequality” (= workers’ fraction of all U.S. wages has been falling since 1981) .  Student debt burden has been rising at a well known but astonishing rate.

Post high-school education is expensive and has been growing ever higher for some time, with no good way to pay for it. This should worry you if you are considering how to survive our present and future reality of shriveling opportunities in the American world.

The NCES (National Center for Educational Statistics) is a government agency that reviews current and past American education.  We use the current NCES post-secondary education (post high-school) tuition trend data to understand what has happened over the past 40+ school years (1969-70 to 2011-12), then demonstrate a correlation with Saez-Piketty economic changes.  Continue reading

Posted in Economics | Tagged , , , , , , , , , , , , | 2 Comments

World Oil Production – Our Finite World

Just a note on a blog we’ve discussed before.   A perceptive analysis of our civilization’s current status in tapping its finite oil reservoir has been posted on Our Finite World.  It is called World Oil Production at 3/31/2014–Where Are We Headed?.

As we have pointed out before, Our Finite World has many carefully crafted analyses on the usage of our petroleum reserves; this one is a must-read if you are interested in the situation.   Personally, I think of it as a needed update to LastTechAge’s  Patterns in World Oil Production.

OFW WorldOilProduction 2014-0331Gail Tverberg discusses production from Russia, Saudi Arabia, Iran, China, Iraq, US, and Canada – a meaningful list.  It includes a very perceptive analysis of the price implications.

You can see the issue in her first graph (Figure 1) on World crude production. This is an increasing curve but the rate of rise drops off and the production curve is starting to flatten out, though not yet at a peak.  She uses linear graphs which are more intuitive than the LTA preferred semilog ones.  Her points are clear.

Read it then think – how good are projections of future prosperity if viewed under the shadow of outrageously expensive oil?

George Bush filled up our Strategic Oil Reserve in the early 2000’s when oil was about $35/US-barrel.  Today it is in the neighborhood of $100/US-barrel (factor of nearly 3 over the decade).  Multiply this by only 2 for the coming decade then make a do-it-yourself projection as to how we will be living.

……………………………….

Charles J. Armentrout, Ann Arbor
2014 July 23
Listed under Natural Resources  … thread   Natural resources > Oil
Have a comment? Click on the title of this post, go to bottom, let us know.
Related posts: Click the INDEX button under the Banner picture

Posted in Natural Resources | Tagged , , , | 2 Comments

Piketty Under Attack

Piketty is under attack by the Far Right. They argue the data , or imply he is a hidden Communist.

Thomas Piketty published the English translation of his Capital in the Twenty First Century (C21) and pulled his massive open database into the bright light of fame. Reviews started arriving in March; praise came from economists in the political moderate center to central left. The far left think it is incomplete, it ignores important things. The strongest pushback, though, has been from the fringe on the political right. A small sampling of responses:

Positive: Eduardo Porter3 reviews from economistsJennifer SchuesslerSteven Erlanger,   Paul Krugman.

Negative:  James Pethokoukis,  David BrooksClive Crook (neg)Thomas EdsallChris Giles,  plus the Scott Winship and Russ Douthat (their comments below).

C21 is incomplete:   Clive Crook (pos)  later version.
Modern left of center thought
(Andrew Mackay).    Adviser to President Neil Irwin.
There are many more that say C21 has incomplete solutions than in this tiny sampling

The LastTechAge review of C21 is here.

The Attack Continue reading

Posted in Economics | Tagged , , , , , , , , , | 3 Comments