Gaza in Proportion

In this day of information saturation, you would imagine that easily-obtained numbers, showing the relative might of the Gaza Strip and of the State of Israel would be prominently featured in a box  next to news coverage of the recent re-re-re-re-ignition of the conflict between Israel and the Gaza strip. I touched on this in the last post. Herewith some additional data:

Gaza Strip Compared to Israel
			Ratio
	Gaza Strip	Israel	Gaza	Israel
Population (mil)	1.657	7.941	1	4.79
Per capita GDP ($)	3,100	31,467	1	10.15
Area (sq. miles)	139	8,019	1	57.69
Population per sq. mile	11,921	990	1	0.08

The tabulation shows differences between the Gaza Strip and Israel in terms of population, per capita Gross Domestic Product, area, and population density. Nearly 1.7 million people in Gaza occupy a mere 139 square miles, with some 11,900 per square mile. Compared to the inhabitants of Gaza, Israel’s population is ten times richer, has nearly 5 times more people, and nearly 60 times more area. Israel’s density is less than a tenth of Gaza’s.

What follows next is a map of both. Alas, the Gaza strip is virtually invisible. I’ve provided an arrow that points to it.

Now the spectator populations across the world, looking at this, and reading the hyped coverage in the media—where the oppressed and one might say suffocated population of Gaza is the chief villain, might well say, Hmmm…

U.S. Military Aid to Israel

Are we in some way participating, through the taxes that we pay, in the violence centered on Gaza that is now beginning in Israel. Yes, in a way. In the current fiscal year we gave Israel $3.1 billion in military aid; it accounted for 99.4 percent of all aid we gave that country. That’s a fair amount of money, indeed a fifth of Israel’s 2012 expenditures on the military ($15.2 billion), that number from to Wikipedia (link).

I show here a graphic tracking U.S. military aid to Israel for FY 1997 to FY 2013 (the last is proposed) along with bars showing what percentage that aid is of total U.S. aid to Israel. My source is a Congressional Research Service paper dated March 12, 2012 (link).

Two out of every ten bullets or missiles or bombs are ours, you might say. We don’t participate in targeting.

A Look at Payroll Taxes

It’s eye-opening to look at the role that Payroll Taxes have played over time as a source of Federal Revenues. The data are there, to be sure, but not presented quite as starkly as I am doing this morning. I have these data from the Office of Management and Budget, an agency of the White House (link, see Table 2.1).

The dramatic change in the 1950 to 2012 period has been the steep rise of payroll taxes as a percent of total revenue—and the almost parallel decline of corporate taxes. To make this picture even more dramatic, we can look all the way back to 1934 using the White House Data. Here it is in a tabular form.

Revenues as Percent of Total, 1934, 1950, and 2012
				Change from
	1934	1950	2012	1934	1950
Income Tax	14.2	39.9	47.2	33.0	7.3
Corporate	12.3	26.5	9.6	-2.7	-16.9
Payroll	1.0	11.0	34.1	33.1	23.1
Excise	45.8	19.1	3.2	-42.6	-15.9
Other	26.7	3.4	6.0	-20.7	2.6

Now it is well to keep in mind that payroll taxes are regressive, thus they apply only up to a salary/wage income of $110,100 in 2012 and (perhaps appropriately in year 2013) to $113,700 next year. Thus it does not cover all of the $250,000 which seems, today, to mark the boundary of “real” money. But it falls heavily on the working poor. For them the payroll tax is a real whopper, comparable or greater than owed income tax.

If we now drop down that Fiscal Cliff, that black line up there will shoot a ways higher. The graphic also shows that Social Security contributions loom very large in the eyes of the Federal Government. They represent more than a third of the total revenue stream.

For completeness, the Other category consists of estate and gift taxes (7.7% in 2012), customs and related fees (21%), and miscellaneous income (71.3%). Of that last about three-quarters are interest earnings of the Federal Reserve.

Excise taxes are levied on alcohol, tobacco, telephone services. It also includes windfall profit taxes and revenues associated with transportation and other sectoral activities.

Who has the power? If we look at changes between 1934 and 2012, we see that the lower quintiles of the population have borne the brunt of increases, 33.1 percent; those paying income taxes come next.  Those for whom the payroll tax is a meaningful levy saw it as the biggest tax increase in the 1950 to 2012 period! They bore the brunt of the relatively small increase in income taxes due to the tax-cutting that became a perennial favorite in politics in that later period. My youngest daughter, once long ago, still as a child, articulated the benefits achieved by the corporate and institutional sectors. Asked to share a toy, Michelle memorably said: “I want to share by myself.”

The Rock and the Hard Place

Tax increases and mandatory program cuts, due to take place January 1, 2013, are the so-called Fiscal Cliff. In its May 2012 report (link), the Congressional Budget Office put the effect of that event—falling off the cliff, thus letting the laws now in place go forward without change—at $559 billion for FY 2013. I’ve cited a slightly lower number in yesterday’s post. This in effect results in a lowering of the total FY 2012 deficit from $1,171 to $612 billion in FY 2013. The CBO then goes on to say that this change will weaken the economy. Therefore unemployment will increase and GDP growth will slow. The logic behind this is that people will have less money to spend. Spending less, the private sector will have less income. It will respond by laying off people. That is the rock.

The hard place is the level of the National Debt.  It has a legally set ceiling of $16,400 billion. According to the Treasury’s website (link), the actual debt was $16,245 as of yesterday . We are going to exceed it fairly soon. The downside of that, nominally, is that U.S. national debt will be down-graded as it reaches ever higher levels of GDP. The current debt, measured against current GDP (for the 3rd Quarter of 2012, annualized) was 102.9 percent and trending up—comparable to China’s at 16.3 percent, and trending down.

This means that if we reduce our deficit, by gladly falling down that fiscal cliff, we shall lose jobs and economic momentum. If we resist going over the cliff, we shall have decent GDP and jobs growth but, by 2016 (the next national elections), our debt to GDP ratio will be 111.9 percent (China’s at 9.7%).

Not quite sure which way I want to jump. What helps, somewhat, is to contemplate 1945. That year our Debt to GDP ration was 134.5 percent—and we survived. To be sure, that was war time. Maybe we are again, at war. In more ways than one. If the GOP has its way, tax cuts will not expire and therefore, in theory at least, people will happily be spending money to whip that sluggish GDP into a faster trot. But to save us from breaking the Debt Ceiling—and again and again—will require very massive program cuts. And what will that mean? Less income for people, actually. Get rid of Social Security, Medicare, Medicaid, Unemployment Insurance, agricultural subsidies, pensions, highway funds, etc. But doesn’t that amount  to the same thing? No money, no spending, no jobs? Surely it does. So it’s a rock and a hard place, whichever way I look.

Related post.

Abrupt Transition

One day it was all about momentum and battleground states (but like dominoes they fell for Obama), abruptly we are supposed to be terrified—by the Fiscal Cliff. So just what is it—and how big?

This Ogre has four components. Those, and the estimated of the impact of each, are shown in the following tabulation:

Fiscal Cliff Components and impacts, in $ bill. Bush tax cut roll-back 280 Payroll tax cut roll-backs 125 Emergency unemployment benefit termination 40 Budget Control Act spending cut mandates 98 Total Impact 543 As percent of GDP 3.4

The impact estimates come from the Wall Street Journal (May 16, 2012) citing J.P. Morgan economist Michael Feroli. In current journalistic rounding, I find some putting it at anywhere between $560 to $600 billion. Whatever. The total amounts to 3.4 percent of GDP, and one way to view that is to apply it to one’s own personal income. If that income is, say $45,000, a 3.4 percent cut would translate to about $129 per month. Okay. Ouch. But a fiscal cliff it is not.

Nor is it likely to take place as currently projected. What the abrupt transition from Election Hype to Fiscal Cliff Hype indicates, however, is that the media exist by promoting great clouds of anxiety. We must seamlessly move from one to another. Therefore, predictably…

But as the election itself refreshingly revealed, the people collectively have some sense. I say that after every national election whether the people I supported win or lose. Therefore the Fiscal Cliff will not cause a collective epileptic fit—except among the pundits.

Money in Politics

The elections are over. President Obama remains in office. As in earlier years, but more intensely than ever, the media emphasized the power of money, particularly of independent groups, such as political action committees (PACs) active on behalf of candidates but at a distance: the campaigns could not influence them.

The New York Times featured a page (link) yesterday showing total spending by such independent organizations as of November 6, 2012. The listing featured 35 Republican and 10 Democratic groups. I show the results in the following graph:

I look at this and say to myself, “If money could buy elections, the Republicans should have swept the field.”

But the picture is mixed when we include funds actually raised by each campaign combined with funds contributed by the two party committees, the Democratic and Republican National Committees (link). Those in the following tabulation (in millions of dollars):

Funds raised by the candidates
	Obama	Romney
Campaign	637.3	388.1
Party Committee	214.6	342.0
Totals	851.9	730.1

Here Obama had more money than Romney, although the difference between them isn’t very large. Money obviously plays its role, but would not seem to be conclusive. What this tells me is that my deeply-held doubts about the predictable powers of advertising need not be reexamined.

Voice Spam

We use a Uniden cordless telephone on two floors. In the basement is a venerable old green telephone of the bygone age. To be sure it has push button dialing, but underneath it says, impressed into the brass plate, “Bell System Property, Not For Sale.” I spend my morning in that basement. And now, now that the season of voice spam is reaching its most hysterical boiling point, I make my coffee in the morning and then stick the cordless Uniden into my shirt pocket. It has a little screen, of course, and when the phone rings I look there to see if a family member, friend, or doctor’s office is on the other end. That helps a little. The current form of my Denial (of everything modern, that is), takes the form of pushing Talk and immediately afterwards pushing End. What the little Uniden lacks is a way of automating answering. I wish I could program it with a handful of numbers—and, at my option—cause it to hang up, automatically, on all the rest, indeed before it permits itself to ring.

A certain cost in time and effort goes into the creation of an automated telephone message. The school board candidate who just called me automatically (sometimes if rarely I do actually answer) probably had to visit a studio, may have paid for parking, spent some time before (writing, honing, practicing his message), recording it, and the listening to the result. He had help, and help must be compensated. Then there is the cost of getting it on the air and programming it to call a set number of numbers—the acquisition of which has a cost as well. Money.

At last the call comes to interrupt me. Such phenomena of disembodied persuasion always make me wonder if anybody is actually moved to any kind of useful action from which the candidate benefits. I doubt it. Faith in the power of advertising, however, is bottomlessly deep. The philosophers who claim that reality is Pure Will can take comfort from such behavior. Money is no object if you believe—believe in the fulfillment of your wish. And those who sell this kind of ethereal Brooklyn bridge at least get paid in real dollars.

Nor can I sanction those who call me—by carefully noting their names and not voting for them because they called. Those I’ve long ago decided to support also call. And even that inconvenience won’t change my mind. In some still extremely dim future, humanity will look back on the Magic those people believed in. And some, in that future, will try to practice it too—only to discover that it doesn’t really work.

Just a Little Jar of Pickles

Costco style! She Whose Food Must be Tasted is planning something mysterious. It involves masses of pickles. Hence she dispatched me to buy three jars. Looking for these I encountered the gallon-jar of Vlasic Kosher Dill Wholes—and, being at Costco, it was massive. I figured that she would be delighted and settled on buying just one. Well, she was! She wanted a picture of it, presumably for Facebook.

Well, my little Kodak M893IS, whose characteristics are that she is the smallest Kodak, presumably, decided not to be cooperative. She absolutely refused to show just how HUGE this jar really is, despite various efforts on my part to introduce perspective.  Instead, she made it fit her own view of size. Well, it’s the best I can do—but I do include a duette in which that jar is next to a 1/2 gallon bottle of Buttermilk. And I show images with and without a flash.

Costco features industrial-size retailing. If I owned a forklift, I’d take it with me shopping there. You want to see a cucumber that would not fit in this jar? Here it is. I purchased in mid-September from a household in our neighborhood; they were selling the surplus of their garden on the curb. Are we in some ways fixated on cucumbers around here? No. But unusual size does fascinate. A recent fascination is with Shi Tzus—trying to recognize them from a distance. And I do keep hoping that, someday, genetic science will deliver the miniature elephant, the perfect pet, about the size of a goat.

Employment Update: October 2012

The October employment report (Bureau of Labor Statistics, link), the last one before the elections next Tuesday, were quite favorable. First of all, both August and September data were revised, upward, August by 50,000 and September by 33,000, so a gain of 83,000 over the last report. Then, the change from these revised totals in October was an additional increase in employment of 171,000. The chart follows. Revised months are marked in pale red, October results in red.

This month we also, finally, crossed a symbolic border. We have now recovered 51.2 percent of the total jobs lost in the 2008-2009 period. It took almost three years to regain half the jobs lost in two. But the direction is upward, however slowly. I show that result in the next graphic.

These numbers, ultimately, have little to do with who is in the White House or who controls Congress. The Great Recession, however, may be blamed, at least in part, on the Federal Government. It had loosened banking controls gradually and thus “enabled” the mortgage bubble to develop. That disaster did not take place under President Obama, however. But at the level of the Great Collective, which struggles to display even the intelligence of a duck, we operate under odd delusions…

Positioning the Story

The Wall Street Journal yesterday published an interview with Sam’s Club CEO Rosalind Brewer. This post, however, is really about journalism, specifically the bear-baiting habits of the media, which try to generate “excitement” by using words that signal combat, war, and conflict.

On the front page of the Marketplace section, the WSJ headlines a page 7 story thus: Sam’s Club Chief Maps Big Plan to Outflank Costco. The story’s actual headline is: Sam’s Club CEO Launches Charge on Rivals. The story is an interview. It begins with a blurb by the Journal “setting the stage,” thus “positioning the story.” In that setting, Sam’s Club is compared, unfavorably, to Costco and Amazon.com.  Then the interview follows. But the only mentions of either Costco or Amazon are two questions by the Journal’s interviewer, each a leading question:

• Sam’s Club has posted two years of positive sales growth but still lags Costco. What will it take to catch up and make Sam’s Club into an $80 billion—$100 billion business?
• Are you afraid of online retainers like Amazon.com that have been taking away market share from brick-and-mortar retailers?

Rosalind Brewer artfully avoids mentioning these two companies or engaging those questions at all—except to note, in answer to the second question, that “It’s always good to have a strong competitor; they make you better.” She speaks of products and serving the customers throughout. Well, Bravo, Ms. Brewer. She seems to grasp something that the “investment community,” so called, will evidently never learn. Companies exist to serve their customers—not to please those who buy their stocks. Some CEOs know that, others don’t. Life is about service, not combat. Therefore a quite innocuous story is turned into a seeming clash of giants when it’s really about carrying more gluten-free products…

Longitude, Latitude: Terminology

Humans—or as Quark, the Ferengi, in Deep Space 9 used to say, hu‑mahns—are challenged in a three-dimensional world. It might just be that we come from a four- or four-plus-dimensional region of the cosmos where wishing is as good as going there, so who needs bothering with maps. It’s a different story here. Two posts on this site are very popular. One, called “Longitude,” is the all-time favorite; another, “The Astrolabe,” which deals with Latitude, is tenth. One wonders why. Perhaps people are confused—and count me in. I wrote those posts but occasionally a kind of baffled fog surrounds me. I am temporarily unsure again. What is it, again, that longitude measures? I think the lines run up and down. Does it measure north-south alignment. Wrong, WRONG. But let us get there.

The “long” in longitude has obvious meaning. Something that is long. The “lat” in latitude is less obvious. It comes from Latin and means width. But we don’t measure the lat of a table or of a football field. Now the maddening—and confusing—aspect of these terms is that in effect we use longitude to measure width, latitude to measure height, both from fixed points on the face of the globe.

Longitude measures distance from some fixed point to the east and west. Call it Eastwestitude. Those lines are numbered from 0 to 180. The zeroeth line runs through Greenwich, England north to south or the other way about—which tells us who ran the last undisputed world empire. To the left and right of that line, the Meridian, thus to west and east of it if your head is north, your feet are south, the numbers increase at equal increments on both sides until they meet again and merge in 180 exactly at the opposite point of the globe from Greenwich.

Latitude measures distances from the Equator to the north and south. Call it Northsouthitude. The Equator represents 0 Latitude. Numbers above and below it both increase until they reach 90 at the two poles. Is there some equivalent to Greenwich on the Equator the name of which everybody knows? Yes and no. There is such a place, but virtually nobody knows it. It is Ciudad Mitad del Mundo (Mid-World City) in Ecuador. I bring an aerial image of it here from Wikipedia (link). Notice the yellow line faintly visible in the middle of the picture. That’s the equator. In this town you can walk with your loved-one hand-in-hand, one of you walking in the northern, the other in the southern hemisphere, and your hands clasped in the mitad.

Now when it comes to mnemonics, the problems continue. Eastwestitude is a pretty decent, straightforward description. But notice that it lacks an O, the marker in lOngitude, to which it belongs. Similarly, Northsouthitude is handy, but it lacks the A that might link it to lAtitude. Gul darn it. Based on this I am sure that in some future time I’ll be struck again by the lightning of confusion. Longitude will be there like some hovering monster—and I won’t remember whether to go up or down or left to right. That’s when blogs come in handy. Or should I speak of blags?

Windows 8. Is it New Coke?

Remember 1985 when The Coca-Cola Company rolled out what became known as New Coke? You might if you are, say, 40 and older. It caused a furor, a revolt. To be sure the sheepish masses started to buy and drink it, but a very vocal minority eventually prevailed. Coca-Cola withdrew the new brand and “reintroduced” the old—but now dubbed Coke Classic.

I drank a lot of Coke those days and hated the simpery taste of New Coke. I was also a hard-ass. I wouldn’t touch Pepsi because I was at war with Pepsi-Cola’s policies in the environmental arena. Therefore I began to purchase RC Cola in massive quantities—and found it a quite suitable product. I was not alone. Now in America we do not believe that we can influence Commercial Giants like Coca-Cola. Therefore, as the revolt became public, I didn’t dream that I would actually see New Coke fail. But it did—that year yet. To be sure, New Coke remained on the market until 1992 as Coke II, a subsidiary brand. The Giant actually caved.

Now for what it’s worth (read absolutely nothing), I have the same visceral reaction to Windows 8—and I haven’t even tasted it. It goes on the market tomorrow, but Staples was trying to seduce me into buying a computer this morning using Windows 8 as the come-on. That came by e-mail. Well, one doesn’t answer ads—but this ad I did answer, informing Staples that some of us are not in love.

We bristle at nothing with quite the same fury as attempts to change our ingrained habits—and I will not have my screen invaded by touchable panels. Long live Windows Classic.

If I am part of a potent minority, we may see Microsoft retreat yet. But what they’ll probably do is introduce a more expensive Windows 8 Professional version—in which the front face of the operating system will be the traditional face and the touchable panels will be an option—rather than the other way around.

Die Windows 8, die!

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I have my image from Evandye.Angelfire.com (link).

Hire a Multiplier

The New York Times editorial this morning, “The Myth of Job Creation,” attempts to correct the misconception, voiced by Mitt Romney and quoted there, that “Government does not create jobs.” My, Mitt. And you are supposed to be a numbers-crunching analyst? Government does too create jobs—and the NYT makes the case for the obvious.

I thought I’d look back to 1939 and see what roles government jobs play in total employment. Government as here defined includes the federal, state, and local. In the case of the federal, it includes postal employees as well as bureaucrats. At the state level it includes state-run educational schools. At the local it includes public schools. All education, except the private, is included.

In this 74-year period, government has accounted for, on average 16 percent of all employment. The lowest point came in 1947 (12.5%), the highest in 1975 (19.2%); government employment last month was close to the average (16.5%).

Now as all good wonks and analysts should know, job creation, whether by government or private industry, has a multiplier effect. This means that adding employees has secondary costs. New people need furniture, computers, sometimes vehicles, tools, occasionally uniforms. They consume supplies that would not otherwise be consumed. The hiring of new employees, consequently, increases demand. And in meeting it, new jobs are created (or preserved). The reverse, of course, is also true. Layoffs are bigger, in total effect, than the number of jobs erased.

How big is this multiplier? The NYT points at the Economics Research Institute to justify what I viewed as an exaggerated multiplier effect. Looking at the source, however, I saw a lower number for the actual new-job-related multiplier. It excludes some of the tertiary effects the NYT includes. (Journalists are not visceral analysts, alas.) EPI projects a 1.67 multiplier for state-and-local employment. This means that 100 jobs created at the state-and-local level translate to 67 jobs created elsewhere. It seems safe enough to assume that a similar multiplier applies to federal workers as well. That would mean that the 22 million government jobs in place last September accounted for an additional 14.7 million jobs in the economy.

Now I’ve never heard of any private company generating public sector jobs—unless it does so by crimes and misdemeanors the prosecution of which (we pray and hope it really happens) will generate jobs for public prosecutors and the clerks who help them, police and other investigators, judges and wig-makers, and even (but this is to hope too much), wardens and prison guards.