Category Archives: bureau of economic analysis

Proposed: A Federal Department of Science, Statistics, and Public Information

In the wake of 9/11, when about 3,000 civilians were killed on U.S. soil despite $billions spent on defense, a series of failures was revealed.   Various agencies had the information to identify and stop the attack, but failed to cooperate. Despite a huge military posted all over the world, there were only two military airplanes defending the entire East Coast of the United States, only one of which was armed. And the non-military agencies tasked with defending the U.S., such as the Coast Guard, U.S. Customs Agency, and Immigration and Naturalization Service, were distributed among a variety of federal departments, with little emphasis on any of them and no coordination between them. To remedy this 22, agencies were removed from other Departments and integrated into a new Department of Homeland Security.

Today, we face the equivalent of 9/11 in every part of the country every year. Life expectancy is falling, due to the cumulative disadvantage foisted on later born generations by those who came before, an opioid epidemic, and rising suicide. Life expectancy is set to fall for the third consecutive year for the first time in 100 years.

https://www.economist.com/news/united-states/21733980-thats-not-really-meant-happen-developed-countries-life-expectancy-america-has

But this crisis has been building for two decades, its scope not understood until a couple of economists, with expertise not in vital statistics but rather in value added taxes, brought it to public attention.

https://larrylittlefield.wordpress.com/2015/11/08/death-is-the-ultimate-statistic-ii-the-most-important-news-in-ten-years/

The belated realization of what is happening is a failure for this country’s policy wonks and journalists every bit as large as 9/11 was for our intelligence agencies and military. And a similar response is required.

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Will New Jersey’s Phil Murphy Be the First To Tell The Truth about Generation Greed?

Coming into office eight years ago, New Jersey Governor Chris Christie faced a fiscal disaster, following decades of shortsighted but popular policies that robbed the future. He talked like a problem solver, and could have made difficult choices to raise taxes and tolls, and reduce public services for everyone, not just for transit riders.   But since the majority of New Jersey residents don’t follow state and local government closely, this would have meant Christie received all the blame for all that had gone before. So he punted, and shifted costs from the past further into the future, to the extent that this was possible. As a result he won a second term. But the future continues to become the present, and the bills continue to come due. He is leaving office as one of the most despised politicians in the country.

Coming into office today, therefore, New Jersey Governor-elect Phil Murphy also faces a fiscal disaster, this time at the peak of an economic cycle rather than in a deep recession. A fiscal disaster that is certain to get even worse when the next recession hits and the stock market corrects to something like fair value. And he faces those same two options. Raise taxes, cut services, and perhaps tell his public employee union supporters that they have to give up more to get back in solidarity with their fellow state residents. And be blamed for all of the above. Or hope that state residents have gotten used to how bad things are under Christie, kick the can a little further, and try to sneak into a second term before the additional bills come due. And then leave office as despised as Christie and outgoing Connecticut Governor Malloy.

But there is a third option.   Interested Phil?

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The Executive/Financial Class, the Political/Union Class, and the Serfs, Redux

Two kinds of people have been getting richer. The top executives who sit on each other’s boards of directors and vote each other a higher and higher share of private sector pay, to the detriment of investors, consumers, and other workers. And retired and soon-to-retire public employees in places like New York City, who cut deals with the politicians they control to retroactively increase their already rich pensions, to the detriment of public service recipients and taxpayers. There is the executive/financial class, the political/union class, and the serfs.

The serfs continue to become worse off, adjusted for whatever point we are in the economic cycle. Today they may be a little better off than the were in 2010, but they will still end up worse off than they were in 2007, at the prior peak, which was worse off than they were in 2000, the one before, which was worse off than they were in 1987, etc. The next bottom can be expected to follow the same pattern. And the serfs continue to be lied to and manipulated by the executive/financial class, the political/union class, the media, and “truth telling” professions such as public employee pension actuaries, city and state comptrollers, certified public accountants, stock analysts, bond raters, and executive pay consultants.

This post uses recently released Local Area Personal Income data through 2016, from the Bureau of Economic Analysis, to document the trend. We had better use it while we have it, because the falsification of federal statistics in the interest of the entitled over-privileged is the logical next step in the direction of our society. And if you are a serf who rides the subway who really wants their blood to boil, be sure to read through to the commentary at the end of this post.

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What the Social Security Administration Knows, and Could Tell Us

Last December I wrote a quick post expressing concern that the U.S. might have reached peak transparency, now that the Democratic Party, as a result of the rising burden of public employee pensions, has turned against the dissemination of accurate, factual information about government and society. Joining the Republicans, who have been against providing access to such information for a couple of decades.

https://larrylittlefield.wordpress.com/2016/12/10/nobodys-gonna-pay-you-to-tell-the-truth-or-worse/

Since then I’ve seen the same concern expressed by many others, now that Donald Trump, hardly Mr. Transparency himself, is President, with reports of government bureaucrats spiriting away statistical information to a secure location before the change of regime, lest it be deleted. Even so, I’m always on the hunt for alternative sources of actual facts, and this January I happened to think of one – the Social Security Administration. And wrote a letter to the Deputy Chief of the Office of Long-Range Actuarial Estimates, the office “responsible for estimates for up to 75 years in the future, based on economic/demographic assumptions developed for the annual Trustees Report.”

I didn’t receive an answer. Given that people need to keep their jobs until they can collect their pensions, and having worked for the government for 20 years myself and knowing what it’s like, I didn’t expect one. It is fair to say that I wrote the letter that follows for the purpose of publishing it on this blog after a reasonable period of waiting for a response had passed.

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Local Area Personal Income Data: The Unsaid

Not long ago, the U.S. Bureau of Economic Analysis released its Local Area Personal Income data for 2015.

https://bea.gov/newsreleases/regional/lapi/lapi_newsrelease.htm

And I downloaded some data, using the “interactive data” tool to the right on the website, to see if various trends I have observed in the past have continued.   The data show that the Tri-state area continues to be a much richer than average part of the U.S., due mostly to those living and working in Manhattan (many of the richest of whom live in the suburbs), but Brooklyn, the Bronx and Queens remain relatively poor. Manhattan is rich enough that New York City’s share of the nation’s personal income is stable even as its share of the nation’s population continues to fall. In New York State the total earnings per worker of state and local government workers (including employee benefits) continues to soar relative to the earnings of most private sector workers, who are left worse off as a result. The idea that lower wages for private sector workers are offset by, and in some sense caused by, higher employer costs for employee benefits hasn’t been true for more than two decades, and Obamacare did nothing to alter this. And more and more people have become self-employed, freelance, and contract laborers, rather than being employees at all, and the average earnings of such workers continues to fall. A series of charts and some discussion follows.

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