Are American corporate profits really so high?

The debate among economists on corporate profits rages on.  Are they real up relative to wages or not. The first link it Tyler Cowen on the same, and the 2nd link is a search of the subject on Marginal Revolution.

 

Are American corporate profits really so high?

More on the same.

What does Spain Tell Us about Crime

I vacationed in Spain recently. People warned us of the crime so I looked a could of stats. Spain has a very low rate of crime. 

Spain's murder rate is second lowest in the EU, data shows

Spain Unemployment Rate is at 16.55%, compared to 16.38% last quarter and 18.63% last year.

The gap between the rich and poor of Spain has widened during the economic crisis, a new report on income inequality has confirmed. 

The causes of crime are not what most people think they are. It is not poverty nor relative poverty. I have a suspicion though that what causes crime causes relative poverty.

Alcohol abuse appears to me to cause crime and relative poverty.

Alchohol and Child Abuse

Maltreatment of girls and adolescent pregnancy in the US  by Bill Gardner

The US National Academy of Sciences reports on US health in a global perspective and the news is bad. Citizens of peer nations live longer than Americans do, and the difference is growing, especially for women. The report notes nine health domains where the US falls short. I’m going to highlight two domains that are critical to child health: Injuries and Homicides and Adolescent pregnancy. These two domains are connected in a distressing way.

It interests me that Italy shows up as so low on the chart above. It makes me think that the biggest problem is alcoholism. The rate of alcoholism is very low in Italy. Interestingly Japan has one of the lowest overall rates of crime in the world where Italy is close to the middle of the pack of developed countries in crime but the rate of Maltreatment death is more than double in Japan what it is in Italy (at least on that chart).

(Here is a great post by Tyler Cowen on the subject of alcohol. ) So the question is what can we do to reduce the overuse of alcohol. It is important that we diagnose the problem correctly. I wonder if we have good studies on the relationship of alcohol use to abuse.

Middle Class Decline?

Many people are talking about a decline in the middle class. I think they are wrong. I think that the middle class is as solid as it has ever been. Median real wages have continued to rise, though slower than in 1950-1975, as have wages at the 20 percentile.

But what I agree has happened is NIMBY has driven up housing costs in the highest wage cities to an absurd degree, allowing owners of existing housing to capture most the rise in income in those cities.

Also at it's 1970's peak about 18% of USA workers worked in manufacturing and a little more than half of them were highly paid. Those jobs are almost all gone. But though highly paid, those where not great jobs, it was boring, hard work. So as sad as it is that they are gone the lower paying jobs that replaced them at least are not as hard. When I worked in restaurants we joked that the one good thing about a low wage job is you did not care so much if you lost the job but the environment was good.

If you took all the income gains to the top 20% above the gains of the rest and spread it over the rest of workers you would raise the bottom 20% by about 25%.  That would be great but not life changing.

My son took a job as an assistant plumber right out of high school within a few years he was doing great pay wise, so the skilled trades still doing quite well. He bought a very nice 2 bedroom condominium here for $44k. He lived with us 2 years and saved his money and added some college money that he got from my father and paid cash for the condo. Why is so cheap here in Gainesville FL to buy a nice condo, because they let people build sufficient housing unites here in Gainesville FL. See here. 

We could all live much better than folks in the 1970's and before if we lived more like they did. Here is a story about the poorest county in the USA the folks there live middle class similar how people used to live.

Fertility

Lyman Stone on fertility:

It turns out, once they are out of school, most women have very similar fertility trajectories. Regardless of their degree, once women are out of school, their odds of having a kid ramp up to about 10 to 15% a year, and it remains there until they hit their 40s, when biological limitations become significant and fertility declines (negative figures here represent generational differences in prior fertility, not lost children). In other words, the measurable effect of education on birth rates is very small, and even such effect as does exist appears to be unrelated to the actual degree obtained and more related to whether or not a person is enrolled at any level. https://ifstudies.org/blog/do-schooling-and-city-living-equal-fewer-babies

...

The fertility rate for non-enrolled women is vastly higher in all cases. Now, it is possible that becoming pregnant induces some women to accelerate degree completion and then forestalls subsequent degree-seeking, possibly distorting these statistics. But it is at least as likely that women simply postpone childbearing until they have completed their education. The result of successfully following this “success sequence,” however, is that many of these women never have the kids they want to have. Indeed, economic research has recently shown that in the U.S. and U.K. at least, most women systematically overestimate their likelihood of working in a field that will require a degree and also overestimate the number of children they are likely to have. In other words, the gender norms surrounding higher education today both place enormous pressure on women to obtain higher degrees than they are likely to use, and in turn, the time spent pursuing those degrees reduces the odds that women have as many children as they want to have.

Two Surprising Results

Could be wrong but interesting even if they are wrong:

Data on 25 major [US] cities … 1900-1940 … municipal-level public health efforts that were viewed as critical in the fight against food- & water-borne diseases. … None … contributed substantially to the observed declines in total & infant mortality" http:/

A tweet about that one.

Is the USA first in public health?

1. For per capita prevention, the U.S. is a clear first in the world.  (I wonder, by the way, to what extent this contributes to higher health care costs in the United States, since preventive care also can drive doctor and hospital visits.)

2. The UK and France made a deliberate decision to switch away from public health to curative medicine, after the end of World War II, when they were building out their universal coverage systems.

3. The American history with public health programs is a pretty good one, with advances coming from the anti-smoking campaign, lower speed limits, anti-drunk driving initiatives, fluoridated water, and mandatory vaccination programs.

4. The British fare poorly on various public health metrics.

5. “The US system of public health fares rather well compared to other Western nations.”  On net, our population is not as anti-science as it may seem, at least not if we look at final policy results, as compared to some of our peer countries.

Article Contends Healthcare could be 80 to 90% Cheaper Based on Direct labor Costs

I found this very interesting:

Post-apocalyptic life in American health care

80 to 90% off
Yes, that’s my best guess. I do the analysis by considering a particular medical service, finding out roughly how much a person providing it gets paid per year, and dividing by how long it takes to do to get the direct labor cost; finding out the cost of the equipment used and amortizing it; and adding in an estimate of the overhead (cost of the building and a reasonable level of administrative work). I’m reasonably skilled at this sort of analysis as a consequence of having run small businesses.Estimates may vary, but everyone seems to agree that heath care is way more expensive than what you’d expect based on this sort of analysis. No one seems to know why; or, put a different way, where the money all goes. Everyone who has studied the problem agrees that it’s highly mysterious. It’s clear that administrative costs are needlessly much higher in health care than elsewhere, but that’s probably not the only source of the discrepancy.

Robin Hanson's Call for Unbelievers to Adopt a Religion

People with religious beliefs, and associated behavior, consistently tend to have better lives. It seems that religious folks tend to be happier, live longer, smoke less, exercise more, earn more, get and stay married more, commit less crime, use less illegal drugs, have more social connections, donate and volunteer more, and have more kids. Yes, the correlation between religion and these good things is in part because good people tend to become more religious, but it is probably also in part because religions people tend to become better. So if you want to become good in these ways, an obvious strategy is to become more religious, which is helped by having more religious beliefs.

More data:

Depression is the leading cause of illness and disability in adolescence. Many studies show a correlation between religiosity and mental health, yet the question remains whether the relationship is causal. We exploit within-school variation in adolescents’ peers to deal with selection into religiosity. We find robust effects of religiosity on depression that are stronger for the most depressed. These effects are not driven by the school social context; depression spreads among close friends rather than through broader peer groups that affect religiosity. Exploration of mechanisms suggests that religiosity buffers against stressors in ways that school activities and friendships do not.

 …a one standard deviation increase in religiosity decreases the probability of being depressed by 11 percent.  By comparison, increasing mother’s education from no high school degree to a high school degree or more only decreases the probability of being depressed by about 5 percent.

Wondering Why People Voted for Trump

This is an old article but I am continually draw back to it. If you are wondering why people voted for Trump a good place to start is asking them.

Here is the only article that I have seen that asks: 
What Do Donald Trump Voters Actually Want?

I understand that is not the end of it because people lie and sometimes do not know themselves well enough to know why (see: Elephant-Brain, Matt 6:5, Jeremiah 17:9), but asking is a good place to start.

Misunderstanding The PPACA

Do Obamacare’s Left-Wing Critics Actually Understand It?

Few Democrats seem to appreciate it but the PPACA moved the USA reasonably close the systems in German, France and The Netherlands.

Also Democrats should play around with different incomes on the Healthcare.gov. The premium subsidies are pretty high. They should be happier than they are about the program as it is and stop asking for single payer. While single payer works reasonably well in Canada at the time being cost are still rising and could at some point cause some large dead weight losses.

Admittedly starting in 2019 the penalty for not having insurance is eliminated and that may or may not doom the program. Well will have to see.

BTW it seems top me that healthcare is a mess all over the world with Singapore being the best. See below:

80 to 90% off
Yes, that’s my best guess. I do the analysis by considering a particular medical service, finding out roughly how much a person providing it gets paid per year, and dividing by how long it takes to do to get the direct labor cost; finding out the cost of the equipment used and amortizing it; and adding in an estimate of the overhead (cost of the building and a reasonable level of administrative work). I’m reasonably skilled at this sort of analysis as a consequence of having run small businesses.

Estimates may vary, but everyone seems to agree that heath care is way more expensive than what you’d expect based on this sort of analysis. No one seems to know why; or, put a different way, where the money all goes. Everyone who has studied the problem agrees that it’s highly mysterious. It’s clear that administrative costs are needlessly much higher in health care than elsewhere, but that’s probably not the only source of the discrepancy."