Hey – We Found Where All That Retail Spending Disappeared To

❝ Retail is in trouble. Sales declined for the second month in a row in the U.S. in March, and there’s talk that perhaps traditional retail has passed a tipping point, with lots of store closings, layoffs and bankruptcies to come.

❝ One obvious reason for retailers’ difficulties is the rise of Amazon.com Inc. and other establishments that the Census Bureau classifies as “nonstore retailers.”…

There have been even bigger shifts over the decades, though, in what we spend our money on, according to the personal consumption expenditures database maintained by the Bureau of Economic Analysis. Increasingly, it’s not tangible stuff that you buy in a store or order online, but services…

❝ Health care is by far the biggest contributor to this move from goods to services — spending on health care services has gone from 3 percent of personal consumption expenditures in 1929 to 17.2 percent last year. Spending on pharmaceuticals made up another 3.8 percent of personal consumption in 2015…

These huge spending gains can be chalked up partly to medical advances, an aging population and rising expectations for health care. But they also can lead a person to wonder to whether there isn’t something terribly inefficient about how the U.S. delivers medical care.

What are we spending less on? The two biggest decliners by far have been groceries and clothing, although the share of spending going to cars and to furniture and home appliances has fallen a lot since the 1950s as well…

❝ Then, once again, there’s all that money going to health care and financial services — $3.1 trillion in 2016. Surely some of that could have been spent on shopping instead.

Validating, once again, US consumers spend more on the whole cost of healthcare for less in return than any other developed industrial nation. The details on insurance company ripoffs are easy. Just compare them to Social Security and Medicare charges. Poisonally, I think most of the rest is simple collusion between major healthcare providers, pharma and those folks in the insurance industry – again. They agree on absurd charges for procedures and prescriptions knowing they get rolled into the insurance bill.

Happy Nations Don’t Focus on Growth


Roman Gorielov/Istockphoto

❝ The Socialist candidate for the French presidency, Benoit Hamon, says he doesn’t believe in the “myth” and “quasi-religion” of growth — it’s part of the “consumerist, productivist and materialist model” of development, he argues. That’s outside the economic mainstream, and many see those views as a symptom of the meltdown of the global left. But the recently-released Global Happiness Report 2017, produced under the auspices of the United Nations, shows that Hamon just may be ahead of the curve.

❝ Since the project’s inception five years ago, small, rich Western European nations have led the list. In this year’s ranking, compiled using the last three years of data, they make up the top six, with Norway, Denmark and Iceland leading the world. In terms of growth, these nations have long lagged behind the global level…

Meanwhile, China, which has one of the highest sustained growth rates in the world, is not progressing in terms of happiness. The happiness report contains an entire chapter on that, written by Richard Easterlin, Fei Wang and Shun Wang. They pointed out that based on previous studies, China should have seen an increase in well-being of one full point on the ten-point Cantril Scale. Instead, Chinese people are just about as happy as they were in 1990.

❝ The team of respected economists Jeffrey Sachs, Richard Layard and John Helliwell suggests six variables explain the subjective well-being levels: wealth expressed as per capita GDP, the level of social support, healthy life expectancy, freedom to make life choices, generosity (the prevalence of giving to charitable causes), and perceptions of corruption…

❝ …The experience of the small European nations at the top of the table shows that once a certain level of wealth is achieved, growth isn’t as important to happiness levels. As long as per capita GDP is relatively stable, the other factors do their job, and if there’s a problem with them — for example, health care becomes less accessible or deteriorates, the social fabric starts fraying, people grow more selfish or freedom erodes — people tend to feel unhappy despite an unchanged comfort level.

The happiness-related findings are politically important. In 2015, George Ward of the London School of Economics analyzed European election data to show that subjective well-being was a stronger predictor of the vote for the incumbent government than GDP growth or the unemployment level. It’s hard for technocratic elites to acknowledge that the relative electoral success of nativist parties could be dictated by a yearning for social cohesion that they believe is undermined by immigration and globalization; it’s even harder to come up with ways of fixing the problem.

❝ Far left politicians such as Hamon at least give it a try. The French presidential candidate wants to shift the focus from growth to the social support network, primarily health care and education. He also proposes a universal basic income and a shorter workweek, made possible by higher taxes on the rich. It could help or it could backfire…

❝ …Regardless of whether their specific recipes are workable, the left-wing radicals are right in trying to shift the rich world’s policy focus. There’s plenty of wealth, that goal is already achieved. Good policy is a matter of directing it toward the determinants of happiness.

I’ll second that emotion.

In case you need reminding — You Are Hardly Overtaxed in America!

❝ Americans generally feel they’re being over-taxed, especially around this time of the year . . . The Organization for Economic Cooperation and Development analyzed how 35 countries tax wage-earners, making it possible to compare tax burdens across the world’s biggest economies. Each year, the OECD measures what it calls the “tax wedge,” the gap between what a worker gets paid and what they actually spend or save. Included are income taxes, payroll taxes, and any tax credits or rebates that supplement worker income. Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains.

Click on this once or twice to get a larger version

While you’re at it – reflect that those tax dollars in other countries get folks better healthcare, generally better education and jobs for their kids, better roads and public transit – especially high speed rail. They don’t go to the world’s largest military-industrial welfare plan, special loopholes for Big Pharma, the NFL, etc..

Thanks, Barry Ritholtz

Congress’ Analysis says – Republicans will take away health care coverage from 24 million Americans


“You’re a bigger liar than I am”

❝ Fourteen million Americans would lose coverage next year under House Republican legislation remaking the nation’s health care system, and that number would balloon to 24 million by 2026, Congress’ budget analysts projected Monday. Their report deals a stiff blow to a GOP drive already under fire from both parties and large segments of the medical industry.

❝ The Congressional Budget Office report undercuts a central argument President Donald Trump and Republicans have cited for swiftly rolling back the 2010 health care overhaul: that the insurance markets created under that statute are “a disaster” and about to implode. The congressional experts said the market for individual policies “would probably be stable in most areas under either current law or the (GOP) legislation.”

The report also flies in the face of Trump’s talk of “insurance for everybody,” which he stated in January. He has since embraced a less expansive goal — to “increase access” — advanced by House Speaker Paul Ryan and other Republicans…

You have “access” to the best medical care in the world, right now. If you can afford it. Obamacare made healthcare affordable for millions more Americans. Trumpcare takes it away...

❝ The budget office’s estimates provide a detailed, credible appraisal of the Republican effort to unravel former President Barack Obama’s 2010 overhaul. The office has a four-decade history of even-handedness and is currently headed by an appointee recommended by Price when he was a congressman…

❝ …The budget office said the GOP measure would reduce federal deficits by $337 billion over the coming decade. That’s largely because it would cut the federal-state Medicaid program for low-income Americans and eliminate subsidies that Obama’s law provides to millions of people who buy coverage…

Truly kind-hearted crew in the Republican Party. If you’re a millionaire.

❝ The American Medical Association, which has opposed the Republican bill because it would reduce coverage, said the report shows the legislation would cause “unacceptable consequences.”…

❝ By 2026, the office estimated, a total of 52 million people would lack insurance, including 28 million who would have been expected to lack coverage under Obama’s statute. People with lower incomes age 50 to 64, generally too young for Medicare, would represent a disproportionately large share of the uninsured, and growing numbers of people would lose coverage from jobs.

One of the best economists currently teaching in the United States tweeted calculation of an individual example for someone just short of making it to Medicare:

You really gotta give it to the Republicans. If you don’t, they’ll come to your home and take it away!