Carpe Diem

H.S. Diploma in 1970 = 2+ Years of College Today

From the article: “More Grads, But Cognitive Ability Declines: Degrees and diplomas may not translate to on-the-job success,” in a recent edition of InsideRecruiting, a recruiting industry trade publication:

The good news: recruiters should see an increase in applicants with college degrees and high school diplomas; the bad news is that those applicants might not succeed on the job. A study conducted by Wonderlic, Inc. reveals a steady decline in the cognitive ability scores associated with specific education levels.

From Wonderlic’s press release about its study:

The explanation for this downward trend in cognitive ability by level of education is that more people with modest ability are remaining in school and graduating,” said Michael Callans, President of Wonderlic Consulting. “While remaining in school has obvious personal and societal benefits, it also impacts the relative meaning of a high school and college degree for employers.”

The study suggests that because the ability level of the average high school graduate has changed over time, finding job candidates with the same level of ability as 1970 high school graduates requires employers seek out applicants with two or more years of college training.

MP: Hey, but aren’t grades (and self-esteem) at an all-time high in both high school and college?

(HT: Jeff Perry)

Carpe Diem

Dr. No

From John Stossel in today’s NY Sun:

U.S. Congressional representative and Republican presidential contender Ron Paul has been called “Dr. No” because he repeatedly votes against legislation he believes gives government too much power. If it’s not in the Constitution, he says, the federal government has no business doing it. He even votes against appropriations to his constituents.

For example, his Texas district is subject to floods, but he voted against FEMA. He represents a farm district, but has voted against farm subsidies because they are not authorized by the U.S. Constitution.

In other words, Ron Paul, aka Dr. No, is a real rarity, a politician with integrity. He’s my kind of politician, and I’ve joined the list of academics for Ron Paul.

Carpe Diem

Foreign Buyers Snap Up U.S. Real Estate, II

NPR Morning EditionIn 2007, foreign investors acquired more than $43 billion worth of U.S. properties — almost double the amount foreigners spent a year earlier.

Three reasons:

1. Weak dollar makes U.S. real estate more affordable.

2. Increased global wealth means international investors have more investment capital.

3. Falling U.S. real estate prices offer bargains for foreigners.

Bottom Line: A market correction is taking place in the U.S. real estate market thanks to foreign investors, another benefit of globalization. Lou Dobbs, listen up.

(HT: Ben Cunningham)

Carpe Diem

Chart of the Day: Stock Index vs. Home Price Index

Home prices have been falling (see WSJ article), but still dominate stocks over the last 10 years. Compared to ten years ago, the S&P500 Index today is 2X higher, but home prices are 2.68X higher.

From CNBC’s RealtyCheck: “Prices may be down, down even farther than the nasty recession-related bust of the early 1990s, but let’s remember whence we came. During the recent housing boom, prices were up in far greater percentages than they’re down today, so if you bought your home more than three or four years ago, you likely have plenty of gains left.”

Carpe Diem

World Economy Growing At Fastest Rate Since ’80s

The chart above uses international macroeconomic data on real GDP growth from the USDA’s Economic Research Service. Over the last four years, the world economy has grown at an annual average rate of 3.6%, the fastest growth in real world output over a four-year period in almost twenty years (see shaded areas above). If there is any kind of slowdown in global economic growth, it sure hasn’t shown up yet in real GDP data.

Carpe Diem

Compelling, But False Tale of Middle-Class Decline

The American middle class is fighting for its life — or at least that’s what Lou Dobbs would have you believe. The CNN anchor’s rants about “the war on the middle class” are probably the most prominent examples of such economic doom-saying, but he isn’t alone. Democratic presidential candidates pepper their debates with references to the assault; leading liberal thinkers argue that supply-side conservatives captured the Republican Party during the Reagan administration and implemented policies that continue to privilege the super rich today. They tell a compelling tale of middle-class decline. Pity it isn’t true.

Read more of the article “5 Myths About the Poor Middle Class” in the Washington Post

Carpe Diem

Foreign Buyers Snap Up 2nd Homes in the U.S.

The events of 2007 have made the U.S. much more affordable for international home buyers. Severe dollar declines against the euro and pound have made U.S. homes much cheaper for Europeans. But even foreign buyers without that sort of currency advantage are benefiting from sharp drops in housing prices at a time when problems in mortgage lending are keeping many Americans out of the market.

At the same time, many foreign real estate markets, especially in Europe, have experienced sharp increases in home prices.

Read more here.

(HT: Ben Cunningham)

Carpe Diem

Ethanol’s Role in The Growing “Dead Zone”

JEFFERSON, Iowa - Because of rising demand for ethanol, American farmers are growing more corn than at any time since World War II. And sea life in the Gulf of Mexico is paying the price.

The nation’s corn crop is fertilized with millions of pounds of nitrogen-based fertilizer. And when that nitrogen runs off fields in Corn Belt states, it makes its way to the Mississippi River and eventually pours into the Gulf, where it contributes to a growing “dead zone” — a 7,900-square-mile patch so depleted of oxygen that fish, crabs and shrimp suffocate.

Note: 7,900 square miles is larger than the states of Rhode Island, Delaware and Connecticut combined!

HT: Chris Douglas