Peggy Noonan writing in yesterday’s WSJ: We can’t have a president who spent two minutes on YouTube staring in a mirror and poofing his hair. Really, we just can’t.
For 2008, the economic outlook is Topic No. 1 for almost all investors. Stock prices and bond yields already reflect recession worries, but an actual downturn would hit portfolios hard. To help get a handle on what to expect, BusinessWeek asked 54 forecasters for their views on everything from housing and the credit crunch to Fed policy and global growth. (Click here for full survey results.)
Bottom Line: The economists project, on average, that the economy will grow 2.1% from the fourth quarter of 2007 to the end of 2008, vs. 2.6% in 2007. Only two of the forecasters expect a recession, although it might feel like one if there’s sluggish growth over the next couple of quarters, as many predict.
The OLS regression results above further verify that the negative relationship between state population growth and state tax burden is statistically significant at the 1% level (highest level generally reported).
Thanks to Ben Cunningham for supplying the data. See First Trust Portfolio’s similar analysis “Voting With Our Feet” here using the same data.
From George Will’s most recent column:
McDonald’s exemplifies the role of small businesses in Americans’ upward mobility. The company is largely a confederation of small businesses: 85% of its U.S. restaurants — average annual sales, $2.2 million — are owned by franchisees. McDonald’s has made more millionaires, and especially black and Hispanic millionaires, than any other economic entity ever, anywhere.
(HT: Division of Labor)
From McDonald’s website:
1. McDonald’s Hispanic-owned restaurants generate estimated annual revenues in excess of $1.5 billion. Note: That is more than the annual GDP of the Central American country of Belize.
2. McDonald’s African-American-owned restaurants generate estimated annual revenues in excess of $2.4 billion. Note: That is about the same as the annual GDP of the African country of Rwanda.
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)
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.
NPR Morning Edition–In 2007, foreign investors acquired more than $43 billion worth of U.S. properties — almost double the amount foreigners spent a year earlier.
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)
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.”
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.
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