Aswath Damodaran finds the equity premium has risen to 6%—in the top decile historically. He estimates shocks from 2 of the following have already been priced in: • Slower growth • Political/economic crisis • Higher interest rates • ... Read More
Millennial Incomes Are Comparable to Prior Generations
A new Pew study finds Millennial household incomes are higher today than they have been for every other comparable generation, except in the year 2000. Using the Pew data, Ernie Tedeschi finds Millennial household incomes today are comparable to past generations after adjusting for education. But such comparisons assume education is as productivity-enhancing today as it was in the past when America educated fewer people at the margin. Bryan Caplan, for example, ... Read More
New Study Shows 83% of Criminals Rearrested Within 9 Years
A 9-year Justice Department study shows 44% of released prisoners are rearrested within 1 year; 83% within 9 years. 77% of drug offenders are rearrested for non-drug related crimes including 34% for violent crime. On average, released prisoners are rearrested 5 times. ... Read More
Two charts show income inequality hasn’t risen as much as we’ve been led to believe
Two charts show income inequality hasn’t risen as much as we’ve been led to believe. ... Read More
Krugman’s Misleading Scandinavian Comparison
Paul Krugman wrote a misleading post comparing U.S. wages and productivity growth to Scandinavia without admitting that Scandinavia’s test scores are much higher than America’s. Comparing Scandinavia to Scandinavian-Americans instead of to Americans more broadly is a simple way to factor out the benefit of higher Scandinavian test scores. (If anything, Scandinavians with lower socioeconomic status immigrated to America.) On average, Scandinavian-Americans earn ... Read More
New Study Offers Worrisome News on Solutions to Global Warming
Some worrisome news from the Economist on global warming: “On October 19th, the International Energy Agency reported that doubling world GDP by 2040 would require only a small rise in energy demand if everyone adopted strict standards, like Japan’s for vehicle-fuel efficiency. … [According to their logic,] higher efficiency means less fossil fuel must be burned—and less planet-cooking gas belched—to power the global economy. But some economists are not so sure. [In] ... Read More
With $3-an-hour Mexican Labor, Why Should Capital Flow to Rural America?
With $3-an-hour Mexican labor, why should capital flow to rural America? Can rural America achieve the productivity needed to sustain high wages unless it exports labor to urban America? It doesn’t seem likely. ... Read More
