Medicine is Complicated, So Are Computers: You Can Get Price for iMac, But Not Ingrown Toenail

Health-care prices are a mishmash for lots of reasons, but one of the main ones is the way we pay for health care — you don’t pay the doctor, your insurance company does, an arrangement that gives at least two of the three parties involved a good incentive to obscure prices, so that the consumer has no idea how good or how rotten a deal he is getting while the insurers and hospitals attempt to game and swindle each other. Given the shocking and terrifying size of serious medical bills — my mother’s last stay in the hospital billed out at $360,000 -- the American health-care consumer, quaking in his paper hospital slippers, no longer even asks: “What does this procedure cost?” He only asks: “Does my insurance cover it?” No prices, no negotiation, no mystical coordination between producer and consumer — instead, maddening and expensive and often underhanded mediation by the insurer.

Medicine is complicated; computers are complicated, too, but you can call Dell or Apple or Best Buy or whomever and ask: “What does this sort of computer cost?” and you will receive an answer. And then, when you get to the store — miracle of miracles! — that will be the price. Computers are damned complicated to make, with programmers in the United States and India collaborating with Taiwanese microchip fabricators, Dutch LED manufacturers, Irish customer-support agents, etc. You can get a price on an iMac, but you can’t get a price quote on an ingrown toenail.

~"Priceless is Worthless" by Kevin Williamson in National Review (subscription required)

Thanks to Pete Friedlander.

Update: Full article here.

21 Things That Became Obsolete This Decade

PDAs, email accounts you have to pay for, dialup, getting film developed, pay phones, newspaper classifieds, landline phones (even 30-45% of the homeless have cell phones), etc. Link.

Related: Creative Destruction.

Christmas Shopping for a Camera: 2000 vs. 2009

Cost of a Nikon 3.0 megapixel camera in 2000: Twisty CoolPix 990 for $1000, $333.33 per megapixel

Cost of a Nikon 10.0 megapixel camera in 2009: CoolPix for $189.99 $189.99 (pictured below), $18.99 per megapixel

Bottom Line: The dollar cost per megapixel has fallen by 94.3% since 2000, from $333.33 in 2000 to $18.99 today.

See more here of "10 Obsolete Gadgets That Made Great Gifts in 2000" (HT to Juandos)

Markets in Everything: iTunes Gift Cards Selling on eBay for More Than Cash Value; "Gift Card Scalping"

What's going on here? The examples above of completed eBay auctions are just two of hundreds of examples of iTunes gift cards selling for more than their face value on eBay. Isn't this "gift card scalping"?

Christmas Shopping for a VCR/DVD: 1981 vs. 2009

Cost of a Sears VCR in 1981: $1389.88, or 187.3 hours of work (23.4 days or 4.7 weeks) at the average hourly wage of $7.42 (total private industries).

Cost of a Sears VCR/DVD combo in 2009: $74.99 or 4hours of work at the current average hourly wage of $18.74.

Bottom Line: If we paid the same price ("time cost") today for a VCR as in 1981 (187.3 hours at the average hourly wage of $18.74), a VCR today would cost $3,510. Or equivalently, consumers in 1981 actually paid the equivalent of $3,510 in today's dollars. Alternatively, the typical consumer today would earn enough money on a single day before lunch (4 hours) to purchase a brand new VCR/DVD player, and the typical consumer in 1981 had to work full-time for almost five weeks to earn enough money to purchase a VCR then.

This is the best holiday season ever, see Reason.tv video.

Another V-Sign of Economic Recovery: ECRI

NEW YORK, Dec 18 (Reuters) - A weekly measure of future U.S. economic growth continued to rise, reaching levels hit in the summer of 2008, while its yearly growth rate climbed toward recent record levels, a research group said on Friday, saying this reaffirmed its forecasts of smooth recovery into 2010. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 130.7 in the week ended Dec. 11 from an upwardly revised 130.2 the previous week (see chart above).

38 States Now Have Smoking Bans

MICHIGAN DAILY -- Governor Jennifer Granholm signed a bill that prohibits smoking in public areas statewide into law today, making Michigan the 38th state to enact such legislation.

MP: Of course, the article doesn't mention the 12 states without a smoking ban, and here's an example below of why I love Wikipedia, it took 30 seconds to find this. Also, Wikipedia was updated today to reflect the change in Michigan law that was enacted only yesterday.

WIKIPEDIA -- As of December 2009, 12 states have not enacted any general statewide ban on smoking in any non-government owned spaces: Alabama, Alaska, Indiana, Kansas, Kentucky, Mississippi, Missouri, Oklahoma, South Carolina, Texas, West Virginia, and Wyoming.

Hypocrisy Offsets Now Available for 15th United Nations Climate Change Conference (COP 15)

Copenhagen, Denmark: The National Center for Public Policy Research is showcasing the hypocrisy of the carbon-emitting travels of global warming activists at COP-15 in Copenhagen by offering conscience-clearing "hypocrisy offsets" to attendees (see sample above). The hypocrisy offsets parody carbon offsets sold and traded allegedly to allow people to live carbon-neutral lives. The hypocrisy offsets also highlight the insincerity of world-traveling, energy-guzzling COP-15 delegates.

"Many of those in attendance to press for additional commitments for carbon reductions traveled thousands of miles and used substantial amounts of carbon-emitting jet-fuel just to get to the conference," said David Ridenour, vice president of the National Center for Public Policy Research. "We are exposing the hypocrisy by offering them 'hypocrisy offsets' to alleviate their green guilt. As one who is skeptical of the necessity of draconian carbon cuts, I plan to do my part to ensure plenty of hypocrisy offsets are available. I'll refrain from reducing my own personal carbon footprint."

"Environmentalists are in Copenhagen demanding global limits on emissions, but they don't want to follow the very rules they are proposing for the rest of the world," said Amy Ridenour, president of the National Center for Public Policy Research. "Their participation may earn them some media coverage, but it is having no effect on an agreement. In fact, the United Nations mostly banned them from even entering the conference, so their voluntary contribution to carbon emissions -- emissions they insist imperil the planet -- from this unnecessary travel is a stunning act of hypocrisy. Because we know they must be feeling very guilty about what they've done, and in most cases intend to continue doing indefinitely, we invented hypocrisy offsets as a humanitarian act."

Watch this related video "Limos at the COP15 Copenhagen" (HT: Cafe Hayek)

Nov. Jobless Rate Fell in Almost 3 of 4 States

1. Thirty-six states and the District of Columbia recorded over-the-month unemployment rate decreases in November, 8 states registered rate increases, and 6 states had no rate change, the Bureau of Labor Statistics reported today.

2. In November, nonfarm payroll employment increased in 19 states and decreased in 31 states and the District of Columbia. The largest over-the-month increase in employment occurred in Texas (+17,300), followed by Ohio (+5,400), Georgia (+4,800), and Arizona and Iowa (+4,300 each). Alaska experienced the largest over-the-month percentage increase in employment (+0.5 percent), followed by Iowa (+0.3 percent).

Update on The "NYC Taxi Cartel"

NEW YORK (August 7, 2009) -- As Wall Street still wobbles under the pressure of a weak economy, one New York asset class stands firmly on all four wheels. Taxi medallions — required licenses fastened to the hoods of all New York City yellow cabs — have rocketed in value at a time when many investments have plummeted. The average rate in July for a corporate-licensed taxi medallion in the Big Apple was a record $766,000 — up 126% from $339,000 in 2004.

"It's an industry that has always gone up," says Andrew Murstein, president of Medallion Financial. "It has outperformed every index you can think of — the Dow, Nasdaq, gold, you name it."

In a ratio set by law, 40% of New York's 13,257 medallions — a number strictly controlled by the city — are designated for individual, as opposed to corporate, ownership. Individual owners are required to drive at least part time, while corporate owners have the option of hiring an agent to lease the medallion full time for up to $800 a week.

MP: That USA Today report was from July, and the "priciest piece of aluminum in NYC" - a taxi medallion to operate a single cab in NYC - has gone up another $13,000 since then, reaching a new record-high of $779,000 in November for a corporate medallion (see chart above, data here), almost double the average price of $391,000 just four years ago in November 2005. The average price for an individually-owned taxi medallion also reached a new record high in November at $579,000, a two-fold increase since the summer of 2004.

Membership in the "taxi cartel" certainly has its privileges: above-market returns (18.1% per year for corporate medallions and 15.7% for individual medallions, vs. -0.52% per year for the S&P 500 since 2004), see previous CD posts here and here.

Capitalism Is the Driver of Real, Sustained Growth

There’s an old saying: “Everyone’s a capitalist on the way up and a socialist on the way down.” People want it all—to reap the benefits of free markets, but be protected against any downside. Capitalism won’t abide. And that’s a good thing. It’s a system of inherent checks and balances, which can be swift and brutal during the pruning process. In rough times, we seem willing to sacrifice free markets’ benefits for perceived security from this process. Still, if free markets were restricted, what would happen to those checks? Subprime problems (or Bernie Madoff’s) were not revealed by regulators, but by markets. Note, politicians are human, too.

Capitalism and free markets are not ever-stable. They work precisely because they compel folks to take risks and seek to create excess value out of existing capital, in whatever form that might be. They’re examples of constant change and innovation. Change isn’t always comfortable—and much of it will fail—but when it moves society in a more efficient direction, society certainly becomes more profitable.

During crises, the balance always tilts toward government and away from capitalism. This doesn’t mean capitalism is done. But such things are always said in times like these. Government “solutions” can only carry the economy so far—it’s up to capitalism to drive real, sustained growth. That is, it’s up to the people who make an economy, not its turgid overseers.

~Fisher Investments Editorial Staff (12/26/2008)

MP: I posted this about a year ago, but it's a timeless message that is still as relevant today as last year, maybe even more so.

Another V-Sign of Economic Recovery: Philadelphia Fed Index Highest Since Apr. 2004, 4 1/2 Year High

PHILADELPHIA FED -- Activity in the region's manufacturing sector is expanding, according to firms polled for this month's Business Outlook Survey. Indexes for general activity, new orders, and shipments all remained positive this month. Indicative of improvement, the overall level of employment and average work hours among reporting firms increased this month. Overall, expectations moderated somewhat in December, although the forecast for employment improved slightly.

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 16.7 in November to 20.4 this month. The index has now remained positive for five consecutive months (see chart above, click to enlarge, data here).

MP: The 61.7 point improvement in the Philadelphia Fed Current Activity Index from -41.3 in February to +20.4 in December follows a pattern very similar to the last two recessions (see red circles in graph) and provides an additional V-sign indicator that we are now in a period of unmistakable economic expansion (see more here).

Chicago Wal-Mart Update II: Inexcusable

Only seven shopping days left till Christmas, and you know what that means: Head for the suburbs.

This year's holiday shoppers have shorter lists, and they're looking for bargains like never before. Industry surveys show that half or more of them are spending time and money at big-box discount chains. Can you say Wal-Mart? Consumers who are seduced by those ads for a $195 iPod Touch or a $299 Toshiba laptop will likely find their closest Wal-Mart outside the city limits, thanks to Chicago's labor unions.

This is doubly maddening if all you want for Christmas is a job. Since 2004, when a divided City Council voted to allow Chicago's first Wal-Mart, the economy has gone down, down, down, while efforts to bring in a second Wal-Mart -- and 500 new jobs -- have gone nowhere.

Employers aren't exactly lining up to come to town these days. The Chicago unions want jobs on their terms or not at all, and they're getting the latter. That's inexcusable.

~Chicago Tribune editorial

Markets in Everything: Cash for Gift Cards

Many consumers face a dilemma on what to do with unused gift cards. If you’ve ever received a gift card to a store you don’t particularly care for, you know this feeling. While there are options on the internet to sell or exchange gift cards with other gift card holders, many consumers are not comfortable with selling, exchanging, or buying gift cards from someone they don’t know. That is where GiftCardRescue.com comes in.

You can sell (for cash) or exchange your unused gift card directly with us. What’s more, when you exchange your gift card with us, we will send you a brand new gift card of your choice (which you select from our list of popular gift cards). This makes re-gifting of gift cards easy and more exciting. We also sell gift cards at discounts of up to 20% off.

Six Ways to Slash Your Health Costs

1) Cut prescription costs, 2) use retail clinics or Teladoc, 3) shop for diagnostic procedures and lab work (ask about cash rates and discounts), 4) medical tourism (including inside the U.S. at cash-only surgery centers like the Surgery Center of Oklahoma), 5) compare insurance options, and 6) become an empowered patient.

~Devon Herrick, NCPA

Of course, this is most relevant for those with HSAs or those who are spending their own money.

Outsourcing Santa

(Click to enlarge)

Santa's been "Bangalored."

From Reason.tv, Why This is the Best Holiday Season Ever: Better Stuff, Lower Prices

TIPS Derived Expected Inflation: About 2%

The spread between nominal 10-year treasuries (data) and 10-year TIPS (data) has increased to above 2% this week, up from almost 0% at the beginning of the year. But the current 211 basis point spread is still below the 250 basis point average during 2004, 2005, 2006, 2007 and the first half of 2008.  This measure of expected inflation (about 2%) is consistent with the market consensus inflation forecast from the latest WSJ survey of about 2% through the end of next year. 

Leading Indicators Rise for 8th Month to 2-Yr. High

The Leading Economic Index (LEI) increased for the 8th straight month to 104.9, the highest level since the summer of 2007, and the first time in more than five years of 8-consecutive monthly increases (since early 2004).

Details:

The Conference Board LEI for the U.S. increased again in November. The interest rate spread, initial unemployment claims (inverted), average weekly hours and housing permits made large positive contributions to the index this month, more than offsetting negative contributions from the index of supplier deliveries and the index of consumer expectations. The six-month growth in the index has slowed somewhat in recent months -- to 4.7 percent (about a 9.6 percent annual rate) in the period through November, but it remains substantially higher than the increase of 1.2 percent (a 2.4 percent annual rate) from November 2008 to May 2009. In addition, the strengths among the leading indicators have remained widespread in recent months.

Chicago Wal-Mart Update

Chicago Sun-Times editorial:

The time for a South Side Wal-Mart has come. Unemployment in the Chicago region hovers above 11 percent, with higher rates among blacks. Even Mayor Daley, who hasn't pushed hard for Wal-Mart for fear of alienating the unions, is publicly going to bat for the superstore. It's now up to Ald. Edward M. Burke to make it happen.

An ordinance to allow for a long-awaited Chatham Wal-Mart Supercenter, which sells groceries, has languished for months in the City Council Finance Committee, which Burke chairs. This is just the latest delay in a five-year battle by Ald. Howard Brookins to get a Wal-Mart at a former industrial site at 83rd and Stewart.

Burke, an unabashed union supporter, has said Wal-Mart is welcome in Chicago, so long as it hammers out a "living wage" compromise with union leaders.

In a perfect world, we'd like a living wage agreement, too. Too bad that's not the world we live in. We live in a world where South Siders need fresh groceries, where South Siders need the amenities available at Wal-Mart, where South Siders need jobs.

And the jobs don't exactly pay the slave wages Wal-Mart opponents suggest. At Chicago's only Wal-Mart, in Austin, the average hourly wage, excluding managers, is $11.30.That Wal-Mart created 400 permanent jobs and, since opening three years ago, $16.3 million in sales tax revenue.

Who is Ald. Burke to say no to Chicagoans who want these jobs? The Chatham Wal-Mart proposal deserves a vote in City Council, and Burke now holds the key. His committee should move quickly to hold hearings on the proposed Wal-Mart and then move forward with a vote.

Each day that passes is one extra day without jobs and groceries for deserving South Siders. The time for a South Side Wal-Mart has not only come -- it's also way past due.

Jobless Claims (4-Week Moving Average) Fall for 15th Week to 15-Month Low

The Department of Labor reported today that unemployment claims (4-week moving average) fell to 467,500 for the week ending December 12, which is the 15th consecutive weekly decline and the lowest level since the week of September 20, 2008, almost 15 months ago (see chart above).

Median CPI 50% More Accurate (vs. CPI) at Gauging Future Inflation, Suggests Inflation Not a Problem

According to a report just released by the Federal Reserve Bank of Cleveland, the median Consumer Price Index was virtually unchanged at 0.0% (0.2% annualized rate) in November. The median CPI is a measure of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers was increased 0.4% (4.9% annualized rate) in November. The CPI less food and energy was virtually unchanged at 0.0% (0.4% annualized rate) on a seasonally adjusted basis.

Over the last 12 months, the median CPI rose 1.3% (see chart above), the CPI rose 1.8% (first positive 12-month change since February 2009), and the CPI less food and energy rose 1.7%.

According to the Cleveland Fed:

Federal Reserve policymakers are always on the lookout for inflation (i.e., a general increase in prices), and they use a variety of measures to gauge inflation trends. One such measure is the Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS).

The CPI measures changes in the prices of a number of goods and services—things like gas, rent, groceries, and clothing. However, the prices of some of these items—such as food and energy—are volatile; they can change a lot from month to month, based on supply and demand. So the BLS also publishes a measure of “core” prices that excludes food and energy prices. Researchers at the Federal Reserve Bank of Cleveland and The Ohio State University devised a different way to get a “core CPI” measure—or a measure of underlying inflation trends. It’s called the Median CPI.

To calculate the median CPI, the Federal Reserve Bank of Cleveland looks at the prices of the goods and services published by the BLS. But instead of calculating a weighted average of all of the prices, as the BLS does, the Cleveland Fed looks at the median price change—or the price change that’s right in the middle of the long list of all of the price changes. According to research from the Cleveland Fed, the median CPI provides a better signal of the inflation trend than either the all-items CPI or the CPI excluding food and energy.

Here's a video explaining the median CPI:


Bottom Line: Historically, the median CPI has been 50% more accurate at gauging future inflation than the traditional CPI (based on the Cleveland Fed's research), and the median CPI is now suggesting that rising inflation is not an imminent problem. In fact, the decrease in November's median CPI to 1.3% from 1.45% in October was the 14th consecutive monthly drop in median CPI inflation (see chart above).

Video Roundup

1. Dan Mitchell of the Cato Institute explains why Deficits are Bad, but the Real Problem is Spending.

2. Reason.tv video "Red, White, & Sacrebleu: How American Wines Shocked the World."

3. Reason.tv video with Nick Schulz and Arnold Kling discussing their new book "From Poverty to Prosperity."

Ticket Scalping = Unmet Demand and Can Easily Be Avoided: Raise Prices, Increase Supply of Tickets

LAS VEGAS -- Garth Brooks elicited several lofty promises when the country megastar agreed to unretire for an exclusive gig at Steve Wynn’s eponymous Vegas resort. None, however, was loftier than this: Wynn would wage an unprecedented all-out war to prevent even a single attendee from getting in using a scalped ticket. “I’m gonna break them of the habit of thinking they’re gonna sell Garth Brooks tickets for $700 or $1,000,” Wynn told Portfolio.com. “That ain’t gonna happen, even if it means a lot of people who bought tickets are having trouble getting into the show.”

And yet, as the first of a planned 300 Garth Brooks shows over the coming five years parts its curtains tonight, the Vegas and broader show-ticket industry looks on in morbid fascination to see how well Wynn delivers—and what sort of histrionics result. Brooks set the prices at a flat $125 to “make sure the fans can come see me,” he said at an October press conference. That price is uniform regardless of where in the 1,500-seat showroom a guest sits.

The Wynn antiscalping effort has been complex and draconian. Tickets for his first 20 shows—he’ll do four shows 15 weekends a year through 2014—sold out within hours of going on sale on October 24. After that, buyers received calls and letters informing them they were required to inform the Wynn Las Vegas immediately as to who would attend with them. If the tickets were to be a gift, buyers had just a couple of days to tell the box office and fill out a form vouching for that.

Buyers were also warned there would be no refunds, the purchaser would have to bring the credit card used, as well as every attendee to pick them up on the day of the show. Each guest would receive a wristband and hand stamp they could not remove until they entered the venue. All show-goers would have to show photo ID at the door along with their tickets.

MP: If Garth Brooks: a) really wants to be sure his fans can come and see him perform, and b) prevent ticket re-selling, he and Steve Wynn could make several adjustments to the supply of tickets, which they have currently under-supplied relative to the demand. They could either: a) add more concert dates, and/or b) move the shows to a larger venue, both of which would contribute to satisfying the unmet demand, which then creates a market for re-selling. And of course, they could also easily help to reduce or eliminate ticket re-selling by raising the price above $125.

By underpricing and under-supplying the tickets relative to the demand, Brooks and Wynn have themselves created an economic environment that leads directly to a secondary market for tickets priced above face value. They can erect convoluted and costly barriers to combat the natural economic forces that they themselves created, but they are learning an important economic lesson: the laws of supply and demand are not optional.

Inflation Update

1. Thanks to Scott Grannis for this thoughtful response on his Calafia Beach Pundit blog to this CD post about annual M2 growth falling recently to 4.5%, the lowest growth since late 2005, and what that means for future inflation. Scott makes the supply-side case for rising inflation:

One of the key insights of supply-side economics is that free markets are excellent sources of real-time indicators that can be used to tell, for example, whether monetary policy is inflationary or not. It's rather simple: if there are too many dollars in the system, then we would expect to see some or preferably all of the following: a) the value of the dollar falling relative to other currencies, b) gold prices rising, c) commodity prices rising, d) the yield curve steep or steepening, e) credit spreads tightening (since easy money is great for debtors and should reduce default risk), f) inflation expectations as embodied in TIPS prices rising, and g) currency growth falling (currency becomes a hot potato when inflation rises, so the demand for currency should fall). All of these are symptomatic of a situation in which the supply of money exceeds the market's demand for money.

Since we have been seeing most or all of these rising inflation symptoms for the past year or so, that's why most supply-siders have been predicting rising inflation even though M2 growth has slowed down rather remarkably (M2 growth is essentially zero over the past six months). Caveat: this is a highly contentious issue about which reasonable men can and do disagree.

2. Speaking of reasonable men/economists disagreeing, the consensus forecast from the most recent (Dec. 4-7) WSJ survey of 52 professional economists seems to disagree that rising inflation will be a problem in 2010 (see chart below). The consensus forecast is for CPI inflation to be about 2% through next year, falling to 1.8% by the end of 2010.

If that is the case, annual inflation in 2010 would be the lowest since the 2.04% inflation in 2003 (December 2002 to December 2003), except for 2008, which experienced almost no inflation (-0.08%). Even Brian Wesbury and Bob Stein are predicting inflation of "only" 3.5% by December 2010, just slightly above the 2.8% average since 1990.

Bottom Line: The case for rising inflation in 2010 still seems somewhat unconvincing to me, and I guess I'll go on record as an "inflation skeptic."

M2 Money Growth Lowest Since 2005

Many economists and analysts are getting more and more concerned now about inflation, including Larry Kudlow, Brian Wesbury and Bob Stein, here's the latest from Brian and Bob: 

The Federal Reserve is twiddling its thumbs waiting for consistent signs of falling unemployment before it starts raising interest rates. The Fed’s theory is that inflation won’t show up until the labor market gets a lot stronger than it is today. But inflation isn’t just arriving early, it’s bashing down the door.  With the economy recovering faster than the Federal Reserve anticipated, the easy money policy it continues to hold onto is a dangerous problem. With each passing month the Fed is getting further and further behind the curve.

MP: And yet the money supply figures, at least M2 growth, don't necessarily indicate any inflationary pressures.  The chart above displays year-to-year M2 growth (data here) back to January of 2005, and shows that M2 growth has been falling since the first of the year when it peaked above 10%, and now the most recent growth rate of 4.5% through the end of November is the lowest annual growth in M2 since December of 2005.   What gives?  Wouldn't M2 money growth have to be much higher to fuel the kind of inflation many are worried about?

Pure Self-Interest Promotes Energy Efficiency

NY Times -- President Obama came to a suburban Washington Home Depot store Tuesday to push a program -- helpfully called “Cash for Caulkers” -- that is aimed at helping homeowners to make their homes more energy efficient. “I am calling on Congress to provide new temporary incentives for Americans to make energy efficiency retro-fit investments in their homes and we want them to do it soon,” Mr. Obama said.

Mr. Obama wants Congress to look into consumer rebates for households that make energy efficient upgrades to their homes. He said homeowners could get back their investments in energy efficiency in two to three years.

MP: Department of Energy data (here and here) show that household consumption of energy (in 1000s of BTUs per square foot) declined by almost 33% between 1980 (65) and 2005 (43.7), and household expenditures on energy per square foot (in 2009 dollars) declined by more than 40% between 1980 ($1.39) and 2005 ($0.83, see top chart above), suggesting that American homes are becoming more and more energy efficient all the time. 

Likewise, there have been dramatic increases in energy efficiency for standard household appliances since 1980, according to data from the Association of Home Appliance Manufacturers (see bottom chart above). For a home refrigerator in 1980, its energy factor (EF, a standard measure of overall energy efficiency for appliances) was 5.59, and by 2008 the EF for refrigerators had increased almost three-fold to 15.50, for a 177.3% improvement in energy efficiency. The other standard home appliances in the chart above also had significant improvements in energy efficiency, from a 41.5% increase for the room air-conditioner, to a 91.4% increase for the dishwasher.

Bottom Line: These significant increases in energy efficiency for both our homes in general and also for the appliances that we have in our homes have happened gradually, but steadily, for many decades, and many of these improvements in energy efficiency probably took place without any government intervention, stimulus or rebate programs.  The incentive to save money ensures that there will always be an incentive to become more energy efficient out of pure self-interest, since increased energy efficiency translates directly into monetary gain. 

Listening to Obama, one might get the impression that we have become less and less energy efficient over time, and we energy gluttons now need nanny state hectoring to become energy misers.  The truth is just the opposite - we have become more and more energy efficient over time, not less, and here's another example showing that today's economy is more than twice as energy efficient as the economy in 1970, measured by "Energy consumption per real dollar of GDP (data here):
    

See a related article in National Review Online by Nick Schulz and Arnold Kling, who predict that:

We might see increased efforts to inflate a green bubble in the coming years as the Obama administration sees renewable energy as a way of driving down the unemployment rate. In a speech last week at the Brookings Institution touting proposals for job creation, President Obama urged Congress to “consider a new program to provide incentives for consumers who retrofit their homes to become more energy efficient, which we know creates jobs, saves money for families, and reduces the pollution that threatens our environment.”

More "Jugaad" From the "There, I Fixed It" Blog

Link.

HT: BlogDog

The Universal, Entrepreneurial Concept of "Jugaad"

Nick Schulz at The Enterprise blog points today to a news report featuring a Legatum Institute study about India's entrepreneurial sector, and a separate related blog post, which both discuss the concept of "jugaad," a Hindi word describing entrepreneurial ingenuity in the face of adversity, equivalent in English translation to "making do," "jury-rigging," or using a "duct-tape arrangement." 

According to the "Our Delhi Struggle Blog," the concept of jugaad is:

Best illustrated by a common rural sight that people actually refer to as “a jugaad": a homemade vehicle made by cobbling together a wooden cart with the kind of diesel water pump farmers use for irrigation (see photo below).  Fitted with makeshift steering and braking mechanisms, these jugaad vehicles are used for everything: for transporting people from one village to another, with dozens of riders crammed together tighter than the bundles of sugarcane they are also used to transport; for trips to regional markets; and for transporting the pump itself. Farmers share or rent these pumps, and this arrangement lets the pump actually transport itself to wherever it’s needed next. These vehicles reflect the true spirit of innovation in rural India.

Here's another fine example of Indian jugaad ingenuity:

Of course, jugaad is not unique to India and is a universal philosophical outlook that applies whenever entrepreneurs are trying to solve problems with what they have, not with what they wish they had. For example, here are some fine examples of American "Redneck-jugaad," see more pictures here and here:

Christmas Shopping, Stereo System: 1958 v. 2009

In 1958, the “best stereo sound equipment" Sears had to offer was advertised for sale in its Christmas catalog for $84.95 (pictured on left above), boasting that “You’ll be amazed at the ‘living sound’ you’ll hear on this newest development in portable phonographs. Four tubes per rectifier. Hear every note, every shading of tone.”

I doubt anybody today would be too amazed at the sound quality of that 1958 state-of-the-art stereo equipment, and nobody would trade his or her iPod for that system, especially considering that the "time cost" of today’s iPod (12.51 hours of work at today’s average hourly manufacturing wage of $18.59 to earn enough income [ignoring taxes] to purchase a $229.99 iPod at Wal-Mart ) is almost 71 percent cheaper than Sears’ best stereo equipment in 1958 for (42.9 hours of work at the average wage of $1.98 per hour to earn enough income to purchase the $84.95 stereo in 1958).

Read more here at the Enterprise Blog. 

Phoenix Home Sales Increase for the 10th Straight Month, Median Prices Increase for the 6th Month

1. A total of 9,153 new and resale houses and condos sold in the Phoenix metropolitan area in October, up 3% from September and up 20.1% from a year ago, according to DQNews. Total home sales have increased on a year-over-year basis for 10 consecutive months, while total resales (no new homes) have risen on an annual basis for 16 consecutive months. October’s total sales were the highest for that month since October 2006, when 11,584 homes sold.

2. The region posted its sixth month-to-month increase in the median sale price, which got a boost from lower concentrations of foreclosed homes selling in recent months. In October, 54% of the houses and condos that resold had been foreclosed on in the prior 12 months, down from 56.5% in September and the lowest since such foreclosure resales were 49.8% in September 2008. Foreclosure resales hit a high of 66.2% of all resales this March. The median price in October for all new and resale houses and condos combined was $138,000, up 0.7% from $137,000 in September but down 21.1% from $175,000 a year ago.

Christmas Shopping for a TV: 1958 vs. 2009

Click to enlarge.
In 1958, American holiday shoppers paid $269.95 for Sears’ “best 24-inch console TV” (Update: black and white) in its 1958 Christmas catalog (see photo above on left), or it would have taken 136.34 hours of work at the average manufacturing hourly wage then of $1.98 to earn enough income (ignoring taxes) to purchase the TV.

Today you can purchase a Sansui 26-inch widescreen LCD high-definition TV (see picture on right) on the Sears website for about $350 (or chose from the several hundred other TVs available), which would be a “time cost” today of only 19.03 hours of work at today's average hourly wage of $18.39, and this represents an 86 percent reduction in the cost compared to the 1958 TV. 

Alternatively, it would be slightly less costly for a holiday shopper to purchase seven 24-inch TV sets today (133.21 hours of work at the average hourly wage) than it would have been for a 1958 holiday shopper to purchase just a single 24-inch TV (136.34 hours of work at the average hourly wage). 

College Admissions: Discrimination Against Women

WASH POST -- Civil rights investigators will soon begin reviewing admissions data from a sampling of colleges in the Washington region to determine whether, after decades of progress toward sexual equity, female students have become so plentiful in higher education that institutions have entered a new era of discrimination against them.

Women apply in greater numbers than men to most colleges in the D.C. area. They make up at least three-fifths of the applicant pool at a number of schools, including the College of William and Mary in Virginia, Goucher and St. Mary's colleges in Maryland and American University in the District.

Anecdotal evidence suggests that some schools are favoring men by admitting them at higher rates than women to try to preserve a male-female balance on campus. Conventional admissions-office wisdom dictates that colleges dominated by either sex are less appealing to applicants in general.

William and Mary admitted 43 percent of its male applicants and 29 percent of its female applicants in fall 2008, according to its institutional data. Vassar College in New York's Hudson Valley admitted 34 percent of the men who applied and 21 percent of the women. Swarthmore College in Pennsylvania admitted 19 percent of male applicants and 14 percent of female applicants. Wesleyan University in Connecticut admitted 30 percent of the men and 25 percent of the women. Female applicants far outnumbered male candidates at all four schools.

Over the past 40 years, women have gone from underrepresented minority to overrepresented majority on U.S. college campuses, where they outnumber men by a proportion approaching 60-40 (see chart above). Barriers that kept women from college have been swept away, and scholarly focus has shifted to the impediments facing men, who are more likely to drop out of school and more apt to go into the military, manual-labor jobs or prison.

2009 Worldwide Bull Market Rally: Stock Markets Gain 60%, $17 Trillion in Value Since Early 2009

The value of world stock markets increased by $1.6 trillion in November (data here) to $45.4 trillion, the highest level for total world stock market capitalization since August 2008 (see chart above).  The world's stock markets have increased in value eight out of the last nine months, and world markets have gained $17 trillion in market capitalization since the February bottom of $28.7 trillion, representing almost a 60% increase this year.   

Over the last year, 51 out of the 53 stock markets tracked by the World Federation of Exchanges have registered positive gains in market capitalization, and some stock markets have more than doubled in value since November 2008 including Brazil (+119%), India (+121%), Indonesia (+145%), and China (+146%). 

MP: Add this as another V-sign of economic recovery here and around the world, see Scott Grannis for his growing list of V-signs: strong retail sales growth, car sales, employment and the ISM index.

New Homes Built Today Compared to the 1970s: More Square Footage, Baths, Garages, Central A/C

In 1973, slightly more than half (52%) of all new homes built had either just a single garage (17%), a carport (13%) or no garage (22%), and only 48% of new homes had garages for 2 cars or more.  In each of the last ten years, 80% or more of new homes built have garages for two cars or more, with a slight decrease over the last few years (see chart above, Census Bureau data here). 

In 1973, 60% of new homes were built with two or more bathrooms, and that percentage increased steadily over the years and reached a peak of 96% in 2005 before declining gradually to 93% by 2008 (data here).

Although not presented here graphically, Census Bureau data show that fewer than half (49%) of  new homes in 1973 were built with central air-conditioning, and by 2004 the percentage of homes built with air conditioning increased to 90% (data here).
 
Bottom Line: A generation ago it was fairly common for new homes to be built with a single garage, single bathroom and no air conditioning, and today those types of new homes have become extinct.  What are most common today are new homes with two or more bathrooms, two-car garages or bigger, central airconditioning, and 50% more square footage than new homes in the early 1970s (data here).