Do Ethical People Finish Financially First or Last? December 28, 2017
It is almost Christmas time and the song “Santa Claus is coming to town” keeps playing over and over. For me the key lines of this ear-worm are “He knows if you’ve been bad or good so be good for goodness sake.” The song clearly states doing the right thing leads to more gifts on Christmas day. I have been puzzling over these lyrics for years and wondered if the lines are true. Outside of Christmas does being ethical and honest lead a person to riches or poverty? While the debate has lasted a long time, only recently have actual data been gathered that can answer the question. My recently published analysis contained results that surprised me; only a few ethical and unethical acts were associated with financial changes. Continue reading
Why does the price of turkeys fall just before Thanksgiving? November 20, 2017
Thanksgiving is a great U.S. holiday during which people consume huge quantities of turkey, stuffing, cranberry sauce and pie. One of the stranger things about this holiday, however, is that a few days before everyone starts cooking, whole turkeys are suddenly discounted by supermarkets and grocery stores. Continue reading →
GOP plan to tax college endowments like Yale’s and Harvard’s would be neither fair nor effective. November 8, 2017
Tucked away in the recently announced GOP tax bill is a small item you may have missed: a new tax on university endowments. As I have spent decades working in higher education, the proposal immediately piqued my interest. Colleges create endowments by raising funds from alumni, companies and other donors, invest the money in stocks, bonds and other assets, and use the returns to fund student aid programs, professors’ salaries and any other expenses needed to run a college. Republicans want to slap a 1.4 percent tax on certain endowments’ investment income, also known as their returns. Continue reading →
Puerto Rico – you don’t count……to the U.S. government. October 25, 2017
Hurricanes Irma and Maria devastated Puerto Rico in September destroying homes, crops and communications. Many weeks later, less than 20 percent of the electricity has been restored, and no one really knows when the rest of the island will regain power. How much did the devastation caused by these storms on Puerto Rico impact key U.S. mainland indicators like GDP, unemployment and inflation? The answer might surprise you; not at all. Continue reading →
Why we should bring back the $500 note and other big bills. October 20, 2017
A world without cash seems wonderful at first glance since it is convenient and fast. You don’t need to withdraw dollars or euros ahead of time. You don’t have to worry about money being lost or stolen. Paying for things with your phone is a breeze. Many countries around the world are steadily shifting away from cash. Canada, the United Kingdom and Sweden have already largely embraced a cashless society. The U.S. is also steadily making the move, with people holding smaller amounts of cash. Continue reading →
Richard Thaler Wins the 2017 Economics Nobel Prize. October 9, 2017
The 2017 Nobel Prize in economics was won by the University of Chicago’s Richard Thaler. The Royal Swedish Academy of Sciences gave the prize “for his contributions to behavioural economics,” which is the integration of economics with psychology. The award was not a total surprise since Thaler’s name was floated earlier on the list of potential winners. Continue reading →
Cincinnati Ohio and P&G’s Board Fight. October 3, 2017
On October 10th Proctor and Gamble, nicknamed P&G, is holding a shareholder meeting to elect a new board of directors. This vote has the potential to dramatically impact Cincinnati, Ohio. Most corporate shareholder meetings are boring affairs that rubber stamp management’s slate of candidates. Not this one. Nelson Peltz, a Wall Street billionaire, is spending huge sums of money asking P&G’s shareholders to vote the white ballot. Voting white will put him on the board and give him some control. P&G is spending equally large sums to convince shareholders to vote the blue ballot. The blue ballot will keep Peltz off. Continue reading →
Is it me or are there more disasters in the US? September 8, 2017
Is it just me, or do you also think the number of major natural disasters is increasing each year? Disasters make news. Are they just being over-hyped by the onslaught of 24/7 reporting? The U.S. government’s National Oceanic and Atmospheric Administration (NOAA) actually maintains a website that answers this question. NOAA’s list of billion dollar weather and climate disasters goes back to 1980 and records the date, place, deaths and total cost. Since 1980 there have been 212 disasters, which NOAA calculates have a combined cost of over US$ 1.2 trillion. Continue reading →
The penny may be worthless, but let’s keep it anyway. August 24, 2017
There has been a growing war on cash in an attempt to curb terrorism and tax evasion. Much of the focus has been on abolishing large bills, such as the decision to eliminate the €500 note from circulation. However, politicians are also targeting smaller forms of money for elimination. U.S. Senators John McCain and Mike Enzi introduced legislation in March 2017 to eliminate minting of pennies and switch the dollar from paper to a coin only. Continue reading →
How Economics Helps You Save Money When Traveling Internationally. July 28, 2017
The number of international travelers is soaring. Many travelers need different currency as they arrive in new countries. In the past, travelers using an ATM, credit or debit card were simply charged for purchases and withdrawals in whatever currency the locals used. For example, U.S. travelers to France were charged in Euros when they used their credit card in Paris. Recently, instead of being simply charged in the local currency many travelers are being asked if they want to pay in their home currency. Companies offering the service call it “dynamic currency conversion.” For example, some U.S. travelers to France are now asked if they want to complete transactions in dollars. Continue reading →
How Trump’s nominee for the Fed could turn central banking on its head. July 25, 2017
President Donald Trump on July 10 nominated Randal Quarles to be one of the seven governors of the Federal Reserve System, the central bank of the United States. Before I get to Quarles and his qualifications, it’s important to understand the Fed and what it does. Its decisions are vital to every person on the planet who borrows or lends money (pretty much everybody) since it has enormous influence over global interest rates. Its board of governors also influences most other aspects of the global financial system, from regulating banks to how money is wired around the world. Continue reading →
Four Key Facts about Fireworks. June 29, 2017
The 4th of July is a day for many people of parades, barbeque and of course fireworks. The tradition got its start when the founding fathers met in Philadelphia to write and sign the Declaration of Independence. The day after the Continental Congress voted for independence, John Adams, the future U.S. president, wrote to his wife Abigail. At the end of his letter he stated that Independence day “ought to be solemnized with pomp and parade, with shews, games, sports, guns, bells, bonfires and illuminations from one end of this continent to the other from this time forward forever more.” One year later in 1777 Philadelphia had fireworks, which Adams called “illuminations,” plus a parade commemorating Independence Day. Since the 4th is so closely associated with fireworks here are four key points to talk about between explosions. Continue reading →
Will Regulating Fast Food Restaurants Really Help Poor People? June 14, 2017
Eating fast food is frequently blamed for damaging our health. It is not the healthiest type of meal since it is typically high in fat and salt. Because of this some government officials have considered regulating parts of the fast food industry to improve public health and reduce health inequalities across society. Regulating fast food locations to improve health among low income Americans rests partly on a key assumption: that fast food is primarily eaten by poor people, who cannot afford nutritious but more expensive food. Mark Bittman in the New York Times, summed it up nicely: “The ‘fact’ that junk food is cheaper than real food has become a reflexive part of how we explain why so many Americans are overweight, particularly those with lower incomes.” Our recently published research examined this assumption Continue reading →
When people leave Ohio, where do they go? May 24, 2017
A few months ago newspapers in Columbus and Dayton trumpted stories with headlines like “More People Moving Out of Ohio.” Both stories relied on data from large moving companies. While data from United Van Lines and Atlas Van Lines is interesting, relying on moving companies for migration information presents a biased view of migration. Continue reading →
Census director’s resignation could affect control of Congress after 2020. May 14, 2017
John H. Thompson, the director of the U.S. Census Bureau, just resigned amid a funding fight over the 2020 Census. Since it comes at the same time that the president fired the director of the FBI, why should anyone care about the resignation of just another Washington “bean counter”? This bean counter, whose name is likely unfamiliar to the vast majority of Americans, is actually one of the most important people in determining whether Democrats or Republicans control Congress. The census has a significant impact on political representation and how federal money is distributed. Moreover, how hard the director fights for more funding helps determine the accuracy of the census. Continue reading →
Is The Trump Individual Tax Cut The Biggest Ever? April 26, 2017
President Donald Trump has long been known for his fondness for superlatives when describing his projects and policies. His administration’s proposal for a tax cut is certainly no exception. In a recent interview with the Associated Press he declared: “It will be bigger, I believe, than any tax cut ever. Maybe the biggest tax cut we’ve ever had!” Continue reading →
Update for 2017 on the “Cost of Going to the Prom” April 17, 2017
In both 2014 and 2015 I wrote about the cost of going to the Prom. I found the results surprising. The cost of going to the prom from 1998 to 2015 was going up much slower than the cost of inflation. The findings appeared in outlets like the Washington Post, US News and The Conversation. It is now two years later. What has happened since 2015 to the cost of attending the prom? Continue reading →
Taxes: Where the Federal Government gets its money is not where you think. April 13, 2017
It is almost April 15th; the time many people in the U.S. file their income taxes. Shocking as it may seem, personal income taxes don’t provide most of the federal government’s revenue. Since World War II personal income taxes have consistently provided less than half of all the money taken in by Washington. Just as shocking has been the change in the source of federal revenues over time. The official statistics show in the 1940s and 1950s corporations picked up a major share of supporting the federal government. Today, it is taxes on workers. Social security and Medicare taxes are now four times more important in providing revenue for the government than they were in the mid-1940s. Continue reading →
Why Some People and Businesses Are Happy About Rising Interest Rates. March 15, 2017
The Federal Reserve is expected to lift short-term interest rates at the close of its two-day meeting today and signal that more hikes are to come over the course of the year. Numerous commentators have focused on who is hurt by rising rates, particularly those with lots of floating rate debt, such as a credit card balance, or anyone in need of a loan. Not everyone, however, is negatively affected by rising rates. There are some individuals and businesses cheering the Fed on as it pushes up rates, including savers, people traveling abroad and foreign exporters and businesses with large cash balances. Continue reading →
What is the Council of Economic Advisers and Does it Really Matter? February 10, 2017
When President Donald Trump formally announced his Cabinet, one of the surprises was that the list of 24 Cabinet-level officials did not include the chair of the Council of Economic Advisers (CEA). There is no formal requirement that an economic adviser be part of the Cabinet. However, Barack Obama started a new trend by appointing the last four council chairs as part of his Cabinet. Being part of the Cabinet is important because it ensures economic as well as political considerations are part of presidential decisions. Continue reading →
Why Wall Street’s Dow 20,000 is totally meaningless. January 25, 2017
The Dow Jones Industrial Average just broke 20,000 for the first time. Traders and investors cheered this historic high of the world’s most famous stock market index, which is composed of 30 of the biggest and best-performing American companies and is frequently used as a barometer of the strength of the economy. Continue reading →
What Has Happened to Maternity Leave Over Time? January 23, 2017
The recent presidential campaign reminded us that the U.S. is one of only a handful of countries that doesn’t require companies to provide paid maternity leave. Maternity leave is important. One of the key reasons is because medical researchers have shown overwhelmingly positive effects when parents are able to spend time with their newborn children. Continue reading →