Here’s some more conflicting data for you.
The BLS has been reporting unemployment claims pretty level for the year … but increasing lately.
Defying gravity (and logic), the unemployment rate has going down … an inverse relationship.
Hmmm.
Magic?
Unemployment claims up, unemployment rate down … huh?
October 7, 2012Piling on: New Yorker cover says it all …
October 6, 2012Things are bad when you’re a liberal and the New Yorker turns on you …
Maybe Clint Eastwood was prophetic …
Nappers: Plop down anywhere with an Ostrich Pillow.
October 5, 2012Architecture and design studio Kawamura-Ganjavian has announced the innovative Ostrich Pillow – essentially a combination pillow & hat that lets would- be nappers kick back or plop down wherever they may be.
The pillow features holes for your head and hands, and “has been designed to allow you to create a little private space within a public one.”
Check out the video …
You just can’t make this stuff up …
Thanks to JNH for feeding the lead
Encore: “It is important not to read too much into any one monthly report”
October 5, 2012… unless the data is good, that is.
Team Obama’s victory lap re: last month’s favorable jobs report was unexpected (<= sarcasm), since they have said repeatedly:
“It is important not to read too much into any one monthly report”
Below is an encore post … a stroll down memory lane …
* * * * *
What are you going to believe, the facts or our rhetoric?
Reported by Chris Moody of Yahoo News …
When the Bureau of Labor Statistics announced the nation’s latest national employment last week, the Obama administration stressed that people should not “read too much” into the data.
Mitt Romney’s campaign pounced, and flagged the fact that the White House has repeated that same line nearly every month since November 2009.
See below for the roundup of articles from WhiteHouse.gov that Romney’s campaign posted on its site. In many of the posts, the authors for the administration do acknowledge that they repeat themselves:
June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”
May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”
April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”
March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK:)
February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”
January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.”
December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.”
September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.”
October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.”
September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.”
July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.”
August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”
June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”
May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.”
April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”
March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”
January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”
November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.”
In other words, it’s important not to read too much into the Obama administration’s past 3-1/2 years of performance.
So much for accountability …
Thanks to SMH for feeding the lead
If you missed the debate …
October 5, 2012
Here comes the taxman … BOOM!
October 5, 2012Great analysis published this week by the non-partisan Tax Policy Center that details the potential impacts if the Bush (and Obama) tax cuts are allowed to expire at the end of the year.
The entire report is worth reading if you’re in the 53% who do pay Federal income taxes … or if you’re at the top earning end of the 47% – since you’ll get banged, too.
According to the TPC, there will be different effects on households at different income levels:
For most households, the two biggest increases would be the expiration of the temporary cut in Social Security taxes and the expiration of the 2001/2003 tax cuts.
- Households with low incomes would be particularly affected by the expiration of the credits expanded or created by the 2009 stimulus.
- Households at the highest income levels would be particularly affected by expiration of the 2001/2003 tax cuts that apply to upper income levels and by the new health reform taxes.
- Upper middle-income households would be particularly affected by the expiration of the AMT patch.
- In addition to raising average tax rates, the fiscal cliff would substantially raise marginal tax rates. The average marginal tax rate would increase by about 5 percentage points on wages and salaries, by about 5 percentage points on interest income, by about 7 percentage points on long-term capital gains, and by more than 20 percentage points on qualified dividends.
* * * * *
Potential Stock Sell-off
One implication of increasing marginal tax rates is that some investors would have an incentive to sell appreciated stocks, bonds, and other assets before the end of the year, if they believe the capital gains rate will go up as scheduled and then remain in place for tax year 2013.
That is exactly what happened following the enactment of the Tax Reform Act of 1986, which increased the top capital gains tax rate from 20 percent to 28 percent.
Capital gains realizations almost doubled in 1986 and then fell back in 1987 as investors rushed to take advantage of the soon-to-expire 20 percent rate.
Similar behavior is likely this year unless investors believe that the scheduled tax increases will be averted.
* * * * *
In summary: Ouch.
Teachers making millions of dollars … don’t I wish
October 5, 2012Punch line: Here’s an angle … An online lesson-plan marketplace allows teachers to make thousands (or millions!) selling lesson plans to other teachers.
Anybody want to buy a PVP syllabus?
* * * * *
Excerpted from businessweek.com’s “How a Teacher Made $1 Million Selling Lesson Plans”
Deanna Jump is not a trust fund baby. She never married into money and she has never won the lottery. But in the past year-and-a-half, the 43-year-old kindergarten teacher has earned more than $1 million. Her unlikely strategy: selling catchy kindergarten lesson plans to other teachers.
Jump is just one of 15,000 teachers currently marketing their original classroom materials through the online marketplace, TeachersPayTeachers (TPT). Since signing on to the site, she has created 93 separate teaching units and sold 161,000 copies for about $8 a pop.
To be fair, no one else on TPT has been as wildly successful as Jump, but at least two other teachers have earned $300,000, and 23 others have earned over $100,000, according to site founder Paul Edelman.
Edelman launched TPT in 2006 after sinking grueling hours into planning his own classes. “To get ahead, Edelman and his colleagues swapped ideas and lesson plans. They also perused online sites for helpful resources, but found only sub-par, outdated materials.
After four years in the classroom, Edelman hit upon the idea for an online lesson-plan marketplace. Soon after the launch, New York-based publisher Scholastic bought the site for a low six-figure sum. Over the next few years, TPT continued growing, though not fast enough to hold Scholastic’s interest. Edelman bought the site back in 2009.
Little by little, TPT began gaining steam. Today the site has 1.1 million active members and over the past year has seen enormous growth. Last month alone, TPT grossed $2.5 million in sales, up from $305,000 in August 2011. It has 10 employees working in customer service. Teachers pay an annual premium membership fee of $59.95 to sell materials on the site, and TPT takes a 15 percent cut of most sales.
Jump admits that her own success is partly due to keeping a popular blog that helps direct readers to her TPT materials. TPT’s “Follow Me” button has also been a boon. “I have over 16,000 followers,” she says. “So every time I post a new product, an e-mail goes out to those people and—literally within an hour—I’m selling, selling, selling.”
In the past three months, Jump, who earns $55,000 per year teaching, has collected $213,000 in TPT sales. The money has not changed how she lives day-to-day. If anything, she’s working harder than ever, putting about 40 hours a week into TPT projects, apart from her regular teaching schedule. So far, she’s used the money to pay off bills, send her daughter to college, and buy a handicapped-accessible van for her quadriplegic brother.
Edit by BJP
It’s Thursday, so … guess what?
October 4, 2012Yep, the BLS announced this weeks initial unemployment claims, and you know what?
They revised last week’s headline number up.
Now we’re up to 81 out of 82 weeks — and, at least 22 election season weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.
Based on Thursday’s BLS report, the number for the week ending Sept. 15 was revised upward from 359,000 to 363,000.
In itself, the 4,000 isn’t a big deal.
But, in context it is
Again, I ask: statistical bias or political bias?
I’m now starting to conclude the latter.
The BLS has plenty of statisticians on payroll … and this is an elementary stats problem
* * * * * *
Let’s try a new way of reporting … here’s a picture.
Note that the preliminary estimate (the blue line) is ALWAYS low … by a couple of thousand.
Hint to BLS: just add 2k or 3k … or .8% to your prelim forecast !
NOT HIRING: Job growth not likely according to latest ADP forecast
October 4, 2012Punch line: Ahead of the government’s official monthly job report, ADP forecasts a slowdown in job growth.
Macroeconomic Advisers went on to predict that the unemployment rate would likely still be above 8% a year from now.
* * * * *
Excerpted from CNN Money’s, “Private sector hiring slowed in September”
Private employers added 162,000 jobs in the month … which marks a slowdown from August, when ADP said private employers added 189,000 jobs.
“While this number today is above consensus, it’s hardly a strong number,” said Joel Prakken, chairman of Macroeconomic Advisers. “It’s only barely above the pace that would push the national unemployment rate down.”
The unemployment rate stood at 8.1% in August, and economists surveyed by CNNMoney predict it remained there in September.
Given weak economic forecasts for the foreseeable future, Prakken said he wouldn’t be surprised to see the unemployment rate still above 8% a year from now.
The ADP report is monitored closely since it comes just days before the government’s official monthly job report, due Friday. But the ADP figures are often not a great predictor of what the Labor Department will report.
Edit by JDC
Spanked! … Here’s why.
October 4, 2012It was was fun watching the MSNBC post-debate show last nite. No tingle up Chris Matthews’ leg.
CNN ran a “scientific poll” of debate watchers … Wolf Blitzer squirmed to rationalize the 67 to 25 Romney win. Their panel’s best excuse: “Must have over-sampled Republicans.”
Hmmm.
Suddenly over-sampling matters.
Both CNN and MSNBC were asking: “Why didn’t Obama bring his “A” game tonite?”
First, I think he did … but, for the sake of argument, I’ll give the benefit of the doubt.
Still, I think pundits are missing the likely “why?”
My take: 3 things took Obama off the game his loyalists expected:
1. Benghazigate … while the topic wasn’t on the docket, I gotta believe that –- behind the scenes – that’s using up a lot of Obama’s energy. Foreign policy in flames, caught lying, forced to play down nailing Bin Laden, CNN broke media ranks and started reporting the cover-up. That’s gotta be taking a toll
2 Hampton speech … the Tuesday release of the factually flawed and racially divisive speech Obama gave in 2007 took “47%” off the table … if he had hit Romney with that, it would have opened the floodgates for a stream of dot points re: how Obama has been dividing the country … I bet Romney regrets that Obama didn’t bring it up.
3. $17,000 deduction cap … great play by Team Romney on Tuesday … sent Team Obama scrambling, diffused the “get specific” line, and left Obama with a weak argument: “Create jobs by taxing the rich”.
Collectively, I think that – behind the scenes – Obama was more focused on these 3 “distractions” than on the debate … and it showed.
* * * * *
For the record, I think Obama did bring his A game … he was holding a bad hand, being forced to defend his record … he wasn’t going head-to-head with the ladies of the View … and he had to go without his crutch …
As Bill Maher tweeted: “Maybe the guy does need a teleprompter”.
Michael Moore tweeted: ““This is what happens when u pick John Kerry as your debate coach.”
Bottom line: The Emperor just wasn’t wearing any threads…
What’s your brand worth? … Ask Interbrand.
October 4, 2012Punch line: Interbrand released its 13th annual Best Global Brands Report, giving Coca-Cola the top bid.
* * * * *
Excerpted from the New York Times, “List of Global Brands Keeps Coke on Top, and Apple Jumps Up.”
Interbrand’s 13th annual Best Global Brands report addresses the value of powerful brands — and the problems of brands whose value is diminishing.
The report ranks what it deems the 100 most valuable brands on criteria that include:
- Financial performance
- The role the brand plays in influencing the choices made by consumers
- The brand’s ability to help its parent’s earnings
Many of the ranked brands are known for dedicating time and corporate treasure to continually, if not continuously, trying to improve the results of their advertising.
Case in point is the brand that ranked No. 1 on the list for the 13th consecutive year, Coca-Cola. Interbrand estimated its brand value at $77.8 billion, up 8 percent from the 2011 report.
Although nothing lasts forever, the company will strive to keep the Coke brand relevant through innovations in how it engages with consumers.
For instance Facebook Coca-Cola has more likes, 51.98 million, than any other brand.
“A lot of staying relevant is not being afraid to take risks or do different things,” Mr. Tripodi, of Coca-Cola said. “It’s less about what you sell and more about what you stand for as a brand and company.
Eight of the remaining top nine brands changed ranks from last year, including Apple, which rose to No. 2 from No. 8, and Samsung, which rose to No. 9 from No. 17.
Also, two brands dropped out of the top 10: Disney, which fell to No. 13 from No. 9 last year, and Hewlett-Packard, which fell to No. 15 from No. 10.
The list is dominated by technology companies.
Of the top 10 brands, five are in technology: Apple, Google, Microsoft, Intel and Samsung. Another prominent technology company,
Facebook, entered the list for the first time, at No. 69. Facebook was among six new entrants; the others are Pampers (34), Prada (84), Kia (87), Ralph Lauren (91) and MasterCard (94).
Several brands that were ranked lower on the 2012 list compared with last year’s have been suffering setbacks.
Among them are BlackBerry, which tumbled to 93 from 56; Goldman Sachs, which declined to 48 from 38; and Nokia, which dropped to 19 from 14.
Edit by BJP
Is nothing sacred? … Time Inc.’s Twitter background is, well, an ad.
October 4, 2012Punch line: As part of its progressive digital ad unit, Time Inc. has — for the first time — leased the wallpaper of one its twitter properties as ad space.
* * * * *
Excerpted from Ad Age, “Time Inc. Magazine Finds Another Next-Gen Ad Opportunity: Its Twitter Wallpaper”
Time Inc. recently built a new digital ad unit as part of its effort to deliver “the next generation of advertising solutions,” but one of the publisher’s titles seems to have found some ad inventory just waiting for the taking: the wallpaper on its Twitter profile page.
People StyleWatch, the fashion and shopping spinoff of People magazine, this week turned the background of its Twitter page into an ad for Jergens Daily Moisture. Media brands on Twitter typically use that area to promote themselves or nothing at all.
Twitter said its users are free to turn their profile pages into ad venues.
“The space is the user’s to customize, and we encourage them to be clear if they are promoting something there, for money or other consideration,” a spokesman said in an email.
Edit by JDC
Now, you’re talking … firm to score debate with a real BS detector.
October 3, 2012This is too good to be true: “Obama and Romney to face real lie detector test during debate.”
According to the Daily Caller:
When Barack Obama and Mitt Romney face off for the first time at tonight’s presidential debate in Denver, they’ll also be taking a lie detector test.
A spokesman for the group Americans for Limited Government announced that thee group has contracted with a company to use new truth detecting technology to determine whether either candidate is lying during the debate.
“For the first time, within a few hours of a political debate, the American people will know if the candidates are telling the truth, and better be able to judge what promises are real, and which ones are nothing more than political pandering.”
The group says they hope to release the results from Voice Analysis Technology within three hours of the debate.
Voice Analysis Technology has done work for high-profile criminal cases … and have done interrogations for the Department of Defense, Bureau of Prisons, the Los Angeles County Sheriff’s Department and 60 other law enforcement agencies.
If only the process were in real time with a BS meter on the screen …
Romney’s $17,000 tax fix … I like it!
October 3, 2012According to ABC News, Mitt floated an elegantly simple idea for cleaning up the tax code:
Cut every bracket’s marginal rates and limit deductions to $17,000.
Specifically, Romney said:
“As an option you could say everybody’s going to get up to a $17,000 deduction; and you could use your charitable deduction, your home mortgage deduction, your healthcare deduction… to fill that bucket, if you will, that $17,000 bucket that way
And higher income people might have a lower number.”
For the record, the idea would hurt me personally since I carry a couple of jumbo mortgages and make charitable donations.
Still, I think the idea is GREAT.
It simplifies the tax code … and levels the field, say, between renters and home owners.
I’ll continue to give to charities … so will Mitt … so will most current donors.
If charities don’t have powerful enough value propositions to raise money, that’s their problem.
I really like that the change would screw folks in high tax Blue states – e.g. NY, CA – since the deduction for state & local taxes would fall under the cap.
There’s less of an impact on folks in well run states (like VA) … that’ll give tax & spend states more motivation to clean up their own acts.
Sure, there are plenty of details to be worked out (e.g. how to handle child credits) … but, I think this simple plan might be a game-changer.
Possibly the dumbest editorial ever …
October 3, 2012The WSJ carried an editorial by Alan Blinder, a Princeton prof, tiltled “The Case Against a CEO in the Oval Office”.
It should have been titled “How we in the ivory tower – who have guaranteed life-time employment and have never set foot in a business – think that business works.”
Blinder’s central thesis: Business people fail in government because there’s no bottom line — and compromise is obligatory.
”Presidential history teaches us that the abilities, character traits and attitudes it takes to succeed in business have little in common with what it takes to succeed in government. In some respects, they are antithetical.”
Say, what?
I don’t know where to start …
First, he obviously is a non-quant economist … he thinks that the law of large numbers and statistically significant samples also applies to small numbers and insufficiently small samples. He concludes that some of our 44 presidents were good ones … and that some of them were politicos and not biz people … and, “the two truly successful businessmen to win the presidency were Herbert Hoover and George H.W. Bush” … and, we know how that turned out.
Case closed..
Huh?
Then, he lowers the boom, quoting from Nolan Bushnell, “the highly successful entrepreneur who founded Chuck E. Cheese” who said “Business is a good game — lots of competition and a minimum of rules. You keep score with money.” Blinder concludes “that’s virtually the opposite of being president of the United States”.
Note: Not Jack Welch, not the CEO of a successful Fortune 500 company … nope, he centers his argument around Chuck E. Cheese’s daddy.
Good enough for me.
More specifically, Blinder asserts that companies are dictatorships, not democracies … they ignore all stakeholders other than shareholders.
Gee, I wouldn’t have picked up on that one from my many managerial and board meetings.
My absolute favorite: “Sound companies dote on efficiency …. and, while there are niches in the federal government where efficiency matters … the big decisions aren’t about efficiency at all. It may even be critical to cut people a little slack here and there.”
He forgot to add: “And, cover for the inefficiency by taxing people who make more than I do their fair share.”
Unbelievable.
He also opines: “A good president communicates well with people and inspires them … Barack Obama may never have met a payroll, but he’s a gifted orator, and empathy and fairness are in his bones … traits … not prized in CEOs.”
To be honest, his appearance on the View during the Libyan crisis didn’t exactly inspire me.
To that point, check out the ad “Leadership” … just sroll down to the video
Gimme a break, man.
IQ scores are rising … here’s why.
October 3, 2012Simple answer: more folks are reading the Homa Files.
A more complex answer is offered by James Flynn is his book “Are We Getting Smarter? Rising IQ in the 21st Century”.
Here’s an excerpt from the WSJ review …
* * * * *
From the early 1900s to today, Americans have gained three IQ points per decade.
In 1910, scored against today’s norms, our ancestors would have had an average IQ of 50 to 70.
Our mean IQ today is 130 to 150, depending on the test.
Our ancestors weren’t dumb compared with us, of course. They had the same practical intelligence and ability to deal with the everyday world that we do.
Our lives are utterly different from those led by most Americans before 1910.
The average American went to school for less than six years and then worked long hours in factories, shops or agriculture.
The only artificial images they saw were drawings or photographs.
Aside from basic arithmetic, nonverbal symbols were restricted to musical notation (for an elite) and playing cards.
Their minds were focused on ownership, the useful, the beneficial and the harmful.
Rising IQ scores show how the modern world, particularly education, has changed the human mind itself and set us apart from our ancestors.
Our ancestors lived in a much simpler world, and most had no formal schooling beyond the sixth grade.
Modern people do so well on these tests because … we are the first of our species to live in a world dominated by categories, hypotheticals, nonverbal symbols and visual images that paint alternative realities.
A century ago, people mostly used their minds to manipulate the concrete world for utilitarian advantage.
Our minds now tend toward logical analysis of abstract symbols.
Today we tend to classify things … take the hypothetical seriously …and easily discern symbolic relationships.
Since 1950, there have been large gains on vocabulary and information.
More words mean that more concepts are conveyed.
More information means that more connections are perceived.
Better analysis of hypothetical situations means more innovation.
A greater pool of those capable of understanding abstractions, more contact with people who enjoy playing with ideas, the enhancement of leisure— all of these developments have benefited society.
Our mental abilities have grown, simply enough, through a wider acquaintance with the world’s possibilities.
Thanks to AR for feeding the lead.
Spreading the wealth … from the suburbs to the center city.
October 3, 2012Last night, the Daily Caller released an “explosive” new tape of Obama speaking to a group of black ministers at Hampton college in 2007.
I didn’t think the tape’s revelations were all that explosive.
But, one part of the report did catch my attention:
Obama said: “We don’t need to build more highways out in the suburbs,” where, the implication is, the rich white people live.
Instead, Obama says, federal money should flow to “our neighborhoods”.
No problem with the last part … I’m all for urban development … transportation, schools, businesses.
The rub is that Obama positioned a zero sum game between the cities and the suburbs … with redistribution from the suburbs to the cities.
First, I don’t recollect his being so direct on that point in his campaign speeches … hmmm.
Second, brought to mind a recent book on the subject that I largely dismissed at first glance.
Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center and author of “Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities”.
His central premise was summarized in Forbes:
In the eyes of the leftist community organizers, suburbs are instruments of bigotry and greed — a way of selfishly refusing to share tax money with the urban poor.
To reverse the trend, some groups advocate systematically redistributing the wealth of America’s suburbs to the cities via “regional tax-base sharing,” a practice by which suburban tax money is directly redistributed to nearby cities and less-well-off “inner-ring” suburbs.
President Obama has lent the full weight of his White House to the efforts.
A federal program called the Sustainable Communities Initiative, for example, has salted planning commissions across the country with “regional equity” and “smart growth” as goals.
These are, of course, code words.
“Regional equity” means that, by their mere existence, suburbs cheat the people who live in cities.
It means, “Let’s spread the suburbs’ wealth around” – i.e., take from the suburbanites to give to the urban poor.
“Smart growth” means, “Quit building sub-divisions and malls, and move back to where mass transit can shuttle you between your 800 square foot apartment in an urban tower and your downtown job.”
Suburbs are for sellouts: That is a large and overlooked theme of Obama’s famous memoir, Dreams from My Father. The city is the moral choice.
He attributed urban decline to taxpayer “flight” to the suburbs.
So, compulsory redistribution of suburban tax money to cities was the only lasting solution to urban decay.
Obama’s uncovered Hampton speech may boost Kurtz’ book sales and unsettle some suburbanites … especially those sitting in bumper-to-bumper commuting traffic.
Dirty politics: Romney trashed … by his garbage man.
October 2, 2012Yep – the O-Team has literally dragged the campaign into the gutter.
American Federation of State, County and Municipal Employees (AFSCME) – a union supporting Obama – tracked down the garbage man on Romney’s route and got him to testify against Mitt.
The charge: not once has Romney given the dude Gatorade … proof positive that Romney doesn’t get it … that he’s only for rich folks.
You just can’t make this stuff up.
The economy is stalled, the Middle East is ablaze, and these clowns are pitching Mitt Romney’s garbage man.
Geez.
No economist foresaw the severity of the recession … and no president could have done a better job … wrong and WRONG!
October 2, 2012Obama has been stumping that no economists foresaw the severity of the recession … so don’t blame him the a trillion dollar faux-stimulus didn’t keep unemployment under 8%.
Former President Clinton pitched at the DNC that no president – not even him – could have pulled us out of the dive better than Barack did.
Huh?
Last weekend, the NY Times debunked the first claim:
President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was.
It was during those weeks ..when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.
Ms. Reinhart and Mr. Rogoff … were arguing that financial crises led to slumps that were longer and deeper than other recessions.
Almost inevitably … policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones.
Obama advisers … knew the history … yet, of course, they did repeat it.
By late 2008, the full depth of the crisis was not clear, but enough of it was.
A few prominent liberal economists were publicly predicting a long slump.
The Obama team, in private, discussed the Reinhart-Rogoff work.
So why didn’t that work do more to affect the team’s decisions?
Want more proof?
On 12/24/2008, USA Today published a piece titled: Forecasters share predictions for economy’s outlook in 2009
The punch lines:
If the recession continues past the spring, as many economists predict, it will be the most prolonged one since the Great Depression.
Employers are expected to continue to shed jobs at a rapid pace.
Consumers will pull back spending.
Businesses will cancel equipment purchases. Unsold, empty homes will dot city blocks.
I guess what Team Obama means is Goolsbee, Romer, and Bernstein didn’t see the severity.
Clinton’s claim of un-doability is just plain silly.
Reagan inherited a recession as severe as the one Obama inherited, plus 18% inflation.
He pulled the economy out in 1-term … so, there !
Team Obama seems to have a penchant for re-writing history.
Cable news ratings … some reasons to fret.
October 2, 2012The below chart — jacked from Drudge – caught my for a couple of reasons:
- No surprise, the top 6 spots go to much maligned Fox
- Comedy Central – Stewart & Colbert – are categorized as “news” … say, what?
- Stewart & Colbert outdraw MSNBC’s big 3 – Maddow, Schultz, O’Donnell
- CNN is practically off the charts … down around free access viewer levels
A couple of things trouble me …
Though I’m a Fox fan, it’s sad to see CNN tank. I think they tend to have the best analyst panels and the most mature discussions. It’s too bad that they surrendered their neutrality. Veering left of center has, in my opinion, cost them.
Drudge probably has the networks properly categorized. The fact that a big swath of folks get their news from Comedy Central can’t be good.
All of the numbers – even O’Reilly – are miniscule as a percentage of total adult population. That suggests that the vast majority people who get news – get it from the major networks via their local channels. Since, for example, the networks haven’t been covering the Libyan terrorist attack cover-up, that’s problematic.
Oh well ..
NetTrax: If you think that you’re being followed around on the net … you’re right.
October 2, 2012And the company doing it is probably Acxiom … recently profiled in the NY Times.
I had some weird happenings recently.
A friend who works internet marketing for a “plus sized” women’s clothes company used my computer to show me her site’s cool redesign.
For the next couple of weeks I was getting pop-up ads for big women’s clothes … even when I was on common sites like ESPN or WSJ.
Huh?
Another time, I checked the spelling of a Spanish word via Google.
Next couple of times that I went to You Tube, the lead in ads were in Spanish.
Double huh?
I was wondering how the web “knew” … now I know, courtesy of the NY Times.
Here are some highlights …
Acxiom
IT knows who you are. It knows where you live. It knows what you do.
It peers deeper into American life than the F.B.I. or the I.R.S., or those prying digital eyes at Facebook and Google.
If you are an American adult, the odds are that it knows things like your age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams — and on and on.
Right now, more than 23,000 computer servers are collecting, collating and analyzing consumer data for a company … called the Acxiom Corporation, the quiet giant of a multibillion-dollar industry known as database marketing.
Acxiom has amassed the world’s largest commercial database on consumers — Its servers process more than 50 trillion data “transactions” a year.
Acxiom maintains its own database on about 190 million individuals and 126 million households in the United States
Its database contains information about 500 million active consumers worldwide, with about 1,500 data points per person.
Acxiom’s Consumer Data Products Catalog offers hundreds of details — called “elements” — that corporate clients can buy about individuals or households, to augment their own marketing databases. Companies can buy data to pinpoint households that are concerned, say, about allergies, diabetes or “senior needs.”
In a fast-changing digital economy, Acxiom is developing the most advanced techniques to mine and refine data.
Digital marketers already customize pitches to users, based on their past activities … think “cookies”.
Acxiom is pursuing far more comprehensive techniques in an effort to influence consumer decisions.
It is integrating what it knows about our offline, online and even mobile selves, creating in-depth behavior portraits in pixilated detail … Its a “360-degree view” on consumers.
How it works
Scott Hughes, an up-and-coming small-business owner and Facebook denizen, is Acxiom’s ideal consumer.
In fact, Acxiom created him. Mr. Hughes is a fictional character who appeared in an Acxiom investor presentation in 2010.
A frequent shopper, he was designed to show the power of Acxiom’s multichannel approach.
In the presentation, he logs on to Facebook and sees that his friend Ella has just become a fan of Bryce Computers, an imaginary electronics retailer and Acxiom client.
Ella’s update prompts Mr. Hughes to check out Bryce’s fan page and do some digital window-shopping for a fast inkjet printer.
Such browsing seems innocuous — hardly data mining. But it cues an Acxiom system designed to recognize consumers, remember their actions, classify their behaviors and influence them with tailored marketing.
When Mr. Hughes follows a link to Bryce’s retail site, for example, the system recognizes him from his Facebook activity and shows him a printer to match his interest.
He registers on the site, but doesn’t buy the printer right away, so the system tracks him online.
Lo and behold, the next morning, while he scans baseball news on ESPN.com, an ad for the printer pops up again.
That evening, he returns to the Bryce site where, the presentation says, “he is instantly recognized” as having registered.
It then offers a sweeter deal: a $10 rebate and free shipping.
It’s not a random offer.
Acxiom has its own classification system, PersonicX, which assigns consumers to one of 70 detailed socioeconomic clusters and markets to them accordingly.
In this situation, it pegs Mr. Hughes as a “savvy single” — meaning he’s in a cluster of mobile, upper-middle-class people who do their banking online, attend pro sports events, are sensitive to prices — and respond to free-shipping offers.
Correctly typecast, Mr. Hughes buys the printer.
But the multichannel system of Acxiom and its online partners is just revving up.
Later, it sends him coupons for ink and paper, to be redeemed via his cellphone, and a personalized snail-mail postcard suggesting that he donate his old printer to a nearby school.
“Waste”
There is a fine line between customization and stalking.
While many people welcome the convenience of personalized offers, others may see the surveillance engines behind them as intrusive or even manipulative.
Privacy advocates say they are more troubled by data brokers’ ranking systems, which classify some people as high-value prospects, to be offered marketing deals and discounts regularly, while dismissing others as low-value — known in industry slang as “waste.”
Exclusion from a vacation offer may not matter much … but if marketing algorithms judge certain people as not worthy of receiving promotions for higher education or health services, they could have a serious impact.
“Over time, that can really turn into a mountain of pathways not offered, not seen and not known about.”
A bit creepy, right?
Where do MBA’s want to work?
October 1, 2012Punch line: Google, KPMG, P&G, Microsoft and Deloitte top the list of MBA’s most sought after jobs.
* * * * *
Excerpted from businessweek.com’s “Hot Jobs, Google, KPMG, P&G, Top 2012 Rankings”
The world’s college business students have spoken: The single, most coveted job in the world isn’t with some big-name consulting firm or high-flying investment bank.
For the fourth consecutive year, it’s with Google, whose incomparable perks and startup-like culture have catapulted the search giant to a seemingly permanent place atop Universum‘s annual list of the most highly desired employers.
Top 10 Desired Employers for MBA Students:
- KPMG
- Procter & Gamble
- Microsoft
- Deloitte
- Ernst & Young
- Pricewaterhouse Cooper
- JPMorgan Chase
- Coca-Cola
- Goldman Sachs
What separates the winners from the losers is innovative products and services, a relaxed and creative work environment, global opportunities, benefits and perks, and the ability to advance one’s career and personal brand by working for a company.
Millennials are interested in the ‘me brand,’ and they are more concerned about their employ-ability. They want a company with a good reputation. They want to say they work for a ‘cool’ company. Each of the companies at the top of the list has different characteristics that make it cool.
Whole industries can benefit from the perception that that they can serve to advance careers, which is what seems to have happened with management consulting. Consulting as a career is really interesting for people leaving college to develop a set of skills that are transferable to different industries.
Nowadays, the hunt for talent revolves around understanding the unique needs of millennials. At P&G, the company tries to give new college graduates a chance to try on different hats. To increase brand awareness among young people, P&G has undertaken targeted marketing efforts such as the “Thanks, Mom” ad campaign, which aired during the 2012 Summer Olympics. Microsoft, the other company on the rise with job hunters, hires several thousand undergraduates from around the world each year. Mostly discovered through the internship pipeline and on-campus recruiting, these young people are drawn to the company’s willingness to give them real responsibility from the start.
Edit by BJP
Welfare: How much has been spent since LBJ declared the war on poverty?
October 1, 2012Answer: About $17 trillion … but, there’s much more to the story.
There has been so much talk about welfare recently that I did some digging … not to judge good or bad, simply to to get some facts.
You can draw your own conclusions …
* * * * *
Overview
According to Congressional testimony given by the Heritage Foundation, “welfare” refers means-tested federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low income Americans.
Means-tested programs are anti-poverty programs: they are intended to increase the living standards of improve the capacity for self-support among the poor and near-poor.
Means-tested welfare spending or aid to the poor consists of government programs that provide assistance deliberately and exclusively to poor and lower-income people.
For example, food stamps, public housing, Medicaid, and Temporary Assistance to Needy Families are means-tested aid programs that provide benefits only to poor and lower-income persons.
Non-welfare programs provide government benefits and services for the general population — all income levels.
For example, Social Security, Medicare, police protection, and public education are not means-tested per se.
But, Social Security benefit pay-out rates are lower for higher income people and Medicare premiums are higher for higher income people
There are 69 means-tested welfare programs operated by the federal government:
- 12 programs providing food aid;
- 10 housing assistance programs;
- 10 programs funding social services;
- 9 educational assistance programs;
- 8 programs providing cash assistance;
- 8 vocational training programs;
- 7 medical assistance programs;
- 3 energy and utility assistance programs; and,
- 2 child care and child development programs.
* * * * *
Spending
Since the beginning of the War on Poverty, government has spent $15.9 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare.
In FY2011, federal spending on means-tested welfare, plus state contributions to federal programs, were about $940 billion.
Combined federal and state means-tested welfare is now the second largest category of overall government spending in the nation.
Means-tested welfare is exceeded only by the combined cost of Social Security and Medicare.
Welfare spending is greater than the cost of public education and is greater than spending on national defense.
Total means-tested spending in 2008 was $708 billion … about $7,700 to $17,100 in means-tested spending for each poor American (depending on the estimating method) … on average, around $30,000 to $33,000 for a family of four … with about 1/3 of the amount going to medical care.
In FY 2011, total means-tested spending going to families with children … was around $33,000 per low income family with children.
In recent years …
- 52 percent of total means-tested spending went to medical care for poor and lower-income persons,
- 37 percent was spent on cash, food, and housing aid.
- 11 percent was spent on social services, training, child development, targeted federal education aid, and community development.
Roughly half of means-tested spending goes to disabled or elderly persons.
The other half goes to lower-income families with children, most of which are headed by single parents.
Most of these lower-income families have some earned income. Average earnings within the whole group are typically about $16,000 per year per family.
If average welfare aid and average earnings are combined, the total resources available come to between $40,000 and $46,000 for each lower-income family with children in the U.S. … about 15% below the total population’s median household income.
What’s up with Gallup?
October 1, 2012Like most Romney supporters, I’m grabbing at straws to find hope in the recent polls.
Gallup has some recent numbers that have me scratching my head.
Last week, according to Gallup, Obama’s approval rating skyrocketed.
According to my analysis, Gallup had Obama’s approval jumping by an unprecedented 12 points in a single day.
Technical note: To isolate daily movements, I “unpacked” the 3 -day averages to see what the newest day’s score would have had to be to move the 3-day average.
Really?
The economy’s tanking and the Middle East is afire … and Obama’s approval jumps.
Just doesn’t pass the smell test.
So, I did a little digging.
Here’s an article I picked up from earlier in the month.
Senior Obama Campaign adviser David Axelrod reportedly contacted The Gallup Organization to discuss the company’s research methodology after their poll’s findings were unfavorable to the President.
After declining to adjust their methodology, Gallup was named in an unrelated lawsuit by the DOJ.
Probably unrelated to the numbers, but sure looks funny.
Dennis Miller: “Just quit !”
September 29, 2012Dennis Miller – comedian & political commentator – does a regular Wednesday nite segment on O’Reilly.
This Wednesday, he was unusually provocative by commenting:
If you’ve got a family of 4 and you’re busting your hump 40 or 60 hours a week – maybe 2 jobs — to make $45 grand and make ends meet … if Obama gets re-elected, just quit.
Kick back … take the handouts and enjoy life.
You can make just as much just sitting around …
If you don’t, those who are just riding the train will be laughing at you.
Why keep hitting your head against the wall?
Paraphrased from O’Reilly 9-26-12
Struck me at the time as akin to Rick Santelli’s “We need a Tea Party” rant on CNBC.
O’Reilly tried to soften the blow by bloviating (his word) about the American work ethic and how “most Americans have too much pride to stop working … that being on the dole has a stigma attached to it”
O’Reilly’s words seemed quite hollow in comparison to Miller’s.
And, reminded me of the government government promotional campaign to counter the “pride and other beliefs” that keep people from signing up for the SNAP program and getting food stamps.
The USDA has adopted a range of strategies and programs designed to bring more people to SNAP, including taking on “pride.”
Local assistance offices have been rewarded for “counteracting” pride and pushing more people to sign up for benefits.
The Ashe County Department of Social Services in Jefferson, N.C., for example, received a “Gold” award for confronting “mountain pride” and increasing food stamp participation.
“Eventually, many accepted assistance from the Low Income Energy Assistance Program, the Qualified Medicare Beneficiary program, and others, in some cases doubling a household’s net income. In 1 year, SNAP participation increased over 10 percent.”
Overcoming “beliefs” is a stated method from the USDA to bring more people to the program.
A “Supplemental Nutrition Assistance Program (SNAP) Community Outreach Partner Toolkit” details the importance of reaching people who … have beliefs that conflict with accepting food stamps.
Excerpted from the Daily Caller
Since the USDA has “mountain pride” in the win column, will “work pride” be the next to fall?
I think Miller is onto something.
HITS: Effective problem-solving … the five key skills.
September 28, 2012HITS: HomaFiles’ Ideas To Share
Earlier this week, I had the opportunity to kick-off the MSB Consulting Club’s pioneering extracurricular series on problem-solving.
My overall message was that there are 5 key problem-solving skills that consulting firms are looking for …
* * * * *
Here are some of the Homa Quotes that set-up each of the skills …
(1) Identify core issues quickly
- “Managers faced with a complex problem typically end up solving the wrong problem.”
- “The number of core business problems is not infinite … though variants abound.”
- “Answer the question that was asked, not the question that you want to answer.”
- “Some people go for the the jugular, others go for the capillaries.”
(2) Generate testable hypotheses
- “For analytical efficiency, it’s always best to try to validate (or refute) a hypothesis.”
(3) Gather and analyze facts efficiently
- “There are two types of people in the world: simplifiers and complicators”
- “Do analyses … not just calculations”
(4) Craft creative, practical solutions
- “More people seem able to identify problems than to solve them.”
- “Better an imperfect solution that can be implemented than a perfect solution that can’t.”
(5) Syndicate support and mobilize
- “Getting the answer is the easy part. The hard part is convincing people to do it.”
- “In baseball, pitching is 80% of the game … the percentage is higher in business.”
* * * * *
In subsequent posts, we’ll dig a little deeper into each of the 5 essential skills.
The last time that I talk about BLS reporting bias …
September 28, 2012… certainly won’t be today
Unbelievable, they did it again this week.
I promise that I’ll stop writing about BLS reporting bias when the streak ends, but …
Now we’re up to 80 out of 81 weeks — and, at least 21 election season weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.
Based on Thursday’s BLS report, the number for the week ending Sept. 22 was revised upward from 382,000 to 385,000.
In itself, the 2,000 isn’t a big deal.
But, in context it is
Again, I ask: statistical bias or political bias?
I’m now starting to conclude the latter.
The BLS has plenty of statisticians on payroll … and this is an elementary stats problem
* * * * * *
Let’s try a new way of reporting … here’s a picture.
Note that the preliminary estimate (the blue line) is ALWAYS low … by a couple of thousand.
Hint to BLS: just add 2k or 3k … or .8% to your prelim forecast !
* * * * *
Here are the nums … but the picture says it all.
Absolut takes customization to the extreme
September 28, 2012Punch line: Absolut Vodka recently re-engineered a production plant in order to produce 4 million bottles – all of which are completely unique with no two bottles having the same design.
In a world where consumers are demanding more and more customization, where should companies draw the line?
* * * * *
Excerpted from PSFK’s, “Absolute Creates 4 Million Unique Vodka Bottles.”
Absolut Vodka recently launched ‘Absolut Unique,’ a project in which the vodka makers will release 4 million limited-edition, unique bottles.
The project required a company’s production plant to be completely re-engineered; the ‘carefully orchestrated randomness’ to the bottle design involves using complex pattern programming alongside splash guns and color-generating machines to ensure that no two bottles come out the same.
The vodka bottles will be individually numbered and will be distributed globally in 80 markets.
“Absolut Unique feels a bit mad scientist, a bit street art. When the bottles first appeared on the conveyer belt, we cheered. By that point the production line looked more like an artist’s studio than a bottle factory.”
Take a look at this video for a behind-the-scenes look at the process.
Absolut Unique–Behind the Scenes
Edit by BJP
HOT – Can problem-solving be learned?
September 27, 2012Here’s an encore HOT – Homa Online Tutorial – straight from the classroom to you via the HomaFiles.
* * * * *
I sometimes get asked: Can problem-solving be learned or is hardwired into people’s DNA?
My view: DNA can help (e.g. raw brainpower can help) but “ordinary” folks can become adept problem-solvers.
How?
By internalizing models i.e. simplifying frameworks) and protocols (i.e. analytical methods) … and applying them in a variety of contexts.
In doing so, the “devices” can be stored sub-consciously and retrieved consciously to solve problems.
That’s called intuition.
Back to the Clinton years? … Dems: Be careful what you wish for.
September 27, 2012Lots of articles have been written about how the the bottom 50% pays no Federal income taxes and the very top tiers pay vast shares.
The usual cry from the Dems: what about payroll taxes?
Then, they holler: go back to the rates in effect during the glorious Clinton years.
Well, the Independent Review pulled together Federal tax burdens back to 1980 … including payroll taxes
The key findings:
Since 1980, the bottom 40%’s share of total Federal taxes has almost halved … from about 9% to to 5%.
The top 10%’s share has grown about 15% … from 40% to almost 55%.
Most of the top 10%’s share increase has landed where?
You guessed it … among the evil 1-percenters.
Geez.
If we could only get the wealthy to pay their fair share, we’d be out of this fiscal mess, right?
The new Kraft : the spirit of a start-up and soul of a powerhouse
September 27, 2012Punch line: CEO Tony Vernon sets lofty goals for the new North American standalone business.
* * * * *
Excerpted from adage.com’s, “Kraft’s New Grocery Company Plans Marketing Boost in Search of Renaissance.”
Tony Vernon, the CEO of Kraft Foods’ new standalone North American grocery business set lofty goals for the company, pledging to pour more advertising behind top “power” brands while slashing overhead to create a more nimble corporate culture.
Vernon said his goals are “nothing short of creating a renaissance in North American food and beverage.” He added:
“We will create a new Kraft, one with the spirit of a startup and the soul of a powerhouse.”
Mr. Vernon gave the most detailed look yet at his strategy for the $19 billion company.
In a plan put in place last year, these grocery brands are being split from Kraft’s global snacking and candy products such as Trident and Oreo, which will become part of a company called Mondelez International.
Kraft is betting that the split will bring more focus to brands while creating two distinct investment choices for Wall Street.
Mondelez is positioned as a high-growth company with penetration in developing markets, such as Brazil and India, while Kraft Foods Group is full of category-dominant meat and cheese brands, which act as cash cows that will generate consistent dividends for investors.
The trick for Kraft Foods Group will be to differentiate its grocery brands in categories that risk becoming commoditized.
Vernon suggested that Kraft would spend more with marketing to catch up to peers.
Kraft Foods Group brand spent 2.9% of its net revenue on advertising in the latest fiscal year, compared to the 4.5% average spent by competitors, including 8.6% by Kellogg Co., 6.4% by Campbell Soup. Co. and 5.5% by General Mills.
As it puts more money in marketing, Kraft Foods Group will continue the strategy already underway in which top power brands, will get the lion’s share.
Those brands include Lunchables, Planters, Velveeta Shells & Cheese, Capri Sun, Jell-O, Philadelphia, Kraft Macaroni & Cheese, Kool-Aid, Miracle Whip, MiO and Gevalia.
Key non-power brands, such as A1, Athenos and Cool Whip, will be supported with more “entrepreneurial” methods,
Mr. Vernon said, including with digital advertising such as YouTube videos. Among the ads Mr. Vernon showed off to analysts is this YouTube spot for Cool Whip, featuring characters from TV show “Family Guy.”
Edit by BJP
Crop shortfall starting to impact prices … at the grocery store and and at the pump
September 27, 2012Punch line: Forecasts of U.S. corn and soybean yields are set to have a major impact on the prices we pay for everything from processed food to beef and poultry.
* * * * *
Excerpted from NYT.com, “Government Lowers Crop Yield Forecast Again”
The Agriculture Department lowered its forecast of corn and soybean yields as record heat continued to batter crops in the Midwest.
The new data suggested that customers would pay more at the grocery store next year as the prices of corn and soybeans — major ingredients in processed food, animal feed and biofuels — rise to record levels.
The United States is the world’s largest exporter of corn and soybeans.
The report said exports of both crops would be substantially lower than last year, which could have a devastating effect on countries like China and Mexico, which depend heavily on American exports.
The report said beef and poultry production was expected to increase this year as livestock producers culled or sold their herds because of higher feed costs.
But prices for beef and poultry are expected to rise 4 to 5 percent next year.
Edit by JDC
Who pays taxes? Who benefits? … Here are some nums.
September 26, 2012As loyal readers know, I’ve been trying to get my arms around this question.
In a prior post, we drilled down on taxes … or, as my Dem friends would say government “revenues”.
We posted that in 2012 Americans will pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.
Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively. Note that the Federal portion is just under $2.5 trillion.
* * * * *
If these are “revenues” there must be matching services provided, right?
I found a study by the non-partisan Tax Foundation that analyzes taxes paid and benefits received.
The study is old – using 2004 data – but, in my opinion is a good starting point to calibrate the answer.
First, the easy part …
The Federal tax revenues in 2004 were a bit over $2 trillion … compared to our $2.5 trillion projection in 2012.
Here’s how the 2004 tax revenues were spent … i.e., the benefits received by citizens.
Note that the Federal spending is just under $20,000 per household.
* * * * *
The Tax Foundation analysts also sorted taxes paid by household income pentile against benefits received by the pentiles ….. and things got interesting.
The bottom pentile – households in the bottom 20% of income – pay about 2.5% of Federal taxes (including payroll taxes !) … and receive 1/3 of government benefits.
The top pentile pays over half of the Federal taxes and draws about 15% of government benefits.
The middle pentile comes close to breaking even – paying 14.1% of Federal taxes and getting 16% of government benefits.
* * * * *
Here’s another way to cut the data …
On average, households in the bottom pentile get $23,178 more in benefits than they pay in taxes; average households in top 20% run a deficit of almost $40,000 – that is, they pay about $40k in taxes than they receive in benefits; the breakeven point is somewhere around $50,000 in household income – that’s where taxes paid equal benefits received.
* * * * *
When state & local taxes and benefits are factored in, the surpluses and deficits grow even larger.
The bottom 20% gets over $31,000 per household in net government benefits; the top 20% pays almost $50,000 per household more than it gets in government benefits.
The breakeven point is still somewhere around $50,000 in household income – that’s where taxes paid equal benefits received.
* * * * *
I’ll be hunting for more recent data.
Until I find it, chew on this!
Note: The Tax Foundation says it doesn’t have funding to update its study.
Nuts !
Wipe that smile off your face … if you’re in New Jersey, that is.
September 26, 2012Not in all instances, just for the picture on your driver’s license.
New Jersey has joined several other states in the use of facial recognition software … linked to driver’s license photos.
So, it’s all about facial recognition:
“The distance between someone’s mouth and their chin. The distance between their mouth and their nose. The distance between their eyes.
And when you make a bizarre or obscure facial expression, it prohibits the computer from conducting the measurements it needs to do,”
Couple of points;
1. I’ve never heard accuse New Jersey folks of excessive smiling … scowling, yes … smiling, no.
2. Who ever smiles when they’re at the DMV.
3. NJ is at least 3 years behind Virginia … we posted about my wife’s smiling reprimand back in 2009.
How much can a family with 2 kids earn and still pay zero Federal income taxes?
September 25, 2012The answer is about $45,000
Reminder: Median household income is just a tad over $50,000
* * * * *
Here’s an analytical walk-through from the non-partisan Tax Foundation …
Start with the answer: assume a family of four making $45,000 in adjusted gross income.
Subtract a standard deduction of $11,600 and personal exemptions of $14,800 (four times $3,700) and the family’s taxable income is reduced to $18,600.
The family is taxed at 10 percent on their first $17,000 of income and at 15 percent for their remaining $1,600 of income, giving them a total tax liability of $1,940.
But, they allowed to deduct two tax credits of $1,000 for each of their two children.
And, they’re allowed to deduct an additional $214 due to the Earned Income Tax Credit, which is a credit designed to financially assist low to
moderate income working families.
Subtracting these tax credits from the family’s tax liability brings their $1,940 liability below zero.
However, since the child credits and Earned Income Tax Credit are so-called refundable tax credits, the family ends up receiving a check for $274 from the IRS for the remaining value of their tax credits.
For families who are eligible for other credits such as the child care credit, education credit, or the tax credit for purchasing a hybrid vehicle….. AGI can go higher than $45,000 with no tax liability.
* * * * *
Ironic Twist
The same George Bush that the left demonizes is the President who signed the 10% marginal tax bracket, boosted the child credits, and introduced the refunable tax credits.
The irony: liberals should be praising him and conservatives should be dissing him.
If it weren’t for the evil Bush tax cuts, we wouldn’t be at the now famous 47% level of folks not paying Federal income taxes.
Tomorrow: Who pays taxes and who gets the benefits?
Shocker: Profs shell out $$$ … got Obama.
September 25, 2012No surprise that liberal university profs support Obama.
What may be surprising is that they’re throwing money into the pot … in a big way.
According to the Washington Times …
Professors are stocking Obama’s campaign war chest.
The elite fundraising committee through which President Obama solicits his largest campaign donations relied overwhelmingly on professors from equally-elite universities last month.
The top donors, measured by frequency of donation, were Duke University, the University of Michigan, University of California, University of Washington and Stanford University, and Mr. Obama’s alma maters of Columbia and Harvard.
Ask less, get more … keep your mouth shut when conducting interviews
September 25, 2012Punch line: The more questions you ask, the more you learn about a job candidate, right?
Wrong.
Here is a better strategy.
* * * * *
Excerpted from Inc.com , “Best Interview Technique You Never Use”
Sometimes, instead of asking questions, the best interviewing technique is to listen slowly.
In Change-Friendly Leadership, management coach Rodger Dean Duncan describes how he learned about listening slowly from PBS NewsHour anchor Jim Lehrer:
“He urged me to ask a good question, listen attentively to the answer, and then count silently to five before asking another question … Giving other people sufficient psychological breathing room seemed to work wonders.”
Once you give candidates a silent hole to fill, they’ll fill it, often in unexpected and surprising ways.
A shy candidate may fill the silence by sharing positive information she wouldn’t have otherwise shared. A candidate who came prepared with “perfect” answers to typical interview questions may fill the silence with not-so-positive information he never intended to disclose.
Edit by JDC
Flashback: About those 47% who don’t pay income taxes …
September 24, 2012Romney sure caused a stir with his remark that 47% don’t pay Federal income taxes.
Well, the Homa Files was on this case over 4 years ago !
This analysis was originally posted on July 31, 2008 during the run-up to the election. It proves the point (ahead of its time) that less than half of all voters pay any income taxes now that “Make Work Pay” has been enacted (as part of the stimulus program). Think about it: the majority gets to demand more government programs that they don’t pay a cent towards. I think that’s scary. Very scary..
It’s the HFs post that continues to get the most hits, and the topic is ‘hot’ this week because of Mitt’s smokin’ gun video.
So, here’s a flashback …complete with numbers and sources.
* * * * *
Despite the drumbeat of warnings from various sources, the prospects that a minority of voting age Americans will be paying Federal income taxes under the Obama tax plan doesn’t seem to arouse much visible public anxiety.
Why?
First, for those in the emerging majority that won’t pay any income taxes – or may even be getting government checks for tax credits due – the deal is almost too good to be true. To them, Obama’s plan must make perfect sense. So, why rock the boat?
Second, some people argue that low-earning people who don’t pay income taxes shoulder a regressive payroll tax burden to cover Medicare and Social Security. Yeah, but these programs – which are most akin to insurance or forced savings plans — offer specific individual benefits that are directly linked to each wage earner’s contributions.and the benefits phase down quickly as qualifying income increases. That is, they’re not as regressive as many people argue.
Third, most of the energetic criticism of Obama’s plan has centered on its redistribution intent — taking over $130 billion of “excess” income from undeserving rich people, and giving it directly to those who earn less and need it more.
Fourth, most folks just don’t believe that the numbers will really shift enough to create a voting majority of citizens who don’t pay income taxes. They’re wrong. Very wrong.
Here are the numbers … and why they should bother you.
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Today, 41% of voting age adults don’t pay Federal income taxes
Based on the most recent IRS data, slightly more than 200 million out of 225 million voting age Americans filed tax returns. That means that 25 million adults – presumably low income ones – didn’t file returns and, of course, didn’t pay any income taxes. See notes [1] to [4] below
Of the 200 million voting age filers, approximately 68 million (33% of total filers) owed zero income taxes or qualified for refundable tax credits (i.e. paid negative income taxes). [5]
Add those 68 million to the 25 million non-filers, and non-payers already total 93 million – 41% of voting age adults.
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Obama’s Estimates – Make that 49%
Not Paying Federal Income Taxes
Obama says (on his web site) that he will give tax credits up of $1,000 per family ($500 per individual) that will “completely eliminate income taxes for 10 million Americans”. And, he says that he will “eliminate income taxes for 7 million seniors making less than $50,000 per year.” [6]
Taking Obama’s estimates at face value, the incremental 17 million that he intends to take off the income tax rolls will push the percentage of non-payers close to 49% of voting age Americans — within rounding distance to a majority. [7]
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And, Obama’s estimates are probably low,
so make the number 55% (or higher)
Since Obama’s basic proposal is for tax credits ($500 per person or $1,000 per family) – not simply deductions from Adjusted Gross Income (AGI) — they will have a multiplier impact on the amount of AGI that tax filers can report and still owe no taxes.
For example, a childless married couple that files a joint return can currently report about $17,500 in Adjusted Gross Income (AGI) and owe no income taxes. [8]
Under the Obama Plan, that couple’s zero-tax AGI is bumped up to $27,500 since their new $1,000 tax credit covers the 10% tax liability on an additional $10,000 of AGI. And, married couples filing jointly can keep adding about $10,000 to their zero-tax AGI for each qualifying dependent child that they claim. [9]
click table to make it bigger
Based on the 2006 IRS data, approximately 25 million tax returns were filed that reported AGI less than $27,500 (the post-Obama zero-tax AGI) and required that some income taxes be paid. [10]
Assuming that 45% of those were for couples filing jointly, they represent over 22 million adults. For sure, these 22 million will come off the tax rolls – and they alone will be enough to create a non-taxpayer majority (51% of voting age adults),
click to make table bigger
And, there are more folks being pushed off the tax rolls. About 4.7 million childless individuals earn less than $13,750 (the post-Obama zero-tax AGI for childless individuals), and currently pay some Federal income taxes. This group will shift to non-payer status.
So would several million joint filers who can take advantage of the Child Tax Credit to report more than $27,500 and not pay Federal income taxes.
And, some portion of the 7 million Seniors that Obama says will have their taxes eliminated — that is the Seniors couples earning more than $27,500 (but less than $50,000) — and Senior individuals earning more than $13,750 (but less than $50,000).
So, post-Obama, the percentage of non-taxpayers will easily exceed 55% of voting age adults — a solid majority. It won’t even be close.
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The Bottom Line – Why You Should Worry
An income tax paying minority of voting age adults isn’t just a possibility. Under Obama’s plan, it’s a virtual certainty. Based on the hard numbers, Obama’s plan will create a new majority — a powerful voting block: non-tax payers. UH-OH.
Again, for those in the emerging majority that won’t pay any income taxes – or may even be getting government checks for tax credits due – the deal is almost too good to be true. To them, Obama’s plan must make perfect sense. Count on their perpetual support for the plan.
But for those in the new minority, watch out if the new majority decides that more government services are needed, or that $131 billion in income redistribution isn’t enough to balance the scales.
The Tax Foundation — a nonpartisan tax research group – has repeatedly warned that “While some may applaud the fact that millions of low- and middle-income families pay no income taxes, there is a threat to the fabric of our democracy when so many Americans are not only disconnected from the costs of government but are net consumers of government benefits. The conditions are ripe for social conflict if these voters begin to demand more government benefits because they know others will bear the costs.” http://www.taxfoundation.org/research/show/1111.html
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Sources & Notes
[1] The Census Bureau reported 217.8 million people age 18 and over; as of July 1, 2003.
http://www.census.gov/Press-Release/www/releases/archives/population/001703.html
http://www.census.gov/popest/national/files/NST-EST2007-alldata.csv
[2] The IRS reported 138.4 million personal tax returns filed in 2006.
http://www.irs.gov/pub/irs-soi/06in11si.xls
[3] The IRS reported that in 2006, approximately 45% of filed returns were by married couples filing jointly (i.e. 2 adults per return); 55% for individual filers (including ‘married filing separately’ and ‘head of household’). http://www.irs.gov/pub/irs-soi/06in36tr.xls
[4] Calculation: 138.4 million returns times 1.45 (adults per return) equals 200.7 million adults represented on filed returns
[5] http://www.irs.gov/pub/irs-soi/06in01fg.xls http://ftp.irs.gov/pub/irs-soi/06inplim.pdf
[6] http://www.barackobama.com/issues/economy/#tax-relief
[7] Analytical note: 93 million plus 17 million equals 110 million divided by 225 million equals 49%.
[8] Analytical note: $17,500 less a $10,700 standard deduction, less 2 exemptions at $3,400 each, equals taxable income of zero – so no federal income taxes are due.
[9] Analytical note: $27,500 less a $10,700 standard deduction, less 2 exemptions at $3,400 each, equals taxable income of $10,000, which at a 10% rate is a $1,000 tax liability that gets offset by the $1,000 Obama credit, reducing the tax liability to zero.
[10] http://www.irs.gov/pub/irs-soi/06in11si.xls
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Which Federal government agency is rated lowest?
September 24, 2012Answer: the Department of Education
As Nick Cannon would say on AGT, “America has voted … via a Pew Research poll.
Despite spending hundreds of billions of dollars over the past couple of decades*, the Department of Education gets the fewest favorability nods for Americans … only 40% give it a favorable rating … and its favorability rating is falling faster than any other agency.
The Education Dept’s low ratings aren’t that surprising since the U.S. is constantly reported to be trailing other developed nations in math, science and other basic skills … and since every politician lasers in on our need to fix public education (while protecting the sanctity of the teachers’ unions).
Second lowest is the IRS … also not surprising given its adversarial role versus citizens … imagine the IRS rating once the 15,000 new agents start enforcing the ObamaCare mandates on companies and individuals.
I was surprised to see the low rating for the Social Security Administration … especially since its primary mission is handing out money. Best hypothesis I can conjure is that the SSA is generally regarded as a hassle to deal with, and probably gets the brunt of ill-feelings when folks can’t make ends meet when on Social Security.
Initially, I was most surprised to see the comparatively high score for the oft-maligned Post Office … with an 89% favorability score, it’s 10 points higher than #3 – the Center for Disease Control.
Come to think of it, the Post Office hasn’t disappointed me often – especially given the number of transactions it handles. In fact, our local Post Office and our neighborhood mail carrier provide really good service. I guess that happens when people are customers not captives, and when there is some private enterprise competitors keeping the system somewhat on its toes.
First Target, now Facebook … “Sweet, you’re having a baby!”
September 24, 2012Punch line: Consumers and companies are confused as to how Facebook is using personal information to target individuals and their needs and preferences. Facebook admits the company’s ability to pin point consumer interests based on online interests, but maintains that status updates are never used to target consumers. Despite many users sharing everything on social networks, consumers are still fighting for privacy.
Excerpted from adage.com’s, “Does Facebook Know You’re Pregnant? What It Knows Depends on Whom You Ask: Social Network Says One Thing, Its Advertisers Another.”
The pregnancy of 30-year-old Sally was announced to the world through her husband’s Facebook page, after he tagged her in a photograph showing a positive home pregnancy test.
Two months later, while Sally was browsing Facebook, she noticed a Huggies ad. Sally had never “liked” Huggies or any baby-related posts or pages. Nor had she posted about her pregnancy, so she figured Facebook had connected the dots between her husband’s status update and his relationship with her.
Did Facebook and its client, Huggies, know she was pregnant?
According to Facebook and Huggies parent, Kimberly-Clark, Sally’s browsing experience resulted from blind luck.
The ad was the subject of a two-week test targeting parents of young children, Huggies fans and their friends — as well as a three-day subtest of women ages 18 to 34.
Facebook, for its part, said it rarely uses the content of status updates as a signal for ad targeting.
But plenty of marketers that target pregnant women believe they’re identifying them, at least in part, by their status updates.
Some marketers say they have been told so by Facebook.
The confusion over what exactly Facebook is doing is indicative not only of the opacity of the social network’s ad-targeting algorithms but also the privacy tightrope it walks, offering marketers the precision they crave while assuaging users that their every utterance isn’t being mined for ad targeting.
Here’s what we know … Marketers can reach pregnant women on Facebook with near-surgical precision, mixing and matching a variety of targets, such as those interested in baby products and people who like children’s music, which taken together produce a high likelihood of hitting the mark.
But Facebook is careful to note that it doesn’t use the content of status updates to target pregnant women.
Tech-savvy consumers may already assume that their status updates are a key part of the targeting recipe since Facebook’s own “data use policy” states that “key words from your stories” are used to deliver ads. But according to Facebook key words in status updates are used only rarely for real-time targeting. (A hypothetical example is a user who has posted “I could go for some pizza tonight” being served an ad with a coupon from Domino’s Pizza.)
Certainly there’s a gap between what marketers say they are being told and Facebook tells a journalist on the record.
Edit by BJP
Breaking news: Romney’s tax rate only 14.1% … but his all important GBSR is 43%
September 21, 2012OK, Romney released his 2011 tax return.
- In 2011, the Romneys paid $1,935,708 in taxes on $13,696,951 in mostly investment income.
- The Romneys’ effective tax rate for 2011 was 14.1%.
- The Romneys donated $4,020,772 to charity in 2011, amounting to nearly 30% of their income.
Holy Buffett, Mitt only paid 14.1% in Federal income taxes … a lower rate than Warren’s secretary.
Scoundrel.
Let’s re-write the tax code.
Not so fast.
Last fall, the Homa Files coined a new metric: the GBSR™ – “Give Back to Society Rate”
We defined the GBSR™ as the sum of taxes paid plus charitable contributions – since those are all money that’s supposed to be going to the common good, albeit administered by different organizations – divided by AGI.
In Romney’s case, his release says that he made $13.7 million … paid $1.9 million in taxes … and donated a whopping $4.02 million to charities.
So, his tax rate may sound meager @ 14.1%, but his GBSR™ is about 43% – and that’s not counting state & local income taxes.
My bet: add S&L taxes in and Mitt‘s GBSR™ is way over 45%.
So, it just may be that the tax code is leading fat cats to do the right thing – it’s just that they’re giving much of their dough to private charities instead of the Feds.
Do you blame them?
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Romney’s 20 year tax history
According to the Standard ,,,
- In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.
- Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.
- Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.
- Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.
- Over the entire 20-year period, Romney’s GBSR™ the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.
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For comparison …
Filers in Obama’s millionaire range ($200,000 to $250,000) donate about 2.5% of their income to charities.
Picture of the week: Remember the Somalian pirates?
September 21, 2012Well, apparently they’ve taken their game up a notch.
But, we can all relax … the President is dishing his charm to get the pirates under control.
Photo courtesy of Obama-Biden 2012
You just can’t make this stuff up.
Unemployment claims drop by 3,000 … well, not really.
September 21, 2012Yesterday’s headline’s trumpeted a 3,000 drop in initial unemployment claims.
Hooray. Right?
Of course not, the BLS revised last week’s number up by 3.000 so that it could report this week as being down by 3,000.
Huh?
Now we’re up to 79 out of 80 weeks — and, at least 20 election season weeks in a row — that the BLS’s “headline number” has under-reported the number of initial unemployment claims … and cast the jobs situation as brighter than it really is.
Based on Thursday’s BLS report, the number for the week ending Sept. 8 was revised upward from 382,000 to 385,000.
In itself, the 3,000 isn’t a big deal.
But, in context it is
Again, I ask: statistical bias or political bias?
If the former: fix it already, BLS.
Hint to BLS: just add 2k or 3k … or .8% to your prelim forecast !
I promise that I’ll stop writing about BLS reporting bias when the streak ends.
Factoids: The state of the economy …
September 21, 2012The economic analyses done by Mort Zuckerman at US News are always laden with cold facts.
Read the article for the prose. Here are the factoids:
- Annual wage increases have dropped to an average of 1.6 percent, the lowest in the past 30 years.
- A Census Bureau analysis indicates that median income in 2011 had fallen to $50,054, the fourth straight year of decline.
- Layoff announcements have risen from a year ago and hiring plans have dropped dramatically.
- 5 million people have now been out of work for 27 weeks or more. That’s roughly 40 percent of the unemployed.
- The average period of unemployment is close to 40 weeks.
- Fewer Americans are at work today than in April 2000, even though the population has grown by 30 million people since then.
- Older people are not leaving the workforce at the same rate as in the past … employment in the age group of 55 and older is up 3.9 million, even as total employment is down by five million.
- The so-called quit rate has sagged to the lowest rate in years.
- Young workers now face double-digit unemployment and job prospects for young workers aren’t very good.
- As a result, the birth rate has just hit a 25-year low of 1.87 births per woman. And
- Of jobs that have been added, more than 40 percent of new private sector jobs are in low-paying categories such as leisure and hospitality, bars, and restaurants
- Millions of people who had good private sector jobs are now dependent on the government for life support.
- Roughly 15 percent of the population, a record, representing over 46 million Americans, are in the food stamp program, compared to the 7.9 percent participation from 1970 to 2000.
- A record 11 million-plus Americans are now collecting federal disability checks. Half of them have come on board since President Barack Obama took office.
Sure doesn’t look like we’ve turned the corner yet.
HOT: Why marketing is important (and cool) … and, certainly not dead !
September 20, 2012Earlier this week, we posted the HBR article claiming that “Marketing is Dead”.
Fact is, many folks think that marketing is nothing more than a bunch of b.s. being dished by shysters.
And, some folks (think finance majors) regard marketing as unchallenging & touchy-feely … a discipline for folks who can’t cut it in finance.
Au contraire, mes amies.
This week at the annual Marketing 101 session for 1st year MBAs, I tried to convey that marketing plays a central role in most companies, is highly analytical, and – done right – is harder than it looks.
From the HomaFiles archives, here’s the HOT (Homa Online Tutorial) that pitches the case.
Buffett Rule passes the House … now, you’re talking.
September 20, 2012What gridlock in Washington?
Yesterday, the House of Reps passed a Buffett Rule that should put an end to Warren’s carping about how his taxes are too low.
According to the Washington Times:
The House passed Republicans’ own version of the Buffett Rule, which allows wealthy Americans to voluntarily pony up to reduce the deficit.
The bill, labeled the Buffett Rule Act, passed by voice vote, meaning Democrats and Republicans agreed with it.
Under the legislation, taxpayers can check a box on their taxes and send in a check for more than they owe to the IRS.
“If Warren Buffett and others like him truly feel they’re not paying enough in taxes, they can use the Buffett Rule Act to put their money where their mouth is and voluntarily send in more to pay down the national debt, rather than changing the entire tax code to inflict more job-killing tax hikes on hard-working Americans.”
Current law already allows taxpayers to send money to pay down the debt, but the process is a bit onerous.
Under their new plan, taxpayers would have an easy option on their tax returns allowing them to pay more.
Under the legislation, the money would go directly toward reducing the debt.
So, do you think Buffett will put his money where his mouth is?
I’m betting the under.
Do Americans think that they can trust government?
September 20, 2012Yes for state and local governments … the Federal government: not so much.
According to Gallup, less than 1 in 5 Americans say that they trust the Federal government
… over 80% only trust the Federal government some of the time or never.
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According to Gallup, a majority say that they trust state governments to handle their problems
…. about 2 in 3 think they can trust their local governments.
The lesson to politicos: keep it local … decentralized … closer (and more responsive) to the people.
Better vision: Warby Parker eyeglasses.
September 20, 2012Punch line: Warby Parker, a luxury eyeglass company with a social component, has grown 500 percent by following a few easy guidelines.
* * * * *
Excerpted from Inc., “How Warby Parker Grew So Fast: 3 Reasons”
Addressing a crowd of more than 550 entrepreneurs and business owners at the Growco conference, … the company’s co-founder, Neil Blumenthal, offered a bit of insight into how and why the company has grown so rapidly …
- Cut out the middle men: By working with a manufacturer in China, and designing the glasses themselves, Warby cut out the middle men and make the glasses far more affordable.
- Don’t overspend on unnecessary marketing: Instead of a five or six figure launch spend … Warby launched with two well-placed editorials in Vogue and GQ. The tactic was so effective that … within two weeks, they had sold out … and had a waitlist of 20,000 customers.
- It all comes down to company mission: When the company moved into its new offices a couple of months ago, it decided to knock down the walls of the office … “to institute mechanisms for people to learn on a regular basis.”
Edited by JDC
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Reprise: Who do income tax payers support – Obama or Romney?
September 19, 2012We posted this last week, ahead of the curve …
Since the bruhaha erupted when Carter’s grandson leaked the pirated tape of Romney speaking to donors, I thought a repost was in order …
Bottom line: It’s not 100% taxpayers for Romey; 100% non-taxpayers for Obama … but there is a statistically significant difference.
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Who do tax payers support – Obama or Romney?
That’s an easy one … but, the latest CNN poll was the first I spotted that divides the population along those lines … or, at least, sorta does.
CNN breaks the sample by those earning less than and more than $50,000 .
$50,000 is about the point where folks have to start paying Federal income taxes.*
No surprises in the data.
Romney has the edge among Federal tax payers.
Obama gets those who don’t pay Federal income taxes … by a whopping 57% to 42%.
Uh-oh.
* P.S. Yeah, yeah, yeah about payroll taxes … but they are “insurance” payments with directly associated benefits.
Behavioral analytics … bad when Target does it … OK for political campaigns?
September 19, 2012A couple of months ago Target got some bad press when it was revealed that the company was mining customers’ purchase histories to slot them into behavioral groups susceptible to tailored promotional pitches.
For example, Target identified purchases that mothers-to-be made early in their pregnancies – sometimes before they even knew they were pregnant. Think bigger jeans, skin care lotions.
Many folks railed that it was an example of big brother invasion of privacy.
Well, guess what?
Political campaigns are using the same methods that Target was using
The modern science of politics is increasingly based on principles from behavioral psychology and data analytics.
Campaigns today mine large data bases with mathematical algorithms that slot folks into categories and provide the basis for how people should be approached (or ignored).
According to the WSJ:
Perhaps the most valuable data in modern campaigns comes from statistical “microtargeting” models—the political world’s version of credit scores.
Campaigns gather thousands of data points on voters, culled from what they put on their registration forms, what they have told canvassers who have visited their homes in the past, and information on their buying and lifestyle habits collected by commercial data warehouses.
The campaigns then run algorithms trawling for patterns linking those demographic characteristics to the political attitudes measured in their polling.
Financial institutions run such statistical models to generate predictions about whether a given individual will demonstrate a certain behavior, like paying a bill on time or defaulting on a loan.
Campaigns do the same, only they are interested in predicting political behavior.
So it’s typical now to generate individual scores, presented as a percentage likelihood, that a voter will cast a ballot, support one party or the other, be pro-choice or antiabortion, or respond to a request to volunteer.
These scores now stick to voters as indelibly as credit scores.
And just as a bank officer won’t sign off on a loan without requesting one, a field director for a campaign won’t send a volunteer to a voter’s door without knowing the relevant number.
BTW: It’s Team Obama that’s doing most of this stuff.
Bad for Target … but OK for Obama.
Hmmm
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WSJ source: “The Victory Lab: The Secret Science of Winning Campaigns” by Sasha Issenberg
The Homa Files 