QUOTE OF THE DAY
WSJ: The Wisdom of Gary Becker
In the 19th century, John Stuart Mill commented on the rapidity of economic recovery from national disasters and wars. He recognized that nations recover quickly as long as they retain their knowledge and skills, the prime engines of economic growth. America retains its vast supply of both, which suggests that, contrary to fears, the Sept. 11 attacks are unlikely to worsen the medium- to long-term economic outlook.
The effects of the earthquake that hit the Japanese city of Kobe in 1995 illustrate Mill’s conclusion. This quake destroyed more than 100,000 buildings, badly damaged many others, and left hundreds of thousands homeless. Over 6,000 people died. Estimates place the total loss at about $114 billion (more than 2% of Japanese GDP at the time). Yet it took only a little over a year before GDP in the Kobe region returned to near pre-quake levels.
New York Times: From Rags to Riches to Rags
BY now most of us know the basic facts of America’s rising income inequality: Since the early 1970s, the gap between the top and bottom of the income distribution has expanded significantly; what’s more, the only group to have experienced real economic gains during this period has been those in the top 20 percent, with gains heavily concentrated in the top 10, 5 and — most famously — 1 percent.
The picture drawn of the 1 percent has been that of a static population, just as the 99 percent is often portrayed as unchanging. There is a line drawn between these two groups, and never the two shall cross.
But is it the case that the top 1 percent of the income distribution are the same people year in and year out? Or, for that matter, what about the top 5, 10 and 20 percent? To what extent do everyday Americans experience these levels of affluence, at least some of the time?
SF Gate: Illinois schools struggle to soften pension losses
Concerned about retirements and its ability to recruit new professors, the University of Illinois is working on a plan to make up for what employees will lose after the state’s landmark pension overhaul, but most other state universities say they don’t have the ability to follow suit.
Most say they just don’t have the money to do anything about it.
“Where does this money come from?” asked Matt Bierman, budget director at Western Illinois University, where up to 150 employees are expected to retire, almost 8 percent of the university’s 2,000 staff and faculty. “If we’re going to add another benefit to our employees, which is probably deserved, we still have to find the revenue or cut expenses.”
Crain’s: Plastic ban means higher costs are in the bag
Now that Chicago aldermen have passed a partial ban on plastic bags, executives at Binny’s Beverage Depot have to rethink how they source the tens of thousands of bags the 30-store chain runs through every month.
“We can go paper, we can go compostable, we can go many different directions,” says Dale Maple, Binny’s internal auditor and sourcing manager. “We don’t know yet. All I can say is that we play by the rules and we’ll work to get the best cost available on the best alternative.”
Ms. Maple says a single large Binny’s location runs through 2,600 bags per month. At 3 cents a pop, that means the company pays about $78 every 30 days to keep the store in bags. If Binny’s were to switch to paper bags, which cost about 6 to 9 cents each depending on size and handles, the location’s outlay would jump to between $156 and $234 each month.
The Economist: Where there’s smoke
ELECTRONIC cigarettes made their American debut seven years ago. People have bickered about them ever since. Some praise e-cigarettes—which deliver a vapour with nicotine, but no tobacco—for helping traditional smokers to quit. Others fret that they will promote nicotine addiction and reduce the stigma of smoking, which in America now ranks somewhere between theft and public indecency.
On April 24th American regulators stepped in (as the European Parliament did in February). The Food and Drug Administration (FDA) proposed rules for e-cigarettes. These would, among other things, ban sales to children and require firms to list ingredients, include warnings that nicotine is addictive and register new products with the agency. The FDA did not propose banning flavours or advertising, but may do so in future. It will accept comments on its plan until July 9th. Even after it finalises this set of rules, it may later issue further restrictions.
Cities, states and even employers are testing their own rules, too. For example UPS, a shipping company, is charging workers who use e-cigarettes more for their health insurance. (Only non-union workers, of course; the Teamsters would surely stub out such an idea.) As of April 29th it is forbidden to “vape” in Chicago’s restaurants and shops or even in New York City’s parks. Rhode Island may slap e-cigarettes with an 80% tax. On May 1st city health commissioners will meet in Washington, DC to discuss further rules.
Chicago Tribune: Latinos take pass on Obamacare in Illinois
Despite launching a Spanish language website, a bilingual call center and spending millions on outreach and marketing efforts targeting Latinos, the state of Illinois was unsuccessful in persuading the majority of these consumers to sign up for health insurance coverage in 2014, federal data show.
Only a little more than 1 in 20 Latinos in Illinois who were eligible to buy private health insurance under the Affordable Care Act did so in the first year, according to a Tribune analysis of enrollment figures released last week and federal Census data.
The lackluster participation numbers concern advocates, who question whether Latino consumers were targeted appropriately with federally funded, state-led outreach programs
Daily Herald: Business tax breaks of $310 billion spark partisan squabble
The U.S. House Ways and Means Committee is heading toward approving $310 billion of tax breaks, as Republicans defeated Democratic objections to the plan’s budgetary costs.
The tax breaks, many of which benefit companies such as Intel Corp. and General Electric Co., have bipartisan support. How and whether to offset their cost remains an area of dispute.
The Republicans’ proposal would make the breaks permanent, ending the lapse-and-revive cycle that has persisted for years. The six breaks under discussion and dozens of others expired Dec. 31. The move separates some of the breaks from Republicans’ broader goal of revamping the U.S. tax code.
CARTOON OF THE DAY
