Do Pot and Microbreweries Explain the Future of the U.S. Economy?

Washington Post: “Breweries and dispensaries offer lessons for how policymakers might nurture a small-business comeback in the United States. But they offer very different lessons, one focused on government intervention, the other on reducing hurdles for entrepreneurs to enter a market — and their ultimate lesson could prove to be, the big guys tend to win in the end.”

Economists can’t pinpoint what’s driving a start-up slowdown, “but one theory has to do with market power. As big companies get bigger — in retail or tech or anything else — they find ways to shield themselves from competition, often by lobbying the government.”

“The beer industry is more dominated by big players than almost any other in the United States … And yet, for all that market power, the beer giants are acting scared of their smallest competitors — perhaps because there are more of them every day.”

“There are simple reasons why brewing is so friendly to start-ups: … It doesn’t cost much to learn to brew … It also doesn’t cost much to start a brewery, relatively speaking.”

“The pot industry’s approach to start-up cultivation is the opposite of the beer industry — higher barriers to entry, coupled with strict regulations. And yet, some cannabis entrepreneurs think they can copy a … secret of microbrewers’ success: artisanal differentiation.”

Suing States Quietly Look for Ways to Comply with Clean Power Plan

E&E News: “Legal opposition to U.S. EPA’s Clean Power Plan roared into action in recent weeks, with Mississippi being the latest of 27 states now challenging the regulation in court.”

“But a review of how all the suing states are approaching the climate rule reveals that even though a state may be litigating the Clean Power Plan, it doesn’t mean it’s not actively considering how to achieve the required emissions cuts.”

“Few suing states are not publicly discussing how they might comply with the rule; most in this category have Republican governors with presidential aspirations. And in recent weeks, the ‘just say no’ strategy encouraged by Senate Majority Leader Mitch McConnell (R-Ky.) seems to have faded away.”

“Even EPA’s staunchest opponents are saying it would be impractical to ignore the climate rule altogether.”

“Much of this is because the parties charged with actually achieving the carbon emissions reductions — air regulators, power companies and grid operators — want to know their state’s strategy might work as soon as possible.”

“In Michigan, the first state to announce it will be writing a compliance plan while suing EPA, leaders argued that this strategy will ensure that the compliance plan doesn’t end up in federal control. This decision was quickly applauded by many of the state’s power companies.”

How Miserable Are Americans?

Matt O’Brien: “The economy is supposedly the least miserable it’s been in almost 60 years, but don’t try actually telling anyone that.”

“That’s because the so-called misery index, which adds up the inflation and unemployment rates, doesn’t really tell us that much about the state of the economy right now. There are three problems with it. The first is that it says lower inflation is always better inflation, when that isn’t necessarily the case. The second is that, even seven years after the crisis, the unemployment rate still isn’t doing a great job capturing all the people in the labor market who actually want jobs or better jobs. And the third is that you shouldn’t put equal weight on inflation and unemployment when the second one is much worse. Add it all up, and you get a metric that paints a much sunnier picture of the economy than real life.”

Source: BLS

What’s Driving the New Low for Congress? Republican Dissatisfaction.

Gallup: “Americans’ current 11% job approval rating of Congress is its worst rating so far this year. It is also barely better than the all-time low of 9% from November 2013, after the last major government shutdown.”

Congressional Job Approval

“The 86% of Americans who disapprove of Congress in the Nov. 4-8 poll ties the high disapproval figure in Gallup’s 41-year trend, found in the November 2013 poll and two others.”

“Frustration with the party leadership may explain why Republicans (8%) are slightly less likely to approve of the job Congress is doing than either independents (13%) or Democrats (11%), even though Republicans have majority control of both houses. Usually, Congress’ approval ratings are significantly higher among supporters of the majority party.”

Medicare Premiums to Increase by 16% not 52%, as Initially Projected

According to the most recent Kaiser Family Foundation newsletter, as a result of the recently enacted budget deal in Congress, “the 2016 Medicare Part B monthly premium will be $121.80, increasing by 16 percent over the 2015 amount—far lower than the increase initially projected by the Medicare actuaries, a new brief from the Kaiser Family Foundation explains. The Part B premium increase will affect 3 in 10 Medicare beneficiaries. The remaining 7 in 10 beneficiaries will pay the same $104.90 monthly premium in 2016 as they paid in 2015, thanks to protections in Social Security law that exempt them from the increase.”

Figure 1: Medicare Part B Monthly Premiums, 2015-2016

“The brief describes how the Medicare Part B premium and deductible are affected for 2016 by the Bipartisan Budget Act of 2015, including a new $3 per month fee for some beneficiaries to offset federal spending. It also lays out the connection between the Medicare Part B premium, the Social Security COLA, and the so-called ‘hold-harmless’ provision, and why, without the change in law, Medicare premiums would have increased by 52 percent for the 30 percent of beneficiaries not protected by the hold-harmless provision.”

Personal Explanations: How Congress Explains Its Absences

Pro Publica: “Voting attendance has become a topic of discussion in the Republican presidential primary, as Florida Sen. Marco Rubio has missed about a third of all votes this year, by far the most in that chamber.”

“In the House, unlike the Senate, lawmakers are given a chance to provide ‘Personal Explanations’ to explain missed votes … ProPublica has collected all of the Personal Explanations filed since 2007 — some 5,058 in all, covering 21,176 votes — and created a database that lets readers look up their representatives’ missed votes, as well as their explanations. These statements … document a little-discussed aspect of the lives and work of lawmakers, and provide hints at the competing priorities and difficulties of a system that, to many, seems chronically dysfunctional.”

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“The reasons lawmakers cite most for missing votes range from the mundane (travel delays, often due to weather, or remaining in their districts for job fairs) to more personal (the birth of a child or a graduation ceremony or illness). Lawmakers have missed more than 2,000 votes for medical reasons, and thousands more for personal and family reasons.”

“Democrats have missed more votes than Republicans since the beginning of 2007, but they account for an even greater share of the explained missed votes: two of every three since the beginning of 2013.”

Pro Publica lists the Representatives with the most missed votes: Bobby Rush and Luis Gutierrez, both Illinois Democrats, top the list at 22.4% and 15.1%, respectively.

 

 

 

Last Night’s Debate Tactics: Denial and Deception

Jonathan Chait, commenting on last night’s debate, observes that “all the candidates prefer to live in a world in which big government is crushing the American dream, and all of them lack even moderately credible specifics with which to flesh out this harrowing portrait. The most successful efforts were made by the candidates who did not even try and, in their different ways, used personal symbolism in place of policy detail. The two candidates who do this the best are Rubio and Donald Trump. Rubio answers the question about changing America by framing the problem in generational terms. What’s wrong with America, he explains every single time he is asked, is that it is old, and what’s needed is something new, i.e., him. Trump has the exact same approach, only in his telling, every problem is a matter of losing, and the solution is to bring in a president who wins, i.e., him. Both the Rubio and the Trump themes can be adapted to any subject, and can be stretched to cover up for a lack of policy substance or even ideological coherence. The lack of socialist horrors to have materialized under Obama is not a problem when your promise is to be new or to win.”

“In a debate where chastened moderators avoided interruptions or follow-ups, the candidates were free to inhabit any alternate reality of their choosing, unperturbed by inconvenient facts.”

Philosophy Majors Actually Earn More Than Welders

Matthew Yglesias: “Early in the Fox Business debate, Marco Rubio took a strong stand in favor of vocational education. ‘For the life of me I don’t know why we stigmatize vocational education,’ he said. ‘Welders make more money than philosophers. We need more welders than philosophers.'”

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“According to the Bureau of Labor Statistics, the median annual salary of a welder is just over $37,420 a year. As you can see, philosophy majors do considerably better than that. This isn’t to say there’s no strong case for vocational education. But it makes perfect sense for people who are interested in philosophy and can do the work to study it.”

Renewables to Overtake Coal as World’s Largest Power Source

Eco Watch: “The International Energy Agency’s latest report found that ‘in advance of the critical COP21 climate summit in Paris, there’s a clear sign that an energy transition is underway.’ The World Energy Outlook 2015 report, published today, found that ‘renewables contributed almost half of the world’s new power generation capacity in 2014 and have already become the second-largest source of electricity (after coal).’”

“The report also found renewables are set to become ‘the leading source of new energy supply from now to 2040.’ And renewables will overtake coal as the largest source of electricity generation by the 2030s.”

“’Renewables-based generation reaches 50 percent in the EU by 2040, around 30 percent in China and Japan, and above 25 percent in the United States and India,”’ according to IEA estimates.”

Pie charts are rubbish - but basically less coal, more wind, solar

Global Temperatures to Reach an Alarming New Record

Mashable: “The globe is set to pass a symbolic yet significant climate threshold in 2015 while careening into a new era of supercharged global warming, new data released Monday shows.”

“This year, global average surface temperatures are likely to reach 1 degree Celsius, or 1.8 degrees Fahrenheit — which is above preindustrial temperatures for the first time, according to the UK Met Office. This puts the world halfway to the internationally agreed warming target of 2 degrees Celsius, or 3.6 degrees Fahrenheit.”

“The Met Office is one of four agencies in the world that maintain official global temperature records. Another of these groups, the National Oceanic and Atmospheric Administration (NOAA) in the U.S., corroborated the UK report on Monday.”

Temperature Increase

Despite Bad Politics, GOP States Are Sticking With Medicaid Expansion

Washington Post: “Republican-led states that expanded Medicaid are sticking with the change, despite qualms and intense political pressure within the GOP about embracing a key part of President Obama’s health-care law.”

“GOP governors and legislators have balked at repealing expansion partly because of the benefit of providing federally funded health insurance to large numbers of constituents, analysts say.”

“They also wish to keep the billions of dollars of federal funds that … gives states that broaden Medicaid.”

“Of the 10 states in which Republican governors expanded Medicaid, none has backed out in the face of frequent efforts by GOP legislators to reverse the decision.

“’Once you step over the threshold and have tens or hundreds of thousands of people getting coverage, it’s very hard to go backward, which is why for opponents it’s a battle to the death to make sure it doesn’t happen in the first place,’ said Sara Rosenbaum, a professor of health law and policy at George Washington University.”

Will The Fed Raise Rates in 2015?

Wall Street Journal: “Economists are taking Federal Reserve officials at their word—the first interest-rate increase will come this year.”

“About 64% of respondents to The Wall Street Journal’s monthly survey of economists now say the Fed’s Dec. 15-16 meeting will culminate with the first rate rise in nearly a decade.”

“’The Federal Reserve has all-but-telegraphed a desire to begin raising rates by year’s end, and this is likely to be at their December meeting,’ said Chad Moutray, the chief economist for the National Association of Manufacturers.”

“Despite these assurances, many investors in financial markets remain skeptical. Futures contracts in Chicago imply just a 39% probability that the central bank will raise rates this year, according to data from CME Group.”

“While most economists thought the Fed would raise rates in December, 23% said it would wait until March, the second most popular response.”

Carbon Levels Projected to Surpass a Historic Milestone

The Guardian: “The Earth’s climate will enter a new ‘permanent reality’ from next year when concentrations of CO2 in the atmosphere are likely to pass a historic milestone, the head of the UN’s weather agency has warned.”

“The record concentrations of CO2 in the atmosphere were up 43% since pre-industrial times, said the World Meteorological Organization (WMO), prompting its secretary general Michel Jarraud to say immediate action was needed to cut CO2 emissions.”

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“Concentrations of CO2 stood at a global annual average of 397.7ppm in 2014, up from about 278ppm in 1750, and the UN said the global annual average is likely to pass the symbolic 400ppm milestone in 2016. Scientists say that the ‘safe’ level of CO2 to avoid dangerous global warming is more like 350ppm.”

The Francis Effect: More Americans are Worried About Global Warming

The Yale Project on Climate Communication reports that “today more Americans and more American Catholics are worried about global warming than six months ago and more believe it will have significant impacts on human beings.  Some of these changes in Americans’ and American Catholics’ views can be attributed to the Pope’s teachings, as 17 percent of Americans and 35 percent of Catholics say his position on global warming influenced their own views of the issue.”

“Key findings include: Americans have become more concerned about global warming. More Americans say that global warming is happening (Americans: from 62% in March to 66% in October, +4 points; American Catholics: from 64% in March to 74% in October, +10 points).”

“More Americans think global warming will harm people here and abroad. More think global warming will cause a great deal or moderate harm to people in developing countries (Americans: from 48% to 63%, +15 points; American Catholics: from 45% to 62%, +17 points).”

“Aligned with Pope Francis’s message, Americans are more likely to think global warming is a moral issue (Americans: from 32% to 38%, +6 points; American Catholics: from 34% to 42%, +8 points).”