Political Calculations
Unexpectedly Intriguing!
June 30, 2005

Recognizing the Carnival of Education is overdue, especially so since we've begun making regular contributions over the past several weeks! In any case, in keeping with Political Calculations(TM) ongoing recognition of the best posts offered among the various Carnivals in the blogosphere, here are the top education posts from this week's Carnival (hosted by the Education Wonk):a

From the joke files: The top reasons to study Economics, as if you needed any more....

  1. Economists are armed and dangerous. Their motto: "Watch out for our invisible hands."
  2. Economists can supply it on demand.
  3. You can talk about money without every having to make any.
  4. Mick Jagger and Arnold Schwarzenegger both studied economics and look how they turned out.
  5. When you are in the unemployment line, at least you will know why you are there.
  6. If you rearrange the letters in "ECONOMICS", you get "COMIC NOSE".
  7. Although ethics teaches that virtue is its own reward, in economics we get taught that reward is its own virtue.
  8. When you get drunk, you can tell everyone that you are just researching the law of diminishing marginal utility.
  9. When you call 1-900-LUV-ECON and get Kandi Keynes, you will have something to talk about.

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June 29, 2005

Are you interested in making and saving money? If you are, there's a new Carnival in the blogosphere that's got your number! The Carnival of Personal Finance just had it's second edition, hosted this week over at the Blueprint for Financial Prosperity. The premiere edition was hosted at Consumerism Commentary. Here are the best three posts from the first two issues:

  • Macroeconomically speaking, is it possible to get out of debt? Jon of Smart Money Daily believes it is impossible for every financial entity to be debt-free at the same time.
  • With 40-year mortages becoming more common in the marketplace, JLP of All Things Financial compares the costs of these long-term obligations with 15 and 30-year mortgages.
  • Should you pay more for shipping your online purchase faster? Nickel at FiveCentNickel has the inside scoop on how shipping really works and why you shouldn’t pay the extra charges.

If the posts above have wet your whistle for more, the next edition of the Carnival of Personal Finance will be at All Things Financial.

Do you remember the electrical power crisis in California in 2000? At one point, then-Governor Gray Davis, after presiding over the state's Christmas Tree lighting on the capital lawn in Sacramento and ceremoniously flipping the switch to light the tree, felt he had to pull the plug just minutes later to conserve the state's then very limited supply of power.

The situation was bad enough that some really crazy ideas were advanced as serious solutions to the state's electrical supply problems. One of the more unique ideas involved launching satellites into space for the purpose of converting solar energy into microwave beams that could then be directed to a ground station on Earth and converted into electricity.

Solar Power Generating Satellite

As ideas go, it's a big one. Solar energy is clean, virtually free, and abundant - especially compared to other energy sources. In space, unlike ground-based solar power generating stations, the photovoltaic (PV) cells attached to an orbiting satellite would be completely unaffected by weather, smoke or dust in the air, or even the prolonged darkness of night. So, why hasn't this idea taken off?

The Dismal Science

The answer lies in the intersection of economics and engineering. Even with today's technology, which has greatly increased the electricity-generating capability of PV cells in recent years, the technology's lack of cost competitiveness with other energy sources limits its pursuit.

First, the cost of building such a solar power satellite must be considered. To generate enough energy to beam back to Earth to justify the expense of launching such a system into orbit would require constructing a very large satellite using available technology. Rocket launches aren't cheap - and it could take several launches to support the construction effort.

Second, the opportunity cost of the needed orbital real estate is substantial. To consistently provide power for a given area on Earth, the satellite would have to be positioned in geosynchronous orbit, some 22,300 miles above sea level, in order to remain in the same position in the sky above a ground station at all times. The number of geosynchronous orbit slots available for positioning a solar power satellie is limited, which means that a lot of satellites with other uses (communications being the primary one) would have to be potentially denied the use of the orbital slot designated to support generating power from space.

Third, such a satellite would also require substantial effort to keep it in its desired orbit given its size. In orbit, positioning thrusters on a satellite must be fired on semi-regular intervals in order to maintain the satellite's orbit. Without such orbital positioning maintenance, satellite orbits eventually decay - for a solar power generating satellite, this would mean eventually not being able to consistently supply power to its intended ground station as it drifts out of its desired position.

And then there's the problem of directly maintaining the satellite itself. What do you do when you need to fix the satellite? Or worse, when it's time to replace the satellite altogether? Is it really any wonder why this technology hasn't taken off already?

Where Would They Work?

Earth and Moon It does occur to me however that solar power satellites do have a role to play in supplying power to meet human needs. It's just not here on Earth! Instead, consider what it would take to supply power for a base on the Moon.

Fortunately, the solar power satellite it would take to provide power for a lunar base would be much smaller than one that would transmit power back to the Earth's surface. This means that the technical requirements for building and launching such a satellite for a lunar mission would be much less that for a mission that would transmit power back to Earth.

Also consider the extreme environment of the Moon. Daylight on the lunar surface lasts for two weeks, which is followed by darkness for another two weeks. A future lunar base powered by solar energy could get around this restriction by being located near the Moon's poles, where solar energy collection might be possible on a near-continuous basis, but that may not be the most desirable place to locate a base. Alternatively, a base could be located anywhere else on the Moon's surface, but would require significant energy storage capacity to be able to get through the lunar night.

A solar power satellite system would be more than capable of getting around this limitation. The satellite could provide power around the clock, making it possible to locate a base anywhere desired on the lunar surface. While it will still be necessary to have power generating equipment and battery storage for redundancy or safety requirements on the surface, the base would be able to get away with having a lot smaller energy generating and storage capacity, which brings up another good point: it would save weight!

For a lunar mission, the mass of what may be safely landed on the moon is just a tiny fraction of what is initially launched. For example, the Apollo 17 mission in 1972, the Saturn V rocket that launched the mission into space weighed some 6,444,965 lb (2,923,387 kg) at launch while the portion of the vehicle that was able to be safely landed upon the lunar surface weighed just 36,262 lb (16,448 kg), just 0.56% of the starting weight of the vehicle! When so much of the cost of supporting a lunar base is directly driven by the cost of launching and landing objects on the moon, the ability to not have to transport solar energy generating equipment to the lunar surface makes real economic sense.

Another application for solar power satellites is discussed at the Spacecraft blog.

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June 28, 2005

Are economists finally learning basic physics? Not long ago, Jean-Phillippe Bouchaud and Marc Mezard, both practicioners of a new hybrid field of economics and physics called "econophysics" discovered a connection between the physics of materials and the movements of money. Now, the connection between physics and economics is coming into play again as the Federal Reserve Bank of Cleveland has recently issued its June 2005 report of Economic Trends (available as a 1MB PDF document) in which the Second Law of Thermodynamics plays a starring role in explaining the reactions of financial markets following key events.

First, here are the Laws of Thermodynamics:

  1. Energy can be changed from one form to another, but it cannot be created or destroyed. The total amount of energy and matter in the Universe remains constant, merely changing from one form to another.
  2. Energy tends to flow spontaneously from being concentrated in one place to becoming diffused or dispersed and spread out, unless it is hindered from doing so.
  3. It is impossible to cool a body to absolute zero by any finite process. Although one can approach absolute zero as closely as one desires, one cannot actually reach this limit.

For most people, the Second Law of Thermodynamics makes pretty good intuitive sense. For example, the Second Law is the reason why your hot cup of coffee cools down to room temperature when you leave it sitting out. You can stave off the loss of heat by putting your coffee in an insulated cup, hindering its discharge of energy, but eventually, it will cool down to room temperature.

The writers of the Cleveland Fed's report on economic trends make use of the analogy of the laws of thermodynamics in several ways, all of which appear in the "Economy in Perspective" secton of the report. First, they note the reaction of foreign exchange markets in discharging energy by lowering the rate of exchange between the Euro and the U.S. dollar after the French rejected the proposed EU constitution.

Another example of how the Second Law is used by the Cleveland Fed applies to how financial markets are reacting the the earning potential of U.S. carmakers as they cope with structural disadvantages in costs and productivity with respect to their foreign competition. Here, the Cleveland Fed notes:

The Second Law states that once an obstacle is removed, built-up tensions eventually dissipate. For the U.S. automotive industry, credit rating agencies’ downgrades were what set the adjustments in motion, and the repercussions are being felt all along the supply chain as the industry prepares for various consolidations. Some firms are already leaving the industry, and others are working to reduce costs.

At this point, having already opened Pandora's physics box, the report's authors at the Cleveland Fed begin losing control of the science (being economists after all), by introducing the First Law of Thermodynamics, the Principle of Buoyancy and, oddly enough, kitchen safety:

Thermodynamic forces are also working to convert the potential energy bound up in the Chinese renminbi’s peg to the U.S. dollar into kinetic energy. The question, of course, is in what direction and to what degree the currencies will depart from the present fixed exchange rate, when—and if—the Chinese government alters the peg. Some market observers are convinced that the renminbi is seriously undervalued and would appreciate rapidly in a free float, much like an inflated ball that has been held underwater and then released. Others think that focusing on the exchange rate misses the bigger picture: The thermodynamics of the economic relationship between China and the United States involve far more than the dollar/renminbi exchange rate. The United States is a mature economy and, although it constantly reinvents itself, its pace of change is nowhere near that of China today. The hot frying pan that is China will take a long time to cool, and those of us who want to stay in the kitchen must be careful not to get burned.

Personally, I'm glad they stopped here because I was becoming concerned where they might be going next - Schroedinger's cat had best take note....

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June 27, 2005

The Carnival of the Capitalists is hosted this week by the fine folks at Business Blogcasting. So, without any further adieu, the best posts of the week that was are:

Best of This Week's Carnival of the Capitalists
Contributor Post Category Description/Comment
Ripples: Post Corporate Adventures Insane Corporate Efficiency - Part 3 business
business
David St. Lawrence remarks on the importance of corporate culture in determining how well a business works.
Photon Courier Technology for the Poor technology
technology
David Foster looks at how development in the poorest regions of the world can be accelerated through innovative, low-cost technology products. Best post of the week!
Gongol.com Five Big Economic Threats to the United States economics
economics
Brian Gongol reviews and provides alternative solutions for the U.S.' looming problems with pension underfunding, public debt, overbuilding in high-risk areas, retirement savings and energy.
Roth & Co. Tax Updates Tax Protestor Wins Jury Verdict; Delusion, Paranoia Break Out taxes
taxes
The tax crazies come out of the woodwork to celebrate a tax protestor's beating of the rap. Joe Kristan puts the event in perspective.

I'm actually surprised that we haven't already seen this latest development, but investing in microcap stocks may just have become easier as the Russell Investment Group (the same people behind the Russell 2000 index, among others) has rolled out a new microcap stock index!

The move, which comes as part of Russell's regular reshuffling of the publicly traded companies covered by its indices, should make it possible for small investors to gain access to the market's least capitalized stocks. While there are a number of funds that do include many of these small stocks, many are closed to the public. A recent article by AP business writer Meg Richards explains why this is so (links added):

Microcaps typically have very small trading volumes, so it's difficult to maintain a fund of any size in this space. When new funds appear, their asset levels grow very quickly. They become too large, lose their edge and are typically closed to new investors.

"There's a meaningful number of microcap funds, but unfortunately most of them close because of those liquidity issues," said Russ Kinnel, director of fund research at Chicago-based research firm Morningstar Inc. "One of the challenges investors face in picking a microcap fund is you generally have to choose among very new funds or funds with bad records, because the good ones close."

Russell's new index will cover roughly 3% of the U.S. equity market, for companies that range in market capitalization values from $60 million to $500 million. Meg Richards describes the new Russell index:

It includes companies that are traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq Stock Market, and excludes any stock on the less-regulated over-the-counter bulletin board or pink-sheet stocks priced under $1. The holdings include companies like 1-800 Contacts Inc., NutriSystem Inc. and Restoration Hardware Inc.

The average market cap for the Russell Microcap Index is $290 million, compared to about $900 million for the Russell 2000.

While investors won't have immediate access to a fund in which they might invest in Russell's new microcap stock index, it is expected that several Exchange Traded Funds (ETFs) will pop up in short order to capture the new index. At present, only Barclays Global Investors, the investment house behind iShares, has licensed Russell's microcap index and has recently filed to register a fund based on the index with the Securities and Exchange Commission.

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June 24, 2005

Did you ever get the original theme to Gilligan's Island stuck in your head? Do you know the one I mean? The one with the lyrics from the television show's early years when The Professor and Maryann were collectively referred to in the show's musical roll call as "and the rest?" Well, in creating today's dynamic table for ranking the nations and territories for which the 2003 World Factbook provides GDP and population data, Political Calculations(TM) has rounded up all the data that hasn't already been covered in the series. In doing so, I couldn't help notice that much of this data covers the world's island nations, territories and regions. As a result, the "The Ballad of Gilligan's Island" is now firmly stuck in Political Calculations' mental subconscious - and when that happens, the only way it gets unstuck is to make others think of the song. Cheers!

Now, about today's dynamic GDP table. Once again, 2002 Gross Domestic Product (GDP) data is presented that has been adjusted for each reported region's Purchasing Power Parity (PPP) and their estimated population as of July 2003. This provides each region's related GDP per Capita (which is also adjusted for PPP.) You may rank the nations in the table below according to the different categories by selecting the individual column heads:


2002 Miscellaneous GDP and Population Data
Country GDP-PPP ($USD Millions) Estimated Population (July, 2003) GDP-PPP per Capita ($USD)
American Samoa 500 70260 7116
Anguilla 104 12738 8165
Aruba 1940 70844 27384
Bermuda 2250 64482 34893
British Virgin Islands 320 21730 14726
Cayman Islands 1270 41934 30286
Cook Islands 105 21008 4998
East Timor 440 977853 450
Falkland Islands 75 2967 25278
Faroe Islands 1000 46345 21577
Fiji 4700 868531 5411
French Polynesia 1300 262125 4959
Greenland 1100 56385 19509
Guam 3200 163941 19519
Guernsey 1300 64818 20056
Jersey 2200 90156 24402
Kiribati 79 98549 802
Man, Isle of 1600 74261 21546
Marshall Islands 115 56429 2038
Netherlands Antilles 2400 216226 11099
Niue 7.6 2145 3543
Northern Mariana Islands 900 80006 11249
Palau 174 19717 8825
Puerto Rico 45700 3885877 11761
Saint Helena 18 7367 2443
Saint Pierre and Miquelon 74 6976 10608
Samoa 1000 178173 5613
San Marino 940 28119 33429
Sao Tome and Principe 200 175883 1137
Solomon Islands 800 509190 1571
Tokelau 1.5 1418 1058
Turks and Caicos Islands 231 19350 11938
Tuvalu 12.2 11305 1079
Vanuatu 563 199414 2823
Virgin Islands 2400 124778 19234
Wallis and Futuna 30 15734 1907
All the Rest 77749 8284909 9384

Sources and Acknowledgements:

Gross Domestic Product (GDP) Data: The World Factbook, 2003 via Bartleby.
July, 2003 Population Estimate: The World Factbook, 2003 GDP Data via Bartleby.
Table Sorting Function: The Daily Kryogenix.

Political Calculations' GDP Series

Here are Political Calculations' posts dealing with GDP around the world, in chronologically published order:

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June 23, 2005

As an engineer who has worked in a large corporation, I had always heard that the company's business executives would always make more than the company's engineers and scientists. Now, an intrepid reader has sent me an e-mail with a rigorous mathematical proof that explains why this is true:

Postulate 1: Knowledge is Power.

Postulate 2: Time is Money.

Now, as every engineer knows,

          Work = Power x Time

Since

          Knowledge = Power

and

          Time = Money

we have:

          Work = Knowledge x Money

Solving for Money, we get:

          Money = Work / Knowledge

Thus, as Knowledge decreases, Money increases, regardless of how much Work is done. The natural conclusion:

          The Less you Know, the More you Make.

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June 22, 2005

Scott Woolley of Forbes has an interesting strategy for avoiding taxes on his cell phone bill: get a phone number from the area within the U.S. that has low wireless telecommunication taxes (in Woolley's case, Idaho)! (HT: Robert Lawson of Division of Labour.)

If, after reading the Forbes' article, you're curious as to what the effective total wireless service taxes being charged in your state might be, in the interest of "shopping" your wireless service, the Tax Foundation has a comprehensive table showing state by state wireless taxes, which Political Calculations' presents below using dynamic tables. Just click the column heads to rank the data in the table from highest to lowest, or vice versa:

2004 U.S. State-by-State Total Federal, State and Local Wireless Telecommunication Tax Rates
State Effective State and Local Tax Rate (%) Total Effective Tax Rate (%)
Alabama 9.88 15.93
Alaska 7.48 13.53
Arizona 9.70 15.75
Arkansas 13.68 19.73
California 10.23 16.28
Colorado 12.10 18.15
Connecticut 5.96 12.01
Delaware 4.83 10.88
Florida 16.10 22.15
Georgia 15.85 21.90
Hawaii 5.99 12.04
Idaho 4.11 10.16
Illinois 18.90 24.95
Indiana 9.11 15.16
Iowa 9.39 15.44
Kansas 20.28 26.33
Kentucky 12.81 18.86
Louisiana 10.73 16.78
Maine 7.25 13.30
Maine 4.32 10.37
Maryland 25.26 31.31
Michigan 18.10 24.15
Minnesota 6.71 12.76
Mississippi 12.58 18.63
Missouri 21.74 27.79
Montana 3.83 9.88
Nebraska 23.17 29.22
Nevada 1.92 7.97
New Hampshire 6.26 12.31
New Jersey 6.69 12.74
New Mexico 6.54 12.59
New York 15.24 21.29
North Carolina 16.78 22.83
North Dakota 9.47 15.52
Ohio 8.50 14.55
Oklahoma 17.92 23.97
Oregon 11.15 17.20
Pennsylvania 15.28 21.33
Rhode Island 16.76 22.81
South Carolina 12.60 18.65
South Dakota 6.53 12.58
Tennessee 11.81 17.86
Texas 23.24 29.29
Utah 12.31 18.36
Vermont 5.22 11.27
Virginia 27.72 33.77
Washington 17.21 23.26
Washington, DC 12.19 18.24
West Virginia 21.41 27.46
Wisconsin 5.08 11.13
Wyoming 10.04 16.09

The U.S. federal government places a 6.05% tax upon wireless communication services, which has been rolled into the total effective tax rate data above. The original source of the wireless tax data is the Council on State Taxation (COST).

June 21, 2005

The Federal Reserve Bank of Dallas' 2004 Annual Report (available online as a 3.5MB PDF document) contained salary data for a variety of occupations according to their required level of education requirement (whether they required a college degree or not) and their experience level (where skilled = high, inexperienced = low or entry-level, unskilled = doesn't matter) for 2004, which Political Calculations' provides in the dynamic table below. You may click upon the column heads to rank the data from either highest-to-lowest or lowest-to-highest.

2004 Salaries - Degree vs. Experienced Non-Degree Occupations
Skill Level/ Degree Degree/ Occupation Salary
Inexperienced, Degree Accounting 41058
Skilled, Non-Degree Air Traffic Controller 95272
Inexperienced, Degree Chemical Engineering 52539
Inexperienced, Degree Computer Science 49036
Skilled, Non-Degree Dental Hygienists 59785
Skilled, Non-Degree Elevator Repairers 57077
Inexperienced, Degree English 31113
Inexperienced, Degree History 30344
Unskilled, Non-Degree Janitor 20763
Inexperienced, Degree Journalism 26758
Inexperienced, Degree Nursing 38920
Unskilled, Non-Degree Parking Lot Attendant 18055
Inexperienced, Degree Pharmacy 78593
Inexperienced, Degree Psychology 28230
Skilled, Non-Degree Real Estate Brokers 71444
Unskilled, Non-Degree Sewing Maching Operator 19373
All U.S. 2004 Average 36999

It's interesting to see that even within the groupings for both degree and non-degree occupations, education is a differentiating factor in determining an individual's income. For the non-degree occupations, the higher level of education is reflected in the form of the specialized skills an individual acquires through experience or training, as you would expect in the case of an air traffic controller compared to a parking lot attendant.

Likewise, the higher level of education required to gain the entry-level skills of an engineer or pharmacist command much more income than those degrees whose graduates do not require the same level of specialized knowledge. Think about it - you could teach a pharmacist to be a journalist and you would likely have them up to speed at the occupation in less than a year. If you tried the reverse however, it would certainly be unlikely that the journalist seeking to become a pharmacist would be anywhere near ready to work behind the counter filling prescriptions at Walgreens in the same amount of time. This difference in specialization accounts for the substantial difference in starting salary between the two occupations. Adam Smith's "division of labour" marches on!

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June 20, 2005

Previously, Political Calculations analyzed Air America Radio's business outlook, noting that the network's ability to remain a viable ongoing concern has not yet been firmly established. Not much has changed for the left-leaning radio network in the nearly two months since my original back-of-the-envelope analysis, although what has changed does not bode well for Air America.

First, Air America's ratings have continued to slip, although not substantially since the last ratings period. More notably however is a trend becoming evident in established conservative-leaning talk radio stations, whose ratings have also declined in the most recent recording period (both trends are noted on Brian Mulroney's blog, The Radio Equalizer). This development may be an indication that the talk format in radio broadcasting may be becoming less attractive from an industry perspective.

What's more interesting is that new competition for the liberal politics-oriented listener may be developing. Industry giant Clear Channel has recently begun introducing a progressive talk format to one of its stations in Ohio. After first using a publicity stunt to introduce the new format in Akron, Clear Channel has now begun expanding its programming. The new station format does not use Air America's programming at all, so it will be interesting to follow how well it performs going forward.

On the plus side of Air America's ledger is that the network has begun broadcasting in Chicago again. Station WAIT-AM has changed its call letters to WCPT-AM (for "Chicago's Progressive Talk"). No ratings are yet available for the station at this writing.

Overall, Air America Radio's position within the Business Strategy Matrix is relatively unchanged, growing slightly weaker in both Industry Attractiveness and Enterprise Strength:

BSM: Air America Radio

The Business Strategy Matrix continues to suggest that Air America's leadership should pursue a phased withdrawal from its marketplace, seeking to achieve the following goals in the interim:

  1. Preserving or boosting its cash flow.
  2. Making an opportunistic sale of the business.
  3. Increasing the business' strengths.

The great unknown continues to be whether Air America Radio is able to support its operations solely through its operational revenue or if it is still dependent upon investment capital to cover its operating costs.

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Wayne Hurlburt of Blog Business World hosts this week's Carnival of the Capitalists. Wayne makes use of his famous jedi blogging tricks for making search engines aware of a blog, as the phrase "Carnival of the Capitalists," "carnival" or links to the main CotC site appear no fewer than nine times in the text of this week's Carnival, including the post's title: Carnival of the Capitalists at Blog Business World. (Two can play that game!) That said, here are the best posts of the week as judged by me:

Carnival of the Capitalists
Blog Post Description
Fund Universe 8 Rules That Will Make You Wealthy Robert Goodman's book Independently Wealthy forms the basis of Peter's post this week, providing eight good tips on how to build your financial security.
The Blog Studio Who Should Be Blogging - Part 2. Realtors Peter Flaschner thinks that "every single real estate agent in the world should be blogging." He's right!
Joseph's Marketing Blog The Power of Empowerment Joseph DePalma offers employee empowerment as an effective tool for building your business' reputation and brand.
Gongol.com Is Debt Relief Always a Good Idea? Does debt relief work? Brian Gongol explores various approaches and notes their potential hazards.
Mad Anthony Going Postal Mad Anthony looks at the U.S. Post Office's pluses and minuses.

June 18, 2005

Will Franklin of WILLisms is covering the Iranian election at a Ramada Inn in Houston, including video footage. Be sure to follow Will's links for coverage of the event you won't see anywhere else.

June 17, 2005

Update (11 January 2005): The 2004 GDP Rankings for Asia are now available!

The Far East. The Orient. The Subcontinent. The Near East. These are all alternative names for the regions of the world that are home to some of the world's most rapidly growing economic juggernauts: Asia. Today's dynamic GDP table focuses upon the nations of Asia, taking their 2002 Gross Domestic Product (GDP) data adjusted for each country's Purchasing Power Parity (PPP) and their estimated population as of July 2003, and then provides their related GDP per Capita (also adjusted for PPP.) You may rank the nations in the table below according to the different categories by selecting the individual column heads:

2002 Asian GDP and Population Data
Country GDP-PPP ($USD Billions) Estimated Population (July, 2003) GDP-PPP per Capita ($USD)
Afghanistan 19.0 28717213 662
Armenia 12.6 3326448 3788
Azerbaijan 27.0 7830764 3448
Bahrain 9.8 667238 14687
Bangladesh 239.0 138448210 1726
Bhutan 2.7 2139549 1262
Brunei 6.5 358098 18151
Cambodia 19.7 13124764 1501
China 5700.0 1286975468 4429
Georgia 15.0 4934413 3040
Hong Kong 186.0 7394170 25155
India 2660.0 1049700118 2534
Indonesia 663.0 234893453 2823
Iran 456.0 68278826 6678
Iraq 58.0 24683313 2350
Israel 122.0 6116533 19946
Japan 3550.0 127214499 27906
Jordan 22.8 5460265 4176
Kazakhstan 105.0 16763795 6263
Kuwait 34.2 2183161 15665
Kyrgyzstan 13.5 4892808 2759
Laos 9.9 5921545 1672
Lebanon 19.3 3727703 5177
Macau 8.6 469903 18302
Malaysia 210.0 23092940 9094
Maldives 1.3 329684 3792
Mongolia 5.0 2712315 1843
Myanmar (Burma) 70.0 42510537 1647
Nepal 36.0 26469569 1360
North Korea 22.0 22466481 979
Oman 22.4 2807125 7980
Pakistan 311.0 150694740 2064
Philippines 356.0 84619974 4207
Qatar 17.2 817052 21051
Russia 1350.0 144526278 9341
Saudi Arabia 242.0 24293844 9961
Singapore 105.0 4608595 22784
South Korea 931.0 48289037 19280
Sri Lanka 73.7 19742439 3733
Syria 59.4 17585540 3378
Taiwan 406.0 22603001 17962
Tajikistan 8.0 6863752 1166
Thailand 429.0 64265276 6675
Turkey 468.0 68109469 6871
Turkmenistan 26.0 4775544 5444
United Arab Emirates 53.0 2484818 21330
Uzbekistan 65.0 25981647 2502
Vietnam 183.0 81624716 2242
Yemen 15.7 19349881 811
Asia (All) 19624.0 4055821108 4837

Sources and Acknowledgements:

Gross Domestic Product (GDP) Data: The World Factbook, 2003 via Bartleby.
July, 2003 Population Estimate: The World Factbook, 2003 GDP Data via Bartleby.
Table Sorting Function: The Daily Kryogenix.

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June 16, 2005

In case it wasn't clear to you already, the following list illustrates the differences between you and your boss:

Time Management

When you take a long time, you are slow.
When your boss takes a long time, he is thorough.

Work Ethic

When you don't do it, you are lazy.

When my boss doesn't do it, he's too busy.

Initiative

When you do it without being told, you're trying to be smart.
When my boss does the same, that is initiative.

Performance

When you please your boss, that's brown-nosing.
When my boss pleases his boss, that's co-operating.

Accountability

When you do good, your boss never remembers.
When you do wrong, your boss never forgets.

June 15, 2005

The Federal Reserve Bank of Dallas has issued its 2004 Annual Report, which examines the benefits of education in the U.S. The report, "What D'Ya Know: Lifelong Learning in Pursuit of the American Dream," is available online as a 3.5MB PDF document. (HT: Craig Depken of Division of Labour).

Among the many features that make the report worth reading is that the Dallas Fed examined how well nations around the world performed with respect to their position within the Index of Economic Freedom for 2000 (the listing for 2005 is available at Wikipedia). Here is the chart from the report's Exhibit 3, titled "Ignorance is Misery; Knowledge is Bliss" (on page 12), which shows the relationship between 2000 per capita GDP and the average number of years of schooling for each nation:

2000 GDP per Capita vs Average Years of Schooling

The report explains the chart's data (emphasis mine):

Free economies get the most out of education. The top quarter of the 108 nations in the Index of Economic Freedom (in green) cluster toward the top of the chart, indicating they’re getting a lot of per capita GDP from years of schooling. The least free quarter (in orange) tend to get less from their education, which pushes them toward the bottom of the chart. The remaining countries (in purple) make up the middle two quarters of the index.

The lines on the chart indicate the relative position of each country with respect to its peers. Countries that are above the line are effectively receiving a higher return on their schooling than those falling below the line. The Dallas Fed's report observes that the position of the U.S. below the green line indicates that "Americans aren't getting as much income as we could from our years in the classroom."

I wonder what factors account for the lower performance of the U.S. with respect to its peers. Quality of education? Demographics? Public funding? Culture? Bueller?

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June 14, 2005

The 2004 Washington State Governor's Race came to a close just over a week ago when Dino Rossi declared that he would not appeal Judge John Bridges' ruling in the election contest case to the state Supreme Court. In doing so, Rossi recognized that Judge Bridges had set an impossibly high standard in order for him to win his contest: he would have to show how each and every illegally ballot cast in the state of Washington had actually been cast. Given that the secret ballot is essential to successfully making democratic elections work, the judge's standard forever stripped the state's election contest laws of ever offering a candidate an effective remedy for gross misconduct in an election.

In effect, the judge's ruling also trivializes the state's election laws. By failing to attach any real culpability for the mishandling of absentee, provisional and precinct-cast ballots on the part of election workers and the officials to whom they report and allowing their failure to reconcile discrepancies in accordance with state law prior to certifying election results as well as their failure to verify that everyone casting ballots in the election was in fact legally eligible to do so to go without punitive rebuke, Judge Bridges failed the voters by effectively denying them any confidence that elections in the state of Washington will be held to any standard that ensures their legitimacy.

As a result, the basis of deciding close elections in the state of Washington, and especially in King County where the vast majority of voting irregularities occurred, now seems to rest upon what most benefits the majority party in power. This de facto standard of only looking out for "la cosa nostra," or in English, "this thing of ours," may now be seen in the machinations of the party in control in seeking to escape from having to fulfill even the most basic requirements of their official positions as currently prescribed by law.

Despite the impossible standard of proof by which he based his ruling, even Judge Bridges could not ignore the irregularities that characterized the 2004 stage governor's election. The judge made it clear in his ruling that "the voters of this state are in a position to demand of their executive and legislative bodies that remedial measures be instituted immediately." Who among Washington's election officials, and especially those in King County, will heed the judge's admonishments?

June 13, 2005

The concept of "finding a needle in a haystack" is often used to illustrate the difficulty of finding an object among many other, somewhat similar objects. Of course, anyone really wanting to hide one particular needle successfully will hide it among a lot of other needles. That metaphor comes to mind after reading a recent report of how Sweden may be masking its true rate of unemployment: by putting the unemployed into benefit classifications other than unemployment itself. (HT: Mahalalnobis.)

The report was written by former LO trade union economist Jan Edling, who resigned from the union after claiming that LO's leadership was trying to block publication of his work. Edling's paper has since been published online by the Swedish free-market think-tank Timbro (currently available on its Swedish language website as a 1.8MB PDF document.)

The English-language Swedish newspaper The Local describes how the unemployment numbers may be being manipulated:

Five percent of Swedes of working age are currently classed as unemployed. A further three percent are occupied in state-organised job schemes. The controversy surrounding Edling's report centres on his interpretation of the 700,000 Swedes who are either on long-term sick leave or in early retirement. Edling asks how many of these people are in fact unemployed.

Edling focuses on certain regions with high numbers of people on sick leave and in early retirement, and concludes that the real reason that people are not in work is that there are no jobs.

Edling's measure of the difference between Sweden's official estimate of its rate of unemployment and his own estimate is dramatic. Mahalanobis offers an excerpt from the Wall Street Journal ( Subscription required, links and emphasis mine):

That Sweden has far more people out of work than detailed in the official 5.5% unemployment rate isn't totally new. Beyond the official rate, an additional 4.4% of the working-age population are parked in the government's elaborate array of job-creation and training programs, according to a study by Skandinaviska Enskilda Banken AB with data from Statistics Sweden. But Mr. Edling calculates that another 10% of working-age people can be identified as unemployed, using correlations between unemployment, long-term sickness and early retirement among Sweden's municipalities and regions. This makes the actual unemployment rate closer to 20% of the work force.

If correct, how Sweden reports its unemployment rate could make for an entirely new chapter in the book " How to Lie with Statistics." (If you're not already familiar with this book, I highly recommend it!) At best, this kind of tactic represents a political calculation destined to backfire. The only real question is how long can knowledge of the magnitude of the problem be suppressed before it erupts into public view?

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This week's Carnival of the Capitalists is hosted by Byrne Hobart of Byrne's MarketView, 18-year old blogging savant and future economics and finance major at Arizona State University! And now, for a quick review of the best contributions of the week!

June 9, 2005

I don't know what it is about cows and business - but here's another entry from my e-mail inbox....

Over the years, a farmer had purchased several cars and trucks from his local automobile dealer. One day, the car salesman contacted the farmer about buying a cow.

The farmer and the salesman negotiated, and the salesman bargained the farmer from his initial $750.00 asking price down to $499.95 and a contract was signed at that price.

However, on delivery, the farmer presented the car salesman with the following invoice:

Basic Cow $499.95
Shipping & Handling $35.75
Extra Stomach $79.25
Two Tone Exterior $142.10
Produce Storage Compartment $126.50
Heavy Duty Straw Chopper $189.60
Four Spigot/High Output Drain System $149.20
Automatic Fly Swatter $88.50
Genuine Cowhide Upholstery $179.90
Deluxe Dual Horns $59.25
Automatic Fertilizer Attachment $339.40
4x4 Traction Drive Assembly $884.16
Pre-Delivery Wash and Comb $69.80
FARMER'S SUGGESTED LIST PRICE: $2843.36
Additional Dealer Adjustments $300.00
TOTAL LIST PRICE (Including Options): $3143.36

June 8, 2005

Ready to start saving for college? This calculator can help you estimate how much you'll need to set aside so that the money will be ready when the universities come knocking. The goal in using the calculator is to end up with positive results in the final expected year of college in the Amount Remaining column of the results.

The Investment Side

This portion of the calculator was modified from the Investing: Future Value calculator. One important consideration in using this calculator is to consider only the effective after-tax rate of return for your investment. For instance, if you expect you'll be in the 25% tax bracket for the duration of your investment, you should reduce your investment rate of return by this percentage to obtain the rate of return you should enter into the calculator. Alternatively, there are a large number of tax-free investment options for supporting education costs, such as 529 plans and Education Savings Accounts, among others, where you could simply enter the full rate of return for the investment.

About the College Cost Data

The number for the current cost of college comes from Florida State University, which made its undergraduate degree basic cost data easy to find on its web site, and should be fairly representative of many public universities' student costs. The number represents an in-state student's annual tuition cost for 30 credits and associated boarding, food and textbook costs. Since your expected costs may differ, use a figure that best reflects your particular situation.

The college cost inflation rate comes from FinAid, and typically, college tuition increases at a pace nearly twice that of inflation, with annual increases ranging between 5.0% and 8.0%. The rate of 7.0% has been entered for the sake of erring on the conservative side, although you may alter the figure as you see fit.



College Investment Data
Input Data Values
Starting Principal ($USD)
Amount of Regular Deposits ($USD)
Frequency of Deposits
Annualized Investment After-Tax Growth Rate (%)
Compounding Period of Investment
College Cost Data
Input Data Values
Current Annual Cost of College ($USD)
Annual College Cost Inflation Rate (%)
Years Until College
Expected Number of Years in College

Projected Investment Values and College Costs
Values at Beginning of College Year ($USD)
Year of College Investment Value College Cost Amount Remaining
Freshman
Sophmore
Junior
Senior
Super Senior
Super2 Senior

About the College Investing Calculator

The calculator doesn't account for scholarships or student loans, which might reduce the amount you would have to save to pay for college. The calculator assumes that the costs for a full year are paid up front and that the student will attend college for the full year, both of which simplify the math involved. Likewise, the calculator also assumes that the neither the rate of return for your investment nor the rate of tuition inflation varies over the term of your investment.


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June 7, 2005

BusinessWeek's Blogspotting's Stephen Baker writes on in "The End of the Beat Reporter" of his lunch conversation with a media executive:

He said that the day of the classic "beat reporter," is coming to an end. Replacing the legions of beat reporters banging out their stories in newsrooms, he predicts, will be a far smaller group of so-called multimedia journalists. These people will be higher paid. They will know how to harvest the knowledge of experts and citizen reporters alike, and will fashion new journalistic products out of various media. They will have entrepreneurial skills and many will create their own brands.


- May 19, 2005

Which naturally led me to think of the following thought from BusinessPundit regarding the potential sale of Fast Company:

Maybe we can start a business blog buyout fund and purchase the magazine ;-)


- May 24, 2005

BusinessPundit's Rob may not be serious (Yet.... - Ed.), but wow, wasn't that fast?! It certainly would save some suitably-inclined, well-heeled blogging entrepreneur quite a bit of time to take over an existing brand and rejuvenate it than to build one up entirely from scratch. Then again, they would have to deal with the existing brand's baggage. Still, it's probably only a matter of time....

June 6, 2005

Perhaps the hardest thing to do in management is to manage through a crisis. The crisis could be anything - literally. Your fast-food restaurant could be the victim of a criminal conspiracy that damages its reputation and its business. Your company's CFO might be involved in criminal activity involving a federal investigation. Then again, you might have some explaining to do when the public discovers that your solution to disposing unwanted birds at your chicken farm involves building a crocodile farm next door.

Crises like the ones mentioned above have the ability to shake the trust that your company's customers, suppliers, employees and other stakeholders have in your company. As a manager in this situation, you may expect to find yourself drawn away from running the day-to-day operations of your business in order to deal with the crisis forced upon you on two levels - one level involving the particulars of the crisis itself and another level that must provide leadership for all those who have a personal stake in the success of your company.

So, what do you do? Aside from continuing to run the business, you will also need to rebuild the confidence of everyone who might be potentially impacted as a result of the crisis your company is undergoing. Emmett Seaborn of the Human Resource service consulting company Towers Perrin has outlined a 12-step crisis communication plan for re-establishing trust with a company's stakeholders (via BusinessTrainingMedia.com):

  1. Get your leaders in front of people. Let your people see leaders visibly handling the issue with candor, credibility, and concern.
  2. Help your leaders avoid the spin. People will quickly see through any effort to shade the facts.
  3. Tell all the news you have—even bad news. Save the time-release strategy for another time. Tell everything you know so that employees have little room to jump to their own conclusions.
  4. Connect with all stakeholders. Communicate with all your constituencies, especially employees.
  5. Reach beyond the media. Don’t just send a letter to employees, or let news reports do the talking for the company. Send flesh-and-blood humans to talk with employees about their concerns.
  6. Offer the opportunity for dialogue. The translation and interpretation of messages happens through dialogue and demonstration, not by reading memos.
  7. Balance high tech with high touch. Computers are great for fast communication, but they don’t replace in-person conversation and discussion.
  8. Listen to your people. Ask how they are responding to the bad news and what questions they might have. The process doesn’t have to be formal. Just making the effort sends a positive message.
  9. Communicate and involve more, not less. Don’t disappear. Avoid the natural reflex to clamp down when people most need to hear from you. When it feels like you’ve told your story over and over, you’ll know you’re on target.
  10. Remind people of the fundamentals. Repeat, repeat, repeat why you are in business, how the business works, what the business needs to achieve, and how employees can contribute.
  11. Help people see their roles. Communicate the business goals and the employee’s role in achieving them. Be clear about the rewards that will come from that effort.
  12. Ask people to move on. Limit the permission to whine. Once you have communicated openly and thoroughly, ask people to move on. There is a point when an organization must stop focusing on crises and begin to focus again on serving customers, making money, and creating value for shareholders.

The best time to craft your company's crisis communication plan is long before you have crisis that requires it. Having an effective crisis communication plan can make a huge difference in your company's ability to recover from its ordeals. By reinforcing your business' key relationships at a time of crisis, you are building the foundations for your company's future success after the crisis has passed.

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This week's Carnival of the Capitalists is hosted by Kaushik Gala of GalaTime. The best posts of the week include:

June 3, 2005

Today's dynamic GDP table focuses upon the nations of the Pacific Rim, and just for fun, tosses in the Pacific Ocean bordering U.S. states of Alaska, California, Hawaii, Oregon and Washington using each states individual 2002 Gross State Product (GSP), the state equivalent of Gross Domestic Product (GDP). As with Political Calculations other dynamic GDP tables, you may rank the data in the table by clicking upon the column heads.

The data in the table below has been adjusted for each country's Purchasing Power Parity, which takes into account how much an individual can buy within a country along with the currency exchange rate between the individual country's currency and the U.S. dollar. This allows for a more direct comparison between countries with different rates of exchange in their currencies, as well as what their currencies are capable of buying within their own countries. As a final note, the individual U.S. state GSP data has not been adjusted this way.

2002 Pacific Rim GDP and Population Data
Country GDP-PPP ($USD Billions) 2003 Estimated Population GDP-PPP per Capita ($USD)
Australia 528 19731984 26759
Bangladesh 239 138448210 1726
Bhutan 2.7 2139549 1262
Brunei 6.5 358098 18151
Cambodia 19.7 13124764 1501
Canada 923 32207113 28658
Chile 151 15665216 9639
China 5700 1286975468 4429
Colombia 268 41662073 6433
Costa Rica 32.3 3896092 8290
Ecuador 41.7 13710234 3042
El Salvador 30 6470379 4637
Guatemala 48 13909384 3451
Honduras 17.6 6669789 2639
Hong Kong 186 7394170 25155
India 2660 1049700118 2534
Indonesia 663 234893453 2823
Japan 3550 127214499 27906
Laos 9.9 5921545 1672
Macau 8.6 469903 18302
Malaysia 210 23092940 9094
Maldives 1.3 329684 3943
Mexico 900 104907991 8579
Mongolia 5 2712315 1843
Myanmar (Burma) 70 42510537 1647
Nepal 36 26469569 1360
New Caledonia 3 210798 14232
New Zealand 78.8 3951307 19943
Nicaragua 12.8 5128517 2496
North Korea 22 22466481 979
Pakistan 311 150694740 2064
Panama 17.3 2960784 5843
Papua New Guinea 1.2 5295816 227
Peru 132 28409897 4646
Philippines 356 84619974 4207
Polynesia, French 1.3 262125 4959
Russia 1350 144526278 9341
Singapore 105 4608595 22784
South Korea 931 48289037 19280
Sri Lanka 73.7 19742439 3733
Taiwan (China) 406 22603001 17962
Thailand 429 64265276 6675
U.S. - Alaska 29.7 643786 46133
U.S. - California 1368 35116033 38957
U.S. - Hawaii 44 1244898 35344
U.S. - Oregon 115 3521515 32656
U.S. - Washington 233 6068996 38392
Vietnam 183 81624716 2242
The Pacific Rim (All) 22510.0 3956840086 5689

Sources and Acknowledgements:

Gross Domestic Product (GDP) Data: The World Factbook, 2003 via Bartelby.
July, 2003 Population Estimate: The World Factbook, 2003 GDP Data via Bartelby.
Table Sorting Function: The Daily Kryogenix

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