Nums: Who is likely to do a better job – Federal government workers … or zombies?

April 15, 2014

I guess Zombies are a rage these days, so Rasmussen  must have felt obligated to pop that question to a broad sample of Americans.




Here’s what Rasmussen found ..,

Read the rest of this entry »

Mouse tracks: Mickey’s hot on your trail …

April 14, 2014

According to Business Week

“Disney has launched a $1 billion experiment in crowd control, data collection, and wearable technology that could change the way people play—and spend—at the Most Magical Place on Earth. “



The innovation – called MyMagic – let’s Mickey track every move you make around the old Magic Kingdom.

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Want a job? Then learn to crunch nums …

April 11, 2014

McKinsey recently published a report “Big Data – The Next Frontier” that concludes:

The United States faces a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts to  make decisions based on their findings.


Crunch those nums …

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Nums: Ask why … not just how many.

April 10, 2014

Some highlights from an HBR article:  The Hidden Biases in Big Data

These days the business and management science worlds are focused on how large datasets can decode consumers’ behavior patterns … enabling marketers to laser-target high potential prospects with finely-honed messages, offers, and “attention”.

“Big data” … becomes problematic when it adheres to “data fundamentalism” … the notion that correlation always indicates causation, and that massive data sets and predictive analytics always reflect objective truth … that  “with enough data, the numbers speak for themselves.”


Big data has hidden biases in both collection methods and analysis …

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C’mon, buy one more thing, OK?

April 9, 2014

In class this week, I was noting that for many (most ?) retailers, the difference between low (on no) profits and extraordinary profits is getting people to throw just one more item into the shopping cart.

Well, Business Insider must have been listening in …



Specifically, BI offered up  18  ways that retail stores get us to buy more stuff.

Here’s the list …

Read the rest of this entry »

Forget cow tipping … there’s a new sport.

April 8, 2014

A news story caught my eye yesterday.

But, first some context …

Have you ever heard of “cow tipping?

It’s a ritual where drunk farm boys  sneak up on cows and tip them over.

Technical note: I have no idea why they have to be drunk, but it’s always stated that way.


Last year , Modern Farmer magazine published a scientific study on cow tipping.


Basically, Modern Farmer debunked the rural legend:

 Cow tipping, at least as popularly imagined, does not exist.

Drunk young men do not, on any regular basis, sneak into cow pastures and put a hard shoulder into a cow taking a standing snooze, thus tipping the poor animal over.

While in the history of the world there have surely been a few unlucky cows shoved to their side by gang of boozed-up morons, we feel confident in saying this happens at a rate roughly equivalent to the Chicago Cubs winning the World Series.

The evidence against cow tipping is immense, and backed up by both farmers and the laws of physics

Ignore the cheap shot at my favorite Cubbies … focus on the “boozed up morons” and the “laws of physics”.

The Modern Farmer study was provocative  enough that it was picked up by with the following headline:




Uh-oh, this is where things get really interesting …

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List price, realized price … and the war on doctors.

April 7, 2014

Have you ever really looked at the EOB (“Explanation of Benefits”) that you’ve gotten from your health insurance company after getting medical care?

I hadn’t … just threw the letters into the file … or wastebasket.

But, the ObamaCare launch has heightened my interest … and recently, unfortunately, I’ve been able to gather some personal empirical data points.




Here’s the first part of my story …

Read the rest of this entry »

What are your chances of dying from ___ ?

April 4, 2014

OK, here’s a test for you  …


Rank the the following by the odds that somebody who is in the group or who is exposed to the risk is likely to die.

Make #1 the highest risk of dying in the next year; make #7 the lowest risk circumstance

  • For women giving birth
  • For anyone thirty-five to forty-four years old
  • From asbestos in schools
  • For anyone for any reason
  • From lightning
  • For police on the job
  • From airplane crashes

And the answer is …

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Do the ObamaCare exchanges really need healthy young people?

April 3, 2014

Now that the ObamaCare site has logged over 7 million sign-ups (yeah, right) I expect the focus to shift to the mix of the Exchange’s mix of old, unhealthy folks who consume lots of healthcare (i.e. more than they pay for their insurance) and young invincibles who pay in but don’t consume much.

The common wisdom is that the ObamaCare insurance exchange needs healthy young people to subsidize the older, less healthy enrollees … otherwise, policies offered on the exchanges will go into a premiums’ death spiral.

I’m not so sure.




Here’s my thinking …

Read the rest of this entry »

6 million is a “sliver”, but 7 million is a huge success … say, what?

April 2, 2014

Yesterday, President Obama took a victory lap for getting over 7 million folks to put a free or heavily discounted ObamaCare policy in their shopping basket or to click the “I tried, don’t fine me” button.

Still no word on how many folks “bought” policies … i.e. paid the 1st months premium  … insurance companies say that 20% haven’t.

And, McKinsey says 73% of the 7.1 million are from the pool of over 6 million folks who had their insurance policies cancelled because of ObamaCare.

Focus for a second on that 6 million number.

At the time the cancellations were announced, Jay Carney – Obama’s front man — said the 6 million is “just a sliver or cut of the  5% of the people on the individual market who are affected.”

Here’s the video clip.  The killer quote comes at about the 2:20 mark

 click to view video


Let me be sure that I understand: 6 million is a “sliver” but 7 million is a big number.


What if the 7.1 turns out to be only 1.5  … [7.1 X 80% X 27% = 1.5]

Won’t that be smaller than a sliver?


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Tainted donkey meat … say, what?

April 1, 2014

Recent issue of Business Week ran an article titled “Keeping the Mystery Out of China’s Meat”

Can’t explain why I decided to read it.



But, I did … and here’s what caught my eye.

Read the rest of this entry »

MH370: My favorite conspiracy theories ….

March 31, 2014

Below is an interesting infographic from Engineering and Technology Magazine listing the array of likely causes:

  • Catastrophic structural failure
  • Bad weather
  • Engine failure
  • Hijack
  • Terror attack
  • Pilot suicide




Guess what?

The list doesn’t include either of my 2 favorites ….

Read the rest of this entry »

Should a family of 5 have to pay more at a restaurant than a family of 3?

March 28, 2014

The answer is obvious, right?

They take up more seats, require more server time, and eat more food.

Why do I ask?

Virtually all articles re: ObamaCare are saying “at least save the popular parts like allowing adult children on their parents’ policies until they are 26”.

First, the term “adult-children” gives me the creeps. But, that’s beside the point.

I don’t care if insurance companies have to carry 26 year olds on their parents’ policies, but I don’t understand why you & I have to pay for it … not the adult-children’s parents.

Now, practically all employer-sponsored  health insurance plans charge premiums in tiers: employee only, employee plus spouse, employee plus children, and employee plus spouse and children. Note: it doesn’t matter if the employee has 1 child or a dozen children … same premium.

Say what?

For example, the United Healthcare plan through Georgetown — which is probably pretty typical — charges:


Note that it costs  $7,346 to tack a spouse (or equivalent) — presumably an adult — onto an employee’s policy.

Read the rest of this entry »

Biases: The favorite-long shot bias …

March 27, 2014

In gambling and economics, there’s an observed phenomenon favorite-long shot bias.


Here’s how it works …


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Oh Swami, what’s the secret to success?

March 26, 2014

Psychology professor Angela Lee Duckworth has researched successful students, athletes and business managers.

She concludes that talent and intelligence will get you only so far.

The characteristic that separates successful people from the also-rans is, in a word, grit”.

Grit is tenacious spirit that keeps certain people dedicated to their goal (whether it involves their studies, their projects, their clients, or something else) for the long haul, determined to accomplish what they set out to do.

Grit is working with intensity and  stamina over long periods of time to incrementally chip away at some goal.

Prof. Duckworth says schools & companies should recruit people who are not only smart, but also demonstrate “true grit”.

Maybe she’s onto something.


Here’s a TED talk in which Prof. Duckworth summarizes her findings.


If you want more here’s is a link to a longer talk Prof. Duckworth gave recently.

Read the rest of this entry »

Biases: The “halo effect” … rock on, sister!

March 25, 2014

I’ll explain the picture later, but first, the back story.

A couple of interesting dots got connected last week.



First, I started watching The Voice.

I liked the talent and the bantering among the coaches, but wondered why they used the turning chairs gimmick.  You know, judges can’t see the the performers, they can just hear them.

Became apparent when Usher turned his chair and was surprised to see that the high-pitched soul singer was a big white guy.



Second, for the course I’m currently teaching, I’ve been reading a book called The Art of Thinking Clearly — a series of short essays on cognitive biases – those sneaky psychological effects that impair our decision-making.

Read the rest of this entry »

Re: MH370 … as Hillary would say “What difference does it make?”

March 24, 2014

We’re going into our 3rd week of of wall-to-wall news coverage of the the disappearance of the Malaysian 777.

Yesterday, I saw a “news alert” announcing that the cabin radio transcripts revealed nothing … English translation: no news to report.

And, I got a peak of a Chinese satellite photo of a “possible object” floating around  in the Indian Ocean.


Question: Any idea how much garbage is floating around in the oceans?

Answer: Tons.

I understand that news outlets are keeping the real-time stream of newsless news up because there’s a market for it — their audiences are eating it up

Except for the passengers friends and families, I don’t get it.

Here’s what has me most perplexed ….

Read the rest of this entry »

Banned substance: Red ink is,well, threatening …

March 21, 2014

I once worked for a CEO who wouldn’t stand for lemon in his water or red ink.

That is, both the red ink on a financial statement and red ink on a document.

Apparently, he was onto something with the latter.


In the UK, hundreds of schools have banned their teachers from marking in red ink.

Here’s why …

Read the rest of this entry »

Nums: 94% of profs rate themselves above average … but, don’t we all?

March 20, 2014

According to

Since psychological studies first began, people have given themselves top marks for most positive traits.

While most people do well at assessing others, they are wildly positive about their own abilities.

The phenomenon is known as illusory superiority.


Illusory superiority is everywhere

  • In studies, most people overestimate their IQ. For instance, in a classic 1977 study, 94 percent of professors rated themselves above their peer group average.
  • In another study, 32 percent of the employees of a software company said they performed in the top 5%.
  • Drivers consistently rate themselves as better than average — even when a test of their hazard perception reveals them to be below par.

Ironically, the most incompetent are also the most likely to overestimate their skills, while the ace performers are more likely to underrate themselves.

Psychologists say the illusory superiority happens for several reasons:

  • people don’t usually get honest feedback from others others (who are too polite to say what they really think)
  • incompetent people lack the skills to assess their abilities accurately
  • most positive traits — like being a good driver — are so vaguely defined that there’s plenty of wiggle room
  • self-delusions can actually protect people’s mental health serving as a protective mechanism that shields self-esteem

The remedy for illusory superiority ?

Since people are generally more accurate in assessing other people (than assessing themselves), get — and take to heart — constructive criticism from others.

Yeah, right.

Source: Why We’re All Above Average

* * * * *
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Gotcha: “I paid more, so it must be better …”

March 19, 2014

One of my favorite sports’ movie scenes is from “Major League”

Newly hired manager Lou Brown is chatting with the Indians’ general manager.

One of the team’s players –Roger Dorn – pulls up in a fancy ride, hops out and unloads his golf clubs.

Brown says to the GM: “I thought you didn’t have any high-priced talent.”

The GM shoots back: “Forget about Dorn, he’s just high priced.”


Lou Brown almost fell for a common trap …

Sometimes people do perceive that higher priced products are better – even when they’re not.

They’re subconsciously using price as a “quality cue”.

Here’s some research that supports the dynamic …

Read the rest of this entry »

Should I still be teaching Michael Porter’s strategy stuff?

March 18, 2014

OK, I was asleep at the switch on this one … completely missed that Monitor – the consulting outfit started by strategy guru Michael Porter – went bankrupt last year and got acquired by Deloitte.

How ironic … an uber-strategist’s own company goes belly up.


Here’s the scoop …

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WSJ: “Rot in the job numbers” … yeah, but a week late.

March 17, 2014

This morning, the WSJ published an editorial titled “The Hidden Rot in the Jobs Numbers ” by Prof. Edward  Lazear, who was chairman of the president’s Council of Economic Advisers from 2006-09, is a professor at Stanford University’s Graduate School of Business and a fellow at the Hoover Institution.

Strong credentials, right?

The punch line: “Hours worked are declining, resulting in the equivalent of a net loss of 100,000 jobs since September.”

No kidding, Prof. Lazear?

Loyal HomaFiles readers are already aware of that … assuming that they read last Monday’s post: Smokin’: Employment growth exceeds expectations … oh, really?

Gotta crow a bit on this one … beat the WSJ by a week.

Here’s what we said last Monday:


Smokin’: Employment growth exceeds expectations … oh, really?

The headlines are that 175,000 jobs were added in February.

Proof positive that the Obama economy is kicking in.



Hate to rain on the parade, but ….

Read the rest of this entry »

Who’s the stronger leader – Putin or Obama ?

March 14, 2014

YouGov polled Americans on that very question. asking folks to to rate Obama and Putin – whether they are strong or weak leaders.

How would you have rated each of them: very strong, somewhat strong, somewhat weak, or very weak?



And the survey said …

Read the rest of this entry »

Nums: Obama’s bad day … and, about the Tea Party

March 13, 2014

Holy smokes.

First, a dude from Hangover asks him: “What’s it like to be the last black President?”

Then, some dullard named Jolly rides the anti-ObamaCare train to victory in a Florida Congressional election.

And, finally, more bad polling from WSJ / NBC  (which I assume offset one another re: political bias)

The top line: Approval slides to 41% … an all-time low.



Here are some nuggets that I found interesting in the polls details ..

Read the rest of this entry »

In praise of tough teachers …

March 12, 2014

My students are likely to cringe at this post which kinda legitimizes my teaching style.

Uh-oh …


According to a recent WSJ article:

The latest findings in fields from music to math to medicine lead to a single, startling conclusion: It’s time to revive old-fashioned education.

Not just traditional but old-fashioned in the sense that so many of us knew as kids, with strict discipline and unyielding demands.


Because here’s the thing: It works.


Of course, that conclusion flies in the face of the kinder, gentler philosophy that has dominated American education over the past few decades.

The conventional wisdom holds that teachers are supposed to tease knowledge out of students, rather than pound it into their heads.

Projects and collaborative learning are applauded; traditional methods like lecturing and memorization — derided as “drill and kill” — are frowned upon, dismissed as a surefire way to suck young minds dry of creativity and motivation.

But the conventional wisdom is wrong.

And the following eight principles explain why …

Read the rest of this entry »

Maybe, the best commercial ever … n’est-ce pas?

March 11, 2014

Have you seen the new Cadillac commercial?

At several levels, I think it’s a great ad.

At a broad level, it’s creating an incredible level of buzz.

As AdAge puts it:

Fans on the political right see . . . an unapologetic ode to American values.

Critics on the political left see it as Ugly American chest thumping at its worst.

What’s got folks so stirred up?

Here’s the ad’s punch line:

“We’re crazy, driven, hard-working believers. . . . . You work hard. You create your own luck.

And you’ve gotta believe anything is possible.

As for all the stuff?

That’s the upside of only taking two weeks off in August, n’est ce pas?”

Crass ugly American materialism … or the American Dream?

Watch the commercial and draw your own conclusion.

One of my favorite reactions was from a “Manhattan brand consultant” who quipped:

The spot is well-done but philosophically odious.

The surprising thing strategically is that they would choose to play to their base instead of trying to expand it.

Say, what?

First, what’s odious about reaping some benefits from hard work ?

Sure, it’s ironic that the commercial is coming from Government Motors … but should the company be touting the progressive mantra “liberation from work” ?

I don’t think so.

Re: “playing to the base” …

I thought Cadillac’s base was NFL-NBA players and urban-based chemical distributors.

Who else rolls in Sclades ?

Note: I probably shouldn’t generalize from personal experience, but an NFL player lives a mile or two from our house.  During the season, there are always 12 or more black Escalades parked in his circular drive.  Place looks like a Caddy showroom.

They are trying to “expand the base”.

The Caddy ad caught my attention ….

…. just like C.C. Catch did in the 80s with her hit “In the Backside of Your Cadillac”

I may go car shopping this evening …

Smokin’: Employment growth exceeds expectations … oh, really?

March 10, 2014

The headlines last Friday were that 175,000 jobs were added in February.

Proof positive that the Obama economy is kicking in.



Hate to rain on the parade, but ….

Read the rest of this entry »

Gotcha: Man, that was a fast yellow light …

March 7, 2014

Might not be your imagination.

In some locales, city-fathers are shortening the duration of yellow caution lights – you know, going from green to red.


Simple.  To increase the odds that you get ticketed by a red light “safety” camera.


According to a News 10 TV report,  in Tampa, the yellow light duration was reduced by a fraction of a second at intersections with red light cameras.

The result: red light tickets and their accompanying revenue more than doubled.

Red light cameras generated more than $100 million in revenue last year in approximately 70 Florida communities,

What’s the impact on traffic safety?

Read the rest of this entry »

Don’t faint: I agree with ObamaCare on this one …

March 6, 2014

For the record, I think that ObamaCare is an expensive, amateurish travesty that should be repealed and rebuilt from the ground up by professionals.  Keep the high risk pools for pre-exiting conditions, keep the subsidies for the poor … but lose the  micro-narrow provider networks and the junk mandated into policies (e.g. my favorite: universally free birth control for law schoolers).

And, I think that Dr. Dr. Ezekiel Emanuel – Rahm’s brother and one of the ObamaCare architects – is a complete butt.


That said, I was on Zeke’s side when he sparred with O’Reilly this week …

Read the rest of this entry »

Taxes: The only thing to love about the AMT …

March 5, 2014

Just finished this year’s taxes.

One interesting twist ….

In 2012, like a lot of folks, I sold a bunch of stocks to beat Obama’s hike in the capital gains tax …  from 15% to 23.8% (including the 3.8% ObamaCare surcharge)

As a result, my state tax bill paid in 2013 was higher than usual … Virginia’s share of the capital gains.

At first I was delighted this year.


Because, on my Federal return,  I could deduct the higher-than-normal taxes that I paid to Virginia.

Unfortunately, the thrill was short-lived.

I’d forgotten about the AMT … you know, the Alternative Minimum Tax.

I’d forgotten, but TurboTax hadn’t.

Bottom line: My VA tax deduction got wiped away by the AMT calculation.

Like many folks, I had internalized that state income taxes are annoying, but no big deal since they get written off at the Federal level.

Not so if you’re among the millions of Americans who get snared in the AMT trap.

Oh, well.

At least there is one small delight I get from the AMT …

Read the rest of this entry »

Nums: The Obama SOTU bounce fades …

March 4, 2014

Mass media was making a big deal when the President’s approval scores bounced from the low 40s to the mid-40s after the SOTU address.

Premature victory dance?

Today;s Gallup daily tracking poll put Obama right back at the presidential Mendoza line: 40%.


Source: Gallup

Results are consistent with the other major polls tracked by RealClearPolitics …

Read the rest of this entry »

Flashback: Obama schools Romney that “Russia isn’t a threat”

March 3, 2014

Remember the 2012 Presidential debates?

A key moment was when President Obama ridiculed Gov. Romney’s knowledge of foreign affairs.

Given recent events in the Ukraine, the clip is a classic …  try to stay calm when it


Here’s more that’ll make make you scream …

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Flashback: Michelle’s commencement speech rocks …

February 28, 2014

Yesterday, President Obama announced a  public-private partnership designed to provide economic and educational opportunities to young men and boys of color through commitments from foundations, business leaders and public officials.

He didn’t speak to the deterioration of family structures, the dominuation of  religion in kid’s lives, the toxic influence of bad-boy rappers, etc., so I’m not optimistic. But, I’m rooting for him on this one.

Brought back memories of a post from last May, praising Michelle Obama.

Here’s a flashback…


I haven’t been a big Michelle Obama fan.

Never recovered from her “first time I’m proud to be an American” snit … and totally turned off by her hypocritical  lifestyle of the rich & famous routine.

Biggest deal: I’ve oft said that she and her husband have squandered an opportunity to talk frankly to black kids in a way that only they can.

They’ve got the cred to push family values, individual responsibility and the importance of education.

Except for a few lines in a few speeches, they’ve come up prtetty empty.

That is, until last week when the First Lady gave a great commencement address at Bowie State University.


She  encouraged the graduates  to promote the importance of education in the black community.

According to the Washington Post, she layered a tough-love cultural commentary with statistics …  one in three African American students drop out of high school  … only one in five African Americans between the ages of 25 and 29 have a college degree.

Here are a couple of the high impact sound bites from her speech:

Read the rest of this entry »

Nums: Are women still at a disadvantage in the workplace?

February 27, 2014

According to a  WSJ poll

“Women in large numbers believe they face more discrimination in the workplace than in other situations.”


= = = = =
The “disadvantages” include lower pay than men …

Read the rest of this entry »

$$$: How much do MBA interns get paid?

February 26, 2014

According to Business Week, top school MBAs haul in an average of about $1,750 per week for their summer internships.

At HBS, the median is $7,000 per month … that’s about $1,650 per week … which annualizes to about $90k.

Of course, there’s wide variation based on the school and the industry.

Note that Kellogg –- a general management and marketing school – tops the list


* * * * *
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MBA: Career-switching is back in fashion …

February 25, 2014

According to Business Week: “More MBA grads are switching careers as the job market improves.”


Here are the details …

Read the rest of this entry »

The “Dirty Jobs” guy nails it …

February 24, 2014

Following up on our salute to garbage men last week …

Mike Rowe is the host of “Dirty Jobs” … a series on the Discovery Channel that reports on jobs that many (most?) people wouldn’t touch.

He’s not an economist, but he certainly has a perspective on jobs.

His: view: “employers are desperate for people willing to learn a “useful skill” and work hard.

But, many unskilled unemployeds shun jobs that are “Beneath them” … even if the jobs pay the rent and are stepping stones to better jobs.

It’s a great country that liberates them from jobs they might not like, right?

Video clip is worth watching …

click to view 90 second video


Back to the garbage men: a reader forwarded an interesting link

Triumph of the trashmen: Landing a gig on D.C. truck is hard to do and they stay on the job a long time

Nutshell: Though wages are modest (~$35,000) and the job is dirty, job security is high, benefits are good … including (for gov’t trash guys) a short work day.

* * * * *
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Air fares: Public weighs in …

February 24, 2014

According to a survey reported by  NBC News  …

Survey says: 4 in 10 Americans  wouldn’t mind being publicly weighed at the airport.


The results suggest that a once-unthinkable concept of differential fares based on size could become a fact of life for fliers.

Here are some verbatims:

Read the rest of this entry »

Odds: Are casinos really that smart?

February 21, 2014

Harrah’s is a poster child for “predictive analytics” … using hard numbers to make good decisions.


Why then – asks the IO Creative Group of tiny York, PA – did the Las Vegas big boy casinos lose over one billion dollars.

According to IOCG, casinos attendance is up, their hotel stays are up, their night club business is up, restaurant and bar sales are up.

How could their profits be down by one billion dollars???

It is because of their belief that new customers were in order – which attracted a lot more customers who are completely NOT PROFITABLE.

These new Vegas fans sleep all day, party all night and do not gamble. They don’t shop nor do they utilize the services and amenities of the buildings.

Vegas became married to the idea that their money should be invested in attracting new younger, hipper, sexier customers and they achieved that.

What they failed to do was to invest in their current very profitable customers who were actually making them money.

Casinos got caught up in the “shiny object syndrome” –  the need to go after something new when their most profitable market was already right in front of them.

When they were going after completely new markets, they should have been further investing in the one they already had.

* * * * * *

IOCG offers up a couple of ways to increase current customer “monetization”:

Read the rest of this entry »

Salute: High praise for garbagemen … really!

February 20, 2014

Last week, Pelosi. et. al., were lauding how ObamaCare was “liberating millions of Americans from the burden of working at jobs they don’t like.”

Simple thesis: just hang on the couch and let taxpayers foot the bill for your food, phone and, now, health insurance.

Why work?


Right when I  was about to get terminally discouraged, I decided to go fetch our mail … on one of those windy, below-zero days.

At the mailbox, my faith in the American spirit was refreshed.

Read the rest of this entry »

What happens when the minimum wage is raised?

February 19, 2014

President Obama is pushing to raise the minimum wage to $10.10 per hour.

Interesting play

$10.10 … not $10.


To make folks think that he thought about it … that $10.10 is some kind of magical optimum.

Putting that silliness aside, the rationale is well-intended: get low-earners closer to a “living wage”

The major argument against the move is econ 101 … and empirical evidence.

The below chart – from AEI’s Mark Perry –  cuts to the chase.


The chart plots the level of the Federal minimum wage against the number of percentage points that the teenage unemployment rate is over the all-inclusive unemployment rate.

Implicitly, the analysis assumes that the bulk of minimum wage jobs go to teens … and, measuring the differential (instead of the gross rate) normalizes to the overall state of the economy.

The conclusion is stark: when you raise the minimum wage you lose jobs.


But, some folks argue that economic life is better for the minimum wagers who retain their jobs.

Not so fast …

Read the rest of this entry »

Bad day at he office? … Blame Joe Banks.

February 18, 2014

I wasn’t that into the Olympics until the U.S. Men’s speed skaters started blaming their poor performance on new space-age uniforms supplied by Under Armour.


Here’s my take on the situation:

Read the rest of this entry »

MBA Pay: European & Asian schools catch the U.S. …

February 17, 2014

According to research reported in BusinessWeek

MBA grads pay at business schools in Europe and Asia increased dramatically in the past couple of years.

Adjusted for local purchasing power, European and Asian MBAs have essentially caught up to U.S. MBAs.

To avoid distortions between countries, the pay levels are stated in “international dollars” that have been adjusted for purchasing power parity.


The researchers attributed the pay growth in Europe to the growing demand for MBAs in Europe and the geographic proximity of highly ranked European programs to the key labor markets they serve.

Why has MBA pay in the U.S. apparently stalled?

Read the rest of this entry »

Bias: How you do depends on who interviewed before you …

February 13, 2014

According to the HBR Daily Stat …

MBA applicants may be at a disadvantage if they interview on a day when several others have already received positive evaluations

Specifically, the 4th Great MBA applicant interviewed on a given day Is less likely to get a high interview score


Study results and what to do about them …

Read the rest of this entry »

Gotcha: Using your own genes against you …

February 12, 2014

 NPR says …

“Getting the results of a genetic test can be a bit like opening Pandora’s box … you might learn that you’re likely to develop an incurable disease later on in life.”

There’s a federal law that’s supposed to protect people from having their own genes used against them, the Genetic Information Nondiscrimination Act, or GINA.

Under GINA, it’s illegal for health insurers to raise rates or to deny coverage because of someone’s genetic code.


But the law has a loophole: It only applies to health insurance.

Some insurance can be denied or priced high because of a person’s DNA.

Here’s an example … and a prediction.

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Work: Maynard G. Krebs was just ahead of his time …

February 11, 2014

Last week, the CBO reported that 2.5 million people will likely quit their jobs to cash in on ObamaCare subsidies and other government programs.

That brought to mind a famous TV philosopher … Maynard G. Krebs.


In the late 1950s and early 1960s. there was a popular TV show called “The Many Loves of Dobie Gillis” … it feature a bon vivant girl-chaser (Dobie) and his beatnik friend Maynard G, Krebs (played by Bob Denver who was Gilligan on Gilligan’s Island).

  • Technical note to younger readers: a beatnik was a self-proclaimed member of the “beat generation” – think early day hippies and slackers.

Maynard had a philosophy of life that wasn’t exactly work-inclined.

In fact, whenever Maynard would hear the word “work” he’s have an immediate reflex action…..

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“Liberating workers to pursue other activities” … say, what?

February 10, 2014

Hopefully everybody has heard about the CBO report that estimates 2.5 million current workers will either intentionally cut the number of hours they work, or quit work altogether in order to qualify for ObamaCare subsidies.

That estimate is up threefold from the CBO study that was used to justify ObamaCare economics.


Read the full CBO Report


Today I’ll try to stick to the technical aspects of the CBO Report…


First, the literal CBO finding:

The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.

The decline in fulltime-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours.

The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked.

English translation: the unemployment rate will decline because there will be fewer workers in the labor force.

That’s one way to fix an unemployment problem.


Why the original CBO miss?

The CBO notes that their earlier projection – supportive of ObamaCare – recognized these labor force dynamics, but underestimated them (by a factor of 3).

Why the new upward revisions?

There are several reasons for the difference in the former and current estimates:

CBO has now incorporated into its analysis additional channels through which the ACA will affect labor supply, reviewed new research about those effects, and revised upward its estimates of the responsiveness of labor supply to changes in tax rates.

English translation: Oops, dropped the ball … nothing changed in the world, just our view of the world.


What new research?

What the CBO is referring to is work done by University of Chicago economist Casey Mulligan. Prof. Mulligan’s work isn’t “new”, though.  He was touting it before ObamaCare was enacted.

Putting that technical point aside, the WSJ says that the CBO’s intellectual conversion is directly attributable to Mulligan’s ideas.

Mr. Mulligan’s premise is what economists call “implicit marginal tax rates“.

ObamaCare make work less financially valuable for lower-income Americans.

Because the insurance subsidies are tied to income and phase out as cash wages rise, some people will have the incentive to remain poorer in order to continue capturing higher benefits.

Another way of putting it is that taking away benefits has the same effect as a direct tax, so lower-income workers are discouraged from climbing the income ladder by working harder, logging extra hours, taking a promotion or investing in their future earnings through job training or education.

Specifically, as the CBO put it in their report:

For some people, the availability of exchange subsidies under the ACA will reduce incentives to work both through a substitution effect and through an income effect.

The income effect arises because subsidies increase available resources — similar to giving people greater income — thereby allowing some people to maintain the same standard of living while working less.

The substitution effect arises because subsidies decline with rising income (and increase as income falls), thus making work less attractive.

As a result, some people will choose not to work or will work less — thus substituting other activities for work.

English translation: Workers will be liberated from their personal responsibilities to earn a living and support themselves.

Is this a great county or what?

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Nums: Ask why … not just how many.

February 7, 2014

Some highlights from an HBR article:  The Hidden Biases in Big Data

These days the business and management science worlds are focused on how large datasets can decode consumers’ behavior patterns … enabling marketers to laser-target high potential prospects with finely-honed messages, offers, and “attention”.

“Big data” … becomes problematic when it adheres to “data fundamentalism” … the notion that correlation always indicates causation, and that massive data sets and predictive analytics always reflect objective truth … that  “with enough data, the numbers speak for themselves.”


Big data has hidden biases in both collection methods and analysis …

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Gotcha: Geez, you can’t even trust used car salesmen …

February 6, 2014

Few things are more attractive than those that are unavailable or in scarce supply.

Tell someone that they can’t have something, and they will be much more likely to desire it.


Here’s the way at least one used car salesman plays the scarcity game …

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Gotcha: Man, that was a fast yellow light …

February 5, 2014

Might not be your imagination.

In some locales, city-fathers are shortening the duration of yellow caution lights – you know, going from green to red.


Simple.  To increase the odds that you get ticketed by a red light “safety” camera.


According to a News 10 TV report,  in Tampa, the yellow light duration was reduced by a fraction of a second at intersections with red light cameras.

The result: red light tickets and their accompanying revenue more than doubled.

Red light cameras generated more than $100 million in revenue last year in approximately 70 Florida communities,

What’s the impact on traffic safety?

Read the rest of this entry »


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