Thursday, December 1, 2016

Donald Trump wins the presidency. What's his economic plan ?

Donald Trump won the US presidential election. Donald ran on a platform of economic populism. He ran a wild campaign of slogans and untruths that attacked the economic establishment.  And he won.

He is in the unique position of owning very little to the existing economic order: Democratic or Republican. He does owe a great debt to working class Whites in key states that voted for Trump in larger than expected numbers.

He will try to focus his economic programs on their needs.  However, short of a government jobs program, no one is quite sure how to help working class Whites.

Let's look at some of Donald Trumps economic policies:

Likely to Pass Quickly

Two to three trillion dollar federal tax cut. Higher deductions and lower rates for the middle class.
$500 billion to $1 trillion in Infrastructure spending tax credits over 10 year
Reduced funding for regulatory agencies
Cut government spending 1% for non-defense

Likely to Pass Longer Term

Child care tax credits
Business can repatriate off shore profits at 10%
Energy Policy changes
ACA (Obamacare) replacement

More difficult to pass

$25 Billion dollar wall with mexico
Trade agreement changes
Tax changes beyond tax cuts
Changes in immigration policy

Election Year Promises only

Renegotiate NAFTA
Limit cuts to safety net
Eliminate corporate subsidies except for R&D
Eliminate carried interest


Monday, November 28, 2016

How to handle an Affirmative Action Brownie Sale

Houston Chronicle: Bake sale at University of Texas

Occasionally you will see a conservative group selling cookies or brownies at different prices to make a point about affirmative action.  They will offer the same brownies at different prices for male, female, Black, Hispanic/Latino and White customers. For example, the brownies is $1.00 for White men, $0.50 for Hispanic women and $0.25 for Blacks.

They are trying to make the point that Affirmative Action gives people "free" things they did not deserve. They are wrong for three reasons.

1) They are making broad generalizations about groups of people while ignoring the fact that each individual had a unique struggle to make it to the University of Texas

2) They also miss the idea that a diverse student population increases the richness of the campus experience. Diversity improves debate, strengthens ideas and encourages understanding.

3) Finally, they are also ignoring the long history of educational, political and economic oppression of minorities in the US.

Most people see how mean spirited and shallow the brownie sale argument is and do not take the young conservatives seriously.

How to respond

The best way to respond is a large anti-racism protest. The more people the better.  A large show of numbers is critical. You need, as the police say, "An overwhelming show of force."  Chanting "no to racism, yes to unity" and "racist" works great.

Try not to ridicule the anti-affirmative action protesters since it breeds resentment.

Short of jumping up in someone face and screaming "You don't know me," the second best response we found was is to set-up an alternative stand near by with free food items.  The stand would promote an alternative point of view. For example:

1. The graduate and professional students of color at University of Illinois organized a White privilege popcorn sale.  White males get a full bag and everyone else get a 1/3 of a bag. You can read the story in the Daily Illini.

2. You can also give away free cookies while also promoting "Cookies under Socialism."  While giving away the cookies, explain that racism, class, ignorance and selfishness are natural byproducts of capitalism. And that capitalism encourages racism.

Other alternatives are:

3. A booth on slavery or murders by police with graphic photos. A photo of a lynching or a whipped slaves' back is pretty effective.

4. A booth on poverty in the US, the minimum wage or income inequality.

5. Bake White privilege cookie which is costs 4 slave hours in 1860; 3 Jim Crow hours in 1930 (15 cents); 1 hour at incarceration wage (UNICOR 0.23 cents)

Note: Price Discrimination is when he same supplier charges different groups different prices for the same item.  For example, reduced drink prices on "Ladies Night". Price discrimination is illegal when based on race, gender, nationality or religion


Monday, November 14, 2016

No change in key rates ahead of election: Unemployment stable at 4.9% with 161,000 new jobs

October Unemployment Wrap-up

Every major unemployment indicator has been "little changed" over the past 18 months. This report was no exception. The unemployment rate dropped to 4.9% as the 161,000 new employees found work in October according to the BLS monthly unemployment report. The report, which was released four days before the election, was ignored by both candidates. Wages rose $0.10 cents to $25.92 per hour at an annual rate of 4.6%. The unemployment rate has been 5.0% or below since October 2015.

The Labor Force Participation(LFP) rate was 62.8%. The figure has been flat since December 2013.

The Black unemployment rate rose to 8.6%, the second straight month of increase. The long term unemployed was also unchanged at $2.0 million.

Establishment Survey

Business reporting hiring 161,000 new workers in October. Both the business services (+43,000) and the healthcare sector (+39,000) added the highest number of new jobs.  The federal government add (+12,000) while manufacturing lost (-9,000) positions.

Black Unemployment

The Black unemployment rate was calculated at 8.6% after hitting a recent low of 8.1% in August. The Black LFP was 62% overall. Black men 20 and over participated in the job market at a 67% rate while 62% of Black women were in the labor force.

The national unemployment rate was 4.9%.

The Black labor force participation rate was a low as 60% in December 2013 but has since rebound to nearly 62%. Black unemployment was measured at 8.6%.

The Black unemployment rate continued to be significantly higher than the White or Hispanic/Latino rate.

Government added 19,000 jobs in October 2016.

Every category was up except manufacturing and retail trade.

We are adding a new chart which shows where the jobs are being created: in the good producing sector or in the service providing sector.   Service jobs are being created at a ratio of about five service performing to one goods producing jobs. The number of manufacturing jobs has steadily dropped since the recession due to the growth in imports and the efficiency of the manufacturing sector.

Monday, November 7, 2016

Laundry List of Hillary Clinton's and Donald Trump's Economic Policies

I have to vote tomorrow in New Jersey. I went from Bernie to Hillary to Jill Stein and then back to Hillary.  Hillary needs a mandate to govern.

To prepare for voting I went through every economic policy from the websites of both Hillary Clinton and Donald Trump.  No judgments were made about the quality of the proposed programs. 

Economic Policies of Hillary Clinton


- Ensure the wealthy and corporations pay more
4% surcharge tax on $5 million or more
30% minimum tax rate on incomes of $1 million or more
Close tax loopholes used by the rich like stepped up basis on estates, offshore tax avoidance schemes and using derivatives trading to reduce taxes
Eliminate the carried interest tax loophole
Restore estate tax; eliminate stepped up basis

Child Related

Double child tax credit to $4000
- Provide tax credits for affordable housing
Limit child care expenses to 10 percent of income

Corporations, Financial Institutions, Small Business, and Manufacturing

Additional risk fees on large financial institutions
End overseas inversions. Pay exit tax when they leave the US. Stop Earning stripping
Use Treasury department to stop inversions
Offer manufacturing tax credits
Reward companies that invest in the US or bring back jobs
Close tax loopholes for oil and gas. Promote clean energy
Allow small businesses to immediately deduct some expenses. Simplify small business returns
Support small business, advanced manufacturing, and startups
$1500 tax credit for apprenticeships
Spend $275 billion over five years on infrastructure investments: Roads, public transit, airports, energy and internet networks.


Make college debt free. Eliminate current student debt
- Make college free now, if you make less than $85,000. Free public college tuition for those making $125,000 or less by 2021. 
Free tuition at community colleges
- Provide $25 billion for HBUCs and Hispanic Colleges

Minimum Wage and Labor

Raise the minimum wage and get rid of tipped minimum wage
General support for unions and labor
Tax relief for working families


Support public investment in R&D
Refinance students loans at  current low rates
Have companies share profits with workers
- Give green cards to STEM masters and Ph.D. degrees graduates and visas for entrepreneurs

Economic Policies of Donald Trump

Create a booming economy. Boost growth to 3.5% on average
Create 25 million new jobs

Individual taxes

Pro-growth tax plan. Reduce taxes across the board especially for working and middle-class Americans.
Reduce tax brackets from 7 to 3: 12%, 25%, and 33%
Proposed a tax cut of $4.4 Trillion ($2.6 Trillion with growth). $1.8 trillion in trade, energy, and regulatory reform savings. $800 billion in other cuts.
Carried interest is treated as ordinary income
Repeal 3.8% tax on investment income. Repeal alternative minimum tax(AMT).
Increase standard deduction to $30,000 for married filers and $15,000 for singles.
Repeal estate taxes. Capital gains over $10 million would be taxed. Repeal special treatment of appreciated assets donated to charity.
Offer spending rebates for child care expenses for people receiving the EITC
Ensure the rich pay their fair share.

Child Related

Eliminate special interest loopholes. Reduce business taxes
Deduct average child care or eldercare costs from taxes
50% match of child savings accounts

Regulatory Reform

Create a modern regulatory framework. Reduce anti-growth regulations
Impose a moratorium on new regulations. Agency and department heads will remove needless, job-killing regulations.
Scrap clean power plan regulations

Trade Policy

Promote an America first trade policy
All trade agreements must increase the GDP growth rate, reduce the trade deficit and strengthen US manufacturing base.
Actively enforce trade agreement violations
Renegotiate NAFTA
Enforce WTO rules against china for currency manipulation and industry subsidies using tariffs and taxes


Energy plan
Support coal and fracking. Support energy development on federal lands.
Ease energy regulations. Streamline permitting process.
Allow the free market to determine energy technologies, not government

Business Taxes 

Lower business taxes from 35% to 15%.
Bring back off-shore profits at 10% rate
Eliminate corporate tax subsidies except for R&D


Reduce non-defense, non-safety net government spending by 1% each year for ten years.

Friday, November 4, 2016

Big Econ Story of the Week: Shrinking Global Trade

Global Trade is Shrinking (by Binyamin Applebaum in the New York Times)

This weeks most talked about economics story is that global trade is shrinking.   The drop in trade is clearly linked to the slowdown in global growth.  Political sentiment against trade may also be playing a part. Some believe the trade explosion was a one time event (you can only hollow out American factories or off shore jobs once) and we have reached a new norm.

You can also read the story here

Saturday, October 29, 2016

Blacks struggle to build wealth according to National Association of Real Estate Brokers

Home ownership has been the primary means of wealth building for the majority of Americans. Now its taking a beating.  All major groups in the US, except the wealthy, have lost homes since the peak ownership year of 2004. The trend accelerated during the last recession with the mortgage loan and foreclosure crisis.

Black home ownership continued to fall as the sub-prime/foreclosure crisis took its toll. Black home ownership has decreased to 41.3% in 2016 down from a high of 49.4% in 2003. That's a 16% decrease. Whites has a corresponding drop of 8%. The percentage is the second lowest ever measured for Blacks since the Census Bureau started keeping track in 1994. The lowest point was 41.2% in 1995.  The sharp decline reflects the disaster in sub prime loans and the crisis in foreclosures.

There are also been a huge shift from conventional mortgages to Federal Housing Administration(FHA) backed mortgages for Black mortgages.

Here is the press release from the National Association of Real Estate Brokers (NAREB) that discusses the issue in detail.

In addition the NAREB funds an annual study of Black home ownership called the State of Housing in Black America (SHIBA). The report is a detailed examination of trends in Black housing. The report gives a significant amount of detail regarding the home loan process, historic discrimination in the real estate market and recommendations for fixing the loan process.

Highlights in the report include:

* Spotlighting a virtual halt in mortgage lending to Blacks since the recession in 2007.

* The huge drop in Black mortgage applications and loan origination after the recession. The number of loan applications dropped from about 750,000 in 2005 to 120,000 in 2010 and the number of loans dropped from 400,000 to 75,000 during the same period.

* Blacks receive fewer conventional loans as compare to White Americans (30% Black vs. 44% White) and are more reliant FHA backed loans. (46% vs. 19%).

Here is a chart of US home ownership rates by race.  You can see the 17% drop in ownership by Blacks versus 8% drop by Whites. In the 3rd quarter of 2016 all rates posted improvements expect Black owner ship.

Thursday, October 20, 2016

Black/White Wealth Gap Remains in Spite of Black Celebrities

In a great article posted on Inequality.Org, Antonio Moore writes that the small number of wealthy, highly-visible  Black celebrities serves to hide the huge racial wealth gap in the US between Blacks and Whites. Black sport figures and celebrities are about 5% of the top 0.1% of earners in the US. Yet their constant media presence deludes both Blacks and Whites about the lack of Black wealth.

The story, called: "Black Wealth in America Hardly Exists", discusses the real lack of progress in closing the Black/White difference in wealth.

The Institute for Policy Studies has found that it would take about 228 years to close the racial wealth gap in a previous study. The report is called "The Ever Growing Gap"

Wednesday, October 12, 2016

No News in September Labor Report. Unemployment Rate Steady at 5% and 156,000 Jobs Added

The Labor department released the September unemployment report on Friday, Oct. 7th, 2016.  There were zero surprises in the report. The official national unemployment rate was reported at 5.0%. The establishment survey report 156,000 new payroll jobs. Yawn. There were 7.9 million people unemployed, about the same as last month. Wages increased 6 cents for the month.

The unemployment rate has averaged about 5.0% for the past year.  Labor Force participation has hovered around 63%.

About 200,000 jobs per month have been added over the past year on average.

The Big Story that Wasn't

There were two big stories non-stories. First, the job report had zero impact on the presidential election. Usually one candidate screams that the report is biased or manipulated. Mitt Romney made a similar claim during the 2012 election.  This time the report was ignored.

The second big economic story is how little movement has occurred in all the large macroeconomic levels in the US. The unemployment rate is flat.  So is the inflation rate.  The GDP growth rate remains below 2.0%. Absent some shock, we are going to continue like this for a while. Some economists are calling this period: Secular Stagnation.  Economists and policy makers fear that the US has entered a long period of low growth and zero inflation. This slow period makes it difficult to solve problems like poverty, unemployment and income inequality in the US.

Black Unemployment

The Blacks' (thanks Donald) unemployment picture continued to improve. The rate has dropped 1.0% in the past year after peaking in 2011.

Black unemployment remains well above the national average.  It is nearly double that of White workers.

The number of Black people who want jobs or additional hours remained high at 13%. U-6 is the total of the unemployed, discouraged workers and workers who want extra hours. National U-6 was reported at 9.7%.

Establishment Survey and Non Farm Payrolls

As mentioned earlier the economy added 156K jobs as reported by the establishment survey. 

Jobs By Category

The biggest job gains were in business services (67K), healthcare (33K) and eating and drinking places (30K).  Retails sales also add 22,000 reported positions.

Construction add 23,000 workers while Manufacturing lost 13,000 sports (11K of which were in durable goods).  Temporary Help increased by 23,000 workers. Government lost 11K employees.

ADP reported 154,000 new payroll jobs split between 34,000 small business jobs (1-49 employees), 56,000 medium sized payroll jobs and 64,000 large corporate jobs(500 or more employees). The report has a surprising number of large company jobs.

The Paychex small business employment index declined from 100.70 to 100.52.  The index has status neutral.

Saturday, October 1, 2016 Black Business Directory

A friend gave me tip on a web site called Spendefy.comIt's a Black business promotion site along with a Black Business Directory.  The directory is currently for New York and Atlanta.

What makes the web site different is the design quality and graphics. They have a great visual appeal. has a cohesive and consistent design lots of graphics and photos. The interface is easy to use.  It's also easy to find what you want. is also loaded with great photos that catch your eye. Thanks to WordPress, the site  also has a full set of modern tools that are typically available on a mainstream web site. And the usually links to social media.

Sprinkled through out the site are news stories, interviews, and advice. One credit mentioned on the site is a photographer Enrique Morgan: Designer. We want to spotlight his web-site because it gives you an idea of what typical photography in the creative industry does. He does mostly web stuff and content not photography. has also received some press coverage.

MadameNoire has a story here.

CNN Interview is here. show what a great creative team can do with a good web site development tool

We also wanted to look at one aspect of the web site that is usually not covered: Web Technology. We used public source information and reviewed the content of the individual web pages on the site.

The site is primarily a WordPress site. The site,, really shows how far web-site development tools have evolved. We went through the whole web-site and there is not a lot of content or business listings yet. But they do have the key players in the New York Resturant market. 

There are several tools that will analyze the public HTML tags and codes of a website.  We sed and also looked at code in the browser->tools->developer section of chrome. 

Builtwith reports

Web Server:                      Apache (assumed at Godaddy)
Hosting, Domani                Godaddy
Email                                Godaddy
Content Management         Word Press
E-commerce                     WooCommerce
Ads                                  Double-Click (not clear if there are any actual ads)
Analytics and Reporting     Google

We have not tried the site on android or iphone.

Overall a very nice site. 

Thursday, September 29, 2016

The Census reports: Income up 5%; Poverty down 1% between 2014 and 2015

On September 13, 2016, US Census Bureau released three important yearly reports. The first covers US incomes and the poverty rate, the second reports on health insurance coverage and the third is an alternative poverty measure.

The reports show positive increases in incomes and health coverage between 2014 and 2015. However, since 1999 household incomes have been flat or declining. Incomes are 2.4% below the 1999 peak.

Income Data

The median household income increased by 5.2% from 53,718 to 56,516.  It was the first increase since 2007. Crazy huh? 2007! The report also noted that real median income in 2015 was 1.6% lower than in 2007 and 2.4% lower than 1999. Basically, incomes have stagnated for 16 years.

Black household incomes rose 4.1%, Hispanic family incomes by 6.1% and White incomes by 4.4% during the 2014-2015 period. Asian income did not increase.

Men saw their income increase by 1.5% and women by 2.7% percent.

Poverty and Health Insurance Rate

The poverty rate in 2015 was 13.5%. 43 million people in the US live in poverty. There were 3.5 million fewer people in poverty than in 2014. The 8% drop is the largest drop in the poverty rate since 1999. 

The poverty rate for families was 10.4% with 8.6 million families in poverty.  The poverty line was defined at $24,257 for a family of four. Again crazy.

The racial break down of people in poverty was as follows:

                       Number (Million)          Rate
Whites            17.8                               9.1% 
Blacks            10.0                               24.1%
Hispanic         12.1                               21.4%

Health Insurance Coverage

The number of people without health insurance fell to 9.1% from 10.4%. About 29 million people do not have health insurance.

The information is contained in the two US census reports:

Income and Poverty in the US: 2015

Health Insurance Coverage in the US: 2015

Supplemental Poverty Measure

The Census also released a third report which calculates poverty in a slightly different way.  It includes additional benefits from government programs but is more realistic about what people spend money on: Food, Clothing, Shelter, and Utilities. The report is a more accurate and detailed way of measuring poverty in the US.

The Supplemental Poverty Measure:2015 (SPM) calculated a poverty rate of 14.3% with 45.7 million people in poverty. 

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