economics

Kelsey C., a master’s student at the University of Colorado-Boulder, sent in this image from Calculated Risk showing the percent of jobs lost in each recession since 1948, relative to the peak of the pre-recession job market. In terms of the percent of jobs lost, the current recession is by far the worst we’ve seen since World War II:

The Bureau of Labor Statistics has a detailed report on employment (or the lack thereof) as of October 2010 available — including information on length of unemployment, numbers working part-time because they can’t find full-time work, labor force participation broken down by race/ethnicity, sex, and educational attainment, Veteran status, disability status, and more!


Dmitriy T.M. sent in a video where Hans Rosling illustrates changes in wealth and life expectancy in 200 countries over the past 200 years, all in four minutes. Pretty neat!

The two google maps below — showing Las Vegas and Laguna Woods — help us understand the extent of the foreclosure crisis in the U.S. (at HuffPo).    Each red dot represents a foreclosure.

Las Vegas, NV:

Laguna Woods, CA:

These illustrations are nicely complemented by our posts featuring the empty housing grids of California City andhalf-home foreclosures, or the dilemma of the duplex.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

In 2010, as a matter of free speech, the United States Supreme Court decided that there can be no limits on corporate spending on advertisements in favor of a political candidate (Citizens United v. Federal Election Commission).  Open Secrets produced two figures revealing the rise in “outside spending” (i.e., non-party spending) showing the rise.

Total outside spending:

Outside spending for liberals and conservatives:

Open Secrets explains:

…the 2004 election marked a watershed moment in the use of independent expenditures to try to sway voters, with most of that new spending coming from the national party committees.  The 2010 election marks the rise of a new political committee, dubbed “super PACs,” and officially known as “independent-expenditure only committees,” which can raise unlimited sums from corporations, unions and other groups, as well as wealthy individuals.

Hermes’ Journeys editorializes:

You can see that liberals slightly outspent conservatives every election since 1996. Except for this year, when quite suddenly a mysterious flood of funding caused conservative campaign coffers to skyrocket, DOUBLING what liberals could muster. Was this the result of concerned right-leaning citizens becoming active in politics and making individual donations?  Of course not, it was profit-minded corporations…

…enabled, if I may finished HJ’s sentence, by the recent court decision.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.


In this seven-minute video, Economist Jeffrey Sachs explains why economic development in Africa remains elusive. He summarizes the geographical, technological, social, and political conditions that held Africa back but propelled parts of Asia forward (he compares to India). Development, he notes, is not simply a matter of wishful thinking and hard work on the part of Africans (as many like to claim), nor is it a matter of just doing what worked elsewhere (as others like to say), but instead requires institutional commitments, economic resources, and global political will.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Dmitriy T.M. and Jeff H. sent in a link to Mapping the Measure of America, a website by the Social Science Research Council that provides an amazing amount of information about various measures of economic/human development in the U.S. Here’s a map showing median personal (not household) earnings in 2009:

The District of Columbia has the highest, at $40,342; the lowest is Arkansas, at $23,470 (if you go to their website, you can scroll over the bars on the left and it will list each state and its median income, or you can hover over a state).

You can break the data down by race and sex as well. Here’s median personal income for Native American women, specifically (apparently there is only sufficient data to report for a few states):

Native American women’s highest median income, in Washington ($22,181), is  lower than the overall median income in Arkansas, which is the lowest in the U.S. as we saw above.

Here is the percent of children under age 6 who live below the poverty line (for all races):

Life expectancy at birth differs by nearly 7 years between the lowest — 74.81 years in Mississippi — to the highest — 81.48 years in Hawaii:

It’s significantly lower for African American men, however, with a life expectancy of only 66.22 years in D.C. (again, several states had insufficient data):

The site has more information than I could ever fully discuss here (including crime rates, various health indicators, all types of educational attainment measures, commuting time, political participation, sex of elected officials, environmental pollutants, and on and on), and it’s fairly addictive searching different topics, looking data up by zip code to get an overview of a particular area, and so on. Have fun!

A recent New York Times article on cheese, brought to my attention by Jordan G., beautifully illustrates the fact that the U.S. government is not a coherent bloc, but a collection of competing interests.

Last month Domino’s Pizza released a new pizza named “The Wisconsin.”   Named after a superbly cheesy state (one close to our hearts here at SocImages), the pizza has six cheeses on top and two in the crust.  The New York Times reports that one quarter of a pie (an amount I could certainly put away without effort), had more than 3/4ths of the recommended maximum in a day and double the calories of some of its other pizzas.

The Wisconsin:

Cheese, it turns out, is the main source of saturated fats in American diets and saturated fats contribute to significant morbidity and mortality in the U.S.  The government, accordingly, recommends that we eat less of it.

Document from the Department of Agriculture:

And here’s where the story gets interesting.  The Department of Agriculture is not only responsible for the health of Americans, it’s responsible for the health of the American food industry.  As consumption of cheese and non-low-fat milks declines in the U.S., the dairy industry suffers.  According to the New York Times:

Every day, the nation’s cows produce an average of about 60 million gallons of raw milk, yet less than a third goes toward making milk that people drink. And the majority of that milk has fat removed to make the low-fat or nonfat milk that Americans prefer. A vast amount of leftover whole milk and extracted milk fat results.

The government used to buy cheese and butter from its dairy farmers, leading to a vast collection of dairy products stored in underground caves in Missouri (totally not kidding). It’s switched strategies — after all, how much cheese and butter can one country hoard? — and while one arm of the Department of Agriculture tells us to eat less cheese, another is telling us to eat more.

In fact, the government spent $12 million American tax dollars marketing The Wisconsin pictured above.  Dairy Management is the dairy marketing arm of the U.S. Department of Agriculture.  It has a budget of nearly $140 million per year… and it is in cahoots with pizza chains.

“This is one way that we can support dairy farms across the country: by selling a pizza featuring an abundance of their products,” a Domino’s spokesman said in a news release. “We think that’s a good thing.”

“Let’s sell more pizza and more cheese!” said two officials with Pizza Hut, which began putting cheese inside its crust after holding development meetings with Dairy Management, according to a memorandum released by the Agriculture Department.

Random suspicious documents:

Dairy Management’s Pizza Hut promotion in 2002 (the “Summer of Cheese”) reportedly pushed an additional 102 million pounds of cheese into American bellies.  And consumers are eating up Domino’s new pie.  The Times reports that sales have “soared by double digits.”

My co-blogger, Gwen, specializes in rural sociology and agriculture.  Discussing this post, she confirms:
It is a deeply, deeply divided government entity, with the “let’s sell more!” side almost always better funded… [than] the “but it kills people!” side.
Next up: Tobacco.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Cross-posted at Reports from the Economic Front.

How do corporations escape paying taxes?  Businessweek recently ran a story on Google that helps to explain how they do it.

The story begins by noting that: “Google has made $11.1 billion overseas since 2007.  It paid just 2.4 percent in taxes.  And that’s legal.”   This is pretty incredible because Google does business in many advanced capitalist countries with high tax rates.  For example, “The corporate tax rate in the U.K., Google’s second-largest market after the U.S., is 28 percent.”

While the article focuses on Google, and how it avoids paying taxes, it made clear that most of the leading high-technology companies use remarkably similar techniques to achieve similar results.

Ok, so how does Google do it?  Google’s office in Ireland is the center of the company’s international operations.  In 2009 it “was credited with 88 percent of the search juggernaut’s $12.5 billion in sales outside the U.S.”  But Google doesn’t pay taxes on that amount, because most of the profits went to Bermuda, where there is no corporate income tax.

So, how did Google get its profits to Bermuda?  Businessweek explains:

Google’s profits travel to the island’s white sands via a convoluted route known to tax lawyers as the “Double Irish” and the “Dutch Sandwich.” In Google’s case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don’t stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008.

Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn’t tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the “Double Irish” nickname.)

This set-up (as Businessweek describes it) also helps Google lower its tax bill in the U.S.  Google Ireland licenses its search and advertizing technology from Google’s headquarters in Mountain View, California.  Obviously this technology is worth a lot—but Google headquarters keeps the licensing fee to Google Ireland low.  Doing so means that Google headquarters can minimize its U.S. earnings and thus its tax obligations to the U.S. government.  And of course, Google Ireland knows how to move its profits around to minimize its tax liabilities.

Not surprisingly, corporations are always eager to learn from each other.  Thus, “Facebook is preparing a structure similar to Google’s that will send earnings from Ireland to the Cayman Islands, according to company filings and a person familiar with the arrangement.”  Microsoft already has one in place.

According to one study cited by Businessweek (done by Kimberly A Clausing, an economics professor at Reed College), these kinds of profit shifting arrangements cost the U.S. government as much as $60 billion a year.  And of course Ireland also loses plenty.  Too bad that the governments of Ireland and the U.S. are suffering from large federal deficits and under immense pressure to slash spending.   Collateral damage I guess to the profit-making drive.

What is being done to change this apparently legal racket?  According to Businessweek:

The government has made halting steps to change the rules that let multinationals shift income overseas. In 2009 the Treasury Dept. proposed levying taxes on certain payments between U.S. companies’ foreign subsidiaries, potentially including Google’s transfers from Ireland to Bermuda. The idea was dropped after Congress and Treasury officials were lobbied by companies including General Electric, Hewlett-Packard, and Starbucks, according to federal disclosures compiled by the nonprofit Center for Responsive Politics. In February the Obama Administration proposed measures to curb companies’ ability to shift profits offshore, but they’ve largely stalled.

nice cozy system, isn’t it.