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PeakTrader said...

It seems, some people miss the good ol' days:

MINER DEATHS AND INJURIES IN CHINA

"In China there are 7.29 deaths per million tons of coal produced, compared to 0.04 deaths in the United States.

Miners die in floods, gas explosions, fires, collapsing tunnels and from carbon monoxide poisoning. About 70 percent of the deaths occur in the small mines.

Mining companies routinely ignore safety equipment and procedures, exceed the number of miners allowed in the mines at one time to boost production far beyond what is safe."

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These type of studies are needed to reduce wild assumptions:

"The study “Randomized Government Safety Inspections Reduce Worker Injuries with no Detectable Job Loss,” found that workplace injury claims dropped 9.4% at randomly chosen businesses in the four years following an inspection by the California OSHA program, compared with employers not inspected.

Those same employers also saved an average of 26% on workers’ compensation costs, when compared with similar firms that were not inspected.

This means that the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection. The effects were seen among small and large employers."

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Jon, I didn't read the study.

I think, your questions are irrelevant, given it's a randomized study and the number of observations.

You can find it here:

http://www.sciencemag.org/content/336/6083/907

"We compared 409 randomly inspected establishments in California with 409 matched-control establishments that were eligible, but not chosen, for inspection.

Compared with controls, randomly inspected employers experienced a 9.4% decline in injury rates (95% confidence interval = –0.177 to –0.021) and a 26% reduction in injury cost (95% confidence interval = –0.513 to –0.083).

We find no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival."

Author's Affiliations

Haas School of Business, University of California, Berkeley.

Harvard Business School, Boston.

Department of Economics, Boston University.


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Regarding the study above, I don't know how much the inspected firms spent to comply with OSHA regulations.

However, the "9.4% decline in injury rates" benefited workers and the "26% reduction in injury cost" benefited the firm (both -0.094 and -0.26 were within their 95% confidence intervals).

Nonetheless, the conclusion was: "We find no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival."

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Methinks said...

I have come around to Larry and Peak's view:

Without the special golden fairies in government restraining us and guiding us into the light, we would be killing each other and crapping in our pants.

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PeakTrader said...

Methinks, that's why we need rigorous studies by experts to limit overregulation.

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PeakTrader said...

"...the shale revolution is delivering a huge multi-billion dollar economic stimulus to the U.S. economy and creating thousands of new shovel-ready jobs..."

It's a false sense of prosperity, because more time and effort are needed for the same barrel of oil.

I suspect, at some point, in the 21st century, the time and effort required for an equivalent barrel of oil will decline.

Then we'll really have prosperity.

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Juandos, are you suggesting crony-capitalism?:

Buffett’s Burlington Northern Among Pipeline Winners

"Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp Keystone XL oil pipeline permit.

The rail option, though costlier, would lessen the environmental impact, such as a loss of wetlands and agricultural productivity, compared to the pipeline...Greenhouse gas emissions, however, would be worse."

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Hancke, the direct and indirect economic costs are also "amazing," (including opportunity costs).

However, it seems, the ending of cheap oil was inevitable.

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Hancke says: "I'll take the opportunity costs of shale gas over it's subsidized or less environmental alternatives. Overall, shale is a huge plus."

What about the opportunity costs of shifting limited resources, e.g. labor and capital, from high-end manufacturing and emerging industries into shale oil?
Is that a "huge plus?"

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Ron, what's odd about a fall in living standards when a country is forced to use more resources to produce the same amount of oil?

Would you rather work one-third of a day to produce nothing and have two-thirds of a day for leisure, or have the full day for leisure?

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Hancke, I guess, you believe working harder for the same amount is a "huge plus."

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Hancke, it's not a "plus," but it's inevitable.

However, someday, it'll be a plus again, although not soon.

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Ron says: "As many of the resources required for oil production aren't the same as those required for high end manufacturing, comparing opportunity costs between the two may not be your best argument."

People aren't attracted to jobs? And higher-paying jobs? Capital doesn't flow to the highest returns? Other inputs will flow to economic activity.

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Juandos, I wouldn't be surprised regulations cost $1.75 trillion a year.

And I wouldn't be surprised if the benefits of regulations are less than half the costs.

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Cost of Regulation

http://cei.org/10KC

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http://www.blogger.com/comment.g?blogID=28997633&postID=314411468779623060

http://www.blogger.com/comment.g?blogID=28997633&postID=1911071446528931811

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PeakTrader said...

It's a slow and uneven "recovery."

Retail sales is up recently, because of back-to-school sales.

The economy may slow or contract going forward.

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The U.S. had 2% real growth in the first quarter and 1.5% real growth in the second quarter (annualized).

The E.U. is much worse:

Europe on the edge of recession
August 14, 2012

"Eurostat revealed that the economies of both the eurozone and the European Union, which has 27 countries, shrank by a quarterly rate of 0.2 percent in the second quarter of the year. In the first quarter, output for both regions was flat.

The 17-country eurozone is grappling with sky-high debt levels and record unemployment of 11.2 percent. Compared with the second quarter of last year, the eurozone's economy is 0.4 percent smaller.

The European Union, which has a population of 500 million people, recorded a GDP last year of $15.5 trillion — slightly more than the U.S.'s output.

Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S.. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales."

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Buddy, a less negative contribution is an improvement.

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Jon, if elected, Batman and Robin may deregulate, cut spending, and cut taxes, which will stimulate growth.

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The federal government is overdue for a massive overhaul, i.e. "creative-destruction."

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Jon, the U.S. economy is much more diversified than the Polish economy. It's the most diversified economy in the world.

Russia's economy, for example, is 40% natural resources. Its real GDP contracted 9% in 2009 (compared to 3% in the U.S.).

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Jon, the deregulation and tax cuts would offset the spending cuts.

Also note, the U.S. economy had a massive creative-destruction process mostly from 2000-02 in a mild recession in 2001 (a recession so mild that per capita real GDP didn't fall in 2001).

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To assume a severe recession is needed once in a while is to assume lots of workers don't need to work for a year or two.

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Chicago Fed Letter
The Chicago Fed National Activity Index and business cycles

"A CFNAI-MA3 value below –0.7...is defined as indicating a significant likelihood that a recession has begun.

Similarly, a recession is indicated to have likely ended based on the CFNAI-MA3 returning to a level of +0.2 after having crossed the –0.7 threshold.

The –0.7 threshold has correctly predicted a recession month with 86% accuracy since 1967, identifying the beginning of a recession within three months on average.

The +0.2 threshold has correctly predicted the end of each recession since 1967 within eight months on average, with no false positive signals."

My comment: We know the economy slowed, since late last year, to the reported 1.5% real growth in the second quarter of 2012.

Also, it's likely real growth picked-up in July and perhaps in August. However, we don't know if it's a blip or a reversal.

Moreover, we're in an unusual economic period, since 1967, including the depression, which may affect the indicator.

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Jon says: "the current trend in the CFNAI means that no recession will occur at least into the first quarter of 2013 (8 months from now)."

That's a false assumption based on the indicator. A recession could begin next month, for example, based on the indicator's past performance.

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Jon, the Chicago Fed stated: "The –0.7 threshold has correctly predicted a recession month with 86% accuracy since 1967, identifying the beginning of a recession within three months on average."

The data are through Jul and the three month average can indicate a recession beginning in Sep.

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One scenerio is several months of falling demand and a build-up in inventories before a one or two month spike in demand, e.g. in Jul and perhaps Aug, which may have been disinflationary.

So, output remained depressed.

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The index began to decline six months or so ago.

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Jon, you don't have the Aug and Sep data. So, you don't know if it's below -0.7.

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If it falls below -0.7 in Sep, a recession beginning in Sep would be within the three month average.

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Chicago Fed

CFNAI-MA3: "The –0.7 threshold has correctly predicted a recession month with 86% accuracy since 1967, identifying the beginning of a recession within three months on average."

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It should be noted, real growth may be expanding only 1% to 2%, in a depression. It wouldn't take much for the economy to contract.

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