The Millionaire Decay Function

Did you know that the most downwardly mobile members of society are millionaires?

It's true, and what's more, we have the data and math to prove it!

Our featured chart today was originally produced by Veronique de Rugy of the Mercatus Institute, which is based upon data from the IRS and analysis by the non-profit Tax Foundation.

Here, the story begins in 1998, when the IRS reports that there were approximately 675,000 tax returns with adjusted gross incomes of $1 million, or more.

[Side note: The traditional definition of a millionaire was someone who had accumulated at least one million dollars in total assets. However, since the word was first documented back in 1826, the effect of inflation is such that perhaps a more modern definition would be those who earn incomes of at least one million dollars in a year. In any case, $45,000 in 1826 dollars is roughly the equivalent of $1 million in 2012, going just by changes in the Consumer Price Index.]

Then, beginning in 1999, following the tax returns filed by the same people, the number of those with incomes over $1 million begins to drop dramatically - by nearly 50% in the first year!

Time After Earning $1 Million
Input Data	Values
Number of Years After Having Earned $1 Million

The Odds of Still Being a Millionaire
Calculated Results	Values
Odds of Earning $1 Million in Each of the Entered Number of Years

And then, it continues, at an ever declining rate, until by 2006, some eight years later, of the 675,000 millionaires of 1998, only 17,000 made a million dollars or more, just 2.5% of the original number.

Expressed a different way, the probability that a millionaire after eight years would be able to make $1 million or more is just 2.5%!

And that's the math our newest tool tries to estimate! Just enter the number of years after which a millionaire has made a million dollars, and we'll give you the odds that they will have done it again!

In a sense, this is very similar to an exponential decay function, such as might apply for things like the decay of radioactive materials, or pesticides. Unlike those things however, the half life of a millionaire is much, much shorter!

One thing we do note from the actual data is that the number of millionaires after nine years begins to increase (38,000 represents 5.6% of the original number of millionaires in 1998). We suspect this is due to a combination of factors, including the effect of inflation from 1999 through 2007 and also the economic expansion that peaked in that year.

It would be very interesting to see how those millionaires have fared in the years since! How many would you think are still making over $1 million per year for the recession years of 2008 through today?

Update 4 February 2012: A sharp-eyed reader has a different take on what the data presented in the chart is actually communicating:

It seems that the number in column N is not the number of "those who were in the original 675,000 while still making a million N years later" as you suggested in your paper. According to that interpretation people would be counted repeatedly in several columns, and it would be a miraculous coincidence that the numbers in all nine columns add up to exactly to the total 675,000 (and the percentages adding up to exactly 100).

My guess is that the number in column N seems to mean the number of people who made it to the end of year (N-1) but not to the end of year N (Except the last column). Or equivalently, it is the number of those fell of the line during year N (Except the last column). It is the number of those being a millionaire for exactly N year and no more. That's why the horizontal axis is called "the number of years as a millionaire". In that case the sum certainly equals to 675,000 since the columns are just an exclusive division of the total number.

If I'm right the number of millionaires by the end of the 8th year is not 17000, but rather 38000. More generally, the percentage of "those who remain millionaires N years later" should be 50, 35, 27, 20, 16, 13, 9, 6. Naturally this curve is much smoother and fit better with an exponential than the original figure which designate the differences between these numbers.

Also, the "increasing" in the last column you mentioned would not surprising at all and may not need any special explanation. This is because the 38000, unlike each of the columns on its left which designates those remain millionaires for exactly N years, designates all those who remain millionaires for 9 years, 10 years, 11 years and more. It's just the sum of all the residue part of the declining curve.

Although, I'm really confused since the original article seems to suggest the same interpretation as yours. But if that's the right interpretation then I do not know how to make sense of the fact that those numbers sum up to exactly 675,000, among other things.

Our reader's interpretation of the data is right on the money - we've re-done our tool to match!

Bill Moyers, Resolutions, and the March Primary Elections

We had an energetic conference call on Saturday. The meeting notes are below. Thanks to Michael Greenman from Columbus for preparing them.

BILL MOYERS

Bill Moyers supports Move to Amend. http://vimeo.com/35388815
Forward the link, share on social media, etc...

RESOLUTIONS

Several communities are looking into passing resolutions calling for an end to corporate personhood and/or money as speech — beginning with Athens. Draft language of the Athens resolution (as of a couple of weeks ago) is posted on our Facebook page, http://www.facebook.com/MovetoAmendOhio

The prototype Move to Amend resolution language (their proposed 28th Amendment) is at
http://movetoamend.org/amendment

Contact 330-928-2301 or gcoleridge@afsc.org if you’d like some guidance or help.

MARCH PRIMARY ELECTIONS

The March primary elections are just a few short weeks away. One US Senate seat and all US House seats are up for grabs. It’s a great time to raise the issues of money as speech and never-intended corporate constitutional rights. Here are 4 ideas
1. Circulate the Move to Amend petition outside or inside debates, forums, meetings or anywhere else candidates will be attending. Download a petition at http://www.movetoamendohio.org/
2. Hand out a Move to Amend flier with the proposed 28th Amendment at the abovementioned events. Several fliers are available on their website -- the best one is a 1/2 page version with the proposed 28th amendment on one side with Move to Amend info on the other side.
3. Dress up as a corporation. Ask candidates if you should possess inalienable Bill of Rights protections. If outside where a Presidential candidate will be attending, hold a sign saying “I’m a person and am willing to be your Vice President!” Direction on constructing a corporate costume is at http://movetoamend.org/occupythecourts under “Instructions to Make a Corporate Personhood Costume,”
4. Request your candidates for federal office complete a survey asking if they agree with Mitt Romney that corporations are “persons” and should possess constitutional rights. The survey is at http://www.afsc.net/PDFFiles/CorpPersonhoodSurvey.doc [Note: Make sure to fill in the candidate’s name before handing or sending it to him/her.]

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Move to Amend Ohio Conference Call
Saturday, January 28 / 10 am - 11 am

Attendance: Dick Bozian (Cincinnati); Greg Coleridge (Cleveland); Michael Greenman (Central Ohio); Karen Hansen (Central Ohio); Doug Jambard-Sweet (Toledo); Mary Nichols-Rhodes (Akron); Carol Wagner (Akron); Robert and Sally Jo Wiley (Athens).
Agenda:
* Occupy the Courts reports / other local reports

-Columbus/Athens – (Michael and Karen) Friday 20 Jan – bitter cold – 120-125 people – lots of signs, great talks – Occupy Columbus – Athens (Democracy over Corporations) group – from several other locations – Met afterwards at Progress Ohio for Potluck. One politician plus three other candidates. Sally Jo – 15th Congressional district candidate was busy, told him his opponent was there!
-Dick – (Cincinnati) – very cold – two state representatives there, Occupy, League of Women Voters, AIR, Common Cause of Ohio; Interfaith Alliance. Very active group – building a coalition of all of them
-Doug (Toledo) – linked to MTA a couple of weeks ago. About 20 people at Federal Courthouse. Traffic responded.
-Greg (Cleveland) – 60-70 people in front of Courthouse, marched. 3 dressed as “corporations”. 1%ers had megaphones – showing that their voices were disproportionately loud. People in tunics: “End Corporate Personhood” on front. Money taped over their mouths showing their voices are silenced. AP was there and got pictures in national media.
-Carol (Akron) – 15-20 people. Spoke out slogans. “Money is not Speech”; “End Corporate Personhood”; coverage in local papers.

* Municipal resolutions

There are already a dozen or so around the country with various wordings.
-Athens – Sally Jo – Their proposal is before Athens City Council. It was discussed last week. On Feb 6 they will take a vote. Two women asked for language to be stronger: asking state and federal government to get on board! Will be first in Ohio.
Next going for County Commissioners – stretching into Vinton and Morgan Counties, trying to get groups going there.
One of our members ran and is on City Council, so very helpful.
(Greg will post language on Facebook and Web Site)
Columbus (Michael, Karen) – one of members is friend of City Council Chair – talking to him. Michael sent letter to Mayor suggesting Columbus could be first in state. No response.
-Toledo (Doug)– contact with liberal City Council Member. Indicated would like to get more popular support to bring resolution to city council. Suggested getting letters of support from civic groups. Going to Democratic Clubs to present the information. Not as widely publicized as in other communities.
-Cincinnati – (Dick) - Parallel initiative. At state level putting in petition for reform of redistricting.
-Cleveland – (Cuyahoga) (Greg) – City Council spoke at OTC so local MTA meeting on Tuesday will strategize how to approach City Council.
Greg – Suggestions: Take the time and figure out ways to maximize education and media attention. Worst is to have something passed quickly that no one knows about. What can we do to have a public hearing or a town hall meeting prior to that; a rally, a vigil, write letters before hand to get visibility?
-Sally Jo – talking about ours in city council for a month. Best approach is to write letters to the editor – once a week. Athens Messenger, Athens News – letters to the Editor. Encouraging “Mardi Gras” celebration on Monday.
-Carol – Plans for Akron City Council? Greg: Akron may not work, but County Council might be a good approach. Mary – Summit County Council – let’s pursue.
Greg encourages to post on Facebook Page: “Move to Amend Ohio”. Send to Jeff Klein at Toledo who does the web site: Jeff.warrenproffitt@gmail.com

* Proposal for MTA workshop at Ohio Rootscamp

-Karen – annual event – nationwide – every community puts together day-long meeting of grass-roots organizations. Come in morning, sign up for slot you’d like to make your presentation. Have one hour to make presentation and discussion. Hundreds show up. Very successful. About 8 tracks, each having 5 or 6 workshops.
Saturday, February 25 at Ohio Civil Service Employees Association, 390 Worthington Rd., Suite A.
– Michael and Karen– will discuss with Columbus group this morning.
Sally – friend who is banker could talk about problems. Also talk about resolution.
Karen will be point person – others contact her to link in. to be a part of the session: Klh.ohio@gmail.com 280-3631

* Ohio State Constitutional Panel formation

Greg - Columbus Dispatch described fact that every 20 years in Ohio there is to be consideration of a constitutional convention. State is looking at opportunity – doesn’t like the idea. Setting up commission – 12 legislators + 20 citizens from around the state to review the constitution and make recommendations to modernize, reform it. Anyone can submit their information to participate.
Opportunity to remove some of the powers of corporations?
http://www.dispatch.com/content/stories/local/2011/12/29/state-constitutional-panel-is-forming.html
http://www.legislature.state.oh.us/bills.cfm?ID=129_HB_188
Deadline is February 1! Get your information in if interested.
Good opportunity!

* Website/Facebook

Any reports, put them on Facebook.
Michael – Encourage people to “Friend” the site, and to add more local pages.
Web site manager Jeff Klein – contact to put items on the site: Jeff.warrenproffitt@gmail.com

* National MTA report
Karen – when make Ohio a formal state group? Greg – need to have affiliation by cities representing more than 50% of population. With 3 “C”s as affiliates, we would have enough. Columbus is an affiliate, Cleveland and Cincinnati are not yet. Go to MTA web site to download application process.
“United for the People” – coalition of groups supporting effort to get amendment. Number of different efforts – all deal with different aspects. http://united4thepeople.org/
Sign as many petitions as you can to get attention to this issue.
-Availability of names on petitions to affiliates? Greg says has availability to people who signed papers petitions and not to those who signed on line. Greg will check on availability.

*Upcoming Primaries in Ohio
-March 6 in Ohio
- Michael – Will make a card based on the letter sent to Ohio Congressional delegation to take to meetings asking candidates if they believe corporations are persons, yes or no, if no, what they will do about it.
-Dress up as a corporation with sign as “potential vice presidential candidate”. Multiple corps, saying “pick me” (at Presidential forums). With money hanging out of pockets.
-Hand out MTA flyers
-Half page sheet with amendment on back, simple statement on front (Greg will send out).
-Poster and bumper sticker available from MTA.
-Greg will send out letter to all congressional delegation – Take it to debates or meetings, get candidates to sign.
-Mary – Each in our area get team of people with corporate costume so when find out someone is in the area, get crash team to go to the event.
-Greg – MTA web site has instructions on how to make Corporate costume.

* Next meeting/facilitator

- February 18 – 4:00 – Karen Facilitate; Dick will take notes.

Forecasting GDP: Looking Backwards (2011-Q4) and Forwards (2012-Q1)

The advance GDP estimate for the fourth quarter of 2011 was released on Friday, 27 January 2012, with that quarter's inflation-adjusted GDP figure being reported at $13,422.4 billion, in terms of constant 2005 U.S. dollars.

That value is just 0.29% higher than what we would forecast using our Modified Limo method for projecting the value of GDP in the next quarter, using the final value of $13,331.6 billion for the third quarter of 2011.

On a side note, since Political Calculations was on our annual year-end hiatus when that final value for 2011-Q3 GDP was reported, and because we had never updated our previous public projection of $13,393.3 billion, the advance figure for 2011-Q4 real GDP is just 0.21% higher than our last posted forecast.

In any case, we anticipate that this figure will be revised lower by the time the BEA's third estimate for 2011-Q4's GDP is recorded.

Looking forward and assuming that the forecast given our Modified Limo methods follows a normal distribution with respect to the trajectory of real GDP, we currently anticipate the following for GDP in the first quarter of 2012, in terms of constant 2005 U.S. dollars:

• A 68.2% probability of falling between $13,357.5 billion and $13,640.0 billion.
  
• A 95.0% probability of falling between $13,216.3 billion and $13,781.3 billion.
  
• A 99.7% probability of falling between $13,075.0 billion and $13,922.5 billion.
  

The midpoint for our forecast range for real GDP in 2012-Q1 is currently $13,498.8 billion. We will revise these projections as the U.S. Bureau of Economic Analysis revises its estimate of real GDP in 2011-Q4. The BEA will release its second and third estimates of real 2011-Q4 GDP in February 2012 and March 2012 respectively.

At present, it appears that our overall forecast of U.S. economic performance remains on track. We continue to anticipate that the most recently reported pace of economic growth will begin decelerating in the first quarter of 2012.

For our GDP forecasts, any major deviation from our projections is an indication that the U.S. economy is undergoing a significant change in its overall economic trajectory, which you can see in our chart above whenever the economy goes through a major turning point. One advantage of our methods is that the results are useful, even on those rare occasions when they turn out to be off target.

If you'd ever like to play along at home, we've created a tool that will calculate the midpoint of our forecast range!

MONETARY HISTORY CALENDAR - January 30 - February 5

JANUARY 30

1835 — ASSASSINATION ATTEMPT AGAINST US PRESIDENT ANDREW JACKSON
Three years earlier, Jackson called for an end to the Second National Bank of the United States by calling on Congress not to renew its charter. He vetoed a bill to renew the bank’s charter, saying the bank was guilty of fraud, corruption, controlling the money supply (expanding and contracting the supply of money to economically and politically benefit the bank) and because “beyond question...this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.” Jackson ordered the US government to move its money out of the Second Bank. In response, the bank called in all its loans and ceased issuing new loans. An economic panic followed. In 1835, Richard Lawrence fired 2 guns at Jackson but both misfired. He claimed his assassination attempt was because, in part, "money would be more plenty.”

1882 — BIRTH OF PRESIDENT FRANKLIN D. ROOSEVELT
"[T]he real truth is…that a financial element in the large centers has owned the government ever since the days of Andrew Jackson."

1934 – PASSAGE OF GOLD RESERVE ACT
The US government ended minting and circulation gold coins. The bill required all holders of gold coins and certificates to surrender them to the US Treasury – at the price of $20.67 per ounce. Collectors and a few others were exempted. Federal Reserve Notes were no longer convertible (or backed) by gold coins.

2009 – US TREASURY DEPARTMENT PURCHASES STOCK FROM US BANKS
The U.S. Treasury Department purchases a total of $1.15 billion in preferred stock from 42 U.S. banks under the Capital Purchase Program.

JANUARY 31

1934 - PRESIDENT ROOSEVELT INCREASES VALUE OF GOLD
A day after the Gold Reserve Act is passed, President Roosevelt issued an executive proclamation which resulted in the value of gold increasing to $35 per ounce. This yielded a windfall profit for the US government and those who retained possession of gold.

FEBRUARY 2

2010- DEATH OF EUSTACE MULLINS, AUTHOR, SECRETS OF THE FEDERAL RESERVE
"The Nation magazine was the only public organ so far as I can find out which printed out that the issue of the money of the U.S. was being turned over to a body of men who were neither elected nor answerable to elections."

FEBRUARY 3

1913 – RATIFICATION OF THE 16TH AMENDMENT, ESTABLISHMENT OF THE US FEDERAL INCOME TAX
The income tax provides a guaranteed and consistent source of income for the payment of any federal government function, including payment of interest on national debt. It was ratified earlier in the same year as passage of the Federal Reserve Act which turned over the nation’s money power to a private central bank. Many economists believe the dollar holds its value better than the Euro in times of economic
crisis since US interest payments from debt can be covered by US income taxes. There is no equivalent European income tax to cover Euro debts. This provides investors greater confidence in the dollar over the Euro.

1924 – DEATH OF WOODROW WILSON, 28TH PRESIDENT OF THE UNITED STATESAND SIGNER OF THE FEDERAL RESERVE ACT
"Some of the biggest men in the United States in the field of commerce and manufacture are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so passive, that they had better not speak above their breath when they speak in condemnation of it."
“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of
their own limitations, chill and check and destroy genuine economic freedom. (1911)
[Note: Despite such misgivings, Wilson signed the Federal Reserve Act two years later]

_______________________________________________________________________________________________

Why this calendar? Many people have questions about the root causes of our economic problems. Some
questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html

How Good Are Earnings Forecasts?

How good are stock market earnings forecasts?

Well, if you go by our chart below, which we constructed by sampling data we obtained from S&P roughly one-year apart (at the dates indicated) and mostly looking one-year-ahead in time, the answer is: not good at all!

The moral of the story: future earnings projections are not necessarily very good indications of actual future earnings!

New Jobless Claims: Still on Track, But Increasingly Volatile

Two weeks ago, we observed that the number of seasonally-adjusted initial unemployment insurance claims being filed each week was still following the same trend it has since 9 April 2011, but that it was becoming increasingly volatile, suggesting that the trend is beginning to break down:

Today's number also underscores the increasing level of volatility in the data - when the current trend was establishing itself, it was characterized by relatively small changes in the number of new jobless claims being filed from week to week.

Today new data marks the fourth time in the last six weeks in which the size of the change in the reported numbers from week to week has exceeded one standard deviation. That's specifically what we're looking at when we suggest that the established trend may be beginning to break down.

The chart below reveals that if anything, that volatility has increased, although it still appears to be following the established trend of an improving (falling) number of claims over time at this point.

If we look just at the micro-trend established since 26 November 2011, when the level of volatility in the data really took off, the data suggests that the rate of improvement in the number of new jobless claims filed each week is leveling off between 370,000 and 380,000.

Hopefully, things will settle back down and the number of new jobless claims filed each will will continue to improve until they reach the average level of 318,000 that was typically recorded in the months prior to the most recent recession.

The President's Failing Focus on Jobs

In his 2012 State of the Union Address, President Obama sought to "embrace manufacturing". Since the President has been in office for three years now, we thought we would take a look at how well he's done so far in embracing manufacturing, by his own terms.

Our first chart shows the seasonally-adjusted number of individuals employed in the Manufacturing and the closely-related Transportation and Warehousing industries (aka "the supply chain"), which is based upon data collected by the Bureau of Labor Statistics in its Current Employer Survey, as of 22 January 2012, from November 2007 through December 2011.

In the chart above, we've emphasized several points with bold text indicating the number of employed at various points of interest. These points correspond to the month preceding the start of the "Great Recession", the month President Obama was sworn into office, the bottom of job loss for the recession, and the most recent month for which we have data, December 2011.

Here, we find that the number of individuals counted as being employed in the manufacturing and supply chain industries has fallen considerably from November 2007 through the present, with 1,583,000 fewer being employed in Manufacturing and 1,964,000 fewer being employed in Transportation and Warehousing as of December 2011. Together, these two sectors of the U.S. economy represent almost 3 out of 5 of all the jobs that have disappeared from the U.S. economy since November 2007.

Starting the clock from January 2009, we find that 946,000 jobs in manufacturing evaporated before job losses in the economy finally bottomed in February 2010, eight months after the recession officially ended, while the number of individuals employed in the transportation and warehousing industries fell by 1,097,000. Combining these figures, we find that these two sectors of the U.S. economy account for over 47% of the 4,317,000 total jobs that were lost according to the BLS' data during the first 13 months of President Obama's tenure.

Since job losses in U.S. manufacturing and supply chain-related industries bottomed in February 2010, some 617,000 jobs in manufacturing and 328,000 in transportation and warehousing have been added to the U.S. economy. These two sectors account for 35.6%, or a just over 1 out of 3 of the 2,654,000 total jobs that have been added to the U.S. economy since February 2010.

Going by the post-recovery figures, we find that President Obama hasn't been paying much attention to manufacturing, either during the recession or during the recovery, as its share of jobs lost and created has been essentially identical during his three years in office.

If anything, it appears that the President's focus on "creating" jobs has been in any area outside of manufacturing or supply chain-related industries, as these areas have seen a disproportionate gain compared to jobs lost during the President's first three years in office.

But perhaps the bigger story is the extent to which President Obama hasn't been paying attention to boosting jobs in the Transportation and Warehousing sector of the U.S. economy. This is the unglamorous industry that ties together all U.S. manufacturers, from the most upstream makers of parts that go into other products all the way through the final link in the chain that reaches the final consumer, moving and storing manufactured goods as value is added through each stage of manufacturing production.

We'll close by sharing our final chart, spanning all the time the President has been in office at this writing, showing the net change in jobs by industrial sector from January 2009 through December 2011:

Perhaps the President should have "pivoted to jobs" more often in the first three years of his Presidency. Especially those unglamorous ones that don't make for good photo ops, as his agenda today suggests is his real focus....

One Hundred Thirty Cities Across the US Protest on Anniversary of Citizens United

Sunday 22 January 2012

by: Britney Schultz, Truthout | Report
http://www.truth-out.org/one-hundred-and-thirty-cities-across-us-protest-anniversary-citizens-united/1327262241

Occupy the Courts - Radio Interview

Progressive Radio Network Interview of Greg Coleridge:
http://www.progressiveradionetwork.com/community-currency/

Occupy the Courts - Cleveland and Akron actions

CLEVELAND

Cleveland Plain Dealer:
http://www.cleveland.com/newsflash/index.ssf/story/protests-to-occupy-us courthouses-over-elections/ab6797987dca44c8b1da17f06c0c3b44

Cleveland Scene:
http://www.clevescene.com/scene-and-heard/archives/2012/01/20/cleveland-activists-occupy-the-court

Associated Press pictures:
- Photo of a member of our Economic and Political Justice program committee: http://news.yahoo.com/photos/carla-rautenberg-participates-rally-friday-jan-20-2012-photo-185223604.html
- Photo, from the India Times website, is of a member of our Monetary Reform workgroup: http://oneclick.indiatimes.com/photo/0fyh2AV2WTcG5#0_undefined,0_

The Alliance Review:
http://www.the-review.com/ap%20financial/2012/01/20/ohio-groups-take-part-on-occupy-court-protests

AKRON

Akron Beacon Journal:
http://www.ohio.com/news/break-news/occupy-protesters-seek-change-against-big-money-in-politics-1.256175

Photos:
http://www.flickr.com/photos/neoafsc/sets/72157629000602629/

The Poison Pill

On 23 December 2011, the Republican party majority in the U.S. House of Representatives caved in on its opposition to President Obama and the Democratic party majority in the Senate's proposal to provide a two-month long extension for the President's payroll tax cut.

Here, the percentage that individuals must pay in their taxes that support Social Security was maintained at 4.2% through the end of February 2012, after which, the rate is set to rise back up to the 6.2% level it had been for the two decades from 1990 through 2010.

With President Obama's State of the Union address scheduled for tonight, there is little doubt that he will seek to extend the payroll tax cut through the end of the year, which will have to be supported by increased deficit spending in order to pay out benefits to today's SOcial Security recipients, which will increase the national debt as the program is set to continue running more deeply in the red.

Given the political damage from the collapse of the Republican's political strategy in December 2011, it seems unlikely that the party's senior leaders will seek to oppose the President's payroll tax cut again. They might be able to get some traction by letting the payroll tax cut expire by cutting federal income (and withholding tax) rates, however that would depend upon the President and Senate Democrats to go along, which seems even more unlikely given their late-year political victory.

If that outcome is not really possible then, perhaps the best strategy that congressional Republicans might follow would be to allow the President and Senate Democrats to have another small victory, but one that would cost them dearly in the November 2012 elections.

It's often said that "people vote their pocketbooks", meaning that economic conditions have a lot to do with the choices people make at the ballot box. For example, if conditions are stable, good, or improving, then it would be more likely that incumbent politicians, such as the President and many Senate Democrats, will hold onto the offices that they hold so dear.

But if conditions are bad or worsening, then they would be more likely to be voted out of office.

The trick then would be to give them the bill they want, but with one key addition - a "poison pill" that they cannot resist ingesting, one that seems like a good idea to them, but that would have the effect of sealing their fate through the damage it might cause to the economy.

It would also have to be something that would have a relatively small effect, because if it works, you'd only want a relatively small mess to have to clean up pretty easily.

To that end, we would suggest raising the federal minimum wage in the U.S. to $8.00 per hour, with the increase taking effect in April 2012.

Even with a growing economy, the amount of that increase would enough to decrease the number of jobs that might otherwise exist in the U.S. economy by roughly 300,000. Since it takes roughly six months for the full effect of a change in the minimum wage to take hold in the economy, that would put the greatest job loss in October 2012, just ahead of the 6 November 2012 election.

Better still, the action would not leave any real political fingerprints, as the reduction in jobs would mostly be in the form of jobs not being created, where the most affected would be teens and young adults, who can have their unemployment more easily concealed since their attendance at school would keep them from being counted as being part of the U.S. workforce.

It's an intriguing idea. And it's very unlikely that the President and Senate Democrats would even consider resisting it, given their beliefs! We wonder if any U.S. politicians have ever tried doing it before....

Using the F-Score to Detect Accounting Fraud

If you're just an average investor, how can you pick up on whether or not a company is cooking its books?

Craig Newmark recently pointed to one of the neater ways in which someone might be able to determine if the numbers they're examining are following a natural pattern as opposed to an artificially-contrived one using Benford's Law, but unless you have access to reams and reams of internal company data, it's pretty unlikely that you as an individual without that kind of access could find out if something shady might be going on.

But for publicly-traded companies, you can get access to a company's publicly-reported financial statements, such as their annual reports or the 10-K statements they file with the United States Securities and Exchange Commission (SEC). And with that information, you can calculate a company's "fraud score" or "F-Score", which can provide a pretty good indication of whether or not the people inside the company might be manipulating their accounting.

Using math originally developed by Patricia M. DeChow, Weili Ge, Chad R. Larson and Richard G. Sloan in 2007 using data from 1982 through 2002, and updated in 2010 to include all years from 1982 through 2005, we've updated our tool for calculating the F-Score for any publicly-traded company for which you can obtain the indicated data below!

For that, you'll need consecutive years worth of the company's annual data - our tool below provides that using Enron's data for the years 1998 (two years prior), 1999 (one year prior) and 2000 (year of interest).

Income Statement Data
Input Data	Year of Interest	One Year Prior	Two Years Prior
Sales (Revenues)
Net Income Before Extraordinary Items or Cumulative Effect of Accounting Changes
Balance Sheet Statement Data
Input Data	Year of Interest	One Year Prior	Two Years Prior
Cash and Cash Equivalents
Short Term Investments
Receivables (Total)
Inventories (Total)
Property, Plant and Equipment (Total Net)
Total Assets
Preferred Stock (Total)
Total Shareholder's (or Owner's) Equity
Statement of Cash Flows Data
Input Data	Year of Interest	One Year Prior	Two Years Prior
Issuance of Long-Term Debt
Issuance of Common or Preferred Stock

Probability of Accounting Manipulations
Calculated Results	Values
F-Score

Here, a result greater than a value of 1 indicates a statistically higher than expected likelihood that the numbers the company in question has published have been misstated, which is "accountingese" for suggesting that the company's books may have been cooked! The following guide, developed by the F-score's creators, may be used to interpret the tool's results ("F-Score 1" corresponds to the specific model used in our tool):

We should note that the math is somewhat sensitive - the formula's creators indicate it will produce a high frequency of false positives, which means that an F-Score greater than one should be taken as an indication that an average investor should be much more diligent in reviewing a company's business before making investing decisions related to it.

The tool above provides different results from our original version of the F-Score formula, which was based upon the original 2007 math.

This update to our original tool is the result of a collaborative project with Pasi Havia, who was seeking to implement a Finnish-language version of the tool. We owe our thanks to Pasi for his detective work in finding that the formula for calculating a company's F-score had changed from 2007 and for developing the new and improved code to calculate the F-Score!

If you compare the results between Pasi's version and ours above, you'll find that the results between the two tools are nearly identical - the difference comes down to how the rounding for the value of the mathematical constant e in the formula was done (Pasi rounded it to 8 decimal places for the sake of matching the authors' results in their paper, while we just let it run!)

Related Tools at Political Calculations

Predicting Bankruptcy

How likely is it that a publicly traded company will declare bankruptcy in the next year? Our tool for calculating the company's Altman Z-Score can answer! It predicted General Motors failure years before the company failed!

Liquidity

Does that publicly-traded company have enough money flowing through its veins to keep operating?

MONETARY HISTORY CALENDAR January 23-29

JANUARY 24

1811 – CHARTER OF FIRST BANK OF UNITED STATES NOT RENEWED
A 20-year charter was issued by the federal government (very unusual at the time since most corporate charters, or licenses, were issued by states) to create the first national private bank. This was the first private institution empowered to create paper money -- with all the power and profit that goes along with it. The bank’s paper money was accepted for taxes. Eighty percent of its shares were privately owned, among these 75% were foreign owned (mostly by the English and Dutch). The bank was modeled on the Bank of England. Within 2 months of its creation, it flooded the market with loans and banknotes and then sharply shifted course and called in many of its loans. The result was the first US securities market crash -- what became known as the “Panic of 1792” – the first of many panics, recessions and depressions due to the private/corporate control of our money system. The result was Congress voting to not renew its charter, thus dissolving the bank. During the first 50 years of the US, legislatures and courts routinely chose to not renew or revoke corporate charters, which were considered democratic instruments and used to control the actions of corporations.

1939 – STATEMENT MADE BY ROBERT H. HEMPHILL, CREDIT MANAGER OF THE FEDERAL RESERVE BANK OF ATLANTA
"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied...”

JANUARY 25

1898 – SECOND INDIANAPOLIS MONETARY CONVENTION BEGINS
Billed as a grassroots effort for monetary reform, the second convention brought together nearly 500 representatives from 31 states. It was a follow up gathering of major corporate leaders (including many bankers and economists representing leading corporations) to the first convention held a year earlier. Participants advocated for a privately run national central bank. Just as the proposed national central bank was misleading (to be privately controlled), the first and second Indianapolis Monetary Conventions were equally misleading. They were hardly “grassroots,” yet the image was useful when lobbying Congress and communicating with the public.

JANUARY 27

2010 — DEATH OF HOWARD ZINN, HISTORIAN
"The challenge remains. On the other side are formidable forces: money, political power, the major media. On our side are the people of the world and a power greater than money or weapons: the truth. Truth has a power of its own. Art has a power of its own. That age-old lesson – that everything we do matters – is the meaning of the people’s struggle here in the United States and everywhere. A poem can inspire a movement. A pamphlet can spark a revolution. Civil disobedience can arouse people and provoke us to think, when we organize with one another, when we get involved, when we stand up and speak out together, we can create a power no government can suppress. We live in a beautiful country. But people who have no respect for human life, freedom, or justice have taken it over. It is now up to all of us to take it back."

JANUARY 29

1737 -- BIRTH OF TOM PAINE, US REVOLUTIONARY
Commenting on the value of colonial-issued money, the “Continental”...
"Every stone in the Bridge, that has carried us over seems to have a claim upon our esteem. But this was a corner stone, and its usefulness cannot be forgotten."

1956 — DEATH OF H.L. MENCKEN, US JOURNALIST
"The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary."

----------------------------

Why this calendar? Many people have questions about the root causes of our economic problems. Some
questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com
For more information, visit http://www.afsc.net/economiccrisis.html

The Core Business of Planned Parenthood

How much of the revenue Planned Parenthood generates through its health center affiliates comes from performing abortion procedures?

The question arises because of a chart Planned Parenthood provided in its 2009-10 annual report. In it, Planned Parenthood indicates that abortion services account for just 3% of all the health services it provides:

We suspect this chart was generated to attempt to underemphasize the extent to which Planned Parenthood's provision of abortion services add to its bottom line through the health centers the organization's affiliates operate. [As an aside, that contribution is even visually understated in Planned Parenthood's pie chart, in that abortion services are depicted in a very understated gray tone, where all the other procedures are shown in bright color.]

Since we've already worked out the average price paid for the majority of abortions performed by annual caseload volume of non-hospital abortion providers in the United States for 2008-09, we'll go back to Planned Parenthood's 2008-09 annual report to work out how much of the revenue it generated from abortion services contributed to its overall revenue for all the health services it provided in that year.

Will it be just 3%, as the pie chart depicting all of the health services Planned Parenthood provided in 2009-10 suggests? Our pie chart below provides the answer:

In 2008-09, Planned Parenthood reported that it generated $404.9 million in revenue through the health centers operated by it and its affiliates. Our low end estimate of $135.6 million for the 324,008 abortion services the organization performed in that year would then represent at least one-third of all the revenue generated by the organization through its health centers.

To put that into the context of Planned Parenthood's total revenue for 2008-09, the amount of revenue the organization generates through abortion services would account for 12.3% of all its annual income, or very nearly 1 out of every 8 dollars:

As such, despite representing just 3% of Planned Parenthood's reported number of health services provided each year, abortion represents the core business of the organization.

Previously on Political Calculations

• The Volume Pricing of Abortion


• The Throughput of Abortion Providers


• The Providers of Abortion in the U.S.


• Race, Poverty and Abortion

"I'll believe a corporation is a person when..."

Thank you to everyone who contributed suggestions. You are a creative bunch!

Feel free to share these at Occupy the Courts actions (there are now over 130 cities with planned actions) and/or with your friends via email and social networks tomorrow. It’s one way to mark the second anniversary of the bizarre Citizens United decision extending never-intended corporate constitutional rights.

“I'll believe a corporation is a person when...
... Arizona deports one
... Texas executes one
... Massachusetts marries two of them
... The US government issues one a Social Security number
... one gets a STD after jumping in bed with an elected representative
... one returns from the Mideast with PTSD
... the CIA extradites one to Guantanamo
... one sacrifices its life in military service
... one is awarded the Nobel Peace Prize
... one is baptized
... one dies from hunger or sickness
... one falls in love
... one is awed by beauty
... one is humbled by things it does not know
… it is NOT too big to JAIL
… one values the life and well being of any one individual before it's own existence
… The Ohio State University graduates one
... Ohio denies two same sex marriage (and divorce) rights
... one can't find a job
… one is elected president or dies in childbirth.
… one is put in prison (which would most likely be for defrauding its investors)
... one dies and is buried in a cemetery
… it grows a heart
… it develops a conscience
... one stays up all night with a sick baby, a troubled teen, or a dying parent
… one worries about the meaning of life
… one is capable of empathy
… one has an ultrasound detected heartbeat
… when its conception occurs in utero
… one is actually held responsible for its actions
… one adopts any of those babies delivered from the women who were denied access to a legal abortion
.... they have to register for the draft
… when one gets pregnant, gives birth and breastfeeds the newborn.
… our budget is balanced
… the created is equal to the creator
… one gives up their personhood to save another person
… they pay their fair share of taxes
… disco music is finally eradicated from the face of the earth
… Lucy lets Charlie Brown kick the football
… a winter storm warning is posted for hell
… Gandhi and Martin Luther King, Jr. return to Earth and declare corporations are people.
… one teaches a child
… they all start laughing out loud at these remarks
... it shows me its birth certificate
‎... it grows an opposable thumb.
... when gepetto makes it a real boy
... they are able to reproduce sexually
... one endorses Ron Paul for President."
And finally…
"I will never believe a corporation is a person."

The Volume Pricing of Abortion

Now that we've revealed the pace at which the most prolific abortion providers in the United States conduct their business, it's time to consider their primary motivating factor behind achieving such economies of scale: revenue.

To do that, we'll need to determine the average amount of money collected for each abortion performed in the United States based upon their annual caseloads. Fortunately, the Guttmacher Institute has once again collected the data we need to construct a model by which we can estimate the average price paid for an abortion in the U.S. depending upon the annual volume of abortions performed by the provider.

We've summarized what we found in the chart below, which applies to all abortions provided in non-hospital settings that are performed at approximately 10 weeks of gestation. (As we noted in our previous post, abortions performed in hospitals predominantly are done for medical reasons, where at least a portion of the price paid might be covered by a patient's health insurance.) This data then encompasses the average prices paid that apply for over 80% of all abortions performed in the United States.

The graph above somewhat resembles a demand curve from economics, where the lowest amount of a quantity demanded corresponds to the highest price, and the greatest amount of a quantity demanded corresponds to the lowest price.

We next took the mathematical relationship we modeled based upon the Guttmacher Institute's data and built a tool, which will allow us to estimate the average price paid for an abortion according to the provider's annual caseload for the procedure. Given the difference between these average prices and the median price charged by non-hospital abortion providers as reported by the Guttmacher Institute, we believe our tool's results will be within 5% of the actual values.

We then went the extra mile to estimate the abortion provider's annual revenue from performing abortions.

Abortion Provider Data
Input Data	Values
Annual Caseload

Average Price Paid and Annual Revenue
Calculated Results	Values
Average Price Paid for Abortion
Annual Revenue for Abortion Provider

For the default data, we find that an abortion provider that performs 1000 abortions per year will collect an average of $484 from each patient, generating over $484,100 in a year.

Plugging in Planned Parenthood's total reported abortion count of 324,008 for 2008 into the tool suggests that the average price paid by a patient at their clinics is $418.61, which would put their annual revenue for performing this volume of abortions at $135,633,517.

That annual revenue figure could actually be higher though, since we omitted later term abortion price data from our model. Consequently, this value would represent a low-end estimate of Planned Parenthood's total revenue from performing abortion procedures in 2008.

Reference

Jones, Rachel K. and Kooistra, Kathryn. Guttmacher Institute. Abortion Incidence and Access to Services in the United States, 2008: TABLE 6. Charges and average amount paid for nonhospital surgical abortions at 10 and 20 weeks’ gestation and for early medication abortions—all by provider type and caseload, 2009. Perspectives on Sexual and Reproductive Health. Volume 43, Issue 1. 10 January 2011.

The Throughput of Abortion Providers

How many abortion procedures do the highest volume abortion providers perform every day?

Having previously determined the number of abortions performed by the various types of abortion providers in the United States, we're digging deeper into the Guttmacher Institute's report on Abortion Incidence and Access to Services in the United States, 2008 to do some basic math to find out the typical throughput for the various types of abortion providers.

"Throughput" is a term that comes from high volume manufacturing operations, which refers to the amount of material that is processed within a given amount of time, or in the case of computers, the number of operations that are performed within a set time interval.

The question arises because of the great differences we observed in the annual caseloads for the various types of abortion providers. Our first chart below shows the percentage distribution for the 1,793 abortion providers counted in 2008 with the number of abortions procedures performed by each:

As you can see, nearly 70% of all abortions are performed in just 378 abortion clinics, while another 24% are performed in 473 "other" clinics. A balance of just under 6% of the total are split between 942 hospitals and physicians' offices.

But the Guttmacher Institute's researchers went a step future and also determined the number of abortions provided by each type of abortion provider according their annual caseload - the number of abortions performed by each in 2008.

We decided to drill down into the data for abortions performed in dedicated abortion clinics and other clinics, since these two types of abortion providers account for just over 94% of all abortions performed in the United States.

Our next chart shows what we found when we looked at abortions performed in the 378 dedicated abortion clinics in the United States:

Our next chart repeats the same exercise for the "other" clinics. One immediate difference between the two providers is that no clinics that are counted among the 378 dedicated abortion clinics performed fewer than 30 abortions in 2008.

We next determined the following average throughput values by assuming a seven-day per week operating schedule, which might be common for these high-volume abortion providers.

• An annual caseload of 30 represents 0.08 abortions per day, or roughly one abortion approximately every 12 days.


• An annual caseload of 400 represents 1.1 abortions per day, or 11 abortions every 10 days).


• An annual caseload of 1,000 represents roughly 2.7 abortions per day.


• An annual caseload of 5,000 represents 13.7 abortions per day.

For the 29 abortion clinics with an annual caseload over 5,000 abortion procedures per year, which performed 188,320 abortion procedures in 2008, the average daily throughput works out to be approximately 17.8 abortions per day.

But for the two "other" clinics that weren't counted among the specialized abortion clinics, but still had an annual caseload exceeding 5,000 abortion procedures per year, the average throughput is approximately 25 per day.

For a standard 8-hour work day, that last throughput value equates to 3.1 per hour.

To put that value into perspective, since most of these procedures represent surgical abortions, if there were only one doctor performing these procedures at these clinics, they would rank among the fastest in the world.

Notes About the Various Types of Abortion Providers

The Guttmacher Institute provides the following description of each type of abortion provider:

Types of Providers and Abortion Caseloads

Clinics. The 378 specialized abortion clinics accounted for 21% of all abortion providers, but performed 70% of all abortions in 2008 (Table 4). Most of these facilities reported 1,000 or more abortions during the year. A total of 473 nonspecialized clinics accounted for 24% of all abortions; some were similar to abortion clinics in having caseloads of 1,000 or more abortions per year. Overall, the number of very large providers (those performing 5,000 or more procedures) increased by more than 50% between surveys: Twenty facilities of this size accounted for 12% of all abortions in 2005¹, whereas 31 such facilities provided 17% of abortions in 2008.

Hospitals. Thirty-four percent of abortion providers were hospitals in 2008, but these facilities accounted for only 4% of all abortions. Many hospitals provide abortions only in cases of fetal anomaly or serious risk to the woman’s health, and a majority (65%) performed fewer than 30 abortions in 2008. Twenty-two hospitals reported 400–999 abortions during the year, and only nine reported 1,000 or more.

Physicians’ offices. Some 19% of providers were physicians’ offices, but these facilities accounted for only 1% of all abortions. A majority of these offices (57%) reported fewer than 30 abortions; our survey may have missed a number of small providers in this category.

Reference

Jones, Rachel K. and Kooistra, Kathryn. Guttmacher Institute. Abortion Incidence and Access to Services in the United States, 2008. Perspectives on Sexual and Reproductive Health. Volume 43, Issue 1. 10 January 2011.

Help complete this sentence: "I'll believe a corporation is a person when..."

In commemoration of the second anniversary this Friday of the Citizens United decision which extended never-intended rights of people (personhood) to corporations, your help is needed to complete the sentence below.

A list will be compiled and send Thursday night. It can then be read if desired by organizers of the Occupy the Courts events in Columbus, Cincinnati, Cleveland, Akron and Toledo. For those unable to attend any one of the events, you can forward the completed list to your own email lists, Facebook page or blog — as a way to commemorate the day wherever you are.

“I'll believe a corporation is a person when...
[Add to the list]
... Arizona deports one
... Texas executes one
... Massachusetts marries two of them
... The US government issues one a Social Security number
... one gets a STD after jumping in bed with an elected representative
... one returns from the Mideast with PTSD
... the CIA extradites one to Guantanamo
... one sacrifices its life in military service
... one is awarded the Nobel Peace Prize
... one is baptized
... one dies from hunger or sickness
... one falls in love
... one is awed by beauty
... one is humbled by things it does not know
...

For details of the Occupy the Courts actions in the abovementioned communities, go to
https://maps.google.com/maps/ms?msid=212543303386647618890.0004b3214495abde956d0&msa=0