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Will U.S. go “Slow dancing in a burning room” with the risk of default once again come January? Larry Summers says “Not likely”

Larry Summers, Harvard president, former Treasury secretary and, until recently, Fed chairman favorite states that Washington won’t flirt with default again once the current debt ceiling is reached (Early January).

“The good news is that even the most foolish of people, having shot themselves in the foot, rarely reload. And therefore I think it is very unlikely, exceptionally unlikely, that we will see another government shutdown or another march to the brink of default of this nature,”.

With the mid-term election drawing near, any political maneuvering that would be of a similar vein to the actions of the past recent months could prove damaging to current incumbents that flirt with the idea of generating a self imposed “default”.

Given the public opinion results of recent polls, members of the House are incentivized essentially to not flirt with the condition of a forced default within the coming year given the opinion backlash most recently witnessed.

“In part, the fact that the [congressional midterm] election is drawing near, and those who push us towards the brink of default do not seem to have been rewarded politically, will act as a discouragement.”

Will the moderate base of the Republican party seems to agree with Summer’s comments do not be to hasty in ruling out the possibility of another impase in the coming months. Tea Party backed candidates such as Sen. Ted Cruz of Texas who became the face of the looming default by attaching a repeal of the Affordable Care Act (Obamamcare) to the continuing resolution to fund the government’s operations and authorization to raise the debt ceiling returns to his district a celebrated representative to the folks who put him in office in the first place. SE. Cruz along with other members of the House and Senate did exactly what they were elected to do “Defund Obamamcare” as it was one of the platform issues they ran on and were elected to pursue.

Will we see a repeat of a possible default come January? Hard to say…

But in Washington, anything is possible.

Courtesy of Quartz

‘Twas climate change that killed the McDouble…With the commodities increase in the franchisee’s library!

Could climate change mean the death of the coveted “Dollar menu”?

Not quite…

The age of the Dollar Menu has come to an end, well sort of. The Dollar Menu will now be known as the Dollar Menu & More which will contain items that go as high as $2 dollars.

The change by McDonald’s is the result of an agreement struck by the company and its franchise holders as a result of rising commodities prices.

As a result of rising temperatures there have been an increase in the number of recorded droughts. These droughts have placed pressure on cattle farmers to reduce cattle herds (less cows) and pay more for feed (less pasture land to graze for cows).

As a result, less cattle and higher costs to feed them have pushed beef prices upward which translates into more costs to produce the McDouble.

The Dollar Menu was first introduced in the early 2000’s and even then it was a contentious maneuver between McDonald’s corporate and franchise owners as the low price point put pressure on franchise owners.

The McDouble is the most expensive item on the menu to produce. As a result of rising cost and the erosion of the marginal profit associated with the McDouble, franchise owners won a small victory in 2008 when corporate agreed to remove one slice of cheese from the McDouble in order to reduce the cost of producing the iconic burger.

But, due to the rising cost of commodities as a result of unseasonably warm and dry periods that have driven the price of beef ever higher, it seems the iconic $1 cheeseburger known as the McDouble has come to an end and will from here on out cost $1 and some change to $2.

Courtesy of Quartz

New Medical Device Tax is pushing manufacturers to lay off employees…but, it may only be temporary.

The Affordable Care Act (Obamacare) was designed to ensure that it would not add to the national deficit. In order to expand health care coverage to 27 million Americans while not adding to the nation’s deficit, revenue enhancements were designed within the ACA in order to meet those increased expenditures. To accomplish this task, the ACA set forth to reduce medicare payments and apply new/increased taxes on industries that would benefit from the health care expansion: hospitals, health insurance providers and manufacturers of medical devices.

Beginning in 2013, medical device manufacturers are imposed a 2.3% excise tax on the sale of any taxable medical device manufactured or imported (exemptions are made to devices that retail for less than $100 in addition to other designated devices: eyeglasses, hearing aids and other devices that are generally purchased at retail by individuals).

The imposition of a 2.3% excise tax has been a contentious issue (especially among the medical device lobbying groups) as the fears associated with the excise tax would lead to off-shoring of medical device manufacturing, would limit research and innovation and lead to increased prices shifted to the consumer to cover the additional cost of manufacturing.

The fear surrounding the excise tax providing businesses an incentive to move their manufacturing off-shore does not seem to be a credible threat. The excise tax applies to imported manufactured medical devices in addition to devices manufactured domestically. The only incentive that could be credible to move production off-shore would be in relation to the associated labor costs overseas. The excise tax actually instead provides an incentive for medical device manufacturing to remain domestically as the excise tax does not apply to exported medical devices.

The fear the excise tax would retard medical device innovation as well seems to be not as credible as a threat as may have been promoted. Currently, the innovative research arm of medical device production has been in a rut for the past few years (so has big pharma as well). The rationale for this “rut” as it were is not one associated with new taxes or a regulatory climate, but instead is a self inflicted type of slowed innovation in the market. Innovations in the medical device market have been negligible to small changes to existing devices as investments in R&D have not yielded substantial results. To the contrary, new regulatory conditions established by the ACA in fact may provide incentive or competitive pressure for medical device manufacturers to invest and produce innovations as Government pressures to lower cost of health care.

A third concern deals with “cost shifting” in which the 2.3% excise tax will force manufacturers to pass on those additional cost to consumers through the prices of associated medical devices. While the concern is probable, the medical device market is highly competitive and there is a great deal of manufacturers that compete with one another to provide medical devices. Therefore, medical devices that are applicable to the medical device excise tax are highly sensitive to price; in order to remain competitive in the market, manufacturers will more than likely be unable to fully pass on the 2.3% excise tax on to consumers as other manufactures could then undercut the cost of the manufacture that decides to “cost shift”. Treatment for health conditions is elective and physicians can select alternative treatment methods for patients. If shifting the excise tax on to consumers is pursued and results in significantly increased prices for produced medical devices than consumers and physicians can elect to pursue other treatment options and forgo selection of the medical device that may have been used in the treatment.

Given these three concerns, one additional concern should be highlighted. As the 2.3% excise tax can increase the cost of production for a medical device manufacturer and medical devices are price sensitive in the highly competitive market, manufactures can elect to reduce other associated cost in the manufacturing process such as labor.

Stryker Corps. a medical device manufacturer based in Colorado announced in 2011 that it would move forward with reducing its workforce by 5% (estimated at 1,000 positions) and finish the layoffs by the end of 2012. Stryker’s CEO stated that the layoffs were in direct relation to the imposed cost of the medical device excise tax of 2.3%. Stryker estimated that the 2.3% medical device excise tax would cost the manufacturer over $100 Million in owed taxes to the Federal Government. Due to the highly competitive nature of the medical device market and the associated price sensitivity of manufactured devices, Stryker opted instead to reduce other associated cost in its production; in this case, that cost was labor.

Pat Stryker and Jon Stryker are the owners of Stryker Corp. who inherited the business from their father Homer Stryker who was an accomplished surgeon and founder of the company. Pat and Jon are major Democratic party contributors; Pat donated $175,100 to pro Obama super PAC and Democratic candidates including Obama. Jon donated $2,066,000 to Democratic super PAC and Democratic candidates. Though Pat and Jon are owners of Stryker Corps. they are not involved in the operations of the company.

Though Stryker Corps. reduced 5% of its global workforce as a result of the medical device excise tax, analysts state that the expansion of health care to 27 million Americans under the ACA will greatly benefit those industries involved in health care. The medical device manufacturing industry (as a whole) reports annual sales of $106 Billion to $116 Billion annually. Those sales are expected to grow as more individuals have access to healthcare and will need associated health needs including medical devices.

The ACA has not fully gone into affect, two weeks from now the open exchanges (where individuals can compare health care plans and purchase health care from across the nation among a wide variety of providers) will go into affect and the individual mandate will begin in 2014 followed by the employer mandate in 2015. By this time, the ACA will be in full effect and millions of new individuals will be a part of the health care market.

The Stryker Corps. layoffs may have happened relatively early before full implementation of the ACA, but given the likelihood of increases in medical related industries those jobs could return in addition to even more given the demand for medical devices when 27 million more individuals are seeking medical care.

Courtesy of The Colorado Observer

Courtesy of American’s for Tax Reform

Courtesy of The Center for Budget and Policy Priorities

Courtesy of Michigan Live

The unintended consequences of The Affordable Care Act (Obama Care): Layoffs, reduced work hours and dropped health care coverage

A condition of the Affordable Care Act contains a provision within the law known as the employer mandate. This stipulates that any employer that has more than 50 employees must provide health insurance to any employee that works a calculated average of 30 hours per week.

The contention surrounding the employer mandate has been a topic of discussion among economists, politicians and policy wonks alike. The employer mandate provision essentially provides an incentive among businesses to reduce worker hours below the threshold of 30 hours per week (or generate layoffs).

The White House has already moved forward to pushing the start date of the employer mandate to 2014 (a 1 year extension). Despite this, businesses have been reporting that they will be pursuing reduction in employees work hours per week and layoffs to offset associated cost increases in providing health insurance to employees.

This past week Indiana University has announced that it will lay off 50 maintenance and custodial workers and instead will shift those workers to a contractor that will manage the workers hours. The university has also stated that Graduate Students employed by the university will see their hours restricted below the 30 hour a week threshold to avoid having to supply them with health insurance coverage. The university currently spends $215 million on health care coverage.

Trader Joe’s became well known to do something that few retail businesses were doing at the time: Trader Joe’s began offering its part time employees health insurance coverage. This practice continued on for many years; however, according to a new leaked memo by the company’s CEO Dan Bane has outlined that Trader Joe’s will end their health insurance option for its part time employees (those that work below 30 hours). In exchange, Trader Joe’s will cut those employees affected a $500 check at the beginning of the year which they can use to purchase their own health care plan through the health care exchange networks established under the Affordable Care Act.

The rationale for Trader Joe’s to pursue this endeavor is about cost. The memo states that employees can, in addition to the $500 they will receive from Trader Joe’s also take part in other additional associated tax benefits outlined in the Affordable Care Act that can be used to purchase health insurance at no cost to the employee.

These are only two recent examples of businesses that are pursuing different operational models in relation to employee health care offerings. As of September 3rd, 258 business and organizations have been reported to cut hours and staffing levels as a result of the cost associated with the employer mandate.

While there are associated benefits of the Affordable Care Act, there is as well unfortunate and unintended consequences that arise as a result of provisions contained within the Affordable Care Act. One of those provisions is undoubtedly the employer mandate.

American manufacturing is coming back (to a degree) but not without a few caveats in exchange.

The new normal of American manufacturing: Less pay and paying more for received benefits.

U.S. manufacturing is experiencing a bit of resurgence (nothing grand) but is reporting some positive growth in the sector. General Electric recently spoke about bringing manufacturing jobs back to its United States division from overseas.

Te rationale for this perceived “in-sourcing” that is occurring in manufacturing has to deal with a few key points:

  1. Currency fluctuations (the decline in the value of the Dollar and the increasing value of the Yuan currency).
  2. Oil prices (cargo ship fuel has increasingly become more expensive since 2000 and as a result increases the cost of shipping manufactured goods from abroad).
  3. Wages increase in China (wages paid to workers overseas in manufacturing are nearly five times greater that they were a decade ago; as wages increase, this lowers the profit that can be earned on manufactured goods).
  4. Natural gas production is up and cost are down (the boom in the natural gas industry has pushed the cost of it below the cost of oil, in turn, this lowers the operational cost of the machinery used in manufacturing).
  5. American unions have become more “agreeable” (from the 1980’s to 2000’s unions have often been identified as a factor that has complicated U.S. manufacturing i.e. (driving cost through wage increases and strikes); unions today are much different than they were 20 years ago. Their membership is down and they have negotiated lower wage agreements with manufacturers to secure jobs).
  6. U.S. labor is more productive (U.S. labor has continued an upward climb in productivity measures; U.S. labor can produce more than it once good before which lowers operational and production cost and improves profit).

One particular factor to draw attention to is #5; unions facing a decline in membership and losing bargaining power through recent right to work legislation in states have become more agreeable with manufactures in accepting concessions in regard to wage and benefit agreements for their members.

One example of this new “modern U.S. manufacturing” is taking place in Michigan (the former bastion of the automotive industry) where companies like American Axle are bringing back investment in U.S. manufacturing and with it new jobs.

The caveat is that the jobs being created are only paying half of what they used to almost 20 years ago.

New employees hired at New Axle are being compensated $10.50 an hour and are required to contribute more to their health benefits and retirement than their counterparts did 20 years ago. The company itself almost went bankrupt in 2008 at the beginning of the recession but has in the last few years been able to spring back thanks to increases in consumer demand for automotives.

With the increase in consumer demand and new agreed upon concessions with the United Auto Workers Union has created new opportunities for manufacturing in the United States to be more competitive with their global counterparts.

Whether or not this trend will remain to be seen in years to come is a discussion of contention among analyst, but, one thing is for sure, manufacturing is returning to the U.S. slowly but surely.

Courtesy of Market Watch

Courtesy of The Curious Capitalist

Courtesy of Carpe Diem

Courtesy of Forbes Leadership Forum

Forever 21 may not be “Forever” when it comes to offering many of its full time employee’s health benefits.

Forever 21 may not be “Forever” when it comes to offering many of its full time employee’s health benefits.

The privately held Teen clothing retailer Forever 21 will be shifting non-managerial full time employees to part time status by the end of the month (August).  This includes:  stock associates, sales associates, store maintenance associates, accessory specialists and cashiers; those who are currently full time will be reclassified as part time employees. The speculation for the shift in moving full time employees to part time designation has to do with the Affordable Care Act’s employer mandate which stipulates that any organization employing more than 50 individuals will be required to provide all employees who work 30 hours or more per week comprehensive health insurance or face a penalty (a monetary fine per employee not covered).


The news for this reclassification came in the form of a leaked internal memo circulated within Forever 21. The memo found its way online and social media outlets where it sparked heated debate among individuals speaking out against Forever 21. Forever 21 responded on its own Facebook wall stating that the changes the company is instituting will only affect 1% of its workforce and that the employer mandate (or commonly referred as just Obamacare) was not cited as the reason for the companies maneuver to reduce employee’s hours.

Forever 21 are reported to have 500 stores and 40,000 employees.  If Forever 21’s statements holds true that only 1% of its workforce will be affected by the reduction in hours to part time status, about 400 employees will then be shifted from full time to part time status and lose their associated health coverage benefits.

Forever 21 holds that the reduction in employee’s hours has to do with realigned sales expectations. In essence, the company expects that sales will not be as high as projected at various stores and requires a reduction in staffing (labor costs) to tether those reduced sales projections.

Interesting Forever 21 sees its sales being softer than expected considering it has almost doubled its sales since 2007 (only 6 years) and has expanded its growth rate faster than many of their competitors (like GAP).

Forever 21’s decision to reduce employees hours is coming at a time when other retailers and food industry organizations are instituting a similar measure; the difference, those organizations openly state that their reductions are a result of  expected/projected cost associated with the Affordable Care Act’s employer mandate.

Courtesy of Behind The Storefront

Courtesy of Health Exchange

Egypt, Tanks, Fighter Jets, and $1 Billion dollars in annual aid, how the industrial military complex utilizes domestic concerns to reinforce the iron triangle.

The industrial military complex refers to policy and monetary relationships between legislators, national armed forces, and the military industrial base (Contractors) that supports them.

These relationships include political contributions, political approval for military spending, lobbying to support bureaucracies, and oversight of the industry.  This relationship is known as an Iron Triangle.

The term is most often used in reference to the system behind the military of the United States, where it gained popularity after its use in the farewell address of President Dwight D. Eisenhower on January 17, 1961.

Egypt serves as a case example of the industrial military complex and the iron triangle in which it represents.

Each year, the Unites States Congress votes to appropriate $1 Billion Dollars in monetary to aid to Egypt. This aid, however, does not come in a direct form ($1 Billion in cash), but instead comes in the form of manufactured goods; for example:

Egypt has been receiving tanks from the U.S. since the late 1980’s. In total, Egypt has received over 1,000 tanks manufactured within the United States valued at $3.9 Billion.

This same time period, the U.S. has also sent 221 fighter jets (including the well known F-16) valued at $8 Billion.

The last few years, American military advisers in Cairo have been instructing the State Department that Egypt does not need any more tanks or fighter jets (200 of the tanks sent from the U.S. have never even been used and remain sealed in storage).

But, despite this recommendation to reduce the number of military vehicles being produced and shipped to Egypt, the tanks and the jets keep on coming and the aid keeps on flowing.

So why keep appropriating $1 Billion a year to Egypt to manufacture tanks and jets that will just end up in storage?

The reason being the exemplification of the Iron Triangle in action.

Egypt won’t turn down tanks and jets from the U.S. and that is exactly how the U.S. wants it!

The tanks and jets produced for Egypt are built in the U.S. Those orders for tanks in jets translate to production request. Production request are paid for by government appropriations. Those appropriations are then used to pay contractors to build tanks and jets. Contractors then hire workers to build those tanks and jets. Hired employees are working and their representative in Congress can campaign on a platform of creating/saving jobs for the American people. Congress representative can then become re-elected and remain in Congress. Congress representative then votes to appropriate $1 Billion in aid for Egypt and the cycle begins anew.

That is the industrial military complex as exemplifying the concept of the iron triangle. Each interest reinforces the other in a continual cycle/loop which repeats over and over and over.

Everyone in the process benefits from the actions. The U.S. maintains a healthy relationship with Egypt in a region where positive U.S relations are difficult to come by; military contractors get money to operate and earn profit and leaders in Congress maintain a positive image of strengthening domestic economic conditions.

The incentive to continue the cycle is greater than the benefit of ending it. Therefore, the process will continue.

Dwight D. Eisenhower was right to warn the United States of the rise of the military industrial complex, unfortunately that warning has fallen on deaf ears.

Courtesy of NPR’s Planet Money

The unemployment rate drops for the month of July. However, just because it’s lower does not necessarily mean things are better.

The reported unemployment rate dropped to 7.4% for the month of July (a decrease of 0.2 percentage points) down from 7.6% reported for the month of June. The economy added 162,000 jobs, below projected expectations of 185,000 by analyst. The aggregated average for the past 12 months rests at 189,000 per month.

The unemployment rate is the lowest it has been since December of 2008.

The bad news however is that the reported unemployment rate does not report individuals who are “underemployed” (individuals working only a few hours a week). Even more striking is the number of individuals that are classified as “discouraged”; discouraged workers are those individuals that have not looked for work in over four weeks or more.

Essentially, you have individuals that have given up looking for employment all together as they have been unable to secure employment. The number of workers who have given up looking for employment have increased by 133,000 from July 2012 to July 2013 (2.5 million Americans are classified as “discouraged”).

Less individuals looking for work, the smaller the rate of unemployment appears.

In addition to discouraged workers there are also individuals that are opting out of the labor market all together, but not as a result of lack of employment opportunities. The population is aging; as a result individuals (baby boomers) are beginning to exit the labor market and entering retirement. Students are also opting to stay in college longer as well (pursuing additional education or extending their undergraduate studies). The majority share of students now graduate from undergrad within a six year frame instead of the standard four year period.

One additional indicator the unemployment rate fails to draw focus to, is the annual reported wage being paid to employees. The average hourly earnings for employees for the month of July has fallen by 2 cents; the  average over the past year has only risen 1.9% which is right at the rate of inflation of 1.8% for consumer products. When adjusting for inflation, wage earnings have been stagnant which is abnormal for the American economy.

Minimum wage earners are hit particularly harder as their purchasing power has eroded by 20% due to inflation. With an estimated 11.5 million individuals out of work there is an abundance of supply of workers readily available for low wage positions. This, in turn, exacerbates low wage earnings.

This is not the case for all workers however…

Economist estimate a skill gap is present in the current labor market which is leading to an estimated 3.8 million jobs being available, but workers do not have the skills to fill them.  Fields such as energy, computer related or engineering are reporting significant starting salaries for workers due to the high demand of the field, but the relatively low supply of available workers.

When examining the changes in the reported unemployment rate there are some caveats that need to be taken into consideration. This is especially important when media outlets report such information to the general public.

This does not mean everything is doom and gloom, as some individuals may have a much rosier outlook than others.

Courtesy of NPR Business

Courtesy of NPR The Two Way

Courtesy of NPR Planet Money

Courtesy of Marketplace Economy

Courtesy of Washington Post WonkBlog

Courtesy of U.S. Inflation Calculator

Public higher education cost continue to go up while lower and middle income families struggle to keep up with the cost.

Tuition in Virginia has increased dramatically in recent history. For example, the State Council of Higher Education in Virginia (SCHEV) reported that the average increase for in-state undergraduate tuition and mandatory fees from the 2009-2010 school year to the 2010-2011 school year was 13.1 percent at public four-year institutions. Similarly, the Joint Legislative Audit and Review Commission (JLARC) reported in its 2012 Review of State Spending that tuition and fees increased on average $804 per student or 9.4% between years 2010-2011 to 2011-2012 (1).

The JLARC 2012 report reveals Virginia’s average annual in-state tuition and fees at public four-year institutions of higher education was $9,618 in 2011, ranking the eleventh highest average in the nation; Virginia was ranked fourteenth in terms of costs in 2010. Virginia jumped 3 spots up the list in one year. This signals costs have increased in the Commonwealth of Virginia at a rate faster than other states in just a one year period. Over the year period of 2006-2007 to 2011-2012 (6 years), tuition in Virginia increased by an average of 33%, indicating that increases in costs is not necessarily a recent phenomenon (1).

Costs among Virginia’s public higher education institutions have increased at an alarming rate. When Senators and the President talk about college costs reducing affordability and access for families, the measure used to compare the rate of college costs to other increases of costs to other goods is known as the consumer price index (CPI); this measure is a collection of assorted goods sold in the national economy and tracks the % change of the prices for those selected goods. By doing this, it produces comparison of price changes. When Senators and the President talk about college costs reducing affordability and access to families this is the measure they use to make that determination.

The rate of inflation calculated by the Consumer Price Index (CPI) for the five year period 2006-2007 to 2011-2012 averaged 10.3%; Virginia’s tuition increases outpaced the rate of inflation by more than 22%. JLARC argues that costs have increased faster than incomes (1).The data provided thus far show costs are going up and outpacing the costs of other goods in the economy.

Have incomes increased to offset the increases in tuition and fees? The answer is “sort of” as incomes vary by different quintile classifications and income groups have experienced different growth rates. Comparatively, however, as costs have increased, those costs have grown at a rate that is greater than household earnings. In sum, households are paying more to send their children to college, but their incomes have not increased to compensate those increases. In turn, this leads to reduced affordability and access.

Data pulled from the U.S. Census Bureau’s annual American Community Survey database shows the median household income for the state of Virginia experienced a decline in year 2008 as a result of the economic recession; however, it seems it began to recover following 2009 once the recession had officially ended. However, when examining the household income by quintile, the picture is a bit different, especially income groups represented by the lower quintile classification (2).

The median household income in Virginia showed a relatively high aggregated average income of $60,000+ with the exception of the decrease experienced as a result of the economic recession in 2008 (2); when looking at the household income by quintile classification, however, there is significant difference among the income classifications.

Lower income groups are enrolling in greater numbers to attend public higher education institutions (income groups classified as below the median household income make up more than 50% of the total population of enrollments) (3). These enrollments are occurring at a time when costs of attendance are increasing and when household earnings have remained flat or decreased throughout the six year period. Importantly, the proportional share of income that is accounted for in terms of mandatory costs reflects that those income groups that are among the lower quintile classifications are disproportionately affected by changes in costs. Low income residents are paying substantially higher percentages of their income relative to the cost of attendance (4).

(1) Joint Legislative Audit And Review Commission (JLARC), (2012).Virginia compared to other states: National rankings on states, budgetary components, and other indicators (419). Retrieved from Commonwealth of Virginia website:

(2) United States Census Bureau. (2013). American community survey: Mean household income of quintiles Virginia; years 2006-2011 [Data File]. Retrieved from

(3) State Council of Higher Education for Virginia (SCHEV). (2013). SCHEV research: Annualized in-state fte enrollment [Data File]. Retrieved from

(4) State Council of Higher Education for Virginia (SCHEV). (2013). SCHEV research:Annualized in-state fte enrollment [Data File]. Retrieved from

State Council of Higher Education for Virginia (SCHEV), (2006-2012).Tuition and fees at Virginia’s state supported colleges and universities. Richmond,VA: The Commonwealth of Virginia.

Positive Economic News: People drove more and bought more houses like it was 2007.

The last few years have been a rather sluggish economic recovery for millions of Americans.

Luckily, year 2013 is showing some green spots in areas which represent “positive” signs that things may be getting better little by little.

Vehicle Miles Traveled

The Department of Transportation reports today that vehicle miles traveled in May this year in the US was the highest traffic volume for the month since 2007.

Travel on all roads and streets changed by +0.9% (2.3 billion vehicle miles) for May 2013 as compared with May 2012. Travel for the month is estimated to be 262.1 billion vehicle miles.


The positive news is that after three years of reported decreases in vehicle miles traveled, year 2013 is showing that individuals are back to traveling as much as they were previously in the pre-recession years.

Ideally this means a couple of things:

1) More people are traveling for vacation during the summer month.
2) More products are being shipped to stores.
(consumers are buying goods and producers are supplying goods)

House Sales

The National Association of Realtors reports today that June existing-home sales were the highest for the month since 2007, and the median sales price was the highest since June 2008.

Total existing-home sales are 15.2 percent higher than the 4.41 million-unit level in June 2012.for all housing types was $214,200 in June, up 13.5 percent from June 2012.

The national median existing-home price  This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.

The positive news is that more houses are being sold on the market. In essence, individuals are getting mortgages and buying homes to a greater degree than the previous year. Housing prices for homes have also increased indicating that the market for home ownership has grown (houses increasing in value).

Courtesy of U. S. Department of Transportation Federal Highway Administration

Courtesy of National Association of Realtors

Gabriel Lucatero

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