Half of College Grads Are Working Jobs That Don’t Use Their Degrees

Link: https://www.wsj.com/lifestyle/careers/college-degree-jobs-unused-440b2abd

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Of the graduates in non-college-level jobs a year after leaving college, the vast majority remained underemployed a decade later, according to researchers at labor analytics firm Burning Glass Institute and nonprofit Strada Education Foundation, which analyzed the résumés of workers who graduated between 2012 and 2021. 

More than any other factor analyzed—including race, gender and choice of university—what a person studies determines their odds of getting on a college-level career track. Internships are also critical.

….

Bachelor’s degree holders in college-level jobs earn nearly 90% more than people with just a high-school diploma in their 20s, according to a Burning Glass analysis of 2022 U.S. Census Bureau data. 

By comparison, underemployed college graduates earn 25% more than high-school graduates.

….

Contrary to conventional wisdom, not all degrees in science, technology, engineering and math, or STEM, disciplines are a sure bet to landing a job that reflects a college education, the study found. 

Nearly half of people who majored in biology and biomedical sciences—47%—remained underemployed five years after graduating. Likewise, business majors less focused on quantitative skills, such as marketing and human resources, were twice as likely to be underemployed than those with math-intensive business degrees, such as accounting or finance. The data cover graduates who didn’t get master’s or other advanced degrees after college.

Author(s): Vanessa Fuhrmans and Lindsay Ellis

Publication Date: 22 Feb 2024

Publication Site: WSJ

The Rich Aren’t Rich Enough to Balance the Federal Budget

Link:https://www.wsj.com/articles/the-rich-arent-rich-enough-to-balance-the-federal-budget-with-tax-increases-60969410

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As budget deficits surge toward the stratosphere, Congress will soon have to get serious about savings proposals. Yet reforming Social Security and Medicare—the leading drivers of long-term deficits—remains a political nonstarter. Neither party is willing to raise middle-class taxes. And cutting defense and social spending would save at most $200 billion annually from deficits that are projected to approach $3 trillion by 2034.

That leaves one option: Tax the rich. It won’t be nearly enough.

There are a few excessive tax loopholes and undertaxed corporations that lawmakers could address. It’s farcical, however, to suggest that the tax-the-rich pot of gold is large enough to rein in our deficits and finance new spending programs. Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.

In a study for the Manhattan Institute, I set upper-income tax rates at their revenue-maximizing level, while paring back tax loopholes and fighting tax evasion. As background, the Congressional Budget Office projects that our budget deficits—which currently exceed 7% of gross domestic project—will surpass 10% of GDP over the next three decades. My research shows that the “tax the rich” model would raise at most 2% of GDP in additional revenue over the long term.

Author(s): Brian Riedl

Publication Date: 22 Jan 2024

Publication Site: WSJ, op-ed

How Benjamin Franklin Helped Foil Early American Money Counterfeiters

Link: https://www.wsj.com/articles/how-benjamin-franklin-helped-foil-early-american-money-counterfeiters-bf51f8c7

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Franklin, who was a printer, among his other roles, was known for marking his early paper money with images of intricately veined leaves that were nearly impossible for counterfeiters to copy, using a variety of fonts, some available only to him, and intentionally lacing the text with misspellings.

But scientists say Franklin took things a step further to stave off fraudsters. Other distinguishing characteristics of Franklin’s money—the new research revealed through advanced atomic-level imaging methods—were more subtle. He used a unique black ink. His paper glimmered. Blue threads decorated the surface, and finer fibers were woven throughout. 

Researchers detailed the innovations in a paper published Monday in the journal Proceedings of the National Academy of Sciences. The findings describe previously unknown methods Franklin developed to safeguard printed money notes against counterfeiting.

Author(s): Jo Craven McGinty

Publication Date: 17 July 2023

Publication Site: WSJ

Fitch Downgrades U.S. Credit Rating

Link: https://www.wsj.com/articles/fitch-downgrades-u-s-credit-rating-56c73b89?mod=hp_lead_pos1

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Fitch Ratings downgraded the U.S. government’s credit rating weeks after President Biden and congressional Republicans came to the brink of a historic default, warning about the growing debt burden and political dysfunction in Washington.

The downgrade, the first by a major ratings firm in more than a decade, is evidence that increasingly frequent political skirmishes over the U.S. government’s finances are clouding the outlook for the $25 trillion global market for Treasurys. Fitch’s rating on the U.S. now stands at “AA+”, or one notch below the top “AAA” grade.

….

Few investors believe that Fitch’s downgrade will immediately challenge that role. Still, it is the first time a ratings firm lowered its headline assessment of the U.S. government’s propensity to pay its bills on time since Standard & Poor’s in 2011 lowered its rating one notch below the top grade. That decision followed another tense debt-ceiling standoff in Congress.

Moody’s, the other member of the three big U.S. ratings firms, continues to give the U.S. its strongest assessment.

Fitch said Tuesday that the downgrade reflects an “erosion of governance” in the U.S. relative to other top-tier economies over the last two decades.

“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.

Author(s): Matt Grossman and Andrew Duehren

Publication Date: 1 Aug 2023

Publication Site: WSJ

Biden Seeks to End Cheaper Obamacare Alternatives, Expect Another Supreme Court Smackdown

Link: https://mishtalk.com/economics/biden-seeks-to-end-cheaper-obamacare-alternatives-expect-another-supreme-court-smackdown/

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Biden’s efforts to produce more inflation are nonstop, 24×7. His latest move is a set of regulations to force people into Obamacare despite the fact a District Court already ruled against his proposed regulations.

Biden Attempts to Make Healthcare Even More Expensive

To understand what Biden wants to do, and why the Supreme Court is likely to smack it down, we need to review a District Court ruling from 2020.

On July 24, 2020, CATO reported In a Win for Consumers, a Court Ruling Affirms the Legality of Short‐​Term Health Insurance Plans

….

Jam City, Dateline July 7, 2023

The Wall Street Journal comments on Biden’s Short-Sighted New Health Rule

Behold the President’s plan to limit short-term health insurance plans in order to jam more consumers into the heavily subsidized and regulated ObamaCare exchanges. The Health and Human Services, Labor and Treasury Departments on Friday proposed rules to roll back the Trump Administration’s expansion of short-term, limited-duration insurance (STLDI) plans. Since 2018 these plans have been available in 12-month increments, and consumers have been able to renew them for up to 36 months.

These plans are especially attractive to young people whose employers don’t provide coverage. Why would a healthy 26-year-old want to pay for maternity, pediatric and other services he probably won’t use in the near future?

The Inflation Reduction Act sweetened ObamaCare’s insurance premium tax credits that are tied to income. As a result, a 60-year-old making just above four times the poverty level has to pay only 8.5% of his income toward his insurance premium while the government picks up the rest. If premiums increase, government is on the hook for more.

Author(s): Mike Shedlock

Publication Date: 9 July 2023

Publication Site: Mish Talk

The Moral Hazards of Being Beautiful

Link: https://www.wsj.com/articles/the-moral-hazards-of-being-beautiful-94346e61

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Beauty has its privileges. Studies reliably show that the most physically attractive among us tend to get more attention from parents, better grades in school, more money at work and more satisfaction from life. A study published in January in the Journal of Economics and Business found that good-looking banking CEOs take in over $1 million more in total compensation, on average, than their lesser-looking peers. “Good looks pay off,” the authors write.

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Scientists attribute the human tendency to give attractive people better treatment to something called the halo effect. Basically, we tend to assume that good looks are a sign of intelligence, trustworthiness and good character and that ugliness is similarly more than skin deep. “Personal beauty is a greater recommendation than any letter of reference,” Aristotle observed. This may help explain why attractive people are less likely to be arrested or convicted, even after controlling for criminal involvement, according to a 2019 study of nationally representative data published in the journal Psychiatry, Psychology and Law.

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Yet those of us who never got that genetic golden ticket should take heart: The halo effect appears to go both ways. A number of studies show that goodness often enhances our looks. A paper in PLOS One in February, for example, reports that people found faces in photos more attractive when they learned the subjects were honest, kind and not aggressive. The results suggest that “facial attractiveness is malleable,” the authors write. Or as Sappho observed: “What is beautiful is good and what is good will soon be beautiful.”

Author(s): Emily Bobrow

Publication Date: 10 June 2023

Publication Site: WSJ

Why You’re Losing More to Casinos on the Las Vegas Strip

Link: https://www.wsj.com/articles/why-youre-losing-more-to-casinos-on-the-las-vegas-strip-73f6f3ab?st=x02m0zq2rrmv5sj&reflink=desktopwebshare_permalink&fbclid=IwAR22FpxvLhFtnRbQ0YaEwFgHqN764ULdkADv9QXOGc-PKpeTbds8nUrIUs0

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Casinos on the Vegas Strip are making it costlier to play and harder to win.  

Payouts are lower for winning blackjack hands. Bets on some roulette wheels are riskier. And it is taking more cash to play at many game tables.

Blackjack players lost nearly $1 billion to casinos on the Strip last year, the second-highest loss on record, after 2007, according to data from the Nevada Gaming Control Board. 

Some Las Vegas casinos cut back the number of blackjack tables with dealers, raised minimum bets during busy times and lifted their advantage over players in some games—doubling-down on a prepandemic practice of making subtle changes that favor the house, according to industry executives, researchers and gamblers.

….

Blackjack, a fast-paced card game, historically paid out a ratio of 3:2 when a player hit 21 on the first two cards. That means a gambler wins $15 for every $10 bet. Now, many blackjack tables on the Strip pay out at 6:5, which means that same $10 yields only $12.

John and Kristina Mehaffey, owners of gambling-news and data company Vegas Advantage, have been cataloging these changes since 2011, walking miles-long routes through casinos to record the number of blackjack and roulette tables set outside of VIP areas.

According to the Mehaffeys’ data, more than two-thirds of blackjack tables on the Strip currently offer 6:5 payouts, as opposed to 3:2.

….

Las Vegas visitors on vacation might not notice—or might not care—about the casinos’ increased advantage, says Bill Zender, a casino consultant who focuses on table-game management. But casinos risk losing business over time, he says. 

“If you go into a casino and gamble, and you lose your money fairly quickly, almost every time, you don’t feel you’re getting the bang for your buck,” Zender said.

Author(s): Katherine Sayre

Publication Date:29 May 2023

Publication Site: WSJ

Why Insurers Are Fleeing California

Link: https://www.wsj.com/articles/state-farm-homeowners-insurance-california-2a934a22?st=0vc5cbqwbedf0b2&reflink=desktopwebshare_permalink

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State Farm General Insurance Co. last week became the latest insurer to retreat from California’s homeowners market. The culprit isn’t climate change, as the media claims in parroting Sacramento talking points. The cause is the Golden State’s hostile insurance environment.

The nation’s top property and casualty insurer on Friday said it won’t accept new applications for homeowners insurance, citing “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”

In other words, State Farm can’t accurately price risk and increase its rates to cover ballooning liabilities. Other property and casualty insurers, including AIG and Chubb, have also been shrinking their California footprint after years of catastrophic wildfires, which are becoming more common owing to drought and decades of poor forest management.

Author(s): Editorial Board

Publication Date: 30 May 2023

Publication Site: Wall Street Journal

China Is Facing a Moment of Truth About Its Low Retirement Age

Link: https://www.wsj.com/articles/china-is-facing-a-moment-of-truth-about-its-low-retirement-age-5ed9b57f

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China has one of the lowest retirement ages among major economies. Under a policy unchanged since the 1950s, it allows women to retire as early as at age 50 and men at 60. Now, local governments are running out of money just as a wave of retirees hits. That is leaving Beijing with little choice but to ask people to work longer—a move economists say is long overdue but one still likely to meet with resistance.

China’s version of “baby boomers”—those born after China emerged from devastating starvation in the early 1960s—are retiring in droves. Even with government subsidies, by 2035 China’s state-led urban pension fund will run out of money accumulated over the previous two decades, leaving it to rely entirely on new workers’ contributions, according to projections made in 2019 by the Chinese Academy of Social Sciences, a government think tank. 

Former central bank Gov. Zhou Xiaochuan warned in a February speech that China must address its pension shortfall and communicate that many Chinese may need to rely on private pension savings

Author(s): Livan Qi

Publication Date: 11 April 2023

Publication Site: Wall Street Journal

Thousands of Retirees Can’t Withdraw Savings Invested in Firms Controlled by Indicted Financier Greg Lindberg

Link: https://www.wsj.com/articles/thousands-of-retirees-cant-withdraw-savings-invested-in-firms-controlled-by-indicted-financier-greg-lindberg-6a268369?st

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The 52-year-old executive [Greg Lindberg] was indicted last month on federal charges that he defrauded his insurers by lending $2 billion of their funds to companies in his private conglomerate, while allegedly siphoning off huge sums to finance his lavish lifestyle. He has pleaded not guilty and is out on bail.

Until last July, Mr. Lindberg was in federal prison on bribery charges related to the insurers. He was released after 21 months when an appeals court overturned the conviction. A retrial is scheduled for November.

The executive also is fighting a drawn-out court battle with North Carolina regulators, who seized his insurers in 2019 and now say they should be liquidated. Mr. Lindberg, who previously lived in North Carolina and was the subject of investigative articles in The Wall Street Journal in 2019, says the insurers are healthy and he has a plan to rescue them.

What rankles Mr. Zintel and others is that they believe Mr. Lindberg is using their money to fight his legal entanglements, allowing him to continue living extravagantly even as they cut back. Among the alleged extravagances: The divorced executive has spent millions of dollars on gifts for women, according to court documents, including paying some women to produce offspring for him.

Some 70,000 holders of annuities totaling $2.2 billion are unable to withdraw their money, filings show. Many are retirees or conservative investors who bought five- to seven-year annuities in 2017 and 2018. Financial advisers typically marketed them as a safe, higher-yielding alternative to bank CDs.

Author(s): Mark Maremont, Leslie Scism

Publication Date: 26 Mar 2023

Publication Site: WSJ

The Banking Sector Turmoil in Charts

Link: https://www.wsj.com/articles/the-banking-sector-turmoil-in-charts-52bb6095?mod=e2twg

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It has been a wild ride for banks. Silicon Valley Bank, which catered to venture capitalists and startups, collapsed March 10 after a run on deposits that was preceded by a plunging share price and a money-losing bond sale as the bank tried to raise capital. Two days later, Signature Bank SBNY -22.87%decrease; red down pointing triangle was closed by federal regulators following a run. Then, First Republic Bank FRC 29.47%increase; green up pointing triangle, at risk of a run as its share price plummeted, was flooded with cash in an extraordinary action by some of the largest U.S. banks—but its shares resumed their plunge a day later. 

Here is how some banks ended up in the market’s crosshairs.

Author(s): Nate Rattner, Alana Pipe

Publication Date: 18 Mar 2023

Publication Site: WSJ

Barney Frank Pushed to Ease Financial Regulations After Joining Signature Bank Board

Link: https://www.wsj.com/articles/barney-frank-pushed-to-ease-financial-regulations-after-joining-signature-bank-board-e5c8819c

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Former Rep. Barney Frank co-sponsored the law that tightened banking regulations after the financial crisis, but since leaving office he has been working the other side of the street—as a board member of Signature Bank, which regulators shut down Sunday.

The 2010 Dodd-Frank legislation set tougher regulatory safeguards on banks with more than $50 billion in assets. After leaving office and joining Signature’s board, Mr. Franks, a Massachusetts Democrat, publicly advocated for easing those new standards for smaller banks.

Part of what former President Donald Trump signed into law in 2018 raised the asset threshold to $250 billion, meaning Signature and other regional banks no longer needed to comply with the extra regulation set out in Dodd-Frank. 

After the bill was signed, New York-based Signature more than doubled in size to $110 billion in assets, and $88.6 billion in deposits as of the end of 2022. The stricter requirements, had they been in place, might have prompted bank executives and their overseers to move more quickly to place the lender on sounder financial footing, some industry observers say. 

Mr. Frank, who has earned more than $2.4 million in compensation from Signature Bank since 2015, rejected the idea that the regulatory change abetted Signature’s collapse. 

“Nobody has shown me any evidence of systemic or other kinds of fraud that would have been prevented” without the 2018 rollback, Mr. Frank said.

Author(s): Julie Bykowicz

Publication Date: 13 Mar 2023

Publication Site: WSJ