Category / Economics

by Hoosier Econ

Mental Disorders Rising for Social Security Disability

This blog has chronicled how lawyers get rich taking in Social Security Disability claims.

Now CNSNews has come out with some new SS disability data that raises some doubt if this program has any control:

One in three, or 35.2 percent, of people getting federal disability insurance benefits have been diagnosed with a mental disorder, according to the latest data from the Social Security Administration (SSA).

Washington, D.C., the seat of the federal government, ranked in the top-ten list of states where disabled beneficiaries were diagnosed with mental problems.

In 2013, the latest data from SSA show there were 10,228,364 disabled beneficiaries, up 139,625 from 2012 when there were 10,088,739 disabled beneficiaries.

Disabled beneficiaries have increased 49.7 percent from a decade ago in 2003 when there were 6,830,714 beneficiaries; and the number is up 14.3 percent from the 8,945,376 beneficiaries in 2009, the year President Obama took office.


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Here is another chart showing how big the disability fund has grown in the last ten years.
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by Hoosier Econ

Education: Money Doesn’t Solve All Problems

Chalkbeat Indiana did an in depth write up pertaining to school funding in Indiana. I’m posting some graphs the author laid out in showing grade scores and performance between IPS and Carmel school systems. IPS is being shown as one of the poorest (families avg $20k/yr) while Carmel is one of the wealthiest (families avg $60k/yr). What makes this fascniating is the school systems are right down the road from each other.

The graphs are self explanatory. The second one shows funding to each school with IPS getting almost $3,000 more per student then Carmel students. The author links that since Carmel residents make more money and have more access to “private tutors” their scores are higher. While that maybe one factor, what this write up does not take into account is the role of having intact families. Two thirds of IPS children live in single parent homes. Carmel has only about 10% single parent homes. An amazing stat that needs to be brought into perspective.

by Hoosier Econ

Why Gas Prices Will Go Back Up Part II

In December I posted a blog about why gas prices will go back up and it received numerous hits. The content of that post is now playing out.  Mark J. Perry just released some data of oil rigs being shutdown due to the drop in price of crude oil.  Here is what he found:

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US Oil Rigs Fell Last Week to 1,317, Down 292 and 18% from October Peak of 1,609

This is a quick reversal so I wouldn’t be surprised if 500 shutdowns happen before March. With production falling and the strength of the dollar in question, crude oil will eventually start rising.

by Hoosier Econ

Percent of Fuel Cost in Your Grocery Store Bill

With fuel prices dropping over the last several months, many shoppers are asking why food prices have not shown corresponding drops in prices. The asnwer may surprise you in how much fuel costs affect grocery store bills.

Annemarie Kuhns with the Agriculture Department’s Economic Research Service is reporting that only 4.7 cents of every dollar spent at the supermarket goes toward food transportation costs

So less than 5% of your bill is attributed to fuel costs.

by Hoosier Econ

Inflation Alert: Chicken Wings

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According to the Daily Northeast Broiler/Fryer Report by the U.S. Department of Agriculture’s Agriculture Marketing Service the price for retailers purchasing chicken wings to sell at their business has jumped by 35% compared to last year. This was reported in PRNewswire:

The average price (wholesale, not retail) of whole wings is currently $1.71/lb, up from $1.35/lb at the same time last year.

This is not the highest ever seen:

This is down significantly from when wing prices hit a record high of $2.11/lb in January, 2013.

by Hoosier Econ

$43 Hot Dog

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CNBC reports as the financial elite meet at Davos for the World Economic Forum they are shelling out some hefty money to eat food. Appearently hot dogs are a big seller:

Full of global leaders, policymakers, business gurus and the odd music star, the attendees at the World Economic Forum (WEF) at Davos aren’t short of a dollar or two. But they might well be at the end of the week — with some of the food prices around town proving to be a little hard to stomach.

At the posh Steigenberger Grandhotel Belvédère, a conference hotspot, even humble menu items can be astronomically pricey. A hot dog with pickles, fried onions and mustard is priced at 38 Swiss francs (about $43.50). It’s 48 Swiss francs for a chicken Caesar salad with parmesan (about $55) and a draft beer at a local restaurant – in a pint-sized glass – can cost 6.50 Swiss francs, about $7.50.

I really don’t know how this yearly meeting of financial gurus does for the world economy. Probably a lot of it is nostalgia. But you do get a lot of lecturing of how to live your life from these people. This does remind me of a story related to Walmart. One year during their annual board meeting of directors the financial numbers weren’t too hot. The meeting was getting close to lunch and board members were getting ready for a big spread. The door opened and it was a Walmart associate with bread, lunch meat and some chips. The members looked stunned and the director said [paraphrasing] “If we are losing money, that means we have to cut expenses”.

I think I’ll buy my hot dogs at Walmart.

by Hoosier Econ

Keystone Pipeline Reality

Economist Mark J. Perry had a Keystone Pipeline perspective today on Twitter:

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by Hoosier Econ

Indiana Pacers Worth Hundreds of Millions

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Forbes magazine is stating that the Indiana Pacers has spiked in value over the last year and is now edging up to the “Billion Dollar” mark. Here is more in their report:

The value of the Indiana Pacers franchise skyrocketed by $355 million just since last year to $830 million, according to Forbes magazine. The Pacers rank 21st among the NBA’s 30 teams. The Los Angeles Lakers were first at $2.6 billion. In the magazine’s annual report on franchise values, posted Wednesday, reporter Kurt Badenhausen attributed the huge growth of the NBA to “a massive new $24 billion television contract, a nearly six-year bull market in equities creating tremendous wealth, and cheap credit.”

The Pacers new financial numbers are perplexing considering the deal they struck last year with the city of Indianapolis using taxpayer money to subsidize their operations.

The Pacers’ value also increased 74 percent and could renew questions about the Capital Improvement Board’s decision, less than a year ago, to use $160 million in tax money to cover operating costs and upgrades at Bankers Life Fieldhouse. The Pacers keep revenue from all fieldhouse events — basketball and non-basketball alike.

The CIB who negogiated the deal gets money from taxpayers:

The CIB gets its revenue primarily from hotel, food and beverage, and admissions taxes. The agency also collects money from rental fees, parking garage income, car rental taxes, cigarette taxes and Downtown income and sales taxes.

While most of the CIB’s revenue comes from Marion County, six neighboring counties — Boone, Hamilton, Hancock, Hendricks, Johnson and Shelby — also pitch in through a 1 percent food and beverage tax.

H/T Indianapolis Star

by Hoosier Econ

2015 Super Bowl TV Ad Costs

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America is passionate about not only watching the end of the year contest between the top two NFL teams, but also the commercials. But how much does it cost the companies to get their ads placed during the game?

Yahoo Sports has the breakdown:

The Super Bowl ads, and presumably the Super Bowl as well, will be on NBC next year, and hoo boy, is the Peacock Network looking to cash in. Variety reports that NBC is asking $4.5 million for 30-second spots, obviously a record and a 12.5 percent increase over Fox’s rate just this past year.
Why on earth would anyone pay this much money for a single commercial? Because the Super Bowl is the most-watched television program of the year; Super Bowl XLVIII was the most-watched show in human history with 111.5 viewers.

Just ten years ago a Super Bowl ad spot ran for $2.4 Million

by Hoosier Econ

Community Colleges Produce Poor Results

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In the President’s State of the Union tonight he will unleash another signature plan of throwing money at something. This one is “Free Education” at two year community colleges. That will be a terrible idea and Cato Institute explains why:

Take completion rates. According to the federal Digest of Education Statistics, only 19.5 percent of first-time, full-time students at two-year public schools finish their programs within 150 percent of the time they are slated to take. So less than 20 percent finish a two-year degree within three years, or, say, a 10-month certificate program within 15 months. And that rate has fallen even since 2000, when 23.6 percent of students completed.

That statistic doesn’t change much when you account for student transfers. According to the National Student Clearinghouse Research Center, only 20 percent of community college students transfer to four-year institutions. Four years later, 72 percent of those have completed their degree or remain enrolled. That inches the success rate to roughly 34 percent.

For profit two year programs come with a steeper cost, but more people flock to them then community colleges.

Given the wide price difference, you would expect for-profit schools to be getting their lunch eaten by already dirt-cheap community colleges. They haven’t been. Between 1990 and 2010, for-profit colleges saw much faster enrollment growth than community colleges; 179 percent compared to 44 percent. Why?

There are many reasons, but one seems to be that for-profits are more responsive to students’ needs and desires than community colleges. They appear to offer more flexible scheduling, better focused training and superior student services. They can charge more in part because they provide a better service.


Cato’s write up is in depth and also tackles “the fraud” issue as well. Take a look at the rest of it here.