NKU Student Wins Top Honor at State Economic Conference - The River City News

A Northern Kentucky University student won "Best Undergraduate Paper" at the 2021 Kentucky Economic Association Undergraduate Research Conference last week.

Brooklyn Stephens, an economics major at NKU and a fellow at the Center for Economic Education, presented "Money Keeps Me Up at Night: An Analysis of Financial Anxiety in the United States".

The paper identifies demographic groups that may suffer from increased financial anxiety. The research study serves as the first step in the process to identify policy avenues to alleviate the burden in individuals' lives, which will improve financial and overall wellbeing. Stephens said she chose the topic because it is relevant but also under-researched.

“There is limited existing literature on this topic,” Stephens said. “However, the sources  that are available are clear that financial anxiety can have a multitude of negative effects such as the increased likelihood of a depressive and/or anxiety disorder, decreased academic performance in college students and decreased voter participation, especially among those in poverty.”

Stephens is the second NKU economics student to win the award in the past three years. Dakota Langhals won the award in 2018 for his research on the effect that predatory lending laws have on mortgage prices and closure rates.

“Winning the best paper award was something I didn't expect but means so much to me,” Stephens said. “I am so grateful to the Center for Economic Education for giving me the opportunity to work on this research and learn something new.”

“I am extremely proud of Brooklyn and her efforts,” Dr. Abdullah Al-Bahrani, director of  the Center for Economic Education, said. “It is a rewarding experience to watch students tackle hard tasks and succeed. While I had no doubt of her ability, this recognition by the Kentucky Economic Association is validation to Brooklyn of her ability  and a testament to the work of our economics department. We are focused helping develop students by providing them with experiences for career development.”

-Staff report

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Real World Economics: Shipping container problem won’t be hauled away - TwinCities.com-Pioneer Press

It is too bad Joe Biden and Pete Buttigieg can’t bring Robert McNamara back from the grave to sort out import container confusion that impedes manufacturing and angers consumers.  McNamara helped develop mathematical techniques for optimizing airlifts and bombing for U.S. air forces in World War II.  These contributed to what is known as “operations research” today. He loved to tackle logistics bottlenecks.

Edward Lotterman

Is that the problem today? Yes, though one must recognize that in addition to this supply-side factor, there also is unprecedented demand.

COVID halted much spending over which consumers had any discretion. Last year’s consumer sales were abysmal. The dam has broken and many households, though certainly not all, have money to spend and want to spend it. This is showing up even in used-car prices. Slack demand slowed much manufacturing. That is coming back, but many factories, including auto plants, need components, many of which are imported.

So high demand is in play. Unfortunately, the only way to curtail this would be the Federal Reserve sharply crimping the money supply, starting a recession. This won’t happen until circumstances force it. Dealing with supply problems is the only immediate option, and that isn’t easy.

The adjoining ports of Los Angeles and Long Beach stand out as the chokepoint delaying unloading of dozens of huge container ships carrying industrial components and consumer goods wanted for a bountiful holiday season.

Is the hold-up physical, a lack of adequate port and transportation infrastructure? Or is it a human one, lack of labor or bad management?

The answer isn’t clear. Port managers claim they are working as fast as they can but are short of workers to operate cranes and drivers to shuttle and sort boxes from dockside to temporary storage or onto trains and over-the-road semis.

Drivers say that there is no shortage of able workers, but that management has been slow to train these for specific positions, especially highly skilled crane operators. Port workers unions say there are members waiting for callback.

Critics of regulation say that zoning limits on the height to which boxes can be stacked compounds the hyper-traffic-jam situation. And there are photos of mountains of boxes in some ports

Reaching a conclusion may be impossible, but consider some background.

First, the shipping container revolutionized seaborne trade and is a greater factor in globalization than the lowering of tariffs.

Ships’ capacities exploded with burgeoning Chinese output. A ship that could hold 6,000 20-foot containers was news in 2000. In 2013, ones holding 16,000 were hailed. Eight years later, we are up to 30,000.  The ability to move boxes across oceans grew much faster than port capacity and faster than the rail and road links needed to get boxes from seacoasts to factories and stores.

Port authorities and the federal government have invested a lot of money in infrastructure. Most of the federal money, however, was for dredging deeper harbors to accommodate the larger vessels that can pass the updated Panama Canal. Nearly all is on the East Coast, and we have duplicated capacity because if you dredge one, representatives of states that have competing harbors demand equal treatment. So we have overcapacity on the Atlantic.

There really are only four ports on the West Coast through which containers can flow: Vancouver, Tacoma, San Francisco and Los Angeles.  All have deep harbors and major rail connections and are 5,000 to 6,000 nautical miles from Shanghai.

In addition, Prince Rupert, British Colombia, has the same assets, but it has more capacity to handle bulk exports like grains or coal than incoming containers. Mexican ports have more capacity than people realize, but their rail links, while improving, remain problematic.

Florida Gov. Ron DeSantis has said that state’s ports are open 24/7, but he did not note that Jacksonville is over 10,000 miles from Shanghai vis Panama versus 5,000 for Tacoma and 5,700 for L.A.  Like many, he does not understand great circles on a globe.  New Orleans, Mobile, Charleston, Savannah and New York-New Jersey are all in the same ballpark

Unfortunately, while these have rail connections, neither of the major railroads servicing East Coast ports have the capacity to the Heartland of the country that the BNSF and Union Pacific have from the west.

In particular, the BNSF “Transcon” that follows the Los Angeles to Chicago route of the Superchief passenger trains that celebrities used to ride is optimized for container trains. The company had invested several billions over the last decade, double-tracking nearly all of it and constructing 10,000-foot-long sidings to facilitate meeting and passing. The UP has less favorable terrain but huge capacity nevertheless. The BNSF lines from Puget Sound to the Twin Cities and Chicago carry more grains but have less container capacity. The Canadian Pacific has good lines from British Colombia ports, especially Vancouver. Both the BNSF and UP have large new yards near Chicago. So once past the ports, boxes can flow reasonably well.

The imbalance between loaded and empty boxes is a longstanding problem. Ideally, ships would bring containers loaded with U.S. imports from Asia east across the Pacific and then return with boxes filled with our exports to that region. But the value and volume of flows are not balanced and more of our exports are in bulk, like grains. No one wants to pay to ship empty boxes back west and ship owners don’t want to tie up vessels hauling nothing but air at low rates.

The same is true for railroads. A two-mile-long train of laden containers rolling east across deserts and prairie means millions in revenue for the BNSF. Empties headed the other way do not. Eventually, empty boxes do go back, but any economic incentive to optimize the return is lacking.

The upshot of all this is that this is not a problem elected officials will be able to solve easily or quickly. Calling out the National Guard is nonsensical.  No one in the Army who can operate a container gantry isn’t already doing it in civilian life. And all the trucks in the National Guard couldn’t load the containers that go on one train.

Nothing here stems directly from any discretionary policy of either the Biden or Trump administrations, but most Americans firmly believe that presidents are responsible for every economic outcome. So the current one will have to take the heat if kids don’t find what they want under the Christmas tree.

St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.

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Economics class: Sunak defies hawkish instincts to oversee massive expansion of state - Financial Times

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

•  Fiscal policy

Click to read the article below and then answer the questions:

Sunak defies hawkish instincts to oversee massive expansion of state

• Identify the components of fiscal policy.

• Distinguish between a budget deficit and a budget surplus.

• The article refers to ‘the yearly real-terms increase of 3.3 per cent in day-to-day spending on public services.’ Explain what is meant by a real-terms increase.

• With reference to chart 1, compare government spending and tax revenues during the period shown.

• Health and care costs will be among the main drivers of pressure on the public finances. Paul Johnson, director of the IFS, states that measures to boost capital investment and address demographic pressures on health and social care were ‘largely . . . unrelated to the crisis’. Evaluate whether the UK’s relatively low tax burden will inevitably continue to rise.

Gavin Clarke, Emmanuel College

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Steep Cuts to Carbon Emissions Gain Stronger Economic Backing - The Wall Street Journal

Until recently, economic models found climate change wouldn’t hurt economic growth by enough to justify the steep cost of achieving net zero emissions.

Photo: Charlie Riedel/Associated Press

As a growing number of global leaders pledged to achieve net-zero carbon emissions ahead of this week’s climate conference in Glasgow, an awkward question hovered in the background: Is it worth it? That is as much an economic as a scientific question, and the economics of climate are far less settled than the science.

Until recently, economic models, including one developed by the world’s best known climate economist, Nobel laureate William Nordhaus, concluded climate change would hurt economic growth, but not by enough to...

As a growing number of global leaders pledged to achieve net-zero carbon emissions ahead of this week’s climate conference in Glasgow, an awkward question hovered in the background: Is it worth it? That is as much an economic as a scientific question, and the economics of climate are far less settled than the science.

Until recently, economic models, including one developed by the world’s best known climate economist, Nobel laureate William Nordhaus, concluded climate change would hurt economic growth, but not by enough to justify the steep cost of holding the rise in global temperatures to below 2 degrees celsius or achieving net zero emissions.

But some economists now argue those models use outdated data, put too low a value on future well-being and don’t properly price society’s desire for insurance against catastrophes. Their research is yielding higher costs from emissions, which doesn’t prove net zero is cost effective but suggests that prospect is more likely than once thought.

The White House is consulting these economists as it develops a new estimate of the social cost of carbon: That is the value, in today’s dollars, of all the future harm caused by a metric ton of carbon dioxide released now. A higher social cost of carbon would justify more stringent emissions regulations, and could thus influence how President Biden fulfills any commitments he makes in Glasgow.

Mr. Nordhaus, who pioneered climate economics as a 34-year-old professor at Yale University in 1975, is the creator of Dice, the best-known integrated assessment model (IAM) for studying how the climate and economy interact.

William Nordhaus developed the best-known integrated assessment model for studying how the climate and economy interact, and later won a Nobel Prize.

Photo: Michael Marsland/Yale University/Associated Press

In 1992, Dice calculated future damage from global warming would come to 1.3% of future gross domestic product, and put the social cost of carbon at under $5 per ton. That could only justify reducing emissions by 9%.

Mr. Nordhaus continued to refine Dice and in 2017 compared its latest predictions with those of 1992. The scientific inputs hadn’t changed much, but the economic inputs had: Population, GDP and carbon concentrations were a lot higher and the social cost of carbon had increased sevenfold, to $36.

Climate change “menaces our planet and looms over our future,” Mr. Nordhaus declared in 2018 upon sharing the Nobel Prize for economics for his climate work. Yet in that lecture he also cautioned that eliminating all emissions to hit the Paris climate accord’s 1.5 to 2 degree warming target wasn’t worth it. He reckoned that would cost 3.5% of GDP, whereas the damage from temperatures rising 3 degrees was just 2% of GDP. “Zero net emissions is unlikely to be feasible with today’s technologies,” he warned.

Money is a sticking point in climate-change negotiations around the world. As economists warn that limiting global warming to 1.5 degrees Celsius will cost many more trillions than anticipated, WSJ looks at how the funds could be spent, and who would pay. Illustration: Preston Jessee/WSJ The Wall Street Journal Interactive Edition

Despite the importance of Mr. Nordhaus’ work, the community of economists modeling climate and the economy is tiny. Including Dice, there are only three well-established IAMs. (By contrast, about 50 scientific modeling teams advise the United Nations Intergovernmental Panel on Climate Change.) Former President Obama’s administration used all three to calculate the first federal estimate of the social cost of carbon.

Since then, key features of those models have come under criticism. Most important is the discount rate used to convert future dollars to the present. The lower the rate, the more future damages are worth today. Mr. Nordhaus used a rate between 4% and 5%, after inflation. The Obama administration used 3%, which would produce a social cost of carbon of $46 now.

Many economists say an even lower rate is justified by the decline in inflation-adjusted interest rates to near or below zero in major economies, and by the fact that climate change could leave society, especially in developing countries, much poorer than otherwise. “Intuitively, a $100 cost in a future in which society has grown dramatically wealthier should be valued less, from today’s perspective, than the same $100 cost in a relatively poor future with stagnant economic growth,” says a new study by a team organized by Resources for the Future, an environmental think tank.

The study used a more up-to-date climate model and projections of GDP and population, and made adjustments for the greater harm $100 of damages inflicts on a stagnant society than on a prosperous one. It puts the social cost of carbon at $61 using a 3% discount rate, a third more than Mr. Nordhaus, and $168 using a 2% discount rate.

Another controversy surrounds the so-called damage function: how much economic harm a given change in temperature causes. Dice draws on several dozen studies, mostly from the 1990s and early 2000s. It doesn’t explicitly model nonmarket costs, like loss of biodiversity and greater uncertainty; rather, those are covered with a single, 25% adjustment to the cost of carbon.

Michael Greenstone,

a University of Chicago economist who led the Obama administration’s calculation of the social cost of carbon, said this is no longer good enough. Mr. Nordhaus’ estimate of 2% GDP loss is “not grounded in empirical evidence,” he said. “Nor does it capture and reflect the heterogeneity, the differences in climate impacts around the world.”

He said that since 2010, 438 empirical studies of climate impact have been released, none of which are reflected in established models. Mr. Greenstone co-founded the Climate Impact Lab to put climate economics on an empirical foundation. Its findings break important new ground. For example, they show the two biggest sources of damage from climate are premature death and decreased labor productivity due to extreme heat, neither of which figure prominently in established models.

In the other direction, CIL tempers the harm from extreme weather and rising sea levels by assuming people adapt, such as by building levies. This, however, varies considerably by region: CIL finds Norway will spend less on winter heat while Nigeria will spend 20 times more on electricity for more air conditioning. But a swath of developing populations won’t even be able to afford air conditioning and will have to endure the consequences. By dividing the world into 25,000 regions, CIL identifies localized risks that less granular models like Dice miss.

CIL’s preliminary findings put the social cost of carbon at more than $100, with a 2% discount rate. Just as people buy insurance against catastrophes like their house burning down, CIL finds evidence they would pay to avoid the small probability of climate catastrophes, such as a six-degree rise in temperatures. This insurance premium boosts the social cost of carbon above $200.

Neither RFF nor CIL set out to put a higher price on climate damage. That their findings do just that matters for the net zero debate. The International Monetary Fund estimates if the whole world put an average $75 price on carbon (such as through a carbon tax) by 2030, it would be on the path toward holding the temperature increase to below 2 degrees. The 38-nation Organization for Economic Cooperation and Development suggests $140 would achieve net zero. These numbers used to be far above the expected damage from higher temperatures, and thus hard to justify, economically. As the social cost of carbon gets revised up, they start to look more economically sound.

SHARE YOUR THOUGHTS

What are the potential long-term economic benefits of a carbon-free world? Join the conversation below.

“With the updated research, the marginal damages are higher than previously understood, suggesting a substantially higher optimal carbon price consistent with more stringent action to address climate change,” said Kevin Rennert, who led the RFF study.

The debate isn’t about to be settled. Economic assumptions are more subjective than scientific assessments, which are themselves evolving. The discount rate, for example, depends on how to value future generations. “A lot of people will say that’s a moral judgment,” said Maureen Cropper, a University of Maryland economist who co-led an expert panel on how to revamp the social cost of carbon.

Nor is the outcome of this debate about to revolutionize policy. Few governments around the world are imposing penalties on carbon that come anywhere close to its social cost. Democrats in Congress passed up a chance to include a carbon tax in their own climate plans. Mr. Nordhaus plans to revise Dice, but still thinks 2 degrees isn’t feasible. That target “is, realistically, impossible without rapid and universal carbon pricing in virtually all countries,” said Mr. Nordhaus. “We will pass the 1.5 degree threshold before we even get serious at a global level.”

Write to Greg Ip at greg.ip@wsj.com

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China's falling factory activity a sign of economic woes ahead - Reuters

By Reuters Staff

4 Min Read

BEIJING (Reuters) -China’s factory activity contracted more than expected in October to shrink for a second month, hurt by persistently high raw material prices and softer domestic demand, pointing to more economic disquiet in the final quarter of 2021.

FILE PHOTO: A worker wearing a face mask works on a production line manufacturing bicycle steel rim at a factory, as the country is hit by the novel coronavirus outbreak, in Hangzhou, Zhejiang province, China March 2, 2020. China Daily via REUTERS/File Photo

The official manufacturing Purchasing Manager’s Index (PMI) was at 49.2 in October, down from 49.6 in September, data from the National Bureau of Statistics (NBS) showed on Sunday.

The 50-point mark separates growth from contraction. Analysts had expected it to come in at 49.7.

China’s sprawling manufacturing sector has steadily slowed this year, with output in September growing at its most feeble pace since March 2020 due to environmental curbs, power rationing and higher raw material prices.

In line with the softer headline PMI, a subindex for production slipped to 48.4 in October from 49.5 in September. A subindex for new orders also contracted for a third month, coming in at 48.8.

“About one-third of the surveyed companies listed insufficient demand as their biggest difficulty, indicating inadequate demand had restricted their production,” said Zhang Liqun, an analyst at the China Logistics Information Center.

More worryingly, a subindex for output prices rose to 61.1, the highest since 2016 when the statistics bureau started publishing the indicator, suggesting rising inflationary pressures while broader economic growth slows.

“The production index has dropped to the lowest level since it was published in 2005, excluding the global financial crisis period in 2008/09 and the COVID outbreak in February 2020,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“The output price index rose to the highest level since it was published in 2016. These signals confirm that China’s economy is likely already going through stagflation.”

POLICY TIGHTROPE

Factory gate inflation rose to a record last month on soaring commodity prices but weak demand capped consumer inflation, forcing policymakers to walk a tightrope between supporting the economy and further stoking producer prices.

Analysts polled by Reuters expect the People’s Bank of China to refrain from attempts to stimulate the economy by reducing the amount of cash banks must hold in reserve until the first quarter of 2022.

“Production remains weak, indicating the demand problem may be relatively large, and some easing of policy is still needed,” said Zhou Hao, senior economist at Commerzbank.

The official non-manufacturing PMI in October eased slightly to 52.4 from 53.2 in September, when services swung back to expansionary at the end of a COVID-fraught summer.

New clusters of COVID-19 returned in October, especially in the north, which could again disrupt economic activity and deal yet another blow to the services sector because of tough restrictions to contain the disease.

“Due to the impact of the epidemic and weather, consumers were more inclined to spend their holidays at home or travel for short distances,” said Zhao Qinghe, a senior NBS statistician, in an accompanying statement.

While the transport sector including air and railway services expanded, the growth was relatively weak, Zhao said.

China’s official October composite PMI, which includes both manufacturing and services activity, stood at 50.8, down from September’s 51.7.

Reporting by Ryan Woo and Gabriel Crossley; Editing by William Mallard and Richard Pullin

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Crimes Against Nature: $2m whales, wartime Britain and the economics of saving the planet - The Guardian

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Crimes Against Nature: $2m whales, wartime Britain and the economics of saving the planet  The Guardian
Crimes Against Nature: $2m whales, wartime Britain and the economics of saving the planet - The Guardian
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Can’t Pass A Carbon Tax? Require Transparency, Economists Say - Forbes

Transparency alone can motivate companies to confront their impact on the climate, and it can also motivate other incentives like a carbon tax, according to a panel of economists and business leaders convened Wednesday by the University of Chicago Booth School of Business.

“No firm wants to be the dirtiest on the block,” said Mili Fomicov, a researcher at the Imperial College Business School's Centre for Climate Finance & Investment, “and when you have very consistent data across sectors and then create proper benchmarking, the role of competition can be extremely powerful.”

Transparency could do some of the work of a carbon tax, said Sir Ronald Cohen, an investor and philanthropist knighted for pioneering venture capital in the United Kingdom. The carbon tax is widely embraced by economists as a way to motivate businesses to account for their externalities—the damage they inflict on society but do not pay for—but carbon taxes have been politically unpopular in many countries so far.

“One incentive can be taxation, but I actually think transparency provides a massive incentive, if indeed there is a correlation between impact performance and company valuation,” Cohen said. “The transparency itself would create a race to the top.”

Cohen and Fomicov agreed that a “dispersion” has already appeared in markets between companies that are poised to benefit from a cleaner economy and those that are not. It is most evident in the energy sector, Fomicov said, but is appearing across markets, Cohen said.

“Within many sectors you now see a correlation between higher pollution and lower stock market values,” he said. “So the weight of ESG money is affecting the valuation of companies. And so regulators are, not surprisingly, focusing on impact transparency.”

Transparency might also make a carbon tax more politically viable, added Lars Peter Hansen, winner of the 2013 Nobel Prize for Economics, because it will expose the polluters who cost the rest of society.

“I certainly agree that transparency can open the door to better tax systems, for sure,” Hansen said, “and we’re still struggling with how to make carbon taxes implemented in ways that could be politically feasible, and it’s quite possible that transparency can help us achieve that aim. On that I would be all in.”

Cohen worked with the Harvard Business School to assess the climate impact of companies and found that many produce more environmental damage than profit.

“In recent years, most major international airlines have reported healthy profitability. But our calculations show this to be a mirage,” according to a 2020 article in the Harvard Business Review. “In the case of Lufthansa and American Airlines, for example, accounting for their environmental costs of $2.3 and $4.8 billion respectively would make both companies unprofitable.”

Harvard’s Impact Weighted Accounts Initiative assessed about 1,700 companies and found that 15 percent produce environmental damages that exceed their profits. Another 32 percent produce damage in excess of a quarter of their profits.

“Together they deliver $4 trillion worth of environmental damage in a single year,” Cohen said.

To achieve transparency, the markets need consistent data across sectors, Cohen said, which is where governments may have to step in.

“The crucial step that we need to take now is for governments to mandate impact transparency,” he said. “We need consistency of data, and only governments can mandate that.”

He imagines Generally Accepted Impact Principles (GAIP) on the order of Generally Accepted Accounting Principles (GAAP) that companies have complied with for decades.

“It’s going to parallel what the Roosevelt Administration did in 1933 and ’34 when investors realized they had no transparency on profit because there were no accepted accounting principles, no auditors. Companies could put a share of their profits into hidden reserves without telling shareholders, and today we are at a similar crossroads.”

Watch the full forum:

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Hidden economics lessons in ghost stories | TheHill - The Hill

With Halloween just a few days away, the trick-or-treating is about to begin. Americans are predicted to spend $3 billion on Halloween candy this year, and about the same on costumes and decorations. But this isn’t the only way economics is on display during the spooky season. Ghost stories are also a great way to absorb a few econ lessons, if one reads them closely.

Take, for example, “The Legend of Sleepy Hollow,” by Washington Irving. In the classic tale, Ichabod Crane, a schoolteacher living in a small New York town, has his eyes set on a young damsel, Katrina Van Tassel. The problem is that Crane has competition in the form of Abraham “Brom” Van Brunt. Ichabod and Brom couldn’t be more different. Brom is strong and broad-shouldered — a real “man’s man” about town. Crane is tall and lanky and an outsider. But he’s well-read and sophisticated, which makes him popular with many ladies.

It is a tale of rivalrous competition, scarcity, and unsatiated wants — all core economic concepts.

The two protagonists compete to impress Van Tassel, in a contest to win her hand in marriage. One autumn evening, after a long night of celebrating (which includes sharing many scary stories), Crane rides his white horse back through the woods alone. At a little bridge known for being haunted, he runs into a headless horseman. The horseman is rumored to be a Revolutionary War soldier, decapitated by a cannon ball and cursed to roam the forest endlessly, searching for his lost head.

Restlessness — a characteristic of this ghost — is also a foundational economic concept. Human beings experience unease, and this causes them to act to improve their situation, sometimes relentlessly. So too does unease seem to be a primary motivator of other ghosts that engage in haunting.

It is quite common in a ghost story for the specter and a human to compete over a scarce resource. A house can become haunted because a ghost lays claims to it. A dispute arises when a pesky mortal comes along and moves into the space. 

An economist might call this a classic problem of weak property rights. A world without private property is communism, which is a recipe for conflict. If humans and ghosts could each offer something the other values, they might be able to resolve their disagreements in some sort of paranormal market. Unfortunately, money doesn’t do a whole lot of good in the afterlife. 

A related problem is communication. Ghosts often can’t communicate directly with mortals because they can’t speak. Economics teaches us that people can sometimes overcome communication challenges if they share a common vision about how things should end. But too often, ghost stories end in violence and death, highlighting how hard it is to align visions when everyone has a different goal in mind.

Ghost stories also include omens; they warn us about things to come. In Charles Dickens’ short story “The Signal-Man,” a train switch operator is haunted by a phantom who warns him of his own imminent death. Dystopian novels like “Frankenstein” or the “Strange Case of Dr. Jekyll and Mr. Hyde” can be understood as warnings not to meddle with nature, or similarly, that technology might do us all in one day.

These stories draw attention to the dual, flawed nature of mankind. At times, we are the ultimate hypocrites, capable of both good and evil. Economics sees humanity largely for what it is: a collection of individuals mostly out for themselves. This can lead to good outcomes, to be sure, like when an entrepreneur creates a business that makes money and improves his community, too. But self-interest can also lead to “market failures,” like pollution or technology run amok.

Edward Bulwer-Lytton, a 19^th century British politician and himself a sometimes author of ghost stories, is perhaps best remembered for the line “the pen is mightier than the sword,” along with the classic opener, “It was a dark and stormy night … ” The best fiction writers are the ones who appreciate the challenges and fears that we grapple with in life — many of them economic — and incorporate these as subtle themes in their tales.

Bulwer-Lytton recognized that the ideas that shape our world have had more influence than any battle. So, this Halloween, read a spooky story or two. If you read carefully, the hidden economic insights contained therein just might be revealed to you.

James Broughel is a senior research fellow with the Mercatus Center at George Mason University.

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Economics in Brief: DOJ Leads Hard Charge Against Redlining - Next City

U.S. Justice Department To Take Action Against Redlining
The Justice Department has announced it will take aggressive action against redlining.

At an Oct. 22 press conference, Attorney General Merrick Garland noted the importance of homeownership in building wealth, Black Enterprise reports, as redlining increases the racial wealth gap. Data from the Brookings Institute shows that the net worth of the average white family is nearly 10 times greater than that of a Black family.

Garland said that the government is already investigating several cases, including one against TrustMark National Bank for which the DOJ claims TrustMark avoided providing financial services to those living in Black and Hispanic neighborhoods in the Memphis area.

The company settled and agreed to pay $5 million in penalties to the Consumer Financial Protection Bureau. Trustmark CEO Duane Dewey said in a statement that the bank “shares the common goals of breaking down barriers to home financing and exploring innovative ways to help residents of underserved areas.” His company has also committed to making changes to its business practices.

McDonald’s Workers Join Growing Strike Movement
McDonald’s workers across the U.S. are planning walkouts to protest harassment at the workplace, ABC News reports.

This marks one of many protests across the nation. Kellogg’s and John Deere workers have also made headlines as they advocate for better wages and stronger protections. For McDonald’s workers, however, this marks the fifth time in the last three years that employees have decided to strike against what they say is a “culture of harassment,” the News & Observer adds.

Workers have made more than 50 complaints against the fast-food giant, triggering civil rights lawsuits and complaints with the Equal Employment Opportunity Commission.

In April, McDonald’s announced that employees would have to undergo sexual harassment training and planned to implement new procedures to report complaints by January 2022. But their employees feel that this is not enough.

“Workers are getting harassed, and some people are scared to speak out because they feel like they might lose their jobs,” Raleigh McDonald’s worker Rita Blalock said in a press release. “Coming together in a union would help because we would have a real voice in our store — not just about abuse, but about wages and safety and everything else.”

Treasury Department Names First Racial Equity Counselor
The former head of philanthropy of JP Morgan Chase is now the Treasury Department’s first counselor for racial equity, Reuters reports.

Janis Bowdler was appointed to this position after the Biden-Harris administration identified a need to create economic policy initiatives that would push for racial equity. Bowdler will work with researchers, activists and advocates as part of an external advisory committee that can better identify barriers to Treasury benefits.

Other changes in the Treasury Department include the appointment of the first Black acting director by former veteran, Ventris Gibson. With this decision, 40% of the Treasury’s appointees are said to identify as people of color, though the department recognizes greater strides need to be made to diversify the general staff.

Solcyre (Sol) Burga was an Emma Bowen Foundation Fellow with Next City for summer 2021. Burga is completing her degree in political science and journalism at Rutgers University, with plans to graduate in May of 2022. As a Newark native and immigrant, she hopes to elevate voices of underrepresented communities in her work.  

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Biden's Economic Agenda, Transitory Inflation, ECB Woes: Eco Day - Bloomberg

Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Welcome to Friday, Americas. Here’s the latest from Bloomberg Economics to start your day: 

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Hidden economics lessons in ghost stories | TheHill - The Hill

With Halloween just a few days away, the trick-or-treating is about to begin. Americans are predicted to spend $3 billion on Halloween candy this year, and about the same on costumes and decorations. But this isn’t the only way economics is on display during the spooky season. Ghost stories are also a great way to absorb a few econ lessons, if one reads them closely.

Take, for example, “The Legend of Sleepy Hollow,” by Washington Irving. In the classic tale, Ichabod Crane, a schoolteacher living in a small New York town, has his eyes set on a young damsel, Katrina Van Tassel. The problem is that Crane has competition in the form of Abraham “Brom” Van Brunt. Ichabod and Brom couldn’t be more different. Brom is strong and broad-shouldered — a real “man’s man” about town. Crane is tall and lanky and an outsider. But he’s well-read and sophisticated, which makes him popular with many ladies.

It is a tale of rivalrous competition, scarcity, and unsatiated wants — all core economic concepts.

The two protagonists compete to impress Van Tassel, in a contest to win her hand in marriage. One autumn evening, after a long night of celebrating (which includes sharing many scary stories), Crane rides his white horse back through the woods alone. At a little bridge known for being haunted, he runs into a headless horseman. The horseman is rumored to be a Revolutionary War soldier, decapitated by a cannon ball and cursed to roam the forest endlessly, searching for his lost head.

Restlessness — a characteristic of this ghost — is also a foundational economic concept. Human beings experience unease, and this causes them to act to improve their situation, sometimes relentlessly. So too does unease seem to be a primary motivator of other ghosts that engage in haunting.

It is quite common in a ghost story for the specter and a human to compete over a scarce resource. A house can become haunted because a ghost lays claims to it. A dispute arises when a pesky mortal comes along and moves into the space. 

An economist might call this a classic problem of weak property rights. A world without private property is communism, which is a recipe for conflict. If humans and ghosts could each offer something the other values, they might be able to resolve their disagreements in some sort of paranormal market. Unfortunately, money doesn’t do a whole lot of good in the afterlife. 

A related problem is communication. Ghosts often can’t communicate directly with mortals because they can’t speak. Economics teaches us that people can sometimes overcome communication challenges if they share a common vision about how things should end. But too often, ghost stories end in violence and death, highlighting how hard it is to align visions when everyone has a different goal in mind.

Ghost stories also include omens; they warn us about things to come. In Charles Dickens’ short story “The Signal-Man,” a train switch operator is haunted by a phantom who warns him of his own imminent death. Dystopian novels like “Frankenstein” or the “Strange Case of Dr. Jekyll and Mr. Hyde” can be understood as warnings not to meddle with nature, or similarly, that technology might do us all in one day.

These stories draw attention to the dual, flawed nature of mankind. At times, we are the ultimate hypocrites, capable of both good and evil. Economics sees humanity largely for what it is: a collection of individuals mostly out for themselves. This can lead to good outcomes, to be sure, like when an entrepreneur creates a business that makes money and improves his community, too. But self-interest can also lead to “market failures,” like pollution or technology run amok.

Edward Bulwer-Lytton, a 19^th century British politician and himself a sometimes author of ghost stories, is perhaps best remembered for the line “the pen is mightier than the sword,” along with the classic opener, “It was a dark and stormy night … ” The best fiction writers are the ones who appreciate the challenges and fears that we grapple with in life — many of them economic — and incorporate these as subtle themes in their tales.

Bulwer-Lytton recognized that the ideas that shape our world have had more influence than any battle. So, this Halloween, read a spooky story or two. If you read carefully, the hidden economic insights contained therein just might be revealed to you.

James Broughel is a senior research fellow with the Mercatus Center at George Mason University.

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Economics in Brief: DOJ Leads Hard Charge Against Redlining - Next City

U.S. Justice Department To Take Action Against Redlining
The Justice Department has announced it will take aggressive action against redlining.

At an Oct. 22 press conference, Attorney General Merrick Garland noted the importance of homeownership in building wealth, Black Enterprise reports, as redlining increases the racial wealth gap. Data from the Brookings Institute shows that the net worth of the average white family is nearly 10 times greater than that of a Black family.

Garland said that the government is already investigating several cases, including one against TrustMark National Bank for which the DOJ claims TrustMark avoided providing financial services to those living in Black and Hispanic neighborhoods in the Memphis area.

The company settled and agreed to pay $5 million in penalties to the Consumer Financial Protection Bureau. Trustmark CEO Duane Dewey said in a statement that the bank “shares the common goals of breaking down barriers to home financing and exploring innovative ways to help residents of underserved areas.” His company has also committed to making changes to its business practices.

McDonald’s Workers Join Growing Strike Movement
McDonald’s workers across the U.S. are planning walkouts to protest harassment at the workplace, ABC News reports.

This marks one of many protests across the nation. Kellogg’s and John Deere workers have also made headlines as they advocate for better wages and stronger protections. For McDonald’s workers, however, this marks the fifth time in the last three years that employees have decided to strike against what they say is a “culture of harassment,” the News & Observer adds.

Workers have made more than 50 complaints against the fast-food giant, triggering civil rights lawsuits and complaints with the Equal Employment Opportunity Commission.

In April, McDonald’s announced that employees would have to undergo sexual harassment training and planned to implement new procedures to report complaints by January 2022. But their employees feel that this is not enough.

“Workers are getting harassed, and some people are scared to speak out because they feel like they might lose their jobs,” Raleigh McDonald’s worker Rita Blalock said in a press release. “Coming together in a union would help because we would have a real voice in our store — not just about abuse, but about wages and safety and everything else.”

Treasury Department Names First Racial Equity Counselor
The former head of philanthropy of JP Morgan Chase is now the Treasury Department’s first counselor for racial equity, Reuters reports.

Janis Bowdler was appointed to this position after the Biden-Harris administration identified a need to create economic policy initiatives that would push for racial equity. Bowdler will work with researchers, activists and advocates as part of an external advisory committee that can better identify barriers to Treasury benefits.

Other changes in the Treasury Department include the appointment of the first Black acting director by former veteran, Ventris Gibson. With this decision, 40% of the Treasury’s appointees are said to identify as people of color, though the department recognizes greater strides need to be made to diversify the general staff.

Solcyre (Sol) Burga was an Emma Bowen Foundation Fellow with Next City for summer 2021. Burga is completing her degree in political science and journalism at Rutgers University, with plans to graduate in May of 2022. As a Newark native and immigrant, she hopes to elevate voices of underrepresented communities in her work.  

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Biden's Economic Agenda, Transitory Inflation, ECB Woes: Eco Day - Bloomberg

Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Welcome to Friday, Americas. Here’s the latest from Bloomberg Economics to start your day: 

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D-ECON - Diversifying and Decolonising Economics: A Response to the Most Common Excuse - The Elephant

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Northern Kenya has long been associated with marginalization, inter-communal conflict and underdevelopment. The region shares a vast porous border with Ethiopia and Somalia, making it a suitable corridor for the unimpeded flow of illegal immigrants, illicit arms and drugs originating from neighbouring conflict zones.

Marsabit County, which borders Ethiopia to the north, is home to some 14 ethnic communities: Borana, Gabbra, Rendille, Garreh, Burji, Daasanach, Somali, Sakuye, Turkana, Ameru, Samburu, Konso, Watta and Elmolo. The Rendille, Gabbra and Borana are the dominant communities in terms of population and areas settled. These three communities together influence and drive the social, political and economic agendas. The contemporary political importance of the ethnic group is primarily a function of its size. However, the Burji – a relatively wealthy community concentrated around Mount Marsabit – arguably punch above their weight and have joined the powerful Borana, Gabbra and Rendille to become the fourth most influential force in the county’s ethnic politics.

Marsabit County continues to feature in the news constantly for the wrong reasons: insecurity and killings. It is a matter of grave concern that security in the county is going from bad to worse. Political leaders, faith-based groups and non-state actors have repeatedly sought protection from the government and the security agencies without success.

In January 2014, war broke out between the Borana and Gabbra communities in Moyale, leading to Deputy President William Ruto threatening to suspend the county government unless then Governor Ukur Yatani took responsibility for the insecurity in his area. But Raila Odinga accused Ruto and the Jubilee party of targeting Yatani, now National Treasury Cabinet Secretary, for being an Orange Democratic Movement governor.

The November 23 2018 issue of the Indian Ocean newsletter reported that Governor Mohamud Mohamed Ali had appealed to Nairobi over Yatani’s role in the escalating conflict between the Borana and Gabbra and communities. The paper claimed that Yatani had influenced the government to stop issuing national identity cards to members of the Borana community.

Borana and Gabbra rivalry

The rivalry between the Borana and the Gabbra dates back to the late 1990s and escalated in July 2005 with the Turbi Massacre in which more than 60 people, the majority of them schoolchildren, were killed. Ever since then, peace in Marsabit has remained elusive. On 10 April 2006, a plane carrying four area representatives and security officials from Nairobi to Marsabit on a peace and security mission crashed, killing everyone on board. For a short period, the deaths brought a hiatus to the fighting as the warring communities retreated into introspection; that incident left many wondering if the Borana-Gabbra conflict is stoked by competition for water and pasture or is fuelled by politics.

Traditional drivers of conflict

The historical stress factors leading to conflict have been studied and documented. They include climate change and environmental degradation; drought, famine and other natural catastrophes; resource and land-related conflicts (some relating to administrative and electoral boundaries); the proliferation of small arms and light weapons; and human-wildlife conflicts aggravated by the competing use of land for wildlife conservation in private conservancies.

Traditional security measures — disarmament and emergency deployments of security forces — only serve as a temporary measure. This is because the communities feel that the national government has been ambiguous in its response to the conflict, with some believing that the national authorities have failed to act decisively and impartially to negotiate a lasting solution to the crisis. Communities in remote areas have suffered the worst consequences of the insecurity because of the inhibiting context — a permissive environment and ungovernable spaces where these vulnerable communities live.

For years now, the planned killings of livestock herders, the calculated raids on rural settlements, the brutal murders of innocent women and poor quarry workers and the indiscriminate massacre of Boda Boda riders and commuters, including children on their way to school, have continued unabated, especially in Saku and Moyale constituencies. Attacks and killings in settlements and at water points occur two to three times a week. In the last two months, there have been clashes and killings in Funan Qumbi, Funan Idha, Elle-Borr and Elle-Dimtu. With the historical injustices not addressed and the “our man” syndrome taking root, the mistrust between the two communities is growing by the day.

Political supremacy

The violence involving the Borana and Gabbra has steadily moved away from traditional resource-based conflicts to more sinister criminal acts fuelled by efforts to sustain economic and political gains.

Ukur Yatani’s efforts to rebrand the Watta community were seen as politically motivated to reduce the numerical strength of the Borana to which his political nemesis Governor Ali belongs. The Watta had decided to shed off their name — which they said was disparaging and meant to portray them as wanderers or beggars — to become the Wayyu. It is reported that Yatani had stood with them in their efforts to seek their own identity as a distinct ethnic group while he was governor. Critics accuse Yatani of using state resources to build his support base and engage in sowing discord.

Historically, the conflict between the two pastoralist communities has been over water and pasture but more than a decade and a half of countless peace meetings have borne no fruit. However, the dynamics have now shifted to the control of a KSh7 billion annual fund which points to a fight for political supremacy.

With the historical injustices not addressed, and the “our man” syndrome taking root, the mistrust between the two communities is growing by the day.

Security pundits have repeatedly claimed that the clashes and conflicts in Marsabit are also schemed by political forces who are determined to keep the county destabilised and to derail the development agenda of the elected leaders. Even though the responsibility of the attackers cannot be ignored, it is also becoming increasingly clear that there are conflict entrepreneurs and activists in the county who are involved in fomenting inter-ethnic conflicts and planning violent attacks. Communities that have co-existed peacefully for years and have a history of voting together are being turned against each other in order to cause political disunity.

Ethnic conflicts and killings cannot be planned or sanctioned by the entire community. It is often groups of individuals — working for themselves and advancing interests that are against the wellbeing of the community — who plan and cause bloodshed in the name of their community. No community should be branded as criminal. Appeals have been made to the security organs to cease placing the blame on all the elected leaders and elders of the warring communities because that approach has been counterproductive in the past; they should instead focus on apprehending the real planners and perpetrators of the violence.

The County Action Plan for integrating the United Nations Security Council Resolution 1325 and the National Strategy for Countering Violent Extremism (NSCVE) has not been implemented for more than two years now. The project partners include CIFA (Community Initiative Facilitation and Assistance), MWADO (Marsabit Women and Development Organisation), and SND (Strategies for Northern Development). The Saku Accountability Forum (SAF) is also involved in the project with funding from UN Women (Kenya).

The dawn of devolution 

Historically, drivers of conflict in Marsabit County were competition for grazing lands and watering points. But not anymore. Today’s conflict is a result of scheming by groups intent on exploiting ethnic vulnerabilities and fears for political and economic gain.

Devolved politics is one factor exacerbating the conflict as it defines the economic and social realities of communities in unforeseen ways. The question of who makes executive decisions regarding the allocation of resources for development programmes that have the potential to change the lives of these previously marginalised people is the elephant in the room.

Devolution is the contextual background behind a ruthless competition for power and economic dominance that has spawned a new “tenderpreneur” class that is wreaking havoc in the region.  Devolution has brought with it erosion of trust and intolerance amongst these groups. Visionless politics of ethnic supremacy, the politics around land and development projects, coupled with weak land tenure rights and the chronic failures of policing and justice, form the bedrock of militia activities under the guise of inter-communal violence.

There are conflict entrepreneurs and activists in the county who are involved in fomenting inter-ethnic conflicts and planning violent attacks.

The link between the conflict and elections was clear during the last two polls held in 2013 and 2017 under the devolved system of government. During these elections, the Gabbra community was pitted against the dominant Borana, and both formed alliances with minority ethnic groups. Simultaneously, the sophisticated weapons used by community members rendered local security forces helpless, and the Kenya Defence Forces had to use air power to stop the fighting.

Every electioneering period is followed by a cycle of ethnic violence in Marsabit. Yet many, including the media, continue to attribute the reason for the conflicts to fighting over resources.

Violent conflicts have also occurred between the Gabbra and Daasanach in the lower part of Marsabit County. Knee-jerk decisions by the national government such as disarming local police reservists have done little to calm the situation. Now the violence threatens to spiral out of control in an environment marred by mutual mistrust and suspicion.

Politicians and those who finance the conflicts use ethnicity and identity to mobilise and engage young illiterate people in violence to achieve their ego-fuelled personal political and economic goals. Every human life is sacred and special, but losing the young to this kind of evil violence is particularly heart-rending, and such cases are becoming far too frequent and almost normal. The injured are hospitalised, the dead are buried, politicians issue the same hollow, platitudinous statements and the police promise investigations, and that is where it all ends.

Laxity of security agencies

No arrests are made and when they are, no successful prosecutions follow. Too many grieving families are left traumatised and permanently scarred, with no real closure. And the cycle continues.

But while the incidents of violence could be politically motivated, no high-level national government official has visited the area; it would appear that the warring communities have been left to their own devices to make war or broker peace. There had been hope that the government’s June 26 statement would quell the violence but it has continued unabated.

Devolution is the contextual background behind a ruthless competition for power and economic dominance that has spawned a new “tenderpreneur” class that is wreaking havoc in the region.

Although local politicians have been arrested for political incitement, and meetings have been held between local leaders, interfaith groups and Kenyan and Ethiopian government officials, peace remains elusive. However, a cross-border peace initiative launched on 1 July 2019 with financial support from the United Nations Development Programme (UNDP) does signal hope and the decision to set up a community-based peace committee is encouraging although it will need full government support to work.

Peace and security are two sides of the same coin – they always walk together. It is the responsibility of the national government to guarantee the safety and security of all citizens, as enshrined in the constitution. However, all the available anecdotal evidence points to severe gaps in the capacity and willingness of the government’s various security and administrative branches to play this role effectively and fairly. The bottom line is that any government that consistently fails to safeguard the security of its citizens and their property has no legitimacy to govern.

The unspoken reality

The conflict appears increasingly driven by politically instigated ethnic territorial expansion (illegal settlements) and competition to increase voter numbers for the 2022 elections. The county’s last two polls stand out for the enmity and ethnic hatred that were manifested and which have grown to untenable levels.

This is the unspoken reality but when peace meetings are called, all speakers use code words, phrases and innuendos to spin and sidestep the truth, declare a fake ceasefire, pray for rain and peace, and disperse. This charade of duplicitous interactions followed by inaction must stop. First, we need to frame the challenge and articulate it clearly and truthfully. If our moral compass is pointing in the right direction, we must speak up; we cannot and should no longer remain silent.

Any government that consistently fails to safeguard the security of its citizens and their property has no legitimacy to govern.

A practical solution to the Marsabit conflict is to find the strategies needed to eliminate the reasons that fuel divisive politics among the resident communities. A long-term solution for sustainable peace in Marsabit requires a means of reconstitution and a process of empowerment, of an inclusive and equitable political system; the kind of peace that will make life in that the  county worth living, the type that enables parents, families and communities to hope and build a better life for their children.

If Marsabit voters do not collectively reject those politicians who do not seem to value human life, who lie to them repeatedly and disastrously, who waste or misuse their resources with impunity, then they deserve their fate.

The fact of the matter is that conflict in Marsabit is local and manufactured. Therefore, the solution can only come from the communities themselves, and it is not beyond them. Accepting death, suffering, and pain is not an option anymore.

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Kemper Named Agricultural Economics and Agribusiness Assistant Department Head - University of Arkansas Newswire

Oct. 29, 2021

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Nathan Kemper, a two-time U of A graduate, has been a faculty member in the Department of Agricultural Economics and Agribusiness since 2014.

Associate professor Nathan Kemper has been named assistant department head for undergraduate programs and online instruction for the Department of Agricultural Economics and Agribusiness in U of A's Dale Bumpers College of Agricultural, Food and Life Sciences.

Kemper, who is also the departmental undergraduate and internship program coordinator, is a two-time U of A graduate. He earned his bachelor's degree in finance from Missouri State University in 2001, his master's degree in agricultural economics in 2005 and his Ph.D. in public policy and food policy economics in 2016, both from the U of A.

"I am fortunate to be a two-time graduate of this great university," Kemper said. "This place changed my life, and I am grateful for all of the wonderful things and people that are a part of my life because of this campus. I met some of my best friends here; I met my wife here, and I continue to meet great students who challenge me to improve each day. As a faculty member and in my new role as assistant department head, I have the opportunity to give back to the campus that has given so much to me."

In this position, he supports department head John Anderson by providing leadership and management of the undergraduate program, and in planning, development and delivery of new and existing online content. Kemper, who began his new role in August, chairs the undergraduate program committee, schedules courses and advises Anderson on teaching assignments, works with the administrative staff in reporting to the dean's office, represents AEAB on the college curriculum committee, and identifies strategy for improving undergraduate program content, student recruitment and retention efforts.

"Dr. Kemper is an outstanding scholar and one of the most dedicated and gifted teachers that I have been privileged to work with in my career," Anderson said. "He continually looks for ways to improve the quality of our program as well as the student experience in our department. He is an expert in the development of high-quality online content, and that expertise has been absolutely vital to our success as a department during the pandemic. Dr. Kemper's proven record of commitment to students and innovation in curriculum development and delivery make him ideally suited for this new role in the department."

Kemper is leading the development and implementation of additional online offerings for both undergraduate and graduate students. Most recently, he has developed a plan to create a new agribusiness concentration in the area of agribusiness risk management, to be available 100 percent online. The department is home of the Fryar Price Risk Management Center of Excellence, which provides analysis and education on issues of price risk management in agriculture, finance and energy.

Kemper is also working across multiple U of A colleges to coordinate online offerings, oversee and promote programs, and working with Global Campus on program and course development and management.

His research interests focus on food policy economics, survey research methods, choice experiments and teaching methods. He has served as faculty adviser to the Agricultural Business Club and the Academic Quiz Bowl team since 2014.

Kemper has also coordinated the Trade Adjustment Assistance for Farmers regional program for the Cooperative Extension Service. The program provided training, business planning consultation and cash payments to Southern farmers and fishermen in industries negatively impacted by U.S. trade policy.

Kemper, who received the Bumpers College Alumni Society Outstanding Advising Award in 2020 and the Gamma Sigma Delta 2020 Teaching Award of Merit, has held positions with Deutsche Bank, with the U of A System Division of Agriculture and with American Express Financial Advisors.

He was a research associate for the Arkansas Agricultural Experiment Station from 2005-10 and with the Cooperative Extension Service from 2010-14. He joined the AEAB faculty as an instructor in 2014, became an assistant professor in 2017 and associate professor in 2020.

About the Dale Bumpers College of Agricultural, Food and Life Sciences: Bumpers College provides life-changing opportunities to position and prepare graduates who will be leaders in the businesses associated with foods, family, the environment, agriculture, sustainability and human quality of life; and who will be first-choice candidates of employers looking for leaders, innovators, policy makers and entrepreneurs. The college is named for Dale Bumpers, former Arkansas governor and longtime U.S. senator who made the state prominent in national and international agriculture. For more information about Bumpers College, visit our website, and follow us on Twitter at @BumpersCollege and Instagram at BumpersCollege.

About the University of Arkansas: As Arkansas' flagship institution, the U of A provides an internationally competitive education in more than 200 academic programs. Founded in 1871, the U of A contributes more than $2.2 billion to Arkansas' economy through the teaching of new knowledge and skills, entrepreneurship and job development, discovery through research and creative activity while also providing training for professional disciplines. The Carnegie Foundation classifies the U of A among the top 3% of U.S. colleges and universities with the highest level of research activity. U.S. News & World Report ranks the U of A among the top public universities in the nation. See how the U of A works to build a better world at Arkansas Research News.

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Kemper Named Agricultural Economics and Agribusiness Assistant Department Head - University of Arkansas Newswire
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America's economic recovery hits a major roadblock - CNN

New York (CNN Business)This summer, the American economic recovery hit a roadblock.

The US economy grew at an annualized rate of only 2% in the third quarter, the Bureau of Economic Analysis reported Thursday.

The highly infectious Delta variant of the coronavirus, supply chain chaos, worker shortages, sluggish jobs numbers and higher prices weighed on economic activity.

It was far lower than the 2.7% economists had predicted and the slowest pace of growth since the start of the recovery, as well as a massive step down from the 6.7% rate in the spring.

Aside from the monumental downturn in the first half of 2020, when the economy ground to a halt amid lockdowns, it was also the worst quarterly performance since the final quarter of 2019, when GDP grew at a pace of 1.9%.

Spending slowdown

The slowdown was "more than accounted for" by a slowdown in consumer spending, according to the BEA, which dropped off after the stimulus check sugar rush faded.

Although American incomes rose $47.8 billion on the back of higher wages, even as government benefits wound down, disposable income actually fell by 0.7%, or $29.4 billion.

The savings rate also came down to 8.9%, compared with 10.5% in the second quarter. In principle that's a good thing, because it helps the economy when people spend rather than save. But over the summer, consumers also spent less as confidence took a hit amid the rising Delta cases.

Americas spent less on goods — particularly cars — as well as services, with restaurants and hotels feeling it the most, as consumers again got nervous about being around others.

The frenzy in the car market, meanwhile, has been a hallmark of the recovery: New cars were in short supply due to shortages of chips and parts, so Americans bought used cars like never before, driving up prices and snapping up all the used vehicles available. But the buying spree slowed over the summer and is now showing up in the GDP.

What's next

Consumer confidence has recovered and Covid cases are no longer at the alarming highs seen in the third quarter. So far, even high inflation isn't deterring Americans from spending.

Economists believe this is a good sign for the final quarter of the year.

"We are confident that the fourth quarter will be much better," said James Knightley, chief international economist at ING. "High frequency consumer activity numbers such as flights, restaurant dining and hotel stays have turned higher through mid-September into October as the Delta wave subsided."

That said, the supply chain chaos that became more apparent over the summer is still nowhere near resolved. In September, bottlenecks held back industrial production, and as of October, billions of dollars worth of goods are floating on container ships outside California's backlogged ports.

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America's economic recovery hits a major roadblock - CNN
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America's economic recovery hits a major roadblock - CNN

New York (CNN Business)This summer, the American economic recovery hit a roadblock.

The US economy grew at an annualized rate of only 2% in the third quarter, the Bureau of Economic Analysis reported Thursday.

The highly infectious Delta variant of the coronavirus, supply chain chaos, worker shortages, sluggish jobs numbers and higher prices weighed on economic activity.

It was far lower than the 2.7% economists had predicted and the slowest pace of growth since the start of the recovery, as well as a massive step down from the 6.7% rate in the spring.

Aside from the monumental downturn in the first half of 2020, when the economy ground to a halt amid lockdowns, it was also the worst quarterly performance since the final quarter of 2019, when GDP grew at a pace of 1.9%.

Spending slowdown

The slowdown was "more than accounted for" by a slowdown in consumer spending, according to the BEA, which dropped off after the stimulus check sugar rush faded.

Although American incomes rose $47.8 billion on the back of higher wages, even as government benefits wound down, disposable income actually fell by 0.7%, or $29.4 billion.

The savings rate also came down to 8.9%, compared with 10.5% in the second quarter. In principle that's a good thing, because it helps the economy when people spend rather than save. But over the summer, consumers also spent less as confidence took a hit amid the rising Delta cases.

Americas spent less on goods — particularly cars — as well as services, with restaurants and hotels feeling it the most, as consumers again got nervous about being around others.

The frenzy in the car market, meanwhile, has been a hallmark of the recovery: New cars were in short supply due to shortages of chips and parts, so Americans bought used cars like never before, driving up prices and snapping up all the used vehicles available. But the buying spree slowed over the summer and is now showing up in the GDP.

What's next

Consumer confidence has recovered and Covid cases are no longer at the alarming highs seen in the third quarter. So far, even high inflation isn't deterring Americans from spending.

Economists believe this is a good sign for the final quarter of the year.

"We are confident that the fourth quarter will be much better," said James Knightley, chief international economist at ING. "High frequency consumer activity numbers such as flights, restaurant dining and hotel stays have turned higher through mid-September into October as the Delta wave subsided."

That said, the supply chain chaos that became more apparent over the summer is still nowhere near resolved. In September, bottlenecks held back industrial production, and as of October, billions of dollars worth of goods are floating on container ships outside California's backlogged ports.

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America's economic recovery hits a major roadblock - CNN
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