Newt Gingrich does not believe Americans should sacrifice.

In a TIME magazine article on November 1, 2008, Newt Gingrich said:

"People don't elect presidents who tell them to sacrifice. They elect presidents who solve problems so they don't have to sacrifice."

This is further evidence that Baby-boomers are the most selfish generation in U.S. history.  Baby-boomers have been unwilling to pay for all of the government services they have used.  The public debt began to rise dramatically around 1980, when Baby-boomers began to play a significant role in running both the government and the private sector.  And the wars in Afghanistan and Iraq are the first time in American history when Americans have insisted on tax cuts in a time of war.  Many Americans seem unwilling to make sacrifices for any cause - not even for war or national defense.

Health Benefits of Red Wine

The publication of medical studies that suggest drinking red wine has health benefits caused an increase in the demand for red wine.  The quantity of red wine demanded increased at almost every possible price.  Graphically, this is illustrated by a shift of the demand curve for red wine to the right.  The effect of increased demand in the market for red wine was an increase in both the price of red wine and the quantity of red wine purchased and consumed.

Here is an overview of the medical studies that suggest there are health benefits to drinking red wine:

"It's thought that red wine, despite the alcohol content, also has helpful properties, like resveratrol and other polyphenols," says Barbara Shukitt-Hale, a research psychologist at the Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts University in Boston.

Polyphenols are chemical compounds found in the skin of grapes and other plants. These compounds act as "antioxidants" -- the vitamins, minerals and enzymes in foods that protect the cells in your body from damage caused by the normal process of metabolism and ward off chronic disease. Resveratrol is a type of polyphenol found in red wine.

You could say that each serving that you have of a fruit or a vegetable — or perhaps a glass of wine — is beneficial, Shukitt-Hale reasons, as long as you don't forget that wine is alcohol, and you need to drink responsibly.

"You don't want to have seven glasses of red wine a day instead of seven servings of fruits and vegetables," she cautions.

One of most widely documented benefits of red wine is heart health. A pivotal study published several years ago in journal Nature found that red wine inhibited the synthesis of a protein called endothelin-1 that can lead to the development of atherosclerosis, a build-up of fatty material along the artery walls.

A November 2006 article in the academic journal Nature claims: 

Regular, moderate consumption of red wine is linked to a reduced risk of coronary heart disease and to lower overall mortality¹, but the relative contribution of wine's alcohol and polyphenol components to these effects is unclear². Here we identify procyanidins as the principal vasoactive polyphenols in red wine and show that they are present at higher concentrations in wines from areas of southwestern France and Sardinia, where traditional production methods ensure that these compounds are efficiently extracted during vinification. These regions also happen to be associated with increased longevity in the population.

...

Calif. County Prosecutions Halt May Spread

Tax cuts are very popular.  Yet, so are government services.  There seems to be a huge disconnect between many people´s desire for the benefits of government and their willingness to pay its costs.  The following story from National Public Radio (NPR) explains how budget cuts are forcing a county in California to stop prosecuting many crimes.  Citizens are outraged.  What will it take to increase the willingness of people to pay for the government services?  Will an increase in the crime rate do it?

All Things Considered, May 13, 2009 · The District Attorney of Contra Costa County, Calif., set off a uproar when he announced he will stop prosecuting misdemeanors and low-level felonies because of budget cuts in his office. Many say what's happening in Contra Costa County today will likely occur elsewhere in cash-strapped California as counties slash their budgets.

Retail sales drop unexpectedly in April, raising recovery doubts

Macroeconomic policy attempts to manage the economy by affecting overall spending on newly produced goods and services (which economists call "aggregate demand").  The largest component of aggregate demand (AD) is consumption (C).  Retail sales are the primary  component of consumer spending.  Thus a decline in retail sales indicates a decrease in aggregate demand.  The primary cause of recessions is insufficient overall spending.  Thus, the news that retail sales are declining indicates the recovery from the recession may not be imminent.

Bloomberg reports the same news:

May 13 (Bloomberg) -- Retail sales in the U.S. unexpectedly dropped in April for a second month, indicating that rising unemployment is prompting consumers to conserve cash.

The 0.4 percent decrease followed a revised 1.3 percent drop in March that was larger than previously estimated, the Commerce Department said today in Washington. Other reports showed companies continued to cut stockpiles as demand slowed, and climbing oil costs pushed up prices for imported goods.

Fewer jobs, falling home values and the biggest loss of household wealth on record may limit consumers’ ability to spend for years, analysts said. Stocks dropped for a third day as the reports indicated any recovery from the worst recession in at least half a century is likely to be subdued.

“It looks like consumers are losing momentum heading into the second quarter and that is a very worrisome development,” said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York. “They have very significant headwinds and number one among them is that the labor market is far from turning the corner.”

Is the Republican Party an Endangered Species?

In a May 7, 2009 TIME magazine article entitled "Republicans in Distress:  Is the Party Over?", Michael Grunwald claims:

"These days, Republicans have the desperate aura of an endangered species. They lost Congress, then the White House; more recently, they lost a slam-dunk House election in a conservative New York district, then Senator Arlen Specter. Polls suggest that only one-fourth of the electorate considers itself Republican, that independents are trending Democratic and that as few as five states have solid Republican pluralities. And the electorate is getting less white, less rural, less Christian — in short, less demographically Republican. GOP officials who completely controlled Washington three years ago are vowing to "regain our status as a national party" and creating woe-is-us groups to resuscitate their brand, while Democrats are publishing books like The Strange Death of Republican America and 40 More Years: How the Democrats Will Rule the Next Generation. John McCain's campaign manager recently described his party as basically extinct on the West Coast, nearly extinct in the Northeast and endangered in the Mountain West and Southwest.

So are the Republicans going extinct? And can the death march be stopped?"

Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations by Paul Krugman

This book is essential reading if you want to understand how politics led the U.S. into misguided economic policies.

Information about the book from Amazon.com:

Editorial Reviews

Review
In ten lively chapters, Krugman traces how loose economic thinking has repeatedly led to wrongheaded government policies. In the process, he offers the best primer around on recent US economic history. -- Newsweek 

Product Description
The past twenty years have been an era of economic disappointment in the U.S. They have also been a time of intense economic debate, as rival ideologies contend for policy influence. But strange things have happened to economic ideas on their way to power--they've been hijacked by policy entrepreneurs who offer easy answers to hard problems. 

About the Author
Paul Krugman is the recipient of the 2008 Nobel Prize in Economics. He writes a twice-weekly op-ed column for the New York Times and a blog named for his 2007 book, The Conscience of a Liberal. He teaches economics at Princeton University.

"The Fed Today" video

Join radio and television journalist Charles Osgood as he explains the workings of the Federal Reserve System. 

This 13-minute video covers the Fed's history from its creation in 1913 to the technological innovations of 21st century banking. It explores the structure of the Fed as well as monetary policy, banking supervision, financial services, and more.

Are Business Leaders to Blame for our Tendency to Overeat?

According to "The Science and Psychology Behind Overeating," an April 28, 2009 Wall Street Journal review of the book The End of Overeating: Taking Control of the Insatiable American Appetite:

The Science and Psychology Behind Overeating
Former FDA commissioner David Kessler examines the causes of excessive eating in his new book, "The End of Overeating"
By JEFFREY A. TRACHTENBERG

In a wide-ranging look at eating habits, David Kessler, the former head of the Food and Drug Administration, addresses America's ever-increasing waistlines in his new book, "The End of Overeating: Taking Control of the Insatiable American Appetite."

He interviews the overweight, who say that just the sight of a favorite snack food is enough to make them feel hungry, as well anonymous food executives who admit that fat, salt and sugar are often the building blocks of successful food products. The book was prompted by a question that had long nagged Dr. Kessler: Why is it that Americans continue to crave such foods as potato chips and candy bars long after they feel full? "No one has ever explained what's happening to them and how they can control their eating," he writes. "That's my goal in this book."

Dr. Kessler, a 57-year-old pediatrician, was commissioner of the FDA from 1990 to 1997. He is probably best known for his opposition to tobacco interests and efforts to better label food products. He is currently a professor of pediatrics at the University of California, San Francisco.

The Wall Street Journal: What most surprised you while researching this book?

David Kessler: I wanted to understand why it was so hard to control what we eat. I thought I was going to end up in the world of nutrition and endocrinology. I ended up inside the brain and inside the food industry. The metaphor for the book was: Why did the chocolate chip cookie have such power over me? I saw a woman on Oprah who said she ate when she was happy, when she was sad, before her husband left for work and then after he left. I wanted to understand what was driving her behavior. It was not just that she was eating too much -- she was eating when she didn't want to eat. And nobody could explain why. I wanted to know, how could we help her? What was driving her? The greatest surprise was understanding how highly palatable foods had hijacked her brain.

WSJ: Early on in the book, you suggest that that major food companies know what motivates shoppers.

Dr. Kessler: They know what drives demand, and they were able to design foods to be hot stimuli. The food industry says they only give consumers what they want. But what they want excessively activates the rewards circuits of the brain. They aren't selling just any commodity. They've designed highly stimulating products, and consumers come back for more. Nothing sells as much as something that stimulates the rewards-circuitry of the brain. It's all about selling product.

WSJ: What about restaurant eating?

Dr. Kessler: Much of what we eat in restaurants is fat on fat on sugar on fat with salt. Pick any dish in any mid-American restaurant. What is spinach dip? Fat on salt with green stuff. Look at the average salad we're eating. If you look at the bacon, the croutons, the cheese…it's fats, salts and a little lettuce.

WSJ: At times I couldn't decide whether you felt that the overweight were victims or undisciplined. Which is it?

Dr. Kessler: The answer is probably neither. Nobody has explained to people what is going on with them, or given them the tools to cool stimuli. Yes, you are bombarded throughout the day. You respond. And that creates torment for people. But just because we are activated and stimulated doesn't mean that that there aren't things we can do. Yes, their brains are being hijacked. But once we understand what is going on, we can change.

WSJ: What are the most important signs that people can recognize before they eat something they actually may not want?

Dr. Kessler: The fundamental question, when you look at food, is this: Is it real food, or is it food that is layered and loaded? It's easy to look at food and see what else is being layered on top of protein. I don't have a problem with a plain hamburger -- it's adding cheese and bacon. Also, you want a reasonable amount of food that you can control. Today if you put large amounts of food in front of me, I don't want it. But I used to go through big portions in an instant. We each have to decide what we find rewarding, and then decide how we control it.

WSJ: Regarding visual food cues, are you suggesting that the sight of a bowl of innocent M&Ms is enough to make us want to eat them?

Dr. Kessler: It depends on your past experience and what stimulates you. Everybody is different. For me it may be chocolate-covered pretzels. The one thing I can assure you: At the core, it's fat, sugar and salt. Not everything activates each of us the same. Here's the fundamental point: We are wired to focus on the most salient stimuli in our environment. If your kid is sick today, that's what you think about. For some people it's sex, gambling, alcohol. For many of us it's food. And within that category, different types of food are salient. You have to condition yourself to take the power out of the stimulus.

WSJ: Are we then all victims of subtle cravings whose genesis we're doomed never to understand?

Dr. Kessler: This syndrome of conditioned hyper-eating, which is what this is -- the loss of control in the face of highly palatable foods, lack of feeling full -- is reward-based eating. Not all are equally susceptible. Those obese and overweight have a greater incidence. But even 20% of the healthy report occasional loss of control. You will find people for whom food doesn't capture their interest, but it's probably a small percentage of the population. For the rest of us, it's a continuum. It's not only conditioned behavior. It's the learning and motivational circuits of the brain being captured. Is it nurture or nature? You expose children who are eating fat, sugar and salt all day. They've never been hungry a day in their lives. Once you lay down that neuro-circuitry, it's there for life. The actual act of consumption isn't as strong as anticipation. It's the conditioning associated with a cue. Once you are cued and you're activated, it amplifies the reward value. It torments you. You want it more.

WSJ: There is a lot of concern about obesity and children. What is the biggest cause? It is portions that are too large, or the wrong types of food?

Dr. Kessler: They are getting huge portions of very stimulating foods, hyper-palatable foods. You have huge portions of sugar, fat and salt. Every time they eat those foods it strengthens their neuro-circuitry to eat that food again. It activates them. Once these cues are laid down, and the information is in your brain, it stays there and drives behavior. This isn't a disease. But we've been captured by these stimuli. In the past, it allowed us to survive. Now we have health consequences because it's available 24/7 and we've added the emotional gloss of advertising.

WSJ: Is nutrition too difficult a concept to regulate?

Dr. Kessler: In the end it's not about regulation. Government can play a role. It's about how we as a country view the product. What was the real success of tobacco? We changed how we viewed the product. It was a critical perceptual shift. That's the key.

Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com

Fiat Lux

Click on the photo to enlarge it.

The Jacksonville University motto is Fiat Lux, which is Latin for "Let there be light." It appears on the university seal across the pages of an open book, accompanied by a lit lamp and a globe. The symbolism is that Jacksonville University uses the lamp of knowledge to enlighten its students and dispel the darkness of ignorance throughout the world.

When something is done by fiat, it is done by declaration or decree. Fiat lux is a declaration of light. But the word, fiat, has other applications. Fiat money is something that is accepted to serve as money because it has been declared to be so, usually by the government. For example, in the United States, paper money has no intrinsic value. We accept pieces of paper in exchange for valuable goods and services because as a society we have agreed to do so. Federal Reserve Notes (the official name of our paper money) are not of much use other than as money. They are imprinted with the sentence "This note is legal tender for all debts, public and private" as an assurance of the social agreement that they will be an acceptable form of money.

Unlike fiat money, commodity money has intrinsic value. Metal coins, especially ones made of gold and silver, can be melted down and the used for other things, such as jewelry. Thus coins are typically commodity money.

Ronald Reagan´s Inaugural Address - 1981

In Ronald Reagan´s inaugural address on January 20, 1981, he claims:

For decades we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.

Despite these warnings from the beloved Republican leader, the policies pursued in subsequent decades have dramatically increased budget deficits and the public debt.

Politicians Mislead Us With Economic Lies

Arthur Laffer - Father of Our $11 Trillion Debt

Arthur Laffer, the Ph.D. economist who created the Laffer curve and is sometimes called "the father of supply-side economics", can also take credit as the father of our massive public debt.  The tax cuts (and subsequent revenue reductions) he inspired were not matched by decreases in government spending.  And contrary to the claims of supply-siders, the tax cuts did not result in extraordinary economic growth. (See Table B-4. Percent changes in real gross domestic product from the Economic Report of the President.)

Dilbert Survey of Economists

http://www.dilbert.com/blog/entry/dilbert_survey_of_economists/

What Good are Economists?

In the cover story to the April 27, 2009 issue of Business Week magazine, journalist Peter Coy asks What Good Are Economists Anyway?

 

Scott Adams provides an excellent answer:

What Good are Economists?

Aug 22, 2008 

If a weather expert tells you what the weather will be on a specific day next year, you can safely ignore him. If he tells you a hurricane is heading your way, it's a good idea to get out of the way, even if the storm ends up turning. That's playing the odds.

Likewise, if an economist tries to tell you where the stock market will be in a year, you can safely ignore that. But if he tells you a gas tax holiday is an unambiguously bad idea, that's worth listening to, especially if economists on both sides of the aisle agree.

If you think it is okay to ignore economists because they are so often wrong, you're looking at the wrong questions. Economists are generally wrong with complicated models but right about concepts. For example, they know that additional domestic drilling won't make much of a dent in the energy problem. And they know that free trade is generally good for all economies. (You can argue with my examples, but the point is that some things are generally known by economists while not being understood by the general public.)

By analogy, a mechanic knows that changing your oil is good for your engine, but he can't tell you what problems you will have with your car next year. You shouldn't ignore the mechanic's advice on changing oil just because he doesn't know when your battery will die, or because he didn't personally perform any scientific studies on oil changes.

Doctors are often wrong, but you are still better off going to the doctor than diagnosing problems yourself. And when you get the opinions of several doctors, your odds improve, even if those several doctors aren't a scientific sample. The important thing is that following a doctor's advice, or the consensus of several doctors, increases your odds compared to the alternative. And the more doctors the better.

Some of you noted that the candidates have top economists on their payrolls, so voters can be assured any president is getting good advice. But realistically, an economist involved in a political process has to support the candidate's ideas or he's off the team. At best, one of the candidates obviously has bad economists advising him because they disagree with the other guy's economists. 

Some of you noted that most economists are Democrats. Prior to doing the survey, I expected it would be the other way around. But indeed, most of the economists we surveyed are registered Democrats. But there are plenty of Republicans and independent voters in the survey so you can see how each group weighs in separately. Personally, I will be most interested in the independent voters and the economists who cross party lines.

After the results are announced I'll tell you how we cleverly found over 500 economists. There's a clear limit to how scientific you can get with your sample when it is a bunch of people who chose economics as a profession and were easily findable. But again, you have that same problem when you pick your doctor, or when you get second opinions. You're not dealing with scientific sampling.

You're going to wonder what my own political bias is. In the interest of full disclosure, I think I registered Independent the last time I voted, but frankly I don't remember. I'm not superstitious, which leads me to be socially liberal. Economically, I'm conservative. I'm closest in philosophy to an Arnold Schwarzenegger Republican. He seems to be interested in keeping the government out of people's private lives and managing things based on data as opposed to faith. Neither presidential candidate floats my boat. One wants to transfer my money to other people and the other is a lukewarm corpse. I think both candidates would be indistinguishable in foreign affairs because their options will be so constrained. Those are my biases.

World Institute for Development Economics Research

http://www.wider.unu.edu/

World Institute for Development Economics Research of the United Nations University (UNU-WIDER) is the first research and training centre of the United Nations University (UNU), established in Helsinki, Finland in 1984. UNU-WIDER undertakes applied research and policy analysis on global development and poverty issues.