How Much Must You Give for a White House Invite?

The NY Times today ("White House Welcomes Donors...", Sunday, April 15) had a page 1 story by Mike McIntire and Michael Luo about President Obama's invitations to the White House. Fascinating stuff.

Biggest surprise for me was the degree of White House transparency. The Federal Election Commission (FEC) keeps track of campaign donations (see www.data.gov) and the Executive Office of the President keeps a public log of visits to the White House that is posted on www.data.gov. Inevitably, someone was going to tie these together.

The donation totals are cumulative over three election cycles, i.e., from 2008 through 2012 (first quarter). Surprise (not) - there is a pretty close relationship between how much money you give and the probability of a White House invitation - for this purpose a visit equates to an invitation. The Times story doesn't provide a formula, but here is what I got inputting the numbers from the Times chart - see my chart immediately below.

PROBABILITY OF AN INVITATION y=26.3% + 40.2%x$GIFT (in thousands of dollars).
So if you give $100,000 over a 5.5-year period, your probability of an invitation is 26%+40%x100, which is (26+40)% = 66%.
What this means is that two out of three donors at the $100,000 level visit the White House. 
But a few caveats are needed, and a couple of questions must be asked.

First off, the FEC disclosure reports include gifts of only $200 and above. That excludes many small gifts via the Internet. So there will some invitations to dinner to the Internet givers that wouldn't show up on the FEC reports. The probability at the "zero" gift level is the probability that someone gets a White House invitation after giving only (at least) $200. The probability applies to givers of $200 or more.

Second, the White House visitors' list is hard to navigate for purposes of reconciling the numbers. What rules were followed in deciding who is included from the list of invitees? For example, many overseas visitors show up on the site and they are not permitted to give. Many of visits are labeled as events ("Holiday Party"). Some of the locations to which visitors are invited are strictly public rooms. How was the list narrowed down?

Finally, to draw conclusions that would characterize the Obama White House in any way, would we not need some data from other presidencies? How does the Obama era differ from Bush 43, for example?   

Credit Card Absurdities

A story in The New York Times yesterday ("Consumer Bureau Declines to Resist Upfront Credit Card Fees, April 13, p. B1) expressed disbelief that the Consumer Financial Protection Bureau is proposing to allow credit card issuers to charge fees before borrowers' accounts are opened.

That's the kind of ripoff that The Credit Card Holders Bill of Rights, signed early in President Obama's presidency, ought to prevent.

Chi Chi Wu, an attorney at the National Consumer Law Center, describes an  example of what is going on:

First Premier [Bank of South Dakota] began charging a $95 processing fee before the card account was opened, as well as a $75 annual fee. Yet the credit limit on the card was $300.

Comments on the Bureau's proposal are due by June 11.

Meanwhile, James Monaco, writing "Guestwords" in the East Hampton Star yesterday, suggests that credit card companies haven't gone far enough, and that there are still untapped opportunities for gouging consumers. He suggests the following innovative fees:

No-call fee. $9.95 a month for no calls from credit card companies.

Automatic deductions.  $12.95 for each charge.

Paper billing fee. To get a paper bill, pay $17.76 a month, or $24.95 to include a return envelope for payment by check.

Unredeemed fee.  For each month you delay redeeming your frequent flyer miles, $19 per 10,000 points.

These fanciful suggestions are unfortunately not much worse that the reality. Banks for quite a few years have been making more money from fees than from interest rates.

Manhattan Outpaces LA and Cook Counties, 3Q11

Numbers just released by the Bureau of Labor Statistics allow us to track the relative economic performance of large counties through the third quarter of 2011. This week for the first time we have the dollars associated with payroll jobs in each area.As a model for understanding the numbers, let's take  the three largest counties - Los Angeles, Cook County and Manhattan (New York County). Los Angeles County has the most jobs - 3.9 million of them, 3.0 percent of all jobs in the United States. Cook County is second with 2.4 million jobs, 1.8 percent of all U.S. jobs. Finally, Manhattan has 2.3 million jobs, 1.8 percent of all U.S. jobs.  The three counties together have 6.6 percent of all U.S. jobs.
The relative size of the largest counties are shown in this BLS chart posted Friday, March 30. Los Angeles County encompasses the City of Los Angeles and Cook County encompasses the City of Chicago. New York City is the only U.S. city that includes more than one county. New York County is coterminous with the Borough of Manhattan, which is not the largest borough by number of residents but includes approximately three-fourths of the Gross City Product.  

Table 1. Employment in Large Counties

  USA and Three Largest Counties

    September 2011('000)
United States          130,524.7

 1.Los Angeles, Calif.    3,872.5       

 2.Cook, Ill.             2,402.7

 3.New York, N.Y.         2,332.5

Source: Data for this and the next four tables: Bureau of Labor Statistics, Quarterly Census of Employment and Wages, QCEW report for September (3Q) 2011, March 28, 2012.

It is already known that Manhattan grew jobs at the fastest rate, 2.6 percent, during the year ending September 2011. This is a full percentage point faster than the United States as a whole. Cook County was also above the national average for job growth but Los Angeles grew jobs only half as fast as the nation. (See Table 2.) 

 Table 2. Increase in Employment

  USA and Three Largest Counties  

  September 2010-11 ('000 and %)
United States     2,040.9 (1.6%)

New York, N.Y.       60.6 (2.6%)         

Cook, Ill.           48.5 (2.0%) 

Los Angeles, Calif.  31.1 (0.8%)

The question that the new data on average wages help us to answer is - what happened to average salaries in the counties? Did job growth reflect a growth of less-well-paid jobs, or was the job growth occurring in better-paid industries? The average wage in the third quarter of 2011 was $916 a week in the United States and it was $1,647 in Manhattan, $1,047 in Cook County and $1,026 in Los Angeles. (See Table 3.)

  Table 3. Average Weekly Wage

  USA and Three Largest Counties       

         3rd quarter 2011                  

United States                  $916

New York, N.Y.                1,647

Cook, Ill.                    1,047

Los Angeles, Calif.           1,026

If one multiplies the total jobs in Table 1 by the average weekly wage in Table 3, it generates a good first approximation of the relative Gross County Product, i.e., the economic product of people working in each county. This number was the foundation for the NYC Comptroller's Office estimates of New York City's Gross City Product in the 1990s. New York City was the first city to develop Gross City Product estimates, at a time when Gross State Products were not available from the Bureau of Economic Analysis, as they are now.
Finally, we look at how the third-quarter 2011 average wage compares with the same quarter in 2010. This shows wages increasing faster in the rest of the United States. The average wage increase between the third quarter of 2010 and the third quarter of 2011 was 5.3 percent - from a much lower base than in the three largest counties. The Los Angeles County increase was only slightly below the national average, whereas New York County and Cook County wages rose 0.7 and 1.3 percentage points more slowly than the nation. (See Table 4.)  

Table 4. Increase in Average Weekly Wage

   USA and Three Largest Counties     

 3rd quarter 2011 (% change from 2010)

United States                 5.3%

Los Angeles, Calif.           5.2%           

New York, N.Y.                4.6%

Cook, Ill.                    4.0%

At low levels of growth, the percentage increase in jobs plus the percentage increase in the average weekly wage approximates the percentage increase in the Gross Product.  So the percentage increase of the national GDP would be approximated at 1.6% + 5.3% = 6.9%. The more accurate formula is multiplicative, which gives slightly larger rates of increase than adding the two percentage increases:

     ΔGross County Product = (E+ΔE) x (W+ΔW),

     where E is Employment and W is Wages.

For the nation, the more accurate figure for the change in the wage component of the Gross Product is 7.0%. (See Table 5.)

Table 5. Increase in Wage Component of Gross Product

         USA and Three Largest Counties     

       3rd quarter 2011 (% change from 2010)

                    A=(E+ΔE) B=(W+ΔW)C=AxB   ΔGCP

United States       101.6%   105.3%  107.0%  7.0%

New York, N.Y.      102.6%   104.6%  107.3%  7.3%
Cook, Ill.          102.0%   104.0%  106.1%  6.1%

Los Angeles, Calif. 100.8%   105.2%  106.0%  6.0%

From the last column in Table 5 we can now answer the question – how have the wage sectors of the three largest counties been performing based on the latest county employment and wage data?
The wage component of the nation’s economy grew 7 percent. The nation was led by New York County, which grew 7.3 percent. The other two counties’ wage economies lagged behind. Wages grew at a faster rate in Los Angeles County than in New York County, but from a very much lower base (as shown in Table 3).
We get a general picture of the relative performance of the county wage economies from the QCEW data. We can then drill down into the industry components to understand which parts of each wage economy are contributing the most. This will be the subject of another post. 

Smart Move: Suffolk County Declares Fiscal Emergency

One of the first acts of the incoming Suffolk County Democratic leadership under County Executive Steve Bellone was to assemble an impressive seven-member commission headed by Dr. Richard Halverson to review the county's fiscal outlook.


The commission concluded in a report to Bellone and the Legislature on March 6 that a $530 million shortfall of income below revenues was looming over three years. The problem is not so much with 2011, which has a small gap remaining, as in the following two years.

Bellone responded by saying he would take immediate action to close the gaps. 


This was a smart move for Bellone. He and the Suffolk legislature have their eye on Nassau County to the west, which has been subject to state controls for more than a year. Showing that they are aware of the county's fiscal problems should be reassuring for the State Comptroller.


Suffolk County has been one of the hardest-hit counties in the tri-state area. Its pension fund shortfall is also one of the most serious. 


If the U.S. economy continues to recover, the worst scenario for Suffolk County could be averted, but county officials can't assume this will happen. Tax revenues are hard to predict with any certainty, whereas much local spending is under the control of local officials.

Wall Street, NYC Gained More Jobs in 2011 Despite OWS

March 8 - It's now official. Wall Street did not lead to layoffs because of the Occupy Wall Street campaign. At one time this was a question in the mind of the Mayor. 

Quite the opposite. Wall Street companies hired 4,900 more workers (net of layoffs) from January 2011 to January 2012 than previously reported by  the NYS Department of Labor. Instead of losing 1,100 jobs as previously reported, the securities industry gained 3,800 jobs. 

The broader financial services sector, which includes banks and insurance as well as securities staff, hired 7,800 people from January 2011 to January 2012, bringing its payroll to a total of 440,600.

The revisions, which are made every year at this time, also show:

- An increase in the annual average NYC private-sector employment by 85,300 jobs, twice what was originally reported.

- This 2011 rate is 60 percent faster than in the country as a whole.

 - Over the past two years, NYC has grown more jobs than the next 10 cities combined.

- As of December 2011, NYS recouped 76 percent of the private sector jobs lost in the 2008-2009 recession.


- The NYS unemployment rate rose a tenth of a percentage point to 8.3 percent in January from a year earlier. 


- NYC’s jobless rate rose fourth-tenths of a percentage point to 9.3 percent over the same time.


- In January, NYC added 31,600 private-sector jobs, the largest one-month gain since 1990 except for July 2011 when the numbers were distorted by the end of the Verizon strike.


- In January, Wall Street hired 600 workers, bringing its total workforce to 171,300 employees. 


Sources: NYS Department of Labor, NYC Office of the Mayor, Reuters (Joan Gralla) and Crains.

The Unexpectedly Strong January Job Numbers

Job numbers are of great political and business importance. Voters care whether they or members of their family have a job. Jobs are a measure of community prosperity. Jobs affect company prospects. So the numbers are closely watched. News stories appear beforehand predicting them and afterwards analyzing their implications.

The Bureau of Labor Statistics comes out with these job numbers - the household employment and unemployment numbers and payroll jobs - the Friday after the end of the month for which it reports. This speedy reporting results from (1) using a reporting period at the beginning of the month, (2) utilizing all the state unemployment insurance offices to help process the payroll data to support unemployment insurance filings, and (3) employing the Census Bureau to survey households every month on changes in employment of family members, and (4) efficient processing of the data by the BLS. The speed of reporting helps make the job numbers are crucial source of current data on the economy.

Newspaper editors have a dilemma on the evening before the job numbers come out. They can ignore all the predictions about the job numbers, and appear out of it. Or they can summarize the predictions with a story and headline.

I use the New York Times, my favorite newspaper, as an example. On Friday morning at 8:30 a.m., I checked in to the BLS website for the latest press release (go here for the archived version if you are reading this in March or later) and I find the good news that the unemployment rate is down for the fifth month in a row, to 8.3 percent and employers added 243,000 jobs in January, up from an addition of 203,000 jobs in December.

So in December the U.S. economy was adding jobs at a rate of about one million jobs every five months. In January it was adding jobs at a rate of one million every four months. Clearly, this is hugely good news for Americans and for the President, whose reelection is widely viewed as hinging on better economic news.

Next I turned to my morning New York Times and read a report, by Catherine Rampell ("Stagnant Job Growth Is Expected In Report", Friday, February 3, p. B1) that says that "economists predict ... unemployment stagnating at 8.5 percent," and a "median forecast [of] 135,000 jobs" which is close to the average net gain of 137,000 jobs per month over the previous 15 months. At the predicted rate, it would take the country more than seven months to regain one million jobs, barely enough to take account of population growth and not enough to put many unemployed back to work.

The New York Times headline this morning over a story by Michael D. Shear ("Jobless Rate Falls to 8.3%, Altering Face of Campaign", Saturday, February 4, p. A1) gives the game-changing job numbers appropriate attention. "Economists were surprised by the strength" of the numbers, not only because of the January job growth, but also because previously released 2011 job numbers were revised upward, with the result that U.S. employers are now reported to have added nearly two million jobs (2.2 million private-sector jobs) between January 2011 and January 2012.

The country is not just trending in the right direction, it is moving in that direction at a faster rate.

Michael Shear had a much easier reporting job than Catherine Rampell. It's hard writing a story when you know that by the time most people read it, your headline will be obsolete... or worse. This is a problem for any daily print media.

Is there a solution that would equalize the competition between print and online media? Well, it might be easier on the Times if the job numbers appeared the evening before, say at 8 pm, in time at least to get the headline right. The Thursday evening news would get to cover it. Two problems would remain: (1) The Joint Economic Committee of the Congress, where the job numbers are routinely presented on the first Friday of the month, would have to consider an evening meeting or risk not getting covered. (2) The print media would still face the having to issue predictions a day earlier - for the Thursday editions!