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How Much
October 16, 2019

Poverty presses at the core of humanity. We often judge the best of us by the least of us. Most of us already know that much of the world’s population lives in extreme poverty. But just how prevalent is this issue? Using data from 2018, we created an easy-to-read visualization to chart the total number of people living in extreme poverty in countries around the world.

  • The U.S. poverty rate has fallen for the fourth consecutive year.
  • The U.S. metric for measuring poverty is considered misleading as it undercounts people suffering from economic deprivation.
  • International poverty rates are already high and may be worsened by the trade war.
  • In the United States, people of color are disproportionately affected by poverty compared to white people. 

For our visualization, we pulled 2018 population data from The World Bank as well as data from the Bill & Melinda Gates Foundation’s 2019 Goalkeepers report. This is an annual report that focuses on the progress achieved toward the Sustainable Development Goals (SDGs), 17 ambitious goals the member states of the United Nations committed to reaching by 2030.

To obtain the figures used in the visualization, we multiplied the population of each country by the extreme poverty rate. We then visualized this data using circles for each country. The bigger the circle, the higher the number of people living in extreme poverty. For figures smaller than 1,000 the country is represented with a “<1,000” label. 

Countries With The Highest Extreme Poverty Rates

1. Somalia: 99.2% 
2. Central African Republic: 80.92% 
3. Burundi: 77.72% 
4. North Korea: 70.58%
5. Madagascar: 69.77%
6. Democratic Republic of Congo: 68.84%
7. Malawi: 67.56%
8. Yemen: 64.51%
9. Sierra Leone: 59.55%
10. Guinea-Bissau: 53.88%

By analyzing this data, we can see how many people across the globe are living under the international poverty line ($1.90/day). While several countries have an estimated extreme poverty rate of 0%, poverty is a much larger issue in other countries, such as Somalia, in which the majority of the population lives in extreme poverty.

The United States also has a considerably low extreme poverty rate at 0.97%. However, though the U.S. poverty rate is declining, many suggest that these numbers are misleading and don’t represent the true number of people living in poverty in the country.

Much of the world’s population is living in extreme poverty; however, you might not have realized how serious this issue actually is. By taking a look at our visualization, we can see how much of the world is living in poverty and get a better understanding of how this issue may or may not be improving.

Should the U.S. update its metric for measuring poverty? Why is extreme poverty distributed the way that it is? Let us know what you think in the comments.

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How Much
October 15, 2019

According to the most recent data from the U.S. Census Bureau, the median household income in the U.S. is $61,937. Some companies are well-known for having sky-high salaries that are more than twice the median household income. Our new visualization ranks the highest-paying U.S. companies by median salary based on the latest research from Glassdoor.

  • Most of the highest-paying American companies are in the technology sector. Consulting and finance companies like BNP Paribas and McKinsey & Company are also represented.
  • Most of the top 25 companies are headquartered in California, especially around Silicon Valley. Only four of the companies are headquartered in other states or countries.
  • While the tech sector tends to pay the high median salaries at the company level, the  top five highest paying jobs in America are in the healthcare field, not tech.
  • Data does not take into account executive-level (C-Suite) salaries.

The data source for this visualization is Glassdoor’s 25 Highest Paying Companies in America report. The report relies on crowdsourced data about compensation (including base salary, commissions, tips, bonuses, etc.), as reported by U.S.-based employees on Glassdoor from July 2018 to June 2019. All companies included in the final report received at least 75 salary reports by U.S-based employees during this time period. Our visualization charts each of the top 25 companies by median salary, with the highest salaries on the left and the lowest salaries on the right. To illustrate each company, we also included the company logo.

Top 10 Highest-Paying American Companies

1. Palo Alto Networks: $170,929
2. NVIDIA: $170,068
3. Twitter: $162,852
4. Gilead Sciences: $162,210
5. Google: $161,254
6. VMware: $158,063
7. LinkedIn: $157,402
8. Facebook: $152,962
9. Salesforce: $150,379
10. Microsoft: $148,068

Interestingly, some of the most profitable companies in the world, such as Apple and J.P. Morgan, are not listed among the highest-paying companies in America. Instead, firms that specialize in social media networking, cybersecurity, cloud computing, and software are the most-represented on the Glassdoor list. In fact, some estimate that there will be 3.5 million unfilled cybersecurity jobs by 2021, which could drive median salaries in this field up even further. But at the same time, workers at some tech companies like Google and Facebook face an uncertain future due to increased public scrutiny and calls for regulation. As the economy, federal laws, and job market demands continue to evolve, the list of highest-paying companies could also look very different in the future. 

What companies do you think will be on this list next year, or even a few years from now? How do you think employment and salaries for tech firms will change within the next year? Would you recommend this as a career path for young workers, and why? Please let us know in the comments.

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Hard Assets Alliance
October 15, 2019



Hard Assets Alliance was created as a cooperative of investment professionals who believe there's a better way to invest in precious metals. This is a guest perspective on the markets from one of these partners; we hope you enjoy it.

By Charles Hugh Smith
The Daily Reckoning

All eyes are again on the Federal Reserve, as everyone understands that the Fed is the market — the stock market, the bond market, the art market, the housing market, etc.

All markets have been driven higher by one force: central bank money creation and distribution to the financial sector of financiers and corporations, the richest of the rich.

What few seem to grasp (because they're paid not to?) is the Fed is powerless over what actually matters in a healthy economy:

1. The Fed is powerless to create productive, profitable ventures for capital to invest in. Productivity has gone nowhere during the Fed's reign, while speculative profits leveraged by the Fed's free money for financiers have soared.

2. The Fed is powerless to raise wages. Despite ginned-up claims that wages are finally rising 3% a year after a decade of stagnation, wages are still losing purchasing power once real-world inflation is factored in.

3. The Fed cannot force creditworthy households and enterprises to borrow more money, nor can they stop banks from lending to the only people who want to borrow more money, those who are credit risks, i.e., borrowers who will default at the first spot of bother.

4. The Fed is powerless to stop the New Gilded Age consequences of their policies via the Cantillon Effect, where the rich benefit most from new money that enters the system: It's not just how the money is created, but how it's distributed.

“Markets That Live by the Fed Also Die by the Fed”

Those who get the Fed's nearly free money can use it to buy productive assets and pursue speculations such as stock buybacks, while everyone else who didn't get a single dollar of the Fed's trillions experiences a loss of purchasing power as the Fed's new money expands the money supply without actually expanding the real economy.

The only power the Fed has is to incentivize profiteering via stock buybacks and speculations of the super-wealthy — the power, in other words, to create a New Gilded Age of obscene wealth inequality.

The Fed's New Gilded Age is generating political blowback, and eventually the masses will awaken to the fact that the Fed is the enemy of the people because it is the sole enabler of the unproductive, parasitic, predatory corporate/insider class that's skimmed something like 87% of all the "wealth" "created" by the Fed's policies.

The Fed has created an economy in which capital has been stripped of low-risk yield. All capital must become gambling chips in the casino to earn a return, but gambling is intrinsically risky, and the asymmetry between the risk — rising — and the return — increasingly paltry — is setting the markets up for a fall the Fed is powerless to stop, and a political blowback to the Fed's New Gilded Age that it is equally powerless to stop.

Markets that live by the Fed also die by the Fed. The Fed's abject, pathetic powerlessness over what actually matters will be revealed in the years ahead, and everyone will look back on the decades in which the Fed was viewed as god-like as a form of mass delusion.

“The Financial Storm Clouds Are Gathering”

The "everything bubble" is not permanent. Gambling is risky, and the Fed has rigged the world's largest casino to benefit its banking/financier/corporate cronies. But bubbles burst for reasons outside the control of the Fed, a reality that's about to become undeniable.
 
The financial storm clouds are gathering, and no, I'm not talking about impeachment or the Fed and repo troubles — I'm talking about much more serious structural issues, issues that cannot possibly be fixed within the existing financial system.

Yes, I'm talking about the cost structure of our society: Earned income has stagnated while costs have soared, and households have filled the widening gap with debt they cannot afford to service once the long-delayed recession grabs the economy by the throat.

Everywhere we look, we find households, enterprises and local governments barely able to keep their heads above water — in the longest expansion in recent history. This is as good as it gets, and we're only able to pay our bills by borrowing more, draining rainy-day funds or playing accounting tricks.

So what happens when earned income and tax revenues sag?

Households, enterprises and local governments will be unable to pay their bills, and borrowing more will become difficult as the financial markets awaken to the re-emergence of risk: as shocking as it may be in the era of central bank omnipotence, borrowers can still default and lenders can be destroyed by the resulting losses.

Two Features of the Era of Central Bank Omnipotence

The era of central bank omnipotence has been characterized by two things:

1. A disconnect between risk and return. Since "central banks have our backs," risk has been vanquished, and since central banks socialize losses by bailing out corporations and banks who gambled and lost, then the financial oligarchs have been free to ignore risk since the Federal Reserve has implicitly guaranteed returns will always be secured by Fed backstops, market interventions, etc.

2. Costs have been ignored because "we're all getting richer" via asset bubbles. Your health care insurance just doubled in a couple of years? Forget it, pal, that's chump change compared to the big-time gains in the value of your house and 401(k) stock holdings.

This is the wealth effect: Even as rising costs consume earned income, we ignore this financial erosion and borrow and spend more because we feel richer when we look at our home and stock valuations.

In other words, the wealth effect has been deployed to paper over the enormous structural gap between income and expenses. The wealth effect doesn't just affect households: Rising real estate valuations have boosted local government tax revenues, and small businesses have been buoyed by the spending of the top 20%, who own 93% of the stocks owned by households and who have seen their homes soar in value.

But asset bubbles always pop, and once they do, the wealth effect reverses and people feel poorer as the values of their homes and portfolios decline. They borrow and spend less, and all the capital gains that boosted local tax revenues dry up, too.


Wages Aren’t Keeping Pace With Expenses


Here's reality: Wages haven't kept up with expenses like health care costs, but rent, higher education, childcare, etc., have similar asymmetries.

We’re seeing an enormous asymmetry between stagnant income and rising costs, and of the "solution": debt, and lots of it.

Wages stalled but costs haven’t, so people increasingly rent or finance what their parents might have owned outright. Median household income in the U.S. was $61,372 at the end of 2017, according to the Census Bureau.

When inflation is taken into account, that is just above the 1999 level. How households earning $61,000 can acquire cars costing half their gross income is a story of the financialization of the economy.

More accurately: Financialization is the result of the cost structure pulling away from our ability to pay our expenses with earned income. The only way to enable costs to continue soaring far above our ability to pay them is to financialize the economy, making debt the core mechanism to pay the bills and asset bubbles the core mechanism to create phantom collateral to support the skyrocketing debt.

The Price of the “Solution”

Here's the problem with reducing the cost structure to levels we can actually afford: All the fat in our system is screaming that it's bone. The slightest reductions trigger titanic lobbying by whatever group of insiders or vested interests will bear the brunt of the cuts.
This leaves politicians with one easy way out: borrow enough money to satisfy the demands of every constituency, every clique of insiders and every vested interest. Rather than realigning costs with our ability to pay, we're going to use debt to keep all the constituencies happy.

The price of this "solution" — the undermining of the financial system — will eventually be paid in full to the detriment of everyone, including all the layers of productivity-killing fat that proclaimed themselves essential bone.

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How Much
October 10, 2019

Americans are notorious spenders. Compared to many other nations around the world, households in the U.S. have a particularly low savings rate, and 28 percent of American adults have no emergency fund. However, consumer spending accounts for 68 percent of the country’s GDP, making it essential for economic strength. Our newest visualization takes a closer look at how Americans are spending their money.

  • While this chart shows the averages across all American consumers, earnings and spending vary by factors such as location, gender, and age group. For example, data from the Bureau of Labor Statistics shows that the 45-54 age group has the highest mean salary ($109,366), while the 75 years and older age group spends, on average, more than they make ($43,181 spent vs. $38,786 earned).
  • Americans’ income is typically allocated to one of three places: taxes, savings, or annual expenditures (spending).
  • Most consumer spending falls into the larger categories of food, housing, transportation, healthcare, insurance, and other goods and services. Housing alone accounts for almost a third of spending.
  • The savings rate is calculated by subtracting annual mean expenditures from annual mean income after taxes.

The data from this visualization comes from the Consumer Expenditure Survey by the Bureau of Labor Statistics. The black bar on the far left of the chart shows the average income for the American consumer. As you go farther to the right throughout the visualization, it provides a greater level of detail for how that income is allocated. For example, it breaks down average income into taxes, spending, and savings (color-coded pink, blue, and green respectively). Then it breaks down spending into general categories, and finally into more specific categories. The average dollar amount spent is included with each section of the breakdown.

Top Consumer Spending by Category

1. Shelter - $11,747
2. Pensions & Social Security - $6,831
3. Food at Home - $4,464
4. Utilities - $4,049
5. Vehicle Purchases - $3,975
6. Food Away from Home - $3,459
7. Health Insurance - $3,405
8. Entertainment - $3,226
9. Other Vehicle Expenses - $2,859
10. Other Housing Expenses - $2,270

Changes to consumer spending will have far-reaching ramifications for the rest of the economy. Since there are warning signs that consumer spending is already starting to cool, some economists are concerned about problems down the road. For example, changes in consumer behavior are threatening traditional retail companies and have already led to nearly 200,000 lost jobs since the start of 2017. More recently, the trade war has been taking a toll on consumer confidence and that’s a serious threat to economic growth. Perhaps next year, the breakdown for the average American consumer’s spending will look very different than it did for 2018.

How do you think consumer spending will (or won’t) change in the near future? Please let us know in the comments.

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Hard Assets Alliance
October 9, 2019

There’s a growing panic in Fed headquarters not only about the inability of policy to improve the economy, but over the fact that the board members don’t even know what policy to pursue. It’s one thing to say the “right” policy isn’t working. It’s quite another to realize the Fed doesn’t even know what the right policy is.

 

At some point panic sets in. This is not about panic in the markets. That will come soon enough. It’s about panic among policymakers overwhelmed by forces they don’t understand and cannot control. What we’re seeing now are the usual signs of panic consisting of finger-pointing and wildly different views of the reality of the situation. The Fed is now divided more than ever when it comes to policy.

 

The FOMC is normally the ultimate consensus-driven institution. It is even more consensus-driven than usual right now because Fed Chair Jay Powell is a lawyer, not an economist, and lawyers are typically motivated to reconcile opposing views and reach a settlement that all parties can live with. There are a total of 12 voting members of the FOMC consisting of seven Fed governors and five regional reserve bank presidents (there are two vacancies at the moment, so the total voting members are 10). Unanimous votes on policy are not unusual, but one or two dissents are quite common.

 

A typical disagreement inside the FOMC consists of, say, 10 votes for one policy (to raise, lower or stand pat on rates) and two dissents from that consensus. Strong dissents or close votes (say, 6-4) are almost unheard of. The decision-making and voting process is nondramatic by design.  Yet the minutes of the Fed’s July 31, 2019, meeting show not just dissent but dissents in opposite directions.

 

The majority voted to lower rates 0.25%. Yet some FOMC members wanted even larger cuts of 0.50%, while others wanted no cuts at all. This kind of “three-way” disagreement is almost unheard of. It gets worse. Most participants agreed that the economy has been stabilizing. Inflation appears poised to make a comeback from recent disinflation (the weakness in prices was “transitory”). If that’s true, why cut rates at all?

 

Yet the same minutes show concern about slowing growth due to trade wars and declines in manufacturing output. Which is it, stable growth or slower growth? The Fed is in complete disarray. There’s no intellectual coherence and no consensus on policy. That’s not surprising because the Fed’s models are badly flawed.  The importance of these minutes is not the policy decision but the light they shine on the Fed’s own confusion. Some Fed members want to cut a little, some want to cut a lot and some don’t want to cut at all. They are already contemplating what to do when the Fed hits the zero bound:

 

More QE? Negative rates? Both?

 

I received some insight in late July, when I was at the Mount Washington Hotel, site of the 1944 Bretton Woods international monetary conference, to acknowledge Bretton Woods’ 75th anniversary.

 

One of the meetings I attended was deemed “off the record.” One of the members in attendance was a senior official at a highly regarded Fed regional reserve bank. Another was a former member of the Fed board of governors and now a top monetary economist who keeps in touch with current members of the board. The third was a governor of the European Central Bank. In short, we had some of the top central bankers in the world present — not analysts or talking heads but true central bankers.

 

What they discussed was not just critical to markets, but was also surprisingly straightforward. Central bankers are notorious for speaking in elliptical and opaque words and phrases. That was not the case this time. The central bankers told our group behind closed doors exactly what was happening with the economy, where central bank policy was headed and why.

 

The first point they made was that U.S. growth is slowing down and this fits in with an even more distinct slowdown in world growth. Overseas, the picture is more dismal. Germany and the U.K. both had negative growth for the second quarter. China is slowing dramatically. This slowing trend is expected to continue because of head winds from trade wars and currency wars.

 

The next point emphasized by the central bankers was the distinction between nominal interest rates and real interest rates. Real rates are simply the nominal rate (the one you hear about on TV) minus inflation. They insisted that real rates are what count in terms of growth and inflation. On this point, they are certainly correct.

 

The panel’s point was that you cannot describe interest rates as “high” or “low” without considering the real rate. The panel was saying that even if nominal rates are low (they are) real rates are not particularly low (they’re not).  The object of central bank policy today is to achieve lower real rates. Yet the policy goal runs into a conundrum, which is that inflation itself is falling. If you hold rates steady while inflation falls, then the real rate goes up. If you cut real rates but inflation falls by more than the rate cut, then the real rate goes up again.

 

The implication is that nominal rates must be cut sharply to keep pace with falling inflation and to produce lower or even negative real rates.

 

I was extremely impressed with the point the central bankers were making about real rates versus nominal rates. It’s something that most analysts gloss over in their analyses even though they understand the difference.  I was even more impressed with the matter-of-fact way in which the discussion unfolded. Here was an A-list of U.S. and European central bankers telling us that interest rates have to drop sharply to produce low real rates to have any hope of stimulating the economy out of its slowdown.

 

This roadmap to future central bank policy could not have been more clear if they lit it up with neon signs.

 

The last topic discussed by the central bankers was negative interest rates. There’s nothing new about negative rates. In the post-2008 environment, Japan, Germany, Sweden and Switzerland have all used negative rates. The European Central Bank, or ECB, applies negative rates to reserves held there by its member central banks.

 

But again, I was surprised at how relaxed the U.S. central bankers were about negative nominal interest rates. They recognized that the chase for negative real rates might require moving the fed funds target rate back to zero if disinflation persisted or turned into deflation.

 

Once at the zero bound, the Fed might resort to more quantitative easing (QE4 anyone?), but it might also go to a negative interest rate policy. Of course, it could use negative rates and QE as a double dose of easing if the situation required.

 

The Fed panelists made it clear than no decision has been taken on this negative rate policy. They merely made the point that the Fed was perfectly prepared to go there if needed. It was not regarded as controversial by the panelists even though it was completely unprecedented in the history of U.S. monetary policy.

 

I was not shocked at the announced policies, but I was surprised at how matter of fact the central bankers were in announcing them. What we heard was that Fed and ECB policy rates are coming down quickly. ECB rates will go more negative and Fed rates will chase disinflation down to zero and perhaps beyond if needed.

 

We must conclude that a new rate-cutting cycle is underway and rates may fall all the way back to zero before it is over. And quite possibly lower than zero.

 

Jim Rickards

 

Jim Rickards is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He was the principal negotiator of the rescue of Long-Term Capital.

 

Hard Assets Alliance was created as a cooperative of investment professionals who believe there's a better way to invest in precious metals. This is a guest perspective on the markets from one of these partners; we hope you enjoy it.

For more postings by Hard Asset Alliance, click HERE

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WealthCare Connect may receive compensation from Hard Asset Alliance for purchases make through links(s) on this website.

How Much
October 9, 2019

Trade talks between the United States and China are ongoing, with another round of talk set to launch soon. The standoff remains with just over a year to go before the 2020 presidential election. Two-thirds of voters said in a recent poll that tariffs on Chinese goods will increase prices on U.S. goods. But what are those goods, anyway? Likewise, what does the U.S. export to China? 

  • U.S. imports from China are down 12.5% for the year amid new tariffs.
  • China, once the number one trading partner with the United States, has since fallen to third.
  • U.S. soybean exports to China are expected to be one-third of what they were in the previous year.
  • A thirteenth round of trade negotiations between the U.S. and China is set to kick off this week.

The data comes from the Observatory of Economic Complexity, a data visualization site for international trade data created MIT Media Lab’s Macro Connections. The visualization depicts both the United States top ten categories of exports to and imports from China. The left half of the viz depicts imports, and the right half exports. Each are sorted from high to low. A darker shade of pink indicates a higher level of imports, and a darker shade of blue indicates a higher level of exports. 

Top 5 Imports from China to the U.S. 

1. Telephones for cellular networks or for other wireless networks: $43.67 B (9.80% of total imports)
2. Automatic data processing machines: $37.24 B (8.40% of total imports)
3. Tricycles, scooters and similar wheeled toys and other toys: $12.32 B (2.80% of total imports)
4. Communication apparatus: $11.25 B (2.50% of total imports)
5. Games; articles for funfair: $5.35 B (1.20% of total imports)

Top 5 Exports from the U.S. to China 

1. Aeroplanes and other aircraft: $13.13 B (9.90% of total exports)
2. Soya beans: $12.46 B (9.40% of total exports)
3. Vehicles with only spark-ignition internal combustion reciprocating piston engine: $7.89 B (6.00% of total exports)
4. Electronic integrated circuits; Processors and controllers: $4.95 B (3.70% of total exports)
5. Oils: $3.97 B (3.00% of total exports)

China’s economy may be known by American consumers mostly for its electronics exports, and indeed the majority of America’s most-imported Chinese products are in electronics. But more than just an exporter of keyboards and DVD players, China has become a significant leader in areas like currency reserves and GDP, as illustrated by this HowMuch article

That said, the rise of China’s economy coincides with its rise in trade with the United States -- namely with the trade deficit, which has doubled in just ten years. This trend has not escaped the attention of the current U.S. administration, who has imposed tariffs on various Chinese goods to level the playing field in trade. What goods are affected? Chinese electronics, the biggest import, have fallen 4.4% since last year. On the other side, semiconductors and processors are a significant export to China. Huawei, a major Chinese tech company, has been placed on a U.S. blacklist requiring American firms to obtain government permission to sell to the company.

Aside from technology, the U.S. is a major natural resources and agriculture exporter to China: of particular interest are soybeans and oil. The former is hurting: U.S. soybean exports to China are expected to be one-third of what they were last year, and prices of the commodity have fallen by half. On the other hand, U.S. crude oil exports set a new record-high monthly average of 3.2 million barrels a day in June, even briefly surpassing Saudia Arabia as the world’s leading exporter of oil, despite the trade war with China. Nevertheless, the oil market appeared at an inflection point as the U.S. and China are set to resume a thirteenth round of trade talks. 

How will the trade war with China affect the U.S. trade deficit? How will it affect the election? What products were you surprised to find on the list? Let us know in the comments and share with your friends. 

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How Much
October 7, 2019

How much of the federal budget is dedicated to helping children? From healthcare and nutrition to education and tax benefits, the United States government spends hundreds of billions of dollars on children.

To see exactly how much the federal government spends on the nation’s children, we created an easy-to-read visualization using data from 2018.

Federal spending on children is decreasing and recently hit a 10-year low.
● The majority of federal spending on children goes towards healthcare, including things like Medicaid and vaccinations.
● The United States’ interest payments on debt will soon surpass total federal spending on children.
● A large portion of federal spending on children comes from tax reductions, such as the child tax credit.

To create our visualization, we used data from the Urban Institute’s annual report on federal expenditures on children. This report provides a complete picture of federal spending on programs and tax provisions that benefit children. Using this data, we created a sunburst chart to demonstrate how much the federal government spends on children in total and how this money is divided between different programs.

Top Categories for Federal Expenditures on Children

1. Health: $116.2 billion
2. Tax Reductions: $105.5 billion
3. Refundable Portions of Tax Credits: $72.7 billion
4. Nutrition: $57.2 billion
5. Income Security: $54.7 billion

Top Programs for Federal Expenditures on Children

1. Medicaid: $93.3 billion
2. Child Tax Credit (Nonrefundable): $54.9 billion
3. Earned Income Tax Credit: $52.1 billion
4. SNAP: $29.7 billion
5. Exclusion for Employee-Sponsored Health Insurance: $25.1 billion

In total, the United States government spent more than $484 billion on children in 2018, or about $6,200 per child under age 19, according to the report by the Urban Institute. The majority of this spending is dedicated to health costs and tax provisions.

While this may seem like a lot, it is actually lower than government expenditures on children in 2017 due to lower spending on education, nutrition, and child tax credits. Spending is expected to drop even more as the portion of the federal budget dedicated to children is expected to drop to 7.5% over the next decade. As child-related federal spending continues to decrease, the United States will soon be spending more on interest payments on debt than on children.

According to the Urban Institute's report, the United States has the second-highest child poverty rate among 29 developed countries. Despite high child poverty rates, the United States is continuing to decrease federal spending on children. By analyzing this visualization, we can see not only how much money the federal government spends on children, but also which programs this portion of the budget is applied to.

Do you think the U.S. should reevaluate its child-related expenditures? Should a larger portion of the federal budget be dedicated to children? Let us know in the comment section below.

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How Much
October 3, 2019

The world’s economy is seemingly poised for a slowdown, due to factors such as shifts in consumer spending, decreased global investment, and escalating tensions in the trade war between the U.S. and China. Historically, a variety of changes in international politics, technology, and monetary policy have influenced the trajectory of the world’s economy. Our newest visualization offers a timeline of the world’s economic history, with an emphasis on how worldwide GDP by purchasing power parity (PPP) has changed in response to major world events.

  • In 2018, worldwide GDP by purchasing power parity was more than $121 trillion. In 1 A.D., it was only $184.1 billion.
  • Economic growth increased exponentially after World War II, nearly tripling worldwide GDP from 1940 to 2018.
  • Advances in technology such as the Internet have also been responsible for some of the largest jumps in worldwide GDP. Between 1993 and 2018, worldwide GDP more than doubled.

For this visualization, we retrieved recent GDP by PPP data from the World Bank. To obtain the historical GDP numbers, we applied the period variation calculated with Maddison’s historical GDP database, which provides information on economic growth over the long run. All values are expressed in constant international dollars from 2011. The x-axis of the timeline lists the years ranging from 1 A.D. to 2018, while the y-axis lists the world’s GDP in trillions. The line showing the world’s economic growth over time is shaded in purple, with lighter shades of purple representing lower GDP and darker shades representing higher GDP. Interspersed along the chart, we have also included pink circles highlighting major events that have had an impact on the world’s economy.

The way that people exchange goods and services has changed over time. In prehistoric times, bartering was the main economic activity. Over time, civilizations developed coins and paper money as currency to be used for trade. Fast forwarding to the twentieth century, credit cards made it even easier for consumers to make purchases and generate more demand for products and services. In addition, the rise of cryptocurrency in the twenty-first century has also revolutionized the way we use money across borders and could play an even greater role in the future.

Another theme in the timeline of the world’s major economic events is the increased interconnectedness of different nations’ economies. The rise of mercantilism after Columbus’ contact with the New World and the creation of Dutch East India Company affected how European nations viewed their own economies in relation to each other as well as colonized parts of the world. Global interconnectedness has also caused economic strife among countries in more recent years. For example, the OPEC oil embargo in the 1970s caused massive stagflation in the U.S., while the current trade war between the U.S. and China is affecting workers and consumers in the world’s two largest economies. As we rapidly approach a new decade, it will be interesting to see what new events will continue to shape the world’s economic history.

What other events do you think have shaped the world’s economic history? Please let us know in the comments.

 

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How Much
October 2, 2019

You obviously went to the best college. No one can tell you otherwise. But... there might be an objective way to measure colleges. With student debt climbing every year, we need our choices validated. We put together a comprehensive list that includes things like student satisfaction, alumni salary, and more. This gives us a comprehensive measure of what it means to be the best. So, let’s dive into which schools are the best by state.

  • Famous schools like Harvard, Princeton and Stanford top the list for starting salaries.
  • However, you can graduate from the U.S. Air Force Academy, with $0 in debt. 
  • 9 of the top 10 schools for best salary after graduating are private schools.
  • 32 of the top 50 schools are private when you look at the best college selected for each state.

Selecting the right college balances cost and post-graduate salary. We balance in-state tuition vs. out-of-state tuition, private vs. public, scholarships vs. strong alumni programs. But students want to make the most out of their time. So how do you measure all the different pieces? What tells us which school is best? Forbes looked at five categories to determine the best schools: alumni salary (20%), student satisfaction (20%), debt (20%), American leaders (15%), on-time graduation rates (12.5%) and academic success (12.5%). Their approach attempted to balance various categories for choosing the right college.

Top 10 Colleges By State & Starting Salary

1. Stanford University, California, Private - $79,000
2. U.S. Air Force Academy, Colorado, Public - $76,300
3. Princeton University, New Jersey, Private - $75,200
4. Harvard University, Massachusetts, Private - $74,800
5. University of Pennsylvania, Pennsylvania, Private - $72,800
6. Darmouth University, New Hampshire, Private - $71,500
7. Duke University, North Carolina, Private - $71,100
8. Rice University, Texas, Private - $71,000
9. Yale University, Connecticut, Private - $70,300
10. Cornell University, New York, Private - $70,100

People often think the more money you spend the better the education. That isn’t necessarily true. You don’t have to spend more on college to get a better education. Beyond the Ivy League colleges many excellent choices exist, even for low income families. Government schools like the U.S. Air Force Academy offer an opportunity to exchange for public service

Students look at a variety of factors when they choose their school. Deciding where to go balances factors such as living costs, average loan size needed, scholarships available, degrees offered, as well as post-graduate placement. While each person’s situation is unique, it’s important to look at what matters to you. Strong alumni programs help students find jobs after college. Brand names like Harvard and Stanford help to open doors with big power brokers. Hidden gems like Yale may surprise you at how affordable they can be.

Looking past personal bias, do these numbers make sense? Does the Forbes methodology include all the important factors to find the best colleges? Or do they miss some key elements? Let us know in the comments.

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How Much
September 30, 2019

In an age of “unicorn” companies, which are private companies with billion-dollar valuations, and even trillion dollar companies, it can be difficult to mentally comprehend important financial metrics due to their enormity. Worldwide corporate profits are certainly one such measure, with many companies clearing hundreds of billions of dollars annually. 

  • 70 companies around the world earn over $1 million in profits in one hour or less.
  • Globally, the corporate profit pool is expected to shrink to 8% in 2025 from 10% today.
  • In the United States, corporate profits remain below their 2014 peak.
  • Saudi Aramco, the world’s most profitable company, is planning an IPO in 2020 in the face of attacks on its facilities.

One way to make the enormity of annual profits more comprehensible is to instead measure daily profits, and we’ll take this strategy for our analysis. The data comes from the latest rankings of the Fortune Global 500. Our viz uses a radial stacked bar chart to compare the daily profits of the top twenty most profitable companies. A darker shade indicates a higher profit.

Daily Profits of the Ten Most Profitable Companies on Earth

1. Saudi Aramco: $304.04 M daily - Earns $1 M in 4.7 minutes
2. Apple: $163.1 M daily - Earns $1 M in  8.8 minutes
3. Industrial & Commercial Bank of China: $123.29  M daily - Earns $1M in 11.7 minutes
4. Samsung Electronics: $109.3 M daily - Earns $1 M in 13.2 minutes
5. China Construction Bank: $105.48 M daily - Earns $1 M in 13.7 minutes
6. JPMorgan Chase & Co.: $88.97 M daily - Earns $1 M in 16.2 minutes
7. Alphabet: $84.21 M daily - Earns $1 M in 17.1 minutes
8. Agricultural Bank of China: $83.99 M daily - Earns $1 M in 17.1 minutes
9. Bank of America Corp.: $77.12 M daily - Earns $1 M in 18.7 minutes
10. Bank of China: $74.59 M daily - Earns $1 M in 19.3 minutes

To standardize the analysis of the world’s biggest corporate earnings, we’ve also calculated how long it takes each of the ten most profitable companies worldwide to earn $1 million in profits. It’s well under half an hour for each -- by the time you’ve finished reading this article, you can count on tens of thousands more. Most of the top ten operate in either the banking or technology industries, with headquarters in the United States or Asia (namely, China). 

The one exception: Saudi Aramco. The Saudi national energy company is the most profitable on earth, nearly doubling that of the second-place Apple. Saudi Aramco is going public in 2020, floating up to 10% of the company. This is planned in the face of recent attacks on its oil facilities and mounting tensions among Saudi Arabia, Iran and the United States, among other countries.

The Asian firms on the list, with the exception of Samsung, are state-owned Chinese banks. Amid the trade war with the United States, Chinese banks have been reluctant to lend. The Chinese central bank in response has left interest rates unchanged in the face of declining rates worldwide. These policies will have mixed effects on the profitability of these so-called “Big Four” Chinese banks. 

Tech companies are also among the most profitable, and smartphones are key to two of the ten. Apple may be losing margins on phones as customers lean toward less expensive models. To counter this industry trend, Samsung is re-launching its $2,000 luxury foldable phone.

What surprises you about the data? Which is the most profitable company in your country? Did stating profits in terms of daily earnings help? Where are corporate earnings headed in the future? Let us know in the comments and share with your friends. 

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