Derek Thompson

On Tuesday, the S&P 500 and the Dow closed at nominal all-time highs. Three days later, the Bureau of Labor Statistics reported that the economy added a shockingly low 88,000 jobs in March. How bad is 88K? Well, put it this way, we're theoretically in the midst of an accelerating recovery, and 88K new jobs per month won't get us back to full employment for another 20 years, or more.

I suspect that this will be one of the defining national stories of 2013, and beyond: The big, sustained, and accelerating gap between the working opportunities of most Americans and the profits produced at the top.

You could argue that this is a new, and transitory, story. You could say I picked two headlines from the past four days (I did). You could say that firms rushed to technology and efficiency to replace workers in an exceptional, and slowly normalizing, crisis (they did). You could say that the balance between labor and capital might naturally come back to normal as rising Asian wages send more work back into the U.S. (they might).

But when you draw back the lens, you see that this week's stock market/labor market schism isn't a new story, at all. Here's the 40-year look at the growth of corporate profits vs. GDP vs. income that goes to workers, rich and poor. I mean, holy wow.

Why are corporations on such a tear? The first clue is that a significant share of these profits have always come from two sectors, as Jordan Weissmann has reported: Manufacturing and Finance. Together, they account for more than 50 percent of domestic corporate profits. But they employ just 13 percent of the workforce. 

Manufacturing and finance are both global industries, and global industries have advantages on both sides of the profit equation. First, they have access to demand in countries that are growing quickly, especially in Asia and Latin America. Second, they have access to workers in countries with cheaper wages.

Meanwhile, the fastest-growing jobs in the U.S. over the last few decades have been in industries insulated from globalization, precisely because so many jobs in worldwide industries like manufacturing have escaped overseas. Between 1990 and 2008, virtually all (97.7 percent) of the net new jobs came from what economists call the "nontradable" sector, which is a funky way of saying the work must be done locally (e.g.: government, education, health care). Even in the recovery, health care, food service, and other local and low-paying industries have led the jobs recovery.

Workers in local industries might have access to the global capital boom if they saved and invested in a markets whose growth represented the success of global companies and the flow of global capital. But they don't, really. Many families hardly have any savings outside of their 401(k) at all. Eighty percent of stock market wealth goes to the top 10 percent (graph below).

This isn't shocking. People with more money have more money to save and invest, which typically makes wealth inequality wider than plain-old wage inequality. But it exacerbates the trends we're seeing from the top: Small local jobs falling behind the runaway train of global capital.

No matter how you want to break down the schism -- 99% vs. 1%; wages vs. wealth; labor vs. capital; local vs. global -- this thing is real and there aren't many good reasons to expect it to go away, whether we have a great jobs report (last month) or a bad jobs report, like this week. This is the economy, now.

Let's talk about marriage. Today, young people get married later. There are more unwed mothers. And gay marriage is winning broad support.

These are three true things about marriage. But three true things about marriage don't necessarily have anything to do with one another.

The connection between the rise of gay marriage and the fall of straight marriage has been made, most notably, by Times columnist Ross Douthat, who has asked liberals to acknowledge that the mainstreaming of gay marriage just might have led the an increase in unwed moms and the decline of the institution, in general. This is dubious, for two big reasons. First, support for gay marriage is highest among higher-educated, and higher-earning people, who are less likely to have children out of wedlock. Second, if gay marriage were *behind* the rise of unwed mothers and delayed marriage, it would theoretically have to come first. But it didn't. As we'll see, out-of-wedlock births and delayed marriage were already underway before the 1990s, when gay acceptance suddenly exploded.

So let's ask three natural follow-up questions: When did support for gay marriage increase? Why are Millennials getting married later? And what's behind the rise of unwed mothers?

Where did gay tolerance come from?
(Starts with: Late Gen-Xers and Millennials growing up in an era of increasingly gay-friendly media)
As defenders of all strains of equality like to say, the arc of history is long, and it bends toward justice. But for gay marriage, it bent particularly quickly and shortly.

We're going to tell this story in charts. First, between the 1970s and early 1990s, there was practically no change in public attitudes towards gays. In the 20 years after 1990, the gap closed by an astounding 60 points.

Practically NOBODY strongly supported gay marriage in the late 1980s. It was unheard of. Today, it's mainstream, and about half the gap closed before 2004. Remember: It wasn't until 2003 that the Supreme Court ruled that gay people shouldn't be thrown into prison for consensual sex -- in the same year, the British government officially allowed the teaching of "the acceptability of homosexuality." This was an incredibly rapid change.

The public today is roughly evenly split over gay marriage, but when you break this down by age, you see the vast majority of resistance comes from older Americans, and support comes from the youngest.

Big picture: Gay acceptance, which took off in the 1990s, led to gay marriage acceptance, which advanced in the last 20 years. By the time that late Gen-Xers and Gen-Yers reached young adulthood, the vast majority of them simply didn't care about homosexuality. It just wasn't a thing.

Mark McCormack, the author of The Declining Significance of Homophobia, attributed it to two factors that are essentially one factor, which is media exposure: (1) The rise in openly gay performers and characters normalized homosexuality for young kids listening to music and watching TV and movies; and (2) the Internet revealed to young people outside of liberal urban bastions that being gay simply wasn't that weird.

Why are there so many unwed (mostly lower-income) mothers?
(Starts with: Decline of low-income men combined with women empowered to make their own decisions about motherhood)
Between 1970 and 1990, out-of-wedlock births nearly tripled for black infants to 64 percent and sextupled to 18 percent for whites. (You can see the huge 1970-1990 increase in the picture below, from Family Facts:) This happened over two decades when attitudes toward homosexuality did not change by a single percentage point.

There are two empirical schools of thought here. First, there is an economic explanation for why more disadvantaged women would resist marriage. Second, there is a "tech shock" explanation for why more disadvantaged men would resist marriage.

One thing that changed is that low-income men got demolished in the labor market starting in the 1970s with the demise of manufacturing (and, later, retail hours) and marriage became an unappealing contract for their girlfriends. Poor men saw, by far, the largest drop in marriage rates. (This is the "they're not marriage material" argument, writ very large.)

Poor women surrounded by men who more likely to be unemployed, underemployed, or incarcerated are ditching unions that might be seen as a financial drain. As William Julius Wilson argued, "high rates of unemployment and incarceration meant that the local dating pool was populated by unmarriageable men--and the result was that women chose to live independently."

But there's another answer that George A. Akerlof and Janet Yellen famously offered in a Brookings paper. In a sentence: Abortion and contraception laws empowered women to make decisions about keeping children, and this ironically freed men from the obligation to promise marriage to their sexual partners.

It's a clever, but somewhat complicated argument that comes down to the decline in shotgun marriages.

They write that "75 percent of the increase in the white out-of-wedlock first-birth rate, and about 60 percent of the black increase, between 1965 and 1990 is directly attributable to the decline in shotgun marriages." What in the world do the availability of contraceptives and the liberalization of abortion laws -- both late-60s/early-70s developments -- have to do with shotgun marriages? Shotgun marriages prevail in an environment where men and women assume that all pregnancies lead to children. But since the 1970s, sexual activity has increased without an expectation of marriage. Men realized that they didn't have to trade the promise of marriage-in-the-event-of-a-pregnancy for sex.

In their words: "By making the birth of the child the physical choice of the mother, the sexual revolution has made marriage and child support a social choice of the father." As unwed mothers became more common, they became more socially acceptable. This made it even easier for men and women to not marry in the event of a pregnancy: Nobody else was doing it, either.

Why are people getting married later?
(Starts with: More educated women and the Great Recession.)
Well, this is complicated. I mean, every question in this article is complicated, but this question is complicated. For a longer explanation, I'll direct you here.

For our purposes, let's boil it down to the short-term explanation and the long-term explanation. The short-term explanation is very clear. It's the recession, which has delayed every hallmark of young adulthood -- getting a job, moving out, getting married, having kids, and so on.

But this delay is part of a longer delay of marriage that stretches back about half a century. As more women attended college and worked through their 20s, they built enough financial independence to wait for marriage. Meanwhile, the cost of being single fell dramatically, as birth control technology extended courtships, home tech (e.g. washing/drying machines, video games) made it easier to live alone, happily and cleanly. As you can see in this study by Betsey Stevenson and Justin Wolfers, marriages per capita have been declining since the 1940 (except for a little boomer-fueled uptick in the late-1960s):

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If you're furious about the cost of cable TV, and you don't watch sports, just close this window and walk away. Seriously, don't even read another paragraph. It'll just make you too angry.

Still there? Okay, so here's where we left things last time we discussed the economics of sports and television.

In a sentence: Television economics are sports economics, and sports economics are television economics. Sports accounts for half of the programming costs of TV, and TV accounts for more than half the revenue of many professional sports leagues. Without television, professional sports could scarcely exist. Without sports, the TV cable bundle -- and the golden age of television that it's ushered into existence -- might unravel entirely.

Your cable bill -- $80 or $90, or whatever it is -- is best understood as two prices. The programming (i.e. the channels you watch) and the distribution (i.e. the infrastructure and profits for the cable companies). Every time you pay a cable bill, the channels collect a small fee. It's called an "affiliate fee." The most in-demand channels tend to negotiate the highest fees. And those tend to be sports channels. Take a look.

There's no great mystery here. Sports are expensive because they are valuable. And sports are valuable because they attract a larger live audience than average prime-time shows. That's the big picture. A 2013 report from RBC, "Moneyball: The Current State Of The Sports Media Landscape," sharpens the image.

Here's a great picture of the sports premium, drawn from data in the report. The gap between NFL viewership and primetime viewership is large and growing. In 2002, NFL games averaged about 15 million viewers and broadcast primetime shows averaged about 10 million. In 2012, that 50 percent gap exploded to a 150 percent chasm between the NFL and non-sports programming.

I used the NFL, because just as sports economics dominate the price of TV, NFL costs dominate the price of sports. The NFL accounted for 30 percent of sports advertising and 36 percent of sports rights in 2012.

By my rough calculation, if you pay $90 a month for cable, you are paying about $76 a year (about 7 percent of the total cost of cable TV) just for the NFL.

If you don't watch sports, you are literally paying an annual subsidy to support your sports-fan friends. But wait. Before you get more upset, consider this. You're *also* paying the media companies that produce some of the great shows you like on other channels. Roughly 28 percent of Disney earnings -- and 23 percent of News Corps' cable earnings -- come from sports channels.  These sports channels are profitable. And those profits can cover the cost of content on ABC (owned by Disney) and FX (owned by News Corp).

Sports keeps the cable bundle together. And the cable bundle is powering the media companies through a remarkable surge in quality TV entertainment.

There are 4.3 million retail salespeople in the United States, equivalent to the state population of Kentucky. And there are 310 prosthodontists -- that is, dentists specializing in prosthetic teeth -- which is enough to fill, well, a medium-sized lecture hall.

Those are the most- and least-common occupations in the United States, according to a new survey from the Bureau of Labor Statistics. Here are the full top- (and bottom-) ten lists:

Three more interesting nuggets from the report.

(1) The most "urban" job in America -- that is, with the highest concentration in metro areas -- isn't technically a job in U.S. cities, but above U.S. cities. It's flight attendants. 

(2) What's the most common government job? Depends on the level of government. At the federal level, it's postal service workers. In state governments, it's correctional officers and jailers. And at the local level, teachers aren't just the largest job category. At various levels of education, they're the five largest job categories.

(3) Shampooers are more likely to live in cities than software developers. Now you know. If you're interested in learning more about shampooers, this page is your new heaven.

Technical note: There are surely scarcer jobs than prosthodontists, it's just that the BLS doesn't count them. Take, for example, I don't know, rodeo clowns. How many rodeo clowns are there in America? I haven't the faintest idea. Neither does the BLS. Last year, it published a report on rodeo clowns, in which the author bravely admitted: "The U.S. Bureau of Labor Statistics does not collect employment or wage data on rodeo clowns." So to be precise, these are the least-populated job categories in the BLS Occupational Employment Statistics.

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Like Western democracy, Socratic philosophy, written histories, epic poetry, and every other foundational pillar of high culture, spring break began in ancient Greece.

Called "Anthestreria" by the local teens, and their parents, it was a festival dedicated to Dionysus, the god of wine and whoopee and just about every excuse to party. For three days, people would dance, singers would perform, women would deck themselves with flowers, and Greek men would compete to see who could be the fastest to drain a cup of red wine.

Two thousand years later, practically nothing has changed except our taste in chugging alcohol. While Anthestreria is immortalized in terracotta wine vessels in world-class museums (below), you might think today's spring break rituals are as easily forgotten by history as they are by memory-blighted college students. But for the American cities that host students, the impact is not so brief, as John Laurie explained in his fascinating economic study Spring Break: The Economic, Socio-Cultural and Public Governance Impacts of College Students on Spring Break Host Locations.

The paper begins, as spring break did, in Greece, before the rise of Christianity put an end to kylix head-stands and other childish things for two thousand years. It wasn't until the mid-twentieth century that modern spring break emerged. In 1934, Sam Ingram, a Colgate College swim coach, was looking for a warm place to keep his swimmers in shape. He chose the small, quiet town of Ft. Lauderdale, Florida. More swimming instructors followed. During World War II, rich Ivy League students, who occasionally visited Bermuda during their spring breaks, were suddenly spooked by rumors of German U-Boats roaming the Caribbean. The best intracontinental alternative was to meet up with the swimmer co-eds in Florida. And so, Ft. Lauderdale became the first official home of the American Anthestreria tradition.

The Spring Break Effect
Fast-forward six decades and, by the early 2000s, nearly 40 percent of college students travel en masse for spring break, spending "nearly $1 billion" in Florida and Texas alone, according to Laurie. In addition to the peculiar joy of reading a paper with these sort of topic sentences -- "Spring Break has a temporal as well as descriptive definition" -- it makes a substantive point about the economic benefits of spring break to the cities receiving hoards of boozing college students.

The spring break effect is, in a word, meh.

But how exactly do you measure "the spring break effect"? Laurie graphs sales taxes and hotel development taxes for various undergrad hotspots in Florida, Texas, and Arizona. His overall conclusions are:

(1) Spring break can be great for some small businesses and bars that make their money selling cheap rooms and liquor on volume; BUT ...

(2) It's not a dependable revenue generator for the counties at large, which suggests the economic benefits of the event are overrated, even for the most popular destinations; AND ...

(3) The only local industry that is clearly and consistently stimulated by spring break is law enforcement.

What Hath Spring Break Wrought? The Panama City Story
Just inside the armpit of Florida's panhandle, looking into the Gulf of Mexico, sits Panama City Beach, the "spring break capital of the world." Every year, the area draws up to 500,000 college students -- that's 42 co-eds for every city resident counted in the 2010 Census. For many years, Panama City has been MTV's home base for spring break coverage, and partiers spend $170 million during six-week period, according to a 2004 study.

Sounds like quite the stimulus. But Laurie's research in Bay County (home to Panama City) found that "the sales tax collected in Bay County during the month of March is actually the lowest of any month" before ticking up in April. Here's the chart:

What about hotel taxes (i.e.: tourist development receipts)? It's a similar story. July is the year's clear winner. March and April, while a huge improvement over February, are hardly better than May or September.

How is spring break so economically tame? Here are two conclusions, besides the possibility that Laurie's data simply does not properly reflect the benefits of spring break. First, college students are cheap and poor. They buy bad booze in bulk, they sleep five to a room, they lie out under the sun with nothing but alcohol and tanning lotion, and they hunt around for the best deals for dinner and accommodation, even if it means staying in a different city and driving to the beach every morning.

Second, although the spring break effect is weak, it's still there. March and April are considerably more lucrative for Bay County than January and February. In defense of college students, maybe they don't spend as much money as the four-person families who fill out Florida over summer vacation, but they might pull forward the spring vacation season by a few weeks.

If you're wondering how half a million people leave so little a mark, however, the proper response is that they do leave an unmistakable mark on local crime and non-criminal citations. March is by far the year's worst month for public safety in Panama City Beach.

It is notable that almost all of the cities in the paper saw extraordinary business and income growth in the mid-2000s. But since these years coincided with the heyday of the housing boom rolling through the sunbelt, it's reasonable to suggest that spring breakers might not have been the first (or 100th) most important factor in Florida's economic development.

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Murkiness makes for lovely impressionistic ambiance, but it's less attractive in price marketing [Met/Wikimedia Commons]

Many of the Met's 6 million annual visitors pay $25 to see the country's largest collection of art. Some pay out of a sense of obligation. Many pay because they don't know they have a choice. It's easy to read the board listing prices for adults and children without seeing the small font saying "Recommended." Ask for a ticket, and you will be told "$25."

It's pretty clever nudging. But maybe too clever. Like, illegal-clever.

A new lawsuit accuses the Met of violating the spirit of a 1893 New York state law "that mandates the public should be admitted for free at least five days and two evenings per week," according to the AP.

If you still feel guilty about not paying the full price, consider that the museum receives annual grants from the city without paying taxes or rent, has a $2.5 billion investment portfolio, and uses admissions to cover only 11 percent of its operating costs. Six in ten Met tourists don't pay the full $25, but as the AP reporting reveals, many of the people who don't pay are locals who know they don't have to, while it's the unwitting out-of-towners who get yoked into chucking up the full price. Third-party websites don't say the fee is recommended.

Still, the suit goes way too far, "seeking compensation for museum members and visitors who paid by credit card over the past few years." Clearly, the museum can't be expected to find and interview 20+ million people to discover who would have paid what amount between $0.01 and $25 had the font size for "Recommended" been slightly bigger. Let's just hope the suit encourages the Met's signage to be clear enough to out-of-town groups who don't realize they have to pay $100 to see public art.

(via Max Read)

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We speak of The Federal Budget as a monolith. But there's nothing monolithic about the federal government. What we call "Washington" is a million little and big programs doing a million little and big things, but we add them all up to One Number, because they all fall under the umbrella of federal spending.

So, let's be a little more specific (but only a little). Let's talk about two federal budgets. The part that's growing. And the part that's shrinking.

What's growing, as a share of the economy over the next 20 years is Medicare, Medicaid, and Social Security. What's shrinking is, well, everything else. At a glance:

You would think that a serious deficit hawk would want to cut the part that's growing. Instead, what Paul Ryan's plan does over the next ten years is to concentrate 97 percent of his $5.6 trillion cuts in the part that's already projected to shrink. He hardly cuts Medicare or Social Security, at all ...

... to which you might say, "Great!" Say you're in your 50s, you love Social Security, you don't want Medicare to change, and you happen to hate infrastructure, education, R&D, and income-support programs for the poor. This is the plan for you!

But let's say you're worried the federal government is pulling away from productive spending on young people and infrastructure. Let's say you know the U.S. government already spends 2.4 times as much on the elderly as on children, more than practically any economy except Japan and Greece (some company, there). Let's say you don't think we should slash our already-shrinking investments in the future to spare our already-growing insurance payments to retired folks. Then this is not the plan for you at all. It's the opposite of the plan for you. It's an excuse to drown productive federal spending in a bathtub to protect spending on today's older voters at all costs and, just as importantly, spare the rich from paying more taxes.

The deficit debate isn't just about the deficit figures we want. It's about the kind of government we want. Demographically speaking, government of the old, by the old, and exclusively for the old is probably going to perish sooner or later, don't you think?

This is a seriously cool graphic from Wired showing how NBC, CBS, and ABC lost their stranglehold on Emmy nominations in the 1990s. First HBO came along with "The Sopranos", "Sex and the City", and "Six Feet Under." Then Showtime, AMC, and FX gobbled up the nods in the last few years.

"More Competition = Better TV," Wired concludes. That's right. It is awesome to love TV at a time when half a dozen premium cable channels will throw tens of millions of dollars at auteurs and showrunners. But the *real* reason that great television is (a) in its golden age and (b) mostly on cable is all about the business model.

Broadcast channels (like CBS) and cable channels (like TNT) are both in the television business. But they're not in the same television business.

Broadcast gets more of its money from advertisers. Cable networks get more of their money from being on cable. Out of every $80 you pay to Comcast, each channel gets a little cut. That cut is the lifeblood of cable earnings.

If you own a broadcast channel, your job is to develop as many shows as possible that attract a wide audience. The formal term for most of these shows is "produced for a mass audience" but the common term is "relentless crap." Then again, it's an advertising game. So broadcast aims broad.

But if you own a cable channel, your first goal is to develop a handful of "hits" that get you on that bundle to get guaranteed monthly income from tens of millions of subscribers. The rest of your lineup can be cheap "Law & Order" and "House" reruns, for all you care. Ratings don't matter as much if advertising doesn't matter as much. America's "best" shows -- like "Breaking Bad" and "Mad Men" -- are all ratings dogs, each struggling to get a Nielsen rating higher than 3. But it doesn't matter, because AMC's cost structure allows for a few elite shows, one huge show ("Walking Dead"), and a lot of reruns.

Television audiences hate the cable bundle, because they think they're paying for television they don't want to watch. But they don't often appreciate that (a) the bundle is created by media companies, not cable companies, and (b) it's at least partially responsible for the golden age of television that we're living through. It's created a motivation for no-name cable companies to make great entertainment.

Here it is: In 2012, newspapers lost $16 in print ads for every $1 earned in digital ads. And it's getting worse, according to a new report by Pew. In 2011, the ratio was just 10-to-1.

The digital ad revolution, always "just around the corner", remains tantalizingly out of reach for most newspapers, which explains why some stalwarts like the New York Times and Wall Street Journal have moved to subscription models for their websites to bolster digital ad growth. Just today, the Washington Post announced a paywall.

Here's the ten year picture of print vs. digital ads for newspapers:

Since 2003, print ads have fallen from $45 billion to $19 billion. Online ads have only grown from $1.2 to $3.3 billion. Stop and think about that gap. The total ten-year increase in digital advertising isn't even enough to overcome the average single-year decline in print ads since 2003. Ugh.

Who killed newspapers? The classic response is the classifieds, and it's true that websites offering direct information about housing, rentals, cars, and other goods and services that once found a unique home in newspapers have gutted the old revenue model. "More than three-quarters of print classified revenue has been lost since 2000," Pew reports.

But as you can see, the majority of print's ad decline since 2003 has come from retail ads (the most common slice of most newspapers' revenue pie) and national ads. Here's the breakdown of that $25 billion lost over ten years. It's about $11 billion each from classifieds and retail ads, with the remainder coming from national ad spots.

As revenue falls, reporting is falling with it. Newsroom employment fell below 40,000 full-time workers for the first time since 1978 -- and 30 percent below its peak in 2000.

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This was the most shocking statistic I read this weekend: 58 percent of first births in lower-middle-class households are now to unmarried women. Meanwhile, two in five of all births are to unwed mothers, an all-time high, according to the Centers for Disease Control and Prevention.

Why?

The thesis of this fascinating article in the Wall Street Journal says the real mystery here isn't "Why so many babies?" but rather "Why so few marriages?" -- particularly among less-educated men and women.

This is a complex economic mystery that we've explored often at The Atlantic, but we can take a big bite out of it by focusing on three factors: (1) The changing meaning of marriage in America; (2) declining wages for low-skill men; and (3) the declining costs of being a single person.

A New Union
Marriage has changed. Once upon a time, the typical marriage, as Justin Wolfers has explained, involved special roles for the husband and wife. He would work. She would stay home. It was an efficient arrangement where opposites attracted. Men who wanted to be executives would marry women who wanted to be housewives. And, since almost half of women had no independent earnings 40 years ago, there were a lot of women who just wanted to work at home and raise a family.

Several factors mussed up this traditional union. Today women expect to work much, much more than they used to -- and they do. They make up the majority of new college graduates and their labor participation rate has soared over 60 percent. Since 1950, hours of work by married women have increased by roughly a factor of three, according to the Minneapolis Fed.

Now that women are better educated, with greater control over both their fertility and their earnings, modern marriage has changed from an arrangement where men marry for a housewife to a "hedonic" model where both partners can be the breadwinner. As marriage has shifted from opposites-attract to like-attracts-like, researchers have found that sorting has increased all along the educational scale. College graduates are more likely than ever to marry college graduates, as Charles Murray has written. High school dropouts are more likely to marry high school dropouts.

Think of marriage like any other contract or investment. It's most likely to happen when the gains are big. So we should expect marriages among low-income Americans to decline if women perceive declining gains from hitching themselves to the men around them.

That's precisely what we've seen...

Cheap Wages, Cheap Technologies
Low-skill men have had a rough two generations. The evaporation of manufacturing work has gutted their main source of employment, while globalization has held down their wages. Marriage has declined the most among men whose wages have declined the most. Here's a remarkable graph from the Hamilton Project comparing change in earnings (the RED LINE) and change in likelihood to be married (the BLUE BARS).

In a dating pool where poor women are more likely to be surrounded by men with low and falling fortunes, more women have ditched a union for good economic reasons: It could be a financial drain. In The Truly Disadvantaged,  William Julius Wilson, argued that "high rates of unemployment and incarceration meant that the local dating pool was populated by unmarriageable men--and the result was that women chose to live independently."

It is hardly easy to do anything with earnings near the poverty level. But it is relatively easier to raise a child and keep up a home with modern household innovations. The connection between Lunchables, detergent and marriage rates is not often made. But perhaps it should be. The development of time-saving technologies -- cheap prepared foods, cheap clothes, machines to wash, dry, and vacuum -- has not only encouraged more women to seek work, but also made it relatively easier for single parents to raise a child. Put starkly, technology makes it cheaper and easier than ever to be single. It makes marrying a financially unstable man even more risky.

That women find themselves drifting "unintentionally" into parenthood with men they have no intent of marrying creates another generation of problems. Children raised in two-parent households are more likely to go to college, more likely to be employed, and more likely to earn a high wage. The rise of unwed mothers might be logical for many of these women. But there is too much evidence that it deepens the divide between the haves and have-nots in America.

Magical (adj): "delightful in such a way as to be removed from everyday life." [Synonyms: fake, absurd, couldn't-hardly-happen-even-if-Republicans-controlled-both-houses-and-the-presidency]

2.1% and $6.7 trillion

Without context, these are inconsequential numbers. With context, they're magical numbers. So here's the context.

Paul Ryan and his budget have taken lots of flack for giving Medicare an unrecognizable facelift and gutting federal spending on the poor and sick to reach his balanced budget goals next decade. Both of those goals are radical and/or visionary, depending on your opinion of Ryan, but neither are quite magical.

What is magical, however, is thinking you can cut non-defense discretionary spending -- what most people think of as Government -- to 2.1 percent, one-third below its modern low. That's what Ryan's budget does. Here's how he does it.

He keeps the sequester -- a $1 trillion guillotine to non-defense and defense spending. But his breakdown of spending pushes virtually all of those cuts into non-defense categories. In other words, everything in our discretionary budget -- scientific research, housing, international relations, education, public safety, public health, environmental protection, job training -- doesn't just get a sequester. It gets a double-sequester! Plus another $250 billion in cuts, under the Ryan budget. Win the future.

Here's the long view of non-defense discretionary spending, with data from Loren Adler and the Bipartisan Policy Center (plus an assist from Michael Linden at the Center for American Progress). The green line is today's law, including the sequester (a law passed specifically because it was so bad that it would force us to change it). The blue line is the Ryan plan (even worse).

"It's just fake," Linden said. "It's just total fake. Ryan's projection is about a third lower, as a share of the government, than any year since [we have records]. No future Congress would ever approve this."

The second most magical number comes from the other side of the budget. We talk a lot about Ryan's spending cuts. But it's his tax spending cuts that are perhaps the most ludicrous.

Ryan wants to change projected tax revenue by $0.0. But his plan to cut and consolidate rates creates a $6.7 trillion hole in federal revenues, as Matthew O'Brien pointed out. That can only be made up by eliminating the biggest (and most popular) tax breaks. He would almost certainly have to tax employer-paid health care, mortgage interest, charitable donations ... the list goes on and on. Ryan doesn't say what he could cut because it would be despicably unpopular, even more so than his proposed cuts. In fact, his $6.7 trillion in mystery tax-spending are 46 percent more than his spending cuts. (Good luck, Ways and Means Committee!)

If I appear to be disproportionately picking on Paul Ryan, it is only because I am. There is widespread understanding that unemployment is a real crisis, right now. There is thorough economic evidence that our most immediate crisis is long-term unemployment and the permanent structural deficiencies it will create. There is widespread belief that we need to reduce future deficits through a combination of higher revenues and lower spending. Ryan's budget neither protects the unemployed, nor fixes their hysteresis, nor proposes a balanced solution to a future budget problem that it also overemphasizes. Make-believe numbers in the pursuit of misguided goals is dark magic, indeed.

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It's Budget Week in America. First, Paul Ryan released an update to his conservative vision of America, proposing trillions in spending cuts, mostly to health care. Yesterday, Senate Democrat responded with their own budget, which cuts about $1 trillion, raises about $1 trillion in taxes mostly by limiting deductions for richer families, and throws in a $100 billion stimulus.

How do these plans compare? Here's how:

Four key takeaways:

(1) Ryan is most famous for his plan to reform Medicare. But in the next ten years, his budget is first and foremost a sledgehammer to everything except Medicare (and defense and Social Security).

(2) What's "other mandatory" spending? It's mostly income security programs (unemployment insurance, food stamps) and retirement and health benefits for the veterans and federal employees.

(3) Remember that half of the Senate's savings come from new revenue. Even so, Ryan's cuts are far deeper because he intends to balance the budget by the early 2020s, a goal that is arbitrary and almost certainly unnecessary, since we can run small deficits forever (and have).

(4) Zero cuts for Social Security in both plans. Who's afraid of senior citizens? The representatives elected by them, evidently.

Boring (but important, and necessary, etc) methodology note: If you're asking yourself simply, What do these cuts represent? they represent cuts in a world without a sequester.

But comparing these budgets isn't like comparing apples to apples. It's not even like comparing apples to oranges. It's more like comparing an apple to something that looks like an apple, but later you learn is not really an apple.

Let me explain plainly as I can. The Senate Democrats' plan assumes no sequester. The Ryan budgets assumes a sequester in which practically all of the cuts occur in non-defense spending, according to Michael Linden at the Center for American Progress and Loren Adler at the Bipartisan Policy Center. In the nitty-gritty breakdown of spending by function (Defense, Agriculture, Education, etc), Ryan's budget assumes that defense spending in 2023 is practically the same as the CBO projected before the sequester became law. But he also includes total discretionary spending (defense and non-defense) that reflects the sequester.

In short, he dreams a little conservative dream: America keeps the sequester, but moves practically all the defense cuts over into non-defense cuts. Another bit of magic.

Washington might be awful at coming together to pass budgets, but it's rather good at coming together to talk about budgets. Today, The Atlantic is hosting a massive economic conference to debate The Debt, in all its shades -- good and bad, short-term and long-term, public and private, ours and the world's.

Today, I spoke with Alice Rivlin, the first director of the CBO who has worn more hats than I can name -- at the Federal Reserve, the OMB, Brookings, the president's deficit commission, and on the list goes. Her position on the debt is pretty clear. She supports high deficits today, and she supports lower deficits in the next decade. To get there, she wants a balanced approach between discretionary spending cuts, tax revenue increases, and entitlement reforms that save us money, not only in the next 10 years, but in the 10 years after that (... and after that).

What she said didn't surprise me, on a sentence-by-sentence basis, but the sum her statements raises a larger question. She said the Paul Ryan budget reminded her of every other Paul Ryan budget, and not in a good way. She said she had fewer objections to the president's budget, but that she would still like to see more eagerness among Democrats to change entitlements. She said she didn't want to cut spending too dramatically now. She said that the sequester was a dumb idea. She said she didn't agree with Paul Krugman (and other critics of deficit hawks), because she's worried about the long-term right now.

I agree with Rivlin. And I agree everybody else who worries about long-term deficits. I believe that current spending trends, projected over the next 10 or 20 years, point to a risky future for U.S. finances. They don't guarantee a debt crisis. But they dramatically raise the odds.

I just don't agree with her now.

What I'd like for deficits is an Evans Rule.

What does that mean? Late last year, the Federal Reserve adopted a proposal by Chicago Fed President Charlie Evans, who said our central bank should announce that it won't tighten monetary policy until unemployment fell under 6.5 percent (or inflation rose to 2.5 percent).

Once unemployment hits 6.5 percent, I'll root for Washington to sit down at a table with Rivlin, whose deficit reduction plan with the Bipartisan Policy Center was a nice framework for a balanced approach to long-term deficit reduction. Until then, attention paid to the future deficit crisis is attention not paid to the current jobs crisis. I wish that weren't the case, but it is.

Rivlin says she hopes Washington can pass a long-term deficit-reduction budget that preserves high deficits today to protect the recovery. But recent history suggests Washington lacks the will or the faculty to be so bifocal. The Budget Control Act is law, and it cuts the debt by about $1 trillion. The sequester is law, it cuts the debt by about $1.2 trillion. The American Jobs Act and its multi-billion-dollar stimulus? Gone in a blur. The president's budget asking for hundreds of billions of dollars spent right away? Hardly considered, easily forgotten.

Since we started talking about high deficits today and low deficits tomorrow, we've just gotten lower deficits today. Washington would like to think it could walk and chew gum at the same time. It can't.

The sooner the economy recovers, the sooner I'll go from agreeing with Alice Rivlin 50% to agreeing with her 100%.

It balances the budget! But it solves our income inequality problem like a flamethrower solves a house fire.

Paul Ryan's new budget is quite long, but its thesis can be stated briefly. If you cut spending on the poor to the bone and radically change the U.S. government's promises to help needy people pay for health care, it is remarkably easy to balance the budget.

Ryan has been releasing an annual plan to sledgehammer U.S. spending for years now, but this time, the mighty hammer falls with a bit of a tailwind. Our deficits are already going down, by a lot. First was the Budget Control Act of 2011, which scheduled $900 billion of cuts over the next ten years. Second was the Fiscal Cliff Deal, which raised taxes on family income over $450,000. Third was the sequester, which cuts another $1.2 trillion -- half from defense, half from non-defense -- over the next decade.

Ryan pockets all of those savings. And he goes further. Much further. He repeals Obamacare. He cuts federal support for Medicaid. He cuts another $1 trillion from "mandatory spending", which is a deceptively anodyne catch-all for mostly (a) cash assistance to the unemployed, low-income, and veterans, and (b) retirement programs for vets and federal employees. 

But this budget is as notable for what it cuts as for what it doesn't cut. Social Security, defense, and Medicare -- together making up about half of the federal budget -- would scarcely be cut at all. After all, it's hard to win a Republican election if you abandon old voters and the defense industry. As for health care and cash support for the poor? That's where the hammer hits.

Seen slightly differently, here's a pie chart of the cuts above. Health care cuts are in gray-scale. Yes, half of Ryan's cuts come from chopping health care spending.

One might hope that, if the poor lose in spending cuts, the rich might lose in tax hikes? Oh my, if you have ever read a Ryan budget before, you are laughing uproariously at the suggestion.

The tax plan would cut the top rate to 25 percent -- a 15-point reduction for income above $450,00 -- but somehow it would also collect the same amount of revenue as the president's current policy. Quick math: If you cut tax rates for the top 0.1 percent in half, the only way to make the same amount of money is (a) to practically wipe out all of their tax advantages or (b) to raise taxes disproportionately on the bottom 99.9 percent. To be clear: As written, this is almost certainly a plan to raise taxes on the same lower-middle class which is also getting hit with massive spending cuts.

Ryan is most well-known as an entitlement reformer. And his Medicare reforms are serious. But in the next ten years, entitlements would scarcely change at all, really. Obamacare would never get off the ground. Medicare would hardly be cut. Social Security would see exactly $0.00 in cuts. In the next decade, Ryan's plan is essentially a vision of America where deficits fall because government assistance to the poor and sick rapidly shrinks. It solves our income inequality problem like a flamethrower helps a house fire.

***

AND ANOTHER THING: This isn't really about Paul Ryan's budget, specifically, it's about all budgets that graph America's debt-to-GDP ratio out through 2080.

Look, it's fun to talk about 2080, the way it's fun for children to make-believe they're astronauts and for men to imagine they're married to Heidi Klum, but can we stop pretending like projecting current trends 70 years is a useful way to think about the future?

If you read a stream of technology and budget columns side-by-side, you see one column of people guessing at an unpredictable future of rapid change, where robots take our job and control the world, and another stream of accountants predicting that nothing about today's trends will change EVER, least not the exquisitely precise pace of health care spending. But just LOOK at the pace of health care inflation: It's wildly unpredictable! It's fallen by 50 percent since 1990. It looks like a Universal Studios installation, for heavens sake.

Who looks at this graph and thinks they can draw it for the next 70 years? Only a Washington budget analyst. To be fair: It's their job. To be more fair: That it's their job doesn't make it accurate, or even mildly useful, to anybody else.

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It's easy to debate the value of college, but it's impossible to doubt the clear difference between the unemployment rates of those with a college degree and those without a college degree. Just 4 percent of America's bachelor's holders (in blue in the graph below) are unemployed today. For high-school grads who skip college (in purple), the jobless rate is twice as high.

That picture looks pretty conclusive. Go to college, and you'll raise your odds of finding a job. So what do we make of all these stories about 50 percent of recent graduates being unemployed?

A new study from the Bureau of Labor Statistics helps us answer the question. They take a snapshot of the employment situation for recent college grads from 2007 through 2011 and find that they are always unemployed at higher levels than the rest of the country (especially the guys). Here are those numbers in a chart:

I can make this picture even simpler by showing you two years: 2007 and 2011. As you can see, the recession and the weak recovery have been hard on every group. But they've been hardest on those with less than a high-school degree. They saw the steepest rise in unemployment.

I think the following five things are true about college in America today:

(1) Going to college gives many people a better chance to get a job and earn more money.

(2) It's a tough job market today for young college graduates (especially guys).

(3) It's *always* a tougher job market for younger people, including college graduates.

(4) The benefits of college are clear, but they are also being tested in a weak economy where young BA-holders are facing competition from not only a larger pool of BA-holders, but also those familiar forces of globalization and technology.

(5) If the costs of attaining a bachelor's degree continue to rise faster than the benefits of having a BA in this labor force, more middle- and lower-income families might be better served by being strategic and aiming for an associate or online degree combined with some sort of targeted vocational program.

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Intrade, the Web's most famous marketplace of predictions, has shut down "in accordance with Irish law." (You might know it as the e-oracle of American political elections, but the company is based in Ireland.) In November last year, the Commodity Futures Trading Commission filed a lawsuit against the company, claiming it was letting Americans bet on the price of commodities (like gold) on an unregulated exchange, which is against U.S. law. In December, the company suspended trading for all U.S. customers.

If you visit Intrade.com now, you will find the following page:

It is against U.S. law to buy or sell commodity options -- that is, to bet on the future price of commodities, such as gold, copper, and oil -- except on a registered exchange. The CFTC claims this is necessary "to police market activity and protect market integrity." When the Commission charged Intrade on November 26, its release said:

Specifically, according to the complaint, from September 2007 to June 25, 2012, Intrade and TEN operated an online "prediction market" trading website, which allowed U.S. customers to trade options products prohibited by the CFTC's ban on off-exchange options trading. Through the website, Intrade and TEN allegedly unlawfully solicited and permitted U.S. customers to buy and sell options predicting whether specific future events would occur, including whether certain U.S. economic numbers or the prices of gold and currencies would reach a certain level by a certain future date, and whether specific acts of war would occur by a certain future date.

The CFTC's complaint also charges Intrade and TEN with knowingly filing false "Annual Certification" forms with the CFTC stating that Intrade limited its options offerings to eligible market participants. Contrary to these representations, the complaint alleges that Intrade unlawfully solicited and permitted retail U.S. customers to buy and sell off-exchange options on the website.

In addition, the complaint alleges that TEN violated an order issued by the CFTC in 2005 that found that TEN had previously engaged in similar conduct and ordered TEN to cease and desist from violating the Commodity Exchange Act and CFTC regulations, as charged.

For those with money tied up with Intrade, the company says it has "closed and settled all open contracts at fair market value as of the close of business on March 10, 2013" and that they can still see their account details by logging into the site.

Food is cheap and getting cheaper in America, unless you're poor

Like most journalists, Atlantic writers tend to be both curious and often hungry, which might be why we write so much about the price of food and drinks. So I really dug this new Bloomberg Businessweek chart about "America's shrinking grocery bill." (You should check out the full, rich version of the chart.)

Here's the story. Thirty years ago, the average household spent about 17% of its income on food. Today it spends about 11%. It's a global trend: Food is getting cheaper relative to incomes everywhere with rising incomes. But there's also a distinctly American thing going on here. We spend less of our cash on food than any other country -- "half as much as households in France," according to Dorothy Gambrell.

In fact, if you consider "cheap eats at home" the most important measure of social welfare, the United States is the greatest country on earth. Eating at home takes much less from our budget than other countries.

One reason we spend so little money at home is that we spend so much more money under other people's roofs. Over the last century, Americans have spent more and more on food they didn't prepare at home.

But "average household" doesn't mean much in a country where the top 20 percent earns 15X the bottom 20 percent. So how do poor families food budgets compare to the rich -- and how that changed over the last 30 years?

The short answer is that relative food costs are low and falling fast for everybody -- but they're not falling for the poor.

In 1984, the poorest Americans spent 16 percent* of their income to eat. The median-income family also spent 16 percent of its (slightly higher) income on food. And the rich spent the least. In the last three decades, food's share of the family budget has fallen for all but the poorest families, where it's stayed the same.

It's well understood that everybody needs food to live, no matter how much money they make. But stomach sizes have a much narrower spectrum than U.S. incomes. So how are rich people earning so much more, but spending nearly the same share of their budgets on food?

Deep inside the numbers, you see some pretty spectacular differences between rich and poor families' eating habits. The richest quintile spends about 4X as much as the poorest in general-- but it spends 6X on alcohol, 5X on dining out, and 3X on food. The most important difference between rich families and poor families when it comes to food spending isn't really what they eat, but where they spend their food money. Poorer families eat much more at home. Richer families spend more money (but a similar share of their income) dining out.

________

*Why are my figures slightly different than Bloomberg's? I used "spending" and they used "after-tax income." Slightly different figures. Same general idea, though, but keep in mind that richer households are more likely to save more, so dividing by income will always give you a lower number than dividing by spending.

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It's typically considered indecent wonk etiquette to get too excited about any one jobs report, for at least three reasons: (1) It's just one month; (2) The numbers will be revised; (3) They're only statistically significant plus or minus ~100,000 jobs, anyway.

With that caveat out of the way: Woo hoo, let's get excited about this jobs report!

The numbers everybody will talk about are 236,000 jobs added and 7.7 percent unemployment. But that's not why you should get excited. The first number is a pretty good number. The second number is a bad number. Unemployment is still quite high, although it's coming down slowly, by about 190,000 jobs per month over the last three months.

Before we get to the exciting stuff, here's the context: Private sector job creation emerged from its cave in early 2010 and it's been recovering fairly strongly for the last three years. State and local government austerity -- soon to be joined, perhaps, by federal government austerity -- has kept monthly job creation a little lower, around 160,000 jobs per month.

Zooming in, you can see that this month (the far right bar) was one of the best months yet for private sector jobs, but not the best. So why do I consider this the most optimistic jobs report of the recovery?

This is why. We added more construction jobs in February than any month since the Recession. If the numbers hold up -- big if, you might say, but I'm just going off today's stats -- it will be the single best month for construction jobs added since March of 2007 and the third best month since 2006! The housing market is sort of (fingers crossed) on a roll.

When it comes to recoveries, not all industries are created equal. A retail recovery is nice to have, a food services recovery is nothing to sneeze at, but when housing comes back, a recovery starts to really look like a recovery.

It's happening. Even if you shake off this jobs report, the Credit Suisse monthly housing survey uncovered "unprecedented breadth of strength in both pricing and traffic at start of spring selling season." Unprecedented. Home prices rose in every city and every market, "the first time this has occurred in our survey since [the survey's] inception in 2005."

Optimism isn't mission-accomplished-ism. The labor market is still sick. Long-term unemployment is creating structural damage to the economy, and the share of Americans who are actually working is staying frustratingly low. But in the face of rising payroll taxes and ongoing foolishness in Washington, this is good news for an economy that desperately needs it.

Europe's hot new idea: Slashing compensation

You might consider America's vast wealth inequality, vividly illustrated in this viral video, to be offensive, infuriating, or irrelevant. But it is not terribly mysterious.

Rich people have more money. More money tends to lead to bigger properties, fatter savings, and better access to capital markets. As a result, the top 1% of the country controls between 40 and 50 percent of the total wealth from stocks and bonds. What's more, the very very richest people tend to be lawyers, doctors, and executives, especially in finance, with equity in their firms and companies. And that, right there, represents the overwhelming source of high wealth (as opposed to high income) at the tippy top: It comes from stocks, from real estate, and from business equity.

Poorer people save much less, don't have much in the way of a stock portfolio, and (somewhat by definition) aren't owners or partners in rich private firms. Instead, they might own homes. But homes, as we've seen, aren't always the steadiest investment. All of that explains why the share of total household wealth, which has fallen at the bottom thanks to the housing bust, is accumulating at the top 1 percent.

The two easiest ways to think about reducing wealth inequality are (a) building up the bottom and (b) cutting down the top. These aren't equally sensible approaches, they're just the two most obvious. From the bottom, if we found ways to make poor and middle class families save more, they could invest that money in assets that got more valuable over time, and this would increase their wealth. From the top, one extreme solution beyond raising taxes would be to find ways to cap income and compensation.

If you find income-capping sort of a goofy idea, perhaps you're not a member of our trans-oceanic readership.

Europe in on a rampage against sky-scraping compensation packages. Months after France announced a new confiscatory top tax rate, the EU recently capped banker bonuses at twice their salary. This weekend, Switzerland voted to put historic restrictions on corporate pay. Two-thirds of a national referendum (in one of the finance capitals of the world!) voted to give shareholders the right to slash their executives' compensation and banned "golden parachutes" for outgoing executives. The new crime for paying a CEO too much money? As much as three years in jail or six years' salary in penalties.

When Switzerland puts its foot down on rich bankers, you know something's wrong.