High Five

The Ladder to One Percenthood

In the midst of the debate and discussion surrounding the 1% versus 99% dichotomy, I've heard the claim that making it into the 1% is just a matter of avoiding consumer spending. I decided to do a kind of test of this theory.

Firstly, we should clarify the definition of the 1%. Most people have been defining it by income, but it is really more proper to define it by wealth. Economix had a good article on this topic. They explain that although the 1% are typically defined as those earning more than $380,000 per year, the 1% can also be defined as those with net worth totaling more than $8,400,000.

So, let us assume that you earn the 2010 median household income of $49,445. We'll also assume that you avoid consumer spending altogether. That's right, we'll assume that you somehow avoid all living expenses, and save 100% of your income. While we're at it, we might as well throw in an assumption that you somehow avoid paying any taxes. You then invest the money at a rate of return of 9.59% (the 20-year average S&P 500 total return). If you start this process at age 18, you'll enter the one percent club by the time you're 50 years old. You can surmise that adding in a small tax rate or living expenses would mean that you won't live long enough to enter the club at all. 

If you're wondering how long it would take you to make it to the top, Carlos Slim Helu's (the richest person on Earth) $69 billion would be matched when you turn 147.

Bring Back the California Raisins

The California Raisin Marketing Board is waging war on Craisins. Apparently the dried cranberries, marketed by Ocean Spray, are cutting into raisin sales. The 'Lets Keep it Real' campaign alleges that Craisins are less healthy, featuring moms who are shocked to learn how much sugar is in Craisins. They don't mention the fact that raisins contain nearly the same amount of sugar. If you really want to compare the details, you can get the complete nutrition facts from the USDA. Overall, raisins appear to be a little more nutritious. Craisins, however, can boast that they have more fiber, less sodium, slightly more niacin and vitamin K, and a lot more vitamin E. Being from Wisconsin, where most of the U.S. cranberry crop is grown, I feel some sense of duty to defend cranberries. I would suggest that rather than negative campaigning, the California Raisin Marketing Board should reintroduce the California Raisin commercials of the 1980s.

Ratio of Democrats to Republicans in the Federal Government

There are 242 Republicans in the 112th Congress House of Representatives. This is the most Republicans in the House since 1949, but this is not the high point of Republican power in the Federal Government. During the 108th and 109th Congresses (2003-2007) Republicans had a majority in the House and Senate, as well as holding the Presidency. 

The following chart shows the ratio of Democrats in the Federal Government since 1957. A value of 1 would imply that the President and all members of Congress are Democrats. A value of 0 would imply that all are Republicans. Values are weighted with the assumption that 50% of the power lies in the Presidency, 25% in the Senate and 25% in the House of Representatives. Independents and members of third parties were ignored by excluding them from the total number of members in the respective body. The high point of Democratic power (since 1957) was the 89th Congress (1965-1967).

If Romney Loses in Michigan

The latest commentary on the Republican nominating contest goes something like this: Rick Santorum is now in the lead, and if Mitt Romney loses in Michigan then his campaign may be over. We should address the first point first; Rick Santorum is not in the lead. Santorum (44 delegates) is in third place behind Romney (123 delegates) and Gingrich (45 delegates). Even the claim that winning the most recent contests is more important than the total number of delegates doesn't clearly place Santorum in the lead; Mitt Romney won the Main caucuses, which ended February 11. Before going any further, I should note that there is substantial difference of opinion on projected delegate numbers. The Associated Press is much more bullish on Santorum, projecting 71 for him, while projecting 105 for Romney and 29 for Gingrich. CNN, on the other hand, projects 127 for Romney, 38 for Gingrich, and 37 for Santorum. Most of the discrepancy results from differing opinions on Minnesota. The Associated Press projects all 37 of Minnesota's caucus tied delegates going to Santorum. CNN is only confident that he'll get 6 of them. I'm trusting my favorite source, Wikipedia, which is between the AP and CNN projections. 

So lets say that Romney loses in Michigan. In fact, we'll suppose that he'll lose terribly, and Gingrich will win all 30 delegates. That would bring Gingrich's total up to 75. But if we're supposing that Romney will do poorly in his home state of Michigan, then perhaps we should also assume that he'll do poorly in Arizona. That is potentially another 29 delegates for Gingrich, bringing his total to 109. That is still 14 delegates less than Romney.