Economics Matters — Blog/Podcast/Financial Riddler/MaxiFi Puzzler
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TheMOUwith Iran was signed almost three weeks ago — the one that opened the Strait of Hormuz to traffic in exchange for a promise of at least $300 billion in redevelopment aid, an end to sanctions, and some $12 billion in immediate support, $6 billion of which the Iranians claim is on its way. What is the approximate rate of traffic through the Strait compare to the pre-war norm of roughly 130 vessels per day?a. 10-35 vessels
b. 35-50 vessels
c. 50-85 vessels
d. 85-110 vessels
e. 110 - 145
And the answer is …
**The very rough estimate is 35-50 vessels. This is about 40% of pre-war traffic — higher than I, at least, understood. On the other hand, some 35% of current petrochemical exports through the Strait are Iranian compared with roughly 10% pre war. I asked Perplexity how many tanker-destroying weapons Iran could acquire with $12 billion. Here is a summary of its answer: ****$12 billion could theoretically fund several hundred thousand of explosive drone boats or 10,000 anti-ship cruise missiles, or several hundred thousand Shahed-136 drones. **
**What share of annual US energy usage goes to heating and cooling residential and commercial buildings?**a. 15%
b. 35%
c. 50%
d. 65%
e. 80%
And the answer is …
**The answer is 35%. An estimated 25% of the costs of heating and cooling buildings could be reduced by investments, based on current technologies, that are free in present value. I.e., the present value of their savings exceed the upfront costs of switching to heat pumps, improved insulations, installing solar, lighting retrofits and occupancy sensors, smart thermostats, efficient appliances, heat pump water heaters, and co-generation technology that captures heat released by electric power plants. **
**How many people die each year climbing Mt. Everest?**a. 1125
b. 377
c. 148
d. 137
e. 79
And the answer is …
**The average is 137, with 108 deaths on the way down and 29 on the way up. **
**Japan’s population is shrinking. By roughly how much did Japan’s population fall in the past five years?**a. 500,000
b. 750,000
c. 1.5 million
d. 3 million
e. 5 million
**And the answer is … **
**The answer is 3 million. That’s half of the population of Singapore. Japan’s current population is now 125 million. The UN projects its end-of-century population at 77 million — a 40 percent drop. That beats China, S. Korea, and Taiwan for whom the UN projects almost a 60% population loss by 2100. China’s population shrank by over 6 million over the last five years. South Korea and Taiwan lost 151K and 260K people over this period. Their temporarily relatively small population losses reflect positive immigration rates (China’s is slightly negative.), but primarily a far larger share of their population in child-bearing ages than is the case for China. **
**US per capita GDP (output per person) more than doubled since 1980, rising by 117%. By how much did median real weekly earnings rise since 1980?**a. 153%
b. 122%
c. 61%
d. 38%
e. 17%
**And the answer is … **
**The answer is 17%. For blacks, median weekly real earnings rose by about 12%. This is part and parcel of our nation’s transformation into a servant economy. In 1980, 71% of workers were service workers (servants). Today’s figure is 87%. The word “servant” is not meant to demean anyone. But it puts a point on the nature of our nation’s inequality, which, at least over the past half century, has dramatically worsened. Over that long span, there’s been, to state things in plain English, essentially no economic progress for those in the bottom half. The broader story is about the super rich getting richer. In 1979, the top 5%, 1%, and 0.1% wage earners accounted for 19%, 7%, and 2% of total wages. Today they account for 28%, 12%, and 4% of total wages. In 1989, the top 1% of wealth holders held 23% of total wealth. Today’s figure is 32%. As for the top 0.1%, they had 9% of total wealth in 1989. Today they have 15%. This said, the top 1% had a larger share of total wealth in the 1920s, roughly 45% compared with 32% today. So, massive inequality has long been part of the American “dream.” This dream has become more a nightmare for the bottom half who are increasingly forced to service the privileged, lucky, famous/infamous rich. Take Taylor Swift who chose the nation’s 250th birthday as the one and only day on which she should hold her estimated $20 million wedding. The roughly 500 servants who helped run the event benefited from their extra pay as did the beneficiaries of the charities who received $26 million — roughly what the wedding cost. But Taylor’s magnificence represented a meager 1% of her purported wealth — a small tip to the public, with the unrounded extra $1 million apparently the last bit needed to assuage her conscience for her despicable ego trip. And yes, Jeff Bezos’ $50 million wedding was twice as disgusting and came with no charitable contribution. (Sorry to all of you Swifties. But your idol is not all that swift at least in the basic decorum dimension.) **
**Labor’s share of national income in 1945 was 73%. What was it last year?**a. 47%
b. 54%
c. 61%
d. 66%
e. 75%
And the answer is …
**The answer is 66%. This fact — workers are receiving 7 percentage less of the national-income pie than they did in 1945 — is part and parcel of the postwar increase in inequality. (The spike, by the way, during Covid reflects firms firing their lowest paid employees. Less was produced during the pandemic, but what was produced was done so with disproportionately expensive labor.) **
**When did Switzerland grant women the right to vote?**a. 1871
b. 1931
c. 1951
d. 1971
e. 1981
And the answer is …
The answer is 1971. But wait for it. The males in the Canton of Appenzell Innerrhoden prevented women from voting in canton elections until 1990.
**Cape Verde nearly beat Argentina in the World Cup. Where is Cape Verde?**a. It’s on the northern part of South America.
b. It’s an island in the Antarctic.
c. It’s an island in the Atlantic near Portugal.
d. It’s in the Mediterranean Sea.
e. It’s in the Atlantic off the cost of Africa
And the answer is …
**The answer is off the cost of Africa. Its 10 islands, with its 530K citizens (far less than Argentina’s 47 million), lie due west of Senegal. **
