Three Misconceptions that Need to be Put to Rest…
At a conference in Philadelphia earlier this year, a Wharton professor noted that one of the country's biggest economic problems is a tsunami of misinformation. You can't have a rational debate when facts are so easily supplanted by overreaching statements, broad generalizations, and misconceptions.
And if you can't have a rational debate, how does anything important get done? As author William Feather once advised, "Beware of the person who can't be bothered by details."
There seems to be no shortage of those people lately, particularly as we found out in an election year that was rife with misinformation.
“Most of what Americans spend their money on is made in China.”
Fact: Just 2.7% of personal consumption expenditures go to Chinese-made goods and services. 88.5% of U.S. consumer spending is for the purchase of American-made goods and services. This figure comes from a Federal Reserve report.
This misconception arises primarily because the big box stores, such as Walmart sell a great deal of knicknacks, clothing, and toys, which generally are manufactured in Asia. Wal-Mart might sell a broad range of knickknacks, many of which are made in China, but the vast majority of what Americans spend their money on is not knickknacks.
The Bureau of Labor Statistics closely tracks how an average American spends their money in an annual report called the Consumer Expenditure Survey. In 2010, the average American spent 34% of their income on housing, 13% on food, 11% on insurance and pensions, 7% on health care, and 2% on education. Those categories alone make up nearly 70% of total spending, and are comprised almost entirely of American-made goods and services (only 7% of food is imported, according to the USDA).
Even when looking at physical goods alone, Chinese imports still account for just a small fraction of U.S. spending. Just 6.4% of nondurable goods -- things like food, clothing and toys purchased in the U.S. are made in China; 76.2% are made in America. For durable goods -- things like cars and furniture -- 12% are made in China while 66.6% are made in America.
Another way to measure the value of Chinese-made goods is to look at imports. The U.S. is on track to import $340 billion worth of goods from China this year, which is only 2.3% of our $14.5 trillion economy. Part of the misconception is also likely driven by the notion that America's manufacturing base has been in steep decline. The truth, which surprises many, is that real manufacturing output today is near an all-time high. What's dropped precipitously in recent decades is manufacturing employment. Technology and automation has allowed American manufacturers to build more stuff with far fewer workers than in the past. An excellent example: in 1950 a U.S. Steel manufacturing plant located in Gary, IN produced 6 million tons of steel with 30,000 workers. Today, it produces 7.5 million tons with 5,000 workers. Output has gone up; employment way down.
“We owe most of our debt to China.”
Fact: China owns only about 7.8% of U.S. government’s outstanding debt! As of August of 2012, China owned $1.14 trillion of Treasury bills, while federal government debt stood at $14.6 trillion for that same month. That works out to only 7.8%. Who owns the rest? The largest holder of U.S. debt is the federal government itself. Various government trust funds like the Social Security trust fund own about $4.4 trillion worth of Treasury securities. The Federal Reserve owns another $1.6 trillion. Both are unique owners: Interest paid on debt held by federal trust funds is used to cover a portion of federal spending, and the vast majority of interest earned by the Federal Reserve is remitted back to the US Treasury.
The rest of our debt is owned by state and local governments ($700 billion), private domestic investors ($3.1 trillion), and other non-Chinese foreign investors ($3.5 trillion). Although the Chinese government may indeed be the largest single foreign owner at $1.14 trillion, the remaining foreign ownership of $3.5 trillion is held by investors in many countries, led by Japanese interests ($937 billion) followed by the U.K. ($397 billion). Right there, you can see that Japan and the U.K. investors combined own more U.S. debt than China. Now, how often have you heard someone say that we borrow an inordinate amount of money from Japan and the U.K.?
“We get most of our oil from the Middle East.”
Fact: Just 9.2% of oil consumed in the U.S. comes from the Middle East. According the U.S. Energy Information Administration, the U.S. consumes 19.2 million barrels of petroleum products per day. Of that amount, a net 49% is produced domestically. The remaining 51% is imported. Of this 51% only a fraction comes from the Middle East, and that fraction has been declining in recent years. In 2012, imports from the Persian Gulf region- which includes Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates accounted for 9.2% of total petroleum supplied to the U.S. In 2001, that number was 14.1%.
Most of America’s imported oil actually comes from within the Western Hemisphere, mostly from Canada and Mexico. As a matter of fact, the oil reserves in Canada’s Alberta oil sands surpass all of Saudi Arabia’s oil reserves combined!
The U.S. imports more than twice as much petroleum from Canada and Mexico than it does from the Middle East. Add in the share produced domestically, and the majority of petroleum consumed in the U.S. comes from North America. When we talk of US foreign oil reliance, the Arab nations do not have the control over US oil supplies that most people think they do! However it must be mentioned that any security and geopolitical issues or disruptions that may occur anywhere in the world is bound to have short term effects on oil prices.
The late Andy Rooney once said, "People will generally accept facts as truth only if the facts agree with what they already believe!" The three misconceptions above really need to be buried and put to rest…
More Than 7.9 Billion Trips Taken On Public Transportation As Ridership Increased By 2.6% in First Three Quarters of 2012
Seven Consecutive Quarters of Ridership Increases Show Growing Demand
More than 7.9 billion trips were taken on U.S. public transportation in the first three quarters of 2012 as ridership increased by 2.6 percent over the first three quarters of 2011, according to a report released this fall by the American Public Transportation Association (APTA).
This report shows that 201 million more trips were taken in the first nine months of 2012 than in the same time period in 2011.
“With seven consecutive quarters of ridership increases, it’s obvious that public demand for public transit is growing,” said APTA President and CEO Michael Melaniphy. “As Congress works to resolve our country’s deficit problem, it also needs to work to resolve the transportation deficit. Otherwise public transit and highway funding will be facing an annual $15 billion shortfall in the next 10 years.”
Mobility is an important reason to have a strong public transportation system. However, public transportation also has a critical connection to the economy. For every $1 billion invested in public transportation 36,000 jobs are created and supported. Additionally, public transportation plays an important role in providing access to jobs.
“We continue to see that in areas where the local economy is improving and new jobs are being added, public transportation ridership is up,” said Melaniphy. “This makes sense since nearly 60 percent of the trips taken on public transportation are for work commutes. Public transit service is an important resource for employees and employers as it is instrumental in helping people travel to their jobs.”
Some of the cities experiencing economic improvements and public transit ridership increases in the third quarter of 2012 include: Grand Rapids (MI); Seattle (WA); St. Petersburg (FL); Phoenix (AZ); San Francisco (CA); Los Angeles (CA); and Riverside (CA).
All major modes of public transportation increased from January through September this year. Light rail and heavy rail saw the largest increases in the first nine months with increases of 4.2 percent and 3.6 percent respectively.
January – September 2012 Ridership Breakdown
Nationally, heavy rail ridership increased by 3.6 percent and 12 out of 15 heavy rail systems (subways and elevated trains) experienced ridership increases in the first nine months of 2012. The heavy rail systems with the highest increases in ridership for the first nine months of 2012 were in the following cities: Cleveland, OH (10.8%); San Francisco, CA (7.4%); Chicago, IL (4.9%); Baltimore, MD (4.4%); and New York, NY (4.4%).
Light rail ridership increased by 4.2 percent from January through September, as 22 out of 28 light rail systems reported increases in ridership. Hampton, VA experienced a triple digit increase due to new service. Light rail systems saw double digit increases in the first three quarters in five cities: Memphis, TN (33.7%); Salt Lake City, UT (19.7%); Los Angeles, CA (13.7%); Pittsburgh, PA (13.5%); and Seattle, WA (11.2%). Other light rail systems with increases were in the following cities: Sacramento, CA (6.8%); Boston, MA (6.2%); Houston, TX (6.1%); and Seattle, WA (5.5%).
Nineteen out of 28 commuter rail systems reported ridership increases and commuter rail ridership grew by 2.4 percent in the first three quarters of 2012. Commuter rail ridership saw double digit increases in the following cities: Austin, TX (15.6%); San Carlos, CA (12.3%); and Seattle, WA (10.2%). Other commuter rail systems showing high increases were located in the following cities: Stockton, CA (9.7%); Portland, OR (8.0%); Baltimore, MD (6.9%); Harrisburg-Philadelphia, PA (6.1%); Portland, ME (5.9%); Los Angeles, CA (5.6%); and Newark, NJ (5.2%).
Nationally, bus ridership rose by 1.8 percent from January through September of 2012, with 28 out of 37 large bus systems reporting increases. Some of the highest bus ridership increases in large cities were reported in: Saint Louis, MO (8.6%); Arlington Heights, IL (5.3%); Newark, NJ (5.2%); and Oakland, CA (5.0%).
Pro-Transit Ballot Initiatives Continue Track Record of Success
Voters Value Public Transportation – Nearly 70 percent of Transit Measures Pass
By a passage rate of nearly 70 percent (68.4%), voters across the country continued a track record of success for pro-transit measures as 13 of 19 local public transit-related ballot initiatives were approved in the recent federal election.
Adding these voting results to earlier transit measures this year, 46 out of 58 pro-transit measures have passed in 2012 at a rate of 79.3 percent. These numbers reflect a long-term trend-- since the year 2000, more than 70 percent of public transit ballot measures have successfully passed.
“Despite concerns about the economy, voters throughout the country at a rate of nearly 70 percent voted on November 6 to pass pro-public transportation ballot initiatives,” said American Public Transportation Association (APTA) President and CEO Michael Melaniphy. “This successful trend of passing transit measures demonstrates that public transportation is a vital and essential service that people want and need. Even with economic concerns still on everyone’s minds, voters decided to pass taxes, create bonding, or take other actions to improve or maintain public transportation.”
A half-cent sales tax for local and regional public transit was passed in Orange County, NC. This follows last year’s successful half-cent sales tax measure for improved public transportation in Durham County, NC, by creating larger, regional public transportation services in the Research Triangle area of North Carolina, which includes Raleigh, Durham, and Chapel Hill.
Voters in Arlington County, VA overwhelmingly voted by 80 percent to pass a nearly $32 million bond that will support a number of public transit projects, including capital projects for the Washington Metropolitan Area Transit Authority.
Not all successful transit-related initiatives involved raising new funds. There were three ballot initiatives to eliminate service and all three were turned down. By a rate of 70 percent, voters in Falmouth, ME voted against ending METRO services after December 31, 2013. Fifty-nine percent of voters in Spencer Township, OH voted against withdrawing from the Toledo Area Regional Transit Authority. Additionally, 73 percent of voters in Walker, MI voted against a measure to end service by the Interurban Transit Partnership.
Two transit-related initiatives in Alameda County, CA and Los Angeles, CA had a majority vote with 65 percent, but were just shy of the required two-thirds margin needed to pass.
Results of two public transit ballot initiatives in the states of Washington and South Carolina have not been released. Two additional public transit measures will be decided in Los Angeles, CA and Kansas City, MO next month.
For a complete list of 2012 transportation state and local ballot initiatives, go to the CFTE web site at www.cfte.org.
Skål International USA Reaches Operational Management Agreement with Travel and Tourism Association
The American Bus Association (ABA) and Skål International USA (SIUSA) are pleased to announce agreement on a management contract for the day-to-day operations of SIUSA for 2012 and 2013, with options to secure a long-term relationship. Over the past several months,the SIUSA Board of Directors and its Search Committee conducted an exhaustive search for an association management company or an individual capable of providing management and operational services. SIUSA selected ABA from a pool of nearly 150 entities that submitted bids.
SIUSA and ABA have a long standing common history, with ABA hosting SIUSA receptions and several chapter events at its annual convention and tradeshow, ABA Marketplace, for each of the last four years.
“I know that I speak for our entire organization when I say that we couldn't be more pleased to formalize the ABA's management contract with Skål International USA,” said Skålleague, ABA President and CEO Peter Pantuso, CTIS. “We believe strongly in continuing to maintain the values of SIUSA. In establishing a long-term partnership, we look forward to providing top-of-the-line customer service and operational stability for SIUSA that will help support them in establishing a platform for continued success and growth.”
Skål International USA President Llana Smith, CTC added, “The ABA will bring strong association management skills to Skål International USA as well as added value that we are looking forward to incorporating into our core programs moving forward. Our account will be managed by several employees with significant experience in our industry and with some impressive expertise, including strong knowledge of accounting and communication skills.”
ABA will be providing a full range of management services for SIUSA under the terms of this agreement. ABA will offer accounting, financial management, web management, public relations, general office and technical services. Under this management model, the day-to-day operations of SIUSA and its interaction with its more than 2,500 members and 61 local club affiliates will remain virtually unchanged. The SIUSA Board of Directors made the decision to move to a new management contractor after significant due diligence, much discussion and several rounds of debate.
“It will be business as usual,” said Llana Smith, Skål International USA President. “We’re confident that this will be a seamless transition for all Skålleagues.”
About the Skål International USA
Skål International USA is the US-based branch of the international organization that brings together all branches of the travel and tourism industry. Representing the industry's managers and executives, Skålleagues meet at local, national and international levels in an environment of friendship to discuss subjects of common interest. The first Club was founded in Paris in 1932 by a group of travel trade managers and from that modest beginning, Skål International now has more than 25,000 members in over 500 Clubs, spread throughout 80 countries.
About the American Bus Association
Founded in 1926, the American Bus Association is the trade organization of the intercity bus industry with more than 1,000 motorcoach owner and tour company members in the United States and Canada. Its members operate charter, tour, regular route, airport express, special operations and contract services. Another 2,800 members are travel and tourism organizations and suppliers of bus products and services who work in partnership with the North American motorcoach industry.