Saturday, April 30, 2011

Ghost Town: U.S. Edition

It turns out that China is not the only nation with a boom in ghost towns. A surprising number of cities in the United States has significant areas where a majority of houses are unoccupied. Douglas McIntyre reports that
There are several counties in America, each with more than 10,000 homes, which have vacancy rates above 55%. The rate is above 60% in several.
The story features the top 10 counties, all of whom have populations greater than 10,000, with occupancy rates from 54% to 66%.  The photos accompanying the story illustrates the reason why capital cannot painlessly be reallocated in a bust, as Paul Krugman would have us believe.

During booms fueled by credit not funded by voluntary savings, some malinvestment is sunk in non-convertible capital goods. Many of these structures now have very little if any economic value and the scarce capital goods used to produce them cannot easily be extracted and converted to other uses. This capital, consequently, is lost and can only be built up again by an increase in voluntary saving.

Friday, April 29, 2011

Walter Williams on the Lew Rockwell Show

Walter Williams was the guest during a recent fascinating interview on The Lew Rockwell Show. Williams is professor of Economics at George Mason University and a member of the board of trustees at Grove City College. During the interview he talks about During the interview Williams talks about his upbringing and early career as well as his two new books, Up from the Projects, an autobiography, and Race and Economics: How Much Can Be Blamed on Discrimination.

You can listen to the program by clicking here.

Thursday, April 28, 2011

More Evidence of Sluggish Economy

Asha Bangalore of Northern Trust agrees with me that things may not be as rosy as financial analysts and pundits want us to believe. In her recent daily economic commentary, Bangalore sees a "Whiff of Decelerating Trend in Second Tier Economic Reports." While she is in no way alarmist, she does imply a concern that economic activity is slowing down. What she sees includes the following:
  • An increase in the four-week moving average in initial jobless claims.
  • A drop in the rate of growth in the factory sector.
  • A decrease in the Conference Board's Index of Leading Economic Indicators.

Wednesday, April 27, 2011

David Stockman is Right On Crony Capitalism and the Fed

David Stockman seems to just get better and better in his analysis of our current economic institutions. In a little over four minutes, he does an excellent job describing the shortcomings of our current economic system that stem from our faulty economic policies developed over decades.

He so gets the distinction between a free market and the crony capitalism rampant today.  He understands that the economic crisis is not a failure of the market, but that the market was not allowed to function because the "rules of the game" were changed.

One of the things that makes the free market work as an institution of social coordination is that it is a profit and loss system. It is the risk of loss that encourages entrepreneurs to invest only in supplying goods people demand. If they do not, but rather produce goods that they cannot sell at a price high enough to cover their costs, they reap losses. It is good that they do so, because this provides a very quick and real incentive not to waste scarce factors of production. If they persist in reaping losses, they eventually will run out of capital and will have to cease functioning as an entrepreneur. They will not be able to waste resources forever.

When the state intervenes, however, in such a way so that entrepreneurs think that certain investments cannot lose, because the government will cover any losses, this creates a tremendous moral hazard.  Entrepreneurs are encouraged  to invest in the more risky, but protected investments.

He is also extremely perceptive in understanding the Federal Reserve to be "the great enabler." The Fed bankrolls it all.

Tuesday, April 26, 2011

My Latest Op-ed at

In case you missed it the first time, ran my article "Money Can't Buy You Prosperity." My main point is that while the monetary inflation pursued by the Fed since 2008 has brought about changes in macroeconomic statistics as well as the unemployment rate, these changes do not reflect a positive change in the economy. True economic prosperity is the product of the extension of the division of labor as well capital accumulation funded by voluntary saving. Increasing the money supply does not foster either of these. In fact it hampers both. Therefore money (meaning inflated fiat government dollars) cannot buy prosperity.

Tipping Point for Taxpayers versus Tax Consumers

Based on the political analysis of John C. Calhoun, Murray Rothbard pointed out that the government budget divides the citizenry into two classes: tax payers and tax consumers. Tax payers are those who pay more money in taxes than they receive in government subsidies. Tax consumers, on the other hand, are those who, even if they may pay some of their income back in taxes, receive more money from the government than they pay in taxes. It should be obvious who lives off whom.

Now James Cooper reports that for the first time since the Great Depression, "households are receiving more income from the government than they are paying the government in taxes."

Given this reality, it is no wonder that the recent "historic" budget deal was smoke, mirrors, and actual savings of only about two day's worth of borrowing. When a majority of citizens are tax consumers, any real budgetary reform, such as actually cutting, let alone eliminating, entitlement programs becomes much more difficult politically

Monday, April 25, 2011

Happy Days Are Not Here Again: NY Times on Disappointing Stimulus

Back in September of 2007, I warned that we should not expect what was then a dramatic interest rate cut by Bernanke to usher in a new era of prosperity. It seems that the New York Times has come around to the same conclusion. An article from yesterday's paper cites a number of economists who agree that there has not been very much to show from all that monetary stimulus.

The article notes that while the massive increase in the monetary base, has fostered inflationary expectations, eased credit conditions for some borrowers, and "pumped up the stock market," the effect on the social economy has not been noticeably beneficial. Economic expansion is slow and unemployment high.

The reason that my essay in 2007 was more right than wrong has nothing to do with any clairvoyance or special insight on my part. It is the product of using a sound, praxeological framework in which to do economic analysis. Understanding the significance of time in the production process and including capital theory in economic analysis allows us to make sense of the business cycle and also guide us in choosing policy to get us out of a recession as quickly as possible.

Sunday, April 24, 2011

He is Risen!

"But on the first day of the week, at early dawn, they went to the tomb, taking the spices they had prepared. And they found the stone rolled away from the tomb, but when they went in they did not find the body of the Lord Jesus. While they were perplexed about this, behold, two men stood by them in dazzling apparel. And as they were frightened and bowed their faces to the ground, the men said to them, “Why do you seek the living among the dead? He is not here, but has risen. Remember how he told you, while he was still in Galilee, that the Son of Man must be delivered into the hands of sinful men and be crucified and on the third day rise.” And they remembered his words, and returning from the tomb they told all these things to the eleven and to all the rest. Now it was Mary Magdalene and Joanna and Mary the mother of James and the other women with them who told these things to the apostles, but these words seemed to them an idle tale, and they did not believe them. But Peter rose and ran to the tomb; stooping and looking in, he saw the linen cloths by themselves; and he went home marveling at what had happened." --Luke 24:1-12

Without the death, burial, and resurrection of Jesus Christ, no intellectual pursuit, including economics, would matter much. Economics is not about everything that matters. It is not even about the most important thing that matters.

The fear of the Lord is the beginning of wisdom and knowledge. Jesus Christ came in to the world to save lost sinners. 

Friday, April 22, 2011

GDP Growth through Economic Waste

Last December I blogged about malinvestment in China manifesting itself in ghost towns. Now, thanks to Isreal Curtis, I've been made aware of a stunning and revealing news report documenting the same phenomenon.

You may have already seen this, but in case you haven't, this fascinating report is definitely worth watching. SBS Dateline, an Australian news program went to China and explained how the Chinese state, in an effort to continually expand GDP, continues to build building complex after building complex, even though several are virtually uninhabited.

In the report, real estate analyst Gillem Tulloch is interviewed and reports that there are 64 million empty apartments in China and they are still building!

Important takeaways from this story:
  • GDP is merely a measure of net income and spending flows, not wealth.
  • Productive investment is investment on goods people actually want, not wasteful government spending on whatever boosts GDP.
  • Central planners can waste a tremendous amount of scarce factors of production (I know this is not exactly news, but it something to see it so starkly portrayed).

Thursday, April 21, 2011

Keynes Reached His Long Run

Sixty-five years ago today John Maynard Keynes breathed his last. Keynes was famous for, among other things, saying "In the long run, we're all dead." That quip has been taken to mean that when there is a serious crisis, wise people are willing to focus on fixing economic problems in the short run and not failing to act, fearing negative long run economic consequences. After all, in the long we are all dead.

That Keynes' economic theories and policies have been both highly influential and economically destructive is no secret to readers of this blog. The problem, as Rothbard once said, is that Keynes is dead and we are still living in his long run.

For a good, brief discussion of the essence of Keynes' economic thought and policy, I recommend, Ludwig von Mises' "Lord Keynes' and Say's Law." For a more extensive treatment of Keynes' economic thought, I recommend "The Misesian Case Against Keynes" by Hans-Hermann Hoppe. For a very revealing look at person and influence of Keynes I recommend Rothbard's "Keynes the Man."

One of the earliest articles I wrote as a new professor was "Keynes the Great?" a response to Paul Krugman's lauding of Keynes in a column he wrote in Fortune magazine. My analysis of Keynesian economics is found in Chapter 13 of Foundations of Economics.

Wednesday, April 20, 2011

Does Economic Growth Cause Inflation?

A good example of this conventional fallacy is manifest in a recent report from Bloomberg News documenting that officials at the European Central Bank are mulling over further interest rate increases because it fears that an economic boom is countries like Germany will fuel increased overall prices. As is reported, "The ECB is balancing the need for tighter policy in countries like Germany, whose economy is booming, against the risk that it could exacerbate the sovereign debt crisis afflicting Greece, Ireland and Portugal."

This sort of analysis is fundamentally Keynesian in that it sees the economy driven by spending. Recessions, it is argued, are due to insufficient aggregate demand. The central bank can help by increasing the money supply, encouraging more spending. Nominal GDP increases, which is equated with economic growth. The concern, however, is that nominal GDP could increase too fast due to too much spending which would result in price inflation. Too much economic growth, therefore, causes inflation.

This line of thinking is in error because economic expansion is the result of production, not spending. True economic expansion is the result of producing more goods with which we can satisfy more ends. Economic growth, then, occurs as we become more productive through a more extensive development of the division of labor and capital accumulation. As we produce more goods, however, prices on those goods will fall, rather than rise. Economic expansion, therefore, contributes to falling prices, not rising prices.

Any apparent economic growth that causes higher prices is no growth at all. It is merely the result of an increase in the money supply. 

Monday, April 18, 2011

Price Inflation Continues to Worsen

Word on the street is that "inflation cooled in March." That is because, as has now become a mantra, while food and energy prices continue to increase, so-called core inflation, the prices of everything else in the market basket, has remained "subdued." Indeed, so subdued that David Levy has said Ben Bernanke is exactly right to ignore price inflation.

As I have said before, however, things are not as rosy as we are being told. Normal people, who live their lives outside the beltway know that the prices of the goods they want to buy are generally rising. Mises alludes to the market alertness of the household in Human Action.
A judicious housewife knows much more about price changes as far as they affect her own household than the statistical averages can tell. She has little use for computations disregarding changes both in quality and in the amount of goods which she is able or permitted to buy at the prices entering into the computation. If she "measures" the changes for her personal appreciation by taking the prices of only two or three commodities as a yardstick, she is no less "scientific" and no more arbitrary than the sophisticated mathematicians in choosing their methods for the manipulation of the data of the market (p. 224).
Last month, the CPI rose 0.5%. If it continues at this rate, price inflation would increase 6% over the next year. That is nothing at which to yawn.

The fact of the matter is that core CPI is rising at a relatively low rate, 0.1% in March, because of the housing market. Prices related to shelter make up 31% of CPI. So many houses and apartments were made during the housing bubble, housing prices are flat or falling almost everywhere you look.

However, this does not decrease the cost of living for those people who are staying put. Those who do not need to buy a house are not helped by lower housing prices, especially if prices on everything else are rising.

And indeed they are. Food and beverage prices increased at an annual rate of  8.4%.

Prices of household fuel and utilities, the part of housing goods that does affect everyone, rose at an annual rate of 7.2%. Transportation prices, which include prices of automobiles, gasoline, and public transportation, rose at an annual rate of 26.4%.

The rise in medical care prices was relatively low at an annual rate of 2.4%. The only truly bright spot for households in which income is tight was that prices for clothing fell at an annual rate of 6%.

Prices of wholesale goods are also on the rise. The producer price index increased 0.7% last month, which implies an annual inflation rate of 8.4%.

Randall Holcombe is right to remind us that we should be careful about making long-term predictions based on a single month's data. But as he notes, "the trend is up."
Looking at the past year, the CPI has increased 2.7% from March 2010 to March 2011. But most of that increase has been recent. In the seven months from March 2010 through October 2010 the CPI rose 0.5%. The five months from October 2010 to March 2011 saw the CPI rise by 2.2%. That’s a 5.3% annual rate of inflation over the past five months.
Finally, there is some stirring of concern amongst some members of the Federal Reserve. Philadelphia Fed President Charles Plosser is now talking about taking the foot off the monetary accelerator. Richmond Fed President Jeffrey Lacker warns that the Fed should not be too slow to tighten monetary policy.  Unfortunately he is not a voting member of the Federal Open Market Committee (the Fed committee that controls monetary policy) this year. Kansas City Fed President Thomas Hoenig said recently that interest rate hikes should come soon. Chicago Fed President Charles Evans, however, is still content with the conventional wisdom that "underlying inflation is still low."

Of course, none of this price inflation had to happen. The Fed did not have to act to engage in any money printing at all. All of the above cheered on past monetary inflation. If they instead allowed capital malinvestment to be liquidated, the economy would be in better shape now than it is. And we would not have to be reporting higher prices everywhere except in housing and apparel.

Sunday, April 17, 2011

Ritenour on Moody Radio

A little over a year ago, I was interviewed by July Roys on Moody Radio's The Morning Ride. We discussed my book, Foundations of Economics, and talked about what Scripture says about why economics is important and what Christian ethics imply about economic policy. I did not have a blog then, so I am posting a link to the interview now. You can listen by clicking here.

Friday, April 15, 2011

Money Can't Buy You Economic Prosperity

That's the theme of my most recent op-ed issued by the Center for Vision and Values at Grove City College. As I say up front:
Defenders of the Federal Reserve have been out in force recently declaring the triumph of Money Printing 2, James Grant’s suggested more truthful term for “quantitative easing.” Some pundits point to an 18-percent increase in the S&P 500 since last August, when the Fed’s policy was announced. They also laud a significant increase in inflation expectations. Nominal GDP is on the rise again and official unemployment is lower. All of these are seen as positive economic signs, indicating that Fed policy is working. Don’t believe it.

Behind the talk is the notion that monetary spending makes the economic world go round. It does not. Increasing money supply does not magically increase the quantity of land, labor, or capital goods available for production. Creating money out of thin air does not produce more consumer goods, and there is the rub. We cannot eat money. We cannot wear money. We cannot live in money. Even the Beatles knew that money can’t buy you love.

Wednesday, April 13, 2011

It's Harder to Protest Globalization

Muhammad Shaaban Azouz
That is the word from Muhammad Shaaban Azouz, leader of the World Federation of Trade Unions. The reason, he says, is that diminished union strength due to globalization makes it harder to coordinate protests between heavily debt-laden countries, such as Greece, in Europe.

Another reason might be, however, that international trade, per se, is no detriment to anyone's real income or wealth. That voluntary exchange is mutually beneficial is a foundational economic principle. As long as people are not coerced into an exchange, each trading party values what it receives more highly than what it trades away. Both parties, therefore, benefit from the exchange. What is true for trading consumer goods is also true in labor markets. When an entrepreneur hires a worker, both he and the worker benefit. What's not to like?

One concern by some in more developed countries is that expanding the global division of labor makes it easier for producers to tap into cheap labor from less developed countries. This, so it is worried, reduces wages and employment for workers in more developed countries. As Mises put it in Human Action (1949),
When the American wage earner refers to equality, he means that the dividends of the stockholders should be given to him. He does not suggest a curtailment of his own income for the benefit of those 95 per cent of the earth's population whose income is lower than his (p. 836).
It turns out, however, that while globalization does result in changing labor patterns, it does not necessarily mean doom for domestic workers in wealthier countries. By any measure, the world economy has become more integrated over the past two decades. What has this meant for the U.S. employment scene? Since January 1980 private employment has increased from 74.6 million to 108.3 million.

At the same time, real compensation increased 38.8 per cent.

Economic history reveals that as the U.S. has become more integrated in a more global economy, total employment and real compensation both increased. This is due to labor becoming more productive as the division of labor expands. Anytime a domestic firm utilizes foreign labor, it does not reduce net jobs in the U.S. It merely frees up labor that can be used producing other things. As the division of labor expands, people can focus even more at producing new things at which they have a comparative advantage. In general labor becomes even more productive, which allows entrepreneurs to increase wages. Employees earn higher wages and, because production is more efficient, are able to buy more goods while paying lower prices. It is hard to protest against that.

Monday, April 11, 2011

The Scriptural Case for Private Property

My article "The Scriptural Case for Private Property and a Free Market," is now available in the most recent (despite its date), Summer 2010, issue of Areopagus Journal . The issue is devoted to the question, "What is social justice?" In my article I develop themes that I have written about a lot in this blog. I lay out what I think is implied in Scripture about the ethics of property. Along with what I write in my book, Foundations of Economics, this article is the most exhaustive treatment on the subject I've given (which is not to mean that it is exhaustive in any absolute sense). It was developed from a paper I delivered at Grove City College's Center for Vision and Values conference Church and State 2008. In my introduction I state: 
While many on the Christian Left may mean well, a truly Christian economic policy must not merely be seeking ends that are perceived as desirous or even specifically Christian. An economic policy compatible with Christian ethics must also achieve its ends with ethical means. Any ethical evaluation of economic policy must take into account the nature of economic transactions. The market economy is a vast network in which human beings are brought together by the exchange of property. Therefore, promotion of any public policy from a Christian perspective must be consistent with Biblical ethics regarding property. Holding interventionist policy up to the light of the Christian ethic of property reveals that state interventionism is not an acceptable Christian means for achieving Christian ends.

This implies, I argue, that a society that embraces the Christian ethic of property will be a free society, and will, therefore, be a society in which people interact in a free market.

Saturday, April 9, 2011

BBC on Japan and the Broken Window Falacy

Steve Fritzinger of the BBC agrees with me about the fallacious notion that Japan's natural  and nuclear disaster will result in economic expansion in Japan. In his outstanding commentary on Business Daily Fritzinger gets it right as he cites Frederic Bastiat's explanation of the broken window fallacy. He makes the following insights:

  • Larry Summers' claim that spending on rebuilding will boost the economy is akin to the claim that a family can improve their economic situation by burning down their house.
  • It is a big mistake to equate GDP with economic wealth.
  • Krugman's hope that such spending could get Japan out of an alleged liquidity trap is crazy.
You can listen to the entire program by clicking here. The commentary begins at 12:17 in the program.

Wednesday, April 6, 2011

James Mill: 'Lenin of the Radicals'

James Mill (1773 - 1836)
On this date in 1773, founding member of the Political Economy club, James Mill, was born. Recent research indicates that it is he that we should credit with the law of comparative advantage, a law that was credited to David Ricardo (not to be confused with Ricky Ricardo). George Reisman considers the best expression of Say's Law to be found in Mill's Commerce Defended.

Murray Rothbard in the second volume of his history of economic thought, Classical Economics, helps us understand how important Mill was behind the scenes, guiding, promoting, and encouraging the work of Jeremy Bentham and David Ricardo. As Rothbard describes Mill:
James Mill (1771-1836) was surely one of the most fascinating figures in the history of economic thought. And yet he is among the most neglected. Mill was perhaps one of the first persons in modern times who might be considered a true 'cadre man', someone who in the Leninist movement of the next century would have been hailed as a 'real Bolshevik'. Indeed, he was the Lenin of the radicals, creating and forging philosophical radical theory and the entire philosophical radical movement. A brilliant and creative but an insistently Number 2 man, Mill began as a Lenin seeking his Marx. In fact, he simultaneously found two 'Marxes', Jeremy Bentham and David Ricardo. He met both at about the same time, at the age of 35, Bentham in 1808 and Ricardo around the same date. Bentham became Mill's philosophic Marx, from whom Mill acquired his utilitarian philosophy and passed it on to Ricardo and to economics generally. But it has been largely overlooked that Mill functioned creatively in his relationship with Bentham, persuading the older man, formerly a Tory, that Benthamite utilitarianism implied a political system of radical democracy. David Ricardo (1772-1823) was an unsophisticated, young, but retired wealthy stockbroker (actually bond dealer) with a keen interest in monetary matters; but Mill perceived and developed Ricardo as his 'Marx' in economics.

Unfortunately his impact on the thinking of the radicals was not altogether positive. He did well to convince Ricardo of Say's Law and the Law of Comparative Advantage. However, he also led Ricardo to embrace a woefully artificial and abstract economic method, oversimplified use of aggregates, extreme Malthusianism, and confusing profit with interest, which resulted in the notion of conflict between labor, capital, and land.

Tuesday, April 5, 2011

What are Volatile Prices?

Bloomberg News tells us that history supports Ben Bernanke's practice of focusing on "core inflation" when considering monetary policy. Core inflation is the CPI with energy and food prices removed. The theoretical rationale for this method is that food and energy prices are "volatile" so it is hard to get identify underlying long-term trends when looking at price data that include these sectors.

Over the past year, core inflation looked like this:

On the other hand, food price inflation looked like this:

And here I thought that volatility meant that prices went up and down.

Energy price inflation looked like this:

Meanwhile prices of goods that are included in core inflation behaved as follows:


Communication and Education:


On the basis of this data, can we really say that energy and food prices or more volatile than the prices of other sectors included in the core?

Sunday, April 3, 2011

Machen On Christianity Versus the Soul-Killing Collectivism of the Modern State

J. Gresham Machen, Presbyterian theologian and seminary professor embraced Reformed theology and saw Jesus Christ, the living Son of God, as the Lord of all life, physical and intellectual as well as moral. This led him to derive from Scripture a profound appreciation for personal liberty. He was asked to contribute to the July 1, 1924 issue of Survey Graphic an essay defending conservative Christianity from the charge that it is reactionary and obstructs social progress. In the article he builds his case by explaining that the individual human being has dignity because he is created in the very image of God. He then applies this truth, showing its importance in social theory:
It is true that Christianity as over against certain social tendencies of the present day insists upon rights of the individual souls. We do not deny the fact; on the contrary we glory in it. Christianity, if it be true Christianity, must place itself squarely in opposition to the soul-killing collectivism which is threatening to dominate our social life; it must provide the individual soul with a secret place of refuge from the tyranny of psychological experts; it must fight the great battle for the liberty of the children of God. The rapidly regressing liberty is one of the most striking phenomena of recent years...If liberty is to be preserved against the materialistic paternalism of the modern state, there must be something more than courts and legal guarantees; freedom must be written not merely in the constitution but in the people's heart. And it can be written in the heart, we believe, only as a result of the redeeming work of Christ.

Saturday, April 2, 2011

Official Unemployment Rate Drops by 0.1%

The official unemployment rate fell to 8.8%, down from 8.9% last month. This has been greeted with Hosannas from various regions of the financial media. Should we get caught up in the hype? Not everyone thinks so. I do not either.

To its credit, in the official labor report, the BLS itself takes a rather measured tone. In the first two pages of the news release the phrases "little changed" or "changed little" are used seven times. The best news in Friday's labor report was that private sector jobs increased by 230,000. Any sustained recovery will be the result in productive activity coordinated by private entrepreneurs. A nation cannot pave the road to prosperity with government jobs. Still, an important reason that the official rate is not a lot higher is that the civilian labor force is still lower than just a year ago and way down from its peak in 2008. If fewer people are actively looking for work, the unemployment rate will decline, even if the number of jobs remains the same.

Even given the news of increased private sector employment, however, it is disheartening to hear people interpret the recent drop in unemployment as vindication for Money Printing 2 and Obama's fiscal stimulus. There is, of course, a superficial post hoc, ergo propter hoc plausibility. After all, the Fed did increase the monetary base by over a trillion dollars.

And the national government has increased federal spending so much that it has made annual budget deficits above a trillion dollars the new normal.

Nevertheless, people who make the claims that such monetary and fiscal expansion have sown the seeds of recovery do so because they do not understand capital theory. Certainly an increase in government spending funded by debt financed by monetary inflation can stimulate a lot of activity. As Austrian economists since Ludwig von Mises have explained, monetary inflation via credit expansion can encourage investment in long-term capital intensive production projects. Those entrepreneurs who get the new money first will use their new purchasing power to demand more labor, bidding some workers away from other employers and other workers out of idleness by offering higher wages. In such circumstances the unemployment rate can fall.

Eventually, however, economic reality prevails, revealing that the new funds available to entrepreneurs were not due to increased savings, but pure monetary inflation. In other words, the capital structure has been distorted via malinvestment. Once it becomes apparent that there is not enough real savings to fund the real capital investment necessary to complete all of the new longer-term projects begun, recession sets in, businesses who cannot make it must liquidate and unemployment will rise again.

It is entirely possible, indeed likely, that much of whatever improvement there has been in the labor situation is not sustainable because it has been funded by artificial stimulus. Productive employment, precisely because it is truly productive, does not need to be propped up by inflation and government spending. It is the result of productive investment funded by real voluntary savings.