Saturday, June 19, 2010

"China exports every six hours what the US exported in ALL of 1978"

A fact from this book. WOW! My, how has trade changed...

40 Great Inspirational Speeches from movies mashed into one Great Speech

Go HERE to see more mash-ups on a variety of topics...Mucho entertainment and a little education to boot!!

Do you self correct?? If so, then your sign is Microeconomics. If not, then it is Macroeconomics...Here's your sign...

Microeconomic and Macroeconomic Excess Supply

A rather simple (by that I mean in layman's terms) explanation of how markets clear, or don't clear, in a Microeconomic vs Macroeconomic sense from Professor Brad Delong.  The writer is suggesting, in a microeconomics sense, markets clear pretty well on their own as business and workers adjust to changes in market conditions, whether it is from creative destruction, out-sourcing, off-shoring, etc.  Resources (land, labor, capital, entrepreneurship) shift to production more desired by society through the mechanism of supply and demand. 
""...Overall unemployment may rise a bit or for a while as this process of adjustment takes place--it depends whether entrepreneurs and producers in the expanding industry where excess demand emerges are more or less on the ball, keen-eyed, and keen-witted than those in the industry where excess supply emerges and where businesses shrink. But the process of adjustment, even with frictional unemployment while it takes place, is a good thing--it makes us all richer. Attempts to stop it in its tracks or short-circuit its mechanisms are counterproductive and harmful. The end of the process comes and excess demand and supply are eliminated when there are more people making the things that are wanted more and fewer people making the things that are wanted less...."""
However, he suggests as you move to the Macroeconomic level this relationship breaks down.
""...But in macroeconomics things are different. The excess supply is economy-wide--throughout all commodity markets, producing supply in excess of demand for goods, services, labor, and capacity. Producers and entrepreneurs respond to an aggregate demand shortfall just as individual producers respond to a particular shortfall of demand for their products: they hold sales to liquidate inventories, they cut prices, they cut wages to try to preserve margins, they fire workers. In the macroeconomic case, the dynamic process that leads to the elimination of excess supply and its counterbalancing excess demand in the microeconomic case gets underway--or, rather, half of it gets underway.
The problem is that the set of industries that are shrinking is made up of pretty-much-everybody. There are no industries that are expanding. The excess demand is not for the products of a goods-and-services producing industry that can rapidly ramp-up production by employing lots more labor. The excess demand is in finance: for means-of-payment, or safe high-quality assets, or for long-duration sales vehicles. There is a rise in unemployment from the flow out of goods-and-services producing industries where the excess supply has appeared. But there is no countervailing flow out of unemployment. How do you put large numbers of people to work making more Federal Reserve notes or increasing the supply of liquid assets that are means-of-payment that are the reserve deposits of banks? How do you shift the flow of production to instantaneously raise the stock of long-duration assets, of claims to wealth that are shares in companies with secure long-run prospects that are vehicles for moving purchasing power across time from the present to the future? You can't...""
In microeconomics, the market "self-corrects" when the economy is expanding and there is room for resources and labor to move to a new level of product/service mix with no net decrease in overall employment.  However in a macroeconomics view when WHOLE industries (vertically and horizontally) experience a slow-down there is no where for productive resources to go---sort of in a holding pattern. and remain idle  He does not come right out and say it, but his premise, I believe, is that the macoeconomy does not "self-correct" and that when the "free-market" (interaction between buyers and sellers) breaks down, then the only other game in town is for government to step in to "prime the pump" with spending, and perhaps an industrial policy (i.e. alternative energy), to get things moving again.

Friday, June 18, 2010

YES!! Coffee reduces heart disease! Up next: Omellettes and Cinnamon Buns and I will be good to go...

Tea and coffee 'protect against heart disease'
Drinking several cups of tea or coffee a day appears to protect against heart disease, a 13-year-long study from the Netherlands has found. It adds to a growing body of evidence suggesting health benefits from the most popular hot drinks. Those who drank more than six cups of tea a day cut their risk of heart disease by a third, the study of 40,000 people found. Consuming between two to four coffees a day was also linked to a reduced risk. While the protective effect ceased with more than four cups of coffee a day, even those who drank this much were no more likely to die of any cause, including stroke and cancer, than those who abstained.

BP CEO is off the hook as most hated man in the US...for a while, anyway...

I made this using BigHugeLabs

Video of the NON-GOAL--start and stop it starting around 35 seconds--Judge for yourself

Sleeping Late? What is the opportunity cost of that decision?

Nice example of opportunity costs---Yes, you can learn economics through comics too!! :) (HT: MV=PQ: A Resource for Economic Educators

Most ridiculous story of the year---8 year old's hat BANNED from school because it had tiny plastic army men attached. What would the Toy Story soldiers say about this?

Toy soldiers run afoul of school's weapons ban
Christan Morales said her son just wanted to honor American troops when he wore a hat to school decorated with an American flag and small plastic Army figures.
But the school banned the hat because it ran afoul of the district's zero-tolerance weapons policy. Why? The toy soldiers were carrying tiny guns.
"His teacher called and said it wasn't appropriate," Morales said.
Morales' 8-year-old son, David, had been assigned to make a hat for the day when his second-grade class would meet their pen pals from another school. She and her son came up with an idea to add patriotic decorations to a camouflage hat.
Earlier this week, after the hat was banned, the principal at the Tiogue School in Coventry told the family that the hat would be fine if David replaced the Army men holding weapons with ones that didn't have any, according to Superintendent Kenneth R. Di Pietro.

Obnoxious Food Item of the Month---Soft Pretzel Stuffed with Philly Cheese Steak---mmmmm....

The Latest From the Gross Foods Arms Race: Philly Pretzel Factory's New Cheesesteak Pretzel
""​Food chains across the country seem to have taken This is Why You're Fat to heart. First there was the Double Down, sandwiching bacon-and-cheese between fried chicken, and then IHOP's Stackers, smooshing together pancakes and cheesecake.
The latest in the greasy fast food arms race is being introduced today at Philly Pretzel Factory--a mash-up of pretzel and cheesesteak.
The cheesesteak pretzel looks like your average over-sized twisty treat, but it's stuffed with ground beef, onions, and cheese. Early adopters seem excited that it's easier to eat than a traditional cheesesteak--an innovation in easy delivery of meat and cheese to mouth, a/k/a the American dream.
The only Philly Pretzel Factory in the five boroughs is on Staten Island (1200 Hylan Boulevard), but there are also branches in Newark and Jersey City. The Staten Island store confirmed that they have the cheesesteak pretzels in stock, and they will give them away for free next Monday the 24th from 11 a.m. to 2 p.m.""

"It's a bird, It's a plane, It's..It's, ballons?"--In South Korea they scramble jets!

South Korea military alert over children's balloons
Balloons released by schoolchildren sparked a major security alert in South Korea, reports say, amid heightened tensions with North Korea.
A resident of Ansan, near Seoul, reported seeing 40-50 objects resembling parachutes falling on a mountainside. The military and police mobilised a special joint task force. Upon investigation, the objects turned out to be helium balloons released by a local school. Tensions between North and South Korea have been running high since the sinking of a South Korean warship earlier this year. Seoul said the ship was torpedoed by Northern forces. In another incident earlier this month, an alert was raised after an explosion was heard on Yeonpyeong island, near the sea border with North Korea, and a diving suit was found on a shoreline, the JoongAng newspaper reported. A joint military and police investigation found that the diving suit was abandoned by a fisherman and that the explosion had been caused by a South Korean mine, the paper said.

How do you say "supply-side economics" in Russian? Don't have to--A 0% Capital Gains Tax Rate is a Universal Language

Russia is ELIMINATING taxes on "capital gains".  Most simply, this means they will not tax the gains/profits from investments made in Russia.  The article does not say how narrowly they define a capital gain in this case. Traditionally, a capital gain is the profit made on a non-inventory investment such as stocks, bonds, etc.  For example if I buy a stock and it appreciates in value from $100 to $150 then my capital gain when I sell is $50 per share  which is taxed at the prevailing capital gain tax rate.  I am assuming the Russians are talking about the gains from physical capital such as land, equipment, buildings, factories, etc. Lowering the capital gains tax will decrease the cost of producing for a business.  This is a significant incentive for a business to move to Russia. However, capital gains tax is only one consideration when deciding to locate a business.  Private property rights, local/national governance and a suitable workforce are some of the other variables.

From BBC: Russia to drop capital gains tax to attract investment
""Russia will scrap capital gains tax on long-term direct investment from 2011, President Dmitry Medvedev has said.
Mr Medvedev said that in terms of improving Russia's investment climate "we, I hope, are moving forward".
He also said the number of "strategic" firms, in which foreign investment is restricted and which cannot be privatised, would fall from 280 to 41. Mr Medvedev has been promoting the idea of "modernisation", including diversifying the Russian economy. Also, many investors have been wary of coming to Russia because of corruption and the dominant role the state plays in Russia's business life. Mr Medvedev told the St Petersburg International Economic Forum that long-term direct investment was "necessary for modernisation". He also said that he would ask the government to create a special investment public-private fund. "Such an idea should be implemented within a year," he said.

The Russian economy, heavily dependent on oil and gas revenues, was enjoying several years of robust growth in the middle of the 2000s. However, it was hit hard by the global economic crisis, and in 2009 the economy shrank by 7.9%. The economy is forecast to return to growth this year, expanding by about 4%. But Russia is also set to run a budget deficit for several years to come. Its oil revenues fund, which has been financing the deficit, is expected to end next year, and the government wants to attract more foreign investment to boost the economy. In an interview with Bloomberg Television earlier this week, Russia's First Deputy Prime Minister Igor Shuvalov said: "While Russian stocks may be undervalued, Russia is not seeking investors interested in quick and easy money." "I would welcome real investors who can build factories, something new in this country."

Thursday, June 17, 2010

Which is more risky--flying through volcanic ash or driving to the store?

A very interesting article on risk and are we, as individuals, able to accurately assess risk especially if the consequences are not immediate or we don't associate one danger with another because they appear remotely connected.

From  BBC: Is driving more dangerous than flying through ash?
""The problem is that people are generally terrible at making rational decisions about risk.
To take just one of many examples, many Americans avoided planes after 9/11 and travelled by road instead. As a result, a team of researchers from Cornell University estimated there were at least 1,200 more deaths on America's roads than there would have been...Some 1,200 people died because they were avoiding what they perceived to be a riskier form of transport, 954 more than who died on the planes used for the terrorist attacks. 
An example of government not properly assessing risk...I don't have the source handy, but I understand that when the Federal Aviation Administration (FAA) mandated that people with small children buy an extra seat and use a car seat rather than hold children in their laps, deaths of small children actually increased! They did not increase in planes however (as far as I know, no child has been killed in-flight as a result of turbulence), but on the highways, as parents elected to not pay for the extra seat because of the expense and drove instead.  More families driving than flying, hence the incidents of car accidents increases. (Note: I am not saying it is the SAME kids getting killed in accidents as would be flying)...

Who spends a dollar more effectively--the Fed Govt or You?...Guess again!

     NewsFlash: We are/have been in a recession!  In this particular recession it is generally accepted by economists (relatively objective ones)  that it is because of sagging Aggregate Demand. This means our total demand for US made goods and services is LESS than our ability to supply US made goods and services (aka Aggregate Supply).  We don't necessarily have an excess supply of goods/services, but we have an excess supply of CAPACITY to produce goods/services---a gap between our actual production and our potential to produce good/services.   Because people are not buying "stuff" then businesses are not selling stuff and certainly not re-ordering stuff.  This in turn effects employment as employers shed employees as demand for their goods declines.  As more people become unemployed they buy less so businesses lay workers off or close entirely, so on and so forth.  It becomes an economic death spiral downward. 
    This means we need to get money into the hands of people/businesses so they can spend it to INCREASE or at least STABILIZE Aggregate Demand so businesses will sell/re-order more goods, and more people can keep there jobs, and hopefully more will be re-called as business picks up--Phew! That was hard work! How best to achieve this?  
     In general, we all think in terms of "bang for the buck" (hey, we are Americans, after all).  What transmission mechanism that originates from the Federal Govt is going most effective---Govt spends a dollar OR Individuals spend a dollar from a tax cut?  Oh, boy, here we go!
     Below is a chart that represents research into how much ONE DOLLAR spent (by govt or individuals) INCREASES GDP, which is the goal of congress/the President. This is called "The Multiplier Effect", or more specifically, "The Keynesian Multiplier Effect".

Mark Zandi via  Ezra Klein 
     Notice that one dollar spent can either yield a change in GDP of more than one dollar or less than one dollar.  How can this happen? 
     To simplify, lets assume we ALL behave the exact same way.  If I get a dollar in the form of a tax cut, research shows that I will save some portion of that dollar and spend the rest.  So if we all save 10% ($.10) of our dollar then we will spend the other 90% ($.90), thereby increasing GDP by $.90.   Economists would say we are acting "rationally" by saving some of our bounty.  However, government does not save ANY of that dollar because, well, why would they? So, on the face of it, which entity, the  individual OR the government, is going to have the BIGGEST impact on the purchase of GDP in that FIRST round of spending?  Why the government, of course (I just proved it to you mathematically!!).  Govt is going to buy $1.00 worth of "stuff" and I am going to buy only $.90. 
    However, as you look at the graph you will notice as you start from the top and move down you will see a transition from Tax Cuts/Rebates to more direct spending by the government then back to spending by individuals.  Does this not go against what I just said about government spending being king? Sort of...
    There IS going to be "leakage" from that federal dollar spent and not all of it will be spent directly on goods/services.  Some of that dollar will be subjected to what I call "WTF"---no it is not what you are thinking, but  it could be, I suppose.  For me, WTF is "Waste, Theft, Fraud".  Ultimately we want to look at who, an individual, business, or government entity is going to spend MORE of that initial dollar when it is received, hence affecting Aggregate Demand in the most impactful way.
   Looking at the graph, we see the group with the highest tendency to spend an additional dollar they receive is the unemployed and others receiving direct government transfers. This makes sense, doesn't it? These are people living at the margin, as economist put it. Or more simply, people who have little immediate need to save but the most incentive to spend right away.  They spend on necessities, one would suppose. Necessities, like food, rent, utilities and other basic staples, that are made in the US (mostly).  This allows businesses to stay open to sell stuff and re-order more stuff AND keep/hire employees.  Now Aggregate Demand is STABILIZED! Perhaps it inches forward to close the recessionary gap?
    This is important to understand because there is A LOT of politics that takes place between the gaps of all the groups in the above graph.  Who should get a tax cut, if anyone? Who should spend money in a recession:? The Federal Govt directly, or people who are most likely to spend it to get the economy stabilized?  What do YOU think????

"And then, And then, I threw a puppy at the Hells Angels and Escaped on a Bulldozer--yeah, yeah, that's what I did!"--no, this was not Will Ferrell!

I spit milk through my nose after reading this...Close your eyes and envision this scenario from start to finish...The Onion could not do any better...

German student attacks Hell's Angels with puppy

A German student created a major traffic jam in Bavaria after making a rude gesture at a group of Hell's Angels motorcycle gang members, hurling a puppy at them and then escaping on a stolen bulldozer.
German police said on Monday that after making his getaway from the Hell's Angels club, the 26-year-old dumped the bulldozer, causing a 5 km (3 miles) traffic jam near the southern town of Allershausen, local police said. He then fled to his home nearby where he was apprehended by the police.  "What motivated him to throw a puppy at the Hell's Angels is currently unclear," said a spokesman for local police, adding that the student had lately been suffering from depression.  The puppy was now in safe hands, the spokesman added.

Arizona has done some squirrely things lately, but this the most squirrely---No, really, it is literally Squirrely

Good use of tax money?? I report, you decide...:)

Arizona Spends $1.25M to Save 250 Squirrels
""Arizona is spending $1.25 million to build bridges for endangered squirrels over a mountain road so they don't become roadkill and then monitor their health.
The money is being spent, officials said, because cars kill about five of these squirrels each year.
While most suburbanites may be baffled why anyone would protect a pesky squirrel, these are Mount Graham red squirrels, a breed once thought to be extinct. Only 250 of them are known to live near the top of Mount Graham. The Federal Highway Administration grant will be used to build rope bridges over the lone road through the squirrels' habitat, according to Arizona Department of Transportation Community Relations Director Timothy Tait. The DOT plans to install 41 of the "canopy tunnel crossings" at a cost of $400,000.
Another $160,000 will be spent on cameras to monitor the bridges, and the rest of the money will fund a project to monitor the rodents.

That works out to about $5,000 per squirrel.""

Wednesday, June 16, 2010

NEVER have to think again about buying "the lastest and greatest"---this Chart does it for you!!

Have you ever wondered how long does it take overseas to make the equivalent of US minimum wage?

Click the image to Enlarge

The shocking disparities of labor cost
Source: FixR

"Bond, James Bond", I mean "Bond, Japanese Bond"--Click HERE to see the NEW Bond Girls!!

Well, not in the traditional sense of a Bond Girl...The Japanese Government is trying lure younger men to buy Government Bonds (Government Debt)...Gives new meaning to the name "Bond Girls"...

Bloomberg: Women Prefer Men Holding State Bonds, Japan Ad Says
""Japanese women are seeking men who invest in government bonds, according to an advertisement being run by the Ministry of Finance.
“I want my future husband to be diligent about money,” a 27-year-old woman says in an ad being run in free magazines promoting a fixed-rate, three-year note that Japan started selling last week. “Playboys are no good.” She’s one of five women featured in the page, which says “Men who hold JGBs are popular with women!!”
The ministry commissioned the ads to appeal to citizens for money at a time when record government borrowing threatens to outstrip demand. Prime Minister Naoto Kan, who took office yesterday, said he doesn’t have an instant fix to rein in the world’s largest public debt.
The government’s plan to attract marrying-age men comes after a campaign aimed at retirees started last August. That push featured Junko Kubo, a former anchor on Japan’s public broadcaster NHK, in ads placed in the backs of taxi cabs. Kubo followed Koyuki, an actress and model who in 2003 appeared in “The Last Samurai” with Tom Cruise as well as posters for government bonds.
“It strikes of desperation,” Christian Carrillo, a senior interest-rate strategist in Tokyo at Societe Generale SA said about the ad campaign. “I doubt this will be a successful strategy to attract retail investors.”"

"Oooohhhh, Ahhhhhh, Only at Mattress Giant!"...umm, no, not this $33,000 mattress!!!

""How much would you spend for a good night's sleep?
Some people might say $33,000. That's the price of E.S. Kluft & Co.'s hand-tufted, king-size Palais Royale mattress and box spring, currently the most expensive American-made mattress set on the market. The company says it has sold about 100 since introducing it in 2008.  Or maybe it's $44,000—the price tag on Kluft's Sublime model, which the company has teed up for a launch later this year"" rest of story HERE and Click on picture to see how it is made!

Oil is THE Green Energy source we have been looking for all along....Say What?

Opportunity cost(s) is/are the most under-appreciated concept in economics, but is perhaps the most powerful when synthesized into critical thinking.  Broadly defined,  it means what you give up to get more of something else, but specifically it is the next best alternative forgone when one makes a choice.   Maybe because economists think in terms of opportunity cost is why people get so frustrated with economic analysis.  Laymen see it as not being able to make a decision ("analysis paralysis"). Economists see it as making sure you think of as many ramifications (positive and negative) when making a decision or fashioning a public/private policy.  As defined this way, you have to give weight to as many things you may have to do without as well as the things you may gain in the course of making a decision. Two examples are provided by Professor Mark Perry at Carpe Diem. You have to count the benefits as well as the costs, it is only honest to do so...
1. “Oil may be the single most flexible substance ever discovered. More than any other substance, oil helped to shrink the world. Indeed, thanks to its high energy density, oil is a nearly perfect fuel for use in all types of vehicles, from boats and planes to cars and motorcycles. Whether measured by weight or by volume, refined oil products provide more energy than practically any other commonly available substance, and they provide it in a form that’s easy to handle, relatively cheap, and relatively clean.’’

~Manhattan Institute’s Robert Bryce in “Power Hungry."

2. "Fossil fuels have been one of the great boons both to humanity and the environment, allowing forests to regrow (now that we don't use wood for heating fuel or grow fuel for horses anymore) and liberating billions from backbreaking toil. The great and permanent shortage is usable surface land and fresh water. The more land we use to produce energy, the less we have for vulnerable species, watersheds, agriculture, recreation, etc. As counterintuitive as it may be to say so, oil is a green fuel, while "green" fuels aren't. And this spill doesn't change that fact." 
~Jonah Goldberg, "Oil: The Real Green Fuel"

Tuesday, June 15, 2010

Wages in China too high ($1.84/hr)---Gotta move to Vietnam to produce ($.49/hr)---Crazy or Crazy like a Fox?

A race to the bottom OR is the bottom being eliminated?  Wages paid to Chinese apparel workers have increased and manufacturers/outsourcers are looking for ways to (1) get around the increase in wages by decreasing other variable costs that go into production or (2) move production to a lower wage country, notably Vietnam.  I have mentioned in class for the last two years that Vietnam is investing in infrastructure, education and creating a more business friendly environment. We have to stop thinking of these places as being backwater "villages".  They are quickly modernizing, however the wages are painfully low, by OUR standards (see graph below).  While there will be no major migration of manufacturing to Vietnam, there is enough movement to get the attention of the Chinese and various apparel retailers.  The Vietnamese are "exploiting" their comparative advantage---willingness to do quality work at lower wages than Chinese workers.  When we look at the relative pay, $1.84 in China and $.49 in Vietnam, it seems pitiful, until you look at what is the alternative for Vietnamese workers?  Does this type of job offer them a foot in the door to a higher standard of living, like the Chinese did 20 years ago?  Do they have a right to use this comparative advantage, even if it seems "exploitative", to climb the economic ladder? Or is this way of economic improvement not right and too exploitative and should be discouraged? What do you think?

""Rising labor costs in China are forcing U.S. apparel and accessories retailers, such as AnnTaylor Stores Corp. and Coach Inc., to consider relocating at least some of their production to countries with cheaper work forces. But doing so could risk increasing other expenses, such as shipping.
"We are looking to move production into lower-cost geographies, most notably Vietnam and India," Mike Devine, Coach's chief financial officer, said at a conference last week. The luxury-handbag retailer already produces goods in those countries, but plans to increase its presence in both of them.""

There is money in Dog Poop...No, REALLY, there is money IN dog poop!!

From NYTIMES: Pet Waste Removal Worker Finds $58 in Dog Poop
This is why your mother says to wash your hands after handling money: A St. Louis worker found $58 -- packed in dog poop. Steve Wilson works for DoodyCalls Pet Waste Removal. On a recent call, he noticed money sticking out from doggie doo. Wilson wasn't sure what to do, but eventually pulled out the bills, sanitized them, placed them in a plastic zip-locked bag and returned them to the customer. It turned out to be $58. The company said the money was torn, but the serial numbers were identifiable, which means the bills could be returned to a bank and replaced with new money. The Association of Professional Animal Waste Specialists says Wilson is the first person in his profession to find and report money in dog poop.

AMAZING interactive Graphic showing migration patterns in US in 2008--Where people are moving to AND away from...

You will find a GREAT interactive map HERE of migration patterns in the US JUST in 2008...Select a city  and watch! If you click on the map itself you can select specific counties--it is that detailed.  Black lines mean moving into and red means moving out...Amazing differences!! Have fun!  (HT: Carpe Diem)

"Oil Spill May End Up Lifting GDP Slightly"---There is no profit in destruction--Frederic Basitat

"Society loses the value of objects unnecessarily destroyed," and at this aphorism, which will make the hair of the protectionists stand on end: "To break, to destroy, to dissipate is not to encourage national employment," or more briefly: "Destruction is not profitable."

A significant negative in the way we count Gross Domestic Product (GDP) is we don't SUBTRACT damage (natural or man-induced) to existing goods and services already provided (i.e.infrastructure).  Example: A house in hurricane Katrina is destroyed.  The value of the house is not subtracted from GDP, ONLY the value of the goods/services purchased to re-build that house is counted.  GDP is forward looking and does not take into consideration the value lost to society to "enjoy", as Bastiat puts it.  An alternative measure of GDP is available called "Gross National Happiness"--Click HERE to find out more about it...

Read more about this GREAT Frenchman..

From WSJ: Oil Spill May End Up Lifting GDP Slightly

""The continuing oil spill in the Gulf of Mexico could end up adding a bit of growth to the U.S. economy as the huge cleanup efforts in some ways outweigh negative factors, analysts at J.P. Morgan Chase said. 
Underlining that gross domestic product measures are often not a good guide to an economy’s well being, the bank said in a research note its best guess is that the impact on the U.S. economy of BP’s Gulf Coast spill would be minimal.
“The spill clearly implies a lot of economic hardship in some locations, but given what we know today, the magnitude of these setbacks looks dwarfed by the scale of the US macroeconomy,” said chief U.S. economist Michael Feroli. If anything, he added, U.S. GDP could gain slightly from it.
The six-month moratorium on deep-water drilling may cut U.S. oil production by around 3% in 2011 and cost more than 3,000 jobs, according to J.P. Morgan’s energy analysts.
Commercial fishing in the Gulf is also likely to suffer, but that’s only about 0.005% of U.S. GDP. The impact on tourism is the hardest to measure, although it’s fair to expect that many hotel workers who lose their jobs will find it hard to get new ones.
Still, cleaning up the spill will likely be enough to slightly offset the negative impact of all this on GDP, J.P. Morgan said. The bank cites estimates of 4,000 unemployed people hired for the cleanup efforts, which some reports have said could be worth between $3 and $6 billion.
“If realized, this would likely mean a near- to medium-term boost to activity that might offset the drags,” Feroli said.""

Trade allows us to get more goods at lower prices...does this make us better or worse off?

In my AP Macroeconomics class, when we look at the numbers in the Consumer Price Index, I ask students to see more than just numbers and statistics.  Reports like these (the CPI) can tell a story and reflect what is going on "out there in the real world".  One connection I ask student to make is to look at how the price(s) of certain categories of goods have changed over time and WHERE they are produced.  Are the goods subjected to competition domestically AND internationally? Does this make a difference in terms of the price of those items? The following graphs from HERE illustratre the price changes over time. The first one shows categories of goods that have INCREASED in price and the second categories of goods that have DECREASED in price...

The simple definition of inflation is "too much money chasing too few goods".  When you have world-wide competition, the production of goods is more diffused and plentiful, making the above definition harder to come to fruition and tends to put a damper on inflation.  However, when domestically you dont have the ability to greatly increase the production of a good relative to the money flowing to it then the definition becomes more appropos (education and healthcare supply are relatively INELASTIC).  One more observation---of the 2 categories of goods that have risen faster than anything else in the CPI, what do they have in common?   (HT: CoyoteBlog)

What do this Matador and a Teacher at O.D. Wyatt have in common?

I can sympathize with this bullfighter. This is the way I felt after my first two weeks at O.D. Wyatt High School in Ft. Worth.  I lost my courage and wanted to break my contract!.  I had to teach Freshman Geography and they were the bulls and I was the timid matador---I was "gored" by the students for awhile! Mr Weaver saved my bacon.  I will never forget him... LOVE O.D. WYATT!!!! :)

From BBC: Mexican bullfighter flees from ring (click link to see video)
""A bullfighter was arrested, apparently for breach of contract, after he turned and ran from the ring at the beginning of a fight. Cristian Hernandez later re-entered the ring but soon left again and was taken to a police station. Several months ago, another bull had gored Hernandez in the leg. After his latest ordeal the matador has said he will retire from bullfighting.""

Everything you wanted to know about the Vuvuzela and less...

Everything you wanted to know about the Vuvuzela, but were afraid to ask...Also click on the link to view a video of a professional musician playing it...What a treat!!!!

From BBC: 10 things about the vuvuzela
What does "vuvuzela" mean?
Again, it appears to be a matter of debate. Some think it comes from the Zulu word for "making noise". Others say it is township slang for "shower" because it "showers people with music". Many believe it means "pump up".
See the rest of the known "facts" about this menace HERE

If you take showers DON'T, I repeat DON'T read this blog entry! It will be detrimental to your health...

No, this is not a reference to the shower scene in "Psycho", but more subtle. .  Don't scientists have better things to do...

FromBBC: Taking showers 'can make you ill'
""Showering may be bad for your health, say US scientists, who have shown that dirty shower heads can deliver a face full of harmful bacteria.Tests revealed nearly a third of devices harbour significant levels of a bug that causes lung disease. Levels of Mycobacterium avium were 100 times higher than those found in typical household water supplies. M. avium forms a biofilm that clings to the inside of the shower head, reports the National Academy of Science.""

Relax Che, at least the T-Shirt and Coffee Mugs were made in China...(Thanks Anglin)

Monday, June 14, 2010

This is NOT an Onion Headline: U.N. Elects Iran to Commission on Women's Rights

This is why the UN, it, uh, well, uh, just read the short article and see if you can believe it yourself THEN formulate you own opinion of the UN and its efficacy...

EXCLUSIVE: U.N. Elects Iran to Commission on Women's Rights

""Without fanfare, the United Nations this week elected Iran to its Commission on the Status of Women, handing a four-year seat on the influential human rights body to a theocratic state in which stoning is enshrined in law and lashings are required for women judged "immodest."
Just days after Iran abandoned a high-profile bid for a seat on the U.N. Human Rights Council, it began a covert campaign to claim a seat on the Commission on the Status of Women, which is "dedicated exclusively to gender equality and advancement of women," according to its website.
Buried 2,000 words deep in a U.N. press release distributed Wednesday on the filling of "vacancies in subsidiary bodies," was the stark announcement: Iran, along with representatives from 10 other nations, was "elected by acclamation," meaning that no open vote was requested or required by any member states — including the United States. learned of the press release only after being alerted to it by Anne Bayefsky director of the Touro Institute on Human Rights and the Holocaust.""Click HERE to continue reading..

Are 9/11 and the Oil Spill similar in National Impact?

President Obama directly or obliquely ( I don't know the context) compared the oil spill to 9/11.  He is shown in this photo eating a snow cone on a beach in the Gulf Coast, presumably reassuring people and encouraging them to not cancel vacations and to come visit the area. Good enough, I support that.   After 9/11 President Bush encouraged people to "go shopping" because the economy was tanking.  Of, course he got alot of flack and derision, and perhaps deservedly so. Is there a double standard in the media? In politics? Are the situations similar or different? Remember, I did not make the analogy, the President did.  One could say, well, in 9/11 people died and it was crass to encourage shopping.  Again, I did not use the 9/11 analogy....What do you think???
"In the same way that our view of our vulnerabilities and our foreign policy was shaped profoundly by 9/11, I think this disaster is going to shape how we think about the environment and energy for many years to come," he told the US political website Politico"

News Flash: Congress just passes law establishing American Eagle Day! A good days work...

I am watching C-SPAN right now...the House is voting on a resolution to establish June 20th as American Eagle Day...So far no one is voting against it!! Finally a bi-partisan issue we can all agree on...I am fully supportive and would NEVER suggest they (Congress) better things to do.  Actually, it may be a good thing they are doing this.  Keeps them out of trouble....Update while writing this---Resolution PASSES! 360 to 0...wonder where the other 75 Members are?  Happy American Eagle Day!! :)

I am buying the White House--First thing I will do is get rid of all that old furniture...

I like the fact that is listed as "For Sale By Owner"---I appreciate the President trying to save the taxpayers the commission on the sale--- :)
""As we looked through the latest properties to hit the market this weekend, we came across a rather famous address that is apparently now for sale: 1600 Pennsylvania Avenue NW -- aka The White House. Redfin has the executive lodging listed for $10 million. The 55,000 square-foot property has a price per square foot of $182.  Obviously this is an error. It looks like Redfin software pulled an example listing from the website by mistake. That example listing was the White House. We have e-mailed Redfin for comment. Aside from the price per square foot calculation, the thing that we like best about the listing is that it is for sale by owner."" (source: HERE) HT: Drudge Report.

Great Economics Jokes! (No, that is not one of the jokes)...

Economics jokes! At the margin, they are REALLY funny!! :) Also, see video at the end from a bonified Economics Comedian (no, not an oxymoron) Caution: Some are "inside baseball"...HT: Economists Do It With Models (yes, that is the name, visit it!!)

Q: How many Chicago School economists does it take to change a light bulb?
A: None. If the light bulb needed changing the market would have already done it.

Q: How many mainstream economists does it take to change a light bulb?
A: Two. One to assume the existence of ladder and one to change the bulb.

Q: How many neo-classical economists does it take to change a light bulb?
A: It depends on the wage rate.

Q: How many conservative economists does it take to change a light bulb?
A: None. The darkness will cause the light bulb to change by itself.

Q: How many B-school doctoral students does it take to change a light bulb?
A: I’m writing my dissertation on that topic; I should have an answer for you in about five years.

Q: How many investors does it take to change a light bulb?
A: None - the market has already discounted the change.

Q: How many Keynesian economists does it takes to change a light bulb?
A: All. Because then you will generate employment, more consumption, dislocating the aggregate demand to the right.
Q: How many marxists does it take to screw in a lightbulb?
A: None - the bulb contains within it the seeds of its own revolution.

Q: How many economists does it take to change a light bulb?
A: Seven plus or minus ten.

Q: How many economists does it take to change a light bulb?
A: Irrelevant - the light bulb’s preferences are to be taken as given.

Given 1000 economists, there will be 10 theoretical economists with different theories on how to change the light bulb and 990 empirical economists laboring to determine which theory is the *correct* one, and everyone will still be in the dark.

Q: How many economists does it take to change a lightbulb?
A: Eight. One to screw it in and seven to hold everything else constant.

Bad Congressman!! No one knew him before but I think in the next few days EVERYONE will know who he is...

I dont know if this Congressman can't take the pressure and cracked; hates people who ask questions; or these "ambush interviews" (by partisans of BOTH parties) are out of control.  The kid did not really have a question, ("Do you fully support the Obama agenda?" What is that??) he was looking to provoke.  HOWEVER, he should not have assaulted/restrained the young man such as he did.  What should he do? Resign? Be censured? Get arrested?  Most assuredly you will see this video on the mainstream news in the the next couple of days....Source: DrudgeReport

Sunday, June 13, 2010

US paying for 9 year olds to carry machine guns....Does this outrage you???

Please read the article and watch the video and see that my blog title is not rhetoric.  This was the topic for our Junior World Affairs Council at my school this year.  We should not be complicit in financing conflicts where 9 year olds serve in military positions in the open and with common knowledge in the international community....Just my opinion...(see video the accompanies the story below)

NYTIMES: Children Carry Guns for a U.S. Ally, Somalia

""It is well known that Somalia’s radical Islamist insurgents are plucking children off soccer fields and turning them into fighters. But Awil is not a rebel. He is working for Somalia’s Transitional Federal Government, a critical piece of the American counterterrorism strategy in the Horn of Africa.
According to Somali human rights groups and United Nations officials, the Somali government, which relies on assistance from the West to survive, is fielding hundreds of children or more on the front lines, some as young as 9.
Child soldiers are deployed across the globe, but according to the United Nations, the Somali government is among the “most persistent violators” of sending children into war, finding itself on a list with notorious rebel groups like the Lord’s Resistance Army.
Somali government officials concede that they have not done the proper vetting. Officials also revealed that the United States government was helping pay their soldiers, an arrangement American officials confirmed, raising the possibility that the wages for some of these child combatants may have come from American taxpayers.""
Click HERE for Video of Child Soldiers TODAY "working" in Somalia---VERY COMPELLING and SAD to watch...

A MUST READ! Vast areas of minerals (Gold, Iron, Copper, and Lithium) JUST discovered in Afghanistan...

A MUST READ article if you follow the war in Afghanistan!! There is a VERY interesting development in Afghanistan.  The discovery of previously unknown vast quantities of minerals  (notably Lithium, which is used in batteries for an array of electronics) has the potential to be a blessing or a curse.  The Congo has a severe problem of "Conflict Minerals" for electronics.  Unless stability and rule of law become the norm in Afghanistan then, well, watch out.  The competition for access to these areas of riches will become intense and nasty...Stay tuned for this one...They (the Afghans) now have something more than Poppies to fight for now...

NYTIMES: U.S. Identifies Vast Riches of Minerals in Afghanistan
The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials. U.S. Identifies Vast Riches of Minerals in Afghanistan.
The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.
An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and Blackberries.
While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.
“There is stunning potential here,” Gen. David H. Petraeus, commander of the United States Central Command, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

World Cup Crime--4 sentenced to 15 years for robbery 4 Days AFTER being arrested--The World is REALLY coming together...

Not sure how I feel about this. I am a law and order type person, but also believe in due process. Can due process take place in 4 days?  Maybe, in South Africa, anyway...

S Africa dispenses swift justice to lawbreakers
""South Africa offered reassurance over security at the football World Cup when two men were sentenced on Sunday to 15 years in jail only four days after robbing journalists at gunpoint.
The men were convicted of stealing goods worth R38,000 ($5,000, €4,100, £3,350) from three journalists – two from Portugal and one from Spain – at a hotel room in the town of Magaliesburg. They were arrested on Thursday, barely 24 hours after the incident, and brought before a dedicated World Cup court charged with delivering fast-track justice.
The men, together with an accomplice accused of receiving stolen goods, were placed on trial and then convicted and sentenced on Sunday.
“The manner in which the investigation was conducted and finalised sends a stern message that our warnings to criminals were not empty threats,” said Nathi Mthethwa, the police minister""

Do as I say, not as I do...BP gas station sign--gotta love irony...

I am assuming this is real and not photoshopped...Notice the BP logo for the gas station in the upper left portion of the photo...HT: The Big Questions
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