Saturday, November 6, 2010

Who can afford to spend millions to promote the eating of cheese AND spend millions to discourage the eating of cheese??...I guess you already guessed...

We are used to contradictions when it comes to Federal Govt policies, such as providing tobacco farmers with millions in subsidies to grow tobacco while also spending millions on anti-smoking programs (What? You did not know that??).  Here is another--Spending money to promote the consumption of cheese while spending money on anti-obesity programs.

NYTIMES: While Warning About Fat, U.S. Pushes Sales of Cheese
""Domino’s Pizza was hurting early last year. Domestic sales had fallen, and a survey of big pizza chain customers left the company tied for the worst tasting pies. Then help arrived from an organization called Dairy Management. It teamed up with Domino’s to develop a new line of pizzas with 40 percent more cheese, and proceeded to devise and pay for a $12 million marketing campaign.

Consumers devoured the cheesier pizza, and sales soared by double digits. “This partnership is clearly working,” Brandon Solano, the Domino’s vice president for brand innovation, said in a statement to The New York Times.

But as healthy as this pizza has been for Domino’s, one slice contains as much as two-thirds of a day’s maximum recommended amount of saturated fat, which has been linked to heart disease and is high in calories.
And Dairy Management, which has made cheese its cause, is not a private business consultant. It is a marketing creation of the United States Department of Agriculture — the same agency at the center of a federal anti-obesity drive that discourages over-consumption of some of the very foods Dairy Management is vigorously promoting.

Urged on by government warnings about saturated fat, Americans have been moving toward low-fat milk for decades, leaving a surplus of whole milk and milk fat. Yet the government, through Dairy Management, is engaged in an effort to find ways to get dairy back into Americans’ diets, primarily through cheese. .."

Input costs for Samsung's Galaxy Tablet...The AP Microeconomics teacher in me LOVES knowing the costs of production of a good...Hmmm, warm fuzzy enclosed...

WSJ: Samsung Makes Push on Tablet Market

Worker Productivity is Declining...This is GOOD news...However, it is NOT permission to goof off on the job...

WSJ: Cooling Productivity Is the Heat Behind Jobs Figures

""U.S. workers are getting less productive. Right now, that actually may be good news for the labor market...The cooling rate of productivity growth. Output per hour of work in the U.S. rose 2.5% in the third quarter from the same period last year, figures Thursday showed. That is a considerable drop from the first quarter's 6.3% growth rate, the strongest pace in almost five decades. Companies, in other words, now require more hours of work and, ultimately, more workers to keep raising output....""

Productivity is defined as "Output Produced per Labor Hour"...Or more simply, how much "stuff" a worker produces in one hour of work.  After the initial plunge into recession in 2007, worker productivity actually increased significantly in the intervening 3 years.  There are many potential explanations for this. Here are a few of my observations from experience and, well, from relentless reading of professional economists blogs.  I dont pretend to be original...

(1) Fear. Workers busted butt, to use an informal term, to avoid being in line for lay-offs. A Darwinian, survival of the fittest mentality emerges at many work places, especially "blue-collar" or lower-level "cubicle jobs. I have no evidence of this other than the many many many many jobs I have held in my life...

(2) A reduced staff/workforce at a business learns to "do more with less". Daily processes are improved and efficiencies are squeezed out of every last input. I once worked in a warehouse as a temporary worker. The place was SO inefficient it made me crazy. I tactfully cajoled the manager to improve various processes and reduce the amount of time it took to unload trucks and process cargo. Needless to say, they did not need temp workers soon after that (guess I cause unemployment to increase...) The negative consequence of this is people may be over-worked and/or they find that they really had too many people in the first place and with streamlined processes they can do more with less labor (see my example above).

(3) Labor has been replaced with Capital.  Machines, computers, re-designed work-stations, and other production equipment have been employed to save on labor costs.

As we emerge from the recession, as measured by an increasing GDP (tepid as it is, it is increasing none the less), we SHOULD be adding workers to help produce that "stuff".  However, business have been tentative and have been able to keep up with additional demand without adding workers on any significant basis. There HAS to be a breaking point!

As noted in the highlighted paragraph, productivity is taking a dip.  Not because workers are not working as hard, but because they are coming up against productivity wall.  Existing workers, even with improved processes and additional capital, are not able to keep up with additional demand and their productivity may actually decline as they work more hours. This could be a signal to the business that they have milked all they can out of workers and capital and it is necessary to add labor (or capital) to improve productivity.  This is good for the labor market and some economists see this as a positive development.  

This graph accompanys the article above and shows an overall (not perfect) inverse relationship between productivity and employment. If the trend continues, we are in for better days...

Wall Street Journal

Friday, November 5, 2010

Higher intelligence associated with "thinking like an economist"---Just sayin'... :)

Higher intelligence associated with "thinking like an economist"
""As the world economy dusts itself down and edges towards recovery, a provocative new paper claims that people with higher intelligence are more likely to think like economists. That is, they're more likely to be optimistic about the economy; to recognise the economic advantages of markets free from government interference, and the advantages of foreign trade and foreign workers; and to appreciate the economic benefits of achieving greater productivity with less man-power. The lead author is Bryan Caplan, an economics professor at George Mason University. Past essays by him include 'The 4 Boneheaded Biases of Stupid Voters (And we're all stupid voters.)'
Prior research has established that the more time a person spends in education, the more likely their broad economic views are to match that of the typical economist (pdf). Caplan and his colleague Stephen Miller point out that these studies failed to take into account the influence of intelligence. After all, it's known that people with higher IQ tend to spend longer in education and intelligence itself may also directly influence economic beliefs....""


How much do you actually pay for a government program with your taxes? Nice graphic enclosed

This is an excellent visual to give you an idea of how much tax money two different taxpayers, at two different income levels, would pay for specific intems in the Federal budget.  The list is not comprehesive. It is interesting to see how much these taxpayers pay for each program and their rank in priority.  Not sure I am getting my $1.51 worth from the last item...
Tracking Your Federal Tax Dollars

Thursday, November 4, 2010

Interested in majoring in Economics? The link enclosed will be very useful to you. Find out what 7 of the most powerful new economists are doing...

Go HERE to see this economists opinion on who are the 7 most powerful new economists.  More importantly, he provides a picture and short bio on each of them.  If you are interested in what economists do for research, this will be VERY informative for you. 

From: Dan Ariely
Many people have contributed over the years to Behavioral Economics–too many to mention here. The individuals on this list have not only changed the face of economics as we know it, but they are likely to contribute a great deal more in the years to come. Each of these individuals has tremendous creativity and insight that has enabled them to capture and explain our odd, complex, and sometimes irrational human nature. Armed with this new understanding of human behavior, and taking our human weaknesses into account, behavioral economics could help us take steps toward designing a better world.

In spite of coconuts and owls, the world is becoming a better place...right? According to The Economist it very well may be...

Is the world becoming a better place? The chart below suggests that since 1980 many places that were extremely poor (based on the criteria for this index) in 1980 are much better places for people today. (Note: As a Marine I was served at the US Embassy in Mali in 1981-83).  I also see good news in the bad news--if you look at the counties on the right side of the chart only one is still declining. The others are still bad, but relatively speaking, are improving.  Is it good enough ? No, but it is nice to see by some measure the world is becoming less dire for more and more people.  Also, can anyone suggest why the years 2000-05 seems to be pivotal years for the countries on the right to head for an improved human index? I am at a loss off the top of my head as to a reasonable explanation...Any suggestions???

Developing Humans: Some countries are making great strides in human development, others less so

Since 1980 the country that has made the greatest strides in improving human development is Nepal, according to the UN’s annual Human Development Index (HDI). The index is a combination of three sub-indices covering wealth, health and education. The countries whose HDI has improved the most since 1980 are mainly in Asia. China and India have been helped by rapid GDP growth, but even slower-growing countries such as Nepal and Bangladesh have fostered human development by making progress in health and education. The countries where HDI has improved the least are mainly in Africa, with Zimbabwe at the bottom of the pile.

Here is another bold claim by me--"Harry Potter kills owls!!" What is wrong with people who take movies so seriously that they live out certain/all aspects of them. Sorry, but that is a form of mental illness. There I said it...

Harry Potter Fans and Black Magic Decimating India's Owls

""Die-hard fans of the best-selling Harry Potter stories are seriously threatening India's owl population, as demands for the ultimate wizarding accessory increase, a wildlife group says.
Potter's snow-white owl Hedwig, his trusty messenger throughout the book and film series, is being blamed by animal groups and politicians for fuelling the trade in Indian owls, as fans look to ape every aspect of their young wizard hero....""

"Following Harry Potter, there seems to be a strange fascination even among the urban middle classes for presenting their children with owls," India's Environment Minister Jairam Ramesh told the BBC at the launch of the report. Traditional practitioners in India, known locally as tantriks, also demand owl bones, feathers, claws and organs, as well as the bird's blood and tears, for ceremonial rituals, the report said.

Apparently coconuts in India are planning an attack when the President visits there. Terrorism takes many forms.

I blogged earlier this week about Coconuts in India (Did YOU know India had coconuts and is the 3rd largest producer in the world??) and now this just today. Things come in 3's...I wonder what the next coconut story from India will be?

Coconuts removed from trees in preparation for Barack Obama's India trip

""Mr Obama will arrive in India on Saturday for the first leg of an Asian tour.
But as well as the usual security measures that come with welcoming a a visiting dignitary, Indian authorities have decided to go one step further, by removing all natural threats to the president as well.
All coconuts around the city's Gandhi museum, one of Mr Obama's stops in the city, are being taken down.
Mani Bhavan, where Mahatma Gandhi stayed during his freedom struggle against the British, is among five places the US president is visiting in Mumbai.
"We told the authorities to remove the dry coconuts from trees near the building. Why take a chance?" Mani Bhavan's executive secretary, Meghshyam Ajgaonkar, told the BBC.""

Inflation? Inflation? We dont have no stinkin' inflation!"...except on the things we actually buy everyday...

Maybe not inflation as officially defined: A general rise in prices. This is a fancy way of saying that all or most prices are increasing in tandem.  The inflation suggested by these articles points to a combination of "demand-pull" and "cost-push" inflation.  Demand-pull inflation occurs because, well, quantity demanded is greater than quantity supplied which tends to increases prices.  The demand-side is pulling prices up with increased incomes and/or a change in consumer preferences.  Much of it is attributed to demand from China and other emerging economies to satisfy consumers from increasing middle classes in those respective economy's.  The "cost-push" inflation refers to the production side.  Raw materials, such as cotton, sugar, beef, cocoa, oil, etc, serve as inputs into making food, clothing and gasoline are increasing in price. This in turn increases the cost of producing. The higher input costs are "pushing" up food, clothing and gas prices.  So, it is essentially is the source of the inertia as to which type of inflation occurs ---demand-side (demand-pull) or the supply-side (cost-push).  Extra credit: Which type of inflation is the EASIEST to solve and why? Which is the more difficult and why?  Use your knowledge of the Aggregate Demand/Aggregate Supply Model to help you.

Headlines in  TODAY's Wall Street Journal:

Food Sellers Grit Teeth, Raise Prices
Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.
Unable to Stretch Further, Apparel Makers Raise Prices
Shoppers will have to pay more for clothing next year as skyrocketing cotton prices force companies to take their chances with price increases even as consumer demand remains sluggish.
Sugar Prices Hit 30 Year High
Raw-sugar futures have pushed above their February highs as weather problems in producing regions, including the world's number-one exporter Brazil, have sparked fears that the previously forecast world surplus this year won't materialize.
Oil Hits 6 Month High (which in turn will likely make gasoline more expensive)

Tuesday, November 2, 2010

President Obama is a Keynesian! No birth certificate will convince me otherwise...

Interviewer asks people at the Stewart/Colbert rally if they thought Pres. Obama was "a Keynesian"...And these people think Tea Party people are stupid? (Note: I am NOT a Tea Party-er).  I just appreciate the  irony...People are obviously not aware of "Keynesian Economics", which the Pres. is most inclined to support.  They think the interviewer is questioning whether or not he is "Kenyan", you, know, from Kenya.  In case you need a primer on John Maynard Keynes and his ECONOMIC philosophy, click HERE
By the way, I believe the Pres was born in the old ol' USA (Yes, Hawaii was a part of the US at the time) and is as American as I am...Did I really just feel the need to defend myself?? Meh....

Monday, November 1, 2010

Is Keith Richards a Supply-Sider BECAUSE of drug abuse or IN SPITE of it???

Inside the Rolling Stones Inc.

""The Stones are famously tax-averse. I broach the subject with Keith in Camp X-Ray, as he calls his backstage lair. There is incense in the air and Ronnie Wood drifts in and out--it is, in other words, a perfect venue for such a discussion. "The whole business thing is predicated a lot on the tax laws," says Keith, Marlboro in one hand, vodka and juice in the other. "It's why we rehearse in Canada and not in the U.S. A lot of our astute moves have been basically keeping up with tax laws, where to go, where not to put it. Whether to sit on it or not. We left England because we'd be paying 98 cents on the dollar. We left, and they lost out. No taxes at all. I don't want to screw anybody out of anything, least of all the governments that I work with. We put 30% in holding until we sort it out." No wonder Keith chooses to live not in London, or even New York City, but in Weston, Conn...""

A penny for your thoughts? Not at this Dunkin Donuts!

A Lone Dunkin' Donuts Sort Of Abolishes Pennies
""One donut shop is taking a stand against the bacteria-ridden zinc disks of suck that are pennies. Reader Tom sent us this photo from a store he recently visited. In a policy change that was probably born during an 8 AM rush, this franchise appears to be are rounding customer totals up or down to the nearest five cents, and only providing pennies to those annoying people who actually want them.

Is the owner of this place a brat, or a visionary?''
HT: Freakonomics

Do you like to help people AND get quality products? is where you need to be! Please check out this blog post and become part of the solution. Thank You!

Please take the time to read this short article of support for and view the accompanying video below.  I believe this represents the best way for the world's poor to begin to lift themselves out of poverty and achieve self-sufficiency.

""Indego stands for "independence, development, governance", and Indego Africa is fighting systemic poverty by giving women a chance at all three. By facilitating access to export markets, Indego is creating opportunities for African women in low-income communities to provide their families' basic needs, and to acquire the education and skills that enable long-term earning potential....Profits are invested back into the artistic cooperatives who produce goods -- like the Couture de Kicukiro Cooperative who made my Nicole Miller bangle (see video below), or the Ingenzi Knit Union who fashions scarves sold nationwide at high-end retailer Anthropologie. Woven into the artisans success is another crucial change in the status-quo: challenging the world of Fair Trade to keep up with Indego's tenaciously business-minded approach to social change. "What that means to us," explains CFO Conor French, "Is that we take an outcome-based approach and focus on core principles like good governance, accountability, and sustainability....So what makes Indego so unique?
A focus on the long-term earning potential of every woman, "so that future income can be generated without our assistance," explains French. "The bottom line is that our artisan partners need to raise their families standard of living now, but also need access to educational pathways that move them toward sustainable, economic independence in the future....Since 2007, Indego's operations have engaged over 200 Rwandan women, benefited over 800 of their dependents, and stimulated more than $50,000 in product sales revenue. Indego's 2009 Social Impact Assessmentreveals a 336 percent increase in the number of women earning more than $1 per day, a 96 percent increase in households eating at least twice a day, a 17 percent increase in the number of women reporting that some or all of their children attend school, and a 42 percent reduction in the number of women with no permanent residence....""

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