Saturday, September 10, 2011

Need more useless but interesting info in your head? See here why carrots are orange...

Why are carrots orange? It is political

""No, the image above does not some show some collection of freshly genetically designed hypercarrots in various colors of the rainbow. This is the spectrum of colors carrots used to have – and in some regions of the world you can still find white, yellow, red and purple carrots. In most countries however, carrots tend to be orange nowadays. Why is that?

They’re orange for entirely political reasons: in the 17th century, Dutch growers cultivated orange carrots as a tribute to William of Orange – who led the the struggle for Dutch independence – and the color stuck. A thousand years of yellow, white and purple carrot history, was wiped out in a generation.

Although some scholars doubt if orange carrots even existed prior to the 16th century, they now form the basis of most commercial cultivators around the world. Presumably crosses between Eastern (purple), Western (white, red) and perhaps wild carrots led to the formation of the orange rooted carrot sub species. Turkey is often cited as the original birthplace of the hybrids (or mutations) of the two groups.

Whatever the origins, the Long Orange Dutch carrot, first described in writing in 1721, is the forebear of the orange Horn carrot varieties so abundant nowadays. The Horn Carrot derives from the Netherlands town of Hoorn in the neighborhood of which it was presumably bred. All our modern, western carrots ultimately descend from these varieties. Hypernature avant la lettre.""

Chart of all charts for young people---the transition of economic power from the 1800's to 2030...Is it inevitable?

A look at the past, present and future or economic power in one easy graphic. Some rise and some fall. Is our fall inevitable or can we stop it? 
Source: The Economist



""A NEW book, discussed in this week's Economics focus, by Arvind Subramanian of the Peterson Institute for International Economics argues that China’s economic might will overshadow America’s sooner than people think. Mr Subramanian combines each country’s share of world GDP, trade and foreign investment into an index of economic “dominance”. By 2030 China’s share of global economic power will match America’s in the 1970s and Britain’s a century before. Three forces will dictate China’s rise, Mr Subramanian argues: demography, convergence and “gravity”. Since China has over four times America’s population, it only has to produce a quarter of America’s output per head to exceed America’s total output. Indeed, Mr Subramanian thinks China is already the world’s biggest economy, when due account is taken of the low prices charged for many local Chinese goods and services outside its cities. China will be equally dominant in trade, accounting for twice America’s share of imports and exports. That projection relies on the “gravity” model of trade, which assumes that commerce between countries depends on their economic weight and the distance between them.""

Two headlines, two different conclusions. Who to believe: Economists or people that actually produce something useful?? :)

Two headlines, two different conclusions. Who to believe: the Theorists or the people who actually produce something?

Many economists say Obama jobs plan will help (USA Today)

Employers Say Jobs Plan Won’t Lead to Hiring Spur (NYTIMES)

US Exports at an All-Time High! Yes, we still do make stuff in the US. Why do we see trade with the rest of the world as a problem instead of an opportunity?

The Red Line represents total imports and the Blue Line total exports. Subtract these two and you get our trade deficit in goods and services with the rest of the world (imports are greater then exports).  The last point on the blue line (exports) is higher than it has ever been. 
Source: Calculated Risk
This second graph shows the impact of ONE good on our trade deficit, Oil---and it is large.  The total trade deficit was $44.8 billion for July and oil imports accounted for roughly $25 billion of the deficit. Need I say it again---we must either "drill, baby, drill" or become less dependent on the stuff. 

I prefer the latter, but the former would create lots of jobs quickly AND send a signal about future supply which would tend to decrease the price of oil today. 

Source: Calculated Risk

Do you play games produced by Zynga? Of course you do. Nice article here on how they use your gaming behavior to, well, game your behavior...

Here is a fascinating look into business side of the "free" online gaming industry. The focus of the article is Zynga, the creator of many popular games that you play or at least tried to play (in my case).  When you play their games you are part of a larger experiment in behavioral analysis and marketing.  They ARE watching every move you make....

 Virtual Products, Real Profits

""To understand why Zynga Inc. is among the tech industry's hottest companies, consider how it gets people to buy a bunch of things that don't exist.

Last year, Zynga product managers for a videogame called "FishVille" discovered something intriguing while sifting data that Zynga collects when people play its online games. Players bought a translucent anglerfish at six times the rate of other sea creatures, using an imaginary currency people get by playing the game.

The "FishVille" managers had artists whip up a set of similar imaginary sea creatures with translucent fins and other distinctive features, says Roger Dickey, a former Zynga general manager who left the San Francisco company recently. This time, they charged real money for the virtual fish, and players snapped them up at $3 to $4 each, says Mr. Dickey.

Just five percent of Zynga's dedicated fans are contributing to nearly $600 million in revenue last year. Nick Wingfield explains the allure of the imaginary economy sustained with real life dollars.

Zynga is transforming the game industry. Traditional videogame companies create games they think players will like, then sell them. Zynga offers free games through Facebook Inc.'s social network, then studies data on how its audience plays them. It uses its findings to fiddle with the games to get people to play longer, tell more Facebook friends about them and buy more "virtual goods." At the heart of the whole process is Zynga's ability to analyze reams of data on how players are reacting to its games.

"We're an analytics company masquerading as a games company," said Ken Rudin, a Zynga vice president in charge of its data-analysis team, in one of a series of interviews with Zynga executives prior to the company's July filing for an initial public offering.

Over 95% of Zynga's players never spend a nickel on its games. But its audience of 150 million unique monthly users is so large that the small percentage that buy $5 imaginary chickens in "FarmVille" and $3 imaginary skyscrapers in "CityVille" generate big bucks for the company. Some players spend hundreds or even thousands of dollars a month—they're called "whales" inside Zynga, the same term casinos use for high rollers...."" Read the Rest HERE

Thursday, September 8, 2011

My two cent, two sentence analysis of Republicans and Democrats in regards to the latest jobs bill...

Republicans are NOT supporting job creating proposals they normally would support because they come from a Democrat (if the Pres was a Republican they would be elated with this proposal). 

Democrats ARE supporting job creating proposals they normally would not support because they come from a Democrat, but mostly because they are not supported by Republicans (if the Pres was a Republican they would be aghast at this proposal).

This jobs bill is in for a rough ride, I believe...

Yes, kids, we are in trouble...

Show me the Spending! Nice graphic showing where the President proposes to spend money to create jobs. I would add one more to the list...

The Presidents job initiative in graphic form.  A little demand-side, a little supply-side.  I do like the school modernization part. This would be MUCH more labor intensive relative too other infrastructure improvements like roads/bridges, which are much more capital intensive. 

What is missing is an intiative to utilize the nations extensive network of community colleges that are vital to re-training workers who have been without work for an extended period of time. It is great (I suppose) to offer companies tax credits for hiring workers out of work for more than 6 months, but if they don't bring skills with them, then it makes it that much harder for companies to hire them---gonna cost more then the $4,000 credit for advanced training...

Source: Washington Post

One of the Presidents proposals: Continue the Payroll Tax Cut---nice graphic here showing what that might mean to YOU!

Go here for my explanation of the payroll taxes (Social Security and Medicare) YOU pay on your wages. Currently you enjoy a 2-percentage point temporary cut in the Social Security tax, normally 6.2%.  The President has proposed this cut continue for at least another year. As a result, you get an additional $2.00 for every $100.00 you earn.

The graphic below shows how much in additional taxes wage earners would pay if the tax cut is not extended. This appears to be a dubious tax cut. If you divide the number to the right by 12 months, then by 4.3 weeks in a month, the amount is relatively small.

 At most this acts as a stabilizer ("saves/maintains jobs") and is not stimulative.  We shall see.
Source: Jared Bernstein

Tuesday, September 6, 2011

Nice example of Complementary Goods---HD TV and Make-up Artists..

Today in class we started our unit on the basics of demand and supply.  I always do demand first because intuitively it is easier for students to understand---they are mainly consumers at this point in life. 

We covered briefly the definition of Complements---two goods that are separate and distinct but are most often used in conjunction with each other.  In general, there is as inverse relationship between the price of one good and the demand for the complementary good.  Below, from the Freakonomics Blog, is a timely reference to complementary goods that is a bit unusual---HD TV and Make-up artists.
Because of the high resolution of HD, every imperfection in skin and hair is magnified.  It has created a surge in the demand for make-up artists.

The price of HD TV (both to broadcast and the price of the TV's) has decreased as it saturates the marketplace. As more broadcast outlets adopt the format more of the goods and services, like make-up artists, that complement it will be in greater demand...

Does HDTV Increase Demand for Make-up Artists?

"A major technical change in TV has been the introduction of HD broadcasting and receivers. For the same price you get higher quality, so this can be viewed as a rightward change in supply. This change has affected a surprisingly related market—that for make-up artists.

Now if you’re on television, as I discovered, every single “flyaway hair” is visible. Most of my hair flew away many years ago, but what’s left might still stick out and need careful laying down by a specialist. A make-up artist tells me that demand for her services has been helped tremendously by the introduction of digital broadcasting and HD receivers."

Cartoon about Ethanol and link to excellent article...


Source: HERE via Carpe Diem

From HERE""As befits the chairman of the world’s largest food-production company, Peter Brabeck-Letmathe is counting calories. But it’s not his diet that the chairman and former CEO of NestlĂ© is worried about. It’s all the food that the U.S. and Europe are converting into fuel while the world’s poor get hungrier.
“Politicians,” Mr. Brabeck-Letmathe says, “do not understand that between the food market and the energy market, there is a close link.” That link is the calorie.
The energy stored in a bushel of corn can fuel a car or feed a person. And increasingly, thanks to ethanol mandates and subsidies in the U.S. and biofuel incentives in Europe, crops formerly grown for food or livestock feed are being grown for fuel. The U.S. Department of Agriculture’s most recent estimate predicts that this year, for the first time, American farmers will harvest more corn for ethanol than for feed. In Europe some 50% of the rapeseed crop is going into biofuel production, according to Mr. Brabeck-Letmathe, while “world-wide about 18% of sugar is being used for biofuel today.""

Monday, September 5, 2011

Nice Labor Day analysis of the state of manufacturing in the US (GOOD!) and the state of manufacturing jobs in the US (NOT GOOD)...How can this be possible? Short video says it all...

Look at the red line in the first graph---it shows the change in US manufacturing jobs since 1939. It does not seem dramatic, because the time frame is extended. The high appears to be in 1980 at about 20 million jobs and the low currently of about 11.5 million jobs---roughly a 43% decrease!

Note the rate of increase in "service" jobs (blue line) starting in about 1983---the slope increases significantly.  That is a point of divergence for manufacturing vs service jobs.

Does this mean at this time we started to lose manufacturing capability/productivity?
Source: BusinessInsider
The graph below seems to tell a different story.  While EMPLOYMENT in manufacturing has declined (red line), manufacturing OUTPUT (dollar value of finished goods in this case) increased rather dramatically (blue line).  As we moved from the mid-1980's into the 1990's the change in employment vs output changes dramatically from a direct relationship into an indirect relationship.  How/Why did this happen?
Source: Carpe Diem

For a hint, watch this short video of a BMW facility. Tells you all you need to know...

The problem with Social Security in one easy chart---too few "youngs" working for too many "olds"....

With all the political talk surrounding much needed reform of entitlement programs, mainly Social and Medicare, the graph below illustrates the heart of the problem.  These two programs are funded directly by payroll taxes levied on current workers wages (go HERE for a primer on these two taxes). Over the last 80 years, because of demographic changes in our population, there are fewer and fewer wage earners supporting an ever increasing number of retirees and other eligible recipients.

Strip away all the high flautin' political rhetoric on the issue you are left with this simple math---Workers must pay more in payroll taxes and/or we cut benefits to the "olds". 

Another option is we "grow" out of the problem---the economy recovers, we get back to full-employment and payroll tax revenues increase---that helps, but it does not reverse the numbers below.
Source: Carpe Diem
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