Updated Map comparing each US States production of goods and services relative to another countries production...Fun times with GSP and GDP!!

Each State has a Gross State Product (GSP)---the dollar value of its production of goods and services in a calendar year.  If you add up each States GSP you will have Gross Domestic Product (GDP)--the dollar value of goods and services produced within the US in a calendar year.  This interactive compares each States GSP with another countries GDP that is similar. If some States were their own countries (California, Texas, Florida, etc) , they would be in the Top 20 in the world in terms of the size of their GDP.  Just another way to illustrate what a powerhouse we STILL are in producing "stuff"...

From THE ECONOMIST: Which countries match the GDP and population of America's states? (HT: Jason Welker)

""IT HAS long been true that California on its own would rank as one of the biggest economies of the world. These days, it would rank eighth, falling between Italy and Brazil on a nominal exchange-rate basis. But how do other American states compare with other countries? Taking the nearest equivalent country from 2009 data reveals some surprises. Who would have thought that, despite years of auto-industry hardship, the economy of Michigan is still the same size as Taiwan's?""

Satellite photos showing the Capital of Haiti pre and post earthquake and the emergence of massive "tent-cities"...Quite shocking when seen like this!

Here are three satellite photos of Haiti pre and post-earthquake.  Go to the link below to manipulate the pictures for a different view and for different parts of Port au Prince.  It is quite shocking. The first picture is of a golf course. The second picture shows the emergence of tent-cities on the property.  The third shows, well, signs of permanancy of the tent-cities.

NYTIMES: Destruction in Haiti, Then and Now

Video of an extremely large mall in China that is virtually empty...AND the developer has plans to EXPAND!!! Gee Whizzz...

Video of an extremely large mall in China that is virtually empty...AND the developer has plans to EXPAND!!! Gee Whizzz...

A Haunting Tour Inside One Of China's Massive Ghost Malls

More evidence that THESE are the good ol' days for most of the world?

Click on the link below to see this graphic in video. I clipped two screen shots for illustration.  One shows the fertility rate and life expectancy in 1960 for different parts of the world and the second shows the same variables in 2008.  Notice how dispersed they groupings are in 1960 and how tight (relatively speaking) they are in 2008.  Fertility rates and life expectancy have changed dramatically in 50 years (my life-time) for most of the world.  Seems like evidence that life is better today for most people in the world than ever before, or does it...What do you think???

WATCH: Amazing Video Chart Showing China's Fertility Rate Dropping Off A Cliff

These are a complement to this excellent Has Rosling video supporting the same conclusion...

PBS Frontline Documentary on Haiti and the lack of the rule of law--Really shocking stuff I was not aware of...

I saw this on TV last night...It is about the lack of civil control in Haiti today...As much as I try to keep up with what is going on in the world, I was shocked and dismayed by the extent of the lack of the rule of law and the anarchy that apparently reigns in most of Port au Prince.  It is compelling to watch and worth the time, if it is your cup of tea.  On the bright side, I was heartened by some of the comments from Haitians and their desire to be self-sufficient.  Many believe the relief efforts actually HURT the re-building of the country. They ALL believe the political system is corrupt and is their worst enemy. 

What do a toaster and a pencil have in common? Low tech items? I don't think so...

...No one person knows how to make either one, in their entirety.  They are very simple products in their finished condition but complex to manufacture. They require the co-ordination and cooperation of 100's of businesses and 1,000's-10,000's of people to produce and deliver it to you at a low price.  Now look at something tangilble around you and marvel at how it came into being...Miracle? I say yes...

This is a variation of Milton Friedman's narration of Lenord E. Read's "I, Pencil" (See Second Video)

Thomas Thwaites: How I built a toaster -- from scratch

From TED Talks: ""It takes an entire civilization to build a toaster. Designer Thomas Thwaites found out the hard way, by attempting to build one from scratch: mining ore for steel, deriving plastic from oil ... it's frankly amazing he got as far as he got. A parable of our interconnected society, for designers and consumers alike.""

Here is Milton Friedman's discussion of a simple pencil...

Ten things to know if you are a procrastinator---don't put it off---read this now! :)

Yes, I am a procrastinator...Not all this applies to me, but if I am honest with myself I would say a good portion of it does.  I like number three and the quote--YES!  I will change my ways---starting tomorrow... :)

Procrastination: Ten Things To Know

1.Twenty percent of people identify themselves as chronic procrastinators. For them procrastination is a lifestyle, albeit a maladaptive one. And it cuts across all domains of their life. They don't pay bills on time. They miss opportunities for buying tickets to concerts. They don't cash gift certificates or checks. They file income tax returns late. They leave their Christmas shopping until Christmas eve.

2.It's not trivial, although as a culture we don't take it seriously as a problem. It represents a profound problem of self-regulation. And there may be more of it in the U.S. than in other countries because we are so nice; we don't call people on their excuses ("my grandmother died last week") even when we don't believe them.

3.Procrastination is not a problem of time management or of planning. Procrastinators are not different in their ability to estimate time, although they are more optimistic than others. "Telling someone who procrastinates to buy a weekly planner is like telling someone with chronic depression to just cheer up," insists Dr. Ferrari.

Caution: Awkward blog posting ahead---"Honey Buns are a form of currency in prison". Insert your own pun...You can't make this stuff up...

Below is a story about how "Honey Buns", a snack food, is used in many  prisons across the country as a form of currency.  Money as we know it ($$) is called Fiat money---US currency is made by the govt and it is the official currency of record because the govt. "says so".  In absence of a fiat currency, money be in the form of a commodity, or a tangible item.  Anything that people generally accept as a medium of exchange can be considered money.  Just as I might pay $1.00 for a bottle of water, I could also exchange one honey bun for the same bottle of water, as long as the person receiving the snack believes he/she can use it to exchange for something else. The honey bun also serves as a unit of account--one honey bun might buy one bottle of water, but it may take two to buy a soft drink. Buyers and sellers can measure the relative value of it against something else. As for a store of value, well, not so much perhaps---it is very perishable, especially in my hands. 

Honey buns sweeten life for Florida prisoners

""The honey buns enter lockup the same way anyone else does: bound, escorted through halls and sally ports, and secluded in small boxes solely opened from the outside. From there the honey buns languish for days, maybe longer, until they're gone.


They are a lowly, sturdy food designed for desperate cravings and vending machine convenience. They can endure weeks of neglect and even a mild mashing in a coat pocket or backpack. They are, it should come as no surprise, especially beloved by a similarly hardy but disrespected population: Florida's prison inmates.
Inmates in the Florida prison system buy 270,000 honey buns a month. Across the state, they sell more than tobacco, envelopes and cans of Coke. And they're just as popular among Tampa Bay's county jails. In Pasco's Land O'Lakes Detention Center, they're outsold only by freeze-dried coffee and ramen noodles.


Not only that, these honey buns — so puffy! — have taken on lives of their own among the criminal class: as currency for trades, as bribes for favors, as relievers for stress and substitutes for addiction. They've become birthday cakes, hooch wines, last meals — even ingredients in a massive tax fraud.

Political Attack Ads, Circa 1800---If you think it is bad today...

Stairway to Heaven? Not even for God if this real estate developer has their way...

Daily Mail: Developers demolish all the stairways of a building in bid to evict family on the seventh storey

""A furious family is suing property developers after they demolished every staircase in a seven-storey apartment block to make them quit their top floor flat.



Mum Zhao Yanhong, 42, claims developers - who want to demolish the flats in Mianyang, south west China, to build a factory - hired thugs to force out other residents but she refused to budge.


'Then one day they turned up with machines and men and knocked out all the stairs to strand us here. They are just trying to bully us out of our home,' said Yanhong.""

Nice Article on the Federal Reserve Bond Buyers...Learned some things I did not know...A must read for an AP Macro Class or a Money and Banking Class in College.

NYTIMES: The Fed’s QE2 Traders, Buying Bonds by the Billions

The smallest miscalculation, a few one-hundredths of a percentage point here or there, could unsettle the markets and cost taxpayers dearly. It could also embolden critics at home and abroad who say QE2 represents a dangerous expansion of the Fed’s role in the markets.

In a spare, government-issue office in Lower Manhattan, behind a bank of cubicles and a scruffy copy machine, Josh Frost and a band of market specialists are making the Fed’s ultimate Wall Street trade. They are buying hundreds of billions of dollars of United States Treasury securities on the open market in a controversial attempt to keep interest rates low and, in the process, revive the economy.

To critics, it is a Hail Mary play — an admission that the economy’s persistent weakness has all but exhausted the central bank’s powers and tested the limits of its policy making. Around the world, some warn the unusual strategy will weaken the dollar and lead to crippling inflation.


But inside the Operations Room, on the ninth floor of the New York Fed’s fortresslike headquarters, there is no time for second-guessing. Here the second round of what is known as quantitative easing — QE2, as it is called on Wall Street — is being put into practice almost daily by the central bank’s powerful New York arm.

Each morning Mr. Frost and his team face a formidable task: they must try to buy Treasuries at the best possible price from the savviest bond traders in the business.

China's decision to restrict rare-earth minerals may affect the price of gasoline---find out how here.

WSJ: Rare-Earth Ripple Effect Hits Gasoline Producers
I don't know what the wholesale price of gasoline is and I don't know what the increase in cost of the rare-earth material will be, but assume for simplicity sake they are $2.00 and $.50 respectively (gas price is probably too low and mineral cost is probably too high).

""The skyrocketing cost of rare-earth metals from China is pushing up the cost of gasoline production in the U.S., the latest sign of the wide-reaching impact of Beijing's decision to restrict exports of the minerals.
Prices for some of the chemicals refiners use to process gasoline have risen exponentially after China, which controls about 95% of the world's rare-earth supply, said it would reduce exports of the metals by 35% in 2011.""

The cost of producing a gallon of gasoline may increase for gasoline refiners, unless they can off-set the decrease in price of rare-earth minerals with a decrease in some other cost of production. Let's assume they cannot cut another cost. This is the graph of the Market for Gasoline in equilibrium. 

At Point "A" the market quantity supplied is 100 gallons (again, a simplistic number for illustration purposes). Ceterus Paribus, if the cost of producing gasoline increases by $.50 then to produce 100 gallons the refiner will need to receive $2.50, Point "B". See graph below:

If "Supply*" is our market supply curve, then we have to assume that at every price and quantity supplied combination on Supply* the cost of production will increase $.50 as well. The next series of graphs illustrates this. Look at each one carefully.

Now we have Points A, D, B and E that lie parallel to the LEFT of Supply*.  If we remove the clutter and connect the points, we find we have a new supply curve, Supply 1, that represents a DECREASE in Market Supply.

Only one of these points intersects with Demand*--Point "D".  We cannot forget our demand curve! In reaction to the increase in price, driven on the supply-side, the QUANTITY DEMANDED decreased.  We moved up and to the left on our demand curve, just as the Law of Demand would suggest. We have reach a new market equilibrium price of $2.25 and market quantity of 75 gallons.  Notice the market price did not increase by the full $.50 increase resource cost.  Because of relative elasticities of demand and supply (slopes of the two curves), the increase in cost of production is going to be jointly shared between producers and consumers.  In this case, the producer will absorb roughly $.25 and the consumer $.25 as well. 

As an alternative view to see how the new equilibrium's are reached, look at this graph:

Assume at our original equilibrium Point "A" the market does not fully recognize what went on. At the market price $2.00 the quantity supplied would be 50 gallons, Point "C", but the quantity demanded would still be 100, Point "A". The market is in disequilibrium where quantity supplied is LESS than quantity demanded. There is a SHORTAGE in the market of 50 gallons.  The price will be bid up--suppliers will increase the quantity supplied at higher prices (Point "C" to "D") and demanders will decrease the quantity demanded at higher prices (Point "A" to "C").  The suppliers and the demanders will each move along their respective curves until a new equilibrium price of $2.25 and market quantity of 75 are reached at Point "D". The market has now been cleared of the shortage of gasoline.

Stay tuned to your gas station of choice and monitor the prices...guessin' a change is a comin'....

Are you a good shopper? Then why do you shop harder to find deals on things increasing in price and less so in finding even better deals on things that are decreasing in price? Which one makes you "richer"? Hmm...

At the popular econblog Marginal Revolution, there is a posting:  "Do falling prices make us complacent?".  Ever curious about human economic behavior, it prompted the following thought about the relationship between increasing and decreasing prices and our reaction to them.

""When prices rise we work harder to find bargains/sales so we can become less poor. This makes sense. There is an incentive to maintain ones current standard of living. When prices decrease we work less fervently to find even lower prices so we can become even richer (or at least better off). This makes less sense--There is an incentive to improve ones standard of living, yet in general we don't pursue it. Seems we work against our self-interest.  Is this "rational" or evidence of the irrationality of the consumer. The producer as quickly as possible increases retail prices when their costs increase, BUT when their costs decrease they are slow to decrease retail prices with the same zeal.  This makes sense from the production side. They are working in their self-interest.  The producer is certainly a rational actor in this case..."

How come on our consumption side we appear to be less efficient and not working in our own self-interest when there is motivation to do so---a higher standard of living? 

One last extra-credit attempt! Extra points on the final if you can offer a plausible explanation.  I have one concept in mind. I mention it OFTEN (as in everyday) and students don't like to hear it because it actually makes them think about making a decision...Opps--that is too much information... :)