Nice graphic showing the emergence of middle classes thoughout the world. Can we give just a little shout out and/or credit to free markets, free trade and globalization?

The spread of market activity, free(er) trade and globalization have lifted 100's of millions of people out of poverty around the world and has made the world a better and more peaceful place (yes, it IS more peaceful).  I don't think anti-capitalists in rich countries (think about those words for just a minute) understand this and only expound on the doom and gloom.  Does globalization have it costs? Absolutely, but when you tally up the costs you must off-set it with the benefits.  How about some acknowledgement of this tremendous achievement in such a short period of time.

The Economist

""THE past four years have seen a sharp contrast between recession-hit rich countries and buoyant emerging giants. Estimates from the Asian and African Development Banks, using a rather broad definition of middle class as living on $2-20 a day, confirm the picture. On this measurement, which includes many people who are only just above the poverty line, a third of Africans and three-quarters of Latin Americans were middle class in 2008. Meanwhile, the evidence that this progress will bring political demands that will reshape the develping world is mounting. ""

Economists have a sense of humor---even if they have little sense for anything else...

 Via: Greg Mankiw

International survey results on the pressure parents put on their children to succeed---Who do you think is first and who is last? Results here....

Interesting international survey results on perceptions of how much pressure parents put on students to succeed in class. Look at the first one (US) and the last one (China)...Polar opposites.

Source: Economix

""The survey, conducted March 18 to May 15 by the Pew Research Center’s Global Attitudes Project, found that China was the only one of 21 countries or territories where a majority believes parents put too much pressure on students to do well in school. In China, 68 percent of adults think parents pressure students too much, and just 11 percent think they don’t push them hard enough.

On the other side of the spectrum is the United States, where more than 6 in 10 Americans say parents do not put enough pressure on their children.

It’s hard to know what to make of these attitudes. The countries where people are most likely to say students are pressured too much do have reputations for being pressure-cookers for students (China, Pakistan, India). And the United States has repeatedly disappointed on international testing.

Does that mean surveyed attitudes are correct? If they are, why aren’t they affecting behavior?

US Labor Secretary buys a car she THINKS is made with American workers and parts. AWKWARD!

The US Labor Secretary buys General Motors car, made in Canada by Canadian workers, in order to support American workers. You read that right.  A cabinet official did not know, or ask, or care if the car she purchased was AT LEAST assembled in the US by actual US workers that her Department is supposed to represent.

 

See the chart below to see a list of cars she could have bought that, while they have a foreign nameplate, were assembled AND made with American labor and a high content of American-made parts.  Full disclosure: I own a Toyota Camry (No 1 on the list)---I support American workers!!!

  

Source: Carpe Diem: "What better example could I set if I encouraged my staff to go and purchase and seek how we could acquire a vehicle that would for me would send a signal that we're for supporting our American workers, American-made products, fuel efficient as well."

One problem: The Chevy Equinox is not built by American workers, because it's not American-made. It's built by foreign workers, in a foreign country: Canada. If Secretary Solis wanted to buy the "most American-made possible" to show her support of American workers, she should have considered the two most "American-made cars" available in America today: the Toyota Camry or the Honda Accord (according to Cars.com).

The Labor Secretary could have also considered one of the other top 10 "American-made" cars like the Honda Odyssey, Toyota Sienna, or the Toyota Tundra. But we all know why that won't ever happen - those cars are mostly built in "right-to-work" states by non-union American workers. And so for political purposes to maintain union support, it's more important for the U.S. Labor Secretary to support union workers in a foreign country than to support non-union workers in America. That just politics as usual in Washington. Better to support Canadian Auto Workers north of the border than support non-union workers in Texas or Alabama.

I hope the President and Congress FINALLY focus on the actual job creators that have historically lead the way out of recessions. See who they are here...

Here is an important graphic to consider when you hear talk of the new "Jobs Plan" the President is going to propose "soon". Historically, the job creators coming out of recessions have been small to medium size businesses.  They are the most nimble, because of a lack of bureaucracy, and can ramp up production when the dark clouds of recession start to part. They can seize on opportunities as they present themselves and risk-taking is morecalculated and tolerable.

However, it requires a reasonable confidence that economic conditions will improve.  This confidence seems to be lacking, for a variety of reasons---Gridlock and poor policymaking in Washington seem to be at the fore-front. Read the blog entry that goes with this graphic HERE

Source: Wall Street Journal

"There is no profit in Destruction"---See how my beach house in North Carolina was affected by the Hurricane...

"There is no profit in destruction"

No, I don't have a beach house in North Carolina.  BUT in my dreams this is what would have happened as a result of hurricane Irene...

Assume in January of this year I built a beach house on the coast of North Carolina at a cost of $200,000.  Gross Domestic Product (GDP) would increase (assuming ALL the construction material came from the US) by $200,000. 

The hurricane comes through and destroys my house.  I receive my insurance settlement and rebuild my house, BUT now the cost of rebuilding the same house costs $210,000 (inflation, scarcity of building materials, increase in insurance, etc). 

GDP increases by $210,000.  So far I have contributed a total of $410,000 to GDP for the year 2011.  This unfortunate event seems to have a silver lining, doesn't it? 

The first week of school you were introduced to the the philosophy of Frederic Bastiat and the important concept of opportunity cost.

Using this new-found knowledge, list/discuss some of the problems or logical fallacies related to Bastiats way of thinking and/or opportunity costs of the above scenario.

Hint: there are LOTS of opportunity costs incurred in this situation, some obvious and not so obvious.  Go crazy and find as many as you can...