The Dow is up 6% for the year!..Wow, great!...What is "The Dow"?

At the daily close of the US stock market the media reports how the stock market has done overall for the day by announcing how "The Dow", or "Dow Jones" has performed.  I don't think most people know exactly what this means.  The offical name is "Dow Jones Industrrial Average (DJIA)". 

Below are the 30 "Blue Chip" companies that comprise the Dow. Each of these companies are supposed to be representative of the industry they compete in. In theory, how goes the price of the stock of the major company in the sector so goes the entire sector.

Go HERE for a more detailed explanation how DJIA index is created and the math behind it.

The Dow itself is up 6% for the year which means if you invested $1,000 at the begining of the year in the components of the Dow, you would have earned an additional $60.00. Don't spend it all in one place...

My modest proposal to help low income people save 10% today on a necessity for their children...This policy is DOABLE! Why do Dems and Reps hate poor people?

Now that the Spiderman and the X-Men, along with their trade lawyers, have defeated (sort of) tariffs on their action figures (see previous post HERE) they can turn their attention to helping poor/low income people.

Tariffs (taxes) on imported shoes are VERY regressive--the lower the price of the shoe the higher the tariff.

""Footwear tariffs are simply a hidden, regressive tax on a household necessity. Their sole effect is to reduce the amount of income families have to spend on all other goods and services. This expense is most onerous for low-income families with children who spend the largest share of their income on the necessities of life..."

""The consequences for families—especially those with low incomes—are dramatic. Tariffs inflate the cost of the cheapest shoes by about a third. A $2.28 pair of sneakers arriving at the border is assessed a 48 percent excise tax, adding $1.09 to the price, which is passed along to shoppers...." (Source: Cut Shoe Tariffs to Help Low-Income Families)

Asume that the $2.28 shoes retails at a store for $10.00, the tariff represents about 10% of the total price of the shoe.

Tariffs, in general (not exclusively, though), are imposed to protect domestic producers from less expensive foreign competition.  But there are NO domestic producers of inexpensive (ok, cheap) shoes to protect anymore. 

So, WHY are these tariffs left in place by Congress?  Want to do something EASY that will benefit low income/poor people?  Repeal these tariffs!!

How many OTHER tariffs are imposed on basic goods that low income people purchase everyday and are NOT produced in the US anymore, so NO domestic production jobs are threatened?

How about it, Wolverine/Spidey or.... CONGRESS...Are y'all up to banishing these anti-poor policies?

Note: Read he two page summary of the research cited above  HERE.

Also, listen to a short NPR podcast on this topic:

Spiderman and the X-Men have met their match: International Trade Lawyers have stripped them of their Humanity...Why is Marvel Inc NOT upset with this development? Two words "$$"

Radiolab

In their quest to be accepted for their humanity in light of their super-natural powers, the likes of Spiderman and the X-men have been foiled by mighty International Trade Lawyers.  In this case, the Marvel brand is VERY happy for this outcome.

Imported "Dolls" have a much higher import tariff than items classified as "Toys".  Marvel action figures imported from China are  classified as "Dolls".  What is the Big Deal??

 Read the following from Matthew Yglesisias at MoneyBox to find out why this is significant:

""Marvel-licensed action figures are generally made abroad and imported into the United States. But "dolls" (which are representations of people) face a higher import duty than "toys" (which are representations of non-humans), so it's in the interests of Marvel to argue that X-Men action figures should be taxed at the low non-tarrif rate. Here's a sample of litigation:

Plaintiff Toy Biz, Inc. ("Toy Biz") brings this action to challenge the tariff classification by the United States Customs Service ("Customs" or "Defendant") of various items imported from China and entered at the ports of Seattle and Los Angeles in 1994. The items are action figures from various Marvel Comics series, including the "X-Men," "Spider-Man," and the "Fantastic Four," and an additional item called "Jumpsie," which is not an action figure. The items are packaged in boxes or blister packs attached to colorful cardboard backing covered with printed illustrations and writing. The packaging of a number of items includes small accessories, such as weapons and other equipment. Customs classified the items as "Dolls representing only human beings and parts and accessories thereof: Dolls whether or not dressed: Other: Not over 33 cm in height," under subheading 9502.10.40 of the HTSUS (1994), dutiable at 12% ad valorem. Toy Biz contends that the action figures at issue are properly classifiable as "Toys representing animals or other non-human creatures (for example, robots and monsters) and parts and accessories thereof: Other," under subheading 9503.49.00, HTSUS (1994), dutiable at 6.8% ad valorem. Toy Biz further contends that "Jumpsie" should be classified as a "toy set," under HTSUS (1994) subheading 9503.70.80, dutiable at 6.8% ad valorem.

It's remarkable, incidentally, the extent to which the politics of "trade deals" have gotten away from the fundamental issues of free trade as seen in an economics textbook. What we have here is a federal 12% sales tax on dolls, but only if the dolls are made in foreign countries, and a different -- arbitrarily lower -- 6.8% federal sales tax on toys, but again only if the toys are made in foreign countries. There's no good reason to have special higher sales taxes on toys made in foreign countries, and there's certainly no good reason to tax dolls and non-doll toys at different rates. It's nuts and it could and should be addressed by a unilateral acts of congress. The amount of revenue that would be lost to the federal government by repealing these taxes would be tiny, and it's trivial to think of better ways to raise the money. And yet this core -- and quite simple -- trade policy issue is a world away from the incredible complexity of the trade deals of the past decade.""

Tariffs on imported goods are levied for a variety of reasons, but the main one is to protect domestic producers from low-price foreign competition.  I am not aware of a significant domestic producer of action figure toys/dolls that needs protecting. Perhaps there was one in the past, but not now.

 Listen to a very interesting Podcast about this issue (starts at 3:00 minute mark).

So...Why is the tariff still in place to protect a non-existent industry? Just askin'...

Why young women are better than young men during these economic hard times...

Here is what (some/many) young men are doing during economic hard times...

This from the WSJ regarding Nike's release of the new Jordan sneaker:

"Sneakerheads," as they are referred to in the industry, tend to be young, male and live from paycheck to paycheck, Mr. Hicks said. As a result, he said, many launches are scheduled for the second Friday of the month or the end of the month, when they tend to have the most cash..."

Here is what (many, not some) young women are doing during economic hard times (NYTIMES):

"Workers are dropping out of the labor force in droves, and they are mostly women. In fact, many are young women. But they are not dropping out forever; instead, these young women seem to be postponing their working lives to get more education. There are now — for the first time in three decades — more young women in school than in the work force....

"Now, as was the case then, one sex is the primary beneficiary. Though young women in their late teens and early 20’s view today’s economic lull as an opportunity to upgrade their skills, their male counterparts are more likely to take whatever job they can find. The longer-term consequences, economists say, are that the next generation of women may have a significant advantage over their male counterparts, whose career options are already becoming constrained....""    

Interested in a programming or computer/ software engineering as a career? Want to work for a Start-Up firm? Nice Infographic and links here that might be helpful to you...

Go HERE for the Source and perhaps a better view...For those of you already aware of this type of info, does it provide good advice?  Are the suggested links legit? Thanks!

"Who's on First?"---See why Big Sugar is Suing Big Corn over naming rights to Corn Syrup. How much do we subsidize these 2 industries EVERY year??

I hope in the opening arguement one of the lawyers uses is a modified "Who's on First" routine...The Sugar industry is suing the Corn industry because the Corn industry wants to change the name of corn syrup to "Corn Sugar" which the Sugar s industry believes will confuse consumers into thinking Corn Sugar is comparable to "real" sugar.  Got that??? Sweet....

Big Corn, Big Sugar in bitter US row on sweetener

Big Corn and Big Sugar are locked in a legal and public relations fight in the US over a plan to change the name of a corn-based sweetener that has gotten a bad name.

The fight began last year when Corn Refiners Association, a trade association, proposed changing the name of high-fructose corn syrup to merely "corn sugar."

The group said the new name "more accurately describes this sweetener and helps clarify food products labeling for manufacturers and consumers alike."

But the sugar industry argued this change would be a bitter pill for US consumers and would only add to the confusion about a sweetener that has drawn criticism by some health advocates.

Sugar producers have filed suit alleging the corn industry has spent $50 million in "a mass media rebranding campaign that misleads the consuming public by asserting falsely that HFCS is natural and is indistinguishable from the sugar extracted from sugar cane and sugar beets."

Nice (scary) Infographic on the 2011 Federal Budget. Increasing/Decreasing taxes and/or Decreasing/Increasing spending is NOT going to get us out of this hole. Only one thing will...

Click HERE (The CBO) to go to original source and a better view...Massive net job creation is the ONLY thing that is going to get us out of this mess.  Increasing/decreasing taxes and/or increasng/decreasing govt spending are all political distractions undertaken by political ideologues who have no idea what else to do.  Losers of the high ground always look for others to blame: "Blame the Rich!!" "Blame the lazy unemployed!! This political season is going to be the worst ever....Bleh...

Is that a Flash Drive in your pocket...or the First IBM super computer? Nice photo showing the change over time of computer storage capability...

(Via Carpe Diem)  For those of us of a certain age and novice users of computers, this is a reminder of how far technology has evolved in our lifetimes.  Still dont know how those little pin drives work, but I am happy they do...

‘In September 1956 IBM launched the 305 RAMAC, the first ‘SUPER’ computer with a hard disk drive (HDD). The HDD weighed over a ton and stored 5 MB of data.’
- Texomatube

If you like back-stories on history (or Literature), this is for you--Who was the REAL Scrooge and was he as bad as Dickens portrayed him? I did not know this before. VERY interesting!!

(HT: Conversable Economist)
 Revealed: the Scot who inspired Dickens' Scrooge

""HIS name became an aphorism for meanness, but the base nature of Ebenezer Scrooge was inadvertently fashioned by failing light and an author whose eyesight was equally dim.
The real "Scrooge", an Edinburgh merchant, could not have been more different from his literary counterpart.

But the gloaming of an evening in the Capital, allied with an episode of mild dyslexia suffered by Charles Dickens, has forever associated Ebenezer Lennox Scroggie with one of the Victorian author’s most famous characters.

In life, Scroggie was apparently a rambunctious, generous and licentious man who gave wild parties, impregnated the odd serving wench and once wonderfully interrupted the General Assembly of the Church of Scotland by grabbing the buttocks of a hapless countess.

Would YOU pay $5,300 for this TV to watch the Bowl Games coming up?

Me either. It WAS made in the USA, but not many could buy one.  We had a crappy, tiny black and white one...

Another way to look at it---the average wage in 1964 was $2.50 per hour (production and non-supervisory workers--Source HERE).  At that wage, it would take someone ($749.00, the price of the first TV in 1964, divided by $2.50) 299.9 hours, or 7 1/2 weeks, to earn enough to buy this TV. 

I was at Best Buy yesterday (example below) and saw a rather large 50' screen HD/Plasma TV for $500. At this price a worker in 2011 earning an average wage of $19.54 would have to work 25.5 hours to purchase a very nice TV that has features the richest person in the world in 1964 could not fathom or even imagine. 

Interesting situation: One TV made in the USA and few people could buy one. One TV not made in the US and a large majority of the US population can afford one or HAS one (I don't, though).  How does THAT happen? Rhetorical question...I know the answer and so do you...

Source: Carpe Diem

China just surpassed the US in terms of manufacturing output. This MUST have been at our expense, right?? See this graph and you tell me, please...

China just surpassed the US in terms of the dollar value of manufacturing output/finished goods, i.e. "stuff").  China is the BLUE line and the US is the RED line.  The US trend line has been remarkably consistent over time.  Post-recession, we are recovering and it looks like we are going to be back on that long term rend. (For my math friends out there, if you were to draw a US trend line, would it be relatively constant over time, or has it fallen since 2000--I am just eye-balling it. Not very scientific. :) )  Graph  from CARPE DIEM

Source: Carpe Diem

My question when I look at this graph: If China had not industrialized as it has, would OUR manufacturing output (I am NOT including manufacturing employment in this discussion)  have increased MORE than what our historical trend in manufacturing shows we could do, OR would it be LESS? If so, how and why?

Excellent Interactive for adults and kids alike! See how the prices of the items in the classic song "The Twelve Days of Christmas" have changed over time. Christmas and Economics---Does it get any better? I think not...

A very nice interactive HERE showing the change in prices over time of the items in the classic Christmas song "The Twelve Days of Christmas".  An entertaining holiday distraction for you and/or your kids AND you/they get to learn a little economics as well....Win!! :)

PNC---Christmas Price Index

Here is a video sample:

I bet "10 Lords a Leapin'" are relatively inexpensive to hire now-a-days...An example of "Flexible Prices and Wages", no doubt. :)

ATTN TEACHERS: This one is for you! Here is a list of "High Paying Jobs that GREW in number during the recession"...I am just the messenger...

7th one down....the graph below this one shows the change in teaching jobs since 2006.  How can the number of administrators INCREASE and the number of teachers DECREASE? Who are those Administrators administratin' to???

Source: EconomicModeling via Carpe Diem

I am living in the Chicago area now...I need survival tips...And a job!

Due to a job promotion and transfer (from Dallas/Ft Worth area) for my wife (@Verizonwireless), I am living in the Chicago area (Deer Park) now.  This is quite an adjustment.  I grew up in Northern New England so I know cold, but as a young person. I have resided in Texas since getting out of the Marine Corps in 1984-85.  I may need some cold weather survival tips from some of you Northerners or other cold weather countries (who I know visit this blog).

I will continue to post things of general/specific interest to me, my collegues (economic teachers and otherwise) and for the high school students (and former students in college as well)  I teach or have taught. My goal is just to keep some basic economic(s) knowledge alive and relevant in your lives. Nothing heavy duty or in-over-my-head analysis...

I hope to secure a job in the next school year teaching Advanced Placement Economics somewhere close to home here in the "Northwest Suburbs" Chicago , as it is known.  Through the grace of God, I have secured a long-term sub position for an AP Econ teacher going out on maternity leave in Feb/March, but I need to look long term.

It is the longest of long-shots, but if anyone knows of anything permanent for the next school year for an AP Econ teacher, I would appreciate the lead.

I will continue to post stuff to keep busy and to stay up on current economic news, events and analysis. I hope this blog helps you in some small (or big!) way... :)

Attention Students: You are short-changing yourself if you don't look off-shore for career potential---this graph shows you all you need to know...

A stunning reversal of fortunes...Since the year 1999 the change in trade flows to "Emerging Economies, mainly Brazil, Russia, India, China has been dramatic.  This graph shows imports into Developed and Emerging Markets. One countries imports is another countries exports.  If you are pondering a career with growth potential, look outwardly.  Incomes around the world are rising and businesses/entrepreneurs with foresight will find a way to sell to these countries/customers. Are YOU on board?

Source: The Economist

From The Economist: ""In 2012, an important new milestone will be reached when emerging-markets import more goods and services than the rich economies combined. That is a dramatic change since 2000, when they imported barely half as much as rich countries did. Policymakers will hope that the rapid growth in developing countries’ buying power will boost the profits of companies in rich economies over the coming years.""