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)

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....

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? Indegoafrica.org 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 indegoafrica.org 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....""

Updated Payscale---Economics holds its own against the Engineers!! Resistance is futile!

Wall Street Journal

UPDATE!!
In class today this particular blog entry generated much discussion.  This chart below is from 2005.  It shows the percentage of Fortune 500 CEO's and the undergraduate degree they received.  I was wrong about the engineers and their numbers in the CEO rankings.  However, you Liberal Arts majors REJOICE! There is still hope for you!! :)

THERE! GOTCHA! Liberal,, America Hating, Media bias at the New York Times exposed...or is it???

I do not agree with this franchisee (NOT condoned by the McDonalds Corporation) who inserted at political flyer into employees paycheck envelops which urged them to vote for particular candidates.  It is not the place for such material.  What I am MORE curious about is the reporting AND the headline attached to the story.  I understand at many/most major print media outlets, there are people who write the articles and there may be someone who creates the headline for the story.  As best I can tell from the article, NO ONE was TOLD who to vote for! Why does the title, which draws you into reading the article suggest they were?  Am I knit-picking?  Trying to get a media "Gotcha! being biased!!" I just read the article and it prompted the thought...Note: pointing out that when I blog I do the same thing with my titles (GUILTY!!) is not the same thing. No one believes my writing is news (except for my disciples)---it is all commentary.  As far as I can tell this is not an opinion piece.  Read for yourself...

NYTIMES: McDonald’s Workers Are Told Whom to Vote for

""When workers in a McDonald’s restaurant in Canton, Ohio, opened their paychecks this month, they found a pamphlet urging them to vote for the Republican candidates for governor, Senate and Congress, or possibly face financial repercussions....The pamphlet appeared calculated to intimidate workers into voting for Republican candidates by making a direct reference to their wages and benefits, said Allen Schulman, a Democrat who is president of the Canton City Council and said he obtained a copy of the pamphlet on Wednesday."

Extra Credit! Is there a relationship between the production of Ethanol and the Price of Corn?

Comparison of Ethanol production (on left) and the price of corn (on right) over roughly the same time period...Is there a relationship? Extra credit on the next test if you can offer an supportive and/or alternative explanation.

The Coconut havesting machine MUST NOT be invented! Jobs will be lost! Where is the local Luddite Party when you need them?

But what about all the jobs that will be lost when capital is substituted for labor?  Luddites Unite!

From UK Guardian: Who wants to be a coconut millionaire?

""The contest was to devise a machine that could ascend a coconut tree and harvest the nuts, thereby doing away with the need for human climbers.
Today, Mr Satheesh's machine, designed with the benefit of practical advice from his father, will be one of eight shortlisted entrants to be tested in a two-day trial overseen by government officials. The organisers received more than 450 entries, and even at this stage people can bring their machines to the finals to compete. Three winners, whose machines are judged to have most effectively scaled the tree and completed the task, will each receive 1m rupees (£14,000).
"The economy of Kerala is very agrarian and many people depend on agriculture and the coconut. It's one of the most important products we have, and every part of the tree is used," said D K Singh, a senior official with the Kerala state government's office in Delhi.
"But nowadays, the younger generation does not want to climb trees. So the government planned to develop a mechanical device.""

Latest GDP Report broken down by its component parts---We need more "P" in our GDP!

Latest GDP report. This graphic shows the breakdown of each component of GDP (C + I + G + N(x) ) and each sectors contribution to GDP in percentage terms.  Consumption  (C) is the value of domestic production that purchased by individuals. Investment (I) is the value of domestic production purchased by  businesses to use in conducting business. Government (G) is the value of domestic production purchased by local, state, federal government agencies. Net Exports (N(x)) is Exports, domestic production purchased by foreigners MINUS Imports, foreign production purchased by Americans domestically.  Notice that this results in a rather large negative contribution to GDP.  When you add the positives (C+I+G) and subtract the negative (N(x)) you get a 3rd quarter (at an annualized rate) increase in GDP of 2.0%.  Tepid.  If you refer to past blog entries concerning actual GDP relative to potential GDP, you know we have a significant output gap.  We must grow faster than 2.0% to get back to full-employment by 2016-2020.  Just chugging along...



Wall Street Journal

Update: Below is a BETTER breakdown of the component parts of GDP, especially with "I"  Investment Expenditures.  Remember, residential housing is a part of "I", not "C" as we might intuitively think.  I believe this will be a drag on GDP for sometime.  It suggests an over-allocation of resources towards many aspects of the housing market and will require a much longer time lag to re-adjust itself.  Those resouces will have to find a new place to settle within "I" or one of the other components of GDP. 

Business Insider

Dirty Politics and Name calling have NO place in Politics!! Really? Someone should have told John Adams and Thomas Jefferson in the Election of 1800...See the vidoe HERE!

This video is GREAT! The more things change, the more they stay the same...It uses quotes from Jefferson and Adams campaigns in the election of 1800.  Worth a look.  The actual sources for the quotes are below as well...(Source: The Agitator)

For those interested, here are some of our sources for the statements made in "Attack Ads, Circa 1800."


John Adams is a blind, bald crippled toothless man
http://books.google.com/books?id=GHMnz8G0GTcC&pg=PA500&lpg=PA500&dq=adams+blind,+bald+crippled+toothless&source=bl&ots=9lbKRZPRGk&sig=G8iF_6jamjrAWBg5_f9aRsW093U&hl=en&ei=FuvJTLTTCYOglAel07SnAQ&sa=X&oi=book_result&ct=result&resnum=2&ved=0CBcQ6AEwAQ#v=onepage&q=adams%20blind%2C%20bald%20crippled%20toothless&f=false

who secretly wants to start a war with France.
http://www.signonsandiego.com/news/2010/sep/19/going-negative-is-in-the-dna-of-our-democracy/

While he’s not busy importing mistresses from Europe
http://www.digitalhistory.uh.edu/historyonline/scandal.cfm

he’s trying to marry one of his sons to a daughter of King George III.
http://millercenter.org/academic/americanpresident/adams/essays/biography/3

John Adams is a hideous hermaphroditical character with neither the force and firmness of a man, nor the gentleness and sensibility of a woman.
http://articles.cnn.com/2008-08-22/living/mf.campaign.slurs.slogans_1_jefferson-family-sally-hemings-vice-president-jefferson?_s=PM:LIVING

Murder, robbery, rape, adultery and incest will be openly taught and practiced, the air will be rent with the cries of the distressed, the soil will be soaked with blood and the nation black with crimes.
http://millercenter.org/academic/americanpresident/jefferson/essays/biography/3

Are you prepared to see your dwellings in flames? Female chastity violated? Children writhing on the pike?
http://books.google.com/books?id=YOWX0jLPbkwC&pg=PA188&lpg=PA188&dq=%22female+chastity+violated%22+%22children&source=bl&ots=4JW5TDUjnX&sig=G6_8ik8es-6hkf-SB2Edx_-E-Zo&hl=en&ei=X-7JTKelNMWblgfxufj6Cg&sa=X&oi=book_result&ct=result&resnum=4&ved=0CCcQ6AEwAw#v=onepage&q=%22female%20chastity%20violated%22%20%22children&f=false

Jefferson is the son of a half-breed Indian squaw raised on hoe-cakes
http://en.wikipedia.org/wiki/Black_People_and_Their_Place_in_History
http://www.post-gazette.com/pg/08036/854713-51.stm

Hamilton is a Creole bastard brat of a Scotch pedlar.
http://www.freerepublic.com/focus/f-news/1071513/posts

Another nice graph of Actual RGDP relative to Potential RGDP...Impress your High School (guess that is me) or College Econ teacher with this knowledge

Another nice graphic illustrating the output gap, which is the difference between what we actually produce and the output potential of our economy, as measured  by Real GDP:

In common graphical form that we have come to know so well in AP Macroeconomics, we can illustrate the output gap in both the Production Possibilities Frontier and the Aggregate Demand/Aggregate Supply Model of the Economy:

The PPF shows our productive capacity in terms of raw production of capital and consumer goods.  The Long Run Aggregate Supply Curve (LRAS) is this raw production converted to inflation-adjusted GDP.   We know we are not always at our potential in the PPF. Sometimes we are outside it and sometimes we are inside it.  We can certainly say our economy today is under-producing/under-utilizing resources, mainly people (9.6% unemployment rate, well over the Natural Rate of Unemployment). 

Point "B" represents the under-employing of resources relative to our potential Point "A". When we convert the raw production at Point "B" to inflation-adjusted prices, we get a Real GDP to the left of our FE RGP. This is represented as movement along our Short-Run Aggregate Supply curve to Point "B" on the  AD/AS Model. 

How soon do we close the gap between Actual RGDP and Potential RGDP? The first graph gives two Real GDP growth rate examples. One is the growth rate from the end of last severe recession we experienced, 1983-84. The second is a tepid growth that seems to be the consensus growth rate we will actually have (again, this is a best guesstimate scenario). Recovery back to full-employment is not going to be quick, UNLESS we get a HUGE positive Aggregate Supply Shock, such as the one in the 1990's.  Don't see that is going to happen, but as mentioned in class, I WISH it would come in the alternative energy sector--significantly reduce energy costs in a clean way,  which will significantly reduce the cost of production across the board. In turn, this may open up new possibilities in a broad range of industries.  Any other suggestions as to what you would like see contribute to a "Positive Supply Shock"??? Let me know--I am always willing to learn new things!

What comes first to increase college tuition for all---increasing costs or increasing subsidies?

This graph shows the rise in cost of attending college, public and private, since 1980.  It is in the form of an price index where the year 1980 is 100. and currently we are at 359, which means there has been a 259% increase in the cost of college tuition to a public university.  Notice as we reach the 2000's the slope of the graph increases considerably, indicating the cost of college is increasing at an increasing rate. Why? Lots or reasons, but subsidies to students have grown considerably.

WSJ...""But the federal government gave out $28.2 billion in Pell grants to students in the 2009-10 school year, almost $10 billion more than the previous year. Pell grant numbers for the current school year are not yet available, but are expected to rise.
Federal grants, including Pell and veteran's benefits, accounted for 44% of the $94 billion in total grant money awarded to students in the 2009-10 school year, compared with 34% the previous year, according to the data. Ten years ago, federal grants represented 29% of the total. The other major sources of grants are colleges and universities, and employers...""

The writer quoted below is commenting on an excerpt from THIS WSJ article about rising college tuition. It reminds me of the chicken and egg conundrum of what comes first.

""From The Enterprise Blog: ""College tuition and fees climbed once again this year, but the burden was tempered for some students and their families by a big jump in federal aid…""

Correct me if I’m wrong, but couldn’t it just as easily have been written:

""Federal aid for college climbed once again this year, but the help was tempered for some students and their families by a big jump in college tuition and fees…""

Hypothetical: I have my own college and I call it "Hayward University" or as it is better known, "Hay, YOU!" (look at the photo above--yes, we are all about the athletics!).  In the short run, there are a fixed number of seats available for college students at my university to meet existing demand.  I currently have 5,000 seats and no plans to expand.  The Supply curve for the seats is vertical at 5000 seats. No matter what the tuition is, I ONLY have 5,000 seats to offer.  I am a captive of the Demand curve!

The Demand curve for those seats is downward sloping to reflect the inverse relationship between price and quantity demanded. The Demand curve intersects the Supply curve at $10,000 per year tuition for each of my 5,000 seats. See graph below that illustrates this equilbrium:

Assume my students become aware they are now eligible for additional student aid in the form of a $1,000 subsidy (Pell Grant et al). So, now instead of paying $10,000 tuition, each student now only has to pay $9,000.  At $9,000 the quantity demand for seats to my school is 6,000 (Point "B").  So, now my quantity demanded (6,000) exceeds my quantity supplied (5,000).  The lower the tuition, the more students want to come to my campus.  I am out of equilibrium.  As shown below, I NOW have a shortage of seats relative to the quantity demanded (Point "B").  How do market forces take care of this? 

The price will increase along the demand curve (as price increases, the quantity demanded decreases) from Point "B" back to Point "A".  Right where we started:

BUT, that is not the end of the story. We cannot forget about the $1,000 subsidy.  Well, I GET THAT TOO!  The market tuition returns to $10,000 PLUS the subsidy---$11,000 to attend my school:

What is true at $10,000 tuition and quantity supplied of 5,000 seats is going to be true at every tuition price and quantity demanded of seats RELATIVE to the original Demand curve. We find that the Demand curve shifts to the RIGHT:

Bottomline? Tuition in the end does not DECREASE and likely INCREASES,  nor do more students necessarily get additional access to college. Nice for me. I will start tuition rates NEXT year at $11,000 for subsidized students and non-subsidized students.

This comment from the article will not be to the liking of college administrators "like me"...

""But Patrick Callan, president of the National Center for Public Policy and Higher Education, said colleges and universities need to get tuition under control. He likened the trends in costs and federal aid to a treadmill, where prices rise, federal money gets pumped in, and costs increase again.
"Unless governors and legislatures stiffen their spines and not allow schools to pass so much of the cost on to families, we are never going to make a dent in access and affordability," said Mr. Callan, whose research group tracks higher-education issues. ""