We know bankers are old goats, but with this bank REAL goats are the form of currency. Yes, this is the year 2010...

We started Monetary Policy in AP Macroeconomic today and talked about what money is and its functions.  Money can be in the form of commodities (gold, silver, cigarettes, etc) or fiat money (what the govt says will be used as the currency of record).  Whatever the society agrees will be the "medium of exchange" becomes the de facto currency.  Below is a case of a commodity becoming a form of money---goats! (HT: Marginal Revolution)

A bank that lends you goats

Women in remote Korawan, 70 km from Allahabad, have come up with a novel bank which exclusively deals with goats - accepting the animal as savings and lending it out as loans.
"Prema and her friends hailing from Afrozi village have establish a bank which deals exclusively in goats," development block coordinator Subedar Singh told PTI.
In tough terrains of Mirzapur district, most of the people are engaged in crushing stone to earn a living.
"Wives of these people help them in crushing stones and breed two-three goats for additional income," Singh said.
"Though the area is best suited for goat breeding, no effort was made to establish it as a full fledged business activity," he said.
"We provide goats to women having interest in taking up breeding as a full-time activity as loan. When a goat gives birth to kids, generally two to three in numbers, one of them is deposited with the bank again," Prema explained.
Goats in the bank are medically examined every week.
"In case a goat dies, then it is either replaced from the market or from the bank depending upon the availability," Prema said.

That is fine China, but can YOU make the Master Chief destroy the Halo?...I didn't think so...

China shows space skills with satellite rendezvous

""China has pulled off a tricky and uncommon feat in space flight, maneuvering one of its satellites to within about 300 yards of another while they were orbiting Earth, space analysts say.
Some analysts view the rendezvous as a potentially ominous sign of China's ability to carry out a hostile act or espionage against a rival satellite in space. Others say it could have been a test of docking skills.
China is not saying why it conducted the August maneuver, but it comes as the nation is ambitiously expanding its space program, including building a space station and conducting lunar missions. It is expected to launch the first module of its space station next year, followed by a manned spacecraft to dock with it.""

Soccer Fans watch this video (27 seconds)---the job is never finished until it is...

If you are doing a social science paper, preparing for debate or Model UN, this interactive graphic will be VERY helpful...

A REALLY, REALLY, REALLY terrific interactive graph that illustrates rich countries contributions to the health, welfare, security, aid, etc of "developing" (poor) countries.  If you are doing some research for a paper, debate or Model UN then this will be VERY helpful to you...Worth a look...Click HERE to go to interactive

Source: Center for Global Development

Nice interactive graph on key mesurements of US economy, demographics, politics...

Nice Interactive graphic on the US from The Economist...

http://www.economist.com/blogs/dailychart/2010/11/us_interactive_guide

""AMERICA as a whole has just endured its sharpest recession since the 1930s, and the recovery is still fragile. But as our interactive map reveals, the pain has been spread very unevenly. The hardest-hit state, Nevada, has an unemployment rate more than three times as bad as that of North Dakota, the state that has done best on that measure. Unsurprisingly, perhaps, there is a close inverse correlation between growth rates and unemployment.


But what of politics? On the whole, the states with the worst unemployment levels tend to vote Democratic, and those with the best are in the Republican camp. Politicians will argue furiously about which way round the arrow of causation ought to run.
Interestingly, America's ethnic composition seems to have little consistent economic impact. States with large numbers of Hispanics (by far the fastest-growing ethnic group in America) include low-growth/high unemployment states like California and Nevada, as well as good performers like Texas and New Mexico.""

Exports are front and center right now---who do we export to? What do we export? Some answers to those questions enclosed...

Some great, easy to read statistics on US Exports of goods, which is the focus of Pres. Obama's current trip overseas.  The first list gives the Top destinations, the second gives the countries with the fastest growth in demand for US goods, and the third gives examples of top exports.  Notice much of them are in the form of inputs that go into making finished goods that we will in turn IMPORT back to the US.  This may be the Achilles heel of trying to increase the export of FINISHED US goods.  It largely depends on the incomes of people in the countries the President is visiting.  Incomes they earn producing FINISHED goods from the inputs we EXPORT to them to make the finished goods that they...well, you get the picture...

Top 10 Countries for U.S. Exports in 2010

The following list identifies the top 20 trade partners and the value of U.S. exports consumed from January to June 2010. Also shown is the percentage increase over the first 6 months of 2009, and the percentage of overall U.S. exports consumed by each country.

These 20 countries received 78.8% of the value of all U.S. exports as of June 2010.

1.Canada … US$121.9 billion, up 26.8% from 2009 (19.9% of US total exports)

2.Mexico … $77.3 billion, up 31.8% (12.6%)

3.China … $41.2 billion, up 35.6% (6.7%)

4.Japan … $29.2 billion, up 18.1% (4.8%)

5.United Kingdom … $24.3 billion, up 6.4% (4%)

6.Germany … $23.2 billion, up 9.5% (3.8%)

7.South Korea … $19.2 billion, up 52.7% (3.1%)

8.Brazil … $16.4 billion, up 37.7% (2.7%)

9.Netherlands … $16.2 billion, down 1% (2.7%)

10.Singapore … $14.2 billion, up 42.4% (2.3%)

11.France … $13 billion, down 6.3% (2.1%)

12.Belgium … $12.3 billion, up 16.1% (2%)

13.Hong Kong … $12.3 billion, up 26.4% (2%)

14.Taiwan … $12.1 billion, up 59.5% (2%)

15.Australia … $10.5 billion, up 15.2% (1.7%)

16.Switzerland … $9.7 billion, up 7.6% (1.6%)

17.India … $9.2 billion, up 22.9% (1.5%)

18.Italy … $7 billion, up 14.6% (1.1%)

19.Malaysia … $6.6 billion, up 50.3% (1.1%)

20.Colombia … $5.9 billion, up 35.8% (1%).

Among these top 20 countries, 18 or 90% increased their purchases of U.S. exports during the first 6 months of 2010.
Only the Netherlands (down 1%) and France (down 6.3%) decreased their consumption of American products over that time period
Fastest-Growing Demand for U.S. Exports by Country

Led by Taiwan, Asian countries topped the list of highest percentage gains for the top 18 countries consuming more U.S. exports.

A total of 15 nations generated double-digit increases in their purchases of American exports from January to June 2010.

1.Taiwan … up 59.5% to US$12.1 billion

2.South Korea … up 52.7% to $19.2 billion

3.Malaysia … up 50.3% to $6.6 billion

4.Singapore … up 42.4% to $14.2 billion

5.Brazil … up 37.7% to $16.4 billion

6.Colombia … up 35.8% to $5.9 billion

7.China … up 35.6% to $41.2 billion

8.Mexico … up 31.8% to $77.3 billion

9.Canada … up 26.8% to $121.9 billion

10.Hong Kong … up 26.4% to $12.3 billion

11.India … up 22.9% to $9.2 billion

12.Japan … up 18.1% to $29.2 billion

13.Belgium … up 16.1% to $12.3 billion

14.Australia … up 15.2% to $10.5 billion

15.Italy … up 14.6% to $7 billion

16.Germany … up 9.5% to $23.2 billion

17.Switzerland … up 7.6% to $9.7 billion

18.United Kingdom … up 6.4% to $24.3 billion.

Not only did the United States grow its export sales by a robust 24.5%, that growth is diversified across a high percentage of the countries with which the USA does business.
America’s top trading partners continue to buy more U.S. exports. This in turn generates more cash flowing back to the United States as its economy recovers.

Top Export Products behind US Export Gains

Chemical products dominated the list of fastest-growing U.S. exports for the first 4 months of 2010, with 5 chemical products among the top 10 export categories.

In first place was the industrial chemical ethyl alcohol with U.S. export sales of $267 million, a 374.1% gain over the first 4 months of last year.

In fifth place, U.S. export sales of polycarboxylic acids gained 199.2% to $457.3 million. Polycarboxylic acids have a wide range of uses from increasing the wet strength of paper to preparing drug salts.

Prepared pigments used in ceramic, enameling and glass products posted a 172.2% rise to $223.5 million.

Used in making plastics, nylons and cosmetics, U.S. exports of phenol-alcohol were ahead 159.1% to $281.4 million.

U.S. metal exports were also among the winners. Refined copper shipments spiked 269.6% to $373.6 million, while iron ore exports climbed 223.3% to $206.6 million. Flat-rolled stainless steel products gained 148.9% to $360.6 million, while aluminum exports were ahead by 100.9% to $283.4 million.

The U.S. also exported 258.4% more flat panel manufacturing equipment parts to other countries, for a total of $3.6 billion in just 4 months.

There were some niche export products with significant gains as well. Exports of buffalo, cow and horse hides and skins were up 125.6% to $208.4 million.

Exports of U.S. soybean oil soared 120.1% to $588.1 million. Sales of articles made with precious metal improved by 149.2% to $94.7 million.

Humorous---Graphic showing how various Smartphone users view each other...Any truth to these???

This is how smartphone users see each other

Do you want a Coke? Pop? Soda? Your answer provides a clue as to where you grew up. Does this map reflect your experience?

Source HERE

What you call a "Soft Drink" gives a clue as to where you grew up...Does this map coincide with your experience?? I grew up in New England and yes, I called any brand of soft drink "soda"...

There is a discussion on american culture related to this graph HERE.  It is quite fascinating and if you are taking a sociology class it might be a good source for an extra credit assignment..

Who can afford to spend millions to promote the eating of cheese AND spend millions to discourage the eating of cheese??...I guess you already guessed...

We are used to contradictions when it comes to Federal Govt policies, such as providing tobacco farmers with millions in subsidies to grow tobacco while also spending millions on anti-smoking programs (What? You did not know that??).  Here is another--Spending money to promote the consumption of cheese while spending money on anti-obesity programs.

NYTIMES: While Warning About Fat, U.S. Pushes Sales of Cheese

""Domino’s Pizza was hurting early last year. Domestic sales had fallen, and a survey of big pizza chain customers left the company tied for the worst tasting pies. Then help arrived from an organization called Dairy Management. It teamed up with Domino’s to develop a new line of pizzas with 40 percent more cheese, and proceeded to devise and pay for a $12 million marketing campaign.


Consumers devoured the cheesier pizza, and sales soared by double digits. “This partnership is clearly working,” Brandon Solano, the Domino’s vice president for brand innovation, said in a statement to The New York Times.


But as healthy as this pizza has been for Domino’s, one slice contains as much as two-thirds of a day’s maximum recommended amount of saturated fat, which has been linked to heart disease and is high in calories.
And Dairy Management, which has made cheese its cause, is not a private business consultant. It is a marketing creation of the United States Department of Agriculture — the same agency at the center of a federal anti-obesity drive that discourages over-consumption of some of the very foods Dairy Management is vigorously promoting.


Urged on by government warnings about saturated fat, Americans have been moving toward low-fat milk for decades, leaving a surplus of whole milk and milk fat. Yet the government, through Dairy Management, is engaged in an effort to find ways to get dairy back into Americans’ diets, primarily through cheese. .."

Input costs for Samsung's Galaxy Tablet...The AP Microeconomics teacher in me LOVES knowing the costs of production of a good...Hmmm, warm fuzzy enclosed...

WSJ: Samsung Makes Push on Tablet Market

Worker Productivity is Declining...This is GOOD news...However, it is NOT permission to goof off on the job...

WSJ: Cooling Productivity Is the Heat Behind Jobs Figures

""U.S. workers are getting less productive. Right now, that actually may be good news for the labor market...The cooling rate of productivity growth. Output per hour of work in the U.S. rose 2.5% in the third quarter from the same period last year, figures Thursday showed. That is a considerable drop from the first quarter's 6.3% growth rate, the strongest pace in almost five decades. Companies, in other words, now require more hours of work and, ultimately, more workers to keep raising output....""

Productivity is defined as "Output Produced per Labor Hour"...Or more simply, how much "stuff" a worker produces in one hour of work.  After the initial plunge into recession in 2007, worker productivity actually increased significantly in the intervening 3 years.  There are many potential explanations for this. Here are a few of my observations from experience and, well, from relentless reading of professional economists blogs.  I dont pretend to be original...

(1) Fear. Workers busted butt, to use an informal term, to avoid being in line for lay-offs. A Darwinian, survival of the fittest mentality emerges at many work places, especially "blue-collar" or lower-level "cubicle jobs. I have no evidence of this other than the many many many many jobs I have held in my life...

(2) A reduced staff/workforce at a business learns to "do more with less". Daily processes are improved and efficiencies are squeezed out of every last input. I once worked in a warehouse as a temporary worker. The place was SO inefficient it made me crazy. I tactfully cajoled the manager to improve various processes and reduce the amount of time it took to unload trucks and process cargo. Needless to say, they did not need temp workers soon after that (guess I cause unemployment to increase...) The negative consequence of this is people may be over-worked and/or they find that they really had too many people in the first place and with streamlined processes they can do more with less labor (see my example above).

(3) Labor has been replaced with Capital.  Machines, computers, re-designed work-stations, and other production equipment have been employed to save on labor costs.

As we emerge from the recession, as measured by an increasing GDP (tepid as it is, it is increasing none the less), we SHOULD be adding workers to help produce that "stuff".  However, business have been tentative and have been able to keep up with additional demand without adding workers on any significant basis. There HAS to be a breaking point!

As noted in the highlighted paragraph, productivity is taking a dip.  Not because workers are not working as hard, but because they are coming up against productivity wall.  Existing workers, even with improved processes and additional capital, are not able to keep up with additional demand and their productivity may actually decline as they work more hours. This could be a signal to the business that they have milked all they can out of workers and capital and it is necessary to add labor (or capital) to improve productivity.  This is good for the labor market and some economists see this as a positive development.  

This graph accompanys the article above and shows an overall (not perfect) inverse relationship between productivity and employment. If the trend continues, we are in for better days...

Wall Street Journal

Higher intelligence associated with "thinking like an economist"---Just sayin'... :)

Higher intelligence associated with "thinking like an economist"

""As the world economy dusts itself down and edges towards recovery, a provocative new paper claims that people with higher intelligence are more likely to think like economists. That is, they're more likely to be optimistic about the economy; to recognise the economic advantages of markets free from government interference, and the advantages of foreign trade and foreign workers; and to appreciate the economic benefits of achieving greater productivity with less man-power. The lead author is Bryan Caplan, an economics professor at George Mason University. Past essays by him include 'The 4 Boneheaded Biases of Stupid Voters (And we're all stupid voters.)'
Prior research has established that the more time a person spends in education, the more likely their broad economic views are to match that of the typical economist (pdf). Caplan and his colleague Stephen Miller point out that these studies failed to take into account the influence of intelligence. After all, it's known that people with higher IQ tend to spend longer in education and intelligence itself may also directly influence economic beliefs....""

 

How much do you actually pay for a government program with your taxes? Nice graphic enclosed

This is an excellent visual to give you an idea of how much tax money two different taxpayers, at two different income levels, would pay for specific intems in the Federal budget.  The list is not comprehesive. It is interesting to see how much these taxpayers pay for each program and their rank in priority.  Not sure I am getting my $1.51 worth from the last item...
Tracking Your Federal Tax Dollars

Interested in majoring in Economics? The link enclosed will be very useful to you. Find out what 7 of the most powerful new economists are doing...

Go HERE to see this economists opinion on who are the 7 most powerful new economists.  More importantly, he provides a picture and short bio on each of them.  If you are interested in what economists do for research, this will be VERY informative for you. 

From: Dan Ariely

Many people have contributed over the years to Behavioral Economics–too many to mention here. The individuals on this list have not only changed the face of economics as we know it, but they are likely to contribute a great deal more in the years to come. Each of these individuals has tremendous creativity and insight that has enabled them to capture and explain our odd, complex, and sometimes irrational human nature. Armed with this new understanding of human behavior, and taking our human weaknesses into account, behavioral economics could help us take steps toward designing a better world.

In spite of coconuts and owls, the world is becoming a better place...right? According to The Economist it very well may be...

Is the world becoming a better place? The chart below suggests that since 1980 many places that were extremely poor (based on the criteria for this index) in 1980 are much better places for people today. (Note: As a Marine I was served at the US Embassy in Mali in 1981-83).  I also see good news in the bad news--if you look at the counties on the right side of the chart only one is still declining. The others are still bad, but relatively speaking, are improving.  Is it good enough ? No, but it is nice to see by some measure the world is becoming less dire for more and more people.  Also, can anyone suggest why the years 2000-05 seems to be pivotal years for the countries on the right to head for an improved human index? I am at a loss off the top of my head as to a reasonable explanation...Any suggestions???

Developing Humans: Some countries are making great strides in human development, others less so

Since 1980 the country that has made the greatest strides in improving human development is Nepal, according to the UN’s annual Human Development Index (HDI). The index is a combination of three sub-indices covering wealth, health and education. The countries whose HDI has improved the most since 1980 are mainly in Asia. China and India have been helped by rapid GDP growth, but even slower-growing countries such as Nepal and Bangladesh have fostered human development by making progress in health and education. The countries where HDI has improved the least are mainly in Africa, with Zimbabwe at the bottom of the pile.