VERY cool graphic on the life-cycle of various technologies---one innovation replaces another AND becomes less expensive!!

Observe Creative Destruction as it happens.  Innovation either improves or destroys existing technology  allowing a new and improved version to come to the market-place.  Graphic is measured since 1980 and it shows by the size of the bubble the relative change in the cost of the good over time. The axis on the right shows the number of units of the good sold...I am always amazed by the changes that have taken place in my lifetime AND yours, all you young people! (click on image to make bigger OR go to the source HERE for full screen view)


Source Washington Post



AP curriculum is changing for some subjects but not economics---see why here...Nice NYTIMES article that will surely spur debated amongst AP teachers...

I am happy to see AP Economics is not going to change...No real need to---Here is an old economics joke that explains why: 

""An economist returns to visit his old school. He's interested in the current exam questions and asks his old professor to show some. To his surprise they are exactly the same ones to which he had answered 10 years ago! When he asks about this the professor answers: "the questions are always the same - only the answers change!"""

Teachers of the affected subjects will be highly interested in the substance of this article, I believe...

NYTIMES: Rethinking Advanced Placement

""Trevor Packer, the College Board’s vice president for Advanced Placement, notes that the changes mark a new direction for the board, which has focused on the tests more than the courses. The rollout of “the New A.P.,” as the board describes it, will actually start this year with a new curriculum taking effect in two smaller programs, German and French language. Major revisions to physics, chemistry, European history, world history and art history will follow, with the hope of being ready for exams in 2014 or 2015.

“We really believe that the New A.P. needs to be anchored in a curriculum that focuses on what students need to be able to do with their knowledge,” Mr. Packer says. A.P. teachers made clear that such a shift was impossible unless the breadth of material covered was pared down. Courses in English and math are manageable, Mr. Packer says, and will not be revised until later....""



Source HERE



I am a closet Chinese mother...Very good article on parenting differences across cultural lines...

WSJ: Why Chinese Mothers Are Superior : Can a regimen of no playdates, no TV, no computer games and hours of music practice create happy kids? And what happens when they fight back

An article that can/will provoke alot of discussion--the cultural differences in raising children the "Asian Way", although the writer includes other ethnic groups. It is predominantly about the Chinese/Asian culture of child-rearing vs the Western view.  Much of the discussion surrounds the importance of "self-esteem", and in her view it is considerably over-rated.  She has lots of great points but perhaps carries things to an extreme (OF COURSE that is what I would think, using my ingrained Western value system as the filter).  I do believe we promote the concept of self-esteem to levels that are unproductive and harmful.  I often wonder if we should promote it at all.  As a teacher (and parent) I know I err too much on the side of caution to avoid conflict.  There are times I find myself, given a particular circumstance, fluffing up a students esteem when I REALLY know what they need is an honest assessment (read that to mean the proverbial kick in the figurative butt).  It is not only exclusive to students--adults, especially me, from time to time need a real assessment of their current performance relative to their potential.  Ahh, potential, that is a word that is not easy to define and is perhaps why we are hesitant to judge. I do occasionally have a student come to me and ask me in a direct way for a hard assessment of their capabilities (I will only do this if I know the student rather well).  I will give it to them, but preface it with "you might want to get a second opinion".  I think they are generally appreciate it and take it to heart.  What do you think about the article?  Also, feel free to assess me---my self-esteem is pretty good...

""A lot of people wonder how Chinese parents raise such stereotypically successful kids. They wonder what these parents do to produce so many math whizzes and music prodigies, what it's like inside the family, and whether they could do it too. Well, I can tell them, because I've done it. Here are some things my daughters, Sophia and Louisa, were never allowed to do:


• attend a sleepover

• have a playdate

• be in a school play
• complain about not being in a school play

• watch TV or play computer games

• choose their own extracurricular activities

• get any grade less than an A

• not be the No. 1 student in every subject except gym and drama

• play any instrument other than the piano or violin
• not play the piano or violin....""

Who has the BEST selling jersey in the NFL??

The playoffs have not yet begun and the Steelers enter as the No. 2 seed in the AFC but the NFL already has declared them champions ... of merchandise sales.


More Steelers merchandise was sold during the 2010 season than any other NFL team, according to NFLShop.com, which counted sales from April 1, 2010 through Jan. 2.


And the top-selling jersey? Steelers safety Troy Polamalu, a candidate for NFL defensive player of the year, beat them all and was the only non-quarterback among the top eight jersey sales last season.


The Dallas Cowboys had the second-best selling merchandise and reigning Super Bowl champion New Orleans was third.


Following Polamalu in jersey sales were Saints QB Drew Brees, the 2009 league MVP, and popular rookie quarterback Tim Tebow of Denver. (Source HERE)

How ironic---the Zimbabwean currency is worth more as a collectors item than as an actual legal currency...Sad but true...

How ironic---the Zimbabwean currency is worth more as a collectors item than it did as an actual legal currency...Sad but true...

""Western visitors to Zimbabwe are looking for zeros. They're snapping up old, defunct Zimbabwe bank notes, most notably the one hundred trillion Zimbabwe dollar bill, as an economic souvenir.
The one hundred trillion Zimbabwe dollar bill, which at 100 followed by 12 zeros is the highest denomination, now sells for $5, depending on its condition. That bill and others -- among them millions, billions and trillions, were abandoned nearly two years ago, when the American dollar became legal tender in the hopes of killing off the record inflation that caused all those zeros.
"I had to have one," said Janice Waas on a visit to the northwestern resort town of Victoria Falls. "The numbers are mind bending." She got her so-called "Zimdollar" in pristine condition, from a street vendor who usually sells African carvings.""

Source: Yahoo News
 

Abandoned building stripped of all that is valuable, except for one thing...can you guess what it is?

This is a photo of an abandoned library in the city of Detroit...MOST buildings like this would be stripped of all its useful/salvageable content and sold for some cash...For some reason, books have no value here. A sign of the times?...(HT: Coyote Blog)


Source HERE



Class Warfare---Athenian-Style...the more things change the more they stay the same...

Class warfare, Athenian-style...



Source: The New Arthurian Economics

  The more things change, the more they stay the same. 

HT: The New Arthurian Economics

What has changed in the Movie industry in the last 10 years? Ticket sales are LESS but revenue MORE. How does that happen? (see the Top movies from 2000--really? That long ago?)

I posted this graphic (left) just the other day.  Looking at it closer, I was curious about the "entertainment" category at the bottom.  In 2000, U.S. box office revenue was $7.7 billion on ticket sales of 1.4 billion.  So the average ticket price was $5.50. Adjusting for inflation, that would be the same as $6.99 today. In 2010 the box office revenue was $10.3 billion on ticket sales of 1.3 billion for an average ticket price of $7.92.  Movie ticket prices have increased faster than the general rate of inflation as measured by the CPI).

A couple of observations...I found it curious that gross ticket sales were less THIS year than in 2000. We were in the very early stages of a recession then, but still in the midst of one in 2010 so that could account for some of it.  However, U.S population most assuredly increased during the decade so that should have compensated some. The only other explanation for a higher average ticket price over the course of the decade is the increase in the number of 3-D movies that sell at a premium over 2-D movies. How about you? Can you think of any alternative explanation I may have missed?  Below are the Top 15 Movies in 2000.  Seems like yesterday!!

1  The Grinch
2  Cast Away
3  Mission: Impossible
4  Gladiator
5  What Women Want
6  The Perfect Storm
7  Meet the Parents
8  X-Men
9  Scary Movie
10  What Lies Beneath
11  Dinosaur
12  Crouching Tiger
13  Erin Brockovich
14  Charlie's Angels
15  Traffic
Source: HERE

Tips for communicating with your collge professors by e-mail...Only one chance to make a first impression...

Here are some tips for e-mailing your Professors in college.  Most center around "growing up". Numbers 1, 8 and 9 would be my personal pet peeves ..(Source: Chris Blattman)

1. Kick the email address from high school. It’s time for “hot_muffin92@hotmail.com” and “mikey_g@gmail.com” to rest in peace.

2. Greet. Politely. Launching straight into the message is bad, but “Hi!” is poor form and “Hey Prof!” is an unmitigated disaster. “Dear” and “Hi” are fine, so long as you follow both by a name or title: “Hi Professor” or “Hi Mr. ____”.

3. On second thought, be careful with the Mr. and Ms. I could care less if strangers address me as Mr., Dr. or Prof. Blattman. Few of my colleagues seem to feel the same way. Sadly your approach must conform to the average (or even lowest common) ego. If you’re not sure if the person is a Dr. or not, three seconds on Google should tell you.

4. Capitalize and punctuate. otherwise we will lol at yr sad attempts

5. But not all punctuation. Of the exclamation point, Elmore Leonard said “You are allowed no more than two or three per 100,000 words of prose.” That’s roughly one exclamation point for every 500 messages you send. Use them wisely, for their overuse is the first sign of an immature mind. (Related, from Terry Pratchett: “Five exclamation marks, the sure sign of an insane mind.”)

6. Death to the emoticon. Keep them for your friends. And recall that, for centuries of the printed word, writers managed to convey sarcastic and funny without the semicolon and parenthesis. If you think your comment needs an emoticon, this is a sign you need to rewrite (or delete) the remark.

7. Avoid fancy typefaces or “stationery”. One word: cheeseball.

8. Be clear and concise. Write short messages, make clear requests, get to your point rapidly, and offer to provide more information rather than launch into your life story.

9. Don’t ask for information before you’ve looked on Google. “Can you send me paper X?” is annoying. But the best I’ve received: a request to explain the Cold War.

10. Don’t sound presumptuous. Many people are busy and important (and everybody thinks they are). If you are asking for anything requiring time or energy, it is courteous to be demure.

11. No quotes from famous people in your signature. See “cheeseball” above.
12. With your juniors, do the above as fastidiously as with your seniors. Allow me, momentarily, to break rule #11: ”Modesty is not only an ornament, but also a guard to virtue” – Joseph Addison

Nice graphic--How things have changed from 2000 to 2010...Quite Amazing!

2000 Vs. 2010: How the world has changed (HT: FLAD on Facebook)

If world leaders (Iran, Bolivia, Venezuela, Cuba, (US?)) would read the chapter in a basic economics textbook on subsidies, they could avoid social unrest and alot of grief.

Bolivian president cancels gasoline price increase

""The government announced Sunday that it was raising gasoline prices by 73 percent, to 92 cents a liter ($3.48 a gallon) for regular gasoline, up from 50 cents ($1.89)....Bolivian President Evo Morales on Friday abruptly canceled a decree that sharply raised fuel prices, reacting to widespread protests and the threat of more to come in the biggest setback of his five years in office... 

Public subsidies are payments by the government to producers and/or consumers of a good or service. The justification for subsidies is the current production of the good/service is less than the socially optimal level of production and/or the current market price is too high. A subsidy to the producer decreases the cost of producing and incentivizes the producer to increase the supply of a good/serviced at a given price (Supply curve shifts RIGHT) which decreases the market price and increases the quantity supplied at that lower price. A subsidy to the consumer decreases the price of a good/service and incentivizes the consumer to increase the demand for a good/service at a given price (Demand curve shifts RIGHT) which Increases the market price (but is off-set with the subsidy) and increases the quantity demanded. This article suggests the subsidy is bestowed on the supply/supplier side, so I will show graphically the effect of the subsidy on supply of gasoline in Bolivia. are payments by the government to producers and/or consumers of a good or service. The justification for subsidies is the current production of the good/service is less than the socially optimal level of production and/or the current market price is too high. A subsidy to the producer decreases the cost of producing and incentivizes the producer to increase the supply of a good/serviced at a given price (Supply curve shifts RIGHT) which decreases the market price and increases the quantity supplied at that lower price. A subsidy to the consumer decreases the price of a good/service and incentivizes the consumer to increase the demand for a good/service at a given price (Demand curve shifts RIGHT) which Increases the market price (but is off-set with the subsidy) and increases the quantity demanded. This article suggests the subsidy is bestowed on the supply/supplier side, so I will show graphically the effect of the subsidy on supply of gasoline in Bolivia.

The first graph shows the apparent market equilibrium price of $3.48 WITHOUT the subsidy, as indicated in the paragraph above. This is shown as Point "A" where Supply* intersects with Demand*. At Point "A" quantity supplied EQUALS quantity demanded.



NOTE: On horizontal axis units are in tens and hundreds. They could be thousands or millions. For simplicity I will just use tens and hundreds

 When the subsidy is granted to the producer the cost of producing decreases. Focus on Supply* curve.  Supply* reflects the quantity supplied (horizontal axis) at every price (vertical axis). With the subsidy, to produce 100 gallons of gasoline it now costs something less than the $3.48 market price, represented by Point "B" in this graph:

What is true at Point "B" is also going to be true ALL ALONG Supply* curve. This is reflected in the following series of graphs:

Points "A", "B", "C", "D", "E" represent different price and quantity supplied combinations that now lie parallel and to the RIGHT of Supply*. If we connect these points and clear the above graphs of all the notations, we will see that we have a new market supply curve, Supply 1:

Notice that ONLY one of these new points on Supply 1, "D", intersects with Demand*.  We have a new market equilibrium price of $1.89 and market quantity 125. Nothing in the market caused Demand to change (shift) ONLY the quantity demanded.  Demanders responded to this increase in Supply, driven by a decrease in the cost of producting, by INCREASING their quantity demanded, moving down and to the right on Demand*, just what the Law of Demand states!
To see this more clearly, assume the market did not recognize what happened and the price stayed "sticky" at $3.48.  In the graph below, we can see at $3.48 the Quantity Demanded is 100 BUT because of the subsidy the Quantity Supplied at $3.48 is 150, shown at Point "F". Quantity Supplied is GREATER than Quantity Demaned! The only why to clear the markets is for the producers and suppliers to move ALONG their respective curves until the reach a new equilibrium at Point "D" where quantity supplied equals quantity demanded at a price of $1.89.

Remember, the price is lower and the market quantity is higher due to the subsidy.  If the subsidy was removed then, absent some other factor affecting cost of producing, Supply 1 would snap back to Supply* and the market price would return to  $3.48.  This is what prompted the Bolivian government to revoke the planned removal of the subsidy.

This is just another reminder of why it is important to study economics and how economic policies can affect politics and society.  As I often say in class, show me a place that has social unrest and I will find you a very basic underlying economic reason for it.

My wish for the New Year....YES, it is related to economics...Don't judge me...

Food for thought as we pass into the New Year...

""On Jan. 1, 2011, the oldest Baby Boomers will turn 65. Every day for the next 19 years, about 10,000 more will cross that threshold. By 2030, when all Baby Boomers will have turned 65, fully 18% of the nation's population will be at least that age, according to Pew Research Center population projections. Today, just 13% of Americans are ages 65 and older.""Pew Research Center

New Year, same problem with long-run Social Security and Medicare sustainability...Is THIS the year these programs will be addressed with the seriousness they merit? That is my wish for the New Year---or to lose 25 pounds, whichever comes first.  They both face insurmoutable odds... :)

If you shovel snow from a public parking space, can you "save" that space for yourself? Show your work for full credit...

Interesting how circumstances can change the way people think about public property.  Just because someone shoveled a space they feel entitled to it.  Perhaps these residents are using this passage from John Locke "Two Treatises on Government" to justify their attempt at co-opting of public property:

""The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by this labour something annexed to it, that excludes the common right of other men: for this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.""

However, I don't believe Locke would not approve of using his words in this case with land legally appropriated for use "in the common"--it is no longer "in the state of nature"--or is it? If government fails in its duty to preserve the property in common (not plowing the road for the safety/convenience of its citizens),should/could it not be considered plunged back into the state of nature?  It would be an interesting episode of COPS to see a resident use Locke to justify  his place-holding of a public parking spot...I am guessing that would end with a tasing.

Wind energy is for the birds! Actually it is AGAINST the birds! I thought Wind Energy was clean...Sounds kinda nasty to me...

Wind energy is already expensive to produce (per kilowatt hour, minus the subsidies it recieves) and if well-intentioned interest groups have any input, it will get more expensive. The problem: Birds are victims of the spinning blades and the American Bird Conservatory would like to require additional environmental impact studies and additional regulations imposed to be more "bird-friendly". 

From American Bird Conservatory:

""Wind power has the ability to be a green, bird-friendly form of power generation, but can also adversely affect birds. Birds can die in collisions with the turbine blades (up to 14 birds per megawatt per year in the U.S., with a median rate of around 2.2 birds/MW/Yr according to industry estimates), towers, power lines, or related structures, and can also be impacted through habitat destruction from the siting of turbines, power lines, and access roads. Some birds, such as sage-grouse are particularly sensitive to the presence of turbines, and can be scared away from their breeding grounds several miles away from a wind farm.

Potentially all night-migrating songbirds are at risk of colliding with wind turbines, as are raptors and waterbirds when wind farms are sited in areas they frequent, particularly wildlife refuges. Greater Sage-Grouse are particularly sensitive to the presence of wind turbines near their breeding grounds.


American Bird Conservancy supports alternative energy sources, including wind power, but emphasizes that prior to the approval and implementation of new wind energy projects, potential risks to birds should be evaluated through site analyses, including assessments of bird abundance, timing, and magnitude of migration, and habitat use patterns.


Wind energy project location, design, operation, and lighting should be carefully evaluated to prevent bird mortality, as well as adverse impacts caused by habitat fragmentation, disturbance, and site avoidance. Wind power projects should be sited on areas with poor habitat where possible, such as heavily disturbed lands, (e.g. intensive agriculture). Excellent guidelines to prevent adverse impacts of wind power generation on birds are already in existence, but these need to be turned into mandatory regulations. Read ABC’s complete position statement on wind.

Cost of production is a determinant of Supply. When additional costs are incurred complying with regulations, ceterus paribus , then supply decreases (shifts left). Moving up to the left along our demand curve, from Point "A" to Point "B", we reach a new higher market price ("P1) and a lower market quantity ("75"). (HT: Environmental Economics)

Good ol' Days--Part 3---Shipping costs in 1960 relative to today...I was born too early!! The good ol' days are today...

Professor Mark Perry at Carpe Diem has done a series of "then and now" price comparisons using a terrific online resource from Radio Shack. They have put the ENTIRE contents of decades worth of their catalogs online. It is really fun to look at the catalog from my (or your) birth year. The pictures are fun to look at and for those of you who are really into the technical aspects of consumer electronics will be AMAZED at the detail they go into with each good. Don't see that anymore....

Dr Perry has focused on final goods, but I was curious about the transportation costs of getting a good delivered to you.  Below you will find the table from the 1960 catalog (my birth year).  If I wanted to buy something that weighed 11 pounds (easy to do the math) and have it shipped to me it would have cost $6.30 in 1960 (1st pound $.70 and each additional pound $.56).  I also used "Zone 5" estimating that the package would travel 1000 miles to get to me.  Using an inflation calculator, that would be $46.57 in TODAY's dollars! WOW!

Radio Shack Catalog--1960

From the US Postal Service website, I found the following:

Just guessing, but an 11 pound item would probably fit in either of the boxes on the right.  These are retail prices, so a large company like radio shack probably gets a significant price break on it shipping costs from the USPS.  Shipping costs are 3 to 4 (maybe 5) times cheaper today than in 1960.

Not only have the goods we buy today gone down in price but the transportation costs to get them to us have decreased significantly as well.  In the age of a global supply chain, it seems you could not have one without the other...