How much does Prom cost and who pays? A nice graphic and some interesting observations from a survey by VISA.

 

 

Here is a short summation of the findings from a VISA survey where this graphic came from (found HERE).

 

Spending on the annual high school ritual of the prom continues to outpace inflation and grew for

the second straight year, hitting an average of $1,139 per family in 2013, results from a new

survey released today by Visa Inc. show. That represents an increase of 5% from the $1,078 that

American families who have a teenager attending a prom spent on all aspects of the dance in

2012.

Visa’s prom survey also revealed some interesting regional and economic disparities. For the

second year in a row, the Northeast led the nation in spending, with the Midwest spending the

least. Regionally, the survey found:

Northeastern families will spend an average of $1,528;•

Southern families will spend an average of $1,203;•

Western families will spend an average of $1,079; and•

Midwestern families will spend an average of $722.

 

One troubling statistic is that parents surveyed who fell in the lower income brackets (less than

$50,000 a year) plan to spend more than the national average, $1,245, while parents who make

over $50,000 will spend an average of $1,129. Additionally, single parents plan to spend $1,563,

almost double the amount that married parents plan to spend at $770.

Travels of a bloody shirt. Which one would YOU buy???

This is from CNN and produced in light of the recent tragedy in a textile factory in Bangladesh.

It shows the cost to produce the same shirt in the USA vs Bangladesh.  The largest differential is in Labor Cost.

Hypothetical:  If both these shirts were in a store hanging next to each other and one was priced at $14.00 and the other at $4.00, which one would YOU buy?  Which one would MOST people buy?

Happy Kentucky Derby Day...I think. Had to throw in an Opportunity Cost lesson...

Jobs report just out. Look at this nugget I observed in the report that you won't hear/read about in the analysis by "Real" Economists/Pundits today. And I think it is the underlying problem with tepid job creation.

The Jobs Report for April is JUST out.  With this months report AND upward revisions for the last 2 months, we are chugging along. The job situation IS improving! Not fast enough, but better than a sharp stick in the eye.

I want to make a longer term observation and pose the question: Are things REALLY getting better? And if so, for WHOM?

I am very interested in the relationship between education, employment and its impact on inequality.

Below I pasted the relevant part of today's job report that shows the relationship between educational attainment and employment.  I highlighted the relevant numbers (in the "Seasonably Adjusted" boxes) to show the change in employment in the PAST YEAR among the different educational attainment levels. (Click image to make larger)


Source: BLS

The change in the number of jobs in each category is off to the left (decreases in Red, increases in Black).

The combined loss in jobs in the Less Than High School AND High School Graduate categories is just about EQUAL to the increase in employment in the "Some College/Associate Degree".

Job creation in the last year has been carried by those with College Degrees and to a lesser extent those some advanced education beyond high school.

Job destruction has fallen on those with lower levels of education.

This long(er) term trend is what SHOULD concern people more.

A piece of the Income Inequality puzzle is right here.  Pretty sure you won't see THIS analysis today!

Your welcome.  :)

The Federal Budget in several easy to read graphs/charts as prepared by the Congressional Budget Office. I report, you decide...

The US Federal Budget in  current, easy to read graphs/charts.  If you are an econ teacher this presentation would be a nice addition to your Fiscal Policy Unit. If you are a student or just trying to learn more from a reasonably objective source, well, here you go.

I report, you decide.  :)

A Tour of the Federal Budget and Possible Change in Budget Policy from Congressional Budget Office

Ladies and Gentleman---Here is the most environmentally friendly product of the Century---Get your phone out now to take a picture!!

I was just admiring my Smartphone this morning (Samsung Galaxy 3). 

It reminds me that it is not only a labor saving device for me but an EXTREMELY environmentally friendly one as well.

With just a cursory look I found pictures of the various separate and distinct devices, products and services that are on the phone that I hold in the palm of my hand.  This is only a start.  With a little more thought and exploration of the phone I am sure I can add many more.  And I consider myself a light user of all its capabilities.

I am sure you have MANY more uses/applications on your phone.  Think of all the physical resources that are NOT being employed to make this short list of devices and products.

Yes, other resources are being used to produce the things/apps that go into your phone.  But I would have to say that the net benefits to reduces resource use have to be postive.  Right???

Look at you! You, You, You accidental environmentalist, You.  Now, good make the world a better place---send a text instead of a letter---without the paper, a pen, a stamp, planes, trains and automobiles to get it to its destination.  How wasteful is that!!

Nice (but HORRIBLE) graphic showing the trade-off that results from using food-for-fuel. 440 million MORE people (primarily the most vulnerable around the world) could be fed if we stopped this insane policy.

As seen at The Big Picture Agriculture....Here are a couple of graphics from THIS report by a private food id organization in Great Britain. I am sure they are biased BUT if even if these numbers 50% of the real impact, it is significant.

Using food for fuel is harmful in many ways, but the most harmful impact is no the food supply for the least of us in the world.  Support for corn-based bio-fuels is support for starvation at the margin (a quite a bit inside that margin).

See here how Mark Cuban's brillant play in the Foreign Exchange currency market is going to make the Mavericks a better team. The rich get richer, but this guy is CLEVER!!

Billionaire Mark Cuban is doing something interesting that makes a nice lesson in the Foreign Exchange Market.  See article HERE. He is converting his US debt held in US dollars to debt held in Japanese Yen:

""...in early December, I went and took every penny of debt that I had – with the Mavericks, and personal debt, and everything – and converted it to a yen loan, when I think [the yen] was in the mid 80s [against the dollar]. So, I've been really happy with it.""

WHY would he do this??  Here is as easy an explanation as I can give...

Let's say I have $1 million US dollars of credit card debt.  That is a lot of debt, but assume my credit is excellent.

Today the Exchange Rate between the US Dollar and Japanese Yen is $1= 100. ($1.00 "buy" 100 Yen).  The reciprocal of this is the 1 Yen = $.01 (one cent).  In other words, 1 Yen "buys" one US Cent.

I go to my favorite Japanese bank and borrow the Yen equivalent of $1M US dollars. That would be 100,000,000 (100 million) Yen. 

I take that 100M Yen and exchange it for $1M US dollars (remember the exchange rate I put above)and pay off my loan. 

So far so good. I now have no debt in dollars BUT I have a big debt in Yen...

Assume that because of other things going on in the Japanese economy the exchange rate changes to $1.00 = 125 Yen overnight.  The reciprocal is 1 Yen "buys" $.008 cents (fraction of a penny).

This means the Yen has DEPRECIATED relative to the US Dollar.  It now takes FEWER dollars to buy Yen. More Yen to buy a US dollar.

Assume also the Japanese bank I borrowed the 100M Yen from wants me to pay it back NOW!

At the new exchange rate of $1.00 US dollar exchanging for 125 Yen, I have to come up with "only" $800,000 US dollars to pay back the loan I took out in Yen. ($800,000 X 125 Yen = 100M Yen)

While I put $800,000 back on my "credit card" notice it is $200,000 LESS than it was before. I hve no more debt in Yen and considerably less in US dollars.

Mark Cuban is betting that the Yen is going to DEPRECIATE relative to the US dollar and is using it as an opportunity to reduce his outstanding debt.

This may translate into more financial capital to improve the  Dallas Mavericks, the team he owns.

The rich get richer...

Here is a story about the 90% Debt threshold, a mouse and a dancing elephant. You would think people would be more concerned about the elephant.

This from my cyber-friend "The New Arthurian"

The Blue Line is Total Federal Debt (private and public) as a percent of GDP.

The Green Line is fixed at 90% of GDP.  The "alleged" cut-off point that suggests if a nations combined government debt exceeds that threshold it will dampen economic growth.

The Red Line is a line you NEVER/RARELY see inserted into the argument. It represents Total Private Debt (mine and yours and a few of our Wall Street/Corporate friends) as a percent of GDP.

Not to put words into the mouth of The New Arthurian, but I believe he is suggesting we are focused too much on dancing around the mouse in the room (the Green Line) and are not so much on the elephant sashaying behind out collective backs. 

I am a terrible dancer, but I know a Two-Stepping Elephant when I see it.



Source: The New Arthurian Economics

Link to interesting posting on the why software developers better be familiar with psychology. "Do you REALLY want your search for the price of a product to return the fastest result to you?" You might be surprised by the answer...

A bit off topic for me, but I found this posting on "Cognitive Overhead" an interesting merge between technology and human behavior.  A tech product/service can fail because it gets ahead of  normal human impulses and tendencies.  I encourage you to read the whole thing. It is not long

This is one paragraph I found to be true after thinking about it.

Slow down your product.

We’ve all heard stories of Google’s relentless quest for search-result speed, but sometimes you need to let your user understand and appreciate what your service is doing for them. Studies have shown that intentionally slowing down results on travel search websites can actually increase perceived user value — people realize and appreciate that the service is doing a lot of work searching all the different travel options on their behalf.
 

While I WANT a quick result when I put in a search request for a good or service that has many possible suppliers, if I get it TOO FAST I am naturally suspicious that it was pre-determined and I am being steered.

(Wonder if car dealers employ the same technique---"I will speak to the sales manager" ALWAYS takes way too long.  Do I perceive they are in tough negotiations on my behalf and coming back too soon makes me think otherwise?)

Think about this the next time you do a search for a price sensitive good/service.  The result is ALREADY in the system, WHY does it take so long to retieve it?  Now you know.

Programmers and software developers have to be students of psychology as well.

US economy Trivial Pursuit. Trivia about something not so, well, trivial...

HT: The Big Picture Blog.

These very informative slides are courtesy of the Bureau of Economic Analysis (BEA), a part of the Department of Labor.

They give an overview of various sectors of the economy.  My favorites are the ones on manufacturing.  One of the most misunderstood industries in the US.

Which one(s) is/are your favorites?

Cspan Slides Myths and Misperceptions

If US manufacturing was its own country, it would rank 10th in the world in terms of dollar value of output. See the stunning chart HERE!!

This chart is interesting for a couple of reasons.  (From Mark Perry at Carpe Diem)

1. It shows how much of an economic powerhouse the US STILL is in terms of the dollar value of the production of Goods and Services in a given year. We produce more than China and Japan together PLUS about half of Germany's production.

2.  US manufacturing is ALIVE (although US manufacturing EMPLOYMENT has devolved). In fact, if you take the dollar value of US manufacturing production and compare it to total dollar value of  production in the rest of the industrialized world, it ranks 10th in the world if it was its own separate country.


Source: Carpe Diem

Starwood Hotels (Westin, Sheraton, Aloft) have an interesting Microeconomics experiment going on---Buy one night at the regular price and get 2 more nights at the dollar equivalent of your birth year.

Just saw this at Freakonomics.  Starwood Hotels (Westin, Sheraton, Aloft) has a unique promotion going on.

If you pay the Regular Rate for the first night, you the second and third nights at the dollar equivalent of the last two digits of your birth year.

For instance, I would pay $235 + 60 + 60 =  $355.00 or $118.33 per night.  Not bad for a Westin hotel!

Interesting strategy. The older you are the less you pay.   A form of discrimination that only an economist/economics teacher could love.

Here is an example from the Dallas area.  Go HERE to find a hotel in your area.

The growth in the printing of $100 bills has increased 500% in 20 years. Where are those Benjamins going? See here for the answer...

The number of $100 dollar bills in circulation has increase dramatically relative to the other US currency denominations in the last 20 years, as you can see from the graph below. 

Source: NPR Planet Money

Where are those Benjamins going?  A good number are going "off-shore".  Seems the $100 is a nice "Store of Value" for foreigners who want to hold there money wealth in US dollars instead of their own currency.  Nice mattress stuffers!! 

Oh, and it also is probably circulating among drug dealer and other nefarious underworld activities.  Gotta love the CASH!!




Reason 1,001 why immigration is good for the US. Nice graph showing the incidence of entrepreneurship in the US. Immigrants carry the load in starting businesses. We need more of this, not less...

This graphic comes from a recent study (found HERE) on the state of entrepreneuship in the US.  There are MANY other interesting graphs and data in the study, but this one interested me because I believe it is important element in the movement to reform our immigration policies.

It shows the incidence of entrepreneurship between native born Americans and Immigrants.  The gray line represent immigrants, the blue line "native borns". Look at the trend over time.

Immigration = Entrepreneurship = Economic activity = Jobs.  We need to be mindful of this when we formulate policy. 

Something about babies and bath water, if  I recall.

HT: New York Times for the link to this study