Monday, 31 May 2010
Degree in "Interdisciplinary Religious and Women's Studies"---is it worth $100,000+???
I have no problem with anyone going to an expensive private college/university. I am for the freedom to choose your own way. However, as with all freedoms there come responsibilities. In this NTYIMES article ("Placing the Blame as Students Are Buried in Debt") we see a young women in despair/regret about the massive debt she incurred in going to NYU---$100,000 plus. Yes, that is alot of money, and a degree from such a prestigious university carries some weight and should explicitly and implicitly contribute to her future prospects in terms of earning power and/or career satisfaction. HOWEVER, if you are going to "bet the farm" on your education, you should probably (1) be cognizant of your major and ITS ability to compensate you for the time and effort you put in to securing the degree, (2) be cognizant of your OWN abilities to create opportunities to benefit financially from your time and effort. These two things should be part of a students self-assessment in determining their major. This makes sense, right?
I had to read through 90% of the article before they mentioned what her degree was in: "Interdisciplinary Religious and Women's Studies" (would the writer have waited so long if the degree was in engineering?). No, I am NOT interested in a debate about the merits of such a degree path. It has value to society, I get that. I have a degree in Political Science (minor in Economics), for petes sake! I cannot speak ill of any degree or its relative importance. But some measure of cost/benefit analysis must be performed before undertaking such an expensive endeavor as a college degree . I am for allowing students choose their own way, but if my daughter wanted to study something akin to what this young woman choose to study, she would NOT be going to NYU but a fine public university (again, I WOULD let her study what she wanted, but not necessarily at the college of her choice, if I were paying for it). If she told me she wanted to study economics at The University of Chicago AND be a high school economics teacher, I would have to do my best to discourage that (I am not betting MY farm and would not willingly allow her to bet the farm she does not have yet). Who is to blame in this scenario? The banks who lent her the money? The college for not better assessing her career goals and balance those against her degree? Her mother for letting her have her way in selecting an expensive school? The young woman herself for her decisions? Hopefully, something positive will come out of this article in terms of a warning to others---CHOOSE carefully and build in some future expectations concerning compensation (financially or otherwise)...Parents will appreciate that and certainly the students themselves will also.
1,000% Inflation in Zimbabwe---It is important to protect your currency, isn't it??
Inflation is a thief in the night (or day) that literally reaches into your pocket to take your money. Actually, it reduces the purchasing power of your money. You can think of price increases in two ways: the value of goods/services increases because they become relatively scarce, or the money used to buy those goods or services is worth less than it was before and now it takes more of it to exchange for those goods/services. Zimbabwe is good example of the devastation inflation reaps on a country. A once thriving country is now reduced to monetary ashes. Inflation is not the only cause of its decline, but it will likely be its complete downfall. A country cannot print more money than its economy can produce in "stuff"...If you increase the money supply by 10% then, assuming constant velocity of money (the rate at which your money supply "turns over to buy GDP), you must produce 10% more in goods and services to maintain price stability. Anything less than that then you have the classic definition of inflation--"too much money chasing too few goods".
From BBC: Zimbabwe's inflation tops 1,000%
""Zimbabwe's inflation rate has surged past the 1,000% mark signalling that the African country is struggling to keep its economy functioning normally. The annual rate of price growth was 1,042.9% in April, the Central Statistics Office (CSO) said, having risen 129 percentage points from March....Zimbabwe is a country that is blighted by crumbling urban infrastructure. There are regular water and power cuts, while the cost of everyday foods has surged. A loaf of bread now costs between Z$80,000 - Z$110,000 (79 US cents - $1.08) up from about Z$7,500 last year, when the price was controlled by the government. A carton of orange juice costs about Z$500,000 and a kilo of beef up to Z$1m.
This is an excellent example of "The Menu Costs of Inflation" (the expense in having to change the posted prices on a regular basis for businesses) and/or the "Shoe Leather Costs of Inflation" (the increase in transaction costs--i.e.-having to go to bank to get more money to conduct business).
"Business quotations are not valid for more than two days," an office manager in Harare told the BBC News website. "Actually I have one in front of me which says it is valid for 24 hours. Prices can literally double overnight," she said...""
Is the situation in Haiti improving?? Not so much...
From NYTIMES: Rubble of a Broken City Strains Haitians’ Patience
Update on how the recovery/re-building is progressing in Haiti. This report "from the ground" shows growing frustration with the effort. Rubble is still piled in the streets and there is public sentiment that the government is not proactive enough with the clean-up and recovery. Have things really changed (or at least improved) internally to bring about desired change?
""While few have given up entirely on the dream that a more efficient, more just Haiti might rise from the rubble, increasingly, hope is giving way to stalemate and bitterness. “Is this really it?” Haitians ask. They complain that the politically connected are benefiting most from reconstruction work that has barely begun. They shake their heads at crime’s coming back, unproductive politicians and aid groups that are struggling with tarpaulin metropolises that look more permanent every day.""
Taking care of people who are in crisis is job one. The problem of homelessness, the"tent/tarpaulin cities" that dot the landscape, and immediate health issues are priorities, but re-building infrastructure and motivating people to create a new and improved Haiti needs to be a high priority too. Seems like enough resources, money and material, have been poured into the country that there could be a full-frontal assault to improve conditions dramatically even at this early stage.
Crucial to this effort must be the participation of ex-patriate Haitians who seem committed to help create a better Haiti. However, this has not been easy for them:
""Before Parliament closed, she added, lawmakers could have made it easier for members of the Haitian diaspora to invest — perhaps by easing rules requiring that joint ventures be 51 percent Haitian-owned...That might have opened the country to more people like Alain Armand, 36, a Haitian-American lawyer from Fort Lauderdale, Fla., who is now trying to open several businesses here in Port-au-Prince, the capital, including a bed and breakfast.""
If the existing government of Haiti OR the shadow government created by the UN with former President Clinton as co-president does not aggressively solicit the investment dollars from people like Mr. Armand, then they are simply going to give up and go away. That would be a shame and Haiti will remain at status quo. That would be in no ones interest...
If you are a computer geek, this is for you---NICE graphic on super-computing...
From BBC: In graphics: Supercomputing superpowers (Click on this link for interactive graphic)
The biannual Top 500 supercomputer list has been released. Use this graphic to explore the world's fastest number crunchers or find out more about alternative supercomputer powers .
About this data: The data used to generate the interactive treemap visualisation come from a draft of the June 2010 TOP500 Supercomputing list. This ranks most of the world's fastest supercomputers twice a year. There may be minor differences between this list and the final published list.
The graphic allows you to see the visualise the list by the speed of each machine; the operating systems used; what it is used for; the country where it is based; the maker of the silicon chips used to build the machine and the manufacturer of the super computer.
The maps were produced using the Prefuse Flare software, developed by the University of California Berkeley.
Wednesday, 26 May 2010
"Blood Minerals"---there is movement to solve this problem that plagues The Congo...
There is movement in trying to solve what seems to be an intractable problem- --the horrendous violence and chaos in the eastern part of the Congo. The Senate has inserted an amendment into the current financial system reform bill to require strict reporting by companies that use minerals that "may" have come from illegal sources within the Congo...
NYTIMES: ""...Nevertheless, tucked into the bill passed by the Senate on Thursday is a provision that requires any publicly traded company that uses certain minerals to file reports annually with the Securities and Exchange Commission certifying whether the minerals originated in Congo or neighboring countries. It also requires them to report what steps the company took to ensure that the purchase of these minerals did not benefit armed groups in Africa. Minerals trading in Africa is often used to finance military activities. These are not just any minerals, however. Columbite-tantalite, cassiterite, wolframite, gold and metals derived from them are widely used in the manufacture of cellphones, laptop computers, MP3 players, digital cameras and all sorts of other consumer electronics. Thus, the regulations could affect hundreds of companies. Wolframite, for example, is a source of tungsten, which is used in integrated circuits, light bulbs, and computer and television screens. The measure calls for any company using the minerals as a primary ingredient in its products to file the reports and to describe the steps taken to ensure that its mineral procurements did not benefit armed groups in Africa."""
Below is an short video explaining what "Conflict Minerals" are and why they are a problem. VERY informative if you are interested in the issue...Also, go HERE for more information on this issue.
Who lies more---Men or Women? See the Top Ten lies each gender tends to tell...
From realm of the obvious, a poll reveals men tend to lie more than women...Glad the British government paid for this one...
From BBC: Men are bigger liars than women, says poll
Men are more likely to tell lies than women and feel less guilty about it, says a survey. In a poll of 3,000 people, researchers found that the average British man tells three lies every day, that's equivalent to 1,092 a year. However the average woman appears more honest, lying 728 times a year - around twice a day.
Here are the Top 10 lies each gender tends to tell...
MEN'S TOP 10 LIES
1. I didn't have that much to drink
2. Nothing's wrong, I'm fine
3. I had no signal
4. It wasn't that expensive
5. I'm on my way
6. I'm stuck in traffic
7. No, your bum doesn't look big in that
8. Sorry, I missed your call
9. You've lost weight
10. It's just what I've always wanted
WOMEN'S TOP 10 LIES
1. Nothing's wrong, I'm fine
2. I don't know where it is, I haven't touched it
3. It wasn't that expensive
4. I didn't have that much to drink
5. I've got a headache
6. It was in the sale
7. I'm on my way
8. Oh, I've had this ages
9. No, I didn't throw it away
10. It's just what I've always wanted
THIS is SERIOUS social science research!!! :)
Wanted: Ambitious, hardworking young people to pay for my Social Security--apply within...
The elephant in the room for the welfare states of the world (US included)...This graph (NYTIMES) shows the Worker per Retiree ratio from the 1950's projected through 2030. In the US we have gone from 7 workers to 1 retiree in 1950 to appox. 3 to 1 today and it will be close to 2 to 1 in 2030. Our birth replacement rate has decreased (historically typical for mature and rich societies) and people are living longer than ever. Math is getting in the way of the social safety net. The largest problem for the US is Social Security and Medicare...Solution? Higher taxes for workers and raising the retirement age to at least 72 (or more?). The higher taxes part is controversial, and any one that knows me, knows that I am highly averse to that solution. However, I don't see an alternative. Cut spending? Or more accurately, control spending, YES, but the shear number of eligible retirees coming online in the next 10 to 15 years is going to swamp any savings relative to benefits paid out. We can work to save money per beneficiary but the volume of recipients is going to financially overwhelm the social security and medicare system...Look at the graph---it tells the story. Sorry, young people! There are simply too many of us "olds" for you to support...
Tuesday, 25 May 2010
Friday, 21 May 2010
General Motors Ad claiming pay back of loan---what they SHOULD have said...
A re-do of the infamous ad from General Motors claiming they "paid back" the government loan they received...This is what they probably SHOULD have said...It is now known that it was the result of creative accounting and some slight of public-relations-hand. I have no problem with GM making a claim, but they owe the public the explicit truth and not make people have to chase it out of them or the government...That is all I ask...
Chinese buy US houses at rapid pace...Is this a bad trend?
Should we be concerned that residents of China are buying houses in the US at an increasing rate? Does it not help absorb surplus housing and help maintain housing prices for everyone, especially in a tough housing market? How did they get so much surplus cash to buy houses in the US...
""As China’s economy rises, a group of China’s new rich with abundant cash funds appeared in Southern California, mostly businessmen, taking advantage of the housing market downturn bought a lot of foreclosures, short sales or not yet listed houses with cash.""
Well, we all know how one sided trade with the China is, right? I don't believe so...Trade is a two-way street--always and each side benefits!...With regards to China, people think it is one-way trip---we buy more stuff from China then they buy from us. We MUST be the loser in this scenario , because the media and the political party OUT of power remind us so with regularity . BUT this is only half the story. China now holds the dollars we used to buy their stuff. What are they going to do with those dollars? To be any good, dollars HAVE to find their way back to the US (directly or indirectly) to be redeemed for US goods/services OR US financial/physical assets...period, end of story! They can (1) buy a US good (John Deere tractor, Dell Computer, etc) or service (IT services, banking services,etc), (2) buy a US financial asset (stock, mutual fund, savings bond, OR GOVERNMENT DEBT...) or physical asset (land, commercial building, factory...) OR a HOUSE! Another incidental aspect to financial assets is China buying bonds/mortgages from the Federal guarantors Fannie Mae and Freddie Mac that allow Americans to buy houses for relatively low interest rates. Yes, that is right, the Chinese may own part of your home mortgage. Whether all of this or only some of this is desirable, we have to consider both sides of trade and recognize the flow of money (or financial capital) as it chases goods/service/assets is CIRCULAR and benefits as well as costs (yes, I recognize the costs) accrue on both sides. Disagree? Let me know...
Monday, 17 May 2010
Do you ACTUALLY make phone calls with your cell phone? If you do, you are in the minority...
We do not have a landline phone (you know, one that plugs into the wall) in our home anymore. We have cellphones as our primary home and mobile telephony devices. How about you? This article in the NYTIMES make the point that we have passed the point where we now collectively use our phones MORE for other uses than simply making a phone call:
""Instead of talking on their cellphones, people are making use of all the extras that iPhones, BlackBerrys and other smartphones were also designed to do — browse the Web, listen to music, watch television, play games and send e-mail and text messages. The number of text messages sent per user increased by nearly 50 percent nationwide last year, according to the CTIA, the wireless industry association. And for the first time in the United States, the amount of data in text, e-mail messages, streaming video, music and other services on mobile devices in 2009 surpassed the amount of voice data in cellphone calls, industry executives and analysts say.""
Professor Mark Perry at Carpe Diem makes an ironic point about this process of "creative destruction" but in reverse(??)...
""Isn't it interesting that historically the telephone replaced the telegraph, and talking on the phone replaced sending telegrams as the preferred method of communication. Now with the popularity of using phones for text messages and emails, it's almost like going back to sending telegrams by phone instead of talking on the phone.""
World's First Gold Dispensing Machine---Watch your fingers!!!
"This Wednesday saw the official opening of the world’s first permanent gold-dispensing vending machine. Created by German company TG Gold-Super-Markt, the GOLD To Go ATM is located (unsurprisingly) in the lavish Emirates Palace Hotel, in Abu Dhabi. Gold has strengthened 13 percent in 2010 following nine straight annual gains, so now when hotel guests want to exchange their cash for something a little more economically-stable, they won’t have to bother with gold store clerks or business hours.
A computer inside the ATM keeps track of gold prices in real time, and prices its gold accordingly. Because it has less overhead costs than a store, TG Gold-Super-Markt claims the machine is able to offer “very competitive prices.” Besides dispensing 24-carat gold bars in 1, 5 and 10 gram sizes, the ATM also offers gift boxes of gold coins bearing symbols such as the Krugerrand, a maple leaf, or a kangaroo - perhaps market research showed that South Africans, Canadians and Australians like gold? Interestingly, there’s no American eagle."
Economics Degrees rank #2 in pay!
Just a plug for Economics as a major...Number 2 on the payscale!!! A very flexible degree and can take you in many different directions. It trains you to think about resources in non-traditional ways...
2. Economics. A pretty ubiquitous myth is that economics is all statistics and math. The fact is, while economics majors do a lot of statistics and math, they also study a wide range of topics, including social science, psychology, political science and history. Alan Metzer, even said: "economics is a social science." There are plenty of humanitarian efforts you can make in this line of work, as economists are needed to create public policy -- domestically and internationally.
Average first year salary: $50,200. Average mid-career salary: $101,000.
Go HERE to see number 1...
2. Economics. A pretty ubiquitous myth is that economics is all statistics and math. The fact is, while economics majors do a lot of statistics and math, they also study a wide range of topics, including social science, psychology, political science and history. Alan Metzer, even said: "economics is a social science." There are plenty of humanitarian efforts you can make in this line of work, as economists are needed to create public policy -- domestically and internationally.
Average first year salary: $50,200. Average mid-career salary: $101,000.
Go HERE to see number 1...
Sunday, 9 May 2010
Friday, 7 May 2010
Video animation of the Oil Rig "Malfunction"...Only 1 minute long
I can't vouch for the technical aspects of this video, but it gives an animated view of what happened with the oil platform...
also from Krugman Sex & Drugs & the Spill.
also from Krugman Sex & Drugs & the Spill.
Wednesday, 5 May 2010
Increased Investment expenditures ('I") in Developing countries means an Increase in Exports for US...
Caterpillar bringing back 9,000 laid-off workers worldwide
"Developing" economies are getting ahead of the the so-called developed countries (US, Europe, Japan, etc) in terms of economic expansion (GDP growth). Businesses in some of these countries are replacing capital goods and buying new capital goods in anticipation of an eventual pick up in business from the US and Europe (China and other Asian economies are already steaming ahead, and are major customers for American producers such as Caterpillar). The US STILL has the Comparative Advantage in the production of medium to large scale construction equipment of all types.
""Exports of heavy equipment to Asia and Latin America are putting employees back to work at Caterpillar Inc. factories in Illinois....The growth in emerging economies is fueling demand for commodities. That is stoking sales of Caterpillar’s big mining trucks made in Decatur and large tractors made in East Peoria. Workers already have been recalled to those factories.""
These immediate purchases increase their domestic spending-- "I" (for Investment Spending) in the GDP equation ("C+I+G+N(x)" ) and, in turn, increases Aggregate Demand. This is a good thing for them because it creates/ressurects dormant jobs TODAY. It is a good thing for the US because it puts idle production capacity back to work and "brings back" jobs to the factories...
""By the end of the year, the heavy-equipment maker expects to rehire 9,000 of the 19,000 workers who were laid off worldwide during the worst of the recession, CEO James W. Owens said. The number of workers being recalled “could go higher,” he told Crain’s during an interview this week at a U.S.-Saudi Arabia business summit in Chicago. "We hope it will."
One-third of the rehires will be in the United States; the bulk of those 3,000 workers will be in Illinois, where Peoria-based Caterpillar has several large plants. Another 9,000 to 10,000 jobs will be created at Cat’s domestic suppliers.""
After the initial purchases, these capital goods become part of the nations Capital Stock, or stock of productive capital, for making goods far into the future. Business spending is significant because it affects BOTH the demand AND suppy side of any economy. It spurs immediate purchases of high dollar goods on the demand-side, and competition, innovation and, perhaps most important, productivity on the supply-side, hence more jobs and opportunities now and into the future...I can feel the ripple effect on the economies of Middle America as we speak!
"Developing" economies are getting ahead of the the so-called developed countries (US, Europe, Japan, etc) in terms of economic expansion (GDP growth). Businesses in some of these countries are replacing capital goods and buying new capital goods in anticipation of an eventual pick up in business from the US and Europe (China and other Asian economies are already steaming ahead, and are major customers for American producers such as Caterpillar). The US STILL has the Comparative Advantage in the production of medium to large scale construction equipment of all types.
""Exports of heavy equipment to Asia and Latin America are putting employees back to work at Caterpillar Inc. factories in Illinois....The growth in emerging economies is fueling demand for commodities. That is stoking sales of Caterpillar’s big mining trucks made in Decatur and large tractors made in East Peoria. Workers already have been recalled to those factories.""
These immediate purchases increase their domestic spending-- "I" (for Investment Spending) in the GDP equation ("C+I+G+N(x)" ) and, in turn, increases Aggregate Demand. This is a good thing for them because it creates/ressurects dormant jobs TODAY. It is a good thing for the US because it puts idle production capacity back to work and "brings back" jobs to the factories...
""By the end of the year, the heavy-equipment maker expects to rehire 9,000 of the 19,000 workers who were laid off worldwide during the worst of the recession, CEO James W. Owens said. The number of workers being recalled “could go higher,” he told Crain’s during an interview this week at a U.S.-Saudi Arabia business summit in Chicago. "We hope it will."
One-third of the rehires will be in the United States; the bulk of those 3,000 workers will be in Illinois, where Peoria-based Caterpillar has several large plants. Another 9,000 to 10,000 jobs will be created at Cat’s domestic suppliers.""
After the initial purchases, these capital goods become part of the nations Capital Stock, or stock of productive capital, for making goods far into the future. Business spending is significant because it affects BOTH the demand AND suppy side of any economy. It spurs immediate purchases of high dollar goods on the demand-side, and competition, innovation and, perhaps most important, productivity on the supply-side, hence more jobs and opportunities now and into the future...I can feel the ripple effect on the economies of Middle America as we speak!
Business Spending Propels Recovery---Nice Graphic showing C + I + G + N(x)...
A MOST excellent interactive graphic from the WSJ (click HERE for original story) on the latest Gross Domestic Product report...Just put the cursor over a particular bar and you will see that sectors contribution (or detraction) from GDP...Conveniently set up to show C + I + G + N(x)!! An economics teachers dream!!
An short yet excellent explanation of a Carbon Tax to reduce carbon emissions. A policy alternative to Cap and Trade
An short yet excellent explanation of a Carbon Tax to reduce carbon emissions. A policy alternative to Cap and Trade...From EconomicsBlog:
"""The production of carbon dioxide is widely held to contribute to social / environmental problems such as global warming. This carbon pollution is a negative externality. It is a cost imposed on the whole of society and not just the individual who consumes a certain product. e.g. if you drive a car, the external costs are felt by everyone else.
Because certain carbon intensive industries create negative externalities, the social cost of production is greater than the private cost.
In a free market, these negative externalities are not included in the price leading to overconsumption and social inefficiency. We can say there is a missing market, because the external cost of carbon emission is ignored.
Diagram to show Welfare loss of Negative Externality
The Purpose of A Carbon tax
The purpose of a carbon tax is to internalise the externality. What this means is that the final price of the good should include the external cost and not just the private cost.
In theory, the tax should equal the external cost. Therefore, the price consumers pay will be the social cost.
Demand will fall and the new equilibrium will be socially efficient because at this output, the marginal social cost equals the marginal social benefit.
Diagram to Show Carbon Tax
Revenue Neutral
In theory a carbon tax should be revenue neutral. This means the tax raised from taxing carbon emissions can be used to reduce other taxes. There should be no overall increase in the tax burden.
Problems of Carbon Tax
•Production may shift to countries with no or lower carbon taxes.
•Cost of administrating the tax.
•Difficult to know the level of external cost and how much the tax should be.
•Possibility of tax evasion. Higher taxes may encourage firms to hide carbon emissions.
•If demand is price inelastic, the tax may have to be very high to reduce demand significantly.
•Consumers dislike new taxes and often don’t believe that they will be ‘revenue neutral’. This is not an economic argument, but it is a political reality and explains why it is often difficult to implement."""
"""The production of carbon dioxide is widely held to contribute to social / environmental problems such as global warming. This carbon pollution is a negative externality. It is a cost imposed on the whole of society and not just the individual who consumes a certain product. e.g. if you drive a car, the external costs are felt by everyone else.
Because certain carbon intensive industries create negative externalities, the social cost of production is greater than the private cost.
In a free market, these negative externalities are not included in the price leading to overconsumption and social inefficiency. We can say there is a missing market, because the external cost of carbon emission is ignored.
Diagram to show Welfare loss of Negative Externality
The Purpose of A Carbon tax
The purpose of a carbon tax is to internalise the externality. What this means is that the final price of the good should include the external cost and not just the private cost.
In theory, the tax should equal the external cost. Therefore, the price consumers pay will be the social cost.
Demand will fall and the new equilibrium will be socially efficient because at this output, the marginal social cost equals the marginal social benefit.
Diagram to Show Carbon Tax
Revenue Neutral
In theory a carbon tax should be revenue neutral. This means the tax raised from taxing carbon emissions can be used to reduce other taxes. There should be no overall increase in the tax burden.
Problems of Carbon Tax
•Production may shift to countries with no or lower carbon taxes.
•Cost of administrating the tax.
•Difficult to know the level of external cost and how much the tax should be.
•Possibility of tax evasion. Higher taxes may encourage firms to hide carbon emissions.
•If demand is price inelastic, the tax may have to be very high to reduce demand significantly.
•Consumers dislike new taxes and often don’t believe that they will be ‘revenue neutral’. This is not an economic argument, but it is a political reality and explains why it is often difficult to implement."""
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