Montreal Expos

Expos to Open 2005 Season in Washington, DC

The Montreal Expos are moving to Washington, DC. The last mlb team in dc was the senators. The Baltimore Orioles owner had opposed the move but major league baseball reached an agreement with him. The Orioles are guaranteed: minimum annual revenues and if they fall short the league will make up the difference, and baseball is also willing to guarantee minimum franchise value for the Orioles.

What do you think about what is going to happen? Even though the Orioles owner has agreed to terms with the mlb, what impact do you think this will have on the Orioles? (revenue, fans, stadium, tickets etc.) Is this a good move with having two teams so close together?

Starbucks to Boost Coffee Prices in U.S.

Due to an increase in the prices of sugar and coffee, two very important complements to Starbucks' products, the price of Starbucks drinks will also increase. The Starbucks Corporation is estimating an eleven cent increase throughout their stores nationwide in the coming months. With prices already high to begin with for their products, it is hard to tell if this eleven cent increase will affect their sales or not: analyst Dan Geiman stated: "It's 11 cents. That's not a huge amount when you're already paying a few dollars-plus for your beverage."

I have always felt Starbucks was too expensive to begin with, yet would still splurge every once and awhile. Odds are once this increase takes effect, I will not be doing so as frequently. Will this change your willingness to buy from them? Do you think this will hurt Starbucks' business or will there be little to no change in their business?

Know When Politicians are Lying!

In this election year it is very difficult for some to know who to vote for. Most advertisements only attack the other opponent. When the ads for each opponent are so contradictory how do you know what is true. One night I was watching CBS news and they were talking about the presidential campaign. They mentioned a web site called factcheck.org to find out the true stories. I checked out the web site and it amazes me how much information they send out is not true. Most of the ads we see take the truth and stretch it so far that it really isn't true anymore. On this web site they talk about all the important topics and what the true story is on the war, health care, and of particular interest for our class, the economy. They have new articles on the site frequently and you can click on archive to see some of the articles from previous weeks. Two articles that I found interesting that relate to the economy are, a recent post, "Are Bush and Cheney "Small Businesses?" Their Ad Counts them as Such." and an archived post, " Kerry's Dubious Economics?" The presidential election is very important and I hope that everyone will take the time to become informed and vote.

Flood Damaged Vehicles

The school will start again, I hope you didn't lose too much in the flood. I think the most expensive property you may lose is the car, but I heard that car insurance dosen't cover the flood, which is not good. If you lost your car, try to not be too sad, I believe you can live without a car, and everything will be ok. Look at the way people in Texas did, and consider about your car.

Moneyball

Moneyball by Michael Lewis is an awesome book. It goes through a season with the Oakland Athletics. Their GM, Billy Beane, not only has developed new ways to think of baseball, the way it is played and the players that should be playing it, but he has also developed a new way of managing a baseball organization. Because of the little amount of money his owner gives him, Billy Beane is forced to view his baseball organizations in a strictly economic sense that analyzes the marginal benefits of wins, compared to the marginal costs of superstars. So not only is it an insight to a successful baseball team, but it is an illustration of a successful business. Good for baseball and business majors alike.

NHL--On the Treadmill to Obscurity

Those are the words of Arthur Levitt, former chairman of the Securities and Exchange Commission, after overseeing an audit of the National Hockey League's finances two years ago. Bargaining between the NHL owners and the players' union has reached a stalemate and the owners have locked the players out. The 2004-2005 season is all but over before it has even started.

According to the owners, the NHL has lost about $500 million over the past 2 seasons and the newly signed TV contract with ESPN and NBC is only worth $130m plus some profit-sharing (compare that to the $600m deal with ESPN and ABC over the previous five years). Of the roughly $2 billion in annual gross revenues that the league pulls in, about 75% goes to player salaries. The average NHL player earns $1.8 million a year. [How much do you think the average NFL, NBA, and MLB player earns?]

The owners are demanding that player salaries be reduced to about 53% of league revenues and that team payrolls be capped at no more than $33 million--equivalent to an average player salary of $1.3 million. The average payroll last season was $41.6 million.

For their part, even though the players' union believes that players should be paid whatever the market is willing and able to pay, the union has proposed a 5% cut in player salaries, imposition of a luxury tax on every dollar above a $50 million payroll, and more league-wide revenue sharing.

Will the two sides see that their mutual welfare depends on coming to an agreement? The owners are apparently willing to ride out a rather lengthy lockout--up to 18 months if need be. The players, on the other hand, are already looking for alternative employment. A number of NHL players have already signed on to play in the European leagues.

For an excellent overall look at the economics of the NHL (and the other major leagues) see the words of Matt Witting.

Mall Curfews for Teens

Ok, you're 16 on a Friday night in Parkersburg. You can't go to a bar or club and other places to hang out are closed. Where do you go? I bet most kids in the area go hang out at the local mall. Actually, I'm sure one or all of us has been at the mall late on a weekend and noticed the hordes of teens just walking around in their little groups. What if the mall were to impose a curfew? Think that is crazy eh? Think again! Many malls now are imposing a curfew upon teenagers. The Mall of America has had a policy of this sort since 1996. Before the policy implementations, there were over 300 incidents recorded due to the deliquency of teens. After policy implementation, the incidents recorded dropped to 2 within the next year. Over 46,000 malls have this policy, where after a certain time (usually around 8-10, but as early as 6pm at the Mall of America) teens must be chaperoned by an adult, unless going directly to a movie theater.

I'm anxious to hear what you guys think since we were teens not that long ago. I didn't have a mall close enough to go to aside from monthly, so I can't say if it would have changed my attitude. I had a curfew imposed by my parents anyway, so it probably would not have affected me.

What about sales in the mall? Would they go down because of the lack of buyers in the market? I've tossed this up in my head, and honestly, when I see kinds walking around a mall at that time at night, they're never in the shops buying, they're just roaming and chatting among eachother.

Hurricanes Weaken US Economy

It has been forty years since three hurricanes with such severity hit the United States. The hurricanes are effecting the economy because there is so much economic production in Florida. Florida has been one of the worse places hit. President Bush is asumingly going to ask congress to grant funds for Florida's damages. Also the hurricanes have slowed down oil and natural gas productions. A quarter of the oil and gas for the United States is obtained in the Gulf of Mexico where most rigs have been evacuated. Ealier in the week the gas prices rose to $1.40 a barrel and then rose again due to the hurricane damage. Check out the website: http://www.belfasttelegraph.co.uk/news/story.jsp?story=561859

Stacey

Supply and Demand

While researching online to help myself understand supply and demand I came across this website http://www.usda.gov/oce/waob/wasde/latest.pdf. As I was reading through it I started to get a better understanding of what we had been talking about, and America's role in production. I think that everyone should take a look at this site to help them understand a little more about what we produce and why. Let me know if you think it was useful!

Oregon's Mileage Taxation Proposal

To compensate for today's incredibly high gas prices, the state of Oregon has proposed a new idea to cut down the cost of gasoline. This new idea would take all tax off the price of gas, and drivers would be charged a set fee for every mile they drive within their state. However, this new idea will not be run on an honor system, in fact drivers will be charged and additional $225 to install a GPS (global positioning system) in their car that will record how many miles they are driving. To me paying a higher price on gas seems more cost effective. When everything is all said and done, the government is going to lose money. It was estimated that just to install GPS systems in everyone's car would roughly cost $23 million dollars. Another idea was brought up, why not charge a $225 dollar tax on all cars and keep the money instead of sending it to the company that installs these systems? There have been no final decisions as to what will be done, but charging citizens by the mile is not an effective way to compensate for high gas prices.

Minimum Wage Increase, A Great Idea!

Minimum wage as it is now is only 64% of the living wage, in the U.S. That is very low. That means that the majority of people would have to be paid at least $8.50 per hour to be making enough to keep them at the poverty level. It is very hard to understand why so many people are against an increase in minimum wage. People have a very difficult time surviving on minimum wage. This is why we have so many Americans on welfare. Everyone's tax dollars support those programs. The link that I supplied discusses these facts and also states that some businesses are for a minimum wage increase because of the positive things that it does for our society and the economy. Some businesses have tried paying at or above the living wage to see what the results would be. They found that there was a reduction in employee turnover and absenteeism, an increase in productivity and morale, and an increase in commitment to the company. This of course results in less spending on training and recruitment costs. Other benefits to our society from an increase in minimum wage would be an increase in payment of taxes and an increase in consumer spending. On a personal level people would be happier and feel better about themselves because they could support their families. The rate of inflation increases without minimum wage increasing. Americans need the pay increases to keep up with the rising costs of everything else.

Republicans versus Democrats: Not a Dime's Bit of Difference?

I have always thought that there's not much difference between Republicans and Democrats--their rhetoric may speak to vast policy differences, but the reality of their actions belies that rhetoric. In the latter part of my principles of microeconomics course we examine a theory, called the median voter model, that attempts to explain why political parties (or candidates) tend to appear as clones of each other.

This was all stirred up in my mind when I read Andrew Sullivan's impression of George Bush's agenda:

...conservatism as we have known it is now over. People like me who became conservatives because of the appeal of smaller government and more domestic freedom are now marginalized in a big-government party, bent on using the power of the state to direct people's lives, give them meaning and protect them from all dangers. Just remember all that Bush promised last night: an astonishingly expensive bid to spend much more money to help people in ways that conservatives once abjured. He pledged to provide record levels of education funding, colleges and healthcare centers in poor towns, more Pell grants, seven million more affordable homes, expensive new HSAs, and a phenomenally expensive bid to reform the social security system. I look forward to someone adding it all up, but it's easily in the trillions. And Bush's astonishing achievement is to make the case for all this new spending, at a time of chronic debt (created in large part by his profligate party), while pegging his opponent as the "tax-and-spend" candidate. The chutzpah is amazing. At this point, however, it isn't just chutzpah. It's deception. To propose all this knowing full well that we cannot even begin to afford it is irresponsible in the deepest degree. I've said it before and I'll say it again: the only difference between Republicans and Democrats now is that the Bush Republicans believe in Big Insolvent Government and the Kerry Democrats believe in Big Solvent Government. By any measure, that makes Kerry - especially as he has endorsed the critical pay-as-you-go rule on domestic spending - easily the choice for fiscal conservatives. It was also jaw-dropping to hear this president speak about tax reform. Bush? He has done more to lard up the tax code with special breaks and new loopholes than any recent president. On this issue - on which I couldn't agree more - I have to say I don't believe him. Tax reform goes against the grain of everything this president has done so far. Why would he change now?

My thanks to the folks at Marginal Revolution for the heads up.

Increased Fuel Economy Sought

I see no point in making more gas efficient cars if they are going to cost more to own. What is the point of saving money on gas if that money saved just goes towards purchasing the car in the first place? Either the $1500 goes towards gas in a cheaper, perhaps less efficient car, or it goes towards a more expensive, gas efficient car. In the long run, the $1500 is spent on the car, regardless of how.

Forecasting the Winner of the Nobel Prize in Economics

The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel (aka the Nobel Prize in Economics) will be announced on Monday, October 11, 2004. Of the 53 men who have won the award outright or shared in it since the prize began in 1969 (no woman has yet to win it), 35 have been Americans. The leading university homes of the winners include the University of Chicago (9), followed by Harvard (4), University of California-Berkeley (4), and Cambridge University, England (4).

Now, let's see how well you can forecast. I will award 2 bonus points to the first person who correctly forecasts the next winner of the Nobel Prize in Economics. Your educated guess must be posted as a comment to this blog before the Nobel Prize announcement is made. In the event that more than one person submit identical guesses, the earlier timestamp of the comment will determine the winner. The bonus points will be added to the winner's next exam score following the Nobel announcement on October 11.

[By the way, any comments made to this post do not qualify as part of the required components to your course grade.]