Thursday, March 30, 2006

Wal-Mart ... Enough Said

So, I have not seen anything on Wal-Mart in a while. I found an article that was written in 2003, but had a lot of valid and understandable points. It was written by Steve Lohr from the New York Times.

The first point you come across is that grocery prices drop 10-15% in markets where Wal-Mart enters. This is where people can see Wal-Mart as a monopoly because they are forcing mom and pop stores out of the local markets. This is very bad for the economy. I am not completely sure why, but in my mind it makes sense. I can best explain my train of thought as, if Wal-Mart enters the local market it puts great strain on the small stores. They are forced to shut down and people loose their jobs. There is less money to be spent. True, it’s nice to be rich, but if you just save your money or spend it at a less rate than you earn it, than you are not doing any good for the economy. That is less money for people who really need it to spend, which bring us to the next point in the article.

The article states, "‘Wal-Mart is the greatest thing that ever happened to low-income Americans,’" said W. Michael Cox, chief economist of the Federal Reserve Bank of Dallas. "’They can stretch their dollars and afford things they otherwise couldn't.’" If you think about it, Wal-Mart is awesome in the short run, but they are destroying the economy in the long run. Just think back. Once Wal-Mart started taking off is when our economy started slipping. I’m not saying that Wal-Mart is the sole reason for our poor economy, but it sure seems funny. Also, as it is stated in the article, cutting prices to drive out competition to raise prices later is typical behavior of a predatory corporation. Wal-Mart has started sending people to China and other places to cut costs, as well as, forcing lay offs and canceling orders. Sounds like hidden plans to me.

The last point I wanted to mention from the article is how Wal-Mart plans on adding 1,000 more stores in the US. They already have 3,000 stores across the nation, and they have started in on the national market. They are the largest private employer in Mexico as we speak. Could Wal-Mart really be taking over the world or are they screwing themselves? It was taught in class how in the MES Market Structure model that with a large output there is only room for one firm, which is a natural monopoly. Maybe I misunderstood, but 3,000 firms is a lot more than one. I hope they do fail, just so I can say I told you so to my grandpa when our economy goes up

Moving from BIG to small?

Towards the beginning of the semester, one day in class, we discussed CAFE standards for cars. Incase you don’t remember, CAFE standards required automobile manufacturers to make cars that have a certain mileage per gallon on average. We also discussed that to meet these standards a company might have to make smaller and lighter cars. I found an article about smaller cars, but they are not being made because of new standards but because of the high gas prices. These car companies are trying to appeal to the public with these smaller, more fuel efficient cars. The status quo in America right now is for everything to be BIG, including our vehicles. With the current prices and the future predicted prices of gasoline, more and more small cars will be produced with the possibility of establishing a larger part in the automobile market. In the article it states that we might see gas prices of $3 or more in May or June and that they could stay at that high price. The increase in gas prices means that there is likely to be a bigger demand for these smaller cars. If you are currently looking to buy a car, you might just keep this in mind.

Tall People Make More Money?

In an article written by Steven E. Landsburg called "Short Changed: Why do tall people make more money?", Landsburg discusses the economic side of being tall versus being short. In the article, I was shocked to read that studies have found that an extra inch of height can mean up to $1000 more in income. Also, if you are 6 feet tall, you probably earn more than someone of average to below average height, say around 5 foot 6 inches tall. Landsburg gives an example to back up his claims when he compares the heights of all of the United States presidents. He states, "Of 43 American presidents, only five have been more than a smidgeon below average height, and the last of those was Benjamin Harrison, elected in 1888. (Another three, most recently Jimmy Carter, were just a hair below average.) Most presidents have been several inches above the norm for their times, with the five tallest being Abraham Lincoln, Lyndon Johnson, Bill Clinton, Thomas Jefferson, and Franklin Roosevelt, suggesting, incidentally, that height predicts not just electoral success but a propensity to subvert the Constitution." So if it really is true that more height means more money, what could be the cause? Well, three economists explored this subject and found some interesting results. It was first hypothesized that tall people made more money because they had a higher self-esteem than short people. The economists also found that, "Tall men who were short in high school earn like short men, while short men who were tall in high school earn like tall men." This finding rules out discrimination as one of the causes and leaves self-esteem. In the study done by the economists, they concluded that self esteem in the high school years has a dramatic impact on future earnings. They stated that, "Height at age 7 or 11 turns out to have no impact at all on future wages. But height at age 16 makes all the difference in the world." This is because once self-esteem is learned, it lasts a lifetime. Therefore, because tall teens tend to have a higher self-esteem, this leads them to eventually make more money than their shorter competitor. Although they say that tall people make more money because of their self-esteems, after reading this article, I'll definitely remember to wear my tall shoes on my next job interview.

Bigger fines for enzone celebrations

NFL owners voted for and passed a new rule banning celebrations in which a player is on the ground, a player is using props, or a celebration lasts longer than 30 seconds. This came to light from last years endzone celebrations by Chad Johnson and Steve Smith. In a vote of 29- 3 NFL owners passed this excessive celebration rule which is a 15 yard penalty on the ensuing kickoff and a hefty fine for the player who celebrates. Spikes, dunks, Lambeau Leaps, spins, dances and simple celebrations will be allowed. But penalties will be given for any celebration other than that. My question is do u feel that there should even be a penalty for excessive celebrations and if you do think there should be one where do you draw the line on what is excessive and what is not.

Cleveland Locks up Another Youngster in Siezemore


The Cleveland Indians just signed a 6-year, 23.45million dollar deal with Sizemore. Seizemore is a young center fielder and batted .289 with 22 home runs last season. Those numbers are not too bad, but not really outstanding either. Seizemore recieves $500,000 the first year, $750,000 in 2007, $3 million in 2008, $4.6 million in 2009, $5.6 million in 1010 and $7.5 million in 2011. If traded, the option becomes Sizemore's decision and the buyout is forfeited if he declines the option. He would alsod get a $500,000 payment if traded, and the salaries in the remaining years of the contract would increase by 10 percent. The Indians also have signed shortstop Johny Peralta (five years, $13 million) and catcher Victor Martinez ($15.5 million for five years). Since 1997, the Indians have started to trade away practically their entire roster; replacing it with young hopefulls. It has been nine years since they started their 'rebuilding' period. Is it wise to keep spending millions of dollars on young players who have yet to develop? It seems as if the Indians have kept trying to build a team for nine years and they still have not made a run at any championships yet. Should the Indians keep rebuilding or would you recommend them to have a different strategy for building their fanchise that makes more sense economically?

Wednesday, March 29, 2006

If we take EVERYTHING out of the oceans…

What will be left of us?
According to OCEANA, a brand new international advocacy organization created with the only one purpose of protecting the world's oceans to sustain the circle of life, oceans feed billions of people across the globe.

More than 1 billion people rely on fish alone for their daily protein, and each year we consume more seafood than beef and chicken combined.

Ocean plants such as seaweed and algae provide more than 70% of the oxygen we breathe. Our coasts host nearly 70% of the world’s major cities and more than 3.6 billion people who share the oceans for transportation and commerce.

Life exists on land because life exists in the oceans.
But people always think that the oceans seemed too large to be polluted or overfished.
Therefore, there has been little understanding of the sustainable limits of their use. Though we already had several laws to prevent the further pollution to the ocean, What should the government or organizations do to help protect the oceans and to enhance sustainable practices without harming the business?

NFL Back In L.A.?

Good news for the west coast?...NFL commissioner Paul Tagliabeu is predicted to retire sometime around July, but not before he initiates plans to bring a team to Los Angeles or Anaheim. Tagliabeu said that this has been a goal of his since the departure of the Rams and Raiders in 1994. Anaheim has proposed the idea of giving the league 50% off the value of the land needed to build a new state-of-the-art stadium, but on the other hand Los Angeles already has a stadium in the old coliseum. What city do you think would be the most economically beneficial site? For the city itself? For the NFL? Now L.A. is noted as the second largest market, but does this change your opinion? What strategies could the cities use to lure the NFL in selecting their location?

Blue Jackets Tie franchise record for wins

With the Blue Jackets win last night over the San Jose Sharks they have tied their franchise record for wins in a season. The Blue Jackets however are out of playoff contention.
"It's a lot easier to come, show up and go through the motions but we're playing for something," Nash said. "It was a slow start this year but we're trying to build a lot of momentum right now and gain some chemistry for the start of next season."
Columbus won its third in a row, and at 29-40-3 matched the 2002-2003 team's victory total (29-42-8-3).
"It's nice, but we should have 40 or 45 wins," coach Gerard Gallant said. "We're a better team than 29 wins. We're going to battle for a playoff spot soon."

Even though the Blue Jackets had a disapointing season should we expect raised ticket prices in anticpation of a better season next year? Or should they even lower prices in order to keep fans coming depsite a bad record?

The Yankees: Is the Fat Salary Working?

What is the first thought that comes to your head when you hear "New York Yankees"? For some of you, it might be the classic baseball franchise in it's early glory with Babe Ruth. For others, it might be their merchandising power. It might be their exorbitant salary, which makes the news every year. Every new season, it seems like the Yankees are padding their roster with another expensive superstar. Finally, for you Boston fans, it might be the fact that despite their huge salary expense, the Yankees haven't won a World Series in five years.
The first year of defeat, 2001, saw the yankees shelling out over $100 million in player salaries. Since then, infamous owner George Steinbrenner has put up $783,466,307. Do they have any championships to show for all of this cash? The quick and simple answer is no.
This calls to question a basic philosophy in sports economics: the constant debate between profits and winning. Some teams go all out, sparing no expense in pursuit of a ring. The Yankees are obviously such a team. However, as is observed, this strategy doesn't necessarily produce the desired results. This causes one to question a central assumption of the matter: are the players really worth what they're paid? The Yankees pay top dollar for the "top" players, but they remain not on top of the league. With other "regularly" priced players emerging the victors, one has to wonder if superstardom is fact or fiction. Can one player on a baseball team really make such a difference? If so, is it large enough to be worth millions of dollars? I think not.

MLB sponsors won't celebrate Bonds

Bonds surpassing Babe Ruth's and Hank Aaron's records is the major talk around Major League Baseball. It is even going as far as thsponsoringps involved for the celebration of breaking the records. Some of Major League's national sponsors are very indifferent when it comes to this topic because of the steroid allegations surrounding Bonds. Some say they will sponsor it in a "muted way," like PepsiCo, and some say they won't sponsor it at all, like Bank of America Corp. If you were head of a major company would you want to sponsor the celebrations that go along with this achievement? Or do you think that if you did sponsor these events that it would tarnish the reputation that you are trying to set for your company?

New York Mess or Brilliance

The New York Yankees are opening a new ball park in April of 2009. This stadium will seat approximately 51,800 and will cost an estimated 1.02 billion dollars. Of this absurd amount of money, $200 million will be shelled out of the pockets of the residents of New York. The stadium is described in the article as, "one which will replicate that of the original Yankee Stadium. The interior of the stadium will be a separate structure, rising above the top of the exterior. The signature frieze, the lattice work that once rimmed the origanl stadium's roof, will adorn the new stadium's roof in the original copper." Giuliani states that the stadium in due time will pay for itself and makes perfect sense from a business standpoint. What about the citizens in New York? How will the affects of this expensive masterpiece reach the consumers of New York? Will taxes of certain items in New York, which are already expensive, cause, price increases? Some Sources say that the Yankee's organization was willing to shell out 15,000 tickets to needy fans as well as $100,000 in equipment to such needy and poor New York children. Is that enough? My Question is how does one economically support those living in New York how have no interest in the Yankees what so ever? Should they be charged just because our poor baseball players can't afford to play in the horrible, historic Yankee Stadium? What are some ways the city of New York and bull ride these dollar burdens on solely that of the fans?

How Much Does March Madness Affect A School's Bottom Line?

The NCAA basketball tournament is largely one of the most watched television events in the sporting landscape. 64 games, 65 teams, and the drama of nailbiters and upsets makes the tourney riveting television. However, while the tournament has proven to be lucrative for the NCAA as a whole, netting a six billion dollar multimedia package for the schools, how much does the tournament, and, in specific, getting to the big dance, mean for an individual school or conference in the college landscape?

Initially, a $30 million dollar payout from the proceeds of the package will be given out, but only to the members of 1-A conferences, 119 of the over 300 D-I colleges in basketball, and , arguably, the most lucrative product available. Reports claim, however, that those 119 schools account for an estimated 4 billion in revenues in the college realm - meaning the payout is equivalent to 0.75% of the revenues brought in by 1-A schools.

In larger conferences, such as the SEC, the rewards for success in the tournament, and in general, are still minute. Florida, who is going to be in a national semifinal game this weekend, will get around a $1 million payout from the SEC as a result of it's success, but even that is less than 1.5% of the budget for the school's athletics. Often times, as one AD notes, these payouts are enough to "help with expenses as we advance, but it's just that: expense money, a tiny slice."

Funds from the tournament package itself account for 90% of the NCAA's own operating expenses, which entail a number of scholarship supplements for teams, as well as support for academics for student athletes. The "basketball fund" is what most of this money is put towards, however - an incentive based system that rewards teams for making and progressing through the tourney.

It's a simple system: A school gets a unit for each tourney game they play in. Progressing along nets schools additional units, which are then aggregated over a 6 year period and paid out from the fund. Each share, in the latest distribution, nets a school nearly $164,000. This spreads out over a 6-year payout period, meaning a share from the 2006 tourney will pay out in 2007, 08, 09, 10, 11, and 2012 - meaning that, essentially, a share is worth a million dollars to a school over its counting. This creates a situation where, at the end of a game, a school may have to deal with a "million-dollar free throw" - if it goes in, and a team moves on, it nets a program another million dollars.

This system of subsidization for teams seems to be a good incentive, but has raised a lot of ire, particularly among teams beyond the I-A conferences. Schools from conferences where, likely, the only tourney team is the automatic bid for winning the league tourney feel that the incentive program shuts out smaller conferences and rewards those conferences who, due mainly to larger exposure, get more teams into the tourney, netting their teams more funds for expenses. Additionally, some teams gripe that their subsidies are not enough to even cover the expenses, as noted above by one AD, for getting to the tourney, which can give some schools in smaller conferences less of an incentive in going to tourney games, as they may end up losing money over the near-term, costing their programs precious funds. A lot of debate also rages about the prospect of the aforementioned "million dollar free throw" scenario - should this be how a school makes or loses money in the tourney?

The main question is this: should the NCAA devise a better subsidy system for teams in the NCAA tourney? Should conferences be given money, and not the teams themselves? And, should the subsidies be increased to ensure teams can cover their expenses?

Astros Insurance Claim Denied

The Houston Astros tried to recover $15.6 million of the $17 million injured slugger Jeff Bagwell is getting paid this season. Their foundation for this arguement is that their aging star is too injured (chronically injured shoulder) to play this year. Because he played at the end of last year, they will not be recieving any money from the insurance policy they took out on him that ran out Jan. 31, 2006. This is because from the end of last year, to the end of January, there were no changes in his health condition. The Astros intend to take the insurance company to court over the issue, they hired Attourney Wayne Fisher. When asked of his opinion on the issue he remarked, "For a lawyer who has 45 years of experience in this kind of thing -- big, gigantic shock, an insurance company doesn't want to pay." Because of the obvious economic impact on the organization, this will be an interesting case to follow. This story brings me to my main question:does it ultimately pay off to pay a fan favorite such as jeff Bagwell who is past him prime a contract that is way over market value just to keep him on the team? By doing so, do you really gain or keep enough fans to justify paying an old, broken down first baseman who has been relegated to nothing more than a spot player crazy sums of money or should the team let his diminishing talents go elsewhere?

Cleveland Connection

Recently, the Cleveland Browns entered the free agent market armed with around $25 million. Interestingly enough, the money they had to spend on free agents, ended up being a smaller issue than the location of the Browns. Joe Jurevicius, LeCharles Bentley, and Dave Zastudil, all Cleveland natives took pay cuts to sign with their hometown team. The Browns aren't the only case of something like this taking place. The Cleveland Cavaliers have a hometown hero by the name of LeBron James. While he was a lottery draft pick, it was rumored that the Cavs won the first pick in the draft just so that James could stay King of Cleveland. Which brings me to my question, is it better for a professional sports franchise to be in a great athletic area like Cleveland which may not be the biggest market? Or is it better to be in a region like the northeast which may not produce the best talent, but has a larger market such as the New York franchises? While this may not have a lot to do with economics, it has to do with the location of expansion franchises (remember the Texans are located in Houston, a haven of High School football), and where teams may relocate.

Tuesday, March 28, 2006

Is Bonds good for baseball?

Even though Bonds has a lot shadowing him these days, I’m sure whether Bonds played a third of the season or more this year every team in MLB would love to have him. Statistically, he is a reliable man to get on base for the Giants when he plays. Bonds is going to be a big reason for putting fans in the seats whether the game is home or away because of his chance to beat the homerun records set by Babe Ruth and Hank Aaron. Whether those in attendance are fans or not attendance to watch Barry Bonds as he chases this remarkable feat will increase. With more people going to the game to watch Barry Bonds, I expect the demand for his jerseys to increase. I would have to say there is also going to be a demand for kayaks and small boats. More people will be swarming McCovey Cove hoping to grab a piece of history. Do you expect the demand for anything else to increase? Maybe the shadow of his possible use of steroids has gloomed over him so long that he won’t put people in the seat or glued to the television. From an economic viewpoint, Barry Bonds is good for baseball, do you agree? I think you can count on him to play the majority of the season because he's wanting that World Series ring, so people should purchase tickets now while good seats are still available. Would you buy a ticket with the chance he might not play that day?

GM elastic or inelastic

As GM suffers more losses from competition, workers suffer by getting their jobs taken away.

The more losses GM has to bear, the more workers get laid off.

"GM didn't give an exact figure but said fewer than 500 jobs were cut Tuesday at 30 locations across the United States, including factories and engineering centers. A cut of just less than 500 jobs would represent about 1.3 percent of GM's U.S. salaried work force of 36,000."

"Under the plan, GM wants to cut 30,000 U.S. hourly workers and close 12 facilities by 2008. GM lost $10.6 billion in 2005, largely because of increased competition and rising costs in North America."

Looking at the numbers, do you think that GM jobs vs. $ lost from competition are elastic or inelastic? As more money is lost, do a lot of jobs get affected or just a few?

How much would you pay to sit atop the Green Monster?

Fenway Park, home of the Boston Red Sox, has been adding seats over the last couple of years in response to the increase in demand of tickets. The Red Sox were one of only a few teams to completely sell out every seat for every game the past three years. The most recent additions of seats include the Green Monster seats and the Right Field Roof Deck Tables.
The pricing for these seating areas are interesting. The price of a single ticket depends on who the Red Sox are playing that day. A Green Monster seat in the second or third row to see the Kansas City Royals play would cost a person $90, but the same seat to see the New York Yankees would cost that person $110.
The Red Sox started this pricing scheme for the 2004 season. The front office determines 20 "red" games before the season starts. The "red" games are more expensive and are the games that are consider to be the games fans want to see more.
Another interesting thing is these seats are not available for purchase when the other seating areas go on sale. In order to be able to purchase Green Monster seats, one must submit an inquiry to Redsox.com (one per email address). Your name will be entered in a drawing and if your name is drawn, then you will have a two hour window to purchase Green Monster seats. This drawing stops once all the tickets for every game has been sold. For 2005, this drawing lasted only eight hours before the last seat was sold for the season.

Monday, March 27, 2006

How Ridiculous are Gas Prices?

If the gas prices surge anymore the only economical thing that middle and low class people can do is to carpool, ride their bike, or walk. For a person who is only making minimum wage working 40 hours a week, they aren’t going to be able to afford anymore significant increases in gasoline prices. I would have to say that the majority of workers drive to work. You can only budget so much. People have to get to work and not everyone lives within walking distance. But even those people who walk to work sometimes decide to drive on a cold, snowy, or rainy day. The national average on March 24 of about 7,000 gas stations estimate that the price of regular unleaded gasoline is $2.499 per gallon. The higher prices were a result of the changes in the gasoline formula instituted by the Environmental Protection Agency and the new national energy bill. The article says that, “The U.S. economy is strong enough to absorb the increase in prices without affecting a change in demand.” There’s got to be a limit to gas prices. You see more and more people who own trucks or SUVs trading in these vehicles and purchasing a more economically affordable automobile. This has got to hurt automobile companies such as GMC and Ford because these economically affordable cars are being produced by foreign companies. The U.S. economy isn’t strong enough to absorb increases in gasoline prices. The U.S. middle and low classes needs some type of break. Do you think the U.S. economy is able to absorb these increases?

Mobile Handheld Gambling Devices

The Nevada Gaming Commission recently passed mobile gaming regulations that allow gamblers to be able to leave the casino floor and still be able to take part in the games going on within the casino. Portable bingo devices have been around since the 1990s, but the devices weren’t allowed to leave the bingo halls. This new regulation allows the use of handheld devices for gambling in any public area of the state’s casinos, except for hotel rooms and other places that cannot be supervised. These devices for example can be used while eating at restaurants or while your just lounging around the pool. Since the electronic bingo devices didn’t replace paper, major casino owners are taking a wait-and-see approach. As a couple casinos are trying this new device, major casino owners are going to be paying attention to the devices demand and how technology will unfold. An opponent of this regulation says, “It will be hard to keep these mobile devices out of the hands of minors.” I’m not in favor of this new regulation, but I do have to agree with them that this will better use other resort space. Economically, this might be beneficial to the casino and the other spaces where money is being spent, but it will be hard to stop minors from gambling. What’s your opinion about allowing portable handheld casino devices outside casino floors?

Sunday, March 26, 2006

March Madness in the Work Place

A study by Challenger, a research company, claims businesses will lose an estimated 3.8 billion dollars in productivity due to March Madness. The study is based on time spent on the internet watching games/highlights, filling out brackets, and the overall distraction of the tournament while at work. There is not a possibility to cancel the NCAA tournament; therefore employers are likely to lose productivity each year. Employers are concerned over the lost productivity and the economic effect the tournament could have on business. A strong argument against the drop in productivity is company unity and moral. During March Madness, people from various departments throughout a company will engage in activity ranging from organizing brackets to talking about games. The people in these departments will rarely get the chance to interact with each other during other times of the year. Do you feel March Madness is an economic strain on employers or a time for increased unity and enhanced moral for a company?

Thursday, March 23, 2006

Foreign Manufacturing

Various shoes companies such as Nike and Reebok have been looked down upon for doing business in foreign countries. Nike and Reebok use outside contracts to produce athletic shoes. The two companies have been faced with arguments of using foreign manufacturers as “sweat shops.” Both companies have recently made strong efforts to make the public aware of the attempt to make factory conditions more humane. The companies have released statements of ethics demanding fair working conditions, while knowing factories are still treating workers poorly in some countries. Do you think the two companies are making these attempts to clean up the factories conditions to be an ethically stronger company or simply to reduce the negative stigma and increase the bottom line?

Change at the Top in the NFL

NFL Commissioner Paul Tagliabue recently announced he will be leaving the NFL. Tagliabue was in office for 16 years before announcing retirement. When the Commissioner was asked what his greatest accomplishment was, he responded by saying ''Turning around our relationship with the NFLPA is the thing I'm most proud of. Everyone in the National Football League in the '80s saw that as a growing negative. Making the players into a partner through the CBA . . . was a very positive thing." Another highlight of Tagliabue’s legacy was his ability to persuade Gene Upshaw of the Players Union to allow 1.8% of league revenues to be placed into an open fund. Teams could use the fund for small loans to aid in stadium construction. The NFL Commissioner recently was a key player in the battle to extend the collective bargaining agreement over the past couple of weeks. The Collective Bargaining Agreement allowed for an extended salary cap, protected medical benefits, and secured retirement benefits for players. What do you think was his most significant accomplishment of these three? What action was the most economical for the NFL as a whole?

Monday, March 20, 2006

The Supreme Court Hears Patent Case

By providing an exclusive right to innovators, the US patent system is meant to encourage innovation and constant technological improvements. In this manner, for a certain amount of time, innovative people/companies are the sole benefactors from their innovation; giving them an advantage in their industry.

But what is worthy of being patented? Has the US government granted too many patents? An article on MSNBC discusses an upcoming patent case before the Supreme Court. This particular case deals with LabCorp and Metabolite Laboratories and their “patented method of correlating blood homocysteine levels with vitamin deficiencies, relating to heart attacks” (Waldmeir). But there is a larger issue at hand. The decision in this case could set precedence for the patent process in the US. Perhaps the government is giving too many patents and not allowing enough information to become common knowledge that benefits all. Patents awarded on this type of information/innovation have led to unneeded litigation and ultimately a slowdown of innovation.

So what should the US government do? They do not want to make the patent process difficult and discourage innovation, but they also do not want what perhaps should be shared information to be patented either. How can they draw a line and distinguish between the two?

Thursday, March 09, 2006

Spring Break = Health Risks?

Spring Break is a huge time of year for college students. It's a time for hanging out with friends, beach trips, and for some, lots of drinking and lots of sex.

The AMA is warning young college women about the hazards of excessive drinking and/or sexual activity during spring break. The article states that women process alcohol differently than men and poses a higher risk for health problems. Unprotected sex can obviously lead to some unexpected guests, whether in disease or child-like forms.

The AMA surveyed 644 college women and graduates. 74% admitted to using drinking as an excuse for excessive and outrageous behaviors.

Spring break is also a kind of college tradition. 30% stated it was a necessary and essential experience to college life. Plus, spring break is marketed. MTV has a kind of reality series based on spring break activities.

Do you think warning young women about the risks of excessive behavior is woth it, given the tradition of the event? Do you think it'll happen anyway? What are the costs of these behaviors? What kinds of "complements" to spring break are marketed and sold more around the same time?

Wednesday, March 08, 2006

Airfares are Not Fair

As an international student, I have a lot of chances to take airplanes and spend a fortune on tickets. As we know, the amount of money that people pay for their tickets for are quite different, even for the exactly same flight.
As it is mentioned in the article attached, there are several aspects that airlines have to worry about when they set their price policy. Unlike other industry, the marginal cost (variable cost for one more passenger) is very low but the fixed cost of operating the flight is really high. Also, the closer to departure, the more desperate the airline would like to sell their seats. There comes a contradiction. Airlines would like to charge high prices for this kind of “last minute” tickets because “must travel” passengers are always the demanders. However, airlines are also happy to sell those “last minute” tickets at lower price to attract those who would like to travel only if they see an unbelievable bargain fare.
Another aspect that airlines have to consider is reasons that people go traveling. Some people fly because they have to for business, for emergency or for convenience. Others fly just when airfares are cheap enough to attract them. On the other hand, some fights are simply more popular than others, maybe because of time or day of week, maybe because of specific flight course. For instant, flight on Friday is always more popular than its counterpart on Tuesday.
Do you have any creative ideas about how to set airfares? Remember, the airlines would like to sell as many tickets as possible per flight and at as high an average fare as possible.

Sales Help Shoemakers Beat Profit Predictions

The shoe industry has been rapidly rising over the past years, prooving that they can bring in more money than their retailers expect. A famous shoe retailer, Steve Madden, has proven that it is possible to rise up to 3% in one day. It has not only exceeded its' expectations in its wholesale business but also in its' retail business. This explains the supply and demand in the shoe industry. The supply for the type of shoe Steven Madden creates is in high demand at this moment. If Steve Madden is able to capture the selected target market, and keep up with production, supplying these demands will set some of its highest profit levels they have reached in years. An interesting thing to look at would be the how the demand for stock in Steven Madden has influenced the stock market. Wall Street and the stock market erupts when companies with the profit levels like Steve Madden takes in over the course of a year. Stock in the company becomes very popular with investers.

Black Berry Patent Battle

Blackberry is in a trail to secure a patent for their phones. It is going to cost them an estimated $612.5 million or what they offered to pay to secure the patent. The stock line reportedly rose by 12% after the offer for the patent. They hope that they will gain the patent and control of the market. The cost of getting the patent will ensure the model of phone for their company and their company alone.

New Orleans Schools Reborn by Katrina

New Orleans was devastated this past summer by multiple storms, but the most distructive, Katrina, left a lasting memory. Before the storm, schools in the New Orleans Parish were literally rotting from the inside out. Buildings were falling apart, children were consequently not learning and administrators were constantly changing. With no sense of security and a dreary outlook for the future, the school district is now looking at Hurricane Katrina as a blessing instead of such a grave misfortune. Although only a small number of schools have reopened since the storm, those that have have taken a huge step in the right direction. With the opportunity to start from scratch, school officials and the committee in place to assist in the reopening are taking full advantage of this chance. This is a great economic advantage that came of the storm, which many people have not thought about. Without Katrina, these schools possiblt would have remained in the hands of the government for years to come. As schools begin to reopen and occupants see that progress is being made in education, more and more residents will be able to confidently move their children back to the area. This will bring about economic growth for the New Orleans community.

Complexity causes half of product returns?

In the fast paced consumer world of today is it any wonder that people rarely stop to take the time to read instructions. According to the attached article nearly half of product returns in this European area are due to consumer error. How much are the producers suffering due to returned products which eat into profits? I think that it is a worthwhile investment for theses producers to develop more consumer friendly directions which users would be more likely to read and understand. Nowadays many computers come with setup instructions that are only 3 steps long and color coded on a huge diagram. It only makes sense that the widely expanding market of consumer electronics follows suit. How are these returned products affecting the existing supply and demand curves? Would a change in the way producers include directions create a shift in either the supply or demand curve?

I just saved a bunch of money on my student loans...

A private student loan organizer has decided to be different than the other non-government backed loan companies. How does this organizer know if you are going to pay them back or not? Your grades. If a barrower submits information to show that they are in good academic standing along with good credit standings, that student can get major discounts on their rate. A good student may receive .25% off of their rate. An outstanding student may get as much as .75% off. The company's plans are to make these discounts even larger eventually. As long as this company keeps succeeding in their business, other loan organizers are going to have to follow suit. If they choose not to, a company offering lower rates would be the obvious substitute. If this company is right, this good grades/debt repayment relationship may begin to show up in more places than just loans: it won't only be saving you money on your car insurance.

eastern asia are stealing from us

If you own a business or a corporation experts are strongly advising you to register your brands/trademarks in China because of "trademark squatting". "Trademark squatting" is when someone else takes your name (as a company) or product and use it as their own. Opportunists in China can make loads of money by registering well-known U.S and international brands in their own country. There was a U.K company that went to register their tradmarks in China but found out that they have already been registered, which isn't illegal in China. For years this company in the U.K have been losing money because some else registered their trademarks and have making money by using their ideas/product. Owen Smigelski, an intellectual property attorney with San Diego-based Achtel Law firm, strongly suggest brand-holders to immediately file their trademark in countries that trademark squatting have been taking place. It only cost under a $1000 to register a trademark, which makes it very inexpensive for a group or person to steal your trademark.

USDA cites confusion on beef export rules

Why can't we ever get along? It appears to me that when the USDA makes a new export rule, they should notify the exporting companies and clarify it to them. Apparently this didn't happen, because the American Veal and Lamb Company (Brooklyn-based) did't get the memo. They were unaware that they couldn't send beef to Japan that had a back bone cut in it (a.k.a the hotel rack) or for any other matter any Asain country.
Japan had just recently opened its doors again to our meat trades after the United States' first case of Mad Cow in 2003. Even though the veal was not contaminated with the Mad Cow disease many Asains believe that this is where the disease originates and spreads from. Then of course there's the second offense of putting "offal" in the shipment. Offal is the unedible parts of the carcass. Which demands the question, WHY? Why put it in the shipment if it's not edible. Perhaps the shipment of the wrong cut was accidental, but how could it be accidental to put the offals in there? All in all, it was preventable by notifying the two companies who had access to exporting to Japan. Now they know, but when will Japan open its' borders to our trade again??

Handhelds

While the Palm's Treo has become one of the most popular handhelds; so much so that it's being considered the ipod of the cell phone world, it has competition. This new cell phone has a newer operating system, has a better digital camera, and a faster network through Verizon's BroadbandAccess data service. Lucky for Palm it's their own. The Palm Treo 700W is the newest installment in Palm's Cell phones. It's more advanced, but as the article states, it might not be a better deal than the 650. The 700 is an option, but for some it's the only option. It has a download spead of 400-700 kbps(kilobits per second), compared to the 650's 70 kbps. THe 700 will be priced between $400 and $620, depending on the Verizon service. It has a card slot that will boost the internet performance which isn't available on the 650. While the 650 limits your activities to just one, the 700 allows users to receive email while you jot notes or flip through programs like a regular computer. So while you can choose the 700 with more features and the ability to handle more at once, you might want to weigh in the price. If you want to be able to do more at once, the 700 is probably a good choice, but otherwise, the 650 isn't shabby either.

Tuesday, March 07, 2006

New website allows users to trade CDs

Yet another online market has been created, this time its for music. Don't get the gallows out yet, this one keep so-called "music pirates" from plundering. Its called Lala.com and it is a CD trading market run completely over the internet. How it works is that traders post a list of the CDs that they are willing to trade on the site, and those interested in having a particular CD give the owner a notice. The reciever then pays $1 to Lala.com and the requested CD is sent by mail. However, in order to get a CD you musy give one up, keeping an even amount of "buyers and sellers" preventing the demand from becoming greater than the supply, a shortage disequilibrium . Economists are on the fence as to if this will benefit the recording industry or not. The CEO of the site Bill Nguyen, claims that he will allow traders to buy new CDs if their requests are not available and he also wants to give artists a share of the profits for having their CDs traded. If Lala.com and other sites like it boom as many think they will, it can only shift the demand curve outward for the music industry. Sorry folks, looks like we won't be hanging (suing) any pirates (nerds) for much longer.

Lincoln Electric Reports Record 2005 Results

The majority of this article describes the percentages of how much Lincoln Electric imporved through 2005. For those of you who don't know what Lincoln Electric is, it is a world's leading manufacturer of arc-welders. I want to use them as an example of a supply and demand graph to explain what might have caused their profits to increase dramatically.

Lincoln Electric is the leader in technology and design of the welders. It is possible that they created a new design or technology that made manufacturing welders more efficient and less costly. This situation would cause the supply curve to increase to the right, thus creating more supply. There was also an increase in the number of companies and people needing welders caused by natural disasters, specifically the areas hit by Hurricane Katrina. This increase could have caused a shift of the demand curve to the right. These two situations combined would create an increase in quantity and most likely an increase in price, though price is indeterminable; thus creating a situation where Lincoln Electric earns record profits in 2005.

Delectable Deserts

KrispyKreme announced today that it will be replacing it's uper level management, most notably it's CEO and President, with a former Kraft Foods executive. This replacement seeks to stem the lack luster performance the company has been experiancing since going public. Following multiple executive shuffling and dismissals, there is hope that the fresh blood will revitalize the company and get it back on the right track.

From a consumer standpoint, do we even care about what goes on at the top? Does the buisness practices of your favorite food's manufacturer influence your choice in pastries? I imagine not. I doubt any actual KrispyKreme consumption will be affected by this CEO shuffle, but perhapse certain buisness practices may be implamented to increase supply from factories that could result in better sales. One can only hope such delicious concoctions will remain on the market for a long, long time.

Advancement in Recycling

Recently, it was found that a certain strain of bacteria is capable of eating Styrofoam and producing useable plastic as a result. This is likely to lead to revolution in the recycling industry as there is now an additional quantity for which it is reasonable to recycle.

Granted, that assumption cannot be made yet as the article in question does not say whether or not it is cheaper to heat the Styrofoam up and allow the bacteria to dissolve it into reusable plastic. For example, it is not actually cost effective to recycle paper as it is much cheaper to just burn or bury used paper and make new supplies from trees grown specifically for that purpose. Currently the same problem faces the industry of recycled plastic, and because of this I am cautious about whether or not this new technique will actually have any significant impact. Still, it is interesting to note that Styrofoam can be recycled.

The Most Powerful and Largest Coffeshop Chain Getting Even Larger?

Starbucks is the largest and most successful coffeeshop in the United States. According to the article by CNN.com, there are about 7600 locations for Starbucks in the US. But Starbucks isn't satisfied as they are planning on opening up 1300 more locations in the year 2006. As they continue to expand from large areas to small areas they are also expanding their menu. With all the coffee and other beverages, they plan to add on more food and to start they have already began to serve cereal served with steamed milk. Not only are they beginning to serve cereal but hot sandwiches are also on the menu. The sandwiches have already started and they have gained a profit of 30,000 from them with their 600 locations.

coffee may spell heart trouble for some

Many Americans today rely on caffeine - mostly coffee - to keep them going. Coffee shops are springing up left and right to accommodate these people and their willingness to pay for a quick pick-me up. When people are willing to spend $3-$5 on one drink that costs 50 cents to make, there is a lot of profit to be made.
But what if there are negative side effects affecting the health of these coffee consumers? According to an article in USA Today, a new study based on people in Costa Rica revealed that there is a specific gene that will decide whether caffeine is good or bad for each individual. If you have that gene, it will supposedly lower your risk of heart attacks. But on the other hand, if you don't have that gene, you become 36% more likely to suffer from a non-fatal heart attack. Despite the results of this study, at this time the general public cannot have themselves tested for this gene.
What are the consequences of this study for those in the United States? What does this research do to the market for regular coffee? Decaf coffee? In the long term, if this research holds up, will coffee shops continue to be successful?

The Big Freeze

This article is about how many companies are freezing their employee's pensions in favor of profits. Personally I believe this has bad things written all over it. With Social Security slowly but surely being cut off, those that are 20 or 30 years into their careers assuming that their savings will only need to be minimum at best are prone to be hit doubly by a loss of both Social Security and weakended pensions. This, along with ever increasing life expectancies, could create a huge poverty increase especially with baby boomers nearing retirement. I'm not sure in what way it will effect the entire economy, but I believe that companies should be more aware of the future of their employees. Those joining in to the workforce today and in the near future would be wise to keep their savings private and avoid reliance on things like social security and pensions simply because there's no way to ensure their reliability.

Can we really end illegal music downloading?

I can assume that many students in Economics courses have heard one or two lectures on the issue of illegally downloading music. But just hearing about it can make one wonder, what would motivate people to take the risk of illeaglly downloading music in the first place?

Could the fact be that the average person wishes to perform tasks the easy as much as possible? It is common knowledge that CD albums cost $20+. Also, usually when someone purchases a CD, they usually only have the intention to listen to a few select songs from the entire album. What would the point be to spend over twenty dollars to buy an entire album when you only wish to purchase a few individual songs? Are there not enough CD singles in the market to meet consumer demands?

Even buying music online has its restrictions. It can be difficult to move your music to another computer or even a portable MP3 player. There are restrictions are the number of times you can burn a song onto a CD. Plus, Apple's music store allows you only to download music to an iPOD alone. All the above tend to be reasons as to why someone would rather break the law and illegally download music instead of trying to abide by the rules and permissions that have been set already.

So, could illegal downloading and sharing of music be stopped ever? Probably not. However, I do believe that the music industry is trying to meet consumer demands while also maintaining profits in good shape. But still, what is there left to be done for the music industry to satisfy every consumer? CD singles are being sold in cheap music stores and iPODs have helped to give consumers their own customized collection of music to have with them at all times. What else would it be that consumers are looking for to get the kind of music they want in the way they want it? Besides, wouldn't buying an artist's album be the best way to thank him/her for his/her enjoyable music?

NFL Players Lose Millions

A man named Kirk Wright and his company, International Management Associates, were sued in federal and state courts and neither Wright or the money has surfaced. Listed as plaintiffs in the state lawsuit are Terrell Davis, Steve Atwater, Rod Smith, Ray Crockett, Blaine Bishop, Al Smith, all current or former members of the Denver Broncos. Wright and his company are accused of collecting between $115 million and $185 million from at least 500 investors since 1997. Apparantly Wright has ran away with all of these professional athletes money. By tellings these people that he was making accounts and some of the time not even making them at all and pocketing the money, this is a huge issue. As if pro athletes don't complain enough already as it is, this gives them something more to complain about. This is also a court case that is taking away from the government's time. This is not good for the economy at all because now people are going to be afraid to invest their money because of the threat that it could be taken.

Should Your Boss be Blogging?

This article poses an interesting question: Should blogs be allowed in the corporate world? After reading the article, I have come to agree with its ideas. Blogs would be a great way to receive a tremendous amount of feedback from customers without much cost. A blog can allow the tracking of who read and posted information. Also, ranges of options allow adjustment so a blog isn't too open, risking the privacy of a company. In this article, blogging is presented as another technology that makes communication within a business easier and more accessible.

GM want slashes retirement packages

GM want slashes retirement packages
General Motors said Tuesday it would reduce traditional pension benefits for veteran salaried employees and shift newer staff to a defined contribution plan as part of a move to cut high labor costs.
GM's pension liability at the end of 2005 was $10.9 billion, according to its balance sheet.
GM shares lost more than 50 percent of their value in 2005.
Why GM made this decision?
GM's pension liability at the end of 2005 was $10.9 billion, that's really is a large number, after taht it will cut its yearend 2006 pension liability by about $1.6billion and resuit in a pretax charge of about $120 million.

Demand for High Paying Jobs After Lay offs

Over the past year or so many plants in Parkersburg, WV have been closing leading to many lay offs. Many of these workers came right out of high school to work, skipping totally their college education. Most of the workers were making wages well above minimum wage. All these workers have ever known was the jobs they have been working and recieved many payment increases as their time with the companies went on. Now that they've been laid off the only jobs they can seem to find are jobs that only pay between $7-10 an hour. Many of these people have been passing on these "low paying" jobs because of the prices of gas, or because the position wasn't quite right for them. With all of these lay offs over the years the competition to find the good paying jobs has increased greatly. One man said that there may be 20 jobs that are available in the area and 500 people who could be completely qualified to do the job.

Granted some people are taking the low paying jobs because they need the job, and some other assistance is being offered to these people. Some are going to college to take courses that could prepare them for the higher paying jobs, while recieving assistance.

The choice of what one should do is hard. It's the typical supply and demand situation. There is a shortage of the "good paying" jobs. What would anyone in this situation do?

When sleep is just a dream

The greater the competition, the more pressure there is on companies to be productive and efficient. But what does this mean for an individual employee? According to an article entitled “When Sleep is Just a Dream”, it means higher stress levels and less sleep.
On average people should get 6 - 8 hours of sleep a night. But a poll conducted by NBC reveals that about 50% of Americans don't think they get enough sleep while 25% are getting less than 6 hours of sleep per night. This is a 20 year trend of Americans getting less sleep.
Although a lack of sleep is not good for people in general, there are some industries cashing in on people's demanding life styles. 42 million prescriptions for sleeping pills were filled last year; a 60% increase since 2000. The International Sleep Products Association reports that the sale of mattresses priced over $1000 was up by 9% in 2004 as compared to 2000. Not to mention all of the coffee shops popping up everywhere to provide people with a quick jolt of energy.
Despite these few industries that are benefiting from a society deprived of sleep, what is this lack of sleep doing to the rest of the economy? By working longer hours are people really being more productive or are they just taking longer to do the same job because they are tired? The article suggests that a simple answer to this problem would be a 20 minute nap in the middle of the day. Do you see companies making napping part of their corporate culture? If not, what will be the long-term consequences of this lack of sleep? Or won't there be any?

Mardi Gras to fatten New Orleans tourism

The time for Mardi Gras comes every year and it has arrived this year even though Hurricane Katrina hit New Orleans. The festivities continued and the tourists came to celebrate. $200 million was expected to be earned to help recover economics. Most tourist attractions were open for the festivity even though some were not. The attractions that were not open, plan to be open in the Spring or beginning of the Summer and will bring more tourists. Hotels and restaraunts were opened up to accommadate the tourists coming in.
People were going to celebrate Mardi Gras just like every other year, but while they were there they got to see just how terrible a loss there was that these people are dealing with. Comments were made about them not realizing how disastorous the hurricane was until they saw for themselves. I think it's good that Mardi Gras still continued in New Orleans because it is giving families who live there hope that things will be alright. Now there is more money coming in to help the people set up places like hospitals and schools that they need for everyday living. It's sad that they did not expect the outcome that normally arrives for them. The number of people showing up and the profits were lower but the fact that people still showed up and the money is going to good use is wonderful. Zenny

Pot of Gold

It is estimated that consumers are going to spend nearly $2.7 million dollars this St. Patricks Day. The National Retail Federation conducted a survey showing the increase in consumer expenditure. The holiday's popularity has grown over the year helping out restaurants, bars, and retail stores. On St. Patrick's Day the average person should spend about twenty-eight dollars compared to last year's twenty-three dollars. Most people continue to spend the holiday wearing green and joining the festivites at restaurants/bars, attending a party, decorating their home, or staying in and making a special dinner. The increase in spending during the Irish holiday is due to the increase in celebration.

Starbucks: It's Not Just for Lattes Anymore

As we all know, Starbucks is the leading coffee franchise in America. Their freshly brewed coffee has made them a favorite to many of us, but isn't it a pain to have to go to another chain such as Dunkin Donuts or McDonalds to get the breakfast that goes with your coffee? You're probably just better off buying the coffee where you bought the breakfast.

Starbucks has recognized this problem and has come out with a new line of hot breakfast foods that are being sold in 250 stores nation-wide today. They say by the end of their fiscal year in October they will be providing hot breakfast sandwiches at 600 stores. It is said that all of these foods will be about the same price as you could get them anywhere else so another question arises. Is it possible that Starbucks could one day monopolize the morning meal business? It is evident that people enjoy Starbucks products more than those of McDonalds or even Dunkin Donuts, it's just a matter of how much Starbucks will expand to other parts of the country such as southeastern Ohio.

We've already seen what Wal-mart has done with every other conceivable product besides fast food and if Starbucks tries to do the same they may lose some of their reputation for outstanding coffee. If I were Starbucks I would take advantage of this new development and wait for the next move of my competitors.

Why This Oil Boom is Different

This oil boom that we are experiencing in the 2000s is supposed to be different because of what is being done with the money that we are getting from the petroleum which is called petrodollars. During the 1970s the petrodollars were not spent and instead were put into savings. Without spending that money, the economy became depressed. But recently the money has been spent.
In the 1970s the Middle East was extremely underdeveloped so they had nothing to spend the petrodollars on so they just deposited it in banks and kept the money from going back into the economy. Now, however, The Middle East is more developed and are investing their petrodollars in making improvments such as building ski slopes. By doing this, more jobs are being created which is helping the economy.

American Airlines: "Soda is on us"

American Airlines was charging $1 for soda and juice trying to increase profits. They almost went bankrupt in 2003, so they are trying new ways of making a buck. Drinks and other perks such as food and pillows used to be free but that is changing. They offered snack boxes and sandwiches for a small fee, but are learning their passengers don't like the idea. The airline got feedback from the test saying passengers would much rather receive the drinks for free and pay for pillows and blankets. Some airlines are even axing the free pretzels to make up for the soaring fuel prices. American Airlines was hoping to be like a movie theater and make a profit on the sales of snacks and drinks, but passengers would rather have free drinks and pay for food and pillow-and-blanket sets.

Maybe if American Airlines offers free drinks that will increase the amount of passengers. The more passengers the airline can generate the more money they will bring in.

House Moves to Raise Minimum Wage

From Gongwer News Service....
A House panel acted unexpectedly late Tuesday to raise the state’s minimum wage...the amendment, offered by Rep. Chuck Blasdel (R-E. Liverpool), a congressional candidate, would raise the state’s minimum wage from $4.25 per hour to the federal minimum of $5.15 per hour. The bill is slated for a House floor vote on Wednesday.

Ohio is catching up to the federal minimum wage over ten years after it was passed. Though it's a non-binding floor, it will certainly have an impact on wages for some and entire jobs for others. The ammendment to change the minimum wage is peculiar given the timing and circumstances. No big deal being made by politicians or rallies by special interest groups. This was something done quietly without little noise. Why? Most Ohioans support raising the minimum wage. You would think politicians would be screaming from the rafters. But most companies probably could do without this ammendment. In theory it puts an artificially high minimum on the cost of doing business. And for many politicians they have been screaming about creating more jobs. In theory, this probably isn't the answer. But for many Ohioans it's too low to raise a family or even take care of yourself living on 4.25/hour. In an election year, that may win you a couple new friends.

"Get Your Money right" Hip-Hop financial literacy

"Get Money Right" is an attempt by Chrysler Financial and Anheuser-Bush Inc. to reach out to the youth population through Hip-Hop. Starting the 25th of March the tour will kick off visiting several different colleges providing financial speakers and hip-hop artist with financial stories. According to the Economic Policy Institute, debt in the U.S. has risen by 36% in U.S. households over the last four years. The tours intentions are to attack the "lack of knowledge" and "lack of basic knowledge" in hopes of enlighting todays youth on how to manage financial situations. The tour has aspirations of teaching basic concepts of banking, repairing and understanding credit scores, assets and wealth management, vehicle financing and home ownership.

My question is whether a hip-hop convention is the most efficient way of teaching youth the concepts of financial planning. I agree that financial control is vital in ones future, yet I feel there should be more effective ways of teaching the ways of finance.

Cold winter blasts retail sales

Thanks to a unseasonably warm January, followed by a frigid February, retail stores took a major hit to their normal customer sales numbers. Many major retail stores sales decreased in the month of February, which experts determined was caused by cold temperatures and people wanting to stay warm inside and not leave the house. Because January was unexpectedly so warm, sales went way up during that month as people got excited for spring early. But as temperatures dropped, February's numbers did as well. Popular teen stores like Gap, Pacific Sunwear, Aeropostale and Hot Topic all dropped for their sales in February, as well as home furnishing store Pier 1. A bright spot was stores like Wal-Mart and Target, as they both increased in sales slightly. Although since Easter is later this year, store experts are expecting decreases in March, with increases coming as April nears. Easter is a big holiday for consumers and producers. Stores like Wal-Mart and Target should benefit greatly from the holiday as many families buy an influx of candy, food and gifts for their loved ones. But aside from that assured case of consumer increase in April, the stores right now are hoping that Mother Nature is on their side and the temperatures start to rise, so their retail incomes will as well.

Should Governments Legalize and Tax Marijuana?

The government (ie taxes payers) spend a lot of money making sure that illegal drugs to not get in to this country. When I really think that they should some their money on preventing people from coming into our country, not drugs. The Fraser Institute conducted a survey and found out that if the government legalized marijuana and placed taxes on it, our government beget would increase by 7 billion dollars (keeping the price the same $8.60 for 0.5 grams).
That to me is too big of a number just simply not consider especially with all the problems and debt that we are in. I personally view marijuana just like tobacco, and I think the public would as well. Most businesses are offering incentives to quit smoking. I think that business would step up to the plate and offer to stop smoking marijuana. Businesses are already making their employees pass drug tests on a regular basses and I don’t foresee that stopping. Many people are petitioning the stopping smoking in public places and most of the time being successful. Smoking Marijuana would fall under this category, anti smoking advertisements can include marijuana as well. I truly do believe that in my generation smoking in general will become a thing of the past, if you do it you will hid it, and society will phase it out just like every other fad.

Real Cash for Game Cash

An article from the Philadelphia Inquirer recently explored the issue of people spending money in order to purchase gold in World of Warcraft. Most of this gold comes from companies based in China using cheap labor and in game exploits to farm large amount of gold and items.

The main benefit to purchasing fake gold with real money is that it lessens the amount of time players have to spend gaining money. For $60 a player could by 500 gold pieces, which would probably take them a couple weeks to get on their own. This time can be spent doing less tedious actions and having more fun. Items and accounts are also for sale on the IGE website, which makes the amount of time spent on getting the best items cut drastically.

A major flaw in purchasing fake gold is that part of the fun of the games is getting to the higher levels on the player's time spent. Being able to purchase anything makes it easy to get into groups or guilds because of having super items. This is a problem for guilds with players using purchased accounts because the player might not know fully how the game operates. The most striking flaw is the amount of inflation that will occur because of this system. Because very large amounts of gold are being sold and entering the system, with very few outlets for the money, prices will rise dramatically over short periods of time, causing the entire economy to be hurt.

With all things considered, purchasing gold is a part of online gaming that will be impossible to remove and in game economies will have to find ways to adjust to the rapid item and monetary inflation.

Economics should not trump ethical standards

This week Presindent Bush came to an agreement with the Prime minister of India to allow India into what the article calls, the "nuclear club." What this means is that India will be allowed access to nuclear technology of the United States. India hopes this will help lessing the energy crisis the country has been experiencing.

The flaw in this agreement is that President Bush left out a crutial safeguard called the Nuclear Non-Proliferation Treaty.

The article points out the values of the agreement with India. This agreement opens up a great deal of jobs for the people of India. This increase in jobs will result in India being able to spend more money on American products. It is estimated that American corporations in India will florish with this agreement with the US.

The article also questions weither this is a good thing. Are we giving up safeties in order to obtain economic gain? If so, is giving up safeguards a thing we are willing to take a chance on? It seems to me that many post 911 Americans, and the current Bush administration would value the saftly of our country compaired to the possible economic gain in India. It cannot be argued that the US has a president that is fighting to bring democracy to the world at the cost of drastically increasing our national debt, and he stresses how inportant the protection of our nation is. For these reasons I would think the President would be more cautious when making agreements with other nations that could be seen as wise econmicly but unwise when considering safety.

Monday, March 06, 2006

US government near to debt limit

US Treasury Secretary John Snow has told Congress to raise the government's credit limit in order to avoid having some of its operations shut down.The government needs Congressional authority to borrow and the total accumulated debt is now close to its limit of $8.2 trillion (£4.7 trillion). If the limit is not increased, the government could find it difficult to pay debts or borrow money.Congress is expected to agree to an extension, averting any debt crisis.
The government borrow money that they can make better from this. The money include tapping the civil service pension funds and using the $15bn in the Exchange Stabilisation Fund, a reserve held for smoothing out volatile movements in the value of the dollar in currency markets.

Coming to a Bathroom Near You...

So apparently the kid's bathroom department is a growing market.

Kimberly-Clark is a multi-million dollar corporation that is continuously shifting their focus more and more towards children and their bathroom habits.

Kimberly-Clark's journey into the children's bathroom market started with baby wipes that double as moist towelettes for kids just starting to be potty trained. The company's latest innovation is kid toilet paper that has small paw prints on every piece of paper and a puppy or kitten on every 5th sheet to show kids what's the right amount to tear off. Parents are excited about the product claiming that their children use too much toilet paper and need to be taught how to use their resources more economically.

Kimberly-Clark will basically go without any competition into the emerging market. Their main rival, Proctor and Gamble, will continue in the competitive market for baby wipes but have yet to develop a children's toilet paper of their own. Will going without competition into a new market help Kimberly-Clark to develop its own prices or will the present cost of "regular" toilet paper set a guideline?

I wonder what the actual demand is for kid's toilet paper. Is this a market that's about to boom? Or is Kimberly-Clark about to spend too much money developing a product with virtually no audience?

Intel Aims to Get Back on Track

"You're just paying for the brand name". We have all heard that expression once or twice before, and many of us have purchased items solely on the brand name. I was skimming the internet and found the above article about Intel and their strive to get back onto track in the world of computer processing.
The article discusses how Intel is introducing its new chips for business computers, laptops, and desktops. They are going to unveil their new design at their twice-annual developers' forum in San Francisco later this week. This introduction is just coming of the news that there first quarter revenue will be much lower than they have previously thought.

When I was reading this article, I was thinking about my own personal computer. When purchasing my computer, I decided not to go with an Intel Processor, but instead decide to get the AMD 64bit processor. Many people are not familiar with AMD and their products, but they should be. There processors are the wave of the future. They have already unveiled a chip with two processing cores, and next year are expected to unveil a chip with four processing cores. Although many people do not know who AMD is, the company had nearly 22% of the global desktop market at the conclusion of 2005.
Then I began to think, why are people still paying for the overpriced (in my opinion) Intel chips when there are other companies that produce higher quality chips, and the consumer gets a better deal on the purchase? So I began to think, what will it take for people to get out of the trend of just buying a product based on the brand name? In my opinion I think people fall into this trap, due to their lack of knowledge concerning new technology, which is something that needs to be changed.


Also, how do you think the introduction of the Intel Processor into the Macs will affect their sales and competition with AMD?

Invisible profit is not important?

The great franchise in Houston Astros, Jeff Bagwell is forced to retire because of his high salary in 2006. Specifically, the problem is that if Roger Clemence returns to play, the total salary of the Astros in 2006 will be more $100 million. The Astros' purpose is to save $17 million from Bagwell's retirement. The management of the Houston Astros thinks that Bagwell probably isn't going to be able to play at the $17-million level because of his age and health. However, the great franchise in Astros, Jeff Bagwell has sacrificed his whole career for Astros and fans. Obviously, many Astros fans comes to stadium to see him playing during a season. And they buy a lot of products such as bats, balls, and jerseys. Also, many people are becoming Astros fans by his playing. In my opinion, the Astros should consider how important Jeff Bagwells career and reputation is for the team and fans. Do you think Bagwells presents contribution for total margin of a company?

Call center leaving behind 150 jobs

Alliance Data Systems, a local call center is closing the doors on its Reno, Ohio facility. The Reno location was established as an overflow facility for the main office located in Columbus, Ohio. The local office took the extra calls during peak calling periods that could not be handled by the Columbus office. Due to the expansion of 70-80 positions in the Columbus facility, the overflow center in Reno is no longer needed. The Reno, Ohio employees were offered the chance to relocate to the Columbus office. The closing of the Reno office will effect the sales tax collected by the city, as well as the loss of jobs for the area. Employees electing not to relocate to Columbus will be given a severance package.

DaimlerChrysler to Recall Mercedes Cars in China

DaimlerChrysler AG, the world's fifth-largest automaker, will recall 23,677 Mercedes-Benz S- Class cars in China to fix defects, the General Administration of Quality Supervision, Inspection and Quarantine publish this statement on its Web site, citing the automaker. The cars were imported/made between October, 1998 and March, 2005.

After China started to implement vehicle-recall rules in October, 2004. Since then, 25 automakers including Toyota Motor Corp. and Honda Motor Co. have recalled about 370,000 defective vehicles, according to the agency. When countries are trading with each other, if the quality would not be assured then gradually there would not have any trade made. Now every automaker is staring at this last piece undeveloped market: China. If they want to do well and grabe a of chunk the market, they are better first working on their own part of job.

Glass Companies Cope with Energy Prices

Fenton, like many other local hand-blown glass industries, are beginning to feel the energy crunch as factories struggle to stay in the marketplace. Although the natural gas has been an issue for awhile, many businesses are really beginning the feel the full effects. These businesses have to decide what to do between the high natural gas cost, which is needed to produce the hand-blown glass, and the number of employees they are able to support. According to Tome Fenton, plant manager and vice president of Fenton Art Glass Co. in Williamstown, "[w]e estimate that we will have paid 40 percent more for gas by the end of the year than we had budgeted.” “We had already budgeted a hefty increase." Although some of these businesses are doing what they can to stay in business, aka layoffs like Fenton has done recently, some businesses, like Davis and Lynch, are trying to get by through cut-backs on other ways instead of layoffs. "Natural gas is a large portion of our cost," said Charlene Geiger, office manager for Davis and Lynch. "We run the furnaces five days a week. Due to the increase in natural gas, we shut down one crystal tank for a few weeks in October." Shouldn’t the government or some other organization be looking into the natural gas increases? What about help from the Industries of the Future-West Virginia (IOF-WV)? An organization that works to help save energy at the state's energy-intensive operations. However, they could only go so far. "With energy efficiency measures, you can probably look at a 15 percent reduction of energy cost," IOF-WV Director Carl Irwin said. "If you're really good, maybe 20 percent if you implement everything you possibly can.” However, for businesses, it is sometimes hard to do these energy efficiency measures because of the cost. Like I have said before, when will the government look into this? Before of after the businesses go under?

AT&T Sees 10,000 Job Cuts After BellSouth Deal

AT&T Inc. estimates there will be about 10,000 job cuts in the next three years (between 2007 and 2009) because of it's acquisition of BellSouth. The acquisition cost AT&T almost $70 billion dollars, and the company is looking to save money in any way possible. The job cuts would be part of a plan save AT&T nearly $20 billion dollars, and would only represent about three percent of the combined work force. The company also looks to save money by cutting down on advertising.

As you can see, AT&T realized that the acquistion of BellSouth would allow one company to enjoy the maximum benefits, and increases AT&T's growth profile. The merger brings to AT&T both BellSouth and Cingular Wireless.

The merger also begs the question, "who will be next?" Verizon stands firm on its position to simply buy the rest of Verizon Wireless.

AT&T's acquisition will put the company in debt, which is why the need to save money is so large. It also puts a lot of pressure on the competition to make their companies larger as well. As a result of acquistions like AT&T's, consumers should benefit greatly as well.

Does Eliminating Discrimination Hurt The Economy?

This article discusses a Hawaiian school's policy of only accepting those students of Hawaiian blood. Lawsuits are being brought against the school, claiming they violate anti-discrimination laws. If the court agrees, this would cause a shift to the right of the demand curve. With the requirement of being at least some part Hawaiian blood lifted, there will be a dramatic increase in the number of applicants. This opens up enrollment to many who would not otherwise have applied, given the restriction. Also, with many people desiring to live in Hawaii, this will attract many families who can be assured that their kids will go to a good school. This shift in the demand curve will cause the price of tuition to rise, and the number of students accepted to increase. This means that some current students may no longer be able to afford to attend. Also, the increase in the number of students accepted may decrease the quality of education. Teachers can spend less one-on-one time with each student. In my opinion, this would not be an economically sound decision - morally sound perhaps, but not economically sound.

Sunday, March 05, 2006

The service sector increased in February.

The service sector, employment, and new orders increased in the U.S. this past month.

In the U.S. economy, about 80 percent of business is made up of the service sector. This includes businesses such as restaurants, hotels, and banks. Out of 17 industries, ten industry sectors reported growth in February. These industries include mining, insurance, communication, business services, health services, public administration, utilities, construction and retail trade. These increases are measured using the Institute for Supply Management Index; the index rose from 56.8 this past January, to 60.1 in February.

This is good news for the U.S. economy; as more people get jobs, supply increases. Business activity also increases. As employment increases, people will feel comfortable spending more money, and in turn demand will increase. The economy will then stabilize.

Global Warming and Maple Syrup

Global warming is hitting New England hard in recent years. Over the past 100 years the average temperatures in the Northeast have increased by almost two degrees. In addition the growing season has gained about eight days, according to an UNH researcher. This many not seem like much, but it is enough to drastically affect the delighted environment of the Northeast, which is accustom to frigid winters and mild summers. The warmer winters is especially harmful to the maple syrup industry. According to the article, "warmer days and cold nights get the sap running in late February or early March, and the season lasts until the trees bud in April" but the warm winters are cutting this time down by extreme increments. According to a study in 2001, the maple syrup industry could disappear from New Hampshire within this century.
This may seem like a simple and easily ignore issue but it does bring up some interesting questions as to the future of maple syrup in America and in general. Without some of the main producers in the Northeast, the price of the syrup is sure to rise somewhat. Maple syrup is already sold at a increased price due to its short harvesting season and unique growing climate, but its prices can grow to huge sums of money. Maybe this could increase even the price of lower cost mediocre syrup in the future. In turn this could increase the price of baked goods, as well as other syrup. Even the quantity demanded for pancakes, a compliment good, could decrease due to the rising price of syrup. A final thought is that Canada is also a huge producer in the maple syrup industry. Perhaps we will see an increase in trade or smuggling of syrup into the US. Imagine, black market maple syrup!

Capitalisim Takes A Blow...

As many probably already have seen on news reports from around the country. A teacher named Jay Bennish in Colorado is the center of a fiery debate of freedom of speech after comparing President George W. Bush to Hitler when analyzing the State of the Union with his 10th grade Geography class. Bennish has been put on administrative leave without pay and students for both sides are in an uproar. The story is making headlines around the nation and sparked my interest. Although I have my personal opinions of comparing the President to Hitler I will set those aside and examine something else that Mr. Bennish lectured about, capitalism. Mr. Bennish said the following,

“If you don't understand the economic system of capitalism, you don't understand the world in which we live. OK. Economic system in which all or most of the means of production, etc., are owned privately and operated in a somewhat competitive environment for the purpose of producing profit. Of course, you can shorten these definitions down. Make sure you get the gist of it. Do you see how when, you know, when you're looking at this definition, where does it say anything about capitalism is an economic system that will provide everyone in the world with the basic needs that they need? Is that a part of this system? Do you see how this economic system is at odds with humanity? At odds with caring and compassion? It's at odds with human rights."

Anytime you have a system that is designed to procure profit, when profit is the bottom motive – money – that means money is going to become more important potentially than what? Safety, human lives, etc.”
Wow, my thoughts are he doesn’t agree with the American way. Did anybody else sense that? Well after reading this I started to look at capitalism and realized that in class we are talking about a lot of fundamental parts of capitalism that help keep at least some of the economy from becoming the monster that Mr. Bennish believes it has already become. Tools like price ceilings, price floors, quotas, licenses, “sin” taxes, as well as other governmental protections help to keep the markets in line. Although a price ceiling is not often used aside from rent, according to our text, they are there when needed. Besides, who likes the government stepping in and saying that you can only sell a product for a certain price and even if people are willing to pay more you just can’t accept it. I don’t know about Mr. Bennish (although his words would make me assume that he would disagree with me on this) but I am proud of the economic system set up in America, there may be some problems, but we have created a system that is valuable to entrepreneurs and those who actively participate in our capitalist markets.

Lamborghini Keeps Supply short of Demand

Italian automaker Lamborghini is keeping a watchful eye on the Chinese, Russian, and Indian markets. Many people in these markets are looking to buy expensive vehicles, and the company is aware of the potential profits that could be made. Lamborghini would consider it a success if they were able to sell 20 to 30 cars in each of these developing countries. This is because an average Lamborghini sells for around $275,000. At this price, the company is able to make substantial profits. This is evident since sales and profits have increased in the past five years. Lamborghini CEO Stephan Winkelmann said that the company tries to keep supply shy of demand. He claims this causes strong loyalty among buyers. In my opinion, this is a very smart way to do business, as long as the company is still making a profit. By keeping supply down, they are guaranteeing a future market for their vehicles. Assuming the buyers are loyal to the Lamborghini brand, they will be willing to stay on the waiting list. They may have to wait a year to get their new Lamborghini, but the cars are so rare, they figure it is worth it. This does mean that Lamborghini is losing out on potential profits. There are people willing to spend $275,000 on a car they are unable to find. Economists would look at this move as being inefficient, but I see it as looking to the future. While they might not have an immediate sharp increase in profits, the company will see a steady increase in profits overtime.

Does China need more progress?

"China needs to make more progress toward currency flexibility, and its growing global role brings greater responsibility" Treasury Secretary John Snow said Friday.
This is what Snow said at Stanford University, he insisted that "Adjustment of global imbalances is a shared responsibility that ust be undertaken in a way that maximizes sustained global growth". He is pretty much unsatisfied with what China did with the currency flexibility and urged China to open up its financial sector to improve market efficiency. Just have a look at the outcome of the increase of currency flexibility: for China itself, export may be influced in a way due to the increased price. Futher more, the price of the consumer goods are also rising. It makes goods which are "Made In China" less competitive. The increase of currency flexibility does good to individual Chinese people but it is hard to say if it has greater positive or negative infuluences to the whole country.

OPEC Unlikely to Curtail Production

This article highlights concerns over the price of oil for the oncoming months. Because of the warmer-than-usual winter here in the United States many oil producers now hold an inventory of oil which would expect the prices to lower considering the US is the world's largest consumer. One problem OPEC is facing is the increasing threat from unstable countries such as Iran and Nigeria are allowing prices to remain high. OPEC will meet this Wednesday to plan for the "Spring" season - which is typically their lowest demanded season. Due to this, analysts fear the lowering of prices due to the lowering of demand. Some Oil Ministers want to cut production due to this potential of less demand, however the common theme is the fear and threat of attacks on Middle East pipelines. If an attack should occur in Iran or if Iran faces economic sanctions by the UN Security Council concerning its nuclear program, producers worry about the sudden demand that would result and OPEC's ability to keep pace.

It appears that, though there is an increase in supply, we will pay the same rates at the pump we have for the past few weeks with little hope for a price cut in sight. Would consumers rather pay much cheaper prices now for gas and then *if* something were to happen in the Middle East pay much higher than ever before or will consumers be more accepting of the current trend? Either way, it seems we will be paying the same either way in the long run.

Saturday, March 04, 2006

Oscar with tax?

Entertainment industry is one of the major industries today. There are thousands of movie stars, editors all around the world. Every year, they are make a great number of movies. How to define the quality of a movie and how to say if an artist is good or not? Awards maybe is the best way to identify the quality of a movie.
Oscar is one of the most important awards for movie makers. The movie makers who win the Oscar will not only recieve honor, a golden statue and a lot of gifts, but also a income tax bill.
According to CNN news, the star who win the Oscar will recieve a great number of gift bag. It is said that the gift bags have estimated to be worth more than $100,000. Some people says these gifts might be treated as a taxable income. However, the other group of people argued that they are just gifts and might not treated as a taxable income.
Right now, this is a contriversial issue. The IRS spokeman Terry Lemons said, "It really depends on the facts and circumstances of each of these cases."

Kraft shuts plants and axes 8,000 jobs

Kraft Foods Inc. is in the middle of its plan to cut 14,000 jobs and close 40 plants by the end of 2008.

Kraft takes this move due to the increase in resent years of the price of raw material of cheese, coffee and other ingredients; specially, they are the main material for Kraft.

The increase in the prices of raw material will lead a shift in Kraft’s supply. As the cost to produce increased, Kraft had to make the choice: weather to pass the increase cost to the consumers or cut the cost of the company to keep the price unchanged. In other words, weather to raise the prices of its productions or produce less. As we can see in the article, Kraft Foods Inc. chose to cut its cost to produce to keep the price as the same as before. There was another factor that forced Kraft to make this decision to cut jobs and close plants. That is the slow down of the sales. It means there was a surplus of the supply. Therefore, Kraft’s move will reduce its output as well as save spending to meet the equilibrium of the market.

Super Bowl's Price Bubble

According to the information in Mercury News.com, the super Bowl, the most-wachted and popular teleivision show in the US, is going to get $2.4 million for its advertising price.

Go back to the advertising history of the Super Bowl game, in 1967, the price for broadcasting a advertisement in the super bowl game was between $37,500 and $42,500. In 1985, the price increased to $500,000 and jumped to $1 million in 1995. And in 1996, the price reached 1.2 million, which is half of the price in this year.

More surprisingly, broadcasting three advertisements in the Olympic game can only cost the price for one in the Super Bowl game. Moreover, the Super Bowl's advertising price is still going up. Despite the increasing prices, "there may not be a stampede among big advertisers to purchase time during the Super Bowl this year."

What caused the huge demand of the advertising business?

First, according to the statistics in http://sports.yahoo.com/nfl/news?slug=ap-superbowl-ratings&prov=ap&type=lgns, The game was watched by an estimated 141.4 million people in the United States. Compared to the normal rate, it definitely provides a prime opportunity to those advertisers to propagandize themselve and increase their reputations. Furthermore, the advertising part of the Super Bowl game has already become a distinct part from the game itself. Majority of the audience are also looking forward to see the fancy advertisements. The two reasons above can explain the advertising price bubble of the Super Bowl game, for it can be seen as expectations of the factor for shifting the demand curve to the right. Following the increasing price of advertising, the demand curve should be therefore decreased. However, Considering about the advertising benefit for Super Bowl's adertisements, the demand changed in any given price and the entire prices are higher than any other television programs.

Thursday, March 02, 2006

The $92 Million Heist

This article is concerning a huge man hunt for the gang in England that stole over $92 million dollars. The gang, dressed as police officers, kidnapped a cash depot's manager and his family at their home. The gang then forced the manager to give them access to the depot. What is interesting is that there has been a massive man hunt for the gang members and how much it is costing the police. When these people are brought to court they will be charged with kidnapping and stealing the money. What about the money that it takes to find them? What about the money it takes to house the prisoners? What about the money that it takes to try the prisoners? Should this be taken into account? The government must be spending millions of dollars on just finding these people and prosecuting them, should the criminals be charged for this amount also. I think that these people should also be charged for the money that the government has to spend on them, due to the fact that if they got a real job and didn’t partake in kidnapping and bank robbing, that the government could have spent this money differently. Be it for better police training, community action services, or otherwise.

Home Prices – Skyrocketing

Based on Rex Nutting's article, "Average U.S. Home Worth 13% More", from http://www.marketwatch.com/, the average U.S. home prices raised 12.95 percent from the fourth quarter of 2004 to the fourth quarter of 2005, and show no evidence of slowdown.

In the competition of average house prices growth, Phoenix won the first place with a ratio of 39.7%, followed by Washington, 23.7%, then Los Angeles, 22.4%, San Jose, 20.8%, and Baltimore, 20.8%.

Although the growths of average house prices were at amazing speeds in some large cities, in some others, these speeds were not so fast. The radio of Detroit is the lowest 2%, followed by Dallas with 3.7%, then Houston at 4.4% and Indianapolis at 4.5 %.

So a question raised in my mind: what caused the home prices in U.S. to grow so fast? The leftward shift of the supply curve? The rightward shift of the demand curve? Both of them? Or the effect of the government?

According to a research by Harvard Institute of Economic Research, “Why have the house prices gone up? ”, the key reason to the rise in housing prices is relative to construction costs. Because of the new construction has declined sharply in high price locations, the supply curve shifted to the left.














The left picture above is declining construction intensity in select high house value markets San Francisco, Los Angeles, and New York PMSAs, 1960-2000, from the research of HIER, “Why Have The House Prices Gone Up?” The right graft is the possible effect that the declining construction intensity in select high house value markets caused. As less house producers would like to build and supply houses because of the high cost, the supply curve shift to the left. As a result, the prices have gone up.

Of cause, the house market is a really complex market which was affected by all kinds of variables. The analyse I gave about is just a rough one. In the research of HIER, they built a model of house market and use a more accurate way to find the reason. That is beyond what we have learnt right now.

The Social Reprecussions of Abortion

Abortion is a very controversial issue. There are people on both sides that feel strongly about it. Recently there was an article written in Newsweek discussing abortion and how Americans tend to feel about it.

It isn’t so much this article that poses an economic question for me. What I would like to discuss here is an observation that I read about over winter break; something this article reminded me of. In the book entitled Freakonomics: A Rouge Economist Explores the Hidden Side of Everything, Steven D. Levitt and Stephan J. Dubner claim that the decrease in crime rate in the 1990’s was partially caused by Supreme Court Decision in Roe vs. Wade allowing women to have abortions. Their argument was somewhere along the lines of that most of the women who choose to have abortions are low income, low educated, or simply do not want a child. Being raised by a mother like this has been found to increase the chance that the child will have limited opportunities and will have an increased likelihood of turning to crime. Therefore, by allowing these women to have abortions, the crimes these children would have committed aren’t being committed; which in turn led to a reduced crime rate for the rest of society.

As I read this a couple of months ago it intrigued me and I was wondering what others thought about it?