Lessons from Blogging 101

Thanks for those who participated in this first attempt at integrating a blog into my courses. I've learned a few lessons that I will apply in next semester's rendition of MariettaEcon.

1. The content of many of the earlier blog posts did not contain as much "analytic" thought as I was hoping. Rather, many of the posts merely introduced a topic and then "asked" what the reader's thoughts were on the issue. The original post should contain at least one conjecture or quibble regarding the issue at hand. I blame myself for this as not clearly explaining my expectations and not providing enough proper guidance early on. The comments, on the other hand, tended to be very good--I could see that some of you were quite passionate about some issues.

2. From a grading perspective, while it still seems to me that quantity is more important than quality at this point, I suspect I will change the grading scheme to assign point values to posts and comments rather than setting quotas. I will also put more emphasis on spelling and grammar in my grading scheme.

3. I did not have 100% participation, even though 5% of the student's course grade was a stake. Perhaps I should raise the weight of the blog beyond 5%--I'll give this some thought.

4. I need to do a better job of getting students to space out their blogs over the course of the semester---there was too much bunching of posts during the last week of classes. Such procrastination does not allow for adequate time to comment on late blog posts.

Hurricanes An Advantage For Florida Economy?

In a recent article the question was brought up of whether the hurricanes helped the economy in Florida. Is this even a possibility? Regrowth and new job opportunities are obvious advantages to a disaster such as a hurricane. Could these possibly outway the costs of a hurricane? In most cases the loss is going to be overwhelming compared to the very marginal benefits afterward. In Florida's case they talk about construction jobs mainly and how the huge increase in the number of construction jobs will help to balance the economy after the hurricanes. Do you think the increase in construction jobs could possibly balance the loss in the economy from the hurricanes?

Did America "embrace" Bush's agenda?

Today in class, we discussed a politician's positioning on the median voter model. Recall that this model suggests that a candidate seeks the support of swing voters of whom will ultimately determine the outcome of a political race. Using the median voter model as reference, President Bush was the most successful at reaching a "common ground" with Republicans and Democrats alike. But in an election with a 3% difference in popular vote, John Kerry had to be almost as close to the median as Bush was/had been.

In his acceptance speech, President Bush claimed that America has "embraced" his agenda, but Democratic senator Kent Conrad doesn't get it. "There's no free lunch," Conrad said, echoing Dr. Delemeester's teachings, "and at the end of the day our country will have a tremendous price to pay for this profligacy." What do you think? Did America truly "embrace" Bush's conservative agenda? What could John Kerry have done during his campaign to have gained the few extra feet of "common ground" that would have convinced the swing voters to have voted for him?

Demand for Energy Increasing

According to the United States Department of Energy, the demand for energy is still increasing, despite increasing prices. The demand is expected to continue to rise in the coming years, and the United States is making plans to supply more energy to meet the demand by producing more oil and importing more natural gas. Although energy use is expected to rise, the rate at which it is expected to rise is not as high as predicted last year, so the higher prices have had a small effect on the demand for energy. If the prices remain where they are now, energy consumption is expected to continue to increase at the current rate for industrial, commercial, and residential consumers, but the rate is expected to decrease for the consumption of energy in the transportation sector. This article suggests that the demand for energy is inelastic, but not perfectly inelastic.

College Athletes vs. The NCAA

We talked about the large revenues that college athletes bring the NCAA each year with their participation in collegiate sports. This Time Magazine article discusses how in February of 2000 46 college basketball player formed the Student Basketball council in order to bring there concerns about the rules and regulations imposed upon them straight to the NCAA. With such stringent rules and penalties placed on the athletes, they believe that the NCAA could possibly reward them better. One of there resolutions to this dilemma is a stipends for the athletes. What are your feelings on the payment of college athletes? Remember though the possible repercussions on competitive balance and league performance. Also would the threat of a sit down, as presented in the article, threaten the value of the league? The athletes control the supply of talent, and they create all of the demand so is a free college education enough of an incentive to keep the NCAA going?

Wine by mail

In 26 states it is legal to order wine directly from out of states. The question as to whether the 24 states which do not allow it have the legal rite to block the sales. The issue was brought to the US supreme court, and a decisions was past down December 7th. The issue was whether the jurisdiction to make the decisions was up to each state, or was left up to the federal government. There were two peaces of legislation that were looked at. The first was the 21st amendment, and the second was the interstate commerce clause. The interstate commerce clause is what allows the federal government to regulate business. The 21st amendment gave the states blanket authority over importing of alcohol into the state. The main finding is that the states do not have the rite to make these decisions. It went on to say that the state should not be able to discriminate in the favor of the wine producers that are in their own state. One other argument that is being addressed is the sale of wine to minors. The people against the sale by mail say that there is no established way to make sure that the people who order the wine are of legal age to consume it. This is being seen as a staling tactic and a way to slow down the movement towards legalizing this.

Outsourcing by Financial Frims

Outsourcing is a concept that is very popular with today’s financial industry. It allows the industry to increase efficiency and increase cost savings. The firms can also increase customer satisfaction, which is a goal that companies are always trying to obtain. In the long run it allows firms to provide a better service to their clients. I am a strong supporter of outsourcing. I feel that it helps to build a stronger economy because it requires companies to specialize in certain areas of business and therefore not have to do everything by themselves. The decision to outsource is ultimately an opportunity cost, because a corporation has to give up something in order to gain more profit. However what the financial companies have to give up is the highly confidential information of the clients. This is part of the risk in the decision to outsource. Risk can take the form of three types, operational, reputational, and legal. However I feel that the marginal benefit of outsourcing is higher then the marginal cost of the risk, so if I were a financial president, I would have no hesitation outsourcing some operations of my company.

http://www.frbsf.org/publications/economics/letter/2004/el2004-34.html

City or Country: Where do Businesses use the Internet

I found this article to be very exciting. I had never considered the Internet to be a tool that would change the style or location of where a company would do business. By looking at the Internet in this position, one can immediately realize the heavy economic change that this would pose to society. Currently most large companies reside in many major cities all across the world. Certain types of companies also inhabit certain cities, for example: automakers in Detroit, film production and distribution in the Los Angeles area, and financial services in New York. This article states, that through the availability of the Internet, these companies will be able to relocate to into rural areas. This would then allow the companies to create global villages, where they can communicate all around the world with the Internet and no longer have to be located near each other. If the companies moved out of the cities, they face immediate drawbacks, such as having to build a new office and learning to work without the availability of unlimited resources that you would have access to in the city. If the companies moved to rural areas, I also think they would downsize, since they could outsource work through the use of the Internet.
I feel that even though the Internet allows the possibility for companies to relocate to rural areas, majority of companies will stay in their city locations so that they can be in the heart of the industry. If they moved to rural areas, they would always be behind the times and constantly catching up with their competitors. The idea of relocating to the country is the same idea as telecommuting. It just doesn’t work. It removes people to much from the internal structure of the company which results in the marginal benefits of working outside the city being far less then the marginal cost of working in the city.

http://www.frbsf.org/publications/economics/letter/2004/el2004-24.html

the computer evolution

MariettaEcon.

The use of computers has had a great impact on the workforce of the world. “In this article the writer used research from five surveys, covering the period of 1984 to 2001, to examine two key aspects of the computer evolution: The spread of PC’s at work and the evolving wage differentials between individuals who use them and those who do not.” The article drew connections between a college education and the use of computers at the workplace. I also found it interesting that the wage gap have not gotten smaller between people who use computer in their jobs and those where computer usage is not required. In today’s world I find it hard to believe that a computer would make a difference in someone salary. I feel that most people posses the necessary computer skills to perform simple task drawing on knowledge from using their own personal computer. I also found it interesting that the article leads the reader to believe that just because you have a college degree means you are skilled in using a computer. College education and computers leads to one of the underlining economic principles of this article. A worker will now how to be weigh the marginal benefits and marginal cost of having a college education. The marginal benefits of having a college degree means you can have a job that requires computer usage which will ultimately lead you to be paid more, the marginal costs are the cost of college and the lost wages you could have earned doing a that didn’t require computer skills.
This article posted some very interesting numbers and I was glad to learn that my computer skills will come in handy at my future employer.

http://www.frbsf.org/publications/economics/letter/2004/el2004-19.html

Chiron Boosts Vaccine Market

The current suspension of Chiron, the company that had supplied most of the US's flu vaccines, has been extended until at least April. But in the mean time, Bush has been frantically searching it seems for other companies providing vaccines.

At least three other companies have been temporarily approved by the FDA for vaccinations, including Glaxo, a company that since 1992 has been supplying at least 70 other countries with vaccines but never the US. The stock in these companies is climbing quickly, and more are becoming interested in the US as a market for flu vaccines. So why did the US rely solely on one company to provide vaccines, and can we blame the government for the shortage panic this flu season? Sure, this seems great for all of the prospects for the industry, but this emergency approval for the companies rushing to get in line leaves me NOT rushing in line to get a flu shot.

BCS Screws Up Again

I think it is time to get rid of the Bowl Championship Series (BCS). This article shows that for the second year in a row, we are left with three teams in the National Championship hunt in college football, yet only two teams get to play for the championship. The main reason why a tournament stystem (the only way a true National Champion will ever be decided) is because the bowl games rake in a ton of money for the schools playing in the bowls. The Presidents of the Division I-A schools are in no hurry to change the system either, they will continue to get alot of money for their school and in their pockets. How do you think we can solve this problem so that everyone is happy? Is there a solution at all to make everyone happy? College Basketball and the rest of College footballs divions can do it, why can't Division I-A?

Gambling for Scholarships

When I went to school in West Virginia, I received the Promise Scholarship. This scholarship let anyone with a certain high school GPA and ACT or SAT test score, go to any public college in West Virginia without having to pay for their tuition. They would give you the average amount of money spent for a public tuition if you went to a private in-state college. I have since lost the scholarship since I transfered to an Ohio school, but that's ok.

This was first turned down by the state before it passed the second time it was voted on by the state representatives in Charleston. The reason it was turned down the first time is because part of the bill was allowing casinos to be built in the state, such as at the Greenbrier, and part of the money from those casinos and the state lottery would go towards the scholarship. Casinos are actually illegal in West Virginia. Many of the county representatives voted against it because it "promoted gambling." Now the money comes from the tax payers in West Virginia. With the lottery already going on for years, slot machines at race tracks such as at Wheeling and Charleston, and the fact that many bars have machines in their business that pay out money (if you have ever been in JP Henry's, you know what I'm talking about), what would be the difference if businesses in the state could build a casino and some of the money could go towards students getting an eduacation? People are already going to gamble if they want to, no matter what, so lets at least make it so that someone benefits from it other than the casino owners.

Will NBA's Revenues Fall?

We have all heard about and seen the brawl that took place in Detroit, between the Indian Pacers and the Detroit Pistons. This fight has been said to be one of the biggest disgraces in sports history. Charges were handed out to Ron Artest, Stephen Jackson, David Harrison and Anthony Johnson. With these charges if convicted some of these players face jail time. Also many of the fans involved were faced with very similar charges. My question to you is, do you think that due to this fight the NBA’s revenues will decrease? The fans and players were both charged so should there be a difference in peoples views on weather to go to a game or not, or will people feel that it is to dangerous. The NBA is trying everything in its power to get everyone from both sides (fans & players) to come to some kind of middle ground. The players have been suspended already, Artest for the entire season. Will the absence of these star players hurt the NBA’s profits and revenues though? Will fans take their blame and consider what happened to be mutual and continue to buy tickets and NBA apparel?

What is the price of life?

Halliburton, a subcontracting company based in Texas, has received around $10 billion in money from the government for work done in Iraq. Although Halliburton is being audited and investigated for its business practices, Halliburton is still the prime contractor in Iraq. Halliburton has suffered 55 deaths at the hands of militants and other reasons since combat ended. Can this be defined as an externality? Is it fair for Halliburton to continue doing business in a without protection for its workers?

The Smart Mergers Continue

It seems that the recent Kmart/Sears merger has become a fad with the major leaders of industries. Now, a possible merger between Sprint and Nextel is being considered.

A merger of the two companies, with Sprint being the third largest wireless supplier and Nextel being the fifth, would give both companies an advantage. Nextel would have access to Sprint's high-speed data network, and Sprint would have access to Nextel's well-oriented management team and business oriented base (and as a Sprint customer, I have to say they definately need some better management). Stocks for both companies have already raised because of the rumors and it is clear that this would be a profitable thing to do.

The merger would leave only four main wireless carriers in the industry. Less competitors, less price elasticity... sounds like a good idea. But is it always safe for these major competitors to be teaming up like they do? Maybe for the companies, but what about us consumers? What effect would the merger have on us, and will the merger trend continue?

A Sirius Problem

The value of Sirius stock fell sharply Wednesday after the increased popularity of the satellite radio service caused many analysts to say that the stock was overly priced. With the signing of Howard Stern to the Satellite radio provider, Sirius' popularity has increased since October. Sirius has been competing with XM satellite radio for years. Do You think that Sirius decision to sign Howard Stern was a good idea? Will Sirius be able to make up the losses that they are currently facing?

Can Giambi be an Externality?

For the past couple of years now we have had an ear full of steroid talk when relating to baseball. The latest story to hit the baseball headlines was not free agent pick-ups or any other kind of cool baseball topic it was Jason Giambi. If you have not heard Jason plays for the New York Yankees and has recently come out to admit publicly that he had used steroids. This brings me to my question, do you think what Jason Giambi or any other player using steroids for that matter is involved with the term externality? In class we covered that an externality is when decision makers do not consider all relevant costs and (or) benefits. With Giambi being on one the biggest center stages in baseball do you think that him using steroids has caused some sort of negative externalities? With all the fans who would have given anything to see their hero hit that long ball do you think that Giambi really gave a crap about their feelings and how they loved him oh so much? This is just one externality that might be present, can you think of any? May you think that sports figures should be free to do what they will, explain why.

Cingular and AT&T Combine

There had been rumors circulating about the merger of Cingular and AT&T. Obviously, I would be slightly interested because I am an AT&T wireless customer. One day a couple weeks ago, I received a letter and a large pamphlet in the mail. The letter told me that nothing had changed on my account and that the merger was complete. The large pamphlet told all about what Cingular and AT&T customers now receive and then all the new phones and great offers you can switch to for extra money. I am satisfied with what I have, but just out of curiosity I visited their web site(attached) and clicked on "I am an AT&T Wireless customer". First I learned that I now have access to the Cingular Allover Network, which is supposed to give me better coverage, because it's a bigger network. I also have unlimited mobile to mobile, which is the largest network of 46 million customers and I am eligible for Cingular's rollover minutes to name a few changes. Now all of this stuff sounds wonderful but I have always been a bit skeptical. As I read further, I found out that if I want all these new great things, all I have to do is call and change my plan. I am sure that would increase my payments. As I have learned in Econ all these recent mergers could be a negative thing for consumers. Sure this sounds like a great thing now, but what about in the long run. If they begin to monopolize the market, then what? In a few months will my bill go up a few dollars. No doubt, if it did they would claim it would be for my benefit. So they could offer more wonderful services. What do you think? Do you believe that customers will benefit from this merger or not? I guess time will tell for sure.

New California Emissions Standards and Auto Makers

The California Air Resources Board (CARB) recently passed new regulations stemming from a law AB1493 signed by for California Gov. Gray Davis in 2002. The new regulations require automakers to cut cars' greenhouse gas emissions by 25 percent starting with the 2009 model year and up to 34 percent by 2016.

Other states that follow California's rules on automobile air pollution, such as New York, Massachusetts, Vermont, and Maine may have to abide by the new regulations as well. New Jersey, Connecticut and Rhode Island are in the process of adopting the California air quality standards as well.

What this means for the automakers is that their emissions standards would have to be set at the California state standards instead of the federal standards because of the large and infeasible cost they would occur from producing two separate types that conform to both standards.

The argument that is currently happening is between the cost that the automakers claim they would incur based on these new regulations and the cost CARB estimates automakers would have under the new regulations.

The other argument proposed by the automakers is that the new regulations on auto emissions are actually designed to increase fuel economy standards which can only be set by Congress under the federal Energy and Conservation Act of 1975 which prohibits states from adopting policies on fuel economy. The CARB states that their regulations are not designed to increase fuel economy standards, but to limit automobile emissions to decrease greenhouse gases.

So, does it really matter if the new emissions standards set by the CARB does increase the fuel economy in the automakers' fleets when it is actually designed to decrease automobile emissions which lead to greenhouse gases? And, what responsibility is it of the state legislature of California if other states decide to mimic their auto emissions standards?

Title IX

Title IX, a law that was enacted in 1972, requires schools receiving federal funds to offer equal opportunities to men and women. This Time Magazine article proposes the argument that this law was originally a good idea, but might it be outdated in the present era? I am all for equality among sexes, but forced equality does not work. In creating this law I believe the government has created a type of ceiling on the number of men in sports. And as we all know, most interference with a free market will end in inefficiency. So why keep a law that is creating a gender quota at many schools. For efficiency and fairness sake, maybe the government should just let athletes (men or women) be.