How do people like bankruptcy?

How much do you know about bankruptcy? Do you have or have you had any of the misconceptions listed below?

1. Everyone will know I've filed for bankruptcy.
2. All debts are wiped out in Chapter 7 bankruptcy.
3. I'll lose everything I have.
4. I'll never get credit again.
5. If you're married, both spouses have to file for bankruptcy.
6. It's really hard to file for bankruptcy.
7. Only deadbeats file for bankruptcy.
8. I don't want to include certain creditors in my filing because otherwise I can never pay them what I owe.
9. Filing for bankruptcy will improve my credit rating because all those debts will be gone.
10. You can't get rid of back taxes through bankruptcy.
11. You can only file for bankruptcy once.
12. I can max out all my credit cards, file for bankruptcy and never pay for the things I bought.

There is a kind of people who fear of bankruptcy. To them, vanity is much more important. They don’t want others to know they are filed bankruptcy, maybe because it is a symbol of “failure”. But actually, bankruptcy is a common economic means to get a lot of people out of trouble if they simply choose this way at a proper time. And some people do not choose to announce bankruptcy merely because they think bankruptcy will take away all the things they have had. However, according to the article, we know it will not cost you anything more to bankrupt, since bankruptcy itself is to help people get out of the trouble of debt with some of your mortgage. Considering some personal relationship, some people who decide to bankrupt do not have to worry about there would be no chance to repay their creditors.

On the contrary, another kind of people abuse bankruptcy. Before certain law was set up, some people take bankruptcy as their income by maxing out their cards or something. But as the law become increasingly precise, it is getting harder for people to bankrupt infinitely to lead their lives. However, the law is still not enough to prevent some people abuse bankruptcy. Can you think out any other suggestion to ameliorate the law?

Raise Minimum Wage?

Today's society is full of expenses. These expenses include things necessary for living such as food, clothing, and house payments. They also include things that aren't exactly necessary for living, but are nice to have such as a telephone, television, or a computer.

The fact is that all prices are constantly going up. Food, gas prices, electric bills, and phone and cable services seem to increase every year. Household appliances are also always going up in price because of new features the appliance is capable of doing.

People who are uneducated and just work minimum wage jobs can barely afford the things they need to live on. Costs of living are always going up, yet minimum wage is always the same. As shown on a minimum wage history graph at http://oregonstate.edu/instruct/anth484/minwage.html, minimum wage hasn't changed since 1997. This is the longest stretch with no change in the US minimum wage history.

In order for people to be able to have the necessary things to live on, minimum wage needs to be increased. Prices are just getting too high for some people to have a healthy lifestyle.

US construction spending tumbled in July

According to the article of “Construction Spending Tumbles” published on CNNMoney.com, after seasonally adjustment, the US construction spending fell to an annual $1.2 trillion rate in July, which was the steepest decline since August 2001. This much greater-than-expected decrease was combined by a 2 percent decrease in private residential construction and a 0.3 percent increase of private nonresidential construction.
As we know, house holds buy new houses as part of the investment, and the quantity of investment goods demanded depends on the interest rate, which measures the cost of the funds used to finance investment. If the interest rate rises, fewer investment projects are profitable, and the quantity of investment goods demanded falls, which is shown in the downward-slope investment function. In our case, there was an upward trend in interest rates curtailing US home sales and building. However, the big decrease still caught analysts’ attention because they predicted that the construction spending could decrease by 0.1 percent while in the real world, it went down by 1.2 percent.
Were there any other reasons that caused the construction spending, which was part of the investment, other than the increase in interest rates?

Warning: Warnings are getting out of control!

WARNING: Do not read this newspaper while driving a motor vehicle, operating machinery or piloting an aircraft. Do not read newspaper over an open flame. Do not hold newspaper close to face while smoking a cigar. Do not use newspaper as a flotation device. Newspaper may be harmful if taken internally. Reading newspaper articles may cause irritation, nausea, drowsiness, uncontrollable laughter, weeping, cynicism, confusion, depression or existential despair. Keep out of reach of children.

Warning lables are everywhere! Most commonly they are on cigarette packs to warn that they are unhealthy, that hot coffee is actually hot, and medicine labels list various side effects that may occur. However, now they are even being found on dog leashes, rented movies, and biology textbooks.

In the United States, some warning lables are required by federal or state law, while others are voluntarily displayed on the product in order to prevent a lawsuit. In 1973, Congress voted to require labels on products containing toxic substances. The law created three levels of warnings: "Caution", "Warning", and "Danger!" Today's era is the era of warning, so consider yourself warned.

Some extreme warnings that are actually true:
Baby stroller - Remove child before folding
Heat Gun - Do not use as a hair dryer
Kitchen knife - Never try to catch a falling knife
Cocktail napkin decorated with a map of Hilton Head, S.C., - Not to be used for navigation
Bottle of dried bobact urine (for insect control) - Not for human consumption
Dr. Scholl's socks - Please be cautious as socks can be slippery when walking without shoes
Toilet brush - Do not use for personal hygiene

More of these true but strange warnings can be found in Dorigo Jones' forthcoming book "Remove A Child Before Folding: The 101 Stupidest, Silliest, and Wackiest Warning Labels Ever." You can check out more on this topic at this website http://www.mlaw.org/wwl/index.html.


Is America overprotective? Are warning labels a "safe bet" for businesses in order to protect them from lawsuits?

Yahoo: Now Hiring Economists

The Wall Street Journal notes that Yahoo has recently hired a team of economists and other researchers to stimulate research into ways of turning data mining into more revenue. For economists, this is an opportunity to test a variety of theories that they've been working on in their ivory towers.

Until now, university economists typically have had to rely on limited sets of historical data to test their theories. At Yahoo, they can tweak market conditions and watch what happens to the company's roughly 500 million monthly visitors.

Economic theory can be applied in a variety of settings. For instance, consider Yahoo's online dating site, Yahoo Personals. In 2001, Yahoo started charging users for the service and actually saw membership increase as a result. [Ordinarily economists would expect higher prices to decrease consumption. Why, in this case, do you think a fee led to an increase in use?]

One of the academics hired by Yahoo is Cal-Berkeley microeconomist Michael Scharwz, whose recent research includes a paper titled "Synchronization Under Uncertainty." Dr. Scharwz's research has clear implications for online dating:

These days, Mr. Schwarz is thinking about how to use economics to save attractive women from unwanted solicitations on an Internet dating site. One idea employs the concept of "scarcity," rationing the number of free messages each lothario can send. Another uses full disclosure, by displaying how many people a suitor has already approached.

The battle for internet supremacy may have more to do with economists than computer programmers.

The FairTax

Have you heard of the FairTax? It’s a tax system that is being proposed in congress that would replace the federal income tax and payroll taxes, including gift, estate, capital gains, Social Security/Medicare, and corporate taxes. The FairTax is based on a national retail sales tax. So the more items your buy, the more you are taxed. I’ve stated a few of the main points of the FairTax below:

- Americans take home 100% of their paychecks
- No federal sales tax up to poverty level
- Monthly rebate to account for necessities
- No tax on used goods. Amount paid to fund government is totally visible.
- Retail prices wouldn’t hide corporate taxes or their compliance costs
- The income tax exports our jobs, rather than our products
- The FairTax is revenue neutrality: Neither raise nor lower taxes so consumer costs remain stable


More detailed information on these topics can be found at http://www.fairtaxvolunteer.org/smart/FairTaxFAQ.pdf or for a more general view of the tax system, go to http://fairtax.org/.

I think the FairTax system would be great. The tax system as it stands now is large and cumbersome. I find this topic very interesting and would like to hear people’s opinions. Would it work? Could we see more jobs come back to the US? How would the political scene change if this system were used?

Birds May Travel, but Will You?

The bird flu has been discussed in the news for several months now. Both the World Health Organization and the Center for Disease Control in Atlanta say that traveling to countries that are known to be infected with the bird flu disease in both humans and poultry, will not be restricted at this point in time.
It has been said that the Avian Flu will arrive in North America sometime this year, 2006. This will result in a pandemic where scientists have mentioned an estimated 30% of the population will become infected and very ill. As you know, health care in America is already a mess and for all we know it will be up to us to help ourselves when this flu strikes.
When it comes to travel, for business or pleasure, people have the choice to fly and/or take a cruise, but because of this new bird flu scare, will people all over the world stop traveling? Think about the Caribbean Islands, villagers thrive off of tourism. If they do choose to stop traveling due to the fear of becoming infected by this flu, will economies deplete, sending airlines and cruise lines out of business? How about Disney World, the main tourist attraction in America, will it run out of business?

New York Women See 2 Sides of Prescription-Free Morning-After Pill

According to the New York Times, the morning - after pill or Plan B has now become available to buy it at any pharmacy without a prescription for women 18 and older. Making this pill simple to get has some women breathing a little easier, while other are worried that this might increase sexual behavior. Women now have the choice of taking a pill that can lower the risk of pregnancy by up to 89 percent. Plan B does not protect against sexually transmitted diseases or HIV. Barr Pharmaceutical Company has said it hopes to begin nonprescription sales of Plan B by the end of the year. The pills will be sold only from behind the counter at pharmacies, but not at convenience stores or gas stations. There isn't enough scientific evidence that young teens can safely use Plan B without a doctor's supervision, but Barr did prove that over-the-counter use is safe for older teens and adults. The morning after pill has been available by prescription since 1999 with many people having to pay around $300 for a visit to their local doctor in order to get the drug. Now the Barr Pharmaceutical Company, the maker of Plan B, has made the pill available to women at $20 to $40 a pack. Is it in a woman’s self interest to take the pill? Are there more unintended effects of taking the pill than just the possibility in the amount of sexual activity?

Schering-Plough to Pay $435 Million in Probe

Forbes.com reported today that pharmaceutical giant Schering-Plough, the maker of Claritin agreed to pay $435 million (talk about sunk costs!) and plead guilty to conspiracy to settle a federal investigation. The corporation has been charged with overcharging Medicaid for drugs as well as marketing them for unapproved uses.

Previously, Schering-Plough paid $346 million to settle charges that it paid bribed an insurance company in order to protect the market for its product, Claritin. Other charges and allegations that the company has been faced with include:

· 2 separate accounts of selling different cancer-fighting drugs for uses which had not been approved by the FDA.
· The sales department determining which doctors received grants to run continuing medical education programs (presumably based on which physicians used their products).
· Providing false data to the government’s Health Care Finance Association about the price of Claritin Redi Tabs © to secure that HMO’s business, as well as attempting to supply them with free drugs.

Part of the settlement includes a stipulation that the company adds a section to their corporate integrity agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services, which will require Schering-Plough to monitor their marketing and drug pricing in the future, as well as make amends for their past manipulations.

Incidentally, Schering-Plough has 32,000 employees worldwide and makes approximately 9.5 Billion dollars annually. After the settlement was made known, their stock rose 41 cents (2 percent) on the New York Stock Exchange.

Should the government be allowed to interfere to this degree in a free market economy, if the general public is not aware of a corporation’s abuse of its position? Would this be possible in a laissez-faire system? Are the penalties they impose even effective, if a corporation is as wealthy as this one? What if the cancer fighting drugs really do save lives- does the FDA have the right to deny patients’ a chance to survive? Does this take away individual choice? And, perhaps most importantly, is it coincidence that after being charged with a lawsuit, the companies stock prices jumped? What does this say about the American economy?

English Only Town: A Good Idea?

I was doing homework while listening to the news last week when something caught my attention. A New Jersey town is considering making the town an English only town (English would be town's official language). The question of YES or NO will be put to voters come election time in November. The mayor seems to be in full support of the idea saying it would "unify the town." If this is passed it would require all businesses to conduct all business in English unless otherwise required by State of Federal Law.

This could have several repercussions, but one concern is the definite economic trouble it could cause the city. If part of the population does not speak/read English, then they will either relocate, or at least take their business elsewhere. Either way, it could cause economic problems for the city. What do you think the best course of action is? Would you vote yes or no?

fuel costs weigh on consumers

Gas prices are still on the rise and home values are decreasing, so should it be any surprise that our economy is in a slump? With the gas prices taking such a high toll people are focusing more on necessities and are spending less on impulse buys. Applebee’s is even suffering from the gas prices because people are less willing to spend money on dining out and are opting for the less expensive meals at McDonald’s. The purchases of many expensive items are being avoided like new cars, vacations, and even remodeling the house. Many Americans are changing there complete lifestyles from the route they took to work to weekend plans . It is difficult for Americans to have to make such difficult tradeoffs between things they want and things they need.The slump says a lot when even Wal-mart is seeing a decline in profits.
How much longer are we going to be in a slump? What other unintended consequences will arise due to high gas prices?

America's Drunkest Cities

Forbes.com reports on the "drunkeness" rankings of 35 metropolitan areas within the United States. Rankings were based on state laws, number of drinkers, number of heavy drinkers, number of binge drinkers, and the extent of alcoholism.

The top five cities are:

1. Milwaukee
2. Minneapolis-St. Paul
3. Columbus, OH
4. Boston
5. Austin, TX

Hmmm...is this something that Milwaukee can be proud of? (Should Columbus be worried that it is only ranked #3? After all, Columbus has a reputation to uphold now that OSU's football team is the preseason #1 ranked team in country.)

How much weight do you give to such rankings? Take a look at the methodology behind the rankings and suggest an alternative system if you're not satisfied with the approach of Forbes.com.

Thanks to Division of Labour for the tip.

Waiting for Starbucks

Since Hurricane Katrina, New Orleans has been in the dumps, literally. Businesses are slowly moving in, even though many of the people who lived there before, have all moved back in. Because of this, many people wonder if they will have the jobs to support their families. According to CNN.com "Waiting for Starbucks", in order to deal with this problem, the city is allowing the local businesses to open first, and the national businesses later. Starbucks for instance, only has two of their four stores open, and Popeyes has sixteen of their thirty-six stores open. With the exception of Wal-Mart, which has eight of its ten stores open, many nation-wide companies have not moved back in. Cooperate America is afraid to move back in because they fear a lack of employees and also consumers. Lack of housing and cost of housing has caused more problems in staffing because many people cannot afford to move back in, in order to take their old jobs back. Plans to sell four of the five city hospitals have been broughten up because the city cannot afford to keep them all. Because of the shortage of workers and worker housing, the number of jobs in education and health is down 42%. Jobs in hospitality are down by 35% and in trade and transportation, down 28%. Yet, with all these jobs “open”, many relocated New Orleanians are still in search for jobs. In fact, one out of every four is unemployed. But, the national companies are doing their best to help. Wal-Mart tracked down every evacuated employee and their family members to tell them they could have a job at any Wal-Mart they could get to. Popeyes has gone to such lengths as to ask FEMA for trailers as a way of housing families, so they could have housing and a job. FEMA said they could only give them to teenagers, not their employees. Robert Pollin, an economist at the University of Massachusetts Political Economy Research Institute, says to tell employers to buy their own trailors in order to house the families, and then submit the bills. James Boyce, one of Pollin's UMass colleagues, agrees: "The record shows that business will respond if asked to do something that makes sense, is within its sphere of competence, and isn't financially suicidal. There's a lot of good will in this country's business sector, but it needs to be called on."

What do you think? Should local businesses buy their own trailers in order to house their employers? Do you think it would be worth it? Should the State, or FEMA for that matter, be more willing to help?

...Will that be smoking or non-smoking?

A brouhaha recently occurred in Ohio as part of the political tactics involved in the anti-smoking campaign to ban smoking from all indoor public places in the state. The group SmokeFreeOhio is pushing for a November ballot issue that would increase regulations on second-hand smoke exposure by banning all indoor smoking in public places within Ohio. Meanwhile, SmokeLessOhio is pushing an alternative ballot issue that would also limit indoor smoking but would allow some exceptions such as bars and restaurants.

Over in Europe, Scotland implemented the more stringent version of the smoking ban back in March of this year and the early evidence suggests that pub owners are now feeling the pain. According to an industry group, drink sales are down 10% since the ban. Pubs also report fewer visitors and reduced meal sales. Some even claim they could go out of business if business stays flat.

This raises an interesting tradeoff from society's point-of-view: what price are we (society) willing to pay for increased health? Are we willing to sacrifice bar and restaurant jobs for increased health? How many jobs? How much better health?

Pay More For Your Food

With each passing year the number farms is decreasing rapidly. The government wants to keep food at a cheap and resonable price. This causes farmers to lose money because the governemnt tries to control the cost of food. Many farmers end up having to pay more to produce the food than they actually make. This puts many farmers out of business. Also our environment is being depleated. The government had also driven us to buy processed foods with are not from the farmers and there for take away more revenue from them. The US only spends 11% of their income on food while other countries spend up to %20 for their food. The government has put policies into place but the hidden cost is the damage to the environment.
One idea was to buy food directly from the farmers. Farmers then know their demand prior to the season. For example, buyers will order the amount of chickens that they want for the upcoming year and then the chickens will be delivered directly to them. The down side to this is how many people know how to kill the chicken and then make it into editable food or how many people actually want to do that. There is a problem but is buying direct from the farmers the way to fix it?

Security and Oil

The US Energy Secretary wants Iraq to open it's oil sector. The US wants to help Iraq recognize the potential gain in doing so. The country would be able to bring in large benefits if they would begin to open up trade in oil. The US wants to help Iraq gain $20 billion in investments to increase it's production. Recently Iraq has lost more than $11 billion due to terrorists attacks and theft. Iraq feels that it needs protection before it can produce more oil. The US wants other countries to help out with security and investments. Maybe the US should not involve other countries and make the investments themselves. Our oil prices are high enough. We are currently giving Iraq protection so we should open up more trade with Iraq ourselves. With more oil our gas prices should go down.
Our troops are the ones that have been over in Iraq for 5 years. Why does the government want to help other countries get more oil. Our country needs the oil. I don't see why the government wants to almost give the oil to other countries when we are the country that have been fighting over there.

Japan Opens Trade

After 3 years Japan decides to re-open trade with the US on beef. In 2003 Japan stopped trade with the US because of reports of mad cow disease. Japan lifted the ban because our government allowed Japan officials to examine US packing plants. In 2003 alone Japan bought $1.4 billion worth of beef. It could be estimate that the US lost $4.2 billion in the past 3 years from not having Japan as a market. I wonder if the US will have the supply needed to ship to Japan. I would think that some of the smaller beef factories would have had to been shut down because our demand went down by so much. I believe that this is still a great benefit to the US.

Minimum Wage

The House voted today to the raise the minimum wage over a three year span to raise the minimum wage to $7.25 an hour. A serious issue for many Americans has become a circus show in Washington between Republicans and Democrats. Nobody can deny that the minimum wage of today is worth more than the inflation adjusted minimum wage of 30 years ago. In fact when adjusted to inflation, today's minimum wage is 30% lower than their counter parts in 1976.

For the Americans who make minimum wage this would be the first pay increase in almost a decade. A family can not reach above the poverty line if a worker only makes the current $5.15 an hour. With rising energy costs and inflation, we need a new system in place to calculate the minimum wage on a year to year basis. The states of Washington and Oregon index their wages to inflation, why can the national government not use this system as well? Also if minimum wage rises will this also mean the price for goods skyrocket?

Second Source: http://www.epinet.org/content.cfm/issueguides_minwage_minwagefaq

Report: US Airways CEO asked Delta about merger

US Airways CEO wanted to merge with Delta Airways after Delta filed for bankruptcy. Delta decided not to merge with US because they have decided to exit bankruptcy court next spring and become a stand alone company again. If this would have went through Delta could have possibly started to have some price discrimination because they could have more of the routes in the United States after they merged. Delta could have also started merging with more and more airlines until the government would have to step in and break Delta up into multiple companies, just like they have done to other monopolies in the past. How big would Delta have to get before they broke them up?

Free music can actually cost millions

After reading this article it goes to show that you could be part of a black market and not even realize it. In chapter 20 we learned about things such as public and private goods. Well the music and entertainment business provide a variety of rivate goods to consumers such as cd's and movies. But you always have those people that want a free ride and thus file sharing programs were invented. These enable you to download music and movies for free. This is actually illegal making it a black market. My question is what do you think they will do in the future to cut out all filesharing and piracy? Do you think that it will be around forever?