*Recovered Post* US Productivity Increases - But How?

*This is a recovered post from December 6, 2005 at 5:33 PM*

Business productivity in the United States at a 4.7 percent annual rate in the third quarter, the largest increase in the indicator in over two years. This figure seems positive, right? Well, there is no way to physically measure the idea of producivity as a whole, so how does the US Labor Department comprise this number?

The answer lies in a few underlying measures the US Labor Department measures separately. The first of these is the demand for durable goods, defined as goods that are meant to last more than three years, such as automobiles. This measure increased 3.7 percent over this period. Another measure that is factored into the productivity calculation is the measure of shipments of complete goods from factories. This measure rose 1 percent in the period. Although numerically these add up to the 4.7 percent mentioned above, a couple of other measures exist that factor into the productivity measure.

The Labor Department has a measure of unit labor costs for durable goods in the United States. This measure compares the standard wage of an employee in various industrial fields with the unit cost of production of an item. The change in the wager rate over the course of a quarter is measured against the change in the unit cost of the items being produced by that employee. This comparison can measure productivity in that the unit labor cost is lowered, even if the wage rate increases, if the production of an item increases enough.

In addition, there is a ratio measured known as the inventories to shipments ratio, which measures how long it would take to deplete standing inventories at the current rate of sales for durable goods in the US. This rate, which stood at 1.17 months in October, indicates to producers whether or not to increase production of goods in industrial fields, thereby allowing the producers to artifically create higher productivity within their businesses.

All of these factors contribute to the single measure mentioned above, the 4.7 percent increase in productivity in the US. And this, indeed, is a very positive number.

As stated in Detroit news last wednesday, Ford will cut up to 30,000 jobs in North America within five years and close at least 10 assembly and component plants. They also stated they will announce the departure of up to seven top executives in the coming weeks. All these changes are expected to be unveiled by January 23rd, 2006.

These changes have become more reality than rumors because of soaring health-care and raw material costs, and a decline in U.S. market share. So far this year, Ford’s North American unit has lost more than $1.4 billion before taxes. Also fords auto sales have fallen every month but two in the last 18 months.

Therefore, because of recent layoff's, do you expect the unnemployment, welfare, and bunkruptcy rates to rise signifigantly?

Barking up toy business tree

Michael and Theresa Frasier started a business about a year ago selling dog toys. They stumbled on the idea after their dog, Chloe, choked on the stuffing found inside of a purchased dog toy. Theresa decided that it was time for her to start making her own, safer, toys for Chloe. She decided to make a toy that had no internal stuffing, instead opting for an all cloth toy. After realizing how much her dog enjoyed the toy, she decided that she had stumbled on a great idea. She and Michael decided to sell the toys over the internet, and their business was born. Theresa realized that by subcontracting the toys to a China based manufacturer, she could make a greater profit. The toys sell for $12 plus shipping and handling.

This small business example illustrates the growing burden that companies face when faced with the decision to make their product within the United States or outsource manufacturing to other countries where labor is cheaper. If small businesses are forced to outsource, then what implication does this have for the rest of companies within the United States? Furthermore, What implications does this example have on the unskilled labor force? Does the idea of social cost and benefit limit itself to one nation or on global terms?

Ban smoking

In this article, it talks about banning smoking in public places. This law is spreading acrossed the United States. While smoking is a private cost for the smokers, in public places, smoking is an external cost to non-smokers. By making this law, the government will be using Pigou's theory...if the smokers want to smoke, they will have to pay the price of leaving the public place, to go outside and smoke, so that the non-smoker has an equal right to breath clean air. By cutting back on the smoking in public places, will the businesses pick up because more people will come out knowing that it is smoke free? Or do you think that the businesses will be losing customers because of smoking being banned?

Identity Thief

This article talks about how people can become victims of identity thief. There was a study done proving how easily identities can be stolen and how identities are chosen to be stolen. Many consumer watchdogs are trying to push Congress to enact laws against indenity theif and making the punishment much harsher. Do you think that banks and businesses can do anything to help push the laws through Congress and do you think the laws will help cut down the amount of identities that are stolen every year?

Clothes & Where you should buy them

In New York there was a commercial for the New GAP store placed before movies in the theater, this is a very derranged setting of tearing apart an old store, to find out a new one is going in. GAP used to be one of the top sellers and it's customer number has decreased 4% over the year. Many people feel it is because GAP changes it's style so often compared to that of Abercrombie and Fitch and American Eagle. GAP used to be trendy and trendsetting, now today it changes so often that it's hard to determine what it is. One reason is that GAP seems to be a season behind, with fall clothes still being full price and hanging on the racks, although it is winter. And with sales decreasing what will happen to this fashion mogul?

Where should you buy your clothes, somewhere that's trendy or somewhere that's cheaper? What's the difference in the supply and demand of these two differences? Is GAP really on the verge of declining and even going out of business? Or is this just talk due to a bad publicity stunt?

TI to increase revenue in the fourth quarter

In this article the well-known TexasInstrument is set to increase their revenue greatly. This is because of the high demand for semiconductor products. These products are used in mobile phones. Stock prices have risen 2% compared to the 1% of the previous day. Prices will rise from 38 to 40 cents a share on a revenue $3.56 and $3.71 billion. Compared to the previous 36 to 40cents a share and $3.43 and $3.72 billion. There have been supply shortages over the past few months, but it has not been resolved due to the high demand of these products.

Is the trade off fair to consumers, that the supply is low while the demand is very high? The company is making a 35% rise in revenue compared to the 15% rise in revenue of Dow Jones Semicondutor index. Is it fair to the other businesses like Dow Jones that TI is gaining more and more money for unproduced product?

Tax Bill passed

NEW YORK (CNNMoney.com) - The House on Wednesday overwhelmingly approved a $31.5 billion bill that would prevent millions of Americans from paying higher tax bills in 2006 as a result of the alternative minimum tax.

The bill would extend for one year, through 2006, an increase in the levels of income that would be exempt from the AMT, a move that would shield an additional 17 million or so taxpayers from being subject to the higher tax next year. The $31.5 billion cost of the bill represents the tax revenue the federal government would lose if the House bill becomes law.

The AMT system was originally designed to make sure the very wealthy didn't dodge their fair share of taxes. But because the income-exemption levels were never adjusted for inflation, the AMT is set to capture an ever-increasing number of taxpayers, many of them middle-income, absent a change in the law.

That's why, in recent years, lawmakers have issued temporary "patches" that raise the AMT exemption levels for a year or two at a time. But temporary solutions are considered inadequate to address the complexity and fairness issues the AMT presents, so there also has been a push to eliminate the AMT altogether as part of broader tax reform package.

People must pay the AMT only if their tax liability under the AMT system is higher than it is under the regular income tax code. That means calculating their tax liability under both systems, which differ in key ways.

The AMT, for instance, disallows many of the deductions and exemptions allowed under the regular system, which can make your taxable income look a lot higher.

The House's AMT bill is separate from a $56 billion tax bill for 2006, which House lawmakers are expected to vote on Thursday. AMT relief has broad bipartisan support, but the separate House bill is a concern for Democrats, according to a report in Congress Daily and Heather Bennett, editor in chief of Tax Analysts' federal publications. Here's why:

The Senate in November passed its own tax relief bill that included AMT relief but did not include an extension of lower tax rates for capital gains and dividends -- a centerpiece of the House's tax bill and something President Bush has been pushing for.

The Senate and House will need to negotiate which elements from each of their bills make it into a final joint bill that will be sent the president.

"The fear among Democrats is that passage of a stand-alone AMT bill would free up $30 billion that Republicans could use to include the capital gains and dividend cut, or other GOP priorities, in the tax reconciliation bill," Congress Daily reports.

The extension of the investment tax breaks, currently set to expire in 2008, would come at a time when lawmakers want to reduce the budget deficit and have proposed doing so in part by curbing spending increases for programs that target low-income Americans. Critics say the investment tax breaks primarily benefit upper-income taxpayers.

After the House vote on Wednesday, Rep. Bill Thomas (R-Calif.), chairman of the Ways and Means Committee, said he thought it would be possible for lawmakers to complete their work on a final joint tax bill this year, Congress Daily reported.

But given all the other legislative business on both the House and Senate agendas before Christmas, there is a possibility that the conference on the final tax bill will get pushed into 2006. If that's the case, the Senate may try to pass its own separate bill on AMT relief before the holidays to make sure it's in place before the New Year.


Do you think the passing of this tax bill will affect the economy at all?

On the Internet?

The internet has put shopping at the fingertips of many. People can buy almost anything online that they could at a store; even prescription drugs. According to an article on ABC, there is an increasing black market for the sale of prescription fertility drugs. Some people don’t need all of their prescription and are willing to sell it at a fraction of its cost to other people in the same position.

Couples are looking for a way to have children and they are desperate. They are willing to take the risk that the treatment they are receiving could have been altered and could potentially make them sick or even cause them to die. Knowing that these risks exist and still being willing to take the drugs, people are causing medical professionals to worry.

What can be done to prevent this situation from occurring? Do you think that this practice of selling leftover prescriptions online will spread to other prescription drugs? If the black market spreads online, what impact will this have on the official economy?

Will The Rise In Gas Prices Ever Stop?

A recent article on CNN.com mentioned that one of President Bush's top economic advisors said that the gas prices across America is still too high even though they have fallen in the last few weeks. The national average fell last week to a price of $2.15 per gallon, which was the lowest since late June. It stated that average unleaded prices are still up 10% from last years prices. After hearing one of the top advisors even come out and say that the prices are still too high, do you think that gas prices will ever get to where they were about 2 years ago? Is there any chance of the average price of gas to get that low ever again?

Heating Costs Rise ..But Why?

In a recent article on CNN.com, it stated that a warm start to the winter will give some Americans a sense of relief on their heating bills. They said this because Americans are expected to suffer the worst heating price in the last five years. The Energy Information Institute came out with some numbers that said the average American household 25.7% more this winter than last winter. The average heating bill is supposed to reach about $989. This is the biggest percentage jump since 2000-2001 when the average heating bill rose 37% and the average bill came to be $774. Is this rise in the cost of heating bills due to the cost of natural gas? Or is the main reason due to the ridiculously high oil prices? What do you think the main reasons are for the big rise in the average cost of heating bills?

auto insurance

The price of auto insurance is based off of a variety of criteria: age, number of accidents, number of tickets, type of vehicle driven, etc. Based on an article in USA Today, insurance companies might be adding address and zip code to that list. A new study found that people who reside within a mile of a church are 10% less likely to be in an accident and drivers that live within a mile of a restaurant are 30% more likely to be the cause of an accident.

Is a person’s address and zip code a fair variable to add into the equation of what determines the price of auto insurance? If it is used, will the difference in insurance premiums change the behavior of people buying homes? Or will it be a minimal amount that will have little effect? How should insurance companies use this study when setting insurance premiums for their customers?

Abortion and Crime? Related?

A recent book titled Freakonomics by Steven Lewitt. This contriversal book is aboutthe hidden economics behind every day problems in society. One chapter of the book has become a large dispute between economists everywhere. The chapter deals with abortion and crime rates. The theory, quoting the artical, "Unwanted children are more likely to become troubled adolescents, prone to crime and drug use, than are wanted children. When abortion was legalized in the 1970s, a whole generation of unwanted births were averted, leading to a drop in crime nearly two decades later when this phantom generation would have come of age."
Some economist are now saying that Lewitts reasoning is very faulty. And that he left out some major points to consider. After reading this artical do you think that this is a good theory or has Lewitt got it all wrong? What do you think is the reason for the crime drop?

itunes

According to The Register, a UK based internet site, Microsoft is complaining that apple is building a monopoly with its downloadable music site, itunes. Microsoft states that only music downloaded from their site is available to use on the ipod, an extremely popular MP3 player that is available through Apple. Additionally none of the music downloaded from the itunes site is compatible with the windows based media players.
Do you think Apple is creating a rival monopoly to capture the portable music market and challenge some of Microsoft?s business?



http://www.theregister.co.uk/2003/10/20/microsoft_monopoly_says_apple_monopoly/

McDonald's Under the Tree

McDonald's is promoting reloadable gift cards for the holiday season in an effort to increase sales and decrease time spent in lines at the counter. The cards are available in $5, $10, $25, and $50 denominations. In an effort to increase the popularity of the cards, McDonald's has given away millions of $1 cards to Southwest Airline employees and customers, their own customers who bought premium chicken selects during a promotional time period, and through American Express credit card mailings. Do you believe that these reloadable gift cards will increase McDonald's sales? What do you think about this idea? Will and should other fast food joints follow in McDonald's footsteps?

Free Agent Fraud

the game of baseball witnesses players changing teams almost weekly. some big name guy goes here for millions of dollars while another big name guy goes there for draft picks or prospects. is all the trouble worth the benefit though. in some cases yes, but in some cases no as well. we've all heard of those big deals where a player gets signed for a ridiculous amount of money because he had a great season the previous year with a different team. what happens when they don't perform? was all the off-season work worth the mid-season flop? how do managers draw the line on whether or not the benefit of taking a chance on a player outweighs the work they put in and money spent to get him. it doesn't seem likely that we will ever find a way of knowing the future, so what factors do managers have to look out when determining their overall costs and benefits of taking a chance on the new free agent?

No more smoke

Across the country, it is becoming more and more common for establishments to be designated as non-smoking. Because second hand smoke can be just as dangerous to a person’s health as if they chose to smoke themselves; bars, restaurants and now hotels are starting to take action. By eliminating smoking in their establishments, these owners are protecting their workers and their patrons from the negative externalities of second hand smoke.

This article on MSNBC, discusses the actions of the Westin hotel chain. Westin, a company which has 77 hotels in North America, has decided to make it a policy that all of their hotels be free of smoking. Anyone caught breaking this rule will receive a $200 penalty. Westin believes that it may lose the business of smokers initially, but as time passes they expect to attract more guests who prefer the policy.

Do you think this is a good economic decision for Westin or for society? Will other hotels follow suit? If more and more businesses continue to eliminate smoking, do you think this will lead to a decline in the number of smokers?

Baseball a Billion Dollar Business?

after reading this article on what makes up the overall value of a sports team it got me thinking. is baseball merely a profit-making business investment for owners these days? mentioned in the article is the fact that the new york yankees baseball team has an estimated worth of nearly $1 billion. do owners think of baseball as a mere business investment or is it for the love of baseball? it is obvious that owners have the potential to make a lot of money off of a team. what about the bad teams who finish near the bottom of their division every year; are those teams as profitable. i like to think of it as a challenge for the owners. when their ownership begins they need to make the most profit off of the team as they can. to do this they have to win and get good fan support. so my question to you is, do owners simply think of baseball as an investment in which they are only out to make money and collect the benefits?

Iraq: Should we stay or should we go?

As we all know, the war in Iraq is continuing to grow less popular. Congressional meetings are showing the opposing opinions on the war. On one hand there are people saying that since the world's greatest army is protecting Iraq, the Iraqi government will have no incentive to protect itself. These same people may say that American forces have "become a catalyst for violence" (as Democratic Congressman John Murtha said in a speech supporting the deployment of American troops). Murtha suggested that a gradual pull-out could take six months. On the other side of the argument, people may say that pulling the troops out of Iraq will send a message to terrorists that we will "abandon our interests when we are confronted with murder and blackmail" (as stated by Vice-President Dick Cheney in response to Murtha's comments). In the past few weeks, Donald Rumsfeld and Condoleezza Rice have both commented on the possibility of withdrawing some of the troops.

According to this link, 54% of Americans think the war was a mistake. 32% of Americans believe that the war will result in a stable and reasonably democratic Iraq. A fifth of Americans support the immediate withdrawal of all troops, while most support gradual withdrawal over a long period.

How has the United States economy been affected by the war? Will the economy be better off if the government decides to 1.) pull troops out immediately, 2.) gradually withdrawal, or 3.) stay. And lastly, do you think that the war will negatively reflect upon Republicans in the 2006 election? How so?

Boeing Bounces Back

Boeing, one of the worlds largest airplane producers, is bounceing back from a slump in sales with their new line of airplane models, to combat lost sales taken by Europes top producer, Airbus. The most impressinve being Boeing's new 787 Dreamliner jet. The 787 is a lighter more fuel efficient plane. In fact, it burns an average of 20% less fuel that other planes its size. Plus, it conserves 24% more fuel then Airbus's A350. With gas prices like they are, many airliners are turning to the Dreamliner, ordering so many in fact that Boeing is outselling Airbus at a 10-1 ratio. Do you think its possible with Boeing's new model that they could monopolize the airplane manufacturing industry? Do you think that Airbus can bounce back? Furthermore, Dont you think its weird that a gas crisis can be beneficial to a company? Why do you think that is?

Schools ban soda?

Stephen Gardner is a lawyor for the Center for Science in the Public Interest. He is trying to file a lawsuite against soda companies for the sale of soda in schools. He claims that the calories a student consume from soda in school is a direct cause for the increasing number of obesity among kids. The major cola companies such as pepsi and coke are fighting against Stephen. They are claiming that cola companies are not the cause of obesity in schools. The sugar consumed by a student from cola in school is neglectable. Do you think that cola companies will ever be banned from schools? Do you think cola contracts to a school have a large effect on obesity in the classroom?

Ford seen cutting up to 30,000 jobs

Within the next 5 years Ford is going to close 10 of their plans and cut atleast 25,000 jobs. "Ford's pretax profits in North America have fallen from almost $1.8 billion in the first nine months of 2004 to a loss of nearly $2.2 billion for the same period in 2005. "

General Dynamics May Lay Off 2,400

General Dynamics may have to layoff 2,400 submarine workers, as a result of not getting more contracts from the Navy they expected to get. General Dynamics is one of two makers of Navy submarines and ships, the other company is Northrop Grumman Corp. of Los Angeles. The impending layoffs would be about 20 percent of General Dynamics total workforce which employs around 11,000 people. The shipbuilding industry has been in decline in the last few years, and most of the companies like General Dynamics rely mostly on Navy contracts, for the future I think they need to think about building different types of ships rather than just Navy ones. This might help in not having to get so many jobs in the future.

Gulf Coast Relief

According to FoxNews.com, President Bush's proposal of a tax package for the Gulf Coast region is currently being decided on in Senate. The tax package proposes special tax breaks for many businesses, the creating of low-income housing, and the restoration of historical buildings. This proposal is meant to spur on economic growth and expansion after the devastating effects of Hurricane Katrina. Will this special tax break bring out about the incentives needed to help rebuild the Louisiana area? How long will this tax be needed to help rebuild and will people be able to actually rebuild and want to live in the area again?
In addition to this, the Federal Housing Administration is creating a program in which they will pay for up to 20,000 mortgages for a year for those who suffered from the hurricanes this year. The purpose of this is meant to draw people back into their homes, especially those that are living so far away. Although families have an incentive to move back, they may not have any source of income due to damage of many businesses. The money to pay for these mortgages would come from the FHA insurance paid premiums, not from taxpayers. Would this help rebuild the economy in the South?

Katrina relief fund to distribute $90 million

Today, December 7 at 1:40 former Presidents Clinton and Bush are announcing who will be the recipients of the $90 million dollars collected for the Katrina fund. $40 million will be given to the governors of Louisiana, Mississippi, and Alabama for non- governmental needs. The $30 million will go out to 30 colleges and secondary schools across the affected states. $20 million will be given to a ministers fund which is administered by an executive committee of clergy. This fund will go to the needing communities and congregations.

It is a great thing what Bush and Clinton are doing here. $90 million dollars is a lot of money but do you think its really going to help that much. Sure it’s an excellent start but when you think about how large the area is Katrina destroyed, it’s not much. Three states were pretty much destroyed. Think about all the money that was put into those states to make them what they were before the hurricane. I don’t know if it’s possible to come back from this sort of loss. It can happen but not anytime soon. Its hard to say what is to be down there but what are your comments?

Gold Prices Rising

In London, gold prices are soaring and are on their way to keep increasing. Right now the price for an ounce of gold is about $520.30. The price has risen almost 17 percent in the past year. Experts think that there is a chance for gold to be as expensive as $1000 an ounce. Do you think that gold prices will reach this plateau? What do you think is causing the price of gold to increase?

Ford Plant Closings

Today, CNN/Money.com reports that Ford Motor Co. is planning to close up to 10 pleants and cut 25,000-30,000 jobs across North America. The restructuring is likely to happen over the next 5 years. The Detroit Newws is quoting people familiar with the plan that the proposal is to be presented to the board of directors today, Dec. 7th. However, it will not be revealed to the public until January 23rd.

The current proposal is much worse than earlier reports. The initial restructuring only had up to 3 plants shutting down and 7000 employees losing jobs. The paper reports that up to 7 of Ford's top executives will depart due to the shakeups in upcoming weeks.

The amount of cuts that Ford is planning is comparable to the closures GM has made. GM is planning to close 12 North American facilities and eliminate approximately 30,000 jobs.
The article states through the first 9 months in 2004, Ford's pretax profits had fallen 1.8 billion, 2.2 through first 9 months in 2005. What future problems will this lead to for Ford Motor Co. Why are profits down so much over the past few years?

How Restaurants Get You to Spend More

"A new study from British researchers at the University of Leicester and the University of Surrey concludes that when restaurants play classical music, diners are influenced to indulge more, specifically by buying fancy coffees, pricey wines, and luxurious desserts, reports Reuters and The Associated Press."

The study was done over an 18 night span in a restaurant in Market Bosworth, England. They alternated between silence, pop tunes, and classical music.

When classical music was played, patrons spent on average $40 per person, compared to $36.75 when pop tunes were featured and $35 when there was silence. Beethoven, Mahler, and Vivaldi encouraged patrons to spend more on dinner, especially on luxuries, such as coffee, dessert, fine wines, and appetizers.

Why is it that classical music makes diners feel more willing to spend money on items that make them feel more sophisticated or cultured?

Things continue to get worse

Earlier on in this semester I commented about Delta Airlines filing bankruptcy soon after another airline filed to. Well things continue to get worse for the company of Delta Airlines. A recent CNN article states that Delta Airlines now faces liquidation. This means they are at risk of being disbanded into other airlines. Delta is at higher risk of liquidation than its sister company Northwest Airlines. This is due to the fact that it has nothing to fall back on like Northwest Airlines. Northwest can fallback to smaller flights located throughout the northwest. My question is whether things like this will continue to happen to Airline companies in America, and what will happen to the economy if Airlines start to be liquidated?

View Shows On iPod

I read an article on Usatoday.com explaining the NBC/iPod deal to give individuals the chance to buy and view shows on their iPods. NBC has entered into this deal after ABC has been making profits from the same idea. It states that NBC's goal is to have all their shows being able to be downloaded by viewers. Shows can be bought through iTunes, annd then transferred to the iPod. The shows are being sold at $1.99 through iTunes, and Apple has sold of 3 billion videos since October. How do you feel new technology has changed the economy? In what direction do you think technology will go in another 20 years, in regards to electronics such as these iPods?

Johnson and Johnson buys heart devic maker corporation

Johnson and Johnson have decided to buy Guidant Corp. which specializes in making heart devices. They have settled on the price 21.5 billion. They have considered backing out though due to the legal issues surrounding the corporation when they recently had to recall thousands of pacemakers. If they were to back out now it would cost them 300 million dollars, plus the man hours and costs of making the arrangements for this transaction, but the latter two are sunk costs. Do you think that this is a bad business decision for Johnson and Johnson Co.? Do you think that Guidant Corp.'s reputation will affect sales? Would it be wiser to pay the 300 million and get out now?

Will Vioxx Put Merck and Us Down the Drain?

This article is about how the Vioxx trials will affect not only the drug company that manufactured the unsafe drug, called Merck, but also all of us... Vioxx was the Merck drug that was recalled from the selves last year because it increased the people's chances of having a heart attack. There were several people that died from these heart attacks and many that are bringing their cases before a jury to collect damages from Merck. Merck is the third largest drug company, but these trials may end up hurting the company a lot. Not only is Merck having to pay damages to the families that were negatively affected by Vioxx, but many employees will end up losing their jobs because of the losses that the company will suffer, which is millions and what could be billions of dollars. The problem with all of this, and even though Merck is fully aware of and should pay damages, is that there is a chance that the company will have to cut back expenses and employees. This company and this field of drug manufacturing is important to us. These are the companies that manufacture effective drugs that help us live and overcome diseases. Merck could be laying off people that will one day come up with a cure for cancer or AIDS. This is a very serious problem, especially because these drugs and other ones will be important as we ourselves get older and are prone to more diseases and illness. Should there be a smaller cap on the damages that Merck has to pay to families that is regulated by the government? What are other costs that Merck and us face because of the people going to trial over this? Do you think it is fair that people are going to trial over the Vioxx and gaining millions and billions of dollars? Is it more beneficial for families for receive damages or employees to keep their jobs (and in turn help society)?

Consumer Spending

In a recent CNNmoney article it was noted that consumer spending has increased over the past few months, starting with September. What does this really mean? Interest rates are going up, the housing boom has slowed, and people are still paying around two dollars for gasoline. Is this increase in spending only due to the upcoming holiday season, or is it a trend that will continue into the next year? The article also mentions that personal savings are still in the negative territory, what does this say about the increase in spending, and peoples attitudes toward the economy?
J. O'Dell

Cobra thirsts for India beer boom

Cobra Beer is going to take a daunting task and make a brewery station in Hyderabad, India. This beer has fewer bubbles than the average beer making it easier for consumption with spicy curry food. The company expects the Indian beer consumption to rise by 40% in the next 25 years. This would be a profitable increase seeing how India has one of the largest populations. Also, what makes India attractive is that a majority of the population is under 25. This will also save cost since duty costs are 400% when imported. This is definitely a long term investment since Cobra beer is 10-20% more expensive than other beers and beer is still an expensive purchase for many buyers. Do you think that this is wide investment? Will Cobra beer be able to profit from this investment?

Wal-Mart revving up for more discounts?

Wal-Mart discounts on limited quantity of holiday exclusives brought on stampedes and fights on Black Friday, which marks the start of the holiday shopping season."We said we will be aggressive this year," Scott McCall, vice president and divisional merchandise manager with Wal-Mart's toy division, said in a recent interview with CNNMoney.com. His interview indicated that Wal-Mart plans to keep on surprising customers with its low prices. "We don't want to tip our hand to our competition," McCall said. "In the last few days we will be equally aggressive or even more aggressive." With Wal-Mart's price drops, other retailers have no choice but the drop their prices as well, leading to an "unprecedented" level of discounts this year. Especially in the week before Christmas, as Wal-Mart hints at dropping their prices even lower. Wal-Mart had good sales in November but everyone else's sales were much lower, even with Black Friday sales. This will make retailers nervous about Wal-Mart's price drops in December, leading to even lower prices.
How low do you think retailer's will be willing to drop their prices in competition with Wal-Mart? Do you think their low prices will take away from Wal-Mart's profits?

Embraer shows Brazil's aviation flair

Embraer aircraft, a Brazilian owned company is ready to unleash its newest commercial jet, the Embraer 190. This new plane can sit up to 110 people. Though Boeing and Airbus have virtually dominated the jumbo jets, Embraer is specializing in the small to medium sized jets. This little nitch allows them to compete with the major airlines and still make a profit. It has currently made 177 orders to airlines around the world. With this new nitch fairly untapped, how will this affect the airline industries? Will other smaller airplane produces spring up?

Bush Urges Tax Cuts to Help Stimulate Economy

I found an interesting article in the Washington post titled, "Bush Renews Push for Extending Tax Cuts," in which it reveals Bush's plan to help 'renew' the economy by extending tax breaks to "investment dividends and capital gains." Basically, Bush plans to once again give tax breaks to the investors who are already doing well, in the hope that it will boost the overall economy. Several House representatives- moderate of course, do not condone the decision to approve a bill that would not only give tax breaks to the rich, but would also, "cut people off food stamps, squeeze student lenders, impose new fees on Medicaid recipients and slash federal aid for child-support enforcement." Needless to say that positive sentiments about the overall American economy are not very high, considering the problems this administration has had with national defecit, growing unemployment and unbelievably high gas prices, etc. Despite that fact that employment is steadily growing, gases prices are falling, etc. the gallup poll revealed that "58% feel the economy is gettin worse." Needless to say, not everyone is pleased with the overall job that Mr. Bush is doing for the economic welfare of this country.

HMV bid for Ottakar's gets review

Ottakar, a major bookstore retail shop in the UK, has announced that it will be merging with HMV, its largest competitor. But a group of small independent bookstores do not like this idea at all. These small stores feel that this could potentially create a monopoly by HMV bookstores. They have filed a grievance with the Forum of Private Business, which deals with such cases. Some believe that the level of competition will be lessened due to this merging. Ottakar has 137 stores across the UK and if this merge is successful then the new chain would control 23% of the UK market. Do you think that these small stores are overreacting? Is 23% really that much?

First class stamps to go up by 2p

Just recently, first class stamps in the UK will rise from 29p to 32p. There is a possibility that first and second class stamps will rise by 3-4p by 2010. Originally, the Royal Mail wanted to charge 39p for first class stamps and 27p for second class stamps. The justification for this increase in price is that it will help pay for modernization and the hole in the pension fund. This is will provide an extra �1.2 billion dollars. In the U.S. we have seen our price in stamps rise to 37 cents. Do you think that if the UK has to keep raising its price in stamps that people will start to e-mail more? How high can the price go before people find an alternative price? Or will people just pay the price no matter what?

Wal-Mart

This post does not come from a website but is information provided to me by my brother who owns a Pharmacy. A drug vendor supplies the plastic bottles to pharmacies that they distribute your pills in. Wal-Mart uses the same vendor that my brothers pharmacy uses. The drug vendor charges Wal-Mart $10 per box of viles and my brothers pharmacy $33 per box. Before the vendor struck a deal with Wal-Mart my brothers pharmacy was only charged $22 a box. After the deal was made the vendor uped the price. My brother found out about the price Wal-Mart was being charged and called the vender and they now let him buy the viles at $10 a box. this is a great example of price discrimination. This only happens because Wal-Mart bullies the vending company around and makes them give them the viles at such a low price, then they try to stick someone else with the price. Now you know why Wal-Marts prices are lower than most others, because they get a lower, unfair price and get the smaller businesses stuck with higher prices.

Americans on the Move to Get Away from High Costs of Living

According to CNN.com, many residents of high-priced housing markets around the country are moving to more affordable areas. According to the article, the number one reason that people are leaving their homes is the high cost of living, with the number one area needing improvement being housing affordability. For example, California suffers a net loss of about 100,000 residents a year to other states. In recent years, many of these people have moved to nearby states like Oregon and Washington. However, prices have now climbed in those states as well, which is causing Californians to turn to the Midwest, where houses are available for half the cost of similar space in Los Angeles.

What will this do to housing in California? In the Midwest? What is the potential problem with this migration to the Midwest?

Kroger Rings Up a Profit Dispite the High Oil Prices

According to CNNMONEY, Kroger's third quarter profits rose nearly thirty percent. I kind of find this a little peculiar since all that people talked about when the country was experiencing such high energy prices and when the oil companies were reporting record earnings, was that the other markets such as grocers and merchants like Krogers and WalMart would suffer the worst from these prices. This goes to show that Americans did not seem to adjust their spending due to the high energy prices and seemed to react totally opposite of what was expected. How do you explain this? And why does the market get so out of whack when oil prices sky rocket? It has always been amusing to me to watch these people freak out, but then everything seems to always work out fine.

MariettaEcon

A recent article on cnnmoney stated that there is a trend starting in America among those who are living in cities with high costs of living. These people who live in busy areas like Massachusettes, New York, California, and Hawaii are thinking about packing up and moving to less expensive regions in the Midwest, or to the quaint Southwestern states like Arizona. People are starting to find out that they can buy homes in these areas that costs less than half the price of living the bustling city life. My question is what will happen to the economies of these two very different communities if this does become a major trend amongst Americans? Will the cities begin to suffer and the rural areas prosper, or will it lead to Americans starting all new economies and societies in what now can sometimes be a struggling rural community?

New WWF Star

Very recently a group of researchers in Borneo discovered a previously unknown mammal carnivore in the deep rain forest. This new discovery is just another example of the numerous mysteries that lie in the vast forests of the world. These forests are often threatened by deforestation efforts. As in any economic analysis the costs and benefits of a plan are measured to decide whether or not the plan is a good idea. Land use debates often are hard to decide on due to the lack of actual value to be placed on a forest. This discovery is just one more reason to protect the forests worldwide before the unknown benefits are destroyed in order to profit right now.

It's Gettin Hot in Here

When evaluating an environmental policy or protocol like the one set up in Kyoto there are three main ideas to focus on. These ideas are efficiency, cost effectiveness, and fairness. By focusing on efficiency I mean matching the marginal damages of an certain problem, global warming is this case, to the marginal abatement costs of preventing the problem. The major problem facing the Kyoto protocol is the actual determination of the costs involved with increasing global temperatures. Some estimates place these costs “including effects on property values, insurance rates, food and water supplies -- would be in the tens or hundreds of billions of dollars, according to the United Nations and other organizations.” With these numbers actions taken by the protocol would be easily justified. But as always, these number are being debated. Do you think that the costs involved in cutting back greenhouse emissions worldwide match the possible damages to be imposed? Use the three above mentioned keys to decide.

Outsourcing America

The recently passed budget bill passed has part of its total dollar amount dedicated to finding the true impact outsourcing jobs. As the article discusses there are many US companies that shift parts of their business practices to cheaper foreign labor, but the true impact of these practices has not been easily measured due to lack of cooperation from the employers. This data will possibly help to further explain shifts in the American workforce. For example, in labor economics we have discussed the decline of unionism in the US for private sector firms. One explanation is the structural hypothesis that points to globalization as a major cause. This study may help in further understanding these declines, but will not be easy to come by since data acquisition is very difficult.

Airlines cut flights, boost fares?

Compared to this month last year, the number of domestic airline seats have decreased by 5 percent. That is equal to 3.9 million airline seats, or an average of 126,000 seats each day, that aren't available this December that were last December. The airlines reduce the number of seats to help cut expenses and give them more control over pricing. The article states that the U.S. airlines have lost in the past four years a total of $32.3 billion, and the airlines are predicted to lose $10 billion this year. The capacity reduction will no doubt cause the price for a seat to increase, in the end producing more revenue for the airlines. If the airlines are decreasing their quantity of output, they are obviously trying to increase their profit. Do you think that if the airlines continue to lose money, they will go through a short-term shut-down? Could the airlines eventually have seasonal flights?

Verizon will save money by cutting manager's pension

Verizon Communications, the second largest U.S. telecommunications firm, is planning to restructure their retirement benefits in hopes of saving around $3 billion for the next 10 years. Once put into action, this will affect 50,000 managers. Those employees who are currently under a defined-benefit plan, which typically consists of a fixed payout at the time of retirement depending on earnings and years of service, will keep pension already earned and receive an 18-month enhancement next June equal to the value of their pension and retiree medical benefits. The company says that these changes, even though they do not affect union workers or those already retired, will save $3 billion pre-tax over the next 10 years. Verizon Wireless is a joint company of Verizon and Britain's Vodafone Group, and their managers do not currently have pension or retirement medical benefits. These companies have begun to phase out the defined-benefit plan because they have found them to be too expensive. Verizon Chairman and Chief Executive said that these changes will provide the company with more affordable benefits and increase their ability to compete in this market.

Do you think this is the most efficient way for Verizon to cut costs and save money? Are there other ways they could in a sense achieve the same goal and still remain competitive in this industry? Also, how much more competitive do they need to become, if they are already the second largest company...should cutting costs even be one of their top priorities right now?

Walmart

So everyone knows that Walmart most of the time has the lowest price. According to CNN.com Walmart is getting ready for another round of promotions just like the ones on black Friday. Do they really have to do it? Walmart already brings in loads of money even with out these promotions, I am not complaining about this at all. My question in this; Do you think that Walmart is turning into a monopoly by trying to do this again with the 2nd round of promtions? Do they really have to do it because of low sales or are they doing this to make more money? This is definitly somthing to think about.

Marijuana

Declaring something illegal should cause the supply curve to shift to the left; both increasing the price of the good and decreasing the quantity demanded. It also causes producers of the good to go underground, where there are no regulations on the good being produced.

Today, many countries are facing the problem of how to deal with illegal drugs. According to an article on yahoo.com, the Netherlands are proposing a pilot program to regulate marijuana in the same manner as tobacco. The sale of marijuana would then come with warnings of its side effects; much like the sale of tobacco products. Dutch officials believe that this program will allow both the growth and sale of marijuana products to be regulated. If nothing else, this type of system is should deter the use of underground marijuana sales – when the consumer has no way of knowing what they are really putting into their body.

Do you think this pilot program will have positive or negative consequences for the Netherlands? If it helps them control the use of marijuana, do you think that it will be applied to other drugs? If it is successful, do you see the U.S. instituting a program like this in the future?

Store Credit Cards...Are they really as good as they seem??

http://moneycentral.msn.com/content/Banking/creditcardsmarts/P135858.asp

This article talks about those cards that you see at basically every store you ever go to. They are usually at the register when you check out and might be advertised like the following...Gap Credit Card: Save 10% on today's purchase and every Tuesday. They always seem appealing, and you are usually enticed to sign up when the cute girl behind the counter smiles at you, knowing she's getting commission off of it, and asks you if you want one. However, is the customer really getting a good deal? Though most people judge a book by its cover, and don't realize the harms of these, there are actually a great deal of downfalls that come with these cards. They run at extremely high interest rates, and can even devalue your credit history, something not very helpful when applying for that real credit card. My question for you is this...Do you think that these cards are actually hurting our economy. After all, it has been proven that people spend more if they have a credit card than if they only have cash. Thus, more peopling find themselves in debt. Just a thought.

Microsoft in TROUBLE??

http://money.cnn.com/2005/12/05/technology/xbox_suit.reut/index.htm

Microsoft is facing a suit from an Illinois man, taking them to court seeking damages and a recall of the new XBox, for claims that because Microsoft was trying to leap ahead of other video game makers, that they rushed the production step, and there are power flaws in the system. The game system often shuts down and overheats after long use, and/or online play. He says that because they wanted to gain ground in the multi billion dollar video game industry, that they overlooked some simple problems. He is suing them basically for their ignorance. It was also reported that shares of stock in Microsoft went down after this case went public. Do you think that this case will affect Microsoft, in the future, now that consumers know that their quality has been dropping due to rivalries in the industry, or do you think that this case will not affect them much at all. The court has yet to make a ruling, for this could be just another Bill Gates hater trying to make his affections for Microsoft public.

The Rising Sun?

In today's economic world we hear all kinds of predictions about the future. We see our industrial might being transferred to other countries in order for companies to make more money. It seems that the high pay U.S. workers are accustom could even be unsustainable. To look local, just go up the river and see how many plants are making as much money as they have in the past.
With our country facing such changes it seems that Japan is not the same way. Their export industries are making money. The Article "Sun still Rising- Japanese Invincible Might" argues that Japan has purposely kept their growth quite. It even argues that Japan has a "monopolistic leadership in more and more area of advanced manufacturing". Japan also has industrial wages that are 20 to 30 per cent higher that the U.S. Japan has found a way to flourish in this modern World Trade environment.
My question is what can the U.S. learn from Japan? Should the U.S. worry more about Japan or China and why?

The new XBox

After looking at this website, the new Xbox, has put people of America in a trap. They can buy the xbox360 without all of the pieces needed for it such as the ear piece, the wireless controller, and any other object to play the game for $299. However, they can buy the "better" deal of spending $399 for all of the pieces of equipment needed to play the games that people want to play. The idea of this is an example of the compliments in economics...the ear piece, and controller are both needed to play the game regardless, they are a need to get the full effect of the game. So family members can either A:spend the extra $100 dollars, and not have to worry about getting the wrong things, and spending more time on it...or they can B:spend less money by buying everything seperately, but worry about getting the wrong pieces, or worry about the pieces being out of stock. Either way it is a trap.

Bush and Greenspan, Different views for the Economy

President Bush exclaimed that the Economy was looking better than it has been in the past few years. This was cited for the latest job creation and unemployment figures released earlier in the day. The President had a different view from Federal Reserve Chairman Alan Greenspan, who said hours earlier that budget position will worsen in the coming years dramatically. Greenspan said that the rising costs of medical care, will place a burden on the budget. Bush declared that the country's economy continues to gain strength and momentum, "thanks to good old-fashioned American hard work." 215,000 jobs were added in the month of November, and the unemployment remained at 5 percent. Why is our president saying one thing and the Federal Reserve Chairman claiming the complete opposite? I understand that people have different views and see things differently but when important people are informing the U.S. about the economy shouldn't we get the same answer instead of making us wonder if they are telling us the truth or not?

~Jessica Hutchison~

Education

Throughout the years, it has become common knowledge that teachers are undervalued. Based on an article in Newsweek, the average teacher today makes just under $30,000 per year. This amount of money may seem decent for those coming out of college; but for many who have mortgages and kids; this salary doesn’t pay the bills.

Education creates many positives from society’s perspective. Not only do better educations lead to better jobs for individuals, but they also have positive externalities. People who are educated are more productive. Generally, they have higher paying jobs and a decent standard of living. Because they are able to provide for themselves and have what they need to be successful, these people are probably more willing to give back for the good of society. They are also less likely to take from society (lower crime rates, not on welfare).

If all of this is true, then why are teachers – college educated individuals – paid so little in comparison to others? They are the foundation of our education system. Without good teachers, there would be no need for colleges because students wouldn’t be prepared. Good, higher paying jobs would go elsewhere; they would move to areas with an educated population. This situation could lead to economic recession, and if severe enough, maybe even depression.

Knowing this, why does the education system in the US provide so little of an incentive to teach society’s youth? Would better teachers remain in schools if the pay was higher? Do you think raising the wages of teachers will lead to a better education system, or would it just create an overabundance of teachers and not enough jobs to go around lowering teacher’s salaries even further?

Internet Service

Most of us can’t imagine life without the internet. We use if for research, for communication and all sorts of information. For most areas, internet service comes with a fee dependent upon the type of service sought. What would happen if this service was free to all consumers? Do you think it would be good or bad for the economy?

According to an article in USA Today, New Orleans is instituting a free internet system to its residents. It will be a city wide program that anyone can use. The city government, in an attempt to spur economic growth, will run this program.

The article did not go into much detail on how advanced this system will be and what it will entail, but I don’t know how successful this will be. For one, everyone does not want the same type of internet service. Some are willing to pay more for a faster services and higher degrees of internet protection. Also, are government run programs really efficient? Who will decide when it is time to upgrade the system? What will the process be? Wouldn’t competition be a better means of providing the services people seek?

The idea of providing free internet to those that may not be able to afford it is fine, but is it efficient and will it spur economic growth? I don’t know.

Holiday Travel

It’s that time of the year again and families will soon be hitting the roads again to visit each other and go shopping for gifts and presents. According to one brief post on an AAA survey, “37.3 million Americans will travel 50 miles or more from home… 83 percent making those trips by car.” Obliviously with the rising gas prices and a slow rise in market prices, business revenues around the country are expected to rise. Compare the importance of this shopping season to other times of the year. What kind of important contributions does this make to over all business around the country?

Air Pollution

Tourism is a popular activity in the world now and that bring a lot of benefit to government. But at the same time, Tourism can cause the same forms of pollution as any other industry: air emissions, noise, solid waste and littering, releases of sewage, oil and chemicals, and even architectural/visual pollution.
In response to the rising number of tourists and their greater mobility, transport by air, road, and rail is continuously increasing. From a report by the International Civil Aviation Organization (ICAO) stated that the number of international air passengers’ world-wide rose from 88 million in 1972 to 344 million in 1994. Tourism now accounts for more than 60% of air travel and is therefore responsible for an estimated 7% of total carbon globally. This percentage is likely to increase the number of international travelers expected to increase from 594 million in 1996 to 1.6 billion by 2020.
According to the Natural Resource Defense Council (NRDC), fuel burned by airplanes puts nitrogen oxide and water vapour about 30,000 feet. These are two greenhouse gases together give as much as twice the global warming effect as the carbon dioxide released by the airplane. One tree offsets the carbon dioxide emitted by the airplane over 4,000 miles and two more trees offset the greenhouse effect caused by the nitrogen oxide and water vapour.
My question is to increasing the tourists really a good idea for our world?

Generation Y

Some economic issues have arisen as a result of a new generation becoming dominant in the workforce. Generation Y's broadest definition is those Americans born between 1977 and 2002. Because of generation Y's high expectations, ongoing learning, immediate responsibility, and desire to be goal-oriented, there have been changes in workforce trends. One issue discussed in this article is turnover. It says that younger professionals are not afraid to change jobs because of recent business scandals that seem to have been caused, in part, by job loyalty. Another reason for this is that generation Y is not as afraid to question their superiors. It said this generation grew up questioning their parents and are not afraid to question employers. I agree.

Department of Labor Awards $125 Million

70 Community colleges have split up a pot of 125 Million in the competition for the presidents Community-based Job Training grants. Although due to Hurricane Katrina preference has been granted to gulf state community colleges because these affected communities have their programs in strong efforts of rebuilding. Still, these 70 grants have been devided up amoung 40 states. Community-Based Job Training grants will help to support the training and growth of of industry through these slected colleges. These grants will also give studnets skills that their local industries require for employment. the training is targeted at jobs expected for high growth and where demand is exceeding supply. How will this effect unemployment nation wide? Will these grants help demand catch up with supply? Do you think the president is looking out for industry than unemplyment?

"Pathways to Employment"

"Pathways to Employment" is and intitiative to help struglle victims of recent hurricanes to find employment and training to get back on thier feet. The assistance is based on individuals needs and comes from different offices accross the country. There are 3,500 one-stop career centers in the U.S. This department is sending experieced counseler to help the evacuees find jobs and connect them to supportive services through local and educational opportunities. 15 million will be set aside for this particular area of concentration. They are also usning "specially trained experts" to individuals with dissabilities find jobs and gain benefits and services through local and government services. There are 4,000 Job Corps scholarships targeted to young people/students (ages 16-24) who need to get back on their feet.

Better gas mileage or BS

In the November 30th Wall Street Journal an article titled "Dear Valued Hybrid Customer...", author Holman W. Jenkins, JR, talks about the issues with the Toyota Prius and other Hybrid vehicles. He states that the Prius gets about 26 percent less gas mileage than advertised and that the car costs $9,500 more than a comparable vehicle. Also in the article Jenkins talks about how Toyota has increased horsepower in one of its SUVs by using Hybrid technology, but gas mileage has remained the same. Is the use of hybrid technology a good idea or is its just a ploy by car manufactures to make money, is the use of hybrid technology to improve horsepower and not increase fuel economy reasonable. Or is it worth paying $9,500 more for a car that will save you annually $580.

U.S. Department of Labor Anounces 3.5 Million Dollar Grant

The U.S. department of labor has anounced the release of a 3.5 million dollar grant. This Grant will be used to increse the skills of IT workers in Arizona. this grant is part of the presidents High Growht Job Training Initiative. This will help expand industries by providing highly skilled workers. Currently in Arizona there is a shortage of highly skilled workers in the IT field. The money will be put towards new course curricula in engeneering ang testing. The students who pass their final exams will be certified in industry-recognized SQE certifications. With an estimate of 20 Community College instructors, over 1,500 students will be trained in a 3 year period. This training will make it easier for students to take advantage of jobs in high demanding areas. What effects do you think this will have on labor supply and demand in Arizona? What effects do you think it will have Nation Wide? Is this a good way, economically to spend government grants? Will this have a possitive affect on the economy and unemployment?

AIDS

AIDS is a serious disease that affects the lives of many around the world; especially those living in Sub-Saharan Africa. It is estimated that about 70% of people suffering with this disease live in this area of the world (Lairson 425). In Botswana, for example, by 2010 the average life expectancy of a new born is expected to be 29 years and the probability of a 15 year old boy dieing from AIDS is over 50% (Lairson 425).

These statistics paint a picture of just how bad AIDS can be for countries incapable of dealing with AIDS. From an economic perspective, the loss of life due to AIDS will be correlated with declining economic activity in a nation. If people are not expected to live past the age of 29, how productive are they going to be? This will lead to a decline in productivity, a decline in national income, and have effects on everything contingent on income.

According to an article in USA Today, President Bush has introduced an initiative to help people suffering with AIDS through government aid to mission groups. Bush believes that “[b]y identifying and supporting these organizations, we will reach more people, more effectively, and save more lives" (USA Today).

Do you think that this is the best way for the US to help in the AIDS pandemic in Sub-Saharan Africa? From an economic point of view, is there a better (more efficient) way to cure this disease (or at least stop the spread of it)?

Works Cited
Lairson, Thomas D. and David Skidmore. International Political Economy: The struggle
for Power and Wealth. Third Edition. Wadsworth. Canada, 2003.

Groups Propose Alternative to E.P.A. Rules on Mercury

Coal-fired power plants emit about 48 tons of mercury each year in the United States. This leads to great amounts of health risks, mainly through the consumption of fish. The Environmental Protection Agency developed a plan in reducing mercury emissions by 21% in five years and 70% by 2018. The regulator's federal plan is to achieve 80% reductions by 2008. One major problem with is plan is that plants have already had to spend millions of dollars to reduce emissions of other chemicals that may also help to reduce some of the mercury emissions, just not enough that this new plan is gong to require. Also government officials do not like the idea of assigning states a total number of permits for how much emissions they may have and selling unused permits to other states. Even though this may meet an efficient level of emissions nationwide, officials do not like the idea becuase it will just create "hot spots" for mercury.

Are there any other ways we could meet an efficient level of mercury emissions nationwide without using tradable discharge permits? Is there anyway to meet the standards while not spending millions more dollars?

Rural Water Worries Persist After Chinese Chemical Spill

On November 13, an explosion at a petrochemical plant spilled 100 tons of benzene and nitrobenzene in the Songhua River. 200 miles downstream from Jilin City, where the spill occured, is Harbin. Fortunately the four million citizens that live in Harbin were informed that their water supply would be restored by Sunday evening. Unfortunately, there are several people that live in rural areas outside Harbin that will be without water for much longer. Liu Shiying is one of the people that lives in the rural areas. She says that their water has been off for four days already and only has one clay cistern filled with water for her and her family. The citizens in Harbin were given plenty of bottled water to get through this hard time. Liu said that they would see on tv that water was delivered to the people in the city. The water supply for the people in the rural areas comes from underground wells or straight from the river, both of which have been contaminated by the spill. The only way to get water to these people is to take the dirt and gravel roads away from the city. The Shiying's are not expecting water to be delivered because they live so far away from the. They are just concerned about the little water supply they have left and when they will be able to drink from their well.

Is it possible to pull some economic concepts into this situation? Would the Shiying's be able to trade water with some of their neighbors or find some other way to ration out their water?

Ford eliminating 5 major plants

Ford Motor Co. is likely to close five plants that employ about 7,500 workers, or about 6 percent of the company's North American work force, the Wall Street Journal reported Friday. These assembly plants are located in St. Louis, Atlanta, and St. Paul, MN. they are also shutting down engine part plants in Windsor, Ontario and a truck-assembly plant in Cuautitlan, Mexico. The company lost $284 million in the third quarter. On Thursday it said sales fell for a third straight month, down 18 percent, and cut its production forecasts for the fourth and first quarters. The company announced that it will eliminate 4000 salaried jobs. Do you think this is because of the gas prices or just because of the fact that Ford is being overpowered by other corporations and automobile companies? Do you think that this is the correct step for Ford or should they keep these jobs and plants rolling?

Delphi Hourly Workers hold Protests at Plant

Delphi hourly workers protested the company's executive compenstation plan with pickets at the auto supplier's plant. They believe it is unfair to pay huge amounts to top management while proposing to cut wages of hourly workers. Delphi filed for Chapter 11 bankruptcy last month and as part of their restructuring plan, proposed cutting production workers' hourly wages from $27 to between $10 and $12.50. Delphi is asking the bankruptcy court to approve a plan that would give stock options and cash bonuses for about 600 executives when the company emerges from bankruptcy. This estimates to be worth more than $500 million. Delphi says the compensation plan is necessary to keep its executive team in place during the bankruptcy process because recruiting new executives would be costly and time-consuming. Members of the UAW believe this compensation plan to be unfair because "it seems they are rewarding incompetence." Bob Nelms, a member of the UAW says, "the same people who bankrupted the organization are being rewarded." Do you think this compensation plan will cause production workers at Delphi to find work elsewhere? Also, will these workers be able to make a living a support a living on the $10 or $12.50 proposed wage cut?

No Purchase Necessary

A lingerie store in Augusta, Maine has caused more than a few eyebrows to raise-- the store uses live models in its window display. Yes, you read that correctly- three lingerie-clad women grace the window of a newly-opened store in Maine.

The advertising technique has caused mixed reactions. Some believe that it is distasteful and has actually driven customers with children away from the store. On the other hand, some believe that it is innovative: "It's like a New York thing. It's urban. It's edgy," said Stacy Gervais, owner of Stacy's Hallmark Store and a founder of a downtown merchants group. "We need a shtick _ something that we do that attracts people and gets us remembered."

Now this raises some questions on my part: Does this technique raise the bar in terms of advertising? Can we expect other stores to follow in this boutique's footsteps? Will money that used to go into print advertising and displays now go into hiring live models?

WalMart- Always Low Price...But at What Cost?

A recent national poll indicates that more than half of U.S. adults say that the low costs that Wal-Mart provides on its shelves bring about other costs in its workforce and benefits. The national poll--conducted by WakeUpWalMart.com, a union-funded group that has been pressuring Wal-Mart to raise employee wages and benefits-- claims that 56% of U.S. consumers believe that "Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers."

Currently, Wal-Mart is facing a lot of fire from critits. As the largest U.S. private-sector employer, Wal-Mart faces intense pressure at home from unions, environmental gropus and others who say the company pays poverty-level wages, offers poor health-care benefits and gobbles up green space with its massive big-box stores. Wal-Mart is also defending itself in a record-large, class-action lawsuit that charges it with discriminating against women in pay and promotions.

Is Wal-Mart really so bad? Sure, Wal-Mart's got great prices on products, but can you put a price on "moral and economic costs" that apparently so many Americans feel are being imposed? Does this recent poll spell trouble for Wal-Mart?

global warming, is there any kind of substitutes ?

According to National Academy of Sciences, the average global temperature has raised 1° Fahrenheit in the last century The increasing temperature of the earth’s surface is commonly known as global warming. It causes many negative impacts, which include “more-violent storms, changes in the course of the Gulf Stream”, melting of the polar ice sheets, and rising of the sea level. Since the industrial movement, the world’s economic developed rapidly. The development of economy helps many countries create more benefits. However, the environmental problems, representing by the global warming, which are due to the industrial production became severe and the cost of solving them was significantly high during the last decade.
Since the global warming problems is mainly caused by the use of fossil fuel in the industrial producing, is there kinks of alternative energy sources could be used? such as the solar energy, the nuclear power, or wind projects?
know more about global warming : http://yosemite.epa.gov/oar/globalwarming.nsf/content/index.html

Piracy

Over the past few years, entertainment industries have voiced their concerns over the downloading of copyrighted material. Consumers have used the internet as a tool to take the work of various artists/entertainers without payment. As many have seen, this issue is difficult to handle. How can the government regulate this piracy when the technology is readily available to the average consumer?
According to an article on yahoo.com, Japan has come up with a solution. Under their current system, consumers in Japan pay a 3% tax on recording devices and other gadgets that can be used to duplicate copyrighted material. This tax is included in the price of the good; so many consumers are unaware that it even exists. This tax is then given back to recording industries as payment.
Do you think this is a fair system? Is the 3% tax really making up for the losses that piracy causes? What about consumers who pay fees to download music legally? Is it fair to charge them twice? Do you think the US should consider a similar set up?

Jobs Back on the Rise

Jobs Back on the Rise

Recently, the Labor Department released the news that 215,000 jobs were added in November, up from 44,000 in October. The Bush administration claims that the increase is due to their policies of cutting taxes and spending. Unemployment remained around 5%. Job growth rates have finally returned to pre-Katrina levels, indicating the the nation is firmly on the road to recovery from the disaster. Average hourly earnings rose along with the new employment, up to $16.32 from $16.29. However, the economy must be monitored closely to avoid "overheating," as mentioned in the article. My question is this: the Bush administration is taking a lot of credit for the increase in jobs and hourly earnings, citing tax and spending cuts. However, surely this policy was not the only cause. What other factors could have contributed to these positive trends in the labor market? One possibility is that consumers have become more confident and are buying more products, producing profits for companies. These profits allow the companies to employ more workers. I'd like to hear what someone else might think about this issue.

Illegal immigrants = legal citizens

President Bush has recently announced an initiative to grant temporary legal status to illegal immigrants, and this raises a labor economics question. Illegal immigrants come to this country because they can find under-the-table jobs that are beneficial to both employer and employee alike. Employers benefit because they are not bound by minimum wage laws and also avoid a number of taxes. Illegal immigrants benefit because they still make more money then would be attainable in Mexico. If these immigrants were made legal citizens, would the potential benefits enjoyed by the employers disappear? If so, would this lead to an increased unemployment rate among the new citizens? Or do you think that immigrants would still prefer an “illegal” status because it provides more job opportunities?
An interesting article describing the president's decision can be found at
http://www.time.com

Party in Cancun?

Over the past few months, hurricanes have been a major problem facing the United States. The damages caused have been devastating to many. But as hard as it is for the US to recover, it is probably going to be more difficult for Mexico.

As Cancun was hit by hurricane Wilma, it took a huge loss to its tourism industry. According to an article by MSNBC, tourism in Cancun makes up about half of all tourism revenue in Mexico. Estimating that it will take Cancun at least 2 months to restore the hotels to their pre-storm conditions; will they be ready for holiday vacations? If they can’t fix their problems within this time frame, these hotels could lose out on huge amounts of revenue during the winter tourist season.

Other than lost revenue, are there any other consequences of this storm? How will tourists react? Will they travel somewhere else (substitutes), or will they cancel their vacations all together? What does this do to other industries (compliments) connected to tourism in Cancun (airlines, restaurants, souvenir shops)? Who will suffer more from this storm: the hotels or the little shops that sell their products to tourists?

Clicks, bricks and bargains

the shopers favorite holiday black monday, the day after thaksgiving where everybody goes nuts about the deals at wal- mart is being invaded by internet shopers. internet shopers on this holiday has increased nearly 35 percent in the last year alone and sales have almost equaling that of the instore take. so i ask is there any threat of online shoping taking over, will society become so lazy that we cant go to a store to find a pair of pants. also what impact do you think this will have on stores in the long run. and do you think this trend will conmtinue to grow. and finally do you belive that this will affect the economy in any way.

Are US Auto Companies in Trouble?

In a report made by Cnn it talk about U.S. auto sales on the slide. It also reported that companies such as Ford and GM are having to lower production of the autos they are making because of the decrease in sales. With these sales continuing to dimish what do you think will happen to U.S. auto companies? Also what do you think they can do to turn around the problem and maybe have a comeback?

Stock, dollar, oil, gold jump

full article
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20051201&ID=5322423

U.S. stock indexes climbed on Thursday, with their biggest single-day gains in a month, while the dollar rallied, oil jumped more than $1 a barrel and gold popped above $500 an ounce to its highest level in nearly 23 years.

But U.S. Treasury bond prices fell on concerns that strength in U.S. manufacturing data would give the Fed another reason to keep raising interest rates.

- - -

does this mean oil prices are going to rise again? Are we doomed with high prices on oil and gas? How is the gold rising going to affect us?

New technology race

Intel Corp. has announced a plan for new technology, called Viiv that would combine computer capabilities in a a television, such as dowloading music and accessing the internet, all using a remote control for the television. Also, the Viiv computer will be able to pause and rewind television shows, as well as connet to other media players and dvd players. Other technology companies are also trying to make similar models for competition. Ted Schadler, consumer-technology analyst at Forrester Research Inc. said, "There are a lot of companies from a lot of industries who are trying to figure out where the power is and where the check points are." What do you think this means for the technology industry? Do you think that these new products will be able to be made affordable enough to take over the technology industry?

Gates plans huge push for next Windows

Bill Gates Company last launched its new design in 2001 Windows XP. Being pressured by many competitors he announced on September 13, 2005 about his company new Windows Vista. Gates is planning on pushing this windows launch in 2006. How will this affect the economy? Will this put the little business out of business or even hurt his competitors? Gates is one of the world largest software builders, and with launching this new idea may put him over the top. His business average $33 billion yearly in revenue. This new software is being design for personal computers and Gates said, “would drive a new wave of personal computer upgrades." Everyone always wants upgrade, but sometimes upgrade hurts the economy in the long run. We will have to wait and see what the launch of Mr. Gates Windows Vista will do to the economy!http://money.cnn.com/2005/09/13/technology/gates_windows.reut/index.htm?cnn=yes

Consumers say Wal-Mart bad for U.S.

A recent report from wakeupwalmart.com (a union-funded group that has been pressuring Wal-Mart to raise employee wages and benefits) showed that out of 1,012 randomly selected adults 56% believed that Wal-Mart was bad for America. The survey asked the participants to pick one of two options that they most closely associated they feelings with Wal-Mart.

Participants could choose: "I believe that Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers" or that "Wal-Mart is good for America. It provides low prices and saves consumers money every day." Out of the other 44% of America, 36% said Wal-Mart was good for America and 8% declined to answer.

Another poll from Zogby questioned consumers on whether or not they believed Wal-Mart was becoming too powerful in the market. 33% of participants claimed they wer very concerned, while 20% claimed they were not concerned at all.

What do you think? How do you feel about Wal-Mart's power in the market? Do you think that Wal-Mart is on the verge of becoming a monopoly?

Teflon: helpful or harmful?

Today, many people have kitchen pans lined with Teflon. This non-stick chemical has made cooking a much easier process for people across the country. Companies also use Teflon to line candy wrappers, pizza boxes, microwave popcorn bags and hundreds of other food containers. It has proven to be a success in preventing food products from sticking to their container.

But is this a safe chemical? Due to the accusations of a former employee of Dupont, there is has been an increased concern about the safety of Teflon. Within Teflon, a chemical by the name of zonyl exists. And according to an article on msnbc.com, zonyl was recently put under observation. The concern is that once zonyl gets inside a human body, it turns into a substance known as PFOA, which has been documented as damaging to the health of animals and could possibly be damaging to the health of humans. “The Environmental Protection Agency has been trying to decide whether to classify PFOA as a “likely” human carcinogen” (Associated Press).

Dupont has also faced several lawsuits regarding their use of dioxin – a chemical believed to cause cancer in humans. “[A]n oyster fisherman who claimed dioxin from a Dupont plant caused his rare blood cancer was awarded $14 million in actual damages and his wife received $1.5 million” (Associated Press). They are also facing two other lawsuits in dealing with PFOA; totaling over $100 million in damages.

Has Dupont been reckless in its efforts to increase revenues? Or are these just accusations of a disgruntled former employee? If the FDA decides that the use of Teflon is harmful to the health of people and they ban its use, what will be the economic effects? If it is banned, who will bare the brunt of the costs associated with the abandonment of Teflon: consumers or producers? Do you think that there would be a substantial improvement in human health conditions as a result of the banning? Or will companies just find another product to replace Teflon that will bring its own unique damages with it?

New Technology Saves a Life

New Technology has arrived and is in action in Bangor, North Wales. This new computerize technology saved a girl from drowning in a pool back in August. This system alerted the lifeguard something was wrong with a person in the pool and by the monitor they lifeguard could locate exactly where and within 40 sec she was saved. With this new creation it would cause the PPF (Production Possibility Frontier) line to shift outward because of this new discovery, causing the number of drowning also to decrease. Do you agree with this new technology and believe that it will actually decrease the deaths?

The article was written by Steve Ranger entitle Computer saves drowning girl from CNET News.com

Unemployment Benefits Drop

The number of workers claiming first-time jobless benefits fell last week below pre-hurricane levels, and consumer incomes and spending showed more normal growth as well. Initial claims for state unemployment benefits dropped 17,000 to 320,000 the week ended Nov. 26 from an upwardly revised 337,000 the prior week, the Labor Department said. Well now that a couple months have past the unemployment benefits have dropped means that the country is getting somewhere slowly but surely. But how long will it take to solve this problem? Will it ever be solve, or will those victims of the hurricanes be living off unemployment for life and never have a job?

http://www.usatoday.com/money/economy/2005-12-01-jobless-income-spending_x.htm

Kyoto --- Whoa!

The Kyoto Protocol, as I am sure many of you know, is a multi-national effort in an attempt to curb greenhouse gas emissions. The Protocol calls for a reduction of 6% emissions from levels present in 1990. Many nations have joined in, with 34 now participating. The target date for the emissions levels is 2012, but the European Union has just announced that it expects to achieve a level of 9.3% below 1990’s levels by 2010.

How has the European Union progressed so quickly? The answer lies in an efficient system of tradable discharge permits.

Under the scheme, which limits emissions from about 11,500 manufacturing plants and power stations, European governments issue carbon dioxide allowances, which are sold into the market by firms emitting below their limits then traded.
A program called the clean development mechanism allows companies to also invest in environmentally friendly projects in developing countries to earn credits at home.

Effectively, the tradable permits have made a market for carbon and stuck a price tag on it. With the advent of the permit system, the number of carbon allowances is limited, thereby cutting back supply and raising the market price of carbon. Now, when companies are facing choices, the price of carbon is becoming a major factor. With the price of the permits tripling since January, companies in the EU have had a huge incentive to cut back on emissions, either by a reduction in output or by an investment in cleaner technology.

Given the results, do you see the tradable discharge permit system as applicable to every nation?

Ski

Finally the ski season is approaching. I've started researching season pass and single day ticket prices at some of the area ski resorts and have noticed how the prices are generally the same in the midwest area no matter what state, Ohio, PA, WV, or the size of the resort. But I also know that out west, a single day ticket is sometimes twice as much as these resorts. I'm betting it has to do with the quality of skiing and the size of the resorts out there. Personally, I've been to Perfect North, Indiana and Mad River, Ohio, which both are pretty beginner hills. I've also been to Timberline, WV which is a slight step up from the previous two. None of those compare to Mammoth Mountain, CA which boastst the largest ski resort in the nation and a ski season from late October to Late June! I was just curious as to who else enjoys skiing and where you've found the best carving for your buck.

OPEC chief says no need for output cut

The world is always seemingly worried about a shortage of oil. Yet three days ago the OPEC Chief stated that oil prices and levels were fine. He went even further and said that markets who needed more oil could have up to two million extra barrels per day, if needed. It sure doesn't seem like there much of a shortage of oil. It seems as if the actual price of gasoline is completely irrelevent to the actual supply of oil/gasoline.

Apple #1 for Online Buyers

In the Consumer Reports for people buying computers online, Apple was the top choice with IBM coming up second, Dell in third and HP falling into fourth place. Dell used to be higher up on the list, however its customer service seems to be the factor that agrivated customers. Dell decided to outsource it's customer service branch which created language barriers between customers and technicians, and also customers complained of very long waits on the phone with the hotlines. Other factors that influenced customer's opinions about the companies inlcude price, products selection, products quality, and ease of use. Does Apple deserve to be the top choice because of its computers or maybe because of other products like the ipod? Do you think that with Apple being the top choice instead of PCs like Dell, that the business world may convert to Apple technology in the future? How will this affect the business world?

Chiquita sees fruit shortage from storms

Chiquita the fruit company will be expecting some sales losses this quarter due to several tropical storms. Heavy rains destroyed about 1600 of its Honduras fruit farms. Also, they lost some of their fruit farms in Guatemala due to hurricane Stan. These storms will no doubt create a shortage of fruit production for their suppliers and consumers. But Chiquita is looking for alternative places such a Latin America. Is there any way that Chiquita can better prepare for such losses? Should they move to Latin America? How will this affect prices and consumer consumption?

Sales Climb at Retailers on Internet

Many people wanted to skip the 6am rush the day after Thanksgiving. It was a rush of people wanting to get there and catch the sales before the product was sold out. However, this year shoppers spent 26 percent more on online purchases than in 2004. Consumers spent $925 million on online retails from Thursday to Sunday. VisaUSA say online buying by their cardholders rose 26 percent. On Monday many continued to shop online getting little work done. Those who shopped online went from 11.1 million to 15 million. Stores such as Barnesandnobles.com said Monday was the biggest this holiday season. The three most popular sites were eBay, walmart, and Amazon. Internet sales were rising at a remarkable rate while shoppertrack, which keeps track of store sales, said it only rose 0.4 percent since last year. To get shoppers to purchase online many of the sites offered similar incentives as of the stores, and many sent emails out telling details about the sales. Were you one of these online shoppers? Do you think this will have an impact on the stores itself?

Ageing process may mean working longer

A recent poll in Europe showed that due to better medicine, working conditions, diet and education people are living longer. This seems as a good thing but the poll also showed less people having kids. According to the article this could create a problem for the future work force. As the present workforce continues to get older and less people having kids, replacements could be an issue. One argument was to allow people to work longer and maybe even pass their pension plans. But the majority of people do not even work until their pension plan, which is 65 yrs old. Also, if there is a younger worker shortage who will pay for the older workers pension? How will European companies fix their potential worker shortage? Will they require their older workers to work longer? How will they draw in the younger workforce?

Disney Enables ESPN Fans to Dial In

ESPN, the largest provider of sports in North America is trying to go mobile. Disney, its parent company, has come up with an idea that will allow sports fans to watch games and get highlights and score reports on their phones. Their is one catch, the subscriber will have to buy one of Disney's new phones manufactured by Sanyo Electric Co. and get airtime minutes from Sprint Nextel Corp.'s national cellular network. These phones are not cheap costing $499.99. The billing statement would come from Mobile ESPN, not Sprint. It will range from $64.99 to $224.99 a month. This new idea is very challenging since the cell phone market already has heavyweights such as Verizon, T-Mobile, Cingular and Sprint. Their aim is to pull already existing customers away from their competitors. Will ESPN Mobile be able to exist in this already completive market? Will they have to lower prices to lure customers? Or will the existing companies provide their own sports service?

Online shopping goes into high gear

Online shopping keeps getting more and more popular. It has been reported that people are shopping online during work, and 59% of buying has come from work computers this month. In addition, the Monday after Thanksgiving has been named Cyber Monday because the large amount of people who shop online after the door buster sales the day after Thanksgiving. Online sales are expected to keep increasing, and stores are aware of the change in buying habits. Do you think that with the great sum of people buying online that the stores will reduce sales? In fact, do you think that most stores will have fewer employees this season than normally because of the expected online buying? Will this factor be a problem for families who rely on part time jobs around the holidays to purchase gifts? How will this affect the economy?

Merck Makes Changes

The drug company Merck and Company announced recently that it would be making cuts in it's costs. They will be making these cuts by getting rid of 7,000 jobs (11% of it's workforce) and closing various branches of the company including a few manufacturing plants, a research site, and two development sites.

How will these changes in Merck affect the overall prescription drug market? How will it effect the job market in the areas where the plants and sites are located? Finally, how will it effect the overall economy?

Link: http://biz.yahoo.com/ap/051128/merck_cuts.html?.v=12

Can Playboy pull a rabbit out of the hat?

Full Article [http://moneycentral.msn.com/content/P133917.asp?GT1=7390]

Given the huge amount of ?adult entertainment? we consume as a nation, it?s a wonder Playboy Enterprises' stock performs like it needs a dose of Viagra.
Just look at the size of the porn market:
Americans spend about $5 billion to $8 billion on smut each year.


Sex sites account for 40% of all Internet traffic.


Satellite and cable operators earn about $800 million a year from adult movies, or about 40% of pay TV and on-demand TV revenue.
Now look at how Playboy Enterprises (PLA, news, msgs) continues to struggle:


Playboy magazine lost money last quarter as publishing revenue slipped 8%. Playboy circulation fell again to near 3 million -- which means the monthly places 19th among U.S. magazines.


Founded by Hugh Hefner in 1953, the magazine is now firmly entrenched in circulation rankings below National Geographic, Good Housekeeping and Ladies? Home Journal. So far this year, Playboy's publishing unit has lost $3.4 million.


In the third quarter, Playboy as a company took in just $80.9 million in revenue. The 10 cents a share in profit Playboy earned may seem good -- since that beat last year?s results by four cents. But a closer peek reveals cost-cutting saved the day, along with sharp declines in taxes and interest payments. Without that help, which can?t last forever, the company would have reported a loss of 5 cents per share.


For the first three quarters of the year, Playboy revenue grew an anemic 3%, and the business lost 16 cents a share -- exactly the same amount of red ink spilled in the same period last year.
All of this paints a fairly dreary portrait of Playboy.

- - - -

My question is, if the porn industry is making decent money, then what can be expected if the most famous of the porn industry shuts down? Will the income fall, will it increase from some newer trendier playboy? If playboy doesnt start making up money, will our famous adult entertainment known as playboy change how we view the porn industry, and how we buy?

EPA picking up the pace

In Environmental Economics, we have discussed many different types of policies that are all geared towards reducing pollution. No matter the specific type of policy, enforcement is always a big problem. This is due to the fact that each individual firm will abate only to a point in which the MPC (marginal penalty curve) is equal to the MAC (marginal abatement curve). To increase the compliance rate, the EPA can raise fines for violations, raise the probability of getting caught, or do a combination of the two.
The EPA published an article on Nov. 15 that shows that the agency has increased the probability that violators of environmental policies will be caught. In 2005, the EPA prosecuted some of the “largest environmental crimes in history.” The specific charges and sentences can be found through the link to the EPA website.
My question to the audience is this: will the increased prosecutions shift the MPC to the left, causing a higher compliance rate, or will they not act as a deterrent?

http://www.epa.gov/compliance/data/results/annual/fy2005.html