Economic Growth

The economic growth in the United States for the fourth quarted was slightly below the forecast. The U.S. GDP value increased by 4.4% in 2004 which was up 3% from 2003. These figures along with other information in the article show that the U.S. economy is making a comeback. I personally feel that the reason for the economy is continuing to grow is because the smaller companies continue to created jobs and the unemployment rate is very close to the natural rate. I also believe that the President is doing a good job and encouraging Americans to go ahead and invest and ensuring them everything will be alright. I think that some people are too worried about what might happen next and looking in to the future too much. What is your opinion? What do you think is the cause of this growth?

Cell phone laws

The other day as I was driving home from class I heard an interesting news report on the radio. The government is trying to pass a law that will not allow teen drivers to use the cell phone while on the road. It doesn't matter if the phone is hands free or not. I looked for an article on this but was unable to come up with anything.

• My thoughts on this are why just teens?
• Are teens on cell phones the only people causing accidents?
• Are teen drivers the only ones who use cell phones while driving?
  

I do feel that cell phones can be dangerous while on the road. I have experienced it by running my car into a ditch while trying to find my cell phone but that doesn't mean the cell phones are always the cause. If I wouldn't have ran my car into a ditch looking for my cell phone I probably would have put it in the ditch while looking for a cd.

Does that mean the government should ban the use of cds in the car? Maybe they should just up the driving age until 21. They claim we are adults at the age of 18 but we are still labeled as the dumb teenagers. Soon enough you will have to drive a car with no music and no distractions. Anything you have in the car must be put in the trunk so its only you and in the interior of the car. They may even pass a law that states teen drivers are not allowed to ride with one another.
Does anyone else just feel like they are picking on the young and inexperienced?

Clear Sky?

There is currently much debate in Washington over President Bush's Clear Skies initiative, which essentially repeals the New Source Review aspect of the Clean Air Act. Without going into great detail on what exactly New Source Review (NSR), it is sufficient to know that it was an attempt by Congress to regulate the externality of pollution caused primarily from power plants. NSR required plants, currently operating, to put in place pollution decreasing technologies when major maintenance of the plants occurred. Bush is formulating a policy that would not require this to be done. Instead he would like to set up an emissions trading program, where older plants will be able to purchase "emission points" from newer, cleaner facilities.
I do not claim to be an economist or a political scientist, but I see some major flaws in the president's initiative. Under NSR, all plants would eventually use the same pollution reducing technologies. Bush seems to be acting under the belief that requiring old plants to convert to the new technologies would be so costly that they would no longer be able to compete with the new plants which already possess the technology. However, wouldn't the new plants still have a competitive advantage over the old, because they will be able to sell their unused portion of emissions to the old plants? Also, by allowing plants to trade emissions, there is a real threat of "hotspots" developing in regions where most of the power plants are old, which could lead to increased health risks.
Once again, there is much that I don't understand about economics, but does it make sense to try and marketize an externality like pollution?

http://www.greenwire.com/web_landing/sr_nsr_G.htm

Merging Phone Companies

There are some reports that SBC is in talks with AT&T about a buyout. Reports are stating the buyout could be worth as much as $15 billion. It seems to me that lately many phone companies keep merging together. If you recall a few months ago, Cingular bought out AT&T Wireless. With companies merging like this, is this good for the economy or are one or two companies going to control the market and have their way with the prices and force the consumers to pay too high prices? What is your opinion?

Student Debt

I realize that no one really wants to think about this, but the average debt of college students has significantly increased over the past few years, according to the article it has increased by 66% from 1997 to 2002. In 2002 the average college graduate came out of a four year college about $19,000 in the hole. What a way to start off the rest of your life. Anymore a college degree holds about the same significance as a high school diploma did 30 years ago. You really can't get much of a job without one and sometimes can't get much of a job with one. Has college become a trap for the less fortunate in America?
Scenerio- Your poor; you want to better yourself; you go to college; to pay for it you borrow money; you graduate and get a job; you make more than your dad did but after 6 months you are burdened with school loans, combine those with car loans, rent, the new furniture you bought for your apartment, car insurance, taking your girlfriend out 3 nights a week so she doesn't complain you never go out, cable, gas bill, electric, new clothes for your new job, the list goes on and on.
Is college the holy grail that it promises, or is it the start of a life of owing others?
Should some people forget about college and start working construction right out of high school?
What do you think?
Link http://www.nelliemae.com/library/research_10.html

A Sony PSP in your Pocket, or just a Clone?

Do you think a Sony PSP is worth $400 imported from Honk Kong? For about $100 less you can have a PSP clone. Companies overseas are trying to clone the best portable gaming systems. If you ever thought about buying a clone you should probably expect dissapointment. The quality of a clone is going to most likely be very poor. Do you think that the PSP is worth the big price tag? Or should customers look to the cheaper clone products?

Who's the real winner

A recent blog has brought attention to an international issue, the weakening of the dollar. Over the past few years the purchasing power of the dollar has continued to dwindle, increasing the strength of other "major" currencies including; the English pound, the European euro, and the Japanese yen. As the dollar value decreases, exports from the U.S. become cheaper to foreigners and imports to the U.S. become more expensive. From an economic standpoint, this occurrence increases the demand for U.S. made products and decreases the demand for foreign made goods.
Last week a meeting was held in Paris, which was attended by the finance ministers of Germany and France. The general attitude at this meeting was one of concern to say the very least, because they have already endured some of the negative consequences that a stronger currency brings. Some seem to think that President Bush is not concerned with the weakening of the dollar, because it could lead to a reduced trade deficit. In other words, the U.S. is seen as receiving all of the benefits from a weaker currency. However, I think this isn't the case.The real winner in this situation is the relatively silent and somewhat overlooked China.
China has tied its' currency to the dollar, which means that its' currency has dropped as much as the dollar has. The U.S. has an enormous trade deficit, which is a contributing factor to a weaker dollar; however, China is experiencing an economic boom with a consistent trade surplus. By fixing its currency to the dollar, China's currency has become extremely under-valued, creating an even higher incentive to buy Chinese goods. Also, since both of our currencies are tied to each other, the weakening of the dollar is not a disincentive for us to import Chinese goods.
When will China begin to float its' currency?
http://www.stuff.co.nz/stuff/0,2106,3166588a6026,00.html

Cadillac DTS

WIth new cadillac DTS limousine taking President Bush to the Inauguration ceremony. I really dont think that Cadillac's plan to get high profile people back buying armed Cadillac limousine. The lexus and toyota armed cars have a lot more stye then the new Cadillac DTS. But I wll say that this was a great PR move and that it was a great way to advertise their new car. I guess we will just have to wait and see what happens with the DTS.

Driving Privileges: Should senior citizens be required to pass road tests?

First of all, picture yourself driving to - lets say, work. There is a bad traffic jam for the freeway, so you decide to take the back roads to defeat the traffic in order to not be late for work. On your way, cutting lefts and taking rights, you end up behind some late 90's Cadillac going about 15 under the speed limit. Patiently waiting for it to pull off to the side, your nerves really start to get to you. You finally pass the "ol' geezer" and are on your way to work. About 10 minutes later, you hear schreeching of loads of tires and loud banging and smashing of metal. You look to the freeway on your left, and see that the same Cadillac, which was causing you hell earlier, just caused a 10 car pile-up for pulling out infront of someone going 70+ mph. If that doesn't bother you, then you must not read on.

Within the past few years, senior citizens and their driving abilites, or shall I say "disabilites" have been making the news. Every now and then, you'll hear of some 75+ year old man or woman carelessly causing a critical (and sometimes deadly) automobile crash. Many of you may know about the crash out west, where a senior citizen male crashed through a market place killing some people and injuring some as well. Well, there is a similar story that hit my hometown. About two weeks ago, on Rt. 50 there was a very bad crash right outside of my town. I live in Belpre, Ohio..about 15 minutes away from Marietta, and there are stop-lights down our highway to "prevent accidents." Adding to this, is a 50 MPH speed limit, in which you should follow. Well, a mom and her daughter were driving down the highway, and were coming up on the lights. They were green, so they preceeded to go. Just within seconds, a senior citizen driver ran the stop light and hit the woman and her daughter. The womans husband was following behind them in his car. He stopped the car, jumped out of the vehicle, and tried to get his wife and daughter out. Minutes later an Ambulance arrived: sending the daughter to the hospital in critical condition, and the wife being pulled out of the car with the jaws of life, and later on dying from loss of blood. This is only one, of MANY nationwide cases which happen week after week.

I know the question that comes to most people's minds: How can someone driving so slow, be so dangerous? Well, in today's world, nobody really ever takes their time anymore. Going too slow, can cause careless bumper-to-bumper accidents, road rage, and sometimes all-out car pileups. Something needs to happen to prevent further deaths. There should be some type of road testing for senior citizens to pass once every few years (or maybe even months!)

In my opinion, the public is usually scared of teen drivers hitting the road; but, what about these senior citizens?
There are various things about senior citizen drivers which infuriate me:
1. Leaving their blinkers on 10 miles after they have already turned.
2. Going 10-20 miles per hour UNDER the speed limit in safe road conditions.
3. Not knowing how to correctly park a car.
4. Pulling out infront of you, then going SUPER slow.
5. Not being able to hear your constant horn honking when you are trying to tell them something.
6. Passing one old person, just to end up behind ANOTHER old person.

Please tell me your opinion on this and what should be done....

Professional Sports Teams Can Use Their Own Money

Over the past 10 years there has been an enormous rise in professional athlete’s salaries and a rise in the number of new stadiums built to house these athletes. Stadiums being built today range from $150 million to $400 million. It is understandable that owners feel they need to have the top of the line stadium to attract the best athletes, improve their team, and increase their wins. That is what they are in business, to produce winning teams. But, why do so many owners feel it should be the city’s burden to shell out hundreds of millions of dollars to build these stadiums around the country and not their own?

Since 1997, 14 new stadiums have been built. Each costing at least $150 million, with the highest costing $534 million in Seattle. Subsidies were used to pay for at least half of the costs, if not all, of each stadium, except for three. Across the nation subsidies for professional sports stadiums cost taxpayers over $500 million annually. This is $500 million that could go to road improvements, more police on the streets, better equipment for firefighters, or improving schools. This $500 million could also go back into the pockets of taxpayers.
Why are cities willing to shell out so much money to build a place that millionaires can run around and play in, when many of them will never see the inside or will not be allowed to go where the millionaires go? One way owners push for new stadiums to be built is by threatening to leave a city and move somewhere else. By doing this they may put two or three cites into a bidding war with one another. Many cities want to be a "Major League City". They think by having a professional sports team that it will improve their cities economy. This is not the case.

One strong argument for the subsidizing of new sports facilities is the creation of new jobs. If a new stadium is constructed in a city in which the team already has a stadium, these jobs will simply be transferred. Only a small number of new jobs may be created. If a city outbids another city, and the team relocates, then jobs are simply moved from one city to another. In the case when one of the leagues’ offices grants a city an expansion franchise, new jobs would be created, although many of these jobs are only seasonal, which could be anywhere from 8 months to 6 months out of the year. A majority of the jobs created are not full-time positions. Many are only part time, because most positions are only needed when the team has a home game
By providing sports franchise with subsidies to build new stadiums, a deadweight loss to society occurs. If the construction of new stadiums are not funded by subsidies, they will be built by private developers. Owners would be forced to spend their own money, causing more time to be spent "in the planning, construction, and operating phases of such projects in order to achieve the economic returns necessary to attract and maintain the capital investment." There is no economic development when one stadium is abandoned and a new stadium is built down the road. When facilities are still functional and then deserted in order to build a new one, no societal value is gained. One economist remarked, "It is make-work: no different in principle from digging and re-filling ditches."

My question is why do citizens of cities continue to subsidize stadiums for professional teams, if there are no economic benefits for their city? Is the extra tax citizens’ pay worth the cost of living in a "Major League City", or is it something else?

After the Inauguration

After President Bush’s inauguration (http://www.rnc.org/ ), there will be another four years of Republican Party. The Republican Party prefers minimal governmental regulation of business for it gives more individual freedom, which means it tends to protect the individualism of business from “Big Government.” The Republican Party held great power back to the Civil War period since business development was taking place on the land and society needed relatively free market. However, during the Great Depression, American business lost such power in the society, the small impact from government was challenged. Nowadays, after the terroristic attack, American business seems not as active as it used to be. So is it good to protect those individual business groups, or the government needs to pass some laws to solve social problems?

Ohio Republican Party: http://www.ohiogop.org/

Asian Economic Potential

Asian economic is stronger in recent years. In 2004, Aisa once again is a bright spot in the global economic picture. Asian financial markets have done well, outperforming other regions in most asset classes. Asia is expected to grow at 5 percent in 2003 and 5¼ percent in 2004, making it the fastest growing region in the world. http://www.imf.org/external/np/speeches/2003/101203.htm Desipte the effect of SARS and recently the serious affect of Tsunami, Asia's economic growth forecast for this year has been underestimated. Beside some big countries like China, Japan, South Korea..., the other countries in Aisa are also developing well. Indonesia may achieve GDP growth of 5 to 5.3 percent for this year, up from the firm's earlier forecast of 4.5 percent. The potential for Thailand is 6 to 6.2 percent, up from 5.7 percent previously anticipated. Malaysia may reach 5.3 to 5.8 percent, up from the earlier 4.8 percent forecast. Philipines is 4.8 to 5.5 percent growth, compared to the earlier forecast of 4 percent... http://www.taipeitimes.com/News

China:Market social economy

China used to be a planned economy country. Government tried to give each individual equality of opportunity. We were not rich in material, so China did not develope rapidly for many years. Because government did not give people enough material incentives. But now China choose Market social economy. The income distribution according to how much you worked, I think this is very fair. What is the difference between our market economy and other counties'? I think is that besides we encourage competition in market, we also consider about the weak group's benefits. Do you want to know more about Chinese economic system, please click http://www.china-window.com/china_economy/Socialist-Economy/index.shtml

Buy your book online

Have you ever buy your text books onlie? If you have done that, you must have figured out the price online is much cheaper than the textbooks in bookstore. and sometimes, you can get a new book with very low price. But the price online is not always very low, it has some fluctuation which according to supply and demand. If there are not too many a certain book, the price of this book will be higher. The prices are set by sellers according to how new(new, like new, acceptable) they think their books are. So do you think online book market is Monopolistic competition ? which means involves many firms, each having some price-setting power as a result product differentiation(cited from Comparative Economics).
And do you also think online book market is a underground economy? http://www.freerepublic.com/focus/f-news/1312260/posts
Will it affact the accuracy of GDP? I think that if we considered used books, we cannot put the income from selling the used books into GDP, because they may not be produced in a given year. However, if we imagin selling books as a job, the income from it should be people's wages which is part of GDP. So what do you think?

Washington Capitals Ice Rink to benefit Area

The Washington Capitals and Arlington County are going to develop a community ice rink. It will serve as a training center and a place for the community use year round. This should help with the increasing demand for time by local hockey teams and skating groups. This ice rink should benefit local restaurants and retail stores. The rink will also generate taxes from the revenue of the complex. I think this will be a great addition to the community in Arlington, Virginia.

What can 40 million dollars buy?

What can 40 million dollars buy? If you are President Bush and his administration the answer is a lot. A lot of celebratory propraganda and unnecessary party favors. In a time of constant warfare, soldiers' struggles, and economic hardship, Bush decides to throw the largest party to welcome himself back into office. The inaugural bill exceeded 40 million dollars. While the large majority of this was from private contributors, you can guarantee the me and you, tax payers, will be fronting some of the bill.
Who needs this kind of celebration? Is it a president who has seen a decrease in popularity, or one that needs a boost of confidence? Once again the world had to stop so all eyes can be fixed on Mr. Bush. While millions are grieving, picking up the pieces, or still in shock in East Asia, Mr. Bush decides this would be the perfect time to celebrate. Not just any kind of celebration, but a 40 million dollar one.
So what could 40 million dollars buy, putting all unproductive means aside? Could it help to fund the unfunded Bush mandate that is to leave no child behind? Could 40 million dollars help contribute to the tsunami relief efforts? Or possibly could the 40 million dollars be used to fund our troops which are fighting his war? No! 40 million dollars was better spent on parades, champaign, and celebration.
One must ask himself or herself the price of happiness. Would you spend 40 million dollars at your graduation party, or would you contribute that to people around the world who lost everything? What is the value of Life? To Americans is it 40 million dollars to recognize one man when all in East Asia is lost?
While inauguration is a big event and should be celebrated, there are factors that must be taken into consideration. Current events should have demphized this inauguration, but the Bush administration had to distract from reality again.
Instead our tax money is being used to toast Mr. Bush and friends. That is one expensive toast!

Social Security and the Economy

Social security was a large issue in the 2004 election. Now that Bush has been re-elected, the issue of social security is back in the news. NBC nightly news did a story saying that social security is not as bad as it seems. The real danger may be 50 years down the road according the the news program. The link in the title gives a tax analyst's point of view on the issue of social security. From the past election, and what you have heard in the news, what do you think about the issue of social security?

SuperBowl Commercials

When we think about the SuperBowl the first thing that comes to mind are the commercials. But are the companies that pay for these multi million dollar advertisements really trying to promote their product or are they just having fun comming up with new ideas to get Americans to laugh? One of the most famous commercials during the SuperBowl was the Budweiser frogs commercial, where three frogs spell out Bud-weis-er. But what do frogs have to do with beer? The answer : nothing! Budweiser tries to use the frogs to make their commercials funny so that people remember them more often, but does that really help in selling their beer or just in remembering their name? Although I find the commercial humorous, I have to say I wouldn't buy Budweiser beer just because three frogs can croak out the company's name. I always thought the point of commercials was for a company to prove that their product is better than their competitors. That isn't what the commercials shown during the SuperBowl accomplish. Their main objective? To influence people to buy their product. What have they done? Make people laugh and only remember the name. Which is more important: a famous name or larger sales?
Link: http://www.suberbowl-ads.com/2005/index.html
Go to 1998 selection and it is the second Budweiser commercial.

When will this bubble burst

After the bubble burst in stock market, more and more people start investing money on real estate. During the past three or four years, both supply and demand stand on a very high level. On December 2004, housing starts jumped 10.9% from previous month, and reached its “biggest gain in seven years”. However, will housing still hot? When will the bubble burst?
Some economists believe that the increase in buying due to the low mortgage rates. So I guess if like David Lereah, chief economist for the National Association of Realtors has said, the fixed-rate loans would rise to 6.75% from about 5.70% now by the end of 2005, number of people buying new houses would begin to shrink. No one wants to face such a huge number of credit repayments. Nonetheless, other people maybe anticipate in rising interest rates and invest more just like what they do in stock market. You buy at lowest, sell at highest.

Second, as the price has already reached its summit, it must start to decline. In other words, we got a “saturated market” now. The weakening in November is a sign; the US’s “housing market bubble is at risk of bursting”. Furthermore, job losses and international market would also be a shock. But some realtors say that demand is still strong since there are higher-than-expected immigrations who need to buy a house.
More information can be found here.

Competitive Health Care

As college students, many of us take our health care for granted. If we get sick we may just go to the Student Health Center, or to our family physician, and our parents insurance takes care of all but $30 or $40 worth. Since we’re only paying $40 we do not care how much the physicians visit is, or how much it may be for a x-ray or MRI. We just go anywhere we want to go. But, what if we were consumers of our Health Care? What if we did care how much it cost? If you needed an MRI and there were two physicians beside each other, one charging $1000 for the MRI and the other charging $800, which one would you go to? Well under traditional old health insurance plan, many people would not care. They are only paying $40 either way. They may never even know how much it costs. But, if they were paying for it out of pocket, they then would become price conscience consumers of their health care. The U.S. economy is based on competition for consumers. Health care does not have that competition because many people do not care how much it cost.

In the news recently there has been much discussion about America’s health care system and about the growing number of physicians quitting the profession or moving state’s because of the high cost of malpractice insurance. Cost in the health care industry continues to rise because of a lack of competition, and the lack of consumers shopping around. One idea the White House has came up with is Health Savings Accounts. A health savings account is a tax-sheltered savings account similar to the IRA, but earmarked for medical expenses. Deposits are 100% tax-deductible for the self-employed and can be easily withdrawn by check or debit card to pay for medical bills. Larger medical expenses are covered by a low-cost, high deductible health insurance policy. HAS earns interest and what is not used from year to year stays in the account. By having people use these accounts for their first medical expense, it will cause consumers to shop around for their medical service, and will increase competition in the health care industry. By this increase in competition, consumers may see health care cost fall, while services continue to improve. This is by no means a save all for Health Care. Do you think competition is good for the Health Care Industry, or do you believe the traditional way of co-pays and high insurance costs is the best? If most of our economy is based on competition, and free market, why should our health care be any different?

Internet Shopping (Ebay, Overstock, Etc...)

Internet shopping has been on a steady rise. With online retailers like Ebay and Overstock, I am beginning to wonder if the online shopping is actually hurting some retailers. As an avid shopper of Ebay, I know that a lot of things people buy can be found on Ebay for a lesser price. I have purchased everything from textbooks to tickets to Kenny Chesney. Do you think these online powerhouses are helping out economy or hurting it in the long run?

Video Game Monopoly

EA makes the most recognizable football game in the video game industry: Madden NFL. They have dominated the market for football games ever since Madden NFL was first introduced “back in the day.” Why? Madden was a better game in every way to its competitors. EA was proud of this fact, and very aggressive in keeping their game on top. Last year, they were challenged by a well know video game company, Sega. Sega, a couple of years ago, changed their business format from hardware and software, to just software. Sega is a large company with good business sense (arguably bad luck, but that is another topic). Sega saw the market for football video games and jumped at the chance for profits, and with their new focus on software, they had the ability. Their answer to EA's Madden NFL was ESPN NFL, using both the ESPN and NFL name rights. This game has been in the market for a while, but last year, with new vigor, Sega attempted to make it the first game to truly compete with Madden. They not only made a fine game, which for many people, was better than the Madden game, they reduced their prices to about half of Madden (I don't know how they were able to do so, but that is also a different issue). Well, for Sega, it worked. Their game was successful and Madden finally had a comparable rival. Just as the market is leaning towards competition, in comes the aggressive stance that EA has taken in this particular genre. That aggression has finally went too far. In December EA made its first move by acquiring a deal with the NFL for exclusive rights. That means that only EA can use players’ names, NFL logos, NFL endorsements and anything else that comes with the NFL brand name. That was already a slap in the face to its major competitor, Sega. There was even, what turned out to be rumor, talk about EA making the same move for MLB, NBA, and NHL rights. Now, EA made the final blow that is so aggressive, I view it as a personal attack on Sega. They bought the exclusive rights to ESPN, the very organization that Sega’s game is named after.

One consequence from EA’s actions, is that their competitors in the broader sports genre of video games are forced to make self preservation moves, though Sega themselves was not one of them. Soon after EA bought the rights to the NFL, another competitor made a move for exclusive MLB rights, and a follow up story hints that this deal is going through. There is also talk about the companies attempting to get exclusive NBA rights, though the NBA seems to resist this.

These actions are very controversial in the gaming community. I personally got in an argument with someone from that gaming community about the underhandedness of EA. The argument at first was about bias toward one game or the other, but it soon turned to an argument on whether or not EA is a monopoly. In comes my question: I believe that this action not only gives a certain amount of market power in the football genre of video games to EA, it is enough to classify EA as a Monopoly in this market. So, I ask, do you believe that EA should be considered a monopoly and the government intervene, or do they have the right to grab up exclusive rights deals such as they did?

Also, if EA were to be considered a monopoly, should its competitors response by securing the MLB rights be considered the same, or should it be justified as a self preservation move and given an exception (at least a temporary one)?

Why not in the U.S.?

All of us here at Marietta know what WalMart is, what great prices they have for college kids, and what a fun place it can be to hang out at if you are really bored. Another thing WalMart is known for is bringing hundreds of jobs to a community. Many people accuse WalMart of running the "little person" out of business and this may be true, but overall most Walmart’s increase employment in a community. This is well in good, but how well does WalMart treat its employees? Well, that is the first mistake I have made, there are no "employees" at WalMart. WalMart prefers to call them "associates". One writer from the Washington post called Walmart’s "associate"; "a term that connotes higher status and collegiality and that actually means lower pay and workplace autocracy."

Since Walmart’s existence it has always called it employee’s "associates", and it has always opposed every effort of its "associates" to form unions. In the U.S. if WalMart employees, sorry "associates," formed a union, WalMart would not deal with them because WalMart does not recognize unions. But, this is no longer the case for Walmart’s all across… China.

In the last week of November of 2004 WalMart of China, now called China WalMart, decided to let Walmart’s across China to form unions. Independent trade unions in China are illegal, so any unions formed at any one of the 40 Walmart’s in China would have all associate belonging to the "Communist Party controlled umbrella body All China Federation of Trade Unions (ACFTU)." Under this new system China WalMart must only allow their "associates" to form unions if they ask for a union. Currently no store has asked for a union.

Why will WalMart allow unions to be formed in China and not in the U.S.? Some economists believe WalMart opposed unions in the U.S. because it allowed them to keep wages low and benefits to a minimum. Unions in the U.S. fight for their members by demanding fair wages and benefits, and speak out when these are not achieved. Why would WalMart feel China would be any different? Unions affiliated with the All-China Federation seldom push for wage increases or safer machinery. There are few union uprisings in China and those persons who seldom speak out about workplace abuses and pay are dismissed, organizers of labor protests face imprisonment. In the United States WalMart itself has fired at least 5 percent of workers involved in unionization campaigns. This is illegal in the U.S.

I am not trying to make WalMart look like an evil empire. I just feel it is a unique situation that one of the largest cooperation’s in the United States is willing to allow its branches in a foreign country establish unions ran by a Communist Government, but will not allow unions associated with the AFL-CIO to be established. Is WalMart really looking out for the best interest of their "associates" or trying to keep boosting profits by keeping wages low and not having to worry about anyone complaining?

A few kinds words for a communist...

Zhao Ziyang, former Premier of the People's Republic of China, has passed away at age 85 while under house arrest. Zhao was instrumental in helping to introduce market reforms into communist China during the 1980s. His radical proposals included dismantling the commune system that dominated agriculture and introducing private ownership of small plots of land in order to encourage agricultural production. Zhao also argued for price reforms to free up prices from central control.

What set Zhao apart from others in the Communist Party hierarchy was his fervent belief that economic progress was critically linked to political democratization. Unfortunately for Zhao, his sympathies toward political openness lead to his eventual downfall (and house arrest) in the aftermath of the Tiananmen Square protests and massacres during the summer of 1989.

My question: Must economic and political liberalization always go hand-in-hand? Is the Chinese model of social reform (market economy with limited political freedoms) a viable long run choice? My sense is that once you give people a taste of freedom in one area (the economy), they will thirst for even more freedom in the other area (politics).

Powerful, yet non-smelly manure?

What in the world am I referring to? Well, with the farms in America facing more and more struggles to stay out of debt, some farmers in Vermont have found what could be the way to save their farms and power America at the same time.

In Vermont, 1,500 cows now not only provide milk, but electricity! Yes, the methane gas from their manure is being routed to a generator, and then injected straight into the power grid of a nearby city. The 1,500 cows provide electricity to over 300+ residents already. Now the farmer has income from the cows' milk and manure, more income for the same amount of capital. The residents pay 4 cents more for this 'special' electricity than they would normally, but it's cleaner than coal, and most definitely renewable. And, a final plus is that after the methane gas is removed, the manure has virtually no smell left and can still fertilize, just without the threat to your nose.

Is this the new electricity generator? It very well could be. I'm wondering how fast other farmers will try to do this same thing and capture more income. Will rural America be revitalized? What will the coal burning companies do? Granted coal is used for more than just electricity, but it is the leading electric production input. Will places like West Virginia face more layoffs in the residual mining towns? With the pressure for environmentally safe inputs, could coal see a decrease in demand, with companies either being forced to lower price or to buy into the manure market? Only time will tell!

Click here or the title if you want to read the story!

Strong Growth in Germany

Germany's gross domestic product grew 1.7 percent last year compared to a 0.1 percent decline the year before, the Wiesbaden-based Federal Statistics Office said. This is also greater than that previous three years combined. Germany is considered to be Europe's largest economy, but as seen in this article, this large economy can't expect to see more substantial growth in the future with the fluctuating Euro/Dollar exchange rates. The Euro has shown tremendous strength all through 2004 and continues to stay strong into 2005.
I spent 7 months in Italy last year (Jan.-July) and I saw the direct affects of a strong Euro. For us it meant that our Dollar wasn't worth as much which made things more expensive. In addition, because of the exchange rate European exports were down and prices were increased domestically. We kept praying that the Dollar would one day jump back up to the 1 to 1 rate seen in January of 2003, but were never fortunate enough to see that happen. We talked about it in International Finance and thought that perhaps a new American president would help strengthen our currency but that didn't seem to be the case because the Euro continues to stay above 1.30.
I'm not an expert on currency exchange, but I've learned a lot over that past year and fear that the Euro's high trend won't end anytime soon.
http://specials.ft.com/euro/FT3OAVRRCZC.html
As many experts say, this will hurt European exports but it tends to help America's exports to Europe because of the Euro's purchasing power.
I'm interested to see if lagging European economies will at some point slow the Euro's growth. It's also a bit ironic that Europe is hurting itself with its own currency. So the ultimate question remains: Is there a point where the Euro is TOO strong; and how will it be weakened?

The Hockey Blues

As an avid hockey fan, I really missed the chance to attend NHL games over this semester break. I'm sure others share the same blues about his issue. What went from a supposed half-season lockout has now turned into a full season lockout. Hopefully the arenas can survive, especially those that are not multi purpose stadiums such as the Igloo in Pittsburgh. There's only so man circuses and concerts a venue can put on due to nearby competition, but is it enough to keep the arenas alive without the stream of income from hockey?

So what's with hockey these days? Should the finger be pointed toward the owners or the players? Are the players truly underpaid (which from comparing NHL players’ average salary to that of MLB players, they are) while the owners are 'tweaking' book profits? Or are the profits what they are and the players will have to take a salary hit if they still have enough passion for the game to play?

These are all questions I'm wondering, but right now I'd like to focus on one possible reason for the long lockout, arbitration. The NHL uses traditional arbitration, which would consist of a player, or the NHLPA, putting forth a salary offer and the owners, or the league in this instance, countering the offer. In traditional arbitration the arbitrators examine both offers and can decide on either offer, but generally tend to favor something in the middle of the two. This leads to problems, long arbitration and small contract zones. The players have the incentive to overvalue themselves while the team owners have the incentive to undervalue the player. This can lead to a very small contract zone and leave little or no room for negotiation. Click here for a list of all of the hockey players that sought wage arbitration in 2004.

Now, click here to compare the amount of NHL players asking for arbitration to that of the MLB. I found this to be grossly disproportionate, especially given the fact that there are many more players in the MLB (30 teams in both leagues, but average roster for MLB is 40 and only around 20 for the NHL). But, MLB utilizes a different 'flavor' of arbitration, called "final offer". In this environment, a player and team both submit salary offers as before, but the arbitrator(s) chooses only one offer, there is no 'middle ground' per say. If the player shoots too high and the arbitrator agrees with the owner, he could risk losing a lot, and vice versa for the owner. This induces both parties to put up an initial offer that is close to what each side estimates would be the arbitrator's decision in the matter. In doing this, the contract zone is expanded, and often in the MLB, arbitration is not used as an active tool, and most cases that do go to arbitration have a wide contract zone. The player and the team both have the incentive to negotiate 'out of court' or such.

Could this be something the NHL should look at instituting?

Are Emily and Greg More Employable Than Lakisha and Jamal?

That's the title of a paper by Marianne Bertrand and Sendhil Mullainathan published in the most recent issue of the American Economic Review (September 2004) and available here. Bertrand and Mullainathan (henceforth B&M) conduct a field experiment by sending out fictitious resumes to a number of employers in Chicago and Boston. The resumes were constructed to depict high quality candidates and low quality candidates and then randomly assigned White-sounding names and Black-sounding names. B&M then recorded the rate at which candidates were "called back" in order to setup an interview. White names received about 50% more callbacks than Black names. The differential callback rate is taken to be evidence of continuing racial discrimination in American labor markets.

B&M go on to discuss the implications of their results for the leading economic theories of labor market discrimination, namely, taste-based and statistical discrimination models. Taste-based models essentially argue that employers (or fellow employees or customers) have a "taste" for avoiding people with particular characteristics (race, gender, etc.). Such prejudice comes at a price though: a discriminating employer willingly passes up on a highly qualified minority, thereby overpaying for a worker from the majority group. (See Gary Becker for details on this theory.)

Statistical discrimination is primarily the result of imperfect information regarding the productivity of potential employees. Employers may resort to using group-based characteristics as proxies for individual productivity as a means of reducing the cost of searching for new employees.

According to B&M, their results imply that "training programs alone may not be enough to alleviate the racial gap in labor market outcomes...[and] if African Americans recognize how employers reward their skills, they may rationally be less willing than Whites to even participate in these programs."

My take: I wonder if African American parents will feel pressure to choose White-sounding names for their children in the future.

Where's the BEER?

Ever notice how after the Budweiser frogs had their 15 minutes of Superbowl fame, beer commercials seemed to taper off (save for the occasional clydesdales playing football)? When one thinks of the main corporations sued during civil lawsuits that deal with alcohol 'problems' and violations, what comes to mind? Anheuser-Busch and the Miller Brewing Copmany is the correct answer. It is the beer industry that is always targeted for lawsuits, but could this have had regulatory effects on how much this industry could advertise? I don't personally know enough about the issues offhand to know whether there were ramifications from lawsuits that constituted more than monetary issues.

Alright, you're at a concert long before the gates open, presently tailgating in the parking lot. What do you picture 90% of everyone there drinking, if indeed they are consuming alcohol? Beer, that's right. The beer industry has a problem though, believe it or not, it's losing its market share in the U.S. In 1995 the beer industry constituted 59.5% of all alcohol sales in the U.S., while by 2003 that percentage had slowly slipped to 56.7%.

What could cause this possible slip in market share? It is that the government imposed advertising limitations on the industry, or perhaps the beer industry had crutched too much on past sales and past market shares and saved money on advertising solely by its own decision. Maybe demand has just tapered off with all of the 'diet crazy' of the 1990's, or beer might have just lost it's appeal, or could it be competition?

Depending on how widely you define the relevant market, spirits and wine could act as perfect susbtitute for beer. If this were the case, and beer prices were to increase, then consumers would exit the beer market, lowering demand and price, while entering the markets for spirits and wine, increasing demand and driving up price in both of the latter markets. In 1999 the spirits market grabbed a mere 28.6% of the U.S. alcohol market, but by 2003 it had edged its way up to 29.7% The percentages for both the beer and spirits industries may seem marginal, but it could be a hint into future trends.

Another issue perhaps we should consider is advertising. The spirits industry unloaded a cool $100 million out of its pocket to be spent on broadcast advertising alone in 2004. A huge chunk of this change is focused on the younger demographic as well, capturing the market of the 'new drinkers'. Also, by far the biggest consumers of beer are the Baby Boomers. But as the Boomers age, they tend to prefer the 'finer' things in life and switch from beer to wine or mixed drinks, something that's said to be more cultured. It could be this shift in preference that is driving down the demand for beer slowly over time. As noted in the Yahoo! article, it could also be a rebelling of Generation X to drink wine coolers, mixed drinks and other items in an attempt to stay away from the traditional beer consumption of their parents and other elders. Only time will tell if this trend will continue.

Can the beer industry gain back its lost ground? I believe so, but in order to accomplish the said task, it will have to start becoming active 'recruiters' versus passive producers. Anheuser-Busch has already started to allocate more for advertising in 2005 as has Miller Brewing, so let the games begin!

Lessons from Blogging 101

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

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

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

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

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

Hurricanes An Advantage For Florida Economy?

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

Did America "embrace" Bush's agenda?

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

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

Demand for Energy Increasing

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

College Athletes vs. The NCAA

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

Wine by mail

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

Outsourcing by Financial Frims

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

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

City or Country: Where do Businesses use the Internet

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

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

the computer evolution

MariettaEcon.

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

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

Chiron Boosts Vaccine Market

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

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

BCS Screws Up Again

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

Gambling for Scholarships

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

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

Will NBA's Revenues Fall?

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

What is the price of life?

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

The Smart Mergers Continue

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

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

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

A Sirius Problem

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

Can Giambi be an Externality?

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

Cingular and AT&T Combine

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

New California Emissions Standards and Auto Makers

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

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

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

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

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

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

Title IX

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

Coming soon: Toy Story 3, Nemo 2 ?

New York (CNN/Money) - The Walt Disney Company is pushing forward with plans to capitalize on the blowout success of "Finding Nemo," "Monsters, Inc." and other animation films whether partner Pixar Animation Studios likes it or not.

See this article -> http://money.cnn.com/2004/12/08/news/fortune500/iger/index.htm

According to this article, the Walt Disney is forcing to Pixar Animation Studios to work together for famous sequel such as Toy Story 3 or Finding Nemo 2. However the problem is that Pixar seems that they don't want to consider about this suggestion. Although, Pixar Animation Studios are composed of many people who had worked in the Walt Disney Company before.

My question is this.
What do you guys think about this situation?
If Pixar accepts it, would it be better decision for the Walt Disney Company? OR would it be better decision for Pixar?
What if Pixar disagrees this suggestion, what situation will happen between these two companies? For Animation Industry, Are there going to be a big change because of this conflict between two companies?

Paying for the Colts

When the Colts moved from Baltimore to Indianapolis, the team signed a lease with the city until 2013. Part of the deal with the NFL, the Colts, and the city was, that the Colts had to bring in the league average of revenue. If they were not able to do this, essentially, the people of Indianapolis would have to be the ones to pay to get their team up to that average. In 2003, the Colts missed the mark by $12.6 million dollars. Now, the Colts could get out of their lease in 2007 if the people of Indianapolis do not pay the extra sum of money through taxes. If you lived in Indianapolis, would you want to pay to keep a professional football team in your city, or would rather just see them leave?

'Tis the Season

This article tells of the sales that took place on the Friday after Thanksgiving this year. It is stated that advertising has begun to slightly increase the sales in the past few years. Sales are higher so far this year than at this point in the past three years. The economy is in the process of recovering from its fall after the terrorist attacks, but has the economy recovered so much that people can once again afford to spend A LOT of money on gifts this year?? Or have people adapted the the declining economy and learned how to make their budgets stretch so that they can spend during the Holidays??

I think it is a combonation of the two. The economy is recovering therefore enabling those people that are employed to have money to put back into the economy. But, since people are still struggling, they have had to adapt by making sacrifices during the year. This gives them more money to spend when they are feeling the holiday spirit. Stretching the money that is put back into the economy makes for a better holiday season for buisnesses, gift givers and gift receivers.

Reply: Would you like to pay more?

I have noticed that hamburger comes in different leannesses. At Reeds where I work we shop for lean hamburger which commands a higher price over the less lean meat which commands a lower price. I prefer lean hamburger because it tastes less greasier than the cheap hamburger. The hamburger that we buy isnt always brand name just depends who has the better deal that week. So how do you like you burgers? cheap a greasy? or pricey and lean?

IBM Quits the PC Business

Like most people out there, I too was first introduced to the personal computer world through the handiwork of IBM. I remember having a friend who had one of those really old Apple computers...The one with the dark green screens; but I wanted something better and at that time, IBM was the only one that offered any options. Nowadays all kinds of PC producers have emerged, including names like HP, Compaq, Dell, Gateway, Sony, etc... IBM was the first to ever make a portable computing device when it introduced its ThinkPad to the technology world. It's so hard to believe that a technological pioneer like IBM would throw in the towel after all these years of work with PCs. I guess it's to be expected though since companies like Dell have come in and offered so much more product for the money. I was just recently looking up some PC information for my parents because they wanted to buy a new computer over the holidays. I compared three PCs: Dell, HP, and IBM. The Dell was much less than IBM and only slightly cheaper than HP. I have to say that even the outside appearance of the Dell and HP would have made me want to buy them over the IBM. I suppose this might be the reason why IBM's PC sales (about 10% of total) have seen losses over the past years. The ticket price isn't cheap (at $1-$2 Billion), but like the article said, it would be a great way for some smaller named computer groups to better compete against PC giants like Dell. Goodbye IBM, and thanks again for the PC.

Food Prices on the Rise

Ephraim Leibtag, an economist with the USDA’s Research Service informed consumers on Monday that, “The price of food is going to rise as much as 4% this year.” This food price inflation is going to be the highest since 1990. The past two years the food price inflation has been 2.2 and 1.8 percent. Why is the price of food increasing? Since some consumers have adopted a high protein diet, the beef industry has seen an eleven percent increase. Dairy products have increased by eight percent. Due to the harsh weather the southern states have suffered this past hurricane season and which caused farmers to replant their crops, there has been a four percent increase in fresh vegetables. My question to you is, “How much more of our consumer income are we going to have to use to purchase food and is that food, fad or necessary?” Do we need all these high proteins diets on a daily basis or can we supplement our diets with seasonal items, such as fruits and nuts to get the most value for our food dollar or will we be at the mercy of producers and the premise of “what the market will stand?” If the demand for beef were to fall and the supply were to rise, the excess inventory would then become excess production and producers want to move excess inventory, especially if it is perishable. Smart shopping can hold the price we pay for our consumer good and an increase of 1.8 and 2.2 percent could carry through the year.

Free Ipod - Scam or No?

Okay, I got this thing about a free ipod (http://www.freeiPods.com/?r=12744069
) and I was wondering about it. Supposedly it works - you sign up, refer 5 people who sign up, and complete one offer, like a free trial of diet pills. Supposedly, you can cancel the diet pill trial just before the free trial ends, and avoid at least the majority of fees, but still get credit for it. A friend of mine did this, and it actually worked for him. He checked the serial number and it is legit and everything.

But what about the old adage, "If it sounds too good to be true, it is"? (AKA TANSTAFL - remember that? There ain't no such thing as a free lunch.) And what are the economics of it? Seriously, how do they make money if they give it away for free? My guess is that their sponsors (the people you have to sign up for an offer with) pay a lot of money for the advertisement they receive, thus Ipod makes money still.

Porky Pets

The article that I found on National Geographic.com entitled Porky Pets caught my attention. My three year old golden retriever is 20 lbs. overweight and the vet suggests a special formula to help her lose weight. I think it is also necessary to mention that the dog food is about two times more expensive than any regular store brand.In the article it discuss how 1 in every four pets in America is obese which puts them at a high risk for diabetes, heart disease, and many other health problems. Which makes me want to provide the best for my dog, no matter how expensive. So my question to you is whether or not the diet dog food is worth it? And if the veteranarian(they only place you can buy the food) has created a monopoly like advantage?

Gas prices continue to drop

Since Nov. 19, the national average for self-serve regular unleaded gas dropped about 3 cents and was about $1.93 a gallon on Dec. 3. The main reason of the dropping price is that more plentiful crude oil supplies. Thereby, gas prices also are going down. It means that the supply curve of gas shifts right. Although demand of gas will increase with the dropping temperature of winter weather, U.S. heating oil stocks rise due to the fall in oil prices. In order to control the price of gas, OPEC could choose to rein in output of crude oil. Lundberg said “the oil cartel is unlikely to cut production and that would prompt gasoline prices to drop even further.”
However, I think that gas price will increase in the long run, because demand of gas will increase. As far as we know, winter is coming and temperature is lower and lower. The demand of gas for heating will go up if people want to keep their room warm. On the other hand, OPEC is planning to reduce supply. According to those reasons, the supply surplus of crude oil will decrease to a new price so that the supply can be equaled to the demand. About the future gas prices, what do you think?

Discounts = Sales This Holiday Season

As the holiday season of 2004 is here in full swing, now is the time to head out to the stores and buy buy buy...however if these things can wait till after the big 25th you may find some better deals. It seems this holiday buying season will be fueled heavely by discounts around the marketplace. Sales are poping up everywhere from places such as BestBuy.com, abercrombie.com even down to the little Putnam Chocolates here on front street in Marietta.

Kathleen Hays in this article, reviews some of the latest movements in corperate America to help attract you to send your hard earned buck at their store...

Australian firms bullish on China

This is an article about Australian companies, which would like to increase their investments for commodity exports increases. As a developing country, China needs to trade with other countries in the world that have a comparative advantage in a specific good. China was Australia’s second-largest market for exported goods in the nine months to Sept. 30th, 2004. Many companies have already made a plan about investing in China in the coming year because they have confidence in the Chinese substantial economy. However, some economists think that China’s economics is not very strong, and compare it to pie in the sky instead of Promised Land. What do you think about it?

Sony vs. Microsoft

If there's ever been any question as to what Microsoft does and does not monopolize, the video game industry would certainly fall under the "Does Not Monopolize" category. In fact, Microsoft is challenging the Sony Playstation's dominance of the gaming market, especially now that Sony announced that their super speedy computer chip - dubbed The Cell - will power the next Playstation console in 2005 or 2006.

The Cell, which combines four processors that will allow the third Playstation's graphics to look as if it were "done in a Hollywood studio," has Microsoft scrambling to respond with a new gaming system of its own.

And considering that gamers tend to be price-sensitive, The Cell will sell for less than $100, as opposed to the $150-$200 selling price of a lot of computer processors. This is even worse news for Microsoft!

But an Insight 64 chip analyst says PC processor designers shouldn't be too worried, considering how specialized The Cell chip will be. On top of that, the market for video game chips is only 1/10 the size of the market for PC chips.

So here are my questions: Will the demand for Playstation systems increase, allowing Sony to dominate the market even more so than Microsoft is claiming they already do? Or will the demand for The Cell chips be nearly non-existant, considering how small the size of the video game chip market is compared the market of PC chips. What will Microsoft's new system have to be like in order to rival Sony's, or will Sony's system even be a threat to Microsoft?

Video games calm kids before surgery-More effective than tranquilizers or parental presence

This article talks about a hospital in Trenton, NJ that has been letting children play video games on a Game Boy in the operating room before undergoing surgery. They claim that it will help them relax better than tranquilizers or holding "mommy's hand". Researchers have found that by letting the children play the Game Boy, the childrens anxiety was reduced before the anethesia actually kicked in. They say that this could be especially helpful, because parents are extremely uneasy about tranquilizers being given to their children. They say that these methods have been used before, but never actually in the operating room. The Design Continuum Inc., has even begun testing a "combination anesthesia mask and headset that would allow patients to play video games or listen to music". The hospital is even considering making Game Boy use standard before pediatric surgery.

So my question to you guys, is "if hospitals begin to use Game Boys before pediatric surgery, what effect will it have on the market for game boys?" Another important thing I should mention, is that on CNN.com(the place where I found the article) advertisers from e-bay.com, fingerhut.com, shopping.com, and fun-free-videogame.biz have all took up advertising spots on the website. Game Boy has already recieved free PR from the article itself, not to mention the paid adverstising from other Game Boy stores.

BASEBALL STEROIDS

If you follow sports or even just the news in generaly you have heard the recent news. Jason Giambi of the New York Yankees has admitted to taking steroids, becoming the 3rd MVP to admit to taking steroids in the past 5 years, joining Jose Canseco and Ken Caminiti. Also, Barry Bonds, one of the greatest ever, has said he took a form of steroids but did not know they were steroids. My first question is this: This could possibly be four great players who have won MVP's and have set many records. So should Major League Baseball take away their MVP's or their records? Should there be an asterick in the record books saying they took possibly took steroids when breaking these records? These are many questions MLB commish Bud Selig will be debating soon. Giambi is also facing losing his contract with the Yankees because of admitting to steroids. Should he lose all this money he was possibly going to make. Baseball is on the downfall right now. There are many other players out there as well who are taking steroids and just have not got caught yet. Is this going to hurt the income of MLB teams in now? Are fans going to start to boycott games. Things could get interesting. And teams could possibly lose money, but will they lose so much it could hurt them? Just some questions for everyone to think about a little. Some Econ related some not. But all interesting.

GM, Ford cut production after U.S. sales fall

General Motors and Ford are planning to cut production of automobiles more than expected because of weaker sales in November. Some analysts predict this will hurt profits. However, even GM's "Lock and Roll" incentive, which would have given consumers the option to lock in current financing rates on both a new 2005 model and a second bought years later, didn't meet General Motor's expectations. I'm wondering what factors caused sales in the United States to slip. Apparently higher incentives are no longer enough to boost sales significantly. As a consumer, I know that price influences me more than anything. Perhaps the price of Ford and GM's vehicles are too steep at the moment for some consumers who would normally invest in an automobile manufacured by the companies. Chrysler, Toyota, Nissan, and Honda have all reported stronger November sales, so perhaps consumers are finding better deals on vehicles there. If supply is cut, according to typical supply and demand analysis, price will increase. However, since demand is weaker than expected, maybe this will result in a move towards equilibrium. I guess we'll just have to wait and see.

The Hardee's Monster Burger Beefs up its Advertising

Two weeks ago Hardee's released the newest item on its menu known as the 1,420 calorie 107 grams of fat "Monster Burger". In order to gain publicity for this new product, they are going to launch a multi-million dollar advertising campaign. Foriegn nations such as Japan, England, and Canada have allready heard about the "Monster Burger". With no indication of its sales so far, Hardee's is still intent on making the campiagn.

Here's my question for you....do u think that Hardee's is making a smart choice by spending such a large amount on their advertising campaign or not? With the hype over healthy eating today and low-carb selections, more cosumers are being drawn to places like subway. The 3 major fast food chains - Burger King, McDonald's, and Wendy's- have all resorted to making more healthy menus with items such as new salads, bunless-burger meals, and more chicken selections. Also, these larger franchises would have the money to advertise for a "monster burger" campaign and recover if it failed, unlike Hardee's. So, is the risk for Hardee's advertsing campaign going to break the chain of healthier food going to be a success or are they doomed to fail from the beginning??

Are the Yankees a Monopoly?

My question to everyone is, are the Yankees a monopoly? Yes, I know that in class we covered that there are really no monopolies in the everyday world. However, I want to ask, are the Yankees a monopoly in the baseball world? With peeking the payroll records every year now for the last ten, the Yankees have done nothing but buy the best players and gather up the best records in baseball. Yes it is true that they lost to the Boston Red Sox this past world series, but still we all know that George Stienbrener will come back next season with something up his sleeve.
My next question is about one of the aspects we covered in class relating to a monopolist. That is price discrimination. In my mind the Yankees have handed over these huge contracts and made impressions on these players that they are worth these ridiculous amounts. I know as a Cleveland fan that the Indians not only would never pay A-Rod the money hes making, but couldn't afford it to begin with. With that in mind is it really fair? The Yankee's can afford to pay these top players what ever they want and with the game of baseball turing into a money game we know noone will beat out the Yankees eventually in this money game.
Finally, I would like to bring up the dead weight loss side to this possable monopoly. Do you think that by the Yankees having all the top players have hurt and cost other franchises money? Of course. Every year you can pencil them in as a playoff spot, meaning that that other teams that couldnt afford to keep up with the Yanks are left to a loss in not only the extra money the playoffs bring to a team but the social aspect as well.
In closing I just wanted to point out that in recognition of the free market world of baseball the Yankees are becoming a monpolist. Should the government put a salary cap on baseball, or should we let these monopolist bore up the amercain past time.

Toys To The Rescue?

Most everybody recognizes the Cabbage Patch Kids, and Tickle Me Elmo as two toys that created some of the biggest crazes during the Christmas shopping season in recent history. Robo Sapien is this year's toy that may come close to this level of success. The existence of these toys has two positive affects for retailers: First, they generate a lot of direct revenue since these toys are able to sell out. This will increase the retailer’s profits. Additional profits will lead to higher wages for labor, and higher investment, which leads to more economic activity. Second, these toys bring in a lot of extra people who may not have shopped at this location before. This will not only increase the retailers profits further because of additional purchases the people make while in the store, it will have a multiplier affect on the local economy (The multiplier affect means the money used to purchase an item, is used over again by the new recipients until it is fully spent or saved, therefore multiplying the affect on the economy; The multiplier affect applies best when the original money spent is from a source outside of the relevant market as is the case here). Any growth in economic activity is obviously positive for the entire economy. Soon, the day may come when the economy is having a severe downturn, a toy of the nature of Tickle Me Elmo comes out, and the added economic activity throughout the nation would become enough to stimulate growth in the down turned economy. Toys to the rescue? Sure, why not.

More digital TVs seen under trees this year

Can you imagine that in a few years, you are not able to watch TV if you don’t have a digital TV set? It's not a joke. The digital TV or DTV sets came out in the late 90s, but they were too pricey at that time, one digital TV would cost you thousands dollars. Therefore, in the electronic market, the price was high, the demand was low. But in the past several years, the price of DTV was keeping falling. Today, according to the nonprofit Consumers Union advocacy group’s Consumer Reports; the price of basic DTV sets start at price $500, and the price of the HDTV (high-definition Television Sets), which are the most sophisticated form of DTV sets with the best quality picture and sound is as much as $1500. People who want to by a DTV or a HDTV now can afford those prices. As the price declining, the demand increases. On the other hand, which the demand of DTV increases, the supply of the programs broadcast in digitally compatible "high definition" would increase to satisfy the demand. Today, you can see Many major sporting events on HDTV, as well as regularly scheduled hit shows such as "CSI: Crime Scene Investigation," "Desperate Housewives," "Without a Trace," "ER," "Everybody Loves Raymond," "Lost," "The Tonight Show With Jay Leno" and "The Young and the Restless."

In the report, it also says that the Consumer Association, a trade group for manufacturers and retailers had an optimal prediction. They think that there would be 3 million DTV to be sold in the last three months of this year, which in the total of 7 million predictive sold for 2004. Therefore, homes of the United States will have 12.1 million HDTV at the end of this year, comparing 7 million for 2003, according to the Yankee Group, a Boston technology research outfit.

That optimal prediction makes sense because the sales of electronics kept tech stocks slightly raised during the thanksgiving weekend, compared the others were declining. Also, The Federal Communications Commission urged TV broadcasters to switch from airing programming on the traditional analog spectrum to a digital spectrum, which offers higher picture and sound quality as well as a government-led consumer education campaign. All of those will help the sell of DTV.

The demand of the DTV set increases fast but not fast enough. As I mentioned at the beginning, why you are not able to watch TV unless you have a DTV? Because the transition from analog to DTV is slated to end by 2007; isn’t it a concern that it is likely to extend the date? The DTV definitely have better quality of picture and sounds; I have seen the DTV in my friend’s home in China, and I like it. But I believe not everyone in this country can afford this by that time. Well, unless the prices of DTV keep falling until what everyone can afford. It is not a dream though, the price may keep falling, and people’s income will increase in the long run; eventually everyone can afford this new technology just like the transition from black and white TV to color TV, but maybe not in this short time.

WalMart, Jr?

Blockbuster is currently the leader in the movie rental industry with Hollywood Entertainment in second place behind it. Blockbuster has been offering $700 million dollars to buy out their competitor. Movie Gallery Inc has also recently placed an offer for Hollywood Entertainment, though the amount is undisclosed. The future of Hollywood Entertainment is unsure.

With Blockbuster owning 9,000 outlets worldwide and it's nearest competitors only owns 1,920 stores (Hollywood Video) and 2,000 (Movie Gallery) it is becoming apparent we may have a "WalMart" of the movie industry on our hands. Throughout the past few years, in my town at least, I have watched small "mom & pop"-type video rental stores go out of business due to Blockbuster moving into town, they simply could not compete with Blockbusters convenience and selection. If Blockbuster buys out Hollywood Video, what will be next? Soon, Blockbuster could be the only place to rent from. Considering their prices are already one of the more expensive of rental stores, it is scary to think of how they could manipulate prices once they have reduced their competition. Who knows, maybe WalMart will enter the video rental industry... that would make for interesting competition...