Incarceration of Criminals: Negatively Affecting the Economy?

In an interesting study titled "Diminishing Returns: Crime and Incarceration in the 1990s," some negative points of locking up criminals are discussed. One that is mentioned is a greater difficulty for the criminal in finding a job with the disadvantage of a criminal record. Another, is "breakup of families through divorce an parental rights." I used to think that whatever happened to a criminal was not my problem and that that person deserves whatever comes to them in the form of a punishment. However, through education, I have learned that other people's problems can often be my problems, at least indirectly. A person not being able to obtain a job, in my view, is a negative impact on the economy. The economy obviously affects me. Breakup of families has also proven to be detrimental to the economy. I would prefer to see families stay together. I know it's better for society and thus better for the country. So, maybe incarceration isn't having the positive effect that we thought it should. Maybe it's not the best choice (there is much more detailed discussion and backing in the article). Unfortunately, I can't think of an alternative.

Steady-State Economy

Herman Daly came up with an idea called the steady-state economy. This is where there is no absolute limit of efficiency in the use of natural resources. He basically thinks that the more population there is there will not be enough natural resources to support everyone. So he thinks that the government should have a policy that there is no more population growth. They should also set a level of goods that should be produced. Last the government should limit the amount of wealth each person has. Well I personally do not agree with any of these principles. I think that the government has enough say in what we do already. How do you feel about the issue?

future of US cars


Above is the address of an article on us cars makers and their asian competitors. I think that they are good examples of monopolistic competitive firms. Until reciently US auto makers have made alot on pickups now companies like toyota are trying to get in on that market as well. Monopolistic competitive firms make a product that is different but with time people start to copy and take away their competetive edge. In the case of US auto makers I think that if they cant turn things around or come up with a new "different" product they could go under.

Landfill Taxes

How would you feel about being charged a fee for a landfill? That is one way that has been considered to pay for landfill taxes. This would cut down on recycling, because if you have to pay for a landfill then you might as well use it. Another solution would to charge each family for the amount of garbage they throw out. The way this would be done is by weight of garbage. It seems way to complicated who really has time going around and weighing garbage. But then people would just start burning and talk about pollution. I don’t know if there a solution or not to this. What do you think about the landfill tax, how should it be handled?

Bonds up, dollar down

The article stated that the dollar is losing value and interest rates on bonds are increasing. This information seems like it should be used when making managerial decision on how much cash should be held by the corporation verses reinvested in other assets. The amount of cash a company has effect’s the market value of the stock. Do economic factors carry as much weight as the market value of their stock when making managerial decisions?

Bankrupt Airlines Undermining Free Market?

In an article entitled "Airline Workers Face More Pain as Crisis Worsens", it mentions the "enviable flexibility in terminating contracts and pensions" the airlines in Chapter 11 bankruptcy have. If they have the ability to terminate contracts and cut costs due to bankruptcy, then it seems to me they have an unfair advantage and ability to manipulate the market in ways that increase the damage incurred by the airlines who have managed to avoid bankruptcy.

I hate to see good people lose jobs, but unprofitable businesses are a drain on our resources and it seems that bankruptcy laws are enabling them to stay afloat long enough to drag their competitors down with them. It's very much like how a drowning person will drag down another in attempt to save their own life, and in doing so, drowns them both.

Mercedes Benz

DaimlerChrysler announced that it will recall 1.3 million cars in an expanded effort to ensure quality and solve a current electrical problem in the luxury brand of automobile. An alternator crisis in the expensive sedans has made the company decide to replace all of the parts in the cars. This massive projected cost set the price of Daimler stock back a little but it promises to regain ground. Many professionals predict that this recall may have an adverse impact on sales of Mercedes, but common sense says otherwise. Some may veer away from the brand, but no one can deny that a Mercedes is at the top of its class.

Free Trade Spreads Democracy

Free trade helps to spread democractic ideals. This is the idea presented in a small article from the CATO Institute called Trade, Democracy, and the War on Terror. The article explains that as trade and globalization have spread throughout the last 30 years so have democracy and policitcal freedoms. Nations that have submited to trade reforms in recent years are more likely to expand their citizens' political and social freedoms.

If the United States government wants to spread democracy it should increase trade. It might be more effective to increase trade than to increase military pressure on most countries. Maybe the saying should be "the dollar is mightier than the sword."

$105 a barrel

I just logged on to the internet when somthing caught my eye, I saw a little link that said oil could soar to as high as $105 a barrel if this really happens we are all in for a world of hurt. Not only will gas prices soar at the pump but everything we consume will increase as well, lets hope this doesn't happen.

Propery Rights and Elephants

In class last night, we discussed how property rights may be the best way to save endangered animals. Specifically, we discussed elephants and how property rights in certain countries have increased their population. Here are some comparisons of elephant populations in African nations that have adopted property rights compared to those that haven't.

Externalities of Transportation

We all know that pollution creates negative externalities and that there are a variety of methods to help deal with the problem. According to an article on libray.thikquest.org one simple method is that the government introduces a fuel tax, which they have already done. The effectiveness of this process depends largely on the elasticity of the demand for fuel. In the short run, fuel is quite inelastic, meaning that raising the price will not greatly decrease fuel usage. But in the long run, an excise tax will decrease fuel usage. This solution might encourage people to buy cars that use less fuel or to use public transportation. Both of these changes are environmentally desirable. So even though the excise tax isn’t going up, but prices are, why do people keep buying gasoline? Do you think in the long run people will quit buying gasoline because of the high price and why is it they quit buying it because of the high price but not because of the negative externalities it causes to the environment?

Future Environmental Economics

According to the article, Impacts on Future Environmental Economics, in evaluating policy decisions, governments often leave out a very important group: the people of the future. Economic and environmental decisions often fail to take into account the well-being of future inhabitants of the planet. It goes on to say that the discount factor is used to determine the worth of something in the future, and a discount factor of 1 means it will become more valuable in the future, where as, a discount factor less than 1 means that the value will decrease in the future. Because so many goods have discount factors of less than 1, some people would argue that the current generation should not worry about future generations in this respect. The current generation would only be sacrificing its own well-being, and growth will cause future generations to have higher living standards anyways. In the end it says that environmentalists would argue that we must uphold our moral obligation to future generations. What do you think about this article? Do you agree with the environmentalists and do you really think people don’t care about future inhabitants of our planet?

MCI still can't decide

Why is MCI having such a hard time deciding on what it is going to do? MCI has been getting great offers from Qwest, but still keeps thinking about settling with Verizon. Verizon's offer is 7.51 billion and Qwest's offer is 8.94 billion. I remember reading about this situation earlier, it stated that MCI was having a hard time settling with Qwest because of their finacial instability. Why do you think that this bidding has been going on for so long when MCI has basically made up its mind? Which company do you think that MCI should settle with?

Economic Growth

In the article "Americans' incomes, spending rise solidly" it talks about how the average income has risen 0.3% in the month of February, while spend went up 0.5% in the same month. It is said that these increase are because of 262,000 jobs that were created in February. This is all really good news for our economy, but on the other hand I have read other blogs and articles that say we are heading into a recession. I don't understand how we can have a growing economy and be heading into a recession. Can someone explain this to me?

Microsoft Portable TV

Recently I read an article entitled, Microsoft launches portable TV service. The article mentions that Microsoft is now providing a service for $20 a year that allows anyone to download certain TV shows to portable devices such as media players and advanced cell phones. Most people have already been allowed to download and watch some television shows for free. The newly launched service promises to provide more viewing options than the current free version, by bringing more sports, business, and children’s programming to the menu. The service marks Microsoft's latest effort to get people interested in Portable Media Centers and other devices that use its Windows Media Player technology for watching movies and listening to music. The idea of charging people for something they are already getting for free seems to be an economically challenging idea. I can’t help but wonder if perverse incentives will force people to find free ways to download the television programming, and skirt their way around the $20 a year service fee. Then again, it seems that $20 bucks is a small price to pay to be able to download all of the TV programming your portable little viewing device can hold, especially for a full year of service. Microsoft probably has a really idea going here, only time will tell if it becomes a profitable monopolistic little venture at that further enriches Bill Gates.

Incomes Rise

President Bush's tax cuts just might be working to stimulate the economy. Incomes rose by .3 percent and we had a .5 percent increase in spending. Also, analyst are expecting a 220,ooo gain in new jobs. President Bush so far has done a solid job with the economy since he got into office. You have to take in the fact the he inherited a recession and 9/11 happened. I have one quesion about this article, if jobs are increasing, why did unemployment claims go up in this report also?

Privatizing Social Security

In an article titled Privatizing Social Security Thomas Sowell brings up some good arguments for privatizing . He says that when you have a contract with a private insurance company they can't change the rules they have to pay you what they said they would when they said they would, unlike the govt. who can change the rules any time they want without consulting the people who have invested the money.


Why Should I Work?

Why should I work when I end up getting less of a government grant for school as a result? Why should I work when I could get my rent for free through subsidized housing? I have a friend who decided, a while back, to quit his job so he could focus more on his schooling. As a result, the government takes care of him and his wife through various welfare programs that are available to low income families. Am I gaining more of an economic benefit than my friend by working while going to school? I know I could get better grades if I could stay at home and study more and live off of government programs. Would better grades and less work experience be better then a lot of work experience and lower grades? Would I be abusing government programs if I do what my friend is doing? I personally think I should work and avoid living off of welfare programs as much as possible. I hope that my future employer(s) feel the same.

Study links good governance to performance

The article "Study links good governance to performance" researched whether good governance is an indication of whether the company is sound or not. The research revealed a striking resemblance of companies with strong shareholder values vs. those without much shareholder values. The study looked at 1,500 large companies from 1990 to 1999 and found that those with stronger shareholders' rights produced returns 8.5 percent better than companies with more dictatorial management structures.

What does this information mean? First of all, shareholders are the owners of the company. The CEO is responsible for providing a return on investment to their shareholders. Ultimately, shareholders want to be paid dividends or have the value of the stock rise. Investors these days are investing in stocks in the short term, which means that dividends are less important, and relying on the value of the stock to rise in order to make money. This is the classic example of buying low and selling high. If a company tries to hide information from shareholders, or acts in their own interest, then the return for the investors will be minimal. If this is the case, it could ultimately hurt investors, consumers and the employees of the organization. Just to show an example is companies such as Enron, WorldCom, Tyco, and others you hear in the news today.

Debt and Young Americans

This article, "Why young Americans are drowning in debt," was very insightful. It discussed three major factors that are contributing to the enormous debt that young americans are being faced currently with. The number one listed was the amount owed, on average, in college loans. They have reached record heights recently and look to continue to soar. One of the other major factors is credit card debts. The last major factor is how tight the job market is at this time. With all of these factors going on that are real-to-life for most young adults in the U.S., many think that they (we) may be the most indebted generation of young americans ever. Perhaps there should be a class or two required in high school that would help rising college students and even those who don't plan on attending school to see this reality before being hit by the train. If it is really this big of an issue, why don't we do something about it? If not, this trend will just continue to grow.

When are we taking sexual discrimination cases too far?

IKEA, the Swedish furniture company, is being accused of sexual discrimination. It is being claimed that in their instruction manuals for putting together their furniture they only dipict men not woman in the pictures. It is being claimed that IKEA is therefore against sexual equality among men and women. I think that equality between genders is an absolute must, but at some point we have to draw the line. I don't think that IKEA meant any discrimination towards woman in this case. I'm all for women's rigts, but I think some instances are taken too far. Of course women can put together furniture as well as men can, and by thinking that IKEA might assume otherwise is more like discrimination to me. http://money.cnn.com/2005/03/10/news/international/ikea.reut/index.htm?cnn=yes

Emission Taxes

The article on Emission Taxes is talking about how the government sets an amount of taxes that companies pay for every unit of pollution that they produce. With this certain policy there is a couple of advantages, which are it makes businesses internalize negative externality costs, and can solve the problem of economic inefficiency by allowing firms to maximize profit and pollute at the most efficient level. This way there will be less pollution because companies will want to avoid the tax. When thinking about it that way I think that emission taxes would not be a bad idea, because there would be less pollution. The only problem with emission taxes is that the government would have to carefully measure how much to tax each company.


It seems that Bush’s plan to protect the countries steel producers failed! In 1991, Bush placed a tariff on all imported steel to help protect his major supporter, the steel industry. Unfortunately for the steel industry, “(steel consumers) immediately set about cutting their use of steel so as not to spend more on it than they would have had to spend had they been able to buy the imports.” American steel producers raised the prices of steel thinking they had a monopoly on the market. Consumers simply consumed less while the consumption budgets didn’t grow leaving the steel industry with a surplus and no buyers. This action of protectionism only helped to move along the decline of steel market in the U.S.

For more read, “The Evolution of Protectionism”

More Work For Our Courts

The Supreme Court made a ruling that is going to give the opportunity for many more court cases. On Wednesday, job protections were expanded for nearly half of the nation's work force ruling that federal law allows people 40 and over to file age bias claims over salary and hiring. The part that got me especially was that even if employers never intended any harm. The employers will most likely still be able to win if they can cite a reasonable explanation for their policies. It will just increase the number of hearings in our "unsatisfied, legal-minded people." I have to agree with the business and municipal groups in saying that it could creat costly additional litigation. Whenever you try to please everyone, it usually ends up blowing in your face, which I think will be the case of this decision for the courts. There are so many younger, spunky, more-educated employees that are pouring into the work force from higher education and training. Of course many of these younger workers are more qualified for certain positions than those who have been in the work force longer. I think this is many times what the people are complaining about though.

Should Any Nation Have Nuke Weapons?

During the Cold War, all over the U.S., a fear spread from east to west. Although this war is now over, this fear of nuclear weapons hasn't left the American people. In fact, according to the article, "Poll: No Nation Should Have Nuke Weapons," most Americans think that it is likely we will be attacked by terrorists or a nation with nukes within the next five years. It's interesting to note that two-thirds of Americans say that no nation should be allowed to have nuclear weapons, including the U.S.. I wonder if most of the people who were part of this survey were recently scared into beleiving this by the media. Would everyone be so scared if the media didn't poke it's nose into everything? Yes, it's nice to know that nukes do exists but does everyone need to know all that we know about everything. It certainly gets our attention. But isn't that what the media is going for? That is how they stay in business. The more extreme the news, the more attention they draw to themselves.

No Worries, Greenspan Is On It!

In an article entitled Party Pooper, Alan Greenspan is labeled as an "inflation hawk" by cutting an raising interest rates as needed to either slow inflation or increase economic expansion. The Fed raised interest rates for the seventh time since June, bringing the federal funds rate - which banks charge one another on overnight loans - to 2.75 percent. The Fed also did something it hasn't done in a while: warned investors about inflation. As expected the market is in a tizzy with the Dow Jones industrial average, which traded as high as 10,984 in rececent weeks, sank to 10,430 following the Fed's move. The new worry about inflation, and especially the notion that companies were starting to pass along increases in the cost of wholesale goods, has diminished the allure of the stock market that some believe could be the turning point for intestors. While the ability to raise prices may be good for corporate profits in the short-run, inflation is bad for consumers in the long-run. The Fed's statement was widely viewed as a warning that if prices rise noticeably, some sizable rate increases are to expected down the road.

Living Wage Laws

Battles over minimum and living wage laws are all over the political radar. The article, Durham paves way for living wage in NC, is just one more example of municipal governments electing to institute living wage laws. "When you are trying to help people reach the 'American Dream,' a living wage is the best way to do it," said James Mitchell, a member of Charlotte's City Council. Arguments like This one from Councilman Mitchell are the battle cry for living wage activists. Where is the economic sense? When government requires employers to pay more in wages unemployment grows and the price of goods increases, thus making us all poorer. As managers living wage laws will make us less efficient and will be a roadblock to progress.

How is America going to stay on top?

An article entitled "Getting America's Groove Back", http://biz.yahoo.com/bizwk/050330/tc200503292357_tc200.html?.v=4, discusess what America needs to do to continue being a cultural and economic force. The article suggests that the "three I's" are the solution. The "three I's" are immigration, immunization, and inspiration.
Immigration refers to reforming immigration laws. People from other countries have a lot to offer both culturally and economically. Who knows what innovations that US could produce if people from other countries had a chance to offer their skills. Immunization refers to taking care of the current US population. The article suggests that the government needs to provide more pre and post-natel care. Inspiration refers to inspiring the american people to be innovative and rewarding them for thier innovation. The article's suggestions are interesting. I wonder if this philosophy combined with other solutions would keep America a cultural and economic force.

Tufte's Economics Classes Blog

Tufte's Economics Classes Blog

Farm Subsidies

We all know that farm subsidies support the agricultural industry in the U.S.. But what does this do to other countries? The article "Punch-up over handouts" explains who benefits from agricultural subsidies and who it hurts. The author explains that 33 of the 49 poorest countries import more farm goods than they export. If subsidies were extinguished, then these countries would pay a higher price for their imports. Most of these countries already receive aid from other countries, which would just transfer the burden to the aiding country. Other countries, however, would benefit from freer agricultural trade. Brazil and Argentina are already strong agricultural exporters and would gain more from freer trade, while the rest of Latin America would lose approximately $559 million a year. In a world of increasing competition, I believe we should eliminate subsidies and let the market decide who can offer agricultural products at the lowest price. Every country has a comparative advantage in something, let them figure out what it is instead of bailing them out.


The article on Externality, is talking about the two different types of externalities which are positive and negative. A positive externality is something that actually benefits the society as a whole; an example of this would be environmental cleanup. A negative externality is a lot more common, an example of this is pollution. There is a problem that is created from this where that companies do not fully measure the economic costs of their actions. Because they don’t subtract these costs from there revenues, so profit is inaccurately portrayed. This is where the government comes into play it is there basic goal to have companies internalize externality costs. For example if a company causes someone to get sick from there pollution then the company will be liable for the medical bills. So this way the company can more accurately compare revenues and expenses and decide if production is profitable. What do you think is this how it should be measured?

Recycling Domestic Waste

In the article Recycling Domestic Waste, it is referring to the two economic factors that limit the amount of recycling that can be done. The first reason is that recyclable materials must be collected, and the costs of these can be high. The second reason is the market for goods created from recycled materials is limited. People say that they can sort out waste before recycling, but they may not have the skills required. This is when it can get expensive because then you have to higher people to do it, and more money is involved. There are also economic benefits if fewer items are thrown away then the governments costs will be lowered in paying for landfills. So what do you feel about recycling is it worth it in the long run, will it save money?

Unhappy Blogger

I apologize for not including a link to this post, but I feel strong enough about the poor service blogger.com is able to provide to exit the normal posting procedure. Admittedly I have been a short-term consumer to the web-site recently joining only to achieve school credit. In the little time I have had to get to know and use the web-site I have encountered many problems. Including but not limited to the invitation process, the posting of a blog, the commenting on a blog, and even the logging on to Tufte’s Economics Class Blog page. (Even when it does work it takes forever!) Truly and in all honesty I have spent more time fighting the web-site errors than actually participating in online blogging. I hope mine is an extraordinary case but I have a feeling this problem is more universal. The persisting problem demonstrates the economic paradox of scarce resources. As a company time after time wastes their customer’s scarce resource of time, their customers begin to look elsewhere for service. Had this been a free market setting not a monopolistic, I would have long ago looked past blogger.com for a different blogging service provider. ):


Detroit is Losing

In the article "Detroit losing auto race to Japan" it talks about how our American cars (GM, Chrysler, Ford) at one point has 76% of the automotive market and now they have fallen to 60% and it has been taken over by Japanese cars. This is all basic economics; the more competitive cars are starting to take control of the market. I don't think that Japan will ever completely dominate the market. There are to many that love the American brands, and will never own a car that isn't that brand.

To much money in China

In the article Beware Of Hot Money, it points out how China has been growing extremely fast the past couple of years which means lost of money has been flowing into China. The large amounts of money are causing prices in China to rise really fast especially in real-estate. The government is trying to implement new laws and is issuing bonds to absorb all of the currency that is floating around China, but if they cannot keep up with the inflation that is happening China along with the rest of the world could be in big trouble. There is a bubble that is beginning and without some changes it will grow and then burst which will hurt the world’s economy because China is a heavily used place for businesses from around the world right now and the affects of the inflation after the bust will be scary. What changes need to happen to try and prevent this from happening?

Increase of Home Sales

In the article "Sales of new U.S. homes soar in February" it is stated that home sales have risen 20% in some areas. How long can this continue? Probably not for long, it is reported in the article that the Federal Reserve is increasing interest rate to head off inflation. I think this is very good because we don't want inflation to take over but we needed a boost in our economy.

Oil prices ripple through the economy

In the article oil prices spread ,the point is brought out about how there is a ripple effect happening to the economy due to the rising prices of gas. Many businesses depend on the use of gas to stay in business; therefore a business has to pay more for the gas to get the job done which has the affect of making their customer’s price for the product or service even more expensive. When one looks at it from this perspective people are getting hit twice when it comes to the pocketbook which includes once at the pump and again on any service that would take gas which could even mean buying something off the internet and having it shipped to them or having a pizza delivered. The article brings out there has not been that big of an impact on the economy because of absorption, but what is the long term effects if the price keeps going up? Will it slow the growth of the economy?

Be Aware of Patents

Sony and their ever famous PlayStation and PlayStation2 may be yanked from the shelves. According to the article Mortal Combat, US District Judge Claudia Wilken ordered Sony to "stop selling its already hard-to-get PlayStations, as well as nearly four dozen games it has made or allowed others to sell on its systems". The dispute is over what is called haptics technology - software and hardware that makes a game controller shiver and shake when you slam a car into a wall or get shot by a bad guy, or makes a steering wheel veer out of control when you bump into an object. Apparently Sony is infringing on patents owned by a small Silicon Valley company, Immersion, which patented the shiver and shake technology.

Patents are one method a company can use to protect unique production processes and products and prevent competitors from copying ideas; however, they are also something other companies must recoginze and respect, as Sony failed to do this time.

Adam Smith and the Neanderthal

Adam Smith presented the theory that division of labor and specialization creates a more robust economy. Don Boudreaux reviews how a group of three Economics professors explain that a misunderstanding of this economic principle led to the demise of the Neanderthals in the article Did Use of Free Trade Cause Neanderthal Extinction?

Neanderthals had to cooperate to some extent, but there is no evidence to show that they understood the concept of division of labor or trade. When modern humans arrived on the scene they established an inter-group trading system, and brought about technological innovations. The trading which took place allowed a division of labor as well as specialization. Exchanges of goods and ideas among different groups helped create "supergroup social mechanisms " which helped the cultures survive and led to new cultural advancements. Because the humans naturally followed this economic principle, they survived. The "self-sufficient" Neanderthals perished because they did not.

Did the early humans survive due to a primitive form of outsourcing? Did they do what they were good at and allow somebody else to do what the other excelled at? If we try to keep all jobs in America, even the ones that others can do better, might we go the way of the Neanderthals? Let us do what we are good at and let others do what they can excell at doing. If we do, we will find new things we can do better than others and continue to advance as a society.

Free Riders of All Classes

An article by ABC News at abcnews.go.com/Business/wireStory?id=624158 shares the estimated lost revenue to the IRS by those who underreport their taxable income. The numbers are astounding- a whopping estimate of $300 billion a year. That is more money than government spending on Medicaid for a year! The IRS was able to recover only about $50 billion of that lost revenue last year. Without regard to ethics, is it better for the economy for that money to be in the hands of the private sector than to be paid to the government? After all, the government transfers a lot of that money back to individuals and corporations anyways. That seems to be a popular belief if so many people are doing it.


Hardly a Cause for Panic

Why does this year’s deficit seem to create so much controversy? In theory large deficits threaten future prosperity. That’s because when governments run deficits they must borrow to make up the difference. The borrowing comes from scarce funds and can bid up interest rates. This can slow productivity growth—the cause of rising living standards.
Andrew Chamberlain blogg “Do Deficits Matter,” shows that this is not necessarily the case. “The historical relationship between deficits and interest rates is murky.” Many things in the economy affect the interest rates. It seems that government borrowing and interest rates tend to move in opposite directions altogether.
Deficits are clearly harmful to some extent. The question is to what extent? The average deficit, over the last 42 years, has been 2.1 percent of the GDP. In order for deficit to be considered large it must be 5.9 percent of the GDP or larger.
This year’s deficit is projected to be 3.6 percent of the national income. In the 1980s and 1990s the deficits was 4-5 percent and “hardly cause for panic.”

Government, Steroids & Baseball

In an article entitled Throwing Some Heat the House Government Reform Committee administered an 11-hour scolding to Major League Baseball due to steroid use and policy. Tom Davis, a republican from Virginia chairs the committee and says that the reprimands are far from over. President Bush in his 2004 State of the Union adress, adressed the matter of steroids in professional sports and pleaded for leagues to "get tough" on steroids for the sake of children who see drugs as the only way to compete at elite levels. While performance-enhancing drugs have always been an issue in elite sports, critics say that Major League Baseball has been especially bad about keeping them out. Organizations such as the National Football League and the U.S. Olympic teams have more rigrous tests and harsher sanctions. In Major League Baseball a player's first steriod offense gives them a 10-day suspension and their fourth offense is a year suspension, whereas in the NFL a player's first steroid offense is a quarter season suspension and an olympic athelete's first steroid offense is a two-year suspension. Are Major League Baseball's steroid policy in need of adjustment? Is this something that Major League Baseball could have fixed without government intervention? Is baseball and the new records being broken loosing validity?

Le Tax: Do the French have it right?

I learned something new in an article at money.com about the dual tax code that was first established by the French and has since been adopted by nearly all developed nations out there, except the U.S. The article offers a simplified overview of how the system works and how it could be adopted by President Bush if the correct tweaks are made.

So basically what is potentially being proposed is to have a 25% tax on all income above $100k (less than that is tax-free), and then there is a secondary federal tax on all consumer goods or a consumption tax. This type of tax is intended to encourage people to save more of their money and allows the government to operate with an extremely efficient tax code.

Opponents to these ideas say it is an unfair tax burden on the poor because a greater percentage of their income is spent on consumer goods. They also point out that it has been difficult for European countries to have restraint when it comes to keeping the consumtion tax at a constant and reasonable rate, since it is so easy to increase by 1% which then cranks up government revenues substantially.


Economic vs. Accounting Profits

In today’s world, especially in the United States we have the opportunity of deciding on a career of our choice. I believe the first thing factor many people look at when deciding is money. However, ultimately most people settle into something they enjoy doing, instead of how much money they will make.

I have a brother-in-law that is currently serving in the armed forces. He and his new wife are struggling to pay the bills, but they have the opportunity to fly, and see the world at not cost to them. In fact, he and his wife are going to Egypt in a couple of weeks. In fact he has seen more of the world than I have, and probably more than most people as well. To my brother-in-law, the opportunity to see the world instead of a heavy paycheck makes him happy; economic vs. accounting profits.

Myself, I would not enjoy serving in the armed forces, because I am not a big flyer. Therefore the benefits from different jobs depend on the individual. What someone calls a benefit, others may call, (for lace of better words) a loss.

Privatizing Space Travel?

With our discussion in class on monopolies and their characteristics I came across an article that discussed the pros and cons of space travel going to the private sector-Privatize Space Shuttles? Not So Fast. This article explains that if space travel was private there would be so many costs that would be associated with it that it would be very hard for some private sector to fund it let alone make it safe enough to have people want to experience it. This would be one heck of a monopoly, but would it be worth it?


Companies for Families

Is taking care of family life economically beneficial for employers? According to many companies it is worth the extra dollars to make sure that their employees are able to take care of family matters. This article mentions many companies that provide flex-time, day care, and even elder-care programs to help out their employees. Companies are providing these services because they realize that mothers are the sandwich generation that has to take care of both children and the elderly. Ted Childs of IBM says, "This is not a feel-good program for us; this is about getting the best talent, the most sought after talent, and keeping them happy at our company”. Many companies value this so much that they will penalize managers if they do not respect the policies. Candice Lange of Eli Lilly says, "Our philosophy is to work with our employees throughout their life-cycle with us so they have control over their personal lives and feel more fulfilled”.

U.S. Manufacturing

This article discusses how manufacturing has increased within the United States the past year. The annual increase in orders had the biggest jump since the booming 1990’s. However, manufacturing is increasing faster than the manufacturing employment. Companies are operating with fewer employees than needed, but the falling dollar will entice employers to hire. The falling dollar makes imports more expensive to the consumers of the United States and also makes goods more competitive in international markets. Economists predict that manufacturing employment will continue to grow, and that the manufacturing industry needs to create demand for the rest of the world to grow.

Temporary Visas for Illegal Immigrants

President Bush wants to allow illegal immigrants currently working in the U.S. to get three-year visas, reported CNN. The President emphasized that temporary visas will not grant amnesty. Immigrants wishing to do reside in the U.S. permanently will still be required to complete the process of becoming citizens.

Immigrants fill many jobs that Americans are unwilling to take. Why not allow companies to hire these employees legally. President Bush said, "This new system will be more compassionate. Decent, hardworking people will now be protected by labor laws, with the right to change jobs, earn fair wages and enjoy the same working conditions that the law requires for American workers." These illegal employees will also be required to pay taxes. This would be a great benefit to the U.S. because illegal immigrants use public goods funded by citizen tax dollars.

Bush also said, "Our homeland will be more secure when we can better account for those who enter our country," he said. "Instead of the current situation, in which millions of people are unknown ... law enforcement will face few problems with undocumented workers and will be better able to focus on the true threats to our nation from criminals and terrorists," he said.

The U.S. government has been losing the battle against illegal immigration for years. I think the President's plan is a good way to combat the problem. Illegal immigration will continue despite all government efforts to stop it.

Should the Government Interfere?

Terry Schiavo suffered brain death in 1990 after her heart stopped. Because of extensive brain damage, Terry will never recover. She is in a persistent vegetative state. She has existed on life support ever since. The feeding tubes were removed on Friday. Her husband supports this. Neurologists said this is a painless death.

Terry's parents are petitioning the U.S. Supreme Court to reinsert the tubes. These petitions had previously been defeated in court numerous times. This latest appeal was dismissed. Florida Governor Jeb Bush tried to have Terry Schiavo put in state custody so her feeding tube could be reinstered. A judge has blocked the Governor from doing so.
"The president is saddened by the latest ruling," White House spokeswoman Dana Perino said Thursday morning.

Why is the government always interfering in matters that don't concern them? Granted, the parents of Terry Schiavo have the right to appeal to the courts. Michael Schiavo claims Terry told him she would never wish to be on life support. The death is painless. No abuse is involved. Because this is the case the government has no leg to stand on. Her husband has a right to remove life support. The doctors, the husband, and the family are the only people with the right to decide her fate.
Why is Governor Jeb Bush interfering? He has no right to keep this woman in a vegetative state. The main problem is that the Federal government has become too powerful.

Will Robots replace our regular doctors?

A recent article found at, http://biz.yahoo.com/special/hospital05_article2.html, expounds on the idea and actual implementation of robot doctors. A wireless Web link allows the doctor to fire up the robot from anywhere, using a laptop and a joystick to drive it through the hospital.
Does this not sound a little bizarre or even worth ones time of going to the hospital only to see the Doctors face on the screen of a robot? Would it be worth the cost you pay to not have human interaction? According to numerous people who have had experience with the new innovation, before they see it, they're resistant to the idea, but once they see that it's just like communicating with a real person, their opinion changes radically.
Will this change the way our healthcare operates as we now know it? It may save some time and allow the doctors to be more than one place at a time, but is this worth the benefit that is lost from communicating personally-human face to human face?


Free Riders

The article that I read was called Free Riders. This article is talking about those people who think that they should have everything for free. Or in other words you benefit from something without paying for a thing. Free riders are known for taking advantage of public goods without contributing anything for them. I really have problems with people like this because I hate it when people think they deserve things for nothing. No, that is not the case step up and takes some responsibility. I personally could never be a free rider because I have had friends throughout my life that I called mooches, or also know as free riders, which drove me crazy when they thought that they did not have to pay for anything. The main problems that free riders create are when they are told not to use certain products where the environment can be harmed. As a whole most of the population listens, but then there are those people who think that they are the exception.

Good move by the Fed?

On March 22, The Federal Reserve raised its key interest rate for the seventh time in a row. This raise can be good or bad depending on what market you’re in. For people planning to buy a home or set in a variable interest mortgage this is bad. For me, the raise is good; it has made certain investments more appealing. In the article “How Does 3% Sound?”, Aleksandra Todorova says CD rates are finally starting to improve. With rates of 3 percent or better, CD’s are investments to research again. The raise boosted Treasury bond prices, sending yields lower, and also helped slow inflation, which has been a current concern in the economy. In general, I believe the interest raise was a good move by the fed for the country.


The Deficit: The Sky may not be Falling

According to an article from BusinessWeek Online, on March 16 the Commerce Dept announced the current account deficit to be 665.9 billion last year. Because this number hit a record there is some concern that the US has become so dependent on foreign money that sooner or later the dollar will crash. However, a number of Federal Reserve officials say this is not true. Fed Governor Ben S Bernanke has a theory called the “global saving glut” that says, the glut is holding down interest rates in the US, freeing the federal government to run big budget deficits and allowing debt-laden consumers to spend more. If Bernanke is right, fears that foreign funds will dry up and lead to the collapse of the dollar are significantly exaggerated.

These federal officials believe the US will be okay because of the Retiree Effect and the War Chest Factor. In short, the Retiree Effect says that global saving surplus comes from the rapidly aging societies of Japan and Europe. Workers there need to build up savings for retirement but because of their countries slow growth, they are investing money abroad and much of it is in US Treasury Securities. The War Chest Factor says that China, South Korea, Taiwan, Thailand, and Brazil have increased their holding of Treasuries to insulate themselves against the vagaries of international capital market flows, and some countries like China, are even linking their currencies to the dollar.

If these Fed optimists are right, then there is no big rush in cutting the current account deficit. The deficit will some day fall, not with a bang of a dollar crash but slowly, as the rest of the world gathers the rewards of the savings it invested in America. Do you agree with these Federal optimists?

Surging Gasoline Prices Not Slowing Demand

This article that I found on Yahoo Finance was very interesting. One reason I found it to be interesting was because as the price per gallon of gas has gone up, demand has not gone down. Doesn’t this go against the rules of supply and demand that we have learned? Over the past month gas prices have gone up more than 10% and motorists are still buying it. The Energy Department released some figures that the demand for gasoline has raised about 2% from over a year ago. Why do you think demand keeps going up?

Another interesting point was that diesel fuel has gone up roughly 36% from a year ago, but the trucking industry is still thriving. Why? Some say it is because of fuel surcharges and a strong demand from the retail and manufacturing sectors. This is very good for the trucking industry as long as they can keep covering their fuel costs.

One last bit of information that I thought was interesting was the fact that gas prices would have to climb another $1 per gallon to reach all time highs. For our sake, let’s hope this doesn’t happen!


Overpaid and Underworked

Recently, I read an article entitled "Captains of Piracy". The article is a good read and I have to say that I agree with the author. America's CEO's are definately compensated much more than they certainly earn. My problem with the compensation issue is why can't those excess profits be shared among the owner's of the corporation, the shareholders. The most awful part about all this is that even when companies were going under, or even just reporting losses for the period the almighty CEO received a large bonus. The article mentions some good examples. Disney's Michael Eisner, and Hewlett Packard's Carly Fiorina. Both of these individuals were rewarded with healthy sums of money when neither deserved it nor earned it.

"As John Kenneth Galbraith once put it: "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself."

Some may argue that CEO's have top be paid large amounts of money and receive huge bonuses, in order to keep good talent around. I hope they are trying to keep GREAT talent, but the problm is they aren't. When a CEO has earned his due he should be rewarded, but in my opinion he should earn it. That means he must work just as hard and longer if need be than any other employee to earn his reward. Just because he is the guy that calls all the shots doesn't make him so special that they no longer have to work hard for what they earn. I feel that if CEO's shared a little more of the pie with everyone else. Everone else would benefit, and higher levels could be reached by all.

Will the Auto Bubble Burst?

In a recent article published in Business Week, http://www.businessweek.com/bwdaily/dnflash/mar2005/nf20050321_4309_db084.htm, the author points out that with oil prices and interest rates rising, fast times for auto and SUV sales are ending. Has the cost of buying one of these machines overcome the benefit of having one? With the interest rates rising and the cost of gas rising as well, one can not afford to drive, let alone buy an SUV. The author also points out that the problems in the auto industry goes well beyond GM. As stated before, with interest rates rising and the price of oil sky-high, Americans may be nearing saturation, with much less incentive to buy new cars for now. The sales slowdown may result in a stunningly nasty crash.
The end of the so called auto bubble may create conditions for a new wave of inexpensive imports as domestic manufacturers weaken and consumers get even more price-conscious. GM's bad first quarter may signal a very rocky road ahead. What do you think? Will car manufacturers continue to decline in their sales and will we start buying cheaper foreign cars in replacement?


In the article Ongoing inflation fears weigh on stocks they talk about how the price of crude oil is at $57 a barrel, interest rates are rising, and how the stock market is falling. Many large companies are making major cut backs. Could this be the beginning of a recession? I think that is what is happening in our economy right now. Our unemployment rate is up and we are having major cut backs. I think that it is time to watch for the recession's effects to start happening.


Is Oil Really in Short Supply?

Oil prices have been increasing drastically over the past year. Some critics argue that oil is in short supply, and that is why prices are so high. Others, however, claim that oil producing nations create the shortage. They always seem able to produce more oil when they claim that it is in short supply. According to the article "Time for OPEC to plump up its cushion", oil producing nations in the middle east found new oil supplies, or else prolonged the retirement of current oil wells. If this is true, then they are producing more oil than we think. With summer just around the corner, and oil prices on the rise, we can look forward to gasoline prices well over $2.00 per gallon. If OPEC puts a cap on oil prices, the price could remain low, but supply will dwindle. In my opinion this would increase prices as well because of the shortage. Americans are using so much fuel to operate their hummers and suburbans, that the price will remain high. If these nations really have more oil than they say, we could see a decrease in price. But if consumption remains high, so will fuel prices.

Is China Really Taking Away Jobs in the U.S.?

One of the biggest topics among politicians is the fact that the United States is losing jobs overseas, especially in China. According to the article "US textile makers raise alarm over Chinese import surge" China is exporting more than ever before. If the history of China follows, China will grow until it monopolizes the nation in textile exports. Official data released Friday showed China accounted for 35 percent of US textile imports in January and 22 percent of apparel imports. They said that some products such as cotton trousers saw import increases of as much as 1,000 percent in January compared with the same period a year ago. If the government doesn't intervene to save Americas textile industry, many jobs will be lost. Of course it is good for businesses that import because costs will be lower and they will ultimately be able to offer lower prices to the consumer. Is this worth losing jobs? Free trade supporters believe that it is necessary for global competition, and in the long run will be more beneficial. Should the government try to regulate imports from China?

The Government's Exercise Recommendation

Something I have been recently reminded of is that the government issues dietary guidelines. The new guidelines, issued in January, now recommends 60 to 90 minutes of exercise. There are two issues I would like to address. First, couldn't the government spend its time and money somewhere else more valuable than on writing up dietary guidelines for the country? I think society should be able to learn for itself. However, my wife brought up the point that the government has to "fork out" a lot of money, due to government health care plans, to take care nutritional related health problems. Second, in this time demanding world, is 60 to 90 minutes of exercise a day economically beneficial. I am a strong advocate of exercise and have found 15 to 30 minutes of exercise has benefits that outweigh the cost. However, any longer than 30 minutes, I feel I experience diminishing returns.

Bush Levels Playing Field

Bush’s administration is proposing a major to cut to the agriculture world in the U.S. These cuts are specific to the subsidies the government issues to farmers.

Bush feels that the subsidies are lopsided and need to go. It’s about time! As you may well know from previous blogs, I’m not a huge fan of subsidies, as they seem to primarily represent special interest groups.

“Two-thirds of the nation's 2.1 million farmers receive no subsidies, either because the crops they grow are not eligible or because they are too small and marginal to qualify. In the case of cotton, the proportion of federal aid going to large operators is unusually lopsided. One percent of those receiving subsidies collected 28 percent of the money paid out between 1995 and 2003, according to the Environmental Working Group. In Mississippi, seven farms out of 10 receive no subsidies.” – (Bush Administration Challenge to Cotton Subsidies)

Bush is leveling out the playing field! A huge portion of these budget cuts will directly affect the largely republican states of “Texas, Mississippi, Arkansas, Tennessee, Alabama and Georgia.”

Is the dependence on foreign debt capital affecting U.S. hegemony

Despite what you have heard or read in the media our heavy reliance on foreign debt capital, mainly from China and other Asian capital markets, are not adversely affecting our global position. Granted the dollars is weak, but in no way is it threatened as the global monetary standard. Our economy will have to adjust to the devalued dollar which will inevitably lower our standard of living but not affect the U.S. global position. In regards to the large amount of foreign debt capital this is a sign of growth much like a leveraged firm, the U.S. economy is expanding with innovations and the applications of new technology. And what if we lose our needed foreign investors, not likely. China for example, is one of our largest financiers, but China needs us more than we need them. China's booming manufacturing sector is only booming due to the high U.S. imports of their goods. The U.S. of course is not the only importers of Chinese goods but we are the largest, as to say China is not the only foreign creditor of capital but is the largest. So even if the dollar is low this will not lead to a selloff of U.S. assets by foreign investors. Other countries not just China depend on the U.S. economy for stability in thier economy. Especially in the Asian markets with thier aptness for deflation and economic stagnation. For a more broader perspective please read this article.

Inflated Heads

Many people these days sit there and complain about inflation and how oil prices are soon going to be too high to handle. I’m not sure I completely agree with this thinking.
I see inflation somewhat as a byproduct of greed and our inflated egos. In the working world, isn’t it our goal to get as much money as we can get? People are constantly trying to up their pay and in turn, up their buying power. As people continue to increase their pay, aren’t merchants going to continue to raise their prices because they know there’s more money out there?
Every time we see a minimum pay rate increase, we’re bound to see some inflation as a result of this cash inflow to the buyers. In essence, aren’t we decreasing the value of a dollar every time society gets a pay raise?
“A whole host of leading indicators is pointing towards a slowdown which should/could occur any time now. If the Fed continues to tighten while the economy is decelerating we should stop worrying about inflation right now.” – (Inflation?)
So if inflation is increasing, so is our pay and if pay is increasing so is inflation. I’m not worried about inflation…are you?

Retail sales up in February

The article stated, “overall sales rose 0.5 percent last month.” I find it interesting that sales are increasing yet many people are so negative about the economic health of the country. What is the cause of the negative prospective about the economy, even though it continues to grow?

Ski Helmets That Rock

All of a sudden seasonal demand makes a little more sense to me. I'm predicting that's what we’ll see with Giro’s new TuneUps ski helmet. According to the article in Businessweek titled, "A Soundtrack for Downhill Racers", the helmet allows you to listen to music while you ski. It comes with a cord that plugs in to a digital-music player to let skiers and snowboarders rock out on the slopes. Sounds like a great idea, especially for those of us who love to rock out on the slopes without music. With helmets becoming more popular on the slopes this will definently increase the demand; however, it will probably be only seasonal demand.


Kraft CEO Is "Living Proof" That An All Kraft's Food Diet Works

Kraft Food's CEO Roger Deromedi came forward today stating that the South Beach Diet actually works and he is "living proof". Kraft has recently launched a new South Beach Diet brand of foods that focuses on eating the "right type of carbs" and eating lean protein; it is considered a modified version of the faddish Atkins Diet. Deromedi claims he has lost 12 pounds since Christmas and credits Kraft's new food line for his success. At first, I thought this was a rather shameless publicity stunt for their CEO to get the word out about the new product line, but I've changed my mind. If it works for him and he can personally show the diet's benefits, that's all the more reason for other dieter's out there to give it a shot.

I'm Sick and Tired

When I was a young boy I always heard my parents say "I'm Sick and Tired", and I would laugh at them, but now that I'm a dad with responsibility I'm sick and tired. I'm sick and tired everything going up in price and my wages staying the same. I'm sick and tired of others trying to tell me how to think, I'm sick and tired of being sick and tired.

Gas Prices are Rising Again

As we all may observe the gas prices have risen again, and that means that other things may become more expensive as well. Groceries have already becoming expensive, but now that it cost more to ship goods price adjustments wil need to be made. Actually sometimes I think the idea of price increases in gas also gives business a good excuse to raise gas prices. At the beginning of fall semester this last year I went to Little Ceasers and inquired why their 5 dollar pizza can only come with cheese and pepperoni and any additional topping was a dollar more. The girl at the counter remarked by stating it was the rise in gas prices. Well dang, they might as well start asking 3 dollars extra to add cheese to bread, and 3 extra dollars to add sauce. However, though that may be an extreme example of a girl that was told to answer a common asked question to make sence to the consumer, I think that a lot of unofficial additions are added to the propositions out of the excuse of rise in gas prices. Cedar has been fortunate thus far. Comparing the prices in the nation, Cedar's prices are on the lower end of the spectrum. For regular unleaded oil, the West Coast is looking at an average of $2.228 per gallon. How do you think that this rise in the price of gas is going to effect consumer spending? This rise will even be larger in the later spring and summer. Do you think that it will effect trips people plan on taking this summer?

Better Computer Chips

In this world of growing technology it is important for computer companies to keep up. The article titled "Super Cell", http://biz.yahoo.com/fo/050127/e77d9f1fe84a7208eec1dd0d6df251c4_1.html, talks about the new generation of computer chips. The new chip will power the new Playstation 3, and will be produced by Sony, Toshiba, and IBM. It will make computers go "so fast there no point in talking about the number". I think the technology is an interesting industry in that is changes rapidly and if companies are not able to keep up with technology they will be left in the dust. Companies such as Dell who use JIT inventory will be the most successful in the long-run, because they can adapt easily to the changing industry.

The Strength of Our Economy

The tax relief budget, signed by President Bush in 2001, to become a law, has proven to be very beneficial to our US economy. Recently, I read an article published in 2003 at www.gop.com which talks about thousands of dollars being given back to tax payers in America. Today, people in America have more money to spend, invest, and even save than we did in the past. Perhaps there are too many people putting to much emphases on the defecate as a nation. According to the Department of Treasure, "Without the fiscal measures implemented under President Bush, there would be as many as 2 million fewer jobs for America workers today". Within a four month period 328,000 of those jobs were created. Today, the US economy has the strongest growth rate in almost 20 years.

The article continues on about how we as a nation are experiencing free trade with Chile and Singapore, etc. Looking at the above advance, perhaps we are on our way to continue our strong economy rate in America.


Air Travel: Quicker & Safer?

In an article entitled "Software and Smart Cards", by Samantha Levine in the March 14, 2005 U.S. News and World Report, Samantha states that the Transportation Security Administration (TSA) is in the process of spending hundreds of millons of dollars in research and new technology aimed at taking some of the hassle out of the flying experience. Since June the TSA has been running a test program where registered, prescreened air passengers are on a "fast-track" program allowing them to bypass cumbersome checkpoints and skip most secondary screenings. The U.S. has now teamed with Amsterdam's "fast-track" flying security program to make flying international easier. The government is now giving the nod to the private-sector, i.e. individual airports and airlines, to develop their own "easy-pass" programs. Economists say that the private sector can do it in a more efficient way, both service and cost. Do you see any loopholes in this new system? Are prescreened passengers always going to faithful domestics or can a mole/terrorist work his way in? Is it smart for the government to let the private sector develop it's own "easy-pass" systems?

Wally's Price Control

Alright, here’s the deal. Wal–Mart has been rated one of the countries most admired company’s because of their “low prices”. Well recently an article named, One Nation Under Wal-Mart explained what a vendor has to go through to get the big contract to sell their product through Wal-Mart. The process consisted of a seven by ten foot room with thirty minutes to give your pitch (if you’re the vendor). The article continued to explain the strong urge these vendors have to get Wal-Mart to carry their product. It seems that because Wal-Mart is so big that when a vendor gets the contract that they would probably settle for a lower price than what they where considering because Wal-Mart can sell the product by mass quantities. This is interesting because it shows that Wal-Mart can continue to keep their low prices through bargaining with vendors because Wal-Mart can sell so much.


Are you for sell?

In the article, Rent this space: Bodies double as billboards, there is a supply and demand issue happing in the advertising industry. Advertising takes originality and what is more original and creative than paying people to use their bodies to sell a product. This type of advertising grabs people’s attention in both areas of supply and demand. Businesses like the supply aspect of it because potentially millions of people will see the business logo on a persons head and other body parts and it will not even cost as much as putting up a billboard. On the demand side many people thinks its great to get paid for something as simple as putting a logo on there body. They believe if people are going to look at them they might as well get paid for it. The negotiations for “price and parts” are happening on eBay. Are you up for sell?

Venezuala's oil

This article expreses how Venezuela is the fifth largest exporter of oil in the world, and a main supplier of crude oil to the United States. Oil prices are spectulated to remain the same as they are now; however, a question remains about how oil price increases may hurt the world's economy. Venezuela's oil minister dismissed this subject, and this is why I ask you all if oil price increases will damage the world economy.


Supermarket Bankruptcy

In the article Supermarket Bankruptcy, it is referring to the Winn Dixie corporation, which at one time was number four in the supermarket chains. They have recently just declared chapter 11 bankruptcy; they have closed over 200 hundred stores and have slipped down to number 14. Of course there main competition is Wal-Mart, and the reasons for this are because Wal-Mart has the lower prices. It is hard for anyone to compete with Wal-Mart prices. Another problem of the Winn Dixie firm is they really never decided if they were an upscale vendor or if they were a discounter. Which is a mistake on there part because you need to be able to have a target market, so you know exactly who to target.


McDonald's Will Outsource

McDonald's new plan includes outsourcing. In an effort to improve their business, the fast-food giant plans to use call centers to handle their famous drive-thrus. The idea will hopefully speed up their process while making it more accurate at the same time. McDonald's management believes that outsourcing is the key to improve their sales revenue by providing a more efficient service.

Baseball Simulation

This article discusses how an entrepreneur from Germany made his own simulation baseball game. He designed the game so that fans can manage their own teams. The game plays according to statistical data, which makes the simulations more realistic in that the performances of the players are tied to their current numbers, like batting averages. The business is not very large; however, it has found a profitable niche in the market. Customers can download the simulation games from ootpdevelopments.com for $19.95 a each game. According to Markus Heinsohn, his company's sales reaches "six-digits" every year. He has found a way to make money doing what he loves.

Race Cars

In the article Racing to the Dealership:How Motorsports Affect Our Cars it talks about how lots of cars are designed by looking at race cars. Sports cars are a major industry in the U.S. Every car manufacturer has a sports car that they sell. In this article it talks about when designing a car they look at the suspension, the power and make up the engines, the overall design of the car. Which I think this is great because you can use these race cars to market and sell your much simpler car. If one kind of brand is doing well on the race track then that will help your sells. Another thing that manufacturers are doing is bring back the "name" of some popular muscle cars that they discontinued. For some car enthusiast this great and they will buy it just for the name alone.


Congress on Steroids

In the article Congress on Steroids, it is concerned with the use of steroids in Major League Baseball. The reason that congress is deciding to take this upon their selves to resolve is for the future generation of children. So that they do not get the wrong idea that steroids are good for you, and if you use them nothing will happen to you. Baseball players are role models to thousand of kids, and as a role model they should act like ones. There are also those that think that congress should not have any part of this. Some people have asked, “Is it a good idea to have a hearing, why is it necessary?” Congress does think that it is necessary because they think that there is a cloud over baseball and they would like to relieve it. But as already mentioned the main reason or focus is the message being sent out to the children. What do you think should Congress have a part in deciding what happens in the baseball world of steroids?

Lefties make better fighters

In the article Lefties make better fighters, it is talking about the advantage that people who are left handed have a better advantage of fighting then those that are right handed. The reason that this is thought of is because people generally are used to fighting those that are right handed, so if you are left handed it confers an element of surprise, and therefore the right handed person is thrown off. I found this to be interesting because it is true in most cases that there are more people that are right handed. So what do you think is their advantage or not?

Free Trade in El Alto

In El Alto Bolivia many protestors are lining the streets and demonstrating why they do not want free trade opened up in their country. The article talks a little bit about how poor this town is and how in trading with the US, even in small amounts, has benefited them greatly. However there are still a few people who believe that opening up to free trade will chip away at Bolivia’s control of its natural gas and mineral reserves. Others say that free trade will simply lead to more instability in their country. There are also those people who are seeing the benefits of free trade, such as, many small businesses opening up which has also created thousands of new job openings.

By reading this article and knowing a little about free trade, it seems to me that the benefits definitely outweigh the costs, so why are these people protesting against it? Is it that they are afraid of change or do they really think it will hurt their country?

New Market for Pets

Since the attacks of September 11, many business and vacation travelers have opted to drive rather than fly and to take their pets with them. Therefore many motels are offering Pampered Pooches and Finicky Felines programs that provide special food, grooming, bedding, wellness and massage services as well as veterinarians on call.

Pet friendly policies, as well as, extra comfortable beds, and high speed internet access have become more common tactics in the hotel marketing wars that are taking place. Do you think this new Pet Friendly market that is emerging will be successful?

Delta Cutting Costs

Delta Airlines announced it will stop selling food on its flights and give passengers a choice of snacks instead, in order to help reduce costs. Delta will also be eliminating the pillows available on the flight in order to save even more money.

A Delta senior vice president said these latest changes might offend travelers from the glamorous days of air travel, but most travelers today are value seekers. Efficiency and value to the customers are two major ways airlines are surviving. In order for Delta to stay afloat they are cutting some of their variable costs and increasing what the customer is demanding, efficiency. Do you think these new managerial decisions will help or hurt Delta in the long run?

Does It Pay To Buy Organic?

The world today is turning a lot more health concious, but does that necessarly mean that it is worth paying the extra bucks for food that is organic? Organic food is food that has not been treated with pesticides and fertilizers. Antibiotics, growth hormones, and feed made from animal parts are also banned. There are shoppers today that will pay 10%, 20%, sometimes even 100% more for organic food. The organic food sales hit $10 billion in 2003, up from $178 million in 1980. Because of the current hipe with natural foods, grocery stores are starting to stock a lot more of these type of goods. I guess demand has increased the supply, more so in our regular grocery stores.
So is organic worth the extra money? Research has yet to prove an adverse health effect from consuming the low levels of pesticides commonly found in U.S. food. But for the most vulnerable groups -- children and pregnant women -- going organic whenever possible for fruits and vegetables that carry the heaviest pesticide load makes sense.
Granted, foods that are not treated with such things as pesticides are going to be more healthy, but are they worth the extra costs associated with it?

Wal-Mart Pushes for Longer Trucker Hours

Recently, retail giant Wal-Mart has been lobbying Congress to extend the work day of truckers from a 14 hour work day to a 16 hour day. The proposed 16 hour day comes from truckers complaining of never having time to take a break, eat or even wait for their trucks to be loaded and unloaded. Current regulation requires truckers to have a 14 hour day. This includes 11 hours of consecutive truck driving, with a three hour mandated break. The reason Wal-Mart is pushing for a longer day is that truckers currently don't get paid to wait at the loading dock while their trucks are loaded. Extending the day would give the truckers more time to drive during the day, but it would also give them more time to wait at the dock while they aren't getting paid. This gives Wal-Mart the best of both worlds they have their drivers on the road longer and they are still not paying them to wait at the docks. This is the main argument of people who oppose the proposed legislation. The whole idea seems obsurd to me. Giving truckers more time to be on the road will only make them more weary, and tired. This could lead to more accidents on our highways, making it unsafe for people to be on the road. I really don't see how allowing truckers more time on the road can benefit everyone.


McDonalds Changing the Menu

McDonald's is adding new more nutritious items to their menu. In the article McDonald's rolls out new lifestyle campaign they talk about how McDonald's is adding fruit instead of fries to happy meals and how they have introduced new salads to the menu. This is great for McDonalds to stay up with the healthier lifestyle crazy that has hit Americans. It shows that they are wiling to compete, but the majority of the items on the menu are deep fried or filling with fat and calories. So what will the company do to keep up with this demand? They cannot change everything on the menu. Will the company go under if they cannot keep up with health demand?

A New Victoria Secrets

In the article Is Chico's teasing Victoria's Secret? they talk about a new company that it competing with Victoria Secrets. It is for the individuals that are not interested in sexy, young underwear. It is for older individuals that want less of the sexy look. I think that this is great that there is a company out there that will have to make Victoria Secrets compete in the market. The more competition ino the market the better for the consumers.


Minimum Wage Increase

According to the Associated Press, on March 7, the Senate defeated two bills designed to increase the minimum wage. Senator John Sununu voiced his argument against the wage increase, "when you raise the minimum wage you are pricing some workers out of the market." In macroeconomics we learned that as the minimum wage increases the unemployment rate also increases. Is this true? If somehow these minimum wage bills do get passed will it hurt the economy?

A minimum wage increase could make it more difficult for employers to hire unskilled workers. How could this minimum wage hike effect firms? Everybody who is paid minimum wage would like an increase, but I think it could possibly cause more negative effects on the economy than positive. What is your opinion? Are the macroeconomics books telling us the truth?

Boeing and The Affair

This week Boeing ousted Chief Executive Officer Harry Stonecipher for having an affair with a female employee. Was this a smart move for Harry Stonecipher? Let's pretend to be in the shoes of Harry Stonecipher as he is making the decision to have an affair with this woman. Lets look at the opportunity cost; On one side you can say if I don't have an affair I can save my name and still be the head of Boeing. On the other side you can say if I have the affair I will get a quick fix and maybe carry on the relationship with the employee, but I will be fired because I violated the code of conduct. This is a tough decision. What would you do if you were in this situation? I cannot decide.


Job Market Looking Up

As most of us are nearing graduation, or at least we hope so, we begin looking for a job, but what if there isn’t one available? According to MonsterTRAK, sixty percent of graduates head back home to live with their parents after graduation because of the lack of jobs available on the market. However, there is hope! An article in the New York Times entitled, Here Comes the Class of 2005. Can It Pay Rent? states that this year’s graduates face the best entry-level job market in more than three years, and lucky for us, business graduates have the best prospects, especially those majoring in fields like finance and marketing. So good luck to all of the graduating seniors and I hope you will be able to find a job that is rewarding to you.

Is Martha's Company In Trouble?

In the article Martha a buy? Not so fast ... it talks about how Martha Stewart's stock has fallen since she was released from prison. The stock has declined to be worth less than $10 a share. Since Martha Stewart's legal problem arose the company has lost $60 billion. Also Martha Stewart Living magazine has had a 50% decrease in the amount of ads that have been sold.

Is Martha Stewart in big trouble? I think that investors are just cautious right now and soon Martha will be on top again.


Production and Output

We have been learning in class about reaching a constrained optimization for profit through hiring employees until their marginal resource cost equals their marginal revenue product. Companies hire employees that, due to the nature of their jobs, do not increase the productivity of the company, such as janitors or grounds maintenance. To use a specific example- a manufacturing company hires an accountant in order to do work created by new tax legislation or accounting regulations which were previously not met by the company. He or she will not increase the output of the company, but serves a supporting function. Does this mean that production is more than just output?

Gas Prices Going Up

In the article Gasoline set to surge it talks about how the average price for unleaded gas could rise to well over $2.10 a gallon. Gas could rise 12 cents before the middle of March and then another 12 cents at the end of the month. Some of the reasons they are pinning on the huge increase in gas is because of the high cost of old oil refineries in the U.S. and a growing demand for gas in developing countries. I think that this increase could be from the tsunami and the rebuilding efforts of the effected areas. No matter what this will effect our economy as a whole, it takes gas to ship it, or it gas to build it. Most industries use gas in one way or another.


Last Year's Election

RollingStone wrote an article on MoveON, an Internet activist group. The Conspiracy to Keep You Poor and Stupid, by Donald L Luskin, commented on the article saying “MoveOn has raised – and burned through – tens of millions of dollars, innovating without producing many concrete results.”
MoveOn made some serious and costly blunders during last year’s election. It looks like they failed to do a cost analysis of what would happen to it when comparing Bush to Hitler. Little political profit was yielded from the thousands of dollars spent on Anti-Bush commercials.
The stock of MoveOn is dangerously overvalued. If its cost persists to outweigh its profits it is going to implode.

Aerospace firms take to Offshoring

According to Chapter 7 in our Managerial Economics textbook, firms that do not look aboard for cheaper inputs face loss of competitiveness in the world markets and even in the domestic market. According to an article I found on the Network World Fusion webpage, aircraft manufacturers such as Boeing and Airbus are expecting to cut costs by sending some of their software development and engineering work offshore. With the airline industry continuing to struggle, these companies are expecting to increase cost efficiencies by 10 to 15 percent. Do you think Airbus and Boeing will save money by sending their software development programs overseas and do you think offshoring and outsourcing are smart moves for companies?


The worth of an Oscar

I just saw this article that discusses how an Oscar can impact the career of its winner. It evaluates what it might do for someone like Jamie Foxx compared to Hillary Swank, who took home Best Actor and Best Actress Academy Awards, respectively. Foxx's ability as an actor combined with his new Oscar will likely double his earning power, while Swank, who has taken home her second Oscar in five years, will probably have a tougher time defining herself beyond the tomboy roles she has often played. Also discussed are historical examples of how Oscars affected the earning power of people such as John Wayne and Gene Hackman.

Greenspan speaks out

Alan Greenspan spoke openly about social security and Medicare this week. He urges that America get a hold of the budget as soon as possible before it is harder to correct it. He goes on to say that the baby boomers will be taking too much money to replace with the following generations. Alan Greenspan also mentions that interest rates will continue to rise, and the economy is growing at promising rates.

Investing in Nanotechnology

Nanotechnology is derived from the study of quantum mechanics. If you want to know more about quantum mechanics go to http://rugth30.phys.rug.nl/quantummechanics/. The word nano comes from the Greek word dwarf. Nanotechnology, however, is a new discipline that exploits the strange properties found in atoms in the world of quantum mechanics. Thanks to researchers, scientists are able to view atoms at an unimaginary small scale, called a nanometer. A nanometer is a billionth of a meter, or roughly the length of ten hydrogen atoms. At this new scale scientists are able to find new properties of molecules and this is the birth of nanotechnology. Scientist have already learned how to build nanoscale clusters of atoms into spheres, rods, helices, and even resembling flowers. A promising new addition is the carbon nanotube. The carbon nanotube is from a newly discovered form of carbon that is rolled into a cylinder, with the diameter of a nanometer. This carbon nanotube can be used as a sensor, a fuel cell, or to increase computer memory capacity. Scientists have also discovered a way to spin nanotubes into fibers to create the strongest polymers. Building on a nanoscale could change the way we manufacture as well as the way we live. From an inventory of raw materials (atoms) we could produce any type of product from scratch literally. This type of manufacturing, scientist believe, will be aided by nanobots small nanoscale robots producing everyday products. The American government has already spent $1.6 million in 2004 to fund the research and science associated with nanotechnology. So investors beware, we may see with nanotecnolgy a bubble much like the internet bubble in 2000. Also many firms added the name nano- to gain funding so fundamental research into these firms is necessary. If you want to learn more about nanotechnology and manufacturing go to http://www.zyvex.com/nano/.

A brain drain in America?

According to The Times of India,( http://timesofindia.indiatimes.com/articleshow/1022305.cms) America is experiencing a brain drain in Science and Technology. The site says, "The highly-skilled, India-born talent that once flocked to the US is now returning home, turning America's brain drain into India's brain gain". If this is true now would be a great time to get into these fields because demand for these positions will be on the rise and thus compensation will be on the rise. What does this mean for American Companies? How do you think this brain drain will affect India?

What medicines are REALLY safe??

For decades medicines have been approved by the FDA and later recalled because of serious side effects, even death. So how do we know which ones are safe and which ones are hazardous to our health? There is no real way to know for sure, but the smart thing to do would be not to start taking a new "miracle drug" right as it hits the market. Wait it out a year or two until all of the drugs side effects have been discovered, and then decide for yourself if it's worth the risk. The medicine making industry is huge. After all, the money is in the medicine not the cure right?

One of the more recent discoveries is that the FDA has now issued a warning for naproxen, based on the evidence of some cardiac risk. Naproxen is a heavy duty NSAID more commonly known as the headache medicine Alieve. It is also sold under some other cheap generic brands.

This is just one example of a commonly used drug that we assume is safe and has no risks, but really can pose a threat to our health. What should we do about this problem? One possible solution to help lower the risk is to recall our commonly used medicines a few at a time and re-run them through the several layers of the FDA approval process. Even then, if they missed the risks the first time, can we really depend on them to catch them the second time through?

PepsiCo and Obesity

PepsiCo is taking an interesting approach to the Obesity lawsuit craze. (http://www.msnbc.msn.com/id/7067184/) Pepsi is trying to be proactive in protecting itself from the obesity lawsuit age that we live in. Will trying to steer its adds away from kids have a positive or negative effect on demand? I think that demand won't be changed a whole lot. PepsiCo has already made inroads with parents so steering advertising away from kids will most likely be very inelastic because brand loyal parents already introduce pepsi products to their kids.

Demand for Martha

Martha Stewart may be back and as strong as ever. In this article, (http://www.msnbc.msn.com/id/7038081/site/newsweek/), it explains some of the things she is planning. Her misfortunes and her willingness to comply with the punishment may have actually increased the demand for Martha. Her fans seem to feel she was treated unfairly and can't wait to be able to support her. Could it be possible that Martha will be more marketable than ever because of her mistakes. Did prison time actually rejuvinate her career. How do you measure the demand increases or decreases caused by this type of exposure.


St George Housing Costs

I read the article "New-home sales plunge; weather blamed" at http://www.msnbc.msn.com/id/7044977/ and chuckled to myself because of the chaotic home building and prices in the St George area. The article says home building is way down in the United States this winter (mostly in Northeast and Midwest), but the weather is probably the biggest reason why. My question is how to figure out when it will slow down here and the prices will finally level out. Apparenty there are hoards of Californians coming to Southern Utah and throwing cash around like crazy, but this can't go on forever. It now costs between $75,000 - $110,000 for a quarter of an acre. Will the prices drop back down?

2/28 Fair Play Discussion

This post showed up this morning at EconLog. It summarizes research that says that you shouldn't pay much attention to warning labels; for similar reasons to those discussed in Fair Play about parents worrying more about risk behavior than their kids do.