Tufte's Economics Classes Blog - A Living Textbook

2011-11-30T22:14:00.001-07:00

As a class we have been studying the principle agent problem and concept of employee shirking. An article written by Esme Deprez in Bloomberg outlines the US minimum wage increase in 2009. It suggests that the proposed increase came at a poor time for the US economy due to the recession. A primary concern of raising the minimum wage is job losses by small businesses that can no longer

Solar Power Bankruptcies Loom as Prices Collapse

2011-11-30T20:47:00.001-07:00

This article found on CNN Money about the recent collapse of certain Solar Companies is interesting because of the political ramifications that they have. We have started to see signs of this due to the Governments presence in financing many of these Solar Companies like Solyndra. Because of the last few years and the desire to rid ourselves from foreign oil, demand for solar panels soared

Occupy this: Affordable Data Revolution!

2011-11-30T20:45:00.002-07:00

You could call it a data revolution. There is something amazing happening before our very eyes. Massive amounts of data are being created, processed, stored, analyzed and used for profit. Many successful companies rely on massive amounts of data to design their products. For example: Facebook, Groupon, and Human Genome Sciences use enormous data sets to capitalize on the rapid technological

After the Floods, a Sea of Disk Drive Shortages

2011-11-30T15:39:00.002-07:00

According to Businessweek, Seagate Chief Executive Officer, Stephen J. Luczo, is forecasting difficult times for the disk drive industry. Each of the hundreds of thousands of drives Seagate’s Thai factories ship every day contains parts from 130 or more suppliers. Many of these suppliers are three feet under water. For the past six weeks the floodwaters have engulfed much of the industrial

2011-11-30T11:25:00.003-07:00

I wish I had read Robert J. Samuelson’s article when it was originally published. He excellently predicted what we are now experiencing in today’s economy. He clearly elucidated that the usual side effects of a recession are higher unemployment, weaker profits, and you nailed it—more stress! Sounds like my job. He then breaks down a major benefit of a recession: it dampens

You might want to wait until next year to buy an LCD TV

2010-11-27T22:37:00.003-07:00

Black Friday has come and gone this year, and if you did not purchase a big-screen LCD, then you’re an informed consumer or you already have one. Better deals are expected to come later on this holiday season and into the beginning of 2011. This quarter, the average price for a 42” LCD TV is approximately $626. However, the price is expected to drop

Movie theatres charging a higher price and succeeding?

2010-11-27T04:02:00.002-07:00

The movie theatre industry is making some big changes to the way you watch movies and it's worked so far. They are giving people more options in the movie theatre instead of just your typical movie going experience. You can now sit in seats that shake or a "no-kids" zone for adults to enjoy movies. These changes are having a positive effect on sales so far even though they cost a little more.

Are leaked Black Friday ads a positive or negative externality?

2010-11-27T02:58:00.003-07:00

The leaking of Black Friday ads have become quite a problem for many business over the past few years. Somehow people are getting a hold of Black Friday ads before they are released and posting them online, but business are unaware of how this happens. Wal-Mart, though, has been taking the initiative to correct this by pursuing legal action against the people who post these ads without their

Chinese Cotton on the Rise

2010-11-26T18:36:00.002-07:00

Chinese cotton prices are rising due to labor, real estate and demand. The world is spending more money on clothes and Chinese factories are behind in production, again. This movement in the demand curve, coupled with higher prices in production of cotton clothing AND the smallest stockpile of cotton in 15 years will cause the price of clothing at retailers like GAP, J.C. Penney and Wal-Mart to

Proposition 19 – Legalization of Marijuana

2010-11-26T11:21:00.001-07:00

Should marijuana be legalized? According to 46% of California’s voting citizens, the answer is yes! For these voters, they believe that the legalization of marijuana will “cut law enforcement costs, raise tax revenue, and make it harder for children to get marijuana.” From an economic perspective, I have to agree with them. However, I don’t think their argument is complete as I believe they have

Troubled Asset Relief Program Update

2010-11-23T18:42:00.002-07:00

This article is interesting as an update and overview of the Troubled Asset Relief Program (TARP) initiated during the Bush administration. It will be interesting to see the effects of the money the Government has been injecting into the economic arena. Most likely the dust won’t settle for at least a few more years, and perhaps then we will have a more concrete idea of how effective these huge

The Click and the Dead

2010-11-23T13:13:00.001-07:00

The article, The Click and the Dead, talks about how the internet has changed the consumer market. “Everywhere people bemoan the replacement of the local and the quaint by outposts of big, homogeneous chains. But how true is the notion that the internet in particular has hastened the demise of some retailers, and that those it hurt were overwhelmingly small?” Before the internet and e-commerce,

Wal-Marts Strategic Move for Black Friday

2010-11-23T09:45:00.002-07:00

Wal-Mart recently announced that it will be matching its competitors’ Black Friday Ads. I think this strategic move by Wal-Mart is very smart and economically beneficial. The move will increase the amount of shoppers who enter Wal-Mart over the holidays. Even if most shoppers are only at the store for a price-match, Wal-Mart will benefit from the additional foot-traffic, and they must feel that

New Rules in Health Care?

2010-11-22T20:30:00.002-07:00

Federal rules were issued today as Washington moves forward on Health Care reform. The new regulations are aimed at dictating how insurance companies allocate revenues. Many insurers will now be required to spend more on medical care and less on overhead, expenses, and profits. These regulations could lead to fewer companies in the health care coverage industry. Wouldn't this actually be

Falling Oil Prices

2010-11-22T13:16:00.003-07:00

Is there any wonder why oil prices are falling with Ireland now joining Greece as the second European country requiring “bailout” assistance? According to an Associated Press article, “traders and investors are concerned [that Ireland will not be the last country requesting bailout assistance as] heavy debt burdens in Spain, Portugal and Italy may lead to other bailout packages.” In light of this

Ireland, the latest country to be bailed out?

2010-11-22T10:10:00.003-07:00

Ireland, once deemed the "Economic Superstar of Europe" is the latest country in need of a international bailout. This bailout is surprising since Ireland had recently been considered a world economic leader as late as 2007. Similar to the US, Ireland's economy was spurred on by real estate and development growth. This growth turned out to be unsustainable and now the "loose" lending

Netflix Raises Prices, Hulu and Redbox Compete

2010-11-22T08:47:00.004-07:00

Netflix has decided to raise their prices on various services they offer, and they have decided to being offering an internet streaming-only option. This is probably due to the increase in popularity of free online services such as Hulu. Hulu has recently added a new subscription based service called Hulu Plus which allows users to access to a great number of past seasons of TV shows and movies

Torn Over Taxes

2010-11-15T23:06:00.002-07:00

I usually align myself with the conservative republican way of thinking; however, on the subject of extending the Bush tax cuts I am torn. Both sides of the debate make their arguments using “facts” and “polls” which contradict each other making me lose confidence in their respective arguments. In fact I find much of their remarks to be misleading. On this issue I could really use some sound

Dish Network Preventing Product Cannibalization?

2010-11-15T21:57:00.003-07:00

Several weeks ago, in response to the high prices for my previous cable television supplier, I began to shop shop around for less expensive options. It was interesting to me how much planning went on in putting together each company's different channel lineups. Each company offered several different plans, with different channels and different combinations of high and standard definition.

The Decline of the U.S. Dollar?

2010-11-15T12:28:00.003-07:00

In the article, The Dollar: Soon to Swooth, the author quotes Mohammed El-Erian who is the head of the world's largest bond fund. El-Erian states that the dollar is destined to decline and lose its status as the world's reserve currency. El-Erian also states that the most serious risk is a "disorderly decline." This may be true from his point of view, but from the point of view of Americans the

Are Lower Interest Rates the Gas to Fuel the Economy?

2010-11-14T23:07:00.000-07:00

The article, "Stable Home Prices, Low Mortgage Rates Could Gas Economy", suggests the possibility that stronger home prices and further reductions in interest rates, could be what is needed to push the economy in the right direction. The author, Stephanie Armour, presents the facts that 30 year loan rates are at 4.17%. Median home prices in the 3rd quarter were up in 50% in metro areas

Engineer Shortage

2010-11-14T18:37:00.001-07:00

According to a Duke Study the United States is in fact still generating high quantities and high quality engineer graduates compared to China and India. This is contrary to the often reported stat that the United States has a major shortage of Engineers. The study pointed to the conclusion that companies are outsourcing these high tech jobs based on cost. The survey indicated that companies

Retailers: The Bipolar Holiday Sales Season

2010-11-14T18:13:00.002-07:00

The surveys are in and the verdict is...bipolar. Retailers are expecting a holiday season with heavier spending in the luxury market and lighter spending at chain stores. Consumers with an annual income under 50k are expecting to spend 1.2% less than last year. +50k income earners are expecting to spend 2.9% more than last year. This increased demand forecast is pushing luxury retailers like

Big Boost from Dollar Decline

2010-11-12T18:26:00.008-07:00

In the article, Big Boost from Dollar Decline, it indicates that the U.S. economy may experience a boost in growth from the dollar's decline in value. Bernanke signaled that the Central Bank was going to pump more dollars into the economy and the dollar fell by 4.8%. With this devaluation the trade deficit will decrease, which is an equivalent of 0.5 percentage point of growth each year. Applied

Creative Destruction

2010-11-11T21:20:00.004-07:00

Dean and Sobel report that the universal belief that Walmart drives “mom-and-pop” shops out of business is statistically unsupported. Their research suggests, that while Walmart does cause some directly competing small businesses to fail, those particular failures are completely counterbalanced by the entrance of new small businesses through the process

The Costs of Drilling for Oil

2010-11-11T20:44:00.002-07:00

As attention has drifted from the oil spill in the Gulf of Mexico the Obama administration has lifted the ban on deep-water drilling. Many oil companies are looking to expand their extraction efforts into drilling in the Arctic Ocean. A recent report by the Pew Environmental Group has been released in an attempt to prevent such drilling. The report notes that the risks of drilling in the

Spice

2010-11-09T20:23:00.001-07:00

In some Utah counties the sell and production of Spice is illegal. It is expected that the drug will soon be banned state wide. Spice is a drug that gives a marijuana like high from a mixture of herbs. According to the article “Bill banning spice being prepared for legislative session” spice currently sells for $13

Utah looks to cut back on deer hunt

2010-11-09T16:44:00.001-07:00

Baseball may be America’s pastime, but for many Utah residents, hunting deer is a way of life. However, a recent news release from the Utah Division of Wildlife Resources (DWR) indicates that Utah hunters may find it more difficult to draw a hunting tag for bucks next year.This new policy is being considered due to the relatively short supply of bucks found within the deer population. If Utah