Healthy Economy vs. Healthy You

Wow! I read an article that illustrates perfectly why 2 factors that appear together are not always correlated. The Conspiracy to Keep You Poor and Stupid highlights a study that concludes that during healthy economies, there are more heart attacks and higher death rates. An economics professor in the article claims that when people are working more, they are not exercising, they are eating out more, and probably smoking more. However, the study does not give any concrete evidence as to the actual correlation between low unemployment and higher deaths. Is there any evidence that someone will join a gym and work out more if they are out of work? It seems a bit suspicious to me.

New Economics in France?

I recently read a good article on a French Economics teacher. The teacher had attended an internship that allows teachers to rotate through several departments of a company to see how the business is run. She has now been including capitalism, or "the market economy" as she puts it, in her high school classes. She was surprised that people enjoy working for companies and she is now encouraging students to study more than just the shortcomings of capitalism. France's economy is changing, as is illustrated with new employment laws. However, it is evident that many French citizens do not have a firm understanding of basic economic concepts. For instance, in a government survey, only 23% of respondents knew what GDP was. Hopefully this teacher's class will be a good start to a more thorough economics education.

Some Intervention Doesn't Make Sense

As I read The Case for Small Government blog post called "Externalities", I realized that just about everything we do affects someone, whether directly, or indirectly, for good or bad. Such a reality makes governments' dilemma of tyring to determine which issues are worthy of their intervention very complicated. The author of the post talks about the negatives that can be associated with alcohol, and his view that drugs should not be prohibited. While I see the harm that alcohol and drugs can cause individuals, and others around them, I still don't feel they should be illegal. Such consumption would not stop with a ban, but would likely spur people to resort to desperate, and often dangerous methods to attain them. That being said however, I wish people would not consume such products. Judgement is impaired, and thus true self-control. It is when that judgement is self-control is distorted that people make stupid decisions that harm others. Rather than banning these products, I think government, and private entities should make educating others' on alcohol and drugs' dangerous affects a priority. While it won't eliminate consumption altogether, I feel it is the best option because the often grim alternatives that could be associated with illegalizing alcohol and drugs altogether could be much more severe, as the author of this mentioned post emphasizes.

Health, Not War

As I read a post entitled “Large Government Budgets Result from Monopolization, Not Tax Revenue” from the Productivity Shock blog, I realized that it seems conservatives don’t always practice what they preach. How can you claim that implementing less governmental organizations is the key to lowering gov’t spending, and then pass literally every proposal requiring the deficit to bulge? You can speak to the masses about ideals that you really don’t have, but sooner to later, society is smart enough to realize that you are a hypocrite. So many conservatives get heartburn over the very thought of a nationalized health care system, but don’t even bat an eyelash at the fact that we’re spending billions of dollars every month in Iraq!!! At least implementing universal health care would promote health, not violence, something that is priceless in today’s ever unstable world.

Arbitrage, Or Just Business Savvy?

As I read the Division of Labour Blog, and read the Starbuck’s post from April 7th, I actually agreed with the comments. But then after thinking about it for a minute, I realized they charge ridiculous prices for their coffee because swarms of people come everyday, willing to do so! Why would Starbuck’s offer their coffees, etc. for anything less, when they have such a large, and continually growing clientele willing to shell out big bucks? While I would never personally fork out that kind of money for a beverage, apparently Starbuck’s has found a way to capitalize on people with deep pockets, or cravings. No one can deny Starbuck’s has found a way to make good on the simple idea of a cup of coffee turned espresso.

Mitt Romney's Health Care Reform

I've been watching the news recently and there seems to be quite a bit of talk over the new healthcare bill in Massachusetts. Governor Romney is taking advice from both the right and the left by creating a bill that requires purchase of insurance by all individuals for whom it is affordable. "A Healthy Blog" states that the governor is getting loads of feedback from both sides, some good and some bad. However, from what I understand, this reform seems like it actually may work. It is a mix of private businesses and government funding that will supposedly make healthcare affordable for just about everyone. We'll see!

CEO's Salaries Tied to Profits

There has been much talk in the business world about CEO's salaries being too high even when profits are down. Is this ethical? Personally it doesn’t matter how much a CEO makes but when the profits are down, the CEO’s salary should also be down. The president of Ford, Bill Ford, is taking a 40 percent hit on his salary due to the fact that of losses. He says he will not regain his normal salary until the company makes a profit.

Fed's Next Move

With the new chairman of the Fed, the question is will they keep on raising the rates and continue Greenspan's legacy? For the past 20 months the Fed has raise the rates a quarter percent at a time and businesses are wondering if the Fed will cease the raising. The article refers to Bernanke as being the tough guy trying to show who is boss but despite the media thinking that there will be another rate increase, professionals thinks otherwise. There are many assumptions about the May 10 meeting. The chief U.S. economist at Goldman Sachs believes it is not so easy to understand what the Fed will do because of the large hit the economy took with the last increase. The Fed will also take into account the unemployment rate. If the Fed keeps on raising the rate it will have a negative effect on the micro issues due to the fact that businesses and individuals will have a harder time with paying the higher interest rate.

Could This Help With Illegal Immigration?

As you know, illegal immigration is a big issue in this country. Several posts on this blog have mentioned President Bush's plan to deal with it. Most of us have agreed there is a need for action, but admittedly, few of us have a solution. I think this post from Vox Baby brings up a viable idea. At the heart of this issue is the fact that there are no real incentives for Mexico to help police the borders. The country receives a lot of remittances from those working illegally in the U.S. So, it is in their best interest to favor and condone the illegal immigration activities. How do we solve this? The author sums things up by saying, "If you want Mexico's help on the border, find a way to tax Mexico for violations of the border." The suggestion is to expand Bush's guest worker program. The key is to allow a number of guest workers, but decrease that number of guest workers whenever a worker comes over illegally. The specifics would have to be worked out, but I kind of like the idea. What do you think?

What a Difference a Stadium Can Make

This is an interesting post about professional sports teams and the effects of a new stadium. There is an economic impact called the "honeymoon effect" when a team builds a new stadium. This means that the attendance numbers increase because fans want to view the game in the new stadium. This can affect ticket and concessions pricing. The author gives an example of the Arizona Cardinals and describes them as one of the worst teams in the NFL. I must say, I agree. When Arizona was up for an expansion team, they chose to have the Cardinals come over from St. Louis instead. I still don't understand that decision. Anyway, the point is that the Cardinals are building a new stadium in Glendale, Arizona. Now that this is the case, they are no longer offering deals like the four-game ticket package. It is either one game or season tickets. Will they ask higher ticket prices while they are at it? It is interesting that this "honeymoon effect" has an impact on prices, but the team will likely not improve.

Failure to Launch

The new movie Failure to Launch depicts a thirty-something year old man living with his parents. I have come to learn that this scenario is becoming more likely. Over the thirty years, according to the Census Bureau, the real median income for young men (ages 25-34) has decreased about twelve percent. In addition to lower real income, housing costs are increasing at a greater rate than inflation. The result, more of these young men are living with their parents. I am pleased to find out that I am the subject of a major movie.

Free Pretzels?

I recently read an article that discussed the disappearance of “free” concessions and meals on flights. Instead of offering a free snack, airlines have been charging for such extras as has long been done with alcohol. This has been particularly apparent on domestic flights. Some passengers have been upset by this change; however, many airlines have continued with these changes. This is likely a result of the fact that consumers are more concerned with the price of the ticket and not the extras the airline offers. Why do you fly with a certain airline?

Is Amway Here To Stay?

I read a post called "Is Something Rotten In Utah? from the voluntaryXchange blog and must say I couldn't agree more with the comments contained in it!! While I think Utah is a wonderful place, with amazing people, it does seem like multi-level marketing tactics are very prevalent here. Perhaps the promise of getting rich quick is appealing to those who are trying to support large families, but ironically, such "promises" usually just suck people in, ultimately wasting their time and money, two highly valued commodities. Perhaps leaders of such companies see Utahns as trusting and friendly individuals, and pounce on them as their prey, but ultimately, people need to recognize that such marketing tactics are scams!!! Getting involved with such shady projects can also prove to be offensive. Just because one thinks they are going to be the next millionaire over night doesn't mean that everyone else shares in their passion. In fact, one of my mother's friends whom she had known for a long time invited my mom over for a "visit" and "lunch". This masked invitation turned out to be a 3 hour scheme to have my mother get involved with Amway. When my mother politely refused, she felt very awkward and uncomfortable. Sadly, that friend has failed to contact my mother since, and this happened many years ago. To which I say, what a loss! There are plenty of honest ways to make a good living, that don't require you to use your friends, and damage long term relationships. Those ways are called good ol' fashioned hard work! Sorry to say, you can't get something for nothing, and the sooner people start accepting that, the better off we'll all be. Trust me, if I never saw another pesticide selling or security system selling recruiter in the halls of the Sharwan Smith Center, IT WOULD BE TOO SOON!!!

Don't be "Bugged"

The Division of Labour post entitled: "Counterfactual analysis" commented on an article that claimed that bugs save the U.S.' economy billions of dollars every year. Despite these amazing savings, the author had to rain on my parade by talking about all the negative aspects of insects, even minimizing the multi-billion dollar savings the U.S. enjoys by saying, "That's all"? While I'm not a huge fan of misquitos or tics, I still can appreciate the point the article within the post was trying to get across. It is important that we recognize how all life forms contribute to our world, especially financially. All life, including insects, can help carry out crucial tasks for our ecosystem, and it's important to recognize those roles because they ultimately have a great affect on humanity's quality of life.

Cheating on your TAXES!!!

The recent New York Times article titled "Filling in the Tax Gap", is an excellent article that goes against the traditional grain of hating the IRS . It says that if you are an honest tax payer you should want the IRS to perform more audits. Most people are deadly afraid of the IRS and the word, "Audit." This should not be the case. The article details a 3 year IRS study. In the study the IRS randomly selected 46,000 tax returns for intensive review. Using this sample the IRS projected that the difference between the amount of taxes paid and the amount that should have been paid was a whopping $346 million. As an honest tax payer this disgusts me. Why should I be paying my fair share of taxes while there are others who are cheating on their returns? The article did convince me, an honest tax payer, that the IRS should do more to catch cheaters, but I am still deeply afraid of anything to do with an audit.

Does Training Improve Ethical Behavior?

Those of us in the MBA program have had several classes now where ethics have been discussed and taught. A post from the Finance Professor Blog poses this question, "Do training and new regulations lead to more ethical behavior?" In the same sentence, the author gives his answer, "Maybe, Maybe not." I guess this a safe enough answer, but it seems to hit the nail on the head. I think most people agree that ethics are important. By the same token, it seems that encouraging improved ethics through training or regulation would be a good thing. I believe ethics training is very useful and worthwhile. However, it is up to the individual to use what he/she has learned and apply it.

I often feel like the subject of ethics is discussed as a "situational analysis". To me though, situational analysis covers only one part of it. There seems to be two layers involved. That is, the situational layer and the core layer. The core layer consists of time-honored "laws" that just about everyone can agree on. This would include important principles like honesty and integrity. No amount of change or new thinking can change these principles or the effects of not following them. I doubt anyone serious about ethics would demean the value of honesty or integrity.

Let me clarify the distinction between core principles and situational analysis. Dr. Hamlin had a discussion recently on ethics in his Organizational Issues class. Many points of view were shared and many determined that defining ethics was a moving target. I agree that it can be difficult because there are many "gray areas". During the class he told us about some scam artist that tried to rip him off by using false money orders. No one in the class argued about the ethics of such behavior. It would have been silly to do so. This is an example of a core principle that everyone agreed on. It may have been that it was so much at the core, that people did not even think twice about it.

I usually do not enjoy discussing ethics in classes. I feel like the study of situational analysis detached from core principles does little good. It is hard to define and agree on what is right and wrong in each any every situation. However, we need to realize that core ethical principles can act as “pillars” to guide us even when there are “gray areas” or unclear solutions. I have seen the good side and the bad side of ethics training. I feel like SUU does a great job because professors teach moral behavior (core principles). I have attended other schools where moral behavior was formally taught, but unethical behavior was informally applauded.

Now, to answer this question, "Does training improve ethical behavior?" I have to agree with the author when he said, "Maybe, Maybe not". I think Dr. Christensen's explanation gives further clarity. He teaches that moral judgment can be taught, but moral courage is harder to teach. In essence, the teaching of ethics is good but the true test is whether you and I will have the courage to stand for what we know is right.

I Like Mike!

When I saw a post about Mike Leavitt on the voluntaryXchange blog I became very interested. While I didn't realize that Mike Leavitt had a strong chance of getting the already filled Chief of Staff job, I have no doubts as to why he would be a highly considered choice. Although the position was apparently filled by someone else, Andrew Card, I look forward to seeing what political and social positions Mike Leavitt will ultimately fill. I had the opportunity of meeting Mike Leavitt on March 25th, and I must say I was very impressed to say the least. I remember having met him at a Onions days parade in Payson, UT when I was very young, but this last meeting left a much deeper impression on me because of the place I am in my life today. It is also quite a special thing to me that one of Utah's governors was a gradate of the business school that I am currently attending. It is amazing to see where successful, goal oriented, and entrepreneurial minded individuals come from. People from all walks of life, and locations, large and small do incredible things, and it was very inspiring for me to meet one such person, Mike Leavitt, a graduate from my soon to be Alma Matter!

Trvial, Yet Relatable

Upon reading this March 31, 2006 post entitled "Fun fact of the week" from the Asymmetrical Information blog, I immediately could relate. She talked about something supposedly called the "Garcia effect", which is basically the complete avoidance of something because of a bad experience upon first encountering it. Incase you didn't refer to the link, the Garcia effect is in reference to edible things. To this day, I refuse to eat watermelon, and most melon type foods because of an instance when I ate watermelon and became sick immediately after. While I don't believe that the watermelon made me sick, I have always associated it with becoming sick, and have thus avoided it like the plague. While I realize this isn't entirely economics related, it really is food for thought. On another note, how many times do we avoid something great in life, because of one bad experience that could have happened as a complete fluke? My point, unless it's the opera, you may want to consider trying something again after a bad experience to see if it could actually be worthwile!

Free Trade Is The Right Choice!

An April 1, 2006 post called "Free trade pact?" on the FinanceProfessor.com blog was to the point, and accurate. The author provided a snippet from a BBC News source that explained South Africa, India, and Brazil's desire to establish free trade with one another. I think this would be great for them. Having the ability to trade with others makes markets more efficient because it allows others to produce items and make profits, while creating a larger market of consumers for producers. Less restrictions on trade offer more opportunities to engage in market related avticity, and therefore help to increase the quality of life for nations around the world. I hope that the nations listed above will be able to engage in free trade with one another and will be able to see the fruits of their labor in the process.

Bankruptcy is usually a Copout!

As I was reading a March 29, 2006 post from the Half Sigma blog entitled: "The moral justification for bankruptcy" I became annoyed. The author of this post made the act of taking out bankruptcy seem like a trivial event, however, it is not! His argument that people have been paying a type of "insurance" premium in the form of interest rates from creditors, and thus have the right to take out bankruptcy is completely bogus! People shouldn't file for bankruptcy because they have had to pay interest charges, but rather have had to pay higher interest charges because of the mass of careless individuals and corporations that have gone bankrupt. Many who file for bankruptcy never pay their creditors, and essentially force their creditors to raise rates for all of society in an attempt to recover their losses. While I realize that there are genuine situations where filing for bankruptcy is necessary, such as insurmountable medical bills, etc, bankruptcy shouldn't be a copout to get out of paying creditors. That is stealing. It's too bad if individuals decide that they no longer want to finance their outlandish homes, boats, cars, and other toys. They made a contract, and should be bound to it. I am not living within my means so that I can help subsidize the excessive spending of irresponsible and materialistic borrowers. However, the message that the author of this post conveys seems to prove otherwise.