Outsourcing

I recently read a blog posted by Gregory Mankiw, a Harvard professor, and author of Economic textbooks. Professor Mankiw referred to a comment he made in one of his textbooks which caused a bit of an uproar regarding outsourcing. In regards to outsourcing, Mankiw states, “more things are tradable than were in the past, and that’s a good thing.” The article goes on to mention the importance of facing the challenges which outsourcing will bring. I agree that outsourcing or offshoring is a means of seeking greater efficiency through the market, but I realize it means lots of temporary job loss for countries like the USA.

Global Warming, The Result of Cleaner Air?

A recent European science meeting presented new research stating that clean air may be causing global warming. Two trends are thought to be pushing temperatures higher than originally believed, which are that cleaner air is letting more solar energy through to the Earth's surface, and increased water vapor in the atmosphere is reinforcing the impact of man-made greenhouse gas emissions. This is yet another indication that global warming is indeed a threat that needs to be addressed before it's too late.

Who Says A Name Is Just A Name?

A blog titled What's in a Good Name? on Daniel Gross's blog caught my interest. The entertainment company CKX has recently purchased, for $50 million, an 80 percent stake in Muhammad Ali's name. The company already rakes in millions for controlling the rights to such names as Elvis Presley, "American Idol" and David Beckham. In the five years prior to purchasing the rights to Elvis Presley, Elvis Presley Enterprises had brought in revenues of $40 million per year. So next time someone asks you what's really in a name, the answer could be millions.

Hugo Chavez, Venezuelan President

I read an interesting article titled, The Man Who Controls Venezuela. Hugo Chavez, when campaigning to be the Venezuelan president in November of 1998, had an interesting way of running for presidency. He stood in front of the television cameras and cracked a whip in a fury. "This is what I am going to do to my opponents!" Now a well-known figure in politics, one unique program known as Chavez's Barrio Adento program, has aided his economy by bringing in thousands of Cuban doctors to Venezuela in exchange for oil. The goal of bringing healthcare to the needy is not confined to his government alone. Although, maybe a little eccentric in his ways, he seems to be producing positive results for the Venezuelan economy.

Federal deficit, a record for March

The federal deficit reached a record for March at $85.47 billion which was the highest in history for any March. The article blames the fact that some payments usually not made until April were made in March. Does that mean April's deficit is going to be drastically lower? Probably not. The deficity just seems to keep growing with no plan to reverse it. This last February we reached a record spending for one month of $119.20 billion. At least we didn't reach that record two months in a row.

Living Wage vs. Minimum Wage

I read an article in USA Today called Living-wage movement takes root across nation. It is not an economic commentary, I know, but it talks about the price floor called a minimum wage and the price floor called a living wage. I am one person who does not believe that there should be a floor to wages. Maybe it is because I have never been paid minimum wage, but I don’t think so. I think that I am a person who believes strongly that there are market values for everything. I think that you can buy anything in this world with money. I think that the minimum wage creates an artificially inflated value for a sub-standard product. I think that the market should determine the value of one’s labor. I think that the price floor on labor is creating a social tax. I think that it creates a surplus of supply and a shortage of demand.

Armani...More Than Just A Name

A post entitled "The Business of Armani's Fashion House" from the Knowledge Problem blog explained how Georgio Armani has branched out into much more than wearable fashions, such as cosmetics, furniture, and even candy. While he was interviewed by the Wall Street Journal and was basically asked if he felt diversifying in so many product lines would take away from the prestige of his brand, he seemed quite confident in his abilities to cater to various markets with special attention, without losing his vision in any one of them. I think it's great that he has started to get involved with various projects, outside of clothing design. In business, if you have a talent for something, such as Armani's creativity and detail, why not capitalize on that in any way possible? It seems quite feasible that someone who has been highly successful creating timeless fashions would have great potential doing the same thing in other markets, such as furniture or cosmetics. I say, if you've got it, flaunt it!

Penny Pincher

The Daniel Gross blog had a post called "A Penny Saved. . . ." that was of particular interest to me. The post went on to comment about the recent high returns in the metals market, especially copper. I can attest to this because in my investments class, my group invested in a copper company, and recently just cashed in, earning ourselves a hefty 23% profit in less than a quarter! We were thrilled to say the least. The author of the post brought up the interesting idea that pennies may actually be worth more than a penny if the prices of copper keep booming. If that were to be true, I might actually have something going for me financially, but I'm not about to hold my breath over the possibility.

Hooray For Wal-Mart Banking!

As I read The Case for Smal Government blog, a Wal-Mart Banking post really appealed to me. The author had a great point. He basically said that if Wal-Mart could offer banking what it has offered the world of retail, than it would be a great thing. I completely agree! Finance is my field, and I don't feel threatened by Wal-Mart's possible emergence in the banking world. Perhaps they could bring something to the table lthat traditional banks have not. It remains to be seen what will ultimately come to pass from Wal-Mart in terms of its blending of banking and retail, but the future looks bright.

Lobbying To The Limit

As I read the Capital Freedom blog, I came across an interesting post concerning lobbying. The author talked about some recent proposed changes that would restrict some of the lobbying activity taking place, although the article linked within the post ultimately went on to say that major lobbying activities such as funding politicians' trips, etc. are still allowed. Basically the senate has recently tried to tighten up on its' lobbying policies, by attempting to outlaw politicians' acceptance of meals, as well as trying to increase the amount of information that lobbyists would have to disclose concerning their activity with politicians. Overall, I was quite dissapointed with the outcomes. In my opinion, not many laws were passed, and lobbying procedures still seem to remain pretty unregulated. I think that lobbyists and politicians working together represent a huge conflict of interest. One group receives gifts and resources (politicians), while the other usually gains huge incentives and legislation passed in favor of their businesses (lobbyists). It's about time, senate really stepped up and took a stand against lobbying. Lobbying is bribery, and shouldn't be a part of our governmental policy!

Airline tickets increase with increased fuel charges

The recent increase in fuel is effecting everyone whether you travel by air, bus, train or car. Even the cost of groceries has increased due to the cost of fuel. American Airlines has announced an increase in international tickets of $20 round trip. There is no end in sight of the continued cost increase. American Airlines has announced the increase for international flights but domestic flights will probably follow soon. I believe even the cost of fast food will be increased shortly.

Real estate slowing down

As I read this article I was slightly disappointed. I am probably in a similar situtation to most graduating students who are planning on selling their homes and moving in the next year. This article states that 2006 will be a slower year for real estate and the trend will continue. One of the reasons for this is that mortgage rates are expected to climb. Another fact I am not too happy about. I guess these are trends I and other students will have to live with.

Kinder Capitalism

Capitalism has always been about making the most bang for your buck. But recently there has been a few new companies arising trying to sell their products for only around a 33 percent markup. This is unheard of in our capitalistic economy. These companies buy their products from different poor countries and turn it around for a little profit. They believe in fair-trade, giving the consumer and wholesales more money in their pocket.
If this was my company I wouldn’t have the same business attitude. Maybe it is because I’m a college student waiting to make the return on my investment of school, on the other hand, I might have the same views in the long run.

Lack Of Financial Knowledge Highlights True Problem

After reading the contents of a post called “USATODAY.com - U.S. teenagers lack financial literacy” from the FinanceProfessor blog, I was not surprised at all. The article linked within the post goes on to show the grim statistics of high school students’ lack of financial knowledge. After reading this article, my first thought was that their lack of knowledge signals a major lack of competent teaching. Based on my own high school experience, I feel there is a real disconnect between many high school classes, and relevant real life instruction, including basic financial techniques such as budgeting, and investing, etc. The only class I recall teaching much in the way of financial information were my adult roles I and II classes. I think it’s time to stop reporting on this information, and start being proactive about it. I liked the blog author’s suggestion to start volunteering at high schools to teach students valuable financial information. I’m sure the positive externalities associated with such service would prove invaluable!

Unions and Violence

An April 10, 2006 post called "Surrender Monkeys Again" from the Let's Fly Under the Bridge blog, commented on the recent events surrounding French Union protests. According to the post, union members ultimately won their battle against the possibility of an Employment Contract, with their country's president opting not to mandate it. While unions members are obviously happy with the decision, many worry that such a decision could be detrimental to France's economic competitiveness. While I am usually in favor of unions, I have been dissapointed by some of the violent behavior that has been displayed by different union members in France. Peaceably protesting is fine, but violenting demonstrating is another, and in this case, I think that the decision to bow down to union members' wishes almost reinforces such behavior. It will be interesting to see how France's social and economic state ultimately hold up as a result.

Defense spending remains the leading source of revenue

Defense spending remains the leading source of revenue for the US industry. The defense budget continually increases the revenue. Leading areospae companies have stopped focusing on commercial business and instead focus on defense outputs because greater profit is made here. Fighting terrorism has casued increased cost in the field of areospae due to new regulations but it has also boosted profits for companies with defense contracts.

biotechnology, a lucrative business

The biotechnology industry is booming and so are the wages. Many states are now trying to get in on the action. In addition to states wanting to get biotechnology business to come to their state they are also spending billions to support the necessary research. Those in favor of biotechnology do not want government to step in and regulate business. Biotechnology will lead to innovations in the future.

Cracking Down on CEOs Compensation

Due to the rules and regulations the CEO’s and other high executive’s salaries and bonuses are a hard number to figure out. On the books, CEOs and other executives usually make less than a million dollars because of the tax write-off the government gives. But the problem is executives make much more money than that through bonuses and other compensation plans. The SEC is trying to crack down and make the rules clearer to see the whole price of the compensation. I believe that companies can give their executives any amount of money they want but it should be easier for the investor to see the number.

Tanning Industry

The needs and wants of people today are getting more and more into their physical look. One industry in particular is the tanning industry. People spend more than $5 billion a year on tanning. It is also an industry that isn’t dominated by any one company. The single largest company has only 5% of the market. This is identical to the video rental stores in the 80s before the Blockbuster stores came out. Entrepreneurs are seeing this trend and trying to jump at the opportunity. This is a real possibility that most people have overlooked.

College Grads Move to Big Cities

There are many different reasons why college graduates move to larger cities and the main reason is for money. These graduates are looking for high paying jobs and are driving up the housing costs in these cities. It is also creating a problem for cities that don’t attract these educated people. The article refers to, “the largest predictor of economic well-being in cities is the percent of college graduates.” Graduates bring in and spend money to further help the city. The problem starts with cities not offering the higher paying jobs for the educated; therefore, driving graduates away.