Friday, March 9, 2012

I think I see a connection here...

According to this article from, the U.S. government reported an all time low deficit for the month of February reaching $229 billion. They say that the reason for this large deficit (which surpassed last year's low by $6 billion) is a decrease in revenue do to $25 billion in income tax refunds. The reason for this substantially high refund, they say, is because of the extra day in February this year, giving people just enough time to file for tax returns for the month, that they would normally not get in the three years in between. It also reports more depressing news, saying that the overall deficit this year is projected to (once again) be $1 trillion. Sounds like the economy's doing pretty bad right?
The article also said that American's wealth increased by 2.1 percent, that stocks were going up, and that household wealth (which is the measure of value on assets like houses, banks, and stocks) has also increased and is slowly approaching its pre-recession peak of $66 trillion (which is a good thing).
So what I'm seeing here is that even though the government is experiencing a deficit, the wealth of the American people is increasing. I think this is saying something about tax refunds and what they're doing for our economy right now. The report spoke of the $25 billion income tax refund like it was a bad thing, but what it I actually see is that it more likely helped the U.S. economy, rather than hurt it. This refund put money back into American's pockets, which they then spent and invested in stocks.
Now let's refer back to the Bush tax cuts. After taking in all this information doesn't it seem like a cut in taxes is a pretty good idea? The government may not be getting as much money, but the economy is still growing.

Taxes in Texas

Texas is a great state to live in because our tax system works differently than other states, and usually it works out to our advantage. A small family living in on a small property does not have to pay any income tax, and will most likely have a low property tax on their land- not, of course, in comparison to other state's property tax, but in comparison with larger land plots in Texas. Our property tax is nearly double that of most other states. This is because we are not taxed on our income, and therefore the government makes up for losses in income tax by doubling the property tax. It's a fairly simple concept to understand. While Governor Perry was still in the presidential race, he said the following in a primary debate in Florida, "because they know there's still a land of freedom in America, freedom from overtaxation, freedom from overlitigation and freedom from overregulation, and it's called Texas. We need to do the same thing for America."

The weakness of this model, as explained in this star telegram article, is that our state looks highly unattractive to companies that need vast amounts of land for development, factories or for storage to operate their businesses. While the corporate tax rate is also low, the property tax for running a large scale operation would be astronomical. This article explains that Texas, in reality, actually has a medium to high tax rate. Texas also has the 5th most regressive tax model in the country. 

Read more here:


According to this article, cyberterrorists have made a huge impact on our country by stealing our money and using it to finance their operations. Cyberterrorists not only have the power to attack us online, but also on the battlefield. Officials call it a "cyber one-two punch" in which a terrorist group steals intellectual property, and then uses it to potentially disrupt operations on the battlefield. This type of threat could potentially jeopardize national security. With the internet being such a vital part in every day life, should the government take a Big-Brother action and protect us, even if it means violating our bill of rights? The US tried to pass a bill called SOPA which would take measures towards stopping online piracy, but the American people raised to much cain that the bill was stopped in its tracks. If another bill of this topic were proposed, even if its purpose is towards protecting our people from International online terrorists, Americans might be divided or undecided in their views on the subject. Now my question to you is, would you support this kind of legislation?

Wednesday, March 7, 2012

The New United Airlines

United Airlines made an agreement with Continental Airlines to buy them for 3 billion plus dollars making them the world’s largest carrier with commanding positions in top countries. The new United Airlines would pass up Delta Airlines in size which would help in attract more high-fare business travelers. The new Untied would travel to 370 destinations in 59 countries. The airlines said that combining the two companies they would save an average $1 to $1.5 billion dollars a year while generation $800 to $900 million but 2013. This would be a new yearly revenue. Before the merge of the two companies, both were losing money due to high fuel costs. Both companies also shrunk in size prier to making the merging agreement. The merge of the two companies will also create more jobs which then people will have more money to inject into the money flow cycle of America. However this new big company will bring even more competition for struggling airline companies like American Airlines.

Thursday, March 1, 2012

The Next Big Brother?

Do you ever wonder how much Google actually knows about you? Well, it knows a lot. Once Google Inc. combines 60 different privacy policies into one it will have enough power to rule the world. Not really, but that did sound pretty cool. But in all seriousness, this privacy policy will gather all of the information that is collected when a signed in user with Gmail, YouTube, Google Plus, or other Google Products searches for something. Google will take this information and put up ads in accordance to what you commonly search for. So, say if you always Google search for pictures of Reggie Bush or YouTube search videos for Deadmau5. This privacy policy will make it to where you will have ads on the side of your google browser that targets Reggie Bush paraphernalia or future concert tickets for Deadmau5.

The logic behind this new privacy policy is that people will click ads that look interesting to them. A Deadmau5 head-banger would rather click on an ad that is selling tickets to its next show than say an ad that is trying to sell unique floral pottery. And when these head-bangers start clicking away, Google will begin to bank. (on top of its $38 Billion revenue that it receives annually)

My question to you: Is this an invasion of privacy or merely a way for Google to exploit its information?

America's Disappearing Money

In class this week, we've been talking a lot about injections and leakages in our economy. One very notable leakage is our involvement in the global market.

As a company, spending money anywhere but America would be considered a leakage to our economy-exactly what we don't want. We want as much money circulating in our economy as possible so as to ease ourselves out of our economic recession. That seemed to work during/after WWII, when the world relied on us to provide materials and goods for them. Our citizens were employed and working diligently in every industrial area. America was gleaming with pride, or so the old people tell me.

Today it is difficult to simply single out and describe/predict the goings-on of America's economy, for we are overwhelmingly involved in the global economy. Countries trade and rely on each other, and consequently feel the repercussions of such through the strengthening and weakening of their currencies. This article says that since the 80's, the U.S. dollar has weakened by approximately 20%. This is actually good. A weak dollar makes for a high demand for our goods on the international market.

Bob McTeer, the author of the above article says that our weak dollar will help aid us in recovering from this recession. On the flip side, a strong currency would be beneficial so as to "support our rising standard of living". So, we would preferably want a weak currency now, and a strong one once we recover again.

Wednesday, February 29, 2012


The advantage of starting a new book from anywhere is something any bookstore wouldn’t be able to keep up without embracing the digital format. E-books has created big changes in the bookstore market. Now that E-books are very popular and easy to use, more and more bookstores are going out of business. Privately owned stores are being the most effected because they have to keep up with the growing demand of on-line books. What makes Barns & Nobles the number one on-line book store is that they sell over one Million digital books. Barns & Nobles one million digital book’s makes it hard for competitors to reach a point to where they can really compete with Barns & Nobles therefore making them the dominating bookstore chain. But even Barns & Nobles is losing money. They are suffering a net loss of about $63 million for the third quarter of 2010.

Wednesday, February 22, 2012

Resenting The Rich

"This is not class warfare; it's math," is what Obama said about his plan on raising taxes for the rich to make $1.5 trillion dollars in ten years for the US. Would imposing a higher tax rate for the wealthy in America really in the long run of things, help us out. Taking money away from the rich would have a negative effect on the economy because the wealthy would cut down on their spending. With America’s economy in a recovery this is not the time to be taking money out of the flow of money cycle of the US. Much like the problem in Greece is that their government is spending more than they are making. Does this sound familiar? American need to cut back on spending through unneeded agencies and scaling back on new spending. We need to fix the problem and not try to cover it up by increasing taxes to the rich.

Tuesday, February 21, 2012

Hello Greece.

Greece was about to go into default if it wasn't for a 130 billion euro bailout. The 17 countries that make up Europe came together and talked for 12 hours and came upon the agreement that would financially reinstate Greece back into the country. The news of the GDP of Greece's debt projected to come down by %120.5 by 2020 lead to an increase in the value of the euro. If it were not for this deal, Greece was going to face a very bad situation and possible relocation from the eurozone. But why would Europe want to kick out Greece? This is because Greece is not only hurting from its economic downturn, but it is also hurting the rest of the eurozone since they all use the same currency. It is not a surprise that Greece's private investors were asked to take a hit on their high interest rates dropping the face value of return by %53.5. The high interest rates on loans that Greece took out for expenditures were very burdensome and took a toll on the country's economy.

Monday, February 20, 2012

Gas Prices, Mr. Kern... Gas Prices

Referring back to one of my earlier blogs, I said that the U.S. economy could only be stimulated and successful if the American people have money to spend. So, with a huge rise in gas prices expected, that's taking more and more money out of people's pockets. Now a days, there is so much commuting and jobs where people have to drive, that it's almost impossible to go even a day without a car. Since gas is so expensive, people are going to be cutting off on other kinds of spending because they have to save money for gas. This can lead to a huge decline in the U.S.'s economic growth. High crude oil prices and the threat of Iran to cut off oil exports can cause some refineries to close down during the spring, which sends gas prices even higher! Because it is almost impossible for people not to drive, the high prices are just going to throw people's income into gas instead of other markets. Therefore, it will make the economy decline.

Thursday, February 16, 2012

Citizens United vs Federal Election Commission and the 2012 Election

Republican primary season is wrapping up, if it hasn't already. Hopefully many of you know about the supreme court ruling in the Citizens United case, and if you do, I'm going to tell you anyway.

On January 21, 2010, the Supreme Court ruled that corporations and unions cannot have restrictions put on their expenditures towards presidential campaigns, essentially giving them the same right as human beings. To agree or disagree with the ruling that corporations are people is strictly a political matter, and the opinion is all yours. However, what I would like to examine is the change in the rules of the game--how big money now has the ability to control the elections.

Money has always been influential in elections. The most seizable donations made to a campaign, however, would typically come from wealthy individuals or families. Now, corporations and unions can donate obscene amounts of money to the runner's super pac, so long as they don't in any way, shape, or form, "coordinate" with the candidate. But there are so many loopholes that this clause is easily circumvented.

Do you think this is fair?

Wednesday, February 15, 2012

Worth more dead than alive

​ After last Saturday death of super star Whitney Houston, her album sales went through the roof. The same happened with Michael Jackson in 2009. Since his death, Jackson has made 1 billion dallors and sold 9 million more albums. After these artists death iTunes as well as their record label increased the price of their albums. Just after a couple of hours after Houston's death the price of her cds went from $4.99 to $7.99 on iTunes. Because of their death, the demand for their CDs increase and people were willing to pay a higher amount because the artist has became more popular. Houston and Jackson once again topped the music charts after their deaths. After several people complained publicly about how the increase in price was being " greedy", the price went back to normal and people continued to purchase their albums.

Monday, February 13, 2012

Was Hercules Greek or Roman?

I just Googled it, turns out he was Greek, which is good, cause now I have something to write about. If the Disney version of the movie Hercules was a metaphor for the state of the Greek economic system right now, this would be the part of the movie where Hercules is swimming in the lake of souls in Hades. In the movie, Hercules almost died, and he became very skinny and weak, not like the Hercules we all know and love. Thats what Greece's economy is looking like right now. The once powerful nation that brought the world Democracy has fallen in to a "bottomless pit" that needs to be filled up at once.

Greece is one of the seventeen European countries that uses the Euro as it's currency. With it's failing economy, the strong representation the Euro once had is now dwindling every day that something is not done. The other sixteen are backing up Greece in their time of need, but according to German Finance Minister, Wolfgang Schaeuble, the pit needs to be closed before they can put something back in there. That's why today, Monday the 13th, Greece's Parliament passed a piece of legislation that contain $4 billion in budget cuts and 15,000 job reductions as well. This sent protestors to the streets, bring buildings to a rubble, setting cars on fire, and drawing out riot police to control the chaos. Without legislation like this, Greece will keep sinking deeper and deeper into an economic failure, worse than our Great Depression or our recession that we're in now. But once they stop sinking, the rest of the Euronations will offer a bailout which will then send Greece in to bigger debt troubles.

I think it's about time for the Greek government to climb Mount Olympus and ask some favors from Zeus. Maybe throw a lightning bolt or two at that debt and make it go away. As for the American debt problems, we can now see that it could easily be worse. In the words of Tony Horton from the P90 X Workout (talking about sit-ups) - "Imagine if you had to do a hundred of them! Twenty-five doesn't sound so bad..."

Thursday, February 9, 2012

How China Manages Inflation

After China has experienced recent inflation in the past two months, they find themselves in an economically challenging situation. This Time article explains their conundrum.

A way to combat unwanted inflation in any economic system is by raising interest rates, something the Chinese government has been unwilling to do. This is for two big reasons: A) this would attract international money into the country, therefore strengthening the Chinese currency the Yuan. The government finds this undesirable, as demand for their exports is high while the global market is depressed, strengthening their currency would only make their exports less appealing. Or perhaps they resist strengthening the Yuan because of pride issues, something the Chinese undeniably suffer from. They conclude their currency is fine where it is, and inflation can be dealt with in other ways.

New government stimulus policies has lead to a growth in bank lending, which leads to reason B) why China can't hike up its interest rates. Increasing the interest rates would leave more debt in the hands of Chinese businesses and corporations, and all borrowers for that matter.

So the Chinese government is taking a different approach, most unconventional than usual methods of controlling inflation. The banks are to be given certain amounts of money they must store in the bank, hopefully limiting how much they can lend. But it gets more complicated. This method of withholding money from borrowers is due to fail. Therefore the Chinese are going all rogue-communist  on economic practices by controlling the price on staple Chinese foods. This, of course, calls for a delicate balance of supply and demand, or as Schuman calls it, "reserve ratio [increase] and price suppression". 

Wednesday, February 8, 2012

Selling Personal Information

​You may have heard of Facebook starting to sell your personal information to third party companies, but did you know that your cellphone services are already doing this? Mid October verizon wireless changed their private policies to allow them to sell your information like age, gender, and even your location to third party companies. For example if a business wanted to open a new pet store, they can buy a market report from Verizon about the designated area. The report would have information about which city block had the most foot or car traffic from people's who web history indicates that they own a pet. Although Verizon was the first to have this policy, they aren't the only ones. AT&T, Sprint, and T-Mobile are also making money of this. I think this policy is over stepping its rights, but however if I was trying to start a new business this kind of information would be very helpfully.

Tuesday, February 7, 2012

Super Bowl Commercials

There's a different tone and attitude in Super Bowl commercials than the kind of commercials we watch every day. When watching prime time TV like local news, Jersey Shore, or Justified, the commercials that air can be very annoying. For example, that guy from Builders Surplus who smashes panes of glass and screams YEEHAWR! to get attention. No, the marketers who design commercials for the Super Bowl put much more time and thought into how to grab the consumer's attention, and make them salivate for their product.

This past Super Bowl was the most watched television event in American history, NBC says. Therefore it is highly important that whoever pays for a commercial slot during the game will have to make the best impression they can to get the most out of the millions they pour into their ads.

Creating a successful advertisement to air in the Super Bowl is no easy task- you have to appeal and win over an entire country of varying ages and demographics which all have varying interests and humors. So commercials like for the Toyota Camry, which are rather generic in their jokes, could make almost anyone laugh. These commercials are effective and can generate much needed publicity for a company, or just bring in millions of dollars in sales.

Monday, February 6, 2012

War Eagle!

Last week, I travelled to Auburn, Alabama to take a look and tour the campus of Auburn University. The campus was amazing and the academics were superb, with great programs for every major they offer. I pretty much fell in love as soon as I saw it. After the tour, I sat down with my parents and told them that I had a good idea that this was where I wanted to go. And then, all he[ck] broke lose. It hadn't really occurred to me that the cost of college was so immensely high. Out-of-state tuition for Auburn is $34,000 per year, and I needed to pay for some of it. My visit to Auburn was a huge reality check, and got me thinking about my future education and career. Why is college tuition so high? I think it has a lot to do with the economy and the value of the dollar. College is a service provided to you, like the internet or a maid. With a so-so economy like we have now, every other service inflates as well as college tuition. The value of the dollar has decreased so much in the past decade, that every company (including universities) is trying to compensate for the loss of value. So how do we make the price of college go down? According to this article, it's now starting to become more and more of a political issue. Obama, in a recent speech, has provided some sort of plan to make student loans more affordable for college-goers. With increasing interest rates, as well as tuition prices, student loans almost end up making college more expensive then it needs to be.

Wednesday, February 1, 2012

Putting a Price on Piracy

According to this blog post on the Washington Post website, The Motion Picture Association of America estimates that online piracy amounts to a net loss of $20.5 billion dollars a year. However, once you narrow in the window onto American pirates, it is figured that the industry only loses around $446 million dollars a year, subsequently less than what they claim.

There is a grey area in which the numerical figures are to be calculated. We cannot say that money is lost from the industry as it is uncertain if a person who illegally downloads a movie would have actually bought it in the first place. In this instance, the entertainment is at the expense of the entire film crew, but not even. On the other hand, there are cases in which thousands upon thousands of works are downloaded immediately after release, quite at the expense of the industry.

While there may be detrimental damage done to the music/film/television industries by online piraters, there is no harmful repercussion done unto our economy. Money not spent on a $20 movie winds up being spent elsewhere.

As SOPA, the Stop Online Piracy Act, has been pulled from Congress' agenda due to severe uproar amongst the citizens of America, the ball is in the entertainment industry's court. My guess is that Congress will create a new Anti-Piracy Act, but one slightly more lax and less threatening of American's first amendment rights.
​This year the weekend of black Friday had a total of 52.4 billion dollars. Between online sales and in store purchase, 35 percent were generated by online. The name black Friday comes from the fraze " movine into the black" when stores become profitable this day for the year. The Thursday after thanksgiving, black Friday, stores have the highest sales of the year. If the company had a strong black Friday they can generally keep their prices up and assume their holiday inventory will sell. A weak black Friday means that they have mark down their prices to keep money flowing through the Christmas season. Since the falling of the American economy, retailers have come up with the idea of moving back opening hours to midnight or earlier to try and attract more customers.

Tuesday, January 31, 2012

The Unintended Consequences of the Dodd-Frank Act

Everything has cause and effect. If you kick a ball, the ball will roll. If you tease a cat, the cat will growl. If you put your hand in a pot of boiling water, your hand will burn. We see this a lot in our economy, especially now in the housing industry. And this isn't any ordinary industry: It's a driving force for the entire economy, and your government is trying to suck it dry.

When you buy a house, you have to buy appliances, furniture, utilities, etc.. This in return creates jobs for the people, to make washers and dryers, to make chairs and beds, to run operations so that way we can have clean water; and it's all because of housing. But in April of 2010, the Dodd-Frank Act was passed just shortly after the Financial Crisis of 2008. While the Dodd-Frank Act might seem lengthy with its 2300 pages implementing 400 new regulations, it has one sole purpose: To over regulate the Mortgage industry.

If you were a car salesman, could you imagine how you would feel if the government told you that the maximum commission you could make on any car was 50$. It doesn't matter if you sold a Nissan Leaf or a new Bentley, all you could make was 50$. That is what they have done to the Mortgage industry. They made all loan officers make the same amount of money on any given loan. They have changed the way appraisals, title fees, flood certifications, and credit reports are all processed. This makes it longer to get a loan, because it costs more to get it passed which then goes down to the consumer. It is a sickness, it is broken. The mortgage industry will resurrect the housing industry, and by crippling it with oppressive legislation is doing an injustice to the people, an injustice to America.

Monday, January 30, 2012

I Didn't Watch It But...

The economy is stimulated by people spending money. That means people have to have money to spend. Now, I'm not going to lie, I didn't watch President Obama's State of the Union address, but I did read this article outlining his main economic policies for the upcoming year. I'm no expert on politics, but I do notice that the majority of the time, what a President says in the State of the Union address is all talk, no matter whose party they're throwing. But Obama did say some pretty interesting stuff about stimulating our economy. What it looks like to me is that he is all about Congress spending money to make jobs to decrease the unemployment rate. And where does Congress get this money? According to President Obama, its going to come from taxing the rich. Taking money away from the rich also takes away their spending money, so they stop spending money consuming and investing in business, which takes away money from businesses that they could use to create jobs and hire people. So in the end, this plan doesn't really work, because government created jobs aren't really jobs at all. For an economy to work, the people need to have a little bit of freedom and power to make and spend money as they see fit. With everyone "playing by the same rules", it's hard for people to do that. It ends up being a redistribution of wealth which is the complete opposite of the country's capitalistic foundation. In fact, it's socialism (ooohhh scary word). In my opinion, we should be looking for ways to stimulate the economy without additional government spending and taking money out of the public's hands. How? (ask Ron Paul)

Thursday, January 26, 2012

Broken Economy, Broken Country

In his state of the union address, President Obama did not hide his optimism for the outlook of our country. Yes, there have been improvements as well as more set backs pertaining to our country's struggling economy. But for the individuals, or for the families across the nation, the President's bright attitude does not reflect their own. This article from Time looks into the emotions President Obama strived to instill in his speech.

Our country is staring at two broken codependent dimensions: government and economy. As we operate under a mixed economy, incorporating necessary government restrictions and intervention onto an otherwise free market, these two pillars of our country transform and affect one another invariably. Meaning, when the housing market tanks, unemployment skyrockets and more Americans depend on welfare than ever before, Washington divides- more so than its current state -and rips the country in half. The House and Senate are brimming with conflicting arguments and proposals, under-the-table deals and partnerships to block this or that piece of legislation, all of which inevitably leads to the current state of our union: a stalemate.

The solution? Perhaps a clean slate- all new representatives and senators to fill Congress with new ideas, new methods of operation and hopefully a more realistic optimism than that which appears on the President's face. Opposition for the sake of opposition plagues Congress now. Naturally, this rather immature emotional response to the current crisis trickles down into the constituants, as they listen to their congressmen gripe about how he or she COULD have progressed further in this past session, but it was Congressman so-and-so who thwarted his/her proposal. At this point not only in Congress divided, but all citizens of America start pointing fingers at their political enemies.

Certainly at a time of great economic crisis, such antagonism is more than detrimental. The problem to fixing the economy starts in Washington. But when Washington is broken, there's little to be optimistic about.

Wednesday, January 25, 2012


The 34 billion dollar company as well as creating over 65,700 jobs in just Southern California is no other than Disney. What makes Disney so popular is that it is for all ages. Disney has many people they can market to. Along with being a dominating tv channel for kids, movies, having its own popular cruise line and theme parks around the world, Disney has and will continue to have a big economic impact on America. Also having two popular theme parks in the US, tourists are attracted from countries all over the world to America. The cities around Disney theme parks and resorts also see a major increase in their economy. Orange County receives about 45 percent of the overall economic benefit with Los Angeles County receiving about 40 percent. With a booming economy, can you imagine how much money Disney can make? I feel like this is a company that will probably not be in any great financial trouble because people all ages and around the world contribute to the Disney’s company wealth.

Tuesday, January 24, 2012

Hypocrisy? You decide.

Adj. 1. unpatriotic - showing lack of love for your country

Adj. 1. irresponsible not showing or done with due care for the consequences of one's actions or attitudes; reckless

Does President Obama really love our country? Is he a responsible leader? Just recently on December 12, 2011 Obama asked congress to raise the Debt Ceiling by $1.2 trillion. Now flashback to July 3, 2008, when then Senator Obama adamantly proclaimed that President Bush was both "unpatriotic" and "irresponsible" for raising the same Debt Ceiling. Wait, did Obama just really contradict himself? So why did Obama so quickly change his tune now that he occupies Bush's previous post? Maybe because at his core he is simply a hypocrite. I think it's because he will say anything to make himself look good to his liberal base. However, one could simply reason along the lines of what Ed Morrissey, columnist/blogger/political activist, states in the following quote, “if Obama can use the increase in the national debt to question Bush’s patriotism, doesn’t it follow that increasing deficit spending by 152 percent per month makes Obama 152 percent more ’unpatriotic’ than Bush?” Either way, it doesn't cast a positive light on Obama. While everyone is entitled to their own opinion, I believe that Obama is set on this country transitioning from a mixed economy to a commanding one. For example, consider the following; The Affordable Care Act that basically gives everyone health insurance (sound like Canada, eh?), a vary large number of current Federal Employees make up a group that currently owes over $1 billion in delinquent taxes to their employer the Federal Government (someone turning a blind eye here?), and now our Debt Ceiling is being raised once again, thereby continuing to allow our out of control government to, according to Obama's own words, act in an unpatriotic and irresponsible manner to spend more money than we collect. So now, I challenge you the reader, to decide if Obama is really as unpatriotic and irresponsible as he lambasted Bush for being in 2008 or is he simply just a hypocrite and says whatever he thinks sounds good to his adoring fans.

Sunday, January 22, 2012

An Idiot Abroad

This is the most appropriate video I could find on YouTube from Sky 1's (British) An Idiot Abroad. But in this part of the episode, Karl Pilkington goes to visit a village in Mexico where descendants of the Mayans who built Chichen Itza still live. Here, they use the same methods of farming and feeding that their ancestors did thousands of years ago. Karl has to go with one of the men from the village to take a wasp's nest down from a tree, because they use the larva in the food that they eat. The man Karl is with says that eating wasp larva makes you big and strong... but let's be honest, eating tiny wasp larva does not make you big and strong, as Karl puts so very well. But I feel like this is a great example of a traditional economic system, as discussed in class. The descendants still live in a village where lessons and strategies for surviving are passed down from generation to generation, and where they don't stray to far from their old ways. For example, these people have never had bagged chips before. I mean it takes a lot to go through life and not know about Lay's potato chips. And they are still eating wasp larva, because that's just what they are taught. It's weird how there are still people today that use a traditional economic system after we have improved so much farther then that.

Thursday, January 19, 2012

The Cost of a Hit Song

It's no secret that the music industry is expensive. We all imagine the famous pop artists, rappers and bands getting paid millions for every hit album or concert and living luxurious lives. What most of us don't realize is the amount of money that is input to create such hit singles and albums is astronomical. A podcast on npr analyzes the process by which Rhianna's latest hit single was made and the absurd price at which it came. Record labels will fill a dozen recording rooms with top of the line song writers and lyricists. The rooms themselves cost between $2000-$2500 per day, per room. They will work for a week or two, and by the end will emerge with multiple prospective song ideas, which also don't come cheap. A song itself will be priced roughly around $18,000, and Rhianna then gets to choose her favourites to put on her album. The mixers and editors, the producer and the vocal producer also all get paid somewhere around $55,000 total. All these expenditures and the artist herself hasn't even stepped foot into the studio to record yet. What's the reason for such grand amounts of money to be thrown around so easily? Well, you can't pay just anyone to write a song for Rhianna, or just anyone to produce her hit singles. No, these professionals specialize in making Rhianna sound as amazing as she can, and as they are few and far between, they get paid like royalty. The consumer-in this case, the listener- won't buy an album that sounds like a train filled with crying babies. That's why Rhianna and her armada of virtuosos get paid top dollar salaries for their elite labour.

Wednesday, January 18, 2012

Made in China

This article talks about the relationship between trade with China and how it has created a gap between high and low skilled jobs. Because the cost to make something in China as well as other third world countries is much less than making it in America, more and more companies are moving out of the US and setting up factories else where thus taking away factory jobs i.e medium skilled jobs from Americans. Without these medium skilled jobs, people who don’t have the ability to work a higher skilled job have to resort to a lower skilled job where the pay is much lower. This also creates an other gap between upper class and lower class. Many Americans believe that foreign workers are “stealing their jobs” which in fact it’s American companies taking away jobs from Americans. Many products made in foreign countries aren’t being sold by the third world country they are made in but in fact sold by American companies. American companies chose to have their produce made over seas because the cost of labor and raw materials cost less over seas.

Tuesday, January 17, 2012


Outsourcing has had a substantially detrimental affect on America's economy while serving to nurture and aid developing countrys' economies like India and China. Outsourcing is when an American company hires thousands to millions of workers in said countries for cheaper than what the average worker would earn here--much cheaper. An article from says that hired employees in outsourced nations might earn 1/5 th of the wage an American would. What does that mean for the company? Profit, of course. Cheap labor can slash production costs and save a company millions of dollars. However, while the company benefits from this movement, America's economy suffers. All the jobs given to developing nations is the kind of unspecialized labor that the 8.5% of Americans would kill to have. On the flip side, bringing all these jobs back to America--the call centers, the factories, the production lines--would cost a fortune for these companies and for the consumer. Consumers benefit from outsourcing in that they enjoy the deflated prices of the products they spend money on. By the time the company brings all the outsourced jobs back to America, hires Americans, builds new factories and provides them all with healthcare and minimal benefits, the American consumer would have already stopped pouring his/her money into that company.

Monday, January 16, 2012

Water Scarcity

Oil isn't the only resource that's scarce these days in North Texas. Restrictions are being placed on water use in cities all over the south in this unusually long drought. In Dallas, for example, the time of day that people can water their lawn is monitored and there is a limit on how many days a week lawns can be watered. Water is not a resource that we can just create more of. This scarcity of water, in turn, makes it more valuable to it's consumers (that's EVERYTHING by the way). Just the other day, our refrigerator was broken and we could no longer get filtered water out of it. Being as spoiled as I am, this was a big disappointment. I now had to drink tap water. After the refrigerator was fixed, I no longer took for granted my tasty filtered water. It's value increased much more to me, and that's what is happening to all of North Texas.