In a very well written article in the December 22nd issue of BW I found a couple quotes I thought were very poignant:
Article "Job Losses: Is the Panic Justified"
http://www.businessweek.com/magazine/content/08_51/b4113000683374.htm?chan=magazine+channel_top+stories
"Keynesian economics is back in fashion for the first time since the Kennedy Administration."
"...the Obama Administration has to balance the short term with the long term. It needs a plan..."
And most important of all...
"Remember, the recession isn't all bad. Unsupportable debts are being erased. Consumers are rebuilding their savings and lowering their living standards to match reality. Workers are exiting dying industries. And through distress sales, foreclosures, and bankruptcies, assets are being taken away from weak hands and given to strong ones, creating the conditions for future growth."
draws upon multiple theories, styles, or ideas to gain complementary insights into a subject
Monday, December 22, 2008
Sunday, December 14, 2008
With all do respect, please stop talking Congressman Frank
I read the Facetime with Maria Bartiromo section of the latest BW magazine today and it was quite painful. Personally, I think Barney Frank, Chairman of the House Financial Services Committee (D, Mass), said some things he should regret.
The interview is about Frank's opinion on Detroit, Housing, and Exec Pay
http://www.businessweek.com/magazine/content/08_51/b4113000737793.htm?chan=magazine+channel_the+business+week
"...Who would be on your short list for [car] czar?
I don't have a list because nobody's asking me to appoint a czar, and... I don't think about things where nobody cares what I think."
^eek, you should have an opinion, hello, you do serve in the House of the US Government!
"...If they [consumers] don't buy cars from those companies, so what? An entrepreneurial company will take their place and build cars."
^ ok at first I thought, yikes this is kind of a dumb question because everyone knows that the capital investment needed to start a car making company takes a liiiittle more than entrepreneurial spirit, but then again, I think this question was asked mostly to see what he'd say:
"Well, in the first place, it's hardly the American way to just let people go bankrupt."
^ Argh! haven't we already pretty much agreed that is our problem
"You know, people tell me,'Oh, let's just let the market do it.'"
^ yeah... so...
"[For example] we have American agricultural policy..."
^HA HA HA you're going to use THAT as an example
"...At this point, you are talking about a very weakened patient, and slapping that weakened patient around in the interest of proving some economic theory would cause even more damage..."
^newsflash: we've already proven that one!
Then he goes on in the next question to reference vampires... okay so maybe he's been reading too much "Twilight"
"Should GM acquire Chrysler? I'm not competent to say. I try to resist the temptation that too many of us in politics and the media fall into, which is telling people a good deal more than we know."
^ WHAT?!?! yes, he just said that
That's FACETIME BABY!
The interview is about Frank's opinion on Detroit, Housing, and Exec Pay
http://www.businessweek.com/magazine/content/08_51/b4113000737793.htm?chan=magazine+channel_the+business+week
"...Who would be on your short list for [car] czar?
I don't have a list because nobody's asking me to appoint a czar, and... I don't think about things where nobody cares what I think."
^eek, you should have an opinion, hello, you do serve in the House of the US Government!
"...If they [consumers] don't buy cars from those companies, so what? An entrepreneurial company will take their place and build cars."
^ ok at first I thought, yikes this is kind of a dumb question because everyone knows that the capital investment needed to start a car making company takes a liiiittle more than entrepreneurial spirit, but then again, I think this question was asked mostly to see what he'd say:
"Well, in the first place, it's hardly the American way to just let people go bankrupt."
^ Argh! haven't we already pretty much agreed that is our problem
"You know, people tell me,'Oh, let's just let the market do it.'"
^ yeah... so...
"[For example] we have American agricultural policy..."
^HA HA HA you're going to use THAT as an example
"...At this point, you are talking about a very weakened patient, and slapping that weakened patient around in the interest of proving some economic theory would cause even more damage..."
^newsflash: we've already proven that one!
Then he goes on in the next question to reference vampires... okay so maybe he's been reading too much "Twilight"
"Should GM acquire Chrysler? I'm not competent to say. I try to resist the temptation that too many of us in politics and the media fall into, which is telling people a good deal more than we know."
^ WHAT?!?! yes, he just said that
That's FACETIME BABY!
Sunday, December 7, 2008
American Auto Industry Bailout - Raw Econ
Query:
I'm slowly but surely making my way through Alan Greenspan's "Age of Turbulence" and I am at the end of the Internet Start-up boom where he talks a lot about creative destruction. The good ideas survive, while the bad ones must die (even if some jobs/wealth temporarily do too because in the long run we are putting a strain on productivity). I love Ford, my family has been buying its cars for years. But, I am also a hard-core advocate for free markets. Why can't they bail themselves out with better business decisions rather than asking for tax-payer money?
Why:
Because in order to continue to operate, because of the recession, they would have to operate at a deficit for a while, which BTW it does make business sense to do for a while IF (1) in the long run you can be profitable again and (2)you can get loans. And that is the difference in the current economy. They can't get loans because of the financial crisis. Businesses without bail-outs would destruct even though they could in normal situations stay alive, even during a recession, and be profitable again in the long term.
Like I said, I am a pretty hard-core advocate for free markets. Unfortunately, however, the world is not a free market, so I can't analyze it as one. It seems that little steps toward free markets do not work all the time though because of all the rest of things in the economy that aren't free. Many people are asking, is this financial crisis the fault of Capitalism? Let's clear this up once and for all: THIS is not Capitalism. I am saddened by peoples' inability to understand the economy. It is so important, why isn't it taught in primary education? Another thought, The US government has been running at a deficit, are we being destructed for this now?
W/o knowing the text of the current bailout bill, except that the companies are getting money. What should I support?
Raw Answers:
Support a Bailout - if you think American car companies can be profitable in the long run again, then you should support a bailout because you believe that these three companies will pay us back eventually.
Against a Bailout - if you believe that ultimately American car companies are inferior to foreign car makers and won't catch up in price or innovation, then you would likely be against a bailout and all about creative destruction of American auto makers.
Protectionism - if you think ultimately American car makers are inferior to foreign car makers and won't compete in the long run but still think they should be bailed-out, you are advocating protectionism. (Protectionism is the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies. This policy is closely aligned with anti-globalization, and contrasts with free trade, where government barriers to trade are kept to a minimum (wiki))
Alternative - if you think that American car makers could be profitable if they just put their heads together then you may support a merger. I believe this is a great way to ease the short term pain and end up profitable in the long term. I think this would make American car makers competitive with foreign ones and, in the end, create jobs.
Yes, this is very raw and you are probably thinking, what about jobs, or anything else but I stand by my basic option summary.
I'm slowly but surely making my way through Alan Greenspan's "Age of Turbulence" and I am at the end of the Internet Start-up boom where he talks a lot about creative destruction. The good ideas survive, while the bad ones must die (even if some jobs/wealth temporarily do too because in the long run we are putting a strain on productivity). I love Ford, my family has been buying its cars for years. But, I am also a hard-core advocate for free markets. Why can't they bail themselves out with better business decisions rather than asking for tax-payer money?
Why:
Because in order to continue to operate, because of the recession, they would have to operate at a deficit for a while, which BTW it does make business sense to do for a while IF (1) in the long run you can be profitable again and (2)you can get loans. And that is the difference in the current economy. They can't get loans because of the financial crisis. Businesses without bail-outs would destruct even though they could in normal situations stay alive, even during a recession, and be profitable again in the long term.
Like I said, I am a pretty hard-core advocate for free markets. Unfortunately, however, the world is not a free market, so I can't analyze it as one. It seems that little steps toward free markets do not work all the time though because of all the rest of things in the economy that aren't free. Many people are asking, is this financial crisis the fault of Capitalism? Let's clear this up once and for all: THIS is not Capitalism. I am saddened by peoples' inability to understand the economy. It is so important, why isn't it taught in primary education? Another thought, The US government has been running at a deficit, are we being destructed for this now?
W/o knowing the text of the current bailout bill, except that the companies are getting money. What should I support?
Raw Answers:
Support a Bailout - if you think American car companies can be profitable in the long run again, then you should support a bailout because you believe that these three companies will pay us back eventually.
Against a Bailout - if you believe that ultimately American car companies are inferior to foreign car makers and won't catch up in price or innovation, then you would likely be against a bailout and all about creative destruction of American auto makers.
Protectionism - if you think ultimately American car makers are inferior to foreign car makers and won't compete in the long run but still think they should be bailed-out, you are advocating protectionism. (Protectionism is the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies. This policy is closely aligned with anti-globalization, and contrasts with free trade, where government barriers to trade are kept to a minimum (wiki))
Alternative - if you think that American car makers could be profitable if they just put their heads together then you may support a merger. I believe this is a great way to ease the short term pain and end up profitable in the long term. I think this would make American car makers competitive with foreign ones and, in the end, create jobs.
Yes, this is very raw and you are probably thinking, what about jobs, or anything else but I stand by my basic option summary.
Tuesday, October 28, 2008
"Lana the Recent College Graduate" (in reference to 'Joe the Plumber')
Some articles I would like to share from my research session today!
Where McCain scores over Obama-Swaminomics-S A Aiyar-Columnists-Opinion-The Times of India
^ An Indian reporter talks harsh about Obama's lack of experience with law and his anti-trade record.
http://gregmankiw.blogspot.com/2008/10/blog-post.html
^ Mankiw the Professor expresses the disincentive to work Obama's tax plan will cause. It will decrease productivity and hurt the economy even more.
http://online.wsj.com/article/SB122506862956370705.html
^ How the McCain Health Care tax credits will reduce the cost of health care and encourage more people to be covered.
http://online.wsj.com/article/SB122488864905768469.html
^ Even Obama's advisors disagree with his health care plan + discrediting of Obama's claims against McCain's plan
I LOVE it when i get the jokes they say only an economist would love! Cuz that means I am really there!
http://moneyhelicopters.ytmnd.com/
Where McCain scores over Obama-Swaminomics-S A Aiyar-Columnists-Opinion-The Times of India
^ An Indian reporter talks harsh about Obama's lack of experience with law and his anti-trade record.
http://gregmankiw.blogspot.com/2008/10/blog-post.html
^ Mankiw the Professor expresses the disincentive to work Obama's tax plan will cause. It will decrease productivity and hurt the economy even more.
http://online.wsj.com/article/SB122506862956370705.html
^ How the McCain Health Care tax credits will reduce the cost of health care and encourage more people to be covered.
http://online.wsj.com/article/SB122488864905768469.html
^ Even Obama's advisors disagree with his health care plan + discrediting of Obama's claims against McCain's plan
I LOVE it when i get the jokes they say only an economist would love! Cuz that means I am really there!
http://moneyhelicopters.ytmnd.com/
Sunday, September 21, 2008
Don't Panic
Okay, if I don't have anything to say now about this past week and what's to come for the U.S. economy then I am never going to get into grad school. As my AIM away message Tuesday, the day the AIG bailout news was announced, I posted "It is my professional amateur economist opinion that the sh*t has officially hit the fan." Boy was I right. I am a little less uncertain now that it has happened though. Before this major news, I obviously realized the economy was wavering badly but I still saw some evidence that things were possibly not as bad as they seemed. Now I know that the Government and the Federal Reserve know they need to take major action and that makes me feel better.
The jist of the situation is that we are having something happen like what happened to cause the depression except this time the Federal Reserve and Treasury are doing something about it to prevent a depression. Absolutely no offense to Ben Bernanke, but I sort of wish Alan Greenspan were still the Chairman because his specialty area of study was the Depression and the failures of the Fed at that time to prevent it. I feel he would know better what to do, or at least what not to do. Hopefully, the government is consulting him.
Also, if Obama and McCain really want to look smart about the economy they should sit down with Alan Greenspan, or read his research. The game has majorly changed now with the elections and, just fyi, don't count on any of those tax cuts either of the candidates had promised so far.
Everyone is talking about the Depression and there is reason to be scared. BUT DON'T PANIC. That is the worse thing anyone could do. Keep your money in your FDIC insured bank and understand that money is there. Even though you will here that FDIC does not currently have the cash to fulfill their promises if more banks fail, don't panic because the beauty of money is that there is no physical thing backing it up that there needs to be enough of as long as that number from your bank says that is how much you have. That is not the best way to say it but you get the picture.
If you want to panic, how about use your emotions to motivate yourself to become more financially literate since this is such a problem in the U.S. I recommend reading the interview with Suze Orman on the latest Freakonomics blog post. Also, click around the web for more sources. I will try to find some legitimate ones and post them.
Speaking of not panicking: I totally agree with this blog post on Naked Capitalism about the proposed treasury bill about bailing out companies. It is an overreaction that I hope will not slip through because of panic. This quote says it all:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Can you say legislation overboard?
I just have one more thing to say: poor poor poor President Bush
The jist of the situation is that we are having something happen like what happened to cause the depression except this time the Federal Reserve and Treasury are doing something about it to prevent a depression. Absolutely no offense to Ben Bernanke, but I sort of wish Alan Greenspan were still the Chairman because his specialty area of study was the Depression and the failures of the Fed at that time to prevent it. I feel he would know better what to do, or at least what not to do. Hopefully, the government is consulting him.
Also, if Obama and McCain really want to look smart about the economy they should sit down with Alan Greenspan, or read his research. The game has majorly changed now with the elections and, just fyi, don't count on any of those tax cuts either of the candidates had promised so far.
Everyone is talking about the Depression and there is reason to be scared. BUT DON'T PANIC. That is the worse thing anyone could do. Keep your money in your FDIC insured bank and understand that money is there. Even though you will here that FDIC does not currently have the cash to fulfill their promises if more banks fail, don't panic because the beauty of money is that there is no physical thing backing it up that there needs to be enough of as long as that number from your bank says that is how much you have. That is not the best way to say it but you get the picture.
If you want to panic, how about use your emotions to motivate yourself to become more financially literate since this is such a problem in the U.S. I recommend reading the interview with Suze Orman on the latest Freakonomics blog post. Also, click around the web for more sources. I will try to find some legitimate ones and post them.
Speaking of not panicking: I totally agree with this blog post on Naked Capitalism about the proposed treasury bill about bailing out companies. It is an overreaction that I hope will not slip through because of panic. This quote says it all:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Can you say legislation overboard?
I just have one more thing to say: poor poor poor President Bush
Wednesday, August 6, 2008
Hello
I have been blogging about my life each week and found that every week I had something to say about economics. Inspired by the wonderful and interesting economics blogs that I read, I decided to start my own. Don't expect the caliber of "Freakonomics," but hopefully I can provide some interesting reads. I am still a student of economics even though I have my Bachelor's degree. We all are, I say. It is important to spread the knowledge because, as economist's know, markets work best when there is perfect information.
I have a Bachelor's degree in Business Administration concentrated in Economics. I was greatly influenced by the book "Atlas Shrugged" by Ayn Rand. My views are most closely those of a Libertarian but, as the title of this blog implies, I dabble in other points of view.
Another reason for having this blog is to share the plight of an economics-minded person. I asked my peers in my last Econometrics class before graduating college, "By choosing to be an economist, I've doomed myself to a lifetime of misunderstanding, haven't I?" When people asked what my major was in college and I told them Economics, they would often reply "Oh, that's cool, but I don't really like math." !?!?! Economics is not about math, it's about choices. Sure you can get into some amazing calculus in Econometrics, but Economics is about so much more.
Some of my personal hobby research topics are the economics of baseball, Capitalism & Christianity, and charitable contributions elasticity.
I have a Bachelor's degree in Business Administration concentrated in Economics. I was greatly influenced by the book "Atlas Shrugged" by Ayn Rand. My views are most closely those of a Libertarian but, as the title of this blog implies, I dabble in other points of view.
Another reason for having this blog is to share the plight of an economics-minded person. I asked my peers in my last Econometrics class before graduating college, "By choosing to be an economist, I've doomed myself to a lifetime of misunderstanding, haven't I?" When people asked what my major was in college and I told them Economics, they would often reply "Oh, that's cool, but I don't really like math." !?!?! Economics is not about math, it's about choices. Sure you can get into some amazing calculus in Econometrics, but Economics is about so much more.
Some of my personal hobby research topics are the economics of baseball, Capitalism & Christianity, and charitable contributions elasticity.
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