March 20, 2009

World Poverty

Tyler Cowen of George Mason University and economics blog marginal revolution (below, on the right) has some excellent insight on world poverty. Check it out!

March 19, 2009

The Minnesota Timberwolves "Recession" Season Ticket Package

It looks like the Timberwolves have a very interesting marketing gimmick to sell some tickets. If you buy season tickets for the 2009-10 season and lose your job, you can get a full refund on all unused tickets. But then, as Rick Reilly says, you still have to watch the Timberwolves. The T-Wolves also cut prices on 95% of their seats. Of course the T-wolves would see an increase in the quantity demanded of tickets as they lower the price of tickets; however the demand curve could also shift to the left, decreasing demand, and reducing the advantages of this sale to the T-Wolves due to their continued futility.

... but then again, if Latrell Sprewell were still playing, how would he feed his family with this decline in revenues.

March 18, 2009

It's Getting Better All The Time

Here is what the average teenager could have bought, after a summer of work in 1949, at the minimum wage of 40 cents per hour in 1949, assuming a 12 weeks of 40 hours of work per week. This work would have generated $192 in total summer earnings (ignoring taxes). Using a Sears catalog for retail prices, $192 would have only purchased the following 4 items in 1949:
At the mimumum wage of $7.25 today, full-time summer job will generate about $3,500 this year, which would be enough to purchase the following list of 28 items (click to enlarge):
Economics professor Mark Perry says the following: "Teenagers today can afford things like cell phones with cameras, digital cameras, GPS systems, CD players, DVD players, laptop computers, and iPods that even a billionaire couldn't have purchased 20 years ago. As much as we might complain, just by being alive in the 21st century America, even if you're earning the minimum wage, you've "won first prize in the lottery of life."

March 14, 2009

First Wall Street...Now Sesame Street

It appears no one is immune from the current recession. According to the San Fransisco Chronicle...

"The crisis on Wall Street is plaguing Sesame Street.

Sesame Workshop, the nonprofit producer of "Sesame Street" and other kids' programs, is cutting about one-fifth of its work force because of the economic downturn.

The New York-based company said Wednesday that it's eliminating 67 of 355 staff positions.

Declaring it is "not immune to the unprecedented challenges of today's economic environment," the company pronounced a need "to operate with fewer resources in order to achieve our strategic priorities."

JR: It looks like a possibility to introduce economics to my 3 little kids at home.

March 11, 2009

Economics Battle Royale: Mankiw vs. Krugman

Mankiw's best selling textbook. Krugman's text.
Two authors of best selling textbooks, Greg Mankiw of Harvard and Paul Krugman of Princeton have been arguing, via their columns and blogs, about the very rosy economic forecast over the President's budget. Mankiw challenged Krugman to a bet, some of his Nobel Prize million, that GDP growth will not be as large as the President's budget predicts. Krugman called Mankiw "evil" and yet has not responded to the wager. My money is on my facebook friend Mankiw.

Here's the Washington Times today: "Harvard economics Professor Greg Mankiw thinks that Mr. Obama's growth forecasts are overly optimistic and that the federal deficit will be a lot larger than Mr. Obama thinks. He was chastised by Princeton's Paul Krugman, a Nobel Prize winner in economics, who on his New York Times blog claims that Mankiw can only make the predictions that he does because of "more than a bit of deliberate obtuseness." He titled his post on Mankiw, "Roots of Evil."

Last Wednesday, Mankiw responded to Krugman's attacks by suggesting: "Well, Paul, if you are so confident in this forecast, would you like to place a wager on it and take advantage of my wickedness?" Krugman has still not responded. It seems even a Nobel Prize winner isn't willing to lay money on Mr. Obama's rosy projections."

March 10, 2009

Another $1 house in Landlord Nation.... Detroit

DETROIT Welcome to Landlord Nation, where foreclosure notices are plentiful and for-sale signs offer at least 1,800 homes for under $10,000 that once were worth at least 10 times more. In extreme cases, homes are on sale for $1 or less (home pictured above is listed for $1 here), which has enticed investors to Detroit from as far away as the United Kingdom and Australia.

"In the past few months, I've picked up 10 new clients from out of state that are buying in bulk," said Mike Shannon, a suburban Detroit real estate agent. His office specializes in foreclosures in a city that's among the national leaders.

"They're coming to us, saying `Look, I want to buy 50, 100, 1,000.' They want to own every decent and cheap house they can find."

Despite a stagnant retail housing market, real estate sales of foreclosed homes are booming. Shannon regularly fields calls from eager prospects, and recently sold 30 homes in one day to one buyer. A trio of U.K. investors has bought a half-dozen and plans many more.

HT: Carpe Diem

SNL on Treasuary Secretary Geithner and The Banking Crisis

March 7, 2009

Unemployment Rate Now 8.1%, Worst in 25 Years

The Unemployment Rate now has reached it's highest point in 25 years, 8.1%. Anyone want to guess how bad the news will be when the March unemployment numbers come out on April 3rd? Well... maybe the video will help out.

March 5, 2009

One Economic Bright Spot - Used Car Repair Shops

Used car repair services would be considered an inferior good or service, where as incomes fall, demand increases. So, this actually is not a positive sign for the economy, or GM and Ford. But business is good for repair shops, as people fix up their old cars, rather than buy new. Read more here.

Gun Control Articles

From Economist John Lott here and here.

And here is a very good article, on a college professor calling the police after a students gives a presentation claiming guns reduce crime.

The Latest Blue-Chip Penny Stocks

Here’s a short list of only the highest quality, bluest of blue chip, penny stocks:

  • AIG (39 cents)
  • Citigroup (98 cents)
  • Fannie Mae (39 cents)
  • Freddie (39 cents)
  • Unisys (37 cents)

Now, for the not-quite-penny stocks:

  • Ford ($1.83)
  • GM ($1.83)
  • Las Vegas Sands ($1.97)
  • MGM ($1.99)
  • Bank of America ($3.15)
  • Wells Fargo ($7.95)
  • New York Times ($4.00)
  • News Corp ($6.15)
  • GE ($6.75)
HT: The Big Picture

And after my students have studied personal finance, hopefully they know more about stocks than The Pres.

Freakonomics Article on the Death Penalty... and more.

See Freakonomics article, with several additional links here.

Also here you can find an article from economist and my Facebook friend John Lott.

A Couple Economics Students Got Game