Category Archives: Economics

Unemployment and Long Term Unemployment

Posted on July 27, 2011 | 10 comments

For a long time I have railed on the current policy of providing long-term unemployment benefits to people out of work.  I’ve gone further and documented available jobs in my area.  Granted, the jobs are rather unattractive and have, in some cases, offended friends and family who maybe themselves or know someone who has been or is currently, unemployed.

I’ve suspended that series.

However, my point all along is not that people who aren’t taking those jobs but relying on benefits are lazy, it’s that they are rational.  The incentives are all wrong.

For example, if I’m unemployed and collecting $350.00 a week what is the marginal value of me taking a job that pays, say $8 an hour for 40 hours?  Well, it works out like this:

  1. $8*40 hours equals $320.00
  2. The first $50.00 is “burden free”, so that means only $270.00 of my $320  counts against me.
  3. Because my benefits are $350 and I “earned” $270.00, my unemployment benefit check is now $80.00.
  4. Adding my wage and my check, my new take is $400.00.
  5. Because I was earning $350.00 BEFORE my job, my incremental “raise” is 50 bucks.
  6. For 40 hours of work I earned an extra $50.00.
  7. That is about $1.25 an hour.  And when I say about, I mean exactly.
  8. Who expects anyone to work for 1 twenty 5 and hour American?
  9. No one.

And THAT is why our unemployment rate is so high.

Anyway, that’s not my point.  This is:

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Posted in Economics, Economy, Liberty, Politics: National

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Banks Report Loss: Barack Obama at 11:00

Posted on July 19, 2011 | 7 comments

Barack Obama has refined the art of turned profit making into an evil horrible endeavor.

If you are a bank that makes money, you are the evil rich taking advantage of middle class America, who is suffering through the worst recession since the flood.

Oil company?  Corporate greed destroying the planet all the while taking billions in tax payer money to fund their record breaking profits*.

It never ends.  Well, actually, it does.  It ends when Obama actually LIKE a company and would enjoy that company to reap profits.  Like windmill farms, battery corporations and other green firms that go bankrupt in months after Obama comes calling.

After the recession ended and the banks began to report their earnings, Obama was on the news reporting their profits.  “Record breaking and excessive.”

I expect that he’ll be on the same bully pulpit expressing concern for our brothers on Wall Street:

Bank of America reported a second-quarter net loss of $8.8 billion, or 90 cents a share, against a profit of $3.1 billion, or 27 cents a year ago. Economists had forecast a loss of 85 cents a share.

$8.8 billion.  That’s “illion” with a “B”!

I don’t expect Obama to announce this or perhaps even notice this.  But I find it interesting and even irritating that he continues class warfare even as that class he hates drives, or tries to drive, our economy.

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Posted in Economics, Economy, Politics: National

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Economics: Supply and Deman – Twins Style

Posted on July 17, 2011 | Leave a comment

So, yeah, the Twins have been horrible since the start of the season.  Some of that has to do with some guys getting hurt, to be sure, but I think most of it has to do with not having very many good players.

However, as fate would have it, the Twins play in a  horrible division of baseball and are only 6 games out of 1st.

The Twins think they’re “in it”.

And so too, it seems, do the fans:

The defending American League Central champs struggled out of the gate with a mixture of poor play and injuries. Throw in some inclement weather and it was the “perfect storm” according to Michael Nowakowski, one of the owners of Ticket King, an online ticket broker. A representative from StubHub agreed, saying brokers were “giving away 400 to 500 tickets a game.”

…

As he negotiated a deal Thursday, one scalper said he was selling $60 tickets for $5 early in the season. “There was an abundance of tickets on the street. It was bad,” he said. But scalpers were getting as much as $35 more than face value per ticket for the first game following the All-Star break.

In a market that’s widely seen as free, the street, literally, is determining the value of a Twins game.

Fascinating.

An interesting side note:  Notice that in each case, the two parties that exchanged goods–one money for tickets, the other tickets for money–walked away feeling “richer” than they did when they met.  One party was able to ttrade some amount of cash for something that meant more to them; a baseball game.  The other party was able to trade a baseball game for something that meant more to them; cash.

This is the text book example of how trade creates wealth.

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Posted in Economics, Fun

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Marginal Value: The Poor

Posted on July 15, 2011 | 12 comments

So, I was going through some old blogs and looking for some quick insightful nuggets and came across this little gem from TJIC:

http://pajamasmedia.com/ronradosh/2011/0…

Krugman gets to his main point: that in the national debate, his side is that of morality, justice, and reason â?? while his opponents on the conservative side are immoral, uncaring, and actually want the poor to die or disappear.

Speaking for myself, I don’t want the poor to die.

I want them to work harder, to bring themselves up into the middle class (recall: the main thing that seperates the poor from everyone else is that poor people work about 15-20 hours per week, middle class people work 40-45 hours, and upper class people work 60+ hours), or – if they prefer – I want them to keep working very little, and enjoying the trade off of potential cash for increased free time – as long as they do it with out dollars stolen from others.

So I did a little looking.  By God he’s right:

Hours Worked Number of Workers Median Weekly Earnings
1 – 34 21802 233
1 – 4 548 62
5 – 9 1203 69
10 – 14 1865 112
15 – 19 2729 156
20 – 24 6425 212
25 – 29 2953 262
30 – 34 6079 337
35 or more hours 94452 750
35 – 39 8200 485
40 67195 700
41 or more hours 19056 1153
41 – 44 1084 867
45 – 48 5294 994
49 – 59 8450 1246
60 or more hours 4228 1338

Amazingly, the more you work, the more you make.  However, there is a flip side; the more you work, the more you work.

However, as I considered the numbers, it occurred to me, “Of COURSE you earn more when you work more–you’re working more hours!  Duh!”

But check this out:

Hours Worked Rough Dollar per Hour
1 – 34
1 – 4 24.8
5 – 9 9.86
10 – 14 9.33
15 – 19 9.18
20 – 24 9.64
25 – 29 9.7
30 – 34 10.53
35 or more hours
35 – 39 13.11
40 17.5
41 or more hours
41 – 44 20.4
45 – 48 21.38
49 – 59 25.43
60 or more hours

It turns out that the more you work, the higher your hourly wage.  [Though I do admit that the two low values look abnormal.]

 

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Posted in Economics, Economy, Politics: National

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Minnesota: Mark Dayton Blinks – What This Means For America

Posted on July 15, 2011 | Leave a comment

The Democratic governor of Minnesota backed down yesterday.  Said governor, who claimed to be elected into office with a mandate, has realized that he’s damaging the state of Minnesota.  Unlike his election, the election of a republican congress DOES carry a mandate.  And that mandate is “no new taxes”.  So, after allowing the state to experience a government shutdown for nearly two weeks, the governor accepted a deal that the republicans had offered as far back as June 30.

Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote to legislative leaders. “Therefore I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state from further damage.

Dayton walked away from the edge.  I suspect that he realized his partisan agenda didn’t mesh with the responsibilities of governing a state.  And he relented.

This should serve as a guide to national republicans.  This is how the debate is to be won.

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Markets In Everything: Domain Names

Posted on July 14, 2011 | Leave a comment

It seems that where anything is bought and sold, certain rules are true:

A new index launched on Wednesday shows for the first time that even domain names can offer a window into the economy, just as stocks do.

The first-ever domain pricing index, which was created by economist Dr. Thies Lindenthal, joins the ranks of similar economic indicators that track everything from consumer products and homes to truck loads.

…

Domain prices rapidly gained in value from 2006 through 2007 before peaking in September of that year prior to the recession. Not surprisingly, so did the Nasdaq.

Shortly after, when valuations across the board started to fall, both tumbled. The biggest drop was in the heart of the recession between September 2007 and January 2009, with the IDNX and Nasdaq sliding about 31% and 50%, respectively.

Both started to gradually rebound in the first half of 2009 and now sit at their highest valuation since the IDNX began tracking domains in 2005.

While the two are neatly aligned, the IDNX always seems to stay ahead of the Nasdaq and remains stable when compared with Google (GOOG), showing it is less volatile in the face of severe economic headwinds.

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Posted in Economics

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Raising Revenue

Posted on July 9, 2011 | 1 comment

There is a gap.

The United States brings in some amount of money.  And the united States spends some other amount of money.

There is a difference between those two amounts of money; and right now, the bigger amount is the amount we spend.

We’re in debt and getting debt’ier.

All the talk ’round town is that we have to fix this problem pretty soon and the deadline that’s looming is the debt ceiling.  Everyone is looking at August 2nd and working to build a plan by then.

In it’s simplest form, the debate is about narrowing the gap of the spending and the revenue.

How are we gonna do that?

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Posted in Economics, Government, Politics: National

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Unemployment

Posted on July 7, 2011 | 11 comments

Consider 20,000 unemployed people.

Which population would obtain a job quicker?

  1. This group obtains $300.00 per week up until they find a job.  Or hit 26 weeks.  Which ever comes first.
  2. This group gets 26*$300 the day after they file for unemployment benefits.

Knowing this would you change the way in which you construct the unemployment programs?

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Posted in Economics, Politics: National, Rocket Surgery

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Minnesota: A Foretaste Of The Feast To Come

Posted on July 2, 2011 | 6 comments

Minnesota is closed.

As of 12:01 AM July 1, the state has shut down.  A disagreement over how to balance the budget between the Democrat governor and the Republican Senate has caused a stalemate.  Without a budget, the state government officially closed Friday morning.  State parks, rest areas, road construction and other services were shuttered.

State employees were sent home.

The battle just got real for a whole bunch of people; a WHOLE bunch.

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Posted in Economics, Economy, Elections 2012, Government, Politics: National, States Behaving Badly

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Actions Have Consequences

Posted on June 30, 2011 | 4 comments

I really enjoy chess.  Well, actually, I wish I really enjoyed chess.  In reality, I’m a horrible chess player; and I know why.

I think the reason I’m such a poor player is that I’m a “selfish” or “arrogant” player.  That is, I assume my opponent will play as I would.  Therefore, when I create my strategy and begin to implement it, I fail to take into account that as the board changes, my opponent is going to react and change his behavior.

I’ve never overcome this failing of mine.  So I lose.

And because I lose, I rarely play.

I can take heart that others face the same challenges.  However, that comfort can also cause great concern.

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Posted in Economics, Idiots on Parade, Politics: National, States Behaving Badly

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