Welcome Orland Park (074) Students

Welcome, Microeconomics students. This is an exciting if not harrowing time to be learning the dismal science, which is economics. Please use the site’s navigation on the right to access each week’s assignments.

Too little, too late? Factory jobs making comeback

Too little, too late? Factory jobs making comeback.

Does government regulation really kill jobs?

Not so much:

In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of “government regulations/intervention.” By comparison, 25 percent were laid off because of a drop in business demand.

via Does government regulation really kill jobs? Economists say overall effect is minimal. – The Washington Post.

Jobs Returning Slowly as Wages Lag

The pressure on wages has multiple causes. None of the main factors seems poised to change for the better. Advanced information technologies have slashed the ranks of many careers, such as travel agents. Competition from emerging markets has sliced away jobs on the factory floor and customer-service phone banks. Union membership has plunged, from some 35 percent of private sector workers in the early 1950s to 6.9 percent in 2010.

via Jobs Returning Slowly—as Wages Lag – Businessweek.

Corporations Hate Regulation, Until They Love It

[B]usiness prefer[s] no regulation at all, but they know that’s not in the cards. So in public they bemoan complexity, but in private they fight endlessly for more of it. To their lawyers, every single extra page is an extra opportunity to make more money.

via Corporations Hate Regulation, Until They Love It | Mother Jones.

A Tax on Christmas Trees?

The Obama administration has imposed a 15-cent tax on Christmas trees in order to pay for a new board tasked with promoting the Christmas tree industry. 

In classic media reporting bias, Fox released this non-news article in faux outrage. The author trips over himself trying to position this as a slam on the Obama administration.

Nonetheless, the article has intermingled with tid-bits of facts a heaping dose of subterfuge. The bottom line is this, economically, the tax incidence is likely to be shared between suppliers and consumers. I don’t presume Christmas trees to be particularly inelastic, so there may not be a lot of leeway anyway.

Of course, Fox and its Conservative ilk, go on at length to marginalise government involvement in private affairs, and so when a private industry group effectively requests assistance and government agrees (and wants to do the sensible thing, which is to ensure the programme costs are covered), we hear complaints about government meddling.

Moreover, whether government assessed the fee or not, the industry would still have to pay for the campaign, in which case the costs still need to be covered.

Finally as with any advertising or PR campaign, the goal is to increase demand in order to diminish the marginal costs of operation. So, sorry, Judson Burger, you are the Grinch here.

via Merry Christmas? Agriculture Department Imposes Christmas Tree Tax | Fox News.

Large Conservative Bias in Undergraduate Economics Textbooks

The Occupy Wall Street movement has extended to college campuses—or to at least one college campus, in the form of a protest against an economics professor’s alleged conservative views.

Around 70 students at Harvard College walked out of economics professor N. Gregory Mankiw’s class last week after expressing discontent with what they viewed as conservative bias in course materials, as reported by The Harvard Crimson. The protest was intended to express solidarity with the Occupy Wall Street Movement, according to the story, as the students felt that Mankiw’s biases had led to policies that exacerbated income inequality.

Bottom Line – Hell no, we won’t go … to economics class.

The Capitalist Network that Runs the World

The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.

Revealed – the capitalist network that runs the world – physics-math – 19 October 2011 – New Scientist.

Eliminating Minimum Wages as a Jobs Plan?

Fox News said Cain’s opportunity zone plan risks angering unions because it would enact policies they consider bad policy, such as the elimination of the U.S. minimum wage.

Eliminating unemployment is a necessary yet not sufficient solution. We need living wages.  At issue here is not whether eliminating minimum wages would diminish joblessness (increase employment); rather it is to question living standards. Implementing a policy as this would create a larger poverty class. Even currently employed workers in affected areas would suffer as they would now be competing in a race to the bottom.

via Cain to scrap minimum wage in poor areas? – politics – Decision 2012 – msnbc.com.

Skip the Lottery and Save for Retirement?

 One study in Texas found that a person without a college degree spent an average of $250 per year purchasing lottery tickets. If that same person were to start an IRA or other retirement vehicle that earned a conservative average 4 percent annual return and they contributed $250 per year for 30 years, they would have $15,392 once they reached retirement age. If they did the same thing for 40 years, that number would jump to more than $25,000. If it were possible to know the rate of future inflation, the number would be much higher.

Is the lottery ever worth your money? – Money – TODAY.com.

Supply and Demand?

A humourous commentary on supply and demand economics…

The conversation goes like this:

• Customer: $15 bucks a glass?
• Calvin: That’s right! Want some?
• Customer: How do you justify charging 15 dollars?
• Calvin: Supply and demand.
• Customer: Where’s the demand?! I don’t see any demand!
• Calvin: There’s lots of demand!
• Customer: Yeah?
• Calvin: Sure! As the sole stockholder in this enterprise, I demand monstrous profit on my investment!
• Calvin: And as president and CEO of the company, I demand an exorbitant annual salary!
• Calvin: And as my own employee, I demand a high hourly wage and all sorts of company benefits! And then there’s overhead and actual production costs!
• Customer: But it looks like you just threw a lemon in some sludge water!
• Calvin: Well, I have to cut expenses somewhere if I want to stay competitive.
• Customer: What if I got sick from that?
• Calvin: ”Caveat emptor” is the motto we stand behind. I’d have to charge more if we followed health and environmental regulations.
• Customer: You’re out of your mind. I’m going home to drink something else.
• Calvin: Sure! Put me out of a job! It’s you anti-business types who ruin the economy!
• Calvin: I need to be subsidized.