22 Messy and Imperfect

 I appreciate how this chapter more or less admits that the human element's effect the economy is extremely messy and in reality justifies the need for its continued study. The human element; our limited rationality, low self-control, inconsistency and taste of fairness leads to constant challenges and imperfect outcomes in our own lives and economic policy across the globe.

 My lucubrate in this series of blogs reveals how wary I have become of those we are expected to trust. Markets we frequent, government decisions we accept are all full of people with as much limited knowledge of what is going on as anyone of us doing the best they can. It seems that if we all had a better understanding of how this all works we would be better off. If our study of human nature could alter our own decision making process  as we learn to accept our short coming's we could realize the simplicity that is possible. if we balanced that with the study of economics and truly accepted our roll and impact our decisions/actions had on the economy, our lives and the lives of others

 In reality what do we really need? Maslow's basics: food, water, shelter/warmth, rest, safety/security seem as good of place to start as any. Beyond that is where we seem to get into our own way as psychological needs have the potential to get messy. 

 Selfishness is a big part of the problem and not specifically addressed in the study of economics. We all want what others have; the house, the car, the t-shirt and trade-offs, the cost, rational thought go out the window and markets know that and take advantage of that negative aspect of human nature. That is also why fairness and inequality are such a hot topic. We seem more concerned of what we don't have compared to others and not about what we can do to achieve what we need.

Obviously there are no simple answers and it will take all of us accepting our roll in the outcome no blaming others and accepting our fate as it is because we could not think for ourselves.

21 Curves

 

Curves are Confusing

I have been struggling with curves this entire class. Not that I don't understand them at all. It just takes me a while to put the pieces together to understand what they are communicating or how to interrupt them. 

I would have appreciated discussing certain aspects of curves in the class room and how they are interrupted based on the information available to create them or how supply and demand may alter them. It would have gone a long way to increase my level of understanding of this subject.

This chapter was a mixture of what I already understand with new terms thrown in to rattle me a bit. Having a family, car payments, saving money for college and retirement I am well versed in budget constraints and the trade-offs associated with choices my wife and I have made over the years. Some good some not so good.

This chapter seemed a combination of common sense and if it were this simple everyone would be doing it. Years ago when my vices were the reason my bank account was lacking and my wife and I were trying to buy a house I got real about where my money went. Between quitting chewing tobacco ($3-$6 a day) soda (by the case), coffee every morning ($2 a day) and going out to eat way to often, in a short time we came up with a downpayment on a house. I was not making a lot of money back them but I was sure wasting a lot of it.

I could have done better financially to be honest. I haven't saved well I just put as much money away as was comfortable and left it alone. I payed little attention to interest rates what I lost in the market or gained. I have just focused on not over extending myself. That has bounced around as well. For the most part I worked hard. I like the question in the conclusion; Do people really think this way? They may I am not so sure it is conscious it is just what a consumer society does.

20 Divide the Pie

 A tough post. This chapter was very insightful. It provided a great deal of important information, information that many would disregard and overlook all together. I argued with may Aunt once who had just returned from a mission trip to South America to build a school in a poor community about the extent of poverty here in the United States. She was revolted of the possibility and responded with disdain. Yet on page 401in this chapter the figure at the top of the page shows where the United States stands in distribution of economic well-being. hard to believe with our standard of living isn't it.

 Measuring inequality: Reviewing income distribution helps define the poverty rate and the poverty line and who is deemed to be in poverty and who typically is afflicted by this malady. It also addresses the problems with measuring inequality and how foggy the information can be with why poverty even exists. Obviously a touchy subject socially and politically.

 In my Aunts opinion poverty does not exist in the United States. Political philosophy and the topic of redistributing wealth enlists comments of the failure of Communism and how ridiculous taking money away from those who worked for it is. Further comments would be directed toward policies implemented in an effort to reduce poverty such as minimum-wage laws, welfare programs, negative income tax and in-kind transfers that "encourage people not to work."  

 It is a noble cause and our social responsibility to help the less fortunate. 

19 What Can You Do to Improve Where You Are?

 I know that his is a difficult topic. It involves equality or lack there of and in some cases unfortunately, discrimination. Obviously social and personal responsibility is a huge part of the equation but what part do they play? There are so many ways this topic can be discussed and it can get heated.

 I personally do not believe that my success is anyone's responsibility but my own. I did not choose to become a doctor or lawyer or real estate baron. I chose the ski industry. I chose to  ski 100 plus days a year, to continue to learn new skills, work hard, take advantage of opportunities and do what I could to improve where I was to make a better future for myself and my family. By definition I am a white male of privilege but I have worked for what I have done in my life and not always taken what was laid out for me.

 Education I believe is the foundation of my success. I learned that it was important and that it could get you further in life if it was embraced. I haven't always accepted that but it has taken me further than I even thought I could go. I feel that I saw myself as human capital and that improving my skills and knowledge would increase my value and it has.

 In my chapter 17 blog I wrote an interesting paragraph about Rawling the baseball supplier to the Major Leagues. Rawling produces baseballs in a Central America factory in Costa Rica where workers are paid $1.60 an hour working 10 hrs a day hand stitching baseballs for professional baseball players who's average annual salary is $3 million. If that isn't an imbalance of earnings I don't know what is. In that article they mentioned a women who has worked in the factory for years averaging 210 baseballs a week. She spoke highly of working at the factory. Was she being discriminated against? Taken advantage of? You could  argue that MLB could certainly afford to pay more for the baseballs produced in this Costa Rica couldn't you. Why don't they?

 I guess I believe it is all relative to some extent and ultimately its about choice. I have seen a lot of people wearing jerseys of their favorite pro athlete contributing to their salaries all while complaining about what others make. I have a friend who was a stripper while she attended law school, made thousands of dollars a week, left law school with no debt and now works as corporate lawyer. I have a friend who is a restaurant owner I don't know if he has ever had a vacation. I have another in Tokyo sailing for the US in the olympics and another that forages the woods of North Carolina searching for Ginseng. Another who just retired from the Navy after 25 years of service. A lot of varied choices of successful people.

 I appreciate this chapter but it really seems like common sense to me. Life is not fair not everyone is equal and anything desirable is worth working for. If you are not going to carry the torch for yourself and seek to succeed. You are watching the world go by and you may in fact get poorer as others get richer.

Spring Skiing Mt. Guyot

18 Taffy and Pina Coladas

 1. How do the forces of supply and demand affect the decision of a firm on the Jersey Shore that makes salt water taffy to adjust their labor supply.

A First the firm would have to identify when it typically sells the most taffy (quantity of output). Since this firm is on the Jersey Shore I suspect that is during the summer probably between Memorial Day and Labor Day. Additionally increased sales would probably occur over the 4th of July and on weekends. The demand for labor (choose quantity of labor required) would be high and the supply will need to increase to increase production prior to Memorial Day to increase their supply of taffy prior to the start of the season. Labor would continue to increase so that production, sales and shipping needs meet the demand for taffy throughout this time period. As the season wains the need of additional labors tapers off due to the reduced demand. (output would need to stay in line with marginal cost)

C If there is a demand for taffy a company would have to increase their labor supply to meet the demand.

2. What are the factors of production and how are they linked together in the event a volcanic eruption significantly reduces the production of a pineapple plantation in Hawaii. 

A Labor, Land and Capital would all be affected in this scenario and the ripple effects in the economy would seemingly go on for ever. Assume that lava and ash destroy the pineapple crop. Those that work (Labor) on the plantation would be out of work, the plantation owner would be out his crop that was destroyed (capital) along with a storage barn a sorting barn and machine shed (Capital) that collapsed because of the weight of the ash. The plantation owner leased a number of acres (Land) that was covered with a thick flow of lava. That land would never be usable by the plantation again or able to lease by the land owner. As the ripple continued beyond Hawaii the price of pineapple would increase because of the reduced supply and bars might stop selling Pina Colada's because of the increased cost of pineapple juice.

C The factors of production are Labor, Land and Capital and a volcanic eruption would certainly affect all of those factor. people would be out of work, there would be no pineapple to sell and the land would be ruined 

Number 9

 Decline in employment/ increase in output. I suspect manufacturing employment is declining while output is increasing has to do with technological advances in automation and other processes in production.

Protecting manufacturing industries fro international trade. There is a balance between protection and participation. To protect in the sense that manufacturing is not putting in the best effort to provide the best product in competition with international trade is a cop out in my opinion. We need to balance the best of both worlds so to speak to provide quality products and employment in an effort to help everyone be better off.

Who is benefiting and loosing on tariffs on steel and aluminum. Cost from tariffs are ultimately passed on to the consumer. If a tariff is charged on an import the cost of the of the good will increase to balance the incurred cost. In the case of steel for manufacturing tractors for example that cost is passed on to the consumer purchasing the tractor.  Increased cost of steel increased cost of tractor. The government will benefit from the increased revenue from the tariff.

Will more people benefit than loose? I suspect more people will loose. If one country has a tariff and another country does not steel will most likely be sold to the country with out the tariff. Reducing the supply of tractors in the tariffed country increasing cost. If steel is purchased in the tariffed the pass along cost will increase the cost of tractors and even limit the number of tractors available because of the cost of materials. In my opinion the benefit of the tariff does not out weigh the cost to those building tractors, buying tractors and maybe ultimately increasing food cost because of the impact of not having equipment required to do so. 

 

17 Play Ball

 An example of an imperfectly competitive market is an "Oligopoly" where there are only a few producers and sellers who offer similar even identical products providing limited competition in the market. They have strong barriers to entry, may require a lot of initial capital investment or they enjoy intellectual property. Baseballs came to mind. There are 5 companies that make baseballs in the US, 4 of the 5 have been around for 99 years or more, the newest entry to the market 17 years ago.

 Interestingly enough these companies are also monopolistic in nature as they make other products used in game. Where addition to baseballs these companies also make and sell baseball bats, gloves and protective gear. Additionally for example Wilson acquired DeMarini a company that makes baseball bats and added it to its line Louisville Slugger bats are also a Wilson product. Easton introduced the first aluminium bat in 1972 but also manufactures other aluminium products including those for NASA. There are companies in this sports category that just make baseball gloves or bats and because of their quality and/or brand presence can continue to compete in the market. Some of these have been or  I assume will eventually be swallowed up by the big boys like DeMarini. 

An interesting economic tidbit is that Rawling the baseball supplier to the Major Leagues are produced in America, Central America that is. Rawling's factory is in Costa Rica where workers are paid $1.60 an hour working 10 hrs a day hand stitching baseballs for professional baseball players who's average annual salary is $3 million.

https://www.reuters.com/article/us-costarica-baseballs/made-in-costa-rica-u-s-major-league-baseballs-idUSTRE62831Z20100309