Are The San Antonio Spurs Guilty Of Outsourcing?

See Spurs Coach Gregg Popovich Says Foreign Hoops Players Are 'Fundamentally Harder Working'. According to the article "The eight foreigners on the Spurs constitute the most in the NBA in a season when there were a record number of foreigners."

Is The Rich-Poor Education Gap Getting Bigger?

See No Rich Child Left Behind SEAN F. REARDON, a professor of education and sociology at Stanford. From yesterday's NY Times. Excerpts:

"the children of the rich perform better in school, on average, than children from middle-class or poor families. Students growing up in richer families have better grades and higher standardized test scores, on average, than poorer students; they also have higher rates of participation in extracurricular activities and school leadership positions, higher graduation rates and higher rates of college enrollment and completion."

"...in the United States over the last few decades these differences in educational success between high- and lower-income students have grown substantially."

"...the rich-poor gap in test scores is about 40 percent larger now than it was 30 years ago."

"In the 1980s, on an 800-point SAT-type test scale, the average difference in test scores between two such children would have been about 90 points; today it is 125 points. This is almost twice as large as the 70-point test score gap between white and black children. Family income is now a better predictor of children’s success in school than race."

"...the proportion of students from upper-income families who earn a bachelor’s degree has increased by 18 percentage points over a 20-year period, while the completion rate of poor students has grown by only 4 points."

"...15 percent of high-income students from the high school class of 2004 enrolled in a highly selective college or university, while fewer than 5 percent of middle-income and 2 percent of low-income students did."

"The most potent development over the past three decades is that the test scores of children from high-income families have increased very rapidly. Before 1980, affluent students had little advantage over middle-class students in academic performance; most of the socioeconomic disparity in academics was between the middle class and the poor. But the rich now outperform the middle class by as much as the middle class outperform the poor"

"The income gap in academic achievement is not growing because the test scores of poor students are dropping or because our schools are in decline. In fact, average test scores on the National Assessment of Educational Progress, the so-called Nation’s Report Card, have been rising — substantially in math and very slowly in reading — since the 1970s. The average 9-year-old today has math skills equal to those her parents had at age 11, a two-year improvement in a single generation"

"...there is no evidence that average test scores have declined over the last three decades for any age or economic group."

"The achievement gaps between blacks and whites, and Hispanic and non-Hispanic whites have been narrowing slowly over the last two decades..."

"If we look at the test scores of white students only, we find the same growing gap between high- and low-income children as we see in the population as a whole."

"...schools don’t seem to produce much of the disparity in test scores between high- and low-income students. We know this because children from rich and poor families score very differently on school readiness tests when they enter kindergarten, and this gap grows by less than 10 percent between kindergarten and high school"

"The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students."

"Money helps families provide cognitively stimulating experiences for their young children because it provides more stable home environments, more time for parents to read to their children, access to higher-quality child care and preschool and...access to preschool test preparation tutors or the time to serve as tutors themselves."

"But rising income inequality explains, at best, half of the increase in the rich-poor academic achievement gap."

"High-income families are increasingly focusing their resources — their money, time and knowledge of what it takes to be successful in school — on their children’s cognitive development and educational success'

"But even though middle-class and poor families are also increasing the time and money they invest in their children, they are not doing so as quickly or as deeply as the rich."

"...from 1972 to 2006 high-income families increased the amount they spent on enrichment activities for their children by 150 percent, while the spending of low-income families grew by 57 percent over the same time period. Likewise, the amount of time parents spend with their children has grown twice as fast since 1975 among college-educated parents as it has among less-educated parents."

"The economists Garey Ramey and Valerie A. Ramey of the University of California, San Diego, call this escalation of early childhood investment “the rug rat race,"



 

The Pot Business Is Very Competitive In Colorado

The only question is if its perfect competition or monopolistic competition. See The Pot Business Suffers Growing Pains by ANA CAMPOY of The Wall Street Journal. Excerpts:

"But it turns out that trying to make a profit in this business is harder than expected. When grown and sold legally, marijuana can be an expensive proposition, with high startup costs, a host of operational headaches and state regulations that a beet farmer could never imagine. In Colorado, for example, managers must submit to background checks that include revealing tattoos. The state also requires cameras in every room that has plants; Mr. Klug relies on 48 of them.

Prices for pot, meanwhile, have plummeted, in large part because of growing competition."

"A major drag on earnings for marijuana growers is the labor-intensive nature of the business. Payroll can make up more than a third of production costs, says Jason Katz, chief operating officer of Local Product of Colorado. Managing workers is challenging too, he adds, in an industry where many learned their trade by growing clandestinely. His company went through six growers in three years before one worked out. "They aren't used to being part of regular society," he says.

Costs and management issues aside, the biggest shock to most marijuana growers has been pot prices. As the industry becomes more competitive and there is more pot available, the price for a pound of high-quality weed in Denver has slid from $2,900 at the beginning of April in 2011 to $2,400 in the same period in 2012 to $2,000 this year, according to Roberto's MMJ List, a service that connects wholesale sellers and buyers. At the height of summer demand in 2011, a pound sold for as much as $3,900.

To be sure, some experts say it is possible to do well. Roberto Lopesino Seidita, who runs the price list and consults for the industry, says some growers are pulling in double-digit margins by focusing on price, not just quality. They have developed ways to produce large amounts of pot cheaply, and offer it at unbeatable prices, driving hundreds of customers through the door every day. "It's run like Wal-Mart, he says."

"Offering an assortment of marijuana varieties with different flavors and prices, Mr. Klug says, has been key to building a client base. In the wood-and-metal displays at one of his stores, Mr. Klug offers high-end strains such as Phantom OG for $70 a quarter ounce, and cheaper ones such as Andy's Blue Dream, at $50 a quarter ounce."

"His advice for anyone who wants to become rich by legally dealing pot: "Start with lots of money.""

Students: Would You Like A Free College Education And Stipends Of $990 A Month For Six Years?

See Danes Rethink a Welfare State Ample to a Fault by SUZANNE DALEY of The New York Times. Even some liberal or left-wing politicians think the government has been too generous. Excerpt:

"Students are next up for cutbacks, most intended to get them in the work force faster. Currently, students are entitled to six years of stipends, about $990 a month, to complete a five-year degree which, of course, is free. Many of them take even longer to finish, taking breaks to travel and for internships before and during their studies."

There is even a man known as “Lazy Robert”

"Robert Nielsen, 45, made headlines last September when he was interviewed on television, admitting that he had basically been on welfare since 2001.

Mr. Nielsen said he was able-bodied but had no intention of taking a demeaning job, like working at a fast-food restaurant. He made do quite well on welfare, he said. He even owns his own co-op apartment.

Unlike Carina, who will no longer give interviews, Mr. Nielsen, called “Lazy Robert” by the news media, seems to be enjoying the attention. He says that he is greeted warmly on the street all the time. “Luckily, I am born and live in Denmark, where the government is willing to support my life,” he said"

Interesting New Book: With Charity for All

The full title is: With Charity for All: Why Charities Are Failing and a Better Way to Give. It is by Ken Stern. Click here to read the WSJ review by MEGHAN CLYNE. Excerpts:

"D.A.R.E. (Drug Abuse Resistance Education) didn't work. Long-term studies have shown overwhelmingly that the program produced no meaningful reduction in drug use and in some cases actually made kids more likely to use drugs. Yet the nonprofit survives, having consumed an estimated $10 billion to $15 billion in donor and taxpayer funds over the past decade."

"From one-person startups to powerhouses like the Red Cross, charities have plenty of good intentions, slick fundraisers and promotional "happy sheets," but they often fail to solve the social problems they are intended to address. As an example, Mr. Stern highlights fashionable water charities that drill wells in Third World countries with much fanfare but are then unable to maintain them."

"The charitable sector is also plagued by corruption and fraud. Even when nonprofits obey the letter of the law, many defy the spirit of their tax-exempt status, differing in no meaningful respect from for-profit enterprises. Among the more laughable examples are the nation's college-football bowl games, which defend their charitable status by pointing out that they donate some of their proceeds to other nonprofits."

"The IRS approves more than 99.5% of all charitable applications, creating more than 50,000 new charities each year. Once a nonprofit is started, the IRS and state regulators exert negligible oversight; even charities exposed as scams can be nearly impossible to shut down."

"According to one survey, 65% of donors don't research the effectiveness of the organizations to which they contribute; the remaining 35% tend to make only a cursory effort."

I wonder what Adam Smith would say. Although he said people were motivated by self-interest and that is how things got done in the market place, he also thought people could be motivated by sympathy. See this earlier post: Adam Smith vs. Bart Simpson.

Another article that is relevant and interesting is Have We Evolved to Be Nasty or Nice? by MATT RIDLEY of the WSJ. It suggests that whether we are selfish or cooperative depends on the circumstances. If we are nice, then we would never see charities being corrupt. But if we were nasty, we would never donate money to charities. So the truth may be complicated.

How Recessions Affect Young People

This is actually a post from 2010. But this kind of issue came up in a NY Times magazine article last week. See Do Millennials Stand a Chance in the Real World? by ANNIE LOWREY.

It is too early in the semester to have talked about recessions. But there was an interesting article called Recession may shape young adults' future habits. Here are some exerpts:

Researchers found "...young people who live through recessions tend to doubt their control over their careers. Unlike people who have lived through sweeter economic circumstances, the youth of recessions tend to look at career success as luck rather than a result of personal action."

"Beyond family pressures, unemployment among 16-to-19-year-olds is at an extraordinarily high level of more than 26 percent. Students finishing college face difficult job prospects, with hiring of this year's graduates down 22 percent, according to the National Association of Colleges and Employers."

[when] "...individuals have had low stock market returns for many years, they don't want to take risks in stocks. And bad experiences with stocks early in life "have significant influence even several decades later."

"...Americans aged 22 years to 33 years have shifted toward more conservative financial behavior too. It's influencing everything from investing to job choices: More are seeking job security and strong benefits rather than opting to jump from job to job to further their careers."

Another article, Birth date, business cycles, and lifetime income says:

"...a one percentage point increase in the national unemployment rate is associated with a 6 to 7 percent loss in initial wages. The annual wage loss declines over time, but is still statistically significant 15 years later. Comparing the wages earned by the class of 1982 (a peak unemployment year) with the wages of the class of 1988 (a peak employment year) over the first 20 years of a career, the wage difference resulted in a difference of nearly $100,000 in cumulative earnings in net present value."

The Herfindahl-Hirschman Index & The Anheuser-Busch InBev/Grupo Modelo Merger

The Herfindahl-Hirschman Index is a way of measuring how competitive or concentrated an industry is. The market share of each firm in an industry is squared and then all those numbers are added up to get the HHI. This number can play a role in decisions by the Justice Department on mergers.

The Anheuser-Busch InBev and Grupo Modelo want to merge. They both make beer. Anheuser-Busch InBev has 39% of the market and Grupo Modelo has 7%. The increase in the HHI would be 2*39*7 = 546. That would raise the HHI to over 2800. The Justice Department wants to stop the merger becuase the increase in the HHI is too big for a highly concentrated industry. Competition would be hurt too much.

Click here to read the Justice Department complaint. It includes a nice pie chart showing the market shares of brewers. Miller is 2nd with 22%. So right now two firms have more than half the U. S. market. The Justice Department document also shows that in many local markets the HHI could be much higher. Most textbooks say an HHI of 1800 means a concentrated industry while this document uses 2500.

Click here to read a Wall Street Journal editorial about the merger from February that also mentions the HHI.

Study of Men’s Falling Income Cites Single Parents

Click here to read the NY Times article by BINYAMIN APPELBAUM from March 20. Excerpts:

"The decline of two-parent households may be a significant reason for the divergent fortunes of male workers, whose earnings generally declined in recent decades, and female workers, whose earnings generally increased, a prominent labor economist argues in a new survey of existing research.
      

David H. Autor, a professor at the Massachusetts Institute of Technology, says that the difference between men and women, at least in part, may have roots in childhood. Only 63 percent of children lived in a household with two parents in 2010, down from 82 percent in 1970. The single parents raising the rest of those children are predominantly female. And there is growing evidence that sons raised by single mothers “appear to fare particularly poorly,” Professor Autor wrote in an analysis for Third Way, a center-left policy research organization.

      

In this telling, the economic struggles of male workers are both a cause and an effect of the breakdown of traditional households. Men who are less successful are less attractive as partners, so some women are choosing to raise children by themselves, in turn often producing sons who are less successful and attractive as partners.

      

“A vicious cycle may ensue,” wrote Professor Autor and his co-author, Melanie Wasserman, a graduate student, “with the poor economic prospects of less educated males creating differentially large disadvantages for their sons, thus potentially reinforcing the development of the gender gap in the next generation.”

      

The fall of men in the workplace is widely regarded by economists as one of the nation’s most important and puzzling trends. While men, on average, still earn more than women, the gap between them has narrowed considerably, particularly among more recent entrants to the labor force."
 

"...one study finding that single mothers spent an hour less per week with their sons than with their daughters. Another study of households where the father had less education, or was absent entirely, found the female children were 10 to 14 percent more likely to complete college. A third study of single-parent homes found boys were less likely than girls to enroll in college." 

Should Employers Penalize Employees Who Don't Engage In Healthy Behavior?

See Employers increasingly are looking to lower their health care costs by using incentives such as cash rewards by Katie Thomas of the New York Times. Excerpts:

"Employers increasingly are looking to lower their health care costs by using incentives such as cash rewards to persuade workers to make better lifestyle choices, according to survey findings released Monday.

But the survey, by Aon Hewitt, a human resources consulting company, also found that employers aren't always so benevolent: A growing number also are penalizing workers who do not make healthy changes, such as quitting smoking or losing weight.

The survey, of 800 large and midsize employers in the United States, found that 84 percent use some kind of carrot or stick to try to nudge employees to improve their health. Of those, 79 percent offer rewards, while 5 percent imposed penalties. Sixteen percent used a mix of both."

"CVS Caremark, the large pharmacy and drug-benefit provider, recently said it would require its employees to report their weight, blood sugar and cholesterol or be forced to pay an annual penalty of $600. It also will require that smokers try to quit."

Is there sufficient evidence to conclude that women experience systematic pay discrimination?

In one of my micro sections we read a chapter about pay for men and women in the book The Economics of Public Issues.

Is there sufficient evidence to conclude that women experience systematic pay discrimination? Not according to Harvard economist Claudia Goldin. See The Truth About the Pay Gap: Feminist politics and bad economics by Steve Chapman. Here is an excerpt from that article:

"I [Chapman] asked Harvard economist Claudia Goldin if there is sufficient evidence to conclude that women experience systematic pay discrimination. "No," she replied. There are certainly instances of discrimination, she says, but most of the gap is the result of different choices. Other hard-to-measure factors, Goldin thinks, largely account for the remaining gap -- "probably not all, but most of it."

The divergent career paths of men and women may reflect a basic unfairness in what's expected of them. It could be that a lot of mothers, if they had their way, would rather pursue careers but have to stay home with the kids because their husbands insist. Or it may be that for one reason or another, many mothers prefer to take on the lion's share of child-rearing. In any case, the pay disparity caused by these choices can't be blamed on piggish employers.

June O'Neill, an economist at Baruch College and former director of the Congressional Budget Office, has uncovered something that debunks the discrimination thesis. Take out the effects of marriage and child-rearing, and the difference between the genders suddenly vanishes. "For men and women who never marry and never have children, there is no earnings gap," she said in an interview."

This issue came up recently in the San Antonio Express-News. See Texas wage gap 12th-lowest. The problem with saying women make 77 cents for every dollar that men make is that it does not take things like occupation and years of experience into account. In 2007 the American Association of University Women issued a report. One of the things it says is:

"Ten years after graduation, women fall further behind, earning only 69 percent of what men earn. Even after controlling for hours, occupation, parenthood, and other factors known to affect earnings, the research indicates that one-quarter of the pay gap remains unexplained and is likely due to sex discrimination."

I emailed them the following question but never heard back:

"So the 69 percent means that women earn 69 cents for every dollar that men make ten years after college. That makes the gap 31 cents. But when these other factors are accounted for, one-quarter of the gap remains. Since one-quarter of 31 is 7.75, that means when all other factors are held constant, women earn 92.25 cents for every dollar that men make. Is my interpretation correct? How does this compare to what other studies have found? Is this gap changing over time? Were any other causes for the remaining 7.75 cents examined besides sexual discrimination?"

The Federal Reserve Bank of St. Louis just issued a report that says Gender Wage Gap May Be Smaller Than Many Think. Excerpts:

"...the gap between the median earnings for men and women was 16.5% in the second quarter of 2011, a historical low and down from 30% in 1989. ... the gender wage gap is very likely affected by the disparity of men in higher paying professions. That disparity, while troublesome all on its own, may be skewing the data.

“Research suggests that the actual gender wage gap (when female workers are compared with male workers who have similar characteristics) is much lower than the raw wage gap,” the authors write.

... after having children many women prefer jobs that have lower pay but better benefits — either better health-care coverage or other perks like a more flexible work schedule.

Economists Eric Solberg and Teresa Laughlin applied an index of total compensation, which accounts for both wages and benefits, to analyze how these benefits would affect the gender gap. They found a gender gap in wages of approximately 13%. But when they considered total compensation, the gender gap dropped to 3.6%,” the authors write."

Is There Economic And Political Meaning In "The Wizard of Oz?"

To get a handle on this, you can read Money and Politics in the Land of Oz By Quentin P. Taylor. Also, for my students, there is an article in chapter 15 of the micro book by Tucker and in chapter 18 in the macro book.Below is an excerpt:

"Dorothy, the protagonist of the story, represents an individualized ideal of the American people. She is each of us at our best-kind but self-respecting, guileless but levelheaded, wholesome but plucky. She is akin to Everyman, or, in modern parlance, “the girl next door.” Dorothy lives in Kansas, where virtually everything-the treeless prairie, the sun-beaten grass, the paint-stripped house, even Aunt Em and Uncle Henry-is a dull, drab, lifeless gray. This grim depiction reflects the forlorn condition of Kansas in the late 1880s and early 1890s, when a combination of scorching droughts, severe winters, and an invasion of grasshoppers reduced the prairie to an uninhabitable wasteland. The result for farmers and all who depended on agriculture for their livelihood was devastating. Many ascribed their misfortune to the natural elements, called it quits, and moved on. Others blamed the hard times on bankers, the railroads, and various middlemen who seemed to profit at the farmers’ expense. Angry victims of the Kansas calamity also took aim at the politicians, who often appeared indifferent to their plight. Around these economic and political grievances, the Populist movement coalesced.

In the late 1880s and early 1890s, Populism spread rapidly throughout the Midwest and into the South, but Kansas was always the site of its most popular and radical elements. In 1890, Populist candidates began winning seats in state legislatures and Congress, and two years later Populists in Kansas gained control of the lower house of the state assembly, elected a Populist governor, and sent a Populist to the U.S. Senate. The twister that carries Dorothy to Oz symbolizes the Populist cyclone that swept across Kansas in the early 1890s. Baum was not the first to use the metaphor. Mary E. Lease, a fire-breathing Populist orator, was often referred to as the “Kansas Cyclone,” and the free-silver movement was often likened to a political whirlwind that had taken the nation by storm. Although Dorothy does not stand for Lease, Baum did give her (in the stage version) the last name “Gale”-a further pun on the cyclone metaphor.

The name of Dorothy’s canine companion, Toto, is also a pun, a play on teetotaler. Prohibitionists were among the Populists’ most faithful allies, and the Populist hope William Jennings Bryan was himself a “dry.” As Dorothy embarks on the Yellow Brick Road, Toto trots “soberly” behind her, just as the Prohibitionists soberly followed the Populists.

When Dorothy’s twister-tossed house comes to rest in Oz, it lands squarely on the wicked Witch of the East, killing her instantly. The startled girl emerges from the abode to find herself in a strange land of remarkable beauty, whose inhabitants, the diminutive Munchkins, rejoice at the death of the Witch. The Witch represents eastern financial-industrial interests and their gold-standard political allies, the main targets of Populist venom. Midwestern farmers often blamed their woes on the nefarious practices of Wall Street bankers and the captains of industry, whom they believed were engaged in a conspiracy to “enslave” the “little people,” just as the Witch of the East had enslaved the Munchkins. Populists viewed establishment politicians, including presidents, as helpless pawns or willing accomplices. Had not President Cleveland bowed to eastern bankers by repealing the Silver Purchase Act in 1893, thus further restricting much-needed credit? Had not McKinley (prompted by the wealthy industrialist Mark Hanna) made the gold standard the centerpiece of his campaign against Bryan and free silver?"

But not everyone agrees with this. Economist Bradley Hansen wrote an article titled The Fable of the Allegory: The Wizard of Oz in Economics in the Journal of Economic Education in 2002. Here is his conclusion:

"Rockoff noted that the empirical evidence that Baum wrote The Wonderful Wizard of Oz as an allegory was slim, but he compared an allegorical interpretation to a model and suggested that “economists should not have any difficulty accepting, at least provisionally, an elegant but controversial model” (Rockoff 1990, 757). He was right—we did not have any difficulty accepting it. Despite Rockoff’s warning, we appear to have accepted the story wholeheartedly rather than provisionally, simply because of its elegance. It is as difficult to prove that The Wonderful Wizard of Oz was not a monetary allegory as it is to prove that it was. In the end, we will never know for certain what Baum was thinking when he wrote the book. I suggest that the vast majority of the evidence weighs heavily against the allegorical interpretation. It should be remembered that no record exists that Baum ever acknowledged any political meanings in the story and that no one even suggested such an interpretation until the 1960s. There certainly does not seem to be sufficient evidence to overwhelm Baum’s explicit statement in the introduction of The Wonderful Wizard of Oz that his sole purpose was to entertain children and not to impress upon them some moral. The Wonderful Wizard of Oz is a great story. Telling students that the Populist movement was like The Wonderful Wizard of Oz does seem to catch their attention. It may be a useful pedagogical tool to illuminate the debate on bimetallism, but we should stop telling our students that it was written for that purpose."

What Do An Obama Economic Advisor And A Bush Economic Advisor Agree On?

They both agree that the Earned Income Tax Credit (EITC) program is a better anti-poverty program than the minimum wage.

Click here to read what the Bush advisor says (Greg Mankiw, who was the chair of the Council of Economic Advisors under GW Bush)

Click here to read what the Obama advisor says (CHRISTINA D. ROMER, who was the first chair of the Council of Economic Advisors under Obama)

Hungary Tries a Dash of Taxes to Promote Healthier Eating Habits

Click here to read the New York Times article by SUZANNE DALEY (from March 3, 2013). This week in my micro class, we read a chapter from the book The Economics of Public Issues on obesity in the U. S.. There are two major trends that have lead to weight gains in recent decades: More sedentary jobs (their relative pay has increased) and lower relative total cost of food (including preparation time).

As the article says, "Nearly two-thirds of Hungarians are overweight or obese, and the country has the highest per capita salt consumption in the European Union."

So what has the government done?

it "...has, in the past 18 months, imposed taxes on salt, sugar and the ingredients in energy drinks, hoping both to raise revenues and force those who are eating unhealthy foods to pay a little more toward the country’s underfinanced health system"

 Other excerpts:

"Hungary has one of the lowest life expectancy rates at birth in the European Union: in 2011 it was just 71.2 years for men and 78.7 for women. In 2009, the most recent statistics available for all 27 members of the bloc, life expectancy in the group averaged at 76.6 years for men and 82.6 years for women."

"But critics point out that the new interest in food taxes just happens to coincide with tough economic times in Europe. Some say the taxes are as much about raising revenues in a politically acceptable manner as they are about promoting healthy habits. And they worry that the taxes do, in fact, hit the poor the hardest. 

One effort to raise taxes on saturated fat has already failed spectacularly. In October 2011, Denmark became the first country to institute such a tax, raising the price of meat, dairy, edible oils and fats, margarine and other blended spreads, among other items. Fans of the effort thought Denmark was perfectly positioned to make such a tax work, because it already had rigorous labeling requirements, an efficient administration and companies used to making these kinds of adjustments. 

But barely a year later, Denmark gave up on the tax. In the end, experts say, the effort was undermined by political battles, pressure from the food industry and a population that quickly learned to go over the border to Germany to buy the products it wanted."

"The move to institute food taxes in Hungary began ambitiously. It was first nicknamed the “hamburger tax” and included the idea of a tax on fast food. But the effort was later renamed a “chips tax,” skirting the issue of fat altogether, a change that many people attribute to lobbying by multinational corporations. And in the end, the taxes were applied only to packaged foods, making it easier to carry out. The rates vary depending on the food group: adding, for instance, about 13 cents to the cost of a 100-gram, or nearly 4-ounce, chocolate bar, or about 20 cents to a small bag of potato chips. 

But many Hungarians just do not think the taxes are working and see the effort primarily as a revenue-raising instrument..."

"Sales of salty and sugary foods have dropped in the last year, officials said. But it is hard to tell if the taxes had much to do with it. Hungarians, struggling with high unemployment and a dismal economy, bought less of all kinds of foods last year"

many "...customers were not particularly aware of the special taxes on products like powdered soup mixes, jams and chocolate, because the government had raised sales taxes at roughly the same time, making many purchases more expensive."

"The government hoped to collect 20 billion forints, about $88 million, from the food taxes last year and fell 3 billion forints, or about $13 million, short. One reason was that energy drink makers quickly changed their products to duck the tax."

An industry rep said "...taking salt out of a product can have serious technical consequences. In many cases, it serves as a preservative.""

and "...much of the salt that Hungarians consume is not actually from prepackaged foods but from salt added to food cooked at home."

Should U. S. Citizenship Be For Sale?

See A Market Solution to Immigration Reform: The U.S. needs more people with skills and vision. To get them, it should sell the right to become a citizen by GARY S. BECKER AND EDWARD P. LAZEAR, from yesterday's Wall Street Journal. Excerpts:

"We propose that, instead of the current maze of rules and formulas, the U.S. should sell the right to become a citizen. Setting a price of perhaps $50,000 would attract those who place the highest value on citizenship."

"...the U.S. system currently gives much lower preference to workers with skills than do countries like Germany."

"...the sale of immigration slots could be coupled with a loan program that allows people to borrow the fee and to pay it back out of their earnings over an extended period."

"There are several benefits to a market-based immigration system. First, it would attract skilled, productive, entrepreneurial people..."

Second, current citizens could provide loans or pay the fee of immigrant relatives who matter the most to them. This would encourage the best kind of family reunification.

Third, because the current system for legal immigration favors relatives of those already here, immigrants tend to come from relatively few countries. Opening immigration up to the rest of the world is fairer and would be of greater benefit to the U.S.
Finally, selling the citizenship right would bring in much-needed revenue for the government. About one million immigrants arrive legally each year. That is $50 billion in the system we propose."

"People who are now here illegally could become legal by paying the fee."

"Of course, some illegal immigrants might choose to stay underground to avoid paying the fee. For that reason, the sale of slots must be coupled with strong enforcement of the laws."

"A point system requires that the government choose the number of points to award to skills, family ties, age, time living in the U.S., and other factors that are extraneous to economic growth. This means politics will influence the points awarded."

Yes, the price of a slot may also be subject to politics. If it is high, the U.S. will have fewer and more skilled immigrants. This probably means Republicans would favor a higher price and Democrats a lower price—each wanting immigrants they believe would vote for them. Still, selling slots won't create major misallocations among those who come in, once the price is determined."

"...allow people to pay an annual fee, renewable for up to three years, at the end of which time they would leave the U.S. or commit to pay the citizenship fee."

 Mr. Becker, a Nobel laureate, is a professor of economics at the University of Chicago. Mr. Lazear, former chairman of the president's Council of Economic Advisers (2006-09), is a professor at Stanford University's Graduate School of Business. Both are fellows at Stanford's Hoover Institution.

What Will College Students Do For Money?

See The Student Body, for Sale: To meet the rising cost of college, students can call on at least one resource all their own by Don Troop of The Chronicle of Higer Education. If you can't access all of the article, I might be able to email it to you.

Students sell their plasma. Female students sell their eggs. Male students sell their sperm. Both females and males strip. They also get paid to be guinea pigs in medical studies. Excerpts:

"...60 percent of American college students graduate in the red, owing an average of $25,300..."

A male stripper said about his saturday night gigs: "I'd walk out with maybe $600 or $700 a night,"

"The sale of bodily goods or services—"body commodification"—is nothing new among college students. But strides in medical technology, the encroachment of market values on all facets of life, and the reach and culture of the Internet have combined to create a fertile environment for people who want or need to exploit the value of their skin or what lies beneath it..."

"Students sell plasma, take requests to perform custom erotic acts on Web cameras, or offer themselves as guinea pigs in paid drug trials. A master's student in Penfield, N.Y., says she was kicked out of her social-work program last June for snuggling with strangers—no sex allowed—for $60 an hour. A handful of Web sites, like SeekingArrangement.com, promise introductions to young and attractive men and women—often students—for "mutually beneficial relationships." An advertisement in campus newspapers at three elite colleges offers $35,000 for the eggs of a young woman with an SAT score above 1400."

"A 27-year-old woman in a suburban mid-Atlantic area dropped out of community college two and a half years ago to pay off bills and save up for a degree in graphic design. We'll call her "J." She had been eking out a living as a waitress when she decided to take a turn on the stage of a local strip club that paid $500 to the winner of its weekly amateur night. She remembers little about that night, except that she won the contest and brought home $700 in prize money and tips."

"The manager offered her a job on the spot, and she began dancing one or two nights a week, bringing home $200 to $700 per shift, ..."

""Students who strip can alleviate some of the stigma from their occupation by rationalizing their work," the two scholars wrote (Mary Nell Trautner & Jessica L. Collett). "Whether or not they rely on their earnings for tuition, these women believe that stripping is supporting a series of positive life choices they have been making," in contrast to "what they see as negative life choices of 'other' dancers." But there is a downside. Student strippers typically keep the job secret from family members, classmates, and professors, Ms. Trautner and Ms. Collett wrote, an arrangement that can leave them feeling alienated and estranged..."

"College newspapers and Craigslist carry advertisements seeking women and men, particularly students with high GPAs and SATs, who are willing to "donate" their gametes."

"Egg donors in the United States are typically paid $5,000 to $10,000, a voluntary ceiling established by the American Society for Reproductive Medicine. Sperm donors get about $100 per donation;..."

Is all of this degrading? "Economic sociologists such as Ms. Almeling, at Yale, and Viviana A. Zelizer, at Princeton University, believe that the reality is more complex. A transaction that many would see as corrupting might be viewed less judgmentally if it creates the potential for a positive result.

For example, says Ms. Zelizer, if a student exchanges sex for cash to cover her college expenses, she will regard that decision differently. "By saying, 'I'm doing it for tuition,' it kind of cleanses the money," says Ms. Zelizer, author of The Purchase of Intimacy (Princeton, 2005). "Prostitutes themselves differentiate between the money they earn from prostitution and the money they earn from clean sources, and they spend it differently.""

"The United States has become the world's biggest supplier of plasma in part because, unlike Britain and Canada, that part of its blood supply has remained a for-profit system. Mr. Healy says the poor, not college students, continue to be the largest proportion of plasma donors. But many students are on the lower end of the economic spectrum, and the proximity of plasma-donation centers to many colleges hardly seems coincidental." (one student got $25-$30 per donation)

Do Oscar Nominations Mean Money At The Box Office?

See Best Picture Contenders Earn Over $300 Million After Nominations. Excerpt:

"Much more so than in past years, the 2012 Best Picture Oscar contenders have collectively put up strong box office numbers in the six weeks since nominations were announced.

From nomination day (January 10th) through the Thursday before Oscars (February 21), the nine Best Picture nominees have grossed over $305 million at the domestic box office. That's a new record ahead of 1997's $260.9 million in the post-nomination, pre-awards period (over half of which came from Titanic).

There are a handful of factors that help explain this phenomenon, many of which simply have to do with scheduling. This year the nominations were announced earlier, giving a full 12 days more in the post-nomination, pre-awards period than there was the last two years. Also, seven of the nine Best Picture nominees opened in November or December, which is noticeably more than the five from 2010/2011 and the four from 2009. Finally, this is only the fourth year in the modern era in which there were more than five Best Picture nominees, which gives 2012 a major advantage."

I had a similar post last year. See What’s an Oscar Really Worth? One thing the article I quoted said was: "Oscar winners bring in 7.6 percent higher box office return on average than nominees that don’t win."

Is There Really A Honey Bee Shortage?

Fewer bees in US a threat to world's almond supply By GOSIA WOZNIACKA. The bees are needed for pollination and they have been suffering from colony collapse disorder in recent years.Excerpt:

"Bee brokers, beekeepers and almond growers around the state say there's a shortage of healthy honeybees for this year's pollination, especially after colony collapse disorder took a higher toll this winter. The disorder, in which honey bees suddenly disappear or die, wipes out thousands of colonies each year.

The shortage has some growers scrambling for bees — even sub-performers — as trees are about to bloom, driving up bee prices again this year, to an all-time high of more than $200 per colony.

"There's definitely a shortage of strong bee colonies," said Joe Traynor, owner of Scientific Ag, which connects growers with beekeepers. "There is a problem covering all the acres of almonds in the state.""

It is not clear that there is really a shortage. For a shortage, there has to be a greater quantity demanded than supplied at a given price. But as the supply of bees has decreased, the price as risen, as the article says. That is how markets work. Yes, there are fewer bees than there used to be, but that does not mean we have a shortage.

What Does Nike Sell?

Click here to find out. It may not be what you think.

Do Illegal Immigrants Actually Hurt the U.S. Economy?

Click here to read the article from today's NY Times magazine. Excerpts:

"Illegal immigration does have some undeniably negative economic effects. Similarly skilled native-born workers are faced with a choice of either accepting lower pay or not working in the field at all. Labor economists have concluded that undocumented workers have lowered the wages of U.S. adults without a high-school diploma — 25 million of them — by anywhere between 0.4 to 7.4 percent.
      

The impact on everyone else, though, is surprisingly positive. Giovanni Peri, an economist at the University of California, Davis, has written a series of influential papers comparing the labor markets in states with high immigration levels to those with low ones. He concluded that undocumented workers do not compete with skilled laborers — instead, they complement them. Economies, as Adam Smith argued in “Wealth of Nations,” work best when workers become specialized and divide up tasks among themselves."

 

"In states with more undocumented immigrants, Peri said, skilled workers made more money and worked more hours; the economy’s productivity grew. From 1990 to 2007, undocumented workers increased legal workers’ pay in complementary jobs by up to 10 percent."

 

"There are many ways to debate immigration, but when it comes to economics, there isn’t much of a debate at all. Nearly all economists, of all political persuasions, agree that immigrants — those here legally or not — benefit the overall economy. “That is not controversial,” Heidi Shierholz, an economist at the Economic Policy Institute, told me. Shierholz also said that “there is a consensus that, on average, the incomes of families in this country are increased by a small, but clearly positive amount, because of immigration.”

 

The benefit multiplies over the long haul. As the baby boomers retire, the post-boom generation’s burden to finance their retirement is greatly alleviated by undocumented immigrants. Stephen Goss, chief actuary for the Social Security Administration, told me that undocumented workers contribute about $15 billion a year to Social Security through payroll taxes. They only take out $1 billion (very few undocumented workers are eligible to receive benefits). Over the years, undocumented workers have contributed up to $300 billion, or nearly 10 percent, of the $2.7 trillion Social Security Trust Fund."

Does Qatar Have The Highest Per Capita GDP Or Is It Another Country?

Click here to see the CIA rankings on capita GDP. Here is the current top 15:

1	Qatar	$102,800
2	Liechtenstein	$89,400
3	Luxembourg	$80,700
4	Macau	$74,900
5	Bermuda	$69,900
6	Singapore	$60,900
7	Jersey	$57,000
8	Falkland Islands	$55,400
9	Norway	$55,300
10	Hong Kong	$50,700
11	Brunei	$50,500
12	United States	$49,800
13	United Arab Emirates	$49,000
14	Switzerland	$45,300
15	Guernsey	$44,600

The estimates for a few of these countries is for a year before 2012. Qatar has been number 1 for 2-3 years.

But, Monaco, which is listed on the CIA page ranking total GDP, has a per capita GDP of about $179,000. It is not clear why Monaco is listed in the total GDP rankings but not in the per capita GDP rankings. Click here to see the CIA rankings for total GDP.

Monaco has a population of 30,510. It has a total GDP of $5,470,000,000. Both figures are according to the CIA. That would be a per capita GDP of about $179,000, much higher than any other country. But I have never seen Monaco in the per capita GDP rankings.

Click here to see the Monaco page at the CIA.