Tuesday, November 25, 2008
Thursday, November 20, 2008
Foreclosures and Job Losses
There's an article on CNN today about home owners who will lose their houses because they have lost their jobs and how they need to be bailed out. I have mixed feelings about this.
On one hand I feel bad for people who have lost their jobs and can't pay their mortgages. That could very easily be me. I don't have enough savings to live for more than a month or two without a job. And to make it that month or two I might have to cut some very basic things, like food.
On the other hand I feel that people who took on mortgages they couldn't afford deserve to lose their houses and by bailing them out we are just reinforcing that people can and should spend more than they can afford. I would include myself in this category, I do have a fairly large mortgage and if I had wanted to I could have bought a smaller house and had a smaller mortgage payment.
Some may think its hypocritical of me to support bailing out financial firms but not individuals. I guess it sort of is. But honestly some firms are critical to the economy while no individual is.
I have mixed feelings about bailing people out, although I could use a bailout myself. I feel that it is my fault I am in debt (it is) and I should have to pay the consequences of that. However some people may lose their jobs and it's not their fault.
This is a difficult issue, though I assume not for politicians. Who is going to oppose helping people who just lost their jobs other than economics people like me and big corporations?
On one hand I feel bad for people who have lost their jobs and can't pay their mortgages. That could very easily be me. I don't have enough savings to live for more than a month or two without a job. And to make it that month or two I might have to cut some very basic things, like food.
On the other hand I feel that people who took on mortgages they couldn't afford deserve to lose their houses and by bailing them out we are just reinforcing that people can and should spend more than they can afford. I would include myself in this category, I do have a fairly large mortgage and if I had wanted to I could have bought a smaller house and had a smaller mortgage payment.
Some may think its hypocritical of me to support bailing out financial firms but not individuals. I guess it sort of is. But honestly some firms are critical to the economy while no individual is.
I have mixed feelings about bailing people out, although I could use a bailout myself. I feel that it is my fault I am in debt (it is) and I should have to pay the consequences of that. However some people may lose their jobs and it's not their fault.
This is a difficult issue, though I assume not for politicians. Who is going to oppose helping people who just lost their jobs other than economics people like me and big corporations?
Tuesday, November 18, 2008
Friday, November 14, 2008
Another 80s song with new lyrics
This is so awesome... It makes fun of the whole concept of music videos and is just great:
See more funny videos at Funny or Die
Thursday, November 13, 2008
Friday, November 07, 2008
Obama and Protectionism
Tuesday night was the first time I've felt proud to be American since the 2000 election travesty. I am so thrilled that we have Obama as president and that the American people agreed so overwhelmingly that he would take the country in a new direction. I was even able to get to sleep at a decent hour on Tuesday since once New Mexico was called I was comfortable that there was no chance McCain could win.
There is something I am concerned about. A traditional democratic issue is protectionism and opposition to free trade. This is very troublesome to me because globalization is here to stay, free trade makes the world economy more efficient, and I will be very upset if we trade that off to save a few American jobs.
This is based on an economic principle called "comparative advantage." What this means is that some countries can do things better than other countries can. Take two fictional countries, A and B. Country A can make cars efficiently, country B can make coffee efficiently. The most efficient way to allocate the resources is to have A make all the cars and B make all the coffee. If we have some resources in A making coffee we are sacrificing the cars they could be making more efficiently.
The key to this concept is opportunity cost. Even if we can make coffee in A cheaper than we can in B the opportunity cost of making coffee in A is the ability to make more cars. Wikipedia describes this better than I can.
Anyway free trade makes this possible. If we restrict free trade we are artificially raising prices and reducing efficiencies for foreign countries. Let's take a real world example. Data entry and call centers are cheap in India. If we force companies to not use India and instead hire Americans to do that job, they spend extra money on that. That money could be used to hire Americans to do what Americans are good at which is the creative part of the process. So India suffers because they are losing out on the money that they could be making, and the American company suffers because it has to pay higher prices for the same quality, and this makes the consumer suffer because the high prices get passed on to them, and the people suffer because they can't get high-paying jobs for things that we do better here than foreigners can do.
I am very worried about the Democrats restricting free trade. For some strange reason that has been a plank in their platform for quite a while. Its probably because of the support of the labor unions who don't care about comparative advantage or opportunity cost, they just want their people to have jobs and make as much money as possible. I find it ridiculous that a so-called "liberal" party would take such a conservative approach to foreign relations and restrict free trade.
Here's another example. In the US there are high import tariffs on sugar. So the countries that produce sugar cheaply can't sell it cheaply in the US, thanks to a Reagan policy. This makes it cheaper for US companies to buy high fructose corn syrup than real sugar. This provides the farmers and incentive to grow corn instead of other crops. (Also because they get paid by the government to grow corn even if no one wants it.) If we just allowed sugar to be imported the farmers would be free to grow crops that are more useful (and won't be bought by the government and thrown out) and I wouldn't be finding that every single thing I eat all day has high fructose corn syrup as the first or second ingredient. That's not really related to this topic but I hate that everything has high fructose corn syrup in it.
If the government cracks down on free trade the US is going to fall behind the rest of the world. Most of the rest of the world has embraced free trade and they will thrive because of the ability to maximize their efficiencies. The US will stagnate as we force companies to spend money on things that would be cheaper to offshore and less money on things that will drive the economy going into the future.
There is something I am concerned about. A traditional democratic issue is protectionism and opposition to free trade. This is very troublesome to me because globalization is here to stay, free trade makes the world economy more efficient, and I will be very upset if we trade that off to save a few American jobs.
This is based on an economic principle called "comparative advantage." What this means is that some countries can do things better than other countries can. Take two fictional countries, A and B. Country A can make cars efficiently, country B can make coffee efficiently. The most efficient way to allocate the resources is to have A make all the cars and B make all the coffee. If we have some resources in A making coffee we are sacrificing the cars they could be making more efficiently.
The key to this concept is opportunity cost. Even if we can make coffee in A cheaper than we can in B the opportunity cost of making coffee in A is the ability to make more cars. Wikipedia describes this better than I can.
Anyway free trade makes this possible. If we restrict free trade we are artificially raising prices and reducing efficiencies for foreign countries. Let's take a real world example. Data entry and call centers are cheap in India. If we force companies to not use India and instead hire Americans to do that job, they spend extra money on that. That money could be used to hire Americans to do what Americans are good at which is the creative part of the process. So India suffers because they are losing out on the money that they could be making, and the American company suffers because it has to pay higher prices for the same quality, and this makes the consumer suffer because the high prices get passed on to them, and the people suffer because they can't get high-paying jobs for things that we do better here than foreigners can do.
I am very worried about the Democrats restricting free trade. For some strange reason that has been a plank in their platform for quite a while. Its probably because of the support of the labor unions who don't care about comparative advantage or opportunity cost, they just want their people to have jobs and make as much money as possible. I find it ridiculous that a so-called "liberal" party would take such a conservative approach to foreign relations and restrict free trade.
Here's another example. In the US there are high import tariffs on sugar. So the countries that produce sugar cheaply can't sell it cheaply in the US, thanks to a Reagan policy. This makes it cheaper for US companies to buy high fructose corn syrup than real sugar. This provides the farmers and incentive to grow corn instead of other crops. (Also because they get paid by the government to grow corn even if no one wants it.) If we just allowed sugar to be imported the farmers would be free to grow crops that are more useful (and won't be bought by the government and thrown out) and I wouldn't be finding that every single thing I eat all day has high fructose corn syrup as the first or second ingredient. That's not really related to this topic but I hate that everything has high fructose corn syrup in it.
If the government cracks down on free trade the US is going to fall behind the rest of the world. Most of the rest of the world has embraced free trade and they will thrive because of the ability to maximize their efficiencies. The US will stagnate as we force companies to spend money on things that would be cheaper to offshore and less money on things that will drive the economy going into the future.
Tuesday, November 04, 2008
There Can Be Only One
For some reason from Roger Ebert's blog a treatise on the evolution of candy.
From R. Crutch:
Whenever I get a package of plain M&Ms, I make it my duty to continue the strength and robustness of the candy as a species. To this end, I hold M&M duels.Taking two candies between my thumb and forefinger, I apply pressure, squeezing them together until one of them breaks and splinters. That is the "loser," and I eat the inferior one immediately. The winner gets to go another round.
I have found that, in general, the brown and red M&Ms are tougher, and the newer blue ones are genetically inferior. I have hypothesized that the blue M&Ms as a race cannot survive long in the intense theater of competition that is the modern candy and snack-food world.
Occasionally I will get a mutation, a candy that is misshapen, or pointier, or flatter than the rest. Almost invariably this proves to be a weakness, but on very rare occasions it gives the candy extra strength. In this way, the species continues to adapt to its environment.
When I reach the end of the pack, I am left with one M&M, the strongest of the herd. Since it would make no sense to eat this one as well, I pack it neatly in an envelope and send it to M&M Mars, A Division of Mars, Inc., Hackettstown, NJ 17840-1503 U.S.A., along with a 3x5 card reading, "Please use this M&M for breeding purposes."
This week they wrote back to thank me, and sent me a coupon for a free 1/2 pound bag of plain M&Ms. I consider this "grant money." I have set aside the weekend for a grand tournament. From a field of hundreds, we will discover the True Champion.
There can be only one.
Joe Six Pack
First in today's series of campaign-related videos
See more Thomas Haden Church videos at Funny or Die
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