Friday, July 30, 2010

Mazi's Link O' the Day

You can have an impeccable understanding of theory and models, but if you can't understand reality, then you're bound to run into problems. Seems obvious, right? Well, sadly, as this article argues, that is plight of many economists. Some might argue it was this detachment from reality that brought about parts of the crisis.


http://timothyblee.com/2010/07/29/the-neoclassical-lemonade-stand-and-other-confusions/

Thursday, July 29, 2010

It's Their Future, After All

I'm going to bring you back to a situation that happened all too often in the Crihfield house back in the day. A child would refuse to do his homework, and start annoying anyone in the house whose attention he could grab. To stave off this threat, one parent would take him to his room to make sure he does his homework. The parent would sit there and order the child to do his homework, staving off distractions, but in the end, the kid just wasn't making any progress. So, the next parent comes in the room. This parent insists that a different strategy is needed, and begins to more actively help the child, devoting all of his/her time, patience, and energy to trying to get the kid to do the homework. At the end of the day, however, the kid just didn't want to do it, and on top of that, his brothers were constantly popping their heads in and causing general mayhem. The Crihfield family doesn't really accept failure, so that kid would always get his homework done, no matter how much it cost the intervening parents.

Just in case you don't know where I'm going with this, I'll let you in now. We are facing a similar problem in Afghanistan today. America, annoyed by the Taliban after 9/11, decided to go kick them out and fix up the country they left behind. However, the more we struggle there, and the more we change strategies, the more the Taliban (and Pakistani) resistance grows. Quite frankly, we don't have the support we need from the Afghani people. Just like the kid who didn't want to do his homework, there is a huge portion of Afghanistan's population that has no will to do what seems right to us, and want nothing to do with fixing up a modern democratic regime.

So, what do we do? The parents could afford to invest an extra 30 minutes of their time making sure the kid got his homework done on that one night of distractions. However, the US war effort in Afghanistan is turning more and more into a proverbial 24/7 battle of wills with a completely petulant child who refuses to improve. Moreover, even if we did fix Afghanistan, all the bad guys in the world would just set up shop in Yemen! This isn't even a partisan question, war spending is set to peak this year under Obama, who during his campaign said something about ending...whatever.

There aren't enough people in that country that have the same vision as us to make it happen, so give them their damn rock. It sits on trillions of dollars of minerals, let them fall to the resource curse. We have tried too long and too hard with these people and seen no improvement. The Iraqis made an effort, and now their country is very much on the mend. Afghanistan is not. Pull out of Afghanistan. Give the terrorists no more legitimate reason to attack us. And invest in green energy so we never have to go within 1000 miles of that place again. Let the "Three Cups of Tea" guy fix it.

Mazi's Link O' the Day

Not sure what to say to this, but it's certainly interesting nonetheless. I wonder if people are growing disillusioned with this modern life that sometimes seems to cause more trouble than good.

http://blogs.wsj.com/economics/2010/07/29/the-amish-population-boom/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+wsj/economics/feed+(WSJ.com:+Real+Time+Economics+Blog)

Wednesday, July 28, 2010

Luke's Link

There are millions of issues that need to be ironed out for renewable energy, but every time you hear something like this, you know that if we just spent some more money in these sectors, we could have a booming green economy to lead the world into the future.

Mazi's Link O' the Day

Why aren't businesses spending? As I mentioned in an earlier post, lackluster demand plays a large role. Also, as this article explains, regulatory uncertainty is creeping in the backs of the minds of many businessmen.


http://online.barrons.com/article/SB50001424052970203964804575391453166193386.html?mod=BOL_hpp_dc

Tuesday, July 27, 2010

Mazi's Link O' the Day

Good news, I think! For those of you into being green (I'm too lazy to really try, but I appreciate everyone else's efforts). I'm happy to see car companies using these tough economic times, especially for them, to still move innovation forward.

http://www.marketwatch.com/story/nissan-to-start-us-leaf-rollout-in-december-2010-07-27-1216550

Monday, July 26, 2010

Twitter!!!!

We have successfully learned how to navigate the Cyberwebs and have created a Twitter account for ourselves.

Here we are:
http://twitter.com/Econstu

Sunday, July 25, 2010

Luke's Link 7-25

Check out the very last paragraph, quoted from Jeremy Grantham. I've been to an investor meeting for his hedge fund GMO and heard him talk, he's really damn smart.

(Link in the title)

Mazi's Link O' the Day- 7/25/10

I suppose this was inevitable, but good for Bob Dudley, as he moves up the BP ranks.

http://www.bbc.co.uk/news/business-10753573

Friday, July 23, 2010

Mazi's Link O' the Day

I'm going to try, as the title implies, to post a "link of the day" from now on. Hopefully, I will be disciplined enough to keep it up.


As for today's link...

1. If you're a Democrat, here's yet another sign of the coming Armageddon this fall.
2. Also, this link proves, yet again, why you shouldn't blindly believe what Congressmen and women say. Get your facts from somewhere besides the polity's mouth.


http://www.nytimes.com/2010/07/23/nyregion/23rangel.html?_r=1&th&emc=th

Wednesday, July 21, 2010

Teacher's Pets

Today, several big players in the oil industry announced they would collaborate to stop future "Deepwater Horizons" from occurring. These companies, consisting of ExxonMobil, Shell, ConocoPhillips, and Chevron, are setting up a $1 billion fund to create what can be regarded as a giant first-aid kit. Any company drilling in the Gulf of Mexico will have access to these supplies, should they need them (which hopefully they won't.... right?).

BP, not surprisingly, was left off the guest list. This is expected, given how the other big companies have been continually distancing themselves from the British company since this whole disaster started. I can't help but wonder if all this "charity" and criticism of BP are just ways to get on politicians' good sides before, say, one of Shell's rigs explodes. In fairness to these companies, they have insisted that their safety measures are far more rigorous than BP's, and I suppose we should take their words on it. Also, BP has a rather shoddy record of safety upkeep, so this sort of catastrophe wasn't exactly unforeseeable. However, a likely ulterior motive for being the "good guys" here is still related to politics. That is, these companies really, really, really, really want to do deepwater drilling, and, alas President Obama has already issued a moratorium on THAT. Well, luckily for the oil companies, other political pressures are forcing the Obama administration to reconsider the moratorium. Given the state of the economy, ExxonMobil and gang may get their wish. Is that a good thing? IF their safety measures are as rigorous as they claim, then maybe it is. I'll give them the benefit of the doubt. But if politicians do too, and this bet does not pay off (read: another well starts spewing like a garden hose), heads will roll, so to speak. Dare I say, could be BP Part 2 be a presidency killer? Let's hope we don't find out.

Red, White, and Blue Energy

The energy bill sitting in the Senate right now is not going to pass. Right now, it has been hacked and mutilated enough to get 53 hapless Democrats to vote for it, with 7 others still being whiny little bitches. The Republicans are intent on labeling everyone for the bill as "Carbon Taxers", and everyone in America knows that Carbon Taxers are the worst kind of taxers. What if seven Republicans decided to wisen up and support the bill?

First, they would give the war effort in Afghanistan its greatest lift ever. No, there isn't much oil there, but all of the terrorist organizations currently trying to bring us down are based in petro-dictatorships. Cut off these dictator's funding, and they will eventually die out, along with them the terrorist groups they tacitly (or directly) support. It is a great hypocrisy that we send troops overseas to die for America while we are unwilling to make small sacrifices for the country and for them here at home.

Next, China is set to be the leader in clean energy by 2012. There isn't anything wrong with that, I look forward to buying cheap Chinese goods. However, at this pace, we aren't going to even have a clean energy sector worth subsidizing in the future. We have to help it get on its feet now, and create millions of jobs here as well as giving the economy a huge boost.

Republicans and some Democrats profess to be against the bill because it would raise energy prices, hurting "middle America". I won't go off on a rant about the new obsession in the punditry and our leadership with populism, but take this statistic. The world is projected to add 3.5 billion people by 2050. Who want to live the American dream. Have fun at the pump in 2050, Senators.

Monday, July 12, 2010

A Business Agenda

There's been a lot of talk in papers and such about the upcoming "jobs summit" El Presidente is holding. There are, naturally, many things that can be discussed here. However, I'd like to focus on every politician's favorite enterprise: small business.

Politicians are fond of touting themselves as the champions of the little guys, and it wears thin eventually. However, there is something to be said for that position. Small business actually is one of, if not the, most important engines of growth in our economy, and when they do poorly, here come tough times. Currently of note is the fact that the interest rate being offered small businesses is relatively high. As the Financial Times reported, "The Fed’s data show that in early May interest rates on small commercial and industrial loans, on average worth about $500,000, were 3½ per cent higher than the federal funds rate, the widest gap since the series began in 1986." Obama has created a fund for local banks to help small businesses with loans, BUT there is always a but. These banks are not necessarily giving out the money. Why? Well, businesses have not seen sufficient demand. This means they're not expanding. Hence, no loans. The issue, as stated, is due to lackluster demand. You can stuff a piggy bank all you want, but if nobody's gonna break it open, who cares?