Archive forNovember, 2013

Solar Tax

Arizona is implementing a new levy on homes that install solar plates on their homes and still plug into the grid.  They will be charged 70 cents for every kilowatt of installed capacity.  The people implementing this tax still say that solar power would still be economically viable but it is just another disincentive for people to try and help the environment.  Installing solar panels on one’s roof is supposed to create a positive externality for the environment but many people don’t do it because its easy enough to receive your power from the local grid.  The people installing solar powers are trying to help the environment and now they will be taxed for it.

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Is there a bubble in the art market?

http://money.cnn.com/2013/11/15/investing/art-market-boom/index.html

This article from CNNMoney discusses the current art market bubble. Recently, there had been a record-setting boom in the art market. While some art experts argue that this new trend might be a rising bubble, it is most likely that many rich buyers are simply putting their feet in to have some art in their ‘portfolios’. However, no one can argue that the prices will continue rising due to the growing demand from overseas collectors and high-net worth individuals. Therefore, this is a prime example that shows the relationship between high demand and increasing price.

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Financial savings from cows

http://www.economist.com/news/finance-and-economics/21587226-cattle-may-be-terrible-investment-decent-savings-vehicle-udder-peoples Cows are highly valued in India.

Many people have cows here, particularly in the rural areas, and much less so in the cities. Regardless, this is not only because cows are valued religiously in the Hindu culture, but also because they are used as a form of savings. Cows are very valuable because they can produce milk, dung, and calves. Of course, they can also be expensive to take care of.

Economic myopia discusses how people often impulsively spend money rather than saving it. In other words, spending is much easier than saving. One of the major reasons cows are used in India as a form of ‘savings’ is that a cow is not cash. Of course, if one sells the cow, he will earn money for it, but the cow itself is not bills of Indian rupees piled up.  People can also become attached to their cows (like pets), so trading it for money has more psychological affects than just spending money. It is harder for someone to sell their cow than to just spend, and this is a huge reason as to why cows are used as a form of savings (instead of money).

Similar things are done in other countries. Some people use their sheep, goats, horses, etc as forms of savings. Others save gold and silver jewelry, pass it down within generations, as a form of savings.

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Climate negative externalities show dismal hope

This article in the New York Times discusses how although renewable energy in the short term seems environmentally and economically beneficial, in the long term many problems arise and make the negative out weight the positives; an example being the cost of wind turbines, and inconstancy of wind powering them. The article also discussing how taxing CO2 emissions will not show much economic profit because of the cost of producing energy from coal. All of these negative externalities make the future of climate change inevitable.

Article

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Europe Adopts Sweeping Changes to Fishing Policy

Earlier this year, the European Parliament voted to take seriously overfishing in the Atlantic and Mediterranean. Treating fish as an open access resource have seriously depleted fish stocks. This New York Times article provides the details. The article notes that US p0licy, while still imperfect, has been better at protecting fish stocks than European policy in recent years. The use of transferable quotas in the US has improved efficiency in addition to protecting fish stocks.

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Crown, Echo cleared of Cartel Behavior

http://www.businessday.com.au/business/crown-echo-cleared-of-cartel-behaviour-20131119-2xsvx.html

This article provides an example of what happens when companies try to break competition laws and form cartels. Although the companies involved were cleared of the charges, it shows how seriously the ACCC takes its competition laws. Echo and Crown were not charged with creating a cartel and now face harsh competition over territory in Brisbane.

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Wealth Inequality in America

http://www.utrend.tv/v/9-out-of-10-americans-are-completely-wrong-about-this-mind-blowing-fact/

I had watched this video a few weeks ago and after reviewing chapter 17 on labor markets and I found it relates to a few topics discussed in that chapter.  In this video it describes how wealth in the country is divided based on different classes and level of jobs.

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For Blackberry, things from bad to worse

BlackBerry’s failure to keep up with Apple and Google was a consequence of errors in its strategy and vision. First, after growing to dominate the corporate market, BlackBerry failed to anticipate that consumers would drive the smartphone revolution. The company was blindsided by the emergence of the “app economy,” which drove massive adoption of iPhone and Android-based devices. Also BlackBerry failed to realize that smartphones would evolve beyond mere communication devices to become full-fledged mobile entertainment hubs.

As a result, after releasing its quarterly financial results (hoping to see some improvement), BlackBerry saw its shares fall by another 20% (close to 1 billion dollars). Blackberry has also reported that it will be implementing a workforce reduction of 4,500 positions, or approximately 40% of the company’s global workforce. As a result this will result in workforce of approximately 7,000 full-time global employees.

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Discrimination Abound

This article touch bases on the issues that effect women’s access to financial services in developing countries. Legal and cultural norms in countries all over the world have a huge negative impact on the chance of women getting any or equal access to financial services. Women are unable to own an account, less likely to borrow, and have unequal inheritance rights to the property handed down to them by their family members. As a result, countries that discriminate against genders have a gender-based financial exclusion that inhibits them from further developing and operating at maximum capacity.

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Wal-Mart Food Drive

I found this article, “Wal-Mart store’s food drive for its own workers” on the CNNMoney website. This article is very interesting. It discusses how Wal-Mart workers have been protesting, due to low wages. And that there are now food drives to give food to workers. The article states, “a report released by Congressional Democrats showed that the cost of these low wages are transferred to to taxpayers, since employees then rely on public assistance programs. The report, put out by the Democratic staff of the House Committee on Education and the Workforce, estimated that one Wal-Mart supercenter alone employing 300 workers could cost taxpayers at least $904,000 annually.”

You can find the article here: http://money.cnn.com/2013/11/18/news/companies/walmart-thanksgiving-food-drive/index.html?iid=SF_E_LN

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