Tuesday, August 31, 2010

Global-Price Factor Equilization Part I

Hello. This blog has helped me to reach deep conclusions about the complexities of life by virtually thinking aloud. Over the last month, my attention has been captured by globalization and the future impact it will have on factor movements. Over the next week, I want to use this space as a sketch pad for me to visual international capital and labor flows. Most of it will be nonsense that only makes sense to me.

Part I

The two girls are walking ahead of me in the hall at Muscatine High School. They are not in a hurry and they walk down the middle of the hall so that others can't pass them. The girls, if average, have spent 40-minutes getting ready for school. As I walk behind the girls, I listen to their small talk and watch them turn into a classroom that teaches family and consumer science.

Across the world, a young Indian boy walks 5 miles to an Internet cafe as fast as he can to can access to information. Raul aspires to open his own software business. Rual does not have a Facebook account, but he has a Linkedin and Elance account to make collaborative associations around the world to take advantage of varying factor endowments. Instead of going to a back to school dance, Raul uses Skype to meet with a programmer in Israel.

The two girls and Raul don't know it, but they are on a collision course. The bad thing is that the girls just don't see it coming. Raul, who face competition in every waking part of his life, welcomes global competition. The tools he will use include Google apps, B2B business models, integrated data bases, data mining, work flow software, and a well developed mind used to problem solving.

The tools the girls will have to compete with are crayons to color maps, memorized facts that can be looked up on Google in .5 seconds, and their good looks.

The thing is is that there are thousands and thousands of young men like Raul. The ills of social security will pale in comparison to the influx of global competition. And the competition is stiffening.

Monday, August 23, 2010

Saturday, August 21, 2010

Iowa - 21st century curricula

Iowa - 21st century curricula

If you are an educator, this is worth your time to read. I feel like Wiley E. Coyote right now. I am going to double my efforts to bring more of this technology into my classroom.

Jokes Quotes and Humor in Economics

Travels of a T-Shirt in the Global Economy

This is part of my Logistics research, the global suppy chain, and my assault on the pedegogy of American education.

Thursday, August 19, 2010

Mosque Mess

Politics is a dirty game. That’s why there’s so much mudslinging during an election. Sarah Palin’s throwing arm is as strong as Newt Ginrich’s but coming from her, the mud is dirtier. Neither hopeful needs a lesson on the First Amendment. These politicians are exploiting the fear of terrorists for their own benefit.

The actions of a small group are not the actions of the entire group. In the 1990’s and early 2000’s, a militant Christian group, Army of God, began bombing abortion clinics. I’m sure their tactics were not endorsed by all Christians. The bombings of the world trade center are the work of a group of terrorists and not the work of Muslims. George Bush has stated repeatedly that America was at war with the terrorists who attacked us on 9/11 not at war with Islam.

Many people think that the mosque symbolizes that the militant extremists have won. The mosque stands as a symbol of Islam over Christianity. The mosque is meant to be a community center that includes a culinary arts program and basketball courts. It’s not meant to be place of worship.

But Ms. Palin wants to exploit a fear that the mosque be a training ground for terrorists. The mosque will be an incubator for the training of terrorists. Many have questioned why President Obama would make statements about the construction of an Islamic temple so close to ground zero. Maybe Mr. Obama believes that America symbolizes freedom.

This is America where people are free to pursue their religious beliefs. This is a land founded by those who resented the oppression of the government. In America, freedom is one truth that is self-evident. The mosque is a symbol for freedom. Like many others, I feel sympathy for those affected by 9/11.

For Ms. Palin, this isn’t about the First Amendment or about the symbolism of a mosque near Ground Zero, but about being the first lady on Election Day.

Friday, August 13, 2010

How Banks Create Money

This video employs the simple deposit multiplier and assumes no one holds any cash.

How Banks Create Money

This video complements my EconEdLink lesson, "How Banks Create Money". You will see how a deposit into a checking account expands the money supply, the algebra of the change in excess reserves, and what happens if customers begin to hold cash.

Tuesday, August 10, 2010

Unemployment and Graduates

A link to a PBS article is here.

I drew the grad with red hair to symbolize the debt these young people carry out of college.  Many major in history, anthropology, philosophy, and liberal arts.  Few find work in those areas and live at home with minimum wage jobs. 

Monday, August 09, 2010


Facts about Iowa corn are here.

Corn is 12' tall right now. 

Paul Solman on Future Interest Rates

What makes this video so cool is the Fisher Equation. The equation looks like a reaction function to the GDP gap. This post is really a bookmark for me to use in an EconEdLink lesson.

Sunday, August 08, 2010

Job Growth

I was inspired by Grey's Anatomy for this cartoon.  I think we are in the midst of a deep recession.  To think of recovery now is premature.

EconEdLink: Graphing Total Revenue and Total Cost

Saturday, August 07, 2010

Friday, August 06, 2010


I want to see if this works.

Unemployment Report

About a half million job seekers were added to the unemployment figures this month.  The nation is fearing a double-dip recession.  Consumers are afraid.  The recession will hold on the rest of this year.  A different unemployment that combines under-employed workers reckons that 16.5% is a closer figure. 

We need a technology shock.  If you're a fan of the multipliers, then the Gulf oil spill should fuel some recovery. 

I need school to begin.

Demand and Supply

There's no reason to believe that gas prices are going to increase except that other commodities are inflating.  When businesses start demanding more of everything, that's a call to me that gas prices are going to rise.  In 2009, HNI employed 1,500 trucks to deliver office furniture.  These trucks traveled enough miles to go to the moon and back 11 times.  What if the demand for all items increased?  You'll see gas prices increase soon.

Thursday, August 05, 2010

LeBron to Miami -- a Livescribe Pencast

LeBron James

Recently, LeBron James announced that he will play for the Miami Heat. After announcing his decision to leave Cleveland, many of disappointed fans rushed to the streets. The police feared a riot. Many fans burned their Cav jerseys. LeBron’s decision will have a profound impact on the Cleveland Cavaliers and the local businesses that complement Cavalier Basketball.

PBS economic analyst, Paul Solman, investigated how LeBron’s decision will impact the local economy. Mr. Solman found that before LeBron suited up for the Cleveland Cavaliers, the franchise would sell about 12,000 tickets per game. Since LeBron has led the Cav’s to five NBA playoffs, the amount of ticket sales has doubled. Mr. Solman reckons that each home game earns about a million and a half in revenue. In addition, since 2003 the value of the Cav’s has grown in value by $200 million. LeBron’s presence on the team has internationally branded the franchise. The Cleveland Cavaliers are the most heavily televised team around the world according to Len Komoroski, team president. With the Cleveland manufacturing base eroded by global competition, the Calvaliers are the life blood of hope for this economically depressed region in northeast Ohio.

Sunk Costs

In the movie, The Godfather, Dom Coreone, tells his family to stop the killing.  What the Dom is saying that the costs of a war are sunk.  You can't make future decisions based on past decisions.  I drew this sketch while working on drawing another cartoon, but I began to wonder.  Aren't adaptive expectations based on sunk cost?  If so, then the model Milton Friedman built to explain the expectations augmented Phillips Curve is out of date.  Ummmm....

Wednesday, August 04, 2010

Arizona Law

Arizona residents now oppose immigration citing the safety of their children.  Do you suppose they are really concerned with the safety of their own welfare?

Tuesday, August 03, 2010

Meth Monkey

Crystal Meth is a drug that robs the mind's ability to feel pleasure.  Over time, users become hopeless.  In the Midwest, meth is associated with old time values such as hard work.  Typically, a factory will be sold and the new owners slash the wages by 50%.  The workers have to work twice as long to make payments.  They turn to meth.  In time, the meth steals the soul of the worker. 

It's interesting that meth users value hard work.  Let's say a company like Blue Bird closes its doors in Mt. Pleasant.  The town loses tax revenue and there's no income to spend.  It's easy to see how meth can take a grip on those who have given up job seeking.  It's easy to see that more money can be made selling illegal drugs.  But for the man who just wants to take care of his family and uses to earn more, it's an irony that he is hurt most of all.

Wall Street

I predict that the Bears will take over on Wall Street as consumers guard their spending based on consumer confidence.  Nothing's good in the labor market and consumers will find that by waiting they will see falling prices.  This will fuel more waiting and lower prices.  Wages will follow.  The market will value assets on fundamentals and stock prices will fall. 

Monday, August 02, 2010

Big Gut

Let's say a man loses his job in California as a secondary teacher.  The man has three kids and wife he loves.  To make ends meet, he finds a job in New York that even pays better than the one he had in California, so me moves.  Shouldn't the good people in New York be a little miffed at the prospect of this foreigner coming in to take their jobs?  They should be because that man is a citizen of California not New York.  What if the man becomes a drain on the social services network in New York?  Worse yet, what if the man commits a crime in New York?  That man should not be allowed to take care of his family because of things he might do.  In my mind, the scenario I just painted, is no different than Mexican immigrants coming to North America to find work.  They have a family to take care of.  They are acting in the best interests of their family.

Say that the California man could not enter the state of New York because the border is heavily patrolled.  Say the California man dies from hunger and his family has to live in a box.  How is that justice? 

By fencing out honest men who want to work, we are essentially killing families. 

When the earthquake in Haiti ruined a nation, several children were allowed to patriate to the United States.  It was safer here and the living conditions were more humane.  Why is it that in the case of Haiti, immigration to save children is okay, but in the case of Mexican men wanting to come and work to save their families it is not?

Mexico exports about half of its GDP to the United States.  Don't you think Mexicans have a kinship with the U. S. as part of their labor is sold in the U. S.?  When I was a child, my father told me that the men who used to work in the Ford factory all wanted to buy a Model T as they felt that they were part of the car.  That same feeling is the same feeling that Mexican immigrants feel for the goods they make.  They want to consume part of the product they make.

If we shut our doors to Mexicans, we are saying that we value you only for what you can do for us.  We are saying, that you can make our cars, our computers, and our food but you are only an instrument of our satisfaction.  You are our slave.  In that vein, there's no respect for human rights or life.  And isn't that how I started?  You shut the border, you kill human life. 

Sunday, August 01, 2010

Chicken Little

When I drew this, I wanted the necktie to strangle the immigrant from above. 

Economists examine the effects of a law or human behavior using the concept of utility.  Those against immigration claim that the costs are greater than the benefits of immigration.  When I workout, there are people from all over the world.  I am hard pressed to believe that they people are taking away more than they are contributing.  Immigration will bring both costs and benefits.   If you are a utilitarian, then you believe in voluntary exchange because both parties benefit.  In my opinion, immigration will bring more benefits than costs.