Legalizing Marijuana

Would you like a brief summary of the issues surrounding the legalization of Marijuana? This is an excellent place to start (focus on the economic issues).

Print News on Life Support

Print news is in trouble. There are many reasons for this that I will not bother getting into (just think of the costs associated with providing papers to residence). The question is what, if anything should be done about it.

The idea of a ‘newspaper bailout’ has been brought up, but quite frankly this makes even less sense then the automakers bailout (and look how that turned out). In many people’s opinion the greatest loss to a society without traditional newspapers would be the loss of investigative journalism (if there were no newspapers, there would be no Watergate uncover). And any financing by the government may cause a conflict of interest (from the organization that should be investigated the most).

Here is a good piece that follows up with this other previous posting.

Taxing the Rich

One important lesson we learn in economics is that the government’s projected tax revenue differs from actual tax revenue received. To summarize (begin by picturing a Supply and Demand curve in your heads):

1. Any projected tax revenue takes into account the quantity before the tax is placed.
2. Placing the tax on any product will shift the supply curve to the left.
3. Identify the new equilibrium quantity and you will find it has decreased.
4. Find the new tax revenue (quantity times the tax) and it will be smaller than the pre tax revenue.

Here is some evidence of taxing high end labor. Is this a viable and desirable alternative?

Update: For a different perspective regarding taxing the wealthy here is an interesting article by a well known economist.

Nationalizing Health Care I

The first of what I suspect many hints dropped that the government is seriously considering nationalizing health care. What I find interesting is the timing... right after admitting we are out of money Obama implies we will make changes to health care.

In addition to the health care hint there is a word on our deficit and debt.

Is Economics Right for You?

Thinking of majoring in Economics? Here are some pros and cons.

Cons: You will have to put up with some apparent ugly professors.
Pros: Your patience will be rewarded with a relatively higher salary (all things being equal).

The bottom line: Forgo eye candy now for more money latter.

Prices for Baseball Games

The demand for baseball games can be a complex issue. A lot of previous literature exists regarding variables that affect the demand for baseball games. These variables include: weather, day of the week, time of the day, division opponents, and likelihood of a close game (with the home team winning).

So what is the next step? Recognizing that when the demand changes, so does the equilibrium price. Charging more money for games that have a higher demand is the profit maximizing strategy. Baseball has not adopted this strategy… but maybe this is the wave of the future.

Major quote from the article:

Many teams have various ticket prices for the same seats, altering the dollar amount based on the opponent, the day of the week and the time of the year, but those variations are set before the season and not altered. The Giants, by being more fluid, are taking the concept a step further.

Advanta and Alter

Talk about bad times hitting close to home (and how quickly times have changed). Here is a story discussing Alter (as in the building attached to our classroom). Keep in mind they just opened the building inside one month! The bottom line: “Too many [people] have not been paying their bills during the recession.” This is not a good recipe for a credit card company. Hopefully they can pull out of this.

Summer I

Welcome to the American Economy class blog. Please check here regularly for new postings.