Crowding Out?

This may be taken as evidence of crowding-out. Remember that the crowding-out is when the government deficit begins to increase interest rates eventually decreasing investment.

This accompanying piece gives some interesting looks at the debt. (Keep in mind the White House projections may be politically biased... unless prepared by the CBO)

Delaware River

Interested in an environmental topic for your final position paper? This is a nice topic involving the local economy: Should the Delaware River be dredged or not. This article pins environmentalists vs. commerce. I have a feeling it all comes down to commerce. Follow the opposition and you may find it comes down to which state stands to gain from it.

Economic Prosperity

Why do some nations find economic prosperity while others fall short? That is the heart of a very good book titled “A Farwell to Alms”. The first chapter goes a long way in describing this problem and can be found here.

Looking for a graph that tracks these nations? Look here (click on the link below the map to get the bigger version of the map).

HT: Mankiw

EA Sports as a Monopoly

Anti-trust laws are designed to prevent monopolization. The technical terms are restraint of trade. By cutting back quantity a monopolist has an opportunity to increase prices (and therefore profits). If you saw "The Informant" that is what the justice department was investigating.

One of the most obvious cases of restraint of trade comes from the NFL's video game practices. They allow only one company (EA sports) to make a game with the NFL's likeness (and therefore the only game to have real NFL players in the games). EA must pay the NFL a lot of money for this right, and EA must make a lot of money making their version of the game (which is Madden). Now it is being challenged in court.

I am interested to see how the NFL will fight this one. Will they rely on their limited Anti-trust exemption (which they have... and this is what allows them to sign exclusive deals with DirecTV for broadcast rights). This is probably their best legal case, but I give this lawsuit a chance to change everything. With more competition comes choices and decreased prices.

(HT: Deadspin of all places)

Recent Unemployment Rate

So we finally hit the double digit unemployment rate. The unemployment rate is what economists call a lagging indicator. This means that as we climb out of a recession (which we technically have done) there are certain things that happen at different times. For example, worker productivity increases relatively quickly. Once employers recognize that workers are bringing in more revenue they begin hiring temporary workers, then full time workers. The end result is a ‘lag’ between production increases and job increases.

Aside from the discouraged worker effect altering these number, another interesting paragraph in the article that centers on our classroom discussion of underemployment is quoted:

Counting those who have settled for part-time jobs or stopped looking for
work, the unemployment rate would be 17.5 percent, the highest on records dating
from 1994.

Auctions and Politics

Marginal Revolution has this great link to a classroom discussion on auctions and politics. This also relates to sunk costs.