Economics Everywhere

The choice in tax system is between our current tax bracket system and a flat tax. While the flat tax seems fair, an investigation into the decreasing marginal utility of money reveals that the graded system is what is fair, economically speaking.

In the current system for executive pay, people are paid according to the economic utility they provide a company. If you close deals that are worth hundreds of millions, you are compensated accordingly. In a given company, some will make minimum wage while others will make millions.

Revenue for a company it seems, is not subject to any sort of decreasing marginal utility… it may even have increasing marginal utility. If it did decrease, executive salaries would reach a plateau, even as they generated more and more revenue for their companies. This assumption of no decreasing marginal utility of revenue is perhaps responsible for the perceived unfairness in executive compensation.

Now, if for taxes we assume money has a constant marginal utility, the fair system becomes the flat tax. If under the current system we assumed positive marginal utility, the fair thing would be to tax the poorest the most. The assumption of constant or positive marginal utility of wealth won’t ever be accepted for private individuals. Why do corporations get away with it? Does the concept of decreasing marginal utility of wealth suddenly change when you switch from person to corporation?

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Categories: Uncategorized

The Outlet Mall Trap

In my quest to find fashion and value, one of my shopping alternatives is the almost ubiquitous outlet mall. Outlet malls are supposed to have steeply discounted items, usually due to overstock, defective goods, or being last season’s style that wasn’t sold out. Supposed to. Used to. I think the outlet store proprietors and I have a different idea of what outlet stores should be. And I think most people who visit them have an optimistic view of the alleged discounts at these stores.

Consumers associate outlet stores with discount prices. They want to get the brand label without paying the full price. Companies know that people will buy things if they believe they are getting a deal, regardless of whether or not it is a deal. Companies also know that consumers love their brand labels. Lots of people want to dress like success… and hope they are paying less.

But are you really paying less by shopping at outlet stores? Not necessarily. Consider the case of Ralph Lauren men’s classic polo shirts for sale at the RL outlet in Lebanon, TN. If you buy one, it is $49.99. If you buy two, they are $39.99 each. Macy’s online store offers the same shirts for $75 but have them on sale for $34.99. And you don’t have to drive out of your way to get them either. You might even find a discount code online for the shipping. Possibly more selection in terms of sizes and colors as well.

The Coach outlet store (lay off me… I was with my girlfriend) poses a new issue. If you buy designer handbags at mass market prices –  if everybody can afford one – is it still designer? Do these cheaper Coach products have the quality and style of the really expensive Coach products? Are these purses, bags, wallets, etc. really priced at a discount anyway? At least Coach is making bank on the concept. Consumers may not be.

The Ann Taylor store (still with my gf)  really showed what was up in outlet store land. We walked in and were approached by an employee who informed us  that the clearance items are in the far left corner but today there was SO much on clearance that the clearance items had overflowed into the the rest of the store. It was just our lucky day! Or really just an attempt by Ann Taylor to reinforce the idea that we’d be getting a deal, even if not much of a deal was being offered. After all, that is what consumers want in this down economy.

Verdict: Some deals are available but they aren’t all that great. The deals may even be worse that the offerings in regular department stores. Some products are probably lower quality goods created specifically for the budget minded outlet store shopper. I’ll spare myself the long drive and look for a sale at the nearby mall.

Categories: Personal Finance

The False Security of Oil

It is sad to imagine a world where all seafood is too tainted for consumption. No more delicious salmon, tuna, shrimp, oysters, lobsters, crabs, swordfish, snapper, scallops, flounder… we’d probably replace these foods with less healthy and tasty options to exacerbate America’s health problems.

While this scenario is unlikely to become completely true, just consider the rapid impact we have felt from the BP Horizon incident. An article in Time magazine discusses the travesty of New Orleans seafood.

Our appetite for energy grows every day, seemingly leaving little choice but to drill for more oil. As oil companies embark on riskier endeavors in the hunt for oil reserves, the probability of environmentally disastrous events may only increase.

We can define the problem as minimizing energy costs while also minimizing environmental risk. Finding new sources of oil has been a popular solution to this problem so far. Americans have been pumping gas for years and are comfortable with it.

But what about nuclear energy? It has been written off as dangerous since the 6-mile incident. Is the environmental threat posed by nuclear power plants and nuclear waste really greater than that posed by oil, which has produced numerous environmental disasters over the years and produces greenhouse gases when burned? As the least risky oil reserves dry out, the uncertainty of nuclear power may prove favorable to the certain risk in oil.

Categories: Energy

Withdrawal symptoms

Withdrawal symptoms may include stds and pregnancy. Nonetheless, it is the number 2 choice of birth control among teenagers polled in this study described by CNN.

Condoms remain the most commonly used form of birth control. Ninety-five percent of sexually experienced girls used them at least once. Withdrawal was next, followed by the pill.

Sex has moral, emotional, and practical implications which are unique to every individual. Studies about teens and sex can generalize these preferences for a large population. However, this information doesn’t result in any sort of actionable plan on which we can all agree.

But contraception choices are different. They either work well enough to trust (condoms, the pill, etc) or they don’t work well enough to trust (withdrawal) and should not be considered as contraception. It’s easy to say this works well and this doesn’t work well.

So what’s the holdup? An abstinence program which ignores contraceptives fails to inform the kids who are ignoring the abstinence message about contraceptives. That may account for some withdrawals.

As for the other withdrawals: poorly taught sex-ed classes, students not paying attention, false information outside classes… take your pick.

Categories: SEXSEXSEX

Introduction

I often find that the blogosphere is a mishmash of mundane stories, good stories, lies, nonsense, gossip, opinion, and solid information. The journal will attempt to mix opinion and solid information about a variety of topics which are in the public dialogue.

Categories: Uncategorized