Minimum wages, corn subsidies, wealth and GDP, health care, and chocolate

Here's a look at the effect of increasing the minimum wage... as many would expect, there's a fair amount of job loss, and mostly among the young.

The Business Pundit says that we should stop bailing out corn. Ah, to dream...

NYT reports that household wealth has fallen by trillions of dollars. To this, I'd like to emphasize two things. First, that household wealth was inflated beforehand, anyways. Secondly, that this has little to no direct effect on GDP, since GDP is "the market value of all final goods and services produced within an economy in a given period of time" (from Mankiw's textbook). That is, the 2009 GDP does not take into account changes of market values of things produced in other periods of time, by definition. The fall in household prices just means that houses were bad investments.

Professor Reinhardt explains the bit of stimulus money that goes to comparative effectiveness analysis in health care. There is no subversive plot.

A tax on chocolate in England? Oh no! Though, I'd imagine that the demand for chocolate is probably highly elastic, meaning the burden of the tax would fall primarily on suppliers. I can't imagine cacao bean farmers are wealthy enough to take such a hit to production, but I guess it depends on the size of the tax.

Posting may be spotty next week.

Technology, the Fed, the global recession, hiring, and trade

Lynne Kiesling has some interesting posts on smart grid technology. I'm looking forward to this stuff in the future.

Ben Bernanke says that he is glad to work at the Federal Reserve. "Economics is only useful to the extent that it helps people..."--very true.

Academic hiring is down, unsurprisingly. People tend to think lawyers can still make money, but apparently law firms are laying off lawyers, too.

U.S. trade deregulation provided for around 25% of trade growth. Seem obvious? Well, maybe not to people who are advocating protectionist policies.

Global Recession Status map. On the other hand, Chavez says that the global recession has not affected Venezuela.

Christina Romer's Lessons from the Great Depression.

Another thought on the unit-root-vs-trend-stationary Krugram-Mankiw debate, this time from David Altig at the Federal Reserve Bank of Atlanta.

Research on the question: Does Money Bring Happiness? Some research says yes!

James Kwak provides Nationalization for Beginners.

Dani Rodrik on the problem with economists. He says we need to use multiple models, not just the one we believe.

Geithner starts to get some help. Geithner has been scrambling to get stuff done.

The IMF reports the costs of the financial crisis.

Buy American, recession woes, wine, African buses, and NCAA basketball

An article from the Detroit Free Press explaining why "Buy American" sentiments are bad for the economy.

Is death a victim of the recession? Eight states are considering getting rid of the death penalty, due to cost.

The wine competition at the Houston Rodeo brought in much less money than last year for the winning wines. That's why we call them luxury goods! The money goes to fund Texas college scholarships, so there's yet another example of education getting tougher in a recession.

Cote D'Ivoire is now producing buses, aimed at Africans. African transportation systems are known for their terrible buses, so this is meant to fix that. The post I link to says, "Not only are better buses now rolling out onto the roads of western Africa, Cote D'Ivoire is becoming better because of its entrepreneurial drive." However, I wonder if that "entrepreneurial drive" was already there, but now there's enough capital or credit available to justify the venture.

I'm surprised by this article, warning the Fed to not be so expansionary. Really? I think most are agreed that recession-fighting is more important, right now, than inflation-fighting. After all, we're still concerned about whether or not our same jobs will still be around, as the middle class shrinks.

NCAA basketball teams tend to lose a lot of money, with the median team having net loses of over $850,000. I wonder what incentives there are for universities to hold on to get basketball teams, or to hold on to them if they have them.

Unemployment rate, auto industry, Asia, morality, and business cycles

The unemployment rate is 8.1% nationwide, but in Houston it's--erm--"only" up to 6.5%.

James Hamilton at Econbrowser shows us some numbers on the auto industry. It looks like the industry has been faltering since June, those numbers are way down. I'm reminded of James Joyner's piece this past week celebrating the exit of manufacturing jobs. Still, I get the idea that the numbers are soft--domestic and import numbers are down. People have to start buying cars again eventually.

Sachs writes a Letter to the Editor at NYT, disagreeing with Krugman. According to Sachs, the global crisis isn't Asia's fault.

Here's an interesting discussion on the claim that morality is analogous to economics. I've been thinking about similar issues on and off--I even saw a book comparing economic and Christian principles. Although, I guess it isn't surprising that there are similarities in what different groups say will make us better off.

David Beckworth provides an industry-by-industry look at the employment numbers during the recession. Some of them have actually been growing! I don't think it's much of a surprise, but it's still worth a look.

CalculatedRisk talks about business cycle indicators, from lead to lag.

Time v money, manufacturing jobs, future cities, R&D, advertising, recessions, Economics degrees, and Latin American data

A study shows that advertisements that reference time are more appealing than those that reference money. Spending time with something is more appealing than spending money on something. On the subject of consumer appeal, prices that end in 9 are also more attractive, the NYT reports.

James Joyner won't miss manufacturing jobs. Good riddance! I think this similar sort of discussion occurs whenever we lose jobs in certain sectors... probably in any country.

Ryan Hahn talks about cities of the future, sparked by Tim Harford. In my undergraduate years, I spoke in class of future cities as well. When the world becomes "too crowded," we'll just start building up or down. Massive towers of people and communities. Worried about land for food? The towers will have greenhouses. Worried about energy? Cover the towers in solar panels (there are certainly a myriad of energy solutions). This, of course, is an imagination of the extremely distant future, forced into existance by strong price incentives.

A discussion at the Angry Bear about R&D spending in the new budget. Technological progress drives economies, so I hope the money goes to good projects.

Southwest Airlines has sold adverising space to Sports Illustrated--on the side of their planes. This has got to be a marketing gimmick of some sort. Certainly, the people inside the plane can't see the advertisement, and you can't really see the side of a plane very well while it's in flight. You probably can't even see it from inside the airport! The only time this gets viewed is by the very limited number of people who can see the plane as it's coming in our leaving.

More on the recession: The NY Fed predicts an end by the end of the year, based on historical empirical evidence. Managers are more likely to take a pay cut, but lower workers have a harder time finding a replacement job. Menzie Chinn weighs in on the Mankiw-Krugman-DeLong unit root v trend stationary debate. I thought the debate got a little too personal when Mankiw dared Krugman to wager some of his Nobel money on the issue. As if there would even be a clear end to the data! Robert Waldmann laments on the implausibility of macroeconomic arguments. The Everyday Economist quotes anti-New-Keynesians.

The SCSU Scholars comment on how awesome a major Economics is. I agree it's pretty awesome, though I'd agrue that a major in Math gives you more options than Economics does (though, Math may be the only major which gives more career options than Math). I've been thinking that a restructuring of Economics programs may be a good idea, though. At least at my university, I think there should be more of a focus on political science and math. We give the students too many pure-economics classes to take, and they don't get much insight into how economics plays in the real world and what economics is like at the professional level.

Anyways, here's some great Latin American and Caribbean data.

Houston Rodeo, ESE, marginal taxes, protectionism, and popular kids

The Houston rodeo is feeling the effects of the recession.

There is now an Economics Search Engine. It sounds like a very useful thing, but I haven't tried it out yet. (I'm having trouble with the link provided, so maybe you'll also have better luck with this one)

Jonathan Chait has some fun with people who believe they'll be better off by keeping their incomes under $250k.

A couple of World Bankers worry that trade protectionism is rising. I hope any trend doesn't last. (Edit: another Voxeu.org article on a similar subject, but a bit more broad)

Popular kids make more money, says some research. An extra two percent for every extra friend. I wonder what Bill Gates would say about this.

Blogging, eating, and assorted stuff

Another interesting piece on blogging in economics from the Economist. Departments are typically measure prestige in their research output, but blogging reaches more people faster. Also, schools may have a comparative advantage in blogging rather than in research.

Should I be less amused when bankers are eating at McDonald's?

Contrary to what might be implied in Michael Mandel's article, Bloomberg reports that Texans will not be eating out less.

James Hamilton at Econbrowser attempts to put a trillion dollars in perspective for us. He reports that the IRS collected a trillion dollars in income taxes in 2006. So, imagine having to pay that much in income taxes.

I'm a sucker for silly. This post from the World Bank explains to us why we shouldn't fear ghosts. Thanks for clearing that up for us, Ryan Hahn. Ghostly revenge makes me feel safer.

The Secretary of Energy predicts rising demand for oil over the next two decades.

Houston is apparently the second largest home-building market in the nation. Katy's doing pretty well!