Saturday, April 30, 2005

What to look for,

Economics is far more simpler than people realize. It just involves the use of logic. Certain words and terms should give you a red flag every time you hear them. For example the word
free is used to champion government programs. I won't waste time giving example, after example of how this isn't true...I'll just say know that everything has a cost. Simple logic yes,
but often overlooked.

Friday, April 29, 2005

Can't see the forest for the trees...

When we see Capitalism in America, we often don't look past what's on the surface. If I ask you to look at a car and tell me how the economy is helped by its production you may mention the men on the assembly line, the man who drew up the blue prints, and the modern technology that helped make it quicker than it could have been made in the 1950's.

But how about other jobs, that the car was able to bring about? The farmer who was able to sell his animals for leather to make the seats. Once the leather was sold, it had to get to the car manufacture by truck drivers. The truck drivers in turn, have to purchase gasoline to travel.
That is just one part of the car; the radio in the car also uses parts that travel via truck. Also the glass made for the car has to come from somewhere as well.

So Capitalism as you can see, performs everyday miracles that we seldom realize.

Thursday, April 28, 2005

Invisible Costs

We typically think of costs as price tags and taxes. Costs, do include such things but are more complex than that. Often the invisible costs trickle down for the consumer to pay. That is what results when businesses are punished with excessive taxes and government regulations. For instance in California gasoline is required to have special tanks at gas stations, and special ingredients for protecting the environment. As a result of gas companies having to pay for such things, Californians are paying out of sight prices for gasoline.

Taxes do not have to be paid by the businesses they are imposed upon; they can be passed along to the consumer. Cigarette companies are a good example. When they began being taxed heavily by the government, the companies simply passed that cost over to the consumer. That's why packs can cost as high as $5 now, while years ago they only cost as little as 50 cents a pack.

Wednesday, April 27, 2005

risk takers and rule breakers

We all get set in our ways of handling our lives, we don't always stop and think about where we want to wind up. When it comes to a free market economy, one thing is held in high esteem....change. You can't better the standard of living, by doing the same things over and over again. For instance, when the automobile in America came along, life became easier for most Americans even those who couldn't afford to purchase one. Such people benefited from having food and medicine (amongst other things) delivered to them quicker. At the same time, the horse and buggy industry plummeted; the standard of living had advanced. Yes the horse and buggy retailers might have had to bear a burden, but every benefit has a cost.

So who are the Henry Fords' of today? The risk takers. People who not knowing if their ideas will bear fruit, chase after them anyway. The young college student who spends his last dime on a lawn mower to cut yards, the single mother who works two jobs so next year she can try to make it in barber school, and the young man who leaves college for a job he believes will be of more value to him in the long run. We can't all be Henry Ford, but we can all develop a tenacity to chase after our dreams!

"How you ever gonna know..What it's like to live there..How you ever gonna know victory..How you ever gonna know..What it's like when dreams become reality..How you ever gonna know..How it feels to hold her..How you ever gonna know..What it's like to dance..How you ever gonna know..If you never take a chance.." --Garth Brooks

Tuesday, April 26, 2005

lock, stock, and barrel

Socialized medicine always creates interesting opinion pieces. That subject alone is broad enough for me to write a book; however I will make this short and to the point. When a country accepts socialized medicine, they get everything that comes with it lock, stock, and barrel. The long waiting lines, the reduced quality of care, and the red tape. Unlike our current system, the government puts a limit on your choices for care. That includes choice of doctor, choice of medical procedure, and choice of appointment time. Now do you see why socialism is called an enemy to freedom? Ronald Reagan said it best, that a government strong enough to give you everything you want, is strong enough to take away everything you got.

Monday, April 25, 2005

Sure as hell...

If you ever watched cowboy movies of the old west you're probably familiar with the poker scene of the good ole' boys sitting at the table with their guns at their waist. A bet "sure as hell" one of them often brags; saying in essence that their wager can't fail them. Now if you play poker yourself you know that there is no bet "sure as hell". Often what looks like a certain win turns into a upset in seconds.

Not so in economics; the free market has principles that are "sure as hell" every time. One is:
when the cost goes up people want less, and when the cost goes down people want more. That applies to everything from cigarettes, cars, food, and medicine. For instance, if I am a smoker I will get pleasure from smoking cigarettes to get through my work day. But even if the price of cigarettes stays the same, if I lose my job I will probably cut back on the cigarettes because to me the cost of cigarettes has gone up. Likewise if I get a higher paying job, I will probably buy cigarettes more often because to me the cost of cigarettes has gone down.

Sunday, April 24, 2005

economics ...where can it be found?

A classic example that many economists use to illustrate what kind of environment economics can be found in is a battle field. After the smoke clears, a group of medics enter the battlefield. A battle field with littered bodies; some alive, some inevitably dying, some that can be kept alive if quickly nursed, and some who will die regardless of the amount of medical attention. What the medics are faced with is an economic decision. The men who will die regardless of amount of medicine spent on them, shouldn't receive any medicine since there is a scarce supply. The medicine should first of all be spent on those who can survive if nursed immediately, and the next group taken care of should be those that were wounded, but not mortally wounded.

Most people can't understand this principle applied to economics today; because they don't understand that money is a scarce resource. So is time, knowledge, and oil. So since there isn't enough to satisfy everyone's want, the free market gets all resources to where they can be the most help for everyone. When this happens we have prices created.

Saturday, April 23, 2005

It ain't over, till it's over

When a business, closes shop and moves over seas a lot of headlines in the USA are sure to make note of it. "Outsourcing" is the branded name for such businesses; the whole term "outsourcing" is a defamatory term given by today's anti-capitalists. A lot of people knock "outsourcing" because they are econ-ignorant.

My grandfather, now deceased once used to work as a "pin-setter" in a old bowling alley in the 50's. In those days before the automatic ball returns, a man would stand by the pins, set them back up, and return your ball to you. We can "save" those jobs, if we are willing to go back to the days of "pin-setters". How many of us are ready for that?

Also which trade offers more skilled labor, making electric automatic ball returns, or setting up pins?. The same principle holds true for "outsourced" jobs. When the jobs of basket weaving, and box lifting go overseas, that frees up labor for us to do things such as make TV's, microwave ovens, and DVD players!

You won't hear that in your morning paper.

Friday, April 22, 2005

Can't escape the cost

There is a cost to everything. Even people that understand this, sometimes have difficulty determining what the cost of something really is. If you have a picnic today, you will use a certain amount of time and resources; whatever you could have done with those time and resources instead of the picnic, is what the cost of the picnic is. You could also say that if you watch TV instead of doing laundry, then you paid the price of having to do laundry later in order to watch TV. Simple enough I know, but even the most skilled economist has to consider this every day.

Thursday, April 21, 2005

Who prospers?

Who does a free market most value? The answer is easy-the individual; our whole economy is based on the single unit of the individual. That could mean a pizza delivery guy, a CEO, or a stockholder. So ultimately every thing for the "common good" (free health care, and other government programs) are paid by some individual. So when we have a market that gives freedom to the individual, we all prosper; after all we are all individuals.

What most people fail to see regarding this fact, is that if you punish a CEO with high taxes then individual stockholders, company employees, and consumers all pay. If Wal-Mart's taxes increase, what piggy bank are they going to dip into to pay those taxes? They will simply take money away from those whom they intended to spend money on. (employees, stockholders..etc.) So when the businesses prosper in America, we all follow suit!

Wednesday, April 20, 2005

Prices, where do they come from?

We take it for granted that cars and houses are expensive, while hamburgers and sodas
are far less expensive. You may say "Well thats easy, it costs more to make a car than it does to
make a hamburger!". But can you say the same for McDonalds' morning coffee that is cheaper for
senior citizens than it is for others? Does it cost less to prepare coffee for a senior citizen than it does for a 20 year old? The idea that Mcdonalds' is using is that senior citizens are often retired and can afford to congregate in the morning and buy lots of coffee, while the younger folks only have time to buy a cup on their way to work. This is known as price discrimination, but don't let the word discrimination scare you; it is a regular part of economics. That's why matinees are cheaper than a night movie; there is less a demand in the day time so the theater
lowers its prices to attract customers. Once again, you see that it doesn't cost the theater any more to play a movie at night, its just that more people go to the movie at night.

Moral of the story: Prices aren't "set" by any company, person, or entity; they are based on reality of circumstances.

Tuesday, April 19, 2005

A minimum wage quickie,

You know why should the use of "minimum wage" be limited to money? I mean if there is a poor person out there who drives a clunker of a car, shouldn't we feel sorry for him and institute a policy called "minimum car"? Yes it is ridiculous, but no more so than minimum wage. We could say that everyone should at least have a Pontiac. I hope this illustrates to you, why minimum wage is a bad idea.

Monday, April 18, 2005

Are we biting the hands that feed us?

We seem to get joy these days from beating up on Wally's World (Wal-Mart), but do we ever consider what good Wal-Mart has done? For all the Capitalists out there this will all sound redundant, but for the liberals who need on. First of all, the power of choice is present in every economic decision. The people who work there choose to do so, likewise Wal-Mart chooses to hire them- that is what economic freedom is. When any business thrives, it only does so by pleasing its consumers. So doesn't it sound weird to you that the people who are critical of Wal-Mart, are the same ones who have given Wal-Mart the power to become as big as it has?

Also people complain about "mom and pop" stores being run out of business by Wal-Mart. The simple answer to this is--any business that fails in a free economy, deserves to fail! If you are the one to fail you got to reinvent yourself and do something better or different than Wal-Mart. After all that is what Sam Walton did and if you feel that Wal-Mart is powerful would it not stand to reason to learn from those who are powerful and emulate what they did? Will we get anywhere if we bite the hands that feed us?

Sunday, April 17, 2005

Cut from the same cloth.

Liberals and conservatives debate economics regularly; and it wins ratings too just look at cable news in the past few years. Just know that when you see that happening from this day forward, you'll know that they are both Capitalists at heart. Michael Moore didn't sell his movie in France for big profit, he made his cash flow here in America; despite his liberal views. He wants to obtain the highest possible pay for his product. When the liberals and conservatives across America grocery shop, they each look for the low prices, and tend to like them better than the higher prices. So when we all have the freedom to our personal economic choices we become Capitalists. Remember, you heard it here first.

Saturday, April 16, 2005

Is it bigger than a breadbox?

Who is, or what is the "market"? Before we can learn or debate about it, we must first learn what it is. The easiest starting point is to think about what would happen if we all quit buying anything with our money; that would kill the "market". Why? Because free-markets serve the purpose of satisfying everyone's wants with a limited amount of resources. For instance, while I'm hunting a job through college, I might be willing to work for the store in the mall paying $6.50 an hour. But the man with an engineering license who just got fired, and is used to making
over $100,00 a year, might not be willing to work at the store for $6.50. So instead he finds a out of state employer who desperately needs an engineer; so ultimately 4 wants have been satisfied: 1)my want of the job at the mall, 2)the store at the mall who wanted a willing worker,
3)the jobless engineer who wanted a job in his field, and 3)The out of state employer who hired the engineer. So as this shows, the "market" consists of satisfying as many people's wants as is possible with the limited amount of resources we have on this earth.

Friday, April 15, 2005

You always pay something!

As I already said in an earlier post, our government's bank account is always at $0. Yes, I know we hear people all the time talk of government health care, government schools, and government cheese. But the government has no money to pay for any of these things. We only think so, because of politicians telling us that for years. So where does the money come from? Easy answer-taxes. The dirty little secret about taxes, is that when taxes increase on American Businesses, the poor people are the worst hurt. Businesses don't pay taxes...when the government demands that they pay money to Washington, the businesses simply take money away from either employees, stockholders, or the consumers to satisfy Washington politicians.
So, the little guy is the one to pay in the end...which goes to show you..that for every government (fill in the blank) there is a price to be paid!

Thursday, April 14, 2005

Saints and sinners can learn economics from the world's oldest profession!

Ok, the whole idea is to keep my audience's attention, I try to stick to things that make people want to read and learn from what I have to say. So I found a good topic to help anyone understand economics better is prostitution. Prostitutes tend to hang around Army bases frequently as most peole know. They also charge these military men higher prices than the
locals. But why? They also charge physically disabled men higher prices than men in good health. But why? Wouldn't this be called "discrimination" if it happened in any legitimate market? The answer is in a word substitutes. The military men, and handicap men have fewer or no substitutes to satisfy their wants. Whereas, the local and healthy men can easily meet another woman (substitute) at work, in a bar, etc.. etc, for little or no financial cost. Certainly,
prostitution isn't a honorable profession, but it would probably stand to reason that prostitutes understand more about Capitalism, than do our current liberal "experts" teaching on college campuses.

Who says you're not ready for the big leagues?

Did you know that right now whoever you are, you probably understand more about economics and Capitalism than you realize? You may have your own politics you like to talk about, that are liberal tax and spend, while on the other hand you live your personal life in a very conservative economic fashion. And I don't necessarily mean money decisions. Let's say you like to swim, fish, surf, and jetski on your own time, because you enjoy watersports and being around water. Does this mean that you want to one day be drowned by water? Of course it doesn't! To say so would be silly! If you can understand that, you can understand why Capitalists say no to letting the government enter into our economy..via Social Security, Medicare, WIC..take your pick.
Because you enjoy being around water for surfing, doesn't mean that you agree with using water for anything. Surfing in water, can be fun for you, while drowning in water is not very fun. So, some things water serves you well in, and in other ways it does not. Does this mean you hate water? No it means there are some things it can be of good use in, and in some things it doesn't serve your purpose at all. Government is great for defending it's citizens, (police, Army, Navy, Nat. Guard) but terrible at using our money for namby pamby handout programs.

Ok, so if you understand all are ready for the big leagues!

Wednesday, April 13, 2005

Economics's all around us!

We generally think of economics as decisions concerning money. But we make economic decisions every day. If I've been invited by two different people to attend a party,
I will have to make a economic decision. On one hand Fred's party may have the best looking females, while Jim's party may offer a chance for me to sing karaoke. Neither party can provide both the females and the karaoke. So I am forced to decide which of my wants, is most important. That's the whole idea behind economic decisions, there are not enough resources available to the world, to satisfy everyone's wants. So, the freedom of the market allows us
to get the resources to where they are most needed.

Tuesday, April 12, 2005

Wealth and money aren't the same things!

As a young college student, I am very familiar with not having a lot of money. However, I do possess a moderate amount of wealth. Confused? Well I will explain quickly, because not only is it simple to understand, but I get tired of typing real quickly. If I own a car (which I do) and possess a will leaving me property in the future (which I do), then those two examples show I have material wealth. However to make a paycheck (money), I need a job to do this weekend, or sell something this weekend, or provide a service for someone this weekend. The money I make in turn can buy a car, company stock, etc.(wealth). The moral of the story is wealth is created, and income is earned. The government's bank account in America is 0$! That's right, any time you hear a person say that something is "paid by the government", know that the government has 0$ to pay, and that what actually is happening is "we the people" are paying for that something.