I go to ESPN.com to see if there is an article about Tennessee football at the Music City Bowl. Instead I found an interesting article on the spending at colleges on football teams. Ohio State and Alabama each spent over 30 million on their football teams this year. That is a large sum! They spent the article comparing teams spending and I thought the article was quite interesting. Boise State spends less than 10 million/yr on its football program. This is money on weight rooms, hotels, traveling, and other obvious expenses. But that was not what the conclusion of the article was. They built it up as if they were writing an interesting article comparing large SEC/BIG TEN schools to the smaller schools that spend far less. But instead more political crap.
They end the article arguing that priorities are wrong at these colleges that will spend on average $150,000/student-athlete for sports while the tuition of normal students is around $10,000 and that barely pays for their education. The article was talking about the priorities of the programs. What they failed to mention is that the football programs at universities like Tennessee take zero dollars from the education budget. Instead they donate big money to the university (such as the library at Tennessee got over a million this year). Former athletes like Peyton Manning come back and donate money to the school while no tuition money was spent on his football at all.
These football programs bring money into the universities. It is not about priorities. Or if it were I would vote for more of these football programs because it actually helps the education process if the football program makes a surplus and donates money to the education of their students. I'm tired of these political articles that are motivated by controversy even when there is not controversy. It reminds me of the past columns I've written on CEO salaries that people complain about. But if a CEO making a $30,000,000 bonus saves a company $1,000,000,000 over the year. Is that CEO costing the company $30,000,000 or saving the company $970,000,000? Read the past column for more info.
Thursday, December 30, 2010
Thursday, December 16, 2010
"Sending a messgage??"
Some of the analogies in this post might not strike you as obvious and of the same principle but I do see this throughout our society.
I regard lying as one of the worst things you can do in society. While God looks at all sin as equal because its sin against him, us on earth do no such thing and should not do such. If businesses could break contracts (in essence lie to its customers) there would be no trust in our economy and thus a huge drop in investment will take place, less transactions in the marketplace and the economy will be hurt tremendously with our standard of living falling amidst it all.
However, this idea of using people at "examples" is getting on my nerves about as much as lying does. Bruce Pearl lied to the NCAA. Let me begin by saying that I can not read Pearl's heart and I'd say that he is more upset that he got CAUGHT than he is that he lied. But who am I to truly believe that and make that accusation. But I feel that the NCAA is about to make an "example" out of him and I hope they refrain from doing so.
There is no doubt that discrimination has taken place in our society. By the way there is proof that a true free market eliminates most discrimination in society. There is no doubt that violence is done to people due to them having serious "hatred" in hearts to these people. But should there be separate "hate crime" punishment because some court decided that in your heart you hated that person and we are now going to make "an example of you and punish you harder for being sexist or racist"? I think not. Crime is crime and violence is violence. Punish based on that not based on trying to rid someone of their hatred! This brings subjectivity into the law and that is wrong.
Today we always hear about trying to make an example out of someone to "send a message" to others about making the same mistakes. I can understand that to an extent. That is why they had public stoning and public crucifixions years ago. But this was done based on the writing law and consequences not some opinion of a court or body that decided to make this a "special" situation to send a "message". Bruce Pearl will probably be used as this "example". And don't get me wrong-he violated NCAA rules and then he lied about it. He also corrected that lie shortly after. But if the NCAA punishes Bruce Pearl more harshly than he has already been punished in an effort to "send a message"... then they are just as bad in my view.
I'm tired of our Congress wanting to punish those on Wall Street to "send a message" to other investors or future investors. Let the law be law and the rules be rules. Pearl lied. His integrity is now questioned. He cheated and should be punished. But the rules he broke were minor rules that if he had told the truth would have resulted in little punishment. He lied now should he be punished more? Sure, that is another rule. But lets not get caught up with this "sending a message" idea NCAA. Punish based on the wrong he has done. Take the subjectivity out of the question. I want our laws to be tougher and punishments to be harsher. That is after all what law is suppose to do. But I want it to be objective and each person punished equally for the laws they commit. Why? Because this is not a classroom where you treat everyone differently based on their past. This is law that we are talking about when it comes to our nation and her laws and rules and consequences. And all subjectivity should be taken out.
The NCAA can do as they want their a private enterprise and as a Libertarian I would never want them to be held to the same standard that government should be held to. But I hope they realize that Pearl should be punished based on his wrongdoings... not in a fashion to "send a message" to future rule breakers. The law and the rules and the punishments for such rules should already be written to do this objectively. No subjectivity is or needed nor should it be used.
I regard lying as one of the worst things you can do in society. While God looks at all sin as equal because its sin against him, us on earth do no such thing and should not do such. If businesses could break contracts (in essence lie to its customers) there would be no trust in our economy and thus a huge drop in investment will take place, less transactions in the marketplace and the economy will be hurt tremendously with our standard of living falling amidst it all.
However, this idea of using people at "examples" is getting on my nerves about as much as lying does. Bruce Pearl lied to the NCAA. Let me begin by saying that I can not read Pearl's heart and I'd say that he is more upset that he got CAUGHT than he is that he lied. But who am I to truly believe that and make that accusation. But I feel that the NCAA is about to make an "example" out of him and I hope they refrain from doing so.
There is no doubt that discrimination has taken place in our society. By the way there is proof that a true free market eliminates most discrimination in society. There is no doubt that violence is done to people due to them having serious "hatred" in hearts to these people. But should there be separate "hate crime" punishment because some court decided that in your heart you hated that person and we are now going to make "an example of you and punish you harder for being sexist or racist"? I think not. Crime is crime and violence is violence. Punish based on that not based on trying to rid someone of their hatred! This brings subjectivity into the law and that is wrong.
Today we always hear about trying to make an example out of someone to "send a message" to others about making the same mistakes. I can understand that to an extent. That is why they had public stoning and public crucifixions years ago. But this was done based on the writing law and consequences not some opinion of a court or body that decided to make this a "special" situation to send a "message". Bruce Pearl will probably be used as this "example". And don't get me wrong-he violated NCAA rules and then he lied about it. He also corrected that lie shortly after. But if the NCAA punishes Bruce Pearl more harshly than he has already been punished in an effort to "send a message"... then they are just as bad in my view.
I'm tired of our Congress wanting to punish those on Wall Street to "send a message" to other investors or future investors. Let the law be law and the rules be rules. Pearl lied. His integrity is now questioned. He cheated and should be punished. But the rules he broke were minor rules that if he had told the truth would have resulted in little punishment. He lied now should he be punished more? Sure, that is another rule. But lets not get caught up with this "sending a message" idea NCAA. Punish based on the wrong he has done. Take the subjectivity out of the question. I want our laws to be tougher and punishments to be harsher. That is after all what law is suppose to do. But I want it to be objective and each person punished equally for the laws they commit. Why? Because this is not a classroom where you treat everyone differently based on their past. This is law that we are talking about when it comes to our nation and her laws and rules and consequences. And all subjectivity should be taken out.
The NCAA can do as they want their a private enterprise and as a Libertarian I would never want them to be held to the same standard that government should be held to. But I hope they realize that Pearl should be punished based on his wrongdoings... not in a fashion to "send a message" to future rule breakers. The law and the rules and the punishments for such rules should already be written to do this objectively. No subjectivity is or needed nor should it be used.
Saturday, December 11, 2010
Tax Debate
Federal taxes are suppose to be designed to fund the federal government. They are not suppose to be punishments (sin taxes, etc.), they are not suppose to be designed to redistribute wealth, and they are not suppose to be designed for politicians to play with in order to get some kick back from a lobbyist or a vote from the taxpayer.
Taxes should be designed to finance the Constitutional requirements of our federal government without hamstringing the economy. But the last two or three weeks have been filled with constant discussion and argument on extending the tax cuts for some and not for others. Many liberal politicians and voters as well as non-liberal but economic illiterate American citizens want these tax cuts to be kept for the working and middle class but not for the "rich". This "rich" could range from $250,000 plus to $1 million plus income/year.
The unfortunate thing is that most people do not understand how over taxed our corporations and rich already are today. U.S. Corporations pay the second highest tax rate among all other industrial nations behind Japan. The Rich in America (those making say $300,000/yr and higher) are just 1% of the population but they pay over 30% of all taxes. The top 5% of income earners in America pay over 50% of taxes in our nation. This includes rich individuals but also Small businesses that make enough to be in this tax bracket.
Most probably do not know that. These numbers come from the IRS not some conservative think tank that tries to play with the statistics in order to support a political ideology. These are facts. Lets shortly look at some economic facts:
At higher prices people buy less whether that is goods/services, or if that is a business that hires workers. The more you pay in taxes on investment the less investment you will do because the risk that is offset from the big payout is now less due to the taxation of Dividends and Capital Gains of individual investors. Understand that it is rich people who hire other people. If you work for a "poor" person please write me and let me know. Most employers are "rich" or at least well off. Their taxes being low is what will help employment and help raise the GDP in our nation. Lets remember that.
For you wondering what tax structure I favor. Well I favor either a Flat tax or the "Fair Tax". I favor no taxes on investment and no taxes on corporations or businesses. The reason is that those entities do not pay taxes anyways, they just transfer that onto their customers with higher prices. Either way it is still a cost to that business and those businesses wood invest more without taxes.
Have a great Christmas everyone and lets hope that politicians start thinking with their heads and stop thinking with their hearts. The latter causes them to make terrible decisions that are well intended but have terrible consequences.
Taxes should be designed to finance the Constitutional requirements of our federal government without hamstringing the economy. But the last two or three weeks have been filled with constant discussion and argument on extending the tax cuts for some and not for others. Many liberal politicians and voters as well as non-liberal but economic illiterate American citizens want these tax cuts to be kept for the working and middle class but not for the "rich". This "rich" could range from $250,000 plus to $1 million plus income/year.
The unfortunate thing is that most people do not understand how over taxed our corporations and rich already are today. U.S. Corporations pay the second highest tax rate among all other industrial nations behind Japan. The Rich in America (those making say $300,000/yr and higher) are just 1% of the population but they pay over 30% of all taxes. The top 5% of income earners in America pay over 50% of taxes in our nation. This includes rich individuals but also Small businesses that make enough to be in this tax bracket.
Most probably do not know that. These numbers come from the IRS not some conservative think tank that tries to play with the statistics in order to support a political ideology. These are facts. Lets shortly look at some economic facts:
At higher prices people buy less whether that is goods/services, or if that is a business that hires workers. The more you pay in taxes on investment the less investment you will do because the risk that is offset from the big payout is now less due to the taxation of Dividends and Capital Gains of individual investors. Understand that it is rich people who hire other people. If you work for a "poor" person please write me and let me know. Most employers are "rich" or at least well off. Their taxes being low is what will help employment and help raise the GDP in our nation. Lets remember that.
For you wondering what tax structure I favor. Well I favor either a Flat tax or the "Fair Tax". I favor no taxes on investment and no taxes on corporations or businesses. The reason is that those entities do not pay taxes anyways, they just transfer that onto their customers with higher prices. Either way it is still a cost to that business and those businesses wood invest more without taxes.
Have a great Christmas everyone and lets hope that politicians start thinking with their heads and stop thinking with their hearts. The latter causes them to make terrible decisions that are well intended but have terrible consequences.
Tuesday, October 12, 2010
Economics Part 3: Prices effectiveness
Prices are affected by two things: Supply and Demand. When the supply of a good is high prices tend to be lower. When supply is low, prices tend to be higher. When our demand for a good is high, prices tend to be high. When our demand for a good is low, the price is also low.
The benefit is that goods are allocated to their most valued uses. When our tastes in goods change from good A to good B, the price of B rises momentarily and thus resources are allocated or moved towards the production of B. This means the good that we want more, is supplied quicker. That is why innovation takes place in capitalist, price-coordinated economies quicker than socialist, government ran economies. Even more important is when supply is affected.
When a natural disaster hits a location, the supply is obviously affected by being destroyed and thus lowered. This then leads to a raising of prices. This rise in price leads producers to want to take advantage of this profit opportunity so they transfer or allocate resources to that area because this is where they are most valued at this time. The first companies to arrive there make generous profits. This is the incentive to arrive so quickly. That is why people arrived in New Orleans within hours of Hurricane Katrina taking place. When more and more companies arrive, the supply rises back up, and with all the competition, prices begin to fall again.
We can see that in a price coordinated economy, goods are effectively moved to their most valued areas. This is why our standard of living is so much better than most of the rest of the world.
Next post will discuss what happens when government puts price controls in place and thus not allow prices to freely function or change.
The benefit is that goods are allocated to their most valued uses. When our tastes in goods change from good A to good B, the price of B rises momentarily and thus resources are allocated or moved towards the production of B. This means the good that we want more, is supplied quicker. That is why innovation takes place in capitalist, price-coordinated economies quicker than socialist, government ran economies. Even more important is when supply is affected.
When a natural disaster hits a location, the supply is obviously affected by being destroyed and thus lowered. This then leads to a raising of prices. This rise in price leads producers to want to take advantage of this profit opportunity so they transfer or allocate resources to that area because this is where they are most valued at this time. The first companies to arrive there make generous profits. This is the incentive to arrive so quickly. That is why people arrived in New Orleans within hours of Hurricane Katrina taking place. When more and more companies arrive, the supply rises back up, and with all the competition, prices begin to fall again.
We can see that in a price coordinated economy, goods are effectively moved to their most valued areas. This is why our standard of living is so much better than most of the rest of the world.
Next post will discuss what happens when government puts price controls in place and thus not allow prices to freely function or change.
Thursday, September 16, 2010
Economics Part 2: Prices
The most basic and simple principal in all of economics is as follows:
People buy more at lower prices. People buy less at higher prices. Producers produce more at higher prices. Producers produce less at lower prices.
In a market price coordinated economy, prices guide consumers and producers to where goods are most valued. This is the reason that these type of economies have a much higher standard of living than countries that are coordinated by a central planner or some kind of command economy like North Korea, Cuba, or the Soviet Union of the past.
Prices are not a good or bad thing. Prices simply convey information to both consumers and producers. The most important information that prices convey are how scarce resources are. When prices are high that usually means that that resource is very scarce and not a lot to go around. Thus beach front property is highly expensive because there is far more people wanting to live on beach front property than there is room available. Some might complain that this means that only those who are "rich" can afford the most scarce products. To an extent that might be true. But at the same time under non-price coordinated economies the leaders of the country make those decisions. I'd much rather trust markets than some super powerful leader who has the power to tell me what and where and how much of something I can have.
Furthermore, due to beach front property being highly price, most individuals cannot afford this property and thus hotels and rental property is often built there allowing society to have an opportunity to enjoy this property instead of an individual being able to afford it to him or herself.
Prices convey information that resources are very limited but they can also convey the message that this good is readily available. Computer prices have fallen in recent years due to the fact that the resources are readily available and much cheaper than they use to be because of this fact. Without the mechanism of prices, people would buy too much of an extremely scarce resource and prices might not convey the information that this item is now readily available to people that it use to not be available to at an affordable price.
More on prices role next time
People buy more at lower prices. People buy less at higher prices. Producers produce more at higher prices. Producers produce less at lower prices.
In a market price coordinated economy, prices guide consumers and producers to where goods are most valued. This is the reason that these type of economies have a much higher standard of living than countries that are coordinated by a central planner or some kind of command economy like North Korea, Cuba, or the Soviet Union of the past.
Prices are not a good or bad thing. Prices simply convey information to both consumers and producers. The most important information that prices convey are how scarce resources are. When prices are high that usually means that that resource is very scarce and not a lot to go around. Thus beach front property is highly expensive because there is far more people wanting to live on beach front property than there is room available. Some might complain that this means that only those who are "rich" can afford the most scarce products. To an extent that might be true. But at the same time under non-price coordinated economies the leaders of the country make those decisions. I'd much rather trust markets than some super powerful leader who has the power to tell me what and where and how much of something I can have.
Furthermore, due to beach front property being highly price, most individuals cannot afford this property and thus hotels and rental property is often built there allowing society to have an opportunity to enjoy this property instead of an individual being able to afford it to him or herself.
Prices convey information that resources are very limited but they can also convey the message that this good is readily available. Computer prices have fallen in recent years due to the fact that the resources are readily available and much cheaper than they use to be because of this fact. Without the mechanism of prices, people would buy too much of an extremely scarce resource and prices might not convey the information that this item is now readily available to people that it use to not be available to at an affordable price.
More on prices role next time
Saturday, September 4, 2010
Economics Part 1: What, Why, and How
Economics is defined best as: The study of the allocation of scarce resources which have alternative uses.
Simply put, economics studies how we get what we need and want when we get it. During the times of the garden of Eden there was no need of economics. Resources were unlimited. God supplied Adam and Even with anything and everything they needed. There was no reason to economize because there were not costs due to resources being unlimited. There was not work to be done in order to produce their food, water, clothing, etc.. God provided unlimited resources for them.
Today and ever since that time period in history, all resources no matter what that resource is, are scarce. Meaning that the sum of everything we want in life is more than what is available in society. We have unlimited wants but not unlimited resources. This is the idea of scarcity: that resources are limited.
Simply put, economics attempts to teach us the best way or "most efficient" way to spread out or "allocate" limited resources or "scarce resources" to the many different ways those resources can be used or in other words to their "alternative uses".
So that is what and why we have to economize. Allow me to finish part 1 with how we economize.
Most countries throughout history have relied on kings and lords to make decisions of how much to produce of a good and where and when to send it. All matter of production and distribution of resources were left up to the leader of a nation or small state or community. The lord was the leader of the manor in a Feudalistic economy. The dictator and the czar were the decision makers in a Communist nations. During Biblical times, kings were the decision makers. For thousands of years leaders made economic decisions.
Beginning around 1776 the idea that a market or the "invisible hand", as Adam Smith(author of the Wealth of Nations 1776) called it, could guide resources quicker and more efficiently. Meaning, instead of one leader sitting somewhere whether that be in Moscow, Russia or in Washington D.C., a market of prices would be in charge of allocating resources which have alternative uses. A market is made up of consumers and producers who are willing to come into agreements about what they want and what they are willing to give up to get it. And if those choices are left up to those consumers and producers and decisions were based on the costs or prices of making those agreements, then these decisions could be far more efficient since those individuals know far more about their own needs in their own situations than some arbitrary leader in some far away city.
Part 2 coming soon
Simply put, economics studies how we get what we need and want when we get it. During the times of the garden of Eden there was no need of economics. Resources were unlimited. God supplied Adam and Even with anything and everything they needed. There was no reason to economize because there were not costs due to resources being unlimited. There was not work to be done in order to produce their food, water, clothing, etc.. God provided unlimited resources for them.
Today and ever since that time period in history, all resources no matter what that resource is, are scarce. Meaning that the sum of everything we want in life is more than what is available in society. We have unlimited wants but not unlimited resources. This is the idea of scarcity: that resources are limited.
Simply put, economics attempts to teach us the best way or "most efficient" way to spread out or "allocate" limited resources or "scarce resources" to the many different ways those resources can be used or in other words to their "alternative uses".
So that is what and why we have to economize. Allow me to finish part 1 with how we economize.
Most countries throughout history have relied on kings and lords to make decisions of how much to produce of a good and where and when to send it. All matter of production and distribution of resources were left up to the leader of a nation or small state or community. The lord was the leader of the manor in a Feudalistic economy. The dictator and the czar were the decision makers in a Communist nations. During Biblical times, kings were the decision makers. For thousands of years leaders made economic decisions.
Beginning around 1776 the idea that a market or the "invisible hand", as Adam Smith(author of the Wealth of Nations 1776) called it, could guide resources quicker and more efficiently. Meaning, instead of one leader sitting somewhere whether that be in Moscow, Russia or in Washington D.C., a market of prices would be in charge of allocating resources which have alternative uses. A market is made up of consumers and producers who are willing to come into agreements about what they want and what they are willing to give up to get it. And if those choices are left up to those consumers and producers and decisions were based on the costs or prices of making those agreements, then these decisions could be far more efficient since those individuals know far more about their own needs in their own situations than some arbitrary leader in some far away city.
Part 2 coming soon
Economics Series
Now that I am teaching economics full time at Stone Memorial High School, my constant focus on economic principles have motivated me to begin a series on my blog in which I attempt to lay out why I think the way I think. I will attempt to show you why an economic way of thinking is so much different than the way of thinking many of you have been taught. But in reality this blog series will teach you about economics the same way my students are being taught it minus the hour and a half five days a week. This blog will not be as detailed but will teach you the concepts that allow me to think in a way that is usually different from many others, but practical in hindsight.
In the coming days and weeks and even months I will be posting many parts to this series that will be brief and easy to read and will teach any of you who are curious, about economics principles, the reason for economics, and how an economist thinks.
I hope you enjoy
In the coming days and weeks and even months I will be posting many parts to this series that will be brief and easy to read and will teach any of you who are curious, about economics principles, the reason for economics, and how an economist thinks.
I hope you enjoy
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