Critique "Outsourcing in America"

The post “outsourcing in America” discusses a small town near San Francisco and how their local government has been outsourcing the labor done by the city, including its public works, engineering, lawyers, building inspection, and code enforcement. The author of this post feels “as if once again people are looking to take the easy way out instead of making the proper changes to the way the actual city is ran. It also shows no loyalty at all to the citizens of the town and could lead to a mass exodus because people do not agree with the actions of the city. Although they save money by just contracting out the jobs, they also save money by not having to pay as many pensions. This kind of behavior is unethical and is not the way to treat employees and citizens of the city.” I agree with several things the author has said. The first thing I agree with is the fact that this idea of outsourcing the public sector jobs of this city is probably not the best way of treating your citizens that work those jobs. You would somewhat expect the city to employ its own citizens for city jobs. The other thing I agree with is the fact that by instituting this strategy the city has an opportunity to save money to help reduce their deficit, in the short run. By outsourcing these jobs in their community, the city may be saving money in salaries and pensions but a lot of money will be lost from lack of consumption, taxes collected on that consumption as well as the unemployment benefits that will need to be paid out to the people who have become unemployed due to the outsourcing of these jobs. The one thing I disagree with is that this strategy could lead to mass exodus. With the resulting unemployment, current economic climate and state of the housing market, it would most likely be very difficult for a large portion of the city’s population to leave.

Critique of Netflix and Cable battle

I enjoyed reading the post about the battle going on between cable companies and internet video service providers. In the changing technology market consumers are requesting to have access to more and more types of media at their immediate disposal. The competition between internet service providers and cable companies is a perfect competition because they are substitute goods for each other. You can easily replace one with the other and with the quality that you get from internet video services like Netflix and Hulu for the price you pay it is easy to see why a person would switch. I personally have thought about switching to only a Netflix or other provider and currently do use Netflix and also have cable. With such easy access to such a large variety of media content it is easy to see why demand for cable is shifting.
You can see also with the new features that cable has that they are having to add new features to be able to keep the price at what is a sustainable level for them while battling the shift in demand for cable to internet video service providers. The most blatant new adaptation to cable to try and directly compete with such services as Netflix and Hulu is the creation of Ondemand. With Ondemand you are mimicking the services provided by Hulu and Netflix by giving users the direct access to their favorite T.V shows and movies from movie channels they currently subscribe to at any time. They went after the convenience market segment to try and draw them back in and made it easy by simply adding the feature to what already existed without having to install anything or do anything major. This feature worked for a while but then people became complacent with that technology and so the internet video service providers countered back by adding their service to existing products. You can now buy televisions sets and blu- ray players and even all the current gaming systems support some type of online streaming internet video service.
This transition occurred nearly 3-4 years ago and is steadily increasing with every new device that is coming out. However, not to be outdone the cable companies are counteracting this by having specific channels open up their own streaming sites to watch free episodes or like in the case of HBO their entire library of series and movies if you currently have a subscription to the service through an approved cable company.
This is the next strike in the current war for our attention spans. Without consumer demand driving the need for quicker access to digital media this price war would not be occurring.

Critique on gas prices

Response to the rise in gas prices:

I agree there has been a dramatic rise in gas prices over the past few years. Gas it a vital tool that the American society has become accustomed to in order to function and OPEC can use to their advantage. Because not only is gas used to get people to and from work, it is used to operate machines and generators to make electricity and transport goods from point A to point B.

As describes in blog post, the gas prices are affecting our economy as a whole because the average American family is spending more and more money on not only gas but other goods. Just because the gas prices rise does not mean that clothing or food prices remained static. American families are spending more and more of their paychecks on gas for their cars and food and clothes for their family. The food and clothing cost are rising as well as gas cost because it takes gas to produce clothing and food. For example, take a simple food element like corn. It takes diesel fuel to plant the corn in the field, and much more fuel for the upkeep of the corn. Then, more fuel is needed to harvest and transport the corn to its desired locations. If the good was something such as a cereal, there would be all these things plus the additional cost of running the machines to produce the cereal. Rising gas prices effects the average American family more than one thinks.

In the conclusion of this blog post, attention was brought to the fact that the gas price will continue to rise and a substitute will be needed. I don’t agree that a substitute will be needed, but rather a compromise between the American people and their consumption of gas. In essence, I’m saying that we can’t afford to live the grand lifestyle anymore. America isn’t a super power anymore. Cutting back consumption greatly would be helpful in the price of gas. I understand there’s only so much you can cut back because you might have to take your car to work or school every day. But, it’s time America thought of a public transportation system. Not just on a small scale like in New York, Washington DC or San Francisco, but a large, nationwide transportation system. Until recently, I thought public transportation was probably the worst idea ever thought of, but after spending close to a month in Paris and relying on the bus, metro, RER’s and trains to get me almost everywhere, I began to realize that the more I used them, the better idea they were. Overall, the Parisian government encouraged use of the public transportation system by connecting it to many important places, airports, and Euro train stations across France. Not only did it reduce gas consumption, the environmentalist went crazy for it because it also reduced carbon footprints significantly. If the Americans had the resources and finances for the investment of a similar mass transport system such as a Euro train and an intricate metro system, the need for gas would decrease and there would be no need for a substitute. (Because, let’s face it, gas will be almost impossible to substitute for.)

Critique of "Businesses That Will Be History"

I found this article very interesting to read, especially to see what many of today's economic experts are predicting in terms of big name companies and business that will fold in the next year or two. One company that I was not surprised to see on the list was Blockbuster since I used to frequently rent movies and games from them myself. With the emerging of much cheaper and more convenient options like Redbox, companies like Blockbuster which require memberships and limited locations for rentals and returns are quickly becoming obsolete. This alone is a great example how technology can shift a demand curve and can completely change a market.

Another great example was on the cereal industry and the new mindset of consumers to provide healthier food for their families, especially their children. Healthier cereals like Cheerios and and Corn Flakes are selling more and more, while the "junk food" types of cereal like Corn Pops are less popular than before. I find this interesting because even in my own home my family has shied away from the sugar-filled cereals we used to have when I was growing up. Now our shelves have Cheerios and Raisin Bran instead of Lucky Charms and Coco Pebbles. The health industry has exploded in the past few years with new diets, workout programs, and healthier foods to help combat the growing problem of obesity in our country and it's craze shows no signs of slowing down anytime soon.

One company listed that surprised me a little was myspace. I used to use myspace all the time before Facebook became so popular, but I always assumed that there were still plenty of people using the site, or at least used both Facebook and Myspace at the same time. However I can certainly see that technology also played a huge role in this shift of interest for users, since Facebook has more features, games, and easier ways to find people that you know. It also has found ways to connect to more sites like Skype, another social network that continues to grow in popularity. Even websites for Walgreens and CVS can connect to Facebook when you want to order photo prints by connecting to your albums and allowing you to select photos through Facebook instead of uploading them off of your computer. Facebook continues to find new ways to innovate and improve it's site to help ensure users keep coming back for more.

Critique of Cable and Intranet Market

I am responding the article of Intranet and Cable companies fighting for the television market. The world has advanced and now everytjhing is assessable from the intranet including television. While so many people are still with the cable companies the intranet companies are finding ways to have movies and television shows at the click of the button. With the amount of television and movies that are available to consumers the challenge is getting these shows available to the public in a legal ways. the company Netflix is now avaible on the intranet streaming movies of all kinds. Its also at avery afforadable price of only eight dollars a month. Its hard for cable companies to raise prices with this downward push of the demand for price of cable. More and more people are finding how easy the intranet can access your favorite shows for half the price of cable. The cable comapnies are feeling this pressure by the intranet therfore offering new adcentives with sigining a aggreement with the company. I know DirecTV has promotion if you sign up and get a friend to sign up with their cable both creditied a hundrted dollars on the next bill. Intranet has allowed viewers the felxibility to watch shows and pause them, avoding commercials, and instant access to the remainder of the season. Intranet is already making its way into the televisons sets. Samsung has introduced a new tv with intenetr connection connecting the family to netflix,hulu, and social media networks from your living room. Intranet and cable are subsitutes for eachother, but soon enough with the advances in the new tecnology cable companies could be short lived.

Oil Prices Plunge

            To put in simple words, this article mainly explains the surprising decrease in price when 60 million barrels of crude oil were released from Libya. The whole point of releasing a great amount of crude oil to the world was to decrease the high prices that were being distributed for gasoline to avoid a recession. As consumers are using gasoline in their car daily, the amount of gasoline available is slowly decreasing. When too much is used, the supply of gas will also decrease, which caused an inward shift in the supply curve. With supply shifting inward, demand remains the same and according to the law of equilibrium, the market will adjust itself to meet the equilibrium price which is higher than it was before.

            The same also occurred when the US and their allies decided to release 60 million barrels of crude oil. It is mentioned that we consumed more than that amount in a day but the amount released was enough to cause a decrease in the pricing. This is the total opposite of the earlier case. Because supplies have increased, the supply curve will have an outward shift causing the equilibrium point to be at a lower price, and in this case, the lowest price has been since the four months prior, and according the International Energy Agency, this new price level will help the economy from going into a second recession.

            As we learned in our more recent classes, the price of oil is determined largely by the group OPEC. Only in an oligopoly where everyone can trust one another can they set the price, even though it based on demand. Assuming that the members of OPEC all got together to decide the amount of oil to release and the price to set, this well trusted oligopoly strategized their whole market to ensure that everyone is charging the same amount, therefore; no one will be able to gather all the consumers because of cheaper prices.

            Demand is generally very inelastic with gasoline due to its necessity in people’s lives. Therefore in order to change the price of crude oil, or gasoline, a shift in the supply curve must occur, whether it is inwards of outwards. Also because a second recession is extremely unwanted among the nations, the US and their Allies have decided the best way to decrease the chance of a recession is by increasing the amount of oil being released.

http://www.washingtonpost.com/business/economy/oil-prices-plunge-after-us-allies-announce-release-of-reserves/2011/06/23/AGsANYhH_story.html

-Tien Nguyen

critique on gas prices

First of all the economic relevance of this article is almost perfect for the purpose of this assignment, so listed by Dr. Kassens’ purpose for the assignment instructions. “It is crucial that you are able to apply the concepts covered in the principles course to the world around you.” The reason it is so appropriate is that gas prices affect just about everyone. Especially poor college students who are learning about economics. But commercial drivers and commuters to work and school are affected just as much as these college kids and this blog post makes a not of that and does well to point that out. However there are plenty of alternate energy sources to be used. The problem isn’t scarcity because there are plenty of alternate energy sources, but that oil is such a money making machine that no one will willingly invest in these other sources. I am no expert whatsoever so I read this and am inclined to agree with most of it because I would not know how to contradict it. Explaining about how the prices for gas affect elasticity of supply and demand is very informative and useful information in proving a point about the crude oil market. “I think that if a substitute was found for gas, the overall economy at the micro and macro level would face much less hardship. Businesses would be able to produce more at less cost and households would be able to spend more money on necessities and even leisure items.” I really hope so. I like buying what I want instead of pouring my wallet into my gas tank all the time. This blog post makes very good use of many of the ideas terminology, and concepts that we have been learning about at 8:30 every morning for the past month. I’m sold by reading this article and if someone who read this knew nothing about econ they could probably learn a thing or two. If I had to grade this I would say A to the writer and anyone who read it critically.