Do Towns Want Spring Breakers? YES! MB>MC

Duffka is definitely in a different spring break mindset then the "young adults" pictured above.  Spring Break to me is relaxing and may include a trip to Disney to see the attractions.  Duffka has often wondered if places like Daytona Beach and Panama City like the annual party in their towns.  

According to the Wall Street Journal, the oil spill has hurt tourism so apparently spring breakers are better than empty beaches.  All over the Gulf Coast, vacation communities hurt by the oil spill see spring break as critical to reviving their economies and kickstarting tourism before the important summer season . Panama City Beach tourism officials have held promotional events at coffee shops near the campuses of the University of Chicago, the University of Wisconsin at Milwaukee and Ohio State University, offering attendees Panama City Beach-embossed T-shirts, coolers and koozies (those insulated sleeves that keep your soda or beer cold) and raffling off prizes including Southwest Airlines gift cards.

The Wall Street Journal also reported that Spring break is the third biggest tourism month for Panama City Beach, after June and July. The city typically brings in $101 million during March. In recent years, about 300,000 students have descended on its beaches, clubs and bars during spring break.  

Is this gift enough to get college students to go to Panama City?

 Spring Break has always been an interesting event to Duffka.  Viacom, owner of MTV, receives $200,000 from a lucky town each year to host their Spring Break bonanza hosted by societal antagonist Jerry Springer.  

This year Duffka will consider easy Spring Break choices like Chicago, Glenview, and home to celebrate the "readying of the fields."  Which, after all, is why we have a spring break anyways.  Do you see the word "diet" in the picture below?

Pictures courtesy of the Wall Street Journal.

 

Super Bowl or Super Ads?

As a Bears fan Duffka had a tough time deciding who to cheer for.  Typically, I support the team that knocked my team out of the playoffs.  This time I became a Steelers fan.  Both teams have a solid defense, great special teams, and a solid quarterback.  The Bears are very similar--except for Cutler getting hit the most of any NFL quarterback.  

On to the economics of the Super Bowl.  This year, the National Retail Federation, NRF, estimates that $10.1 billion will be spent on the Super Bowl, that’s up from $8.87 billion in 2010, and almost double the $5.8 billion people spent last year on Halloween.  The game was watched by over 130 million people in over 200 countries.  An ad cost $3 million for 30 seconds plus the cost to create the ad.  It would make sense that really only international products from oligopolisitc industries that engage in international trade would pay for the ad time(Coke, Pepsi, VW, Kia, Snickers, Doritos, etc).  If you calculate the cost per minute and divide by the number of viewers it seems even more efficient to advertise during the Super Bowl.  By the way, Dallas thinks that the Super Bowl added $400,000,000 to the local economy.  

Some other interesting information regarding the Super Bowl:

HOW MUCH MONEY MOVES AROUND FOR THE BIG GAME?
$5.6 billion: Amount consumers will spend on Super Bowl related items.
$400 million: Amount of money added to the local economy because of the game.
35%: Ticket holders writing-off the game as a business expense.
$12,500: Price Tiffany charges to produce the Vince Lombardi Trophy.
$2.8 million: Cost for a 30-second advertisment slot during the game.
20.5: Number of minutes worth of ads it would take to pay for a new
Sun Stadium at that rate.
45: Number of minutes worth advertisements during last year's game.
41%: Percent of Super Bowl viewers surveyed who will re-watch this year's ads online.
2.9 million: Number of HD TVs bought for the Super Bowl in 2009.

AND WHAT ABOUT THOSE SUPER BOWL PARTIES? 41: Days in advance, on average, Super Bowl plans are made.
20 million: Number of Americans attending a Super Bowl party.
17: Average number of people attending each party.
5%: Percent of people who watch the big game alone.
40%: Percent of Super Bowl viewers who are not football fans.
25%: Percent of women who watch the game and enjoy it.
10 million: Number of man-hours spent preparing food for the Super
Bowl party.
10 million: Number of man-hours spent making the movie
Avatar.

Duffka asks readers to comment on the economics of the Super Bowl.  Did you watch the commercials?  Which commercials did you like and why?  What about the game?  Why is it more popular than any other single sporting event?

Super Bowl 2011 Ads

From "Obamacare" to "Obamefficiency"?

President Obama has just committed himself, through an Op-Ed piece in the Wall Street Journal, to an executive order that


"... requires federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades."


Of course, as an economics instructor, I am always pleased when the government reviews its regulatory watch for the betterment of the economy.  But I do wonder if this "jobless recovery" can just be changed to a recovery with less oversight.  How long would it take to change the regulatory system?  Can it be done quickly and efficiently so we can get 15 million people that are willing and able to work back to work?  The President gave a poignant example of two agencies working somewhat against each other. 


"For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.".  

That makes sense...I think.  Is saccharin bad for me?  If it is, maybe they should just ban it.  Luckily, I like my coffee black.  Of course, I wonder, if costs and benefits are being considered and then I read this quote:

"As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs"

How exciting is that?

President Obama continues to write that the future of regulation will mean more power to the consumer, less paperwork, decreased burdens on small businesses, one standard for car fuel efficiency instead of 50, and FDA rules for medical devices to list a few.  All of this sounds great but I am still wondering will we ever actually do it?

To wrap this long blog up the President continues to talk that loveable econ talk.  

"Yet according to current estimates of their economic impact, the benefits of these regulations exceed their costs by billions of dollars (consumer surplus?)." 

As I read the article I was inspired to cheer for self regulation of big government then I realized--that doesn't make sense!

The President ends the story with this quote "We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another."

I sure hope so and SOON!  By the way, the President's move to the center of the political spectrum has moved his approval back into the majority (click here). 

        

Has Santa Become a Techie?

 
 Android is outselling the IPhone as a platform, but the IPhone is the single most popular model by a wide margin according to Nielsen Ratings.  Computers were the most purchased tech gift, then tv's, smartphones (non-IPhone), IPad, Blu-Ray players, E-Readers, and Wii's.  That was the top seven.  It was a great holiday shopping season for retailers both online and the traditional "bricks and mortar" stores.  UPS and FedEx were also pleased to see online sales up 13% from last year as well.  

Duffka is interested in the readers gifts?  How did the compare to the list below?  How did the holidays this year compare to the holidays of the last couple of years for you?

Google is a Monopoly--Who Cares?

Times are changing for Google...for the better.  According to their SEC filings, Google employs over 23,000 people.  They have assets valued at over $30 billion.  A gross profit over $14 billion.  Their stock price has increased from $100 per share in 2004 to $600 per share today.  The two founders, Larry Page and Sergey Brin are the same age as Duffka but are worth considerably more.  Larry Page owns 40,000 shares at about $600 a share his holdings in Google are worth about $24 million.  Shriram Ram was the 1st investor in and currently owns 148,000 shares with a value of approximately $90 million.  All of that aside, Google offers many "free" services which are really supported by the massive amounts of revenue generated by the paid ads from the search engine.  The EU announced at the end of November that they are looking into accusations of how the search engine monopoly is being used to influence the search results to negatively impact competitors.  One of the most vocal complaints was from "Ciao" which is owned by Microsoft.  The Economist claims that because Google has turned itself into a verb it has a form of monopoly power.  The Economist asks the question "Can You Dominate and Not Be Evil?"  What do you think of Google's monopoly power?  Do they have it?  Should they be regulated?

  

Deficit vs. Recovery--The Leader is Recovery!

Rule number one in economics is people choose.  The second rule is more painful all choices involve costs.  Now that the leaders in Washington seem poised to increase the speed of the slow recovery, Duffka asks the question--what is the cost and, of course, the benefits.  According to Mark Zandi from Moody's Analytics, "The proposed temporary tax cuts and spending increases will provide a substantial boost to growth in 2011. Instead of another year expanding at no more than the U.S. economy’s potential growth rate — with job gains of 1.2 million and unemployment hovering near 10% — real GDP growth will accelerate to 4%, job gains will pick up to 2.8 million, and the unemployment rate will decline to around 8.5% by year’s end."  Economists know that close to 100% of spending on unemployment (it would be extended 13 weeks)  compensation is spent and that has a large stimulative effect.  Economist Paul Krugman of Princeton University, feels that businesses already have plenty of excess capacity (they are not using their fixed space productively) so they will not expand much this year and he thinks GDP will only be increased by .7%.  The tax plan also includes a temporary payroll tax reduction that will lower many firms marginal cost and average total cost possibly increasing output by firms adding variable inputs (labor) which can lower unemployment if not too many discouraged workers return to the labor force looking for work.  By the way the cost is expected to be over $700,000,000,000 over the next two years.  Economics rule number 6:  The Consequences of Choices Lie in the Future.  No worries--the national debt is still just a tad under $14,000,000,000,000.

                                                  Center for American Progress analysis. 

What do you think of the costs and benefits of this proposal?  Who might you or your family benefit?  What are the costs for you or your family?

 

         

Tracking Your Every Digital Move--Government or Advertisers?

Many people have long complained about the privacy issues regarding the Patriot Act and other government intelligence programs.  Now BlueCava CEO David Norris has found a way to track digital devices, including cell phones and computers, legally.  According to the Wall Street Journal, advertisers are looking for ways to legally track all of our movements in cyberspace.  Every computer user has some unique settings that set their fingerprint apart from other users.  This way, without knowing who the user is, advertisers can see where we click, what we like, and how we interact.  Fingerprinting is almost invisible, difficult to stop and somewhat permanent.  The advertising market is a $23 billion a year industry.  The idea behind BlueCava's information is to allow advertisers build profiles of the people using the devices it has identified.  Click here to see how this is accomplished.  

Duffka's wonders if tomorrow's leaders feel this is an improvement in advertising where the benefit exceeds the cost of privacy?