Wednesday, December 26, 2007

Cartoon

Tax Law Changes Equals Increasing Paychecks

For a single person earning $50,000 per year (assume all wages/salaries and no adjustments), his federal individual income tax bill under 2007 tax parameters would be calculated as follows:

AGI = $50,000

Income Tax After Credits for 2007 tax law = $6,736.25

Now for a person earning $50,000 under the 2008 tax parameters:

AGI = $50,000

Income Tax After Credits for 2007 tax law = $6,606.25

The person would save $130 on the year assuming no pay change, which would be about a $5.42 pay increase per pay period (assuming two per month).

source: Tax Foundation


It is not much, but declining tax bills are good. Although I'm not holding my breath.

Sunday, December 23, 2007

Life After Peak Oil--Gregory Clark

Life After Peak Oil

Oil prices have receded from their recent flirtation with $100 a barrel, but demand soars from China and India, rapidly industrializing countries with a massive energy thirst. The combination of increased demand, high prices and the prospect of an eventual peak in oil production, has caught Americans paralyzed between twin terrors: the fear that rampant consumption of oil and coal is irreversibly warming the Earth and the dread that without cheap oil our affluent lifestyles will evaporate...

Study of the long economic history of the world suggests two things, however. Cheap fossil fuels actually explain little of how we got rich since the Industrial Revolution. And after an initial period of painful adaptation, we can live happily, opulently and indeed more healthily, in a world of permanent $100-a-barrel oil or even $500-a-barrel oil...

Many people think mistakenly that modern prosperity was founded on this fossil energy revolution, and that when the oil and coal is gone, it is back to the Stone Age. If we had no fossil energy, then we would be forced to rely on an essentially unlimited amount of solar power, available at five times current energy costs. With energy five times as expensive as at present we would take a substantial hit to incomes. Our living standard would decline by about 11 percent. But we would still be fantastically rich compared to the pre-industrial world...

At current rates of economic growth we would gain back the income losses from having to convert to solar power in less than six years. And then onward on our march to ever greater prosperity.


Gregory Clark is professor and chair of the Department of Economics at the University of California, Davis.

read the entire essay

Who Has the Oil?


nice map

Saturday, December 22, 2007

Class Information

General Class Information

Order of Chapters:

1st Semester: 1, 2,16,12, 3, 4, 5, 6, 7, 9

2nd Semester: 10,11, 14, 15, 18, Personal Finance

Etc.
This blog is a work in progress to help the class run more efficiently. Feel free to post comments about improving the blog. Remember, I am a technological illiterate...

Goal:
To provide on-line access to virtually all class information. With the ultimate goal of being "paperless".


Updated: 8/5/09

Personal Finance (Course Work)

Online Resources

Money 101--from CNN Money
23 basic lessons

Financial Literacy
11 areas of finance with articles, tools, and FAQs for each

Feed the Pig
Good info about savings

Kiplinger Money Basics

Wall Street Journal Personal Finance Guide

Sources of Capital (Chapter 9)

Chapter 9: Sources of Capital

Study Guide
Chapter 9 study guide

Notes
Chapter 9 notes
Chapter 9 notes fill in

Activity


Handouts


Articles


Additional Readings

International Trade (Chapter 18)

Study Guide
Chapter 18 Study Guide

Notes
Chapter 18 notes
Chapter 18 notes fill in

Activity


Handouts


Articles


Additional Readings


Other Info

Developing Countries (Chapter 17)

"The problem of rendering the underdeveloped nations more prosperous cannot be solved by material aid. It is a spiritual and intellectual problem. Prosperity is not simply a matter of capital investment. It is an ideological issue. What the underdeveloped countries need first is the ideology of economic freedom and private enterprise." Ludwig von Mises: Money, Method, and the Market Process



Study Guide
Chapter 17 Study Guide

Notes
Chapter 17 notes
Chapter 17 notes fill in

Activity


Handouts


Articles


Additional Readings


Other Info

Fiscal Policy (Chapter 15)

Study Guide
Chapter 15 Study Guide

Notes
Chapter 15 notes
Chapter 15 notes fill in

Activity


Handouts


Articles


Additional Readings


Other INfo

The Federal Reserve and Monetary Policy (Chapter 14)

Study Guide
Chapter 14 Study Guide

Notes
Chapter 14 notes
Chapter 14 notes fill in

Activity


Handouts


Articles:
A Classic Hayekian Hangover Roger Garrison and Gene Callahan
Thinking Like a Center Banker by William Poole

Additional Readings


Other Info

Money and the Banking System (Chapter 13)

Study Guide
Chapter 13 Study Guide

Notes
Chapter 13 notes
Chapter 13 notes fill in

Activity


Handouts


Articles

Is the Gold Standard Still the Gold Standard among Monetary Systems? by Lawrence H. White



Additional Readings


Other Info

Role of Government (Chapter 12)

Chapter 12: Role of Government

Study Guide
Chapter 12 Study Guide

Notes
Chapter 12 notes
Chapter 12 notes fill in

Activity


Handouts


Articles


Additional Readings
A World Without the FDA

Websites

FDA Review

Economic Challenges (Chapter 11)

Study Guide
Chapter 11 Study Guide

Notes
Chapter 11 notes
Chapter 11 notes fill in

Activity


Handouts


Articles


Additional Readings


Other Info

Economic Performance (Chapter 10)

Study Guide
Chapter 10 Study Guide

Notes
Chapter 10 notes
Chapter 10 notes fill in

Activity


Handouts


Articles


Additional Readings


Other

Business Organizations (Chapter 7)

Chapter 7: Business Organizations

Study Guide
Chapter 7 study guide

Notes
Chapter 7 notes
Chapter 7 notes fill in

Activity


Handouts


Articles


Additional Reading

Market Structures (Chapter 6)

Chapter 6: Market Structures

Study Guide
Chapter 6 study guide

Notes
Chapter 6 notes
Chapter 6 notes fill in

Activity


Handouts


Articles


Additional Readings

Prices (Chapter 5)

Chapter 5: Prices

Study Guide
Chapter 5 study guide

Notes
Chapter 5 notes
Chapter 5 notes fill in

Activity


Handouts


Articles


Additional Readings

Supply (Chapter 4)

Chapter 4: Supply

Study Guide
Chapter 4 study guide

Notes
Chapter 4 notes
Chapter 4 notes fill in

Activity


Handouts


Articles


Additional Readings

Demand (Chapter 3)

Chapter 3: Demand

Study Guide
Chapter 3 study guide

Notes
Chapter 3 notes
Chapter 3 notes fill in

Activity


Handouts


Articles


Additional Readings

Comparing Economic Systems (Chapter 16)

Study Guide
Chapter 16 Study Guide

Notes
Chapter 16 notes
Chapter 16 notes fill in

Activity


Handouts


Articles


Additional Readings


Other Info

Economic Systems (Chapter 2)

Chapter 2: Economic Systems

Study Guide
Chapter 2 Study Guide

Notes
Chapter 2 notes
Chapter 2 notes fill in

Activity

Handouts

Articles

Additional Readings
Tragedy of the Commons by Garrett Hardin
The Commons: Tragedy or Triumph?

Games
Tragedy of the Bunnies a game that illustrates the "tragedy of the commons"

What is Economics? (Chapter 1)

Chapter 1: What is Economics?

Study Guide
Chapter 1 Study Guide

Notes
Chapter 1 Notes
Chapter 1 Notes Fill In

Activity
Why Are We a Nation of Couch Potatoes?

Handouts
Economics in One Page

Articles
Opportunities and Costs
Opportunities and Costs questions

Additional Readings
I, Pencil

3rd Quarter 2007 Economic Growth 4.9%

from Carpe Diem

How Different Investments Did Last Week

from the Wall Street Journal

Money Supply Growth

from the Big Picture

Yes, inflation is going to be a major concern.

Final 3rd Quater 2007 GDP

from the Skeptical Optimist

Largest Wall Street Bonus Ever

Goldman Sachs Chairman and CEO Lloyd Blankfein will take home nearly $68 million in restricted stock, options and cash, making it the largest bonus ever given to a Wall Street CEO.

Blankfein was awarded $26.8 million in cash and $41.1 million in restricted stock and stock options, according to a company filing with the Securities and Exchange Commission issued Friday.

With this year's bonus, Blankfein shatters the record he set a year ago, when he was awarded $54 million.

read the story

Thursday, December 20, 2007

New Corvette


Building on Chevrolet's muscle-car heritage and cachet with affluent car enthusiasts, GM will introduce its highly anticipated Corvette ZR1 coupe at the show. The car, with only a handful allotted to the Detroit company's thousands of Chevy dealers, will come with a supercharged, 600-horsepower engine and a price tag of about $100,000...
As lawmakers increase efforts to force auto makers into building more fuel-efficient automobiles, GM executives admit the day of the American muscle car may be numbered.

"High-performance cars like this may be legislated out of existence," Corvette chief engineer Tadge Juechter said...
GM is pulling the ZR1 brand out of its recent-history book, borrowing it from a special-edition Corvette that was sold in the 1990s but offered far less power. One of the features that is expected to set the ZR1 apart is carbon-fiber body panels that the company guarantees will last a lifetime. The carbon fiber is lathered with a clear coating that costs about $2,000 a gallon because of a rare additive.

GM will likely build about 2,000 ZR1s annually in an effort to maintain exclusivity. Besides the ZR1, which goes on sale later in 2008, Chevrolet sells other versions of the car for base prices between $46,000 and $71,000.

Federal Spending 2007


great chart from Marginal Revolution

Wednesday, December 19, 2007

Google Challenges Wikipedia

Google, Inc. announced Thursday that it is working on a collaborative online encyclopedia that could compete with Wikipedia, the popular user-edited encyclopedia.

The "knol" project – named for Google's shorthand for a unit of knowledge – will allow a user to create an entry on virtually any topic. Like Wikipedia, it will allow anyone to add an entry, but unlike the largely anonymous Wikipedia, it will post an author's byline and profile with each entry.

read the article

Personal FInance: Investing Advice

The new book Jim Cramer's Stay Mad for Life is a primer for saving and investing. It advises readers to pay off credit cards, make the most of 401(k) plans and individual retirement accounts (IRAs), and get the right kinds of insurance. The subtitle of the book, written with Cliff Mason: Get Rich, Stay Rich (Make Your Kids Even Richer).

Most people actually won't get rich by buying individual stocks, Cramer says. Unless you do your homework, namely spending an hour a week researching for each stock you own, "You won't beat the market, and you'll probably lose money," he writes.

For Cramerites willing to do the research, the book helps construct a long-term, diversified portfolio. For most people, however, he advises low-fee stock index funds.

read the article

All the personal finance advice you ever need in 3 paragraphs. A couple of other points, spend less than you make. Don't get an adjustable rate mortgage.

Wealhiest Americans


Standard of Living for wealthy Americans.

New book:
All the Money in the World: How the Forbes 400 Make--and Spend--Their Fortunes

more charts here

Tuesday, December 18, 2007

Who Pays Federal Taxes?


Austrian-style Business Cycle

ECONOMISTS cannot reliably forecast recessions. Nor can they detect for certain when a recession is in progress. Only after the fact do the official cyclical timekeepers identify the beginning and ending dates of a slump.

Though deficient in the powers of foresight and observation, economists do believe they know how to treat an economy on the brink of recession, as this one seems to be. They administer what non-economists know as the “hair of the dog that bit you.”

But booms not only precede busts, they also cause them. Bargain-basement interest rates are a potent stimulant. Borrowing more than they might at higher rates, people stretch. Businesses stock up on labor, machinery and buildings. Consumers buy cars and houses — houses, especially, these past five years. The G.D.P. takes flight.

Then unwelcome facts intrude. Easy money, it seems, was an illusion. Society was not so rich as it seemed. The prosperous future for which people had collectively prepared is slow to arrive. The inflation rate picks up. Supposedly creditworthy consumers and businesses turn out to be risky. They were creditworthy only so long as lenders were willing to advance them more and more funds at those ever-so-affordable low rates.

Now what to do? Why, slash interest rates to coax forth still more lending and borrowing. It’s the customary curative, seemingly as humane as it is politic.

And if recessions served no useful purpose, it might be. But recessions do. On Wall Street, they speak of “corrections.” What corrections correct are errors in judgment. So do recessions.
They allow the sorting out of boomtime error. They permit — indeed, force — the repricing of inflated assets. In a downturn, previously overpriced businesses, houses and buildings are made affordable again.

Naturally, people hate these painful, salutary interludes. Nobody likes insecurity, bankruptcy and joblessness. So the Fed keeps slashing interest rates. And this balm does mitigate the suffering. Homeowners and businesses refinance their debts. Fewer houses are thrown on an overstocked market.

Observe, however, that the great preceding illusion is undispelled. Prices have not come down as they should have. Neither has indebtedness. The architecture of the economy remains as it was. Land, labor and capital are still structured for an imagined glittering future.

Presently, a new upcycle does begin, but it’s slow off the mark. The world’s top economy seems curiously sluggish. And the economists and politicians ask, “What happened to America’s dynamic economy?” The answer: It’s wrapped in the coils of debt.

— James Grant, the editor of Grant’s Interest Rate Observer.

HT: Mises Blog

Monday, December 17, 2007

The Rich Are Paying Taxes

HT: Carpe Diem

Recession in 2008?

In the latest WSJ.com survey of economists, forecasters on average put the chance of a recession -- often defined as two straight quarterly declines in gross domestic product -- at 38%. That's the highest in more than three years, but the forecasters' best bet right now is that the U.S. will skirt a recession...

read the WSJ article

Thursday, December 13, 2007

Producer Price Index up 3.2%

Wholesale prices saw their biggest jump in 34 years in November, according to a government inflation reading Thursday that came in much higher than forecast due to a record spike in energy prices.The Producer Price Index rose 3.2 percent, up from only a 0.1 percent rise in October.

Thursday, December 6, 2007

Where Would You Prefer to Live?

House A

House B

One house has hot and cold running water, central air conditioning, electricity and flush toilets. The other does not. One owner has a a computer, a high speed connection to the Internet, a DVD player with a movie collection, and several television sets. The other has none of these things. One owner has a refrigerator, a vacuum cleaner, a toaster oven, an iPod, an alarm clock that plays music in the morning, a coffee maker, and a decent car. The other has none of these. One owner has ice cubes for his lemonade, while the other has to drink his warm in the summer time. One owner can pick up the telephone and do business with anyone in the world, while the other had to travel by train and ship for days (or weeks) to conduct business in real time.

from Coyote Blog

College Football Coaches

from Carpe Diem

read the report from USA Today

Tuesday, December 4, 2007

Bubba the Lobster

a 22 pounder next to a "normal" lobster

National Debt: $9.13 trillion


The national debt — the total accumulation of annual budget deficits — is up from $5.7 trillion when President Bush took office in January 2001 and it will top $10 trillion sometime right before or right after he leaves in January 2009.


That's $10,000,000,000,000.00, or one digit more than an odometer-style "national debt clock" near New York's Times Square can handle. When the privately owned automated clock was activated in 1989, the national debt was $2.7 trillion.


read the article