Is it time to rejoice?

As a non-economist, I read a lot of different articles to research for this entry. I found myself mostly looking at blogs and news articles about consumer spending, something that our economy needs. As the recession comes to a close, consumer spending has risen 0.2% since December.

According to Planet Money’s Caitlin Kenney(www.npr.org/blogs/money):

Consumer spending rose just 0.2 percent in December, after increasing 0.7 percent in November. It was the third straight increase in as many months but significantly smaller than the increases in October and November.

While this increase is significantly smaller than in the past few months, it is still a rise. But should we rejoice? I think that we need to wait until the spring to look at these numbers with any real meaning.

Also, the Washington Post published an article stating that sales of cheap liquor have risen over the past few months. Apparently, liquor stores’ sales have risen while restaurants’ sales have lowered. This got me wondering about the sales of these establishments in Lexington. I can probably guess pretty accurately that these numbers would be around the same here. With snow days and formals coming up, college students will be flocking to the ABC Store to get some Burnett’s Sweet Tea Vodka (the cheap version of Firefly) instead of making a reservation for two at the Southern Inn. In Lexington, I wonder if this a boost to the local economy?

I have a lot of questions about the economy and hopefully, in my next entry, I will be able to have them answered.

-Claire McCandless

The market value of Valentine's Day

I will admit that I am sometimes plagued by my own illiteracy when it comes to reading articles about the economy. My favorite economic discussions tend to stem from topics that I might think about outside the realm of a business class. So here’s a topic that might be interesting to my fellow non-economists, especially this week: the market value of Valentine’s Day.

Let’s start at the very beginning. I’m a history buff and like background info. Here’s a post from the History Channel’s website if you’re interested in the origins of the greeting card holiday. It’s a quick read and pretty interesting.

http://www.history.com/content/valentine/history-of-valentine-s-day

The article touches on the economic significance of the holiday: “According to the Greeting Card Association, an estimated one billion valentine cards are sent every year, making Valentine’s Day the second largest card-sending holiday of the year.”

This doesn’t include, of course, the zillions people spend on gifts, candy, jewelry, and dates. The following article from the National Retail Federation forecasts trends in consumer spending this Valentine’s Day and links them with the current economic climate:

http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=887

Rather than not spend at all, the trend seems to be spreading the wealth among the people closest to you. Rather than cut back on the number of people give valentines to, the NRF insinuates consumers will spend a bit less on their significant other and put that money toward gifts for family and close friends. So this week, whether you view the approach of Valentine’s Day with excitement or a sense of impending doom, consider some of the cultural economic semantics that contribute to the popularity of the lovers’ holiday.

From,
Your Valentine

~ Elizabeth Micci

Does the Olympics Help the Local Economy?

While much of the Eastern United States has been snowed in the last few weeks, the world has turned their eyes towards the Winter Olympics in Canada. When addressing the economic conditions of an Olympics it is imperative to note that not all cities benefit from the three week spotlight. Matt Yglesias states that even though there is fierce competition with regards to hosting the games, most cities reap a major financial windfall associated with the post games affect.
http://yglesias.thinkprogress.org/archives/2009/04/a_better_way_for_the_olympics.php
Ryan Avent believes that the games benefit the local economy:
“The games often get cities to undertake massive infrastructure investments, many of which have been in limbo for decades. London's program of transit expansion in advance of the 2012 games is well documented for instance. Now, London may lose money on the games themselves, and it may end up throwing some money away investing in soon-to-be underused natatoria, but the new transit capacity will be around forever, boosting the local economy. Hard to see how that expansion doesn't easily pay for the games in just a few years.”
http://www.ryanavent.com/blog/?p=1984
A third opinion by Andrew Rose states: "We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event."
http://papers.nber.org/papers/w14854
When the world removes their eyes from Vancouver in a few short weeks it will be interested to see which one of these economists have properly predicted the post Olympic economic outlook.

Charlie Gentles

I am not an economist

I am not an economist. I know—shocking. In fact, not many people are economists. There were only 14,600 of them 2008 (about a tenth of the “writers” population), according to the Bureau of Labor Statistics (as a point of interest, the BLS Web site says the average economist employed by the government made $108,010 last year—more than twice the average salary of us “writers.” Prof. Luecke, you’re my advisor: is it too late to change my major?).

But seeing as so few of us are economists (and are now kicking ourselves) and actually understand financial markets and what happened over the last 18 months, there’s a new phenomenon I’d like to highlight: YouTube. Now anyone with Internet access can call themselves a novice economist. These guys break it down simply, humorously and (often) with song. And everyone likes a good song. Call it Schoolhouse Rock for the new generation. Here’s my top three picks:

"Bailout"
Meet “Merle Hazard,” a real-life financial advisor from Nashville. Like any good Nashvillian, he’s also a musician, but not one who leaves his day job at the office at 5 p.m. Here he breaks down the bailout with a country twang.

"The Financial Crisis...Simplified"
Unsure what happened over the past few years? This guy (Hank) breaks down the sub-prime mortgage crisis for us. It’s straightforward, cynical and involves many hats—all keys to greatness in my opinion.

"'Fear the Boom and Bust' a Hayek vs. Keynes Rap Anthem"
This one was recently on NPR’s “All Things Considered” so I can’t take credit for finding it. In a style reminiscent of The Lonely Island, George Mason University economist Russ Roberts and Spike TV (yes, that man channel) producer John Papola rap about the “boom and bust” of the economy as economists John Maynard Keynes and F. A. Hayek. It got the OK from Ke$ha, so it’s OK in my book too.

"Walkin' on Wall Street"
And one more just because I referenced Schoolhouse Rock. It’s necessary to have this one on the list. Here’s a very elementary look at stocks. YouTube: Because us laypeople deserve to know about economics too.

--Stephanie Hardiman