Black Friday Bonanza - A Look Back

A line of people hungrily wait for the doors to open at the biggest Macy's in their area. 3, 2, 1! The doorman opens the door and a stampede of shoppers rushes into the store, grabbing everything seen in sight. Louis Vuitton here! Rolex over there! While these bargain hunters ravage malls, the big brand companies roll the cash on in. What other day could it be? Black Friday.


Here is a brief overview of 2009's Black Friday. More shoppers headed over to the discount and department stores at 5 AM (23% of all shoppers) and targeted clothing (51% of all shoppers) and toys above all else. Favoring quantity over quality, most shoppers favored many items that were priced less than a few items at higher prices. Therefore, clothes, books, and toys were more profitable than large scale electronic products. Moreover, the magic word was discounts, discounts, discounts this holiday season. It is safe to assume that the stores that promised 75% to even 80% off favorite items reaped in the profits this Black Friday with $41.0 billion spent by shoppers all together, says the NRF. On average, most of the Black Friday shoppers (63%) did not intend to engage in the also popular "Cyber Monday" but hadn't completed the majority of their holiday shopping. Instead, not even 11% of shoppers had completely finished their shopping for November and December. Another study done by the NRF shows that most shoppers still hadn't checked off their holiday lists by December 9th and that most intended to continue shopping until the week before Christmas, prolonging the holiday season. 


And with that I wish you all joyous and safe holidays as we all prepare for 2010, which will hopefully be a year of immense progress for America.


Question of the Post: Any predictions for 2010?


Statistics retrieved from: The National Retail Federation (www.nrf.com)

Microlending Miracles

Imagine being able to change someone's life entirely for just.....wait for it.....$25. Seriously, just $25! Now what if this person was a destitute entrepreneur in need of a little financial support? Doesn't that sound incredible? Well, now you can help save the world $25 at a time through Kiva, a nonprofit microlending website (www.kiva.org).

Have you heard that phrase, "Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for life"? Rather than just handing out donations to impecunious citizens of Third World countries, you can ensure that their future is looking bright through a microloan. How do microloans work, you ask? Well, through a lending site (such as Kiva), you can choose an entrepreneur who is requesting a loan starting at as little as $125. Over the course of the next few months, you'll be repaid in installments as their business flourishes with the money you lent them. Often they use the money to buy more inventory or expand their business in a certain way. As you are repaid, you can reinvest your money again to another person in need and create a cycle of wondrous microlending (Yay!). By lending a person money, you give them a chance to become financially stable, to rebuild their lives, and to break the cycle of poverty. I told you $25 can do a lot! For example, you can lend to a secretary in Kenya who wants a new computer to a farmer in Cambodia who needs to buy a cow and now even to New Yorker who needs to buy a new taxi! The possibilities are endless I tell you, endless! A microloan is truly a gift that keeps on giving.

Feel free to check out my lender profile by visiting: www.kiva.org/lender/saloni

Another great way to help out Kiva: click your hearts out at http://www.smallthingschallenge.com/index.php

Now go explore Kiva for yourselves :)

Amazing Adam Smith

We've all heard of him in our basic history and economic courses. We've heard of his world changing principles and ideas. We've heard he was briefly kidnapped by gypsies as a child (ok maybe not all of us...but it's true). Who is this man, you ask? Adam Smith (duh)! Sure, sure we've heard of the "invisible hand" and "self-interest" as mentioned in his The Wealth of Nations (Sorry, I can't underline on Blogger), but have we heard of much more?

In Jonathan B. Wight's fictional adventure Saving Adam Smith, Adam Smith channels his spirit into the mind of Harold Timms, a Romanian immigrant, in order to communicate with doctoral student, Richard Burns. Burns is on the verge of being launched into the highly privileged domain of academia with a revolutionary dissertation, much to the interest of his mentor, Bob Lattimer, and the WorldChemm, a major corporation. However, his attention is diverted when Harold comes to Burns regarding the voice of Adam Smith, who is taking over Harold's mind. Adam Smith is infuriated with the current state of the economy. Forced to listen to this voice, Richard goes on a road trip (from the Virginia to the Silicon Valley) and learns the "morality behind markets" from his conversations with Adam Smith. However, their lives are soon endangered when radical Max Hess plots to kill them. A jam-packed journey filled humor (including a poker game with your favorite Enlightenment thinkers), peril, romance, and economic theory, Saving Adam Smith is certainly a page turner. Wight aims to bring attention to The Theory of Moral Sentiments, the essential root to Smith's later novel. Now, if Saving Adam Smith has piqued your economic interest, I highly recommend it!

Now that you know the basic plot line, here's a brief discussion:

This book brings light to the true intentions of Adam Smith and the core of his philosophy as it differentiates between self-interest and selfishness, explains that justice is needed in a society before free markets can be adopted, and emphasizes the need for "healthy competition."

People are often mistaken with Smith's philosophies and believe that he glorified any and all means to make a profit, which is untrue. Yes, Smith was an advocate for free markets and capitalism, but he also believed that justice is essential to a society before such economic models can be implemented. All of this is explained in his lesser known work, The Theory of Moral Sentiments, which emphasizes that morality is the foundation for an economically sound world. Smith also believed that a balance of competition in the market leads to technological progress. As stated on page 127: "The perennial search for profit leads to unending innovation and business transformation! Every business re-makes itself to survive."

And that is just a small nibble of the wonderful insights this book has to provide, now go read it!

Works Cited
Wight, Jonathan B. Saving Adam Smith. Upper Saddle River: Prentice Hall, 2002.


Question of the Post: If Adam Smith were able to come back to life, what do you think he would suggest to fix the economy?

Miss Economist Update

Hello everyone!

Sorry I haven't been blogging for a while (you gotta love high school)! My exams ended and I just started working on another post which should be up soon! Keep checking back and thanks for the support!

~Miss Economist

POV on Poverty

So for a school club I'm in we had a Multicultural Day where students have a booth where they research a bit about a certain country. I signed up to host a booth and was assigned to my country, Kenya. I was just perusing through the CIA World Factbook Website to catch snippets of important statistics I could use for my poster and I saw Kenya's estimated unemployment rate: 40%. Then, I researched the GDP per capita: $1,600. This got me thinking. How does one get caught in the seemingly never ending cycle of poverty?

Well, I came up with a few possible answers: lack of a sufficient education for the masses, expensive health care, natural disasters, and corruption of the government.

If you want to become a CEO of a major company or a powerful lawyer, how are you going to get there? The answer is simple: an education. However, many children do not have access to a local school because either the school is too far or too expensive. Some children do not even have parents to provide for them. How are we going to get children off plantations and into classrooms with teachers? If an educated man loses his job, there are still so many other opportunities he still can branch out to. An uneducated man, however, can only perform one form of job, manual labor.

Well, we can even take this down a notch. What if you were a miner but can't afford the proper health care to oversee your health? If you break your arm, your job is gone. Your life spirals down into the abyss of poverty. Some causes of poverty are beyond our control, like a corrupt government. What if your nation's government claims to be creating all these awesome reforms and providing benefits for those below the poverty line, but just eats up all that money for itself?

Let's say you have a farm. It's profitable and life for you is going pretty swell. Alas, a devastating storm hits your area. Your land is no longer fertile and is ravaged by the brutal environmental factors. Now, I don't know about you, but I'm not exactly the one who controls the storms of the world.

Is poverty an ugly side of our socio-economic model? You tell me.

Question of the Post: What do you think is the cause of poverty? How can this issue be resolved?


Works Cited:
CIA - The World Factbook https://www.cia.gov/library/publications/the-world-factbook/geos/ke.html

Cartoon #1

Hey readers! I will start adding my own original cartoon series to this blog (Forgive my drawing please!). Feel free to leave comments!

Recession and Depression

So, the other day, I was reading my AP World History textbook and the following excerpt came up: "In 1929 the normalcy of the twenties fell apart. Stocks plummeted; businesses went bankrupt; prices fell; factories closed; and workers were laid off." Um, HELLO? I don't know about you but to me, doesn't that sound awfully familiar? It's like deja-vu all over again. The rest of the section in my book went on about the Great Depression...which got me thinking...is America going into another depression?

Or more generally, what's the difference between a depression and a recession? One of my oh-so eloquent friends described the difference as so: A recession is like not being able to buy your fave Coach shoes...but a depression is like not even being able to buy Payless shoes! Yes, I have such great friends now don't I ;-).
In more technical terms? Well there are a multitude of definitions, so there isn't really a perfect right answer. Most economists state that a depression is a severe recession that is marked with high levels of unemployment, a decrease in the GDP, and a stock market crash. But then again, different people have different definitions.

An old economists joke to add some humor (or not) to your day: A recession is when your neighbor loses his/her job. A depression is when you lose your job!

Question of the Post: Is this the start of a depression?


Works Cited
Bulliet, Richard, Pamela Crossley, Daniel Headrick, Steven Hirsch, and Lyman Johnson. The Earth and Its Peoples. 3rd ed. Boston: Houghton Mifflin Company, 2005.

Madoff as an Icon of Greed?

We see his face plastered on every news channel and his name constantly mentioned in everyday conversation. Madoff this, Madoff that, Madoff, Madoff, Madoff. He organized one of the largest investment scandals of all time. He has been compared to Ponzi, a notorious scam artist from the early 1900s. Madoff, a former chairman of NASDAQ (a highly prestigious position), took roughly 65 billion dollars from investors and now faces 150 years in jail (even though he is already 70).

So, this a failure of the checks and balances system and lack of regulation in companies by the government. Not to mention the product of greed. After all, he is human, just like us all (including investors). However, this is not a failure of economic models.

But really, what I wonder is why the most experienced investors in the nation didn't realize what was going on. For example, if you give me $10 and I tell you that it will become over $50 in just a few months, would you buy into it? Wouldn't you think it was all a scam (especially with the weak economy)? Why didn't the top investors (few who also were said to be experienced economists) take the initiative to question the rationale behind the whole thing?

Now you may be wondering how all this relates to you. Well, Madoff was extremely involved in philanthropy for charities and universities, which have greatly suffered as a result of the scandal. If the average cost for an education for one year at a private college is...let's say about $40,000 and we divide how much money was involved in his scheme by the tuition cost, 1,625,000 students would have had full scholarships for one year at a private college. 1,625,000 people. Wow.

Question of the Post: What do you think of the Madoff scandal?

Recession, Recession, and....More Recession!

Recession. Yes, we hear this word constantly in our lives nowadays. We hear this word on the news, at home, everywhere and anywhere. But, what does this word mean?

Well, Merriam-Webster.com defines recession as..."a period of reduced economic activity" (Source: http://www.merriam-webster.com/dictionary/recession).
Sure, sure, but that's just "dictionary language." What about in everyday-when-I'm-living-my-normal-life language? Well, for some teenagers, recession can mean that your parents refusing to buy you a shiny new Ipod Shuffle or people's mood being ruined upon seeing their stocks plummet. Recession is ubiquitous and affects (almost) all of us.

Let's assess a major effect of the recession which can even impact our students' life, the credit crunch. Simply stated, a credit crunch occurs when it is harder to obtain a loan from the bank. For example, when we head off to college, it will be more difficult to get a loan because of stricter requirements and higher interest rates. Hopefully, President Obama has an effective solution for the student loans in the future.

So, the ever probing question is, when will all this end?! Alas, Adam Smith (if he were to be alive right now) probably wouldn't even know. I mean, come on, we're not fortune-tellers. Asking about the end of the recession is like asking a weatherman if its going to rain in five weeks. But, I think the real question is not when the recession will end, but what will end it.

Question of the Post: What do you think will end the recession? Leave a comment to contribute!

Welcome!

Hey everyone! Welcome to Miss Economist's Blog! Here I, a typical high school teenager, talk about my view on the economy today. I am still learning the ropes of economics, just as today's middle(and very)-aged leading economists are still learning too!

When people meet an economist, they immediately ask, "When will America come out of this recession?" However, I do not know the answer to this question...neither do the top economists who write for the Wall Street Journal. Not even my all-knowing dog Penelope (Penny for short) can. I am here to slay the misconception that economics is the "dismal science."

Feel free to contribute to the discussion by commenting! (Any inappropriate comments will not be tolerated)

Once again, welcome!