Wells Fargo Scam

Wells Fargo has reached a $110 million preliminary settlement to compensate all customers who claim the scandalous bank that opened fake accounts and other products in their name. In September of 2017, the bank opened up to 2 million fake accounts to meet unrealistic sales targets that have since been eliminated. These accounts were created in order to generate profit and meet the sales margin.

Wells Fargo said that the payments to customers will be in addition to refunds the bank has already paid out. The settlement is expected to cover several lawsuits: One in May of 2015, a separate one launched in September 2017 by customers, and over 10 others as well. This settlement marks a reversal from when it tried to kill a fake account lawsuit by forcing victims to resolve their claims quietly in closed-door settings rather than in an open court.

In a CNN Report, Brian Kennedy, a retiree from Maryland who was one of the first to discover that Wells Fargo had opened a new checking account that he never asked for. He says, "It really pissed me off. […] They expect people to not be paying attention and hope that you don't notice."

Despite this new settlement, Wells Fargo does not seem like it is moving away from its practice of enforcing the fine print agreements that require customers to enter arbitration when issues arise. This has been criticized because it allows companies to hide misbehavior in private ways, rather than opening it up to the public. "They continue to believe that arbitration is an efficient and effective way to resolve dispute," a Wells Fargo spokesperson said.


https://money.cnn.com/2017/03/29/investing/wells-fargo-settles-fake-account-lawsuit-110-million/index.html

The Socialism of UBI

Universal Basic Income (UBI), also called the "Freedom Dividend" by its proponent Andrew Yang, is a policy to give American citizens $1,000 per month in order to offset the diminishing labor value caused by automation. This policy does not only address the consequences of automation, but also the ignored labor value of necessary social work, including mostly motherhood and elderly care. However, this post will focus primarily on how UBI will tackle the problems of automation, and whether its socialist prospects may have any bearing on the future of liberal economy in the United States.

John Maynard Keynes, one of history's most prominent economists who's work is widely recognized by governments in devising macroeconomic policies, states that "due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour." (Keynes, 1933, p. 3) This prediction of widespread technological unemployment is precisely what we face today. In a 2016 article, researchers Frey and Osborne from Oxford University estimate that 47 percent of total U.S. employment is in high risk of being replaced by automation in the next decade or two (by 2030) Similarly, McKinsey Global Institute estimates that 23 to 44 percent of total U.S. work hours could be automated by 2030. As residents of the Silicon Valley, we are fully aware of the capabilities of automation. From fully automated Tesla assembly lines to self-driving cars, the most popular jobs are being endangered by technological innovation. According the United States Department of Labor Bureau of Labor Statistics, the major occupational group that has the highest employment is office and administrative support occupations at 23 million. This occupation is projected, by the same statistic, to decrease by 2.6 percent in 2028. It is unclear whether this government projection has factored in how dramatic of an impact automation would have, but that is still a $22 billion decrease in total income in the occupation. It is evident that no matter the accuracy of this projection, jobs in the field will be heavily replaced by autoresponder software, email/meeting schedulers, and an array of technologies that are already being used pervasively. Yang extrapolates the effects of automation onto retail, manufacturing and product transportation jobs, in which he claims the lower echelon of Americans are reliant on. Needless to say, every industry will be transformed dramatically by automation, and the general trend, as supported by the data, shows that labor value diminishes regardless of the type of occupation.

Democratic candidate Andrew Yang proposes a unique solution to the problem of automation by encouraging individual redefinition of their own labor value through a $1,000 guaranteed monthly income. Critics point at the socialist implications of this policy. Yang counters this by arguing that this will not undermine economic competition given the fact that every competitor, or American citizen, will receive the same amount. However, the amount $1,000 is calculated through the approximate labor value automation is diminishing. The purpose of this post is to examine the hypothetical, but fairly likely event of automation causing an exponential decay of labor value, which would guide a government adopting the UBI to increase this dividend even more.

Traditionally, advancement in technology had decreased the labor value of unskilled workers and increased the labor value of skilled workers. The idea is that technology influenced the labor market in a limited way because it required human operation and maintenance. The modern technology, backed by standardization and better-documented research, aims for robustness and autonomy. This undermines the two largest labor groups in an advancing industry--the operators and the technicians. This problem is downplayed by the layers of complexities which plague our current economy, including bad trade deals (an idea advocated by Elizabeth Warren) and excessive infrastructure spending. Another reason why automation is not identified (at least mostly unidentified by politicians) as a cause of our nation's employment crisis is due to the last largest wave of automation, which was during World War II. Military production opened endless employment opportunities, and the incorporation of streamlined, partially automated assembly lines weren't an issue to the bottomless labor pit. The automation revolution which happened during World War II is highlighted in an article featured in Cambridge University Press's Enterprise and Society academic journal on business history. The article was written by Professor David A. Hounshell at Carnegie Mellon University who had completed award-winning academic works on American manufacturing history. The article explained that the focus on creating transfer machines, or "Detroit automation," during World War II spurred a period of excitement for automation in manufacturing, which gave rise to the more flexible "building-block automation," undermined employment in the manufacturing sector, and provided an underlying framework for modern automation ("full automation") we have today.

Knowing the history of automation and its relationship with the labor market, we see that the means of production is quickly being compromised by self-sustaining systems. Not only production, but certain services that require less technical skill are also being compromised. However, consumption has increased and unit cost has decreased. This is a sign of healthy economic exchange with an unhealthy labor market. Yang proposes to maintain the consumer market and change the labor market independently by allowing automation to take hold, while the laborers can use their basic income as a relief fund to transition to a different occupation. However, if autonomous technology continues to advance, more and more jobs will simply be displaced. The labor market will be restricted to an unprecedented extent. At some point, this universal basic income would become the income of many who are unable to find their own niche in a labor world dominated by automation. If our population depends on an income distributed by the government, which was extracted from the value of products or services provided by autonomous technology, then wouldn't our society be effectively socialist, or even communist? We essentially own our own means of production, which is money to purchase the products of an autonomous system which demands no returns. The problem of diminishing returns would no longer be an issue, which is effectively what Marx attempted to solve with his communist ideologies. The idea that the market would remain equally competitive after offsetting the individual costs of labor displacement is rather naive in the face of aggressive technological change. The proposed mechanism gives the people access to the means of production, or what $1,000 is equivalent to in production. With the means of production being gradually compromised by a system designed by humans in sole service of human beings, would UBI be a transition to a society where each person owns their own means of production at near-zero labor cost? Would our current economy model, which has been functionally successful for the last two-and-a-half centuries, finally be toppled by the diminishing value of human labor and a new age of low-cost production?

The Success of the Jeep Wrangler

With roots dating back to World War II, the Jeep Wrangler has become one of the most iconic cars in American culture. Starting off as a small two-seater vehicle, the Wrangler has grown into a sought after big SUV, earning the title of #1 Most Wanted Car in 2017, according to CarMax. The Jeep is one of America’s favorite cars, so how did it reach this popularity?

A large part of this is the Wrangler’s heritage. Still resembling the original Willys Jeep, used by American troops in World War II, the Wrangler taps into the patriotic sentiments of car buyers. For instance, one Wrangler owner can be quoted as saying, “The brand means a lot to me. My grandfather was in WWII, so I feel the connection to the brand through that.” 

The Wranglers only close competition, Hummer, is no longer in production, meaning the Wrangler reigns supreme with an excellent approach angle and ground clearance, necessary to drive the SUV over rocks. This is another part of the Wrangler’s identity, a rugged and tough machine, which can be driven practically anywhere.

However, what is likely the biggest appeal of the Wrangler is its customization capabilities. The doors and ceiling of a Wrangler can pop off like legos, giving owners the opportunity to make their Jeep the very own. The aftermarket customization industry for Wranglers alone is big and estimated to hold a decently sized share of the 41.6 billion dollar off-road industry. 

In total, the Jeep Wrangler’s success can be attributed to both its circumstances and the way it is marketed to consumers.

Sources:

https://www.forbes.com/sites/davidvinjamuri/2018/02/21/jeeps-big-gamble-staying-the-course-with-the-new-wrangler-jl/#7b12664d34f0

https://www.cars.com/articles/ultimate-jeep-head-to-head-wrangler-rubicon-versus-grand-cherokee-trailhawk-1420692461207/

How Warmer Winters Will Impact The Ski Industry

Ski areas in coastal mountain ranges, such as the Sierra Nevada and Cascade Mountains, whose winter temperatures hover around freezing, are in danger of being significantly hurt by rising temperatures. California has already warmed up by 2 degrees Fahrenheit since 1950 and is on track to rise by over 9 degrees if current rates remain constant. Since 1970, the snow line in the Sierra Nevada has risen as high as 1,500 feet and is only set to speed up. 

For most ski resorts, a 100-day season is required to stay profitable, and a large portion of this is attributed to the Chrismas and Spring Breaks, which happen to be at both ends of the season. This means that as the season shortens, the most profitable weeks for ski resorts will go away, leaving many resorts struggling financially. On average, the ski industry sees around 7.5 million skiers a year, generating 1.6 billion dollars in revenue. In low snow years, these figures decrease by 1.3 million, and 100 million, respectively. 

In order to combat the seemingly inevitable drop in snow levels, many resorts are beefing up their man-made snow production capabilities. For instance, Squaw Valley, a resort in Lake Tahoe recently invested nine million dollars into snow production. According to Daniel Scott, a Climatologist at the University of Waterloo in Canada, if current emission rates remain constant, around 103 ski resorts will have to shut down by the 2040s. 

While climate change will surely impact ski resorts, it is not too late to take action, as any small changes one makes may be the difference in being able to enjoy a power day with his or her grandchildren.

Sources: 

https://www.sfchronicle.com/travel/article/How-ski-resorts-in-California-are-preparing-for-13785547.php#photo-16492313

https://www.hcn.org/articles/recreation-ski-resorts-prepare-for-warmer-northwest-winters

https://www.cnbc.com/2019/03/20/climate-change-is-taking-a-toll-on-the-20-billion-ski-industry.html

Cost of the Death Penalty

      Through our human history, there has always been a punishment of the most heinous crimes. This punishment is the death penalty. In the United States, the death penalty is a legal way to punish someone by death for a capital crime. Now the death penalty is controversial in terms of ethics, but it is certainly not good economically. The death penalty is an extremely expensive process. In California, the cost of death row is "$114 million a year beyond the cost of imprisoning convicts for life".
   California has only executed 13 people since 1976. This means that California on average pays 250 million dollars per execution. That is outrageously expensive given that these are criminals. Why should the taxpayers have to spend their hard-earned money on paying to kill a criminal?

   Other people just wonder why it costs so much money to be on death row. It costs so much money because to convict someone and sentence them to death they need to be on death row for 15 to 20 years. This is the length of the extremely long appeals process. The process must be this long because under the law it is hard to sentence someone to death. There needs to be a second trial with new witnesses and additional costs. Along with more witnesses, they have to find more jurors and it is an especially long process because death row cases must be done more carefully.

   Overall it would be beneficial economically to get rid of the death penalty so that taxpayers do not have to pay extra money to a criminal. When money is not spent on the death penalty the government can spend the money on schools or infrastructure. That would be more beneficial than killing a guilty man.


“High Cost of Death Row.” The New York Times, The New York Times, 28 Sept. 2009, www.nytimes.com/2009/09/28/opinion/28mon3.html.

Forgiving Student loans could boost the Economy

   As we are nearing the 2020 Presidential Election, candidates are discussing ways to better the United States. One of the more recent ideas were from Democratic candidates Bernie Sanders and Elizabeth Warren. If either of them were to become president they would want to get rid of the student loans that were taken out by students for college. Elizabeth Warren wants to get rid of "$50,000" of student loans per student and Bernie Sanders wants to forgive all student loans. Although this concept sounds outrageous there might be some benefits to the plan.

   Lawrence Yun from the National Association of Realtor's chief economists even thinks that it would be beneficial to the housing market. Over "1.5 trillion dollars" are locked up in student loans and if some of that burden was gone people would buy homes at a younger age and would be able to spend the money and stimulate the economy. He also said that student loads delay home "ownership by 5 to 7 years". This relief would allow people to go out and buy homes and boost the economy.

   Even after all of the benefits, the plan might still create more debt. But many politicians suggest that they shift the weight of the burden more on the upper class who can afford to pay more taxes. This way the people can get educated and can stimulate the economy without worrying about paying for their college.

   Overall as the next election approaches it is important to consider the new ways that the United States could adjust our economy to better the entire United States. With more consideration and thinking there might be a way for more citizens to become better educated while staying under budget.

Arnold, Chris. “Economists Say Forgiving Student Debt Would Boost Economy.” NPR, NPR, 25 Nov. 2019, www.npr.org/2019/11/25/782070151/forgiving-student-debt-would-boost-economy.

How to Make Money on Instagram?

Recently, when I log in Instagram, I notice that ADs are coming to the top of my pages more frequent than before. Sometimes, I hear people talk about how popular Instagram posters are making money from their posts. I wonder how they make money on Instagram and start some research in this topic.

There are 5 business models to make money on Instagram.

1. Make money from sponsored posts
Cooperate sponsorship, a form of marketing in which a corporation pays for all of some of the costs associated with a project or program. Marketers would give money to influential posters to help advertise their products. By knowing what your audience like, posters can make cautious of their posting concepts and prefer cooperate with companies that sell products similar to their interests.

2. Sell other people's products
Affiliates can make money through continuously promoting the products and linking a promo code in their posts, making sure that viewers would be encouraged to purchase the products.

3. Sell poster photos and virtual products
 Artists can make money from selling their photos to big brand companies.

4.Sell own physical products
 You can be a seller and sell your products directly.

5.Sell drop shipped products
Drop-shipping is a business model in which one can run a store without having any inventory. If consumers decide to purchase your products, then you can make products based on their needs.


References:
https://www.oberlo.com/blog/make-money-instagram

Stanford Alumni Generate $3 trillion in Economic Impact Each Year

Why Stanford University is becoming more and more popular over the years? When my family first moved to California, we wondered what makes Stanford the most wanted to go school for many students. I've heard of several tech companies were established in Stanford campus, but is still questioning about the impacts of Stanford.

According to the recent study by Stanford University, "companies formed by Stanford entrepreneurs generate world revenues of $ 2.7 trillion annually and have created 5.4 million jobs since the 1930s" (Beckett).

It's really amazing that one university can support so many jobs and creates huge revenue for the market. In class, we discussed several revenue models that companies used to generate benefits. Stanford is an expensive university but also is known for the most generous university to provide students resources and low-income students free tuitions. It's not only a school for education but also a school that knows the most profitable revenue model.

Stanford's revenue model->
Stanford encourages students entrepreneurs and creates profits from all kinds of business.

Stanford understand that it's important to not rely on one kind of business, but on multiple businesses. Multidisciplinary learning or multidisciplinary business can help to boost individual and companies' growth. As we learned in class that amazon, google, facebook are creating multidisciplinary markets to increase their revenue model. Stanford is applying the same rule!






References:
https://news.stanford.edu/news/2012/october/innovation-economic-impact-102412.html

The Effect of torrenting games

(finally I get to show off Persona 5 ;) )

We have all been there. Downloading music for free from websites such as YouTube, going onto some websites to read comics for free without purchasing them, or torrenting games for free from websites. Yes, all of these are technically illegal and some might say that they are hurting the game developers and all the people who worked hard to produce the game as well as fans that actually paid the full price to play the game which is true; it is not fair to them or is it moral for people to rip them off.

So it might sound surprising to you when I say that companies actually benefit from people pirating their work as it creates a bigger fandom base or people consuming their products. In the report taken back in 2014 by the EU commissions found out that "illegal downloads of video games do not affect sales" and figured out how these illegal actions were really affecting the market.

This by no means meant to be a message to say, "Go and pirate all the games you have been wanting to play!" No, that is not my intention at all. It is quite interesting to see how there researchers saw a positive trend to the market though as they successfully converted "illegal users to paying users". Some tactics companies uses are extra bonuses on their purchase of the game through legal means such as character design books, merch, and special features in games to list a few.

The gist of the whole situation is that, "there isn't enough data to show that there is a financial loss for companies when European copyright law is violated" in contrast to how illegal consumption of games lead to increased legal consumption; where there is positive growth.

As mentioned earlier, people that fall in love with the game and want more of it tends to lean toward supporting the companies that produces it and actually start to pay respects to it by legally purchasing them from then on. Most people have the fear of trying out new games for they are afraid of ending up not liking it, and wasting a lot of money for it but these illegal practices allow players to try out new games without a lot of consequences... if they are careful enough that is.

Source: No evidence that piracy affects video game sales – EU Commission
The actual study

A tragedy in an online shopping

Two weeks ago, China's online shopping software, Taobao, had a serious incident. (I explained what Taobao is in a previous article, and you can directly understand it as the Chinese Amazon).

A video blogger with 550, 000 followers named "passer-by A" (his video was posted on a website called Bilibili, which can be understand as Chinese Youtube) discovered that one seller on Taobao had mislabeled the price of an orange and accidentally changed the price of an orange from 26 yuan per 5,400 grams to 26 yuan per 4,500 jin (1jin=1/2 kilogram).

According to people's common sense, it is impossible to get only 26 yuan for 4,500 jin of oranges. However, the video blogger did not choose to remind the owner or leave the purchase page. Instead, he led ten thousand fans, each of whom bought a lot of oranges. Tens of thousands of orders a night, involving up to 7 million yuan. 

However, the video blogger and his fans also know that tens of thousands of orders, each with 4,500 jin of oranges, are absolutely impossible to deliver, so he directly led his fans to complain about the store. According to Taobao's rules, if a complaint is successful, the buyer will receive compensation from the seller, so each person received 400 yuan in compensation. When Taobao sellers set up the shop, they will have a deposit of 100,000 yuan, which can be used to pay compensation to buyers. However, the compensation of 400 yuan for each 10,000 people is obviously not enough, so the sellers need to pay their own money to compensate these buyers.

Unable to bear the burden, the store posted a statement directly on his Taobao store, basically saying that it hoped the video blogger and his fans would bypass him and forgive him for his previous technical mistakes, and that he was unable to pay the compensation amount. But the result was ther'es so many unsolved complaints so the orange shop forced to close. 

It was the most serious episode to date, but the video blogger's actions were not uncommon. Taobao often has promotions large and small, so a group of people get together to study each offer and snap up the coupons together, causing the seller to lose money. Like the same shops selling oranges, lots of online seller manage their online stores with just a few workers, so there are also many stores wrong price of the product, or wrong promotion price, cause many people gathered together to buy the goods. The problems exposed by these incidents are still the imperfection of Taobao's policies, and there is no solution to this situation so far.

health insurance: too expensive?

According to the definition in Investopedia, health insurance is "a type of insurance coverage that pays for medical, surgical, and sometimes dental expenses incurred by the insurances".

According to a report released by Bankrate, most Americans can't afford even a minor emergency, with only 39 percent saying they have the village light to cover the $1,000 needed in the event of an accident. Health care costs have become one of the causes of rising poverty, and people need to borrow and borrow money to pay for the costs that are supposed to keep them safe and healthy. The cost of health insurance for American families is now more than $20,000, an exorbitant cost that is driving more and more Americans out of the insurance market.

Here are some specific examples:
-An employee at Walmart works 32 hours a week and earns only $10 an hour, so he makes only $20,000 a year, leaving him with no money to pay for the company's health insurance benefits.
-A worker named Susan DeVolid had just more and more medical bills after a heart attack, and his family had quickly exhausted their savings and racked up $8,000 in debt.


References:
https://www.huffpost.com/entry/most-americans-cant-afford-to-pay-for-even-a-minor-emergency_n_5a68e67ae4b0022830090e5b

Starships... are meant to fly?

Starships, based in San Francisco, is a robotic food delivery company that has becoming popular in college campuses as of recent. With their busy schedules, students often resort to delivery food for their meals but as mentioned before in my "Instant Food" blog, the usage of food delivery apps are not so optimal.

Starships has a better appeal to the market as they "operate from early morning till late at night, rain or shine, traveling at a maximum speed of 4 miles per hour, a fast walking pace designed not to scare people on the streets". They are safe to be around and more efficient! There is no need to worry about these robots running into places and getting lost for they use "sensors, cameras and radar to navigate the streets; artificial intelligence and premapped locations help the bots to know where they are".


This has been tested and been successful thus far in various of college campuses such as George Mason University. These robots are so successful that they are even changing the delivering groceries in England; not as much as the impact they have on universities but quite significant none the less.



With these demands of food delivery meeting up in college campuses, Starships continue to flourish and maybe someday, dominate not only the food delivery industry but other places where delivery is needed as well.



Source: Starship Technologies Raises $40 Million To Expand Its Food-Delivery Robots On College Campuses

Economics of Climate Change

We all know about the recent and serious warnings about climate change (if not, there are some helpful links below). Globally rising temperatures, melting ice caps, and warming oceans (along with ocean acidification) are all extreme environmental effects of this issue. Since these facts are not enough for some to become very worried, there are also major economic impacts as a result of the effects of climate change.

Estimates on these impacts show that they will begin to cost the U.S. from $296 billion to $540 billion (Martinich & Crimmins). Property and infrastructure damages, declining human health and productivity, and increased demand for energy due to lack of reliable power generation are all examples of this, along with disruption in trade as a result of the other countries that will be heavily affected. Agriculture, infrastructure, and tourism are among the most endangered sources of revenue for the United States that will be harmed directly by climate change effects, along with businesses.

Another source lists facts about the "economics of climate change," among them the points that low-income countries will lose larger shares of their economic outputs than others; the price of renewable energy is falling (meaning it will be more beneficial to use these sources as alternatives); "damages to the U.S. economy grow with temperature change at an increasing rate."

Extreme weather patterns, not completely linked to climate change but definitely affected in some ways, also cause extreme damages to the land and, therefore, to the economy, such as the fires (such as the many recent ones in California) and hurricanes. Because of these patterns, insurance companies will raise premiums, making insurance unaffordable to more people. Another current issue caused by rising sea levels and other natural extreme weather is immigration: "since 2008, 22.5 million people have been displaced by climate-related or extreme weather events" (Markham).

These are only a few examples of the economic impacts of climate change. Solutions are currently being searched for, with the UN, the Paris Climate Accord (from which President Trump announced the United States would withdraw), and multiple climate change summits. Hopefully, people (especially skeptics) will become better educated on the massive and irreversible effects from an economic standpoint, if they are not fully convinced by an environmental one.

Source Links:
- https://blogs.ei.columbia.edu/2019/06/20/climate-change-economy-impacts/
- https://www.nature.com/articles/s41558-019-0444-6
- https://www.brookings.edu/research/ten-facts-about-the-economics-of-climate-change-and-climate-policy/
- https://www.nytimes.com/2018/06/29/opinion/sunday/immigration-climate-change-trump.html
- https://www.thebalance.com/economic-impact-of-climate-change-3305682

Climate Change Links:
1. UN: https://www.un.org/en/sections/issues-depth/climate-change/
2. NASA: https://climate.nasa.gov/evidence/
3. IPCC: https://www.ipcc.ch/
4. GlobalChange: https://www.globalchange.gov/climate-change

how do youtubers make money

With 1.58 billion audiences, YouTube is the second largest online search engine after Google. I'm sure you've all seen YouTube video and have some favouraite Youtubers. More and more young people want to set up their own channels on YouTube, one of the reasons is that Youtuber can make a lot of money. For example, a Youtuber with 13 million followers made more than $10 million on YouTube; a six-year-old boy made $11 million by regularly reviewing toys; and a Youtuber who played Minecraft made $16.5 million by just playing games. So the question is, how do these Youtubers make so much money?

The first, and most obvious, is that youtubers make a lot of money from advertising. The first step for youtubers to make money on video is to join a YouTube partnership program that allows YouTube to pay youtubers for their views. Youtuber's revenue model is $3 to $10 per 1,000 viewers, and if they receive additional ads on top of that and insert them into their own video, YouTube gets a 45% cut and Youtuber gets a 55% commission.

In addition to direct or implicit references to advertising in video, viewers will sometimes see links to products in video descriptions that are part of affiliate marketing between youtubers and retailers, in which advertisers pay youtubers for clicks on product links.

You should also often see an entire video filled with ads, and youtubers using that video to introduce a single product launch or campaign. This is because these brands sponsor the Youtuber's channel, again, based on the number of hits to video, but this way the revenue of sponsoring video is higher than the above mentioned revenue.

Many youtubers have made video of "how Youtuber makes so much money", and they all mention that a large part of it is from advertising revenue. However, in order to win the trust and love from these brands and retailers, the first thing is to make a high quality video and has a certain base of audience in the channel.

reference：
https://www.thestreet.com/technology/how-much-do-youtubers-make-14743540
https://learn.g2.com/how-much-do-youtubers-make

Risk Pooling and Self-investment in Baseball

Baseball is a lucrative sport. Players get to play the game they love, for thousands of fans, and they can get paid up to an incredible $20 million every year.

That's if you make it to the national league, though. And the newcomers to baseball have to prove themselves in minor leagues, being paid a not-incredible $8,000 a year. These minor league players are essentially lottery tickets: if they get lucky and make the majors, they can earn millions of dollars. But most players don't. They stay in the minor leagues, at least making more than minimum wage, but not by much.

Luckily, some players have a solution: risk pooling, hosted by a company named Pando.

It goes like this: any number of players make an agreement, and if any of these players make the major leagues and earn a certain amount of money per year (say, $30 million), that player gives back 10% of his salary into the pool, $3 million in this example. Pando takes 10% of that money ($300,000) and the rest is distributed equally amongst the players. This contract runs until the major league player's career ends or they pay $20 million.

What's intriguing is that there is essentially no downside: either no players from the pool make the major leagues and everything is the same, or a player makes it big and pays a fraction of their salary to help their former teammates.

What's more intriguing is that some people refuse this deal because of its connotations. Pando is essentially taking these minor league players, major league hopefuls with so much confidence that they'll make it to the World Series someday, and telling them to consider the chances that they'll stay in the minor leagues for the rest of their career.

Another possible issue is the idea that these insurance policies may encourage players to be less competitive, since they don't need to try so hard to make a lot of money. They could even work to make someone else advance to the major league so they earn their portion. Then again, with such confident players, what player would sabotage their own chances to help another's?

According to Pando's CEO, 140 players are participating in 25 income pools, and three have made it to the major leagues. And of those 140 players, enough players are projected to make the major leagues that the collective salary is estimated to be $250 million dollars, meaning $25 million flows back into the pool for the rest of the players.

Source

Thanksgiving: The Recent Trends

Thanksgiving has been celebrated in the United States since before we even were united as a country. Today it's a significant holiday that grants time off from school and work, requires a whole lot of shopping, and is followed up by major shopping events (Black Friday and Cyber Monday). How does the holiday affect the average consumer?

According to the American Farm Bureau Federation, the average cost of a dinner for ten people in 2018 was about $48.90. This was a 22 cent decrease from the previous year. This may be due to a change in the price of the most expensive item, the turkey, which saw an average price drop of 3%. Around Thanksgiving, the demand for turkey increases. This seems like it would drive the price of turkey up, but it actually goes down as the agricultural industry prepares for the massive increase in demand each November. Turkey is actually at its lowest prices in November and December, right around Thanksgiving and Christmas dinner time. However, in 10 years, the per-pound price of turkey has risen 50 cents.

Consumers are also spending their money on airfare as people fly to see their families. The amount of passengers flying on U.S. airlines during the twelve day Thanksgiving period has been increasing each year. In 2018 it was about 30.6 million people, an increase of 5.7% compared to 2017. One of the busiest travel days tends to be the day before Thanksgiving.

Black Friday is the day right after Thanksgiving when many stores slash their prices in hopes of attracting customers. In 2017, about $2.9 billion was spent on Thanksgiving, and about $5 billion on Black Friday. However, Cyber Monday, a similar retail holiday, brought in $6.6 billion. Clearly, this time of year brings an increase in consumer purchasing behavior. The average American spends $175.65 ($10.51 up from the previous year) per person on Thanksgiving, largely due to travel costs.  Though the cost of a Thanksgiving dinner is decreasing, the cost of the holiday overall is on the rise.

Source:
https://www.weforum.org/agenda/2018/11/the-economics-of-thanksgiving/
https://www.theatlantic.com/business/archive/2014/11/the-economics-of-thanksgiving-dinner/383046/

weather-sensitive products

Does the weather affect product sales? The answer is yes. For example, umbrella sales are much higher on rainy days than on sunny days, and students buy more stationery before school starts. When consumers buy products, they will always consider the practicality of the product, that is, what they need to use at what time. In this process, they often take the weather into consideration and buy relevant useful things in the right weather. The weather determines what consumers eat, what they wear, where they go on vacation, and what products they use. The overall sensitivity of the U.S. economy to the weather is 3.4%.

While consumers take the weather into consideration, producers must also take into account how the weather affects the sales of products, and then change the price of products accordingly to carry out promotion activities in different time periods. In the United States alone, the weather has affected three trillion dollars worth of private businesses. Here are some specific examples:

• Bravissimo, a lingerie and conversion retailer, finds that its conversion rate rises whenever the sun shines, so it USES real-time weather information to show ads on sunny days. After three months of advertising, their revenues have risen 600% and conversion rate rose to 103%.
• In Spain, Coca-Cola used thermal-sensitive technology to change the price of vending machines. The higher the temperature, the lower the price of the drink, and the more people bought their drink.

The following chart shows what happens to a product's sales when it goes up or down by one degree Fahrenheit:

References:
http://www.weatherunlocked.com/media/1096/the-complete-guide-to-weather-based-marketing.pdf
https://www.adwordsrobot.com/en/blog/how-weather-influences-product-sales

Remember Bitcoin?

Around our sophomore year of high school, a company called Bitcoin blew up. At one time, very few people thought Bitcoin would ever make a serious impact on let alone the economy but the world. It was mainly viewed as a hobby or a "dream" rather than a real investment opportunity. However, because of its popularity in 2017, stories have changed. 

Bitcoin has impacted in economy in many different ways. For example, it eliminated the need for middlemen in financial transactions. One of the main features of Bitcoin is that it does not require an intermediary, like traditional currency does. Meaning, rather than a bank or central institution watching over transactions, bitcoin manages the transactions themselves. This worried banks, because it eliminates the needs for their services. 

It also removes barriers to entry. "Cryptocurrencies" have enabled citizens like entrepreneurs to invest in business ventures. Rather than convincing banks to invest in their projects, they an use Bitcoin. As you can guess, this totally complicates regulation. Companies like Bitcoin is potentially a huge challenge to regulate due to their structure. A currency company similar to Bitcoin, called Silk Road, created a massive "black-market" where users could buy illegal items without consequence. Luckily the FBI shut it down, but it does not stop new potential companies to do the same. 

Although Bitcoin has ultimately crashed, according to the stock market, cryptocurrency companies are in the end, dangerous. Being more vulnerable to cyberthreats, online fraud, and a system that could be shut down, you are better off investing in stocks that are wired around real U.S. dollars. 

https://www.technobuffalo.com/5-ways-bitcoin-affects-the-economy

How Teen Birthrates Affect Economy

In America, the rate of teen childbearing is unusually high. U.S. teens are two and a half times more likely to give birth as a teen compared to teenagers in Canada, and around 10 times more likely than countries such as Switzerland. Why is this? Teen births demonstrates variation in income inequality across the United States and developed countries. This can explain a sizable share of the geographic variation in teen childbearing. 

34% of young teen mothers earn usually earn neither a college degree or a high school diploma. And less than 2% of teen mothers earn a degree by the time they turn 30. Why does this affect the economy? Because teenage pregnancy significantly correlates with less education, which leads to a loss of earnings. This effects the economy negatively as a whole. 

The country's lost earnings from an increased number of highschool and college drop outs add up. it was estimated in 2012, that it can add up to billions of dollars of losses, mainly due to increased public health care costs. 

Although the U.S. nationwide teen pregnancy rate is dropping, the rate of teenage motherhood remain highest in states that promote abstinence- only policies. This provides insufficient and misleading information about their reproductive health has which negatively impacts the 

economy and the nation as a whole. 

https://thinkprogress.org/teen-pregnancy-negatively-impacts-the-national-economy-cc2901eaf705/

Disney and its Remakes

Recently, Disney has been coming out with multiple live action remakes, such as Dumbo, The Lion King, Aladdin, Mulan (2020), The Little Mermaid (2020), and most recently, Lady and the Tramp. Though I am a huge Disney fan, what is Disney’s motivation? 

One of the biggest reasons is money. While Alice in Wonderland and Beauty and the Beast earned more than $1 billion each, when audiences demanded original films from Disney, their original movies (such as A Wrinkle in Time, Tomorrowland) still fell short of $1 billion. It would be logical for Disney to turn to their established brands so they can target their audience with nostalgia using characters from their childhoods. People are more likely to see films with familiar story lines and faces. 

In the box office, familiarity rules as people want the classics and what they know. Disney can survive this way because it has become a part of our culture, and it becomes something that older adults want to pass down to their kids and grandkids. Thus, they will continue to crank out the remakes until people become uninterested and their revenue drastically drops, but the chances of that happening? Unlikely.  

link
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pet economy

As more and more people keep pets, the pet economy has been mentioned constantly. Millennials are a big part of the demographic driving this economy, willing to spend a lot of money and time on a pet, even more than on their own medical bills. When choosing a house, people also think more about whether they can keep pets or provide a good living environment for pets. There are more and more beauty parlors, hospitals and entertainment facilities for pets. Retailers, manufacturers, entrepreneurs, and inventors are clamoring to win a leadership position in the U.S. pet economy, with sales projected to exceed $75 billion this year. This is not the only year,  as statistics show that people have been spending a lot of money on pets, the pet economy is now growing more dramatically. Here's some data in 2015 that show how much people have spent on their pets:

• the U.S. Pet Industry generated $221.1 billion in total economic activity
• increased total value added by $102.3 billion
• the Pet Industry supported over 1.3 million U.S. jobs that paid more than $60 billion in salaries
• the Pet Industry and its suppliers and linked service providers contributed almost $14 billion

According to a report posted by the American Pet Products Association (APPA), the annual consumer spending up to over $77 billion on by pet parents on their pets annually. These include the manufacturing of pet supplies, toys, pet pharmaceuticals, grooming, boarding, and other services.

The statistics below are also gathered by APPA from various market research sources that show total US pet industry expenditures:

What is the cause of this phenomenon? Maybe more people tend to enjoy their times with animals, a pet is also endowed with more "human" attributes, followed by healthy pet food and nutritional snacks will become the market consumption upgrade, spend a lot of money on these services then is unable to avoid.

References:
https://www.americanpetprofessionals.com/tag/pet-industry-impact-on-the-us-economy/
https://www.americanpetproducts.org/press_industrytrends.asp

Later Start Times?

Waking up in the morning at 7am can be a huge struggle for teens in this generation. With increasing homework, competitiveness, and once-in-a-while all nighters is putting stress on high-school-age children. 

While some argue that delaying school start times would just cause teenagers to stay up later, however research does not support that idea. Six studies, two of which were randomized control trials, showed that delaying the start of school from 25 to 60 minutes corresponded with increased sleep of 25-77 minutes per week night. In simpler terms, students were waking up later, while still going to bed at the same time. 

Although this might seem like "a dream" in highschool, there are obviously costs to pushing back start times. For example, delaying start times does mean extending school till later. With later school end times, this results in later after-school activities which may interfere with parent's work schedules and run into evening hours. For activities such as football and soccer, outside sports, the instillation of lighting may be necessary. Other costs such as public transportations for most likely low-income families may be an issue. It has been estimated that increased transportation costs would most likely be $150 per student per years. 

Although this may seem like an issue, the added academic benefit of later start times would add up to about 2 additional months of schooling, which would be around $17,500 to a student's earnings over the course of a lifetime. Clearly, the benefits out-weight the costs. To an economic national scale, delaying start times to 8:30 or later would contribute to around $83 billion within a decade. As measured through car crash mortality and increased student lifetime earnings. 

So, the question I have is, is Los Altos Highschool ever going to take this into consideration?

https://www.nytimes.com/2017/09/13/upshot/the-economic-case-for-letting-teenagers-sleep-a-little-later.html

Farmers vs Tarriffs

American farmers have been struggling ever since President Donald Trump's trade wars with other countries. We are now facing billions of dollars in potential losses, as data shows from the U.S. Government statistics. Specifically crops such as corn is facing a huge downfall. 

The Agricultural Department stated that farmers planted a bigger corn area than analysts estimated. This pegged crop yields that also exceeded expectations sparking the biggest drought since 2013. You might not have realized this dilemma while buying produce at local stores, however the decline represents a potential loss of almost $3.5 billion for U.S. farmers. 

Manager of the research team at CoBank, a $138 billion lender to the agriculture industry, Tanner Ehmke stated "This is a huge disappointment for farmers that have already been struggling with a lot of uncertainty with this corn crop, trade wars and what have you. A lot of people were banking on the opportunity to sell at much higher prices." 

Crashing corn prices are one of the main causes for the huge farm debt which is estimated to be around $437 billion dollars. Lower prices could add to grower stress, and also push Trump to announce further aids to farmers as he unfortunately seeks re-election next year. Although Trump may have been a main cause for this issue he has announced $28 billion worth of financial help. 

https://www.bloomberg.com/news/articles/2019-08-13/u-s-farmers-stung-by-tariffs-now-face-a-3-5-billion-corn-loss

Questions Kids Ask

In AP Psych, we learned about the developmental stages while growing up. Ages 2-7 represent the preoperational stage, a period of time where children are too young to perform mental operations and use intuitive instead of logical reasoning. I remember being around this age learning about money and how it was actually paper. I continued to ask the question the obvious question, “If we need more money, why can’t we just print it?”

Turns out, it doesn’t work that way. If a country attempted to print more money, it wouldn’t make them richer, it would only raise prices and lead to hyperinflation. In 2008, developing countries such as Zimbabwe and Venezuela attempted to fix their economies by printing more money. Instead of allowing their economies to grow, printing more money caused prices to rise by 231,000,000% in a single year. To put this in perspective, an item priced at 1 Zimbabwe dollar cost 231 million Zimbabwean dollars a year later.

So, if printing money won’t solve the issue, what helps an economy grow? The answer lies in basic economics we’ve come to learn over the past semester. In order for an economy to grow, the production of goods has to increase, and they have to be successfully sold. This stimulates the economy creating a constant flow of money going in and out. This is also why when people save their money and do not spend it, it can lead to an economic recession. If nothing is being put into the economy, nothing can result.

However, there is one country that can get richer by printing more money, and that’s us, the United States. This is because other goods around the world are priced at US dollars. Therefore, if we want to buy more to stimulate our economy it is possible. If we were to print too much money though, that would lead us into hyperinflation. We just have a little bit more wiggle room than other countries given our economic state and success.

For those countries desperate to improve their economies and cannot just simply print more money, they avoid hyperinflation by allowing governmental control over prices. Laws are passed to keep certain things at low prices to keep them available to all.
The economy is constantly rising and falling, and it’s up to us as consumers to keep it stable. Buy what you can, reap the utility, and stimulate the economy!


Sources:
http://theconversation.com/curious-kids-why-dont-poorer-countries-just-print-more-money-107633

University strike from UK

Universities across the UK are facing widespread disruption after tens of thousands of lecturers and other staff walked out on strike in protest over pay cuts, increased pension costs and deteriorating conditions.


Union leaders reported a strong show of support on Monday for the industrial action, which will last eight days and could extend into the new year with a second wave of strikes if staff demands are not met.
Pickets had been set up at 60 universities that are taking part in the action, and the University and College Union (UCU) said talks were under way with other institutions about being balloted again to join further action in the new year.
More than 40,000 lecturers, technicians, librarians and other academic and support staff were taking part in the action, but the UCU said it had been processing requests from 3,500 more workers seeking to join the union since the strikes were announced three weeks ago.
University employers said they were doing everything they could to minimise the disruption to the million-plus students affected by strike action and urged the union to focus on continuing talks to find a resolution.