The Snuggie

Follow the link in the title to a USA Today article on the Snuggie. The Snuggie is the latest product to make the jump to pop culture icon. Why has this product become so popular. There are a host of other blankets-with-sleeves (a.k.a. “robes”) on the market, from the “original” Freedom Blanket to the socially conscious but awkwardly named Slanket. One upscale version, the Nuddle, even includes a pocket in front for your hands and another at the bottom for your feet (the Nuddle is so upscale that it doesn’t have sleeves, it has slats).

Niche-marketed blankets didn’t catch on last winter, when home heating costs skyrocketed with rising fuel prices.

So why now?

According to their ads, 4 million Snuggies have been sold in the past 3 months. Could the downturn in the economy have anything to do with the increase in infomercials and sales of these products?

Have you ever fallen victim to one of these must have products? Think "Shamwow", "Chia Pet", "Loud and Clear", etc.

Are Newspapers a Thing of the Past?

Precious News
by Kevin Zhang

News of Barack Obama's historic election on November 4 dramatically increased demand for newspapers on November 5. Tall, bold headlines announcing the nation's new president transformed copies of the daily paper into collector's items. Though many publishers printed thousands of extra copies in anticipation of higher demand for their post-election issue, at newsstand prices, supply simply couldn't keep up with the surge in demand. On Wednesday morning, many looking to own a piece of history found only empty news boxes and long lines in front of newsstands.

Not surprisingly, copies of major newspapers' November 5, 2008 issue began selling for as much as $200 on eBay and Craigslist.

This is a classic example of how a market responds to an increase in demand. The market equilibrium on a normal day for newspapers is at point A with price P1 and quantity Q1. As the demand curve for newspapers shifts rightward from D1 to D2 (people want more newspapers at any given price level), both equilibrium quantity and equilibrium price of newspapers increase as a result—from P1 to P2, and Q1 to Q2. On November 5, the quantity of newspapers supplied increased in part because publishers anticipated higher demand and in part because they scrambled to reprint when demand was even higher than expected. In the end, more newspapers appeared in the market, and at higher prices. The new market equilibrium for newspapers on November 5 is now at point B.

Though the consequences of the sudden shock in demand for November 5 newspapers are pretty much as expected, the reasons behind this shock are not so clear.

Though newspapers received renewed attention after the election, newspaper circulation has fallen steadily across the country for years. The ease of instant access to up-to-date information and the accessibility of free content have turned many readers to the Internet for news. The spike in demand for newspapers after the election raises interesting questions about the value of the daily newspaper in a digital world.

With the prominence of the Internet, why do you think people still wanted physical copies of newspapers with news they probably already knew? What factors do you think drove up the value of newspapers after the election? What do paper newspapers have that websites do not?

Are Women About to Become a Majority of the U.S. Work force?

Check out this NY Times article about a truly historic economic event. Women are about to make up the majority of the U.S. labor force. Read the article and see what you think. Is it time for a little role reversal. Is it time to redefine our beliefs about gender responsibilities?

Which Jobs are Recession Proof?

Recession-proof
by Kevin Zhang


Doomsayers are coming out of the woodwork en masse as 2008 ended during a dismal economic downturn. With consumer confidence at an all-time low, the financial industry shell-shocked as grand, monolithic companies crumbled all around, and nearly 2 million jobs lost in the past year, the end looks nigh indeed.

But before you don your sandwich boards and raise high your signs, things may not be as bad everywhere as they seem.

The economy rises and falls in what's called a business cycle. Some years are relatively prosperous with rapid economic growth and expansion while other years see the economy contract or stagnate. These fluctuations last over periods of years and their timing is largely unpredictable.

Some firms stick with the general trend of the market, their business conditions weakening when the market weakens, strengthening when the market recovers. These are procyclical firms. Others, countercyclical firms, do the reverse; their business conditions weaken when the times are good, and strengthen when times are bad. There are still other industries that don't depend on how the economy is doing at all.

So, while the bankruptcies and bailouts get the boldest headlines these days, here's a brief list of industries that are doing just fine.

The funeral services industry depends more on long-term trends such as aging populations and baby booms rather than on the twitching of the stock ticker. And of course, it also helps that their services are always in demand.

The entertainment industry is another good example. Revenue from concerts and movies have stayed strong during this economic downturn. Faced with gloom and doom, many find the few hours of escapism well worth the price of admission.

Discount stores, most notably Wal-Mart, are attracting cash-strapped customers looking to get the most out of their money.

As jobs get scarcer, going back to school makes a lot of sense for those looking to weather the fierce competition in the job market and to improve their skills and credentials. According to the Labor Department, the education industry has added 9,800 jobs in November.

Can you think of any other industries that are counter-cyclical? Has the recent recession caused you to rethink your career plans?

The World Clock

This is a repeat of an older post, but I still love this site. Check out the world clock. Do you see any trends? Any of the numbers surprise you? Check out some of the other features on the site.

We are moving back to this site

We will resume our blogging project on this site. You may still use the wetpaint.com site to get class notes and to reference the other resources on that page, but our blogs and responses will now be posted on this site.
Mr. Pye

Texas to Execute 10 Men in a Month

We spoke about this in class the other day. This is one of those hard issues that you need to think about and have an opinion on as an adult. Remember you vote for candidates that share your views on the issues. This is one of those issues. Where do you stand on the question of capital punishment?

A Call to Action

Check out this op ed from Robert Samuelson at the Washington Post. As young voters it is now your responsibility to take charge of your own future. What do you think about the author's ideas?

A Hippocratic Oath for Business People?

Over the past year the credit crisis has erased trillions of dollars in investor wealth. Peoples retirement funds, savings for college, and home equity have disappeared almost overnight. The economic downturn has now spread worldwide, with one country, Iceland, teetering on the edge of bankruptcy. Business executives assuredly played a part in this catastrophe.
Perhaps it is time to come up with a business version of the Hippocratic Oath, taken by doctors and medical workers. This interesting idea is the thesis of this article taken from the Economist magazine. Sound like a good idea or not. Can you think of any unintended consequences that might arise?

What happened to all my money?

editor's note - There will be two articles to comment on this week to make up for last week.

Read this interesting article about what constitutes money and what doesn't. Will the events of the past few weeks cause a fundamental change in our assumptions about the market, and how we invest our money? The Great Depression caused our grandparents to lose their faith in banks. What lessons do you think we will come away with from this current crisis?

Law of Unintended Consequences

When the government gets involved in situations, we often see that unintended and unanticipated consequences arise. A perfect example recently occurred when the Nebraska state legislature passed a "safe haven" law designed to protect mothers who drop off newborns that they are unable to care for at Nebraska hospitals. Read the article and leave your comments. Can you think of any other examples of the law of unintended consequences when the government tries to fix something but messes it up even more?

Is it Time to abolish the Penny?

With all the doom and gloom of the previous week, I thought it was time for a lighter post. Follow the link above to an activist website dedicated to abolishing the penny. As you know the Mint just announced its plans to introduce four new designs for the penny. Leave your thoughts on this and on the penny in general.

A Return to New Deal Intervention in the Economy

While we were suffering along without power, it was a week for the ages on Wall Street. By Wednesday, the Dow was down 800 points, and was poised to drop further. The Federal Reserve decided to keep interest rates unchanged. Financial heavyweights like Merril Lynch, Lehman Bros., Morgan Stanley, and Goldman Sachs were declaring bankruptcy or agreeing to be sold to the highest bidder. Gold prices were surging as investors dumped their stocks and invested in gold. Oil prices began climbing again. It was truly a grim situation.
Then on Thursday, word leaked out of a possible government plan to stop the bleeding. The government would step in and start buying up these bad mortgages that were killing the banks and financial firms. The plan is still being worked out by Congress, but it offered hope for a long term solution. Stocks rebounded and the Dow ended on Friday where it started the week.
Here is the problem: $30 billion to save Bear Stearns, $85 billion to save AIG, $500 billion to save Freddie Mac and Fannie Mae, and now as much as $1 trillion to buy up bad mortgage debt. We really don't know how much this bailout will cost.
Should government be in the business of saving the banks from their own bad decisions? It was the banks that made these bad loans in the first place. Will business owners continue to make poor decisions knowing that the government will always come to the rescue. Can we continue to keep spending money like this? What would Adam Smith say?
-or-
Was this action necessary to save the U.S. economy from collapsing? Doesn't the federal government have a responsibility to do what it can to keep us out of recession?
Read the articles and decide for yourself. Post your comments on this wild week.

The High Price of Gas Changing Our Driving Habits?

Read this article, and comment on whether or not the high price of gas is changing the way you drive or even how much you drive.

The American Worker

In honor of Labor Day, read this article about the American worker and leave your comments.
"American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year."

Assignment #1

Follow link to Reffonomics.com, click on Macroeconomics Textbook. Read all parts of first section "What is Economics?" Take online "Hot Potato" Quiz. Print off score sheet after quiz and turn in at the beginning of class Thursday August 28.

Welcome Class of '09

Welcome to AP Economics. This blog will contain readings and assignments that will need to be completed weekly. You must comment on all posted articles, and comments must be a minimum of 50 words. All posts for the week must be completed by Friday at midnight. Any posts made after that time will not be counted.

Monkey Business

As you all know, I am no big fan of monkeys. However, this is a pretty interesting article on the research being done by a Yale economist testing the economic behavior of a group of Capuchin monkeys.

Is the Housing Market Really That Bad?

Check out this story about a new incentive that home sellers can offer potential buyers, the "death incentive."

The Argument Over Free Trade Continues

Read Mankiw's latest regarding the ongoing debate over free trade. Economists and the public are at polar opposites on this issue. Now it is bleeding over into the presidential race.