Wednesday, December 24, 2008

Merry Christmas

Is it wrong that the University of Notre Dame Football team is playing their post-season bowl game on Christmas Eve?

Wednesday, December 3, 2008

Picture This...

hockey, directed by Tex Avery

Change

This is another "idea" sent to President-elect Obama's change.gov web site.
    I'd like to see the administration create more jobs. The country needs them. But it matters what type of job is created. An out of work computer programmer may not want to (or possibly cannot) take a job as a construction worker that was created for the sake of creating jobs. It matters where the jobs are created. One reason the economy is in a recession is because a lot of IT (information technology) jobs have been "offshored" - companies cut costs by replacing domestic employees with contracted, lower wage workers in other countries (typically India in this industry, but not to single them out, there are other countries too). By moving jobs offshore, these companies are moving money out of our economy (for a U.S.-based company, a U.S.-based employee will spend money in the U.S. economy, while an India-based worker will not, so money is taken out of our economy), and that doesn't help. What I'd like to see the new administration do is to get those jobs back in THIS country. It will give great help to the flow of our economy.

Tuesday, December 2, 2008

Circle of Money

Without playing the game of "chicken and egg", the economy works like blood flowing in your body. It's recursive. Each part needs to do its job in order for the whole to continue functioning at the size that it does.

It works like this (again, without trying to establish who's the chicken and who's the egg in the example, or which actually comes first):

  1. People pay a company for their services (say a phone company or a cable company)
  2. That company, in turn, takes that money and distributes it to several of the following groups (this isn't intended to be a complete list, but rather to illustrate the point):
    • other companies, direct or indirect, for infrastructure and equipment
    • CEOs (this isn't meant to be a weighted list either)
    • Congressmen
    • Employees (through direct salary, rewards, benefits, and bonuses)
  3. Either directly, or through another company, each of those items brings money to people. People are consumers.
  4. People save some of their income, and spend other portions, mostly on goods and services
  5. Some of the money spent may go back to this company from which it came, but all the money spent goes to either other individuals or other companies, each in their own places in the larger chain. Even taxes are a form of this, with the Government(s) acting as the companies, spending the tax money on salaries, goods and services, and infrastructure.
The money keeps flowing, like the blood flowing throughout your body, and it always needs to be pumped.

Now what happens to this large circle of money when companies are paying employees (directly, or indirectly through "outsourcing" agreements) in other countries? Aside from probable loss of jobs on the domestic front, it interrupts the circle of money flowing in our economy.

Take a look. The changes are in red.

  1. People pay a company for their services
  2. That company, in turn, takes that money and distributes it to several of the following groups:
    • other domestic companies, direct or indirect, for infrastructure and equipment
    • CEOs
    • Congressmen
    • Domestic Employees (through direct salary, rewards, benefits, and bonuses)
    • Offshore (foreign) "resources" (either direct wages or through a contract to another company, who pays the wages)
Some of this money is staying in our economy, but now, some of the money has effectively left our economy. The circle of money is getting smaller.

Banks are just like you and me

Is there some sort of irony in the fact that major banks are looking for loans? It's gotta be there. Somewhere?