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For today’s post, I will write my thoughts on an article I read earlier this week. It was 20/20’s John Stossel talking about our nation’s health care system and whether or not to publicize it. He thinks no because that would lead to a reduction in health care quality and less incentive to develope new medicines and medical equipment. Today in America, we have a private health care system meaning the people pay for their expenses. Sure there is some government involvment, but it is private. In Europe, where health care is payed for by the government, you have to wait much longer to recieve health services because the government pays for them, and there is a limited supply of services that cannot keep up with the demands of the people. So if someone needs to have an operation, they might be put on a long waiting list to recieve the care they need. In America, since health care is privately funded, the supply does a much better job of keeping up with the demand. Public health care also gives people and company’s less of an incentive to develope new drugs and equipment. If the drug company’s are owned by the government with no competition, why spend billions on researching new drugs when they know that they don’t have to, they are the people’s only choice. In a private system, competition is encouraged and drug companies need to have their products on the cutting edge or they will go out of business. The private system  ensures quality and innovation. That is why we see so much innovation coming out of America and so little out of Europe in terms of health care products. I agree with John Stossel. I think he makes a great argument and it just doesn’t make sense for America to have a public health care system. If we reduce our health care quality to Europe’s, who will develope all the new drugs and equipment? Who else can produce the new innovations in medical technology? No one as of now. The private system ensures that competition will produce the best that America has to offer.

For this week’s post I am going to write about an article I recently read concerning newly elected President Barrack Obama and his plans for catching the man behind the attacks of September 11, Osama bin Laden.  The article goes into depth of the man-hunt situation going on in the remote mountainous regions of Afghanistan and Pakistan and why the U.S. is having such a difficult time finding bin Laden. President Obama is critical of the Bush administration’s efforts to capture the FBI’s most wanted man in the world. Obama plans on stepping up the efforts and making it a serious priority. Although I do not agree with Obama on most issues, I do think that the U.S. has been distracted with the conflicts in Iraq and needs to get back on track with capturing those responsible for the heinous attacks against our country. The capturing of Osama bin Laden will set a precedent to the rest of the world and those contemplating attacking the U.S. by showing that the U.S. has zero tolerance for terrorism and they can not get what they want by using fear and such inhumane tactics.

For my paper, I am researching the history of album covers and their function as a code system. One of my questions was when did artists start utilizing the album cover as a tool to visually translate their music on the actual album. I found that during the 1940’s and 1950’s album covers were generally not very expressive and straight forward. There wasn’t too much room for interpretation on the meaning or message behind it. This changed with the advances in photography and printing and it allowed artists to be more expressive and abstract. One piece of early evidence I found comes out of the 1960’s when “surfer” bands such as The Beach Boys’ albums were coming out featuring images of teens and youthful adults on a beach just having a good time and relaxing. This evidence shows that The Beach Boys were utilizing the album cover to translate to their audience that their music is related to summer, recreation, and vacation, which were all prevalent aspects of  American society at the time. Album covers such as these set the trend for artists to use the album cover as a tool for communicative and marketing purposes.

For today’s blog entry I am going to talk about the book I am reading called The Little Book of Common Sense Investing. This book gives you tips and making your money work hardest for you in the stock market. It is written by John C. Bogle, the founder and former CEO of the Vanguard Mutual Fund Group. It also has a lot of insight and quotes from the CEO of Berkshire Hathway, Warren Buffet. This little book has a very simple message that can make all the difference when it comes to investors maximizing their stock market returns. The message is that the best way to invest your money is through low-cost index funds and then holding on to them for the long run. An index fund is a combination of stocks chosen by a computer system that follows the market. An example of this is the S&P 500 which is a combination of stocks from the 500 largest corporations in the U.S. The advantage of an index fund over a mutual fund is that the computer system selects which securities to put into the fund. With a mutual fund, a fund manager selects them. The difference here is that a computer system does not make decisions on emotion, greed, or speculation of what the market will be doing tomorrow. It simply follows its formula in the software. On average, the index fund out performs mutual funds 9 out of 10 times. This means it has higher returns and more money for the shareholders. This strategy is strongly endorsed by Warren Buffet, one of the wealthiest men in the world who has made much of his fortune on Wall Street practicing this common sense investing. His strategy is buy low and hold, and the hold part is the most important. I thought this was an incredibly useful reading and will be very beneficial in the future.

Today, I am going to write about the article we had to read in class last week about the lack of reading these days. The article states that people just are not reading as much as they used to. It gives examples of surveys taken by adults who admit they have not read one single book all year. They claim that reading makes them sleepy. Then the author talks about how reading has been for the elite all throughout history and now days it is taken for granted. I agree with the author. I admit, I have not read a book leisurley in the past year, maybe even the year before that. I wish I had. I like to read but I find that I am too lazy or just not motivated enough especially since I have to read a lot for school, which wears me down. Reading is an extremely important skill that has numerous intellectual benefits. It broadens our vocabulary and can help improve our speaking skills as well. Reading makes people use their imaginations in contrast to television which explicitly gives you the image that it wants to portray. With reading, however, it is up to the reader to use his or her imagination to form a picture of what they are reading. I think that the only way to treat this trend in American society is to stress reading at an early age. Limit television and require children to read, and not just read anything, but books and material that will want them to keep reading.

In this post I will discuss the chapter in Naked Economics by Charles Wheelan, about what makes countries. Wheelan basically talks about a common theme of elements found in rich countries versus poor countries. The first and probably most important element is an honest government. Wheelan speaks of an interview he had with a Chinese student talking about how he wished China’s government was as honest as America’s. The Chinese student said that if you wanted to do anything like get a permit or license you would have to pay off bereaucrats or it would take years, thus stunting economic growth. For the most part, America’s government is an honest one. China is still corrupt. Another element found in rich countries is an openess to free trade. For example, compare Hong Kong and North Korea. Hong Kong’s market has the least amount of regulation and restriction in the entire world. It is booming economically. On the otherhand, North Korea is an isolationist state. Nothing comes in, nothing goes out. It is illegal to have contact with the outside world. Thousands starve to death every year because of famine and it is illegal to have aid from the outside world. Trade makes both parties better off, and so if there is no trade, North Korea is worse off, much worse. A common misconception is that a nation needs natural resources to be wealthy. This is not true and to prove this consider Israel and India. India has far more natural resources than Israel but Israel’s has much higher GDP per capita than India. How can this be? Israel has a much better system of allocating its resources. India has a very large and slow government that wastes the massive amounts of resources that it does posses. These are all important elements of developed nations but it is not an exact formula yet.

Today, I read a summary of President Bush’s address to the nation concerning the U.S.A on the brink of a serious economic recession. This potential crisis was brought to the nation’s attention after the collapse of several major financial institutions like Merryl Lynch and AIG. Merryl Lynch is no more and AIG is on the brink of bankruptcy. The issue at hand is that President Bush, government officials, and economists, are pushing to bail out AIG for 700 billion. AIG is an incredibly huge international insurance company and if it goes under, the economy will take an even drastic turn for the worse. Bush assures the nation that this is not an attempt to save AIG. He believes businesses that make poor desicions are not worth saving, and that more productive and efficient companies will take over through the concept of “Creative Destruction”. Bush claims that this has to happen in order to prevent the country from further economic disaster and to encourage investing in the American financial market. I agree with the President’s stance here. I think that if we do not bail AIG, there will be serious consequences such as high inflation and unemployment. The only downside is that it will cost the American taxpayer a whopping 700 billion. I do not even think the war has gotten to that high yet. I just hope that the economy shapes up by the time I graduate. 

This week, I am going to write about some of the topics from a chapter in “Naked Economics”. The chapter is primarily about human capitol, which is basically the sum of skills and intelligence that a person possesses. These skills range from social , to critical thinking, to sense of humor. According to Charles Wheelan, an economist and author of the book, describes human capitol as everything that you would have left if all of your material wealth and assets were taken away. For example consider the richest man in the world, Bill Gates. If you were to take all of his mansions, private jets, and everything else he owned away he would still be incredibly wealthy in human capitol. Bill Gates is obviously an incredibly smart man with great leadership skills. That is why he so wealthy. He could be successful in just about anything he did, not just computers and software. His human capitol is rare and companies are willing to pay large sums of money for that. That is called investing in human capitol. According to Wheelan, this is the best investment companies can make.

For my second post, I am going to write about an issue brought up in the book that I am reading, Naked Economics, by Charles Wheelan. The issue is the appropriate size of the Federal Government here in the United States. Some say that the government is too small to confront and solve some of the problems in this country. Through more government action within new and more specific agencies with more funding will be the solution to the problems such as Health Care, Immigration, and Energy ect. On the other side are the ones that say that this country needs some serious government downsizing. They believe that there is already too much wasteful spending on government programs that bear little fruit. In their eyes, government hinders economic growth due to taxation and the slow legislation process. In my opinion, government is too big. Don’t get me wrong, government does serve a very critical role in the well being of this great nation. Because of our government, Americans live safe lives with equal opportunity for the most part. But I think that there is too much wasteful spending going on through the numerous programs, such as N.A.S.A, public education, and Health Care. Taxes, although necessary, are too high and have economic backlashes. 

For my first blog entry I am going to write about the first chapter of a book I just read, Naked Economics, by Charles Wheelan. This book breaks down economic principles and condenses them into simpler concepts for those of us who do not work on Wall Street.  In my opinion, I think the author does a great job of making the complications of economic theories much easier to understand. He sets up the scenarios of everyday life, such as buying food at the grocery store, and relates it all to economics. I think that way of teaching economics is much more engaging and effective. I remember in Economics courses last year being very dull. This book makes you really appreciate why economics are important and how they influence everything we do.