Taxes: Who they really affect

One of the big news stories in the past week has been how Apple used tax loopholes to avoid billions of dollars in taxes.  On the surface this seems like a big scam on Apple's part, but it has much to do with tax laws.  This New York Times article explains the situation in greater detail.

According to Senator Carl Levin, D-Mich, “Apple successfully sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.”  One might think how Apple could not have residency nowhere, but this is where tax laws come into affect.  In the United States, companies pay taxes based where they are incorporated, while in Ireland, companies pay taxes based on where they are managed and controlled.  As a result, Apple was incorporated in Ireland, but was managed in the US in order to "neatly fall between the cracks of the two countries' jurisdictions"


Obviously everyone can blame Apple for avoiding taxes, but what if we consider taxes themselves.  Apple is a big company that avoided taxes, but I'm sure that there are many other companies that deploy the same tactics to prevent giving up over 20% of their profits.  As a result, there needs to be some universal unity in order to prevent such instances.  Although it is difficult to do because certain governments are constructed for specific tax jurisdictions, the UN should at least make some mandatory guidelines.  For example, if in Ireland companies paid taxes based on where they were incorporated rather than managed, Apple would be required to pay taxes to Ireland.  A simple addition of a universal tax code would minimize tax avoidance.

I have to say, I give Apple props for being able to figure out this maneuver around taxes, and it only proves that taxes need to be mandated internationally.  Additionally, even if Apple had needed to pay taxes in Ireland, the rates are significantly lower than in the US.  So for now, companies are going to continue to find ways around tax laws and there's nothing that the government can do about it

How do you think the government should handle tax avoidance?  And how can the government fix the problem of tax avoidance?  Feel free to comment below.

It's Simple Math... For Some

The past week in math class we learned about probability, and I noticed many of the problems addressed the concept of expected value. Expected value is the margin of profit in any given game.  As I began to solve many of the problems, I calculated the odds of winning the lottery (By the way, I wouldn't recommend participating). As I suspected, the old adage was true, "the lottery is a tax on people who are bad at math". This article gives some background about the probabilities of winning and why people play in the lottery.

Mathematically speaking, the odds of winning the Powerball are one in 175,200,000. To put this in perspective, "you're more likely to die from a bee string (one in 6.1 million) or be struck by lightning (one in 3 million)"! The average Powerball jackpot is $95 million and the average cost of a ticket is $2. I calculated that the expected value from purchasing each ticket is -$1.46. This means if someone bought one ticket everyday for 10 years, like many people do, they would lose $5320.83 on average with still only a .0021% chance of winning the jackpot over the 10 years.

So why do people buy lottery tickets? They could be behind on payments, have family tragedies, or be unemployed. Alternatively, maybe people play these games because of the hope that money buys happiness. For that one lucky winner, their life is changed forever. People love the chance to win, a clear American value. This parallels to an era we discussed in class, when the British traveled to America to start anew in the 1600s. Many took risks in search of riches or freedom. Even 400 years later, risk taking is an important component of the American identity. People will do anything to change their life forever, even if it is completely irrational. If I went up to someone and said, "would you throw away $532.90 a year?" they would think I was crazy. However, if I said, "do you want to buy a lottery ticket with the chance of winning $95 million?", most people would accept.

In reality, I'm basically asking the same question. So why do people fall for lottery trickery? I think the lottery does a great job advertising to those most likely to purchase tickets. They are convincing these vulnerable people that this is their chance to get out of debt, become rich, etc. Unfortunately many of the lottery players do not realize how slim their chances are of winning. And even if they did know the odds, I suspect many people would continue to buy lottery tickets.

Why do you think the lottery has grown into a multi-million dollar business? And why do you think people buy lottery tickets? Feel free to leave comments below.

Corruption in the IRS?

This weekend there was a big story sweeping the news.  It was about how the IRS in Ohio was handling certain tax exemptions regarding organizations that identified as Tea Party or conservative.  The IRS was specifically not offering exemptions to those organizations when they applied for them.  This article explains the situation in greater detail.

On the surface this appears entirely political and there is no excuse for targeting political affiliation for tax cuts.  However, the commissioner of the IRS that has just recently resigned, Steven Miller, said that "while 'intolerable', it 'was not an act of partisanship'".  But how much should we trust one of the men that was supposedly involved in this scandal?

It seems as if this scandal was clearly intentional, drawing skepticism with whether President Obama was involved.  Obama claims that this act was "inexcusable", trying to emphasize that he was not involved.  But who do we believe?  The president, the IRS, the organizations wanting exemptions?  This is a very sticky situation and until more details come out it is difficult to target who is too blame.  Nevertheless, this was unconstitutional and warrants serious repercussions including a criminal investigation for those involved.  It is completely unjust to determine tax exemptions on political affiliation and this sort of activity must be monitored in the future.

The purpose of the IRS is to enforce the tax laws, not to determine a political agenda.  In this case, the IRS went beyond their bounds to discriminate against conservatives and Tea Party organizations.  What if, however, the IRS began auditing based on race instead of political affiliation?  Would this draw more attention?  I certainly believe that this would become a significant national issue that would create more controversy.   This example shows how certain issues are prioritized based on controversy.  As a result, race auditing would receive more media attention, making the issue seem more prevalent.  It is a shame that certain controversies are only recognized if the media chooses to cover them, even if the same felony is committed, but it's all about the money.  And race controversy sells.

How do you think this issue would be different if it was a particular race being targeted as oppose to support of a political party?  And how much do you think the media has to do with the attention of certain events?  Please comment below.

Not Part of the Game

When many people talk about applying to colleges, they talk about "playing the game".  This "game" is based on choosing the right college to apply to early decision, doing particular activities, and stuffing your resume.  But do colleges actually care about all of this stuff in reality?  This article explains how some of these tactics actually work against your favor, especially if you are on the wait list.

One counselor of undergraduate admissions, Ms. Brown said. “There’s one parent who calls up and yells at me: ‘I can’t believe this happened! This is a horrible thing!’ And then he calls 10 minutes later and says, ‘I’m sorry.’ Then he calls and says, ‘I know you don’t like me. I’m being a complete pest.’ ”  This would not help someone's son or daughter that was trying to get off the wait list.  Because of tactics like this and others such as sending in projects and videos, colleges have begun to send letters to people on the wait list telling them which activities would not help their cause.  There was one girl that even emailed the admissions office daily.

These people sound like their doing crazy things, but think about how much you prepare to go to college and how important it is to go to one of your top choices.  Some people would do literally anything to get into their "dream college".  This is what America has come to; if you don't get what you want, you beg until you get your way.  Obviously this is not the case for everyone, but I find it outright ridiculous that some people would email the admissions counselor every day in order to get into a college.  It's mind boggling.  

Why do you think people will do anything to get into their first choice college?  And do you think it's moral to do such actions?  Please comment below.

Education for all?

On Monday, I turned in my Junior Theme, the paper that many consider your "most important paper".  My topic was consumer debt, but I was also thinking about doing something about education.  I came across this article and thought it was very interesting and telling.  It is about how the gap between education of the rich and poor have increased, particularly in test scores.

This was one significant stat: "In the 1980s, on an 800-point SAT-type test scale, the average difference in test scores between two such children [rich and poor] would have been about 90 points; today it is 125 points".  When considering standard deviation, this 35 point different is actually a bigger gap.  One would expect wealthier people to receive better education, but why should the gap between rich and poor education rise?  Shouldn't it remain consistent?

I think that nowadays, people spend extra money on tutors and resources in order to improve test scores.  I know that I took countless tutoring sessions for the ACT, which definitely improved my score.  I highly doubt poor children have this luxury or even option.  But why does it even matter that the gap is getting wider?  I'm not completely sure, but I would say that it contributes to a greater difficulty to move up social classes, as well as increasing the difference in income down the road.  So this is a national issue and should be concerning to the government, who is trying to improve the education of the country nationally.

Why does it matter if there is a big gap between the rich and poor test scores?  And why do you think the gap has widened?  Comment below.

Down We Go

Just recently, the first quarter US GDP was released.  The GDP, or Gross Domestic Product, basically represents the income of the country as a whole.  This number determines how much the government can spend and in many ways, the power and prestige of the country.

This quarter, the GDP was $3.0306 trillion, almost the exact same number as four years ago.  This doesn't seem like a cause for concern, but adjusted for inflation, it is 6.5% lower than 2009.  The chart to the right indicates the GDP adjusted for inflation since 1955.  This shows how the current GDP is significantly lower than in the past.  Much of this can be attributed to the recession but also the struggling economy of the US.

Unfortunately, it is not very easy to fix the economy.  Citizens must spend in the economy and the government must reduce spending in order to decrease federal debt.  This will take time but unless it is addressed soon, there will be nothing preventing the GDP from decreasing continually.  If America wants to retain its label as a superpower, we must get our act together and fix this mess.

What do you think would be the best remedy for tour economic problems?  Has America's reputation been tarnished because of our economic issues?  Please comment below.

The Age of Technology

I was browsing through the New York Times today and found a very interesting article about a recurring theme of Excel coding errors.  This may not seem important, but these errors tend to be on major projects and research that affect the whole country.  Here is the article.

A few examples of these errors are as follows:  "In this age of information, math errors can lead to disaster. NASA’s Mars Orbiter crashed because engineers forgot to convert to metric measurements; JPMorgan Chase’s 'London Whale' venture went bad in part because modelers divided by a sum instead of an average."

These are significant errors that lead to disaster and losses of millions of dollars.  Yes, technology has certainly improved many different areas, but we must be cognizant of the possibility of errors.  For example, there was a study done by two economists at Harvard.  This research was determining if there was a correlation between debt and economic growth.  The conclusion of this study was that once debt reaches 90% of the GDP, economic growth slows significantly.

This study came out a few weeks before the Greek crisis, which seemed to follow suit with the study.  As a result, almost everyone took the 90% threshold as fact, not theory.  News stations were referencing the 90% rule when advocating government spending cuts.  These cuts would lower debt, but also get rid of benefits for the unemployed.  And why was the reason this idea arose?  The Harvard study.

When researchers at U Mass looked over the data, they found an Excel coding error.  When corrected, there was absolutely no correlation between 90% of the GDP in debt and economic growth slowing.  What is to be learned?  In an age of technology, people are relying too heavily on electronic devices and programs that may have mistakes.  The 90% fiasco was a huge deal and could have seriously affected millions of Americans even though it wasn't a proven theory. Americans jump to conclusions when they hear an idea.  This can lead to problems.  Technology is beneficial, but we cannot rely too much on it.

Do you think Americans rely too heavily on technology?  Why or why not?  And what can we do to prevent these errors and misconceptions?  Please leave comments below.

You're a Winner! Or are you?

I was watching the news today when the lottery pickings came on so I wanted to follow up on my earlier post.  This post talks about how the lottery is a tax on people that are bad at math, but so are slot machines.  Here is a website that explains how slot machines work and some good strategies to use for slot players.

So to simplify things, slot machines are rigged.  The casino controls how much each player wins per spin and have it set up in a recurring cycle so they are profitable after programing the machine once.  However, they cannot give the player no chance of winning because then no one would use the machine.  As a result, they entice players by giving them a profitable return so they feel like they have a chance, only to let them go another 10 turns without making money.  Then they'll win again, but will not win enough money to offset the amount they lost previously.  This tactic works very well because it toys with the mind and makes a player think they can win.

But once again, why would anyone play?  I would say that more people are aware of the lottery odds than the odds of winning at slots, but most people still know it's a ripoff.  Some do it for entertainment, some to pass time, but anyone that thinks that they will make money off slot machines is kidding themselves.  The casino generally rigs it so they have a 6.58% profit margin, which is pretty damn good for a machine that sits in a casino day in and day out. 

Why do you think people play slot machines if the odds are against them?  And do you think it is unfair for casinos to prey on unintelligent bettors?  Why or why not?  Please comment below.

The Truth Behind Student Loans

As I was working on my Junior Theme, I came across an article explaining how high student loans are getting.  My Junior Theme topic is consumer debt, and one of my sections focuses on how student loans are a big catalyst to in increase in consumer debt.  I always knew the cost of college was very expensive; however, I did not realize how much people go into debt, evidenced by this article.

Amazingly enough, "the total loans outstanding exceed $1-trillion now, which is far greater than either credit-card or car-loan debt".  This number really pops out to me because millions upon millions of people use their credit cards every day to make purchases.  Furthermore, credit cards get the majority of attention when people talk about sectors that cause the most debt.  But to think that the cost of education is so steep that the majority of student must go into debt is sickening.

"Students finish college with an average debt of more than $25,000.  Some students owe more than $100,000".  $25,000 is a lot of money for someone coming directly out of college, especially when they are not guaranteed a job with good income.  Additionally, that loan is going to have an interest rate, making that $25,000 much higher.

It is understandable that colleges want money for providing an education, but really?  Does it have to be $40,000 a year?  Yes, many colleges offer scholarships and/or financial aid, but those discounts only account for part of the tuition.  There is also room and board, books, food etc., which can really add up.

Do we really want college students to experience this rate of indebtedness?  Colleges are not setting a good example of how to lead a successful life.  They are teaching students that debt is normal and it is nothing to worry about.  Then the students receive a bill saying how much interest they have to pay and then they truly understand how much of a scam debt is.  It is normal to incur debt when buying a house or making a big investment, but not when it isn't necessary.

How do you think colleges should approach putting their students in debt?  And do you think debt is a fundamental problem in this country? Why or why not?   Feel free to comment below.

"Same Love"

This morning,  I did my normal routine of waking up, eating breakfast, and going to the bus.  Every morning on the bus, I plug in my headphones and listen to music.   However, for some reason, today more than other days, I focused on the lyrics of the song.  One song that particularly struck me was "Same Love" by Macklemore and Ryan Lewis, featuring Miranda Lambert.  Here are the lyrics of the song.

In this song, Macklemore focuses on how gay people are not treated equally to straight people: "Gay is synonymous with the lesser".  It's hard to argue that gays are treated equally to straights, especially when culture accepts this reality.  Macklemore recognizes this acceptance of culture as well: "'Man that's gay' gets dropped on the daily, we've become so to what we're saying".  I have to admit that I used to occasionally use the word "gay" in a derogatory way until I began to realize how offensive it really was.  As a result, many people are afraid to admit that they are gay for the fear that they may be ostracized.

I, like Macklemore, am not gay, but I also have a gay member in my nuclear family and I realize the severity of inequality.  The United States Declaration of Independence states, "All men are created equal"; however, are gay people really treated as equals?  Currently, I would argue they are not treated equally.  Gays are in a similar boat as African-Americans were when they were fighting for their equality during the Civil Rights Movement.

The Civil Rights Movement resulted in the Civil Rights Act, which was a step in the right direction, even though it did not solve the social problems.  Macklemore sings, "And a certificate on paper isn't gonna solve it all, but it's a damn good place to start".  After gays can legally marry, they will be legally equal, but then the next step would be social acceptance.  "No law's gonna change us, we have to change us".  It's going to take a public acceptance in order for gays to feel equal, allowing gays to come out of the closet.  A lot of work needs to be done in order for gays to feel equal, but many states that have legalized gay marriage have made a good start.

Why do you think gays are treated unfairly?  What do people have against gays?  Please comment below.

Selection Sunday

As I write this post, I am sitting in front of my TV, watching the endless series of Bracketology shows.  For those of you that are not familiar with bracketology, it is a show that discusses all of the matchups in the NCAA Basketball tournament.

Over the past few decades, bracketology has been increasingly popular and is becoming part of the American culture.  In fact, 60% of people say that they will be filling out a bracket this year, whether they know anything about college basketball or not.  Actually, I have some relatives that pick winners based on the name of the school or the colors of their logo.  For sports fans, March Madness is one of the best times of the year, with games every week and incredible underdogs to root for.

So why do Americans love filling out brackets and watching March Madness?  Do Americans love underdogs?  Is it a social talking point?  I believe it is part of American culture.  Americans LOVE to win.  Consequently, when there is an opportunity to have the best bracket, they jump on the opportunity.  I mean, who wouldn't want to have the most accurate bracket in the US and win up to $1 million.  Competitiveness is in the blood of Americans and there is no changing it.  I myself am a sports fanatic but also am extremely competitive so filling out a bracket is a perfect way for me to combine two of my characteristics.  So go print out a bracket, and write down whoever you want, because chances are your neighbor is doing it too.

Why do you think everyone obsesses about March Madness brackets?  And will you be filling out a bracket this year?  Feel free to leave comments below.

Routine DNA Testing- Constitutional or Not?

Last week in Biology class, we discussed that following an arrest, DNA samples are collected from the suspect and stored in databases.  While initially I thought this may be an effective method to identify criminals, I began to question whether it was constitutional.  Then I read an article that addressed this topic in greater depth and the article referenced the Supreme Court case Maryland v. King [12-207].

In some states, DNA is taken from every person that is taken into police custody, whether they are guilty of a crime or not.  This means that anyone who gets arrested, not necessarily charged with a crime, has to give their DNA, an integral part of their identification.

Although, according to Supreme Court Justice Samuel Alito, "lots of murders, lots of rapes can be solved using this new technology", it also pushes the boundaries of the Fourth Amendment.  The Fourth Amendment protects against search and seizure without probable cause.  However, the police are taking the DNA of people that may be completely innocent.  Supreme Court Justice Antonin Scalia remarked sarcastically, "I'll bet if you conduct a lot of unreasonable searches and seizures, you'd get more convictions, too."  Scalia clearly believes that routine DNA testing is wrong because it violates the Fourth Amendment.

Without any evidence of a criminal conviction, the government can take DNA from citizens that are arrested.  Therefore, I believe that it is unconstitutional to DNA test suspects following an arrest because it violates the Fourth Amendment.  I would not want my DNA sitting in a government database for them to test and monitor without my permission, especially if I was not convicted of a crime.  On the other hand, there is the possibility that criminals could be detected, preventing more crimes.  Is it worth taking the DNA of the innocent with the hope of stopping the guilty?

Would you want the government to have your DNA in their database? And do you think DNA testing after arrests violates the Fourth Amendment? Why or why not?  Please leave comments below.

The Sequester

This past Friday, the US government passed the deadline for the sequester, automatically initiating budget cuts.  However, some of these cuts make absolutely no sense.  One automatic cut is regarding the distribution of vaccines.  This article explains why this cut is absurd.

First of all, this cut does not make sense in terms of disease prevention.  Without giving certain vaccinations to large quantities of people, there is a higher chance of the reemergence of diseases that  have been non-existant for years such as polio.

Additionally, vaccines are used in order to save money: "Vaccines are one of the most cost-effective preventative strategies in health care, saving billions of dollars a year".  Why would the government cut something that saves money?!?!?!  Some of the sequester cuts are understandable but seriously. Yes, cuts had to be made, but don't make cuts in a sector that will lead to more debt.  Also, the government claims they care significantly about healthcare, but are depriving people from receiving vaccines.  

If the government truly cared about the health of the people, they would cut from a different sector.   Yes, it's upsetting that they are giving less money for vaccines, but that isn't what is frustrating.  What is frustrating is that the government spends money on many unneeded projects, but when they do decide to cut spending, they are making the debt worse.  How does it make any logical sense to cut something that will put you in more debt than if you didn't cut it at all?  IT DOESN'T

Do you think the government is doing the right thing by cutting spending on vaccinations?  And do you think the government spends uncontrollably on unnecessary projects? Please leave comments below.

The Fiction of Facts

We recently discussed how many movies do not always give a truthful recount of historical events.  Even though these movies have been nominated as some of the best movies of the year, should they give a true reenactment of events?  Movies like "Argo", "Lincoln", "Zero Dark Thirty", and "Django" have all exaggerated the truth.  This article explains where these fallacies occur.

In class we mentioned how in "Lincoln", Connecticut voted against the 13th Amendment, while in real life, they were for the amendment.  Spielberg decided to change it because he wanted there to be drama towards the beginning of the voting, which is counted alphabetically, in order to make the viewer think that the amendment may not pass.  In "Django", "a freed slave in 1858 did not lay waste to a Mississippi plantation called Candyland to free his German-speaking wife".  However, this addition to the movie added drama and was better for the viewing audience.  And isn't that what directors truly care about?

Despite this notion, directors should at least acknowledge when they do not tell the whole truth.  That is the difference between Truth and truth.  "Truth" is staying true to the intentions of the story, meaning the overall series of events are correlative to reality.  In contrast, "truth" is making sure everything matches exactly what happened in reality, with every quote correct down to the last comma.  While I believe it is alright to exaggerate the truth a little bit, there is a fine line between Truth and truth.  I think that Spielberg crossed that line in "Lincoln".  By changing the vote of a state in the most influential amendment passed for African-Americans, some people may view Connecticut differently.  However, I do not think that Tarantino crossed the line in his movie.  Although Candyland is an unlikely name for a plantation, the overall essence of the treatment of African-Americans was true to history.  

When do you think a director crosses the line between Truth and truth?  And can the line be different for each circumstance?  Please leave comments below.

Michael Jordan Turns 50

Today is Michael Jordan's 50th birthday.  It's hard to believe that Jordan hasn't played basketball in more than a decade, but he is still talked about regularly.  Jordan is arguably the best and most iconic player in NBA history.  He is so iconic that ESPN spent the last 2 weeks talking about Jordan and doing a countdown of his top 50 plays and moments.  However, I wanted to talk about the entrepreneur in him.  Michael Jordan revolutionized the marketing industry, especially for companies like Nike and Gatorade.  Here is an article explaining how Jordan got a deal with Nike.

Nike's fourth quarter 2012 sales were $6.5 billion.  A quarter of those sales can be attributed to the Jordan brand.  That is a significant amount of money and it all started because of the idea that everyone wanted to be like Mike.  When Jordan first signed a contract with Nike, they offered him $500,000 a year for 5 years.  Yes, that is a lot of money, but look at the contracts today.  Derrick Rose signed a 14 year, $260 million contract with Adidas.  Lebron James and Kobe Bryant are each making $15 million a year with Nike.  The point I'm trying to make is that Michael Jordan did not just revolutionize basketball, he changed marketing.

Everyone wanted to wear the same shoes or drink the same sports drinks as Jordan.  Businesses began to realize this and began to put significant sums of money into hiring key opinion leaders in order to appeal to consumers.  People are paid millions to associate their name with a product and many people think that advertising is a waste of money.  However, it works.   Companies don't just want a viewer to buy a product, they want the viewer to talk about the product.  Companies care about name recognition because they want you to talk about their product with your friends.

This fundamental idea of marketing is also particularly American, especially when athletes are involved.  Many athletes come from lower socioeconomic status' and don't have very much money.  When they make it to the pros, they are bombarded by large pay checks and sponsor contracts.  The idea that a poor boy in the ghetto can become a millionaire and be a role model for many others is an American idea and both Jordan and Nike capitalized on this opportunity.

Why do you think that marketing is so successful?  And besides Michael Jordan, who do you think revolutionized the advertising industry?

Happy 50th Michael!

Luxurious Ideals

This past weekend I was in Orlando with a group of New Trier students and crossed paths with some interesting people.  However, Karisha, an Argentinean girl, had some particularly interesting comparisons and contrasts between the United States and Argentina.

One thing that stuck out was her idea of socioeconomic status affecting the way one presents themselves.  In America, many people pride themselves on their "looks" and go out of the way to buy more expensive and luxurious items to demonstrate their wealth.  In contrast, Karisha mentioned how it is very difficult to distinguish social classes in Argentina because people generally do not gloat about their wealth.  I found this very interesting coming from a different perspective because as an American, I am often exposed to people that either show their wealth or make it obvious that they are poor.

I think it is important to gain exposure to how different cultures operate because it makes one question why certain things are the way they are.  Although I do not agree with showing off wealth, I understood that it occurred regularly in the United States.  This made me assume that it was the same way in other countries.  However, after getting a different vantage point from a non-American, I am beginning to wonder why this is primarily an American ideal.

I believe that showing wealth is one of the basic ideals of the United States because of the American Dream idea.  When someone comes to America, they are looking for opportunity.  They are looking for freedom.  Many people can attain both opportunity and freedom through wealth.  By working their way up the social class ladder, someone can fulfill their American Dream.  In order to demonstrate that they have reached their goal, I believe many people may display their wealth as a sign of "I did it".

Do you think luxury items are more noticeable in the US than in other countries?  And why do you think Americans show their wealth in the form of luxury items?

The Importance of Youth

Over the past few business days, Netflix's stock, NFLX, has gone up 60%.  I am very interested in the stock market and have my own brokerage account, so I follow stocks that have had unexpected gains.  Netflix jumped because its earnings were higher than expected; however, there is a bigger reason that this movie rental company soared above projections.  An article I read, by Jim Cramer, a stock analyst, explains why Netflix is doing so well and Apple, AAPL, is not.  

"My youngest daughter loves to get ideas from me for my birthday.  So, when she asked me what I wanted I told her I wanted the first-season DVD of Sons of Anarchy.  She writes she isn't going to buy it because it streams on Netflix".  Cramer believes that if the younger generation is talking about a product constantly, then it will be a better investment.

This is also one of the reasons why Apple has dropped recently.  Despite average earnings, the shares of Apple have plummeted 20% in the last month.  Although it owns the market share and everyone owns Apple products, Apple is not creating the buzz it used to.  No one is talking about Apple's new products because they haven't created any new products since the Ipad.  In order to rebound, Apple needs to either make a new product or buy a trending one.  The youth dictates what is popular in the future so it is important to appeal to them now.

Enough of this stock mumbo jumbo.  The point I'm trying to make is that our generation, kids aged 13-20, are the "trend-setters".  We are the ones who create the buzz and determine whether a product is a diamond in the rough or a complete bust.  For those investors out there, it is important to identify what kids are talking about and what seems second nature to them.  For my AS final, of the kids who brought in laptops, probably 90% of them had an Apple computer.  Apple was "in style" when the majority of people bought their laptops, making it a good buy within the last 5 years.  On the other hand, practically no one had a dell computer, showing how Dell has fallen off the charts.  It is just very important to know that when you go buy a stock, a good investment is one that the upcoming generation uses.

What new trend/stock do you think will do better than projections because of the younger generation?  Please leave comments below.

AS Final- "A Story we Tell Ourselves"

This political cartoon is an important contemporary artifact because it conveys our country’s current economic issue. The artifact also relates to the class because it shows an imposing threat, a clash of powers, and an incorrect focus.

In the center of the image, there is a giant, imposing fiscal cliff sign.  This echoes the idea that our country is facing a big problem that is scary and threatening. As a result, the problem must be eliminated in order to protect American citizens. Comparatively, in the movie Grizzly Man, Timothy Treadwell has the task of protecting the bears from poachers and hunters. These poachers and hunters threaten the lives and safety of the bears, putting the burden to save these animals on Treadwell. Werner Herzog recognizes Treadwell’s devotion to the bears: “I have seen this madness [anger towards poachers and hunters] before on a film set. But Treadwell is not an actor in opposition to a director. He’s fighting civilization itself”. Treadwell is willing to do whatever is necessary to protect these animals, even if it means “fighting civilization”. In comparison, Obama and Boehner are tasked with protecting US citizens from the impending fiscal cliff. If a deal had not been reached by Congress, citizens would currently be in disarray and economic hardship. Even though both political parties don’t always agree, they needed to find common ground to protect the citizens from the looming fiscal cliff, just as Treadwell protected the bears from the poachers and hunters.

Despite the compromise to arrive at a fiscal cliff deal, Obama and Boehner certainly were not just trying to find an economic solution. Obama and Boehner were more focused on making each other look bad. This idea is evidenced in the caption, “who would engineer such a thing”. It is quite ironic because Obama and Boehner were the ones who created this mess, but are now asked to fix it. However, now they are not equipped to do so because they have waited too long due to their fighting. The idea of focusing more on making another party look bad occurs in The Crucible. During Elizabeth Proctor’s trial for witchcraft, Proctor is defending her by telling the court that she isn’t a witch. However, since Parris dislikes Proctor, he wants to make a fool out of Proctor and repeatedly says, “this is a clear attack upon the court”(87) when Proctor defends Elizabeth. Parris should be focused on expelling witchcraft from Salem, but is too caught up in trying to get Proctor in trouble. This leads to an even worse witchcraft hysteria, similar to the worsening economic problems our country faces.

Despite focusing on making each other look bad, Obama and Boehner care more about the end result than the process. They have the attitude that as long a deal gets done, it doesn’t matter how they get there. Comparatively, in the poem Shhhhhhirt, by Robert Pinsky, big companies care more about meeting their quotas in order to sell $5 shirts than the working conditions of the producers: “The planter, the picker, the sorter/ sweating at her machine in a litter of cotton/ as slaves in calico headrags sweated in fields”. Workers are suffering like slaves, just because big retail companies want to sell cheap clothes. Similarly, the government just wants to arrive at a fiscal cliff deal, not worrying about the citizens that are suffering economically and the ones who may be affected by it.

The fiscal cliff is America’s biggest economic decision in years, but the government is too caught up in protecting their image. They want the story to be told positively for generations to come. So I guess V.S. Ramachandran was right: it’s just “a story we tell ourselves”.

A way to reduce the debt?

Today, one of my friends informed me of a potential solution to the debt ceiling: a trillion dollar coin.  When I heard this, I had no clue what to think because I could not even fathom the idea of $1 trillion wrapped up into a small piece of metal.  This New York times article explains how it would work.

Although this article explains that making this coin and directly depositing it in the Federal Reserve would be "an accounting trick", it could also cause mass inflation and make the value of the dollar drop drastically.  Many people think that the debt issue could be fixed by simply creating more money.  This may limit the debt, but might cause inflation, making everything cost up to 4 times its original cost.  Our economy is in a huge hole, but it can only be fixed if the government is willing to cut spending.  Although they want to fund their programs, the government cannot keep raising the debt ceiling.  Soon the interest we pay on the debt may reach the high billions.

The fact that the government couldn't even make progress on the fiscal cliff agreement until the due date is quite concerning.  The government knew that the fiscal cliff and debt ceiling were coming years in advance, but didn't make an agreement until the bottom of the ninth.  The government needs to take responsibility and cut spending themselves, instead of relying on the citizens to bail them out.  A $1 trillion coin is not the answer to fix a much bigger issue.  Even if this coin was successful in limiting the debt, it does not change the issue of spending more than the country takes in.  If the debt continues to outpace the GDP, there will be no solution and we actually my "fall off the cliff".

How do you think the government should lower the national debt?  And do you think that a $1 trillion coin would be feasible?  Feel free to comment below.

Django Unchained

Last week I saw the movie "Django Unchained", directed by Quentin Tarantino.  This was an inspiring movie and had the moral of anti-slavery.  For those of you that haven't seen "Django Unchained", here is the trailer and a brief synopsis.

One thing I found interesting about the movie is that it focused solely on Django, played by Jamie Foxx, a freed slave.  Obviously a movie with his name in it would focus on him, but it did not once mention President Lincoln, who was president at the time.  This is curious because Lincoln is credited with creating the Emancipation Proclamation and freeing the slaves.  However, Tarantino decided to focus on how Django freed himself and was resonsible for his own destiny.  This contrasts the film "Lincoln", a movie documenting Lincoln's greatness,  and how many people view history.

Tarantino focused on the lesser known story: an inspiring story that no one credits.  At the time of the 13th amendment, the amendment that freed the slaves, there was still the thought of white supremacy.  This lead to the hypothesis that Abraham Lincoln was 100% responsible for stopping slavery; however, would slavery stop if the slaves didn't mind it?  It wouldn't!  The slaves rebelled as much as they could and tried with a concerted effort to escape and run away.

In an age that claims to be anti-racism, why are there still movies, like "Lincoln", where there is hardly ever a mention of slave revolts to free themselves.  Not even one minute devoted to how the African-Americans may have lead themselves to freedom.  I believe Tarantino decided not to mention President Lincoln at all because he wanted to show how powerful and influential some slaves were.  He may have done this in response to "Lincoln", but also to take attention away from the "good white guy".

Why do you think the public consensus gives President Lincoln all the credit for freeing the slaves?  And do you think there is a bigger issue surrounding racism? Why or why not?  Please leave comments below.