• economic news summary and intellectual property

    Deciding Who Owns LeBron’s Tattoo

    Feb 3 • Businesses, Demand, Supply, and Markets, Economic Debates, Entertainment, Fashion, Government, Innovation, Labor, Lifestyle, Regulation, Sports, Thinking Economically • 39 Views

    The tattoo on LeBron James’s arm might not belong to him.

    Tattoos and intellectual property rights

    From: Kicksonfire.com

    Tattoos that include a 330 area code on LeBron James and “Crown with Butterflies” on Kobe Bryant are the subject of a copyright infringement lawsuit. The firm that purchased the licensing rights from the artists says they control the tattoos while Take Two Interactive Software has been reproducing them in their videos. We could be talking about eight tattoos being worth $819,500.

    Where are we going? To the boundaries of intellectual property rights.

    Protecting Intellectual Property

    Think for a moment about Apple’s logo, the shape of a glass Coca-Cola bottle and McDonald’s Golden Arches. All protected by trademarks, they are a firm’s intellectual property. Similarly copyrights assure authors that they control the books they write and patents convey ownership to inventors.

    Sometimes though intellectual property rights can be tricky. The courts said it was okay for the 2nd Avenue Deli to serve an Instant Heart Attack sandwich even though the Heart Attack Grill of Las Vegas claimed the Heart Attack trademark for its burgers. And while Louboutin could trademark its red soles, it could not claim the exclusive right to produce a red shoe.

    Below you can see that a Tommy Hilfiger Tommy Yacht Jacket and a Pottery Barn Cameron Roll Arm Sofa could not get intellectual property protection.

    Copyright protection for intellectual property

    From: Johanna Blakley TED Talk

    Our Bottom Line: The Individual or Society

    While market economies depend on secure property rights, there are limits to what we can own and how long. Always we have had to balance inspiring innovation through individual intellectual property ownership and the public’s right to share a good idea.

    And now, for a tattoo, a Manhattan judge will again decide that balance.

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  • Economic News Summary and Cutting the deficit

    The Mystery of the Disappearing Deficit Worries

    Feb 2 • Economic Debates, Economic History, fiscal policy, Government, Macroeconomic Measurement, US Presidential Election • 42 Views

    Averaging two times during each of the first five debates in Iowa, the deficit has barely been mentioned by the presidential hopefuls:

    Deficit worries and the 2016 presidential election

     

    Similarly, the Congress seems to be less concerned.

    Deficit worries and the 2016 presidential election

    Where are we going? To a deficit update.

    Who Cares About the Deficit?

    Concern about the deficit is slipping. In a recent WSJ/NBC poll, only 11% of all participants said the deficit and government spending “should be a top priority” whereas six months before that, 17% said it was a major concern.

    Deficit worried and the 2016 presidential election

    From: WSJ

    Pew tells us though that Democrats worry much less about the deficit than Republicans:

    Deficit worries and the 2016 presidential election

     

    And older people worry more than the young about the deficit. But here we might have a contradiction because, as you can see below, people over 50 are much more concerned with securing Social Security and Medicare, an objective that will add to the deficit as baby boomers age.

    Deficit worries and the 2016 presidential election

     

    So, should we worry?

    Our Bottom Line: The Deficit

    Yes.

    In a 2016 report from the Congressional Budget Office, we are told…

    “In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009… If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years…”

    Deficit worries

     

    Correspondingly, fueling the deficit (the amount by which spending exceeds revenue in one fiscal year), the national debt (total amount owed by the federal government) is projected to equal an increasingly larger percent of the GDP:

    Federal Debt concerns

    Returning to the mystery of the disappearing deficit worries, perhaps you just have to look in the right places.

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  • economic news summary and free trade

    The Choice Between Free Trade and Tariffs

    Feb 1 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic Debates, Economic History, Economic Thinkers, Government, International Trade and Finance, Labor, Regulation, Thinking Economically • 47 Views

    After tariffs on Chinese car and light truck tires went up in 2009, so too did rental tire sales. Since the tariffs made tires more expensive, consumers that could no longer afford them needed a cheaper alternative. The problem though was the cheaper choice was really more expensive. Adding together all of the monthly rental payments and the interest that was due, the total was more than four tires would have cost.

    The good news is that the tariff saved 1200 jobs. But, including rental tires (perhaps), each of those jobs cost consumers $926,500 a year. The Peterson Institute did the math:

    Free trade and saving jobs

     

    Fortifying their argument for free trade, Peterson went on to estimate that the extra money spent on tires meant less spending and fewer jobs elsewhere. Consequently, as many as 2,531 retail jobs might have evaporated.

    Similarly, way back in 2002, the Dallas Fed published the following data to prove “the high cost of protection.”

    Free trade and the cost of jobs saved from tariffs

    But a recent study has made all of this more complicated.

    Where are we going? To the cost that some workers pay for freer trade with China.

    The Impact of Freer Trade With China

    Yes, economists agree that free trade is beneficial. However, it is more complex than we think because the cost to the low skilled worker is considerable. Because of Chinese imports, certain U.S. regions have experienced higher unemployment and lower lifetime wages and labor force participation rates. Furthermore, since worker migration to other industries has been less than the experts expected, demand for unemployment, disability and retirement benefits accelerated.

    You can see below that the darkest brown areas had the largest exposure to Chinese imports:

    Free trade and the impact on jobs from China

    From: “The China Shock: Learning From Labor Market Adjustment to Large Changes in Trade”

    Our Bottom Line: Comparative Advantage

    First explained by 19th century economist David Ricardo as the principle of comparative advantage, when nations do what they do best, specialization boosts worldwide productivity. The big picture confirms that comparative advantage makes sense.

    However, as many U.S. apparel and furniture workers would tell us, everyone does not necessarily benefit.

     

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  • Totaling 11 in the picture, actually, a home like Downton Abbey probably had a staff of 25 servants.

    Downton Abbey Feminists

    Jan 31 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Growth, Economic History, Economic Thinkers, Gender Issues, Households, Labor, Lifestyle • 54 Views

    Thinking about Downton Abbey’s women, let’s start with Cora because she makes it all possible. While it is obvious that Lord Grantham married her for more than her money and she accepted his proposal for more than a title, for both the package was rather attractive…and typical.

    Where are we going? To the early days of feminism.

    Cora

    Downton Abbey clearly tells us that the aristocracy is struggling. Many of the 700 families who had controlled 80% of all acreage during the 1870s faced financial collapse 50 years later. For some, the solution lay across the ocean. Sell your paintings to Newport robber barons and marry American wealth. Including Consuela Vanderbilt with a $2.5 million dowry for the Ninth Duke of Marlborough, in 1895, nine American heiresses married British aristocracy. Just as Lord Grantham saved his estate by marrying Cora, the daughter of a Cincinnati dry goods millionaire, between 1870 and WWI, one of every 10 aristocratic marriages was to an American.

    Mary and Edith

    Then we have Ladies Mary and Edith. The adult daughters of the Grantham family, Mary and Edith each pursue an identity that rejects tradition. Before her marriage and then as a widow, Mary displays her willingness to move beyond traditional sexual constraints. As for Edith, after her future spouse disappears and we later learn, was murdered, she gives birth to their daughter.

    More crucially though, Mary and Edith have brains. Stepping into roles that men have traditionally occupied, they encounter the resistance that typifies those who try to retain their power. With Mary, we have a woman who, running the estate, grasps finance, makes tough decisions, and saves Downton Abbey from the economic ruin endured by most of Britain’s aristocracy. Meanwhile, Edith is the intellect who takes over the magazine she inherited from her deceased lover. Entering the financial world, Mary and Edith pushed the barriers of restrictive social norms.

    Gwen

    Moving downstairs at Downton Abbey, we see a similar shift in female power as women leave servitude for the office and the factory. During the last season of Downton Abbey, a former servant, Gwen, returns. With the good fortune of having become a secretary and then marrying into relative affluence, her social climb is higher than most. However, she was representative of the working class women who left the home for a factory job.

    Our Bottom Line: 1920s Feminism

    When Harvard Professor Claudia Goldin explained how evolution and then revolution transformed the role of women, she focused on horizon, identity and decision-making in the U.S. By horizon, she referred to job length and whether a woman developed her human capital for a temporary job or a lifelong career. Then, complementing a woman’s horizon, Goldin took us to individuality and the separate sense of themselves that women were evolving. But only with the third piece, with decision-making power, can we complete the picture.

    You can see below that during the 1920s as the first evolutionary stage was ending, relatively few women were in the labor force:

    Feminism and the women of Downton Abbey

    From: “The Quiet Revolution That Transformed Women’s Employment, Education, and Family”

    For Dr. Goldin, the late 19th century through the 1920s represents the first evolutionary stage when women begin to recognize a different horizon and identity. Only after two more evolutionary stages (1930s-1950; 1950s-1970s), can she take us to the (“quiet”) revolution that began at the end of the 1970s.

    Through Mary, Edith and Gwen, we see prototypes of the women who started it all.

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  • The econlife.com economics news summary

    Weekly Roundup: From Blizzards to Super Bowls

    Jan 30 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Growth, Economic History, Economic Thinkers, Government, International Trade and Finance, Labor, Lifestyle, Macroeconomic Measurement, Thinking Economically • 51 Views

    Posts Roundup

    Snowbound cars Property Rights for Shoveling Sunday 01.24.16

    Why all blizzards are not bad…more

    economic news summary and sell by labels on food Monday 01.25.16

    How expiration labels are about more than a date…more

    how super bowl ads reflect monopoly pricing. Tuesday 01.26.16

    Playing monopoly with Super Bowl ads…more

    economic news summary and outdated regulations Wednesday 01.27.16

    What hotels say about Airbnb…more

    economic news summary and presidential futures markets Thursday 01.28.16

    Where to bet on the next president…more

    economic news summary and highway sign fonts Friday 01.29.16

    Why highway signs matter…more

    Ideas Roundup

    • comparative advantage
    • David Ricardo
    • transportation infrastructure
    • economic growth
    • cost
    • externalities
    • incentives
    • tradeoffs
    • monopoly pricing
    • market structure
    • competition
    • marketing
    • creative destruction
    • regulation
    • Joseph Schumpeter
    • gig economy
    • forecasting
    • markets

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