Obama Is The Best Economic President In Modern Times

• EndlessDreams wrote on 2014-09-10 03:19

  Quote from Ninjam;1246319:

  
  I would support a minimum wage increase because, just look at the people who are in charge of companies like wal-mart or mcdonalds. They have nice cars and suits. Suits! Probably more than 1 too. They should have nice things for being at the top, sure, but what irks me are people who make their money investing, not the ones just making a living but the ones that make millions or billions and not distributing the wealth. I am not saying that being rich is bad, but being rich at the expense of others is terrible. Companies that cut costs by paying their employees less or cutting jobs are not doing that most of the time because there not making enough to survive, they are doing it because the people at the top don't want to see their profits dropping.
  
  I'm going to stop cause I'm just ranting at this point.

  
  
  They do distribute their wealth. They pay a lot more taxes than a person who is at poverty does. Business are in it for the profits. You need to keep your profits in order to expand. The more money you have, the more you can expand the company. Business can always stay growing. There will always be something big that suddenly happens that requires a lot of money to correct it.
  
  Managing a huge corporation and keeping it alive requires a lot of talent. They also know the right people who have those talents as well. There are sure a lot more responsibilities for a CEO than that part-time cashier who gets paid minimum wage.
  
  The common people don't understand this. They only see the "corporate greed" part.
• TLCBonaparte wrote on 2014-09-10 04:49
  bottom line is: This article is full of crap.
• Hanna wrote on 2014-09-10 05:35

  Quote from TLCBonaparte;1246356:

  bottom line is: This article is full of crap.

  
  
  the outperforming Reagan is true
  i never understood why people worshiped Reagan, he was a shit president
• TLCBonaparte wrote on 2014-09-10 12:31
  I don't worship Reagan, I think people do because he was an actor before becoming president.
• Campylobacter jejuni wrote on 2014-09-10 14:45

  Quote from EndlessDreams;1246294:

  McDonald's competition is even worse than third world labor. Their competition is local, often next door or just across the street. McDonald franchises competes with all the dozens of Fast Food stores that are around them. They also compete with other ways of eating as well.
  
  Then, there is a great damage to their brand name when McDonalds food are associated with very unhealthy foods. In-fact, McDonalds profits have fallen over the years. Among other factors. If anything, they should cut workers, or cut cost (or raise prices) in some way in the long run.
  
  Economic activity doesn't serve anyone. It is the product of Supply and Demand. It has no feelings, and no one person can directly control it.
  [...]
  You have to think from the employer's point of view. Would you hire someone who is highly questionable, and no background over someone who isn't?

  
  Which means its competition would be subject to the same conditions.
  
  I honestly don't think people are deciding between visiting a fast food chain or visisting a Michelin-starred restaurant. The reasons for going to one or another business are completely different.
  And if it does turn out people decide to give the higher-price higher-wage business a go despite the completely different type of business, which would increase the market share of such businesses and cause a shift in market dynamics that would favour high-wage jobs, well then I don't see how that is not a situation to look forward to. It's what they call a virtuous circle, right?
  
  That is missing the point. The point is people are engaging in economic activity to increase their welfare. Because we all know how that "you help me I help you" thing works out if people actually adhere to it, it is in the best interest of everyone to conduct themselves a bit less opportunistic economically. Economy is in the end a cultural phenomenon like every single thing humans create, and the way "supply and demand" exactly plays out can vary dramatically depending on how we approach it. If people stop turning every penny five times no mater the cost to others and start being willing to pay fair prices for others' work, then the wealth of everyone will invariable increase. A dollar spent is a dollar earned.
  
  But a single person, or a small group of person, can set in motion a variety of measurements that are fit to influence society - of course this often takes a very long while, and it doesn't help this particular issue.
• EndlessDreams wrote on 2014-09-10 15:19

  Quote from Campylobacter jejuni;1246407:

  Which means its competition would be subject to the same conditions.
  
  I honestly don't think people are deciding between visiting a fast food chain or visisting a Michelin-starred restaurant. The reasons for going to one or another business are completely different.
  And if it does turn out people decide to give the higher-price higher-wage business a go despite the completely different type of business, which would increase the market share of such businesses and cause a shift in market dynamics that would favour high-wage jobs, well then I don't see how that is not a situation to look forward to. It's what they call a virtuous circle, right?

  
  
  That kind of competition is under a different set of conditions. The choices for the customers is right in front of them. 3rd world countries aren't really visible to the regular customer. Most people don't go to Wal-Mart, and check every product and compare where it is made. They just focus on the price.
  
  No, that is not called a virtuous circle. It is just bad business management in times when certain companies are just losing profit because of increased competition and other factors. Raising prices would decrease the demand, and give and advantage to the competitors.
  
  

  Quote from Campylobacter jejuni;1246407:

  
  That is missing the point. The point is people are engaging in economic activity to increase their welfare. Because we all know how that "you help me I help you" thing works out if people actually adhere to it, it is in the best interest of everyone to conduct themselves a bit less opportunistic economically. Economy is in the end a cultural phenomenon like every single thing humans create, and the way "supply and demand" exactly plays out can vary dramatically depending on how we approach it. If people stop turning every penny five times no mater the cost to others and start being willing to pay fair prices for others' work, then the wealth of everyone will invariable increase. A dollar spent is a dollar earned.
  
  But a single person, or a small group of person, can set in motion a variety of measurements that are fit to influence society - of course this often takes a very long while, and it doesn't help this particular issue.

  
  
  People engage in economic activity because it is inevitable in modern society. Majority of the people cannot just spend the time to make everything themselves, and provide everything themselves without help. It is a better opportunity cost for them to spend the money for a particular product/service.
  
  If the wealth of everyone will increase, then, it means that the value of money have decreased. And what is considered a "fair price" for others' work? Some people are demanding 15 dollars as a "fair" minimal wage. Some wanting 10 dollars.
  
  At some point, it is better to just replace certain low level jobs with machines since maintaining the machine is cheaper than paying a worker's salary.
• TLCBonaparte wrote on 2014-09-10 23:17
  It's funny I actually just learned about poverty today in class. Here's the course note:
  
  

  
  About Measuring Inequality and Poverty
  Measuring poverty and inequality can be tricky because there are many dimensions to these two problems. Take into account that both concepts poverty and inequality, are closely linked. Poverty reduction, takes place inherently within a broader process of distributional dynamics: for a given mean income, the more unequal the income distribution, the larger the percentage of the population living in income-poverty.
  As we saw in previous lectures, some people may think that inequality is not an issue since it only reflects differences in willingness to work or in skills. For them, inequality has to exist if we want to preserve market incentives and keep the economy working. And yet, others think that excessive inequality is a moral disgrace and that a more evenly balanced distribution of resources is needed. For this group, inequality may even harm the economy by introducing social tensions.
  But in order to even start thinking about this problem, we have to be able to describe inequality. Only when we can describe the inequality of a population, can we set limits for what acceptable inequality could be. For this reason we review here some statistics that help us to state inequality. Although ideally we want to talk about well being, the easiest way to assess inequality is to look at average annual income. Think of income as some sort of general statement about well-being. Occasionally, we may want to look at other dimensions of well being and come up with other measures. For instance, we may want to review inequality in wealth, or inequality in health or education as determinants of well being.
  What exactly is inequality?
  Inequality means different things to different people: whether inequality should encapsulate ethical concepts such as the desirability of a particular system of rewards or whether it should simply mean differences in income is the subject of much debate. Here we will conceptualize inequality as the dispersion of a distribution, whether that is income, consumption or some other welfare indicator or attribute of a population.
  As mentioned, inequality is often studied as part of broader analyses covering also poverty and welfare, although these three concepts are distinct. Inequality is a broader concept than poverty. Inequality is defined over the whole distribution, whereas poverty is defined over the censored distribution of individuals or households below a certain poverty line. Incomes at the top and in the middle of the distribution may be just as important to us in perceiving and measuring inequality as those at the bottom, and indeed some measures of inequality are driven largely by incomes in the upper tail. On the other hand, inequality is a narrower concept than welfare. Inequality is (or should be) independent of the mean of the distribution and solely concerned with the dispersion of the distribution. Welfare measures usually refer to more than one dimension of the distribution. However these three concepts are closely related and are sometimes combined in composite measures.

  
  
  
  

  Basic Statistics
  Mean The mean measures the central tendency of the sample. It reflects the average well being of the population. It is the quantity you would have if total income were to be divided in equal shares for everybody. However, the mean is not a good measure of dispersion. Two populations may have the same mean but very different dispersion, there may be very rich and very poor people in one population, while in the other, everybody has roughly the same income. The mean does not tell us about it.
  Variance and standard deviation. These are measures of the dispersion of a sample. They reflect how far off from the mean are the values of the distribution. If the variance (or standard deviation) is high, that means that most of the values are far away from the mean, so that we have an unequal population. The standard deviation is just the squared root of the variance and its main advantage is that is comparable to the mean.
  The mean and the variance tell us about the average well being and give us an idea about how many people would "enjoy" the average well being. However, we still want to know more about the distribution. For instance, how poor are the poor relative to the rich and which is the percentage in each class. To learn this we need a more complete description of the distribution.
  Frequency distributions, median and mode: These are also measures of the dispersion of a sample. They give us an idea about the whole distribution. Look at the Table below. The first column gives us the number of families in the sample that is in each income bracket. The second give us the percentage. It is convenient to talk about % because it gives us a better idea of relative sizes. After all, it is not the same having 1,000 poor in a population of 2,000 that having 1,000 poor in a population of 2,000,000. Cumulative frequencies tell us about how many people are below a given income level. Cumulative frequencies are important because they are used to construct many other statistical measures.
  
  Income Class Frequency # % Freq Cum. % Freq.
  Under 10,000 14,562 15.6 15.6
  10,000-24,999 25,764 27.6 43.2
  25,000-49,999 30,991 33.2 76.4
  50,000-74,999 13,535 14.5 90.9
  75,000-99,999 4,761 5,1 96.0
  Over 100,000 3,641 3,9 100
  All families 93,254 100
  
  Another statistic is the median, the middle income level of the distribution. It represents the level of well being of the average family. The median is the level of income that divides the population in half. If we start counting the cumulative frequency in the example above, the median is somewhere between 25 and 50,000. Closer to 25,000 since at that level we already have 43% of the population. It is exactly 28,905.
  The mode is the level of income with higher frequency distribution. That is, what most people have.
  Observations: Note that the mean is the average level of well being (What anyone would get if we were dividing total income equally) while the median is the level of well being of the average family. The mean is usually bigger than the median because in general rich people have very large income. Even though they are few, they tend to elevate the mean but not the median that only takes into account how many people are in each group but not how much do they make. Also note that the median is more influenced by the poor, since they are more and we start counting at the lower end of the distribution.
  Quintile distribution: It gives us the share of total income that the 20% poorest families have and that of each subsequent quintile. If there were total equality each quintile should receive 20%, therefore looking at the quintile distribution we learn a lot about the distribution.
  Sometimes, however, what we need is a measure of the overall distribution, something easy, like a picture. The Bell curve is similar to the quintile distribution when we have more data. It provides the best picture of inequality for a given population.
  Inequality Measures
  There are many ways of measuring inequality, all of which have some intuitive or mathematical appeal. However, many apparently sensible measures behave in perverse fashions. For example, the variance, which must be one of the simplest measures of inequality, is not independent of the income scale: simply doubling all incomes would register a quadrupling of the estimate of income inequality. Most people would argue that this is not a desirable property of an inequality measure and so it seems appropriate to confine the discussion to those that conform to a set of axioms. Even this however may result in some measures ranking distributions in different ways and so a complementary approach is to use stochastic dominance. The following measures conform with the axiomatic approach :
  The Generalised Entropy The value of GE ranges from 0 to  , with zero representing an equal distribution (all incomes identical) and higher values representing higher levels of inequality. The GE measure depends on a parameter , representing the weight given to distances between incomes at different parts of the income distribution, and can take any real value. For lower values of  GE is more sensitive to changes in the lower tail of the distribution, and for higher values GE is more sensitive to changes that affect the upper tail. The commonest values of  used are 0,1 and 2: hence a value of  =0 gives more weight to distances between incomes in the lower tail,  =1 applies equal weights across the distribution, while a value of  =2 gives proportionately more weight to gaps in the upper tail.
  Coefficient of variation: It is the ratio between the standard deviation and the mean. This measure is a free scale index that can be used to compare different distributions. If it is equal to 0 then, there is perfect equality. However, it does not capture changes in the shape of the distribution. It is also more sensitive to changes among the rich than among the poor. ( =0)
  Theil-index: The Theil index is part of a larger family of measures referred to as the General Entropy class. It measures within group inequality and between group inequality. It is scale free and respects the principle of transfers. Like the Gini coefficient, it is more sensitive to changes in the middle of the distribution. The Theil index, however, does not have a straightforward representation and lacks the appealing interpretation of the Gini coefficient. ( =1)
  Popular measures that do not follow the axiomatic approach
  The Gini coefficient is very widely used because it has many desirable properties. It is, however, more sensitive to changes in the middle of the distribution. That means that if the income of the middle class goes up by one dollar, the change in the Gini coefficient goes up much more than if the same change happens to the poor or the rich. The Gini coefficient takes on values between 0 and 1 with zero interpreted as no inequality.
  Decile dispersion ratio: Also sometimes used is the decile dispersion ratio, which presents the ratio of the average consumption or income of the richest 10 percent of the population divided by the average income of the bottom 10 percent. This ratio can also be calculated for other percentiles (for instance, dividing the average consumption of the richest 5 percent – the 95th percentile – by that of the poorest 5 percent – the 5th percentile). This ratio is readily interpretable, by expressing the income of the rich as multiples of that of the poor
  Atkinson Measure: It is a subjective measure of inequality. The Atkinson measure depends on a parameter which is an inequality aversion parameter, 0< <he higher the value of  the more society is concerned about inequality. Hence, Atkinson (0.5) means that the index has been computed assuming that society cares 0.5 (or little) about inequality (that would imply that the fraction of the dollar that gets to the poor has to be great). Atkinson 1 means that the index has been computed assuming that society cares 1 (that is more than 0.5) about inequality. These are the two most usual measures, but you can find Atkinson 1.5 too. Provided that we have the same degree of inequality concern, it can be used to make comparisons. Its main problem is that inequality indexes made for different degrees of worry about inequality are not comparable, but we cannot say that all societies have the same attitude towards inequality. The Atkinson class of measures ranges from 0 to 1, with zero representing no inequality.
  An Alternative Approach: Stochastic Dominance
  Lorenz dominance. If the Lorenz curve, (the plot of cumulative income shares against cumulative population shares) of distribution y1 lies nowhere below and at least somewhere above the Lorenz curve of distribution y2 then y1 Lorenz dominates y2. Any inequality measure which satisfies anonymity and the Pigou-Dalton transfer principle will rank the two distributions in the same way as the Lorenz curves.
  Figure 3: Mean-normalized second order stochastic dominance
  Brazil 1981-1995: Lorenz Curves
  Note: 1995 Lorenz dominates 1990, but 1981 Lorenz dominates 1990 and dominates 1995.
  Source: Ferreira and Litchfield, 1999, "Inequality, Poverty and Welfare, Brazil 1981-1995". LSE Mimeograph.
  It is very important that you are aware of the difficulties in comparing inequality across countries. Even when the same organization has compiled the data, many of the criteria may be not homogeneous. International comparisons should be made with caution.
  REMARKS: You should be able to read and interpret tables like these one. You should know that there are different ways of measuring inequality and their advantages and disadvantages. For instance, I could ask you choose one or two measures of inequality to summarize information about a particular problem of inequality and to explain why do you think those measures are best.
  
  POVERTY MEASURES
  
  Now that we know how to look at inequality in a population, we want to focus our attention on the lower end of the distribution: the poor. We want to be able to assess the level of poverty with an objective measure in order to be able to know if poverty has increased or decreased, or whether the poor are poorer. To be able to answer these questions we need to define who the poor are and the more informative way to describe their situation is. Additionally, as there are many dimensions of poverty , questions like how long does a person stay in poverty or which is the rate of persistence of poverty are relevant to fully understand poverty issues. Another important dimension of poverty is mobility. Poverty may be viewed as less burdensome if the expectation of getting out of it is high. The main problem generated by poverty is that many poor people see their situation as permanent and therefore find themselves without incentives to "get out" of poverty. In this regard, public access to social opportunities like education, training or basic services tend to create a less stratified society and to avoid poverty traps. All these concepts, together with a definition of poverty, will help us decide if there really is an underclass in modern societies.
  Absolute and Relative Poverty Thresholds
  The absolute approach to defining poverty assumes that there is a minimum level of needs that should be covered in order to subsist. Those who do not posses the income to satisfy these needs are the poor. Absolute poverty thresholds are adjusted for inflation so that they remain the same in real terms. However, they define a minimum for well being that is not related to the rest of the population. Suppose that the poverty line is drawn at 16,000$/yr and there is no inflation. No matter what the average income of the population is (20,000$ or 40,000$, poor people will always be those under 16,000$/yr.
  We can ask if the poverty line is not something that should change overtime. What you would consider a minimum housing requirement, like electricity or running water, were considered luxuries during the last century. Even things like what an appropriate diet is may change over time. The relative approach to defining a poverty threshold takes a less severe view and it is usually set as a fraction of the median family income, generally 50%. When society changes the perception of necessities, this is reflected by the well being of the average family and in turn, it translates to the definition of poverty. In short, with a relative poverty threshold the definition of poverty changes with the standard of living changes of the society.
  Observations: Note that with an absolute poverty threshold poverty is bound to diminish if the living standard of the society rises. On the other hand, if we use a relative measure of poverty, there will always be a certain fraction of poor on the population, unless the distribution of income changes.
  The poverty line is usually defined with family income. A family of certain size is said to be poor if its income falls under certain level. This level is calculated in many different ways, but essentially it has into account minimal consumption of essential goods like food, housing, clothing, furniture…
  In Canada, Statistics Canada provides the low income cut-off, (LICO) which is the closest to an official measure of poverty. They were first introduced in Canada in 1968 based on 1961 Census income data and 1959 family expenditure patterns. At that time, expenditure patterns indicated that Canadian families spent about 50% of their income on food, shelter and clothing. It was arbitrarily estimated that families spending 70% or more of their income on these basic necessities would be in straitened circumstances. With this assumption, low-income cut-offs were set for five different sizes of families. These cut-offs were revised on the basis of subsequent family expenditure data. The cut-offs used for statistics since 1992 are based on the 1992 family expenditure data, which indicated that Canadian families spent, on average, 35% on basic necessities. By adding the original difference of 20 percentage points, new cut-offs were established for seven different sizes of families and five urbanization categories. LICO is based on income after government transfer payments such as the Canada Child Tax Benefit, Old Age Security pension, GST Credit, Employment Insurance benefits and provincial of territorial welfare payments but before federal, provincial or territorial income taxes are deducted. For 1990 and 1995, the revised cut-offs were adjusted by changes in the Consumer Price Index between 1992 and the reference income year. As a result of this criterion, the estimated number of persons living in poverty in 2003 in Canada is approx. 5 million (16% of the population). In 2007, 3 million Canadians lived in a low-income situation, down by 400,000 from 2006. This represents 9.2% of the population.
  
  
  Other measures of poverty widely used in Canada:
  Low Income Measure (LIM). The LIM is equal to one-half of median family income adjusted for family size, that is, half of the family income exactly in the middle of all families' incomes - half the families with the same size have incomes higher than it, and half have incomes lower. LIMs vary with family size and composition. There is only one LIM for all of Canada so it does not reflect the reality of higher costs of living in large cities and lower costs of living in rural areas. LIMs and similar measures provide interesting comparisons at a given point in time, but they tend to be 'flat' over time and do not track well against the ups and downs of the economic cycle.
  Market Basket Measure (MBM). The MBM attempts to calculate the amount of income needed by a given household to meet its needs. The MBM that was released by Human Resources Development Canada in May 2003 and estimates the cost of a specific basket of goods and services for the year 2000 assuming that all items in the basket were entirely provided for out of the spending of the household. According to the MBM a person in low income is someone whose disposable family income falls below the cost of the goods and services in the market basket in their community or community size. The market basket on which the MBM is based includes specified quantities and qualities of goods and services related to food, clothing and footwear, shelter, and transportation. It also contains other goods and services such as personal and household needs, furniture, telephone service and modest levels of reading, recreation and entertainment.