Econ Theory

Written by Joe Tetreault | 30 December 2010

THE FUTURE DOMAIN OF HOBBYISTS TJIC is absolutely right. Eventually photog snobs will sniff that Kodachrome was always preferable to digital for clarity of images, much like music snobs sniffed about vinyl in the nineties. Nothing sells like nostalgia, the familiar feel of what once ours when once we were young. It's why the Wii gets plenty of Super Mario Brothers downloads, and why you can still get a Sega Genesis on Amazon.

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Written by Joe Tetreault | 27 December 2010

WORTHY CAUSE: "FEAR THE BOOM AND BUST now has over 2,000,000 views.... We are working on the next one. It will again star Keynes and Hayek. This time they will be arguing about whether government spending financed by debt can create jobs and stimulate an economy in recession." The original video was an addictive thought-provoking watch that effectively conveyed the basic premises of both the Austrian School that Freidrich Hayek advocated (and in the interest of full-disclosure, to which I adhere) and the government intervention model that was touted by John Maynard Keynes. If you missed it:

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Written by Joe Tetreault | 26 January 2010

Two years of High School econ and another semester or two in college. This site, from which the above video originates, is fantastic.

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Written by Joe Tetreault | 04 January 2010

Christine Stuart, editor of CT News Junkie, advises of a pile of new laws that took effect at the dawn of the new decade. The one that - as Stuart quite rightly states - affects the most folks is the increase in the state's minimum wage to $8.25 per hour. Minimum wages are funny things. They poll well, are common in populist platforms, and economically harm more people than they help.

In Connecticut's case, the dollar spread between the federal minimum wage and the state minimum wage is likely siphoning off jobs from CT businesses and industries. The three states that border Connecticut all have lower minimum wages. In the case of New York State, the minimum wage is the same as the federal government. Massachusetts' minimum wage is $8; Rhode Island sets its minimum wage at $7.40. A small business located in Putnam, Connecticut, could endure the burden of relocation across the state line into Rhode Island and save itself eighty-five cents per hour worked by a minimum wage employee. As the spread grows, so does the incentive to pick and leave. In addition, the higher costs associated with entry level labor either result in fewer employed entry-level employees or higher costs to consumers.

For example the cost of movie tickets just went up at the Cinema de Lux we frequent. At $8 for a matinee and $11 for an evening show, the prices are marginally higher than they were last year. But with tighter budgets, it means even for cinephiles like us, fewer shows on the big screen and more via Netflix, where our monthly membership is less than two tickets to tonight's feature. The other place where the increased minimum wage is apt to raise prices is fast food. Many folks will continue to pay the higher prices, but economic reality, like gravity, can only be defeated temporarily before one comes crashing back to earth. In this instance, that means less revenue for those businesses and with less revenue there is less money to pay employees and fewer jobs available.

As of November, Connecticut had the lowest unemployment rate of the four states. Whether CT catch up to its neighbors with lower labor costs is something to watch during the first quarter of 2010.

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