NPR Report: Sales Soar For Shoes, Glasses Like Palin's

From Morning Edition, September 12, 2008 · "The red peep-toe, patent-leather pumps that Alaska Gov. Sarah Palin wore when she was introduced as John McCain's vice presidential nominee are a hot seller. The line is called Naughty Monkey. The Wall Street Journal reports that Palin's eyeglasses also are flying off the shelves."

Listen to the full report here: http://www.npr.org/templates/story/story.php?storyId=94545630&ft=1&f=3

Tax Math

Higher taxes are most likely in our future, regardless of who we elect:

Douglas Holtz-Eakin, a former Director of the Congressional Budget Office and current chief McCain economic advisor, is an honest man--which means he's something of a liability on the Straight Talk Express. A few months ago, he admitted to my colleague, Michael Scherer, that Barack Obama's economic plan would reduce taxes for most people. And now, in a forthcoming book by Fortune columnist Matt Miller, he makes it clear that the next President is going to have to raise taxes.

"If you do nothing on the spending side, you're going to have to raise taxes whether you're a Republican, a Democrat or a Martian," he tells Miller...and then he immediately makes it clear that the "spending side" part of the argument is nothing more than a political fig-leaf.

And the futures market is also betting on rising taxes according to Mankiw.

The top income tax rate is now 35 percent. According to the betting at Intrade, the probability that the top income tax rate in 2011 will exceed 38 percent is 0.87. Call this P(tax hike).

Barack Obama has made such a tax hike part of his campaign promises, and there is no reason to think the Congress won't deliver for him. So let's assume Obama is certain to get the tax hike if he wins. That is, P(tax hike / Obama) = 1.0. (If this assumption is wrong, and this conditional probability is less than one, then my conclusion below would be even stronger.)

According to Intrade, the probability of Obama being the next president is 0.53. Call this P(Obama). And P(McCain) = 0.47.

Now we can calculate the probability of a tax hike conditional on McCain winning. It comes from the formula

P(tax hike)
= P(tax hike/Obama) P(Obama) + P(tax hike/McCain) P(McCain),

and plugging in the above numbers. It tells us that

P(tax hike / McCain) = 0.74.

Google Advice to Students

Google gives great advice to students and  sounds like they are describing BUS 230.

Our Googley advice to students: Major in learning
7/15/2008 05:48:00 PM
Management guru Peter Drucker noted that companies attracting the best knowledge workers will "secure the single biggest factor for competitive advantage." We and other forward-looking companies put a lot of effort into hiring such people. What are we looking for?

At the highest level, we are looking for non-routine problem-solving skills. We expect applicants to be able to solve routine problems as a matter of course. After all, that's what most education is concerned with. But the non-routine problems offer the opportunity to create competitive advantage, and solving those problems requires creative thought and tenacity.

Here's a real-life example, a challenge a team of our engineers once faced: designing a spell-checker for the Google search engine. The routine solution would be to run queries through a dictionary. The non-routine, creative solution is to use the query corrections and refinements that other users have made in the past to offer spelling suggestions for new queries. This approach enables us to correct all the words that aren't in the dictionary, helping many more users in the process.

How do we find these non-routine savants? There are many factors, of course, but we primarily look for ...

... analytical reasoning. Google is a data-driven, analytic company. When an issue arises or a decision needs to be made, we start with data. That means we can talk about what we know, instead of what we think we know.

... communication skills. Marshalling and understanding the available evidence isn't useful unless you can effectively communicate your conclusions.

... a willingness to experiment. Non-routine problems call for non-routine solutions and there is no formula for success. A well-designed experiment calls for a range of treatments, explicit control groups, and careful post-treatment analysis. Sometimes an experiment kills off a pet theory, so you need a willingness to accept the evidence even if you don't like it.

... team players. Virtually every project at Google is run by a small team. People need to work well together and perform up to the team's expectations.

... passion and leadership. This could be professional or in other life experiences: learning languages or saving forests, for example. The main thing, to paraphrase Mr. Drucker, is to be motivated by a sense of importance about what you do.

These characteristics are not just important in our business, but in every business, as well as in government, philanthropy, and academia. The challenge for the up-and-coming generation is how to acquire them. It's easy to educate for the routine, and hard to educate for the novel. Keep in mind that many required skills will change: developers today code in something called Python, but when I was in school C was all the rage. The need for reasoning, though, remains constant, so we believe in taking the most challenging courses in core disciplines: math, sciences, humanities.

And then keep on challenging yourself, because learning doesn't end with graduation. In fact, in the real world, while the answers to the odd-numbered problems are not in the back of the textbook, the tests are all open book, and your success is inexorably determined by the lessons you glean from the free market. Learning, it turns out, is a lifelong major.

J-Term Opportunity

J-term 2009: Voyages with a Vision II: Reality Tour to Tanzania
FOCUS: Social Responsibility, Ethical Globalization, Service Learning

Students will come face to face with crucial issues about globalization and its impact on communities to better understand them and see socially responsible business and other grassroots solutions in action.

More detailed information can be found at: http://www.uwlax.edu/faculty/anderson/information%20Tanzania%208-27-08.doc

(See also UWL's Study Abroad Link to J-Term Offerings)

Contact Professor Donna Anderson and/or attend one of the information sessions:

INFORMATIONAL MEETINGS
DATES: Sept 10 and Sept 22, 2008
TIME: 6:00pm
LOCATION: Ward Room, Cartwright

Congratulations

Congratulations to Economics major John Lauermann for receiving the prestigious 2008 Murphy Award for being the top graduating senior in May 2008. More details on John's achievement can be found here.

Politics and Economists

Greg Mankiw has an interesting strategy for any politician courting the economist vote.

http://gregmankiw.blogspot.com/2008/07/how-to-win-economist-vote.html

Interactive Inflation

Check out this interesting interactive inflation graphic in todays New York Times: All of Inflation's Little Parts.