Guerrilla Marketing

As defined by Wikipedia, guerrilla marketing "is an advertising strategy in which low-cost unconventional means are utilized, often in a localized fashion or large network of individual cells, to convey or promote a product or an idea." In my opinion, Guerrilla marketing is the most effective form of advertising because it is often the most memorable and enjoyable to spread. Rather than using an extensive explanation to communicate my point, I will use pictures to show why guerilla marketing is so successful.

Let's Leave the Middle-East: The Importance of Alternative-fuel Vehicles

Alternative-fuel vehicles (biodiesel, ethanol, propane, etc) have been emphasized through political and social discussions for a few years now. The public has heard it all; however, the media focuses on the "eco-friendly" aspect of the vehicles. That is absolutely important, however I think the more important effect of alternative fuel vehicles is that America can gain independence from the Middle-East. I am by no means the first one to state this, but I would still like to take the time to explain the significance of independence.

For a long time, we have relied on the Middle-east for our supply of gasoline. The large majority of cars in the United States rely on it, and it's a basic necessity for everybody's daily routines. However, some Economists would agree that there is a hidden danger in all of this. By changing the price of gasoline even a few cents, the Middle-east can easily manipulate the economy as they please. As Fadel Gheit, analyst at Oppenheimer & Co, stated; “Higher gasoline prices; lower consumer confidence. Lower consumer confidence; very bad news for our economy.” By switching to alternative-fuel vehicles, America could solve this issue of dependance.

My proposition is that media should appeal to the American patriotism in us all. We should focus on strengthening our own economy, and alternative-fuel vehicles can be the first step in this process.

As a final note, I'd also like to say that I've written posts about gasoline prices before- I find it such a fascinating issue. I would encourage everybody interested to look back at those to get a better sense of how the market works.

Alexander Hamilton Could Have Fixed Our Economy

I am embarrassed to admit how little I knew about Alexander Hamilton before taking US History with my teacher, Mr. Crowley-Delman. However, now that I've researched Hamilton, I believe America's financial and economic institutions owe much credit to him. Out of all his work, one of his most famous and respected policies include establishing the First Bank of the United States. He is famous for many other policies as well; however today I would like to explain the significance of the bank.

At the time of Hamilton's proposition, America had just broken off from England and formed the United States (McDonald, 1979). Prior to this point, America had been thirteen different colonies with their own systems of banking and their own ideas on how to handle finance (McDonald, 1979). Why was this dangerous? The most important reason must have that different currencies would cause disunity both internally and internationally. Just imagine if New Jersey, Texas, and Massachusetts all had different currencies. Each state would be looking out for their own interests, resulting in internal division. In addition, each state would have a different value to their currency. Other countries would have to distinguish between the different types, and America would quickly fall apart. In Hamilton's belief, establishing the first bank of the United States would solve this problem which would result in tremendous economic growth (in addition to paying of the debt America had incurred through the American Revolution) (McDonald, 1979). Establishing this bank would set up a standardized system that would serve as a model for future banks, and set a precedent for fixed currency. Hamilton had the incredible foresight to predict that unless the country could systematize economic trade, disorder would spread across the United States.

As great as the system seems to many today, there was much opposition to Hamilton in his day. Figures such as Jefferson argued that because 80% of the bank was public, other countries who would invest in it could control America's institutions and corrupt our system (Friedman, 1963) However, this was not the case. The buyers of the public shares had no link to the overseers of the national bank (Markham, 2001).

Without a visionary such as Hamilton, where would America's economy been today? He gave the United States some of the greatest tools for setting up a great financial system. World economists should look back at Hamilton's accomplishments (First Bank of the United States, the system of tarriffs, founding of the US mint, Revenue Cutter Service) and think about how we can recreate his successes to strengthen their perspective economies.

McDonald, Forrest (1979). Alexander Hamilton: A Biography. W.W. North & Co.. pp. 194.
Milton Friedman and Anna Jacobson Schwartz (1963). A Monetary History of the United States, 1867-1960
Markham, Jerry (2001). A Financial History of the United States. Armonk: M.E. Sharpe. ISBN 0765607301.

In Time: An Impressive Statement on Capitalism

Aside from being one of the most entertaining movies I've seen, the film In Time with Justin Timberlake and Amanda Seyfried also makes a brilliant statement about America's state of capitalism. In short, the movie takes us to a time where money is the currency; the poor work a day to get another day, the rich live forever, and a cup of coffee costs three minutes. As I watched, one scene specifically caught my attention. A character who had abundant time stated that although one can temporarily change the balance of the wealth, the long-term distribution will return to a state of extreme unbalance.
This was not the first time I heard the argument, and I absolutely agree with it. I strongly believe that even if we were to distribute wealth evenly, the balance would not last long. Although I believe this theory does not apply to every single person, some people are naturally more drawn to use their resources more shrewdly, while others are innately more lavish in their spending (or unaware of how to invest wisely). I would say that it is essentially the mindset which separates one type of person from the other. We have all heard stories of millionaires who lose all their money just to gain it back later. Contacts and experience definitely help the second time, but there must also be some kind of belief system that factors into this process.

Clearly, I am an advocate of this distribution theory. However, there are some aspects of it which leave me confused. For example, how long does it take to restore unbalance? Are we talking months, years, or generations? 'In the future' is a very vague term.

Regardless of your opinion on this theory, In Time is absolutely a worthwhile movie to watch. It will inevitably generate discussion and leave you with lots to think about.

Minimum Wage: Eliminate it!

In theory, minimum wage could be a great thing. It helps ensure employees are fairly compensated for the work they offer, right? Well, not always. I would actually argue that the minimum wage value of labor is over-estimated, and this miscalculation has many negative consequences to the economy. For example, let's take a a company that is forced to implement a new minimum wage above what the company was previously paying. The company has absolutely allocated some amount of money to pay employees, so then what are the employer's options? First, they could fire a few people in order to remain within the parameters of the allocated budget. This option has self-evident negative affects, especially considering people were willing to work for a lower price. According to supply and demand, if you raise the price of a product or service, less of the aforementioned good or service will be purchased. Labor is not exempt from this theory. In fact, a rapidly decreasing rate of unemployment is a significant contributing factor in a recession. Not to mention that many jobs would be outsourced to countries that do not implement the same law. [And Isn't this what we're seeing right now? It IS our fault that China gets all our business] The second option that the employer has is to increase the budget for employment. This higher cost has to be payed for somehow, though. The costs to the company would be translated into a higher price of the product or service. In addition, the people who were either fired, as in the case of a new minimum wage law, or not hired, has in the case of an existing minimum wage law, are statistically not highly educated either (comparatively). This makes it even more difficult fro them to find a new job.

My proposition on how to fix this? Eliminate minimum wage! Or at least lower it significantly. This would create countless job opportunities. More importantly, it would establish America as more self-sustaining , because goods would be cheaper to buy and produce in America!

In fact, the negative effects of minimum wage were effectively illustrated in 2009. After increasing the monthly minimum wage by a little over double, 15,000 people were layed off in addition to increased violence and a grudge against the system. Clearly, minimum wage is simply ineffective.

Tragedy of the Commons: We're All Innately Economists

The idea behind the tragedy of the commons is simple: common resources will be abused because the people using them lack of sense of ownership. Library books are not treated with the same care as personal books are; people fishing do so abundantly because it comes at minimal cost to them; and finally, although nobody would put a factory near their house because of its air pollution, large corporations don't think twice about doing so.
The flaw in the human thought, though, is that these consequences are peripheral. While some people may understand that these habits are taxed in one way or another; the principle of incentives prevents many from taking action. For example, lets say we live in a place, "town Y" where fishing is prominent. Further, lets say each person in the town is taxed x dollars for what is called the "fish tax". While many of us understand that if we fished less, amount X would be reduced, we would feel robbed if we reduced the amount we fish. Many of us believe that if we are being taxed, we should take full advantage.
In fact, I believe (and real life examples have shown) that taxes can actually encourage the habit it was trying to discourage. Before, the people of town Y weren't paying for a service. Now, they're paying for the service, so they feel that they must utilize it.
Unfortunately, our innately competitive nature to gain the most "bang for the buck" ultimately creates a dangerous outcome.
The tragedy of the commons is a great example of incentives, and this theory has been proven numerous times. The first paragraph of the following Forbes.com article effectively reenforces this concept. Below is the link.
http://www.forbes.com/asap/2001/0910/061.html

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http://bestadsever.com/