Cannabis & Capitalism - What's Done in the Dark Series Part 2

In this second installment of the What's Done in the Dark Series, we continue to explore the trade of illicit goods in the United States, namely, the fledgling industry for legalized marijuana sales.

The ad below debuted in Times Square, New York City, March 2010:



In Times Square no less! And earlier this month, a major television network debuted a 1-hour special on the Marijuana Industry in the United States. This macro level view is causing a lot of micro level conversations between regular people in their homes, at their colleges and on their jobs. For decades, the use of this Level 1 drug has been banned in one of the world's most economically progressive countries, while in others, it is accepted and profitable for both the state and the people. The occurrence of the television special itself - much less the content - is evident of changing normative opinions here on the home front.

A bit of history for the buffs: Marijuana is a close relative to industrial hemp; both strains are of the Cannabis genus which is believed to have originated in central Asia. For millenia, mankind has harvested this plant for medicinal, recreational, practical, and ritualistic use. Tribesmen in Africa employ herb to commemorate life's seminal events. Inhalation and ingestion results in a more holistic and vivid appreciation of the natural world and a change in one's level of consciousness. Yet no one person has ever overdosed or died from its use**. Past Presidents George Washington and Thomas Jefferson cultivated and profited from hemp during the dawn of our great country's birth. While marijuana for recreational use is regulated but permissible in countries such as Holland, Portugal and Spain, it was first decriminalized by Oregon (for non-medicinal use) in 1973, right here in the good ol' U. S. of A.!

The 1937 Marihuana Act imposed a nominal $1 tax on all shipments of the plant and a lot of bearucratic red tape on all market participants*. This era also witnessed the effect of the media on societal attitudes. Mogul William Randolph Hearst used his holdings in the publishing industry to further his personal opposition to the "Killer Drug," alongside Federal Bureau of Narcotics agent Harry Anslinger. The movie poster above is from the 1936 film of the same name. From 1937 until 1970, marijuana was technically legal, (though taxed) but America outlawed the "burning weed" at last, forty years ago. Data from the shadow economy reveals that consumption of the distinct leaf has proliferated during this time, to no wonder. Prohibition has a funny way of increasing the propensity to acquire the banned good.

The MSNBC documentary follows restaurateurs and chefs who specialize in edible pot recipes; a necessity for those who seek the herb's medicinal properties but can't or won't inhale. The myriad practical uses for the ubiquitous plant has placed it squarely on the radar of economists worldwide.

We first encountered Harvard economist Jeffery Miron on this blog last year. Since then, Dr. Miron has become a foremost voice on the practical, economic benefits of legalization. He often looks to the success of regulation in other nation's as well as the tumultuous history here that led to it's current banishment. He rationalizes - using economic theory and quantitative forecasting - that the savings the nation would retain from reducing law enforcement come out to about $7.7 billion annually. Similarly, he adds that proper taxation would add amounts of up to $6.2 billion to the budget coffers. You can read more on Miron's research here.

ECONtreprenuers nationwide have been and continue to capitalize off of cannabis. Much like the Gold Rush of the 1840s or the Internet Boom of the 1990s, independent dealers and businesspeople are making a dash to claim their stake in this wildfire (pun intended) market. While official sources of the size, composition and smoking habits of the American consumer base are scarce, a noteworthy reference is PriceofWeed.com. Let us step back and stress that The Delasol Group does not endorse the manufacture or sell of illegal drugs. But we do admire efficient economic ideals, and this website is just that.

Anonymous users can submit their location and the most recent price paid/weight received for (presumably) recreational quantities of the drug. An accompanying blog goes into some detail on the statistical adjustments to the data to cull out pranksters and others who would put in false values. Nonetheless, it gives the casual browser (another pun!) a chance to compare costs from city to city across the U.S.

We here at delasol would be interested in more social metrics from the hardworking people at priceofweed.com. What about a (anon.) user survey on usage, experiences (positive/negative), budget, networking, customer service and general etiquette on navigating the perilous corners of the shadow economy?? We specialize in survey design and implementation, as well as market research, so an economic partnership may be in the makings!


cheers,

delasol


* Obtained from this site.
**courtesy of the Centers for Disease Control This is a .pdf and the CDC data is on the last page.

The Nutcracker, What's Done in the Dark Series Part 1

Happy Holidays from The Delasol Group!

In this first installment of the What's Done in the Dark Series, we explore the prohibited sale of alcohol in our communities. Our harmless post title belies the true nature of the nutcracker, and we don't mean the soldier in red.

In modern day Harlem, USA, a nutcracker is a horse of an entirely different color. Nutcrackers are potent mixed liquor drinks advertised on colorful flyers and sold in doorways and on corners throughout the borough.

Delasol founder Suneye Holmes first encounted the concoction at the annual African-American day parade in 2008. She remembers receiving flyers and business cards in broad daylight at the family affair, "as though selling liquor without a license is even legal!!"

The watered-down marketing techniques only serve to make the beverages appear more accessible and less suspicious to potential buyers.

$5 is the going price for a sealed plastic bottle of a Styrofoam cup of the drink. Vendors are composed of women, blue-collar workers, the underemployed and the requisite hustler-type. Buyers are usually underaged, underemployed or both, though young professionals and family-types are not uncommon. Obviously there is a need to regulate for the protection of the community: youths should not be inebriation and we need to know what's in those cups!! This area of the shadow economy highlights the need for accountability, order and consumer protection laws.

A typical investment is $250 for alcohol and fruit chasers. A typical return is $700, or $2.80 received for every dollar spent on ingredients.

The manufacture and sell of homemade mixed drinks is the stuff stories are made of in Manhattan. 80 years ago, people were just as enthralled with passing the time with an illicit elixir. But just like then, law authorities today are determined to quash the occurence. Equating the unauthorized sale to that of endangering a minor or child abuse, they are pouring out suspicious contents and passing out summons on the street. Recessions have a funny of increasing ECONtrepreneurship...and the fuzz.

Thanks to the NyTimes.com site and Harlem World, USA for much of the research for this blog.


cheers,

delasol

What's Done in the Dark (Series Preface)

By definition, entrepreneurs are risk-takers. They take on the risks of gathering, organizing and profiting from economic resources: the natural land, financial, investment and human capital, and their own blood, sweat and tears.

Entrepreneurs, at some point in time, created businesses to market and distribute all of the products that we buy today, whether it's a physical good (like a volleyball) or a service (like going to get your taxes done). Businesses choose prices to sell their products for that are competitive with other firms. People choose which products to buy based on price and quality, among other factors.

In every country, the sale of illegal products is present to some degree. In the United States, it is estimated that outside of our booming $14.8 billion legal economy*, a $1-2 billion "Shadow" economy exists, though the numbers will vary from source to source. Government agencies, such as the Bureau of Economic Analysis (BEA), gather economic data from the paper trail left by people and businesses spending their incomes. But when the transactions are cash-based and neither the seller nor the buyer reports it, the government misses it. The Shadow Economy gets its name from this phenomenon; since we can only estimate it's size, there is much data than can be brought into the light.

This underground economy takes several forms and (on this blog) it is composed of any economic activity that takes place "off the books" or "under the table." Here are some common examples:

Transportation Services - When in New York City, you as the Yanks do: hop a ride in either a licensed Medallion (usually yellow) Taxicab, or in a mysterious black town car known only as a "gypsy cab." While both offer the same service, Medallion taxis actually have a medallion fixture on the vehicle; gypsy cabs lack this identifier, however, there is more room to barter with the gypsies (in our experience) and they are ubiquitous in the neighborhoods of the City, often preferred when yellow cabs are deemed overpriced or inaccessible. Medallions and their cabs are strictly regulated by the NYC Taxi & Limousine Commission.

Prostitution Services - The world's oldest vocation probably because of perpetually high demand and incomes. Usually shunned because it's obnoxiously labor-intensive. Arguably a low-skills position - pun intended - but the physical and mental stress, as well as the uneven distribution of said income negates most gains. Prostitution is illegal in the United States, but things are definitely done (and paid for) in the dark. The Netherlands legalized this one in 2000 and regulates it to date.

Weapons - The shadow economy provides the means for obtaining guns and ammunition that a government bans, perhaps via smuggling from another country or pilfering from domestic manufacturers. Often, it is the case of someone having a weapon they are ineligible to posses, because of an existing criminal record or maybe a documented mental illness. Rogue governments acquire guns illegally too, and some use them to start covert wars.

Alcohol & Tobacco - Prohibition of alcohol ended in the U.S. because Americans were still drinking and (because?) the economy was in dire straits. From 1919 to 1933 it was illegal to buy, sell, make or deliver alcohol in this nation. The amount of liquor consumed fell, but the number of illegal speakeasys and criminal activity in general rose during this period. The Twenty-First Amendment repealed the Noble Experiment. The U.S. Archives estimates that in New York City alone, in 1925, there were at most, 100,000 speakeasy clubs, offered the gamut of vice goods! Today, New York authorities are struggling with the manufacture and sale of homemade mixed drinks on the street called Nutcrackers.

Copyrighted Media - Think: bootleg. Your friendly local convenience store hookup; outside the store, that it. Whether you make a hand-to-hand transaction or search for that new movie or song online at little to no cost, it's all under the table and out of the light. The artists would argue that a higher fee is owed them for their work.

There are other markets that could be listed here, but delasol wants to emphasize that this list is not to suggest that the shadow economy is composed entirely of illegal activities. We define the shadow economy as including economic activities that are cash-based in nature, the result of bartering, or just outright illegal. Many cash-based businesses are perfectly legal, such as gambling in some American cities. And bartering, of course, is a matter of an agreement between the seller of a good or service and a buyer.

We will begin a new series on this blog on the economic implications of a dynamic underground economy. The first installation will be about the changing illegal drug trade in the U.S. as marijuana appears to transition from a high societal cost to a potential cash cow.


cheers,

delasol


*3rd quarter 2010 data (.pdf) from the Bureau of Economic Analysis

Pre-Paid Debit vs Checking and Credit

An emerging financial market in recent years is the Pre-Paid Debit industry. Marketing as been particularly successful in the aftermath of the 'Great Recession' of 2008, caused primarily by credit on crack.

That one's for Wall Street. 

Pre-Paid issuers, such as Young Money records, Wal-Mart, Russell Simmons and even the Kardashians have enjoyed relative profits as many consumers appear to prefer cash/debit transactions over more debt.

After a conversation earlier this week with a fledging ECONtreprenuer in Atlanta who is a musician/aesthetician/ESL instructor, we decided to devote some blog space to the Pro and Con of the Pre-Paid Debit Card - Fees! - to help inform persons considering their usage.

• User be informed - Fees ahead!

In the October 22nd posting on record label Young Money's venture into the prepaid market, we featured a chart of fees from the RushCard website. With cash that you save and stuff inside a mattress, there are no fees to pay! As an economic tradeoff, however, there is also no interest to earn.

In a checking or savings account, it will vary from bank to bank (or credit union) if you have fees to pay. Ask questions if you are unsure if you will have to pay a fee to keep you money in the bank of your choice.

A Pre-paid debit card - such as the wildly successful RushCard - is NOT a debt instrument, so your credit stays intact! You only spend what you deposit into a pre-established account. Fees abound, however, for Initial Activation, Monthly Maintenance, International/Domestic transfers, Adding Money to you account and more. Understand that the amount that you deposit may not be the final balance after the necessary fees are deducted.

For example: The most popular reloadable prepaid debit card in America, the WalMart MoneyCard, charges $3 as a monthly maintenance fee, $3 to reload the card with more cash, $2 to withdraw cash at an ATM or a bank teller, and $1 to find out your balance at an ATM.
As prepaid cards go, that’s a good deal. Other cards charge a lot more, according to a September report by Consumers Union, the nonprofit publisher of Consumer Reports. One striking example is the Kardashian Kard, which has a $9.95 activation fee and charges $7.95 per month, with a $1.50 fee to call customer support and a $6.00 fee to shut down the card.**

Spend Wisely!

delasol



**Courtesy of the Christian Science Monitor 

Liquid Assets

Liv-ex is a UK-based company that brokers investments in wine.

Yes, wine. That most liquid of assets for oenophiles worldwide. Indeed, Delasol Group Founder Suneye Holmes has in recent years partnered with longtime friend Erica E. to promote informed wine tasting and choosing, at an economical rate, of course.

Liv-ex is an index of 100 wines that are very old and very delicious. Most of them hail from France - Bordeaux, primarily - but also from other countries as well. Wine is a "vice indicator," that is, a guiltly obsession that usually fares well whether the economy is making a lot or a little money for households and businesses. As of November 30th, wine as an investment is doing remarkably well compared to last month and the last year:

Presumably, "vice indexing" can help investors win at the expense of the weakness' of households. During economic downturns - such as the 18-month 'Great Recession' just survived - vice assets such as alcohol, tobacco and wine tend to increase sharply. Even moreso than during the peaks & recoveries.

Investing is as quantitative as decision as it is qualitative. That is, earning profits is as important as putting your money where your mouth (beliefs) is. At the pursuit of profit, entire civilations have been obliterated and cultures lost forever. When your economic decisions reflect the values and principles you want your future children to know, the return is far greater than gold.

While DLS has no holdings in wine, we are partial to grapes from Israel, South Africa, California and Argentina.

Happy Investing,

delasol

Cash Money

Recently Delasol learned of the parent company to music label Young Money (see 10/22 posting), Cash Money, trailblazing new revenue streams in the book publishing industry. Co-Founder Bryan "Birdman" Williams speaks to an NBC journalist on the new directions the label is taking:



ECONtrepreneurship at it's very best! Taking his own resources and ability, Birdman has used pure grit (and lots of money capital) to create a niche in the (neighbor)'hood fiction and non-fiction literature markets. Per Birdman, the goal is to produce and distribute 5 or 6 books a year. Way to improve your bottom line while creating more entertainment, opportunities and motivation for others, Cash Money!

Birdman and brother Ronald "Slim" Williams intend to sell books at concert venues, thus bringing the two forms of revenue (music and books) under one convenient roof for consumers.From HipHopWired.com:

The first book is scheduled to be launched in February entitled "Raw Law: An Urban Guide to Criminal Justice," written by Muhammad Ibn Bashir. In March, they will release Wahida Clark's "Justify My Thug," a paperback original novel. Cash Money also was able to secure the rights to the memoir "Pimp" by the late Iceberg Slim.

Cheers,

DLS

Holiday Shopping Season 2010

The Delasol Group sincerely hopes you had a restful and replenishing Thanksgiving.



Now that we've eaten, we can loosen our belts (so to speak)! The two business days following turkey day are the shining stars of the yearly shopping cycle.

Black Friday (or African-American Friday, as Whoopi Goldberg put it) and Cyber Monday, while relatively new, are now permanent parts of the American lexicon. Wherever would we be without those irresistable sales??

This year, consumers left the credit at home and went in with cash and plastic of the debit kind. Delasol Group Founder Suneye Holmes was one of that number in the pre-dawn hours on Friday, November 25th:

It was incredibly efficient in Weatherford, Texas. I arrived at the local Best Buy at 3:30 a.m. Best Buy representatives circulated through the line with flyers for specific Black Friday items: tvs, Wiis, PCs, washers/dryers, et cetera. Each flyer beared a number that guaranteed the bearer a unit of the item, which was (presumably) in limited supply. At 6 a.m. the doors opened and shoppers with and without flyers were escorted through the doors to a barricaded walkway with "exits" at each major section of the store: computers, music, audio/visual, etc. At each post abbreviated queues formed where employees exchanged products for flyers and shoppers could check out immediately, withough traveling to the front of the store! I purchased a laptop and computer software and security for myself for less than $700 in less than 10 minutes. The laptop was just what I needed: high-end processing speed with a lightweight body and a webcam. I feel that I maximized both my time and my dollar!

This year, shoppers chose to use cash, check or debit over credit cards. 30% less than last year and the lowert percentage in the last twenty years!* The Delasol Group would like to congratulate and encourage the general public for executing sound economic transactions on the most important shopping day of the year! Borrow less and save more for life's events!

Cyber Monday is the next business day after Thanksgiving that encompasses online retail sales by consumers nationwide. Online sales on Monday, November 29th topped $1 billion, the highest ever!! JCPenney's was a big winner this year. Black Friday sales, in comparison, were just under $650 billion, so selling your goods via the Internet in this day and age could prove most profitable. The economic outlook is to look into expanding your new or current product sales onto the World Wide Web!


Smart Shopping,

DLS








*Reuters Online

Young Money

A special highlight today spotlighting the productive efforts of Young Money.



The youthful and creative bunch are well-known as efficient producers of hip-hop music: lots of it at a low cost. Young Money's founder, star artist Lil Wayne is ubiquitous in the mixtape industry, known for arguably the largest volume of published rap available in digital (or physical) form. Considering that YouTube can make you a rapper, that's a most impressive credential. Perhaps even more impressive is Wayne's contribution to the American English lexicon: bling-bling. It is heavily debated that while Wayne did not invent the word or the definition, he did help push its usage into the mainstram following his performance on the hook of B.G.'s 1999 single of the same name.

Not to be outdone, the Young Money crew continues to seek profits in other industries as well, namely cigars and debit cards (this link is not an application form for the card). Random? Perhaps, but not if you associate with Young Money's target demographic or familiarize yourself with their lofty lyrics. There's a market for any and everything perhaps (see 3/24/09 posting) The somewhat offbeat investments could shape up to be well-informed steps towards transforming Young Money into Mature Wealth.

The Young Money prepaid debit card only allows the user to spend - at most - what is in their account. So no "ballin' outta control" if you don't got it. A debit card, versus a credit card, urges more fundamental and practical money management; espeically for young hip hop fans. The Delasol Group credits artists that sing with the bling and support responsible economic growth in marginalized communities and beyond.

Another company that cater to fostering sound market transations with communities of color in (neighbor)'hood near you is Russell Simmons' Rush Card. Savvy ECONtrepreneurs would be wise to read the small print (it's your right!) and compare card fees. The chart below was obtained from Rush's site:



And for good measure:



Careful Spending.

DLS

We see you, Uncle Sam

Don't get it twisted, Uncle Sam. The People of the United States are watching You!

We check back in a few months after a previous blog post on the Credit Accountability, Responsibility & Disclosure Act of 2009. Is Uncle Same keeping his promise of protecting credit card holders? We survey news items obtained from Google on what's current in the personal credit card markets.


1. Early in June, credit card issuers were already cutting up, finding ways to circumvent the new legislation. Violators have been charging new customers processing fees of up to $95 before the card is even used. Fail. Others increased interest rates before the Act took hold and offer a partial rebate (in the future of course) at the lender's discretion. The net result is the same as rasing rates. Epic Fail.

2. July told much of the same story. An associate economist the the Federal Reserve Bank of Chicago is quoted in the Wall Street Journal saying "Card companies are figuring out how to replace old fees with new ones....It's a race between regulators writing ever-more-complex laws and credit-card companies setting up ever-more-complex fees." While the fee increases are legal, they were starting to get out of control. A coalition of consumer rights groups sent a letter on July 7 to the Office of the Comptroller of the Currency name-dropped several offenders. Banks can't charge interest or fees on days payments can't be processed - Sundays and holidays - but stand firm that they still "accept"payments on these days. Doublespeak.

How to fight back amid the minefield of self-interest card companies? First, if you use credit at all, pay your bills on time. Makes raising sand when and if your card company unlawfully raises your interest rate or shortens your billing cycle much more palatable.

Second, continue to education yourself on credit card legislation. You can read the 33-page Credit card Act here (PDF). Get a credit report and always, read the small print. It's in plain language and right in front of your face...by law!

We like this chart, obtained from the WSJ online, with data obtained from the Pew Charitable Trusts, the National Consumer Law Center and the Center for Responsible Lending. It summarizes some of the less scrupulous practices currently being reported:

The Credit Education Series, Part 4 of 4

In this, the culminating segment in the 4-part Personal Credit Education Series, we explore legislation on credit cards passed by Congress in early 2009.

On May 22, 2009, President Barack Obama signed into law the Credit Card Accountability, Responsibility and Disclosure Act. The Act was created to strengthen consumer protection in the credit card market.

Economic commentary can be either positive or normative in nature. Positive economics is "testable" meaning some data exists, we can make hypotheses and we can run social experiments. Normative economics is a personal opinion of how an individual "feels" things "should" be.

Let's put it into practice! The White House issued a press release last Spring that listed several Principles for Long-Term Credit Card Reform. Among them:

1. There must be strong, reliable protections for consumers. We can test (Positive) the reliability (Normative...who determines what is reliable? In this case, the Government does.) & the severity (Normative) of penalty enforcement when card issuers overstep the legal boundaries. How? What data do we have as proof that this measure is Positive economics? Specifically, the Act calls for a ban on unfair rate increases and folks under the age of 21 must have proof of verifiable income or a co-signer...who is older than 21. Going forward we should see a lower (of not zero!) incidence of reports of unfair rate increases and predatory lending if this proves successful.

2. All correspondence sent to cardholders must be in plain language and plain sight. We can check this and compare changes in statements before the Act and after its inception (Positive). Gone are the days of hunting and squinting for the terms of your agreement. Card issuers are required to make it plain and keep it moving, and Congress tells us what "plain" is defined as (Normative) in their policy.

3. Ensure that consumers can shop for a credit card without fear of being taken advantage of. Debatable; this has Normative origins. People shouldn't have to feel as though they are being played. The Act continues on to explain that issuers are required to show consumers the consequences to consumers of their credit decisions; this testable and therefore, Positive.

4. The Act will ensure Accountability from both card issuers and regulators. Again, what is deemed "accountable" varies from person to person (Normative), but for purposes of implementing national policy (a Positive), the Act specifies that issuers must post credit card contracts Publicly (e.g., on the Internet) and among others, requires that issuers must request public input (Positive) on trends in the credit card market and potential protection issues.

Earlier this year the NY Times online posted a Positive blog with Normative comments about the Act. Check it out here.

Given the size of the U.S. economy - the Gross Domestic Product is over $14 trillion! - we will periodically check in with the progress of the Credit Accountability Act. It will take time for these regulations to trickle down to ECONtrepreneurs like you.

Go forth and borrow wisely and better informed than yesterday.

Rational Expectations for the World Cup

The 2010 FIFA World Cup has come and gone, wowing audiences worldwide with the sport's best and most promising teams and athletes competing for the number 1 spot. And for the very first time, the Cup was hosted on African soil. Congratulations to Spain, the winners!


From June 11th - July 11th, money and people flowed into South Africa, a proud country with a history no more complex and convoluted than any other, but did the African citizens benefit from such a seminal responsibility? In other words, was the decision to host the 2010 World Cup one that worked in the country's favor, or against it?

Economists believe that people (and nations) make decisions when they benefit more than they have to pay out; that is, when the benefits outweigh the costs. When we do this consciously with some desired outcome in mind - such as earning a lot of local revenue as a result of hosting the 2010 World Cup - economists say that people are "rational." We analyze a situation and weigh the pros and cons and act based on our expectations on how things will pan out. In this situation, it's safe to assume that the South African government and industry leaders (at the very least) thought that hosting the games would be a good idea for the country since they opted to host.

First, some historical context: South African was hostage to the institution of Apartheid from the 1930s when the term first appeared (an Afrikaans' word meaning "apartness"), through and beyond the 1940s when it was systematized into law. Think Jim Crow: nonwhite residents and business owners were restricted to certain areas, land ownership to nonwhites was duly restrictive, the lawful segregation of public facilities, prohibited social contact between the races, curbed nonwhite participation in government and economic policy, ad nauseum. Mounting international anti-apartheid pressure led to the state dismantling the system in the early 1990s. In it's wake was a worsening problem of income inequality between white South Africans and Black South Africans, and also between rich Black citizens and poor Black citizens.

According to the New York Times on July 12th, FIFA raken in approximately $3.3 billion in revenues from this year's World Cup, primarily from television rights, marketing and partnerships with various sponsors such as Coca-Cola.

South Africa's government spent just over $4 billion to host, most of which went to construction and improving infrastructure requirements. An estimated 130,000 temporary jobs were created by the soccer frenzy, in a country of 48 million (with 25 percent unemployment). President Joseph Zuma informed the media at a news conference "We are sure that the investment we have made will contribute to increased tourism, trade and investment. This will ultimately create new opportunities and bring in the revenue for us to address social challenges."

Well S.A. paid $4 billion and FIFA took in $3 billion. Well what else did South Africans get??

1. FIFA helped to establish the 1GOAL Campaign an initiative that serves the over 72 million children worldwide who are denied the chance to go to school. It was decided that the 2010 World Cup was the best place to launch the campaign, because the eyes of the world were watching. No data on the quantity or quality of education among South African children as a result of the initiative.

2. Ticket sales revenue would have significantly benefited the local economy if more tickets had been sold in advance. Reports state that initially, tickets were only sold online, a slight to Black South African fans, many of which do not hold bank accounts or have access to the Internet. Later, tickets were sold in-person exclusively to South Africans, but not before lots of revenues were missed. FIFA also had it's hand in these money flows as well, however.

Cynics (like the Delasol Group) contend that a not for profit organization like FIFA surely seems to be laughing all the way to the bank at the expense of the host country. Financially, the World Cup was a great deal for FIFA, but the grass wasn't as green on the South African side.

Thoughts? Always welcomed.

The Credit Education Series, Part 3 of 4

Welcome back to the long awaited Credit Education Series, brought to you by The Delasol Group, an Economic Education & Consulting Firm.

In part 3 of our series, we explore a new issue making better, more-informed economic choices for yoursel and your families. That is the issue of Security. Insurance is one form of security in our society, just like alarm systems or credit report monitoring. We need to protect our loved ones, our assets and our personal information.

Compared to thirty or even ten years ago, job hunting has increasing moved from face-to-face interaction, to print media to the Web. Today, Monster.com, USAjobs.gov and Craigslist.org are popular choices for the unemployed. At a time in our nation's history when jobs are hard to find and money is scarce, Internet scams are on the rise and innocent people become more susceptible to the increased temptation!

Here are some common online scams, two of which the writer was involved in (though thankfully not scammed!) in the last three months!! This list is courtesy of the Internet Crime Complaint Center (the IC3) website.

• Someone tries to give you a bad check, forged money order or some other kind of false monetary instrument to deposit. Usually, they tell you to cash it and take some off the top. (IMPORTANT: The bank will hold you financially responsible for what you took when the fraud is discovered!)



• Someone tells you about a business opportunity where it takes money to join and the best way to make money is to sign up more people.



• Someone offers to buy, sell or rent something



• Someone tried to cheat you at gambling



• Someone offers you an employment opportunity that turned out to be fradulent or illegal.

The IC3 serves receives and refers criminal complaints about cyber crime to local, state and federal law enforcement authorities. I submitted a report after I was sent a bogus cashier's check and instructions to cash it, take a fee (for SAT tutoring) and Western Union the rest. All parties were invisible, meaning that I only knew them through the Internet. This is a BIG NO-NO. While they got my address, they didn't get any bank information, and I was wise enough to keep all the evidence for any follow-up with the IC3.

Be smart. Protect your investments: your money, your family, your privacy! We will continue to treat Security has a high priority issue on this blog.

Cheers!

Healthcare Law Challenges Wealth Inequality in the U.S.

Take a good look at this cartoon (courtesy of the SF Sentinel online) and understand what it means. When the President of the United States, Barack Obama, signed into law the Health Bill today, he took America in the opposite direction we have been moving in (with respect to government policy and taxes) for the past 30 years.

Since the late 1970s, the top (read: wealthy) marginal individual income tax rates have declined. There has also been a simultaneous increase in payroll taxes that finance Social Security and Medicare. From this brief, publicly available information, we can assume that our federal tax system isn't particularly progressive; on the contrary, it appears to reward the wealthy and the expense of those in poverty.

Nearly every tenet of the Healthcare Law pushes in the opposite direction. It makes healthcare accessible to every citizen. If people have healthcare, overall they will be healthier to work and play and be productive members of our economy. This assumption is just the icing on the cake, however. The bottom line is that everyone needs healthcare. The Delasol Group believes that all costs aside, healthcare is a basic necessity that no one would want to be without in any capacity. We salute the Administration on their tireless efforts to work across partisan lines to provide for Americans' well-being.

In large measure, the Healthcare initiatives will be financed by taxes on the wealthy. Households that earn more than $250,000 a year will see payroll taxes increase. Most of the beneficiaries of the new law are making less than four times the poverty level, or about $88,000. (The poverty level is set at $22,056 a year for a family of four, according to the Department of Health and Human Services' poverty guidelines (2009 guidelines are in effect until March 31, 2010) - which differs from the Census Bureau's official poverty threshold. If you are in this group and don't have insurance, subsidies will be made available to cover the costs.

Here's a list of other major changes we can expect now and in the new few years with the landmark passage of the $940 billion Health Bill:

1. The good news (and contrary to some) is that Medicare and the Children's Health Insurance Program (CHIP) will not cut back on eligibility. They can only expand it.


2. We like this one!! Within 60 days, the Secretary of the U.S. Department of Health & Human Services (HHS), Kathleen Sebelius, must develop a standardized format to be used to present insurance information to the people of the United States in an "understandable way."


3. By 2014, state-run insurance exchanges will will up and running. Persons choosing not to sign up with their employeer-provided insurance can opt to choose a carrier from a state-run exchange. More options mean that we can hold the insurance carriers accountable for better service for everyone.


4. Monetary penalties on citizens who choose not to carry individually mandated insurance will begin in 2014.


5. Plans will no longer be able to charge for pre-existing conditions.

More provisions for the final Healthcare Bill can be found in this interactive feature from the New York Times. We encourage you to continue to learn more about how this historic legislation affects you and your family.

In all economies worldwide, the demand for healthcare exceeds the available supply, mostly due to rising costs for medical equipment and services, but also because of accessibility. The people in Haiti have faced both of these issues head-on since the earthquake in January. The problem is obviously acute in low-income communities, at home and abroad. We have an obligation to provide for what's best for the public's welfare and healthcare is what's best for everyone.

The 2010 State of the Union Address & You

How President Obama's 2010 economic agenda affects your life.

Happy New Year ECONtrepreneurs! How are Americans faring economically in 2010 and what can they realistically expect over the next twelve months? This blog applaudes President Obama's call for all Americans having the education and means to make informed choices for their lives during his speech last night.
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"How long should we wait? How long should America put its future on hold?"
"Make sure consumers and families have the information they need to make financial decisions."
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From this we know the President wholly supports the mission of The Delasol Group. In today's blog we highlight 5 areas from Obama's Executive Economic Summary for your learning pleasure.

1. Jobs. Last May (see 5/18/09 post, "Economic Indicators") we wrote about the National Employment Situation, a key piece of information about the health of a country's economy. Last night, President Obama stated that "1 in 10 are out of work;" a 10% unemployment rate, as of December 2009 (This is current as of January 8, 2010). When we posted that blog entry last Spring, the jobless rate was 8.5% and 8.9% in March and April, respectively. The unemployment rate has worsened over the last 10 months, but you don't need Delasol to tell you that. In many households people are looking for first or second, or even third jobs to make ends meet. Obama says that employment is our number one concern and last night proposed a new Jobs Bill to add 1.5 million jobs by the end of this year.





2. Works in Progress. On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act to combat the chaos in the economic markets. The Act focused heavily on help for small businesses, building American infrastructure , developing clean energy industry and practices, loosening credit and building national confidence. In the State of the Union address last night, President Obama refered to these areas several times as high priority. The ECONtrepreneur blog will continue to report on how these developments affect you.
   





3. What we got. The President said that in that last year, people had more disposable income (True), COBRA health insurance became 65% cheaper (True), and his Administration pioneered 21 different tax cuts (Possibly; we're still researching this one). With the benefit of hindsight, do you think this was a good sign of greater economic growth to come?





4. What we can hope for. Hope was a major theme of the Obama campaign. Last night he said the American economy will move towards full employment, long-term growth, suspending discretionary spending, universal healthcare, and improving the U.S. Trade Gap. These are additional topics we will explore on this blog in months to come.





5. What groups are definitely getting benefits? Students (loan forgiveness), retirees (stable markets and personal retirement accounts), the unemployed (new Jobs Bill), small business employers (tax credits and loose credit channels), homeowners (flexibility to move to a more affordable mortgage), women (equal pay for equal work), and military (veteran investment and support for families). The only group not benefitting - if that's possible - are the rich, who will not be seeing any tax breaks in the forseeable future.

That still leaves to debate how all of this progress will be paid for.

This year the ECONtrepreneur blog will closely follow progress in President Obama's economic agenda. Can't wait? Follow the Administration's progress at http://www.recovery.gov/.

Cheers!