XXX Olympiad: Time Well Spent

...money, not so much.

This is an Olympic event in and of itself

Economics recognizes time as a valuable resource. We spend it just like we spend money (and if you're fortunate, you've been endowed with more time than money!). As with any resource, it's scarce and thus, valuable; so we should be mindful of how we use it.

Athletes, coaches, sponsors and event staff are putting in unimaginable amounts of time to ensure that those of us at home can indulge in the XXX Olympiad for virtually no cost*. So who pays to put on the Olympics and is it worth it?

Hosting an international sporting event is big business. However, most of the "boom" is temporary: employment, construction, security, tax revenues and local retail sales are well-documented examples. In 2010, the World Cup in South Africa (read my take on it here) was an economic "bust." FIFA, the governing body for soccer on the planet is a not-for-profit group that took in $4 billion that year at the expense of the South African economy. The International Olympic Committee (IOC), also not-for-profit, will laugh all the way to the bank too.

Let's start with the bidding process. A decade before an olympiad, (the 4-year period surrounding the Olympic season) cities begin drafting plans to put on the biggest, brightest most efficient games. But in the bidding process, efficiency is often overshadowed by the minority goals of the local organizing committee. They are motivated by the private benefits rather than public costs! And never mind receiving the bid, just campaigning for it is a significant expense in and of itself. Chicago lost the 2016 bid to Rio de Janeiro for the Olympics, but still spent $100 million in the process.

After the IOC chooses a winner, an already bloated budget blows up even more as city planners hustle to make it happen. In some cases, such as South Africa and Athens (2004), the construction infrastructures are sorely needed to bring a city up-to-date. But in the wake of the event, the buildings often go unused, surrounded by weeds and dust rather than people and commerce. Beijing's energy efficient Bird Nest is the latest white elephant on the world stage.

Beijing's green & white elephant

Total revenue from an Olympics is about $4-5 billion these days, about half of which goes to the IOC, (who in turn distributes 90% to support the staging of the games). Even still, public financing (government borrowing) is almost always necessary. A notable exception is Los Angeles in 1984. L.A. was the only city on the planet willing to host the games, so they could bargain with the IOC for a more reasonable budget that didn't require taking on new debt. In contrast, the costs of the Olympics typically reaches into the tens of billions ($16 billion in Athens, $40 billion in Beijing) most of which is financed by debt and reasonably spent on security. No surprise there, after the horrific 1972 Munich games and the 1996 blast that ripped through Atlanta's Centennial Park. In the days leading up to the opening of such a high-profile event, terrorism fears can greatly increase the size of the budget.

And finally, we can't forget about sponsors. The Olympic Partner (TOP) program will bring in about $2 billion of the total revenue. Business' bid for the right to use the 5-ring Olympic symbol and basically capitalize off the games. This year, the world has witnessed the construction of the largest Mickey D's ever in London which will seat 1,500 and employs scores of people, only to be recycled and razed in six weeks. A waste or a good idea?

The world's largest McDonald's opens 7/28/2012

Without a doubt the Olympics are worth the time and effort to bring together the people of the world, and they are fun! But do you think the financial costs outweigh the feel good benefits? I'd love to hear your thoughts!

Here's a link to the official website of the Olympic Movement for more information on the nuts and bolts of the games.



Prosperity,

@RogueEconomista







*Save the costs of cable, internet, satellite and/or gas to get to your favorite pub to watch the games

The Euro Cup v the Euro Crisis

Germany and Greece. Today. 1:30 PM CST.

Photo courtesy of www.thegamehunter.co.uk website

Not a soccer fan? Shame on you. It's the Beautiful Game and is arguably the most popular sport on the planet. Maybe even the universe! The Delasol Group loves a good competition (*rimshot* that was a wonkish econ joke).

But what makes this particular match so intriguing is the background noise these two economies have been making for some time now. If Germany and Greece are just a fraction as exciting about soccer as they are about bailouts, expect fireworks today!

Here's the skinny on the EuroZone Crisis: Greece is broke. Yes, the whole nation. There are years of data showing that the government takes perverse pleasure in spending beyond its means (America too) which means deficits, debt and very painful deleveraging. Greece joined the European Union (EU) in the eighties which gave it hope, but it didn't change its behavior.  Nor is the EU a political machine. Economically, it allows member-states to enjoy  the benefits of it's "common market" where people, goods, services and capital can move freely across borders. But if it were politically and economically united, the EU could impose laws on countries who mismanage their finances. That, however, would require EU nations ceding some sovereignty, so that's a bust.

In the early 2000s, Greece phased out its drachma and began to use the euro as currency. Mind you, Greece was still spending beyond its income, so its debt continued to rise. The introduction of the euro meant Greeks were required to make deep cuts in public spending and bring inflation under control. Below is a chart showing the Greek deficit since joining the euro. Spoiler: it didn't get better.

So the money ran out and Greece had to appeal to other European nations for a bailout. A year ago, Greece received its first bailout (approx. $140 billion). In March, the Greeks restructured their incomprehensible debt which amounted to the largest sovereign default in history. But it was just a band-aid on an amputation. A second bailout just last month to the tune of $163 billion isn't even helping internal funding issues, but is paying off the interest from the first bailout!

By and large, France and Germany are most exposed to Greek debt. Their taxpayers have made loans to help and now they want their money back. Germany in particular. This is a fiscally solvent, historically relevant nation when it comes to austerity polices. Put simply the Germans go hard with money management. So much so that they're dictating to the Greeks (and everyone else) how they can and can't behave. You can buy this. Not this. Save this. Invest this. Jump! Tsk, tsk...you didn't ask how high! The bailout came with many strings attached, and with Germany at the head of an international, paternalistic, Big Brother handout, there's lots of tension ahead.

So winning today's match may be Greece's only way to stick it to the (wo)Man-in-charge, German chancellor Angela Merkel and her unwelcome (though well-deserved) austerity-for-money schemes. 

And what of France? Not surprisingly, they've softened their austerity rhetoric considerably since the euro economic crisis has spilled over to the doorsteps of its allies Spain and Italy, and yes, to its own doorstep as well.

The Euro crisis will continue as debt levels and unemployment continue to rise across the region (except in Germany). Without political unity, the Eurozone economy will crumble. Without sovereignty, member-states will not agree on political unification.

If only real life were as beautiful as the game. Here's to Greece getting some sunshine in today's quarterfinal match!


Prosperity,

@RogueEconomista

All Day I Dream About Shackles (A.D.I.D.A.S.)

The world will never see the JS Roundhouse Mids, Adidas' most infamous shoe to date. Can you guess why?

After hearing news of the shoe on NPR this morning, it would have been silly to exclude it as a current event in my econ classes today. Students were learning about Keynes' theories on business investment. Back during the Great Depression era, the father of macroeconomics felt that fickle consumers were just that due to our "animal spirits." Businesses never know exactly what products will be profitable and what won't because of our dynamic tastes and preferences! So investment for companies - and people - always involves some measure of risk. 

Well Adidas took a risk alright. But how could a firm as successful as Adidas have missed the mark so badly? 

One argument is that the shackles are representative of imprisonment, and other notoriety from inmates (and slaves) have become fashionable, right? Like braids, over sized pants, chains, brands and tattoos. Granted, not all listed are simply fads; in other cultures, braids and body art can be a sign of position or rank. It is true however that in our urbanized milieu, sagging jeans, "over gold" and brands have become positives instead of negatives.

Never heard of  "over gold?" Play the video below for a 1 minute introduction. It's endemic.

Another argument is that the consumerist American culture likes high-priced goods, no matter how ignorant or hurtful or controversial it may be. One student remarked that Adidas usually sells its shoes for a fraction of the price of the JS Roundhouse (which would have sold for about $150.00). So he would have bought them just to have a limited edition (scarce) one-of-a-kind shoe.

Ultimately, Adidas decided to drop the shoe from its fall line because of negative backlash in the blogosphere; not because a prudent Adidas executive thought better of it. Why? Negative PR leads to losing market share to Nike. The guest on NPR said that while Adidas lost out on the investment, it was a small price to pay to attract more consumers.

It's all about the Benjamins, baby.

Not to mention that best argument of all: why would I want athletic shoes equipped with shackles?? To keep me from jumping and running? That's just dumb.

Your thoughts are welcomed. Prosperity!

@RogueEconomista

Pop that Bubble for Uncle Sam

Deleveraging is the act of reducing the amount of debt you owe. In a word, it is austere.

When the economy is good, people are working and borrowing money with the intention of buying bigger, better products. In America we frequently use credit to buy what we want. Little thought is given as to if it will be paid back because incomes aren't scarce. But when the economy slips into recession, the medicine comes next in the form of austere deleveraging, paying back debt to quell further losses. If the situation is bad enough, this austerity can be excruciating.

No one in U.S. politics wants to even think about formulating a deleveraging plan. It's an election year, and talk of saving money, tightening belts and eating our peas makes voters look to the other guy. So the bureaucrats are procrastinating until after November. But by then it'll be too late to make any meaningful, long-term policy stick. Already we've seen the housing bubble burst, which ushered in the Great Recession and left us with recalcitrant unemployment. It's past time to deleverage and pursue austerity. Isn't watching Athens burn proof positive that another advanced nation like America (or Spain or Portugal) could face the same outcome unless we get control of our borrowing?



Athens, Greece riots, 2012




Yesterday, Twitter told me (via @MsGypsy_Jones) that we're facing another asset bubble. Mass media reports that the cost of a college education is overvalued, and I believe it. Students invest upwards of $100,000 into four years of school without guarantee of a job that will provide a rate of return that makes attending an accredited college worthwhile. With an unemployment rate of 8.1%, that situation's not improving anytime soon. Instead of pushing more students into desks, we ought to control the bubble now and seek alternatives: unaccredited programs, vocational training, community colleges and entrepreneurship basics for children. This way we can head off the inevitable bubble burst at the pass. Remember that economics is about information and weighing the benefits of any choice against the costs. Ultimately we save on the time it takes to get qualified graduates into compaable jobs, the money we lose from overinvesting in education and the economic consequences of postponing debt reduction.


So go'head. Pop that bubble for Uncle Sam. It'll only be worse if we wait.



Prosperity,


@RogueEconomista

By the seat of your gasoline underpants

So many of the decisions we make in our everyday lives can be discussed or predicted using economics. Here's a step-by-step example:

• People desire (demand) gasoline. We use it in  our cars so we can go!
• Gasoline comes from countries (mainly OPEC supplier) who seek profits and control distribution.
• Because of  supply (OPEC) and demand (me and you) we sometimes faces ridiculously high gas prices!

Now we have a choice to make: Pay the higher price to ride around or refuse and stay home/carpool/take public transportation?

Choice

That's economics in action! When faced with any decision - from buying outrageously priced energy to choosing to go back to school - we weigh the benefits against the costs. Rational people will make decisions where the benefits are greater than or equal to the costs (I'll leave it up to you to decide if paying $4/gallon for gas is "rational" or not).

As of late, gas prices have slipped a tad. I filled up for $3.45 this weekend. Last summer I was surely paying in the $3.80s*. But 12 years ago when I left home for college, price per gallon was about $1.25 in Atlanta. What gives and who do I blame for all this volatility??

People like to point to years that gas prices were more "acceptable," then associate any changes (new President or frequent oil spills, for example) with ruining the good ol' days when prices were low. Not fair. Economics on the macro-level is indicative of the choices made by its myriad micro units. If we are more willing to pay $4/gallon, than we are to carpool, we're implicitly telling OPEC that the price is negligible. These countries will continue to earn greater profits as long as our demand stays the course! In this sense, demand creates supply and not the other way around. Sure OPEC has the best and the most oil, but it's worthless until a market for oil opens and flourishes. When cars begin to run on beer, expect to see Anheuser-Busch, Corona and Fat Tire merging to restrict supply and push up prices. It's just economics. We like gas and well, we like beer too. Prices will rise to see just how much we like them.




Custom made beer tap gas pump by GarageArt.com


But by how much will demand for gas rise as energy prices creep north? Economists use a measure called elasticity to answer this, but to keep from boring you to pieces, suffice it to say that gasoline is pretty inelastic: Americans don't respond to higher prices by demanding less gas. We just pay for it and keep pushing. But why?? One reason is that after adjusting the volatility of gasoline for inflation, we're in a place we've already been so it's not that big a deal (relatively speaking). Take a look at adjusted gas prices since 1919:

After accounting for inflation, I was right to feel great about gas prices in 2000 and in Atlanta, they were lower than the national avearge shown above. But these last twelve months are more like the late-1970s and early 1920s. It's not new or even excessively high; but it is very similar to the purchasing power Americans had in those eras. So spend like you know and stop acting so brand new. If your parents or (great)grandparents came of age during either of these times they may well have lacked the daily convenience of debit cards, extensive education (despite skin color), and personal automobiles. During these eras the nation had less debt and higher taxes as well.  Since they made it, how will you? What choices do you exercise when faced with increasingly higher energy bills?


Everything in perspective and moderation. Prosperity,

@RogueEconomista

* I use a handy application on my smartphone called Mileage to track how much bang I get for my buck. Very cool

Personal, Practical Economics!

When people ask me what I do, I say "I'm an economist." Now, I know this is vague, but it gives the opportunity to do what I love: talk about economics!

ECONtrepreneurship in Action

Naturally, the next question is: "Well....what's that?" And naturally, I'm immensely pleased that I've been asked. Have a seat and prepare to get your coattail pulled.

ECONOMICS is the result of people not having enough of the things they desire. Money, clothes, credit, time, energy, anything you can think of! All of these things are scarce, if they weren't we'd have no reason to desire them. Scarcity forces us to make decisions, and making decisions is Economics.

This clip from Wall Street: Money Never Sleeps is a great example of scarcity. Dig Josh Brolin's response:

As on Wall Street, Main Street, and as on Main Street in our homes. Most of our economic decisions are about money and how to get more of it. Economics is useful for becoming financially fit, but its applications extend far beyond finance!

As an economist, I make it my business to help people get informed about sound economic principles to help them make better choices. That goes for you, your household, your business or your community group. Economic principles can help you understand and exercise your rights when it comes to:

• Employment (resumes & cover letters)
• Entrepreneurship (business plans, cost-benefit analyses & websites)
• Wealth acquisition (budgeting, saving & investing models), and 
• Planning for the near future in a complex economy. 

Specifically, I specialize in creating curricula to educate the masses, and delivering personalized consulting that will help you to help yourself. Real information that you can use immediately. Hands-on, practical economics. Oh, and what's in parentheses above are services I offer. See http://www.delasol.biz for more information.

Obviously, making a "good" decision is largely a function of the quality and quantity of the information you receive. The Delasol Group offers a focused group of services and goods that aim to help you nurture your personal economy at your own pace. So to make "good" economic choices, you should get your information from The Delasol Group!

prosperity,

@RogueEconomista

The Rain in Spain

...falls mainly on the plains; but let's be "fair" (pun intended). It's storming cats and dogs in the Spanish economy right now.

What's all the ruckus with high bond yields in Spain? And does that have anything to do with the less-than-stellar numbers the stock market posted on Friday?

In truth, Spain is making financial choices more difficult for everyone as of late. Worldwide media has got its panties in a bunch over high interest rates on the Iberian Peninsula: first Portugal, now Spain. High interest rates mean the same thing for nations as it does people: it's the cost of  the money you want when you have bad credit. The lender is obviously willing to take a HUGE risk so they are rewarded (and you are penalized) with high interest. In the movies, it's this convenient borrowing cost that's obnoxiously high enough to prevent full re-payment, prompting mobsters to dismantle your kneecaps.

Well, the rain is pouring down in Spain and that ship has sailed. The security to watch is the benchmark 10-year  bond. Most advanced economies offer this particular bond and many others that mature sooner or later than 10 years. In theory, "good" governments should allow for productive economies where people have jobs and earn income, spend and save; wash and repeat. Even better if they can choose where they work and what they buy. Under the productive economy assumption, even if governments run national deficits, it can borrow, issue bonds and ramp up production to pay the money back. In theory. In Spain's case, they spent way more than the Spaniards could produce so the deficits got bigger and bigger. The result is a mountain of debt, lots of excess capacity, high interest payments, and very very strict measures to get the economy back on track. Greece and Portugal are experiencing this now! And the citizens are none too happy about it because that involves pay freezes, layoffs and benefit reductions. Dessert or disaster after your rounds of spending? Disaster you say? Done.

Government debt is seen as a "safe" alternative to, say, stocks because again, economies should be stable and dependable, so returns are less risky. U.S. Treasuries are a famous "safe haven" for your money. Sure, our credit is crap, but we're the largest, most productive economy on the planet so you know...we're good for it. Whereas Spanish bond yields on 10-year debt is higher than 6%, U.S. 10-years are just around 2%. Night and day. Rain and sunshine.

The movement of bond yields (returns) reflects investor sentiment: literally, how investors feel. Investors wear their hearts on their sleeves. They take risks, but they don't really want to lose money. Fact is, it's inevitable. But no one wants to lose, so when Spanish debt becomes a liability, investors run in the other direction and expect the worse. Recession in the Euro Zone and the U.S. have left investors with weak stomachs. Thus, Spain's recent tumble into fiscal turmoil inspired investors worldwide to fly the straight and narrow and reallocate into the safe arms of U.S. government debt.

The adverse consequence is that money not only left Spain, but also U.S. stock markets, also seen as riskier  investments than government bonds. More than likely, your retirement account or other investments probably took a dive just before the weekend. Personally, my portfolio - which is disproportionately weighted in stocks for growth..I think.. - took a 1% hit that I'm not too pleased about. It's given that our world is a wide web of connections, so not only do we share the resources, but we also have to share the risks and the consequences of of economic decision-making. As the United States debates federal spending, debt ceilings and new leadership, voters are wise to become informed and self-aware! Have you noticed any negative changes in your stock portfolio as of late?


prosperity,

@RogueEconomista aka dls

Grandma's Hands

Families are our first schools. For many of us, we have learned how (not) to make decisions about from a loved one. And guess what? Decisions about money and/or wealth is what economics is all about! Yup, economics is a decision science.

Sometimes it's hard for families to make good decisions. This is disproportionately so for families of color. Many black families may lack the knowledge to know the difference between money and wealth. Or, they may lack the resources to acquire it. Whatever the case, while individual families have different wealth levels, many families of color have suffered economically due to institutionalized constraints. So when we get good information (like this blog) it's important to spread the word!

Big Mama & Big Papa, circa 1926, Lone Oak, TX

Each March, my mother's family descends upon Mineral Wells, Texas to celebrate our matriarch, Opal V. Anders. Usually, it's an afternoon church service that always coincides with her birthday. This year, Big Mama would have been 106. I am too young to have known her, but man, the kinfolk make a big deal about her as if she just left us!! Why is that? Socially, I know Big Mama was deep in the church and established an annual fellowship event in the late 1970s to celebrate the good life she's been blessed with. What I do know of Big Mama - the woman - was passed down orally to me from her oldest girl who became my grandmother!

So if Big Mama was such a big deal, what can I - a humble economist - learn from her life? Let's be honest, most black people descend from a Big Mama who had it rough and make a way out of no way. Cliche? Maybe a bit stereotypical, but hackneyed, I think not. Her generation achieved no small feat. They literally paved the way for my grandmother's generation to acquire wealth in ways black people never had access to in this country. Both women represent the dynamic American economy: Big Mama lived in a time when people reared larger families without debit cards, degrees or the promises of a pension. My grandmother reaped the benefits of integration and set the standard for her offspring on how to approach banking, education and retirement. I learned a lot from sorting through old family documents and talking to older relatives, but there's also value in digging through the National Archives. In just a few days, data from the 1940 census will be released for the first time, allowing us to get a glimpse as to what life was like for our predecessors! Exciting stuff!

From the work of my grandma's hands to yours: it's important to share good practices. Women especially are ideal to spreading economic knowledge because they generally raise the children and help the husband make decisions. I am now reaping benefits of the good decisions my grandmothers made and bequeathed. Feel free to add to this list and pass it along to a friend who can relate!

Grandma's Hands To Do List for ECONtrepreneurs

• Education creates options.
• Save, save save! Get an interest-bearing account and forget about it! My grandmother left a Money Market account to me, so I'll be sure to nurture it and pass it's value on!
• Know your number. How much are you worth? Take all of your monthly income and subtract everything you have to pay out during a month. What's left is your net worth. You want this number to be positive and big. 
• Know your other number: the credit score! My grandmother had great credit and her relationship with her bank left me some handsome options, including refinancing my car loan. I found out my credit score in the process and set a goal to lower it even more. Check out my previous blog entries on the Credit Score by searching for the label 'Credit Watch'.
• Track your spending. I can't stress this enough to my clients. With the available technology, a good smartphone app can make this an inexpensive and hopefully a fun task!
• Own something. Your own land, home, or business. 

prosperity,

Follow me on Twitter! @RogueEconomista 

POTUS #StateoftheUnion '12

The annual State of the Union address. A major political event, economic increment and trending topic.

@RogueEconomista

Every year Americans await the President's take on the economy and where we're headed in the new year. Campaign years are especially important because voters can signal whether or not they are happy with the administration at the ballot box in November.

Previously, we've discussed the difference between positive and normative economic statements. This is never so tantamount as to when you are deciding which candidate, which party even, to vote for. Politicians have to pander to voters' preferences to get or stay in office. Their political promises, however, often lack the economic prudence to maintain our strong global standing with high production or low unemployment. Below, some highlights from President Obama's 2012 address that could have gotten lost in translation:

• The Iraq War is over and thus commenced the President's speech. By ending the way America lowered her military expenditures and extended the lifespans of troops no longer challenged by Bin Laden's al-Qaeda. President Obama philosophically challenges us to imagine a world where we achieve economic growth without the aggressive use of national (preemptive) defense. It's a tough picture to paint: Americans have been at war constantly for the last 9 years and our economy has not emerged unscathed. This should be a major selling point for what follows...

• "Everyone gets their fair share...everyone plays by the same set of rules..." President Obama calls this idea an American value, not one of only Republicans or Democrats. The idea of instituting equity or fairness into economics is a slippery slope: our experiences, lifestyles and beliefs shape our idea of what is right or wrong, fair or shady. This is a political promise, not an economic one. The markets don't promise fairness, only efficiency. There will be losers. And who determines what is fair? If there is in fact a "who" then we're not in Capitalist Kansas anymore. Welcome to the new State-Sponsored Capitalism. 

Where's the nose??

• Domestic manufacturing is definitely a major bulletpoint of this year's speech. Surprisingly (to me) the President blatantly promoted protectionist strategies to promote domestic business at the expense of importing or producing goods and services cheaper elsewhere. I believe this to be problematic because by promoting America and putting down the rest of the world we are effectively cutting off our own nose to spite our lovely face. International trade helps us to grow beyond the resources we have. If we couldn't trade financial capital or democracy for oil then we'd have to change our way of life immediately. Also, producing goods and services at the lowest cost is a hallmark of competition and provides incentive for businesses to expand and evolve. This is more President political pandering: Obama is obligated to throw his support behind American manufacturing and production because he needs to be reelected this fall. In the long-run trade barriers such as "buying American" or subsidizing American producers hurts competition.  Suppose we protect our industries as the President suggest and prices are better elsewhere in the world? then cash flows will leave our country for more favorable markets; it's a self-fulfilling prophecy. Trade restriction are a highly controversial area especially during a time when domestic jobs are so scarce! But economically, what's better for America's future?

• Aaah yes, and taxes. If anything the Buffet Rule is major political prose. The likelihood that we reform our complicated tax system anytime soon is slim to none. The likelihood that we reform taxes so they are more efficient, less obnoxious and well..fair? You do the math.

*sigh* And no word this year on moving closer towards faster, efficient public transportation like we see in technologically-advanced Europe and Asia. With rising gas prices and American protectionism we can  likely conclude that these constraints will constrict the economy and have an adverse effect on the job situation. People without income cannot pay high gasoline prices at the pump. They need high speed/long-distance trains, new buses, routes and stops, and metropolitan-wide light-rail systems to get them to where the jobs are. Oh, and more jobs will become available as we improve upon our nation's aged transit system to compete with other markets across the globe.

Love to hear your thoughts on this year State of the Union address!

Dr. King's Dream Today

"Beyond Vietnam" is a speech by Dr. Martin Luther King, Jr., that you probably have not heard of if you are an 80's baby like myself. It was the speech he received the most vitriol for. Delivered exactly one year to the day before his assassination in Memphis, TN, King vilified America for her negligence of the poor in lieu of an unpopular war. What economic value can we use today from King's vision in 1967? Is his message in this unpopular speech relevant?

Most notably from that speech, King quoted an important statistic: "We spend $500,000 to kill each enemy soldier while we spend only $53 for each person classifed as poor; and much of that $53 goes to people who are not poor. So I was increasingly compelled to see the war as an enemy of the poor..."

Per Google, the costs of killing an enemy combatant in the Iraq or Afghan wars range from $50 million to $150 million depending on when you compiled the data. However, our soldiers of all colors can sit in the same classroom and live on the same block in peace. But the income inequality is the issue that remains an issue.

I believe that Dr. King would support the #Occupy movements worldwide. In "Beyond Vietnam," King speaks against the war to break down the wall between not only black and white, Jew and Gentile, but also between capitalist and communist and every variation in between. Market structure is a non-factor in King's utopia. Capitalism may very well be an engine of income inequality; but inequality anywhere is injustice everywhere. So with the growing income inequality we have experienced here, the conclusion is that the American capitalist structure must be reformed.

King explicitly addresses the "giant triplets of racism, militarism and economic exploitation..." and says that true compassion will force us to examine our values, or our normative statements. Should we spend our money on national defense or moral uplift? Today, on January 16, 2012 , we ask ourselves this question. The war in Iraq is over as the war in Afghanistan rages on. In contrast, income security, i.e., welfare spending is roughly 12% of the national budget, or $5,777.64 per poor person.

"There will be no meaningful solution until some attempt is made to know these [poor] people, and hear their broken cries."

- Dr. Martin Luther King, Jr., April 4, 1967



prosperity,

@RogueEconomista

BP Must Pay

This week an Op-Ed piece ran in the NY Times which audaciously claimed that BP is the poster child for economic justice in industrial accidents. In response to the accident of 2010, a $20 billion fund to compensate victims of the BP Deepwater Horizon Oil Spill was established and Kenneth Feinberg was appointed by the President to oversee compensation to the masses of households and businesses adversely affected. The NYT author takes pains to note that BP has "performed quite admirably" in the aftermath.

Oil & Water don't mix; BP Deepwater Horizon rig explosion response team

The Players
Last year, The Delasol Group established a working relationship with Fiduciary Management Group (FMG) to facilitate monetary distribution for Loss of Subsistence Use of Natural Resources; verbiage meaning that due to the oil pollution, there are people who can no longer eat food from the water, use the water in any functional capacity or go back to work if their vocation dealt with the water. This is a claim that affects households and small businesspeople in the region.

And that $20 billion to rebuild the Gulf Coast economy? As of Monday the following statistics (1) are predictably true:


The Numbers

• 29.45% of the Fund has been paid out since inception in August 2010.
• 61% of all compensation has gone to businesses.
• There's a 64% chance an individual will receive $5,000 or less (grossly understating the value of loss).
• Claiming Loss of Subsistence Use of Natural Resources comprises two-hundredths of one percent or .02% of all claims paid.

The Rub

Specifically, The Delasol Group and FMG are working alongside tribal leaders of the Biloxi-Chitimacha Confederation of Muskogees in Southern Louisiana. This is a population that falls short of the education and political clout to make easy work of the onerous documentation. The Delasol Group is a business which serves the disenfranchised. This is a population of skilled shrimpers, homemakers, oystermen, deck hands, administrative assistants boat operators and many others who deserve more than a cursory article; more than a federal oversight; more than an obliterated culture. Visit FMG's secondary website dedicated entirely to the cause to learn more about the firm's efforts and the BCCM website to read about the tribes' history, goals and concerns moving into the future.

The Mission

Should the Gulf Coast Claims Facility amend their erroneous processes to file and receive compensation for Subsistence Use claims of Natural Resources damaged by the BP Oil Spill, FMG will invest and allocate reward monies for current and future generations of the tribes. The Delasol Group will draft, publish and present and make permanently available economic literacy curricula sensitive to the tribe's socioeconomic needs to nurture and develop their assets.

In addition to muddied shores and tarred inlets, these citizens face off against both their own government and Big Business in a mutual quest of life, liberty and the pursuit of happiness in an all too familiar standoff. To achieve tribal-level justice the American Indians are pitted against businesses and victims in competition for a bigger piece of GCCF pie. No litigation necessary; it's not their day in court these people strive for. They, like so many other disenfranchised Americans seek a day when their land, language and lifestyle are respected as any other.

I'd like to see the NY Times write a piece on the income inequality rampant among those who have received  GCCF payment and those who have not. Or an Op-Ed on the deleterious conditions marring a credible and accountable GCCF claim approval process. No, a follow-up on how the people in this video clip have improved economically with help from BP since this was filmed last March should do the trick.

BP has made amends for nothing until it has made amends for everything. The GCCF is as yet unsuccessful if it neglects even the least of victims. In the spirit of activist and theologian Dr. Martin Luther King, Jr., "Injustice anywhere is a threat to justice everywhere (2)."



(1) Report obtained from the Gulf Coast Claims Facility website
(2) From King's Letter from Birmingham Jail, 16APR1963



@RogueEconomista

Optimistic Economics!

This year, our 4th year in operation The Delasol Group focuses on improving efficiency in our mission to distribute personal, practical economic information to the People. We've been quietly building a foundation providing resumes and cover letters to job seekers, drafting new economic literacy workshops and partnering with other visionaries to get appropriate information to specific demographics. Efforts to market our mission and our brand have expanded beyond The Econtrepreneur - the official blog - and is now accompanied by a Facebook page and Twitter account profiling Delasol in the community and informal discussion on issues of economic significance. A primary means of marketing has been in the form of commercials, all of which are featured on The Delasol Group's YouTube page. 2012 A.D. has arrived plentiful with new opportunities and even wilder dreams for this small economic education and consulting firm with big ideas. Personal, practical economics. For everyone!

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cheers,

suneye rae
founder / economist