Month: March 2014

A Glimpse into the Federal Reserve

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The Federal Reserve recently released a transcript of their Open Market Committee (FOMC) meeting in September 16, 2008. The FOMC oversees the Fed’s “Open Market Operations,” purchase and sale of bonds; the Fed controls our money supply through this mechanism. It makes sense for the operational arm of the Fed to convene bright and early—8:30am—that day. This meeting took place in the thick of the financial crisis. Chairman Bernanke opened the session: “Good morning, everybody. Sorry for the late beginning. The markets are continuing to experience very significant stresses this morning, and there are increasing concerns about the insurance company AIG.” The Continue reading A Glimpse into the Federal Reserve→

The Risk in Agriculture

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The 2014 Farm Bill that was signed into law earlier this year. The Farm Bill puts out nearly $1 trillion ($956 billion) over the next ten years, but only 20% of that goes to farming. Food stamps make up a majority of the bill, but it is the restructuring of farm subsidies that changes agriculture in America. The Farm Bill has changed from Direct Payments to an insurance scheme. Direct payments was originally established in1995. Farmers originally received payments just for having the property to produce on. This was meant to help farmers during transitional periods between planting and harvesting. Continue reading The Risk in Agriculture→

Thesis Corner: Sport Event Sponsorships May Not Be Worth Their Price Tag

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All marketers face the dilemma of how to promote their brand to consumers creatively and memorably. Today, there are so many platforms to advertise ranging from television, internet, print, radio, and out of home (billboards, bus skins, etc). But among competitors making equal or more noise, how how will advertisers get their brand to stand out? Sponsoring a sporting event (sports marketing) is a nontraditional out of home marketing tactic that many companies believe to have profitable commercial promise. But as several companies attempt to insert their brand in arenas everywhere, how much do we undercut the lucrativeness of these Continue reading Thesis Corner: Sport Event Sponsorships May Not Be Worth Their Price Tag→

Looking Closer at the US Farm Bill: Food Stamps

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    In the most recent US Farm Bill signed by President Obama, Food Stamps are set to be cut $8 billion over the next decade. This comes after a discontinuation of the $5 billion a year increase in funding that was allocated because of increased need during the recession. Also known as the Supplemental Nutritional Assistance Program (SNAP), the program provided assistance to 46.8 million Americans in 2013, a full 15.1% of the US population. Supporters of the recent cuts argue that programs like SNAP create a “dependence” on government and reduce incentives to work, while opponents point out that without SNAP, an Continue reading Looking Closer at the US Farm Bill: Food Stamps→

Faculty Feature: A Workshop on Reflexivity

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[From time to time, Sound Economics will feature contributions from across the economics faculty at the University of Puget Sound. In our first Faculty Feature segment, Wade Hands discusses his recent participation in a conference on reflexivity and the work of George Soros. -Andrew] In October, I attended an interesting workshop in Budapest that may interest readers of Sound Economics. The topic of the workshop was George Soros’s Theory of Reflexivity and Its Relationship to Economic Methodology. Most readers know George Soros as a successful investor and philanthropist and probably do not realize that he has written a number of books on Continue reading Faculty Feature: A Workshop on Reflexivity→

The Fantasy Industry

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Fantasy sports has gained significant mainstream popularity over the last few years. In 2012, fantasy leagues reaped over $1.5 billion in entry fees. They’re so popular, in fact, that they’ve inspired offbeat spin-offs like a fantasy economics league (which I wrote about last week). Just like any other big ticket industry, a number of firms have popped up to cater to its needs. One example: Say the star quarterback of your fantasy team suffered a season-ending knee injury. Or, if you’re more disposed to participate in a fantasy economics league, your star department member unexpectedly developed an allergy to coffee. Either Continue reading The Fantasy Industry→

An introduction to the Farm Bill

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The 2014 Farm Bill (which was signed into law in February) can be a mess to understand. From food stamps to farm subsidies, the bill helps to shape the way America grows, processes and consumes foods. This video gives an introduction to the Farm Bill. It can be interesting to find out the mechanisms involved in such a massive bill (nearly $1 trillion). This is a relatively unbiased view of the bill and the market incentives that drive it. In particular it discusses the new crop insurance program and the decisions producers will face in the coming year. Before we Continue reading An introduction to the Farm Bill→