GDP

In the first video i learned a lot. I learned that the economy is either growing or shrinking all the time and with every penny we spend its all gets rolled up into GDP. For example like cars, toothpaste, cereal all gets added into GDP. But anything that is imported into the US like from china for instance is taken out of GDP. I never knew that manufacturing is 12% of GDP and Health Care is the most expensive its 16% of GDP. If you were to buy an old building to live in that wouldn't count towards GDP but a new building being built would. The government would actually try and guess by a lot of data about market information how much it would cost if you actually rented out that old building that you live in. So from that i found out that 1.9 trillion got added to GDP for just housing. The GDP for 2010 was 14.5 trillion which was the biggest GDP. Basically you need a GDP to keep growing which is the most important thing about it. When i listened to Why GDP is like GPA, i learned that GDP is not always a perfect number because of everything that if being manufactured and bought changes it all the time. What really surprised me and raised a question that i thought of was how if you buy a tomato that goes towards GDP but if you were to grow it it does not go towards GDP same with if you hired a nanny to watch your kids that goes towards GDP but if you watched your kids by yours self that would not goes towards GDP. So why would we buy things and give the government our money when we could save more and do things ourselves? Also with the oil spill all the helpers that helped clean the oil spill is calculated into GDP but nothing was subtracted from the environmental issues themselves. What also surprised me was that by preventing air pollution the GDP could be 2% lower than it is now. We spend 17% of GDP on healthcare which is a lot compared to Europe. In Europe its less than 10% and also the US spends more than 4.0% of GDP on military which is major also while Europe is less than 1.0%. All three things about GDP gave me things to think about and definitely stirred up questions.

Would you let a coin toss decied your future?

Flipping a coin is easy for the little things like where to go out to eat or what movie to go see but we wouldn't flip a coin on a big decision like a big move into another house or a new profession. Would you or wouldn't you. Daniel Herrington 26, who now works on advanced research projects for energy was a former professional race car driver about 2 years ago. He wants to know if he should leave his job now and hes pretty indecisive so Daniel went with the coin toss. Daniel and his girlfriend decieded that since they are both very indecisive and the coin toss make their life so much easier.

Steve Levitt said that most of the stories are factual based stories and there not meant to help people. Steve says that the upside of quitting even though quitting has a bad wrap, strategic quitting though can be a good thing. We make choice without a lot of information and then we get new information and quitting might be the right thing to do Steve says. Steve has quit everything that he is bad at.

Serra Mentessi says that she fell outta love with running but thought it was very hard to quit because it defined her. Serra needed someone to tell her that it was okay for her to quit running and when she heard the podcast she was able to do so. When people are faced with a big decision, should they quit there job, what college should they pick Steve says that he has something to offer for people that listen to this show. So many people ask themselves should i quit this or that but theres no way that Steve or his crew can make that decision for them but he can give them a framework to those people for making those decisions. Out of this framework was born a website called freakonomicsexperiements.com which will walk you through a couple of steps if you are uncertain about a decision you are trying to make.

Economists are always trying to figure out at the margin would it better to go one way or another and in the real world we dont have that option to live two lives. Problems that people have with the most difficulty deciding are important things.

Steve Levitt said that when you come to a point in life and you have to make decisions its costly, you spend too much time thinking about it.

The coin toss is with a random coin and before you flip the coin Steve makes you think a little bit about your decisions and then asks you a few questions. By the time they get done with the survey you may have figured out what you want to do but for those who are still perplexed with the decisions they will flip the coin for you and for most people they feel regret when they flip it themselves often asking themselves they wished they never did that, so when someone else flips the coin for them, we feel less regret. Then Steve will ask you to make a pledge, and then to just stay in touch and tell them how your life has been since you made the decision you chose.

The people that make real world big decisions, their changes do them better in life. Whenever your ont he margin you should have a default role and you should go for the change.

A New Mom And The President of Iceland

In 2011 there was an issue between Iceland, Britain, and the Dutch. Iceland was known for their international banking centers. Hundreds of thousands of people had savings accounts and invested money and had high interest rates that they were proud of but in 2008 the banks failed and people who were overseas could not get any money out. Iceland was now in a very difficult situation. 

In Iceland everything needs to be signed by the President who is as powerful as the Queen of England so in order for this to work they had to go to the Presidents house. People were standing outside the Presidents house with red light flares because they were so upset. The President ended up doing a veto which is a constitutional right to reject a decision or proposal made by a law-making body on the bill which he has never done before because this was such a serious matter. People were so upset with this decision that they voted NO to giving money to the Britains and the dutch. So the President set up one more vote. Stephon said that Iceland is not required to pay the money for what was lost from the banks. People are undecided about to vote yes or no. why should the citizens of Iceland pay for the britians and the dutch. The professor that was spoken to said that he was thinking about movie out of the country because it has become that bad. He said that the economy has shrunk and unemployment has sky rocked. Its not fair that people bought shares and now don't have the money that they invested in. Its not fair that we trust the banks and the banks can just walk away. People trusted the banks and the currency way to much. Land cruisers, computers, flat screen TVs were very very cheap says Hitha.

The debt market just wants to get repaid in the end. If bond guys can make money and lend it to us in Iceland then they will. Clayton Nash says he put money in one of these accounts. He put 42 thousands pounds and he got all his money back. The British government gave the depositors there money back to the dutch and they did the same to the Netherlands. Basically if you vote yes the little nation will be repaying the gigantic other population. Everywhere people went they were talking about interest rates. People in Iceland are well educated and full of life to know what they are voting on but then you also have to look at the other people who have jobs which are getting paid for working, the President asked us to read about what we are voting for but hes not paying us to do so so why should we do it says Hitha. She voted NO because this decision should go back to the international courts. But her boyfriend voted YES because the grounds that we stand on doesn't trust foreigners sends a really bad signal

In the end after the case went to the international court and the court issued its decision that Iceland didnt have to pay any money back. Refusing to pay hasn't caused much damage to Iceland and Iceland and the UK can still be friends again. The British and Dutch government still are getting money from insurance but they wont get everything they wanted and its not too bad for them.

     Herbalife International is a  global international company that sells weight loss and skin care products. In the podcast it was explained that Bill Ackman was saying that Herbalife was a pyramid scheme which is considered a pyramid if participants obtain their monetary benefits primarily form recruitment rather than the sale of goods and services to consumers. Bill Ackman placed a 1 million dollar bet against Herbalife saying "Herbalife is a verbal scheme". After Bill made that comment Herbalife plunged 20%.

The reason why I believe that Herbalife is a scheme is because of the points that were made in the podcast that made sense. Herbalife is a big company but I have never heard of any brands by them. Formula 1 is something that is sold by Herbalife but has never been heard up and does the same thing as slim fast but slim fast is a popular brand name. Also, the numbers look odd. The company spends nothing on advertising and they don't sell there product in stores they are sold exclusively out of homes of people. 

Maryanne is in charge of Will Frado who is a independent distributor for Herbalife, so every time Will sells something for the company he has to go threw Maryanne who then gets part of the money of the sale. Basically the way people make the money is by recruiting sales people because then everyone works off everyone for the sale. Avon is a multilevel marketing company for example. What is illegal in this process is if people are selling Herbalife to people who don't actually want to drink the product. so those people who are buying the product but don't actually use is are just buying it to become a distributor to make the money.

Bill Ackman said that he spent well over a million dollars to put Herbalife into shortage. Bill Ackman is the man who said that Herbalife was a pyramid scheme. Either you can short the stock or you can buy the stock and how great it is.


 If Ackman is right the Herbalife company that reports roughly $4 billion in annual sales and a network of 3.2 million salespeople in 87 countries, could be shut down by the Federal Trade Commission.




 For years Herbalife has been referred to as nothing but a pyramid scheme. Because of the pyramid scheme the scandal involving Herbalife products and the number of people being ripped off by Herbalife ment that the company built up the worst reputations of all the multi-level marketing companies. So many people have failed to make money as a Herbalife distributor that most people refuse to get involved, let alone purchase Herbalife products.

I AM A GENIUS

    



1. The main point of this article is that genius in itself does not create great works or accomplishment on a grade scale. It accepts that people are born with enriched abilities that vary from person to person. It does not suggest that if you work really hard you can achieve being a genius it simple says that those who achieved great things did so by increasing their natural abilities through hard work that it didn’t simply land in their laps due to their “gift”. The findings did surprise me because its true that many people want to win but don’t want to work hard to win. It’s not going to be handed to you no matter how smart you are.

2.     2.The author’s view of talent is that its something you have to work for something. Its not handed to you. His view on talent changed throughout his life because when he was younger his mother had told him that he was a genius so he ran with the idea, but later on in life he realized that he might have to out work other or else his writing would count for little. He also said at the end of the article “…how smart you are doesn’t mean jack, and that you have to work demonically regardless”, meaning you have to put in time to get what you want.

3.      3. Basically the characteristics are that success isn’t going to be handed to you no matter what your innate talents are. The characteristics that I found were in this article that were more important than innate talent are hand-eye coordination, perspiration, inspiration, supportive environments, and important mentors.

4.    4.  Steve Hawking views those who boast about their IQs as being losers.

5.    5.  I think the author said that hard work could either encourage you or overwhelm you because it simply true. Either you make up your mind to work hard for something that you really want and can deal with the work that’s comes with getting what you want, or you could be scared off by the amount of work that comes with getting what you want and dismiss the whole idea of success to being with.

6.    6.  I think you assigned this reading because you are trying to show us that anyone can become a genius. Your not born with it, you don’t naturally have it, but you have to want it. And in order to want something you have to work hard to get it, and that what all of us in the class should do. Work hard to get where we want to be.

      I would love to be a genius. most people wish they WERE a genius but according to David Dobbs people aren't just born a genius, they have to work at it just like athletes have to work hard to become professional athletes. If you want to become something you have to put in the effort, or train for it, or time in becoming what you want. Hard work isn't everything though. A supportive environment and supportive people can help pave the way towards your success. Studies have shown that all high achievers have had some source of a mentor in there life to help guide them in the right direction. One study that Dobbs mentioned, involved music students at New York's elite Julliard School and winners of the high school level Westinghouse Science Talent Search. It was found that the Julliard students realized they had full potential when they had one-on-one relationships with their mentors. But most of the Westinghouse winners went on to college without finding mentors to help them through there talent and as a result, only half of them ended up going through with science, and only few of them actually got distinction. So the environment really does play a big role in becoming a genius. You  cant become something over night everybody has to work for what they want. Take Olympic athletes for example they train for years to become where they want to be. with the help of supportive people and environments and the time and effort that you put in to get what you want out then you are a genius. That's why i consider myself a genius because i have put in alot of time to be where i am now with a lot of help from a lot of people. :)

Coca-Cola

From 1885 til 1950 coca-cola was a nickle. For 70 years the coca-cola did not increase in price. other things around coke like gas, television, butter, corn, cars, etc the price grew.

Daniel Levey became very intrigued when he was visiting the coca-cola museum and being an economist wondered about the nickle coke and how is never rose in price. Andrew Young said that the price never changed in an attempt to attract customers but noticed that flavored fountain drinks like grape soda etc went up to as much as 10 cents. By May 8 1886 Atlanta was the first sale of coca-cola.

By 1899 two lawyers went to the president of the coca-cola company and asked to bottle coke. Instead they got a fixed price on the coke syrup at 90 cents a gallon. The problem was that bottled coke took off.

If coke were to increase is wouldn't go towards coke it goes towards the bottlers. Another reason why the price in coke was kept down was because of advertising. 5¢ was the main focus of the ads and was prominently featured.

One way that people could make money off of coca-cola instead of raising the price was to give out smaller glasses to people who were getting coke from the fountain, or use less syrup in the mix.
In 1921 sugar started to rise and the company started to loose money. But coke stayed at a nickle.

One reason why coke didn't change the price in coke was because of its advertising campaign and how long it would take to paint over the buildings that had 5¢ coke on the side of it, coca-cola trays,etc.

Another great invention that helped out the coca-cola business was the vending machine. The most important reason why the price of coca-cola stayed at a nickle was because the machine only took one coin and that was a nickle.

Single coined plan was introduced as an idea that might help the coca-cola business to get more money for each bottle of coke that they sol but doing it threw the vending machines. The plan was that every 9th bottle that came out of the machine was an empty bottle so that people would have to put in another nickle to get another bottle of coke this time a full one. Basically is was an extra 5.62 cents that consumers were paying. Eventually in 1946 vending machines gave change.

 The one and only thing that made coca-cola go up in price was inflation. When ingredients to make the product go up the price of the product has to go up.  1959 was the last nickle coke to be sold. 



At the end of the podcast they talked about how all prices give us that same feeling when they increase. That statement really made me think about it and think of how true it is. prices shouldn't chance and with that feeling is a psychological component that makes us think that way. Companies know this so instead of increasing the price of products companies will shrink a product and raise the price. For example, fewer potato chips in bags, instead of a pint of ice cream they give you 15 ounces etc.
Nickle cokes price was the longest constant in history but wasn't really a bad thing.

The song of the Summer

While I was listening to this podcast I was really interested in how much money went in to making songs that didn't even end up being a hit song. In the podcast when they were talking the competition with songs Rihanna song "Umbrella" was a number one hit. Then two years ago in 2009 "I gotta a feeling" by Black Eyed Peas was the number one hit of the summer. Then after that was "California Girls" by Katy Perry. But the one song that this pod casts really focused on was "Man Down" by Rhianna.

What suprised me is how much work, effort, time, money, patients, etc. goes into making one song and thats not even making it a hit song. In the podcast they explaied the writing camps which is a camp usually for two weeks where they bring in the best producers and writers to help with the making of this song. Usually the cost per day is around $2,000-$2,500 and maybe there would be 10 rooms which need to be occupied for two weeks.

In the writing camps how its done is that there are song writers and producers in the studio and they play beats that they think would be good for the song without lyrics and once they have one they come up with a melody first by humming something that they think would be worth it. What surprised me was that Rihanna still has no part in this or knows whats going on. In the podcast they said it took 12-13 minutes to put the song together which in total was 200 grand. They made the whole album in two weeks.

So, $200,000 divided by 11 singles on the track equals $18,000. But that $18,000 is only for the fancy dinners and rooms within the writing camps. Its another $15,000 for the writer and $20,000 for the music so in total now its $53,000 for "Man Down" so far and still there is no Rihanna.

Another thing that i found interesting was that when Rihanna is introduced to the song and she is in the studio actually singing it its like a party. there could be 30-40 people in the room with strobe lights, incessant burning, and even doves. But the person who put this all together was the vocal producer which costs $10-15,000.

Then the song has to get mixed and mastered which is another 10K. This whole producing activity is so much money to not even know if it is going to be published or not which is shocking to me. So far the total is $78,000 to have a song but not a hit. The next thing that is important for the song is its radio play which can be scandalous sometimes. Many people have paid the radio an amount of money to play the song on radio as its number one hit but now it has become illegal to pay someone to put the music on the radio.Why? Because it can be considered fraud and pay for play is deception. If a radio station does take money to play a song you are suppose to announce that you got donated the money to play the song or something like that.


The grand total all together is 1.25 million dollars to make a hit and a music video. But a shocking fact that I did not know before listening to this podcast was that "Man Down" was not a hit on the radio and that the song did not sell that well. The only reason why it sold was because the song was on the album and 1.3 million copies of the album sold.

                           

                                Adele is moving in and is becoming the top radio hits so far.