RS5 - GDP

The term GDP is a term that most economists know very well, the three letters GDP stand for Gross Domestic Product.  The whole calculation in and out of itself is one giant mess and can cause a great controversy. Economist use GDP to determine how the economy is doing as well as to determine how happy a person might be due to a high GDP.  The difficult part about using GDP is that its a national average and does not speak for people individually because the equation becomes skewed and makes it seem like the economy is doing a lot better then it actually is.    

GDP calculates the United States total output and it breaks it down to sections, but one section that really stands out is defense spending.  The United States spends about 711 billion dollars on the countries defense department while China who is ranked number two is at 143 billion dollars in spending on defense department.  The United States spends almost five times more then China does. And the United States makes up forty percent of the worlds total spending on defense.  It is just hard to imagine why we need so much money to finance the defense of our country.  To me it seems overdone but this is a huge reason as to why our total GDP is so high.  If you lowered the spending on our countries defense we wouldn’t have such a high GDP. 

People argue that a high GDP will create happiness for the people, but how could this be true if we are spending 7% more on health care then western European countries while their life expectancies are all greater then the United States.  We also value our money a lot more then Europeans do as we work more hours then they do while they average 4-6 weeks of vacation. Europeans buy homes the same size as someone making more money over here in the United States because they don’t value their money as high as we do in the US. So you cant say the GDP proves how happy someone is because Europeans are just as happy with less money but equal assets.  So ultimately they have less funds. To me Gross Domestic Product can only be valued so much, but at a certain point, it becomes simply opinionated and as the article stated, “GDP per capita can cause a bar fight.”

RS4 - Would You Let a Coin Toss Decide Your Future?

While listening to the podcast from Freakonomics titled "Would You Let A Coin Toss Decide Your Future?" I began to think about what they were talking about in the beginning of the podcast when they were talking about a prior podcast they had that dealt with people quitting things that they have been doing for a long time but just are not sure about anymore.  They interviewed people and asked what they had quit, and there were some decisions you just do not understand.  The first one they mentioned was a man who was a professional car racer who decided to quit because it was not something for him.  Now that same guy uses a coin to make decisions in his life that dont have a lot banking on it.  For instance he uses a coin flip to decide which restaurant he would like to go to.  Another woman quit her job to become a escort. A very strange decision that she thinks fits her.  Life is honestly about how you personally feel and if you are not enjoying something then you can just step away and not think about it anymore because it is just not a factor in your life anymore.

Life comes with many choices and every choice you make will affect your future.  You may regret some decisions and you may love some decisions but in reality you cannot go back and change them because what is said is done and it is set in stone.  But im a firm believer in every decision you make will eventually pay off in some way.  Whether it is a small decision or a decision that is life altering, there will be some sort of good that comes out of it. But as the podcast focuses on the fact that life is all about decisions, some people have used their podcast and took it to their life and applied it.  It made people think, one man said he has quit everything he is bad at.  He told his kids to quit things that they were not good at.  

Freakonomics has created a webpage where you can go to with decisions of all kinds.  You go through a series of questions that you ask yourself and think about and if you still are not sure then you can actually flip a virtual coin that is 100% real in the aspect that it can land on either side and there is an option where you can do the best 2 out of 3 to determine things if you are just really on edge about. To me this is really cool and maybe its something i would consider using.  But only for decisions that are small and would not affect me either way the coin landed. But I feel as though this site could also be dangerous because what if someone had a serious question regarding life or death and they let a virtual coin flip make the decision for them.  So in some instance this site could be harmful.  As you go through life make sure the decisions you make are thought out and is made for all the right reasons. 

RS3 - A New Mom And The President of Iceland

Listening to Planet Money's podcast "A New Mom And The President of Iceland," I had several things run through my mind.  One being why would people from England and the Netherlands trust a random bank from Iceland with their money when they probably have never even heard of them. And two when the financial crisis occurred why did the people of England and the Netherlands think they were entitled to get their money back when they took a gamble and lost.

The fact that there was a vote on whether they should pay back England and the Netherlands or not to me is just ridiculous.  It should have been a unanimous decision to not pay England and the Netherlands back.  I don’t know why people would be scared that it would go to court because in my eyes, as I already stated, the people took a gamble and ultimately lost.  Obviously the bank is going to take care of the people in its own country.  They are their main clients, not the people of England and the Netherlands.  It would just be a generous thing to do to pay the people of another country back their money, it’s not an obligation unless they signed some sort of contract when they opened the savings account with the bank in Iceland.

The vote ended up being sixty percent with the no don’t pay them back and forty percent yes pay them back, so the governments of England and the Netherlands took it to International Court.  The courts final decision was that Iceland did not have to pay back either nation and they won, they were victorious.  They considered this a major plus, they called it their second win when it comes to war.  The only other was the cotton war where there wasn't even armies involved they joked about.  All in all in my personal opinion it should have never came to the point where the international court had to get involved because it is not the job of Iceland to pay the countries of England and Netherlands their money back because they had a financial crisis.

Although I sided heavily on the vote of not paying back England and Netherlands there very well could have been some bad side effects.  They ultimately could have been shut out of the world economy resulting in complete disaster.  If your country is not able to be part of the world economy they would not be able to trade goods, so ultimately Iceland would become a place where no one could possibly live.  The country would have to make everything, from clothing to all types of food.  And judging by the name of the country, the climate just wouldn't support that. 

RS-2 A Billion Dollar Bet

As I listened to the podcast by Planet Money about the Herbalife company and the possibility that it was a pyramid scheme I began to think.  Herbalife seems like a very successful company due to the fact that they have a good stock and their annual numbers always seem well above the average.  What is not to like about this company if you are looking got invest in it?  You would assume that if this company, Herbalife, is on the New York Stock Exchange that it is a legitimate company especially after hearing that it has been around for thirty years.

And if this company really is a pyramid scheme, how have they gotten away with this for such a long time.  They could have just recently been starting the pyramid scheme because their business is on the downfall or they have been this way from the start.  I personally have never heard of the product so I think it seems very strange that they have such high income with very little advertisement.  Unless it is a popular product in another country this is just very hard for me to believe that what Herbalife is doing is  actual and not a pyramid scheme.  This wouldn't even be a conversation topic if people had actually heard of the product.  But in reality Ive never seen or heard abou the product so I believe Bill Ackman is right with his claim.

The one thing I do not understand is that the short bidding on this company. What does it entail? and how do you do it?

In all honesty I would not doubt that other companies are doing the exact same.  Last year my roommate and few other kids on the floor were involved in a company that seemed to have the same setup as Herbalife.  The company was called Send out Cards,  the owner was a graduate from Sacred Heart if I remember correctly.  But the people would earn commission for everyone they recruited.  It seemed like nobody made any money compared to the top guy, who was a millionaire while my roommate was lucky to make a few bucks here and there after buying a membership that allowed you to do certain other tasks that eventually never panned out to anything.  It just didn't seem right that the guy at the top made profit off of every sale while my roommate was only profiting by selling a card to someone personally.

To me this all just does not seem right and by Ackman doing what he did made the population realize that investing in this company will eventually lead to you you personally losing all your money.

EC-203 RS1

 David Dobbs wrote an article called How To Be a Genius: It really is 99 percent sweat, to prove to people that you’re average Joe can become just as talented as someone born with a special talent. His article states that being a genius takes time and effort, he talks about what characteristics will help you rise above the others in your field, and why hard work can either make or break you.

   Dobbs clearly states throughout the article that to become a genius you have to put in the time and effort, blood, sweat and tears.  Nothing in life comes easy, especially to become masterful at something.  Dobbs claims being a genius is not something you are born with, its something that is developed through time.  In his article Dobbs states that "scholars of elite performance to speak of a 10-year rule: it seems you have to put in at least a decade of focused work to master something and bring greatness within reach."  Just use Tiger Woods as an example, he was born with a talent to golf but he did not get where he is today without hard work and practice.  Tiger was recognized as a premier golfer at a very young age and continued to impress with his progressively increasing talent. Even today after all he went through with his ex wife, he has pushed through and is still an elite golfer with tremendous work ethic that will carry him to many more championships.  To develop such talents you need to hold certain traits that can aid you to your success.

   To become an elite in your field of expertise you need other characteristics to help aid in the development of your field so you can rise above the others.  The obvious answer is hard work.  Without the effort you put in you would get nowhere. You need to be dedicated to pursuing your goals. Set the bar high and do not give up when you are put down, strive on through.  Another characteristic you may need is to become a good listener; reason being is because to learn everything you need to know on your way to the top is to get mentors.  The example Dobbs uses is "music students that attended New Yorks elite Julliard School compared to those who attended other schools.  The students who attended Julliard received one on one relationships with mentors who prepared them for challenges they would face after their studies ended." The other students who attended other schools lacked the one on one attention from mentors and faded off the map because they never were taught to deal with challenges they were to face after school. This clearly shows me that to get to the top you have to allow the people around you to teach you things that they have learned through their years of practice. Hard work requires a lot mentally and physically and can can make or break you.

    Hard work can encourage you or it can overwhelm you. To Bill Gates, Tiger Woods, Babe Ruth and The Beatles hard work encouraged them to keep going and become the best they could be at their personal fields.  They never gave up and when they found themselves stuck in an obstacle they would push through and persevere. All of the people I listed above are where they are now because they took their talents and pushed themselves to the limit. They never quit and they pushed themselves because they knew with their hard work they would be at the top of their game.  Unfortunately for some hard work overwhelmed them and caused them to fall off. They may have had the talent to become something but they did not have what it took to put it to good use.  A perfect example for this would be the 2012 Boston Red Sox.  If you look at the team on paper they have a very talented team and if you look at their record they look as if they are a very below average team.  The team has talent but they aren’t putting in the hard work needed to become the team they should be.  An example is the Red Sox pitching staff last year; they were eating chicken and drinking beer in the clubhouse.  They did not treat themselves well enough to perform to the fullest.  In life it comes down to who wants it and who doesn’t.

   Becoming a Genius takes a lot out of you, but it is rewarding in the end.  You need to be willing to do whatever it takes to perform at your absolute best.  Dobbs gave us characteristics that you need to aid yourself in rising to the top, he proved that hard work can either encourage you or overwhelm you, and he stated that being a genius takes time and effort.

UPDATE:

    As I getting more and more used to being a college student, I have notices several life changes I have gone through.  They may not be anything drastic but none the less the changes I have made in my were necessary to be a college student here at Sacred Heart.  I have developed skills where I can live on my own and take the initiative to get things done without having someone there to tell you what to do.  And if you cant handle your work and your social life you will most likely not survive college. You learn to manage your time, you learn to open yourself up socially because for the most part people go into college their freshman year not knowing many people or in my case not knowing anyone.  As time goes by your skills get better and better. But as I stated in my original post you cannot master anything until you have experience with it.  If you look at the seniors at this school you can tell they are more mature, they are independent people ready to enter the real world of full time jobs and moving out of your home into an apartment or a small house.  Your life changes drastically in the four short years you are here at school, and you dont have a lot of time to adjust to being independent, which is such a major component to your life once you graduate.  


-Pat Plant

  

RS 9 Coke for a nickel

     In this podcast by Planet money they discussed how Coca Cola's price of five cents per can lasted seventy years.  From 1886 to the 1950's Coca Cola never changed in price because of a deal that was made to companies that bottled it.  The deal was that Coca Cola would sell a certain amount of syrup to the bottling company whenever they needed it a certain price. The problem was that the contract had no expiration date so it never ended.  

     With Coca Cola stuck in this contract they had no leverage over companies to change their prices.  So Coca Cola took the jam they were in and made it a profit through several strategies they put in place.  They started off by advertising everywhere, with the five cent per bottle ad.  Doing this in my eyes showed to the population that Coca Cola was an affordable drink and that it was made for anyone to have.  And the consistency of the price showed to the customers that it was a stable product that was worth investing in.  

     Coca Cola then began to use the vending machine to sell their product where still the price was five cents.  The company had hundreds of thousands of vending machines dispensing their product.  Coca Cola then finally created new contracts with the bottling companies allowing them to change the price of the syrup but they continued to stay at five cents per bottle of coke.  To me this was a smart move by the company because not only did they gain control of the contract to price as they please but they kept the price the same because it was working so well but gave them the ability to increase the price if they needed when they needed to.

     When it came to the point where Coca Cola needed to raise the price because the price of the ingredients was increasing they found themselves in a small predicament.  All of their merchandise was advertised everywhere for five cents so they didn't want to double it and make it ten cents. So the company went to the president of the United States and asked him for a coin that would be worth seven and a half cents because vending machines were not capable of making change.  The plan was shot down so the company had to go back to drawing board.  They came to the idea that for every ten bottles they put in the vending machine, one of them would be empty. Doing so would make that one unlucky person put in another five cents. This did not last very long because of the obvious system they were using.  Besides it barely generated any profit by doing so, it increased the profit by not even a single cent.  Doing this was clever but not very rational because in a way they were scamming people, which could have possibly been illegal.  Like I said previously this system lasted not very long.  Soon after Coca Cola had to increase the price of their product because they were losing money. The price didn’t dramatically increase, it only went up to six or seven cents per bottle.  People thought the company would fold over.  If you look at where the company is now I would say it was just a small bump in the road because Coca Cola is a product sold worldwide.

RS8 - Manufacturing the Song of the Summer

            In the podcast that we had to listen to called, “Manufacturing the Song of the Summer”, I learned how much money it really costs to produce a block buster song.  Planet money broke down the expenses to the exact dollar. Just listening to the podcast I learned a lot about the work and preparation that goes into the work as well.

            The podcast mainly focused on Rihanna’s song “Man Down” and how it was built to be a summer anthem sort of song. It turns out the song did not end up living up to its hype because from what Planet Money said they actually lost money. One of Rihanna’s coaches was interviewed and was asked how much it costs to produce a song by a big name artist who is planning to have this song be big itself.  The coach of Rihanna responded by saying a song of decent hype as “Man Down” cost over one million dollars to make.  From the camp costs, to the expenses for the coaches, to personal expenses for the artist so they are most comfortable when they are recording.  A lot more then you actually would think goes into the cost for the production of music.

            Another thing that Planet Money talked about was how producers will get their songs know by the listeners to potentially create a large amount of popularity for the song.  Planet Money mentioned that in order for producers to get their artists songs out there to be heard by everyone is to actually bribe radio station DJ’s in order for them to put the song on the radio several times per hour.  This is fairly common these days as you listen to the radio, hear a good song, then you start to hear it overplayed and suddenly the song is not pleasing to you anymore and you begin to dislike it.  Today music has become more of a business and all about making money then it is to make music for the entertainment for the people.  The money gets to peoples heads and once they build a big fan base then for some artists their music ratings start to decline because they will just make songs to put out to make a quick dollar.  To me the best artists are the ones who start of underground and don’t reach mainstream until they have made a few albums.

            Going back to the “Man Down” single created by Rihanna, I believe another reason that the song didn’t create a profit like it was suspected to is possibly because in today’s day and age people do not buy their songs.  Instead people will go on the Internet and download them for free which in most cases is illegal.  But it is so easy to do so that it is almost impossible to do anything about it because almost everyone does it.  That would be a good explanation to why iTunes has boosted its songs by thirty cents for purchase. They had to do this because they aren’t getting the income that they used to get so the only way for them to still pull in a profit is to increase prices.