Sunday, January 29, 2006

Chinese New Year - Year of the Dog 4704

Today is the first day of the Chinese New Year's celebrations for the Chinese lunar new year 4704. Since it is a lunar (moon), rather than a solar (sun) year New Year's Day varies from year to year depending upon the cycle of the moon. In the Chinese calendar the lunar New Year begins on the first day of the new moon (i.e., when the dark side of the moon is facing earth and thus is not visible from earth).

Being a lunar rather than a solar calendar makes it somewhat difficult to convert between the modern Gregorian calendar (which was an updating by Pope Gregory XIII in 1582 of the Julian calendar created at the direction of the Roman Emperor Julius Caesar in 46 B.C.). The Chinese lunar calendar consists of a cycle of twelve alternating years named after animals - Rat, Ox, Tiger, Hare (rabbit), Dragon, Snake, Horse, Sheep (or goat), Monkey, Rooster, Dog, Pig (boar) – within a larger sixty year cycle. Where as the modern Western calendar uses the birth of Christ as its starting reference point and numbers years prior to the birth of Christ in ascending order backwards from his birth with the suffix B.C. for Before Christ and for years since his birth in ascending order with the suffix A.D. or Ano Domine(which is Latin for After Christ), the Chinese calendar used to number years for reference purposes according to the number of years since the start of the reign of the current emperor (this practice is followed in most countries down to the present – official government proclamations usually reference the current calendar year and the year of the reign of the current monarch – or, like the U.S. which is a republic the years elapsed since the founding of the republic – the ratification of the Constitution in the case of the U.S.) Following the 1911 eleven revolution in China which ended the rule of the emperors, Sun Yat-sen abolished the link between years and reigns of emperors and changed the calendar to start counting years from the origin of the Chinese calendar which occurred about 2698 B.C. in the western calendar thus making the western year 2006 the year 4704 (2698 + 2006 = 4704).

The same historical forces which have made Christmas, a western holiday, known around the world are also responsible for the dispersal of the Chinese New Year celebration around the world. The fourteenth century publication of Marco Polo's account of his travels in China is generally credited with the western world's renewed interest in China and the Orient. Rising wealth in Europe brought about increased trade with the East. However, the fall of Constantinople to the Turks in 1453 cut off the main trade route to China from Europe forcing Europeans to seek a sea route to the Orient. Christopher Columbus stumbled into the New World in 1492 while trying to reach China and India by sea and Vasco de Gama successfully navigated to India in 1497 by sailing east around the tip of Africa.

The discovery of sea routes to Asia and of the New World brought about both a vast increase in trade as well as huge shifts in population. It is common knowledge that there was mass migration from Europe to the New World as well as to Australia, New Zealand and South Africa. Somewhere in the neighborhood of 50 million people left Europe to seek a better life economically and politically in the new lands. Most of these chose to make the move but some, such as petty criminals, were transported to these lands in lieu of imprisonment at home. Large numbers were also transported, involuntarily, from Africa to the New World as the rising demand for cheap labor and new trading arrangements transformed the regional African slave trade into a global trade. In addition to the movement of Europeans and Africans, another 50 million from China and India migrated to the New World as well as to European colonies in the Pacific, other parts of Asia and Africa. Like the Europeans, the Chinese and Indians were motivated by the desire to better themselves economically as well as by the desire for more freedom. While the Chinese and Indians were often mistreated and exploited in the new lands, sufficient numbers found life in the new lands better than back home and elected to stay, giving rise to large Chinese and Indian communities throughout the world.

Today, economic prosperity has resulted not only in economic growth in China and India but also in a large and prosperous overseas Chinese community. Chinese New Year celebrations are taking place world-wide today and the press is full of stories and reports of celebrations in practically every major city in the world.

Like Christmas, there is some variation in the New Year's traditions and customs practiced by Chinese in various parts of the world. Like traditions and customs in other areas, they evolve and change with time which does not make some people happy. An article in this morning's Reuters UK quotes a Professor Gao Youpeng of Henan University saying:

Indeed, some worry that New Year traditions are being lost in the country's headlong rush to develop economically.
"It is being attacked by Western culture," Henan University Professor Gao Youpeng wrote this week in the official Guangming Daily, issuing what he called a "declaration to protect Spring Festival".
"More and more people, especially the young, have no time to consider the true meaning of the festival and prefer to celebrate the game-like revelry of Western holidays like Christmas and Valentine's Day," he wrote.


Substitute Christmas for New Year and Spring Festival in the article and it reads like similar articles last month quoting disgruntled western traditionalists. The world is changing and evolving. Economic growth and rising incomes do result in new ways to celebrate holidays. But people still have the option to not adopt new traditions. Just because my neighbor prefers Jingle Bell Rock to Silent Night doesn't mean that I have to give up Silent Night for Jingle Bell Rock. The beauty of the free market means that I can not only control what is done in my home (my private property) but also if I and others want to listen to Silent Night some enterprising merchant will see to it that we can buy it. So, if professor Youpeng wants to keep the traditions that he knew as a boy (and which may have been too modern and different compared to what his grandparents grew up with) more power to him! He is free to express his ideas and even go into business to promote and sell his traditional way of celebrating – he just can't use force to make others follow him.

Tuesday, January 17, 2006

Benjamin Franklin's 300th Birthday




Today is the 300th anniversary of the birth of Benjamin Franklin. The tenth son of a Boston soap and candle maker, Franklin was apprenticed, at age 12, to his brother James' newspaper, the New England Courant, where he learned the printing trade. At seventeen, following a dispute with his brother, Franklin ran away and fled to Philadelphia. It was in Philadelphia where he rose to fame and dazzled the world with his wit, inventions, scientific discoveries and public service. The list of Franklin's accomplishments in the eighty-four years between his birth in 1706 and death in 1790 and is too huge to enumerate here.

Rather that list the details of Franklin's life or his numerous accomplishments, let's take a look at Franklin through the eyes of Franklin's fictional Poor Richard the namesake of Franklin's famous Poor Richard's Almanac. In the Almanac, which was written and published annually by Franklin from 1732 to 1757, Franklin dispenses numerous one and two line tips for better living. The almanacs contained other information, but are best remembered for these short one or two line bits of wisdom. Poor Richard's Almanac was an immediate success and made Franklin known throughout British North America.

Most, if not all, of these sayings were not original but copied from others going all the way back to the Book of Proverbs in the Old Testament. On the one hand they are common sense guidelines for good living that should be obvious and known by everyone. On the other hand, they are so basic and obvious that most people don't think about them which is why the majority of the human race, since the time of Adam and Eve, continues to make the same stupid choices and mistakes generation after generation.

Because of these sayings and Franklin's own long and successful life, he is often held up as an example of the wisdom of living by these guidelines. Franklin did probably try, and try is the operative word, to live by them. More than likely, Franklin used them as a daily reminder in his life-long struggle to do the right thing. Like the rest of us, Franklin's actions did not always live up to these ideals. There were periods in his life when he squandered his money, over indulged in food and drink and enjoyed the favors of other women (his eldest son, William was the product of a illicit union before his marriage). But struggled on and kept trying to follow these bits of wisdom and, looking at his life as a whole, we see that he succeeded more than he failed. So, armed with the knowledge that the advice from Franklin's Poor Richard is not only good but also helped Franklin in his struggle to do what was right, we will proceed.

Since it is the New Year and the number one resolution for most people these days is stick to a diet and lose weight we will take a look at Poor Richard's advice in this area first. You will note in these instructions, as in his instructions in other areas, Franklin stresses moderation rather than denial. Eating is for pleasure as well as nourishment but, done in excess, the pleasure is not only diminished but other problems result as well. The goal here is balance in daily activities.

Eat to live, and not live to eat.

To lengthen thy Life, lessen thy Meals.

A fat kitchen, a lean Will.

I saw few die of Hunger, of Eating 100000 .

Eat few Suppers, and you'll need few Medicines.

Excess in all other Things whatever, as well as in Meat and Drink, is also to be avoided.

Wouldst thou enjoy a long Life, a healthy Body, and a vigorous Mind, and be acquainted also with the wonderful Works of God? labour in the first place to bring thy Appetite into Subjection to Reason.

If thou art dull and heavy after Meat, it's a sign thou hast exceeded the due Measure; for Meat and Drink ought to refresh the Body, and make it cheerful, and not to dull and oppress it.


Money is the next category and one, A penny saved is a penny earned, that many associate with Franklin. Franklin followed many of these precepts and became wealthy. But he also went against the wisdom presented here at times in his life and lost (for example, on an early trip to London to gain further training in the printing trade he squandered his funds and was forced to return home broke). Here, Franklin is not only passing on the wisdom of the ages, but also has personally experienced both the benefits of following this advice (as evidenced by his success and fortune) and the consequences of ignoring it (as evidenced by some notable failures in his life). In an era where use of credit is widespread, savings small and people are stressed out by people trying to satisfy unlimited wants, it pays to pause and reflect on these sayings.

Buy what thou hast no need of and ere long thou shalt sell thy necessities.

If you know how to spend less than you get, you have the philosopher's stone.

If you would know the value of money, go and try to borrow some.

So much for industry, my friends, and attention to one's own business; but to these we must add frugality if we would make our industry more certainly successful. A man may, if he knows not how to save as he gets, keep his nose all his life to the grindstone, and die not worth a grout at last.

The use of money is all the advantage there is in having it.

There are three faithful friends - an old wife, an old dog, and ready money.

Time is money.

Wealth is not his that has it, but his that enjoys it.

Ne'er take a wife till thou hast a house (& a fire) to put her in.
(In other words, don't get married until you can afford it. (NOTE: the (& a fire) refers to the ability to furnish the house with heat and light – and much more by today's standards. Franklin is obviously not suggesting that the wife be thrown into a fire).

He that buys by the penny, maintains not only himself, but other people.

Again, He that sells upon Credit, asks a Price for what he sells, equivalent to the Principal and Interest of his Money for the Time he is like to be kept out of it: therefore

- He that buys upon Credit, pays Interest for what he buys.

- And he that pays ready Money, might let that Money out to Use: so that

- He that possesses any Thing he has bought, pays Interest for the Use of it.

- Consider then, when you are tempted to buy any unnecessary Household stuff, or any superfluous thing, whether you will be willing to pay Interest , and Interest upon Interest for it as long as you live; and more if it grows worse by using.

Yet, in buying Goods, 'tis best to pay ready Money, because,

- He that sells upon Credit, expects to lose 5 per Cent by bad Debts; therefore he charges, on all he sells upon Credit, an Advance that shall make up that Deficiency.

- Those who pay for what they buy upon Credit, pay their Share of this Advance.

- He that pays ready Money, escapes or may escape that Charge.

If you would be wealthy think of saving as well as getting:
The Indies have not made Spain rich because her outgoes are
greater than her incomes.
(Here Franklin is referring to the vast wealth of gold and silver the Spanish government received from the Aztec and Inca treasures. However, their spending increased by more than the huge inflow of gold and silver causing the government to be in deficit.)

You may think, perhaps, that a little tea, or a little punch
now and then, diet a little more costly, clothes a little
finer, and a little more entertainment now and then can be no
great matter but remember what Poor Richard says "Many a little
makes a mickle; beware of little expense for a small leak will
sink a great ship."
(Note: mickle is an old English word meaning great or greatly)

A child and a fool imagine twenty shillings and twenty years can never be spent.

These last few relate to the proper attitude toward money and wealth. These are a variation on St. Paul's observation that the love of money is the root of all evil (note that St. Paul said that the love of money and not simply money is the root of all evil). Again, the emphasis is on balance in one's life.

He does not possess wealth; it possesses him.

He that is of the opinion money will do everything may well be suspected of doing everything for money.

Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.


Wednesday, January 11, 2006

How to Buy and Sell Textbooks Online

In yesterday's article I mentioned that students could purchase textbooks online from both the Pima College Bookstore at www.Pima.bkstr.com or use another online vendor such as eBay's Half.com, Amazon.com, etc.

In recent years hundreds of sites have sprung up on the Internet offering individuals and businesses the opportunity to buy and sell both textbooks and other books. While the largest volume on these sites is used books they also sell new books at a substantial discount as well.

While I have been aware of these sites for a long time, I never bothered to check them out or use them until a student in one of my spring 2004 classes suggested to the class that they check online for the text. The book retailed at the bookstore new for $135 and used for $95. She purchased it new on Half.com and, with shipping, the total price was $55 . I have since used Half.com and Amazon.com to purchase and resell my daughter's text books. By my rough calculations I figure that I pay a little over a third of what I would pay to get the same books at the bookstore. Part of this savings is the fact that I have more access to used books online than in the bookstore but, like the bookstore, I sometimes have to buy new online. I then recover part of what I pay for the books from the proceeds of the sale of the books at the start of the next semester.

To find and purchase textbooks online, first obtain the ISBN number for the book. Like some other instructors, I have begun including the ISBN number on my syllabi or posting them online (see yesterday's article for the ISBN numbers for the books I am using this semester). If the instructor does not provide these you will probably have to make a trip to the bookstore and obtain the ISBN numbers from the books on the shelf by your classes. This number is usually found on the back cover of the book as well as on the title page. An alternative is to obtain the title, publisher and edition and go to the publisher's web page (use a Google search to find the publisher's web page or obtain it from the book). If you do this make sure you have the correct version and edition as each one has a unique ISBN number.

Go online to your favorite site selling the books (I prefer Half.com and Amazon.com because I know them and have accounts with them). If you don't have a favorite site, go to Google, type textbooks and hit the search button. You will usually come up with thousands of places to find the books. Not all sites will carry the book you want and many sites found this way will be ones trying to generate ad revenues by listing links to sites actually selling the books. When you find the book you want and at the price you want, order it with your credit card. Many also accept PayPal payments or checks.

To sell your books go to the site that allows individuals to post books for sale, read the Terms page carefully and set up an account to sell books. I prefer Half.com, first because I already have an account there (most places let you use the same account to both buy and sell) and because they do not charge a fee until you actually sell a book. There is a lot of competition for textbooks online and I have had books sit on Half.com for over a year before selling. With Half.com, which is a part of eBay.com (and lets you use you eBay account for Half.com buying and selling) you also have the option of moving the book from Half.com to eBay and back to Half.com if it doesn't sell. When you do this you are charged eBay listing fees and are subject to eBay time limits. Depending upon the book, you can sometimes sell it faster and at a slightly higher price than on Half.com.

To list a book on most sites you simply enter the ISBN number, a description and price you are asking. With Half.com and many others they will automatically pull up a picture of that edition of the book and give you a suggested price based upon other sales of the book. Once you sell a book ship it using the U.S. Post Office or other shipping service.

Tuesday, January 10, 2006

Books for My Courses

Here are the books that are required for each of the Economics classes that I am teaching this semester. The book for the Community Campus Economics 200 Telecourse is available at the West Campus Bookstore and the books for the Economics 201 and 202 being taught at the Northeast Learning Center are available at the East Campus Bookstore.

The bookstores are stocking both the textbook for each course as well as various workbooks and study guides provided by the publisher. I am only requiring that students purchase the TEXTBOOK. Study guides and workbooks are OPTIONAL.

Economics 200 Telecourse (Community Campus - CRN 28101)
Economics U$A (7th Edition) by Mansfield and Behravesh, W.W. Norton & Co., ISBN 0-393-92605-2. This book is available at the West Campus Bookstore.

Economics 201 (Northeast Learning Center - CRN 26575)
Microeconomics (7th Edition) by Roger A. Arnold. ISBN 0-324-23670-0. This Book is available at the East Campus Bookstore for $103 new - used copies may also be available.

Economics 202 (Northeast Learning Center - CRN 26576)
Macroeconomics (7th Edition) by Roger A. Arnold. ISBN 0-324-23667-0. This Book is available at the East Campus Bookstore for $106 new - used copies may also be available.

NOTE FOR Economics 201 and 202 ONLY:
Both of these textbooks are paperback. On the same shelf is a larger, hardcover book titled Economics (7th Edition) by Roger A. Arnold. ISBN 0-324-23662-x which sells for $141.50. This is for an Economics 200 course and contains the same content as the Economics 201 and 202 course texts. DO NOT PURCHASE THIS BOOK UNLESS YOU INTEND TO TAKE BOTH ECONOMICS 201 AND 202. If you are taking BOTH ECN 201 AND ECN 202 it is a good deal as the price is about $50 less than purchasing the texts for both courses. BUT if you are only taking one of the courses you will end up paying more and only using half of the book. E-mail me at nugentwork@yahoo.com if you have any questions on this.

These and other textbooks can be obtained by visiting the appropriate campus bookstore OR you can go online to https://www.efollett.com/
where you can order and pay for your books on line AND have them sent to ANY Pima Community College Campus Bookstore for pick up by you. If you are taking classes from more than one campus this could save you some trips to various bookstores - simply go to this site, enter the CRN for each class, select the books, pay then go and pick up.

You can also go online to Amazon.Com, eBay's Half.com or any one of hundreds of other online textbook sites and purchase the books, new or used, at a substantial discount from what the colleg bookstore is charging. I buy and sell my daughter's textbooks from half.com and end up paying about 1/3 what she would have to pay at the bookstore and then reduce this further by re-selling them at half.com at the end of the semester.

Monday, January 09, 2006

The Tucson Home Show




Yesterday morning my wife and I attended the Tucson Home Show at the Convention Center in Tucson. I normally don't go to these shows, but my son, Victor, had volunteered to run the booth for the Ki Center Martial Arts school He has attended this school for many years and has worked his way up to provisional black belt.




Victor got us a couple of free passes, so we got up early and drove him down in time to set up for the 9:30 opening. I was quite surprised at the large crowd that was already there when we arrived.

The show was quite interesting with a large number of vendors present. Given the current housing boom in Tucson, I was surprised to find only one realty company and no home builders other than a couple of small custom ones. There were also only a few mortgage lenders present.

Being Tucson, pool and spa vendors were well represented. Another big group were various home improvement companies, interior design companies and sellers of things like tile, doors and windows, roofing, etc. There were a couple of water softener companies but not the big numbers you would have expected a few years ago – that market must be saturated by now.

There was the usual collection of small home based businesses - people selling their crafts, people who have invested in little home based franchises or multi-level marketing operations, etc. - offering a variety of wares. This segment of the market seems to have matured and established itself because the people in these booths seemed very professional and their businesses seemed to be established and sound. All of them appeared to be serious businesses and not a hobby that pays for itself as many appeared to be in the past.

Among the small, home-based businesses were a number selling skin lotions. The dry climate in Tucson adds to the demand for products like these especially during the winter months when the air is both cooler and dryer. All of them were billed as containing only natural ingredients meaning that that the chemical compounds in them were created by Mother Nature rather than by humans in a lab. In addition to dry skin the products were billed as being helpful in curing psoriases, eczema, acne, burns, skin allergies and a long list of other skin ailments. Two that intrigued me were selling skin products containing emu oil as the main ingredient. Emus are a wingless bird found in Australia. The raising of emus was a hot business in the 1980s. Emu and ostrich enjoyed a wave of popularity at this time mainly as a beef substitute. As I recall, they were economical to raise as they had more meat per pound than cattle and the meat was leaner and lower in cholesterol than beef. Then the importation of ostrich was banned due to a disease which gave the emu an edge. For a while people were making good money by purchasing a couple of hundred dollars or so in a couple of emu eggs which they hatched and raised. They made money by selling the eggs laid by their emu and selling the meat and oils. Emu are supposed to be easy to raise as you just let them run loose in a fenced in area and provide some food. There was some medical research that showed that emu oil showed promise in treating arthritis.

It was interesting to see that emu and ostrich raising had moved from the get rich quick promotion phase in the 1980s to a serious and established industry. I was doing some business counseling at the Small Business Development Center in the early 1990s and had the opportunity once to review a business plan for a person who planned to raise emu. I also used to drive past a home in NW Tucson which had a few emu on an empty lot next to the home. Also, anyone who heads north from Tucson in Interstate 10 will notice the large Rooster Cogburn Ostrich Ranch on the west side of road by exit 219. According to the web site for Laid in Montana Emu Oil Products, the emu oil products vendor whose booth I visited at the Tucson Home Show, emu farms are now well established throughout the nation from the east to the west coast and from the Canadian to the Mexican border.

We had intended to just take a quick look around and leave. However, we ended up spending almost four hours at the show which occupied both the ground floor exhibition hall and a large upstairs ballroom. All in all it was quite interesting and profitable as I came away with reservations to visit four timeshare sales presentations in the next month. Even though I told them that I had just purchased a one week timeshare last month and was not in the market for more at the moment they insisted and dangled sufficient monetary and other vacation packages to make it worthwhile. Not counting a 5 day and 4 night stay in Hawaii, a weekend in Scottsdale, dining certificates and other assorted goodies, I also have been promised a total of $300 in cash and gasoline gift cards.

Thursday, January 05, 2006

More Jobs Despite Outsourcing

While the politicians and mainstream media run around, like Chicken Little, worrying that the sky is falling due to the outflow of jobs and dollars to places like China and India the facts give a different story.

My regular job is managing IT Training and, as a result, I keep an eye on the IT job market in order to know the type of training needed in the market. For the past two or three years I have been flooded with news stories and reports about all the good IT jobs being exported to China and India.

As an economics instructor, I also try to keep up on other economics news and that has been full of tales about how manufacturing jobs, especially in the textile industry, are being lost to China.

It is a fact that thousands of good paying high tech jobs in the IT Industry, formerly done by Americans are now being done by people in China, India and other third world countries. Also, there has been a continuing decline in jobs in old line manufacturing industries as these companies are either moving their operations abroad to countries with lower labor costs or are losing their market share to competition from competitors operating in lower wage foreign countries. But two articles this week shed a different light on this.

First, a blog entry at Mises.org by Mike Shedlock noted
that China, of all places, is LOSING manufacturing jobs. Where are the Chinese jobs being exported to? Nowhere. That's right, job growth in China's manufacturing sector is slowing and, in some cases, actually declining but the jobs lost are not being outsourced to lower wage countries. As China's economy grows, companies in China are starting to face the same pressures that companies in America and other industrialized countries have faced and are still facing. On the one hand competitors in other parts of the global economy are finding ways to manufacture certain products, like textiles, at lower cost than China and this lower cost is passed on to consumers in the form of lower prices. On the other hand, as the Chinese economy grows more jobs are created and companies in China are beginning to encounter labor shortages. When labor, like any resource, is scarce, those that need it begin to bid up the price – in this case wages.

In order to remain competitive, Chinese manufacturers must adapt new technologies and techniques that allow them to maintain or increase production at a lower cost. Like American and other advanced economies, the Chinese are beginning to produce more with less and this translates into lower prices and more goods for all the people. This is the driving force behind the ever rising standard of living that Americans have long enjoyed and the rest of the world is now beginning to enjoy.

The other piece of news comes from a recent survey conducted by Computerworld Magazine about jobs in the IT Industry. According to the survey, less than 5% of the 10 million jobs in the U.S. IT Industry have been outsourced to companies overseas. True, some of these were high paying programming and other technical positions. But, all of these programming jobs and other positions, such as call center personnel, were low end, repetitive type positions. The rapid growth of computers in the past three decades resulted in high demand for programmers which in turn translated into high pay for these positions. The high pay attracted new people into the field and now there are numerous people in foreign countries that can do this work at a fraction of the wage U.S. programmers are being paid.

Does this mean that programmers have no future in the U.S. No! There is a rising demand for programmers with the higher level skills and flexibility needed by U.S. companies. People whose skills are limited to simply writing code probably have very little future, career wise, in the U.S. However, programmers who know how to write in a number of different computer languages and have business knowledge and skills are in high demand as are computer security experts and project managers. In these areas wages are rising and labor is in short supply. In addition to having a broader range of skills, the other critical factor is a willingness to relocate as the jobs and people with the required skill sets are not always located in the same geographic area of the country.

The reality is that the U.S. still faces a labor shortage but it is a shortage of skilled people. The future is great but only for those with the ambition to continue learning new skills and upgrading their existing skills.

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