ECON 101. Happiness by Curly Tops.

The Law of Diminishing Marginal Utility Simplified.

The first curly tops I ate (after weeks of fasting from it) is good. 

On a scale of ten, I'd give it a 10. 

Then, "my happiness by curly tops" has been somewhat tamed, 

but they gave me another, so I took it.

Since I already had one, my "happiness" rates at a 6.5 at best. 

Maybe others will stop before utility ("happiness") drops even more, 

I wanted to stop too, 

but they gave me a third (let's just say it scored to 2.5). 

If I keep getting and eating, eventually, 

I'd reach a point at which my eating more would make me puke/sick, 

providing dissatisfaction, or dis-utility or, "unhappiness". 

Yes, at some point, 

I have reached the saturation, 

the "saturation point". 

ENOUGH.

FLAWED ECON; MISREADING TRADE - 040425

 The Trump administration's approach to calculating reciprocal tariffs presents a significant economic challenge. Their method relies on a country's trade surplus, rather than actual tariff data. This approach is fundamentally flawed and lacks support from established economic theory.

A trade surplus, which represents the difference between a country's exports and imports, is not a direct measure of tariff rates. It is a broader indicator of trade balance, influenced by numerous factors beyond tariffs. To use the trade surplus as a proxy for tariff rates is akin to attempting to measure temperature with a ruler—an inappropriate and inaccurate method.

This flawed formula ignores the complexities of international trade and the diverse factors that influence tariff rates. Basing trade policy on such a methodology can lead to significant consequences, potentially harming both domestic and international economies.

Now, consider the potential impact of a 17% tariff imposed by the United States on Philippine exports. Given that the US accounts for approximately 15-16% of the Philippines' export market, this could result in a 3-5% reduction in total Philippine exports annually.

Further, the increased cost of imported goods could contribute to inflation, potentially adding 0.3 to 0.6 percentage points within 6 to 9 months. The electronics manufacturing sector, which comprises roughly 60% of Philippine exports to the US, might experience production declines of 7-10%, potentially affecting 30,000 to 50,000 jobs. Additional economic consequences could include a 0.5 to 0.8 percentage point slowdown in GDP growth during the first year, a 10-15% decrease in foreign direct investment inflows, and a 3-5% depreciation of the Philippine peso against the US dollar.

In response, the Philippine government might implement expansionary fiscal policies to stimulate domestic demand, potentially leading to demand-pull inflation in certain sectors. The Bangko Sentral ng Pilipinas could face a policy dilemma, balancing the need to support economic growth with the imperative to control inflation.

This might necessitate raising interest rates by 25-50 basis points to stabilize the currency and manage inflation expectations.

It is crucial to remember that these are projections. The actual impacts will depend on various factors, including the adaptation strategies employed by businesses, the government's policy responses, and potential exemptions for specific products or sectors.

Understanding Community Well-being: The Human Development Index (HDI) in General Santos City

The Human Development Index (HDI) serves as a crucial metric for evaluating the overall well-being of a population beyond purely economic indicators. It provides a composite measure of human development by considering key dimensions of human capabilities and opportunities. This lecture will explore the concept of the HDI and its relevance to understanding the progress and challenges within General Santos City.

Defining the Human Development Index

--------------------------------------------

The HDI is a summary measure ranging from 0 to 1, where a higher value signifies a greater level of human development. It is constructed by considering three fundamental dimensions:

A Long and Healthy Life: 

This dimension is measured by life expectancy at birth, reflecting the average number of years a newborn infant can expect to live if prevailing patterns of age-specific mortality rates remain the same throughout their life. A higher life expectancy indicates better access to healthcare, nutrition, and overall living conditions.

Being Knowledgeable: 

This dimension is assessed through two indicators:

Mean Years of Schooling: The average number of years of education received by people aged 25 years and older. This reflects the accumulated human capital within the adult population.

Expected Years of Schooling: The number of years of schooling that a child of school-entering age can expect to receive if current enrollment rates remain constant throughout the child's educational career. This indicates the potential for future human capital development.

A Decent Standard of Living: 

This dimension is measured by Gross National Income (GNI) per capita (in constant 2017 international $). GNI per capita represents the average income of individuals in a country or region, adjusted for purchasing power parity (PPP) to reflect the relative cost of goods and services. It indicates the economic resources available for individuals to meet their basic needs and enjoy a reasonable quality of life.

Significance of the HDI

-------------------------

The HDI offers several key advantages in assessing societal progress:

Holistic Perspective: 

It moves beyond a singular focus on economic growth by incorporating crucial social dimensions like health and education. This provides a more comprehensive understanding of human well-being.

Comparative Analysis: 

The HDI allows for comparisons of development levels across different countries and, importantly for our context, across different regions or localities within a country, such as comparing General Santos City to other urban or rural areas in the Philippines.

Policy Guidance: 

By highlighting areas where a region lags in health, education, or living standards, the HDI can inform policy decisions and resource allocation by local and national governments to address specific developmental challenges.

Individual Impact: 

Ultimately, improvements in the HDI translate to tangible benefits for individuals within General Santos City, such as longer and healthier lives, greater educational attainment leading to better job opportunities, and improved economic security.

.

.

Localizing the HDI: The Context of General Santos City

------------------------------------------------------------

While national HDI figures provide a broad overview, understanding human development within General Santos City requires considering the specific local context:

Health in General Santos City: 

Access to healthcare facilities, prevalence of local health issues (e.g., respiratory diseases, waterborne illnesses), and public health initiatives within the city directly influence life expectancy. Evaluating these factors provides a localized understanding of the health dimension of the HDI.

Education in General Santos City: 

The quality and accessibility of educational institutions at all levels (primary, secondary, tertiary, and vocational), enrollment rates, and educational attainment levels within the city's population are critical for the education component of the HDI.

Living Standards in General Santos City: 

The primary industries and economic activities in General Santos City (e.g., fishing, tuna processing, agriculture, trade), employment rates, average income levels, and the cost of living collectively determine the standard of living dimension of the HDI.

Critical Considerations

--------------------------

It is important to acknowledge that the HDI, while a valuable tool, has limitations:

Inequality: 

The HDI is an average measure and does not capture disparities within a population. Significant inequalities in income, health, or education within General Santos City may be masked by the overall HDI score.

Qualitative Aspects: 

The HDI does not fully account for qualitative aspects of development such as human rights, political freedoms, environmental sustainability, and cultural richness.

Data Availability and Reliability: 

Accurate and up-to-date data are crucial for calculating a meaningful HDI. Data limitations at the local level can sometimes pose challenges.

Concluding Thoughts

------------------------

The Human Development Index offers a vital framework for understanding and evaluating the progress of General Santos City beyond purely economic measures. By considering health, education, and living standards, it provides a more nuanced picture of the well-being of its residents. Analyzing the HDI within the local context can inform targeted interventions and policies aimed at fostering a more developed and equitable future for the community.

when equal IS NOT fair 091408 re-entry

you divide the electric bill by equal parts

so each of you (housemates) pays the same amount

regardless of the electric equipment used and the hours of usage.

bang! that's when 'equal' isn't fair!

you divide the day's allowance by equal parts

so each of you (siblings) gets the same amount

regardless of the fare and the physiological needs of each.

bang! that's when 'equal' isn't fair!

you give your students the same high grade (academic score)

so each of them gets to get good marks

regardless of their research output or efforts in class.

bang! that's when 'equal' isn't fair!

bang! bang! bang!

sayang! : of trade-offs and opportunity costs [reentry 2009]

students find economics so boring... i did too. did is the operative word, i repeat. but when i was asked to teach it, only then i realized that it's nothing but plain life disguised in specialized (technical) terms. since then too, it has become a challenge for me to deliver it in a manner so unlike the way it was delivered to me (double wink here).

one of my favorites is the kingdom of TANSTAAFL. students who have been here would just smile and say: yeah right! 'coz really, truly, in this world "there aint no such thing as a free lunch". nothing comes for free. everything has a trade-off. who doesn't understand trade-off? everyone knows what is is. everyone (save for a very chosen lucky few) knows how it feels of wanting but not having without something (or someone-dear me, or some time-that's more like it) in return.

defined by most economists as 'the highest valued benefit that must be sacrificed as a result of choosing an alternative', it tells us nothing but a trade-off...what have you given up the most in order to get what you wanted (or because you have decided to do something else). okay, if you are reading this blog now and it's taking you about an hour to digest this, bang! you just lost 25 pesos ($.50) if you have used the time working as a bus boy/girl in a fast food chain. see? that easy. but of course, there are many ways to make that harder. you have to read books, consult your teacher and do decent scholarly surfing for that.

one of the most important opportunity costs involves time---when used for one activity cannot be used for other activities. your time used for reading, net-surfing, studying, working, or shopping will not be available for other uses. here, your allocation of time is viewed like any decision you make---choose your use of time smartly! say, to meet your needs, to achieve your goals, and/or to satisfy personal values.

here's one i might need to remind myself...opportunity costs relate to health too. lack of sleep, poor eating habits, lack or avoiding physical exercise may result in illness, time away from productive activities like school and work, higher health care costs, and lower economic (eg. financial) security. hence, your personal resources (time, energy, health, abilities, knowledge) require careful management too or else you'd say 'sayang!' (what a waste!).

since we are a major player of the society (economy too) and we are the ones who constantly make choices among so many decisions, we must consider the opportunity costs all the time. for example, when it comes to money it's knowing that increases in an amount of money may be a result of interest earned so saving or investing instead of spending it today results in a future amount greater than the original money that you have. every time we spend, save, invest, or borrow money, we consider the time value of that money as an opportunity cost.

now, give it a try... what have you given up the most? that may be your opportunity cost. is it worth it?

ouch! the market failed?

a former student asked me... what's market failure? i say, it's just around...i may have laughed answering it but it's true...market failure is a concept (within economic theory) describing that situation when the allocation of goods and services by a free market is not efficient. by 'not efficient', i meant, there exists another possible or conceivable outcome where a market participant may be made better-off without making someone else worse-off... it may be viewed as scenarios where an individuals' pursuit of self-interest leads to results that are not efficient – that can be improved upon from the societal point-of-view...

then he asked, what are the sources of market failure?... i say there are many but to name some we can start with (1)  public goods --- a public good is one, which if provided to one consumer, is freely available to all consumers like the street lights, parks and roads. this means no private firm is able to make a profit from providing such goods.  hence, government should ensure that such goods are provided at the socially desired level. another is (2) income distribution --- the market does not ensure equitable distribution of incomes. this may motivate government to put in place some policies to redistribute wealth through measures like income taxes.

then there's (3) monopoly --- the operations of monopoly (or natural monopoly) more often than not result in misuse of market power (inefficient allocation of resources too which reduce community welfare). here, at times, governments regulate monopoly and enforce laws preventing cartels. then the most famous (for those with background in economics) (4) externalities --- an externality arises when an activity confers a benefit (like the benefit of research or vaccine) or imposes a cost (pollution) on a third party, without the cost or benefit being included in the market price of that activity...

and saving for last is the most common (5) information asymmetries ---supposedly, buyers and sellers in a competitive market have complete knowledge about a product or service characteristics and quality but this is not always true in the real world... information asymmetries between producers and consumers can lead to market failure and reduce community welfare.. this is the part when WHAT YOU DO NOT KNOW WON'T HURT YOU doesn't work... 'coz believe me, it does!

econ 101: externalities

externalities is an economic concept for "side-effect" or "spill-over". it occurs if a person’s activity affects the well-being of an uninvolved person. this term comes from the fact that someone external to the action or transaction is affected by the activity (or production of consumption of the good). this may be positive (externality) or negative (externality). A positive externality occurs if an activity creates benefits for uninvolved people. A negative externality occurs if an activity creates costs (harm or discomfort) for uninvolved people.

lately i have been thinking of this concept in a 'not-so-economist-way'. i have reason to believe that i have been experiencing negative externality. one person's activity have been affecting my well-being (as an uninvolved person in the activity) for about a month now.

have you ever been disturbed by 'noises' of a neighboring space while you are doing your 'writing jobs' ? (remedy: tell the 'whoever causes the noise' to tone it down or if to no avail, let them feel that you are disturbed in any manner you know how) ...have you ever inhaled second- hand smoke that lead you to bouts of irritating cough? (remedy: cough your lung out and drink lots of water or find out next time where/whom the smoke came from and politely ask him/her to just swallow it)...

have you ever been distracted knowing something illegal (or immoral) is going on nearby and you just can't (or so far, won't) do anything about it 'coz you might be branded as naive or self-righteous- so distracted that it costs you your peace during your established work-hours? (remedy: read your bible and ask for inner peace or sing your prayers out loud so your mind won't have space to think of other things or talk to the people involved as if they'd listen to you and feel ashamed that they'd stop doing it or find a new place and wonder what externalities will be in store in the new place)...i could go on and on about it but i guess somehow you get the picture. what are you to do? what am i to do? - still, das ist die Frage!

how much?

If you were 

to put a price tag to yourself 

(hypothetical question, still NO TO SLAVERY :) ), 

what would it be? 

If you were 

to put a price tag of your hour, 

how much would it cost?

relative pay

when i started working at jollibee,
i receive 14.75 per hour.
even before that,
i always knew that time is valuable.
it was just better
to have numbers to back that up...



think:
how much (time/money)
will we earn/waste today?  :D

series of extended power outages - why?

The recent 'brownouts' due to reduction of power supply in Mindanao has been affecting the residents, the small manufacturers and other business establishments.  In  Gen. Santos City (Gensan), this translated to 'rotational brownouts' to the dismay of the many if not all. The outages last from 2 to 7 hours in a day. As expected, it is not a welcome news, even so for the southern Philippines region. 

But even before these series of extended power outages (sometimes scheduled and announced),  Zamboanga and other cities have already experienced 'brownouts' due to the decision of state-run National PowerCorporation (NAPOCOR) to reduce power supply in the city by several megawatts (MW). It is in this event that Gensan suffers the same fate as power supply in the region was cut by hundreds of MW (coupled with the steadily increasing demand) according to the National Grid of Corporation of the Philippines.

Here's how 'The Grid' thing works: A power grid consists of a set of large power plants (hydropower plants, nuclear power plants, etc.) all connected together by wires. It also works as a power-distribution system because it allows sharing. If a power company needs to take a power plant or a transmission tower off line for maintenance, the other parts of the grid can pick up the slack.

For instance, you have tens of thousands of power consumers using megawatts of power, at that exact moment, you have several power plants producing exactly the right amount of power to satisfy all of that demand. And you have all the transmission and distribution lines sending the power from the power plants to the households, offices and/or businesses.
The system, even as it works on an efficient level, is not perfect. There can be situations too (say when there is high demand) that the interconnected nature of the grid makes the system may fail (hence a sudden power outage/interruption). Sometimes, to avoid that (or to secure some level of supply in the coming weeks), the power distributor opts to 'ration' the power supply, hence scheduled 'brownouts'.

Gensan Mayor Darlene Custodio openly presented in her latest State of the City Address (SOCA) the fear that the power situation in the city could get worse and somehow implied that her hands are tied regarding this matter. She tried suggesting several moves which revolved around consumers, offices and businesses to minimize power demand in their own end.

Yes, this is basic supply and demand material. The higher the population (both residence and industry players), the higher the demand for energy. When demand is higher than supply, adjustments may be either [1.] to increase the price (for such good/service) or [2.] to lower the quantity (which may have been their preference) or [c.] both. As consumers, we can only accept this event if it doesn't result to inconvenience and a lot of unwanted changes in our routines among others, but it does...

As to the problem of supply, one solution is to build significant amounts of excess capacity (for example extra power plants, extra transmission lines). With extra capacity, it would be able to pick up the load the moment something else failed.  Here, economics principle #1 would of course come in: with increased capacity is an increasing power charge (bill). So for now, as I assume we make the choice as a group to save some money, we try live with the risk of losing power every now and then :(

But then again, if this route (having electricity from source to our homes/businesses) is that established for many years, how come that we are now suffering the failure of the power distributors (or perhaps the local government) to act on the power crisis which (I believe) was foreseen years ago? Das ist die Frage!

this is just basic economics

Now, lyrically, my game is nice.
I can steal a rhyme without your mindin’ and sell it back to you for half price.
I might even do it twice.

Cause see, I spit [TK1] paragraphs that’ll penetrate your pituitary gland
And make your mind expand, make you understand
There’s a [TK2] so hot between slinging rock and trading stock.

See, this is basic economics. Buy low, sell high.
Your price determines whether demand meets supply.
See, most of us don’t want to even admit it or even hear it,   
But see, being a drug dealer is the epitome of the entrepreneurial spirit.

See, capitalism breeds capitalists, so if there’s demand for a product,
you best believe somebody gonna supply it. See they’ve got the right mind,
the wrong grind. Cause see really even [TK3] sells drugs of all kinds
we don’t have to worry about packing knives or tapping their phone lines
because they’ve got politics and public opinion on their side.

The only way to survive in this society is to have a hustler mentality.
See as long as you’re working for your money, your money’s not working
for you, you’ll forever be a slave. Bill Gates did not stack all that cake just
sitting around waiting for a promotion to raise it. Now, he got the whole game
on lock and gate worrying about prison time.

So if you can slip a 16th into an ounce, and an ounce into a key,
there seem to be no reason to me you can’t exert that same amount
of energy into learning the hustle of the Dow Jones industrial.
So, you need to be fucking with that NASDAQ
and leave that crack alone.

Or you could just invest in a duplex home and rent it to two
different tenants and you could rent money to pay off the loan
in half the time. Or you could continue to grind and hustle them
drugs in the street, but peep, it ain’t about what you got, it’s about
what you can keep. You see, when that task force sweep, best believe
they’re taking the cars, the rims, the beats, the cash, the crib,
and the platinum [TK4] piece.

And I’m getting cents to ten piece to get release and try to look for peace,
but you can’t get you a piece cause that felony on your record has got you
marked as a beast. You’ve got to go back to the streets so you can get cop
you a piece so you can take you a piece. That’s why the streets don’t see peace.

See that’s just one of the many vicious cycles that compromise the struggle.
Understand we can’t all do it like Dr. Heathcliff Huxtable, so don’t stop
hustling, just change your hustle.

See America is designed for the get rich. There’s a million and one ways
for you to get paid off of this bitch. And most of them’s legit. Just find
a market you want to target, produce a service and/or product and
your revenue minus your expenses is going to equal your profit.

See, it’s just basic economics. As long as you have the haves,
you’ll always have the have nots, so it’s up to you to decide
whether or not you’re happy with what you got.

And if not, you’ve got to concoct a plot that’s gonna raise
the stock you’ll be willing to hustle and grind from sunrise
to sun-drop, cause believe me, ejaculation is the only thing that comes easy.
Too many cats who’ll play the lottery think the stock market is too risky.

Now, I know I spit this poem with a whole lot of Ebonics, but it don’t matter
who say it or how it’s been said, it’s still just basic economics.

[“Basic Economics,” by Tommy Bottoms]

business and social responsibility

Cotabato Flood- Concerted Efforts Needed

Cotabato City's history dates back to the 15th century when an Arab missionary- Shariff Kabunsuan, landed along the banks of the Rio Grande de Mindanao and introduced Islam faith to the natives. It was the faith that moved the early settlers to communal life, and to establish the Sultanate of Maguindanao and later developed as the capital town of Maguindanao. In the nineteenth century, roads and wharfs were constructed and it paved way to the birth of modern day Cotabato. Come 1959, the then Municipality of Cotabato became a chartered city .Today, Cotabato City is the seat of two administrative regions: Region XII and the Autonomous Region in Muslim Mindanao.

The city's gem- Rio Grande de Mindanao is the second largest river in the Philippines (182 kilometers long and 96 meters wide) and the longest in Mindanao. The great river was recently filled with aquatic weeds (water hyacinths and the like) coming from nearby marshland which was believed by many residents to may have caused blockage/clogging of the river spilling over the city's areas thereby causing floods due to weeks of heavy rains brought about by typhoons Egay and Falcon.

Over 100,000 people (more than 36,000 families) of the city’s 37 barangays were affected by the disaster. Many of the evacuees are staying with relatives, neighbors and friends but more or less15,000 have to be sheltered on basketball courts and other government facilities converted into evacuation centers.The local government have already identified 16 evacuation centers but officials are worried they may need more should the number of evacuees increase or the flooding worsen. Health and education concerns such as outbreak of diseases and continued suspension of classes (as school campuses were converted to evacuation centers) are also noted.

During the crisis, the national government was criticized for the shortfalls in assistance.Too much attention was given to the supposed role of the national government and too little to the actual efforts of those who made the biggest difference in the first days of a crisis- the people in the communities themselves. The local government and the residents demon­strated effective immediate response. Thousands of people were sheltered and fed by local efforts. The local government officials, with other organizations (NGO, media, schools and local business establishments among others) responded quickly and effectively by providing facilities and resources.

As the aftermath is being dealt with, 'word wars' between the national government (president PNoy and Ms. Soliman of DSWD) and the local government (city mayor Hon. Guiani Jr.) regarding relief assistance ensued. News updates regarding the flood was also flooded with almost-sensationalized statements stirring emotions from both camps and spectators alike. Where did the millions of pesos worth of relief assistance go? Why do local leaders declare (even signed formal manifesto) that they have not received any assistance? Who is to blame? Whom do they ask for further help and support as the effect of the crisis is still being felt?

The issues (food and clean drinking water primarily) and the system of bringing of relief aid (concerns cropping up as some units and offices fail to coordinate with local agencies) to evacuation areas has become a problem.While efforts of LGUs, government agencies and NGOs are commendable and planning for long term solutions that are needed to be able to prevent these scenario from happening again is being done, the affected families and those who chose to stay in their homes continue to wait for best immediate course of action. The success of every undertaking depends on the concerted efforts of the national and local government units, setting aside (or doing away) with political issues for the mean time or for good.

Perhaps it's about time to focus on preparing and developing response plans for local disasters on local level. Although in the event of a catastrophic disaster, a successful response is a national response. However, it does not mean a response that depend only on the national level, but rather at the local level as well in terms of preparation. Given the issues that have cropped up recently, IMHO, "The people closest to the problem are the ones best equipped to find the best solution." This is if and only if they are tapped properly to help in helping themselves.