Some thoughts on money and other things to start the new year | POST

As a retired finance professor, I have some random thoughts and observations as we head into the new year. Some are about money, wages and economics, others are not.

Inflation and the working class

Murad Antia is a finance lecturer at the USF Muma School of Business
Murad Antia is a finance lecturer at the USF Muma School of Business [ USF ]

Many of us agree that high inflation hurts low-income workers the most. But according to labor economist Arin Dube, real (inflation-adjusted) wages for low-wage workers (the bottom 40 percent) have actually increased. Admittedly, these real wage figures are somewhat inflated because a large portion of low-wage workers’ wages is spent on food and energy, which are subject to above-average inflation. But the finding is still striking. Inflation for food and energy is well over 10%. The main reason for such high food and energy price inflation is the war in Europe, so while gas prices have fallen to where they were before the war started, price increases are likely to continue until the end of the war. Russia is a major exporter of energy, and Ukraine is a major exporter of grain.

interest rate

According to economist and New York Times columnist Paul Krugman, the era of low interest rates may not be over. He believes that weak private investment demand – that is, capital spending by businesses – will pull down interest rates. Investment demand will continue to be weak due to sluggish economic growth due to negative growth in the working-age population and low productivity growth.

Macroeconomics tells us that investment spending generally does not reflect the level of GDP, but more importantly, the expected change in GDP. Investment spending is high when companies want to add capacity, and this only happens when demand grows. Therefore, if investment remains low due to weak economic growth, demand for loans will be weak, causing too much savings to chase too few investment opportunities. Therefore, low interest rates are needed in the future.

car purchase

Why do most states have laws against buying a car directly from the manufacturer? Instead, most new car buyers are forced to buy from a dealership. Direct purchases are allowed, and the price paid will be much less. Second, buyers don’t have to spend more than half a day at the dealership with aggressive sales pitches. Dealers have achieved this quasi-monopoly position due to the powerful lobbying power. Governor Ron DeSantis has often declared an interest in liberty. Maybe he should “liberate” the car buying process, so that consumers can choose to save money by eliminating middlemen. Small EV makers may enter the market if they don’t have to bear the cost of building an extensive dealer network. They can train independent auto repair shops to service their cars.

open border

If America really had fully open borders, as many Republicans assert, our population would easily be two to three times what it is today. People all over the world spend their last dollar flying to Mexico and strolling across the border into the US.there are many people think into the US, so why not hold job fairs at the border so employers can interview potential employees? Offers made and accepted should be reviewed by the government to ensure legal wages and taxes are paid.

dreaming of a warm christmas

With the deadly Buffalo snowstorm and the Southwest Airlines crash still top of mind, let’s consider postponing Christmas until the end of March. Historical records are uncertain when Jesus was born. According to some accounts, it may be March 25th. By moving Christmas to that day, the weather will be milder, so there will be fewer flight delays and cancellations. Vacations where people travel will be spaced out better. Thanksgiving and Christmas are currently only one month apart. Four months is better.Also, let’s change the lyrics of the song to “I dream of a Warm Christmas. “

Have a great time with Hayes

Have a great time with Hayes

Subscribe to our free Stephinitely newsletter

Columnist Stephanie Hayes shares thoughts, feelings and anecdotes with you every Monday.

You are all signed up!

Want to receive more of our free weekly newsletter in your inbox? let’s start.

explore all options

white supremacism

There is a small group of people who are very uncomfortable with people who don’t speak or look like them. I’ve been with some of them. Consider white supremacist Nick Fuentes, who had lunch with former President Donald Trump and “Ye,” a man formerly known as Kanye West. What personal “supremacy” has this 24-year-old college dropout achieved in his life? He certainly hasn’t lived long enough to understand how his life will turn out, let alone the future of this country. These are the people who project their personal discomfort onto the entire nation. But why allow them to make other Americans suffer?

salary theft

Retail theft has been getting a lot of attention lately, with shoppers stealing with impunity from West Coast retail stores. But what about stealing wages when employers don’t pay wages promised to their employees? One study estimated that wages stolen from workers due to minimum wage violations could exceed $15 billion a year. Younger workers, women, people of color, and immigrants are more likely than other workers to report being paid less than minimum wage.

Murad Antia, now retired, teaches finance at the Murad School of Business at the University of South Florida.