Archive for July, 2009

The Undercover Economist

If you are looking for a book which does a good job of explaining economics, look no further than The Undercover Economist, by Tim Harford.

Starting with an excellent explanation of the cost of a cup of coffee and how it relates to farming in the 19th Century, Harford goes on to explain how supermarkets get more affluent customers to pay more, and why poor countries stay poor. It’s all written in very clear language, easy to understand but not shying away from the more interesting details of the topic.

If you’d like to learn more about how economics affects not only the finances of the world, but also the cost of your next latte then click on the link to the right to buy this book from Amazon. You’ll be helping to support this website and your eyes will be opened to a whole new world.

You may even learn how to save a few pounds on your weekly shop!

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Sunday, July 26th, 2009 Economy 3 Comments

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Bad news on the employment front

Well, I’m back from the USA now, and the news in the UK media has been about the recent report showing that unemployment is still on the rise. A quarter of the 528,000 people who have been out of work for more than a year are less than 25 years old. There are thousands of school and university leavers who are just now entering the job market and finding it particularly tough.

However, one good thing to do if you find yourself in this situation is to look for extra skills or experience that can differentiate you from other applicants and make you stand out to employers. You can do this by looking for training courses which are relevant to the work you want to do (for example, you might consider a course on computer skills) or by trying to get some volunteer work to get you experience in the industry.

The market is so difficult now for those looking for work that even this may not be enough to get a job immediately. However, those that have spent the time bettering themselves will be the ones to benefit when the job market picks up.

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Thursday, July 16th, 2009 Economy No Comments

Healthcare in the USA

Another thing that is being mentioned a lot in the news in the States at the moment is universal healthcare. They don’t have an equivalent of the NHS that we have in the UK, to get healthcare in the US you need to have health insurance. Just as with car insurance or travel insurance, the more you pay the better coverage you get – the cheaper insurance policies will have high excesses (the amount you have to pay in the event of a claim) and may not cover all treatments.

The cost of insurance has been going up in recent years, and more and more Americans can’t afford to have any insurance at all. Small businesses are also finding it difficult to provide healthcare for their employees, as they can’t negotiate big discounts with healthcare providers. The number of Americans without insurance has been increasing, and although hard numbers are difficult to find (different organisations count the uninsured in different ways), this study claims that it could be as many as one in three are uninsured.

President Obama is pushing for healthcare reform which would cover all Americans with a government-run system, the cost of which is estimated at $611 billion. That’s a lot of money, and it could hit American taxpayers for years to come. However, it may end up costing them less than the private insurance route – as this Wikipedia article says, more is spent per person for healthcare in the US than in any other country – a centralised approach may be more efficient.

What relevance does this have for us in the UK? I believe that healthcare reform could help improve the US economy, and as I said in my last post, that will help bring the world out of recession. Why do I think this? Small businesses in the US are struggling in the current economic climate – they are having to cut healthcare benefits for their employees, or face increasing costs. Citizens with insurance spend less time being ill (as they get better treatment, or indeed any treatment, and also can take preventative measures like regular check-ups) and therefore take less time off work and are therefore more productive. With the burden of providing healthcare for employees lifted, small businesses and family-run businesses should be able to weather the storm of the global recession, and turn a profit sooner.

This is all assuming that the cost of medical insurance as it is currently is higher than the increased taxes that will be required for government healthcare to be provided. This is by no means certain, and of course, health insurance is optional but taxes are not!

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Tuesday, July 7th, 2009 Economy No Comments

The U.S. economy as one to watch

I’m in the United States at the moment, and the news here is of an economy that is still unstable. A recent report shows that not only are employers still cutting jobs, but that the number of jobs lost in June was more than were lost in May. Despite this, Barack Obama is confident that things are stabilising.

Why is the US economy important to us in the UK? The United States has the largest economy in the world and affects the economies of most of the rest of the world, including the UK. There are a range of ways economies affect one another – for example, if the US suffers from a poor economy there will be less demand in the US for British goods and services, as money is tight. Also, our financial institutions work very closely with those in the US – the bad debt created with the sub-prime loans in the US affected banks worldwide, and our own banks had been making sub-prime loans of their own.

It will be possible for the UK economy to recover before that of the USA – and in fact it might happen that way – UK industry does not seem to be suffering as badly as in the US, and we have a smaller economy to turn around. However, it is most likely that the global recovery will begin only once the US itself is in recovery – and the news over here suggests that’s some way off, at least for the moment.

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Saturday, July 4th, 2009 Economy 1 Comment

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