Oil in the Arctic: New Discoveries

Did you know that the Arctic Circle now contains double the amount of oil that was previously found in that region? According to CNN's recent article, the "Arctic may be home to 30 percent of the planet's undiscovered natural gas reserves and 13 percent of its undiscovered oil" (Azadeh Ansari, CNN). This assessment performed in the Arctic Circle is helping scientists with their latest discoveries, and has the potential to "help oil and gas companies locate new troves of fossil fuels". One of the main concepts of Macroeconomics is the idea of scarcity (and accessibility) to resources: in today's society, fuel and gas are certainly considered to be limited resources. Although offshore oil exploration is at its "infancy", companies such as ExxonMobil have claimed their drilling areas without hesitation. Since the United States is one of the largest consumers of oil and gas, it makes sense that the drilling and oil sources are diversified. Public policy ensures us easier access to such scarce resources, which is especially important in regards to the United States' current situation within the economy.

No country for Dead Seals

The EU is putting a ban on seal products from Canada. Seals are hunted in a couple countries across the globe, for their furs and fats. The problem in seal hunting is the methods and ethics involved. Everyone loves a good baby seal, and no one wants to see them cudgeled to death. But, the market for seal products has been established. For some seal hunting provides greater marginal utility than the costs of killing it. Income, trade, and possibly meat for the family (if one believes in such things). Ultimately though, the market of seal stuffs has been promoting economic trade for centuries. So, when the EU Parliament approved the ban 500 something to 49, it was obvious that the trade is nearing its end. Economics gives way to cute, cuddly goodness.

-Adam

A Economic Opportunity on Wheels

Bicycles are becoming more and more common for hotels to rent out. This is a very good thing, because it promotes all sorts of different economic activities. First of all, they benefit the hotels and users of the bikes. The customers at the hotels who rent or provide free bike rentals have a greater utility from the hotel, and therefore, choose to stay at that hotel more often. the hotel benefits from the business, creating more GDP for the country in which it is located. Also, the use of bicycles promotes international trade in two ways: tourism and the market for bicycles. Where tourists flock, the demand for the local currency increases. And countries that produce bicycles can specialize and trade in order to benefit the most from trade. Just to think that one revolutionary idea creates so much economic growth. Imagine what other exciting possibilities there are in other additions to hotel services.

-Adam

Reaching Towards Recovery: What Should Be Expected

Although unemployment rates may remain high, Federal Reserve Chairman Ben Bernanke believes that the United States economy will begin to improve later on this year, assuming that financial sectors continue to 'heal'. Now more than ever, Bernanke appears to be fairly confident that our economy will soon reach its recovery. He predicts a "rebound in consumer spending, which is the driving force behind the economy". Bernanke also claims that we, "continue to expect economic activity to bottom out, then to turn up later this year". Even at the first sign of recovery, however, economic activity rates still won't be as high as they should be. This will keep inflation low for a while, resulting in lower interest rates as well. Bernanke announced that the Fed will soon be releasing further information about various lending programs in order to help release us from this credit crisis. Even though our current situation has become a serious issue and there are only a limited number of loans that banks can offer, Bernanke believes that things will only begin to get better from here.

-Hannah Rutzick

Animals are needy.

The Minnesota zoo announced an new raise in admissions prices by $2, due to a cut in its state funding. This would put them among the highest costing zoos in their category. This summer, prices for admission will rise to $16 for adults and $10 for children between Memorial Day and Labor Day, and will drop back to $13 and $7 in the off season. Family memberships will be increasing to $95. What a discount. The prices for many zoos in the nearby area are much lower. also, there are other options such as the science museum, complete with Imax experience. The problem with raising admissions is the current economic situation. Although input costs for the zoo will be increasing, there is a there is a threshold for prices. Currently, the issue will be whether or not demand will decrease due to high opportunity costs for the possible visitors. If this indeed happens, Minnesota very well could see its zoo closing, due to a downward spiral of customers, and an increasing price of admission.

-Adam

Piggy Pandemic

Let's face it, these past few days, the entire world has been frantically looking out for cases of the swine flu, also known as the "2009 H1N1". We can't help but to notice the increasing number of confirmed cases of the swine flu, which are spreading like wildfire across the globe. Just like any other respiratory virus, this worldwide pandemic is contracted by person-to-person contact. Health investigators from the World Health Organization (WHO) are working hard to keep things under control. A doctor from the WHO stated, "It really is all of humanity that is under threat during a pandemic". We just all have to be careful and make wise decisions regarding our health. Now you may be wondering, how does this situation relate to economics? It's a simple case of supply and demand. Schools and businesses are being shut down. Take into consideration the amount of antiviral drugs that need to be supplied to patients around the world. There is only a limited amount of supplies available right now, and the WHO is debating whether or not a vaccine made specifically for H1N1 is necessary or not. Medications are very costly, therefore creating a vaccine, which is in high demand right now, would cost our economy a lot of money. "There's no one action that's going to stop this. There's no silver bullet, but all of the efforts ... will help to reduce the impact on people's health."

-Hannah Rutzick

Un-Stimulate me, Please

Governor Sarah Palin (R-AK) announced her rejection of 45% of Alaska's portion of the stimulus package. In the short run, this bold move would reject $415 million aimed in multiple areas of life, such as $170 million for education, and several million focused on energy. With this in mind, she claimed that she does not want strings attached to her funds, and expand government, only to have deplete and have programs that become liabilities after the expiration of support. This is a valid objection, but it is a decision that could draw the treatment of economic policy along party lines. If this action holds, and is followed by other governors, much of the stimulus package could go to waste. This would result in an eventual increase in taxes for no apparent reason, causing people to feel less wealthy. End Consequence: a decrease in aggregate demand, leading to... more economic recession. In short: although the stimulus is a highly liberal solution to the economic crisis, opposing it could prove fatal, if not properly researched and planned out. Some conformity of opinion might be necessary for the current recession to be overcome.
-Adam