Economy creates bargain shoppers

Holiday shopping season sales, which make up the largest part of retail sales all year in the U.S., are expected to decline overall this year.

The current economy has left some families in dire straits, struggling to find funds for necessities like food and clothes. This trend will likely stretch through to the holiday season in the hardest hit parts of our nation, but will appear to fade in others.

In a study published by CNNmoney.com, the National Retail Federation is expecting a 1 percent decline in sales from last year. That would be a smaller decline in sales than last year’s realized decline of 3.4 percent.

The declines are likely caused by the poor condition of the credit market. Credit cards have long been a traditional method to buy gifts for loved ones while enabling cardholders to pay later. Aside from the already negative stigma carried by credit cards, interest rates and supply of credit are likely to stay level, making the price of credit higher.

Many are expecting another holiday season focused on bargain prices and discounted products. Big-ticket items such as household appliances, and other high priced goods such as jewelry, are expected to have reduced sales due to lack of credit.

The lower level of demand for high priced appliances will likely increase competition between retailers and manufacturers for shares of consumer spending. These situations can be very conducive to aggressive price wars. Declines in sales make shares of consumer dollars even more important to companies that are already expecting lower sales.

Most news of these dismal projections, with the exception of some great bargains, will go unnoticed by the average holiday shopper. If you are reading this and expect to have an easier, more relaxed time shopping this season, think again. Many common retail giants are expecting the bargain seekers to come to them in droves. Retailers such as Wal-Mart, Target, Best Buy and Kohl’s are likely to pass savings to consumers to supplement sales.

Budget constrained families will practice budget constrained shopping. The market for students is likely to be similar. Students lucky enough to have jobs will search for good deals, and will likely target retail shopping at lower prices as opposed to high-end retailers.

Students will also expect less from not only their loved ones, but from their friends too. The tighter budgets will go full circle, amounting to less gift giving.

As both adults and students reign in their consumer spending, the majority of sales are projected to be from low priced entertainment products like DVDs and Blu-ray discs. Other items like books, food and alcohol are projected to claim a larger percentage of sales than higher priced items.

Rosalind Wells, chief economist for the National Retail Federation, acknowledged a trend toward lower priced goods in an article published by CNNMoney.com.

“As the global economy continues to recover from the worst economic crisis, Americans will focus primarily on necessities this holiday season,” Wells said.

Many other economists are projecting similar moves regarding sales trends this holiday season, which will definitely show how most Americans have changed their budgets and consumption habits. The times of spending the holidays in the Bahamas are over for most.

Although the holiday season will suffer a small decline in sales, the spirit of the holidays will not. Most Americans have had time to realize the effects of the initial punch of the recession, and have made changes to the ways they budget. Some of these Americans have even found new or more work. Studies show gift giving may change its style, but it won’t go away.

Success not without hurdles for Obama

President Barack Obama has yet to pass a health care overhaul bill. Actually, he has yet to even have the bill go untouched, as details have seen several revisions.

Obama’s lack of success is not primarily because of one dilemma or obstacle, but many.

One of his biggest is cost. After evaluation, the Congressional Budget Office has sent back his overhaul proposal. For Obama and Sen. Max Baucus, D-Mont., the result was hopeful. The CBO confirmed that the overhaul would satisfy the president’s main goal — not adding to the government deficit.

“The budget office said the bill would reduce deficits by a total of $81 billion in the decade starting next year,” The New York Times’ Robert Pear and David M. Herszenhorn reported Wednesday.

If the overhaul is expected to save $81 billion in 10 years and doesn’t add to the deficit, people should be on board, right?

They’re not.

Many conservatives find the CBO analysis to be futile, and some Democrats also remain skeptical. In the past, the opposition coming from the president’s own party was mainly regarding policy strength issues, though others were concerned about cost and coverage.

“Several wavering Democrats and one Republican, Sen. Olympia J. Snowe of Maine, had said they would be influenced by the budget office report,” Pear and Herszenhorn wrote.

Delays in progress are also because of myths. Illegal immigrants receiving health care benefits, the government driving the private market into bankruptcy and an unsatisfactory quality of care are all things the overhaul is accused of accomplishing.

Other Republicans take it a step further with cynicism, believing Democrats will write the “real” bill in secrecy.

Regardless of the validity of the right’s claims, the biggest obstacle is timing. Obama’s presidency faces not only the enormous issue of comprehensive health care overhaul, but also a suffering economy and an eight-year war that shows no signs of resolution in the near future. His desk is full of urgent issues, which he must solve in a careful yet timely manner.

Andrew Taylor is an economics Junior and can be reached at opinion@thedailycougar.com

Obama can’t be too transparent

On Sept. 20, President Barack Obama appeared on five major news networks: ABC, CBS, CNN, NBC and Univision. These appearances made up the entirety of Obama’s Friday, as each conversation was taped in the White House.

The unprecedented move was questioned and criticized by the media without taking the strategy or value of the president’s decision into account.  Of course, the president also received the usual criticism from his friends at Fox News, which was not included in the Sunday blitz.

This genius move allowed the president to reach a maximum number of Americans without childish interruption. Anyone who has watched a portion of a health care debate knows that audience members can be the opposite of calm and civil.

As our political system comes close to falling off the deep end into some sort of 18th century parliament-style shout fest, the president was able to deliver his message on health care with maturity in a relaxed manner.

When it comes to issues as encompassing as health care overhaul, the president knows the importance of getting through to people and separating truth from smear tactics.

Obama is by far the best person for the job. His ability to speak clearly, truthfully and confidently is what helped him win the presidency.

The issue isn’t whether or not Obama should be careful to not over-saturate a bunch of Sunday talk shows, because presidents need to be heard. President Obama simply took advantage of something you cannot buy: dominance in the news and television.

If the president doesn’t spend the most time talking about an important issue such as health care overhaul, his opponents will. The result would not only stall progress, but possibly result in a regression of momentum.

The decision for the Sunday media blitz was a clear indication that the president is calling for a serious, civil debate of health care overhaul.

Obama’s presidency gets tougher

When Barack Obama became our 44th president, he knew he signed up for an enormous task certain to never be short of difficulty. As if a president’s job wasn’t already difficult enough, Obama was elected during one of the roughest times in this country’s history.  The issue now evolving into his greatest concern is the war-plagued state of our nation.

The situation in Afghanistan has dominated the news recently, and will continue to demand attention from the president. The comparisons and analogies of the conflicts in Afghanistan and Vietnam are gaining popularity. Some of these remarks have merit; others are enflamed by inaccurate premises.

The president will have to act carefully and quickly to resolve the conflict in Afghanistan; the one thing Obama doesn’t have is time to waste. The president’s greatest task is to find a solution that will resolve the conflict that politicians can collectively agree on. This includes taking notes and cues from history.

In the book Lessons in Disaster: McGeorge Bundy and the Path to War in Vietnam, author Gordon M. Goldstein examines the parallels between the Vietnam era and today. The book, which serves as a wake-up call for many Americans and governmental policy makers, is a must-read when thinking about the current conflict.

Politics will heavily factor into how this current conflict plays out. Obama, who was marveled over during his presidential campaign for his skills in rhetoric and bipartisan spirit, is going to need those skills now more than ever. He hasn’t achieved the levels of cooperation or maturity so far needed for healthcare or economic reform, but hopefully the third problem is the charm.

Gen. Stanley A. McChrystal has already called for more troops from the president, warning that not getting them could result in a failed mission – a mission we’ve already spent too much money on. Shortly after the general’s request for more troops became widely known, Obama’s team expressed their hesitation to immediately send more troops. The administration knows that adding substantial amounts of troops overseas wouldn’t create a better solution than they could at home.

The Afghanistan conflict is an enormous issue that Obama will likely address with little to no help from his fellow politicians. He will be forced to rely on history, his vice president, who is a champion of foreign policy, his fellow colleagues and literature.

No more bailouts; let market take control

General Motors faced tough decisions on how to cut back and comprise with government-approved bankruptcy plans earlier this year. Included in those plans was the decision to pull out of a partnership with Toyota at one of GM’s largest assembly factories.

New United Motor Manufacturing Inc., the largest auto-making factory in California, is scheduled to close at the end of March 2010.

NUMMI, located in Fremont, Calif., employs approximately 4,700 workers. Its closure will be another devastating effect of the recession. This will surely cause unemployment to grow in the Golden State, but it is not enough to call for governmental aid.

According to autoblog.com, more than $24.9 billion has already been given to GM, GMAC, Chrysler and Chrysler Financial. Any more bailouts would be a bad investment. The appropriate measure would be to let the market solve this troubled situation.

GM owned the NUMMI plant–formerly known as GM Fremont–prior to its partnership with Toyota, and this is not the first time the plant has been closed. GM closed it down in 1982 as well. GM Fremont’s closure then too resulted in desperation amongst its former employees.

The situation was powerful enough to shake both the employees’ and auto unions.

When the plant reopened as a joint partnership between GM and Toyota in 1984, skilled autoworkers were so desperate that, according to truthout.com, they “agreed to a union contract outside the national pattern before the lines even started moving.”

If history repeats itself, NUMMI will not perish completely, but will reopen with a different product and purpose. Automakers will have the opportunity to acquire this monstrous facility and the skilled workers who drive it at a bargain price.

Someone will capitalize on this opportunity. It is likely that the plant will find a new purpose and someone to guide it as well.

Even if there are no auto manufacturers in a position to acquire NUMMI, the property will retain great value.

The thought of a governmental bailout or the practice of eminent domain should be a last resort. If the government takes this property and turns it into a railroad, freeway or other public utility, NUMMI’s potential will have been squandered.

This is a problem that markets will likely solve with time.

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com

California’s REAL Death Panels, Big insurance Providers

The situation in California is horrendous and rapidly worsening.

The Golden State is plagued with bankruptcy, wildfires and health care problems. California’s health care nightmares serve as a supporting reason for health care overhaul.

Insurance companies operating in California are denying coverage to patients at alarming rates, resulting in deadly outcomes.

According to the California Nurses Association (CNA) and National Nurses Organizing Committee (NNOC), large private insurers are denying more than 21 percent of claims. Even with a physician’s order, FDA approval or dire need, many medical procedures are not granted due to insurance companies’ unwillingness to help.

Registered Nurse and CNA/NNOC Co-President Deborah Burger acknowledges the need for an overhaul of our health care system.

“With all the dishonest claims made by some politicians about alleged ‘death panels’ in proposed national legislation, the reality for patients today is a daily, cold-hearted rejection of desperately needed medical care by the nation’s biggest and wealthiest insurance companies simply because they don’t want to pay for it,” Burger said in a CNA/NNOC press release.

Many Americans who have evaded this problem are unaware of its severity. For thousands of others, this is not the case.

According to research conducted by the CNA and NNOC, chilling numbers for the first half of 2009 show the harsh reality. Of California’s leading insurers, Pacificare denied 39.6 percent of claims, Cigna 32.7 percent, Healthnet 30 percent, Kaiser Permanente 28.3 percent, Blue Cross 27.9 percent and Aetna 6.4 percent.

These outrageous figures not only serve as a call for action, but also as reminders of pain and suffering. One cannot be surprised that the driving cause behind this absurdity is the irrational greed for profit.

According to a CNA press release, “rejection of care is a very lucrative business for the insurance giants. The top 18 insurance giants racked up $15.9 billion in profits last year.”

If claim denials are roughly a $16 billion industry for health insurance providers, one can expect they are spending a few billion to lobby against an overhaul.

“The routine denial of care by private insurers is like the elephant in the room no one in the present national healthcare debate seems to want to talk about,” Burger said.

Taking to much time to overhaul health care or hiding the issue will continue to impede humane legal progress and growth as well as human productivity.

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com

Old Red Scare tactics, even older argument

An increase in bipartisanship has not occurred and, unfortunately, the future is not filled with hope.

Conservatives do not hesitate to make accusations and gin up stories. They also haven’t given up on challenges coinciding with the Constitution. The right-wing media focuses on hype stories rather than real solutions.

Since February, most policies proposed by the Obama administration have not been challenged by intelligent solutions. Instead, when Obama proposed bailouts, no resolves were given. The media talked about tea parties and socialism.

Now with health care reform raging, we don’t hear about solutions that challenge public options. Instead, we are inundated with charges of death panels, socialism and communism. For the record, you can’t practice both socialism and communism.

So has one party really degenerated? Have conservative and moderate thinkers gone to hide in their closets and basements, waiting for their fears to recede? They have actually done the complete opposite.

Republicans, conservatives and moderates alike have been writing and thinking just as much as the people in President Barack Obama’s cabinet. So why then have we not heard these great counter proposals? Are the real right-wing, and the people that are leaning close to it, being silenced?

It turns out that their voice is intelligent and worth much thought, but it’s overshadowed by a simple case of supply and demand.

Greg Mankiw is one person who comes with many respectable ideas and proposals, but you won’t find him in the spotlight.

Mankiw, an economics professor at Harvard, consistently shares his opinion of policy news and how the Obama administration is doing. One of his most recent blog postings is a an excerpt from an article written by one of his colleagues.

“There is our inefficient and inequitable system of tax-advantaged, employer-based health insurance,” School Dean Jeffrey S. Flier wrote. “While the federal tax code promotes overspending by making the majority unaware of the true cost of their insurance and care, the code is grossly unfair to the self-employed, small businesses, workers who stick with a bad job because they need the coverage, and workers who lose their jobs after getting sick.”

Mankiw’s acknowledgment of his colleague’s thoughts demonstrates an intelligent opinion of his own.

Mankiw is definitely not alone but there appears to be a small audience for respectable right-wing thinkers. Hopefully, they are all in the Senate or House, battling things out the correct way. The news is a constant reminder that this is not the case though.

When Obama gave his speech on health care, Rep. Joe Wilson (R-S.C.)interrupted the president, yelling, “You lie!”

The true problem is the lack of demand for intelligent debate and the actual progress and attainment of successful reform. Droves of people have shown their value of fixing the issue at hand, time and again. The result has been the favoring of fun and conspiracy, not truth and law making.

Scares of communism and socialism get the public’s blood boiling. They bring out emotions and desires to scream and shout.

While almost 10 percent of our nation is unemployed, some are still worrying about Obama’s birth certificate. If that’s too outdated, there’s always a 2012 theory, or a forecast of Obama tripling his czar count and turning blood red.

Wall Street Journal’s Thomas Frank sufficiently captures the fuel for the demand of a good scare.

“Can you really hope to gin up a red scare without almost no reds? Sure you can. Because red scares are fun,” Frank wrote. “It’s somehow ennobling to believe that our leaders have secretly betrayed us; that beneath the placid, suit-and-tie surface lurks a hideous alien philosophy; that time is running out for our country; that we alone have figured it out and now we are stepping bravely forward to give the congressman a piece of our minds.”

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com

School smarts desired during recession

In a depressed economy, investing in oneself is one of the smartest things to do. With high unemployment and companies scaling back their work forces, enrolling in college classes is more valuable than fighting for a job.

The problem is most students have to work while going to school. This leaves stressed students to keep everything afloat while getting an education.

The U.S. unemployment rate looks likely to continue climbing past 9 percent, making jobs harder to find. If you are thinking about turning down job offers and waiting to land a dream job after graduation, think again.

As the recession takes its toll, companies will hire less actively and subsequently reduce their payrolls.

To land a job, a potential graduate will need to plan on differentiating himself from the competition to have an advantage.

But how do students manage this? Some cut back by leasing an inexpensive apartment.

Others, it means staying at home with mom and dad for a less complete college experience. Despite how painful or mundane this might be for one’s social life, it allows a student to maximize savings while minimizing costs.

Finding cheap or free rent allows some students to work a part-time job while keeping up with studies for in a full-time school schedule.

Often the cost of an education sways people to enter the cold, depleted job market without a degree.

Yet, loans can help make education more affordable.

Our government subsidizes education to encourage people to procure college degrees and increase human capital.

An educational investment is always appealing to the open market, providing incentive for companies and firms to hire and utilize knowledgeable workers.

The value of a degree, although in some cases not particularly immediate, surpasses the cost of getting one.

Data shows that college graduates will earn more than non-college graduates in their lifetimes.

The benefits are not only fiscal, as learning enhances all aspects of a person’s life. In college, students gain valuable problem-solving skills, tools for thinking, and reasoning abilities.

Those who do not value a scholastic investment may earn money quickly at first, but soon their degree-wielding peers will displace them with a higher job market value.

In a Tuesday broadcast, President Barack Obama spoke about why it’s important to work hard, study and dream big.

“And no matter what you want to do with your life, I guarantee that you’ll need an education to do it,” Obama said. “You can’t drop out of school and just drop into a good job. You’ve got to work for it and train for it and learn for it.”

This is applicable not only to the American children who heard the speech, but also for potential college students stuck with choosing between enrolling in classes or joining the work force.

Even though tuition rates have increased and times are financially rough, investing in an education is the best tool to achieve success.

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com

Lofts offer comfort at steep prices

This semester, the addition of Calhoun Lofts allows students to choose a different type of on-campus housing: luxury living.

Calhoun Lofts appeals to UH students in several ways, but price is not one of them.

The lofts, located between the C. T. Bauer College of Business and the Law Center, are intended for serious, dedicated students. Units were originally open to only seniors and graduate students, but the classification restriction was dropped because of low vacancy.

The Houston Chronicle reported in mid-August that Calhoun Lofts is operating at slightly more than 50 percent capacity. This lack of interest leaves the original question unanswered: If you build it, will they come?

The deciding factor will be whether students value the luxury of the Calhoun Lofts, despite the hefty price tag. One aspect that may sell more lofts is that living on campus makes students’ lives easier.

Whether students are living in Cambridge Oaks or at Calhoun Lofts, being minutes away from classes is a benefit. Plus, staying on campus greatly reduces traffic and parking concerns.

To students, this can impact everything, from forming a class schedule to making decisions about extracurricular activities.

Residing in Calhoun Lofts would instantly put students within walking distance from the M. D. Anderson Memorial Library, the University Center and the Campus Recreation and Wellness Center. Various eateries such as Pizza Hut, Subway and Maui Wowi are also steps away.

UH felt placing a residence hall near the center of campus would change its environment. This commuter school relies on students who spend hours in their cars traveling to and from school.

Some of these students commute five days a week, racking up costly fuel bills. If more students lived on campus, time spent on the road could be used for interacting with other students, attending on-campus sporting events, exercising at the CRWC or studying.

In an article published in the Houston Chronicle on Aug. 21, UH Vice President of Student Affairs Elwyn Lee discussed the value of not missing a beat on campus.

Lee said students who live on campus “participate in more things.”

“If you have to drive from Katy to hear a speaker, you might not do it,” Lee said. “If you just have to roll out of bed and walk across campus, you probably will.”

Despite all of the positives of convenience, the price presents a tough obstacle.

Most students cannot afford the luxuries of Calhoun Lofts, especially with rising tuition rates. Others value the same amenities, but can find them around the city at comparable prices.

For example, many lofts in downtown offer more space at a slightly higher price. Plus, students who live there are not restricted by the rules of on-campus residence halls.

But, close to campus is still off-campus. Parking and commuting would still be an issue for these students.

Calhoun Lofts will fill once additional on-campus housing is built, along with parking garages adjacent to the building. In the meantime, tenants will have more space for studying, but less of the community they expected.

Our campus is developing and as more students move in, incentive will grow.

Motivation, not supply, creates demand and the staff at Calhoun Lofts is learning this lesson.

Students will improve as the campus transforms and the activities and academic amenities accumulate.

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com

Local music scene a hidden gem

I have come to realize that Houston has an undiscovered music scene. Travel distances, crime, overshadowed character and a bad reputation constrict it.

To many Houstonians, music is not only an escape from the reality and stress, but one of the most popular hobbies.

Houston has always been and will always be a commuter city. When people hit the town, they worry about several problems and confront many constraints.

Traffic, distance to town, lack of parking, futile metropolitan transit and crime that results from the latter two combine to mask our city’s resources and creativity.

But, sometimes the music is worth fighting all these troubles.

Houston’s music scene does not lack quality, creativity or resources, but a strong character that withstands criticism and hardships. These obstacles result in a diminished character, one that is passed over and too often given up.

As the fourth largest city in the U.S., we boast more than 150 venues and independent shops where local talent can be discovered. Numbers like this keep Houston from silencing the music.

The Bayou City has a handful of excellent record and music stores, but Austin offers a larger variety.

Other cities, notably Austin, have more attuned characteristics because of fewer constraints and an abundance of spirit flowing through their city. With a metropolitan area that is lively and concentrated, Austin becomes music friendly, and in turn, a better place to be a musician.

We all know the motto citizens of Austin love to say: “Keep Austin weird.” Two nationally recognized festivals, Austin City Limits and South by Southwest, provide the city with a rich musical culture.

Austin’s acknowledgment and persona is not so monstrous that Houston has to settle for second. Eleanor Tinsley Park was home to the heart and soul of Houston’s music scene on Aug. 8. Thousands shared the grassy slopes of the park, uniting for one love.

Houston demonstrated that it lacks little in the department of spirit. Plus, those who attended exhibited their demand for livelier, top-notch music events.

It appeared that everyone was collectively saying, “We do not have to be the dusty guitar in the corner. No longer will we pawn our instruments and amplifiers in hope of a pilgrimage to somewhere more music-friendly.”

Free Press Houston (FPH) deserves an enormous amount of appreciation for shining a light on the potential that this city holds. One of the directors of the festival publicized his gratitude and said Houston will have another festival soon.

FPH should also be thanked for leading our city in spirit and character.

Houston has a ravenous appetite for music, countless talent and, most of all, locals who dream big and cannot to be stopped. With hope, our music scene will accelerate past Austin and the rest of the nation.

Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com