PAY ATTENTION! Disney’s On to Something

On November 6th, 2017, The Walt Disney Company’s potential acquisition with 21st Century Fox was first announced, and since then, has been the talk of all major media platforms. Although this sale has been thrown around, on and off, for the past month, CNBC reported on December 5th that Disney and Fox could be closing in on the $40 billion deal, as early as next week. But despite this acquisition not yet being official, it alone speaks volumes about our current state of the entertainment industry, and the rapid shifts taking place in the movie business today.

“What is striking about this deal is that, presuming it goes through, it is evidence that both Fox and Disney have fully internalized how the world has changed and are adapting accordingly,” said the stratechery. In other words, networks have two options: adapt or boot, even if it means teaming up with your competition.

It is no secret that the internet has changed our media landscape—especially the way in which we now consume most, if not all, of our video content via online and on-demand. This change has been brought on by giants like Netflix and its rapidly growing power. So similar to how broadcast television destroyed printed content, a comparable domination is happening between broadcast TV and internet entertainment, with the latter in first place.

Companies like Facebook and Netflix are “dominating the digital distribution of digital video content,” as stated by CNBC, and Disney must contemplate what’s at stake to remain on top. The mutual factor in possession of power is access to its customers at the lowest distribution cost—this distribution cost has become close to zero thanks to the digital age. And access to customers is a result of providing the best user experience possible, as Netflix does—and once you provide that, you have your users hooked—and more users mean, again, all the more power.

The stratechery explained it best that “[if] selling the rights to a television show to a broadcast network and an international channel and whoever else wants it is good, then selling streaming rights to Netflix is even better! After all, the content still costs the same amount to make, and now it is generating more revenue. This, of course, is exactly what content producers did.” Disney did have its content on Netflix for some time, which was great for added reach and exposure. But they don’t just want to do “better,” they want to be the best.

It is known by most in the industry that Netflix is currently the world’s leading internet entertainment service, with more than 109 million subscribers in over 190 countries. But on August 8th, 2017, Disney announced that it will pull its movies from Netflix and create its own direct-to-consumer streaming service in 2019. Netflix’s stock dropped over $10, from $181.33 to $169.14, just two days following the news, which shows the power that Disney holds. One reason for this was due to the shareholders’ fear that other networks could follow Disney’s lead and remove their content off of Netflix as well. This announcement acted as a precursor for the Fox acquisition (this acquisition being, a step closer towards Disney’s objective to make their streaming service one that tops Netflix).

So why is Disney even going through the trouble to launch their own service from the bottom-up? This is because, again, Disney is very much cognizant about the changing landscape of media. Entertainment gravitates towards streaming, and while broadcasted television still exists, it is unfortunately dying like the print industry now. Therefore, Disney can’t just continue to do what everyone else is doing by using a source like Netflix, HBO or Hulu to stream their content on. Because Disney is, and wants to continue to be known as the forerunner of the industry, they will not settle for what everyone else is doing.

But this isn’t just about Disney becoming the next Netflix. “From a marketplace standpoint, fundamentally what [the acquisition with 20th Century Fox] does is that it allows Disney to become a bigger player in the cable arena,” said president and co-executive director of national broadcast at Mindshare Jason Maltby—as well as become more accessible and attractive to advertisers. It could “promise one-stop shopping” to marketers and ad buyers, now that Disney has reorganized their ad sales for its entire portfolio, from ABC and the Disney Channel to Freeform and Radio Disney (qtd. in Business Insider)—and with this aquisition, they will only further consolidate their company with additional networks. Also to note, if Disney chooses to dive into the advertising market for their anticipated streaming service, they will have an immense amount of revenue from that alone that Netflix does not have, as a company who is an ad-free service.

And this acquisition 100% aligns with Disney’s trajectory to be the next Netflix. First of all, in terms of success, Disney ranked number one in profitability as one of the six largest studios, with 2016 profits of $2.5 billion. The company currently “owns Lucasfilm, Marvel Studios, and Pixar, [and] already makes almost $1 billion more than its next biggest rival,” Time Warner, profiting $1.7 billion in 2016 (qtd. in The Atlantic). It is also important to note that Disney has not only been around longer than its future competitors (Netflix, Hulu, HBO Go and Amazon Studios), but has had an international presence before them as well. Not to mention Disney provides timeless content that every generation can love.

What Disney is buying is key to understanding their strategy to ensure their streaming company will be a success. They aren’t interested in purchasing 21st Century Fox’s broadcasting network or Fox News—Disney is only interested in buying Fox’s entertainment assets with an enterprise value of over $60 billion. These assets include Fox movie and television studio, the FX cable network, National Geographic, Star, UK pay-television business Sky, and their share of Hulu. Disney already owns 30% of Hulu. If they acquire Fox’s share, Disney will end up having 60% shares of the network responsible for creating Handmaid’s Tale, which took home the most wins at the 2017 Emmy’s, including in the category, “Best Drama Series.” And on top of Disney becoming Hulu’s majority and potentially full owner, the company also holds 18% of the domestic box office while Fox has 12%, according to Forbes, meaning the House of Mouse could end up with 30% of that sector of entertainment as well.

“It’s all about owning content and pipelines. And if you don’t have both, you might go out of business,”said a marketing professor at the USC Marshall School of Business Gene Del Vecchio (qtd. in Los Angeles Times).

So what else is specifically included in Fox’s entertainment assets? Let’s remember that Disney already owns the Star Wars and Captain America franchises. To put that into numbers, Captain America: Civil War made $1.15 billion in the worldwide box office market, while Rogue One: A Star Wars Story made $1.05 billion in 2016 alone. As part of the deal, Disney would also own Fox’s X-Men, Fantastic Four, and Avatar franchises, giving them control of the entire superhero world (and being able to bring that world to 24 hour, personalized streaming).

“In particular, Fox’s strong television production business would help Disney shore up its own struggling ABC Studios, which recently lost its star producer, Shonda Rhimes, to Netflix,” added The New York Times.

Fox’s logic behind selling to Disney “stems from a growing belief among its senior management that scale in media is of immediate importance and there is not a path to gain that scale in entertainment through acquisition,” according to CNBC. Disney is a company that meets this “scale” that Fox desires, who makes enough money to compete with giants like Netflix and Amazon.

So what’s going to happen to 21st Century Fox?

Well, their focus will become Fox Sports and Fox News. “[Given] that both news and sports are heavily biased towards live viewing, they are also a good fit for advertising, which again, matches up with traditional TV distribution. What Fox would accomplish with this deal, then, is shedding a huge amount of that detritus,” as stated by stratechery. Basically, Fox is selling off their assets, as well as debt, to Disney, while honing in on what they do so well (news and sports), without having the pressure of competing in the streaming world.

There is concern, though, that this acquisition could be illegal, drawing attention of government regulators like the Federal Communications Commission and going against antitrust laws. Forbes defines the goal of an antitrust law, in terms of acquisitions, as a way to “prevent those that would limit the general public’s ability to make choices and receive products and services at a fair price.” An acquisition between Disney and Fox, two out of six of the biggest studios, would make the House of Mouse even more powerful than it already is. For example, their future impact on the content consumers will consume would be tremendous and potentially, unfair, depending on the company’s beliefs and biases integrated in their stories. Also, the antitrust laws brings up the notion that Disney most likely would have bought the entirety of Fox if it weren’t for legality issues, but one company cannot own two broadcast networks. Regardless, with the assets Disney strategically picked out from Fox, Disney’s already extraordinary portfolio will be bigger than ever.

Another concern is that “[if] a deal closes, marrying the two brands and two very different corporate cultures could take awhile. You have the family-friendly Disney, which doesn’t even do R-rated movies, and Fox, whose movie studio produces unapologetically hard R-rated,” as explained by Deadline. But instead of thinking of this as a challenge, it is again, broadening their portfolio to provide content that anyone and everyone can enjoy.

So if this acquisition does follow through, which seems highly likely as of now, it will be a game changer for the movie industry. First of all, the “Big 6,” six companies that own basically all media, becomes the “Big 5,” eliminating more competition. Basically, “[in] terms of sellers in the marketplace, agents, managers, producers, production companies – they have one less buyer,” said University of Southern California professor Jason Squire (qtd. in Boston Herald). Disney CEO Bob Iger will also likely “stay on past his 2019 retirement date if the entertainment company wins its bid to buy” from Fox, according to The Wall Street Journal. In fact, 21st Century Fox CEO Rupert Murdock has requested that Iger stay if the sale goes through.

Netflix CEO and Founder Reed Hastings has shared sentiments on why he isn’t concerned about how other streaming companies are doing, during a quarter one earnings call this year. He said, in particular about Amazon, that “they’re doing great programming, and they’ll continue to do that, but I’m not sure it will affect us very much. Because the market is just so vast.” Hastings is known to have a “there’s room for everybody” attitude.

It will be interesting to see if Hastings’ room for all attitude will change once Disney is officially in the playing field, or even better, beating them at their own game.

America’s Most Powerful Economic Position

President Donald Trump has nominated Republican businessman Jerome H. Powell to replace current chair of the U.S. Federal Reserve System, Democrat Janet Yellen. Powell has served on the Federal Reserve Board since 2012, and Yellen’s term expires February 2018.

Before I was in an economics class, not only did I not know who Janet Yellen was, but what territory came with being the chair of the Federal Reserve, A.K.A., the nation’s most powerful economic position. In fact, 70% of the U.S. population has never heard of Yellen, according to a 2015 NBC/Wall Street Journal poll, which was conducted over a year after Yellen had been appointed chairman. Yellen is basically the leader of America’s central bank.

So why does her position hold so much power?

First and foremost, she “is the public face of the Fed, testifying twice a year before Congress and explaining – albeit often in dense Fed-speak – what the Fed thinks about the economy, and why it’s doing what it’s doing,” as explained by USA Today, such as hiking interest rates. USA Today adds—which is key to note—that the “chairman doesn’t set [the] rates, but rather steers the Fed toward a consensus” which “is harder than it sounds.” In other words, what Yellen says has the potential to impact millions of Americans and their finances, as well as the global financial market as a whole—she essentially has the power to both freak them out and put their minds to rest.

And by Americans, we aren’t just talking economists, analysts or businessmen, but any American citizen with a bank account—when interest rates change, “ [it’s also] going to change how much it costs you to borrow from a bank, and how much it costs banks to borrow from each other,” as well as “how much it costs countries to borrow from each other” (Huffington Post). So again, it affects almost everyone.

“Yellen has immense influence over global financial markets and the U.S. economy. Trillions of dollars can be lost of gained based on how investors interpret each word that comes out of Yellen’s mouth,” stated CNN Money. For example, f she sounds confident in the direction of where our economy is headed and if what comes out of her mouth reinforces our expectations, than it can prompt the U.S. stocks to soar, reassuring investors.

So now that we have a better taste of how important the Fed chair is, could Powell do the job?

While (most, if not all of) Trump’s past decisions during his reign so far have been questionable, Powell is a safe pick. Despite not having a degree in economics, Powell, like Yellen, is “someone who supported the cautious approach to interest rate hikes,” as well as “amassed a fortune as an investment manager and, as a pick, would likely please Wall Street” (Independent).

And as a member of the central bank already, he is well-liked. Yellen herself said that she was “confident in [Powell’s] deep commitment to carrying out the vital public mission of the Federal Reserve” (qtd. in New York Times). This is a good thing not only because even our current President has praised Yellen for doing “a terrific job,” but her “leadership has sharply reduced unemployment while maintaining control of inflation,” explained the New York Times.

Powell will hopefully continue a stable economy that Yellen has, and carry on her legacy. More importantly, I hope that a change in the Fed chair will put this position in the spotlight via the media, thus, educating more citizens on the significance of such a valuable role in our economy.

TPP? Trump? NAFTA? What?

President Trump withdrew the U.S. from TPP after taking office, which was one of the promises he made during his campaign trail.

But if like me, you still don’t really understand what TPP is or know what it even stands for, here’s a little breakdown.

TPP, the Trans-Pacific Partnership, involves twelve countries bordering the Pacific Ocean. It was “aimed to deepen economic ties between [those] nations,” and “designed so that it could eventually create a new single market, something like that of the EU,” said BCC. It was supposed to “[level] the playing field for American workers and businesses, supporting more Made-in-America exports and higher-paying American jobs,” according to the government’s statement.

Basically, it had potential to exponentially grow the American economy, allowing trade without tariffs or restrictions between some of the most powerful nations. The Peterson Institute for International Economics estimated that the U.S. national income would increase by $131 billion a year by 2030 under TTP.

So how did people take Trump’s withdrawal of TTP?

On one side, “[big] businesses are howling that Trump is undercutting their ability to sell to the vast majority of the world’s consumers” (CNN), while on the other hand, there is praise in that Americans are being put first. In other words, critics believe that TTP would destroy American jobs.

The New Yorker argued that the trade agreement “wouldn’t have had much direct impact on blue-collar workers” due to the fact that “global shift away from tariffs and other trade barriers began in 1964 and was, largely, complete by the mid-two-thousands.” A job couldn’t determine the number of jobs available, only economic activity can.

Trump is currently renegotiating NAFTA, the North American Free Trade Agreement, which is a trade deal between the U.S., Canada and Mexico. He wants to reduce deficits between the U.S. and Mexico, because, for example, “[in] 2016, Americans bought $55.6 billion more imports from Mexico than vice versa” (qtd. in The Balance).

There is also talk that President Trump could end up eliminating NAFTA on top of TPP. A decision has yet to be made.

Dreamers Manifesting the American Dream

In 2012, former President Barack Obama created DACA, the Deferred Action for Child Arrivals, through an executive order—this program “has allowed hundreds of thousands of young people who were brought to the United States illegally as children to remain in this country,” said NBC News. In fact, The Cato Institute stated that these DACA participants, called Dreamers, have the opportunity to “receive temporary protection from deportation, work permits, and an incentive to invest in their own human capital” as long as they “have lived in the United States for five years or longer and do not have a criminal record.” In other words, Dreamers have been able to “achieve milestones typically associated with the American dream, such as pursuing higher education, earning better wages to support their families, and buying homes,” as explicated by American Progress. On September 5th, 2017, Attorney General Jeff Sessions announced President Trump’s decision to terminate DACA which would essentially kick out about 800,000 Dreamers out of the country. This is not only inhumane, but will have an inevitable impact on the workforce in America—although both sides of the issue will be explored, DACA is more of a boost to the economy than a deterrent.

DACA recipients “are relatively well-educated, meaning they have the capacity to make the economy that much more productive,” according to NPR. The average age of DACA recipients is 22 and they “earn about $17 an hour on average, ‘tend to be younger, better educated, and more highly paid than the typical immigrant,’” said Time. As a 21-year-old at attending a reputable college like the University of Southern California, I have never had a job earning the wage of the average Dreamer—and have actively looked for one—which demonstrates their success and path to fulfillment of the American Dream. In exact numbers, the U.S. Citizenship and Immigration Services declared 787,580 people as DACA recipients through March 2017, and 87% of them are employed as conducted in an October 2016 survey by the Center for American Progress. Also to note, 6% of Dreamers “even starts businesses of their own, thus creating more jobs for others,” instead of taking them away, according to New Republic. The Cato Institute even compares the dreamers to recipients of H-1B visas, “skilled workers who are invited into the country to fulfill specific economic needs.” Most of the H-1B visa participants, like Dreamers, tend to be younger and more educated, thus, they have a closer resemblance than Dreamers do to other unauthorized immigrants. To note, it is crucial to separate DACA recipients in a separate category form other unauthorized immigrants.

According to a 2016 study in the Journal of Public Economics by Nolan G. Pope, “DACA moved between 50,000 and 75,000 immigrants into employment from either outside the formal labor force or unemployment, and increased the average income of immigrants in the bottom of the income distribution.” This is a step up for the economy because a higher income means more money to spend and being able to pay their taxes, thus, further stimulating the economy. The “extra money they made let to financial stability and a big increase in car and home purchases,” according to New Republic. On top of that, a 2014 survey by the American Immigration Council found that “59 percent of DACA recipients reported getting their first job, 45 percent received a pay increase, 49 percent opened their first bank account, and 33 percent got their first credit card due to their participating in DACA”—all factors that, again, boost the economy.

On the other hand, the White House’s main argument is that Dreamers are taking jobs away from Americans. At the press briefing on the day of Trump’s announcement, White House Press secretary Sarah Huckabee Sanders said, “I think that it’s a known fact that there are over 4 million unemployed Americans in the same age group as those that are DACA recipients” (qtd. in The Hill). Although it seems logical to believe that more jobs would open up for Americans if 800,000 DACA recipients no longer existed, but “[there] is no evidence of that,” according to chief economist at Moody’s Analytics Mark Zandi. First of all, the Bureau of Labor Statistics stated that the unemployment rate is 4.2 percent as of September 2017 which is the lowest it has ever been—to put into perspective, the last time our annual unemployment rate has been in the fourth percentile was a decade ago in 2007 at 4.6. This means that our job market is currently doing very well. President and CEO of economic research firm Perryman Group, Ray Perryman, adds, “I think the primary thing that would argue against [the White House’s claim] at this point is, we are at full employment with more job openings than at any point in history” (qtd. in NPR).

If the program continues as it has been, it could end up covering 1.3 million people, which means there is that much more potential for a more effective and productive workforce. But a study by the Center for American Progress shows that an average of 30,000 DACA beneficiaries will be out of work each month which becomes added pressure for employers to fill those spots in a short amount of time to maintain an efficient workplace—if the employers fail to do so, it could potentially result in the closing of their business, thus, Americans losing their jobs as well. And among the 800,000 Dreamers are those with valuable jobs such as in the health-care system. The Association of American Medical Colleges “projects the physician shortage could reach 105,000 by 2030,” as well as “lose nurses, nurse practitioners, pharmacists, medical researchers and slews of other professional and nonprofessional healthcare workers” by kicking out current medical students with DACA status. And not only will the shortage of health workers negatively impact our country, but the AAMC adds that “when physicians train in teams that are culturally diverse,” such as with Dreamers, “it improves outcomes because everyone is sensitized to the needs and customs of patients from immigrant and minority backgrounds.” So we aren’t just losing Dreamers, we are losing compassionate physicians—from diverse backgrounds and those who speak other languages—who help make the entire health-care system a more culturally adept place.

In addition to the fact that Dreamers aren’t taking away jobs from Americans, not even the “lower-educated or low-wage immigrants aren’t stealing our jobs,” according to New Republic. These immigrants compete on their own in an entirely different and more low-skilled workforce than those who are American born citizens, even natives without high school diplomas. While “[less-educated] native workers are over-represented in occupations that interact with the public and coworkers and that have supervising responsibilities, licensing requirements, and demanding mechanical and computer operations,” immigrants dominate jobs with manual or bilingual skills, according to Urban. Urban adds that the two groups “even could be complementing each other.” On top of that, a study by the National Academies of Sciences, Engineering and Medicine, research done by 14 leading economics and other scholars, states that “We found little to no negative effects on overall wages and employment of native-born workers in the longer term” (qtd. in the New York Times). The White House’s statements were simply false.

Not only are Dreamers efficient workers, but the removal of this program would be a huge hit to the economy. In fact, “removing the DACA immigrants from the economy would cost the U.S. $215 billion in lost economic output over 10 years, plus another $60 billion in lost taxes” and “[deporting them would cost another $7.5 billion, and when that’s added up the cost of ending the DACA program comes to a total of minus $283 billion,” according to the Cato Institute. Jeff Sessions argued that “expelling DACA permit-holders—again, many of whom are children—from the country is vital to protecting Americans from ‘crime, violence, and terrorism,’ alluding to the marauding bands of criminal undocumented immigrants,” said GQ. This is also not true because to be eligible for DACA, one must pass a background check as well as a screening process for felonies and misdemeanors. So we aren’t making America any safer by rescinding DACA—we are only increasing government spending and wasting taxpayer dollars on unnecessary deportation of those who have not only done no wrong, but are helping grow our economy. These “high-skilled immigrants add to the nation’s stock of human capital, boosting productivity and growth,” stated U.S. News.

Dreamers know of no other home besides America. And simply put, these Dreamers “never knowingly broke any law and have been productive and peaceful members of society since their arrival,” according to the Cato Institute. And with backed-up evidence that Dreamers are, in fact, not taking jobs away from natives—which is the White House’s main argument—and since they pose as no threat to the country—their other argument of Dreamers being potential criminals—, what are we waiting for? Currently, DACA is still due to expire in six months, although current permits will be honored until expiration.

Works Cited

Albright, Ike Brannon and Logan. “The Economic and Fiscal Impact of Repealing DACA.” Cato Institute. Cato Institute, 18 Jan. 2017. Web.

Bryant, Meg. “Ending DACA Would Damage the Provider Workforce.” Healthcare Dive. Industry Dive, 05 Oct. 2017. Web.

“Bureau of Labor Statistics Data.” U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 10 Oct. 2017. Web.

Covert, Bryce. “No, DACA Immigrants Aren’t Stealing American Jobs.” New Republic. New Republic, 07 Sept. 2017. Web.

Delk, Josh. “White House Claims DACA Recipients Take Jobs Away from Americans.” TheHill. Capitol Hill Publishing Corp., 05 Sept. 2017. Web.

Enchautegui, Maria E. “Immigrant and Native Workers Compete for Different Low-skilled Jobs.” Urban Institute. Urban Institute, 25 Mar. 2016. Web.

Horowitz, Julia. “Trump’s DACA Decision Could Cost Thousands of Jobs, Study Says.” CNNMoney. Cable News Network, 30 Aug. 2017. Web.

Kurtzleben, Danielle. “FACT CHECK: Are DACA Recipients Stealing Jobs Away From Other Americans?” NPR. NPR, 06 Sept. 2017. Web.

“National Unemployment Rate at 4.2 Percent through September 2017.” National Conference of State Legislatures. National Conference of State Legislatures, 6 Oct. 2017. Web.

Nicole Prchal Svajlenka, Tom Jawetz, and Angie Bautista-Chavez. “A New Threat to DACA Could Cost States Billions of Dollars.” Center for American Progress. Center for American Progress, 21 July 2017. Web.

Preston, Julia. “Immigrants Aren’t Taking Americans’ Jobs, New Study Finds.” The New York Times. The New York Times, 21 Sept. 2016. Web.

Salisbury, Ian. “DACA: Economic Cost of Deporting Undocumented Immigrants | Money.” Time. Time, 7 Sept. 2017. Web.

Stone, Chad. “The High Costs of Ending DACA.” U.S. News. U.S. News & World Report L.P., 29 Sept. 2017. Web.

Willis, Jay. “Jeff Sessions’ Rationale for Ending DACA Is Outrageously Disingenous.” GQ. GQ, 05 Sept. 2017. Web.


Equifax Doesn’t Ring a Bell? Well it Should Because It Probably Affects You

Equifax Inc., one of three major U.S. credit reporting agencies, or in other words, a company who has access to your most personal information from social security number, driver’s license, to credit cards.

The company receives all of this personal data most likely from your bank provider, and their “data breach it discovered on July 29” (Wired), is one of the most high-profile security breaches in its’ history. In fact, Equifax stated that 143 million customers—almost half of America—were affected by this breach, and from that number, 209,000 of the U.S. consumers had their credit card numbers exposed.

So why does all this matter? Equifax has most likely put your personal information at risk of being available online. And this data “packaged together sells for upwards of $30 per identity on online black markets, according to Mark Nunnikhoven, head of cloud research for cybersecurity firm Trend Micro.” He adds, “it’s enough to allow cyberthieves to take over you online” (qtd. in CNN).

If this isn’t still clear to you, it means you probably won’t pass a credit check, thus, making it impossible for you to take out any loans. And on top of that, for example, “[if] someone gets a driver’s license in your name and runs a red light or gets a speeding ticket, you’re on the hook,” according to CNN. CNN adds, that “[recovering] from identity theft isn’t easy,” to say the least, and “you could have to provide months or years of information to clear your name.”

The potential for economic disaster is detrimental. So if you’re poor, you’re basically screwed. The worst part is, since “Equifax still hasn’t given reliable information on who exactly was affected,” according to Quartz, that means everyone has to play victim and take responsibility on minimizing potential damages—damages, again, ranging from “thieves using stolen identities to file taxes, obtain drivers’ licenses, run up medical bills or commit crimes” (Quartz)—this not only takes up time, but money.

In a 2016 survey by the Identity theft Resource Center, out of 300 participants who were victims of identity theft, “52% earned household incomes below $50,000 per year, and 33% earned less than $25,000,” as well as an average of “$1,343 in stolen assets” for the average victim for identity theft costs—and on top of that, “31% lost their home” (Quartz).

Now imagine if half the United States was affected, which is what Equifax put us in risk of. Sounds like another depression just waiting to happen. Basically, this Equifax breach can affect you in the most difficult of ways messing up your life in so many countless ways.

On top of its affect on us, who matters, Equifax’s “shares [dropped] more than 8 percent in after-hours trading,” according to Bloomberg. And following the massive security breach, Equifax executives sold “nearly $2 million in shares of credit bureau Equifax Inc,” actions compared to “insider trading,” said Reuters. These stock sales are currently being investigates by the U.S. Department of Justice, the Securities and Exchange Commission, as well as the Federal Trade Commission.

On September 15th of 2017, the Equifax released a statement on their site, announcing the retirement of their CIO and CSO, as well as offering “free credit monitoring and identity theft protection to all U.S. consumers.” If you haven’t already, it’s time to start taking some precautions.

At Least You’re Always Ready for a Night Out?

The lipstick index, created by chairman of Estée Lauder Leonard Lauder in 2011, is the theory that consumers are ready to indulge in cheaper—yet still satisfying—purchases like lipsticks over expensive items like designer bags in rough economic times such as the recession, according to U.S. News.

Lauder “hypothesized that lipstick purchases are a way to gauge the economy. When it’s shaky, he said, sales increase as women boost their mood with inexpensive lipstick purchases instead of $500 slingbacks” (qtd. in New York Times).

In other words, when the economy is low, people are stressed or depressed and what is one way we reduce or momentarily solve that problem? Shopping—but we can’t splurge and treat ourselves with overpriced items so we resolve to the little things in life like a new set of lipsticks.

Although “[this] theory has been debunked many times,” according to Forbes, personally, it is very simple: our morale may be low but at least we look great.

Not to mention, lipstick are not “inferior goods,” as said by the New York Times. In fact, they’re a luxury item that boosts one’s confidence—I don’t think of it as second choice to, for example, a pair of $300 shoes I would have bought instead, but as a deserving little bonus gift for myself that provides me a different kind of happiness. An example of an inferior good would be choosing Taco Bell over having dinner at my favorite taqueria, Gordos, because I should be saving the money.

Sarah Hill and four other researchers studied Lauder’s theory, which was published in the Journal of Personality and Social Psychology, “[confirming] that the lipstick effect is not only real, but deeply rooted in women’s mating psychology” (Scientific American). Hill explains that in a time of economic instability where unemployment rates are high, women want to look their best to attract the financially stable opposite sex who is scarce during recession.

But lipstick sales have been declining since 2007 while sale polish “are up since the first half of 2008,” according to market research firm Mintel (qtd. in Times). Lauder responds that “[nail] polish] is the new lipstick” in Times, and once again reiterates his lipstick index as an idea on the significance of succumbing to smaller luxury items like beauty products, regardless of what it is, during hard financial times.