It’s an interesting fact of life that we often take money for granted. While it is true that “money makes the world go around” (and is constantly the source of both misery and happiness for us), the concept of what money is and what it represented is not questioned. In the United States, we rarely consider the value of money and our currency in relation to others’. These are the sorts of issues that the government, currency traders, and corporations worry about – not the everyday citizen. However, what happens when these assumptions are challenged? What happens when the value of our currency can’t be protected or backed by our government?

This is just one of many questions which have been brought up in the wake of the advent of Bitcoin. Bitcoin is a relatively new form of currency that was created in 2009 by Satoshi Nakamoto (an alias created to disguise true identity of the individual(s)). Bitcoin is a unique form currency in many ways.

First of all, Bitcoin is an electronic form of currency. This means that one bitcoin can be split into almost infinitely smaller pieces, allowing people to spend just part of a bitcoin like they may spend part of a dollar in form of quarters or dimes. Bitcoins are stored in one’s secure wallet which has a unique address similar to a bank account number: disclosing the unique address to someone allows you to pay them or vice versa. Every legitimate transaction is kept on record on a public ledger called the ‘block chain.’ Each Bitcoin wallet involved in the transaction also ‘signs’ the transaction in order to prove that the transaction was approved by both parties and is coming from the owner of the wallet.

Bitcoin it also decentralised – there is no central bank or government that backs the value of bitcoin. In the U.S., for example, the U.S. Federal Reserve decides how much money should be circulating within the economy via interest rates in order to control inflation. Bitcoin, on the other hand, uses peer-to-peer technology in order to “operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.” This implies that Bitcoin is a more democratic form of currency, whose value is dictated completely by the market and how much people are willing to pay for Bitcoins.

Because Bitcoin lacks a central authority to both regulate and provide the source of the money, the way in which bitcoins are created is also different. Bitcoins are created through the process of ‘mining’ – like how one might mine for precious metals. However in this case, miners use powerful computers in order to solve extremely complex computer algorithms. Upon solving these algorithms, the miner is rewarded with bitcoins. More specifically, bitcoin mining is the process of verifying bitcoin transactions.

As mentioned previously, every bitcoin transaction is verified and encrypted so that others cannot undermine the integrity of the transaction by changing its details (time, amount, etc.) Since there are many transactions that happen every minute, transactions are compiled together in a box which is secured with an electronic padlock – “block chains.” Miners run software on their computers which attempt to open the padlock. Once the padlock is open, the miner is rewarded with bitcoins. According to blockchain.info, the average number of attempts it takes to unlock a block chain is 1,789,546,951.05. With a GTX 680 GPU and at the current difficulty level, a single miner can expect to mine one bitcoin in 98 years.

Because bitcoins are ‘mined,’ there are is a finite number of bitcoins available. The code that was written ensures that there will be 21 million bitcoins available. Today, there are more than 12 million bitcoins in circulation. The fewer the bitcoins are to be mined, the harder and more complex mining becomes, decreasing the rate at which bitcoins are mined. Currently, the a maximum of 25 bitcoins are able to be mined every ten minutes.

 

 

Bitcoin is an attempt to address many of the flaws present in a traditional form of currency. Much like cash, using bitcoin is almost completely anonymous. One never has to disclose their credit card details, name or identity in a bitcoin transaction, so long as their bitcoin address is valid. There are also no required transaction fees or foreign exchange fees when using bitcoins. For larger transactions – where one may gather bitcoins from multiple addresses – a transaction fee is usually expected but still not mandatory. There is an incentive to pay and charge transaction fees, however; bitcoin miners who validate the transaction are the ones who receive the transaction fee. Paying a transaction fee is “an incentive on the part of the bitcoin user to make sure that a particular transaction will get included into the next block which is generated.”

However the advent of Bitcoin has also raised significant concerns and highlighted some controversy. Due to the relative anonymity Bitcoin provides, there are some who use Bitcoin to conduct malignant operations and purchase illegal goods such as drugs. The U.S. for example, has researched heavily into Bitcoin and has illustrated its concerns over the potential terrorist threat Bitcoin poses: “The introduction of virtual currency will likely shape threat finance by increasing the opaqueness, transactional velocity, and overall efficiencies of terrorist attacks.”

However, the U.S. is not alone in these concerns. Due to Bitcoin’s connection with illicit activities, Russia has banned the use of Bitcoin: “Systems for anonymous payments and cyber currencies that have gained considerable circulation — including the most well-known, Bitcoin — are money substitutes and cannot be used by individuals or legal entities.” Furthermore, Russia had emphasized that the Rouble is to remain Russia’s only official currency, and that any introduction of other currencies or other monetary units would be illegal.

Because Bitcoin’s value at this point is completely on of public perception, it is an extremely volatile form of currency. While the lack of a central authority controlling its value means that political instability or corruption won’t affect its value, it also means that there is no force that is able to stabilize its value. In October, 2013, one bitcoin was valued at about $126 USD. Just one month later, the value skyrocketed to almost $1010 USD. In April, 2014 the value dropped back down to $420 USD. The extreme volatility of the currency is a serious cause of concern for many, preventing Bitcoin from being a universally accepted currency. Bitcoin is accepted by a few online merchants as well as select businesses and individuals around the world (mostly in Europe.)

Bitcoin remains a complex, innovative and experimental form of currency. While there have been variations of Bitcoin (such as Lightcoin and Dogecoin), its feasibility as a widely accepted form of money has yet to be tested.

 

Sources: 

https://en.bitcoin.it/wiki/Mining_hardware_comparison

http://www.pcworld.com/article/2151261/beginners-guide-to-mining-litecoin-dogecoin-and-other-bitcoin-variants.html

http://www.huffingtonpost.ca/2014/01/26/what-is-bitcoin_n_4661604.html

http://www.reuters.com/article/2014/02/25/us-bitcoin-mtgox-factbox-idUSBREA1O21M20140225

http://money.cnn.com/infographic/technology/what-is-bitcoin/

https://bitcoin.org/en/faq#what-is-bitcoin

https://bitcoin.org/en/how-it-works

https://coinbase.com/charts

http://www.theverge.com/2014/2/9/5395050/russia-bans-bitcoin

March madness made be over but the madness surrounding the NCAA has anything but cooled down.

Ever since Shabazz Napier made a public statement about him going to sleep hungry on more than one occasion, questions began circulating about the treatment of athletes and the rules placed by the NCAA.

More important that was the question about who actually does all the work and who reaps the benefits?

The exploitation of college players and their companion organization is an evergreen story.

But what is interesting here is the way in which the NCAA reacted to players like Napier attempting to unionize in order to receive better aid for not just playing at a competitive level but also winning for the organization as well; an organization that is a non-profit.

Mark Emmert, NCAA President, is obviously against players unionizing.” The notion of using a union employee model to address the challenges that do exist in intercollegiate athletics is something that strikes most people as a grossly inappropriate solution to the problems. It would blow up everything about the collegiate model of athletics,” he stated in an ESPN article.

Grossly inappropriate, especially considering the NCAA made somewhere along the lines of $750 billion in revenue from broadcasting contracts alone.

And how much of that goes to the athletes?

As the chart shows, not as much as they should.

But there are many more issues that come into this student athlete conversation.

1)      The fact that most colleges don’t even take academics as seriously for athletes as they should.

 

2)      The long line of racial disparities when it comes to the graduation rates from white student-athletes compared to black student athletes. It was recently reported that student-athletes at Columbia had a graduation rate of 85% compared to the overall school’s rate of 95% (even more disparity is seen with female athletes but that is another issue).

What is clear here is that there is an even distribution of wealth when it comes to student-athletes. Should they get paid? Do they deserve to considering they win the championships?

As Greg Johnson wrote in an op-ed article, “student athletes do not need salaries or monthly paychecks, even though the NCAA runs just like any other professional sports league. They should simply be allowed to operate within the free market like anyone else in America.”

President Obama’s State Union Address ignited a large (and pre-existing) conversation regarding universal preschool within the nation.

What has followed since is no longer a discussion of a better, earlier education for our nation’s toddlers, but a discussion about the benefits this will have for the whole nation.

To understand this we must first understand how it began. James Heckman, University of Chicago economist and winner of the Nobel Prize in 2000, was one of the first to advocate for a decrease in the “ability gap” in regards to college attendance amongst minorities when he was doing research on government jobs during the 1990s. What he discovered was that this gap was opened up strongly as early as children 3, 4 even 5 years of age.

Since then, there have been many articles as well as infographics that detail the educational benefits that preschool and early education provide to our children.

And while there is still a great emphasis on the educational standpoint that early childhood education advocates use as talking points, discussion is now gearing towards (and appealing to) the economic portion of the advocacy that comes from cultural optimism.

Even Heckman himself wrote a paper in 2004 of all the benefits “investing in young children” could bring forth for our country.

So how exactly do these toddlers become the heroes of our nation?

Taxes do not seem to be the answer to our nation’s search for preschool for all considering Obama’s proposition for this was to tax tobacco. A bit contradictory and also risky considering this implies people should be wasting more money in the tobacco industry; a majority of smokers are already part of the lower-income group (and counter intuitive if one mentions this universal preschool agenda seeks to benefit lower-income members of society).

No, the answer cannot stem from something entirely economic; the way of convincing people is the way it started—focus on the children (in order to secretly talk about everything else).

Putting the “Universal” in “Universal Preschool”

As Heckman mentioned in the 90’s, universal preschool begins by helping bridge the gap of “ability and access.

Universal preschool would mean that all four-year-old children would have access to a quality preschool regardless of income. This would then help children of all color get the education that they deserve, which would mean they would do better in school and have less of a chance of actually needing extra help as they continue through their educational career.

Children would then get older, but having gone to preschool, they would have less of a chance of being involved in crime, dropping out of high school or relying on government assistance as an adult.

Change helps create more change and by starting at the bottom and working our way up, can one appeal to a broader audience.

It is only then, after making the point culturally, that one can begin to talk about it economically again. As Dicken’s wrote in 2009, “well-educated individuals are more likely to be employed at all points in their lives and live longer than those who are less educated which in turn increases labor supply and influences long-term GDP.”

The benefits of preschool are with no question all positive ones. A majority of society is completely in favor of it.

But to depend on children to be the solution to an issue that has always existed is a cycle we continue to place in their hands.

Because after all, “children are the future.”

No pressure, kids.

A good while back, in March, an informal online plebiscite was held asking residents of Venetia, the Italian region in which Venice is situated and the core of what was once the Venetian Republic , whether or not they wanted to become independent from Italy.

A fairly misinformed article in the Atlantic blew this even way out of proportion. You can read it here:

http://www.theatlantic.com/international/archive/2014/03/europes-latest-secession-movement-venice/284562/

However it was enough to get my attention. When I found that the Italian media had completely ignored the plebiscite – which a significant number (several million) of Venetians participated in – I decided to investigate a little.

What I found was that this plebiscite was largely populist political move by the separatist Lega Nord (Norther League) neo-fascist xenophobic party. A party which has a large base of support in Venetia where there are many wealthy but relatively uneducated business owners.

I recruited a childhood friend of mine who attends Bocconi univerity and native Venetian to write an article explaining this Byzantine situation to a foreign audience — which he did quite brilliantly:

http://scinternationalreview.com/2014/04/venetian-independence-explained/

The problem is that this story hasn’t gone away. In fact it’s gotten more coverage in the foreign press. Not surprisingly The Scotsman published this article claiming the Venetians are inspired by Scots and Catalans:

http://www.scotsman.com/news/world/rich-venetians-hopeful-in-independence-poll-1-3341460

And then there’s this sensationalist fool:

Will Venice Secede From Italy?

Both these articles really use the same arguments all of which are refutable.

“Venice would be the 7th largest economy in Europe” Really? As a part of Italy you can measure it that way but to claim that Venice would just chug along if it were separated from Italy… considering that Italy’s Infrastucture is national!  Furthermore an independent Venice would be dominated by far right political parties that would wreak their own political havoc on the new republic which would soon translate into an economic mess.

“Venice pays 1 billion euros in tax revenue to Rome” Yes, Venetia is an economically dynamic region of Italy — it has more economic activity so there is more activity to tax — this seems like more of indicator of an economically successful region.

“Venice would still be in the EU and NATO” Because an independent Venice gets automatic access to two of the most exclusive and powerful clubs in the international system? I think not.

Basically, Venetian Independence is political and economic suicide and should remain as the thought at the bottom of your last Spritz of the night.

I was surprised to find that this Italian Daily ran the following post with such a title: “Venetian Independence No Joke” – the article doesn’t really back that claim:

http://the-view-from-rome.blogautore.repubblica.it/2014/04/06/venetian-independence-no-joke/

This is the problem when wealth, stupidity and power conspire. There’s a lot of stupid people who don’t know what’s good for them. You can’t just quit on your nation because you’re richer — you’re richer because of your nation. I feel that this is a really obvious truism that “the rich” have forgotten in the globally increasingly polarized political-economic environment that separates the ‘haves’ from the ‘have-nots.’

Several times during this course we have pointed to how the American Economy’s greatest asset is unparalleled innovation. When Japan was poised to surpass the US by the 90’s they didn’t in part because of demographics and in part because their growth was due to optimizing rather than creating new technologies. US innovation is often attributed to two major factors that are linked: the quality of US higher education and government investment in fundamental science research.

However it may not be simply the quality of Higher Education that is important. Perhaps the style of education is the key variable. A higher education environment that promotes divergent thinking may be measurably better for an economy than one that simply promotes the retention and replication of preexisting knowledge.

For the past 30+ years France has been in a prolonged recession, worsened only by the 2008 global recession. People have attributed France’s historically stagnant economy to a myriad of factors: Poor leadership, inflated bureaucracy, high tax burdens.

Most foreign coverage of French economics I have come across re-iterates these points year after year. These articles are just a sample of what I am talking about:

http://www.bloombergview.com/articles/2014-04-09/france-s-economic-plan-hope-for-miracles

http://www.economist.com/news/europe/21576414-it-weakness-economy-not-political-scandal-most-threatens-french

However, austerity, an economic prescription that ought to address at least a few of these issues seems to have failed to do so.

An argument to explain France’s woes that I had not yet heard, until reading a recent article in the french press, has thought to look at Les Grandes Ecoles as the problem. After all, these elite public universities are a point of considerable national pride as some of the most prestigious institutions in the world.

http://tempsreel.nouvelobs.com/education/20121025.OBS7128/l-ena-facteur-de-declin-francais.html

This article reports on a book written by Mr. Saby, a graduate of the premier school that trains France’s bureaucrats, the ENA (Ecole Nationale D’Administration | National School of Administration). The article suggests that it is the learning environment within ENA that is the principle cause of France’s decline. Principally the problem identified is the suppresion of innovative, creative and open thought.

I have translated the following descriptions of French Education from the article:

“Pour réussir l’épreuve, pas besoin de réfléchir: vous devez connaître le format et le remplir avec les mots-clés adequats”

To pass the exam, no need to think: you need to know the format and complete it with the correct key words

“En cela ils suivent le conseil que leur a donné un tuteur de l’école s’ils veulent des bonnes notes: apprendre par cœur règlements, directives, décisions de la Commission Européenne et avis du Parlement européen.”

And they [the students] follow the advice to get good grades given to them by a tutor of the school: learn by heart the rules, directives, and decision of the European Commission and Parliament

“La crainte de toute initiative, chez les maîtres comme chez les élèves, la négation de toute libre curiosité, le culte du classement ( Bloch dit « succès ») substitué au goût de la connaissance”

The fear of any initiative, among the professors as well as the students, the refusal of any free curiosity, and a culture of classification have replaced the very taste knowledge.

“On a l’impression à lire Saby qu’à l’ENA, les élèves sont infantilisés, effarouchés, lobotomisés.”

Reading Saby’s book, one gets the impression that ENA students are infantilized, taught to be skittish, and lobotomized [metaphorically].

When I read the descriptions of French Higher Education recounted in the article I recognize similar disturbing traits at USC. Often my fellow Trojans have described USC as “a Disneyland of a university.” Others confess that they feel they are being treated the same way they would in high school. Some students I have spoken to point to the ridiculous lengths to which the university goes to suppress activism on the campus as a suppression of independent thinking.

That being said, while living in Paris I spent 4/6 of my middle school and high-school years following the French National Curriculum. While I can attest that the quality of my education was very high (although an intervening factor here may be that the school I attended is ranked #1) I rarely was asked to create presentations, design experiments, or answer open-ended essay questions. A key reason for wanting to do the IB (International Baccalaureate) diploma for my last two years and attend and American university was not wanting to be stuck in a system that I considered to be mind numbing.

On May 16, the world’s largest democracy is expected to announce its election results. The ongoing Indian election, which began on April 7, will see more than a 100 million newly eligible voters go to the polls to make an Indian electoral population of 814.5 million. The country’s elections have long been seen as an exercise in political opportunism, voting by personality over party platform and marred by false promises of handouts and subsidies. But this election year, the subcontinent’s 16th since independence, is shaping out to be dramatically different. Faced with slowing GDP growth, dysfunctionally inefficient bureaucracy, and the fading of India’s ‘economic miracle,’ the candidates’ economic posturing is more relevant than ever. To Indians and foreign investors alike, the results of the election and the ensuing government coalition’s make up is sure to usher in a new chapter in India’s economic story.

Despite its massive size, the Indian candidature is not as complex as one might expect. Since India’s 1947 independence from British rule, the centre-left Indian National Congress (INC) has dominated the political landscape. Fronting the ruling Congress Party this election is Rahul Gandhi, the promising and youthful graft of one of India’s most distinguished families – which itself includes three former Prime Ministers. On the other side is one of the year’s most talked-about political figures: Nahendra Modi. The self-made leader of the Bharatiya Janata Party (BJP) is known for his 12-year success story in the North-Western state of Gujarat. Since Modi took office as Chief Minister in 2002, the state’s GDP growth rate has been almost double that of its national counterpart (See Figure I). It’s no wonder then that despite Modi’s controversial past (he has been broadly associated with the death of 1000 people, many of whom were minority muslims, in a 2002 riot), much of the Indian electorate is tapping him as their next leader.

Since its 2004 election, the ruling Congress party has developed a rotten reputation for its economic management. Throughout the 2000s the party had reason to be proud, enjoying the effects of the INC’s major economic reforms enacted during the 1990s that paved the way for India’s growth spurt. Riding high on economic success, many in India and abroad were prepared to look the other way. But as the country’s economic miracle has all-but ground to a halt, the party’s shortcomings have been pulled into focus. Critics of the ruling INC have abundantly pointed to the party’s political infighting, corruption, and inability to overcome congressional gridlock as a major cause of India’s inaccessible business climate and, by extension, its economic lag. Indeed, India ranks 199th on the Heritage Foundation’s Index of Economic Freedom and an equally high 132nd on the World Bank’s ‘Doing Business’ list. Similarly staggering, businesses both foreign and domestic must obtain as many as 70 certifications to operate in India.

Unsurprisingly, Modi and the BJP’s realignment from a vehicle of Hindu nationalist agenda to a pro-business, growth-oriented, hardline driver of economic freedom has resounded amongst businesses and investors alike. Indeed, in contrast to Manmohan Singh’s manner of rule, which has been mostly weak and sluggish, Modi’s is decisive, fast-paced, and transparent. Indeed, as Edward Luce points out writing for the Financial Times, “files rarely gather dust in Gujarat. Investments get swiftly approved. Projects are executed on time. And bribes are rare. Gujarat continues to outpace most of India in terms of its investment flows and per capita income growth.”

Modi and his fellow policymakers hope to employ the Chief Minister’s economic model for success, which has been hailed and praised in Gujarat, to revitalise the Indian economy and attract more foreign direct investment. Internally, Modi hopes to restructure the government by reducing its current entanglement in business and cracking down on corruption. But seeing as a even the soundest BJP win these elections will result in a coalition government that must reach agreement in both the lower and upper houses of parliament, Modi is sure to face stiff opposition. On an external and national basis, Modi’s manifesto is one of urban development and infrastructural improvement. Echoing a showpiece project taking place in Gujarat, Modi hopes to transform rural villages into ‘smart cities’ that reduce the strain on current cities and drive up employment and economic growth. Modi’s mix of public spending to incentivise private investment is something that has so far been unachievable under India’s current government.

Nevertheless, for Indian’s both at home and abroad Modi’s economic freedom platform holds a lot of promise. Though the details of its execution remain scarce, there appears to be significant confidence in the marketplace. Compared to the gloomy economic mood just a few months ago caused by high inflation, stagnant GDP growth at less than 5% and major capital outflows, the Indian economic climate has calmed. An increasing number of India’s intellectuals, economists, and elites have thrown their support behind Modi and the BJP. Bloomberg’s Businessweek recently linked market optimism to an economic phenomenon named the “Modi bounce.” Finally, some of India’s more positive economic outlook may stem from the actions of the Federal Reserve Bank of India’s newly appointed central banker, Raghuram Rajan. Rajan has received much acclaim for the RBI’s successful regaining of investor confidence and  recovery from last year’s financial instability caused by capital flight.

What Modi and BJP will accomplish remains very much to be seen. While the tune of the party’s agenda is clear, its finer notes remain unclear. But despite the ambiguity, Modi and BJP’s platform brings forth  a decisive and confident action that has been unheard of India as of recent, leaving the markets and most Indian investors optimistic. From a non-economic standpoint however, both Modi and the BJP have questionable origins that certainly give voters pause. But whatever the final verdict, you can be sure that Modi’s India will represent something drastically different.

The airline industry has an image problem. Plagued by delays, lost bags, impossibly small seats and high ticket prices, flying has become almost synonymous with discomfort, stress, and expense. Indeed, the industry has long been hindered by fundamental problems: sky-high operating costs, spikes in the price of jet fuel, cut-throat competition, and a loss of consumer goodwill. But while the aviator and concorde-filled glory days of air travel are certainly a thing of the past, the industry is undergoing significant changes and an upswing which serves to benefit everyone from passenger to pilot.

Historically, airlines have long-struggled to balance their costs and profits while maintaining passenger satisfaction. In 2012, the industry made an aggregate profit of just $7.6 billion on revenues of $638 billion, a meagre 1.2% net profit margin, according to the International Air Transport Association’s Annual Report. Of the other 98.8%, over two-thirds goes to the airlines’ fixed costs. Of these, labour and jet fuel make up almost half of operating expenses, with the price of jet fuel alone more than doubling in the last decade (See Graphic I).

In addition to the industry’s inescapable dependence on the fuel, the price of jet fuel rises and falls almost in tandem with that of crude oil, making it highly susceptible to shifts in global politics. Strong industry-wide unions resistant to technological automation prevent airlines from laying off staff. Finally, cut-throat competition complemented by the advent of price comparison sites like Kayak and Expedia have created broader awareness and price sensitivity in the marketplace. Even with these heightened costs, airlines have been unable to raise prices or work to distinguish themselves to gain more market share due to mounting and inescapable financial obligations. As a result, all of these costs have often translated directly to the airlines’ bottom lines.

“That airlines made any money at all [in 2012] with GDP growth at 2.1% and oil averaging a record high of $111.8 a barrel was a major achievement,” says Director and CEO of the International Air Transport Association (IATA) Tony Tyler in the industry association’s annual report.

Indeed, despite seemingly insurmountable challenges, the airline industry has shown remarkable robustness in fulfilling its role. During the recession, the airlines saw the first decline in passenger numbers since the decreases caused by September 11th. Even with lowered fuel costs, reduced per capita disposable income and economic activity reduced the demand for air travel (See Graphic II). In the aftermath of the recession however, the airlines have worked hard to dramatically consolidated, trimmed, and altered the industry.

In the U.S. market, the major airlines have consolidated and transformed control of the industry. According to a review of the aviation industry by the Office of the Inspector General, of the ten major American airlines controlling 90% of market share in 2009, just five in 2012 (and now four) remain in the market with a share of 85% of domestic passengers. Through such mergers, the major carriers have been able to strengthen their market position and cut costs, reducing price wars and allowing them to get away with charging new service fees. In 2013, the major U.S. carriers racked up more than $6 billion as part of these new ancillary fees. These fees aside, merger-driven consolidation of the major airlines together with the continued growth of low-cost carriers like SouthWest and JetBlue continues to stimulate essential competition between airlines.

Key to their increased profitability, airlines across the board have succeeded in improving their efficiency. According to a PWC industry trend report, the airlines significantly advanced their capacity discipline, or load factor. Since 2008 there has been an 8% reduction in the number of flights, but just a 1% reduction in number of passengers. More tellingly, though the price of jet fuel now approaches that of its 2008 peak, the airlines have maintained a non-fuel operating cost close to previous levels despite rising costs in fuel. So though the total cost per available seat-mile (CASM) has grown, for example, most of the increase is derived from rising fuel costs (See Graphic III).

In spite of these efficiencies, airline expenses remain high. The rising cost of maintenance, higher salaries (demanded by unions as part of merger negotiations), and environmental taxes contributed to a decline in the average industry operating income per seat-mile of 0.28¢ in 2012. But overall confidence in the airline industry is up. Air freight, an important industry indicator that underwent a significant decline in the last three years, is expected to see growth of 4% in 2014 according to an industry outlook report. Airlines will also see long-terms gains as a new, more fuel-efficient generation of planes is delivered. 

How it all affects the traveller remains to be seen. Though industrywide customer satisfaction is on the rise according to the latest American Customer Satisfaction Index (ACSI) report, passengers continue to complain about the actual flying experience. Reduced delays, worldwide alliances and loyalty programs, as well as more efficiency and stability in the marketplace stands to improve, at least minimally, the traveller’s experience. In changing the way we fly, however, it might be best to look to start looking not at the airlines but the technological manufacturers at Boeing & Airbus et al.

The college debt bubble has gotten everyone a little mad and crazed up. So if the government, the largest lender of college loans were to exit college loans what would happen?

This might cause less people to attend college and make paying for college harder on the ones continuing to attend. This would lead to some compounding effects such as; less people enrolling into 4-year universities;  an increase in enrollment of technical/trade schooling,; lowered tuition prices … which doesn’t sound too bad considering the 1.2 trillion dollars of college loan debt and the $30,000 average debt of college graduates.

Making the decision to go to trade school seems easier now considering that economists describe nurses and teachers as having the most economically sound and guaranteed post-secondary educational investment.

Without government loans I would not be attending a 4-year university. If everyone in my situation were to drop out of school, there would be a severe decline in number of students and future enrollment. With less people attending 4-year universities, schools would not make enough profit to finance their institutional payments (paying teachers, programs, faculty ). This could be a big problem for schools if all of a sudden they were only making half of what they made last year. Even wealthy schools like USC could be hurt considering that if they wanted to keep me and everyone in my boat, they would have to loan each of us  $40,000 a year.

Even if USC had the amount of capital to fund every student’s tuition, it wouldn’t happen without USC programs, teachers and its financial sector taking a hard hit. So maybe USC might give higher grants or just as equally effective, lower their tuition price so to retain as much students as possible. If this were to happen we could  all go back to class with a smile while USC survives the event with a cut in their tuition-based income.

But, what would it mean for students that are entering college next year? Well, there will be less students making the decision to pursue private education over a cheaper tuition. Public schools would get overcrowded and the Department of Education would have to provide greater funds. Which sort of sounds OK. Considering that in 2013 alone the Department of Education made $41 billion dollars from college loans which is enough to pay for 3 million students to attend the public schools that have an average public university tuition price of $13,000. Regardless of that rather pointless hypothetical, there is still no doubt that this would cause private schools like USC to lower their tuition. Then UCLA would have to lower their tuition in order to remain equally as financially attractive as before.

… which might get me thinking about going to school again.

If such an event were to occur, an economist might describe this as a free(er)-market of institutions that are dealing with a shorter number of demand (lower number of enrolled students) and therefore dealing with an abundance of universities that are competing to be the cheaper university. Of course, rankings and brand name universities would allow certain schools to retain some leverage.

Did I just solve the answer to college debt? Nope, probably just my debt. But damn when you are facing $75,000 in debt by graduation you’ll be looking at any solution as the right solution.

… Which brings me to my next thought.

What if the government were to bail out all of our debt just like they did for Wall St.? I should end it here but NO.

The department of education would still have their $41 billion profit from 2013 and Sallie Mae would still have its $900 million. No student would be in debt and could begin to afford buying houses. The public would spend more allowing more circulation of money. This would raise interest rates, but that would make going to college more risky. Maybe colleges might lower tuition to even out the risk. Or…

 

From bartop to supermarket aisle, the familiar bottles of Heineken, Budweiser, and Tsingtao are no longer alone. These recognisable brands, hailed by purists for their age-old recipes and whose advertisements reach everywhere from the Super Bowl and to frat parties, now rub shoulders with a whole slew of new beers. From hipster, moustache-sporting micro brewers to unfamiliar liquor-instilled brews, the beer industry is undergoing an unprecedented change.  Faced with a stagnant global economy and shrinking market share, global brewers like Anheuser-Busch InBev, SABMiller, and HEINEKEN International are stepping up efforts to find viable alternatives to beer and recapture the changing palette of their drinkers.

“Historically, beer has not been an innovative industry,” says at HEINEKEN’s Director of Innovation Xavier Mahot in an interview for Bloomberg. “But this is changing, and the new generation of drinkers that is coming are looking into other categories.”

Millennials make up  a rising figure of more than 26% of drinkers and 35% of beer drinkers, according to Nielsen. Recapturing this consumer segment has become a major priority for brewers across the board. As Mahot points out however, the changing tastes, lifestyles, and demands of millennials demand that the mainstream and historically traditional brewers change their tune.

In response to this, many brewers have begun introducing their own varieties of beer mixed with other flavours, alcohols, or spirits. In the U.S. AB InBev put $35 million behind the launch of its new lime-flavoured Bud Lime product. Its Bud Light Lime-A-Rita variations have shown “strong growth” and are “key drivers” of the company’s beer-only segment, according to the its Q3 2013 earnings report. At the same time, the brewer’s Shock Top brand is the highest performing ‘craft’ beer in the country commanding 16% of the craft beer market share.

Across the pond, HEINEKEN International’s Desperados brand, which blends French beer and Mexican tequila to appeal to young-adult drinkers, grew by 26% in 2011 compared to just 5.4% volume growth in the Heineken brand. In addition, HEINEKEN debuted the Radler brand – a lemon soda and beer mix – to 19 markets around Europe last summer. Though the brand’s financial results remain unclear, HEINEKEN touts it numerous times in its 2013 annual report citing it as the “cornerstone” in its strategy to get 6% of sales a year from new products.

In the U.S. market HEINEKEN plans to launch several new brands including Amstel Radler, Dos-A-Rita, Dos Equis Azul, and two ciders similar to Strongbow. In Asia, HEINEKEN’s Indonesian arm called Bintang is planning to move into the soda market in response to increasing alcohol bans.

Across the board, the global brewers are adapting to meet the demands of a new generation of drinkers. As more and more millennials peer into drinks menus for the first time, the question remains whether the traditional taste of beer will succeed in beating out its stronger and more sophisticated counterparts in the spirit and wine industries.

While their advertisements continually convince me that the world is at peace and everyone loves drinking Coke, the truth is always revealed in the numbers: the company’s stock may have rose 3 percent last week and overall revenue increased, but heavy marketing costs and increased health concerns over the fizzy drinks of yesteryear may signal a downswing in the carbonated drink industry as we know it, calling for Coke to adapt its business.

Globally speaking, Coke’s actual soda sales dropped in their last quarter for the first time in fifteen years. American health advocates cheered, as not only less Coca-Cola was sold in the U.S., but Europe and Mexico. In the latter, historically the biggest market for Coca-Cola, a recently imposed soda-tax probably did most of the damage, and may lead the way for similar taxes in other countries.

“Healthier” alternatives like Diet Coke have not proved sustaining either, as claims against the beverage’s use of potentially dangerous artificial sweeteners have sunk sales.

So where does this revenue bump come from? Coke’s ‘still drinks’, like Powerade, Dasani, and Minute Maid, provide reliable backup, generating over $1 billion for the company every year. In the previous quarter, sales rose 8 percent for the company’s still drink brands. Also, while soda sales have fallen in big markets like Mexico, Eastern markets like China and Japan are starting to carry the foreign carbonated burden, and 80 percent of the company’s volume is still overseas.

Coca-Cola CEO Muhtar Kent plans to focus on the balance between the still and carbonated brands under their flagship, while also massively increasing marketing spending, adding $400 million to already billion dollar costs. Competition like Pepsi Co. are doing the same. That said, increased marketing may not offset the health side of the equation in the long run. The time could come where Coca-Cola’s name brand product will have to take a back seat to the less-carbonated brands. #DasaniIsBeautiful just doesn’t have the same ring, does it?