Archive for the ‘Levels’ Category

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The Claw[backs]

Friday, July 8th, 2011

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(photo credit: mangpages)

It’s kind of an understatement to say that taxpayers were peeved when they ended up footing the bill for the government bailout of the “too big to fail” banks. So they may take some comfort in a new FDIC rule that will seriously punish the leaders of failed financial institutions. Among other things, it says that any executive responsible for the collapse of a major financial firm is subject to spooky-sounding “clawbacks.”

Clawbacks are the equivalent of making an executive return two years worth of their salary to the government if a government agency has to step in and handle the collapse. Big banks will also be required to have a plan in place before they go up in flames, to avoid the kind of sweeping support the government was forced to provide in 2008 and 2009.

That’s a lot of pressure on a relatively small number of people. What do you think – whose responsibility is it to keep a financial institution on the straight and narrow? Should employees lower on the corporate totem pole be punished as well?

The Economy of Sandwiches

Friday, July 8th, 2011

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(photo credit: Toronja Azul)

We all know eating out is more expensive (and more fattening) than eating in. But how much more expensive, exactly? Intern Anna did a little experiment:

Your stomach is grumbling and you’re trying to decide – do I head out the door or hit the kitchen?

Say you’re craving a good old turkey sandwich. That’s it. And you decide to stay in rather than roam the streets. So you grab…

- 2 slices of bread ( = grainy-goodness), $0.50

- 3 slices of turkey, $0.60

- 1 slice of cheese (the nice stuff), $0.35

- a bit of lettuce, $0.10

- 2 slices of tomato, $0.20

- a squeeze of mustard, $0.05

You’re all set and the total is… $1.80! Head to the local deli or grab a pre-packaged sandwich and you’ll probably be paying $5.00 – or more.

One New York City native really took the plunge and decided to only eat in – ever – and she wrote a book about her experience. She’s still blogging about not eating out in NY.

If you keep sweaters in your stove and have a taste for the gourmet, eating out might be a priority for you. But if you’re not opposed to spending more time waltzing down the grocery store aisles and dancing in the kitchen, eating in could keep your piggy bank nice and heavy.

Conscious Consumerism is…

Friday, July 8th, 2011

Conscious consumerism is being aware of where your money really ends up when you spend it. It’s the practice of purchasing goods and services that the consumer (you) considers to be produced in an ethical manner.

Money leaves a social and environmental footprint wherever it goes. So if a company makes a habit of spilling oil in the ocean or refusing to give its employees benefits, you’re unknowingly saying “yes!” to all that by purchasing their stuff.

On the flip-side, conscious consumers are aware of all this and avoid products that do harm to or exploit humans, animals or the natural environment. They not only favor ethical products but also boycott merchandise and companies that act unscrupulously.

Congress, Will You Raise the Roof?

Thursday, July 7th, 2011

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(photo credit: j thorn explains it all)

So much talk about the debt ceiling, so little explanation. The “ceiling” in this case is the limit of how much debt the U.S. government allows itself to take on. That’s why it’s up to Congress to decide what to do now that we’ve pretty much hit that limit. They can raise the roof and make it okay to go deeper in debt, or they can refuse, and the U.S. won’t have enough money to pay off some of the debt it already has.

But what does that mean to you? Conveniently, our friends over at Marketplace have explained why the debt ceiling is important to the average American in “How the debt ceiling affects the average American.” They use an actual example of an actual average American, who emerges from the conversation pretty shaken. (One side effect of the debt ceiling problem is that it freaks people out and makes then snap their wallets shut – otherwise known as shaking consumer confidence.)

Anyway, if Congress doesn’t agree to raise the debt ceiling, then the U.S. government won’t be able to pay its creditors back as promised. And just like a person who takes out a loan and then doesn’t pay it back, a default will lower America’s credit score (or credit rating, which is the national equivalent of a credit score). And with lower credit ratings come higher interest rates on future loans. After all, the bank is taking a bigger risk on you because you’ve shown in the past that you’re not the most reliable borrower. So they’ll let you borrow – but you’ll have to pay.

So what does this have to do with us average Americans, you ask with vague irritation? Well, generally what happens when interest rates increase for the government is that interest rates increase for everyone. So if you wanted to get a loan to buy a car or a house, you would end up paying a lot more for it. And if you have any credit card debt, those interest rates will go up, too. So instead of paying an extra 18% or 30% on the balance you’re carrying month to month, you’ll be paying something frighteningly larger.

Go ahead and see if you can survive the credit storm now, because if the roof isn’t fixed, the weather might be a lot more threatening in the near future…

Why We Give: Brett Kopelan and the Worst Disease You’ve Never Heard Of

Wednesday, July 6th, 2011

Everyone gives for their own reasons – compassion, anger, or sometimes just the tax deduction. But some people have personal experiences that change them forever – and compel them to fight for a cause they truly believe in.

Brett Kopelan is the Executive Director of Debra, a charity that funds research for a terrible disease called Epidermolysis Bullosa (EB for short). Debra also runs programs that help families whose children are afflicted with the disease. Brett has an M.A. in Child Psychology from Columbia University and a daughter with ED. His personal experience with the disease inspired him to make it his life’s work to combat the disorder and support families like his own.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry.

Work Is of Two Kinds

Thursday, June 30th, 2011

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(photo credit: Wonderlane)

Work is of two kinds: first, altering the position of matter at or near the earth’s surface relatively to other such matter; second, telling other people to do so. The first kind is unpleasant and ill paid; the second is pleasant and highly paid.

- Bertrand Russel, “In Praise of Idleness”

We all have to work. Even if we don’t have to work, we have to pretend to work (see, for example, the idle heiress halfheartedly designing handbags and “building her brand”).

So if we need to work, why not be as thoughtful as possible about it? First of all, do you agree with Bertrand’s categories of work? Can you be highly paid and unhappy? Can you be happy taking orders from someone else?

What kind of work would make YOU feel best about the way you spend your days and feed your family? What kind would help you achieve your life goals? Is it the same work?

An Oligopoly is…

Thursday, June 30th, 2011

An oligopoly is a situation in which a small group of organizations dominates a particular market. The actions of these individual “oligopolists” affect one another and can collectively influence prices and production in the marketplace.

Oligopolies can exist both intentionally or unintentionally. For example, Apple and Dell computers dominate the market for laptops because they tend to sell more products than their competitors. But they’re not working together, so the dominance is unintentional. On the other hand, OPEC member countries have joined together and formed a cartel to intentionally dominate the oil market and keep prices high.

Core Inflation is…

Thursday, June 30th, 2011

Core inflation = full (a.k.a. headline) inflation minus inflation in energy and food prices. It’s the number that monetary policy makers (like the Fed) look at when they are monitoring inflation.

Why would they ignore inflation in the two things that we all spend so much money on? The answer is that food and energy prices change all the time, in unpredictable ways. A war in the Middle East can cause oil prices to spike. A drought in the Midwest can devastate crops – reducing supply and increasing prices. But the Fed believes these are temporary events and temporary price changes. So they just ignore food and energy, and focus on the more lasting price changes of other things.

How many different types of bank accounts are there?

Thursday, June 30th, 2011

It’s pretty simple; once you’ve put your money in a bank, it usually lives in one of four types of accounts:

1. Checking – usually doesn’t earn interest, but the money is easy to access (like at the ATM or when you write a check)

2. Savings – earns a little bit of interest and is usually easily transferable to an attached checking account

3. CD – earns more interest than a savings account, but you agree not to take the money out for a set period of time

4. Money Market – earns more interest than a savings account, but the rate can fluctuate and there may be other account restrictions

It’s important to remember that these accounts are typically used to hold money you need today and the near future. If you have more money and are interested in earning greater return for the more distant future, talk to your financial advisor about other types of investments.

Capitalism is…

Thursday, June 30th, 2011

Capitalism is an economic system based on profit and private property. Through free exchange, people and companies are able to trade goods pretty much as they please. In a capitalistic marketplace, nearly everything is privately owned by profit-seeking entities rather than a government (such as with socialism). Capitalism is practiced in the United States and many other countries.

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