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FIRES IN THE AMAZON.

Why is it important to fight fires in the amazon?

There is a war going on between Brazilian farmers, who want to expand and survive, the Brazilian president rallying behind them.

But this means expanding into land currently home to the most expensive and elegant biodiversity, for which we dont even know the value.

Essentially, because of a mismatch of incentives, real estate that could be worth millions and billions of dollars is being demolished. We don’t know the value, and therefore we assume there isn’t any.

The economic solution to a problem like this is to subsidize the farmers for what they would have earned, however lack of organization, and the transaction costs from an unstable political environment, have made this arguably impossible. Also, it’s politically unpalatable to invest into biodiversity, especially with the rise of populism, which is by definition driven by short-term interests.

So if our government, saddled in debt from a great recovery from the Great Recession, isn’t able to make a subsidy of that kind, the best thing we can do is support organizations (Greenpeace, for example) that fight the causes. These organizations hold the key to future generations benefiting from the mind boggling technology nature has created in the Amazon, however most people don’t have the money to support them. Also, mistakes in the past by these organizations coupled with loss aversion bias, or the human tendency to put further weight on those mistakes rather than successes, may lessen support.

Communication Monopoly

In a time where we can be reduced into digital identities, and then come out the same, communicating should be free. Unfortunately, this isn’t the case. Our communication is limited, because of something called monopoly power.

When a firm has monopoly power, it will reduce the quantity to that when the marginal cost equals marginal revenue. They do this because if you sell any less then you can still get marginal revenue over marginal cost, aka profit; you keep on selling until you get to that point. This means a lower quantity to artificially inflate the price for the people that will participate in the market.

To the extent that the increase in price ceases to lose as many consumer’s, they increase the price. Then, for the consumers that are left, the firm will make more profit than they would have at the lower price.

These are the connections that distinguish humanity in the 21st century. It is the speed at which new ideas can be communicated, a most important part of producing technology, fashion, and everything in between.

Being so important, they should be subsidized through government investment to assure that the economically efficient quantity have access, because of the increased benefit to society that this results in, specifically that benefit that isn’t captured in the price.

There is proof that utility companies (those companies that provide us with communication) underprovide the service. This means there is a market failure: subsidy or other regulation is necessary to achieve a socially optimum quantity.

The reason for centralized action: in Economics, when a product has positive spillover effects that benefit the society, more of the product should be provided than a firm will provide, because a firm will only provide up to the amount that it receives the benefit from.

The society should invest up until the society receives benefit that outweighs the cost of investment. It should invest up until a dollar invested will return a dollar in benefit, because up until that point a dollar invested will result in more than a dollar benefit. Up until that point there was net benefit, meaning more opportunity.

Teaming up as a society means working hard for the economy!

Artificial Intelligence

Artificial intelligence is the primary reason why many jobs are being automated. When the tool becomes so sophisticated that it can do everything we can, at a lower cost, investors or business owners buy the tool instead of paying someone to come work for them. What does this mean for you?

It means that it is likely that there won’t be a job for you in the standard sense of the word. This is true for a large percentage of people because of the powerful tools we have created, but if you act soon you can start building yourself income streams that will last a lifetime if properly managed. The technology we have is powerful, and if you start using it to your advantage, you can increase your earning potential by a ton! Earning money online can be difficult to do without the necessary experience, however, so we offer materials with step by step instructions, simplifying the process and making it possible for you!

Remember, it is a risk free offer (links to explanation of what risk free offer means), which means that you have time to cancel and get a refund. Thank you and good luck!

Donald Trump Proposes Payroll Tax

Donald Trump has proposed that we have a payroll tax increase to decrease the national debt. This after a tax cut for higher earners. It’s not the amount of the tax that matters, as the wealthiest would be less price sensitive, it is that there is a tax cut for the wealthy, and this news drives business investment.

Moreover, a cut in the wages of workers, which is essentially what a payroll tax increase is, economically should not impact the amount of hours worked, and may in fact increase the amount. It depends on if the substitution effect or the income effect is stronger. It makes sense that people making less money would be less responsive to a change in wage, or work more because of a pay cut, because they have bills to pay. This makes it an economically efficient choice. As far as economics, things stop there.

As far as equity goes, there are many opponents. The reason for this is simple and obvious: taxing poorer at a higher percentage of their income. Of course this assumes that you make enough to pay taxes. If you don’t, you get a return. It is the middle class that is getting taxed at a larger percentage, which is probably you, the person reading this.

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