More on Kelly

So Kelly Slater has won 10 World Titles. What's next for him? We already saw him win the Quicksilver Pro in Australia but just because he is doing so well doesn't mean he should continue.

There is a debate on whether or not Slater should retire from professional competition.

Matt Warshaw, former editor of Surfer Magazine, wrote an article for the New York Times about how he thinks Slater should "do the thing that virtually every other sports legend, from Ali to Armstrong, has been unable to do. Go out on top." He has the mentality that a "perfect" 10 is "perfect" for a reason and Slater should retire as a successful surfer.

In contrast, Chas Smith believes that because Slater is so talented, even beautiful, that he should never retire from professional surfing.

I've never been a huge fan on debates on what an athlete should do for their career. Its hard to believe that an athlete would choose the desires of the public over his own, making this discussion pointless. The only people that should care are the ones competing against Slater. But what they want probably won't be in the best interest of a competitor that continuously claims all the glory and cash prizes from contests.

Right now he still is competing and I don't think he's going to stop in the near future. One thing Slater has in common with other great athletes like Michael Jordan for example is his unwillingness to quit. Just like Jordan, he retired and came back because great athletes have a personality that won't let them quit. Just look at Brett Favre, a great quarterback who held on until the very end of his career.

This no quit attitude is very inspiring and even though it might be nice to see an athlete retire while he is still on top, I don't think its possible. Slater's personality won't allow it.

I don't think Slater will retire from the World Tour until he can no longer perform at the same level he is performing today. And if he does he will most likely return like many others before him have done.

Kelly Slater

Kelly Slater on March 8th, 2011 won the Quicksilver Pro.

I think that its unbelievable that at age 39, he's still dominating the World Tour. Unlike others of his generation, he's been able to keep up with the younger more innovative surfers of today.

The types of airs and tricks that these younger guys do are insane but Slater continues to do better than them in contests.

I believe that part of his success comes from 2 things. He is more experienced than the younger generation when it comes to competing and his drive to dominate the surfing world is unmatched. I recommend reading Why Kelly Slater is the Greatest Athlete of Our Time to gain a better idea why he is so successful.

But, I disagree with the claim of "greatest athlete of our time." I think comparisons between sports are very difficult if not impossible given the specific circumstances of each sport. What Micheal Jordan did in basketball is very different and hard to compare with what Slater did in surfing.

Natural Disaster

The earthquake and tsunami that hit Japan a few days ago are terrifying to think about. CTV News reports that the magnitude of the earthquake has been measured to be between 8.9 and 9.0 depending on who you ask. And the death toll could be close to 1,700 people.

I am very thankful that all my friends who have family in Japan are ok. There were several days when my friends did not know if their family members were alive because lines of communication were cut off.

The tsunami also hit other areas. In the U.S. five people were reported pulled out to sea in California and Oregon. In addition there was flooding in areas like Hawaii and Latin America.

The SF Gate reported that in Northern California there was significant damage to harbors and boats. Crescent City and Santa Cruz each have 18 and 17 sunken boats respectively. Plus, both cities are expected to need significant environmental cleanup from other damaged boats leaking fuel and oil.

Crescent City is in the northern most part of California and right next to the Oregon border.

This isn’t the first time a tsunami as hit California. The Great Alaskan Earthquake in 1964 caused tsunami waves up to 21 feet in Crescent City and 11 feet in Santa Cruz. Even though the threat of tsunamis is considered to be low in California, it is something to be concerned about.

I’m starting to wonder if we are actually prepared for this in Southern California. But the other day I did notice a tsunami evacuation sign that’s been near my house ever since I’ve been there. I guess we do have a plan. Unfortunately, I don’t think many people are aware of it.

U.S. is not a business, strictly speaking

There’s an interesting and humorous conversation involving the affect of the elderly on the U.S. economy. More specifically, it is trying to hit on the fact that opponents of healthcare reform can't look at U.S. policy strictly as a business because it isn’t one. If we were purely a business we would "euthanize 70 year-olds and harvest their organs for auction." Matt Yglesias shows from this exaggeration that "the problem with this isn’t that it wouldn’t work, it’s that it would be wrong, morally speaking."

If that's the case, we should all be thinking about a way to fund these healthcare reforms instead of trying to not pass them at all.

Austin Frakt points out that government intervention in supporting the retired is inevitable because no one has the incentive to do so themselves. Referring to Yglesias, he agrees that ethics to indeed hinder U.S. policy. Hence the redistribution of wealth falls on the government for healthcare through taxes. In a real business there wouldn’t be a redistribution of wealth to those that don’t pull their weight.

Rather than increased taxes, Ezra Klein offers the alternative of increasing the labor supply by increasing immigration. With more workers paying social security we could offset the "costs" from the elderly.

I completely agree. There seems to be a large amount of illegal immigrants already working in our country, why not make them pay taxes and become part of the system officially.

I thought that this was a unique way of thinking about our economic problems. Maybe those opposed to healthcare reform should think more ethically in light of this and start searching for ways to fund it rather than not pass it.

Lucha Libre Taco Shop

I was watching an old Man vs. Food episode in San Diego where they ate at Lucha Libre Taco Shop. This place is located in Mission Hills and has definitely deserves recognition. I went there this weekend and ordered the Surfin California.  Not only is it a California burrito but also has shrimp. Absolutely unbelievable.

Fighting at a Surf Contest

Last Saturday Sunny Garcia and Jeremy Flores were disqualified from the Burleigh Breaka Pro for fighting. Surfing Magazine says that "Flores states he was intervening when a local surfer was in a verbal argument with Sunny Garcia’s son. The three headed for shore when Sunny came running down the beach to intercept them. He’s then seen assaulting the surfer in the water, punching him several times." Here's the video.

The cameraman who took this footage was also assaulted by Garcia has well.
With Garcia's image as a tough guy I'm not surprised something like this happened but he needs to chill out. I'm leaving Flores out of this because he wasn't strangling anyone in the water. This isn't the tough neighborhood he grew up in; it’s a surf contest in Australia. I understand the need to protect your son but there's no need to chokehold someone because of an argument. Its actions like these that give surfing such a negative reputation.

Unemployment Extension

2/16/2011

Over the next 5 months, millions of people will be losing their unemployment benefits. These benefits are different for each state but are based on guidelines from the Federal Government. Those who have used up all of their benefits, the “99ers,” are waiting on 2 bills to be passed in Congress to change the current Unemployment Extension Tier System.

They are called the “99ers” because they have been unemployed for up to 99 weeks and no longer receive benefits from the government.

The 99er-aiding Amendment would add another 14 weeks of unemployment benefits to the first tier of unemployment.  The second bill, the Americans Want to Work Act of 2010, would add an additional fifth tier to the employment system, thereby adding an additional 20 weeks of unemployment benefits.

The current Tier System is very confusing and differs according to each state, but the standard is 26 weeks of benefits from the State. The Federal Government also offers 4 tiers of emergency unemployment benefits which are extensions once the 26 weeks are all exhausted. A person can go from Tier 1 to Tier 4 which gives them up to 79 weeks of benefits while searching for a job—people are eligible for the third and fourth tier depending on how large their state unemployment is. These benefits come from our taxes.

Is this extension a good idea? Or are we prolonging the unemployment process, allowing people to take advantage of our assistance programs?

Nobel Prize winner, Paul Krugman, claims that those against the extension are "a coalition of the heartless, the clueless, and the confused."

He believes that an extension on unemployment benefits will have trouble being passed because people are misinformed about what these benefits do; they believe that there is a large disincentive to find a job—which is  untrue—and that increasing the budget deficit is a bad thing to do. Krugman believes that by spending money, increasing the budget deficit, we can turn around our “depressed” economy. By not doing so, we are being “cruel” to the unemployed.

He goes onto say:

What’s limiting employment now is lack of demand for the things workers produce. Their incentives to seek work are, for now, irrelevant...anyone who thinks that high unemployment in the first quarter of 2010 has anything to do with workers getting excessively generous benefits must not get out much.

And the truth is that unemployment benefits are a good, quick, administratively easy way to increase demand, which is what we really need. So right now they have the effect of reducing unemployment.

David Moberg uses data from the Congressional Budget Office and Labor Department that says that “for each dollar spent on unemployment benefits, the gross domestic product grows by roughly $1.90 to $2.00.” He also shows that the $65 billion increase in government spending will be offset by this increased consumption and really only will cost $26 Billion.

All of this these recommendations have roots to Keynesian economic theory. These people believe that government spending can affect overall aggregate demand of an economy and its output. They also believe that recessions are economic failures that the government should fix.

Basically Krugman and Moberg believe that these unemployment benefits encourage job growth and national productivity at a relatively low cost to the nation. But with these arguments, why are people still in opposition to these extensions? Let’s look at 3 reasons including some economic theory that can be used in opposition to extending these unemployment benefits. Maybe those in opposition of extending unemployment benefits aren’t as confused as Krugman claims.

First, according to the Real Business Cycle Theory, government intervention has only a small effect on the economy.

Government intervention that tries to increase GDP through consumer spending effects the economy less significantly; the level of consumption is actually determined by business productivity. In 2004 Finn Kydland and Edward Prescott received the Nobel Prize for demonstrating that changes in economic productivity affect GDP, consumption, and investment (either by consumers or the government)—not the other way around. This supports the Real Business Cycle Theory.

This would contradict Moberg’s claim of offset government spending through increased consumption.

Second is the concern of how to pay for these extended benefits. The typical alternatives are to increase taxes or cut spending from other areas. It seems likely that taxes would be chosen since Obama has already proposed large budget cuts that have angered many people. Even if taxes aren’t increased now, according to traditional debt financing, taxes will be increased for future generations to pay off this debt.

In response to Krugman and his increased spending, Josh Hardwick says that if taxes are increased, now or in the future, there is a disincentive for others to work and small businesses to grow. This causes a decrease in available jobs and an increase in unemployment.

This can be explained by looking at a labor supply and labor demand graph.

While there is a temporary increase in taxes, business owners have a reduced incentive to expand their business; they’re forced to shrink their demand for employees (labor supply) in order to pay the same amount in taxes as before.

At the same time a reduction in labor supply decreases workers’ wages. With a decrease in wages, workers are less likely to enter the workforce because their free time as risen in value in relation to the time they would spend at work (a decrease in labor demand). This is called the Substitution Effect.

Finally, there is evidence that unemployment benefits create a significantly large enough disincentive for people to actually take jobs.

Thomas F. Cooley and Peter Rupert refer to a recent Beveridge Curve from the Bureau of Labor Statistics. This graph shows the relationship between current unemployment and job creation. Over the past year unemployment has remained constant while the number of jobs created as risen. They claim that this is caused by an inefficient market system and that workers are becoming pickier.

Tarheel Red points to 2 important studies, both in Denmark and Pittsburgh.  Just as unemployment benefits were about to run out, the “return to work rate” miraculously spiked upwards. These studies suggest that people will do what is in their own best interest. When unemployment benefits give workers more value than a potential job, most workers will choose the benefits.

Plus, the longer someone is out of the workforce, the more their skill set declines. I would imagine that it is very unlikely for someone that has been out of the work force for a year (52 weeks) let alone 99 weeks, could perform as well in their respective profession as when they left their job. Keep in mind that those in school gaining new skills are not counted as unemployed.

To be honest, I can see why people are in opposition to this extension. There are widely held economic theories and behavioral studies that support it. That’s why the debate between Classical and Keynesian economists has gone on for decades.

And continuing to extend these benefits can’t be a self sustaining policy. By increasing unemployment benefits in order to increase GDP, we are basically paying ourselves through higher taxes. Eventually benefits will end and these people will have to accept the jobs that are already being created.

Taking all of this into consideration, I would still have to agree with Krugman and extending the unemployment benefits because this recession is nothing like we’ve ever seen before. Classical Economic Theory can’t explain everything that is going on in the economy and perhaps government intervention is the way to go. Just by doing nothing, unemployment is very high (no, the market is not self-correcting itself) and because those receiving unemployment benefits will be consuming everything they receive, it makes sense that consumption and output will increase.

Even if there is a chance it could be a wrong move, instead of doing nothing, I would rather help out those suffering from unemployment.

**Update 4/1/11: “The Federal extended unemployment benefits… will continue through 2011” with 99 weeks in states with high levels of unemployment. But, there is no fifth tier. The 99ers are receiving no more benefits.