Weakonomi¢s » economics

Where The Poor Do And Do Not Live

The Weakonomist — Thu, 22 Jul 2010 14:17:03 +0000

Poor people, gross. They’re everywhere. They beg for food or money, live off the government, and work low wage jobs. Thank goodness they live in the cities and aren’t disturbing my queit, sheltered life in the suburbs. Whether you say it out loud or not, when you see someone you deem as poor, part of your subconscience is thinking what I just said. You feel guilty for thinking it, so do I. You also don’t 100% beleive it. You have some compassion for the poor, but the fact that most of them live in the cities is hardly what you would call “a bad thing”.

Well, sorry to burst your suburban bubble, but the poor are moving out of the beltways and into the burbs, at least according to a report by the Brookings Institute on income migration, which studied the geographic movement of the different income classes from 2000-2008. To say they found interesting stuff would be an understatement.

Before we get to some of the cooler stuff, let’s get the stuff you should know out of the way first. Let’s look at some cities with the highest poverty rates. If you live around the Great Lakes, you win. Rochester, Syracuse, Buffalo, Cleveland, and Detroit all are in the top 10, as well as Youngstown, OH. Sharing the top spot with Youngstown is Hartford CT with a urban poverty rate of 33.5%. When you look at towns with the lowest poverty rates, you’re looking at San Jose, Honolulu, Boise, and Norfolk VA. The average of the 10 with the lowest poverty rates works out to about 10% and the average among all the cities is about 18.2%. It’s no surprise why the towns stack up where they are. Rust belt jobs are few and far between these days thanks to automation and offshoring. Many of the towns with low poverty rates are vacation destinations so the people that live there tend to have made good money and settled in to the towns they like.

But what is much more insteresting is the poverty rates in suburbs. I won’t give away the juicy bits, but if you live south of I40 or in California’s case, east if I5, you’ll be disappointed. You also won’t be surprised with many of the suburbs with low poverty rates as they’re centered around titans of commerce such as LA, DC, Boston, and NY. All this can be found on page 6 of the report.

Again, no real surprises here. But let’s look at the migration of the poor over the last decade on page 9. This is much more interesting. Let’s look at Baltimore. Baltimore does really well in the category of having a low poverty rate in the suburbs. But all is not well. The poor are moving out of the city. In 2000, 41% of the poor lived in the burbs. In 2008, that number had jumped to more than 50%. If that swing doesn’t sound significant then let me rephrase it. Baltimore is third only to rust belt Cleveland and Katrina stricken New Orleans in terms of suburban poor migration. Atlanta isn’t far behind in growth of poor in the suburbs, but for them the stats are different. 85% of the poor in Atlanta live in the suburbs, which as far as I could tell is tops in the country.

What’s going on in the towns where the poor are moving to the suburbs? I’ve got a definitive answer, and a theory. The known cause is certainly the recession. Even though this data was for 2008, that was far enough along for people to start feeling the pinch. It may not have been so much as people in the suburbs getting new neighbors, just that those neighbors they had crossed the line into poverty. Of course the subprime loan fiasco put more poor people in homes, which I can imagine played its part as well. But I’ve got another theory.

Urban areas are pushing the poor people out. I’m not going to tell you where I’ve been lately, but I am in an area where I commute into the city via a rail system. Here’s what I see on the rail, white collar people are heading into town. As I get off at my stop I see who is waiting to head out of town for work. They’re wearing uniforms distinctive of retail and service jobs that pay low wages. You could sum my oberservation up as the high income workers are commuting in, and low income workers are commuting out. As we all get tired of commuting, we start moving closer to work. This hardly represents the majority of us, but especially the people of my generation, we’re interested in living closer to work.

But the poor are being forced out of cities in another way. Has your local urban area put in some hot new condos lately? I’ll bet they have, especailly since this recession is still very much a blue collar one. Chances are that condo flattened some kind of lower-income housing to move in. That is a direct displacement of the poor right there. Just the other day my wife and I scouted out some “green” residences we saw online close to the downtown area, only to discover they’re right in the heart of a rough urban area. Even though these houses only took up a couple of acres of space, older, low-income homes were clearly flattened to put them up.

Will there be an all out shift of the poor to the outskirts of town? No. But we are seeing a trend where the lines are starting to blur. It will be interesting to see what happens as we recover from the recession. Will the trend continue, or will there be a reversal? It all depends on where the jobs are, which is where the people are. Chicken, meet egg.

Photo: Wm Jas

Related posts brought to you by Yet Another Related Posts Plugin.

My Fat Tax

The Weakonomist — Wed, 21 Jul 2010 14:52:18 +0000

Yesterday, I wrote about how behavioral economics doesn’t seem to do much for getting people to be smarter about what they’re eating. But because policy is so hard to implement, politicians don’t try to do introduce the kind of legislation that could actually make a difference.

Years ago, I’ll bet people said the cigarettes were bad for you. People knew this, but continued to smoke anyway. Thank goodness those days are behind us right? It took a generation of publicity announcements to get people off of smoking, but in the mean time taxes were introduced as a means of curbing some smoker’s desires. The effectiveness can be argued, but it surely works for some, especially if the tax revenues are used for awareness.

Which brings me back to fat people. I am myself, not skinny. I’m not fat, but I’m definetly in that “I’m married and don’t have to try anymore” category. My biggest vice is ice cream, which has plenty of sugar and fat. For other people their vice is steak, or doughnuts, or beer. Whatever it is, many of us have something that we take in too much of, and it adds pounds. Obviously, putting calorie information on packaging doesn’t work, I look at the calories every time I buy ice cream. But I do believe there is some kind of tax that would keep me from eating as much ice cream.

Fat tax.

Fat tax can come in many forms. A tax on high fructose corn syrup, fat, calories, desserts, whatever. But I have a different system in mind. Volunteer yourself to join a government program where you are weighed and measured for fat content. You pay a tax of a certain amount over an “ideal” amount. Next year, you go back and do it again. If you are still above the “ideal” you pay a tax again, proportionate to what is ideal. Once you get below the ideal amount, the goverment starts paying you in the form of tax breaks. But the deal is you have to continue to do the checkup every year to get the break. If you stop coming, you don’t get the break.

The fat people paying the tax would offset the skinny people getting a break. And of course, if you’re already skinny, you can get in on the game to make sure you stay skinny. There would be a downside limit to keep anorexics from bankrupting the program.

I know this system isn’t perfect, and there are plenty of ways to game it. But there are ways to game any system. Maybe a tax on calories or sugar would be better. You can use to the revenue to subsidize healthy foods, making it cheaper for people that can’t afford it. I currently pay $1.80/lbs for apples, I’d buy more if it were $1. Same goes for lettuce, I love salads.

The reason I like my system is that it’s opt-in. And if you don’t think huge people will sign up, think again. The program would be a one-time only enrollment. So if you ever want to get money back, you have to enroll at the start.

Again, this system may not be perfect, but I am all for some kind of fat tax. It will work on me, but I don’t have the willpower to do it to myself. Bring on the fat tax.

Photo: Michael Dawes

Related posts brought to you by Yet Another Related Posts Plugin.

Behavioral Economics (And Congressional) Failings

The Weakonomist — Tue, 20 Jul 2010 15:06:42 +0000

Why did behavioral economics get so popular so fast? What, you read a book about it and were fascinated so you started a blog just so you could talk about it? Oh wait, that’s me. But that is kind of how behavior economics did become so popular. People were fascinated by it because it offered simple solutions to real life problems.

For example: employers want to get their employees to enroll in 401ks, but they aren’t. They were given the materials on investments, told they need to do this if they want to retire, and even pointed out they’d get free money from the company in matching contributions. But many people still didn’t sign up. I’ll let you read the books to find out why, but behavioral economics has a solution. Auto-enroll people and the problem goes away. People are forced to opt-out, and few do so.

Behavioral economics focuses on the bad decisions we make, despite those decisions not being the rational ones. It’s rational to save for retirement, but many don’t. It’s no wonder behavior economics has become so popular, in many cases, the solution to a problem is simple.

But behavioral economics can only go so far, as we’re starting to learn. The minds inside the DC Beltway have caught on to the this new wave and legislation is starting to reflect some of the discoveries in this new field of research. For example, to deal with the problem of fat people in America, the healthcare reform bill includes items such as requiring calories on menu items in restaurants. A better-informed consumer will make smarter decisions. But studies are showing this doesn’t do much for getting people to eat less.

This is where traditional economics can step in where behavioral economics cannot. The problem is traditional economics pisses more people off. To fight the problem with obesity, we could start subsidizing fruits and veggies instead of high fructose corn syrup. This will drive the cost down of healthy foods. That will piss off corn growers, who I’m guessing have a stronger influence on Congress than restaurant owners. All this is a summary of what two dudes wrote in the NY Times last week about behavioral economics. But I want to take it one step further.

How do we solve the problem of Congress taking the easy way out? The solution is easy, but hard to implement. Limit Congressional terms. It doesn’t matter what the limit is, because once a Congressman can’t run anymore, then they’ll start passing stuff that’s good for the people. Just look at Chris Dodd. As chair of the Senate Finance Committee, he was no doubt in the pockets of Wall Street. He received some great contributions from the likes of AIG, Fannie and Freddie, and everyone else; even a great loan rate from Countrywide. During the financial crisis in 2008 he objected to the actions of Paulson’s Treasury Department while claiming these companies were fine.

But, I’m sure sometime in 2009 he decided he wasn’t going to run anymore so he got involved in the CARD act and the newly minted financial reform bill. Not only that, but he even flip-flopped on his position about gay marriage (he now supports it) in 2009. It’s amazing what you can accomplish when you don’t have to worry about raising money anymore. So let’s fix the real problem with policy by allowing Congress to make rational decisions not having to worry about raising money from wealthy donors with certain positions they want you to take.

Related posts brought to you by Yet Another Related Posts Plugin.

Benefits Of Hosting The FIFA World Cup Part III

The Weakonomist — Thu, 15 Jul 2010 14:51:37 +0000

Social Ties Within South Africa
South Africa’s official campaign of the 2010 FIFA World Cup was launched in 2007 with the aim to create 20 community centers around Africa to provide public health, education and football facilities in the hopes that the game would be able to attract young people who would then benefit from the services of the centers. The 20 Centers for 2010 project is part of the Football for Hope movement and the first South African center opens near Cape Town and integrates football with HIV prevention programs aimed at offering young South Africans the skills and information they need to remain HIV free.

The Football for Hope movement runs over 80 social development program in more than 50 countries under the FIFA umbrella. In the South African centers football teams made up of local boys and girls will play in tournaments as part of the Football for Hope Festival bringing much-needed fun and education to the townships.

Sport has the unique ability to help people forget about their differences and enjoyed a shared experience. For example at the 2009 FIFA under 20s World Cup in Egypt, Ghana won against Brazil and everyone ran into the streets and began celebrating together, delighted simply that an African team had won. Similarly in Germany during the 2006 World Cup residents sang the national anthem and hung flags from their homes and cars and it is just not possible to invoke that kind of enthusiasm or passion through politics.

In preparation for the World Cup for new artificial pitches were installed in Africa, ensuring opportunities for the development of young players so they can train a home and go on to take on the world. Additional infrastructure is being implemented to professionalize football in Africa and ensure meaningful development opportunities for young players and there is a lot of work to be done. Through initiatives in Tanzania for example there are now 200,000 players but as President Tenga points out, ‘in reality there are several million playing around the country. We have to be in a position to welcome them all, teach them, and make sure that the most talented are not lost to the game’.

Cultural Reasons for Hosting the World Cup
For years African players have been snapped up by the leagues in wealthier countries as additions to winning soccer teams, and with the World Cup being held in an African country for the first time the biggest sporting community in the world has finally recognized Africa as an equal in the world game. No one expects that hosting the World Cup will be able to instantly overcome the problems facing South Africa such as illness, poverty or a literacy, the important thing is that these issues are highlighted and other major governments and bodies are inspired to work alongside Africa to achieve change.

Healing Old Divides
Of course Africa is not the only country to have ever had cultural issues, and prior to the 1998 World Cup hosted in France the country was labeled as ‘the most racially troubled country in Europe’ and the French team, which was made up of immigrant players from a number of different backgrounds, was heaped with verbal attacks from right-wing politicians who criticized the choice of African players on the French team. Unfortunately for the critics the French team won the tournament and as a result all of the players became revered. Time magazine was even quoted as saying ‘the soccer team did more to promote racial tolerance in France, and pride and a sense of belonging amongst its immigrant population, than anything the government could have ever done’ and the team captain Zinedine ‘Zizou’ Zindane, who was an ethnic Algerian, became a national hero and a household name.

Political Benefits to Hosting the World Cup
South Africa has taken more than a decade to prepare for the 2010 World Cup and while the country has hosted a number of important and international sporting events since its liberation in 1994 none have been on a scale such is this. It is important to recognize ‘the trust and confidence’ which has been bestowed on South Africa in the words of FIFA President Joseph S Blatter, as South Africa has been given the chance to promote itself on the world stage and pull off a memorable tournament and insure a legacy for the entire continent.

In a country which suffered under apartheid it may come as a surprise to learn of the role which sport played in helping South Africa overthrow this crushing and unjust regime. South Africa was divided into distinctive classes with vastly different legal and social rights in the early 1960s, and was battling with both internal resistance and growing international condemnation. FIFA took its first stand against these injustices in 1961 when a suspended the all white Football Association of South Africa (FASA) from international competition, and continued to petition the South African government to abandon its racist policies and in 1976 expelled FASA from the Association.

The growing pressure of political and economic sanctions, coupled with those imposed by other professional sports authorities meant that negotiations finally took place with the help of Nelson Mandela. In 1991 Mandela encouraged FIFA to lift the ban on international football which acted as a signal to the world that South Africa and was ready to honor its promise to establish a democracy for all its citizens.

In July 1992 the South African national football team emerged and though they were unknown, they were not without talent and secured an unexpected 1-0 win over Cameroon at Durban’s Kings Park. More success on the football field and ensured that the world knew the South African football team was one to watch. Though South Africa missed out on the 2006 World Cup, Mandela himself addressed the voting members of FIFA to tell them it would be a ‘dream come true’ if his country could host the World Cup. With the bid won and the stadiums ready and waiting there are already talks of South Africa further exercising its sporting prowess by playing host to Africa’s first ever Olympic games.

For anyone who thought the World Cup was just about a few games of soccer, tuning in to the coverage of the 2010 FIFA World Cup in South Africa is sure to change your mind. As well as marveling at the plays, celebrating with the victors and commiserating with the losers, you will be inspired by the passion, dedication and spirit of every South African, proud to welcome you to their country; and see just one small part of the work FIFA strives to perfect, to make big changes to equality and the integration of nations.

This article was written by Timothy Ng who is a regular personal finance writer and part of the team at Credit Card Finder, a 100% free Australian credit card comparison and application service. Visit the Credit Card Finder website for more information, or subscribe to their RSS feed for more practical articles.

Related posts brought to you by Yet Another Related Posts Plugin.

Or Maybe This Is When Jobs Will Return

The Weakonomist — Wed, 14 Jul 2010 17:32:16 +0000

The great thing about economics is you can be right one week, and right the next week, making you a hypocrite to who you were last week. Case in point: last week I thought that jobs would return when banks increase their willingness to loan and businesses increase their desire to borrow.

This week I have a new idea!

This chart shows us two things. The blue line is the total amount of cash (more or less) that companies are holding. The green line is the amount of cash as a percentage of the total assets owned by companies. Clearly, they’ve both shot up in the recent recession. This is bad for jobs because corporations aren’t investing in new stuff.

Think of it this way. When the recession started, you had 5% of all your money in cash. But once you realized times were getting tough, you hunkered down and changed your holdings to 10% cash. Now you have a lot more cash. But that cash can’t be invested, and it can’t be spent. So it’s essentially just sitting around, not circulating within the economy. This is an oversimplification, but keep in mind this is not a blog meant for economists or finance professionals.

This is what corporations have done. And just like you, you’re waiting to know for sure if the bad times are over before you start spending again. This is part of why we have no demand.

Once corporations start spending again, we’re going to see a lot more job growth. What will get them to spend again? What will get you to spend again? The chicken and egg argument starts again. I can tell you when these lines start falling, you’ll see jobs.

What exactly will make those lines fall is of course the subject of great debate. The only known in economics is that people will disagree, and that we’ll always have another explanation if this one turns out to be wrong.

Source: Advisor Analyst and The Fed

Related posts brought to you by Yet Another Related Posts Plugin.

Benefits Of Hosting The FIFA World Cup Part II

The Weakonomist — Wed, 14 Jul 2010 14:41:13 +0000

South Africa was awarded the honor of hosting the 2010 World Cup six years ago and since the announcement was made South Africans have been working industriously to get ready. Important injections to the infrastructure of the country have seen world-class stadiums being built, promotion of the country’s beauty and culture to encourage tourism and further economic benefits, as well as hope for healing and uniting a nation.

Economic Growth in South Africa
Hosting World Cup has meant the need for 10 new soccer stadiums to be built or renovated in South Africa. The project has been likened to the building of the pyramids, with 11 million bricks, 80,000 cubic meters of concrete and 16,000 tonnes of steel being used. Johannesburg is the country’s hub and the ‘City of Gold’ is home to Ellis Park Stadium which is no stranger to hosting epic sporting events as the final of the FIFA Confederations Cup in 2009 between Brazil and the United States was held at these grounds. The stadium can seat approximately 62,000 fans which is an increase of 9% for the stadium which was first built in 1928 for rugby union. The most memorable game for South Africans would have to be when their rugby team played and beat the New Zealand team in the 1995 Rugby World Cup, not long after South Africa was allowed to compete on the world stage. It was at this game at Ellis Park Stadium that Nelson Mandela proudly held the trophy aloft and the epic moment was cemented in the country’s history.

The Mbomela Stadium in Nelspruit was purpose-built for the 2010 World Cup and acknowledges the safari heritage of the region with jarrah shaped towers and zebra patterned seating. The name of the stadium literally means many people together in a small space but the space is not so small, seating 44,000 people.

The Durban Stadium is also a new structure and takes its design inspiration from the South African flag, as it has a 350 m long arch which represents the unity of the nation, and the two legs of the arch on the southern side of the stadium come together to form a single footing on the northern side which symbolizes the new, united direction of a previously divided country. The 70,000 seat is a multipurpose venue as it also has a cable car which can take visitors to a viewing platform 106 m above the pitch where they can enjoy panoramic views of the city and the shoreline and even take a rope swing back down from the arch.

Port Elizabeth now bears the name of its most famous resident and is now better known as Nelson Mandela Bay. The Nelson Mandela Bay Stadium sits on the shore of the city’s north end late and competes vehemently with its scenic location to catch your eye; the roof design is made up of a series of white petals and though the stadium is the first football dedicated ground in the city or surrounding areas it will host a World Cup games including the third place match and the fourth quarter finals.

The Free State Stadium was originally built in 1952 as a rugby venue but had some major renovations to get it ready for the FIFA confederations cup 2009. The stadium now seats 45,000 people and is the home ground for some of South Africa’s most passionate supporters.

The Loftus Versfeld Stadium it is one of the oldest sporting structures in South Africa, hosting games since 1903. Matches for the 1995 Rugby World Cup and the 1996 Africa Cup of Nations were hosted at the grounds, which have also been performing stages for concerts and stars such as Robbie Williams and Celine Dion.

Rustenburg does not have its own Premier League team at their Royal Bafokeng Stadium has hosted many Premier soccer league games, games for the Confederations Cup and has been upgraded to see almost 45,000 people in time for the 2010 World Cup.

Green Point Stadium is another new venue and is located in Cape Town. If you are able to secure tickets to games at this sought-after venue you will be just minutes from the centre of the city, or the stunning oceans, having the majestic mountain backdrop with you all the way.

The Peter Mokaba Stadium is named for one of the most well-known champions of the country’s struggle against apartheid. A new structure has been built next to the old stadium in Polokwane, to resemble the local baobab tree, having the steel structure which supports the roof pain gathered together at each corner of the stadium and supported by giant trunk like structures. The new stadium now seats over 45,000 people.

National Branding
For the host country the World Cup is about more than just football, it is an opportunity to promote their most important brand to the world, themselves. After the 2006 World Cup in Germany the country’s foreign tourism bookings increased by 31%, unemployment dropped by 29%, consumer confidence was the highest it has been in the country since 1980, investor confidence was also at its highest since the country’s reunification in 1990, Germany’s exports were up 14% putting it into a leading position as an export nation. Chancellor Angela Merkel also benefited from the World Cup as her approval ratings were 79% in September 2007, the highest rating of any German chancellor since the war.

The benefits and accolades for Germany kept on coming as Time magazine titled its August 2007 edition The Second Economic Miracle, which economists had been discussing regarding Germany, and in German’s biggest weekly magazine The Speigel, Germany’s brand image was quoted as going ‘From Humourless to Carefree in 30 Days’. Tony Blair was also quoted in saying ‘a new, positive and more fair image of Germany’ had been presented to the world and Britain’s Times agreed with their Prime Minister saying ‘never mind the final, Germans are the real World Cup winners’.

So what does all of this means for South Africa? The benefits that Germany were not isolated as it has been estimated for each person who attends the World Cup, another 150 people will be indirectly influenced and their perceptions of the host country changed by word of mouth from those visitors when they return home. For Germany who had an estimated 2 million visitors that meant an audience of over 300 million people all being influenced by the most powerful form of advertising there is – word-of-mouth.

Jobs and Economic Growth
In real figures all of this word-of-mouth advertising is expected to generate R93 billion for South Africa and 62% of that is expected to be generated before 2010, and 38% during the course of the year, where foreign tourism will account for 16% of the gross impact. GDP growth for 2010 in South Africa is expected to be around 2 to 2.5% and the net additional economic impact is expected to be 0.54% which is a significant percentage to be attributed to just one event.

Sustainable employment for South Africans has also been measured and the number of annual jobs sustained is 695,000 which is an important figure as this is not just new jobs which have been created but employment which can be sustained in the lead up to the event and throughout 2010. The benefits to employment will also continue long after the World Cup as South Africans are aware that the increase in the profile and the promotion of their country will produce further economic activity in the future.

Tourism
Attracting over 3 million tourists to your country is any promoter’s dream and that is the number South Africa is expecting for the World Cup. This is 40% more than the average annual number of tourists, all of whom are now coming for just one event, giving real hope that all of the money and time being spent to ready South Africa from the World Cup will be justified in follow-on promotions and spending.

However there is only so much that South Africa can do in the lead up to the World Cup because once the tournament begins it is up to their national team to do well, to rally the country, to inspire the people and make sure everyone is invested in their national pride.

Related posts brought to you by Yet Another Related Posts Plugin.

Benefits Of Hosting The FIFA World Cup Part I

The Weakonomist — Tue, 13 Jul 2010 16:41:14 +0000

FIFA is the organization responsible for expertly spreading World Cup fever around the world every four years, and they take their football very seriously. To the Fèdèration Internationale de Football Association football is much more than a game and FIFA has 208 member associations all striving for the constant improvement of the game. FIFA believes by bringing nations together to play the world game, and encouraging competition and integration, greater solidarity can be achieved.

FIFA’s Mission: For the Game. For the World.
In order to make such a difference in the world FIFA is run embodying the Swiss passions of order and efficiency. The association is based in Zürich and was founded in 1904. FIFA is governed by Swiss law, employs 310 people from over 35 different countries, which combine to administer the Association. FIFA’s supreme and legislative body is the Congress which is made up of the 208 member associations and each association gets one vote. Every member of a FIFA team, every member of an association and every partner business is dedicated to the goal of helping football to achieve equality, hope and integration for the world. FIFA works to protect standards, encourage commitment and promote solidarity in the world game in every corner of the world.

Financially FIFA is also very strong, having survived and excelled through the Global Financial Crisis, coming out unscathed and even stronger than before. Where many businesses and individuals around the world were facing financial crisis, in 2009 FIFA:

Showed a positive annual result of US$196 million.

Revenue in 2009 increased to US$1 billion thanks to the increased revenue from the sale of rights to newly concluded contracts for marketing and television. FIFA also consciously works to control their costs and was able to keep within their 2009 expense budget.

FIFA was further protected against losses thanks to its strategy of hedging foreign currencies.

FIFA’s equity increased to US$1,061 million as of 31 December 2009 which puts the association and a solid equity level. It is an important part of their business strategy to have sufficient equity and maintain financial independence as this allows the association to respond positively to unexpected events. However FIFA’s equity will be more accurately assessed after the 2010 World Cup.

FIFA’s Marketing
FIFA marketing is very carefully planned and targeted and as a result the association is able to offer its sponsors and partners promotional opportunities which extend beyond traditional media, and those offered by other sporting competitions. When businesses commence an official association with FIFA they are able to promote their brand both globally and locally. Partners are promoted by official World Cup broadcasters who present TV and radio coverage of the games, the sponsors and the licensees who are integral in supporting the staging and promotion of a FIFA event.

Adidas
It is no surprise to see Adidas in the list of FIFA partners as the brand is synonymous with football and has been inspired by and catering to the need of players of the game since the 1920s. Adidas began its partnership with FIFA over 30 years ago, after having always been integral to the development of the game – it was Adidas who introduced the first screw in studs, worn by the players on the winning German team, at the 1954 World Cup.

Coca Cola
Coke began its formal association with FIFA in 1974, but has had stadium advertising at every FIFA World Cup since 1950. The Coca-Cola campaigns have included the first ever recognition of the best play a celebration during the tournament, a music anthem, worldwide TV commercials, online promotions and the 83 country World Cup trophy tour. Coke’s soundtrack to the World Cup is also an African inspired song called ‘Wavin Flag – Coca Cola Celebration Mix’ and will be played on all TV commercials and on the trophy to events.

Emirates Airline
Emirates was an official partner of the 2006 World Cup in Germany, becoming the first airline sponsor of the tournament. Emirates Airline believes such sponsorship is integral to integrating with its passengers, showing support for their interests and sharing those interests with them. Emirates customers and passengers are a discerning crowd who expect only the best and a partnership between the world’s premier sporting event and the airline is sure to deliver.

The attention to detail which Emirates brings to all of their business operations can be seen in the level of luxury and indulgence awarded to its Citibank Emirates credit card customers. Simply for being a cardholder emirates customers receive chauffeur driven rides to and from the airport when they fly, lounge passes for any Emirates lounge and exclusive access to their Marhaba Airport Lounge in Dubai. Cardholders are also offered a low 2.9% balance transfer offer for an extended 12 months, as well as travel insurance, purchase insurance and platinum concierge service.

Hyundai Kia Motors
Ground transport is integral to the success of an international event of the magnitude of the World Cup. Hyundai Kia Motors began an alliance with FIFA in 1999 to provide a fleet of modern, reliable, comfortable and safe vehicles to transport officials, teams, members of the organizing committee, referees and the media. Official vehicles are also used as city shuttle services, and when transporting the teams the vehicles were decorated with the national team colors, flags and slogans.

Visa
Visa shares the FIFA ideals of excellence, acceptance and public awareness and as a result creates a rewarding and beneficial partnership for the company and for supporters of the world’s favorite sport who need convenience and reliability when they are away from home. Visa have also created the Go Football Experience to provide the millions of football fans who are Visa cardholders the opportunity to join a pre-stadium tour, a pre-match warm-up and other unique behind-the-scenes experiences.

Official World Cup Song and Mascot
An official mascot is designed for every World Cup, since Willy the lion was invented for the 1966 tournament in England. The 2010 World Cup mascot is Zakumi the leopard and his name comes from ZA which stands for South Africa and kumi which means 10 in the various languages used across Africa. Zakumi was born in 1994 in the same year as the country’s democracy so he’s young, energetic, smart and ambitious, inspiring football fans of every age and nationality.

FIFA and Sony have chosen a song written by Shakira called ‘Waka Waka (This Time for Africa)’ and she will perform it with the South African band Freshlyground. The song is filled with traditional African rhythms and represents the life and passion of the country. All proceeds from the sale of the single will be donated to the 20 Centers are 2010 campaign which aims to achieve positive social change through football by building centers across Africa to offer education, health care services and football training.

Related posts brought to you by Yet Another Related Posts Plugin.

Benefits Of Hosting The World Cup

The Weakonomist — Tue, 13 Jul 2010 13:02:49 +0000

It’s been a long time since I’ve done a series of posts, and it will remain a while still because someone else has done a series for me. I regularly have people reach out to me wanting to do guest posts, but I only let in a few because most people have terrible ideas.

But I really wanted to write about the World Cup and hadn’t gotten around to it. Luckily, somebody reached out to me with the idea to do it. He blew my mind with such a long, detailed, and fantastic post that I needed to break it up into three. Stick around as the first in the series will go live later today with the other posts following in the next couple of days. If the World Cup isn’t your thing, I’ll have a couple of mini-posts for you too so don’t worry.

Related posts brought to you by Yet Another Related Posts Plugin.

I Know When Jobs Will Return

The Weakonomist — Thu, 08 Jul 2010 14:42:05 +0000

Maybe.

Do you remember back in 2008 when everyone was talking about giving the banks money to lend to people and businesses? Well that never happened because it turned into TARP and Congress forgot to tell the banks what to use the money for. But, if they had, we might have had a different recession altogether.

My late-evening thinking is that if small business had access to loans (their primary source of funds to grow), then they would be in a position to hire.

Which brings me to my chart above. Don’t worry too much about the blue vs red line, I just wanted both of these things on one picture.

The blue line is basically the % of banks that are increasing their willingness to make loans like for cars and homes. Only recently did that % grow positive, meaning only recently did ANY banks make the transition from increasing willingness to lend from decreasing. This will help spur demand because consumers will have access to money from the banks again. The personal finance guy in me hopes it’s always for fixed rate responsible loans, but the economist in me is less concerned. The increased willingness is correlated to increases in spending, which is what we need to get out of the crappy economy.

Now, look at the red line. This is the % of banks reporting stronger demand from businesses to borrow money. It’s STILL negative. While the line presented is for small business, the one for mid and large is basically the same. In other words, businesses aren’t interested in borrowing. If they aren’t interested in borrowing, they aren’t interested in hiring.

What will get them interested? Increased spending. This week I’ve said that I’m more worried about the economy and questioned what it is in that chicken and egg argument that will get the economy moving again. Looks like it was the credit markets all along, and maybe, just maybe, this heatwave is unfreezing them. So maybe, those jobs will trickle in a little faster soon.

Related posts brought to you by Yet Another Related Posts Plugin.

State Of The Economy – Mid 2010 Edition

The Weakonomist — Wed, 07 Jul 2010 14:32:07 +0000

Don’t let the title fool you, I don’t do this at any regular interval, but I thought this would be a good time to talk about the economy as a whole. That is because we’ve left 6 months behind where we thought we were on track for a stabilizing recovery. Now the picture looks less rosy, more like a morning glory in the late afternoon.

At the beginning of the year, I was confident the recession was over. We’d all been told unemployment would stay high, which it has; we’ll get to that more below. But beyond employment, which lags behind an economic recovery, most people were feeling pretty good about the future going into 2010. But now that we’re 6 months into it, views are changing, especially mine.

Consumer Confidence: Consumer confidence is a measure of how average Joes feel about the economy. Economists care about this number because if consumers are pessimistic, then they’ll spend less. Likewise, if consumers are optimistic, they’ll spend more. Despite dramatic improvements all through the month of spring in this score, we’re now right back to where we were at the beginning of the year. We feel better about jobs and income, but are planning on spending less, thus the balancing out.

Employment: If you look strictly at the unemployment rate, things really haven’t changed much. It’s still hanging out between 9% and 10%. But, that number changes based on people deciding to look for jobs. If people feel good about their prospects, look for jobs, and don’t find any, then they show up unemployed. But if they just give up the search all together, then they don’t. So we can having a falling unemployment rate but actually be in worse shape in real terms. Worse though, is the length of time we’ve been unemployed. The historical range is between 10 and 20 weeks. We just broke past 35 weeks – that’s the average amount of time an unemployed person is without work.

Stock Market: In the first 6 months of the year, the S&P 500 fell more than 7.5%. Much of that occurred in May. There are some good reasons for the sell-off but they aren’t really important here. Just know that if you think the market is undervalued, you’ll find good company with me.

Housing: The situation with housing is about as bad as it can be. Prices were just starting to tick up in most markets but that was thanks to an artificial floor on demand created by the homebuyer credit. Since then demand is down, mortgage applications are down, and I’d guess prices are about to fall. That credit will need to be extended if government wants to hold up house prices further. I’m on the fence about how I feel about this.

Federal Government Debt: The national debt continues to climb to the sky with no end in sight. There is a breaking point somewhere when investors will stop buying the debt we’re selling. No one knows exactly when that will happen. Despite this increasing burden on the next generations, interest rates are really low. This is because foreign investors have no place to put their money. In other words, we may be in crazy debt, but we look to be in better shape than other countries.

GDP: Since the 3rd quarter of last year, we’ve continued to grow the economy. But the rate at which the economy is growing is slowing. This is expected to continue and by the time we get into 2011, we could see negative growth again.

Conclusions: I’m worried that the economy is slowing down too fast and no one feels good enough about the future to make the investments that could actually get us there. We need more people working, but they need jobs, so businesses have to feel better about future growth. People in Washington would have you believe that some kind of magical bill will save us all. I’m more inclined to simply cross my fingers and hope for the best. The key figure to keep your eyes on going forward will be job growth, which comes out with each release of the unemployment rate.

My confidence is wavering, but I’m easily converted back to optimism, so long as the sign is bright enough.

Related posts brought to you by Yet Another Related Posts Plugin.