Tuesday, September 2, 2008

Some Random Observations from America.

I spent the last 2 weeks in New York where I had a break from writing Economics; although on the plane I wrote quite a few posts, which was due to a pretty dire selection of videos on American Airlines and the amazing Apple Mac battery life. These are some random observations from the US.
  • The Housing Crisis is pretty much in evidence. Foreclosure doesn't just have an economic impact but profoundly personal impact on those affected. It is a big issue for many of my friends in the middle class district I stayed. (Boom and Bust US Housing) At least recent signs suggest the slump may be losing its severity with a potential for recovery in 2009.
  • The Airline industry is struggling. I only narrowly avoided buying a ticket with the bust airline Zoom. With less competition and higher oil prices, it will become easier for airlines to justify higher ticket prices.
  • American Food Sizes are Big. I really understand why America has a problem with obesity now.
  • Things are Cheap. In the US, you can get a good breakfast for $5 (breakfast special and coffee). In the UK, this would typically cost £6 ($12 on old exchange rate of 2:1. - Perhaps not surprising the Pound has been falling.(See: Price of Mac)
  • Why Does America not include sales tax in the price? In the UK, the price you see is the price you pay. In America the price you see is usually not what you pay. A bottle of water is advertised for $1.99, sometimes you will pay $2.26, other times you will pay $1.99
The tax is inefficient for various reasons:
  1. Time wasted of shop counting change
  2. Shops have to keep more change
  3. Uncertainty for customers not knowing how much to pay.
The obvious solution would be to make it compulsory to include tax in the final price, I wonder why they don't do it.
  • Advertising for Health Care. I was struck by how much advertising for health care you see in America. In the UK, it is pretty rare apart from some BUPA ads. The high levels of advertising are ultimately paid for by the higher price of health care.

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