Economics in the News – June 20-26, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- Advertisements are coming to Netflix. The streaming giant that has long stayed away from advertisements is talking to potential partners, including Google and Comcast’s NBCUniversal, about launching an advertising supported tier of service. Partnering with established advertisers would ease Netflix’s transition into advertising and is the least expensive way into the advertising space.
Netflix is charging some of the highest prices among streaming services amid losing subscribers for the first time in 10 years. The streaming giant still has a commanding place in the streaming sector, with 79 percent of respondents in a Bank of America Securities survey responding that they subscribe to the service. [The Wall Street Journal]
- Central Banks around the world have been tightening policies and raising interest rates to contain the highest inflation in 40 years. Zimbabwe’s central bank raised interest rates to a record high 200 percent from 80 percent – more than double. The central bank also reintroduced the US dollar as a legal currency.
Zimbabwe’s annual inflation rate reached 192 percent in June, marking the highest level in over a year. Food costs have more than tripled. Zimbabwe’s currency crises extends back to 2009 when the Zimbabwe dollar was abandoned for the US dollar. The Zimbabwe dollar was reinstituted in 2019, but it’s the worst-performing currency in Africa this year. [Bloomberg]
- President Joe Biden is pushing Congress to temporarily suspend the federal gas tax for three months to give Americans a reprieve from high gas prices. Federal taxes on gasoline accounts for about 18 cents per gallon and 24 cents per gallon of diesel.
However, many economists are questioning if the minimal relief for consumers is worth giving up the lost revenue that would be sacrificed. The national average for regular gasoline last week was $4.95 per gallon, according to AAA. That is down from earlier in June when gas prices reached $5 per gallon. [The New York Times]
- Schools are struggling with how to handle mass shootings and how to keep students, teachers and faculty members safe. School districts are spending billions on high-tech defense systems, including gun-detection scanners, wireless panic buttons and high-resolution cameras. According to market research company Omdia, schools and universities across the United States spent an estimated $3.1 billion on security products and services in 2021, an increase from $2.7 billion spent in 2017.
Despite the investment, researchers warn that there is little evidence that the safety technologies are impactful in preventing catastrophic events such as mass shootings. Critics say that the technology does nothing to change the widespread availability of assault weapons and the mental health crisis. Other school districts have had issues with the security systems failing to notify personnel and sending incorrect alerts. [The New York Times]
- Rising temperatures and more catastrophic weather patterns are impacting both long-term health and long-term finances, according to a new research study conducted by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health. The survey found that extreme weather is worst for those in poorer areas, as they are more impacted by strong thunderstorms that don’t qualify for federal relief.
Nearly 25 percent of those surveyed said that extreme weather has had a negative impact on their health – mostly often caused by smoke exposure from wildfires. The survey showed that extreme weather is ravaging finances. Many people who were surveyed have found that the money received for damaged repairs from insurance companies and government assistance are inadequate and they are having to cover the costs out of pocket. As sea levels rise, more families are having to pay for flood insurance – even if their home wasn’t in a flood zone when it was originally purchased. [NPR]