Economics in the News – Nov. 15-21, 2021
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- As an alternative to paying higher prices, millions of people are turning to ‘Buy Nothing’ groups. Online groups where people give away their items. Members in these ‘Buy Nothing’ groups, commonly found on Facebook, aren’t allowed to barter, buy or sell on their group’s page. Items range from clothes items to food to furniture.
The growth of the ‘Buy Nothing’ groups are fueled by people’s desire to reduce waste, connect with neighbors and cut their spending habits. There are nearly 7,000 ‘Buy Nothing’ groups throughout 44 countries. [The Wall Street Journal]
- American icons Johnson & Johnson and General Electric both recently announced that they are breaking up their businesses. GE will break into three separate companies. It will split its health care unit, its renewable energy and power unit, and its aviation unit. Johnson & Johnson will split into two separate publicly traded companies. One company will house its pharmaceutical and medical device division and the other company will be built around its iconic Tylenol and Band-Aid brands.
Does the combined value of the newer companies exceed the old company? Large, corporate conglomerates were a staple in their efficiency. Conglomerates split for a variety of reasons, but one factor is often external pressure from shareholders. Investors see value in smaller, more focused businesses rather than large conglomerates. [The Wall Street Journal]
- President Joe Biden is nominating Federal Reserve chairman Jerome Powell for a second four-year term. Biden endorsed Powell’s stewardship of the economy through the COVID-19 recession. Powell’s renomination must be approved by the Senate Banking Commission and then confirmed by the Senate.
Powell was appointed to his position by former President Donald Trump. He will be tasked with handling rising inflation while improving unemployment. Biden also announced the nomination of Lael Brainard to the vice-chair. She was the preferred option among many of the most progressive Democrats, who remain skeptical of Powell for the Fed’s weakened bank regulation and lack of progress in dealing with climate change. [Associated Press]
- The cost of a Thanksgiving feast is increasing. The Farm Bureau has reported that a Thanksgiving feast for 10 people will cost 14 percent more than last year, averaging $53.31. The calculations include Thanksgiving staples, such as turkey, stuffing mix, sweet potatoes, rolls with butter, cranberries, pumpkin pie with whipped cream, along with enough food for leftovers.
The cost of turkey is 24 percent more than last year, costing an average of $23.99 for a 16-pound turkey. The trend of higher prices is the latest example of how consumers are paying for the largest jump in inflation in more than 30 years. [NPR]
- Airlines are preparing for near pre-pandemic levels of travel this Thanksgiving. The Transportation Security Administration (TSA) expects to screen 20 million travelers over the holiday weekend, roughly 85 percent of the number of passengers as 2019.
The volume of travel will be the greatest test for airlines since the start of the COVID-19 pandemic. Flight crews have been placed under stress while enforcing mask mandates and handling an uptick in violence. [The Washington Post]