Economics in the News – Oct. 24-30, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Former hedge-fund manager and UK Treasury chief Rishi Sunak has been named Britain’s prime minister. Sunak was appointed by King Charles III. He becomes Britain’s first Hindu leader and at the age of 42, Britain’s youngest leader in more than 200 years. Sunak succeeds Liz Truss, who resigned after 45 days in office – marking the shortest-ever tenure by a British prime minister.
Sunak takes over, as the British population is facing a cost-of-living crisis and a looming recession. Britain has struggled to keep up with 10.1 percent inflation that has been fueled by high energy costs due to the war in Ukraine. [The Wall Street Journal]
o It has been one year since the company formerly known as Facebook announced its decision to invest in immersive virtual and augmented reality called the metaverse. The company changed its name and stock symbol to Meta, seeking to become the company to usher in a new era. The hope is to transform the world like smartphones have, while reducing online toxicity.
Meta recently reported its earnings for this year’s third quarter, with a disappointing $3.67 billion loss in its Reality Labs tasked to fulfill the promise of the envisioned metaverse. Since the beginning of the year, Meta’s stock has sunk 70 percent compared to a 20 percent decline with the S&P 500 over the same period. [TIME]
o Twitter has a new owner. Elon Musk – the world’s richest man – closed a blockbuster deal to acquire Twitter for $44 billion or $54.20 per share. He will take the company private, doing away with the requirement to answer to shareholders. Musk is expected to make a wide range of changes at Twitter, ranging from new leadership to the pursuit of new ways to monetize the social media outlet. Twitter has had difficulties in recent years growing its advertising-based business.
Musk – the CEO of Tesla and SpaceX – has been outspoken on his intention to make Twitter a platform to advocate for free speech. Despite researchers saying that Twitter’s rules have been essential to countering online hate speech and misinformation, Musk plans to do away with the company’s former rules including the permanent ban on former President Donald Trump. [The New York Times]
o Families can expect to pay more this year’s Thanksgiving turkey. A strain of avian influenza has killed more than six million turkeys this year, accounting for three percent of the supply in the United States. Experts project that families can expect to pay 20 percent or more per pound in higher costs than last year. This year’s version of the avian influenza is on track to surpass the 2015 total of 50.5 million birds who died, according to the United States Department of Agriculture.
The avian influenza mostly originates in wild birds, who can infect other types of poultry with their droppings while flying overhead. Turkeys are uniquely vulnerable, as many wild birds escape cooler climates and flock south. Many turkeys in the United States are pasture raised, without indoor cover. Experts at the Centers for Disease Control and Prevention says that the virus poses little threat to humans. [The Washington Post]
o Single-family homes and rents are not the only types of housing that are increasing in price. According to a study by LendingTree, mobile homes have increased 34.6 percent on average between 2016 to 2021, compared to 35.4 percent for single-family homes.
But mobile homes aren’t nearly as attractive as single-family homes because they become more burdensome over time. Private companies often lowball prices to buy the homes, while raising rent in the mobile home park. [NPR]