U.S. Fines Automakers Hyundai and Kia for Misstating Mileage

Korean automakers Hyundai Motor and Kia Motors will pay the federal government $300 million as part of a settlement for overstating vehicle fuel-economy standards on 1.2 million cars. The action is part of a broader, more aggressive enforcement effort by federal regulators on the auto industry. Under the agreement, automakers will pay $100 million in fines and forfeit an estimated $200 million in greenhouse-gas emissions credits, which auto companies earn by building vehicles with lower emissions than are required by law. Since all of the testing for these two companies was done entirely in Korea, government officials are also requiring the companies to build a separate, American based center for testing fuel economy as part of the settlement. 
The admission came after an E.P.A. investigation into consumer complaints that their cars were underperforming the official mileage estimates of their new cars. The E.P.A. said the fuel efficiency standards reported by Hyundai and Kia were off by one to six miles per gallon. Hyundai and Kia both apologized for what they called "procedural errors" in testing. 

How big of an impact, if any, do you believe that this news will have on sales for both Hyundai and Kia? Do you think this news could potentially benefit American made car companies? How prevalent do you think misstating mileage is in the auto industry? 

Here's the article http://www.nytimes.com/2014/11/04/us/politics/us-fines-korean-automakers-for-misstating-mileage.html?ref=business

What Water Companies Are Doing In California Is So Completely Messed Up

Seems like both a market failure and and a government failure to me.  What do you think?



What Water Companies Are Doing In California Is So Completely Messed Up

Infographic: The Most Tried and Failed Small Businesses

Check out the picture.  95% of small businesses fail within first 5 years.  



Infographic: The Most Tried and Failed Small Businesses

Five Reasons 8 Out Of 10 Businesses Fail

Business failure rates are huge.  This is an interesting take on how not to fail:  pay attention to your customers.  How does this relate to ideas of maximizing shareholder value?



Five Reasons 8 Out Of 10 Businesses Fail

Why OPEC is fine with falling oil prices

As you may have noticed, filling up your car has felt a lot better lately. Despite increasing tensions in the Middle East, the nationwide average for a gallon of gas stands below $3 for the first time in four years — a roughly 20% drop from June levels. Surprisingly OPEC, an oil producing group that controls about 40% of the world supply, is just fine with this. So, why would a cartel that aims to defend $100 a barrel oil and depends on high prices for the success of its economies, allow oil to slip into the $80s? Simple, America's energy alternatives are becoming far too good. In fact, U.S. drilling companies have become so adept at fracking that the U.S. is expected to become energy independent by 2020. The biggest problem with fracking is its high cost; oil prices need to stay above $85 a barrel in order for new fracking investment to be worthwhile. With this in mind, should OPEC maintain current production levels, we should assume it is more interested in its long-term survival than in a current influx of cash. So, as much as lower oil prices are good for consumers as we head into the winter months, it's critical we maintain investment in all forms of alternative energy, including renewables, here at home. If we hope to continue $3 a gallon at the gas pumps for years to come, allowing OPEC to regain control of the energy markets is not an option.
  Do you believe that OPEC will continue to allow oil prices to remain in the $80s? How believable is the prediction that the U.S. will be energy independent by 2020? What is the economic impact of all of this?

Here's the article http://www.usatoday.com/story/money/markets/2014/11/02/opec-oil-stocks-energy-gas-middle-east/18247191/

Has privatization failed Texas utility customers? - Electric Light & Power

Monopoly power leads to higher prices.



Privatizers use the one-size-fits-all economic theory of “retail choice-free market competition” to promote the deregulation of Texas
electric utilities. Privatizers promise that lower electricity prices
and higher system reliability will follow electric utility deregulation.
Privatizers’ sloganeering convinces on-the-take politicians and the
unsuspecting electorate to approve their lobbyist-written deregulation
rules and laws.... Relative to U.S. electricity prices, Texas electricity prices during the
deregulation and privatization period (2002-2011) rise four times
faster than increases in Texas electricity prices before deregulation
(1970-2001). The Texas electricity market is much less efficient now as a
result of deregulation. Higher relative electricity prices after
deregulation are a liability for Texas residential electricity consumers
and put Texas at a competitive disadvantage compared with regulated
electric utility states when attempting to attract new industry and
jobs.





Has privatization failed Texas utility customers? - Electric Light & Power

New Statesman | NHS reform and the hollow marketisation myth

A free market is not the right organizational form for every activity.



New Statesman | NHS reform and the hollow marketisation myth