Some Cautionary Tales

This article is about, as the author says, getting the United States’ financial house in order, but it is also somewhat a cautionary tale. The author examines four countries (Zimbabwe, Japan, Greece, and France) that economic policy-makers should keep in mind as America moves forward to improve the current economic situation.

Some of the comparisons may seem a bit strange, especially Zimbabwe and its excessive hyperinflation, but overall I like the article. Things like hyperinflation or Greece’s economic crisis may seem almost unimaginable for the US, but no one can tell what the future will hold. Because of that I believe that it is generally wise to look to past because there is so much to learn from history, so overall I think the author’s point is strong.

The New US Protectionism

This article discusses the recent Senate vote to pass a bill that would make imports from countries with "fundamentally misaligned" currencies subject to a duty to 'balance' the currency misalignment. No one doubts that this bill is meant to punish China. The continued animosity that Americans display towards China, and especially trade with China, is disheartening. As we know, if the US wanted to reduce its trade imbalance with China, protectionist policies are counterproductive. The US should be decreasing government spending, and increasing domestic saving. Seeking to force China to float their currency will only hurt the relationship between the US and China, at a time when they should be allies. The House of Representatives has thus far refused to vote on the bill, so this may never come to pass. However, the fact that one legislative body has passed it is a sign of the misaligned priorities of American lawmakers.

Steve Jobs and America's Decline

I think this is a good article but it is a little biased. I think Steve Jobs was "a visionary, the ultimate salesman, charismatic, enlightened, a maverick, a genius, insanely great, a hero, a magician," but his death really won't be the cause of America's decline. If something happens to America, it would be more because of more substantive reason that the death of Steve Jobs.

Nevertheless, it is an interesting article which shows the importance of things like entrapranuership, design, and other things which Steve Jobs embodied. It shows us how ideas are the main essence of everything, not labor, as is seen inscribed on the back of every apple product: "Designed by Apple in California. Made in China." It also sees the potential and highlights the importance of technology in the world.

Unreasonable Institute Teaches New Paths to Social Missions

This article discusses an organization called the Unreasonable Institute. This institute puts on a program every year that gathers together entrepreneurs who are interested in creating for profit organizations that have social benefits for all different parts of the world. During the program, those that get in also meet with other entrepreneurs and at the end meet with investors to pitch their business plans and potentially gain investors. The idea behind it is that sometimes a for profit organization can succeed where a non-profit organization cannot.

An example of this is given by Ben Lyon. He started an organization that allows microfinancing organizations to receive loan payments on their cell phone. He originally tried to start it as a non-profit organization and was unsuccessful, but he has now successfully started Kopo Kopo Inc, which accomplishes his goal using a for profit organization.

India and its new economy

This is just an interesting post about how India is not like a lot of other countries, at the same time it is like a lot of other economies. It talks about where it takes the best part from which economy. Great article to start learning about the Indian economy.

US manufacturers are making one thing - profits

Recent data shows that U.S. manufacturers are seeing an increase in profits while we still work to get through this recession. Since their low point in 2008, the manufacturing industry has seen new light and profits have been on an incline ever since. After tax profits total nearly $159.7 billion which is three times what is was in the second quarter only two years ago. One of the keys to the success in the industry has been the ability to produce and sell goods in various countries. Another contributor to the success has been the U.S. dollar and how weak it currently is. Weaker dollar has led to more exports which has helped to bring in new profits to businesses. Current employment in the U.S. is at 11.7 million which is two million fewer than in 2007, however, is better than the 11.5 million in 2009.

Hopefully this trend can continue and the manufacturing industry can stay strong through this recession. Manufacturing is a vital part to our nations economy and I hope they are able to continue to do business overseas and continue to improve business, which in turn can lead to greater employment.

U.S. Protectionist Policy

Having recently completed learned about protectionist policies in class. It is quite interesting to see that in the NY Times, America is being accused of protectionist policies by China. This has been said because of the request by the American solar panel industry to have a tariff placed on imported Chinese solar panels. The Chinese government criticizes this saying it would adversely affect the international efforts to combat global warming.

In the article the effects of this proposed tariff on trade relations between China and America were highly discussed. Chinese officials suggested that America would lose sales in China for equipment and raw materials in solar panel production. On the other hand the U.S. argues that without this tariff the American solar panel industry will suffer but some environmentalists say that the Chinese industry has helped to lower the cost of solar panels which would help to promote panel sales.

Citi Group Bets Against Investors

This article talks about a lawsuit brought on Citigroup by the Securities and Exchange commission for misleading investors about a collateral debt obligation. Citigroup, who helped manage and select the assets in the investor's portfolio, took a short position on the portfolio, actually hoping investors would lose money. If investors lost money, then Citigroup would make a profit, something Citigroup employees unethically kept quiet. Citigroup reached a settlement in the case and paid $285 million back to cover the estimated $160 in losses from the portfolio.
Citigroup's actions were quite unethical in this instance . Their help in managing the assets created a huge conflict of interest, which should have been made clear to any possible investors. Reading this article made me very angry at the blatant corporate greed exhibited by Citigroup. Negligence of this type is sadly becoming commonplace in our financial sector, and gives credibility to the occupy wall street movement and other movements springing up around the country. In the terms of the settlement Citigroup neither confessed to or denied any wrongdoing, leaving them off the hook. Too bad firms can just buy their way out of more severe legal action.

Apple Loses Some of Its Shine

The new iphone 4s just launched itself last Friday a couple of weeks after Steve Jobs passed away. Apple turned in their fourth quarter report on Tuesday and they didn't sell as many iphone as they were hoping for. Part of the reason was that people are waiting for the new iphone to come out. Apple sold 17 million iphones in the fourth quarter compared to 14 million last year but they were hoping to sell 20 million or more iphones.

Also their shares dropped 6.5% after the fourth quarter closed. Iphones makes the most money for Apple more than a third to nearly half of their revenue comes form Iphone. Their revenue jumped 39% from last quarter but compared to last year it slowdown.

To me technology doesn't last,there are always new competitors or new technology to subsidize the old product. Even though there's a lot of hip about the new iphone their shared dropped during the last quarter. Im excited to see how well the new Iphone4S is doing considering that there are rumors that Iphone 5 might be coming out and some people are willing to wait for the iphone 5.

Bring profits home and create jobs? Maybe not

This article addresses the possibility, which has been debated in the Senate, of a tax break for companies to bring their foreign profits back into America, potentially creating jobs and boosting GDP. Both proponents and opponents have evidence to support their view, including numbers that show job and GDP loss and gain as a result of the tax breaks, from sources like the Congressional Budget Office and the Joint Committee on Taxation. There is no definitive right in this issue, which makes it something interesting to consider.

Personally, I question whether the tax incentives for repatriation would be effective at all. There are currently so many ways that companies evade tax codes by sending profits abroad, that it seems likely that the same sort of thing would occur. Companies would likely find a way to keep much of their profits abroad, or bring back profits that were illegally abroad anyway to receive the break. I have very little faith that these incentives would actually go so far as to create jobs on the ground for unemployed Americans.

What the occupy protests tell us about the limits of democracy

I came across this article in the Washington Post.

It talks about how the occupy protests that have spread internationally illustrates how globalization leads to decline of democracy.
Applebaum does not think that a national democracy is feasible when the economy has been so globalized that change cannot be made through one country's political system.

The article can be a little general and vague, but the message seems to be that in this globalized economy, a country in the other side of the world may cause a crisis at home. People will stand up and ask to fix that crisis, but a national government has no power to do so. This leads to powerless rulers in a struggling economy.

I personally think that Applebaum has taken it too far. I think democracy is definitely compatible with globalization and I feel that her article is an overreaction to all the protests that have caught on in the face of such economic hardship.
However, the article does illustrate well how widespread and serious this disillusionment is throughout the world.
The economic crisis seems to have taken a toll and the people seem restless for a fix. They wanted change, but things have only gotten worse for many families in the U.S.

It will be very interesting come this next election to see what these candidates will have prepared for their economic plan. Obama will need to first explain his first term and the lack of much improvement in the economy as well as what he plans to do different. The Republican side will all propose their own plans, and as long as they do not come up with one so blatantly offensive towards the middle class and the poor, they might have the upper hand.

Applebaum says that democracy is declining. However, I think this economic crisis will show the true power of democracy. It will show that incompetence will not be accepted and will reflect the public's anger at the government's blatant failures. Hopefully the public makes an informed decision, not an emotional decision where the U.S. might get stuck with another period of incompetence from the government in fixing their livelihoods.

Hungry people can make one scary mob. Just ask the French.

E.U. Summit

Germany has been reported to not expect a easy breakthrough in the euro zone’s sovereign debt crisis. The representatives of Germany have suggested that the plan which had been formulated to solve the issue at hand would take much time to properly implement as there are many obstacles in doing such things as forming a plan to help strengthen European banks. This summit hopes to produce a solution to Greece’s debt crisis. So far it has been suggested that banks need to increase their contribution because more private investment is needed for a second Greek bailout.

In the related NY Times article there was talk of American officials blaming Europe for America’s economic hardship. It was said that the continuing sovereign debt crisis would only add to the hardships of the American economy. However, European officials offer their rebuttal saying that the financial crisis originated from Wall Street and as such Europe should not be criticized for its current predicament.

Who’s afraid of the dragon?

Congress finally ratified long-stalled trade pacts with Colombia, Panama and South Korea. But the

previous day the Senate threw down the gauntlet to China. It passed, by a stonkingly bipartisan margin of 63-35, a bill that would authorise the Commerce Department to impose countervailing tariffs on Chinese imports it deems to have benefited from an undervalued currency. The bill is unlikely to pass in the House, but the vote is a sign that China-bashing, always popular in Congress, has become more so as America’s job market has struggled.

Online Banking Keeps Customers on Hook for Fees

Online bill payments are very convenance to use for paying bills. I even use this service to pay my bills. 44 million households paid their bills through the internet last month compared to the last five years at 32 millions. The number of users are expected to grow in the next 6 years. Banks such as Bank of America are starting to collect fee for the service even for debit card users at a rate of $5 per month.

This might caused customers to switch banks but apparently only 7% of people will move their primary bank account compared to last year at 12%. Its because customer thinks that its hassle to move their account elsewhere.

Bank of America won't charge extra fee for customers with mortgage from the bank or having $200,000 or more in their bank account.

I think with this economy the banks are trying to earn money from many ways as possible and this is one of them. With little fees can make a different for banks.

Retail Sales Better in September

This article shows promise in our economy. The fact that sales are above projected means people are more willing to spend. This is showing that there is faith in our economy. If more money starts to flow from consumers this is a step in the right direction. It might even start a spark for our economy. However, I wonder if these higher numbers are due to the approaching holidays. People could be trying to spread out their spending instead of just spending massive amounts at once closer to the holidays. Whatever the case it is still a glimmer of hope for a faster recovery.