http://money.cnn.com/gallery/smallbusiness/2014/01/27/minimum-wage/index.html?iid=SF_E_River
This article discusses how a minimum wage increase would impact small businesses. It tells the story of a doctor who has several minimum wage patients that often don't have enough to pay for their medical needs. She allows them to pay with food or services, but if there was a minimum wage increase, they would be able to pay with money, thus stimulating the economy.
It is interesting to see the perspective of a small business person, since much of the argument in favor of not raising minimum wage is that it would be detrimental for small businesses.
Friday, April 4, 2014
America and The Fight For Free Trade
http://www.economist.com/news/leaders/21596934-barack-obamas-unwillingness-fight-free-trade-expensive-mistake-how-make-world
"No nation was ever ruined by trade." - Ben Franklin
Trade between nations is a key to global economic prosperity and all of the benefits that come along with it. In this article from The Economist the writer discusses the state of free trade among the major world economic players. America, who has been at the forefront of promoting an open global economy, has been particularly bad recently by seeming almost reclusive. Congress has failed to honor commitments and the Federal Reserve has put forth regulations that could hurt foreign banks.
President Obama has also had a major roll in this issue. Prior to being elected, he was cited in saying "America cannot turn inward" but many of his actions do not fit these words. Specific examples are described in the article, but overall The United States and its leaders are negatively impacting the global economy by not employing easily-done trade boosters.
"No nation was ever ruined by trade." - Ben Franklin
Trade between nations is a key to global economic prosperity and all of the benefits that come along with it. In this article from The Economist the writer discusses the state of free trade among the major world economic players. America, who has been at the forefront of promoting an open global economy, has been particularly bad recently by seeming almost reclusive. Congress has failed to honor commitments and the Federal Reserve has put forth regulations that could hurt foreign banks.
President Obama has also had a major roll in this issue. Prior to being elected, he was cited in saying "America cannot turn inward" but many of his actions do not fit these words. Specific examples are described in the article, but overall The United States and its leaders are negatively impacting the global economy by not employing easily-done trade boosters.
Thursday, April 3, 2014
Higher inflation may be needed to leave extra-low interest rates behind
Inflation and Interest Rates
Central banks across the world have been going in separate ways. For example, England and the Federal Reserve are moving away from easy monetary policy while European Central Bank (ECB) may need to be a little more strict in order to keep the European economy away from deflation.
When looking at the past decade, you'll notice that the ECB has had a significantly lower projected interest rate at about 1% while the Fed is closer to 3% and the Bank of England is closer to 2.5%. While the Fed and England both project to be much closer to normal rates, they still have some ways to go, as they are currently at 1.2% and 1.7%, respectively. They are expected to still be just around 2% in the next few years.
These rates to have a positive to them: economies need to avoid debt. With these lower interest rates, it allows central banks a little more "wiggle" room. Economies are currently running at full tilt with the real interest rate at low levels. In addition, rising inequality also adds to how money is no being used. As the rich get richer, they save more of their income (as they don't need to spend as much, meaning consumption actually decreases).
Central banks are more responsible, however, for the low inflation rate. Even though prices have been more stable, the interest rates have fallen due to borrowers not needing to worry about changing inflation rates. Prices have been relatively the same for the past few years. So while it is an accomplishment that central banks have set inflation rates of about 2% per year, it also leads to some issues.
Some options to get out of this tricky situation are to increase the inflation rate target to 3% (decreasing unemployment) or possibly to just try and promise to not tighten anything up until inflation is back to projected levels (about 2% currently).
http://www.economist.com/news/finance-and-economics/21599774-higher-inflation-may-be-needed-leave-extra-low-interest-rates-behind-up-up-and
Central banks across the world have been going in separate ways. For example, England and the Federal Reserve are moving away from easy monetary policy while European Central Bank (ECB) may need to be a little more strict in order to keep the European economy away from deflation.
When looking at the past decade, you'll notice that the ECB has had a significantly lower projected interest rate at about 1% while the Fed is closer to 3% and the Bank of England is closer to 2.5%. While the Fed and England both project to be much closer to normal rates, they still have some ways to go, as they are currently at 1.2% and 1.7%, respectively. They are expected to still be just around 2% in the next few years.
These rates to have a positive to them: economies need to avoid debt. With these lower interest rates, it allows central banks a little more "wiggle" room. Economies are currently running at full tilt with the real interest rate at low levels. In addition, rising inequality also adds to how money is no being used. As the rich get richer, they save more of their income (as they don't need to spend as much, meaning consumption actually decreases).
Central banks are more responsible, however, for the low inflation rate. Even though prices have been more stable, the interest rates have fallen due to borrowers not needing to worry about changing inflation rates. Prices have been relatively the same for the past few years. So while it is an accomplishment that central banks have set inflation rates of about 2% per year, it also leads to some issues.
Some options to get out of this tricky situation are to increase the inflation rate target to 3% (decreasing unemployment) or possibly to just try and promise to not tighten anything up until inflation is back to projected levels (about 2% currently).
http://www.economist.com/news/finance-and-economics/21599774-higher-inflation-may-be-needed-leave-extra-low-interest-rates-behind-up-up-and
Average U.S. 30-Year Mortgage Rate Rises To 4.41 Percent
The rate of fixed 30 year U.S. mortgages rose to 4.41 percent. They are still at very low levels. This news came from the information provided by Freddie Mac. Furthermore, for the average of 15 year U.S. mortgages, rates increased from 3.42% to 3.47%. According to CoreLogic, a real estate data provider, U.S. home prices have increased at a decent rate last February, which would indicate that the supply of homes is more strict. As winter is finishing, it is predicted that sales of available homes will increase due to various factors, such as the season for spring buying about to occur.
China: stepping up?
http://www.reuters.com/article/2014/04/02/us-china-economy-tax-idUSBREA3114L20140402
China finally pulled the initiative in order to improve their economy, fluctuating with instability. First the government has reduced taxes for small firms on Wednesday (4/2). Moreover they are announcing accelerating the progress of railroad construction. Since the railroad is a great system for transportation and to dispatch supplies, a mammoth country such as China having the entire region connected increases productivity and reduces cost of production.
During last semester, there was an economics conference and there was a comment from one of the professionals that the growth rate of China in 2013 was lower than anticipated, thus a disappointment. However China would probably boost the output more in 2014. Their goal is to reach 7.5% of economic growth this year.
The Railway corporation, in order to proceed to the construction plan, sold bonds worth $32.2 billion. This movement might actually make Chinese economy ameliorate, not in the short run, but in the long run.
China finally pulled the initiative in order to improve their economy, fluctuating with instability. First the government has reduced taxes for small firms on Wednesday (4/2). Moreover they are announcing accelerating the progress of railroad construction. Since the railroad is a great system for transportation and to dispatch supplies, a mammoth country such as China having the entire region connected increases productivity and reduces cost of production.
During last semester, there was an economics conference and there was a comment from one of the professionals that the growth rate of China in 2013 was lower than anticipated, thus a disappointment. However China would probably boost the output more in 2014. Their goal is to reach 7.5% of economic growth this year.
The Railway corporation, in order to proceed to the construction plan, sold bonds worth $32.2 billion. This movement might actually make Chinese economy ameliorate, not in the short run, but in the long run.
Wednesday, April 2, 2014
A Republican tries to save the minimum wage increase
Republican Senator Susan Collins of Maine wishes to bridge the gap between Republicans and Democrats and compromise, at least on the minimum wage increase. She has laid out the initial framework for her compromise, as I summarize below.
- Increasing the minimum wage to something between $7.25/hr (the current rate which she feels is too low) and $10.10/hr (the Democrat-proposed rate, which she feels might be too high)
- Increasing the number of hours to define "full-time" employees as set forth under Obamacare, which is currently 30 hours or more.
- Extend small business tax credits
Collins has previously worked to compromise on the government shut down, unemployment benefits extension, and has often been a key vote in the Senate. However, both Democrats and Republicans have been unyielding on the subjects Collins hopes to compromise on.
Soaring Profits but Too Few Jobs
Low interest rates aren't working, but we need a debate about what will.
In class, we have began discussing the effects of lowering interest rates. In class, we saw that lowering the interest rate to near zero maximizes the amount of income the economy can expect to earn based on the LM curve constraint. However, what are the effects of such a policy on the economy outside of that model? This article discusses the ramifications and increasingly diminishing returns to keeping interest rates low: distortions in borrowing costs, the low opportunity cost of holding cash, the acceleration of increasing capital substitution. I want to know what your take on this article is, and what you think about Fed policy in general.
http://online.wsj.com/news/articles/SB10001424052702304886904579473900839794492?mod=WSJ_Opinion_BelowLEFTSecond&mg=reno64-wsj
Tuesday, April 1, 2014
U.S. Consumers Spent More in February, but Showed Less Optimism
http://www.nytimes.com/2014/03/29/business/economy/us-consumers-spent-more-in-february-but-showed-less-optimism.html?ref=economy&_r=0
After the impact of unusually bad weather, The Commerce Department said on Friday that consumer spending rose 0.3 percent last month, matching economists’ expectations. According to the article, the increase in consumer spending in February was due to an increase of demand for health care and utilities, which is services consumption.
However, the increase in consumer spending doesn't suggest the economy is good right now. A second report said that the consumer sentiment index dropped 80.0 in March from 81.6 in February. The survey director, Richard Curtin, said “Current conditions in the overall economy were reported by consumers to have recently weakened.”
After the impact of unusually bad weather, The Commerce Department said on Friday that consumer spending rose 0.3 percent last month, matching economists’ expectations. According to the article, the increase in consumer spending in February was due to an increase of demand for health care and utilities, which is services consumption.
However, the increase in consumer spending doesn't suggest the economy is good right now. A second report said that the consumer sentiment index dropped 80.0 in March from 81.6 in February. The survey director, Richard Curtin, said “Current conditions in the overall economy were reported by consumers to have recently weakened.”
Connecticut Is Increasing Minimum Wage to $10.10 an Hour
Last Wednesday march 26,
Connecticut became the first state in our country to pass legislation to
increaser the minimum wage to $10.10 an hour. The bill was approved through
general assembly and will be in effect by 2017. Governor Dannel P, Malloy and
President Obama publicized the proposal and the governor states that increasing
minimum wage is not just good for workers; it’s also good for business. Congress
and other lawmakers are excited about what Connecticut is doing and believe it
will help things at the federal level move into the same direction. But when
the minimum wage is increased the unemployment rate will rise and people are
going to lose their jobs. In Connecticut between 70,000-90,000 people earn
minimum wage and their wages will continue to rise over the following years as
the new bill continues to increase wages.
http://www.nytimes.com/2014/03/27/nyregion/connecticut-is-increasing-hourly-pay-to-10-10.html?ref=economy
Slowing Economy Leaves Chinese Leaders with Tough Choice
China’s property and manufacturing sectors slide further
this month. Now the Chinese Leaders are faced with a tough decision on whether
to accept this economic slowdown or stimulate the economy at the risk of
creating long-term problems.
The economy is showing many signs of sharp slowdowns. Manufacturing,
which accounts for almost half of China’s economy, has slowed down greatly over
the last few months. Domestic economic activity has slowed down since the
beginning of 2014. Real estate is also showing signs of slowdown. This weaken economy is adding to concerns
that China will not reach its government-set economic growth target for first
time in 16 years.
Housing is a particular problem for China. "Signs are
mounting that the housing market in a number of cities is not just cooling but
actually cracking," said Wei Yao, an economist. China is producing more residential
property than it really needs.
Monday, March 31, 2014
American Banks.. A Harsh Light
http://www.economist.com/news/finance-and-economics/21599788-handful-banks-are-caught-short-feds-annual-stress-test-harsh-light
This article of the economist talks about a stress test given to banks every year. For a normal business, they are valued as their ability to receive money now, and return your money with interest in the future. However, with banks, it is very important for them to return cash to investors now rather than in the future. This is an important measure of health.
Recently, the central bank did an investigation on 30 of the worlds largest banks, and the results usually show if they can return dividends or not. They found that some banks were not able to pass this test, and showed losses in their business without sufficient reasons. For example Citi could not prove why they had been losing money in their foreign operations. If there had been a national crisis tomorrow, Citi would not be in a position to handle it.
In my opinion, this information should be more available to the public before one puts their money in a bank. We sometimes get the idea that banks are not able to be cracked, and that proved wrong in 2008. People should have closer to perfect information about banks in general. This will give the market the ability to self regulate.
This article of the economist talks about a stress test given to banks every year. For a normal business, they are valued as their ability to receive money now, and return your money with interest in the future. However, with banks, it is very important for them to return cash to investors now rather than in the future. This is an important measure of health.
Recently, the central bank did an investigation on 30 of the worlds largest banks, and the results usually show if they can return dividends or not. They found that some banks were not able to pass this test, and showed losses in their business without sufficient reasons. For example Citi could not prove why they had been losing money in their foreign operations. If there had been a national crisis tomorrow, Citi would not be in a position to handle it.
In my opinion, this information should be more available to the public before one puts their money in a bank. We sometimes get the idea that banks are not able to be cracked, and that proved wrong in 2008. People should have closer to perfect information about banks in general. This will give the market the ability to self regulate.
Unemployment rates fall in 29 US states last month
Unemployment fell in 29 states in February due to about 2/3 of states reporting job gains. The decline in unemployment occurred despite last month's nationwide rise to 6.7% from 6.6%. This rise can be explained by an increase in the labor force, as more people began looking for jobs. Frictional unemployment occurred because it takes time for people to find jobs, causing the increase in unemployment.
Following two months of below average job creation (December- 84,000 and January- 129,000), 175,000 jobs were added in February. The terrible winter weather was likely the reason for the slowing in December and January.
The biggest drop in unemployment occurred in South Carolina, where the rate fell from 6.4% to 5.7%. However, South Carolina actually lost jobs in February. How can this be possible? Many unemployed people in the state stopped looking for jobs. In order to be considered unemployed, a person must be actively seeking employment. This means a sharp decline in the number of unemployed people, explaining the fall in the unemployment rate. Ohio had the second largest drop in unemployment, falling from 6.9% to 6.5%.
Following two months of below average job creation (December- 84,000 and January- 129,000), 175,000 jobs were added in February. The terrible winter weather was likely the reason for the slowing in December and January.
The biggest drop in unemployment occurred in South Carolina, where the rate fell from 6.4% to 5.7%. However, South Carolina actually lost jobs in February. How can this be possible? Many unemployed people in the state stopped looking for jobs. In order to be considered unemployed, a person must be actively seeking employment. This means a sharp decline in the number of unemployed people, explaining the fall in the unemployment rate. Ohio had the second largest drop in unemployment, falling from 6.9% to 6.5%.
Rich Chinese overwhelm U.S. visa program
"The number of applicants is now so great that the government might run out of permits." - This is the catchy opening statement of the article from CNN addressing the U.S's cash for green cards program mentioned in another blog post a few weeks back.
For wealthy Chinese families, having a green card offers a lot of opportunities in the U.S. as well as an improvement in quality of life. For the U.S., this is another lucrative source of finance. With the "comparatively low cost" of a $ 500,000 investment, Chinese applications no doubts swarmed the immigration offices.
Is this also one of the way that resources flow from "poorer economies" to "richer economies" as mentioned in our lectures?
Please feel free to leave a comment.
Source: http://money.cnn.com/2014/03/25/news/economy/china-us-immigrant-visa/index.html?iid=HP_River
For wealthy Chinese families, having a green card offers a lot of opportunities in the U.S. as well as an improvement in quality of life. For the U.S., this is another lucrative source of finance. With the "comparatively low cost" of a $ 500,000 investment, Chinese applications no doubts swarmed the immigration offices.
Is this also one of the way that resources flow from "poorer economies" to "richer economies" as mentioned in our lectures?
Please feel free to leave a comment.
Source: http://money.cnn.com/2014/03/25/news/economy/china-us-immigrant-visa/index.html?iid=HP_River
http://online.wsj.com/news/articles/SB10001424052702304773104579265520447488200
When we talk about growth in developing nations one of the main factors that determines their steady state is population growth. New evidence suggests that slumping fertility rates in developing countries are causing labor worries. Countries like Thailand have fallen from fertility rates of 7 in the 1970's to 1.6 children per women currently. Many other countries such as Brazil, Mexico, India and Japan are facing this same problem. It's creating an aging population and a shrinking labor force.
As the article cites, in some cases this can be an opportunity and a threat. This can ease the stresses on the environment and natural resources that are being taxed by increasing global population. On the other hand, decreases in fertility rates like this are often to blame for causing the Great Depression and Japan's stagnant economic condition over the last several decades.
The article also cites that fertility rates are only predicted to fall going into the future. Many people are moving to megacities where the prices of housing and living are increasing so the cost of having large families is increasing.
When we talk about growth in developing nations one of the main factors that determines their steady state is population growth. New evidence suggests that slumping fertility rates in developing countries are causing labor worries. Countries like Thailand have fallen from fertility rates of 7 in the 1970's to 1.6 children per women currently. Many other countries such as Brazil, Mexico, India and Japan are facing this same problem. It's creating an aging population and a shrinking labor force.
As the article cites, in some cases this can be an opportunity and a threat. This can ease the stresses on the environment and natural resources that are being taxed by increasing global population. On the other hand, decreases in fertility rates like this are often to blame for causing the Great Depression and Japan's stagnant economic condition over the last several decades.
The article also cites that fertility rates are only predicted to fall going into the future. Many people are moving to megacities where the prices of housing and living are increasing so the cost of having large families is increasing.
Sunday, March 30, 2014
Connecticut ups minimum wage
The state of Connecticut is raising the minimum wage from 8.70 up to 10.10 by the year 2017. Many states and cities have been raising minimum wage with the president and senate trying to create a raise in the national minimum wage rate. The minimum wage right now is at 7.25. A couple of other states Hawaii and Maryland are also discussing raising there minimum wages. With more and more states raising the minimum wage I wonder if this will affect job growth in anyway. I personally do not think that new jobs would decrease do to any increase in minimum wage. Are companies going to stop hiring and make employees work more over time? President Obama applauded Connecticut for this move and at the same time urged Congress to pass an act on federal rate. If Congress passed an act i would be the first increase since 2009 when it went from 6.25 to 7.25.
http://money.cnn.com/2014/03/26/news/economy/connecticut-minimum-wage/index.html?iid=SF_BN_River
http://money.cnn.com/2014/03/26/news/economy/connecticut-minimum-wage/index.html?iid=SF_BN_River
Winter hits housing recover
Terribly cold weather this winter has taken a hit on home prices in January. The five cities that saw a small gain of 0.4% were all warm weather states: Las Vegas, Miami, San Francisco, and Tampa. Chicago, Detroit, Minneapolis, and Boston all saw drops in home prices. All States that saw drops were hit the hardest by the cold weather this year. The Census Department stated that the stride of new homes sales in February dropped 3% from January. These home sales also fell below last years levels. The cold and snow pose as a big setback for homes sales due to the fact that with the snow it is hard for buyers to see the conditions of the house. For example, buyers looking at a house in the middle of winter with snow on the ground can not see the condition of the roof, lawn conditions, and walk ways that are covered by snow. Also, people simply do not want to go outside due to the below freezing temperatures. With the below freezing temperatures people also do not want to move in the winter. The prices have been helped by drops in foreclosures, and a decline in the unemployment rate, but rates are up from year ago when they were are a all time low.
Cuba Moves to Attract More Foreign Investment
Cuba Moves to Attract More Foreign Investment
Cuba is in a situation in which economic growth is extremely pressing. The GDP growth for 2013 was less than expected, especially for a developing country; merely reaching 2.7%.The government has reached an agreement as of this past Saturday to lower barriers of FDI in order to boost economic growth. These policy changes include an eight year period where no taxes on profit will be placed on a companies operations. The second break is given to all investors, cut profit taxes by 15% to 50%. The only sectors investors are blocked from is healthcare and education. Another benefit is that foreigners are exempted from personal income taxes. There is a downfall for those exploiting natural resources, the tax on these are as high as 50%.
Though this is a very progressive compared to the previous 1995 foreign investment law, in order for Cuba to prosper with other developing nations, the investment needs to reach between $2-$2.5 billion and steady GDP growth rate of at least 5%.
A long and winding road
http://www.economist.com/news/finance-and-economics/21599394-world-needs-more-infrastructure-how-will-it-pay-it-long-and-winding
As financing for infrastructure
becomes a worry, can other investors help plug this gap being that infrastructure
investments are vital for economic growth? European lenders, which dominated
infrastructure financing, are now busy repairing their bruised financial
statements. “Basel 3” rules are steering banks away from long-term loans, ones
exceeding 20 years, required by backers of infrastructure projects. Japanese
banks, which have healthier balance-sheets and are keen to putting money to work,
could help plug this gap. Such activities are very risky for banks and they are
not lending as much for projects from the past. McKinsey consultants predict it
will cost $57 trillion to build and run the world’s roads, power plants, and pipelines
between now and 2030. This value exceeds today’s value of infrastructure, which
is spending currently amounts to $2.7 trillion a year, yet $3.7 trillion is
needed. Governments are unable to make up the entire shortfall being that public
finances have straightened.
This is creating a need and
opportunity for new entrants. Financial instruments linked to infrastructure
are typically hedged against inflation and offer stable returns, with low
volatility and little correlation with other asset classes. Some speak of
budding asset class. Long-term investors have snapped up loans which were originally
made by banks, or they are figuring out ways to issue their own. Sovereign-wealth funds and others
after the raciest returns are keen on owning infrastructure assets rather than
just lending to them. Projects that are suited for banks often don’t appeal to
new moneymen so transition from banks to other investors is not smooth. Insurers
worry assets will not prove as profitable as advertised. They are focusing on putting
together strategic deals, those in predictable places such as Europe. Investing
in 30-year projects is too risky for most.
The main concern from investors is
a shortage of profitable projects. For governments seeking growth, smarter
planning could result in a lot more of the infrastructure they crave.
Spain "booming" economy?
http://finance.fortune.cnn.com/2014/02/14/spain-underground-economy/
We have all heard of the economic crisis in Spain. We've all heard about it on the news and in every major macroeconomic discussion. However, what we haven't heard about, is the side of the Spanish economy that is actually doing remarkably well. The underground economy, otherwise known as the black market. AS the economy continues to falter in Spain with an unemployment rate of over 26 percent and high increases in personal tax, the underground Spanish economy has grown significantly as it now actually properly competes with the legitimate aspects of the Spanish economy. The underground economy in Spain now actually accounts for over 24 percent of the actual Spanish GDP and you have to wonder whether or not other countries that are going through similar economic crisis's are faring any similarly? According to the article in question, apparently there is a trend. Comparing Spain to countries going through similar economic conditions, we actually do witness a sort of competition between such countries. Greece and Zimbabwe are mentioned in the article and apparently the trend is as such, the worse off your economy, the better off your black market. This yet again raises another question, when people tend to lose faith in their economic system, do they really see the black market as a legitimate economic alternative? It seems that way in countries like Spain, where if the situation doesn't improve soon, things might look a bit too ominous for the "actual" Spanish Economy.
We have all heard of the economic crisis in Spain. We've all heard about it on the news and in every major macroeconomic discussion. However, what we haven't heard about, is the side of the Spanish economy that is actually doing remarkably well. The underground economy, otherwise known as the black market. AS the economy continues to falter in Spain with an unemployment rate of over 26 percent and high increases in personal tax, the underground Spanish economy has grown significantly as it now actually properly competes with the legitimate aspects of the Spanish economy. The underground economy in Spain now actually accounts for over 24 percent of the actual Spanish GDP and you have to wonder whether or not other countries that are going through similar economic crisis's are faring any similarly? According to the article in question, apparently there is a trend. Comparing Spain to countries going through similar economic conditions, we actually do witness a sort of competition between such countries. Greece and Zimbabwe are mentioned in the article and apparently the trend is as such, the worse off your economy, the better off your black market. This yet again raises another question, when people tend to lose faith in their economic system, do they really see the black market as a legitimate economic alternative? It seems that way in countries like Spain, where if the situation doesn't improve soon, things might look a bit too ominous for the "actual" Spanish Economy.
Is Cuba ready to open up to foreign investment?
http://www.bbc.com/news/world-latin-america-26807489
Recently,
Cuba's deputies approved a new law to help Cuba
attract more than $2bn a year in investments and help treble economic
growth to 5-7%. Officials have said the
new law would offer foreign investors tax breaks and guarantees
against expropriation. A British
businessman said "The new law looks very promising as a strong
incentive for foreign investment."
Like
we already discussed in class, one way to improve the standard of
living is to attract more foreign direct investment. Cuba's new law
is aimed at boosting their economy while preserving their
independence and sovereignty.
Now,
university students in Taiwan have occupied the parliament to against
the trade deals with China that will allow more investment into
Taiwan by China as part of the ECFA FTA
between China and Taiwan. I think trade
can make both parties better off. It will stimulate Taiwan's business
to be more competitive.
The Dollar Value of an Extra Year of Life
http://economix.blogs.nytimes.com/2014/03/28/the-dollar-value-of-an-extra-year-of-life/?ref=economy
There is a new treatment of Hepatitis C that the manufacturer charges $1,000 a pill, adding up to $84,000 for a 12 week treatment. This has caused a lot of controversy because it would drastically raise the price of public insurance programs, to the point where people have protested in the streets of San Francisco. The drug would also place a pretty heavy burden on a lot of people that will never need treatment, which isn't very fair. It is being argued that the cost of the drug is far too high for the additional total quality of life that it would provide, and should not be used as the primary drug.
There is a new treatment of Hepatitis C that the manufacturer charges $1,000 a pill, adding up to $84,000 for a 12 week treatment. This has caused a lot of controversy because it would drastically raise the price of public insurance programs, to the point where people have protested in the streets of San Francisco. The drug would also place a pretty heavy burden on a lot of people that will never need treatment, which isn't very fair. It is being argued that the cost of the drug is far too high for the additional total quality of life that it would provide, and should not be used as the primary drug.
Is walmart Serious about boosting the minimum wage
The largest retailer in the world employs about 1% of all private sector workers in the U.S.A. and is taking a neutral stance on the debate over minimum wage. Walmart says that they will only oppose the bill if it unfairly targets them. Otherwise they will remain neutral. It will be interesting to see how the world's largest retailer will react to the puch for a higher minimum wage.Will they be a leader and support the raise in minimum, or will they be a detriment to the success of millions?
http://features.blogs.fortune.cnn.com/2014/02/21/wal-mart-minimum-wage/?iid=SF_BN_River
http://features.blogs.fortune.cnn.com/2014/02/21/wal-mart-minimum-wage/?iid=SF_BN_River
"Markets are rigged"
During an interview on 60 minutes, Michael Smith explained his reasoning for calling the U.S. markets "rigged". "The United States stock market, the most iconic market in global capitalism, is rigged ... by a combination of the stock exchanges, the big Wall Street banks and high-frequency traders," he said. He says that everyone who has any investment at all in the U.S. markets are the victims. The Idea is that the insiders are able to move faster than you and play it against orders in ways you don't understand. What are your thoughts on this? Are the U.S. markets truly rigged?
March Stocks: In like a lion, out with whiplash
For the start of the 2014 year stock trading has been choppy in a lot of ways. The majority of these problems have been centered around the crisis in Ukraine but also the anticipation for a hike in the interest rates by the FEDs. There is hope that this will soon smooth out with the release of manufacturing, construction spending and auto sales numbers due out this week. This will hopefully inform investors about the recovering of the United States economy and promote investment into the market.
Regardless of the slow start to the 2014 year there has been significant recovery seen in many areas. Hiring picked up significantly in February with about 175,000 jobs being added. Another bright spot can be seen in the construction sector which really picked up these past few months. However there is still hesitations of further economic growth due to the possible volatility around the European Central Bank.
http://money.cnn.com/2014/03/30/investing/stock-market-lookahead/index.html?iid=HP_LN
Chairman moves on expired tax breaks
This article is discussing the current issue that is occurring in the Ways and Means Committee. The committee, headed by Dave Camp (R-Mich), is working on the extension of tax credits and regulations that expired during the fiscal cliff. He is looking to continue to stimulation of the economy by bringing back and/or making permanent the credits and exemptions that apply to items like research and development and alternative energies. This action is being supported by the Obama administration and similar actions are being looked at in the Financial Committee in the Senate.
Yasou: Greece Is Pulling Off an Amazing Recovery
http://www.businessweek.com/articles/2014-03-27/yasou-greece-is-pulling-off-an-amazing-recovery#r=nav-r-story
Just two years ago, Greece was on the ropes. The yield on
the Greek government’s 10-year debt hit a punishing and unsustainable 30
percent. Today the yield is less than 7 percent—a sign that investors are
increasingly confident of the nation’s ability to pay its debts. Rarely has a
country repaired its image with creditors so quickly. What went right is that
the troika of foreign official lenders gave the Greek government inexpensive
loans so that it never had to borrow at those exorbitant open-market rates. And
the Greek government was surprisingly successful at cutting spending, which was
essential to regaining investors’ confidence. The Hellenic Republic managed to
achieve “primary” balance—that’s when revenue exceeds spending, excluding debt
service—a year ahead of schedule. Still, Greece continues to face enormous
challenges. The main one is that belt-tightening isn’t enough. Greece must also
remove subsidies and barriers that protect politically entrenched interests
while costing the general public and inhibiting growth. So it’s not all good
news out of Greece. But there’s no question that the country is better off now
than when its bond yields were at 30 percent.
5 Things to Watch on the Economic Calander
http://blogs.wsj.com/five-things/2014/03/28/5-things-to-watch-on-the-economic-calendar-10/
This article talks about 5 big things that are coming up that will impact the economy.
1. "This Payrolls Report Should Be Frost Free"--meaning, that this payroll should be clear of weather issues, unlike the past three months. Because the weather this month has been a little better, not as many people have been missing as much work.
2. "Has the Participation Rate Stabilized?"--this section talks about how the retirement of some of the baby boomers generation has stabilized the labor force rate. So, instead of a constant drop, increasing the unemployment rate, everything has become a little better (at least in the way it looks).
3. "Vehicle Sales Should Rev Up"--because the weather is getting better more people are willing to go out and buy cars. Not only will vehicle sales increase, but other sales will increase because with better weather, people are more willing to go out and shop more.
4. "Taking Business's Temperature in March"--this section talks about how manufacturing has slipped because of the abnormally cold temperatures in the past few months as well as car sales. Both are expected to increase in the near future because the weather should be getting better.
5. "Oil Deficit Continues to Slide"--there has not been a huge worsening in the trade deficit of the United States because of the narrowing in the oil deficit. The US is importing less oil now than it did the past few years.
This article talks about 5 big things that are coming up that will impact the economy.
1. "This Payrolls Report Should Be Frost Free"--meaning, that this payroll should be clear of weather issues, unlike the past three months. Because the weather this month has been a little better, not as many people have been missing as much work.
2. "Has the Participation Rate Stabilized?"--this section talks about how the retirement of some of the baby boomers generation has stabilized the labor force rate. So, instead of a constant drop, increasing the unemployment rate, everything has become a little better (at least in the way it looks).
3. "Vehicle Sales Should Rev Up"--because the weather is getting better more people are willing to go out and buy cars. Not only will vehicle sales increase, but other sales will increase because with better weather, people are more willing to go out and shop more.
4. "Taking Business's Temperature in March"--this section talks about how manufacturing has slipped because of the abnormally cold temperatures in the past few months as well as car sales. Both are expected to increase in the near future because the weather should be getting better.
5. "Oil Deficit Continues to Slide"--there has not been a huge worsening in the trade deficit of the United States because of the narrowing in the oil deficit. The US is importing less oil now than it did the past few years.
Teens face toughest job market on record
http://money.cnn.com/2014/03/14/news/economy/youth-employment/index.html?iid=SF_E_River
The
article said that of the students who completed high school in 2012 but didn't immediately
go on to college, 70% tried to get a job but less than half (46%) succeeded in
finding one. This data is historically
low. The economic condition affects younger job market.
However, long term unemployment mostly consist of older people right now. I
think the distribution of the long term unemployment will be a littele
bit changed
because younger people began to suffer from finding their jobs.
To solve this problem, the Brookings report blames
that we should create stronger linkages between school, college and work in
this article. I agree with a part of
that idea. The situation
that only 14
% high school student will earn a bachelor's degree should be improved. As the writer said, the high school program
does not work as preparation for college.
However, the school is not for the company. I mean it is true students
who graduate from a high school or university have to get a job soon, but the
school should not be just the preparation for the Job market. If the university only focus on the rate of
how many people get good job, the school will lost the idea of what is the
education.
Now, at least employment rate of
student who
can earn a bachelor's degree is not so
bad ,compare with high school diploma,
so the government should focus on improving high school program.
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