Biden to Propose New Minimum Tax on Wealthiest Americans

 President Biden proposes a new minimum tax on households worth more than $100 million as a part of the annual Budget. The tax that has been proposed is to ensure the very wealthiest Americans pay at least 20% in tax on their income. The tax proposal would affect fewer than 20,000 household. The plan would roughly generate $360 million in revenue over 10 years which the government could use to spend or increase the saving. Large amount of money in the new plan would come from taxes on unrealized gains built over many years and include much of the wealth of founders of large firms such as Amazon, Facebook (now Meta). Under the Biden Plan, if assets declined in value the future stream of payments would be adjusted downwards and if the value increases, it would lead to a larger stream of tax payments. Under current law capital gains are taxed only when the asset is sold and they are taxed at a lower rates than ordinary income, therefore it creates an incentive for people to hold appreciated assets until death. 

https://www.wsj.com/articles/biden-to-propose-new-minimum-tax-on-wealthiest-americans-11648335232

the unlikely victim of the Ukraine crisis; a Bakery in Lebanon

 

Russia’s invasion of Ukraine has caused many supply shortages, the ones that come to mind are gas and energy. However, the supply of food has also been affected globally. Ukraine is also known as one of the breadbasket of Europe, being the fifth largest exporter of wheat in the world. There are supply shocks to be felt across the globe, given that Ukraine will lose half of it's harvest this year because of the Russian invasion and blockades. Moreover, Ukraine is also limiting its agricultural exports to ensure there is enough supply available for the nation. While developed countries have the resources to protect themselves in the short term, not everyone is as lucky. In particular, the developing world has felt the impact of these shortages in the short run. The MENA region is the highest exporter of wheat in 2020, with half of Lebanon and Libya's wheat supply coming from Ukraine. 

The effects are already being felt on the ground. A small bakery in war torn Beirut is at risk of going out of business. Mr Khafiyeh is struggling to keep his bakery open because his access to flour was primarily on the black market which is seeing price hikes of more than 1,000% since the Russian invasion. He now only bakes when customers pay upfront, has increased his prices by 50%, and fears he will soon have to shut down his business.

https://qz.com/2133068/conflict-in-ukraine-could-hit-lebanons-food-supply/

https://www.latimes.com/world-nation/story/2022-03-17/war-ukraine-kyiv-try-keep-life-going

https://www.middleeastmonitor.com/20220228-ukraine-war-threatens-to-make-bread-a-luxury-in-the-middle-east/

https://www.newsweek.com/bread-prices-may-rise-ukraine-halts-exports-china-sees-poor-harvest-1686416

Mortgage Rates Rising by Large Amounts

     The most common type of loan- the thirty year fixed mortgage- has risen by 24 basis points, up to 4.95%. This puts the thirty year fixed mortgage 164 basis points up from this time last year, which is quite the substantial amount. This is the second time this week the rates have shot up which puts it on par with 2013, the most recent time that the rates have shot up by such large amounts. These soaring rates have caused demands for mortgages and refinancing loans. With all the other prices rising due to inflation it is hard for buyers to keep up and put down payments making them unqualified for mortgages which could cause issues. This could become more of an issue as the spring housing market is one of the most prominent time for home buying and people might be hesitant to do so with mortgage rates soring and uncertainty setting in. This is causing many economists to revise their estimates and sales figures for the upcoming year. This is something that should be watched closely because any market no matter how small can cause a ripple effect in the economy as a whole.

The US is set to release 1 million barrels of oil per day from the US strategic Oil Reserve for six months

source: Joe Biden orders release of 1 million barrels of oil per day from US strategic reserve for six months (freepressjournal.in)

The US President, Joe Biden, has announced that the US will release 1 million barrels of oil from its strategic oil reserve for the next six months, in a historically unrivaled move, which is set to increase oil supply in the light of recent political events, which saw a decrease in the global level of oil supply, due to sanctions placed on the Russian Federation, due to the 'special military operation' being performed in Ukraine. 

This increase in oil supply would help decrease the recent rise in oil prices both domestically and internationally, as the US is a global exporter of oil (7491.36 USD Million in January 2022). According to the National Economic Council Director, there exist about 568 million barrels in the reserve, and the duration of six months was designed to afford a medium-term bridge between this period of oil scarcity, and the period at which they expect greater US production of oil to come back. Furthermore, he said that the US has been in touch with several countries, such as India, providing encouragement to participate and contribute to this act of releasing reserves.

This will, naturally, lead to a surplus of oil at current prices, allowing market forces to drive prices down, a fact that will definitely lead to a decrease in the costs of production for firms in the global economy, due to reduced transportation costs, which would then lead to increased levels of production, leading to greater levels of economic growth in all economies reliant of oil.

Surging Food Prices Take a Toll on Poor Economies

     Poor economies in the process of rising were already in a fragile state because of the lack of tourist activities from the pandemic. However, since the invasion by Russia into Ukraine has caused high commodity, food, and import prices, many less stable countries had rushes for resources, runs on the bank, and large devaluation in currencies. Already high debts are increasing because of food and commodity subsidies, and foreign-exchange reserves are dwindling. Therefore, in addition to taking on even more debt from foreign countries, countries like Egypt and Sri Lanka are being forced to turn to the IMF to forgive debt and offer bail outs. 

https://www.economist.com/finance-and-economics/2022/04/02/surging-food-prices-take-a-toll-on-poor-economies

Afghanistan's Economy Risks Falling into a "Death Spiral"

    The United Nations has only reached 13% of their $4.4 billion goal in fundraising for Afghanistan this year. The UN chief Antonio Guterres exclaimed that wealthy nations cannot ignore the consequences that their decisions have on vulnerable countries. This statement comes after western nations withdrew from Afghanistan last year, allowing Taliban to retake power. The withdraw of western nations has also caused the international community to freeze almost $9 billion in Afghan assets. Guterres has explained that around 95 percent of Afghan people don't have enough money to eat and around nine million are at risk of famine. People in Afghanistan are resorting to selling their body parts and children to feed their families and avoid starvation and malnutrition.

https://www.arabnews.com/node/2054506/world

How North Korea Keep Moving Without Fuel

North Korea is geographically in a poor place when it comes to fuel and oil. Without natural oil and with high expenses on imports of oil and imports in general, fueling their cars with gas is not sustainable and is definitely not reasonable. But, they’ve found their way around this with some creativity. Residential vehicles along with their military trucks use wood to keep their wheels moving. These vehicles have a burning, open fire pit attached to the engine where barrels of wood are poured in to keep them moving. 

I’m not sure how others would feel about this, but having an open flame fire pit right behind me while driving is not something I would feel the most comfortable with. However, you must give them credit as this is a smart play considering that normal fueling techniques are simply not applicable to North Korea.

https://blogs.scientificamerican.com/plugged-in/how-north-korea-fuels-its-military-trucks-with-trees/

Companies that have pulled out of Russia since its invasion of Ukraine and the long term affects.

    In many different ways the world was affected by the invasion in Ukraine from Russia. One of the ways involves a lot of big name corporations exiting in that country, that has become a global reject. No companies want to be apart of Russia's economy and continue there business mainly because they don't want to dampin their reputation.

    Companies that produce fossil fuels, cars, planes, consumer goods, manufacturers, firms, and tech have all distanced themselves from the situation. This is affecting Russia economy in a terrible way in the long run. They are calling it the "Big Business Retreat." The small foreign businesses that have not yet retreated from Russia will end up joining the exodus and shutting down. When this occurs, the overall economic suffering will exist. It all starts with hundreds of thousands of Russians to lose there jobs, then everything goes down hill from there.

https://www.investmentmonitor.ai/special-focus/ukraine-crisis/russia-economy-departing-companies-invasion

https://www.cbsnews.com/news/russia-ukraine-corporations-pull-out-invasion/

Soaring Cost of Diesel Ripples Through the Global Economy

 If we look at the beginning of the pandemic, diesel prices began to fall fairly quickly as the overall economy began to shut down.  With firms being shut down throughout the country, these prices were low.  Early in 2021, however, traffic resumed and these prices began their climb.  These increases spiked even more with Russia moving troops into Ukraine.  With Russia being a major fuel exporter, and the low stockpiles of fuel overall, these prices could keep rising indefinitely.  

While many consumers may not think about goods this way, every good requires the use of fuel in some capacity to make.  For example, crops require heavy machinery to produce and collect: tractors, combines, etc. Every good gets transported somehow as well; from trains and trucks to boats and planes, every method requires fuel.  These sudden increases in fuel prices are pushing inflation up and heavily impacting supply chains.  The most noticeable effect inflation will have on goods is in "big ticket items", these would be bigger home appliances and vehicles, but overall the consumers will begin to feel an increased effect of inflation on all goods.  

While fuel prices seem shockingly high in the United States, Europe is also being hit quite hard.  A gallon of diesel, on average, in the United States is ~$5.19, while in Germany it is 2.15 euros per liter or $9.10 per gallon.  This is an increase from February prices being 1.66 euro per liter.

https://www.nytimes.com/2022/03/31/business/economy/diesel-economy-russia-ukraine.html

Increase in Mortgage Rates

 Earlier this week rates for a 30 year mortgage interest rate rose to 4.95% which is the highest its been since 2013. According to the Real House Price Index, if income remains constant while mortgage rates increase a consumer’s buying power will decrease meaning they aren’t able to afford mortgages. On top of the rising interest rates, prices in other sectors are also rising which negatively affects a consumer’s house buying power. As the spring season is primetime for the housing market because most people choose to enlist and buy houses during this time, the market supply will be tighter which causes prices to further increase.

https://www.cnbc.com/2022/03/25/mortgage-rate-soars-closer-to-5percent-in-its-second-huge-jump-this-week.html

North Korea not telling the whole truth about latest ICBM test, South Korean official says

 According to a South Korean military official, North Korea's launch of an intercontinental ballistic missile (ICBM) last week, billed as its most powerful yet, might be a less advanced weapon than previously thought.

According to the person, who spoke on the requested anonymity, the March 24 launching of what North Korea said was a new Hwasong-17 ICBM was actually the older and somewhat lighter Hwasong-15 – an ICBM Pyongyang previously tested in 2017.

Numerous missile specialists have since come to the same conclusion, but those who caution that the importance of last week's effective ICBM launch – North Korea's first in much more than four years – must not be overlooked, pointing out that the test still evidenced a weapon capable of hitting the entire continental United States theoretically.

According to Japan's Defense Ministry, the ICBM fired by North Korea last Thursday traveled to an elevation of 6,000 kilometers (3,728 miles) and a range of 1,080 kilometers (671 miles) with a flight period of 71 minutes before crashing down in waters off the western coast of Japan.

Biden announces historic oil reserve release, along with other steps, to reduce gas prices

 According to the White House, President Joe Biden is proposing a historic release of oil from US reserves, as well as efforts to penalize oil firms for failing to increase output from underused leases on federal land. 

The measures are intended to lower gas costs while also putting pressure on oil firms to expand supply. The bold move, which Biden was expected to launch from the White House later Thursday, addresses a major political challenge months before the November elections.

"The President will declare the biggest transfer of oil reserves in record, placing one million additional barrels on the street on average – each day – for the next six months," the White House said. "The volume of this production is unparalleled: the globe has never seen an oil reserve release at this rate of one million barrels per day for this long." This unprecedented release will give a historic level of production to serve as a bridge until domestic production rises up at the end of the year."

A total of 180 million barrels of crude oil would be released. Officials from the White House claimed it would serve as a "bridge" when US and worldwide oil production resumes following the coronavirus outbreak. Officials declined to disclose whether other nations were also transferring barrels from their stocks. The move was made in conjunction with US partners overseas, notably in Europe.

Officials, however, refused to speculate on how quickly gas prices may fall as an outcome of the announcement. They also stated that they would not be concerned with "urgent short-term price swings" in the oil sector. Instead, they stated that their purpose was to alleviate a supply shortage caused by Russian oil exiting the industry, adding that this would benefit American consumers.

Recession warning from Germanys top economic advisors as Putin's gas deadline nears

 Germany has a heavy reliance on Russian energy and having this heavy reliance could tip its economy into recession. There has been extreme concerns over Russia's invasion of Ukraine and what it will mean for europe's economies. The war has contributed to higher energy prices, it’s pushing up food prices too and there are additional expenses to deal with. “The high dependence on Russian energy supplies entails a considerable risk of lower economic output and even a recession with significantly higher inflation rates,” the German Council of Economic Experts, which advises the government in Berlin, said in a report Wednesday. "Germany’s Chancellor Olaf Scholz expressed a similar concern last week when addressing the country’s Parliament, saying that imposing an immediate ban on Russia energy imports “would mean plunging our country and the whole of Europe into a recession.”" In 2020, Germany imported almost 59% of its natural gas from Russia, according to data from Europe’s statistics office. They are urging businesses and households should reduce their energy consumption. “Germany should immediately do everything possible to take precautions against a suspension of Russian energy supplies and quickly end its dependence on Russian energy sources,” the German Council of Economic Experts also said on Wednesday."

Russias economy expected to shrink by 10% and Ukraines by 20%

 In its first economic forecast since Russia's invasion it was learned that the war had triggered the greatest supply shock since the early 1970's. This would have a huge impact on economies beyond the area of conflict. "The world economy faced “the greatest supply shock since at least the early 1970s”, it said, pointing out that Russia and Ukraine “supply a disproportionately high share of commodities, including wheat, corn, fertiliser, titanium and nickel”".Previously, Russia was expected to have a growth rate of 3% and Ukraine was expected to have a growth rate of 3.5%. "The latest prognoses “assume that a ceasefire is brokered within a couple of months, followed soon after by the start of a major reconstruction effort in Ukraine,” the multilateral bank said." if this were to happen then Ukraines gross domestic product (war battered) will rebound by 23% next year. With everything going on the it comes with higher uncertainty when it comes to projections which could restrict exports. 

As President Biden Says - Food Shortages are “Gonna Be Real”

   President Biden says that the price of sanctions will not only affect Russia. We will have effects here in the United States. The raising concerns of a food shortage could very much be real. The food shortage won't be present in a way that there is simply no food. However, it will show up through high prices at the grocery stores with only a small amount of food, if any, actually missing. The prices of food rising greatly is very real, while the reality of no food being present in highly unlikely. But, if you cannot afford something, you can't get it. 30% of all wheat comes from Ukraine and Russia. Fertilizer is up three times what it was a year ago. It's easy to see how prices at the grocery store are ready to shoot up as these critical food supply ingredients are in great scarcity. As long as we can avoid panic buying, we will be just alright with food actually bring on the shelves. The price on the shelves however, will be of great impact on hungry Americans. 

Article : https://www.wjr.com/2022/03/28/president-biden-says-food-shortages-are-gonna-be-real/

The Current Gas Shortage and Another Example of How Failure in Less Than 10% of a Market Can Have Massive Ramifications

     So to anyone currently following the state of the economy, or anyone owning a car, it is generally well known that gas prices are surging and this is related to the conflict in Ukraine. Normally one hears "Russia is one of the world's largest oil producers" and "Most of the world have place trade sanctions on Russia because of their invasion of Ukraine" and assume that that's all the explanation that's necessary to explain the shortage of gasoline and the skyrocketing prices. 

    What the above assumption doesn't take into account is that Russia only makes up 8% of the oil market and that the US is the world's largest oil producer. So why are prices rising domestically despite how little the Russian market should theoretically be affecting us? Well it's a few things.

    First up is that since the US is the world's largest producer of oil, it's also the world's largest exporter of oil. Since almost the rest of the world isn't on par with Russia or the US's oil production, they now have to buy from somewhere else. This means that in the US, not only are we losing the oil that we would typically get from Russia, we're also picking up some of the slack for their absence in the market. That in turn leads to less oil in the US.

    The second issue is that US oil refineries are out of date and investors are too scared to pour money into renovations. It's not that the factories are falling apart or anything that severe, but rather they were designed to refine a different kind of oil than what the US is currently pumping out of the ground. This means the US has import oil it can refine, and export the oil it can't. Since this exchange has been broken, it means that even if we keep drilling new oil, we won't really be able to refine it that well. As for the investors, most places don't want to put more capital into refineries due to the large fluctuations in demand that the oil market has. Especially now a days when another shutdown would basically shoot the oil industry in the knees.

    Essentially the crisis in Ukraine is still responsible for the hike in gas prices in the US, but there's more nuance to it. In addition it looks like the US should invest in updating refineries so they can handle the oil that's currently being drawn so it can be more self sufficient to some degree in case another situation like this occurs.

https://www.cnbc.com/2022/03/26/why-gas-prices-have-soared-in-america.html

Coming of Age: Millennial Demand Helps Stoke the Housing Boom

 Millennials are people that are born between 1981 and 1996 and they are the largest generation we have ever had in America. It is estimated that they have caused 60% of the growth in the housing market as they are coming into home buying age. With the amount of millennials reaching the buying age contractors will have to produce 2 million houses each year to satisfy the expected demand, where in 2021 they only built about 1.6 million homes. 

This is not only a result of millennials becoming of buying age, the pandemic has also had a huge influence on this. They are wanting to get into bigger spaces (out of apartments and into homes) because they want more space, especially for remote work. In 2021, this caused a large majority of young buyers to buy single family homes over apartments. 

The question is will this high demand for home last for millennials? Interest rates are rising and have high potential to raise more throughout the year. This is similar to baby boomers in the 1980s, when interest rates increase they had reached their peak in home sales as well. Additionally, with unavailability of raw materials home construction may not be able to keep up with the current demand. 

https://www.economist.com/finance-and-economics/2022/03/26/millennial-demand-helps-stoke-the-housing-boom

Capital Spending Boom Helps Raise Productivity, Contain Costs

The economy is seeing a spike in business investment in tech and other capital for the largest year-to-year gain since 2012 of 7.4% after adjusted for inflation. Computers and processing equipment see a sharp jump in demand while office space sees a decline with remote work becoming more common. With the increase in capital, the US has seen an increase in labor productivity. In 2020 and 2021 productivity increased by 2.2% compared to the 0.9% average increase from 2011 to 2019.

Amidst inflation concerns, productivity growth is a bright spot for future economic growth. This tech growth is spurred by labor shortages and companies are turning to technology to make up for their demand. Chipotle is looking to automate tedious aspects of their jobs in order to lure in more workers. Walmart is announcing it will send robots to warehouses where labor shortages have most affected productivity. 

What this all means for the future of the economy when looked at as a whole is uncertain. Increases in investment and productivity growth are bright spots for the economy but whether they are temporary as a result of pandemic related issues or indicative of long-term trends is unclear. Robert Gordon, a University of Northwestern Economist suggests that much of the recent increase in productivity is a result of remote work in the finance or professional services as software investments promote remote work. As productivity growth is only sustainable by tech advances, perhaps the investments in tech will catch up with tech advancements and increasing interest rates should limit investment in the newest most expensive technology. Long-term then it would be suggested that the current rate of productivity growth is unsustainable. There a lot of questions surrounding the current climate of the economy pertaining to whether certain aspects of growth are sustainable and whether changes we've seen are permanent.

Capital Spending Boom Helps Raise Productivity, Contain Costs - WSJ

 

Mortgage refinance demand plunges 60%, as rates hit their highest level since 2018

• The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.80% from 4.50%. Refinance applications fell 15% for the week and were down 60% from a year ago. Homebuyer mortgage demand rose 1% for the week but was down 10% from a year ago. “Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve,” said Michael Fratantoni, MBA’s chief economist. Driving the downturn in overall mortgage demand was a 15% weekly drop in refinance applications. They are now down a whopping 60% from a year ago. The refinance share of mortgage activity decreased to 40.6% of total applications from 44.8% the previous week.
• https://www.cnbc.com/2022/03/30/mortgage-refinance-demand-plunges-60percent-as-rates-hit-their-highest-level-since-2018.html

Biden Proposes a Tax on Billionaires to Fund his Economic Agenda.

President Biden has recently proposed the idea of raising taxes on the wealthiest American taxpayers and corporations. His proposals aim to attack the budget deficit by changing tax codes and policies which allow the rich to lower their tax liability. 

These revisions to tax codes would counteract many of the changes that occurred in the Tax Cut and Jobs Act of 2017, passed under the Trump Administration. However, Republicans have not seemed to be on board with the idea of increasing taxes on the wealthiest individuals and corporations.

While most people would assume that the reversal of codes passed in the TCJA would affect their economic burden, the average American taxpayer would not be affected at all. Biden's budget has called for a new tax on households worth more than $100 million, which requires a tax of 20 percent on their income and unrealized capital gains. Again, the tax reforms, known as the "Billionaire Minimum Income Tax", would only apply to the top one-hundredth of one percent who are worth over $1 Billion. It is estimated that the new tax would raise nearly $360 Billion over a decade. 

I think tax revisions are necessary, but it will be interesting to see how Republicans respond to Biden's proposals. The main argument that I see arising is that it would deter investment, but I think it could be beneficial to have tax revisions to help reduce the current deficit.

Source: https://www.nytimes.com/2022/03/28/us/politics/biden-billionaire-tax.html  

New York City's Unemployment Rate is Double the U.S. Average

New York City's current unemployment rate is 7.6%, which is double the recent release of the national unemployment average. This number is one of the highest unemployment rates in major cities right now. Many parts of life in New York City are returning to normal, as Covid restrictions are lessening and people are beginning to feel more safe. However, even though many people feel comfortable going out again and seem to want to return to a more "normal" life, many still choose not to go back to work or to work from home. Another factor impacting this high rate of unemployment is the speed of New York City's reopening. Many smaller cities reopened earlier and more quickly, but New York City being a covid hotspot and a bigger risk because of high population, big crowds, and public transportation, they were not able to reopen things as quickly. Even though right now it is fairly safe to go out and go to work, many people in New York are choosing to not go back to work in the office and buildings are under-occupied. Manhattan and the Bronx are both major unemployment hotspots, with fewer paychecks going out in Manhattan now than in the first month of the pandemic (March 2020). Hopefully as people adjust and feel more comfortable taking transportation, being in crowds, and working with others in an office, this number will drop. 

https://www.bloomberg.com/news/features/2022-03-21/nyc-jobless-rates-double-u-s-averages-in-struggle-with-post-covid-recovery

It May be Now or Never for Spring Homebuyers Amid Rising Prices and Higher Mortgage Rates

Spring is the prime time for the housing market. In 2021, existing house sales reached about 6.12 million, which has been the best it has been in the past 15 years. However, new houses sold were only 770,000, which was below the sales in 2020. This was partly due to the labor and material shortages, which made it difficult to construct new homes. The demand for homes is still strong today, so some analysts believe that 2022 could be another good year for the housing market. However, with rising mortgage rates and declining affordability, some analysts believe that the market will return to pre-pandemic levels. The housing market could face higher mortgage rates, higher prices, and a slower rate of sales, which would allow the market to cool.

It is predicted that prices will rise by 9%, which is higher than the 6.6% prediction made in the latter part of last year. 43% of homebuyers are between the ages of 23 to 31, which is up by 6% from 2021. 51% of homebuyers are choosing suburban areas, and 20% are choosing smaller towns. In 2021, new houses 31% of new houses were under $300,000. Today, however, only 18% of new houses are sold below $300,000. Due to the rising prices and high borrowing rates, more buyers could enter the market for fear of missing out. Old sellers that want to downsize could use this as an opportunity to get a high price for their house.

https://www.usnews.com/news/national-news/articles/2022-03-29/it-may-be-now-or-never-for-spring-homebuyers-amid-rising-prices-and-higher-mortgage-rates

Treasury Yield Curves Inverted - A Sign of Recession?

The Fed's desire for a "soft landing" may be even harder than many economists believe. The 2 and 10 year Treasury bonds inverted for a short time today, as the short term 2-year yields increased. As we learned in class, inversions of the yield curve have historically been predictors of recessions. This inversion is one more in a series of inversions seen since October, with inversions for both 20 and 30-year yields and 5 and 30-year yields. 

While an inversion in 2 and 10-year yields occurred in 2019,  that was the result of a trade war with China. Now, economists and investors expect contractionary policy from the Fed, who is looking to reduce inflation. Considering the Fed's plan to raise interest rates more aggressively that in the past, traders have "priced in" a total of 8 rate hikes despite the Fed's plan to meet only 6 times for the rest of the year.

However, there are some glimmers of hope. Fed Chair Jerome Powell has stated that Treasury yields around 18 months, his primary focus, have not inverted or showed warning signs. Additionally, considering traders are expecting 8 rate hikes, if the Fed either does not meet their expectations or if they bring rates back down for some reason, long term yields may start increasing again.

https://www.bloomberg.com/news/articles/2022-03-29/u-s-yield-curve-inverts-from-two-to-10-years-in-recession-sign

U.S. weekly jobless claims lowest since 1969; continuing claims shrink

 The U.S. unemployment rate has been reaching record lows recently.  In fact, the unemployment rate dropped to a 2 year low of 3.8% in February.  Claims for state unemployment benefits have dropped by 28,000 to 187,000 claims.  This is the least number of claims the U.S. has seen since September of 1969.  The reason for such low unemployment rates is the influx of government spending which was used to attempt to offset the pandemic.  It appears to be working well, seeing that unemployment claims reached a record high less than 2 years ago.  It is unlikely that the unemployment rate will remain this low due to the economy being unable to maintain such a large output of goods.

Biden's Opinion on Putin

On Saturday March 26th, Biden held a conference in Poland where he voiced his opinion on the actions of Putin and also the conclusions of several conferences with foreign leaders.  Biden’s words towards Putin were extreme and the White House later clarified Biden’s statement regarding “this man should not be in power” saying that the president was not calling for regime change in Russia but rather bringing attention to the harm Putin has caused and the propaganda induced reasoning for this war.  Whatever the case may be, remarks like this are potentially dangerous as it could trigger Putin and have negative consequences for both Ukraine and surrounding European countries.  Today Biden spoke about his Saturday remarks and that he stands by them fully, while at the same time explaining he would never want to engage in a land war or nuclear war with Russia.  Nonetheless, if he continues to be outspoken with his opinions on Putin he could potentially anger him and there would be negative consequences in the form of nuclear war.

https://www.nytimes.com/live/2022/03/28/world/ukraine-russia-war 

The Second Cold War

 Only sixty years ago the U.S. and the Soviet Union fought a bitter Cold War to decide what hemisphere and economic/political ideology would be the most influential on the post-WW2 stage. After years of "police action", proxy wars, economic battles, and general geopolitical tension, the Soviet Union fell and the U.S. emerged as the paramount world power. 

With the ongoing crisis in Ukraine and increased Russian aggression in the East, many experts believe that yet another Cold War is beginning between the U.S. and modern Russia. Since that no major Western country has actually entered Ukraine to help the invasion through military force, instead the West is fighting an economic war. The large amounts of economic sanctions that have been placed on Russia and its most rich citizens is meant to totally isolate Russia from the contempary market economy. Banking sanctions are the most notable way that economic pressure can placed on Russia. In response, the Russian government has sought out allies to help keep their economy secure, the most notable being China and other OPEC nations that tend to side with Putin's regime. This comes while most Russians are suffering through these drops in living standards while their government continues an unpopular war. 

For now economic weapons appear to be the main way this war is being fought on an international level, one should hope that more direct means of intervention are not needed.