The Onion

While not necessarily as academically robust as some of the other articles on the blog, I feel that the satirical newspaper "The Onion" still brings an interesting and humorous aspect to any debate on economics. This article discusses the arbitrary nature of money, and talks about an alternate reality in which everyone simultaneously realizes that money is not worth anything.

Penalized for Working

Why attempt part time jobs with faulty systems in place such as the one explained in this article. The unemployment system is set up in such a way it does not make sense for many to look for part-time work because of the damage it will do to their current benefits. People around the United States are finding that if they take a seasonal part time job with minimum income it will cost them more money then staying unemployed. These types of kinks result in much higher unemployment rates because it simply does not make financial sense to go back to work unless it is an established full-time job on salary pay.

Why China Probably Won't Revalue the Yuan Soon

Posted by: Bruce Einhorn on February 16, 2010

As China shows more signs of overheating, Goldman chief economist Jim O’Neil says Beijing is poised to allow an appreciation of its currency, the yuan, to slow the economy. As my Bloomberg colleagues reported on Monday, O’Neil thinks the Chinese could allow the yuan to strengthen by as much as 5%. “I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”

While there are solid economic reasons to move quickly, there are also some solid political reasons to stay put. The U.S. has been loudly calling for the Chinese to let the yuan appreciate. For instance, President Obama said in an interview with Bloomberg BusinessWeek, “China and its currency policies are impeding the rebalancing [of the global economy] that’s necessary. My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy.” (You can read the whole interview in the current issue of Bloomberg BusinessWeek.) The president is right, but China’s leaders are probably in no mood to give an inch to the U.S. right now. They’re still fuming over the arms sales to Taiwan, U.S. criticism of China’s Internet censorship and a meeting between Obama and the Dalai Lama that’s scheduled for Thursday. A change in currency policy now would be a big win for Obama – and might lead people in China and overseas to conclude that putting pressure on Beijing works. So even if a revaluation of the yuan is in China’s interest, it probably isn’t going to happen for a while.

Snowmageddon could cost up to 150,000 jobs in February

This very interesting article concerns the back to back snow storms that have pummeled various regions of the country and their effect on the economy. It is estimated that between 90,000 to 150,000 jobs could be lost this month due to the snow trapping people at home and halting the hiring process. People notable to get to their new jobs will file for unemployment benefits. Businesses in the retail, construction, manufacturing, and transportation industries will be particularly hit hard, driving up job loss estimates. However, on a more positive note, economists are saying the storms impact is only temporary and growth will continue shortly.

Barclays Reports Profit Doubled in 2009

The article mainly talks about the reality that Barclays’ profit doubled in 2009, but their top executives gave up their bonus due to the pressure on the whole industry. To be specific, Barclays’ profit rose to 9.39 billion in 2009 from 4.38 billion in 2008, helped by its investment banking sector and the sale of money management business to BlackRock. However, its chief executives decided to give up their bonus, because they know the public’s anger over bank executive taking large payout while the country is barely out of recession still exists. According to Chairman of Barclays, giving up huge bonus is a way of acknowledging the mistakes that they have made and it will rebuild the trust between banks and their stakeholders.

The Greek Tragedy That Changed Europe

Currently, interests rate continue to fall leading into further deficits and a very dangerous buildup of government debt. The country is working towards recovery, but this large amount of government debt could collapse its recent recovery. The Europeans have taken on the challenge to manage their economy, but are not being careful in doing so. The European Central Bank has responded by buy government bonds, but are moving towards cutting Greece off. Greece will not be the only country to experience this cut in aid from The European Central Bank. Since these struggling countries all share the euro, their currencies cannot fall and each country will have make adjustments by lowering wages and reducing the public workforce. The last time this was seen was in the Great Depression.

Greece Pressed to Take Action on Economic Woes

Since we recently discussed the economic situation in Greece in class, I found this article very interesting. The article discusses how Greece manipulated their statistics to conceal from the European Union the extent of their debt. Apparently, this practice is not too uncommon. Both France and Germany have falsely represented the amount of their debt in the past. In order to restore faith in the statistics, Eurostat plans to audit member countries.

Japan stays ahead of China - for now

This article is written in comparison of the quaterly GDP of Japan and China. Many economists predicted that China will go ahead of Japan in 2009; but the recently published GDP results explains that Japan is still ahead of China. Being 10th times the size of Japan and having a GDP growth of nearly 10% China will undoubtedly over take Japan some time near future. But since Japan bailed out some cash in the recent recession through government spending and since Japan had a high net export figures in 2009, it is still the reigning second largest economy.

A Balance Between the Factory and the Local Farm

I found this article very interesting as I have recently read the book "Skinny Bitch" and watched the documentary "Food, Inc." If you are interested in this topic, these two items are very eye opening as well as controversial.

I agree with the following statement: " It may be a case of a manufacturing system that has grown too fast or too large to be managed well.

Somewhere, there is a happy medium."

What's Sustainable About This Budget?

Obama's 2011 budget bears the title A New Era of Responsibility.  His overall goal in the new budget is to invest in our people without leaving them a mountain of debt.  He addressed his politicians by saying Let’s meet our responsibility to the citizens who sent us here.  The real question is if this strategy is realistic.  War is a huge issue as far as the national budget is concerned.  Wars lead to temporary surges in government spending, and recessions lead to temporary declines in government revenue. It makes sense for the government to borrow to make it through these tough times.  Obama is dealing with both of these issues, war and recession.  It is natural to see our country in a deficit because the war is expensive and with the current circumstances there will evidently be a deficit.  As a result, the governments budget will grow faster than the economy.