More students need (financial) facts of life

Ohio is making a requirement for all students to have some background financially before they graduate high school. This will be established by 2014, and all students will have the tools to know "what not to do." Students will learn and understand how to pay taxes, buy cars, pay utilities, and buy houses. So basically, upcoming generations should not make the same mistake that America has been making for the last ten years. A big reason for the big recession that hit a few years ago was people not being able to pay back loans. Banks would loan individuals money for houses and businesses, and these people would not be able to pay them back. Obviously, these people did not understand that if your going to take out a loan, make sure your able to pay back that loan. It's quite obvious this is the reason for housing market being down. Families thought they could afford houses they really can't. I really like the establishment of this class. It will help.

Airlines' hiring of pilots could be set to take off

According to this article pilots are going to start to find jobs in the upcoming months. Delta announced that it was going to hire 300 pilots, and this company has already hired 48 pilots last fall. This is good news because no one has really been hiring since 2008. This could actually be a really good indicator of how the economy is doing. In 2008, the United States economy was a historic low, which would make sense to why this company would not be hiring. Also, most people fly to places for vacation, and because of the recession, I am sure many individuals wanted to save money. At least people will find jobs, but hopefully this could be an indicator of how the economy is doing.

Nobel Economic Recipe: Help States, Add Stimulus

Co-winner of the Nobel Prize for Economics, Peter Diamond, can offer help for the latest economic crisis. His recommendation is to inject the economy with a second round of stimulus. He would hope for the government to help provide money to both state and local governments to prevent lay offs. This would push the US further into debt but would be beneficial in the long run, due to a stronger economy. Diamond believes the government need to start by initiating short term spending by creating jobs. One example includes construction, which will not only create jobs but also provide things that we are in dire need of.

Economic growth may slow as profits high short term highs

Many firms in the United States have posted record profit margins last quarter, but yet there is still great apprehension to hire new talent and expand. These firms fear a double dip recession and the possibility of the rising costs of raw materials. These two factors could distory profits and place the company the in the red, so many firms today are taking these profits and building up cash reserves to make sure they are in a postion great position no matter what occurs. By taking this stance it has greatly slowed job growth in the United States.

Now isnt the right time to cut the budget deficit

In this article, Christina Romer, a UC berkley economics professor and one of president Obama's advisor on the economy argues that even though the Budget deficit in the US has to be reduced, doing it now is not a good idea . She argues that austerity needs to set in but doing it now would make the current situation worse than what it already is. She says that macro economics has taught us that tax cuts and spending increases stimulate demand and raises output and employment. While Tax increases and spending cuts have the completely opposite effect. Since both the employment rate and demand are substantially low at this point, it doesn't make sense to start cutting the deficit right now , because this is going to lead us into more unemployment and less demand, something we definitely don't need more of. She also mentions that instituting austerity measures right now is going to result in a double dip recession, something that happened in 1937 when we tried to incorporate austerity in a recession. This theory is based on the recent reports by the IMF and the World Economic outlook which confirm that fiscal consolidation reduces growth substantially. This can be further verified by the failed attempts of economies such as Ireland, Spain and Greece who tried to stimulate the economy by being more frugal and instead they had to contend with more unemployment and less growth. SO cutting the budget deficit should definitely be on the watch list but doing it now would be short sighted and create more problems.

The Rise of China.

It is a common theme in the world of economics and politics, that the rise of China will undo the power that the United States had gained since WWII. The point is that China needs more than the US output in order to obtain a GDP per capita that the US has. The economic growth rate also will decline as the "optimum" capital is reached.

"In contrast, China still lags far behind the United States economically and militarily, and has focused its policies primarily on its region and on its economic development. While its "market Leninist" economic model (the so-called "Beijing Consensus") provides soft power in authoritarian countries, it has the opposite effect in many democracies. Soft power is the ability to produce preferred outcomes by attraction rather than coercion or payment, and China has announced major efforts to increase its soft power.

Even if China's gross domestic product passes that of the United States around 2030 (as Goldman Sachs projects), the two economies would be equivalent in size, but not equal in composition. China would still have a vast underdeveloped countryside, and it will begin to face demographic problems from the delayed effects of the one child per couple policy it enforced in the 20th century. Moreover, as countries develop, there is a tendency for growth rates to slow.

Assuming a 6 percent Chinese growth and only 2 percent American growth after 2030, China would not equal the United States in per capita income until sometime in the second half of the century. China is a long way from posing the kind of challenge to America that the kaiser's Germany posed when it passed Britain at the beginning of the last century."

Looks like China will have a long way to go.

Housing woes hit job seekers where it hurts

CNN reported that the third quarter showed a record low percentage of managers and executives moving to take up new jobs, at just 6.9%. This is not due to a lack of labor demand for these types of workers but rather because employers have become less willing to help compensate for moving costs, and with the current housing markets it’s almost a certain that anyone selling their house will suffer a significant monetary loss. Also the internet has made it increasingly possible for people to work out of their homes, minimizing the need to relocate for jobs out of town. The internet is likely one of the leading causes of a movement away from executives relocating in general, a trend that has been evident since the early 90s.

There have been small gains for the job market, with many metropolitan areas reporting a drop in unemployment and 500,000+ jobs created in just 27 states alone. Hopefully this trend in large cities continues and extends into more rural areas.

Stock market may turn more volatile

Early in November, the stock market may begin to reflect three major changes in the US economy that some are referring to as a "triple-play": 1) the Federal Reserve is meeting, 2) the mid-term elections on November 2, and 3) the release of the October jobs report. The Federal Reserve meeting will play a role in the volatility of the stock market by shedding light on the amount of money the FED will use for 'quantitative easing'. This method of stimulating the economy has the potential to be larger than the stimulus introduced by the Obama Administration in early 2009. Second, the mid-term elections on November 2 are being watched closely by many Wall-Street representatives because the Republicans are expected to make major gains. And, thirdly, the release of the October jobs market will serve as an indicator to Wall-Street whether the second 'stimulus' by the FED was needed.

The Fed's 'tax on the consumer'

The FED is planning on inputing more money into the economy. According to Bernanke last August, they will institute quantitative easing, which is designed to lower interest rates and expand the economy.

But, with that promise, came a rise in commodity prices, which will further hurt consumers. The 10 year Treasury note yield was as low as 2.33% because of expectations of QE2. This rate is the key to setting mortgage and loan rates, so it is of vital importance. Banks will have more money, and lower rates will hopefully cause some people to borrow. Yet, debt-ridden Americans are unlikely to do so.

Housing Woes Hit Job Seekers Where it Hurts

The combination of a buyer's market in both talent and real estate has pushed the percentage of managers and executives relocating for new jobs down to just 6.9% in the third quarter of this year, a record low, down from 13.4% in the same period in 2009.The Bureau of Labor Statistics reports that 167 metropolitan areas have seen unemployment rates drop over the past 12 months. And as of August, joblessness in 232 cities fell below the national average of 9.6%, and employers in 27 states had created a total of 500,600 new jobs.

Job seekers who own a home and want to sell it really have no other choice but to stay there because they will face a huge loss if they leave. Relocation has been declining since the early '90's. From a record high of 49.2% in 1993, the number of managers and executives moving to take new jobs fell off gradually through the rest of the decade and has stayed below 20% since 2001. This decline is mostly from the Internet because the Internet not only helps look for jobs, but it also gives people the opportunity to work from their homes or anywhere for that matter.