Does This Watchdog Have A Bite

States Seek to Tax Services, From Head to Toe

States are considering taxing more things than what already is for the main reason of raising more revenue. Opponents claim they are hurting as it is and more of a tax will only keep customers away. On the other hand, the political leaders state that the they are hurting from lack of revenue and say it is inevitable that taxes will need to change. They're suggesting "adding scores of services to their states' sales tax requirement and lowering the tax rate under a widened tax base."

China's Role in Clean Energy

I thought this was a good slide show just to illustrate China's growing role in clean energy. This short slideshow clearly shows that China is trying to move beyond pure manufacturing to innovation and sales which are are of higher value to the nation.

european nations working together

This article is a neat reflection about how slightly differing economic systems are working together. European capitalism varies, but as these econmies work together they may begin to even more resemble one another and perhaps be able to create even more effective economic systems.

Greece Receives a Backup Plan

This article is about the the European Union reaching an agreement on whether or not to bailout Greece. All eurozone countries (countries which have adopted the euro, which does not include every country in the European Union) have agreed that they will offer Greece loans at the market rate if Greece fails to receive loans in commercial markets. The terms of the loans will have to be agreed upon unanimously by the eurozone countries (of which there are 16). This gives all of the countries veto power if they do not agree with the loan being made. It has not been disclosed how much will be loaned, but it could be as much as 22 million euros. The article also discusses the European Unions current attempts to create stricter financial regulations for countries in order to avoid a crisis similar to the one Greece is currently experiencing. Interestingly, the article mentioned that no loans were imminent and a loan to Greece would be a last resort.

Bernanke: Economy not out of the woods yet

In a March 25, 2010 meeting, Bernake explained how the the economy is still in need for accomodative monetary policies and ensures the people that when the time comes, they have all the tools necessary to reverse the high monetary stimulus, and more importantly, counter inflation. In the last 18 months, the Fed has bought long term debt, treasuries, and some of the debt of mortgage finance firms like FreddieMac and Fannie Mae under the agreement to sell these mortgages to a third party and later rebuy them at a later point in time. There have been suggestions to remove mortgage backed securities entirely from the market; this has worried many because they believe that by ending such program there will be a rise in mortgage interest rates.

Calif. voters could legalize pot in Nov. election

California is a very interesting case study of a state where direct democracy has had an amazing effect on the state budget. Recreational marijuana use is on the ballot not because everyone there is high - the money it will save in incarceration and the taxation levels of regulating the stuff will help close the state's deficit. Since the California voters automatically recall any Governor who attempts tax increases for the general population, weird stuff like this is the state's only option.

Side-note: I am in favor of complete drug legalization for this very reason: 70% of our prisons are filled with non-violent drug users. If our police forces, DEA forces, and other law-enforcement agencies spent their time keeping out extremists and preventing Tea Parties from cutting gas lines of Democratic Congressmen instead of rounding up nonviolent users, the savings would be tremendous. The multibillion dollar drug trade would lose a significant portion of its revenue (if it's legal, anyone can grow or sell it), making the cartels in Mexico and Colombia cut large portions of their labor-force (aka gunmen and militia), which can't hurt society any.

Euro and Markets Feel Downgrade of Portugal Debt

The Euro hit an 11 month low today and Wall Street shares declined as Portugal's debt was downgraded and the long term outlook is negative. This is causing a lot of pressure for a solution to the Euros problems. As of last Tuesday the Euro hit the lowest it has been since May 2009. Their deficit is at 9.3% of GDP which is much larger than the predicted 6.5%. If Portugal plans to meet the EU's standard of a 3% of GDP as a deficit then they need to take "sizable consolidation measures and withdraw fiscal stimulus this year" in order to reduce the deficit by 2013. Portugal has come up with an austerity package that will reduce government spending, raise the taxes of the wealthy, and putting a cap on wages in the private sector. Also, Germany might agree to help with an aid package to Greece but as a last resort.

Sales of New Homes Weaken in February

This article is about how home sales reached a record low in February which has lowered prospects of recovery for the housing sector. The sales lowered even though government gave tax credit to lure buyers. Sales of new homes have fallen by 23% since October but buyers rushed to take advantage of the $8000 tax credit before it expired. The actual home sales in January were higher than the forecasted sales but it will take some time for the housing sector to prosper.

Will Greece turn from euros to gyros

The more time goes by, the more unlikely it seems that the European Union will bail out Greece. The options that Greece has to get out of this mess are limited. A default would not be politically viable, restructuring would not work, and devaluing its currency is an impossible solution. One of the options that remains is to leave the European Union to allow its currency to devalue, however, this option has been immediately ruled out by Greek prime minister George Papandreou. A possible solution would see Greece taking on a currency solely for domestic use while leaving the euro to be used for international transactions. Greece would print out scrips that act as currency inside the country. By doing this, Greece is able to devalue its currency without affecting the strength of the euro. Another method that is being contemplated is two-euro European Union where one euro will be used by Europe's weaker countries and the other by its most stable countries.

The Economics of March Madness

This is an interesting short video giving all of us college basketball fans an inside look at the business side of the NCAA and their t.v. programming.

Priceline looks to increase sales

This article describes how Priceline is attempting to stay competitive in Asia while its European and American businesses grow older and face much more intense competition.

Greek crisis may hit US economy: Fed regional chief

All the news surrounding the troubles in Greece may affect the United States economy as well according to Atlanta Federal Reserve regional chief, Dennis Lockhart. The Greek debt crisis may affect American exports, as the European Union represents the largest destination of US exports.

In particular, more European countries will look to investing in US assets causing an appreciation of the dollar. This will spark further conversation and debate as to whether the Greeks should drop the use of the Euro and revert to their own currency as their actions have intense ramifications across the European Union as well as into other countries such as the United States.

India’s Woes Reflected in Bid to Restart Old Plant

Great example of globalization gone bad. And an even better example of local feelings on crony capitalism and corruption. The article focuses on a small Indian village where a power plant that had been built by Enron is now being reinvested in by the Indian government. However, there is little enthusiasm within the community where they still have yet to get sufficient electricity.

Red Mist: Who matters in China's Financial System

Working out who is really in charge is nearly impossible in China's financial system. Even in attempting to solve this question, one could find themselves in hot water with the Chinese Government. However, one thing that is most certainly not in question is China's rapid growth and economic prosperity since the late 1970s. This, as the article indicates, is in large part due to China's state owned commercial banks. Despite China's rapid expansion, one must be weary of whether this is sustainable economic growth or merely a forged sense of progression.  

After Facebook and Obama, Chris Hughes launches nonprofit Jumo

Chris Hughes, a co-founder of Facebook, is organizing a new website that connects individuals and organizations striving to help the world. This site will be called Jumo which means "together in concert" in Yoruba a West African language. The site will have vistors fill out questions to help them discover personally relevant opportunities to donate their time and money. This website is experimenting with using social networking for social good. This type of internet service would level the playing field for non-profit organizations that can not afford expensive/direct market campaigns.

PBoC Governor Says Yuan Issue ' Very Complicated'

In this article, you will find some comments from the People's Bank of China and the yuan issue at hand. This article also draws several parallels from the recent class. The PBoC Governor calls for "sound economic analysis" before there are policy changes between the US and China. The US has until April 15 to "label" that China is a currency manipulator and poses a threat to other world currencies. From the comments by other finance ministers, this seems like more of an issue to us Americans than to other countries.

Chinese Oil Firms

This short article shows how Chinese oil companies are starting to work with other firms abroad. It also shows how, opposite of what was said in class today, does lack some natural resources necessary for use in production of other goods and services.

Rio Tinto Employees Say They Took Bribes in China

Yet another interesting article about China. Members of a British-Australian iron ore company took bribes in China. Yet because Australia is one of the leading suppliers of iron ore to China — iron ore worth billions of dollars and intended for the Chinese booming steel industry — the case has become a concern for the top leaders of both countries.

Gas prices expected to flatten

Even though the price of gas has risen an average of 86 cents above the price of a gallon a year ago, the increase has been predicted to slow down because the OPEC is not expected to stop overproducing at these prices. While the demand for gasoline tends to rise in the summer (although expected to be dampened this summer by the economic conditions and the continuous high levels of unemployment throughout the nation), the demand for crude oil decreases because of the lack of requirement for heating houses.

Gas prices expect to flatten

Even though the price of gas has risen an average of 86 cents above the price of a gallon a year ago, the increase has been predicted to slow down because the OPEC is not expected to stop overproducing at these prices. While the demand for gasoline tends to rise in the summer (although expected to be dampened this summer by the economic conditions and the continuous high levels of unemployment throughout the nation), the demand for crude oil decreases because of the lack of requirement for heating houses.

Obama order on abortion locks in health care votes

Depending on who you are listening to today, this bill will cost either $845 billion, $940 billion, $1 trillion, $2.3 trillion, or INFINITE dollars. In any case, this law will have a significant impact on the economy...I am confident it will be helpful, but good or not, the economy will have to change itself to retool to an overhaul of our health-care system.

Failed Search: Google ponders leaving China

Attempts to salvage a deteriorating business relationship are nearing an end in China as google will likely withdraw from China by the end of March. This coming on the heels of failed attempts for stronger censorship of its searches, legal complaints, and several efforts to hack its e-mail system in the previous months. Foreign companies (Facebook, Twitter, Youtube) have all recognized the vast potential of the Chinese markets, however, have largely been unsuccessful in harnessing it. The Chinese government and Communist party continue to take further steps to control access and the capital flow in the market. Googles departure and tightening policies have sent a chilling message to companies that remain in China.

British Airways Strike Effect Disputed

This article relates somewhat to our last exam's materials, with the problems with unions and the workers strike that go along with them. A strike by British Airways cabin crew members entered its second day Sunday, causing further travel disruptions but fewer than the airline had expected. The dispute between British Airways’ management and the Unite trade union, which is over working conditions and pay freezes, intensified over the weekend after the two sides disagreed about the effectiveness of the strike.