Is Serbia the next?

This article talks about mass anti-government protests held in Serbia’s capital, Belgrade. The mass demanded early election from the government and accused the government of corruption and current economic problems. Serbian Progressive Party leader, who organized the protest, said "For 10 years, Serbia has lived under a corrupt government” and called for “more responsible and capable government”. This article once again shows that corruption is like a cancer, it is deeply in the system and the only cure for it, are radical methods like the ones discussed in the article.

France's lost decade

This is a great followup article to the one we had to read for class on friday. Talks about france's more current economic situation and how they are doing through the recovery.

Sarkozy vows to protect the euro

In a brief but poignant article, the future of the Euro is discussed. The economic collapses of Greece, Spain, and Ireland have led many to say that the Euro is in danger of being dissolved. The stronger economic European countries like Germany and France have had to pool their money together to prop up these struggling countries. But is this a sustainable way to operate? French President Nicolas Sarkozy, at the recent Davos World Economic Forum, has said the stability and lasting influence of the Euro is a main priority.

The article highlights Sarkozy's commitment to aiding European countries that have found themselves in near economic ruin. He says the danger of not doing so would lead to the collapse of the Euro, the consequences of which would be devastating.

Should countries like Ireland be able to operate by pinning their success on unstable sources of revenue and unsustainable tax systems because they know they will be bailed out by the EU? While stability in the region may be achieved by the recent 'prop-up' of Ireland, Greece, and Spain, it may come at a price. It may create the precedent that going bankrupt is not as disastrous as previously thought. That's why it's of the utmost importance that 'good individual behavior and surveillance' need to be improved, as the article points out. Sarkozy says that countries need to focus on their individual debts and the imbalance this creates for the EU. If these issues aren't addressed, we may see further imbalance and more bailouts to come.

Buying Facebook's Private Stocks

This article touches on the subject of buying "stock" in volatile private Internet companies such as Facebook. The article talks about the risks and rewards involved with such a purchase. Additionally the exclusivity and difficulty of actually purchasing these types of offerings hinders the process. The most important risk that the article notes is that the financial health of a private firm does not need to be revealed to the general public since they aren't a "publicly traded" company. But on the other hand its quite possible to make large sums of money in such purchases in private firm's shares. If you were to buy Facebook shares early in their time at some secondary trading market, when the company goes private there is a great chance it's IPO will be offered at a price much higher than the price you paid for the shares. Overall these types of investments are hard to come by, risky, and sometimes very reward able. These conditions fit the mold of venture capitalist investors, likewise VC's seem to be the people involved in this type of investing.

The rich and the rest

The article talks about what to do and what not to do about inequality. Yes, reforms would help with the problem. But would they solve it? The skilled and intellectual would still be rewarded and in some instances perform very well. A reform wouldn't particularly solve the issue of income disparity, but it would help the unfair people of the world. It would allow more people to move upwards. It would also boost growth and leave the economy more stable.

I believe that this is the right route to take in improving the economy. yes, a few people wouldn't like it, namely the rich, but the vast majority would and it is what is best for the economy to grow and stabilize. The reform, in my opinion, would do great things for this economy.

Socialism through football

Caught up with Bill Maher on HBO and he had a witty comparison between the NFL and socialism in his New Rules section last Friday. Warning, some explicit language is used.

Egypt's Economy is Near Paralysis

All of the chaos involving the Government in Egypt seems to overshadowing the economic concerns growing in the country. Foreign commerce, tourism, and banking have all stopped leaving businesses and individuals without work, money or food. Individuals are not able to receive their paychecks or use A.T.M.'s and in many cases are not able to put gas in their car because the fuel deliveries are not going into the country. The feeling of the general public is that they will be able to live like this for up to another week but any longer than that and the chaos will quickly escalate.

Spain's unemployment rate grows to 20%

It's fair to say that Spain and its people have enjoyed their fair share of international victories (Nadal, Real Madrid, 2010 World Cup) in recent years. The country earned yet another first place title; but this time Spaniards aren't celebrating. On Friday, the unemployment rate in Spain climbed to a 13-year record of 20.33%, the highest level in the industrialized world. With roughly 4.7 million citizens without jobs now, Spain's economic plight of the past two years only seem to be worsening. As I see it, the Spanish economy looks to be on the final cusp of collapse as it struggles against the quicksand-effects of unemployment, debt, and a banking meltdown. I believe an emergency bailout by the European Union is imminent for Spain, toppling a new domino of the European debt crisis.

Recession and homelessness

This article talks about homelessness hitting not only big cities like Detroit and Newark but the Sarasota-Bradenton area. This area has seen the portion of people living below the poverty line from 2007 to 2009 rise from 9.2% to 13.7%, the largest of any American city, reports the Census Bureau. The article discusses other metropolitan cities seeing an increase in poverty as well. The declining housing situation ended the rapid growth of many of these sunbelt cities were seeing. Although inner cities have higher overall poverty rates, poverty has grown fastest in suburbs. The Urban Institute says that suburban areas are facing “double-trouble” seeing a fall in poverty values and employment , which are connected to poverty. 

Sarasota’s population grew by about 5% for decades, where in 2006 construction, property finance were about 1/3 of the local economy. When property prices dropped the effects were felt and unemployment raised from 3.1% in 2006 to 13.4%% in January of 2010. These combined show the trend found by the Urban Institute.

The article goes on to give accounts of people living in the area and how their lives have been affected over the past years. 

Because Sarasota is a tourist destination, there has been issues with where the homeless sleep, because the city saved little money for social programs. 

I think this article take an interesting look at how poverty isn’t just in inner cities, it is affecting suburbs, and these cities who were prosperous before but decided not to invest in social programs, are now they are struggling to handle the issues. 

Inflation in China

Prices are going up in China, which has caused retailers and manufacturers who rely on Chinese goods and supplies to delay or cancel shipments. This will have an effect on the United States' trade deficit, but will also make prices rise on these goods for U.S. consumers. Another side effect from the inflation is political. There has been pressure building for China to revalue its currency, but with inflation, the problem may be gradually curing itself.

Innovation Is Doing Little for Incomes

Americans' income reflect this slowdown in growth. From 1947 to 1973 — a period of just 26 years — inflation-adjusted median income in the United States more than doubled. But in the 31 years from 1973 to 2004, it rose only 22 percent. And, over the last decade, it actually declined.

Since the early 1970s, most well-off countries have experienced income growth slowdowns like US due to the reaching of a technological plateau. For almost 40 years, we’ve had near-universal dissemination of the major innovations stemming from the Industrial Revolution, many of which combined efficient machines with potent fossil fuels. Today, no huge improvement for the automobile or airplane is in sight, and the major struggle is to limit their pollution, not to vastly improve their capabilities.

Although America produces plenty of innovations, most are not geared toward significantly raising the average standard of living. It seems that we are coming up with ideas that benefit relatively small numbers of people, compared with the broad-based advances of earlier decades, when the modern world was put into place. If pre-1973 growth rates had continued, for example, median family income in the United States would now be more than $90,000, as opposed to its current range of around $50,000.

Will the Internet usher in a new economic growth explosion? Quite possibly, but it hasn’t delivered very good macroeconomic performance over the last decade. Many of the Internet’s gains are fun — games, chat rooms, Twitter streams — rather than vast sources of revenue, and when there have been measurable monetary gains, they often have been concentrated among a small number of company founders, as with, say, Facebook. As for users, the Internet has benefited the well-educated and the curious to a disproportionate degree, but apparently not enough to bolster median income.

Science should be encouraged with subsidies for basic research, as well as private charity, educational reform, a business culture geared toward commercializing inventions, and greater public appreciation for the scientific endeavor. A lighter legal and regulatory hand could ease the path of future innovations.

Never Again?

This article discusses possible causes for the 2008 financial crisis, as well as the reforms and steps the government has taken in the attempt to prevent a future crisis. It discusses the usual "Wall Street" issues as well as the "banks being to big to fail". All the usual criticisms of the 2008 failure, but also discusses the past Senate hearings from 1932 to 1934, investigating the "Great Crash". Which in Perino's opinion, the fundamental reforms to the structure of financial regulation invariably come in the wake of a crisis or scandal. It goes on to discuss the possible solutions, regulations, etc. that could possibly help prevent further crisis. However, they look to be inevitable in a capitalist economy. That ship (crisis of 2008) may have sailed but could things like Illinois debt, chinese economy bubbles, and the current instability of the euro bring the ship back? Its quite a debate.

Made in America. Staying in America.

US company Caterpillar reported on Thursday that sales of machinery in North America in the fourth quarter were up 49% from a year ago. Total North American sales for Caterpillar rose 30%. Also, Sales of electrical components in the U.S. in the fourth quarter rose 22% from the same period last year. Another US company Eaton is forecasting growth of 40% from its U.S. trucking business this year compared to 7% outside the U.S. For autos, domestic production is also expected to outpace foreign demand, but not by as much.

That's great news obviously. It appears to be a sign that many businesses finally realize that they have to ramp up investment on industrial goods to be used in the U.S. As a reult, it might create jobs for Americans, and pull up the consumption domestically.