Cameron Plans to Purge Welfare Incentives Not to Work

This article basically states that the welfare state approach by Britain's prime minister has too many loopholes where people can take advantage. Some people are making a lot more from being unemployed than working. Cameron wants to change this system so that there is more incentive to actively search for and find jobs. This shows one of the problems with maintaining a welfare state. It is similar to some of the problems associated with Sweden's welfare, as discussed in class. Although there are many positives to offering different forms of social welfare, it is clear that certain people will always try to take advantage of the system.

Mideast Protests Drive Up Oil, Threaten Recovery

A sustained 10 percent increase in the price of oil can drain up to 0.1 percent off the U.S. economy. By this rule of thumb, recent petroleum price rises could cost the American GDP roughly $60 billion. This is far from a knockout punch to a $14 trillion economy. But it sets up the United States for a more lethal combination: higher interest rates and greater global instability.
The recent oil price jump could not have come at a worse time. U.S. energy prices had already risen 7.7 percent in December, 2010 compared with December, 2009. The situation is even more dire in the euro zone, where fuel prices were up 11 percent, according to figures released today by the Organization for Economic Cooperation and Development in Paris. If Middle East uncertainty fans even higher prices over the next few months, inflation hawks at the U.S. Federal Reserve and the European Central Bank could well prevail, leading to interest rate hikes that could slow transatlantic recovery.
It is the prospect of long-term Egyptian and Middle Eastern economic and thus political stability that is the best insurance against rising energy prices.

Global Cotton Prices Rise Rapidly

The global cotton prices have been rising steadily and steeply for the past two years. This rise in cotton prices has come as a result of a global shortage of stock of cotton. The shortage has occurred because of the commodity prices crashing after the financial crisis. Additionally, floods in Pakistan, India, and Australia has caused a huge decrease in the supply of cotton in the global market since these areas export large amounts of the global cotton stock. The increasing prices of cotton is great for cotton farmers in all markets, especially since traditionally cotton farmers don't see huge profit margins compared to other agricultural products. But this could spell trouble for textiles, and clothing manufacturers. As prices of inputs increase, the price of the final product is increased. Normally this wouldn't be a big deal, but in the economic condition we are in now, retailers cant afford the higher clothing prices, and the consumers cant handle the price inflation either. So in order to combat this inflation, clothing producers should introduce more substitute inputs into their clothing such as polyester until cotton supplies and demands meet a more steady equilibrium. This will cause a shift from cotton production towards fiber production within the local markets of cotton producers.

Walmart in South Africa

This article highlights the acquisition of Massmart, a South African firm that owns 290 retail stores in Africa, and the opposition they are facing from stakeholders. Many competing African businesses claim Walmart will kill off the unions, make les humane working conditions, and import Chinese goods instead of acquiring the products from more local African sources. Walmart on the other hand claims that they will not change Massmart's business model, and they only wish to accelerate the growths in business. Now we must wait and watch.

Egyptians in America Ponder a Return

This is an example of how the failure of the government leads to the people immigrating to other country and hesitating to go back. For instance, hundreds of Egyptians come to the United States on student visas, planning to earn graduate degrees and look for a job in academia. For years, many of them scrambled to find jobs anywhere in the world outside Egypt. They worried that working as a professor there would not provide enough money to support a family. And more worrisome, they said, was the prospect of limited academic freedom. Out of 300,000 Egyptians in the US currently, there are many of those who have become wealthy in the US. They want to go back and contribute to their country, but they are reluctant to give up all freedom the US offers.

There are still some people who believe in the better future of Egypt with their support. The article gives an example of Rania Behiri, 31, who left Egypt with her family when she a toddler. “People don’t have trust, they don’t have faith and they have been just so oppressed and messed up by the laws that they need to learn how to think for themselves,” Ms. Behiri said. “It’s going to be invaluable. This whole thing showed that people truly can make a difference — so now I feel like, of course, I want to be a part of it.”

Ms. Behiri is one of countless Egyptian immigrants speaking in such grand terms these days, driven by what they saw happen to their birthplace. Many in the Egyptian diaspora here say they hope to educate people back home before elections and will press for the right to vote as well. After years of oppression, Ms. Berhiri said, many Egyptians might be easily deceived by unscrupulous or power-hungry politicians. Friends her age, for example, could be so focused on improving Egypt’s economy that they are too willing to overlook religious demands by public officials.

Balancing The Budget: The Problem Might Be You

It seems that we do not dislike the government as long as we don't have to pay for any services provided by the government. However, as soon as we are faced with the bill, out stomach cannot handle many government services.

Impacts of fuels economic vs. political

In the midst of increasing inflation across the UK and an unstable economic situation across Europe, UK citizens now have to deal with higher oil prices as well as higher taxes as the government tries to keep the economy from collapsing like it did in Greece and Ireland. Taxes have increased 2.5 percent and diesel and gasoline are at near record highs which is causing outcry and some protests at oil refineries. The article also outlines how the higher oil prices have effected the sales of fuel efficient cars due to residents paying taxes on how much pollution their cars make. It points out that GDP and vehicle travel used to be very closely related but with the current economy and oil prices it is taking less vehicle travel to create the same 1pound of GDP.

Rising Food Prices Push Millions Into Poverty, Study Says

This article discusses the sharp rise in food prices last summer has caused millions of people living in developing countries to be in extreme poverty. These increases in prices has in return increased the vulnerability of the countries that import the majority of their food, and have limited amount of government spending. The world bank explained that it is important to slow the increase of poverty and start boosting safety net and nutritional programs to help these countries that are most vulnerable.

Germany as a role model Economy?

The German Economy has bounced back from its recession in a way that makes us wonder if the German economy is a role model economy. Even though the there are many things about the German Economic System that have always worked well, the reason why they bounced back to well from the recession is partially luck. It just so happens that Germany is the number 1 producer of some of the items that the Chinese currently want like luxury cars for example. Having said that, the government succeeded in subsidizing some industries which payed-off which means that the German bounce back was not entirely based on luck. It must be said that Germany is currently too dependent on foreign demand and if they are unable to increase the domestic demand the country could face another economic downturn in the near future.

Where are the workers?

The article is about how people who lost their jobs during the recession aren't necessarily trying to go back into the labor force now that the recession is over. The labor force isn't growing like it should. Many are claiming early retirement or going back to school. The participation rate has been steadily declining for the last 3 years which doesn't make sense considering the recession is over. Most notably, men aged 25-54, have not been entering back into the labor force for one reason or another. This affects the participation rate the most as they are usually the highest sector in the rate. I believe that the rate will see a gradual increase in the coming future, however.

Republicans Dismiss Obama Budget as 'Path to Bankruptcy'

President Barrack Obama's $3.7 trillion budget sets off a clash with congressional Republicans who seek deeper spending cuts and face a potential revolt within their own party if they don’t pare aggressively enough.
Obama’s first budget request since Republicans took House control was met immediately today with demands for a far bolder reshaping of government. House Speaker John Boehner, an Ohio Republican, said the president’s plan “will destroy jobs by spending too much, taxing too much and borrowing too much.” He promised a rival plan for 2012 within weeks.

Ripples, spreading Even the oil-rich Gulf monarchies are feeling the Egypt effect

Since no one has posted anything about Egypt yet.. this is from the economist, first page today.

This article talks about. although there are common grievances in all the gulf states (such as unemployment, living standards, poor schools, repression, and corrupt governments) the current governments are very good at using tactics like propaganda, tribal networks, and patronage to divide and weaken any opposition.
Revolutions are unlikely, they say, for Saudi Arabia, UAE, Qatar, and Kuwait. These countries still have more gas and oil to quell the peoples complaints. However, in Bahrain, the prime minister al-Khalifa , has been in power ten years longer than Mubarak and the gas and oil supplies are dwindling, already leading to unrest.


I posted an article earlier talking about how Egypt's protests had effectively almost stopped the Egyptian economy and their stock market for several days. If these protest continue (not that I'm against them) in other surrounding countries, the same will likely happen to their economy and the regions economy. Something to think about ........