Regulation Is Lax for Water From Gas Wells

Many American industries are focusing on this century's gold rush for natural gas, which has always been trapped deep underground. Drilling companies just recently figured out the way to use this enormous resource, which is enough to supply the country with gas for heating buildings, generating electricity and powering vehicles for up to a hundred years. There are quite many supporters for this new source of energy. Environmentalists say that it helps slow the climate change because it burns more cleanly than coal and oil. Lawmakers consider it as a source of job and as a way to decrease our dependency on other countries for oil.

However, natural gas also poses many hazards. It causes water to contain higher levels of radioactivity. While people clearly do not drink drilling wastewater, the reason to use the drinking-water standard for comparison is that there is no comprehensive federal standard for what constitutes safe levels of radioactivity in drilling wastewater. It can also contaminate the air. Many health problems arise in several regions where drilling plants operate such as an increasing rate of children who have asthma.

However, the regulators are still unclear about its problems and still claim that coal has far more issues. But the hazards associated with natural-gas production and drilling are far less understood than those associated with other fossil fuels, and the regulations have not kept pace with the natural-gas industry’s expansion.

Libya's revolt scares oil traders

Italy is the biggest trading partner of Libya in terms of oil and other natural gas. Libya provide about one third of the oil in Italy and count for about 10 to 15 percent of their natural gas. Which let mean that Italy has the most to loose as the result of the revolution. If Gaddafi's regimes falls it is uncertain that the next government would continue the trade between Libya and Italy.

I find it interesting how the revolution in one country could have a drastic effect on another country and could even potentially affect it economy.

It makes me wonder if Economy and Politics should be linked?

Libya oil production grinding to a halt

Due to the ongoing violence in Libya, half of their oil companies have shut down in production. Italian oil giant Eni, the largest foreign oil company in Libya, declined to specify how much of its production has been shut in, saying that disclosing that information could jeopardize the remaining output.Eni produces about 250,000 barrels a day from Libya, which has a total oil output of 1.6 million barrels per day. Worldwide oil consumption is pegged at 87.5 million barrels per day.

Most of US companies are still operating. U.S.-based Marathon told CNNMoney the 45,000 barrels a day it produces in Libya has not been impacted. Occidental said its 13,000 barrels a day are also still flowing.

Several of the major oil companies, including ExxonMobil and BP have recently signed leases in Libya but are still in the exploration stages and are not yet producing any oil in the country. Those leases, worth billions, may be in jeopardy if the Libyan government collapses.

Eni said the natural gas pipeline running under the Mediterranean from Libya to Italy, which supplies 10% of that nation's gas, has been shut off, but despite that, it is still able to meet its customers' demand for gas.

If the violence in Libya goes on, it is not sure how long the rest of the oil companies can still remain in operation. If this is the case, the shock to the oil price is unpredictable.

Consumer confidence at 3-year high on job optimism

NEW YORK (AP) -- Americans are feeling more chipper about the economy than they have in three years.

The Consumer Confidence Index rose to 70.4 this month, up from 64.8 in January, as Americans expressed more optimism about their income prospects and the direction the economy is headed, a private research group reported Tuesday.

It's the strongest reading since the early days of the most severe recession the U.S. has seen since the 1930s.

A robust stock market and falling unemployment are lifting Americans' spirits in spite of rising food and energy prices and a still-weak housing sector. In addition, a cut to the Social Security tax meant Americans started seeing more money in their paychecks in January, which may be boosting consumer spending.

Retailers including Macy's Inc., Home Depot Inc. and VF Corp., maker of Lee jeans and Vans shoes, reported better-than-expected earnings Tuesday. Home Depot posted its first annual revenue increase since before the housing crash in 2006, while Macy's, the country's second-largest department store chain, saw sales at stores open at least a year climb 4.3 percent...

This is good news, the consumer confidence is gradually increasing since November. This may mean that the U.S. economy is getting stronger as well despite the global news regarding the Middle East. My concern is that increasing oil prices would have impact on the imports and the prices may increase, resulting in a decrease of consumer confidence.

Obama’s 2012 Budget: New Taxes in, Tax Breaks Out

This article gives us a basic outline of President Obama's newly proposed budget. The budget includes plans for reducing the national deficit, by focusing on the High income earning population that is still protected by the Bush-era tax cuts. Overall it talks about many proposed projects that are going to take affect over the next few years. i believe that this is only the first out of many steps the government will need to take to fix the U.S. national debt problem.

Art or Business?

This article talks about how the importance of the quality of Hollywood films has and will continue to decrease over time. What matters in Hollywood and any other industry is profits. What matters now is whether or not a film will sell. The market for American films is now bigger outside of the United States than inside. Producers overall are now more concerned in targeting teenager in countries like Brazil and China than the people who decide which film will receive the Academy Award for best picture. The sad truth is that producers care more about making a profit than making a good film, turning films into a business instead of an art.

Fears of Chaos Temper Calls for Change in Morocco

In Morocco, the people are asking for a change in their government by asking for more democracy. Morocco is another country in the North Africa/Middle East area that is pressing for change.

The people of Morocco are requesting for a more legitimate democracy by limiting the power of the King, Mohammed VI- who with his advisors holds most of the power. Similar to Egypt- there have been protestant movements via the internet and Facebook and other social network websites. But there have been large protestant movements with violence and arrests.

Mohammed VI and his advisors understand some type of reform is needed in Morocco- about 20 percent of the population lives below the poverty line; where the median age is 26.5; and where there is high unemployment, high illiteracy and a level of corruption judged to be more severe than in Tunisia, if below that of Egypt.

Libya Death Toll Surges in Crackdown

The protests that started in Libya over the weekend are continuing on. The leader of Libya, who has been in power for over 40 years, is beginning to lose his handle on the situation. He has begun killing other Libyan's and this has only fueled the countries want to overthrow his regime. He had militia fire into crowds killing over 250 people.

This article is interesting because it highlights some of the points the guest speaking was making on Friday. Most of the protestors are young men and the protests have grown stronger as the weakness of the government is becoming more and more apparent.

Should the federal government let states go bankrupt?

While bailout of companies seems to be over, state bailout is still a hot topic. This year state governments face a collective $125 billion in deficits. With high unemployment rate, state governments need money to pay off the benefits. However, they also need to pay the bill to the federal government for the previous bailouts. What the federal government should do about this deficit is yet to be decided. There aren’t too many options, however. Mr. Obama offered states a short-term relief by postponing the bill till 2014. Newt Gingrich, a putative Republican candidate next year, and Jeb Bush, Florida’s respected former governor, proposed that states “should be allowed to go bankrupt , so they can restructure such liabilities.” Eric Cantor, the House majority leader, on the other hand, rejects the possibility of either bail-outs or bankruptcies “States can deal with this and have the ability to do so on their own,” he said recently. Should the federal government yet once again bailout the states?

Consumer prices show inflation turning up

The U.S. economy has seen an overall decline in inflation for nearly 15 months. But recent data has shown that there has been a subtle increase in inflation in January, which leads many to question where inflation will go next.

Many economists are able to agree on the fact that the U.S. has hit the low of inflation, that inflation should now be expected to rise. But the question is, 'to what extent will it rise?'

Economists differ in their predictions about what will happen next. If unemployment stays at a high, around 9-10 percent, many think inflation will stay at its current low levels. This is consistent with the theories behind the Phillips Curve. Recent filings for unemployment benefits seem to suggest that high unemployment is here to stay for a while, and therefore low inflation will be around as well. But even this data is murky, as many attribute the recent rise in unemployment to volatile winter conditions, and they say unemployment will continue to decline.

This issue brings about questions for the Fed as to what direction to take. The Fed prefers to have about 2 percent inflation so they are questioning what sort of steps need to be taken, if any, to address the issue at hand. The danger of having stagflation should be in the back of their mind as they develop their next move. Having high unemployment with equally high inflation could prove catastrophic to an already weak economic recovery.

The United States' Slowdown

This article discusses a new highly debated e-book called "The Great Stagnation" by Tyler Cowen. He explains that pre-1974, the United States economy experienced great economic growth and wealth by harvesting "low-hanging fruit" due to the availability of mass amounts of cheap land, growing education levels, and technological revolutions. Since then, however, the United States has experienced a slow-down in just about everything- slower life expectancy increases, slower job creation, etc. He says that all of this is essentially a technological plateau that we are currently stuck on. What this can mean is a change of values to a more postmaterial set of priorities and the improvement of quality of life without material gain necessarily. The author runs through the lives of 2 hypothetical men who grew up during different times in American history and thus have very different value sets. I really liked this article; I think it is a really interesting perspective on economic outputs and what our society is producing that is different from what we have been looking at and measuring it by traditionally.

Threat of Protests in China

Since the revolution in Egypt there have been many problems with protests in other countries. In particular, China has recently been reporting mini public gatherings of protesters put together through social media and microblogging outlets. The police have been able to keep the protests under control and the Chinese government has been focusing on changing the negative public opinion on the government through these same social media and microblogging outlets. It seems to me that instead of attempting to change the opinion that the public has about the government, the government should be focusing on actually catering to the needs of the public and making them feel more comfortable in their home country of China.

How Convincing Is the Case for Free Trade?

I understand the benefit of free trade and generally believe in the idea. But national governments exist not only to provide added benefit to the 'winners' but also to provide support to the 'losers' in this paradigm. The problem that I don't see anyone addressing with "off-shoring" is how do you replace those 30-40 millions of lost jobs. These are already service jobs being lost. In the past, the magic of progress replaced manufacturing jobs with service jobs. Also, if what is really being said here is that this off-shoring represents a transfer of wealth from richer nations to poorer nations, while that may be beneficial to the planet as a whole it does raise the question of what a particular nation needs to do to respond. Education is obvious, but I don't think it's unreasonable to consider ways of mitigating the loss of jobs

Why Obama can't save infrastructure

The author argues for the privatization of infrastructures.

American transportation system is now in desperate need of costly repairs but the political leaders cannot agree on how to pay for them. President Obama just proposed $556 billion in new infrastructure spending over the next six years, including money for road and bridge repair, high-speed rail development, and the formation of a National Infrastructure Bank.
Traditionally, spending on transportation infrastructure was paid for by increasing gas taxes, but today's GOP orthodoxy is to oppose all new revenue generators. Another solution is that state and municipal governments can partially privatize their infrastructure assets. The federal government is like a piggy-bank for local governments, and actual implementation and maintenance decisions should be made by local governments.

The article argues that it is time to get over the exception that the America's transportation infrastructure should be government-owned and operated. The reasons are, first, the current system isn't working and there is huge needs in funding for infrastructure. Second, it's counter-intuitive to think that a private investment firm wouldn't do everything in its power to make its transportation assets safe and efficient. And third, local governments have the ability to structure these leases any way they see fit. Infrastructure privatization provides a solution to the current standoff between Obama and House Republicans -- by providing for investment to repair and maintain existing infrastructure, without requiring tax increases or enabling parochial pork. There are also other benefits for infrastructure privatization: up-front payments for local governments to pay existing project debt and to fund other infrastructure needs.

Oil Flows, but High Prices Jangle Nerves

This article talks about the impact of the unrest in the middle east and north African countries (MENA countries) on the global oil prices.

MENA countries contribute to 35% of the world's oil production. Possibility of disruptions in supply from these countries result in skittish oil markets. This as a result is a burden to the global economic recovery.

Oil prices have risen 30% since September 2010.

There is a reason for optimism, as Saudi Arabia can potentially maintain the global production supply of oil if the affected OPEC countries experience fluctuations. This was mentioned by the president of the World Bank at the 'Group of 20' meeting.

90% of growth in oil production will have to be met by MENA countries in the future because alternative sources of energy still have a while to introduced on a large scale.

This article helps bring global perspective to the current unrest in the middle east.

How Obama handled Egypt

During this incredible debacle in Egypt, Obama has been criticized for acting too slow to the troubles in Egypt. The article speaks about how it may not even be necessary for the US to get involved because we don't have much of a relationship with Egypt. Many critics say that Obama and his team were acting "amateurish", "hesitant, inconsistent, confused and just plain wrong" while Egypt has been going through this revolution.

Also, the critics are saying that the lack of actions by Obama has failed to show Egypt that America is on their side. On the other side, some of the republicans have applauded his actions saying that he has handled the issue very well. It is a difficult position to be in as the president of one of the strongest countries in the world. I don't feel that Egypt's issues are necessarily the most pressing issue for the US considering we have enough issues to deal with on our own land.

Obama Looks to Postpone Budgetary Reform

President Obama unveiled his budget draft to congress this week, causing new waves of frustration from both democrats and republicans alike. The budget displays a continuation of a Keynesian approach. While intentions to help stimulate the economy are good, it fails to realize the ramifications of continued large deficit spending. While it is inevitable at this juncture, the debt ceiling is rapidly approaching. Smarter spending on sectors like education, alternative energy, and infrastructure repairs and improvements is necessary. The article warns that budgets will only become tougher to make smaller as baby-boomers retire and want health care and social security. The renewal of the Bush tax cuts and the exorbitant amount of military spending on Afghanistan make this even more difficult. Political stalemate over the budget, of which the republicans made their own draft, will be a hot-button issue for the months to come.

How the middle class became the underclass

This is an interesting article that ties into the article we read for class, "Comparisons of Economic Mobility". The article discusses the income for the middle class over the years, along with the struggles the middle class is facing. It touches on the role of unions and the decline of unions over the past 30 years and how that has affected the middle class. While this is happening the rich are becoming richer, creating more difference between the classes, pointing to the benefits of globalization for corporations among other things. 

G-20 Agrees on Yardsticks for Imbalances as U.S. Seeks Leverage on Yuan

This article states a problem to global economic recovery which is the disparities of growth between the emerging economies and "debt-laden regions".  According to the IMF forecast, China will still be the fastest growing economy in the world in 2011.  The western economies including U.S. seeks to push up the undervalued yuan.  China however sought to ease the tension by raising its bank reserve for the eighth time in a year to fight inflation while still resisting western pressure by objecting to the "use of the current account,the widest measures of trade, as a benchmark" which can give a opening to the west.
Next G-20 meeting in mid-April will formulate voluntary set of guidelines for national economic policy that will be a yardstick that can be used for leverage on Yuan.  Nations are clashing over policies that are needed to erase global imbalance and sustain recovery.  But the agreement of G-20 finance officials to monitor global economic imbalances more closely might prevent a future crisis if it is put in to action effectively.