America's Recovery: The new new normal

So far, the economy looks like it is starting to make a turn for the better in terms of the unemployment rate. As of today, the unemployment has dropped to 8.9%, which is the lowest it has been in years.

Many small businesses and larger firms are beginning to welcome back more employees. The only problem is, is the unemployment rate totally legitimate? Some believe that the unemployment rate has been miss calculated leaving the data incorrect. The problem stems from nonfarm employment surveys, which are derived from a big survey of employers. On the other hand the unemployment rate is derived from a much smaller survey of households. The difference in the gathering of data leaves uncertainty for legitimacy with the unemployment rate calculations.

Unrest in the Middle East: The Price of Fear

The world economy has felt the tremors of volatile unrest in the Middle East and North Africa at an ever-increasing rate in 2011. Eruptions of turmoil in important geopolitical and oil-rich nations like Egypt, Tunisia, and most recently Libya have caused oil prices to soar. This informative article explains that the price of oil is not just reliant on the traditional economic conventions of supply and demand, but also the impact of fear in speculation can have. As evident in current gas prices in the United States, declining reserves of the world's supply of oil paired with unrest in civil society emerges peaks hovering around $120 a barrel today. It will be interesting to see if the development of new revolutions across places like Bahrain or Saudi Arabia will have on the future prices of oil.

Uncorking Enterprise

This article explains the need for entrepreneurship in the battle against unemployment around the world. There is a great pressure on policymakers to promote the creation of new businesses. This has especially come to light in the recent Egyptian revolution, which is in part due to the high (33%) unemployment in the nation. The main reasons given for promoting new businesses are that they create jobs that did not exist before, and that new firms are the most likely to increase productivity.

Recently, the Global Entrepreneurship Monitor (GEM), a new index created by various academics, has been used to judge how favorable and friendly different nations are to entrepreneurship. This index focuses on business creation, but the problem is that it does not distinguish between new companies that will have a big impact and smaller companies that will not have an impact, such as street vendors.

Another index that is being unveiled today, is the Global Entrepreneurship and Development Index, which takes into account high growth companies, ambition, and prevalence of start-ups. The interesting result of this index is that it shows bottlenecks in a nation's economic or financial systems. For example, even though Britain is developed, there is a shortage of venture capital and therefore it is not so conducive to entrepreneurship. The other interesting preliminary result of the index shows that many of the scandinavian countries are in the top ten, which indicates that it is possible to have a welfare state that promotes entrepreneurs.

This article was very enlightening, and it shows how a country could improve some economic problems by promoting entrepreneurship and reducing the cost of opening a business. The new indices measuring this variable are just beginning to be used, but there is hope that they will be able to shed some light onto what makes a country favorable towards entrepreneurs.

Billions of Bloat Uncovered in Beltway

A recent study, intended to be released Tuesday, uncovered about 80 government programs that seem to overlap and are costing American tax payers billions of dollars each year. The hope is to consolidate several of these programs to reduce the government budget. This highlights one of the ways that the government fails to effectively allocate resources. The government is trying to use these programs to help the homeless and promote economic development but they are misallocating tax payer money.

Trade Initiatives

President Obama has not been quiet about his desire to increase exports and to somewhat even out the trade deficit. In this article, the logistical struggles associated with doing that are outlined. Bipartisan politics often drive a wedge in plans such as these. Another issue is government assistance to workers who are unemployed due to globalization. As of now, they no longer receive job training or any benefits. Republicans are also blocking trade deals in order to protect sometimes small companies in their specific states (a sleeping bag company in Arkansas, in this case). These short-sided views will hurt the United States in the long run. As Obama reiterated in the State of the Union, the world where the United States' is a manufacturing mecca is over; the time has come for adaptation.

Poll Shows Support for Embattled Public Sector Workers

The majority of Americans agree with the protestors in many state capitals who are protesting the "efforts to weaken the collective bargaining rights of public employee unions" and "cutting the pay or benefits of public workers".
The biggest protests have been in Wisconsin and Ohio where newly elected Republican leaders will push for these unfavorable reforms.
The most interesting point in the article was that most people surveyed were less opposed to tax increases- the governors are more opposed to it while the people are most imposed to cutting union rights and federal employees salary.

Stocks on The Rise

This article touches base with the reasons behind the abrupt turn-around of the US stock market in the past year. According to analysts, there was a major concern with the global oil supply, they were concerned that an excess supply of oil being sold through Lybia would be too much for the market to handle. But to their surprise, the oil prices surged this past week, despite the looming supply issues. There has been three major components that have helped the stock market rebound in the manner that it has in the past year. Overall spending has increased, personal income has increased, and consumer confidence has increased as well. With these three factors on the rise, the market has begun to move towards the "pre-crisis" numbers. The question being, when will we meet and exceed these numbers.

Economists' biggest worry: Federal budget deficit

This is a good article centered around the mass concern that american economists have about the US budget deficit. The general consensus among these economists is that we are keeping taxes far too low and spending way to much to emerge from the recession, politicians say our system is still too weak to raise taxes or cut spending. Either way, without action we may need major reform in our economy to correct the budget problem

Oil Climbs on Libya Tensions; Treasuries Advance, Euro Weakens on Ireland

Oil extended the biggest weekly gain in two years as fighting in Libya cut production, while Treasuries and gold rose on concern global economic growth will be derailed. Oil added 1.8 percent in New York to $99.65 a barrel as of 1:58 p.m. in Tokyo rallied for a sixth day. Ten- year Treasuries climbed for a third day, while gold approached a record. The euro pared losses against the yen and dollar as the MSCI Asia Pacific Index increased 0.3 percent, erasing a drop of as much as 0.5 percent. Standard & Poor’s 500 Index futures declined 0.2 percent. U.S. officials will meet with their foreign counterparts in Geneva today to discuss the fate of Libya, where opposition forces are making gains in the western parts of the country after taking control of the east. Chinese Premier said the nation set a lower growth target for the period from 2011 through 2015 than in the previous five years, while U.S. data this week will signal household purchases slowed even as payroll gains accelerated and factory orders increased.

Economic growth trimmed, consumers more upbeat

This article discusses the signs that seem to indicate a turnaround in the US economy. One of the main focuses of the article was the impacts of the revolution in Libya and it's affect on U.S. consumers. The article points out that the oil price turmoil that has lead to a 6 cent spike in oil prices hasn't seemed to upset U.S. consumers like it would have been expected to. In previous years it was extremely big news when oil prices were fluctuating so much, but the article is saying that consumer sentiment is up 3.3% since January despite the prices, showing that consumers aren't in such a tight monetary situation

The Big Airlines get Cold Feet

Delta airlines increased it's fares in hopes to bring in extra cash on the 18th. When airlines do this, they do it in the hopes that other airlines will follow their lead so that they can call make more money without one seeming overpriced. Once Delta had upped their prices by as much as $60, American Airlines did the same. However, Southwest Airlines however did not. Considering that Southwest is still one of the cheapest, it made Delta and American look way overpriced with their increases and both Delta and American had lowered their prices back to normal by the end of the week. This shows the huge amount of competition between 3 of the most major airlines in America.

Rising Oil Prices Pose New Threat to U.S. Economy

It seems like the U.S. economy just can’t ‘catch a break’. Consumer confidence is rising which is helping our economy grow, but there has been a significant recent rise in oil prices as well. If this rise in oil prices stays consistent, it will most likely slow down the growth rate of our economy that is already moving pretty slow. This slow growth rate is already struggling to produce jobs in this country. Now with increasing oil prices, this imposes another problem on our economy and growth will not be as great. There is a strong element of fear in consumers of what’s next, and what’s next after next. Budget and debt problems at all levels of American government also threaten to disrupt the domestic recovery. The irony to all of this is that the American economy just barely got up off the ground from the devastating financial crisis and now are being hit with rising oil prices. Higher oil prices restrain growth because they result in higher fuel prices for consumers and businesses.