U.S. Economy: Trade Deficit Narrows Less Than Forecast

U.S. trade deficit narrowed less than forecasted in February, which indicates how the rising commodity prices have affected the economy. Prices of imported goods, especially oil, rose the quickest this past month. The rapid increase in commodity prices over the past year is because of the rise in global demand and the decrease in global supply. Increases in prices in commodities, such as oil and food, have hurt consumer spending. This is unfortunate because food and fuel account for about 70 percent of the economy.

The recovery of our economy will not derail because of the increase in commodity prices. It is unlucky for consumers because everyday commodities like fuel and food have increasing prices. However, eventually the economy will stabilize.

G.O.P. Pushes to Deregulate Environment at State Level

Due to the recession, many states have decided to cut down environmental budgets and eliminate some environmental regulations, such as land conservation, in order to enable more businesses to grow and provide more jobs.

Republicans made clear that reducing all government was important, but that cutting environmental regulations was a particular priority. It is sad to think how environmental protection is always the last to be concerned about and the first to get abandoned in hard times. We should doubt our sustainability of growth in the long run if forests and reserved lands keep giving their way to new buildings and industries.

Fed’s Evans: Without Wage Hikes, Little Inflation Pressure

Federal Reserve braces for the end of the second quantitative easing and is expected to increase interest rates in the near future in order to move toward tighter monetary policy. On April 4, 2011 the interest rate on two-year Federal Reserve note rose to 0.901% which is the highest level since May 2010. This indicates that the Federal Reserve might have already started implementing a new policy. Furthermore, declining unemployment rate supports the believe that the Federal Reserve will slow down its expansionary policy, decrease money supply, and focus its effort on preventing the inflation.

Market Troubles

This article talks about how there has been a drastic decline in the popularity of the free market system. it mentions that since 2002 there has been a 21% decline in people that support the free market system. However one interesting thing about this article was the countries that it mentioned who still show strong favoritism toward free market economies. those countries include China, Germany, and Brazil who all have economies that are performing very well. it just shows that there data presented in this article might be slightly biased because of the recession in the U.S.

70 or bust!: Current plans to raise the retirement age are not bold enough

Countries around the world are beginning up the age of retirement, in order to attempt to hold down the cost of state pensions while encouraging workers to stay at work. Since 1971 the life expectancy of the average 65-year-old in the rich world has improved by four to five years. By 2050, it is estimated that they will add a further three years on top of that. The average retirement age in the OECD in 2010 was 63, almost one year lower than in 1970.

Living longer, and retiring early, might not be a problem if the supply of workers were increasing. But declining fertility rates imply that by 2050 there will be just 2.6 American workers supporting each pensioner and the figures for France, Germany and Italy will be 1.9, 1.6 and 1.5 respectively. The young will be shoring up pensions systems which are riddled with problems- the public-sector pension is a bigger issue in America with a deficit that amounts to $3 trillion.

China reports first quarterly trade deficit in six years

China first time in six years reported quarterly trade deficit of $1.02 billion. It looks like the Chinese government is introducing some reforms to its export oriented economy in order to boost domestic consumption in the next five years. Starting this year, China launched its 12th five year plan of its transition toward market economy. China is also planning to slow its economic growth down a bit from the present double digit growth rate to 7 percent.

Wanted: A Tax Code for the Digital Age

This article centers around a comparison of Amazon.com and Target as companies, and the differences in their effective tax rates. The main issue at hand is the fact that Amazon's effective tax rate is significantly lower than that of Target, almost 10% lower in fact. This difference means that Amazon has a significant advantage over many of their competitors (including Target). The cause for this differential is the make-up of the companies; Target is a U.S.-based company who does sales only stateside, and most of its retail comes from sales directly from the store. Amazon, on the other hand, is an international company that saw 46% of its revenue in the past year come from international sales.

This difference in the companies allow Amazon to take advantage of its lower tax rate and operate with a higher rate of profit. Part of what we've been discussing recently is the important role laws play in terms of protecting American companies and how complicated things can get, and this is a perfect example. Amazon is not doing anything illegal; rather they're just using a loophole in tax law to gain what appears to be an unfair advantage. Examples such as this exist everywhere in our economy.

Banks Are Off the Hook Again

This is an interesting article that looks at the abuses of banks in concern with filing false court documents which have affected many home owners who have already lost 6.7 million homes and it is predicted that another 3.3 million will be lost in 2012. A draft agreement that was published by the American Banker suggests the punishment will not be severe and they exclude efforts to try and hold the banks accountable in the future, meaning they are unlikely to help the foreclosure crisis. The banks must follow existing law and current contracts and must hire independent consultants to check a sample of recent foreclosures for evidence of improper eviction and impermissible fees. The catch is that the consultants will be chosen by the banks, allowing the bank to decide what is appropriate.

Banks "Too Big to Fail" Could Get Bigger

Even though the Dodd-Frank financial reform law signed in mid-2010 was supposed to help control huge financial firms, they might instead help make big banks bigger. The reform made sure that taxpayers would never have to rescue the largest banks in order to stop the entire financial system from collapsing again. It seems that the federal agencies enforcing these laws seem to strengthen the dominant position of the bigger banks. The Federal Reserve issued regulations meant to curb commission payments could just as easily give big banks the chance to dominate the mortgage market. These same big bank biases again resurface in a rule purposed by 6 big name banks that requires “issuers of mortgage-backed securities to keep 5 percent of bonds on their books”. Conservative mortgages (borrowers with good credit and at least 20 percent down) are exempt. Large banks can afford to keep the required risk on their books. In the end, the Dodd-Frank financial reform which was supposed to end “too big to fail” might in turn make big banks bigger.

The Hidden Job Crisis for American Men

Recently, the March Jobs report which was released April 1^st stated that there was a drop in the jobless rate from 9.8 percent to an 8.8 percent. However, it seems an even bigger problem looms over the horizon. It seems that men in particular have given up looking for jobs and are not marked as unemployed. They become stuck as jobless and have difficulty finding jobs. They draw from government benefits or rely on family friends for support. They hurt the economy by draining government benefits that should be used on the unemployed. Men’s absence from the labor market is bad for men, their families, the economy, and the government finances. They make it difficult for other workers whom are unemployed to reenter the job market. A tighter labor market forces employers to consider a wider range of candidates. The article ends by saying “The effect of the ‘mancession’ on the male American workforce will be felt well into the recovery as some men stay stuck in unemployment”.

Recession is over for CEOs

This article explains that while millions of Americans are trying not to lose their homes and jobs, the paychecks for the top American executives are increasing and some are increasing by a lot. The chief executive of Viacom, Philippe P. Daumen made $84.5 million in under a year. Unfortunately for the rest of us, these increases have not been trickling down. Despite the recent fortunes of the CEOs, they are not employing more workers. Although unemployment is down from its peak, economists say that the jobless rate will not significantly change anytime soon. There are new rules in place stating that shareholders should have a say in the paychecks of executives of company but it isn't clear how much of a say. So far this input has been minimal clearly.

Cote d'Ivoire: The forgotten war?

This article talks about the role of the media in the Ivorian war. About thousand of people have been killed and the country has been sliding slowly towards a civil war between the pro Ggabgo and the pro Alassan (who where both proclaim has president of Ivory Coast). The Banks are closed, there is an ongoing battle right in the middle of the economic capital, people are stranded in their home with no food, and final the borders are close therefore no one can go out nor come in. My family was almost attacked by armed rebels and prisoners that have escaped the prisons and a bomb recently killed one of my family members.

Yet the medias have forgotten about the Ivorian situation because of new up coming stories such has Libya. This makes me question the role of the media and their credibility, They are suppose to inform us about what is currently going on around the world and it seem to me that they are not doing so, instead they select what to information is more important to them or which is good for business.

The Budget- the real fight begins

This week Congress has been busy with three overlapping budgetary debates-about a “continuing resolution” to keep the government up and running for the rest of this fiscal year, about next year’s budget and about whether to raise the legal limit on the federal government’s debt. Next year's budget must be figured out by lawmakers in under 6 months and America's debt will reach the current ceiling in under 6 weeks. But without a new resolution, the government’s authority to spend will expire at midnight on April 8th

New Deal avoids government shutdown

Democrats and republicans have struck a deal regarding the government budget. Both parties gave compromises while the democrats agreed to cut nearly $80 billion from the proposed budget for the year, equalling nearly $38 billion less from current spending levels. Although this bill has passed, the next challenge will be the agreeing on raising the debt ceiling imposed on the federal government. The republicans say they will not pass the bill unless the democrats agree to even larger budget cuts, which had led this past bill to almost not pass. Only time will tell.

College Enrollment Fell Slightly in 2010

This article talks about the recent fall in the percentage of high school graduates that are going on to attend universities and colleges around the country. This stat can be expected with the loss of jobs and the continued rise in tuition costs. However, the government needs to find a way to get these kids into schools and ease the burden on their parents. The U.S. can no longer afford to fall behind in education to the rest of the world. The government needs to put in place a system that will get kids the adequate finances and financial aid to allow them to further their education. It will only benefit the system as a whole if a larger percentage of the people in the United States are educated past high school. It is the new standard of the world.

The Truth About China

This article describes a white paper released about China, which reveals political unrest kept quite by Beijing. It reveals how China has resorted to more informal detentions (which can only infer possible illegal action by the Chinese government), as well as an increased role of the military in staving off political unrest. This is troubling news for the international community because it signals a possible larger movement against the government in the long run. Political instability would hinder the efficiency of China's economy, greatly slowing their growth.

I think political unrest is possible in China, however much the military becomes involved. Over the short term we shouldn't see any serious attempts at regime change, but it is my opinion that a a slow movement for change will take place, and a change to a two-party political system could rattle their economy, allowing the US to regain or increase their GDP size lead.

Mango Farmers, Fisherman Fight India Nuclear Plant

Indian government's plan of building a nuclear plant in Jaitapur is facing stronger oppositions than ever. The nuclear plant is supposed to help solving India's power shortage problem: it is supposed to generate twice as much the power produced in Fukushima. As the second-fastest growing major economy, India has a very high power demand, which is increasing at a high rate.
The plan has been opposed by local people live near the site, and not just for the possibility of a crisis like in Japan. Local fishermen argue that hot water discharge pose a risk to fish stocks, while a security cordon would block access to the sea. The prawns, mackerels and king fish from the sea off Jaitapur are exported to markets from Europe to Thailand and Japan. Now, protesters say Jaitapur could suffer the same fate as Fukushima, where Tokyo Electric Power Co. is struggling to contain radiation leaks after a partial meltdown.
“Earlier, government officials used to say: ‘Look at Japan. It has so many nuclear plants in earthquake-prone areas and there have been no accidents,’” said Praveen Gavankar, a 57-year-old Alphonso mango grower who is also one of the leaders of the movement. “Now we are saying: See, we told you it was dangerous.”
Nuclear Power Corp. (NPCIL), argues that the site sits on average 24.5 meters above mean sea level, reducing the tsunami risk. The company also claims water discharged into the sea will be at most about 5 degrees Celsius warmer and confined to an area of 0.28 square kilometers. There have been no adverse effects on marine life at existing coastal nuclear power sites, according to NPCIL. Nevertheless, the company will “revisit” its plans after it gets more information from Japan, according to Chairman Shreyans Kumar Jain.
The delay of a new power plant will affect India's economy negatively. But with the current nuclear crisis in Japan, it is hard to predict the fate of this plan.

Rising oil prices beginning to hurt US economy, weakening the benefits of stronger job growth

Gas prices are rising again. "Just when companies have finally stepped up hiring, rising oil prices are threatening to halt the U.S. economy's gains". The higher gasoline prices were primarily caused by unrest in middle east and Africa. Plus strengthening US economy drives up demand for energy and oil in particular. From a consumer perspective, "more expensive energy siphons away money that would otherwise be used for household purchases, from cars and furniture to clothing and vacations". I don't see any reason why would oil prices go down in the near future, however according to the president of the Federal Reserve Bank of Cleveland, Sandra Pianalto, "large increases in food or energy prices tend to be temporary. History shows that they are often followed by sharp declines".