It’s Time to Make Vague Software Patents More Clear

 An interesting take on where the USPTO should go with software patent laws. The article says that current laws don't encourage innovation and gives several suggestions on how we could improve that.

http://www.wired.com/opinion/2013/02/its-time-to-make-vague-software-patents-more-clear/

UN Economic, Social, and Cultural Rights Complaint Tool

The article announces that the UN has issued a tool enabling individual complaints on social, cultural, and economic rights. This "human rights" instrument will allow victims to file their claims on the international level. Within these violations are inadequate access to food, work, and housing. The idea behind the project is that those most affected by these economic problems are usually those that are most isolated and powerless in making the world aware of their situation. The article states that the entry of information and complaints into the Protocol will allow for a better understanding of the scope of economic problems and remedies. It also makes a statement of the UN's recognition of the need to strengthen the protection of economic rights. However, the article does not explain exactly how the protocol is to work, or how the complaints will be organized and formed into responses. Personally, it seems unlikely that this information will be formed into economic reforms; however, it's existence can only help.

http://www.un.org/apps/news/story.asp?NewsID=44081&Cr=cultural&Cr1=rights#.URbE26XqMVn

Unconventional gas in Europe: Frack to the future

View the article here.

The recent expansion of the fracking industry in the U.S. is leading us to energy self-sufficiency and giving our economy a nice boost. Now it seems Europe wants in on the benefits. It is estimated that Europe's shale-gas deposits might match those found in the U.S. however regulations on fracking are much more strict. These environmental regulations (and outright bans) often make it uneconomic for gas companies to drill in many European countries. France, in particular, is adamantly against fracking. However, some European countries, seeing its promise in the U.S., have begun to deregulate fracking. Most recently Ukraine made a deal with Shell to start probing for unconventional gas sources.

If the fracking industry were to expand in Europe it could bring some much needed jobs, revenues, and energy independence. Russia voiced its disapproval of this new deal, since it exports to many European countries. Experts estimate that it may take up to 5 years to determine if shale gas exists in Europe in commercial quantities, but rolling out the welcome mat is the first step.

Higher Gas Prices?

We have all become accustomed to hearing the words, "expect gas prices to rise...". They are often plastered all over the news, articles, and newspapers. In a Marketwatch article by Myra Saefong, we begin to see her reasoning behind why she agrees. In one week, the average price per gallon of gasoline has jumped 17 cents, the highest weekly jump in two years. Also, during this time many refineries are typically switching to their summer blend which is more environmentally friendly. During this transition supply is temporarily cut, and the price is naturally driven upwards. Speculators and investors have anticipated this, which has already forced the price up. Price peaks for 2013 vary anywhere from about 3.70/gallon to over 4.00/gallon for high traffic areas. The only glimmer of good news for WTI (West Texas Intermediate) is that increased production of shale oil production in North Dakota and Texas should help with countering the volatility that is expected.

Read More

The American Deficit

The deficit has been a topic highly discussed and debated in all of my years at OWU. We have talked about it in multiple classes here in Corns, listened to guest speakers, etc. This article from the Economist states that on February 5th, the Congressional Budget Office (CBO) forecast that for the fiscal year ending September 30th the deficit will clock in at $845 billion, or 5.3% of GDP.  This is significant because this figure will be the lowest since 2008 and in addition, it will be down nearly half from its peak of 10.1% in President Obama's first year in office, 2009. The deficit will obviously be a huge issue for President Obama in his second term. Let me state that the project is assuming President Obama and Congress do not override planned spending cuts and tax rises, most importantly the "sequester." President Obama has also stated that he is prepared to both cut entitlements and raise taxes as part of a broader deal. He and John Boehner were the topic of media attention in December but a deal never went through. Now, the problem is, if any changes occur to the already proposed plan or if the two parties don't find a common ground/compromise, then the long-term debt problem may never be addressed. So when is it too late for the American government to really understand the consequences of pushing off this further? They obviously are concerned about the issue, but the constant changes in both parties' requests have hindered the issue even further. 

Here is the link for the Economist Article

The New Capitalists

This article is in today's addition of The Economist.  It is talking about how North Korea, an example of a socialist economy, in some respects, is moving toward being a capitalist market.  This is not a political move, but instead is an economic move by the people.  It encourages people to give to the radio station that streams into N. Korea so that the people there are more informed that their current system is not free.  This is interesting to me because one of the few examples of a planned economy is appearing to change a bit.

Check out the article HERE!

The Next Supermodel

Since we have been talking about different markets in class, I read an article that discusses a few countries that are doing well using their private sectors as well as government intervention.  The Nordic countries, especially Norway, are currently in an economic boom with satisfied citizens.  They have found many ways to improve their society.  Their taxes have been lowered, corporate income tax is only at 22%, but they have been able to employ and spend enough government money to keep their economy growing.  While the US struggles with a deficit that is about 7% of our GDP, Norway only has a 0.3% deficit.  Their government is not having to deal with the financial burden that we are here.  At the end, the article declares that these countries are not perfect but that they are models that can be studied since it's actually reality and not just theory.

The Next Supermodel 

India to cut some subsidies in order for greater Food Security

http://www.business-standard.com/article/economy-policy/cut-energy-fertiliser-subsidies-to-make-up-for-food-security-montek-113020600706_1.html

The Planning Commission of India is a body comprised of top economists and headed by the Prime Minister in order to decide on the nation's economic issues. It is a powerful body and controls the levels of subsidies, Government involvement, etc.

Essentially, the deputy chairman of the planning commission makes most of the decisions as the Prime Minster almost always listens to him without question. Presently, Mr. Montek Ahluwalia is the Deputy Chairman. He was educated at Oxford, was the president of the Oxford Union, has served in the World Bank, and, in my opinion, is a complete idiot. The person has no idea about the indian grass-roots society and is making decisions that affect the lives of many.

In the article, you all can see another such instance of his foolishness. He wants to cut energy and fertilizer subsidies at a time when they are of utmost importance. Cutting fertilizer subsidies will raise the price of food and the middle-class, already depressed because of drastic increase in price levels in a short-period of time, would again bear the brunt.

Similarly, reduction in energy subsidies would cause the prices of everything to go up. Mr. Ahluwalia fancies himself as a reformist. However, he needs to realize that in order to reduce Government involvement in the private sector, one needs to make sure that the country's population would have employment. In a country where still about 40% of the population (more than the entire population of the United States) lives below the poverty line, one cannot reduce subsidies at a time when the economy is not growing, people are finding it hard to get jobs, and the middle-class is reeling under high prices.

Also note that Mr. Ahluwalia wishes to reduce these subsidies in order to accommodate the Food Security Bill. This bill was actually the brainchild of the President of India's biggest political party. The president's name is Sonia Gandhi and she currently holds no political position. However, she is the most powerful person in India as the Government was formed by her party. She herself could not become the PM because she was born in Italy and became a citizen of India only after her marriage to an Indian. Under her, nepotism runs wild. The prime minister, cabinet ministers, and even the deputy chairman of the Planning Commission are all her lackeys. And therefore, they would rather reduce subsidies and hurt the citizens than not implement her brainchild bill (Food security) and annoy Mrs. Gandhi.

French Taxation

In the second supplemental reading listed for Friday, “So much to do, so little time” the author references François Hollande’s plan to impose new taxes on companies and the rich, including a 75% top tax rate on incomes above $1.3 million.

Mr. Hollande contends that the tax increases are a “symbolic” measure, “never pretending that the rate increases would raise much cash.” Nevertheless, in late December France’s top court ruled that the 75% millionaire-tax is unconstitutional because it fails to guarantee taxpayer equality.

Although the 75% tax rate has been avoided for now, increased taxes on companies, capital gains, wealth and income have made negative impacts on many. The author argues that it is the combined influence of these taxes that have driven celebrities to leave the country and entrepreneurs to criticize the government for encumbering wealth creation.

http://www.economist.com/news/europe/21569068-françois-hollande-remains-intent-introducing-punishing-top-income-tax-à-bas-les-riches

Barclays to Cut Jobs in New York

 February 6, 2013, 6:15 p.m. ET

Dozens of bankers, traders and support staff who survived the collapse of Lehman Brothers Holdings Inc. will face layoffs in the latest round of Wall Street cutbacks.

Barclays BARC.LN +0.07% PLC plans to cut 275 New York employees in three locations around the city, including the former Lehman Brothers headquarters at 745 Seventh Ave. in Midtown Manhattan, the company said in a filing Wednesday with the New York State Labor Department. The company wouldn't say how many cuts will come at each building.

The cuts are part of a broad strategic overhaul set to be presented by Chief Executive Antony Jenkins next Tuesday. The Wall Street Journal has reported the firm could cut as many as 2,000 jobs in its investment bank.

Barclays had 23,300 employees in its investment bank as of June 30. The firm doesn't disclose its headcount for the Americas.

Lehman Brothers collapsed in September 2008 in the biggest-ever U.S. bankruptcy filing, leaving thousands of workers unemployed. Barclays later acquired the company's U.S. investment-banking and capital-markets operations.

Barclays, like its competitors, has been struggling with clients' diminished appetite for dealmaking and weaker trading volume. The company also has been damaged by scandals including a settlement of a rate-rigging probe that has now netted two other giant global banks.

http://online.wsj.com/article/SB10001424127887323452204578288332951705680.html?mod=WSJ_Markets_LEFTTopStories

China Signals Faster Push to Tackle Income Gap

February 6, 2013, 2:33 p.m. ET

BEIJING—The breadth of a plan to narrow the gap between rich and poor, and the fact that it came out at all, heightened the sentiment that China's leaders may be ready to take on powerful interests quickly rather than laboriously trying to reach a broad consensus first.

China's state planners have debated income inequality plans for eight years, and come up with at least a half-dozen drafts, but hadn't managed to win final approval, largely because of opposition of state-owned firms and other powerful actors that could be on the losing end of an income-redistribution scheme.

Premier Wen Jiabao set a final deadline of the end of 2012—and that one was missed as well.

http://online.wsj.com/article/SB10001424127887324906004578287614272457212.html?mod=WSJ_business_AsiaNewsBucket

High oil prices drive Greeks to burn wood

In Greece, the coalition government has pushed the price of heating oil to about 1.50 euros per litre by raising the tax on heating oil by 40 percent. That has caused a drop of a reported 80 percent in demand and forced many Greeks to move away from buying oil and find other means to keep warm. Some are even chopping down trees in the woods and city parks. The concern is to cut back on expenses, households are turning from oil to wood to heat their homes, but in turn are filling the night air with potentially hazardous pollutants. Burning wood in the home releases 30 times more air pollution than using a well-maintained heating oil or gas-burning boiler, resulting in an increase in air pollution which can lead to respiratory problems as well as aggravating allergies and disturb the neurological and reproductive systems. The problem has become so bad that the wood smog has been detected outside the main cities, including the western city of Patras and in northern suburbs of Athens. The wood smog phenomenon emphasizes the needs to move away from both oil and wood as fuel and heat sources, but then do they have other choices?

Source: http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2013/01/18/feature-03

Taking Europe's Pulse

This article from the Economist gives a nice info graphic view of various European countries and certain features of their economy. One of the more interesting pictures is the public debt as a percent of GDP map. Looking at this map you can see which countries are in control of their public debt and which countries are not.

BP Still Suffering Effects of 2010 Oil Spill

Following the oil spill in April 2010, BP is now faced with a fresh lawsuit for economic damages. Parties interested in getting compensation are many state and local governments in the South, with a demanded compensation of $34 billion.

BP representatives say that the company has set aside $42.2 billion so far and call the calculation method of these fresh claims "flawed." The company faces its final civil trial this month and are still hopeful for an out-of-court settlement. The latest financials show a 20% drop in profit for BP this quarter ($5 billion to $4 billion) due to a necessary sale of assets to pay damages ensuing from the disaster. CEO Bob Dudley remains optimistic about possible new ventures.

The company has already settled charged with the US Department of Justices and are yet to pay damages as ascertained by the Clean Water Act as well as the unquanitified natural resource damages.




http://www.guardian.co.uk/business/2013/feb/05/bp-deepwater-horizon-charge-rises

Brazil's Nightclub Fire

http://www.economist.com/news/americas/21571149-better-fire-prevention-should-be-memorial-night-hell

During a concert at a club in Brazil, a member of the band set off a street flare on stage, which caught the building on fire and led to the deaths of 235 people.  Another 100 are injured, many of which are in critical condition.  A majority of these people were students.  In an effort to collect tabs and not yet seeing the fire, bouncers first blocked people in attendance from leaving.  This surely increased the number of deaths and injuries seen as a result of the incident.  The club was also over capacity by over 300 people.  The club also had an expired public-health license and fire safety plan.  

In Brazil, each state sets its own laws.  A proposal to set minimum national standards went to Congress in 2007, but has yet to be pushed through.  Enforcement will be needed to render any new laws effective, but lining up enforcement is the job of mayors in Brazil.  Many clubs run without licenses because of the long wait and high amounts of paperwork needed to get the proper registration.

 

What type of government policies could prevent events like this from happening in the future?  Could one form of government control these tragedies better than another?   

Dell Closer to Buyout as Price Talks Narrow: Source

It appears a deal to take Dell, the world's third largest computer maker, private is set to go through.  The buyout is being done by a consortium led by former founder, Michael Dell.  Currently the buyout price has been narrowed from $13.50 to up to $13.75 per share.  This would give Dell a market value of up to $23.9 billion and make this the largest buyout since the financial crisis.  While even the $13.50 valuation is an improvement from the $11 the stock traded at before news of the potential buyout surfaced, it is a far cry from the $17.80 the firm traded at the previous year.  This rapid devaluation of the firm's stock reflects the loss of market share Dell has suffered to competitors like Lenovo Group and indicates the decline the company has been experiencing.  Michael Dell and his partners will hope to re-ignite growth in the firm if they are able to acquire it.  As for the economy as a whole, the fact that large-scale leveraged buyouts are beginning to occur again is a huge sign that the economy is recovering and that institutions are regaining an appetite for risk.

http://www.cnbc.com/id/100433280

Because Green Goes With Everything

In this article by the New York Times, Ron Shiffman an urban planner is interviewed. Ron has spent over 50 years trying to make New York City more livable and sustainable. In the interview, Ron states that going green is not a "fad" but it's a necessity. The city has done many things to improve their sustainability. I believe Ron is right that going green is a necessity, not only for New York City, but also for other heavily populated areas. I think there are many positive externalities that people can enjoy that go along with building and renovating communities to become more sustainable and environmentally friendly.  Although the initial cost may be higher to build more efficient buildings and better public transit systems, in the long run the energy savings alone should compensate for the initial investment. Not only will the citizens pay substantially less for energy (estimated 20-70%), but they will also have access to an outstanding public transit system that will help keep traffic in the densely populated area less as well. There is also the health side of the debate. Who can put a price tag on your own health? According to the article, New York City has rerouted delivery trucks, cleaned up rivers, landscaped medians, and planted tree pits in order to capture water. All of these measures help clean up the air and the greenery helps lower cooling cost in the summer. I think these steps taken in New York City will be taken into consideration by other urban planners and I hope to see continued improvements in NYC.

http://www.nytimes.com/2013/02/03/realestate/debriefing-because-green-goes-with-everything.html?pagewanted=2&_r=0

Why Do Chinese Billionaires Keep Ending Up in Prison?

http://www.theatlantic.com/international/archive/2013/01/why-do-chinese-billionaires-keep-ending-up-in-prison/272633/

As China's economy has grown, so has the number of wealthy Chinese. However, the top 1% has also suffered increased scrutiny, resulting in numerous investigations, arrests and imprisonments of China's richest citizens.

Is it more dangerous to be a billionaire in China than the United States? Statistics cited within this article would say yes.

Forbes Magazine and its Chinese equivalents post yearly lists of China's richest, the most famous being the Hurun Rich List. After the release of each list since 1999, many of the wealthy and their respective companies have experienced declining share prices and have received fewer government subsidies. Additionally, a large number of tycoons who were once mainstays on the list are now embroiled in corruption scandals and serving lengthy prison sentences.

The author of this article, Rebecca Chao, outlines two main reasons behind China's issue of disappearing billionaires:

-The first is that the nature of a booming, developing nation allows fortunes to be amassed quickly without much deference to the rule of law. When such a country continues to gets richer, the government is then compelled to enforce regulations more strictly and punish illegal business practices. Many of the wealthy Chinese billionaires first amassed their fortunes with the help of widespread corruption. Subsequently, that corruption is now being investigated with real consequences.

-The second reason is what Chao describes as the government interest of 'killing the chicken to scare the monkeys'--essentially sending a message to corrupt businessmen and officials. Moreover, Chao describes the interest of the Chinese government to condemn ostentatious displays of wealth when the vast majority of the country is still struggling to improve their meager economic lot.

Extreme income inequality, heavy Chinese emigration to Western nations, and the common practice of the wealthy hiding their fortunes through 'clever' accounting are all major problems for both the government and its citizens. At this point, many wealthy Chinese see reaching the Hurun Rich List as a curse very much worth avoiding.

Is this issue exclusive to command economies? Is this one unique advantage America has over China, a more equitable judicial system that checks government oversight and protects certain rights? How much of a role does China's 'command' economy play in the persecution of corrupt businessmen?

Netflix's $100 Million Bet on Must-See TV

Netflix recently announced that they will be showing an original series of their own, "House of Cards." While I've noticed that Hulu Plus has their own TV series as well, I was surprised at Netflix's star-studded cast and ambitious expenditures. The program is a $50 million per season investment, and economists are saying it's pretty risky. But Netflix says they want to be seen as not only a distributor of other producer's shows, but to be a provider of "an experience that cannot be replicated by [our] competitors." The article also mentions that streaming others' content is becoming more expensive- yet another incentive for Netflix to start up some unique material. Do you think Netflix is making a smart move? The pricey new show will cost the company nearly $2.00 per share with the first two seasons alone. But I personally admire their bold move, and I respect how they are trying to up their game against other online streaming websites. I think Netflix is popular enough that a successful TV series will prove to help them more than disappoint.

http://money.cnn.com/2013/02/01/technology/innovation/netflix-house-of-cards/index.html?iid=HP_LN

A New Model of Capitalism for Nordic Countries

This article from The Economist talks about Sweden's slow move toward more conservative economic policies and how that has helped their economic growth. Public spending as a share of GDP is 49% today while it was 67% in 1993.The corporate tax rate has also been decreased from 26% to 22%. As a result of these changes Sweden's economic performance has benefited. Between 1993 and 2010 GDP growth has averaged 2.7% a year, outperforming many other EU countries. Despite their conservative movement, Sweden has a strong welfare state still with 30% of the labor force employed by the Government. It seems that Sweden has slowly improved its institutions in a way that doesn't undermine their basic foundations, but have increased their performance.

China's latest investment craze: U.S. pecans

http://money.cnn.com/2013/01/31/news/economy/china-pecan-exports/index.html?iid=SF_E_River

The article basically says that the Chinese are developing a thing for US pecans. The trend started a few years ago in 2007 when the price of China's previously favorite nuts - walnuts - rose significantly. Because of the rise in the price of walnuts, the Chinese had to look for a cheaper alternative and they found US pecans which accounts for 80% of worldwide supply.

Last year, over 20% of U.S. production went to China! Next year, this number is expected to increase to over 30%. This is fantastic news for pecan growers in the US,  found in every state south of the Mason-Dixon Line but especially concentrated in Georgia, Texas and New Mexico. However, China's interest in US pecans has also kept the price of pecans high for both US consumers and European food companies that use them as an ingredient. That has essentially led to a number of US food makers having chosen to cut back on the use of pecans.