GOP Senator, in Reversal, Backs Gay Marriage

http://online.wsj.com/article/SB10001424127887324532004578361971252212296.html?mod=googlenews_wsj

Yesterday, Ohio Senator Rob Portman became the first among current Republican senators to support same-sex marriage. Portman disclosed in an opinion article he wrote in the Columbus dispatch that he has reversed his position on same-sex marriage, “I have come to believe that if two people are prepared to make a lifetime commitment to love and care for each other in good times and in bad, the government shouldn't deny them the opportunity to get married.” Portman said he changed his mind after his son Will, now 21 years old, told him two years ago he was gay. His announcement comes at an interesting time, when acceptance of same-sex marriage is growing incredibly quickly. Do any of you think this could be an opportunity for the Republican Party to move more toward the middle on same-sex marriage? 

British Learning From Sweden

Middle-Income Claptrap

View the article here.

The middle-income trap is the idea that a middle-income country could end up stuck between poor countries with lower wages and rich countries with better technologies, leaving them to compete with both countries above and below them. Adding to this, poor countries have the benefit of being able to move workers from surplus-labor industries into more productive ones. In fact, the Lewis two-sector model can help to explain why this trap may be a very real thing. As workers move from unproductive sectors into more productive ones, such as from agriculture to industry, a country experiences large growth. However, once labor is being used efficiently a country must instead rely on improving productivity within their factories.

The author of this article argues that this may not be the case. He cites a study done by the Royal Bank of Scotland which found that movement between agriculture and industry and service sectors contributed only 1.4 percentage points of China's annual growth between 1995 and 2012. Furthermore, countries can remain competitive at all wage levels since wages and productivity exist along a continuum. Finally, growth models are continuous, and while the Lewis two-sector model explains a large part of growth, it is not exclusive. Factories are constantly improving their productivity while their workforce arrives. The author concludes by saying there are numerous traps that countries of any income level can fall in to, and that there is no reason to single out the middle levels.

Brazil Expands Mines to Drive Future, but Cost Is a Treasured Link to Its Past

As part of the Brazilian economy's attempt to move forwards its slow-moving growth, one of the large mining companies plans to extend its work in the Amazon. The company claims that this expansion would create 30,000 for rural workers in an area where jobs are badly needed. However, the expansion would involve the Carajás caves, an important archeological site. Archeologists have been studying the site since the 1980s and have found signs of life from 8,000 years ago. With several important archeological finds in Brazil in the past decades (some complicating the upcoming Río olympics), there has been increasing focus on the country's ancient history. This mining company has offered to preserve several of the cave areas, but plans to mine the majority of them even while admitting their archeological importance and hiring several archeologists to investigate the site. The government has become involved because the company was once nationalized and the government now holds a large part of its shares. The issue is, therefore, how to find a ground between development and preservation.

http://www.nytimes.com/2012/12/16/world/americas/in-brazil-caves-would-be-lost-in-mining-project.html?pagewanted=1&ref=americas

Workweek Tying Longest Since WWII Spurs Hiring at U.S. Factories

Extremely long factory work weeks seen recently caused the creation of 52,000 new jobs in manufacturing.  Instead of paying so many workers time and a half, it has made more sense to hire additional workers.  Right now, we are seeing the strongest U.S. auto industry since 2007.  New home sales have also jumped to their highest level since the summer of 2008.  In February, production workers averaged 41.9 hours a week, with the record being 45.4 hours a week in the winter of 1944.  This necessity for new workers was a major factor in bringing the Unemployment Rate to the four-year low of 7.7%.  If demand stays steady, this increase in demand for workers may continue as they are forced to hire for future needs.  Along with additional job openings, the Labor Department also reported that employers in January fired the fewest workers since tracking of this data began twelve years ago.  Also as a result of higher demand, auto suppliers are also seeing a need for more employees.
This article implies that consumer confidence is on the rise and that the unemployment rate will continue to fall.  However, while Ohio's unemployment rate is below the national average, it saw an increase in January.

http://www.bloomberg.com/news/2013-03-13/workweek-tying-longest-since-wwii-spurs-hiring-at-u-s-factories.html

Should the US continue to make huge foreign aid payments while domestic programs face drastic budget cutbacks?

http://www.foxnews.com/us/2013/03/06/should-us-make-huge-foreign-aid-payments/

The Obama administration gave $250 million to Egypt, and has received criticism for this because of the cutbacks in other parts of the budget.  One cutback that especially received criticism was the release of "low-priority" illegal immigrants from jail.  However, Secretary of State John Kerry described Egypt as an extreme need.  Should the United States drastically cut foreign aid because of the cuts in our budget?  And if foreign aid is reduced, what is the most important criteria to determine what countries receive aid?  

America's fastest growing job pays poorly

http://money.cnn.com/2013/03/11/news/economy/fastest-growing-job/index.html?iid=H_E_News

Home health care aides are the fasting growing job in America due to the aging population of the Baby Boomers.  About ever eight seconds a Baby Boomer turns 65.  It is predicted that this job will grow 70% between 2010 and 2020.  However, the average hourly wage for health care aides is only $9.70, and they are exempt from federal minimum wage and overtime laws.  Even though some states have passed protections for these workers, a quarter of home health aides make less than federal minimum wage.  Most of these workers are women and minorities, and then majority are not very educated.  These factors make it harder for them to have bargaining power against companies.  However, an increase in wages means that there is a higher cost for the elderly who need care.  

Professor Perks

Faculty perks are of huge importance to distinguished alumni at the top universities in the United States.  Although college costs keep increasing and students keep applying for more loans, universities are offering fabulous incentives, perks, and benefits to faculty. This article outlines the huge pay out that many faculty are getting when stepping down from a top position. For example, James Madara - the medical dean and hospital chief at the University of Chicago - received $2.5 million in severance when he stepped down in 2009. Unlike students, Harvard's faculty can apply for no-interest educational loans. The universities are pointing to getting and retaining the top professors for these special loans and off the charts perks and pay outs. What are your thoughts on professors getting these incentives, while us (students) are paying a fortune for an education?

Link: http://www.bloomberg.com/news/2013-03-12/universities-pile-on-faculty-perks-as-student-costs-grow.html

Public to Private

Mary Schapiro, the recently retired head of the SEC, has been nominated to GE's board of directors. If voted in, Schapiro will make a very nice buck. All board members make around $250,000. As chairwoman of the SEC, Schapiro was paid around $165,000. Schapiro has experience on boards, she served on the board for Kraft Foods and Duke Energy prior to joining the SEC.

Link: http://dealbook.nytimes.com/2013/03/11/mary-schapiro-is-nominated-to-g-e-board/

Italy is facing more than one problem

Italy is in limbo. Currently they have no active government and the Vatican is in a search for a new Pope. This article outlines the frustrations, emotions, and challenges Italian citizens are feeling due to this unique situation. Interestingly, the article points out that since 1948, Italy has had 58 governments. As we have learned in class, Italy is in the middle of a deep recession and the Vatican is fighting a sexual abuse scandal. This Tuesday will be the when the Cardinals meet and start discussing the next Pope. Unfortunately, the EU and Italian citizens will be in a state of nervousness, frustration, and, for some, concern until the next election. The election is VITAL for Italian citizens, Italian companies, and the entire EU.

Link: http://www.nytimes.com/2013/03/09/world/europe/italy-uneasy-over-vacuum-in-vatican-and-government.html?_r=0

Chavez's death could hit Florida real estate

http://money.cnn.com/2013/03/07/smallbusiness/chavez-real-estate/index.html?iid=SF_SB_Lead

The recent death of Hugo Chavez will have affects that extend much farther than the borders of Venezuela. When the housing market crashed back in 2007, there were many expensive and high-end condos and homes left vacant in Florida. Many of the rich Venezuelans looking to escape Hugo Chavez's socialist economy went and bought up many of the vacant properties. With his recent death many of the people known for buying up properties will be sitting idle waiting to make decisions on whether to make purchases or not in Florida or back in Venezuela.  

The Iran-North Korea Axis of Proliferation

Article HERE

This Forbes article discusses the consequences of economic collaboration between Iran and North Korea, two states the United States considers "rogue" and highly dangerous. The two states have been doing business together for quite some time in an effort to skirt crippling sanctions placed on them by the United Nations and recently signed an agreement to kick off scientific and technological collaboration as well.

Many (especially in the United States) are extremely concerned about this development - it is suspected that the nations are using the agreement as a front for exchanging information regarding the development of nuclear weapons. Deeply impoverished North Korea has already demonstrated willingness to sell sensitive information to the highest bidder, and Iran (according to the article) is flush with oil money that it is eager to put to good use pursuing nuclear technology.

Perhaps it is time to begin intense investigations designed to freeze illicit North Korean assets worldwide to cripple the regime.

Workers don't share in companies' productivity gains

http://money.cnn.com/2013/03/07/news/economy/compensation-productivity/index.html?iid=SF_E_River

The gap between productivity and hourly compensation for workers is the lowest it has been since WWII, which has been one of the major dividers in income inequality.  Productivity has grown 80.4% between 1973 and 2001, while there has only been a 10.7% growth in median hourly compensation.  The decline in union power and the national deregulation has led to this income gap.  Additionally, because unemployment is around 8%, workers feel lucky to have a job and do not want to ask for a raise.  However, hourly compensation does not include worker benefits and some believe that as the economy recovers this gap will decrease.  I think this article relates to what we talked about in class with the shareholder and stakeholder interests.