El Salvador's Presidency and Switch to Cryptocurrency

     El Salvador has made headlines in the past week for two things, the decision made by the country's supreme court to allow presidents to run for a second consecutive term, and the addition of bitcoin as its currency/legal tender. The country is known for its unstable government and high homicide rates since its civil war and many citizens have been looking for a solution. President Nayib Bukele has become extremely popular since he has come into office in 2019 for lowering crime rates across the country, building new infrastructure, and providing food stamps. But his astronomical rise to power has not been without questionable political moves in the face of democracy. After gaining a super-majority in the legislature in february, five supreme court judges were replaced with some of his sympathizers to help allow him to change the constitution to have the ability to run for a second consecutive term, which he is now looking to do in 2024. The question then becomes, what will happen now, when Mr. Bukele has the judiciary system on his side? The current situation looks like it is transitioning to an authoritarian rule, something that El Salvador has been struggling to avoid.

     The switch to bitcoin as legal tender has also caused many questions on how the country will change. Having a source of national currency as volatile as bitcoin has raised many eyebrows and has the world looking at El Salvador. When goods and services are tied down to a volatile currency, the biggest question becomes, how will this effect the market? The reason for the addition of bitcoin is due to almost 20% of El Salvador's GDP coming from overseas, where transaction costs are expensive. To counteract this, switching to bitcoin would lower these fees and allow the transferring of money to become much easier. But many citizens in the country are worried, as almost half of the people do not have internet access, and are suffering from problems internally. Is the switch to bitcoin a good decision? Is the switch untimely or ignoring other issues within the country? So many questions arise from both an economic and political standpoint when it comes to El Salvador.

 

Sources:

https://www.economist.com/the-americas/2021/09/11/el-salvadors-bitcoin-bro-president-is-beloved-and-dangerous

https://www.reuters.com/business/finance/el-salvador-leads-world-into-cryptocurrency-bitcoin-legal-tender-2021-09-07/

https://www.newscientist.com/article/2289763-why-has-el-salvador-officially-adopted-bitcoin-as-its-currency/

 The new outbreak of the Covid-19. Do vaccines work?

The world has suffered from Covid-19 infection. People have lost members of the family, jobs,

freedom. I remember everyone took it as a joke. Our university had a spring break at the beginning of

March 2020. This break started a new chapter in students’ lives. I was watching the news, New York

started to shut down their university due to pandemics. No one did not think that this pandemic will kill

an enormous amount of people, turn people's lives into chaos. Starting in 2021 people started to get

vaccines. It seemed to be the end of the pandemic. The president of the United States announced that

people don’t have to wear masks anymore. So what happened? Why do we have to wear them

again?

Since the new outbreak of the Delta variant of the Covid, people have to keep social distance and wear

masks. So why did we get vaccinated? The data shows that the average number of new Covid cases in June was

around 15,000 cases, but it increased dramatically up to 150,000 in late August. According to CDC,

vaccines are highly effective. Unvaccinated people were 11 times more likely to die of covid-19, CDC

report finds. However, it is hard to make people get vaccinated due to the rights of the people or religious

beliefs. The president recently announced that workers companies with 100 or more employees

should be vaccinated or show negative test results each week. In my opinion, every person should be

responsible for society. Either get vaccinated or wear masks every time they are outdoors.

Issues in the shipping world

 

   Of the many things that were messed up during COVID-19 the shipping industry was no exception. Prices have risen almost 4 times from a year ago. The article also mentions how firms are getting desperate and may start sending out faulty ships to try and keep up with demand. I wonder if we could see a backfire of this and having some sort of ship failure causing environmental or damage to the crew members? 

Its also interesting to note how the industry was in a very good place until the pandemic happened. After that the number of idle ships went up by 11% then when the stimulus hit the demand went up 27% causing massive delays and prices soaring. Along with all of this important ports in China were closed causing even more confusion in the industry. The article also mentions how it will take maybe over a year for the backlog to be fixed. 

What I wonder is that with the delays and all the issues will we see any firms innovate and attempt to come up with new ways to ship goods? I wonder if we will ever see drones sly goods across the ocean and if it will ever be viable price wise. Just something interesting to ponder. 

Source: https://www.economist.com/finance-and-economics/2021/09/12/a-perfect-storm-for-container-shipping

Greece's Economy Expected to grow by 5.9% in 2021 says the prime minister

Saturday Greece's prime minister Kyriakos Mitsotakis said he expects Greece's economy to grow by 5.9% in 2021. This is surprising considering the prime minister previously came out and had predicted growth of only 3.6%. As mentioned in the article this expected growth can be attributed to 70,000 more jobs, 46,000 more businesses, and bank savings increasing by 35 billion euros. Given the expected increase the prime minister announced a tax reduction as well as spending targeted at young people. Tax breaks for small businesses encourage them to merge as well as new entrants in the job market will be subsidized. Something I found super interesting is the government is going to incentivize getting the vaccine to 15 to 17 year olds by giving them 50 gigabytes of data for their smartphones. Another announcement by the prime minister was to lower the corporate tax rate from 24% to 22% for small businesses. The prime minister stated his goal was to "increase households' disposable income," as well as strengthing entrepreneurship in the hopes of creating new jobs. The new package sets out to boost liquidity, business growth, as well as promotion of green and digital investments. Surprisingly enough it was also reported that despite the series of strict lockdowns for Covid, Greece's quartile GDP is now back to running above pre-pandemic levels. The prime minister also mentioned a plan to combat a rise in prices. The prime minister plans offset the prices in food and power costs. In doing so the prime minister has announced tax reductions of sales taxes on coffee, transport, non-alcoholic beverages, cinemas, gyms, dance schools, and tourism packages until June 2022. 

Sources: 

https://www.usnews.com/news/business/articles/2021-09-11/greeces-economy-to-grow-59-in-2021-prime-minister-says

https://www.bloomberg.com/news/articles/2021-09-11/greece-forecasts-fastest-gdp-growth-in-2-decades-plans-tax-cuts 

Higher Wages, Higher Inflation

     Due to the earlier waves of Covid, production of non-medical goods saw a decline, and now that regular production has been picking up, the market is lagging behind. Due to the decrease production of important inputs such as raw materials and intricate parts, we are seeing input shortages that have made it difficult for American manufacturing companies to pick up where they left off. Along with the this, many people have refused to go back to work following the pandemic, which has caused a worker shortage all over the country. In fact, the Labor Department has reported 10.9 million open job positions in July, which is hard to believe considering the 5.2% unemployment rate that has been reported by the Fed. To aid with this problem, firms have been seen increasing their wage, subsequently increasing their prices. With the shortages in inputs and shortages in labor, we are seeing a two pronged attack on the price of goods and services. Due to the market being in disequilibria, we will certainly see improvement in the future, however. Due to the decentralization of the market system, the market will soon catch back up with production of inputs. To solve the problem of worker shortages, we will likely see innovation in capital that will replace workers with machines and computer programs in order to lower the currently inflated price of goods. 

Source: https://www.cnbc.com/2021/09/08/businesses-are-feeling-stronger-inflation-and-paying-higher-wages-feds-beige-book-says.html

Biden's vaccine mandate could be a shot in the arm for U.S. economy, experts say

    President Joe Biden announced a nationwide vaccine mandate which requires all employers with 100  or more employees to make sure their workforces are fully vaccinated or show a negative COVID test at least once a week. The government hopes that this mandate will not only protect lives, but the economy as well. Economists have attributed the U.S. economy's slower than expected growth to the highly contagious Delta variant. Until the virus can be contained, states with low vaccination rates will continue slower job growth than states where more of the population is vaccinated. 

    The mandate will affect about 100 million Americans, many of those already vaccinated. According to research from the Associated Press, about half of Americans are in favor of vaccine mandates for employees working in person at their workplace. This comes after the nation only added 235,000 jobs in August, which did not meet economists expectation of 750,000 new jobs. Employers looking for workers may see these numbers and take a page of the mandate to grow their businesses faster.

    However, there are questions to be answered from this new mandate. It is unsure how the vaccine mandate will be unforced and fines to companies who do not comply could be as expensive as $14,000, according to Biden. Also, this mandate could have an adverse reaction from employees, who may just quit rather than abide by the vaccine requirements, further slowing job growth. The largest question still to answer is the virus. Chief economist at Pantheon Macroeconomics, Ian Shepherdson, noted that Delta cases could peak as soon as this month. Therefore, the dip in cases could spur consumer confidence and grow the economy. Still, there is uncertainty about a possible winter surge in the future. So, it will be interesting to see how much dent the vaccine mandate will make in the ongoing pandemic.

Article link: Biden's vaccine mandate could be a shot in the arm for U.S. economy, experts say - CBS News

U.S Hiring Slowed Sharply in August.

 

According to the Labor Department, the U.S. economy added 235,000 jobs in August even though economists had estimated that there would be 720,000 new jobs. The unemployment rate fell from 5.4% to 5.2%, a decrease of 0.2% from July, and the wages increased 0.6% from the last month. The reason why less jobs were added was due to weak hiring in service sector. According to an economist at the Economic Outlook Group, consumers are cautious about spending. This is known to many businesses which is causing them to pull back on hiring. About 5% of events that were scheduled for the coming months have been cancelled and some have been switched to online. As the events are cancelled, businesses don’t have the need for many workers which has resulted in the hiring process slowing down. The pace of job growth is dependent on the direction of Covid-19 as it has already caused uncertainty and that’s why many employers are holding their hiring process. It is also expected that children going back to school will lure parents in the labor force as child-care responsibilities ease, especially for women. Employment at daycare fell during the pandemic because parents were working at home and so were able to look after their children themselves.

 

As Covid-19 cases rise due to the Delta variant, the job market will be impacted. However, the unemployment rate has declined significantly from July 2020 (10.2%) to August 2021 (5.2%) a decrease of 5%. This decrease is attributed to the availability of the vaccine as it has aided the economy into becoming stable again. If we are able to control the Covid-19 pandemic, the unemployment rate will decrease further and the economy might experience a boost again.  

 

 

Cambon, S. C., & Morath, E. (2021, September 3). U.S. hiring Slowed sharply in August. The Wall Street Journal. https://www.wsj.com/articles/august-jobs-report-unemployment-rate-2021-11630624394.

Biden changes sanctions on Venezuela, but what have we really accomplished?

    Venezuela's economy has been in decline for since before Obama was elected. Their government has been plagued with corruption through Hugo Chavez's time in office and after his death in 2013. His successor Nicolas Maduro has also caused lots of controversy since taking control. His election wins had many allegations of fraud and is viewed as illegitimate by the United States and many others. Despite the huge economic struggles Maduro has held significant control over Venezuela with the support of Russia, China, and other foreign Powers. The United States supports Juan Guaido as the rightful president of Venezuela.

    During Trumps time as president he imposed harsh sanctions in a "maximum pressure" strategy. The hope was the Maduro regime would not be able to maintain control in this state, however with the help of Russia and China, Maduro was able to capitalize on certain opportunities Trumps policy created. Part of Trumps policy was to have US companies remove operations from Venezuela causing massive job loss, hurting the civilian population more than Maduro. In the energy sector especially Maduro was able to seize control of an oil company after French and Norway followed the US lead in leaving Venezuela. In response to such harsh measures from the United States, Maduro brought a case to the International Criminal Court in 2020 claiming they were a crime against humanity.

    Since taking office Biden has rolled back the "maximum pressure" policies and is attempting more targeted approach with his sanctions. The goal to remove Maduro from power has remained constant but now more consideration to the real impact is being taken. The United States is trying to remove Maduro because he has created a dire situation for the Venezuelan people, however if attempts to remove him can also hurt the Venezuelan people, careful attention must be paid to what really works and whether or not the consequences are greater than the benefits.

Links:

https://www.uschamber.com/series/above-the-fold/overhaul-of-us-sanctions-policy-toward-venezuela-long-overdue

https://www.laprensalatina.com/venezuela-asks-icc-to-probe-us-sanctions-as-crime-against-humanity/

https://www.nbcnews.com/think/opinion/biden-needs-assert-u-s-leadership-venezuela-maduro-exploits-negotiations-ncna1278382

https://www.reuters.com/article/us-venezuela-politics-support-factbox/guaido-vs-maduro-who-is-backing-whom-in-venezuela-idUSKCN1S62DY

Japan seeks to ease military restriction through defense transfer deal with Vietnam

East Asia has always been very interconnected in the history between nations and their conflicts and cooperation with one another. The East Asian countries have also had their fair share of economic and political pursuits, which in turn has led to many problems. Taiwan, Japan, North and South Korea, and China are all intertwined in this very unique socio-political atmosphere that always has some kind of event or issue at hand.

    

    In Recent news, some Japanese government officials have made some comments about Taiwan and how they are supporting Taiwan, and are concerned about a potential attack on Taiwan from China; especially with a suspected Chinese Submarine off the coast of Japan, but this of course could just be a coincidence. China has taken notice of these comments and newfound support for Taiwan and have not taken too kindly to these Pro Taiwan ideals. China has a history of not liking or supporting any country or person who thinks that Taiwan should be free, and this is especially problematic since China and Japan have been allies since World War Two. 

    Due to these recent developments Japan met Vietnam to discuss and sign a deal that would transfer both technology and defense equipment to Vietnam. The main goal of this deal would be expanding Japan's influence to solve regional security issues and the equipment and technology are meant to aid the Japanese military in its efforts to help increase security. In this deal Japan hopes to expand its military presence in the likes of Indonesia and other parts of Southwest Asia as well. Asian Media has dubbed this situation as nothing more than a dig at China and this does seem to be quite true.

Wang Yi, both a Chinese foreign minister and state councilor visited Vietnam to discuss Japan's motives with Nguyen Phu Trong, who is both a General Secretary of the Communist Party of the Vietnam Central Committee, and the Vietnamese prime minister Pham Minh Chinh. According to several reports Wang reminded these officials “China and Vietnam must abide by the political consensus already reached over the South China Sea issue and avoid any unilateral action that may complicate the situation and escalate disputes.” Whether or not Vietnam will listen to China has yet to be seen, but I do think it is important to keep an eye on this issue as any time East Asia has a conflict, it has several parties involved and can and could get messy. There is also the possibility of tariffs and other economic outcomes which could spread to the rest of the world.

Sources:

https://www.globaltimes.cn/page/202109/1234044.shtml

https://thediplomat.com/2021/09/parsing-japans-support-for-taiwan/

https://news.yahoo.com/japan-detects-suspected-china-submarine-074447208.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAMuHVxxGF3FcfJDoAUCt3sLcgoE0gzAHps39kIycUka-tLmQgf6ycpwn85nUMRyrMSHM2BJran8U3W779ljhfp1m1MSlmlIs5PfPskuXK7QkatvAVSzk3SnbS3hAbUOShQoSlRZN5gbsAEgWUg2gvvb1ykixqYbl-6LHqxDfSQCa

On the 20th anniversary of 9/11, we briefly explore the economic impact of the tragedy

 20 years ago today, on the morning of September 11th, 2001, four commercial airlines were hijacked mid-flight by alQaeda terrorists. This terrorists attack would ultimately kill 3,000 Americans, injure another 25,000 and send shockwaves throughout a whole nation. On the 20th anniversary of this attack, we dive inside the immediate economic affects that took place.

For New York- In Manhattan, New York the World Trade Center buildings, more commonly known as the Twin Towers were directly hit by aircrafts resulting in their collapse soon after. These 110 story buildings were home to financial firms and 400+ other top-tier businesses. So how did this tragedy more specifically affect the New York economy? It did so in a variety of ways. First, through the cost of the loss of life. The value of life lost in 9/11 was valued at $24 billion, that includes the $10 billion the people who died at the World Trade Center would’ve received in income. Next, was the cost to rebuild. To replace New York’s lost and destroyed infrastructure costed $21.8 billion. Overall, when factoring in the lost supplies, utilities, equipment and cleanup on top of the mentioned infrastructure and value of life, the direct toll of the attacks costs $55 billion. 

For Airlines - The terrorists compelled their attacks with the use of American commercial flights, which were unfortunately full of civilian life. This immediately inserted fear in all Americans when it came to flying. As a result, the airline industry immediately took a massive hit. From 2001 to 2002, the U.S. air industry reported $19.6 billion in losses. While from 2001 to 2010, the airline industry suffered $74 billion in loses. In order to prevent future attacks and create a sense of security to the American people, airlines needed to add extra security at airports. The TSA, (Transportation Security Administration) took control of this mission with the aid of increased funding, which comes from American taxpayers. Their 2020 proposed budget was $7.79 billion. With this extra security comes longer waiting, which was reported to cause a loss of $10 billion a year in lost time following 9/11/2001. To counter lost time and flying all-together Americans started to drive more instead of flying. With an abundance of increased drivers, comes increased driving deaths. It’s reported that as many as 2,300 driving deaths could be attributed to the terrorist attacks. The estimated death total costs from increased driving is reportedly $19 billion. Fear was evident following the attacks, as 9/11 was estimated to bring $61 billion in losses to the travel industry- excluding airline travel. 

For the Nation - The attacks on 9/11 sent a shockwave throughout the entire nation, despite it only directly appearing in a few parts. This shockwave brought fear, distraught, and loss with it. The economic loss it brought was significant in various aspects. The US real GDP saw a 0.5% decrease instantly after the attacks, as the increased external war and internal conflict proceeded to negatively affect the GDP growth in the year of the event. The job market too was impacted as 9/11 reportedly resulted in an 0.11% increase in the unemployment rate, which amounts to 598,000 jobs lost. The attacks also fueled debt creation and assets inflation, particularly in real estate, while simultaneously extending the March recession by causing the economy to retract by 1.7%. The Department of Homeland Security gained traction following the attacks of 9/11, and then exploded. Increases in defense spending related to the 9/11 attacks costs $589 billion by 2011 alone. Within that cost of $589 billion, is $110 billion of national intelligence spending for domestic intelligence efforts only. Meanwhile, the cost of war and terrorism skyrocketed for the United States as well.

The horrific attacks on 9/11 will never be forgotten. Meanwhile the economic affects of 9/11 will never go uncounted for. 

Undoubtedly, as said by Former United States Secretary of State Colin Powell, “You can be sure that the American spirit will prevail over this tragedy.”

Is there really a vaccine apartheid in Africa?

 Is there really a vaccine apartheid in Africa?

The podcast I listened to was a discussion with Dr. Richard Mihigo from the World Health Organization on the vaccination situation in Africa. Around 40 million Africans have received both doses of the covid vaccine – which is barely 3% of the continent that is home to 1.3 billion people. The number of people vaccinated is not enough to make a huge difference in covid cases.

Vaccines need to be supplied to more developing nations to prevent deaths that are a result of a limited supply [of vaccines]. Western countries focusing on their populations is understandable, but this disease is not contained within borders, and we can see that with the global spread of the virus. Getting more people vaccinated will help provide herd immunity across the globe and prevent any further mutations of the virus from developing.

Co-Vax was a scheme created to help get vaccines to poorer countries. From my understanding, this is not happening because Western countries are ready to administer booster shots when a large population in the developing world has not received a single dose. This is not helping prevent the spread of the virus or protect most of the world’s population. World health leaders need to focus on getting everyone around the globe fully vaccinated, before administering booster shots to already vaccinated individuals.

African countries have had to rely on other nations to provide vaccines and PPE (personal protection equipment throughout the pandemic. This reliance has led to discussions amongst health ministers across the continent about manufacturing vaccines on the continent in a bid to reduce dependency on other countries. Manufacturing vaccines on the continent would allow African countries to make their own COVID vaccines, and any other vaccines the continent may need. Morocco and Egypt are the first African countries to make such vaccines.  

According to Dr. Mihigo, the WHO projects that by December 2021 30% of the African population will be fully vaccinated and by next July 60-70% of the population will be vaccinated. With the current rate of funding and infrastructure, this goal can become a reality.

  Source: https://open.spotify.com/episode/73nqMPoX0xYon2Nj1fpgzg?si=3Jfe2mRIRNekQEmxuGQ8ig&dl_branch=1&nd=1

China to provide Afghanistan with $31 million worth of aid

 In recent news, it was announced that due to the increasing poverty, lack of food, and major upheaval in Afghanistan, China would be willing to provide aid to the new state. The formal amount of this aid is 31 million dollars, in the form of food, winter weather supplies, medicine and covid vaccines. This was announced by China's Foreign Minister this past Wednesday.

This aid is being provided in cohesion with China's previous statement regarding their commitment to providing lower income countries with COVID vaccines, for which Afghanistan was already in the priority line, pre-Taliban takeover. Additionally, the Chinese government has continuously also spoken about how the United States should follow through with providing the Afghan people with aid as well, and in fact, should be the first to do so. They claim that the US should "assume their responsibility" as well.

China has also pledged to support Afghanistan in the country's peace, reconciliation and reconstruction process. In return, the Taliban have vowed to draw a clear line with terrorism at the Chinese border or with other neighbors such as Pakistan, Iran, Tajikistan, Turkmenistan and Uzbekistan as well. 

The US Economy is Weakening

      The coronavirus pandemic has ravaged businesses and economies around the globe. Many businesses have gone under due to a lack of staffing and many other regulations being unable to be followed. We have recently seen a new variant, the delta variant, really damage some businesses as they are just beginning to open up again. In August of 2021, job growth in America was terrible. This is demoralizing not only to the American people but also our economy as we were just beginning to dig ourselves out of the COVID-19 hole.

    We see a problem in businesses reopening as they cant find low-wage workers to staff. This leads to understaffing which leads to closing sooner which is less money for the business. This unfortunately doesn't look like it is going to change any time soon either. Some Americans have refused to get vaccinated along with refusing to get masks, now that the summer is over cold weather is coming leading many activities and meetings to be indoors in closed spaces, making the virus more susceptible to spread.

    The US economy is struggling and the job market is the source of it. Almost everywhere you go out to eat you see a hiring sign. Many restaurants are even offering higher wages but this still doesn't seem to work. Once jobless Americans begin to start working again, we will see a boost in our economy. Businesses will be open longer allowing them to make more money, also paying employees money in order for them to spend more money. This is a big issue we face right now that Americans aren't pouring much money into the US economy due to unemployment.

link: https://www.cnn.com/2021/09/08/opinions/economy-weakening-goldman-sachs-covid-filipovic/index.html

China Cracks Down, Claiming it is For the People, or So They Say

It is no secret that China has been a socialist country since the end of World War II. The government has been making all of the decisions and giving the people of China virtually no say. Just in the last week or so China has unveiled a "Rejuvenation" campaign. The main goal of this initiative is to revive revolutionary ideals. To achieve the goal of his campaign, President Xi seems to be creating a strict and tightly structured society based on his own ideals. 

One of the hot topics around the world is the new restriction that China has imposed on kids under the age of 18. Kids now only have three hours of online game time a week that is to only be used on Friday through Sunday. President Xi's goal of this restriction is to focus the efforts of the Chinese society, even the youth, onto advancing China as a whole. One of the main ways that they are enforcing this is through the gaming companies. These companies are eager to stay on the good side of the Chinese government and have already begun to enforce these new restrictions on gamers. 

As part of China's crackdown, they are now making restrictions for who can be on TV. The main group of focus is on "sissy men" as the Chinese government calls them. Sissy men are men who are deemed as "insufficiently masculine." The government has now banned all of these men from appearing on TV to promote a "revolutionary culture" that President Xi is looking to achieve.

China is looking to close the income gap in the country. The government is relying on companies to help with this. Some of the large companies such as Alibaba and Tencent have already pledged billions in creating new jobs at the governments request. These large companies, like I mentioned earlier, are looking to stay in the good graces of the Chinese government.  These companies rely heavily on the Chinese workforce and on the consumers in China. For economic reason, they need to stay in the good graces of the government. They do not want to have to leave the country with so many available workers which allows them to pay them a lower wage. In addition to that, with the Chinese government having the final say in all matters, it is imperative that they stay in their good graces which might allow them to have fewer restrictions put on them. It is vital for the companies success. 

Article Link: https://www.usnews.com/news/world/articles/2021-09-07/china-chases-rejuvenation-with-control-of-tycoons-society

India sees 20% GDP growth, way over previous predictions, but does it matter?

News outlets are increasingly posting articles about massive growths in GDP in many nations. One such article is about a 20% growth in India's GDP year over year in 2021, which is much higher than what economists predicted, even between February and April, when times were better before the second wave of the virus. However, many news outlets are claiming this to be a good indicator and international organizations are supporting this view.

When a previous fiscal year saw a recession, it does not make sense say the economy grew better than the previous year. Instead, a better indicator would be to compare growth using 2019 data, i.e., April-June 2021 vs. April-June 2019 GDP growth rate. This comparison would tell us that India's growth rate is 9.2% lower than what it was in 2019 during those months.

Although, from another point of view, the praise of India's growth rates makes sense. India has seen the highest growth rates in the world over the past year and a near-perfect V curve that suggests the economy has returned to the state it was in before the 2nd wave in a very short time. These perspectives justify the praise India's 20% growth rate.

Additionally, measures like record breaking vaccinations, leasing of national assets to raise an equivalent of $81.9 billion, and continuing major infrastructure projects that employ hundreds of millions of daily-wage laborers, and many others providing a ray of hope for an improving economy, rising up better after devastation.

With current figures of growth over past year, economists and international organizations, including the IMF, are predicting much better growth rates than what they previously predicted. It is remaining to see whether India will live up to those claims, especially when on one side, until a few weeks ago, it was predicted India will face the deadliest third wave of the delta plus variant of the virus, and on the other side, recently, it is predicted India is entering an endemic stage, like the flu in the US, where it just exists like a regular disease contained within India.

Link to article: https://www.nytimes.com/2021/08/31/business/economy/india-economy-covid.html

The Taliban Controls The Afghan Economy. Now what?

 The Taliban Controls The Afghan Economy. Now what?

With the recent take over of the Afghan government by the Taliban, the world is wondering how they will handle the $20 billion economy. Prices are already increasing for everyday citizens, and sanctions will only increase on the Taliban. About 3/4 of Afghanistan's budget comes from the United States and other foreign aide. Now that the Taliban has regained power, all the money from the United States and others, about 7-8 billon, is frozen. 

Afghanistan also relied on shipments of American dollars for liquidity in the economy. The previously set sanctions have also stopped those shipments which means that those who want to get money from the recently reopened banks might not be able to. The driver of the economy is the informal money exchange system, hawalas, and they are also running out of dollar bills. 

Last year it was reported that about 90% of Afghans live below the poverty line. The main question is how is the Taliban going to boost an economy that relies mostly on foreign aide? Afghans are already living in poverty and without the funds from foreign countries, the Taliban won't have enough resources to care for the people of Afghanistan. It is also important to note that if the Taliban wants to take women out of the workplace, it will only make Afghanistan's economy fall faster and harder. Time will only tell if the Taliban can take on the responsibility of a 20 billion dollar economy without budging on their principles.  

Should bitcoin be used as currency?

On Tuesday, September 7th, El Salvador announced that the country will be recognising Bitcoin as an official currency. El Salvador is known to have $26 million in bitcoin.

President Bukele came to this decision so that 70% of Salvadors who don't have access to 'traditional financial services can take advantage of bitcoin and use it to their convenience. Bukele also argues that this decision was important to make advancement in the world and keep up with times, as quoted, Bekele said,  " El Salvador has the right to advance toward the first world". This decision will also make it easier for El Salvador nationals who live abroad, to easily transfer money for their families. 

While Bukele was able to support his decision for these reasons there was some backlash. Civilians were not too excited about it. Jesuit college posted poll results showing that 67.9% of the population disagreed with the governments' decisions. Many people reported that they did not know enough about bitcoin and did not know how to use it. The US embassy in El Salvador disagreed with this government's decision and said it "undermines democracy."  

Bitcoin is valued higher with each passing day. Hence, using it as currency can cause spending surges which will result in a fluctuating and unpredictable economy. Keeping that in mind, is El Salvador keeping up with the times or causing an economic tragedy?  

Source

Job openings soar to 10.9 million as companies struggle to fill positions

 US companies are struggling to fill a record number of vacancies. Job Openings are at an all time high coming in at 10.943 million open jobs. Job openings outnumbered the unemployed by over 2 million in July. The rate of Job Openings measured against the total labor force is at 6.9% in July which is 2.3% higher from July 2020.

Certain job fields are getting hit harder than others. The hospitality field (food, beverages, travel and tourism, lodging, attractions, and recreation) which suffered the most during the pandemic had 1.82 million job openings which is an increase of 134,000 jobs from June. This is thought to maybe be a cause from the new Delta Variant which is causing a surge in the covid-19 cases. The financial job field is another job field getting hit harder than others. The finance field job openings measured against the amount of people in the labor forces raised to 5.8% from 3.8% which accounts for over 200,000 jobs. Additionally government jobs rose to about 4.6% from 4.2%accounting for about 100,000.

We also look at particular regions that are having a harder time finding workers than others. The south who have been hit harder with covid-19 than any other region is also having the hardest time with job vacancies. Their job openings measured against the amount of people in their labor force is at the highest at 7.1% which is a 226,000 job increase from June. The northeast rates are at 7% which is an increase from 6.2%.

Although we are finding job openings at an all time high the heiress rate this last month actually decreased. It decreased to 4.5% from 4.7%. Could this be an outcome of the new delta variant or caused by people not having the right skills to fit the job openings?

There are many reasons that there are many job openings across the US. Many people believe it has something to do with the unemployment benefits while others believe it has to do with the fear of covid-19 itself. Another cause of the job openings is the lack of skilled workers needed for the jobs. Hopefully in the coming months we will see a decrease in job openings and unemployment.

Link: https://www.cnbc.com/2021/09/08/job-openings-soar-to-10point9-million-as-companies-struggle-to-fill-positions.html

Walmart raising wages at least a $1 an hour for more than 565,000 store employees

 Since founded in 1962 Walmart has been one of the largest corporations in the world employing more than 2 million people today. On September 2 Walmart announced “Walmart is raising the pay for more than 565,000 store employees. This is helping support what many people have been asking for with raising the minimum wage. “The investment means that over the past year, we’ve raised pay for approximately 1.2 million hourly associates in our U.S. stores, increasing our U.S. average hourly wage to $16.40.” Walmart has seen few repercussions because of this decision because most people are in favor of increasing the minimum wage... Walmart has had cost inflation because of this, but during this pandemic time what company has not increased their prices? 

One more thing that Walmart announced is that like Starbucks “Walmart announced in July it will pay for college tuition and books for its part-time and full-time associates at a group of schools.” This is very important because the number one reason people do not go to college is due to how expensive college is. College is very beneficial, even if you think you are not learning a lot, getting a degree from a college is a good signal for companies to hire you. Statistically speaking a person with a bachelor's degree will make more money than a high school graduate and an associate's degree, and have a lower chance of being unemployed. People may not like being in college but from a wealth standpoint, it helps. With Walmart helping pay for college this opens the doorway for some people to change their lives and get a degree they might have not been able to get before which is far more valuable than a small raise. Other benefits of attending college include you are more likely to volunteer or donate to charity. Walmart is not just raising people’s current economic status by increasing minimum wage, but also putting them on a future path for upward mobility. 

Credit: https://www.usatoday.com/story/money/shopping/2021/09/02/walmart-pay-raise-2021-store-employees/5700722001/

Jobs report disappoints — only 235,000 positions added vs. expectations of 720,000

 URL: https://www.cnbc.com/2021/09/03/jobs-report-august-2021.html

The Labor Department reports the number of new jobs and unemployment which was recently released on September 3rd. This article touches on the lack of jobs being produced that were categorized as "nonfarm payroll". It was expected to be approximately 720,000 new jobs, however it increased by only 235,000. The estimate of 720,000 new jobs was estimated by Dow Jones. The article goes on to talk about how the unemployment rate dropped from 5.4% to 5.2%, which was within their estimate. However, it is important to consider that the measurement of rate of unemployment is not always "telling the entire story", if you will. This could account for people dropping out of the work force as discouraged workers because they cannot find a job. This would decrease the rate of unemployment.

Further in the article, it breaks down the unemployment rate and jobs for different industries, indicating that leisure and hospitability jobs have stalled in August as the unemployment rate in the industry when to 9.1%. It analyzes and described the assumptions and hypothesizes as to why each labor market had a decrease/increase in jobs and a decrease/increase in unemployment rate. It also touches on some of the measurements regarding changes in wage and discouraged workers.

The article states that this new total of new jobs, or the lack thereof, comes as a concern because it could "cloud policy for the Federal Reserve" which is trying to determine whether to pull back on some of the stimulus it had been adding since early 2020. In my opinion, the Fed should begin to pull those stimulus dollars away. As we mentioned in class, there are many workers who are getting paid more on unemployment and the stimulus checks than they ever were while working in the workforce. This does not encourage people to look for jobs and join the labor force. Without the contributions of workers, GDP can slow down or continue to be low which will not allow for the economy to recover. What is your opinion about the stimulus?

**Please note that I am not trying to make this into a political debate. I am not VERY well versed in all topics that are of concern in politics today. I am sharing my opinion based on what I know and have read and researched**

Labor Shortage Leaves Union Workers Feeling More Emboldened

    Ever since the 2008 financial crisis, companies have commanded an upper hand in terms of decisions of pay raises and fringe benefits for their workers. But the table has turned.

    Despite an unexpected slow job growth (only 235,000 jobs were added) reported by the Labor Department, the U.S. economy is recovering. The unemployment rate fell to 5.2% and wages across the nation rose at a 4.3% year-over-year clip. As the economy steadily grows out of the pandemic recession, there has been a spike in the shortage of workers in many industries, which results in gaining leverage for union workers in negotiations with companies.

    Many workers managed to negotiate a good pay rise. For instance, the workers at Volvo, a multinational manufacturing company, were able to have a 12% pay gain. Also, lower-paid workers who have been seen as supportive of a middle-class lifestyle such as waiters and bartenders in the leisure and the hospitality industry were able to benefit from the labor shortage, and now they are a step close to the middle-class lifestyle themselves.

    Moreover, there has been an increase in interest in union memberships recently. Although the scale of organized labor strikes and the size of unions are still not comparable to its influential past, it is still significant considering the fact that union membership has been decreasing for years.

    The growing demand in the labor market is not the only reason that the union workers are gaining bargaining power and financial security. The long-been-growing frustration among working-class Americans over wages has come to a breaking point, which served as a stimulator for changes. In addition, the Biden administration has also made its contribution by appointing a more worker-friendly National Labor Relations Board to settle disputes with employers.

Credit: 

https://www.usnews.com/news/business/articles/2021-09-06/labor-shortage-leaves-union-workers-feeling-more-emboldened

Wildfires are putting water supplies at risk, and corporate America is scared

 Climate change has been at the forefront of many peoples’ minds the past couple of years. In Western America, specifically California, because of climate change wildfires have taken a toll on the environment, damaging millions of acres of forests while also increasing a threat to the state's water supply. “The water supply for many communities, including large cities, starts in mountains and national forests. In California, about 70% of the water either starts or flows through national forests, according to Forest Service estimates.” With a serious threat to a state's water supply action needed to be taken that's why “Two years ago, the nonprofit Blue Forest Conservation organization launched the first-ever Forest Resilience Bond at $4 million”. While the return on the investment is seen as low, about 4% versus roughly 10% average return on stocks, I see this as a necessary investment because if we are not careful water in America could become scarce. 

Companies have just now become interested in investing, “In the technology sector, for instance, many data centers, which need water to cool the banks of computers running inside, are in water-stressed areas. For other product manufacturers, water is crucial to every aspect of the process.” Is it acceptable to solely invest to help save the forests just because the forest burning derails business operations? Should the government implement a higher tax in order to help restore these forests? America has one of the lowest tax rates of highly developed countries, one major department our taxes go to is towards Medicare and Medicaid. We put so much money into health programs and neglecting environmental programs, but as seen in this article if people neglect environmental problems too much we may lose access to clean drinking water. More money needs to be allocated to help areas that have been affected by wildfires and to help prevent future wildfires for the safety of the people. 

Credit: https://www.cnbc.com/2021/09/02/companies-investing-in-forest-protection-to-secure-water-supplies.html

The Danger of Ending the US Eviction Moratorium

Over the last year and a half, renters have been safeguarded from the threat of eviction due to late payments as a result of critical legislation passed during the outset of the COVID-19 pandemic. This was enacted to shield individuals and families from some of the effects that the virus had on the US economy. During a time of great uncertainty with the lack of jobs to the risk of health problems, the eviction moratorium relieved some of the burden on citizens. Now, this rule failed to pass Congress and was recently struck down by the Supreme Court following an attempt by the CDC to maintain this safety net. While significant time has passed, renters are still struggling to keep up with their payments as it is “estimated that roughly 2.5 to 3.5 million American households are behind on rent, with landlords owed as much as $17 billion.” Additionally, there will be about “750,000 US households” that will face evictions by the end of this year. As evictions rise sharply over the next few months, the scale at which this will occur will negatively impact the US economy as people will return to worrying about their rent that they may owe from the time they didn’t pay over the course of the pandemic. This can lead to lower job growth, decrease in household consumption, and higher rates of homelessness. Not to mention the risk of spreading the unrelenting variant of COVID-19 that is now resurging in case numbers nationally. On the other hand, there is a need for landlords to be fairly compensated for what they provide as they also have bills to pay in addition to the costs to maintain their properties. Some landlords might be in a similar situation to their renters as they need to catch up on payments from a year ago. Ultimately, both sides of this housing crisis have or will suffer in the coming months. Without immediate action from Congress on meaningful legislation to relieve this tension, the economy will pay dearly for the explosion of this powder keg of debt.

Credit: https://finance.yahoo.com/news/goldman-sharp-rapid-increase-in-evictions-as-moratorium-ends-landlords-owed-billions-133404937.html

An interesting EconTalk episode on property rights

EconTalk on Mine!!

Last week's EconTalk guests spoke about one of the main institutions of economic systems: property rights. Post your comments below.

Brexit and a smoke-free Britain

 As we know that recent COVID-19 has taken its toll on everyone around the globe but

considering nations like the UK or EU where a number of residents are indulged in unhealthy

activities like smoking cigarettes have eventually caused an increasingly high rate of untimely

death of its dwellers.

We all are well aware of the fact that Brexit had its pros and cons for both nations i.e UK and

EU but considering the life-threatening situation of COVID-19, the inhabitants of the UK who are

highly prone towards smoking weren’t able to fight their battle against this pandemic due to

weak lungs. So the British government has decided to take necessary measures in order to

downgrade cigarette import in the country which will eventually help in dropping the

consumption of smoke. As a result, the government has decided to increase tax rates on all

sorts of cigarettes.

I think this is an excellent initiative by the government to increase tax rates on tobacco

products in order to keep in out of buying capacity for the common man. High tax rates will

eventually decrease in imports of cigarettes which will make the price of common cigarettes

extensively high for the general public resulting in less sales of the product. This will help in

accomplishing the objective of the government which is to make the UK smoke free nation.

https://theconversation.com/brexit-is-an-opportunity-to-stop-britons-smoking-150204

Monoply of Facebook is challenged

Facebook has been sued by many states and the federal government for the alleged abuse of its dominance in the digital marketplace and for being engaged in anticompetitive behavior

The Federal Trade Commission seeks a permanent injunction in federal court that demands divestment of FB assets, including Instagram and WhatsApp.

According to the officials, Facebook's monopoly denies consumers the benefits of competition and the company must be checked for its anticompetitive conduct so that innovation and free competition can thrive.

Facebook bought 2 key services in the social media empire in 2012 Instagram for $1 billion, and in 2014 WhatsApp for $19 billion.

Facebook has its dominance and monopoly for more than 10 years and crushes smaller rivals and competitors.

The state suit calls for a court order binding Facebook to notify state officials before buying any existing brand valued at $10 million or more.

Facebook has prepared well to face the music and presented its narrative that Facebook accepts the regulation but this kind of restriction could risk giving other countries like China a competitive edge in the fast-moving technology sector.

Facebook is not the only company to be taken to court by the US and state government officials. Google and Microsoft had been going through the same kind of allegations in the past. Apple and Amazon have also been probed for potentially anticompetitive behavior.

However, the Government will have to prove in court that Facebook's alleged misconduct led to real-world, measurable harms to consumers or competition.

According to the state suit, Facebook's alleged misconduct harms the consumers.  Internet users have fewer choices. Moreover,  Facebook opens its platform to new app developers and later cut off their access to Facebook's services once Facebook feels them be a competitive threat.

Such cases take years to settle but can greatly impact the market.  Experts credit the Microsoft suite for Google's rise.

Similarly, a court decision to breaks up Facebook or to imposes certain behavioral limitations could have made a place for new products for the consumers.

https://www.google.com/amp/s/amp.cnn.com/cnn/2020/12/09/tech/facebook-antitrust-lawsuit-ftc-attorney-generals/index.html

President Donald Trump and US economy in 2020

In January 2017 President Donald Trump started with a healthy economy that continued to grow by leaps and bounds during his first three years in office. The unemployment rate was 4.7%, lowest in 10 years. With the all-time highest corporate profit rates and high stocks, gross domestic product was growing around 2.5% per annum.

 

Each presidency from Ronald Reagan to Trump commenced under different circumstances. George W. Bush’s first year was tarnished by the September 11th attacks while Barack Obama’s started with the Great Recession, a devastating housing crash and a global financial crisis. Despite all these hard times, these presidents have presided over a growing economy during their era. The Trump presidency, however, will be marked by a health crisis and an economic crisis resulted by Covid-19 pandemic. About 15% of Americans lost and Trump ran the elections under the worst job loss in American history.

On the contrary during Obama’s Presidency the job market was up 0.4% and the situation got even better later in his time and as result, Trump started with the strongest job market in American History. The Covid-19 changed the situation and joblessness went 10% higher from where Trump has started, a historical spike in history. 

 

A data released by the Census Bureau in September 2019 around 9% increase from 2016 in the income of an average American and almost 20 states raised their minimum income. The pandemic has definitely reduced those numbers in 2020. The Stimulus checks made a temporary increase in the income of unemployed people but the future of people who had to shut their businesses and who had lost their jobs is still at waters. Economists think that the businesses and workers will not fully recover from this setback for years.

https://www.cnn.com/interactive/2020/10/business/us-economy-trump-vs-other-presidents/

U.S. Trade Deficit Widens

 The United States trade deficit has widened 1.7% in October to $63.1 billion. The can be attributed to the trade gap with China and Mexico increasing. The deficit with China rose 9% to $26.5 billion while the gap with Mexico rose 10% to $11.8 billion. This year so far the overall gap in the trade of goods and services with the rest of the world has rose to $536.7 billion which is up 9.5% from Jan-Oct 2019. The thing to keep in mind is that President Trump has vowed to decrease the deficit and it will be interesting to see what kind of trade policy President-elect Joe Biden implements. COVID-19 has not helped shrink the deficit either as it has upended trade in services such as education and travel which the U.S. runs surpluses in. The exports for the U.S. are down nearly 20% this year while trade surpluses dropped $18.3 billion in October. This has been the lowest since August of 2012. Lastly the United States ran a deficit of $81.4 billion in the trade of autos and appliances. Overall, it will be interesting to see what happens once Biden takes office to see what kind of policies he will implement.  

https://www.cnbc.com/2020/12/04/us-trade-deficit-widens-by-1point7percent-to-63point1-billion-in-october.html

Brexit is an opportunity to stop Britons smoking

 

Even though COVID takes up the majority of the health news smoking remains the most prevailing part of preventable death in the UK. As the UK seesaws on the edge of Brexit they have the freedom to add higher tobacco restrictions. UK has had a high amount of people dying soon after getting COVID but that does not compare to the high amount of people drying from smoking. Many UK adults are smokers and that’s a major difference in life expectancy between wealthy and non-wealthy individuals. The UK laws have a lot of origins from the EU, especially for tobacco. The EU is very much responsible for tobacco-related good supply to the UK. Now, with the decision to leave the EU the tobacco regulations will definitely be affected. Yet, older laws made through the EU still remain just because they are a part of UK law now. Now that the UK is not bound to EU laws, they have a chance to make changes to the tobacco policy. Tobacco control can be made flexible and counter various tactics of the tobacco industry. Even if current regulations are removed public health will improve. A huge majority of tobacco goods still come from the EU. With a lack of trade deal between the EU and UK, the imports will become tariffed starting 2021 which will raise prices and raise tax for the UK. Research shows high prices are the way to lower tobacco use. The UK government is in a strong position after Brexit to turn tobacco-related regulations/laws in their favor. 

What do you guys think the UK should do?

Reference: https://theconversation.com/brexit-is-an-opportunity-to-stop-britons-smoking-150204

The U.S. Economy is going to GET WORSE before it gets BETTER

There is a promise of the vaccine that will be coming out and be effective, but before everything gets to normal, the economy is going to worsen before it gets better. The economy added about 245,00 just last month, with about 60% of those jobs tied to transportation companies. This pattern that we can see here during this pandemic has been compared to the recession in the 2000-2001 recession. 

A separate survey measured the household’s employment rate, which was negative for the first time since the pandemic had started in April. There is labor - market deterioration because we can see that the government’s survey on the households and saw that the number of jobs created each month. During the 2007-2009 recession, the household survey had begun to show a decline in employment 10months before the establishment survey. 

There have been many new cases that have been building up over this week. According to the New York Times tracker, the U.S. counted 216,548 new cases on Thursday and 2,885 set on Friday. 

Do you guys think that 2021 is going to go the same way it did this year?

https://www.marketwatch.com/story/the-u-s-economy-is-going-to-get-worse-before-it-gets-better-11607113936

Online Shopping Faces Top Holiday Test

 Since the beginning of March, when covid-19 was declared a pandemic, it has caused widespread changes in all our lives. One major change is the way we buy things. In shops, buying had reduced to online shopping or e-commerce. This put a huge strain on companies like Amazon and FedEx to deliver consumer goods on time even though they were getting much larger traffic than they could come with. 

An estimated three billion packages will take this festive season through the nation’s shipping infrastructure — about 800 million more than delivered last year.

Whether packages get delivered or not could break smaller retailers who have seen much less revenue due to the lockdowns and traffic in their stores. 

Many brands are trying to deliver before Christmas day and have set deadline days for items to be purchased. For example, Beatrice Bakery has set a deadline of 9th December, and Disney Store has theirs on 10th December.

Shipping companies have expanded their delivery serviced and hired more people to deal with the greater number of deliveries they have to make. “Demand exceeds capacity, no matter what part of the country you are in,” said Satish Jindel, president of ShipMatrix. 

To make up for the increased numbers, these shipping companies are hiring more workers. FedEx is 70,000 seasonal employees, and UPS, 100,000. Amazon, 100 new fulfillment warehouses, sorting centers, and delivery facilities across North America. The company has hired 275,000 full-time and part-time workers since the start of the year and 100,000 seasonal workers. 

Hopefully, all this enough to get packages to arrive in time with minimal delays, and everyone has a great festive season.

https://www.nytimes.com/2020/12/05/business/ecommerce-shipping-holiday-season.html