Tariff Battle: Where the U.S. and Chinese Moves May Lead

The tariffs on imported aluminum and steel enacted on Friday, a day after announcing levies up to $60 billion in Chinese goods and China made its response. China decided to add tariffs on $3 billion in more than 100 American products, including pork, wine, fruits and so on to balance the loss.

Compared to these two numbers, the American industry seems would not be affected too much, but I believe that this is a warning from China. If the tariff policy is not canceled or modified, China would find more way to against it.

The article mentioned that if Chinese could not export their steel, they have to consume domestically. And because there are so many different kinds of steel for different uses, American steel industries could not satisfy all the demand. In the short term, the price would go much higher but in the long term, the American might have the chance to develop their own steel industry.

The tariff battle, however, is harmful to all the countries because of the economic globalization. The economy of one country would affect others and for protecting its own benefit, the countries would publish some policy to react but it might hurt other countries' benefits as well. This is very complicated and I'd like to see how things go in the end.

https://www.nytimes.com/2018/03/23/business/economy/china-tariffs-explain.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=sectionfront

Fed’s Mission Improbable: Lift Unemployment—but Avoid Recession

We mentioned tradeoffs between economic outcomes earlier in the semester, and this article mentions possible tradeoffs between the goals of the Fed. Per the author, the Fed should aim to increase unemployment from 4.1% to the natural rate of 4.5% in order to combat inflation. However, doing so would most likely lead to a recession. It was interesting to note that the article mentioned that unemployment is on pace to reach 3.6% by the fourth quarter of 2019. In reality, the Fed's plan is to gradually raise interest rates so that unemployment and growth rates return to their long-run sustainable levels. In general, I felt that the author was very biased and critical of the current administration's handling of the economy. It is also evident that he fears a recession soon, as we are nearing the end of a business cycle.



https://www.wsj.com/articles/feds-mission-improbable-lift-unemploymentbut-avoid-recession-1521711004

Why Africa’s poor pay high prices

This article explains the problems faced by less developed countries regarding prices. Many people assume that richer countries have higher costs of living. However, this article shows that that is not the case. The dollar simply doesn't go as far in poorer countries because of the high prices of food. The article states that "cheaper food may boost manufacturing by making wages more competitive." This would help bring developing countries up to par in their standard of living compared to prices.

https://www.economist.com/news/middle-east-and-africa/21738911-africas-economic-paradox-why-africas-poor-pay-high-prices

Crisis in Congo

The ongoing humanitarian crisis in Congo that begin in August 2016 is predicted to be Africa's mega-crisis in 2018 with only more people uprooted and forced to leave everything behind. Not only does this displacement put a strain on Uganda's economy, with more than 34,000 refugees only in 2018- but also it has lead an increase in slum living conditions. On top of that there is also a food crisis where due to the political instability no crops can be planted nor harvested so that most people barely eat one meal a day. The shortage has only made the price of food and other basic necessities go up, with Congo's currency losing 55% of it's value in 2017. This is yet another example of how political unrest in a certain country affects the economy of the entire region.

https://www.nrc.no/opinions-all/congo-will-be-africas-mega-crisis-in-2018/

French President’s Next Target: The Railroads. Strikes Loom.

In France, the railroad system is very important for public transportation and for the people who work on the railroad. For now, the railroad system is controlled by the government, which provide great benefits to railroad workers. Emmanuel Macron, France's president, is proposing to reduce the worker's benefits in order to contain costs and improving service, which shifts the industry to treat its workers more like private-sector employees. France's prime minister said that the government has no intention of privatizing the rail system, but the state-owned rail company must be updated if it is to hold its own with the coming competition from private companies. 

https://www.nytimes.com/2018/03/21/world/europe/france-railways-strike.html?rref=collection%2Fsectioncollection%2Fworld&action=click&contentCollection=world&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront

China's powerful central bank has a new leader

China's parliament confirmed Monday that deputy governor Yi Gang has been promoted to the top job at the People's Bank of China. He replaces veteran governor Zhou Xiaochuan, who is retiring after leading China's central bank for more than 15 years. Yi, a US-educated economist who speaks English fluently -- had been deputy governor of the central bank for the last decade. He begins his first five-year term at the central bank immediately. Analysts viewed Yi's promotion as a sign of continuity for the world's second-biggest economy. Zhou's governorship saw the size of China's economy increase exponentially as well as several big moves to open up the country to more foreign investment. China's central bank -- like the US Federal Reserve -- plays a key role in the smooth running of the country's economy. Its responsibilities include setting interest rates and regulating China's huge financial sector. One of Yi's big priorities will be getting China's enormous levels of debt under control as economic growth continues to cool. Growth is expected to come in at 6.5% this year, a few notches below the 6.9% rate seen in 2017. The Chinese economy faces other immediate threats. President Donald Trump's decision to impose tariffs on imports of steel and aluminum and the impending results of a probe into alleged Chinese theft of intellectual property have prompted fears of a trade war between the world's top two economies.

http://money.cnn.com/2018/03/19/news/economy/china-new-pboc-governor/index.html

A stronger yen is bad news for Japan's inflation target

A recent article published by CNBC discussed the difficulties that Japan is facing in it's economic policy. The country's central bank aims to increase the inflation rate to 2% by fiscal year 2019, but this goal is not very likely due to current trends, according to Hiro Shirawaka, Credit Suisse's chief economist for Japan. Shirawaka stated that this inflation goal is not likely if the yen continues to strengthen. The appreciation of the yen is counter-intuitive to this desired higher inflation rate. Japan's current inflation rate is 0.9% as of January. This is relevant to the course because it shows some of the difficulties that governments face in trying to achieve certain economic goals.

Source: https://www.cnbc.com/2018/03/20/japans-inflation-rate-may-not-be-2-percent-if-yen-strengthens-credit-suisse.html

Backlash to Facebook revelations

This article deals with the ways politicians are reacting to the revelation that Cambridge Analytica stole personal date from over 50 million Facebook accounts to try to predict how people would vote and what could change how they vote. It is largely unlikely that the actions of one data firm or another were the sole factor that tipped a US Presidential election, but this news raises questions about how or if Facebook is preventing data breaches and what the ethical way to use personal data is. In the era of big data, when we're all posting our every move on Facebook, it's important to question how we think about how our information is used.

https://www.politico.com/story/2018/03/19/angry-democrats-facebook-424456

Trump keeps focusing on goods instead of services in the economy

President Trump has long been focused on the US' ability to produce goods when compared to foreign countries since his campaign began.  He has continually emphasized that the US is operating at deficits that are a bit off because he fails to focus on the service-side of the economy.  For example, just last week he said we are at a trade deficit with Canada, which is true if you look strictly at goods production, but we are actually running at a surplus when services are included.  Additionally, he states we are running at a $800 billion/year deficit, which is true if you exclude services, but that number is actually $556 billion/year.

One thing has been consistently true for President Trump, however, and that is that he wants to see manufacturing in this country, specifically cars and coal mining, to increase.  If the President had not made this concept a big idea throughout his campaign, his approach to these numbers would be a tad different.

http://www.businessinsider.com/trump-keeps-focusing-on-goods-instead-of-services-in-the-economy-2018-3

Trade war would wipe out gains from tax cuts, Penn analysis says

 After conducting a hypothetical study of a trade war, experts at the University of Pennsylvania claim that a trade war could potentially wipe out the gains from the tax cuts offered by the Trump administration. So far the US has offered exceptions to Canada and Mexico to be exempted from tariffs temporarily. However, China and the European Union have already said that any tariffs imposed by the US are likely to be met with retaliation. The Trump administration seems to be pretty confident about the unlikelihood scenario of a trade war and is optimistic that even if there is such a situation "Trade wars are good and easy to win". Analysis indicates that this could cause losses to the economy of up to 200 billion dollars over the next 10 years and about 1.4 trillion dollars by the year 2040. Of course, this is just an analysis of a hypothetical situation, the results could be much worse than what is predicted.

http://money.cnn.com/2018/03/14/news/economy/trade-war-economic-cost/index.html

Rule Based Response To Trump On Tariffs

I was expecting to wake up Monday morning with the news that Europe had secured an exception to the tariffs on aluminum and steel that Trump announced last week. I didn't, and this article is the newest update on the European response to potential US tariffs.

Just about every major leader of the EU has put out a catch sound bite against the tariffs -- this article quotes Jean Claude Juncker as saying "Make trade, not war" and another leader as referencing the European-US "special relationship." The article also says that the first counter tariffs that the EU will institute will be orange juice, bourbon, denim, peanut butter and cranberries. This article reports a tense exchange between Trump and the EU Trade Commissioner, pointing out that the EU has a 10% tariff on US cars, but the US has a 25% tariff on trucks and pickups. What comes across in this article is a communication breakdown between the two bureaucratic bodies and the European wish to settle the disagreements without having to take it to the WTO.

Another though I had was if Europe, Canada and Mexico all end up exceptions -- what state would actually be seriously effected by these tariffs? We know there are already tariffs targeting China, and that the US isn't in the top 10 countries that China exports steel and aluminum to.... so if Europe successfully gets an exception, who do these effect?

https://www.euractiv.com/section/economy-jobs/news/meps-back-commission-on-rule-based-response-to-trump-on-tariffs/

US February Jobs

https://www.nytimes.com/2018/03/09/business/economy/jobs-report.html

Strong job creation has been realized by the United States in the past month of February. While 310k jobs were added; the inherent wage increase is less than expected. 310k jobs is the most US jobs added in a  month's time since June 2016. The stock market likes how wages remain low combined with  this job increase . Also, despite these added jobs, US unemployment stays at 4.1%.  Many people are re-entering the employment market across all sectors and I feel comfortable entering the job market in the very near future, as apparently many firms are hiring. 

Ryan Criticizes Tariff Plan as Trump Issues Nafta Threat

This article talks about critiques that the new tariffs that Trump wants to impose on steel and aluminum are getting. In this case, the speaker of the Republican party Paul D. Ryan was the one that criticised these tariffs. He says that he is worried about the consequences that these tariffs are going to have because many countries that trade with the US are getting upset and could start a trade war. The expect if Trump goes through with this decision, that other countries are going to do the same in order to put tariffs on US products that are exported. He has asked the president to back down from imposing these tariffs because it will cause tensions with many countries and at the end will end up affecting products from the US that are exported and trade in general. It looks like Trump is decided to impose the tariffs and will not back down since he has even threatened other countries that he will impose more tariffs if they decide to put tariffs on US products. The effects can not really be measured now since we don't know how other countries are going to react, but all the tension between the countries will probably end up affecting everyone involved.

https://www.nytimes.com/2018/03/05/us/politics/trump-trade-tariffs-nafta.html?&hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

U.S. Car Loan Rates Rise to Highest in Eight Years

            It is a difficult time if you are in the market for a new car in this country currently, as they are continuously getting more expensive. Not only are the cars coming with a higher initial price tag but interest rates for vehicle loans has risen as well. The average interest rate is the highest it has been in eight years and the Fed hopes to increase them again three times in 2018. The demand for new cars has already been on the decline in this country and with these new interest rates and car prices that demand looks to continue to drop. I am curious if these factors in the American car market will incentivize individuals to utilize public transportation more, which is far more environmentally efficient or if it will encourage people to hold on to older less fuel efficient models.

https://www.bloomberg.com/news/articles/2018-03-02/fed-hikes-adding-to-highest-u-s-car-loan-rates-in-eight-years

Theresa May's Road to Brexit speech: Prime Minister reveals UK's demands for financial services to be in deal - and insists she's not cherry picking

The prime minister of UK Theresa May announced her list of demands that EU should include financial services trade with the UK in the future. Along with her emphasis on labor mobility which reminded me what we discussed in class about models around the countries. It can be seen from the speech that the UK tends to continue toward laissez-faire economy. The transition economy can also arise a series problems, governance failure; high inequality; regulation inefficiency. It is said in the article the prime minister will not impose tariffs or quotas on goods instead of using one set of checks to ensure regulatory compliance.
The feasibility of the transition economy doesn't solely depend on the government efficiency but also how the market will react.

http://www.cityam.com/281577/theresa-mays-road-brexit-speech-prime-minister-admits-we

Undocumented Entrepreneurs: How Deportations Could Hurt The U.S. Economy

This was a very interesting article on Israel Concha, an undocumented immigrant that had been brought to thebIS from Mexico when he was a boy. By the time Concha was 30 years old, he was running a taxi business he had started and making $300,000. But he was also employing nine American citizens with steady, well-paid jobs. Concha is an interesting story but not unique. According to a study there are over 900,000 immigrant entrepreneurs (about 10%) of undocumented citizens that hire American workers. Their businesses account for over $17 billion and counting. Unfortunately Concha was detained and eventually deported, which cost the US hundreds of dollars a day, hundreds of thousands in the US economy a year, and multiple jobs for US workers. What is the solution here? Do the US policies need to be more lenient based on the circumstances?

https://www.google.com/amp/s/www.forbes.com/sites/fernandafabian/2018/03/04/undocumented-entrepreneurs-how-deportations-could-hurt-the-u-s-economy/amp/

Trump Threatens to Impose Tariffs on European Cars

President Trump threatened European car companies that the United States would impose tariffs on them if they did not agree to follow through with the recently laid out increased steel and aluminum duties. The problem that Trump faces is that many European car companies are rooted in the United States already and have some level of bargaining power when it comes to making sure they are given a mutually beneficial relationship for supplying jobs to U.S. communities. The article points out that some of these fore mentioned jobs are in both Kentucky and Wisconsin, states where Republican leaders Mitch McConnell and Paul Ryan have constituents. This makes the validity of this political threat hard to follow through upon. 

"President Trump said his administration would enact in coming days a law to impose 25% tariffs on imported steel, with 10% targeting imported aluminum, on national-security grounds." The danger of an action of this nature, as cited by many economists, is that if these tariffs are created unilaterally (instead of through a world trade organization) the resulting effect would be a global trade war. With that said, this action of "national security" could backfire hard on the American economy if accomplished as President Trump suggests.

https://www.wsj.com/articles/trump-threatens-to-tax-european-car-imports-1520110549

Japan Is Growing But Wages Have Barely Budged. Why?

A relevant article about the Japanese economic system that we are currently discussing.

https://www.bloomberg.com/news/articles/2018-03-04/japan-is-growing-but-wages-have-barely-budged-why-quicktake

China says it does not want a trade war with US

This article states how China does not want a trade war with the US but will defend its interests in spite of Trump’s claim of import duties on steel and aluminum. Trump emphasized that trade wars were good and easy to win, a day after he mentioned to put duties of 25 percent on steel imports and 10 percent on aluminum products. The trade between the two largest economies were hazy once Trump took office in 2017, and although China only accounts for a fraction of U.S. steel imports, the lower steel prices account for its massive industry expansion.

As stated in the article, Chinese Vice Foreign Minister Yesui mentioned that negotiations and mutual openings were the best ways to resolve trade frictions. If trade policies are made on the basis of mistaken judgements or assumptions, it would damage trade relations between these two countries and affect long term economic growth.

According to Trump, restricting trade will save American jobs, but in reality, because of widespread tariffs on aluminum and steel, prices would increase and this would affect users like the auto and oil industries and affect employees.

In the article, it is stated that Trump believes in a balanced trade relationship with China, along with potential trade sanctions into China's intellectual property practices and pressure on foreign companies for technology transfers.

In the long run, it will be interesting to notice the trading relationship between United States and China, and whether the occurrence of a trade war could affect both economies in the long run. If both countries would want to benefit economically, they need to reach a mutual agreement.

https://www.cnbc.com/2018/03/04/china-says-it-does-not-want-a-trade-war-with-us.html

Trumps Trade policies

The recent changes to trade policies has put the economy in some trouble. the stock market has taken a hit and its put both businesses and their consumers in a difficult position due to the rising prices. "If the NYSE or the NASDAQ or the S&P 500 tank, the pain will be far more palpable than a lot of people realize." not just because average, working people's 401ks will be wiped out, with the new tariffs in place prices all across the board will rise due to the increase in price to producers. It will be interesting to see what happens as time passes. The economy may not be able to handle the amount of stress that is being forced on it. 


https://www.usnews.com/opinion/articles/2018-02-23/trumps-dangerous-free-trade-policies

CEO's picking sides over gun debate.

CEO’s are picking sides on the gun debate as corporate leaders have had increased pressure to speak out due to the uproar from angry customers and idealistic young employees. Dick’s Sporting Goods CEO took a stand stating “we don’t want to be a part of this story anymore,” and decided to raise the age requirement from buying guns in their stores from 18 to 21. Walmart, Kroger, and L.L. Bean have followed suit and also raised their requirement age after Dick’s made the move.

http://money.cnn.com/2018/03/04/news/companies/companies-nra-guns/index.html

China Sets 2018 GDP Target at about 6.5%

If there is any economy that has potential to match the power of America's economy then it has to be China. A country that within the last decade has posted GDP growth rates as high as 10 percent is now lowering its expectations for growth to 6.5 percent. This is still a massive gain compared to the 2-3% growth we see in America, but China has been turning its attention to other factors in the economy besides growth. For instance, China wants to cut its budget deficit percentage of GDP to 2.6 percent which would be down from its previous 3 percent. In addition, China is also focusing on creating economic stability by creating more urban jobs to replace its huge agricultural workforce along with attempting to decrease the income gap. In the end, China has implemented an economic system that allows them to focus on the very long run rather than the shorter run that those of us in America focus on. 

https://www.bloomberg.com/news/articles/2018-03-05/china-keeps-economic-growth-target-steady-at-around-6-5

Trump's Tariffs

https://www.cnbc.com/2018/03/02/trumps-protectionist-steel-tariffs-criticized-by-economist-adam-posen.html

This is a very interesting article talking about the outcomes of Trump's proposed tariffs. Economist Adam Posen said that tariffs would hurt a lot of US companies, mostly automobile and airplane manufacturers, who will find their costs rise significantly.

Another big fear of the proposed tariffs, is the potentially trade war that could start as foreign countries retaliate against the tariffs. Countries who export steel, mainly Canada, Brazil, and South Korea, could threaten trade with the US, which would further hurt global growth.

One positive, in my opinion, of the tariffs, is the benefit to US steel producing companies. Although, I am fearful this a short-term benefit, as eventually price will rise to high and steel producing companies will have to cut back on employees. It'll be interesting to see the full outcome of these tariffs, as there are many parties who are affected by this. Consumers, I'm afraid, may be hurt the most as traditional service prices may start to rise.

The Genocide the US Didn't See Coming

This Politico article discusses the ways that the US's involvement in Myanmar may or may not have led to the current Rohingya genocide, especially under the Obama administration. The lifting of economic sanctions by the Obama administration was seen as a way to publicly show that countries that changed their ways and showed movement towards democracy could be forgiven. However, many people think that the sanctions were too much, too soon, and may actually have enriched Myanmar's generals, who hold large stakes in the economy (much like Russian oligarchs).

This is relevant to Economic Systems because it shows the ways in which different types of systems interact with each other, and how smaller countries are rewarded for conforming to the dominant system (capitalist democracy). It also shows the ways in which economic sanctions can be effective tools for moral or religious judgements of other countries.

https://www.politico.com/magazine/story/2018/03/04/obama-rohingya-genocide-myanmar-burma-muslim-syu-kii-217214

Crisis

In this article, Desmond Lachman raises his concern about the US economy and financial market crisis. He predicts that next year we will have a crisis like the one we had in 2008-2009. The main causes of the crisis would be price bubbles and credit risk mispricing. Another cause would be high debt level. The US is at its expansionary level with low-interest rates, inflated equity prices, and a weak dollar. Federal Reserve has a difficult choice as raising interest would risk the price bubble burst. The fiscal and monetary stimulus would be the main reasons behind the overheating of the economy.

https://www.usnews.com/opinion/economic-intelligence/articles/2018-02-14/us-economy-is-in-danger-of-overheating-and-exploding-into-financial-crisis

Food Stall Price Discrimination

In this article a food stall owner in New Orleans decided to take a public stance and decided to charge white people two and a half times the amount he charged to minorities. He ultimately did this as an experiment to see what would happen and he explained that the price difference reflected the income disparity between African-Americans and whites in New Orleans. He explained that about 80 percent of the white customers decided to pay the inflated rates.  In addition the majority of minorities declined the redistributed money that was given to them. The owner suspected that the majority paid the inflated rates because they were from higher income brackets. While the price changes were done as an experiment I am shocked people still paid the inflated prices along with the knowledge of what the owner was doing.

https://www.inc.com/chris-matyszczyk/this-business-charged-white-people-more-than-twice-as-much-as-minorities-heres-how-customers-reacted.html https://www.inc.com/chris-matyszczyk/this-business-charged-white-people-more-than-twice-as-much-as-minorities-heres-how-customers-reacted.html

Economic Cost from Gun Violence

Gun violence is taking its toll on the economy and it will be interesting to see what will happen in the future.  After the recent shooting in Florida it is interesting to see what different big department stores are doing to their gun selling.  For example look at Dicksportinggoods who made it so you have to be 21 to buy a guns from their stores.  I wonder if these rule will have any impacts on their profit for the gun department.  Many agreed with this idea of Dicksportinggoods because  of it being able to stop the illegal purchase of guns.  I don't really have any stance on this topic but I do agree with the Dicksportinggoods because hopefully this choice will decrease gun violence in some sense.   But for the economics of it, who knows how well this idea will do but I guess we will have to wait and see.

Electronic Money Leads to Problems with Tipping

https://www.economist.com/blogs/gulliver/2018/03/paying-service

This short article from The Economist sheds light on a problem that most of us probably haven't recently considered. With the rise of electronic payment systems tipping has gone to the wayside for many people. The article mentions that the Uber app now has a function for tipping. Prior to this update, many divers explained that they were not receiving tips because customers couldn't provide a tip through the app. People either didn't have cash on them or thought it wasn't necessary because the app didn't offer the opportunity to tip. The problem with these kinds of interactions is that many people rely on tips as a fundamental part of their income and the rise of electronic payment has begun to hurt those individuals.

Is Bitcoin a Waste of Electricity, or Something Worse?

The news mentions that in order to mine bitcoin, we have to consume huge resources and energies. Nowadays, America is facing the productivity problem, if industries focus on mining bitcoin, the problem would be more serious. 

Tyler Cowen, an economist at George Mason University, suggested that mining gold is a better way to use resources because even if it lost value, it could be used to fill teeth. If bitcoin lost its value, it would become nothing and those resources consumed would never be back.

https://www.nytimes.com/2018/02/28/business/economy/bitcoin-electricity-productivity.html?rref=collection%2Fsectioncollection%2Fbusiness-economy

Brexit: No deal would be 'hugely damaging' to car industry

Despite the car industry'd concerns about Brexit, a lone of big manufacturers have committed to building more vehicles in Britain since the EU referendum.  The government has also pledged to support the competitiveness of the UK sector after Britain leaves the EU, and has invested twenty million pounds in Burnastion alongside Toyota.  It is said that the industry was a success story and the government is seeking partnership that delivers the maximum possible benefits for both the UK and the EU economies, and maintains the strength of world leading automotive sectors.  Various companies in this sector around the UK and Europe are highly dependent on each other which is why it must be ensured that cross border trade is as free and frictionless as possible post-Brexit. Gains from free trade will bring benefits to UK consumers by lowering prices by 8% and enhancing GDP be around 4% by raising competition and productivity

Trump says US will impose steel and aluminum tariffs

https://www.cnn.com/2018/03/01/politics/steel-aluminum-trade-trump-chaos/index.html

Trump announced after a long going debate that next week he hopes to impose a 25% tariff on steel imports and a 10% tariff on aluminum to boost these struggling domestic industries. This article conveys that this will most likely strain our relationships with steel-producing US allies, and potentially create a trade war with other countries.   There is talk of exempting our trade allies from the tariffs, but it has not been determined whether this will be a caveat of the policy.  Trumps announcement took a huge toll on the stock market.  The Dow took a 500-point dip.  There is also concern that this policy will lead to increased consumer prices for products that are made with manufacturing of steel and aluminum as well as lost jobs. It will be interesting to see to what extent and repercussions this policy will have on our relationships with other countries and if the benefits will outweigh the costs.

New Fed chairman says Amazon helped keep inflation low

Federal Reserve Chairman Jerome Powell stated that he believes Amazon had a large influence on the low inflation rates in the US. Other factors in the inflation levels were believed to be oil prices, e-commerce, and labor slack. I definitely agree with Powell when it comes to e-commerce playing a large role in keeping inflation down. For online retailers, like Amazon, the e-commerce format allows the company to offer lower prices, thus keeping inflation down. It was also interesting to note that Amazon made up 44% of e-commerce sales in the US last year. This is an astounding statistic, and I would predict this market share will decrease in the near future as more companies enter the e-commerce market. I am still not sure whether the emerging e-commerce will be sustainable when it comes to keeping inflation low. I feel like online prices will have to increase at some point in the future. Do you think there are any other factors that have kept inflation levels in the US low in recent years?



https://www.cnbc.com/2018/03/01/new-fed-chairman-says-amazon-helped-keep-inflation-low.html

What the world economy might look like without the US

In this article, Adam Posen, the President of the Peterson Institute for International Economics, is an interview guest for Kai Ryssdal.  Posen published an article describing how the global economy would be much more susceptible to conflict without US economic leadership.

The motivation Posen received to write this article points solely to the Trump administration.  With the Trump administration wanting to withdrawal from the Trans-Pacific Partnership, publicly criticizing the World Trade Organization, and renegotiating NAFTA, it become clear to Posen that this is the direction which the world is heading.

Economies in Asia and Europe are much more greedy than the US.  For years, the US has been towards the top in size of economies, but has not been the bully when it comes to enforcing how they wish to due things.  Rather, they have done exceptionally well in getting everyone to follow the rules as they have done so for so long, resulting in a much richer world over the last 50-60 years.  Without the US, the world could face some sort of massive economic downfall.

https://www.marketplace.org/2018/02/26/world/what-world-economy-might-look-without-us

Here are the funny videos on Sweden that I mentioned in class. Hope you enjoy it

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Venezuela launches oil cryptocurrency

Venezuela has recently become the first nation to institute a sovereign cryptocurrency in the form of the "Petro". The oil-rich South American country continues to face severe economic sanctions imposed on it by the U.S. due to a long history of tense relations, primarily due to Venezuela's socialist government. The Venezuelan government claims that the Petro is designed to address the rampant hyperinflation and devaluation that has been going on for years, while critics argue that it is little more than a last resort cash-grab. The ongoing political and economic crisis within Venezuela is still uncertain, and it remains to be seen whether or not an oil-backed cryptocurrency will be effective.

http://www.bbc.com/news/business-43133853

In Germany’s Car Capital, the Unthinkable: A Ban on Cars

In the industrial city of Stuttgart, the major industry in town is facing one of its largest challenges to date. A German court ruled that the city can legally ban diesel cars to improve the air quality in the city. The city is dominated by car manufacturers like Diamler, which produces Mercedes Benz cars and trucks as well as other vehicles used around the world, and Volkswagen and much of the jobs and notable landmarks in the city are fueled by this industry. While the city has taken strides to improve its air quality, it still lags behind the European standards. 

The stakeholders in the automotive industry are extremely opposed to this ban. This includes management and workers in these industries. The manufacturers that will be most effected have had emissions troubles in the recent history and this new legislation may be a pivital point in their trajectory. Workers at Diamler earn extremely favorable wages and the change to the environment in Germany may lead to less job security and job benefits.

Environmental activists, however, argue that the nations crusade for an environmentally sustainable future should outweigh the short term costs to the stake and shareholders in the industry. Angela Merkel has a goal of cutting carbon emissions by 40% by 2020 and this measure would certainly help. 

This is not the first time that Stuttgart has been on the losing side of an industry shift though. They used to be heavily invested in the watchmaking industry and the only reminants today are the clocks that adorn houses around the city. The Mayor of Stuttgart understands this and is quoted saying, “Economic history is littered with examples where protecting today’s jobs destroys tomorrow’s”.

What do you think about this proposed ban?

Is it the place for the government to step into the economy and ban 1/3 of one of Germany's biggest businesses?

Link to Article

Germany companies that don't try harder at gender equity could be fined millions

Germany has a new concept in order to create equality for women in the corporate world. Their idea is to fine companies up to 10 million euro or 5% of a company's annual turnover if they do not have at least 30% females on their senior management and board members. This a follow up bill that required companies to create goals on the amount of women in senior management, and explain why they did not make their goals if the company didn't make their goal. The issue with this bill was that many companies made a goal of 0% of women in their senior management because none of the current members were planning on retiring. Germany did see an increase in amount of women in senior management roles by 8.4 percentage points from the start of 2016 to 2017, but many are looking for better results. Do you think that the new bill would create positive change? Should changes be made?

https://global.handelsblatt.com/companies/germany-companies-dont-try-harder-gender-equity-fined-millions-891848

It’s only been one year since the Dow hit 20,000; today it’s topping 26,000

          The market has been on a role as of late with only minor blips on the radar.  This article points out that only horrible events could cause a decrease in the stock market.  This means as of late people have confidence in the market and expect it to continue to do well.  It is when people expect the market to do bad is when the market could see a downturn.

          This article also points out that Trump has claimed a lot of this market success as stemming from him.  The president and the stock market have very little to do with each other, as stocks are the values of shares in publicly held companies.  Another aspect to take into account is the business cycle itself.  We have reached a period of good growth, but will it peak and will a correction, or a drop in 10%, occur in the near future?  Only time will tell but in the mean time it is interesting to watch the market rise.

https://www.nbcnews.com/business/markets/it-s-only-been-one-year-dow-hit-20-000-n841066

Why companies are abandoning the NRA

People are pushing companies to cut ties with the powerful gun lobby. Advocates are targeting not weapons makers, but banks, rental car agencies, airlines, insurers and other companies with ties to the NRA.  In many cases, the pressure is working. Delta is ending discounted rates for members of the organization. United Airlines will no longer offer discounts on flights to the NRA annual meeting. Enterprise Holdings, which runs the Enterprise, Alamo and National car rental groups, will end the discount deal it has with the NRA. So will Avis Budget Group, which owns Avis and Budget, and Hertz. Similarly, insurance giant MetLife is ending its discount program for NRA members. The First National Bank of Omaha pledged to stop issuing an NRA-branded Visa card. The National Rifle Association released a statement on Saturday saying companies "have decided to punish NRA membership in a shameful display of political and civic cowardice." At this point, businesses that work with the NRA are putting their relationships with customers at risk. Shares of American Outdoor Brands have dropped 8% since the day after the shooting. Vista Outdoor, which makes guns and ammunition, has declined 7%. Sturm Ruger is down slightly. All while the broader market has risen.

http://money.cnn.com/2018/02/25/news/companies/boycott-nra-companies/index.html?iid=SF_LN

Minimum Wage Hikes Up in Ontario

Ontario, Canada's most populated province saw an in increase in minimum wage from $11.60 to $14. Ontario also happens to be Canada's most industrialized province so a beneficial or deteriorating effect to the economy is going to have an impact on the entire country. This move was made to stimulate the economy by allowing more money in the hands of poorest. However, with increased wages the price of goods and services also go up so we can't be quite sure that this will help decrease the inequality between the rich and the poor. With increased living costs in Ontario, most people earning minimum wage are near the poverty line, I'd be interested to see if this works out for the better or for worse.

http://www.cbc.ca/news/business/minimum-wage-experiment-1.4473095