US poverty on track to post record gain in 2009

Poverty rates are to increase from 13 to 15%. With elections around the corner this could spell problems for Obama and democrats alike who are battling for control over congress. With the census in 2009 reports look grim as the recession was at one its worst points. Obviously a stronger economy will lower the poverty rates.

"The most important anti-poverty effort is growing the economy and making sure there are enough jobs out there, Obama said Friday"

If the numbers are true that means 1 in 7 people will be poor last year. What should Obama do about the poverty rate? We are continuously hit with poor jobs data. What should we do other than improve the economy?

'Child poverty increased from 19 percent to more than 20 percent."

U.S. Pressures I.M.F. to expand the role of Growing Economies

The United States has pushed to expand the influence of the International Monetary Fund over economies that are growing or on the path of economic recovery. The I.M.F. has taken a more prominent economic role during the recent financial crisis by increase their lending committments throughout the world from $2 billion to close to $195 billion. The plan to expand the role has seen criticism from many European countries, which are believed to be overrepresented on the I.M.F board. The shift in power will see a shift in power towards other fast growing developing economies. Those in the United States believe that this change will lead to a more multilateral I.M.F. to represent the changes in the economic world today. Do you think this reform of the structure of the I.M.F. will succeed? Do you believe the United States, which is the most powerful nation in the I.M.F. has too much influence and power to push for such a reform?

Is Romer Correct?

We have been comparing the market driven economy and the centralized economy in class. History has proven that the market driven economy outlast the centralized economy due to the weeding out process of the weak while the strong remains. In addition, according to Romer's interview, it is difficult for countries like China to surpass the super-power nation like the US since there are no institutions to produce new innovations. However, according to the article "Steelworkers Blast China on Subsidies" by Elizabeth Williamson and Ian Talley has made it clear that the US is being constantly threatened by China for various reasons. In fact, due to the Chinese subsidies in its clean-energy sector, Ron Kirk, the US Trade Representative, has seen that the Chinese green-technology manufacturing sector would allow China to dominate this sector in the international arena. With the yuan remaining low, the US will face extreme difficulties to go head to head with China, especially with the state that it is in.

As a result, I think that although it might be hard for a country like China to surpass the US at this point. Its ability to compete through copying ideas is astounding especially with the government's help. If there is nothing left to copy, the government's allocation of subsidies might be different. It may possibly shift more toward intellectual institutions for innovations.

LeBron James economic impact on Cleveland, Ohio

With Lebron James leaving the Cleveland Cavaliers for the Miami Heat, economics should be worried about the economic impact it will have on the city of Cleveland. According to this report, James merely not being in the arena amounts to $1.2M per game or $48M a season on revenue taken away from small businesses in the downtown area. Including decreases in national broadcasting, playoff revenues, and money from visiting teams at hotels, it could come close to $200M a season. In addition, the value of the Cavaliers organization is expected to decline by over $200M. During his term in Cleveland, inflation rose steadily as the economyt was improving. Now, inflation still exists even though the money has been pulled out of the economy. Not to mention over $3M in taxes he pays to the government and the hundreds of millions he already possesses in endorsements. What is the future of the economy in Cleveland, Ohio? For those of you from there, should you be worried? Half a billion dollars is a lot of money to take away from an already sturuggling economy, not to mention the emotional impact it has for sports fans.

How to leave Afghanistan

The United States has spent the better part of a decade in Afghanistan, yet turmoil remains in the country as the infrastructure and government is still unstable. The US promise to get out of the country has been debated and has cause political tensions. In another, somewhat related article, Afghanistan has just been the new site of titanium and other precious metal reserves. With this information, will the US continue to stay in the country? As of now the nation stands , it does not look good ether way for Afghanistan. As the article says, "Still, with every new report of setbacks in the fighting or the venality of President Karzai's administration, the likelihood of Mr Obama persisting in the full counter-insurgency, nation-building strategy he set out last year grows dimmer."

Castro says Cuban model doesn't work

Ex-Cuban president Fidel Castro admitted in an interview that the Cuban economic model of communism does not work. When asked if the Cuban economic model was worth exporting to other countries Castro said, "The Cuban model doesn't even work for us any more". This is one of the first times Castro has commented on domestic affairs since turning the presidency over to his brother Raul in 2006. Cuba still clings to its communist system with over 90% of the economy owned by the state. Current president Raul Castro has implemented some reforms saying that "Cubans...need to start working harder and expecting less from the government". However, the article also says that Raul Castro has "no desire to depart from Cuba's socialist system or embrace capitalism". Even though President Castro has no intention of leaving the socialist system, could this signal a shift in thinking that would potentially lead, many years down the road, to a change in the Cuban economic system? Or is Cuba too set in its ways for any sort of economic change?

U.S. regions reporting slower growth

As the summer comes to a close, more parts of the U.S. are reporting a slower growth rates as the economy's momentum. Five of the twelve regions that are surveyed by the FED are reported as having slowed growth. The FED had seen that only two regions had decelerated growth during their July survey. What do you think is causing this deceleration now as the summer ends?

Keeping Bangladesh Competitive

I have linked to a blog that describes a long paper written by The Asia Foundation. It mentions that if Bangladesh wants to remain competitive in its garment and textile industry, it needs to invest more in human capital and technology. In today's global economy, a country must stay competitive internationally as well as within itself. This example of Bangladesh is great for showing how the competition of capitalism can extend past domestic borders and further force industries to grow. The question now, specifically referring to Bangladesh, is how a country with such a low GDP will be able to afford such improvements in human capital and technology.

The Miracle of The Cerrado

Providing enough food for the world's population has always been a topic of discussion for recent economist. Brazil has recently taken a huge step towards being able to reach that long-term goal of stopping world starvation by 2050. However, Brazil had to go through a process before making this huge breakthrough. The recipe for success started with pouring industrial quantities of lime (pulverised limestone or chalk) onto the soil to reduce levels of acidity. Second, introduced a new breed of grass that is capable to grow in the cerrado for the development of cattle. Thirdly, started using a new breed of soybean that jumped Brazil to the second largest user of GM(genetically modified) soya after the United States. It is emphasized that Brazil had to implant a system and not just new technology in order to be agriculturally successful. This article helps explain that it takes many aspects of a country to come together in order to see real development and positive growth.

Tax break proposal from Obama

It looks like the Obama administration is taking aggressive measures to help the economy. Yesterday, President Obama announced that he would propose that companies be allowed to write off 100% of their new investment in plant and equipment through 2011. I personally see this a very positive step because besides consumer spending, business investments make up a huge portion of our GDP. This new tax break will stimulate firms to bolster their investments in capital, which in turns will lead to job creation and as a result mitigate the persistently high unemployment rates.

The Economy- what to do?

Many economists say that the Obama administration is doing too little to rebound the economy, and not in time. Those economists suggest to let the markets be and they will come back on their own, without the help of the government, and that any aid to the down economy will be of no use. Others say that the government can't simply sit back and let people lose jobs and money. So what is the best plan? Is there anyway to be in the middle, where some markets receive aid and others are forced to tough it out?

Someone's Looking out for Us

Every college student has to deal with issues regarding money and in most cases, it comes tied along with credit card debt. The article establishes that, "The average college student graduates with nearly $4,100 in credit card debt, according to a 2009 survey conducted by student lender Sallie Mae. The survey also showed that 84% of undergraduates had at least one credit card last year, up from 76% in 2004." Now, New York has new reforms which restricts schools from gaining a percentage of financial charges on student credit cards. So now, "under the reforms, SUNY will not share students' personal information with credit card companies unless the school has obtained students' prior authorization. It will also offer financial literacy programs to educate students on student loans, credit cards, and other commonly used financial products." I concur with this movement and think that college students, while being careful with their money, always could use a helping hand from time to time.

Bright Economic Forecast

Agriculture has been receiving high demands from abroad, even though it is only a small part of the U.S. economy. Corporate buying also increased but it’s still too early to “declare a comeback.” Improvements at “the big three” can be seen in increase sales at Ford, hiring at Chrysler, and large public stock offerings from GM. The question remains if these companies will they be able to compete long term with foreign motor companies that have proven to be more efficient? It doesn’t seem likely with GM’s sales reported as dropping 25% in August. On the positive side, American manufacturing also increased to “support demands from markets overseas.” Mostly the increase in manufacturing has led to an increase in temporary jobs, which does not signal an increase in job stability for American workers. I found it interesting that the sectors that seem to be prospering are ones that I would not have predicted. The United States does not have the most efficient production of agriculture worldwide, yet the agriculture industry is in high demand: why? Overall, I think that the economic growth mentioned in the article does not signify return to stability for the American economy...

World stocks gain, dollar falls

This article was about how the world stock market rose, but the dollar feel on Monday. Though the dollar feel, there was a better than expected data for US jobs. The dollars dropped relatively to many of the bigger nations' national currency. Do you see this trend continuing on to further reduce the price of the dollar to other currencies? Do you believe this fall in the dollar relative to other currencies could have anything to do with the events happen in the gulf with the oil spills? If so, could fixing all the problems with the oil spills rise the value of the dollar in the world market any?

Stocks fall on fresh European bank concerns

A Follow up to monday's post. Markets monday declined because of renewed European credit fears. There is not going to be any other informational news for the rest of the day so it is likely that the markets will remain in the red.

It has been reported that there is more debt on European banks than previously stress tests reported. It will be unclear how much debt and what kind of debt until we find out what was included in the test. It will be interesting to see what will happen in the markets this week. The renewed fear about banking sends us reminders of what happened in greece.

It is also interesting to note how news from abroad can directly affect our markets.

"What it's going to take to keep (a rally) going is more good news," said James Angel, professor of finance at Georgetown University's McDonough School of Business. Economic data continues to show the economy is growing, but the exact pace of that growth is still uncertain."

Home prices gain 3.6% in past year

Even the home prices show signs of stabilizing, better shape than it was last year, it is expected that they will fall in the next few months or even in a year. The demand for home is a lot weaker as anyone that could buy a house already has already bought one and those that can't aren't. Aside from the unemployment rate, and bank repossessions of foreclosed properties, the tax credit might somewhat contributes to the falling of home prices. The tax credit did indeed spur sales but it also made home values drop more than they should have during the period following the expiration. With every percentage drop in home values, we just added more foreclosures and upside down homeowners in the future which seemingly does nothing but extend this mess even further out.

Growth hopes to boost Global Equities

As the US markets were closed today, markets opened around the world with gains. With good news still overflowing from last week especially about employment. Stocks around the world showed gains today. Even though the IMF warned of weak growth.

What state is the US Market in? Do the US markets depend on other markets?

Theres a quote in the article that says "Merger and Acquisition activity was the most active since 1999"

What does this mean for US markets, is our markets actually shrinking if companies are buy their competition or other businesses?

Obama kicks off campaign with infrastructure plan

This article was about the infrastructure plan that Obama plans to unveil on Wednesday in Cleveland. The article explains that Obama plans to put a plan in effect that will give a $50 billion investment to "...rebuild 150,000 miles of our roads -- that's enough to circle the world six times. ... We're going to lay and maintain 4,000 miles of our railways -- enough to stretch coast-to-coast." Obama is under pressure to make a difference in the unemployment rate and create jobs. This plan will create jobs in constuction of roads and railways. A transportation expert says that 35,000 jobs are created for every $1 billion in transportation construction investment. Over ten years the plan would cost $100 billion. Do you think this plan is a good idea or do you think America should do what John Boehner suggested to "... end Washington Democrats' out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses."

E.U. Chief's Comments Likely to Spark Farm Aid Debate

Janusz Lewandowski, the budget chief for the European Union, said today that farm aid should be reduced to "about one-third of all outlays so that public money could flow to research and innovation". This comment is likely to spark debates over the priority of agriculture subsidies in the E.U. budget. These subsidies currently account for more than 40 percent of the E.U. budget and Lewandowski feels that should be decreased because "Farm spending should constitute about a third of E.U. spending and not its main part". Changing current policies will be difficult as all 27 member states must agree to cuts and many countries will want to preserve their funds with others, especially the new Eastern European members, pushing for a more equal share of these funds. Ultimately this is likely to be another fierce debate in which the national interests of individual member states clash with what could potentially be a beneficial change in policy for the E.U. as a whole.

The cost of weapons

US decreasing spending on new weapons, cutting military costs including personnel cuts, internal cost-cutting redirect money to the war in Afghanistan. After a decade of ever-rising defence spending, “the gusher has been turned off”; now his greatest fear is that defence spending will be cut to curb the budget deficit. Europe cutting defence spending too and China rising in economic strength: concern for west?The beginnings of a sound policy today, he argues, might be for America to withdraw from a costly war in Afghanistan and pull forces out of Europe. But what about those who look to US for military aid? Military as a part of spreading American influence has led us to an influx of commitments. Military goals now are to become better at fighting insurgencies; to preserve enough might to protect allies from, say, North Korean aggression or Chinese hegemony; and also to maintain “all options” for dealing with Iran’s nuclear programme. That means finding new money within constrained budgets. Costs for increacing weapons, military innovations, and training and highering personnel are too high to build up military.

Should US government debt be rated junk?

This article makes the argument that US backed debt is not as strong and reliable as it once was. The author even goes as far as to compare US and Greek debt and deficit structures. Is this really a fair comparison? Was or is the U.S. economy likely to default on any debt they have ever issued? I agree that the deficit the U.S. government is running is excessive. I also believe that the U.S. should borrow the EU's ideas for reform and cut public spending and raise the age people start to receive social security. I do not believe the US debt is ever in any risk of be defaulted on.

Behind Stimulus Argument, Debate on Causes of Joblessness Grows

This article provides two arguements for the continued high rate of unemployment. One of the arguements goes along with the standard reasoning behind unemployment. Demand is down, people are not spending money, businesses are not growing and investing. The other arguement is a little more interesting. Unemployment can be curved if people could figure out a way to sell their house and move to where to work is. If this is the case, is there anything the government can do to fix this disparity or will the job market just have to take care of itself?

Brazil's Bolsa Família & its Limitations

In its effort to reduce poverty and child labor, Brazil created a welfare program in 2003 called Bolsa Família (family grant). Participating households get a monthly stipend of about 22 reais ($12) as long as their children stay in school and get regular medical check-ups. This program has been acclaimed for being responsible for 1/6 of Brazil’s poverty reduction and for reducing Brazil’s Gini index from 0.58 to 0.54. The article I have linked deals with the limitations of this program, most notably about its ineffectiveness in cities versus its significant impact in rural areas. Out of all the possible causes explained in the article, I think the most notable reason why the program might work less in cities is because the costs outweigh the benefits. The jobs kids hold in cities pay a lot more than rural jobs like farming, which most children do essentially for free. The monthly stipend given through Bolsa Família may often be less than a city worker’s wage. If Brazil is really looking to further increase the number of participating families, a program needs to be designed uniquely for city living conditions. Even so, the article also makes a good point that Bolsa Família has done an outstanding job at helping reduce rural poverty, malnutrition, and the absence of clean water in Brazil.

Growth in Jobs, Beats Concerns

In this article it is said that our economy has possibly avoided a double dip recession and the private sector has added 67,000 jobs in August, with some of the strongest in health care, food service, and temporary help. On the other hand there was an overall loss of 54,000 jobs. With indicators showing a gradual increase in consumer confidence and a growth of employment in manufacturing could be signs of the economy moving out of the recession. The Federal Reserve is said to continue providing help if the economy is still showing a stagnant recovery. Overall I think the economy will not have a double dip recession, however it will take time to recover. As mentioned in the article it took awhile to create the problems which caused the current recession and experts fear it will take a while to repair the damage. Do you agree with the prediction that we will not have a double dip recession? why or why not?

Trade Gap in U.S. Probably Narrowed on Falling Imports as Economy Slowed

In July, the U.S. trade deficit narrowed as a result of Americans buying less goods - and many of these goods are imported from abroad. Many economists would say the economy is steadily recovering, but consumers and businesses in the United States spent less in the month of July compared to other months. This trend is expected to continue into the coming months.

The United States plays a huge role in the recovery of global economies. Being the number one consumer in the world, the U.S. needs to increase consumption to alleviate economies around the globe. Many foreign businesses rely heavily on U.S. consumption to maintain a successful business. It appears the U.S. needs to finish what it started - the global recession.

India's disappointing government: Much less than promised

This article is related to my previous post about the potential of India becoming a global power in the future. Yet this article showed us that Indian government is not doing such a good job as it's supposed to which largely hinder the country's growth. Other than output had grown by 8.8% in the second quarter compared with the same quarter last year and a strong growth of 12.4% in job-creating manufacturing, almost everywhere else the results are disappointing.

Food Prices Hit Ramadan

In the close of the month of Ramadan, the holy month for Muslims around the world, observed through fasting from dawn till dusk, food prices have risen exceptionally. It is relatively common for food prices to inflate at this time of the year as Muslims tend to gather more often for large family meals. However, the exception this year is that due to a shortage of meat, the cost of meat products such as beef and mutton have gone up almost a third. Meat prices have soared throughout the Middle East causing alarm for people throughout the region. Essentially, this article illustrates a very simple demand and supply problem where high demand and a shortage of resources has caused a tremendous price increase.

The reason why I chose this article was to illustrate that even though one can easily assume that the demand for food would mostly decrease in a month where fasting is observed for almost twelve hours (in some cases more), it is the opposite. Furthermore, in a region where the poverty and unemployment rate is pretty high, this is a very alarming situation.

Why Coffee Is Getting More Expensive.

This is simple economics. Supply decreases, demand increases and you experience a price increase. Columbia is such a huge supplier of the worlds coffee that a couple slow grow seasons can seriously effect the market. It can be interesting to see a market price shift due to increment weather.

Where the jobs are now, and where they'll be next

This article deals with the unemployment rate and jobs. It described that though the unemployment rate rose, there was a rise in private sector employment over the year. The article also mentioned that the unemployment rate will most likely continue to rise before it ever gets better. After reading the article where do you think the jobs will be after the unemployment turnaround and recession? How far out do you feel we are from a turnaround and full recovery?

Obama Backing research Tax credits

In this article Obama is set to outline a 100 Billion dollar proposal for research and development tax credits. This is going to be a first of many steps to "jump start" the economy. Obama also wants to extend credit options to businesses from 14% to 17%.

"That's where U.S. competitiveness lies in high-technology industries," Laura Tyson, a member of Obama's Economic Recovery Advisory Board"

Now im all for research and development and continuing to develop better products and helping businesses. But what would you do to so call "jump start" the economy? Do we need more tax breaks? With unemployment so high there needs to be something done about our unemployment rate.

Chinese billionaire on success, equality

This is a video interview between CNN correspondent Fareed Zakaria and Zhang Xin, a Chinese real-estate investor worth around$2 billion. Zhang Xin talks about the discontent that the Chinese people feel and express through social media networks such as Twitter. Even though GDP may be high, the people are feeling social discontent. She also discusses the state-run government operations in relation to her field of business and the effects of planned versus market economies. "We have no strategy.", she says of future business plans. The government sets a strategy and the market follows. "As imperfect as the market economy is, we still do not have a better system."
In response to relations with the US she says,"American glory is fading a bit." The job opportunities are better in China for graduates than in the US.
In China, women are experiencing higher levels of equality. She mentions the higher number of women CEO's than in other countries.

Great Recession was emotional ‘roller coaster’

I found this article to be very interesting from an economic standpoint. The effect of such high employment has forced millions to take drastic measures to find new jobs, some even switching job fields or relocating across the country. From an economic standpoint, it will be interesting to see how certain fields demand grows while other decline and the effects of such movement.