Fears of Chaos Temper Calls for Change in Morocco

In Morocco, the people are asking for a change in their government by asking for more democracy. Morocco is another country in the North Africa/Middle East area that is pressing for change.

The people of Morocco are requesting for a more legitimate democracy by limiting the power of the King, Mohammed VI- who with his advisors holds most of the power. Similar to Egypt- there have been protestant movements via the internet and Facebook and other social network websites. But there have been large protestant movements with violence and arrests.

Mohammed VI and his advisors understand some type of reform is needed in Morocco- about 20 percent of the population lives below the poverty line; where the median age is 26.5; and where there is high unemployment, high illiteracy and a level of corruption judged to be more severe than in Tunisia, if below that of Egypt.

Libya Death Toll Surges in Crackdown

The protests that started in Libya over the weekend are continuing on. The leader of Libya, who has been in power for over 40 years, is beginning to lose his handle on the situation. He has begun killing other Libyan's and this has only fueled the countries want to overthrow his regime. He had militia fire into crowds killing over 250 people.

This article is interesting because it highlights some of the points the guest speaking was making on Friday. Most of the protestors are young men and the protests have grown stronger as the weakness of the government is becoming more and more apparent.

Should the federal government let states go bankrupt?

While bailout of companies seems to be over, state bailout is still a hot topic. This year state governments face a collective $125 billion in deficits. With high unemployment rate, state governments need money to pay off the benefits. However, they also need to pay the bill to the federal government for the previous bailouts. What the federal government should do about this deficit is yet to be decided. There aren’t too many options, however. Mr. Obama offered states a short-term relief by postponing the bill till 2014. Newt Gingrich, a putative Republican candidate next year, and Jeb Bush, Florida’s respected former governor, proposed that states “should be allowed to go bankrupt , so they can restructure such liabilities.” Eric Cantor, the House majority leader, on the other hand, rejects the possibility of either bail-outs or bankruptcies “States can deal with this and have the ability to do so on their own,” he said recently. Should the federal government yet once again bailout the states?

Consumer prices show inflation turning up

The U.S. economy has seen an overall decline in inflation for nearly 15 months. But recent data has shown that there has been a subtle increase in inflation in January, which leads many to question where inflation will go next.

Many economists are able to agree on the fact that the U.S. has hit the low of inflation, that inflation should now be expected to rise. But the question is, 'to what extent will it rise?'

Economists differ in their predictions about what will happen next. If unemployment stays at a high, around 9-10 percent, many think inflation will stay at its current low levels. This is consistent with the theories behind the Phillips Curve. Recent filings for unemployment benefits seem to suggest that high unemployment is here to stay for a while, and therefore low inflation will be around as well. But even this data is murky, as many attribute the recent rise in unemployment to volatile winter conditions, and they say unemployment will continue to decline.

This issue brings about questions for the Fed as to what direction to take. The Fed prefers to have about 2 percent inflation so they are questioning what sort of steps need to be taken, if any, to address the issue at hand. The danger of having stagflation should be in the back of their mind as they develop their next move. Having high unemployment with equally high inflation could prove catastrophic to an already weak economic recovery.

The United States' Slowdown

This article discusses a new highly debated e-book called "The Great Stagnation" by Tyler Cowen. He explains that pre-1974, the United States economy experienced great economic growth and wealth by harvesting "low-hanging fruit" due to the availability of mass amounts of cheap land, growing education levels, and technological revolutions. Since then, however, the United States has experienced a slow-down in just about everything- slower life expectancy increases, slower job creation, etc. He says that all of this is essentially a technological plateau that we are currently stuck on. What this can mean is a change of values to a more postmaterial set of priorities and the improvement of quality of life without material gain necessarily. The author runs through the lives of 2 hypothetical men who grew up during different times in American history and thus have very different value sets. I really liked this article; I think it is a really interesting perspective on economic outputs and what our society is producing that is different from what we have been looking at and measuring it by traditionally.

Threat of Protests in China

Since the revolution in Egypt there have been many problems with protests in other countries. In particular, China has recently been reporting mini public gatherings of protesters put together through social media and microblogging outlets. The police have been able to keep the protests under control and the Chinese government has been focusing on changing the negative public opinion on the government through these same social media and microblogging outlets. It seems to me that instead of attempting to change the opinion that the public has about the government, the government should be focusing on actually catering to the needs of the public and making them feel more comfortable in their home country of China.

How Convincing Is the Case for Free Trade?

I understand the benefit of free trade and generally believe in the idea. But national governments exist not only to provide added benefit to the 'winners' but also to provide support to the 'losers' in this paradigm. The problem that I don't see anyone addressing with "off-shoring" is how do you replace those 30-40 millions of lost jobs. These are already service jobs being lost. In the past, the magic of progress replaced manufacturing jobs with service jobs. Also, if what is really being said here is that this off-shoring represents a transfer of wealth from richer nations to poorer nations, while that may be beneficial to the planet as a whole it does raise the question of what a particular nation needs to do to respond. Education is obvious, but I don't think it's unreasonable to consider ways of mitigating the loss of jobs

Why Obama can't save infrastructure

The author argues for the privatization of infrastructures.

American transportation system is now in desperate need of costly repairs but the political leaders cannot agree on how to pay for them. President Obama just proposed $556 billion in new infrastructure spending over the next six years, including money for road and bridge repair, high-speed rail development, and the formation of a National Infrastructure Bank.
Traditionally, spending on transportation infrastructure was paid for by increasing gas taxes, but today's GOP orthodoxy is to oppose all new revenue generators. Another solution is that state and municipal governments can partially privatize their infrastructure assets. The federal government is like a piggy-bank for local governments, and actual implementation and maintenance decisions should be made by local governments.

The article argues that it is time to get over the exception that the America's transportation infrastructure should be government-owned and operated. The reasons are, first, the current system isn't working and there is huge needs in funding for infrastructure. Second, it's counter-intuitive to think that a private investment firm wouldn't do everything in its power to make its transportation assets safe and efficient. And third, local governments have the ability to structure these leases any way they see fit. Infrastructure privatization provides a solution to the current standoff between Obama and House Republicans -- by providing for investment to repair and maintain existing infrastructure, without requiring tax increases or enabling parochial pork. There are also other benefits for infrastructure privatization: up-front payments for local governments to pay existing project debt and to fund other infrastructure needs.

Oil Flows, but High Prices Jangle Nerves

This article talks about the impact of the unrest in the middle east and north African countries (MENA countries) on the global oil prices.

MENA countries contribute to 35% of the world's oil production. Possibility of disruptions in supply from these countries result in skittish oil markets. This as a result is a burden to the global economic recovery.

Oil prices have risen 30% since September 2010.

There is a reason for optimism, as Saudi Arabia can potentially maintain the global production supply of oil if the affected OPEC countries experience fluctuations. This was mentioned by the president of the World Bank at the 'Group of 20' meeting.

90% of growth in oil production will have to be met by MENA countries in the future because alternative sources of energy still have a while to introduced on a large scale.

This article helps bring global perspective to the current unrest in the middle east.

How Obama handled Egypt

During this incredible debacle in Egypt, Obama has been criticized for acting too slow to the troubles in Egypt. The article speaks about how it may not even be necessary for the US to get involved because we don't have much of a relationship with Egypt. Many critics say that Obama and his team were acting "amateurish", "hesitant, inconsistent, confused and just plain wrong" while Egypt has been going through this revolution.

Also, the critics are saying that the lack of actions by Obama has failed to show Egypt that America is on their side. On the other side, some of the republicans have applauded his actions saying that he has handled the issue very well. It is a difficult position to be in as the president of one of the strongest countries in the world. I don't feel that Egypt's issues are necessarily the most pressing issue for the US considering we have enough issues to deal with on our own land.

Obama Looks to Postpone Budgetary Reform

President Obama unveiled his budget draft to congress this week, causing new waves of frustration from both democrats and republicans alike. The budget displays a continuation of a Keynesian approach. While intentions to help stimulate the economy are good, it fails to realize the ramifications of continued large deficit spending. While it is inevitable at this juncture, the debt ceiling is rapidly approaching. Smarter spending on sectors like education, alternative energy, and infrastructure repairs and improvements is necessary. The article warns that budgets will only become tougher to make smaller as baby-boomers retire and want health care and social security. The renewal of the Bush tax cuts and the exorbitant amount of military spending on Afghanistan make this even more difficult. Political stalemate over the budget, of which the republicans made their own draft, will be a hot-button issue for the months to come.

How the middle class became the underclass

This is an interesting article that ties into the article we read for class, "Comparisons of Economic Mobility". The article discusses the income for the middle class over the years, along with the struggles the middle class is facing. It touches on the role of unions and the decline of unions over the past 30 years and how that has affected the middle class. While this is happening the rich are becoming richer, creating more difference between the classes, pointing to the benefits of globalization for corporations among other things. 

G-20 Agrees on Yardsticks for Imbalances as U.S. Seeks Leverage on Yuan

This article states a problem to global economic recovery which is the disparities of growth between the emerging economies and "debt-laden regions".  According to the IMF forecast, China will still be the fastest growing economy in the world in 2011.  The western economies including U.S. seeks to push up the undervalued yuan.  China however sought to ease the tension by raising its bank reserve for the eighth time in a year to fight inflation while still resisting western pressure by objecting to the "use of the current account,the widest measures of trade, as a benchmark" which can give a opening to the west.
Next G-20 meeting in mid-April will formulate voluntary set of guidelines for national economic policy that will be a yardstick that can be used for leverage on Yuan.  Nations are clashing over policies that are needed to erase global imbalance and sustain recovery.  But the agreement of G-20 finance officials to monitor global economic imbalances more closely might prevent a future crisis if it is put in to action effectively. 

Cameron Plans to Purge Welfare Incentives Not to Work

This article basically states that the welfare state approach by Britain's prime minister has too many loopholes where people can take advantage. Some people are making a lot more from being unemployed than working. Cameron wants to change this system so that there is more incentive to actively search for and find jobs. This shows one of the problems with maintaining a welfare state. It is similar to some of the problems associated with Sweden's welfare, as discussed in class. Although there are many positives to offering different forms of social welfare, it is clear that certain people will always try to take advantage of the system.

Mideast Protests Drive Up Oil, Threaten Recovery

A sustained 10 percent increase in the price of oil can drain up to 0.1 percent off the U.S. economy. By this rule of thumb, recent petroleum price rises could cost the American GDP roughly $60 billion. This is far from a knockout punch to a $14 trillion economy. But it sets up the United States for a more lethal combination: higher interest rates and greater global instability.
The recent oil price jump could not have come at a worse time. U.S. energy prices had already risen 7.7 percent in December, 2010 compared with December, 2009. The situation is even more dire in the euro zone, where fuel prices were up 11 percent, according to figures released today by the Organization for Economic Cooperation and Development in Paris. If Middle East uncertainty fans even higher prices over the next few months, inflation hawks at the U.S. Federal Reserve and the European Central Bank could well prevail, leading to interest rate hikes that could slow transatlantic recovery.
It is the prospect of long-term Egyptian and Middle Eastern economic and thus political stability that is the best insurance against rising energy prices.

Global Cotton Prices Rise Rapidly

The global cotton prices have been rising steadily and steeply for the past two years. This rise in cotton prices has come as a result of a global shortage of stock of cotton. The shortage has occurred because of the commodity prices crashing after the financial crisis. Additionally, floods in Pakistan, India, and Australia has caused a huge decrease in the supply of cotton in the global market since these areas export large amounts of the global cotton stock. The increasing prices of cotton is great for cotton farmers in all markets, especially since traditionally cotton farmers don't see huge profit margins compared to other agricultural products. But this could spell trouble for textiles, and clothing manufacturers. As prices of inputs increase, the price of the final product is increased. Normally this wouldn't be a big deal, but in the economic condition we are in now, retailers cant afford the higher clothing prices, and the consumers cant handle the price inflation either. So in order to combat this inflation, clothing producers should introduce more substitute inputs into their clothing such as polyester until cotton supplies and demands meet a more steady equilibrium. This will cause a shift from cotton production towards fiber production within the local markets of cotton producers.

Walmart in South Africa

This article highlights the acquisition of Massmart, a South African firm that owns 290 retail stores in Africa, and the opposition they are facing from stakeholders. Many competing African businesses claim Walmart will kill off the unions, make les humane working conditions, and import Chinese goods instead of acquiring the products from more local African sources. Walmart on the other hand claims that they will not change Massmart's business model, and they only wish to accelerate the growths in business. Now we must wait and watch.

Egyptians in America Ponder a Return

This is an example of how the failure of the government leads to the people immigrating to other country and hesitating to go back. For instance, hundreds of Egyptians come to the United States on student visas, planning to earn graduate degrees and look for a job in academia. For years, many of them scrambled to find jobs anywhere in the world outside Egypt. They worried that working as a professor there would not provide enough money to support a family. And more worrisome, they said, was the prospect of limited academic freedom. Out of 300,000 Egyptians in the US currently, there are many of those who have become wealthy in the US. They want to go back and contribute to their country, but they are reluctant to give up all freedom the US offers.

There are still some people who believe in the better future of Egypt with their support. The article gives an example of Rania Behiri, 31, who left Egypt with her family when she a toddler. “People don’t have trust, they don’t have faith and they have been just so oppressed and messed up by the laws that they need to learn how to think for themselves,” Ms. Behiri said. “It’s going to be invaluable. This whole thing showed that people truly can make a difference — so now I feel like, of course, I want to be a part of it.”

Ms. Behiri is one of countless Egyptian immigrants speaking in such grand terms these days, driven by what they saw happen to their birthplace. Many in the Egyptian diaspora here say they hope to educate people back home before elections and will press for the right to vote as well. After years of oppression, Ms. Berhiri said, many Egyptians might be easily deceived by unscrupulous or power-hungry politicians. Friends her age, for example, could be so focused on improving Egypt’s economy that they are too willing to overlook religious demands by public officials.

Balancing The Budget: The Problem Might Be You

It seems that we do not dislike the government as long as we don't have to pay for any services provided by the government. However, as soon as we are faced with the bill, out stomach cannot handle many government services.

Impacts of fuels economic vs. political

In the midst of increasing inflation across the UK and an unstable economic situation across Europe, UK citizens now have to deal with higher oil prices as well as higher taxes as the government tries to keep the economy from collapsing like it did in Greece and Ireland. Taxes have increased 2.5 percent and diesel and gasoline are at near record highs which is causing outcry and some protests at oil refineries. The article also outlines how the higher oil prices have effected the sales of fuel efficient cars due to residents paying taxes on how much pollution their cars make. It points out that GDP and vehicle travel used to be very closely related but with the current economy and oil prices it is taking less vehicle travel to create the same 1pound of GDP.

Rising Food Prices Push Millions Into Poverty, Study Says

This article discusses the sharp rise in food prices last summer has caused millions of people living in developing countries to be in extreme poverty. These increases in prices has in return increased the vulnerability of the countries that import the majority of their food, and have limited amount of government spending. The world bank explained that it is important to slow the increase of poverty and start boosting safety net and nutritional programs to help these countries that are most vulnerable.

Germany as a role model Economy?

The German Economy has bounced back from its recession in a way that makes us wonder if the German economy is a role model economy. Even though the there are many things about the German Economic System that have always worked well, the reason why they bounced back to well from the recession is partially luck. It just so happens that Germany is the number 1 producer of some of the items that the Chinese currently want like luxury cars for example. Having said that, the government succeeded in subsidizing some industries which payed-off which means that the German bounce back was not entirely based on luck. It must be said that Germany is currently too dependent on foreign demand and if they are unable to increase the domestic demand the country could face another economic downturn in the near future.

Where are the workers?

The article is about how people who lost their jobs during the recession aren't necessarily trying to go back into the labor force now that the recession is over. The labor force isn't growing like it should. Many are claiming early retirement or going back to school. The participation rate has been steadily declining for the last 3 years which doesn't make sense considering the recession is over. Most notably, men aged 25-54, have not been entering back into the labor force for one reason or another. This affects the participation rate the most as they are usually the highest sector in the rate. I believe that the rate will see a gradual increase in the coming future, however.

Republicans Dismiss Obama Budget as 'Path to Bankruptcy'

President Barrack Obama's $3.7 trillion budget sets off a clash with congressional Republicans who seek deeper spending cuts and face a potential revolt within their own party if they don’t pare aggressively enough.
Obama’s first budget request since Republicans took House control was met immediately today with demands for a far bolder reshaping of government. House Speaker John Boehner, an Ohio Republican, said the president’s plan “will destroy jobs by spending too much, taxing too much and borrowing too much.” He promised a rival plan for 2012 within weeks.

Ripples, spreading Even the oil-rich Gulf monarchies are feeling the Egypt effect

Since no one has posted anything about Egypt yet.. this is from the economist, first page today.

This article talks about. although there are common grievances in all the gulf states (such as unemployment, living standards, poor schools, repression, and corrupt governments) the current governments are very good at using tactics like propaganda, tribal networks, and patronage to divide and weaken any opposition.
Revolutions are unlikely, they say, for Saudi Arabia, UAE, Qatar, and Kuwait. These countries still have more gas and oil to quell the peoples complaints. However, in Bahrain, the prime minister al-Khalifa , has been in power ten years longer than Mubarak and the gas and oil supplies are dwindling, already leading to unrest.


I posted an article earlier talking about how Egypt's protests had effectively almost stopped the Egyptian economy and their stock market for several days. If these protest continue (not that I'm against them) in other surrounding countries, the same will likely happen to their economy and the regions economy. Something to think about ........

U.S. trade gap widens to 3-month high

In December, the U.S. trade gap widened to a 3-month high. A large portion of imports is attributed to the rising oil prices while the largest export was seen in weapons. One of the more encouraging signs was the fact that exports grew at a faster rate than imports. The article makes note of president Obama's goal to double exports by the year 2015, which at the moment seems to be a reach for the U.S. This appears to be a reach primarily due to the undervalued yuan. Obama's goal would be a lot more realistic if the Chinese allowed their currency to appreciate, which would decrease their exports/trade surplus. This might not tremendously increase the demand for U.S. exports but this action would definitely create a more level playing field.

Eye-wateringly expensive

This is a great article on the ethical problems that other countries face. Government officials have basically made it impossible for new companies to sell their products in Angola through bribes and what not. The author talks about how incredibly expensive everything was in the city because the government and their connected firms are holding onto extremely large profits. The last little story about a watermelon was kind of humorous but also sad that an economy can be so corrupt.

China raises interest rates. Markets yawn. Why?

NEW YORK (CNNMoney) -- China's central bank raised interest rates Tuesday morning. And the market responded with a collective yawn. At first, stocks barely budged. Ditto for bond yields, oil and the dollar.

As the day progressed, stocks actually marched even higher.

So much for fears of global inflation running amok and worries about how emerging markets would be forced to tighten monetary policy.

Yes, I'm being a bit glib. Investors would be unwise to ignore what's going on in China. The fact that the People's Bank of China raised rates by a quarter of a percentage point to just over 6% is of course interesting.

It is the third such move in four months and comes at a time where Ben Bernanke's Federal Reserve is still keeping its benchmark rate near zero and the European Central Bank is leaving rates at 1%.

China is experiencing inflation in its currency, so China responded by increasing the interest rates to curb the spending and increase savings in an effort to reduce the inflation. People say that China is not being aggressive in fighting the inflation; on the other hand, China wants to take a slow gradual to increasing the interest rates because being aggressive may result in slowing the lending and economic growth.

Lets make a deal! Mergers are back.

There has been a lot of intense activity with companies deciding to merge in the start of 2011. It is up 78% since the beginning of last year. A large $7 billion deal made by Ensco and Pride International was revealed. Every sector seems to be taking part in this exciting process, from coal companies to banks.

This activity has been thriving due to the combination of extremely low interest rates and a rising stock market, which make it easier for firms to do more deals. “Companies have the option of borrowing money at attractive rates to finance deals or using their stock/cash as acquisition currency."

I think this is great to hear our economy getting back on its feet. It is also seen that when companies are merging stocks seem to do very well, which is a plus. However, there can be a downside to mergers because it is not easy bringing together two different corporate cultures, so it doesn’t always work out. Is it a good thing that merging is going on right now with our economy starting up again?

Corporate Taxes

This article deals with corporate taxes, and explains that though the United States has one of the highest corporate tax rates, companies rarely pay that amount. With such a high rate (35%), companies have the incentive to devote mass amounts of time to finding loopholes. The government raises less revenue with this inefficient system. Of course, some companies aren't as ingenious as General Electric and do in fact pay the stated rate, or close to it. Either way, decisions by companies are almost always made with the tax consequences in mind. For instance, airlines buy more planes than they actually need. When companies do things they would not normally do, it slows economic growth.

China Raises Interest Rates to Quell Inflation

Today Beijing raised the interest rate for the third time since October to try to help inflation worries. They raised the one year deposit rate up to 3 percent and its one year lending rate to 6.06 percent, both by rising by a quarter of a percentage point.
Growth rate last year was at 10.3 percent, up from 9.2% in 2009 but inflation is 4.6%.
Inflows of cash from overseas and easy credit have caused the rates to rise all year.

The Economist: How does inequality matter? (blog)

This is something I came across which is very relevant to our Econ systems course work.

The question posted is regarding the impact of increasing inequality in the current economic crisis. A few reputable members of the American Economic Association have contributed to this debate.

Global inequality between nations and domestic inequality within nations are both sub topics that came out of this debate.

The socio-political dynamics seem to be a key concern for economists. However the reasons behind inequality, such as rapidly changing technology and possible solutions to inequality have also been discussed.

It was interesting to find what these economists had to say. Challenging views to mainstream ideas were delivered, which were backed with examples. Serious economists do not consider inequality to be an outcome of 'market failure', rather that it is a result of institutional failure. This idea was important in the podcast with guest speaker, Don Boudreaux. I noticed that these economists reflected that in what they wrote.

This blog is less academic then the podcast, however the many point of views thrown out in the debate help shape a better rounded understanding of unemployment and why it's continuing to exist and grow.

Troops held over DR Congo mass rape

Rape in DR Congo is a frequent unfortunate thing that has been happening since the beginning of the war. It was previously done by the rebels but recently, as talked about in this article, it is done by the army. The very people that were put in place to protect the population are the same that turned around and arm them.

What happened was an army officer got drunk and fired his arm and shot a civilian. It is unacceptable that an officer on duty with a loaded fire arm drinks. The villagers were upset because they thought the civilian was dead and attack the officer and killed him. When other officer heard about their colleague been killed, they attacked the village and raped about 50 women. And some of these women were tied by ropes and other beaten with a rifle before been raped in front of their children.

What I am trying to understand is that what do the women of that village have to do with the death of their colleagues? I strongly believe that the people that attack their colleagues are men, because in their culture the woman is suppose to at home cooking and taking care of the kids, so it is less likely that she would be where the officer was attacked.

Another point I want to make is that, this action are the cause of the miss management of the government. Because with the current shaky government in RDC it almost impossible for them to actually make a good selection of who can get into the army and who can’t.

As Germany Booms, It Faces a Shortage of Workers

Data was released this past week indicating that the unemployment rate in Germany is the lowest it has been in 18 years. For many countries, such as our own, this would be a great accomplishment but for Germany it is a clear sign of their severe lack of workers. When other Western European countries were opening up their borders to Eastern European workers, Germany as well as Austria enacted strict legislation making it very difficult for immigrants to come and find a job. Thus, these people, coming from countries such as Poland, Slovakia, and the Czech Republic moved elsewhere to find employment. Unfortunately for Germany, they were successful. Now they are settled in their new jobs and homes and it is unlikely that they will leave anytime soon. Industries including manufacturing, telecommunications, and health care are suffering because of this problem. The issue is further compounded by the low birth rate; the average number of children born to each woman is only 1.38. I found this article really interesting after reading and hearing so much lately about unemployment in the US, it was quite shocking to learn about this issue Germany is facing.

Euro Bailout Fund is Enough to Protect Against Future Crises

Last week, Germany and France proposed a new plan to deepen integration among the 17 countries that use the Euro as their national currency. The proposal is meant to strengthen the economic rescue fund, which amounts to 440 billion euros. It also could lead to the euro nations agreeing to more of their economic policies in a unified bloc.

I think it's pretty relevant to the article we had on France because that article discussed how the economic policies of France potentially led to them not taking as hard a hit with the recession. Perhaps their involvement in leading this new proposal is a function of their luck, or rather planning, with their economic policies. Obviously based on what has happened recently all nations want their economic systems to be better protected against another crisis similar to the one we've just had, and this proposal is supposed to be a big step towards safeguarding against history repeating itself.

Recovery Progressing, But Don't Heighten Expectations

In this article, the author talks about American recovery from the recession, noting the recent reports of 3.2% GDP growth in Q4, up from 2.6% in Q3. Yet this is still relatively small growth, disappointing, as the US is not falling 5.7% short of its potential. Despite this, real demand (GDP minus inventory sales) grew at an annual rate of 7.1%, the highest quarterly rate since 1984. The falling value of the dollar, while somewhat demoralizing, allows for cheaper exportation and thus increases for the US. Increasing exports would help our economy become slightly more balanced between imports and exports, decreasing our trade deficit (if only a little). The article suggests we be cautious, however. High commodity prices threaten to unseat current growth patterns, and potential economic shocks worldwide and in the US could hinder progress.

I find the article to be encouraging overall. It is more balanced in its approach to US recovery, as one might expect from an outside party. I think the idea of discussing real demand instead of simple quarterly percent GDP growth is a smart move. If this kind of demand continues and producers are able to increase the supply, we may see increased growth in our near future. Yet we must be wary of the rising commodity prices--especially food and petroleum. Possible oil spills or natural gas explosions, both sources of economic shock, should be taken into account as well. Seeing as employment is only a meager 1% above post-recession lows, growth in the face of American pessimism will be difficult, but it is certainly not out of reach.

Disney Looking Into Cradle for Customers

Disney is taking on a new approach to widen its childhood market- newborns. It is a risky new approach where representatives of Disney Baby will visit a new mother and offer a free Disney Cuddly Bodysuit in 580 maternity hospitals in the United States. Disney estimates the North American baby market to be worth $36.3 billion annually.

There are some parents and critics who already believe Disney is already a large powerful force in the lives of parents and its a strategy that is taking advantage of families at a very vulnerable time.

I believe it is a great market for Disney to expand to as well as develop new strategies and products to full fill the needs and demands of the market. But I believe that this new promotional strategy is too aggressive during a very special moment in a family, that should be free of business promotions. I know I would hate for someone to promote baby wear after the birth of my child.

What is everyone else's thoughts?

Egypt’s Transition

In this article, Obama comments that Egypt still has many options as to how the government will be restructured now that former President Hosni Mubarak has stepped down. Obama illustrates that it will be up to the people of Egypt as to how this will be done. Specific organizations such as the Muslim Brotherhood will not have the authority to shape the government as they see fit. Egypt’s revolution was started by the people, for the people. The people will ultimately redefine the governmental hierarchy and what type of economic system will represent Egypt. Interestingly, the type of change going on in Egypt can be characterized as a Marx inspired revolutionary change. A Marxist revolutionary change consists of building up to a crisis and resolving itself by systematic change. This is exactly what has happened in Egypt. The public outcry and protests against Mubarak’s reign eventually led to a change in government structure and power. President Obama remains hopeful that Egypt will cooperate with the United States and accept a partnership with the U.S. in the near future.

Leviathan Oil Field in Israel

The Leviathan Oil Field is a huge strategic find for Israel. Already having problems with their oil-rich neighbors and relying on them for oil, this newly found field could make Israel self sustaining for an estimated 50 years. The field is believed to hold 16 trillion cubic feet of natural gas. Two companies own the field, Delek located in Israel and Noble located in the United States.

China's property market: Protecting the Middle Class

In this article, it is explaining the difficulties that China is facing with its continued increasing middle class. China has such a large population, in addition to a fast growing economy that it is starting to affect the middle class and the tax system.

Housing prices have been on the rise since the start of the fast growing economy. China's cities such as Shanghai and Chongqing have implemented new property tax for those who are putting down payments on second homes. Also, the government has made owners of two houses unable to purchase any more houses. In Chongqing, they specifically are introducing a luxury tax on luxury homes, where as in Shanghai, it only applies to those who own more than one property. In the future, the Chinese government plans on increasing the construction of government subsidized housing.

These kinds of taxes will help continue to grow the middle class and allow them to live comfortably in the one of the largest economies in the world.