Alan Greenspan: Stimulus hurt recovery

Former federal reserve chairman, Alan Greenspan, discusses his desire to see less government intervention in order to increase business investment in capital. Alan Greenspan's thoughts and ideas on the subject are beginning to gain a lot of attention as some agree with him in his desire for less government intervention. These who agree with him believe that government intervention is the cause for uncertainty and less private sector spending. In the short video clip, Greenspan briefly discusses the deficit problem and he believes that it should be the government's priority at the moment. In order to address this problem, Greenspan believes that raising taxes would be the most efficient way to do so.

Death Toll Estimate in Japan Soars as Relief Efforts Intensify

Japan’s $5 trillion economy, which is the third largest in the world, was unbelievably threatened by the 8.9 earthquake, tsunami and recent hazards from the damaged nuclear rectors that leaked radiation. The disaster caused the economy to experience extreme turmoil by death, destruction and homelessness. This terrible catastrophe has left more than 10,000 people dead and millions of people without water, power, heat, or transportation. With all the collective anxiety, Japan’s stock market has seen the worst drop in three years with the main index falling 5.5%. The Bank of Japan put about $86 billion into the economy on Monday because of the worries for the banking and financial systems. The prime minister of Japan has kept a positive outlook on the crisis stating, “If the nation works together, we will overcome”. Since Japan does have such a strong economy, I believe they will in fact overcome this terrible tragedy.

From Gas to Gadgets: Japan's Disaster Means Higher Prices

I know there has been tons of talk about the implications of the earth quake in Japan, but here is a good article on how prices of various goods will be affected by the destruction. It is interesting to see how much the crisis will affect the United States and how the international trade will be hurt between the two countries.

Slower Growth Signaled by Wal-Mart Stock as Commodities Rise

Economists ignore volatile commodity prices when calculating inflation. The poorest families, who spend as much as 25 percent of their after-tax income on food and fuel, don’t have that luxury.

Rising prices “will shave a couple tenths off consumer spending, and the consumers that are going to get hit the most are at the lower end of the income scale,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. On March 11, he lowered his forecast for first quarter growth to 2.5 percent from 3.5 percent and second quarter growth to 3.5 percent from 4 percent, citing in part the persistence of higher energy costs.

America’s poorer families are suffering more than richer households as they face a bigger squeeze from the highest gasoline expenses in more than two years, stagnating wages and a jobless rate that has remained at or above 8.9 percent since April 2009. Their pain is shared by their preferred retailers, including Walmart and J.C. Penney Co.

“Rising gas prices and still-high unemployment levels weigh on the minds of our customers,” Bill Simon, U.S. chief executive officer of Bentonville, Arkansas-based Wal-Mart, said on a Feb. 22 earnings call. “Pressure from higher energy and commodity costs are factors that we will watch closely, as they affect our own logistics and transportation costs, as well as the prices the customer pays,” he said.

Creating a Clean Energy Economy

In this article, the former governor of Colorado and the current director of the New Energy Economy at Colorado State University, Bill Ritter Jr, encourages governors all across the U.S. to aid in the creation and development of a clean energy economy. During his term, Ritter signed over fifty pieces of legislation for clean air that not only resulted in putting Colorado in the top five of states in its amount of clean energy workers per capita, but also created thousands of jobs stimulating the economy. He claims it is the role of the state governors to help make President Obama's goal to produce 80% of America's energy from clean sources by the year 2035 into a reality. Finally, Ritter defends all this by stating that making these strides to protect the environment do not need to come at the cost of compromising production; rather they can coexist. Colorado proved this to be true by passing a bill to shut down inefficient and dirty plants and build better, cleaner ones that utilize natural gas. While governors across the nation deal with budget cuts and constraints, they should remain focused on this goal of clean energy which will in turn reduce our dependency on foreign oil, protect the environment, and create jobs.

China Operating with a Trade Deficit?

This article relates to the import/export numbers that were released out of Beijing recently. Surprisingly, China's imports raised almost twenty percent while exports raised only about two and a half percent, which caused China to have its first trade deficit in almost a year (since the previous March). While many people hope that this would be a sign of friction easing between China and its trade partners over the value of its currency (the yuan), the more likely explanation was the date of the Chinese New Year and the impact it had on the economy.

The value of the Chinese currency has and will continue to be a hot topic because China has often been the main purchaser of U.S. bonds, and the U.S. as well as other trade partners have continuously argued that the yuan has been purposely devalued by the Chinese government to the detriment of its trade partners.

Rustbelt Recovery

This article covers the increase in American manufacturing, as well as the increase in the employment rates in the sector. Manufacturing employment has risen 1.6%, which is the highest on record since the late 1990's. Ohio was one of the states to have unemployment rates fall more sharply, and this may be due to the heavy manufacturing in the state.

This may be a sign that the economy's growth is increasing, due to the increase in the manufacturing sector. Thoughts?

Building excitement: Can China avoid a bubble?

Many of us have seen the various Youtube videos; fifteen story hotel buildings in China are being built in six days. These videos reflect the extravagant growth in the Chinese housing market that has taken place over the past few years. Barclay's Capital, a British investment bank, estimates that within the next six years, forty percent of the world's skyscrapers will be built in China. Although this may seem like progress for the Chinese economy, it has led some economists to worry about a housing bubble burst. In fact, many economists see paralells between the growing Chinese housing market, and the housing bubble bursts in the U.S. and Dubai.

The article points out that the Chinese government is trying to respond to the high level of demand, while attempting to dampen it down at the same time. Many policies have been put in place in an attempt to address inflation in the housing market and lessen housing demand. For example, new homeowners are now required to put down a thirty percent down payment before purchasing a house. There is a real concern that if demand isn't addressed, housing prices will continue to rise at an unsustainable rate.

We have seen the mistakes within the U.S. housing market and we are now seeing China learn from those mistakes. If China is not able to offset a housing bubble burst, the consequences will be far reaching, and may rock the global economy into another mini-recession.

Men's wage

This article explains how a lot of men are now not working. They describe the men either being in disability, retiring, are unemployed or just not in the labor force. It states that in 1969 19 percent of male's aged 20 and older were not working, while it is now 33%. It would be very interesting to see the data breakdown for this; today would more men not be working due to their wife now being in the labor force? Is the job market making these men discouraged and take time off from looking for a job? Or are more men retiring in these tough times? This data would be very interesting to take a close look eye at and really see what this unfortunate job market holds for men.

America's Recovery: The new new normal

So far, the economy looks like it is starting to make a turn for the better in terms of the unemployment rate. As of today, the unemployment has dropped to 8.9%, which is the lowest it has been in years.

Many small businesses and larger firms are beginning to welcome back more employees. The only problem is, is the unemployment rate totally legitimate? Some believe that the unemployment rate has been miss calculated leaving the data incorrect. The problem stems from nonfarm employment surveys, which are derived from a big survey of employers. On the other hand the unemployment rate is derived from a much smaller survey of households. The difference in the gathering of data leaves uncertainty for legitimacy with the unemployment rate calculations.

Unrest in the Middle East: The Price of Fear

The world economy has felt the tremors of volatile unrest in the Middle East and North Africa at an ever-increasing rate in 2011. Eruptions of turmoil in important geopolitical and oil-rich nations like Egypt, Tunisia, and most recently Libya have caused oil prices to soar. This informative article explains that the price of oil is not just reliant on the traditional economic conventions of supply and demand, but also the impact of fear in speculation can have. As evident in current gas prices in the United States, declining reserves of the world's supply of oil paired with unrest in civil society emerges peaks hovering around $120 a barrel today. It will be interesting to see if the development of new revolutions across places like Bahrain or Saudi Arabia will have on the future prices of oil.

Uncorking Enterprise

This article explains the need for entrepreneurship in the battle against unemployment around the world. There is a great pressure on policymakers to promote the creation of new businesses. This has especially come to light in the recent Egyptian revolution, which is in part due to the high (33%) unemployment in the nation. The main reasons given for promoting new businesses are that they create jobs that did not exist before, and that new firms are the most likely to increase productivity.

Recently, the Global Entrepreneurship Monitor (GEM), a new index created by various academics, has been used to judge how favorable and friendly different nations are to entrepreneurship. This index focuses on business creation, but the problem is that it does not distinguish between new companies that will have a big impact and smaller companies that will not have an impact, such as street vendors.

Another index that is being unveiled today, is the Global Entrepreneurship and Development Index, which takes into account high growth companies, ambition, and prevalence of start-ups. The interesting result of this index is that it shows bottlenecks in a nation's economic or financial systems. For example, even though Britain is developed, there is a shortage of venture capital and therefore it is not so conducive to entrepreneurship. The other interesting preliminary result of the index shows that many of the scandinavian countries are in the top ten, which indicates that it is possible to have a welfare state that promotes entrepreneurs.

This article was very enlightening, and it shows how a country could improve some economic problems by promoting entrepreneurship and reducing the cost of opening a business. The new indices measuring this variable are just beginning to be used, but there is hope that they will be able to shed some light onto what makes a country favorable towards entrepreneurs.

Billions of Bloat Uncovered in Beltway

A recent study, intended to be released Tuesday, uncovered about 80 government programs that seem to overlap and are costing American tax payers billions of dollars each year. The hope is to consolidate several of these programs to reduce the government budget. This highlights one of the ways that the government fails to effectively allocate resources. The government is trying to use these programs to help the homeless and promote economic development but they are misallocating tax payer money.

Trade Initiatives

President Obama has not been quiet about his desire to increase exports and to somewhat even out the trade deficit. In this article, the logistical struggles associated with doing that are outlined. Bipartisan politics often drive a wedge in plans such as these. Another issue is government assistance to workers who are unemployed due to globalization. As of now, they no longer receive job training or any benefits. Republicans are also blocking trade deals in order to protect sometimes small companies in their specific states (a sleeping bag company in Arkansas, in this case). These short-sided views will hurt the United States in the long run. As Obama reiterated in the State of the Union, the world where the United States' is a manufacturing mecca is over; the time has come for adaptation.

Poll Shows Support for Embattled Public Sector Workers

The majority of Americans agree with the protestors in many state capitals who are protesting the "efforts to weaken the collective bargaining rights of public employee unions" and "cutting the pay or benefits of public workers".
The biggest protests have been in Wisconsin and Ohio where newly elected Republican leaders will push for these unfavorable reforms.
The most interesting point in the article was that most people surveyed were less opposed to tax increases- the governors are more opposed to it while the people are most imposed to cutting union rights and federal employees salary.

Stocks on The Rise

This article touches base with the reasons behind the abrupt turn-around of the US stock market in the past year. According to analysts, there was a major concern with the global oil supply, they were concerned that an excess supply of oil being sold through Lybia would be too much for the market to handle. But to their surprise, the oil prices surged this past week, despite the looming supply issues. There has been three major components that have helped the stock market rebound in the manner that it has in the past year. Overall spending has increased, personal income has increased, and consumer confidence has increased as well. With these three factors on the rise, the market has begun to move towards the "pre-crisis" numbers. The question being, when will we meet and exceed these numbers.

Economists' biggest worry: Federal budget deficit

This is a good article centered around the mass concern that american economists have about the US budget deficit. The general consensus among these economists is that we are keeping taxes far too low and spending way to much to emerge from the recession, politicians say our system is still too weak to raise taxes or cut spending. Either way, without action we may need major reform in our economy to correct the budget problem

Oil Climbs on Libya Tensions; Treasuries Advance, Euro Weakens on Ireland

Oil extended the biggest weekly gain in two years as fighting in Libya cut production, while Treasuries and gold rose on concern global economic growth will be derailed. Oil added 1.8 percent in New York to $99.65 a barrel as of 1:58 p.m. in Tokyo rallied for a sixth day. Ten- year Treasuries climbed for a third day, while gold approached a record. The euro pared losses against the yen and dollar as the MSCI Asia Pacific Index increased 0.3 percent, erasing a drop of as much as 0.5 percent. Standard & Poor’s 500 Index futures declined 0.2 percent. U.S. officials will meet with their foreign counterparts in Geneva today to discuss the fate of Libya, where opposition forces are making gains in the western parts of the country after taking control of the east. Chinese Premier said the nation set a lower growth target for the period from 2011 through 2015 than in the previous five years, while U.S. data this week will signal household purchases slowed even as payroll gains accelerated and factory orders increased.

Economic growth trimmed, consumers more upbeat

This article discusses the signs that seem to indicate a turnaround in the US economy. One of the main focuses of the article was the impacts of the revolution in Libya and it's affect on U.S. consumers. The article points out that the oil price turmoil that has lead to a 6 cent spike in oil prices hasn't seemed to upset U.S. consumers like it would have been expected to. In previous years it was extremely big news when oil prices were fluctuating so much, but the article is saying that consumer sentiment is up 3.3% since January despite the prices, showing that consumers aren't in such a tight monetary situation

The Big Airlines get Cold Feet

Delta airlines increased it's fares in hopes to bring in extra cash on the 18th. When airlines do this, they do it in the hopes that other airlines will follow their lead so that they can call make more money without one seeming overpriced. Once Delta had upped their prices by as much as $60, American Airlines did the same. However, Southwest Airlines however did not. Considering that Southwest is still one of the cheapest, it made Delta and American look way overpriced with their increases and both Delta and American had lowered their prices back to normal by the end of the week. This shows the huge amount of competition between 3 of the most major airlines in America.

Rising Oil Prices Pose New Threat to U.S. Economy

It seems like the U.S. economy just can’t ‘catch a break’. Consumer confidence is rising which is helping our economy grow, but there has been a significant recent rise in oil prices as well. If this rise in oil prices stays consistent, it will most likely slow down the growth rate of our economy that is already moving pretty slow. This slow growth rate is already struggling to produce jobs in this country. Now with increasing oil prices, this imposes another problem on our economy and growth will not be as great. There is a strong element of fear in consumers of what’s next, and what’s next after next. Budget and debt problems at all levels of American government also threaten to disrupt the domestic recovery. The irony to all of this is that the American economy just barely got up off the ground from the devastating financial crisis and now are being hit with rising oil prices. Higher oil prices restrain growth because they result in higher fuel prices for consumers and businesses.

Regulation Is Lax for Water From Gas Wells

Many American industries are focusing on this century's gold rush for natural gas, which has always been trapped deep underground. Drilling companies just recently figured out the way to use this enormous resource, which is enough to supply the country with gas for heating buildings, generating electricity and powering vehicles for up to a hundred years. There are quite many supporters for this new source of energy. Environmentalists say that it helps slow the climate change because it burns more cleanly than coal and oil. Lawmakers consider it as a source of job and as a way to decrease our dependency on other countries for oil.

However, natural gas also poses many hazards. It causes water to contain higher levels of radioactivity. While people clearly do not drink drilling wastewater, the reason to use the drinking-water standard for comparison is that there is no comprehensive federal standard for what constitutes safe levels of radioactivity in drilling wastewater. It can also contaminate the air. Many health problems arise in several regions where drilling plants operate such as an increasing rate of children who have asthma.

However, the regulators are still unclear about its problems and still claim that coal has far more issues. But the hazards associated with natural-gas production and drilling are far less understood than those associated with other fossil fuels, and the regulations have not kept pace with the natural-gas industry’s expansion.

Libya's revolt scares oil traders

Italy is the biggest trading partner of Libya in terms of oil and other natural gas. Libya provide about one third of the oil in Italy and count for about 10 to 15 percent of their natural gas. Which let mean that Italy has the most to loose as the result of the revolution. If Gaddafi's regimes falls it is uncertain that the next government would continue the trade between Libya and Italy.

I find it interesting how the revolution in one country could have a drastic effect on another country and could even potentially affect it economy.

It makes me wonder if Economy and Politics should be linked?

Libya oil production grinding to a halt

Due to the ongoing violence in Libya, half of their oil companies have shut down in production. Italian oil giant Eni, the largest foreign oil company in Libya, declined to specify how much of its production has been shut in, saying that disclosing that information could jeopardize the remaining output.Eni produces about 250,000 barrels a day from Libya, which has a total oil output of 1.6 million barrels per day. Worldwide oil consumption is pegged at 87.5 million barrels per day.

Most of US companies are still operating. U.S.-based Marathon told CNNMoney the 45,000 barrels a day it produces in Libya has not been impacted. Occidental said its 13,000 barrels a day are also still flowing.

Several of the major oil companies, including ExxonMobil and BP have recently signed leases in Libya but are still in the exploration stages and are not yet producing any oil in the country. Those leases, worth billions, may be in jeopardy if the Libyan government collapses.

Eni said the natural gas pipeline running under the Mediterranean from Libya to Italy, which supplies 10% of that nation's gas, has been shut off, but despite that, it is still able to meet its customers' demand for gas.

If the violence in Libya goes on, it is not sure how long the rest of the oil companies can still remain in operation. If this is the case, the shock to the oil price is unpredictable.

Consumer confidence at 3-year high on job optimism

NEW YORK (AP) -- Americans are feeling more chipper about the economy than they have in three years.

The Consumer Confidence Index rose to 70.4 this month, up from 64.8 in January, as Americans expressed more optimism about their income prospects and the direction the economy is headed, a private research group reported Tuesday.

It's the strongest reading since the early days of the most severe recession the U.S. has seen since the 1930s.

A robust stock market and falling unemployment are lifting Americans' spirits in spite of rising food and energy prices and a still-weak housing sector. In addition, a cut to the Social Security tax meant Americans started seeing more money in their paychecks in January, which may be boosting consumer spending.

Retailers including Macy's Inc., Home Depot Inc. and VF Corp., maker of Lee jeans and Vans shoes, reported better-than-expected earnings Tuesday. Home Depot posted its first annual revenue increase since before the housing crash in 2006, while Macy's, the country's second-largest department store chain, saw sales at stores open at least a year climb 4.3 percent...

This is good news, the consumer confidence is gradually increasing since November. This may mean that the U.S. economy is getting stronger as well despite the global news regarding the Middle East. My concern is that increasing oil prices would have impact on the imports and the prices may increase, resulting in a decrease of consumer confidence.

Obama’s 2012 Budget: New Taxes in, Tax Breaks Out

This article gives us a basic outline of President Obama's newly proposed budget. The budget includes plans for reducing the national deficit, by focusing on the High income earning population that is still protected by the Bush-era tax cuts. Overall it talks about many proposed projects that are going to take affect over the next few years. i believe that this is only the first out of many steps the government will need to take to fix the U.S. national debt problem.

Art or Business?

This article talks about how the importance of the quality of Hollywood films has and will continue to decrease over time. What matters in Hollywood and any other industry is profits. What matters now is whether or not a film will sell. The market for American films is now bigger outside of the United States than inside. Producers overall are now more concerned in targeting teenager in countries like Brazil and China than the people who decide which film will receive the Academy Award for best picture. The sad truth is that producers care more about making a profit than making a good film, turning films into a business instead of an art.

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.